Show JL 6 i the federal farm loan act synopsis of its salient features prepared by H M hanson secretary treasurer farm mortgage bankers association of america FEDERAL FARM LOAN ACT poised by the house of representatives and the united states 6 sen n ate at june 27 and 28 1916 respectively land by the president july 17 1916 3 provides for n federal land lai I 1 hunk bank casten sy in ill tile the continental coll I 1 cental united states exclusive of alaska dividing tile tho count countey y into twelve land bank districts dlf composed of whole states 3 the system Is operated as n tin bit reau of the lie united states treasury to IP part went and supervised by the federal farin loan board the secretary of the treasury Is ex chairman of tie he bourd board with four other members by tile hie president for eight yeni beals a at oil nn it annual annu at salary of one member HK anber Is designated form fann loan commissioner and la Is tile the active executive of licer 3 appointees of boardl board a loan iona registrar for each land batik bank district and b one or more land appraisers for each land bank district salaries paid by federal inn land batik bank or joint stock land batik bank for which they buy net act c land bank examiners sali salaries tries paid by tile tho united states 4 it attorneys experts assistants and other employees to be paid by tho the united states staten 17 powers of the board a to organize org anise and charter federal land banks joint stock land banks and national farm fill ni loan associations b to review and niter alter the rate of interest nt creat to be charged b by federal land banks for loans c to approve or reject any or all lonna loans for bond issue to giant or refuse any specific issue of far annn loan bonds of federal land banks oil and joint stock land banks d to regulate charges for appraisal pra isal lial examining titles tind and re ricord c ord tug lug e to appraise land securing mortgages for bond bell issue f to exercise general supervisory authority over the federal land banks farm anil loan associations und and joint stock and banks i SO 30 tho farm loan commissioner shall filial the lis laws of every ot state aito and if on examination tile tho laws of tiny any state are shown to afford protection to holders its mortgages shall be declared ineligible under this act during the continuance of tile laws in question aa 12 the hie secretary of the alie treasury Is authorized to deposit united states funds in federal land banks at current govern government alent rates of interest tile aggregate of such funds not to exceed tit nt any ono one time FEDERAL FARM LOAN BANKS organization section 4 one in each cadi land bank district branches permitted w athill its district officers president vice president secretary secie tary and treasurer directors six representatives of farm loan associations and three representing the lie public interest attorneys as an experts and other employees all salaries fixed by farm loan board and paid by batik bank subject to scanlan nual by land batik bank examiner CAPITAL STOCK sec B T 71 11 may be owned by individuals firms corporations and the united states and state governments see sec 5 Shil res 5 radi each sec 0 5 all stock remaining 80 30 lays das after subscription books orel anro opened shall be subscribed by the united nud and thereafter ther tafter only tile lio united states government anil and borrowers may require shares of stock see sec 5 united states government not to participate in dividends all other stockholders share dividends eg unify see sec 0 the original capital stock shall be gradually retired after the stock block bield by farm loan associations shall amount to see sec 5 not less than 0 5 per cent of capital shall be invested in united states government bonds POWERS sec IS 11 to buy list first farm mortgages within its district and to issue and sell farm loan bonds sec 11 II 13 to receive front farm loan associations interest intel cst rind payments on mortgages and loan iona tionda bonds sec 13 to acquire and dispose of 0 teal real and personal person nl property iro porty necessary for tile convenient transaction of bustness and land taken in satisfaction of debts or purchased under judgments decrees or mortgages held by it shall not hold title exceeding five years sec 18 13 to accept deposits of securities curi curit ties les or current funds from associations but pity pay no interest thereon sec 13 to borrow money on security and pay interest thereon sec 13 to buy und mid sell united states bonds see sec 13 to appraise lands for bond issue and tot to charge applicants and borrowers the cost of land appraisal examining cities recording an dother legal leal ical gal fees sald fees to be paid la in carai or bo be inide part of loun wid und paid in amortization payments se sec 14 to accept mortgages only from farm lonn loan associations and approved agents sec 14 to iro accept deposits of current funds only from its stockholders see sec 0 to become financial of united states government and depository tory of public money public c deposits cannot be invested in mortgages or farm loan bonds see sec 13 to deposit its securities and current funds subject to check with tiny any member brink bank of the tha federal reserve system and to receive interest ther thereon con BONDS see sec 20 issued in series of or op more in denominations of 25 50 and 1000 sec 20 may bear a maximum rate of 5 per cent interest per annum see sec 10 19 mortgages and united states government bonds equal tit in amount to the farm loan bonds issued are retained as an collateral security by the lie land hunk batik registrar see sec 11 14 the outstanding farm loan bonds shall not exceed 20 times the capital and surplus sec 21 shall be guaranteed by bank of issue unit and all other federal land banks sec 17 no issue Is authorized without the approval of tile farm loan board see sec 22 substitution of mortgages and and united states government bonds held ns an collateral to furin farm loan bonds Is permitted TAXATION see sec 20 the capital stock surplus mortgages and farm loan bonds and nil income derived tire exempt from froin federal state municipal and local taxation S sec c c 20 26 neal property taken and held under tinder the provisions of sections 11 and 13 Is not tax exempt AGENTS see sec IB 15 incorporated banks trust companies mortgage compit companies tiles or chartered savings institutions inny net act ns as agents for federal land banks it if no farm loan iona association lias been formed tit in a given locality af utter ter one year see sec IB 15 borrowers securing loans through agents are required to subscribe 5 per cent of tho the lonn loan to tile the capital of tho the federal land bank sec IB 15 agents are entitled to a of one half 0 1 per cent per annum on unpaid prin principal cipul of each loon loan they negotiate and the bank shall pity agent for actual expenses for appraising land examining titles exe cutyne and recording the mortgage papers which shall be added to the face of tile loan see sec IB 15 agents shall indorse and become liable for the payment of tho the lonna loans they negotiate and the ngoc gato unpaid principal of such bonns not exceed ten tell times the lie ii ti gents capital and surplus see sec IB agents are required to ranko gool any default within SO 30 days after notice see sec IB 15 all collections mado made shall be remitted without charge SPECIAL provisions see sec 22 amortization and other payments constitute a n trust fund to be invested ns as follows n to pay oft off maturI maturing fig form loan bond issues h b to purchase linse farm loan iona bonds c to lend on oil first farm mortgages within the ho dI district it to buy united states government bonds sec 23 Ilc serve tin and dividends no limit la Is placed on oil dividend distributions after it reserve rescue account has been built up till from earnings equal to IQ 20 per cent of tho the capital stock and after 5 per cent of tile tho net earnings annually thereafter are added to tile tho reserve re nc count sec 23 21 funds to be invested d ns as prescribed by tho the federal burat loan iona board see sec 27 form farm lonn loan bonds are lawful investments for fiduciary and trust funds and security for till nil public deposits sec 27 federal federic reserve bank may inny buy and sell form farm loan bonds see sec 20 provision la Is made for its solution nil and the appointment 0 of f a receiver sec 14 no commission or charge not specifically authorized in this net be demanded or received NATIONAL FARM LOAN associations organization section 7 ten farm owners desiring loons loans aggregating or more may form such nn an association see sec ti 7 its affairs are administered ty by five directors including president vice president and n loan committee of three serving without vIt hout compensation and by a secretary treasurer with sn sal 1 nry ary fixed by the fanu loan oan board and by the association CAPI capital CA PIVAl i AL STOCK see sec 8 shares 5 each 1 0 carry ing double liability 8 may bo be owned only by borrowers who are required to subscribe 0 5 per cent of their loan in 14 the capital stock of the association which in turn subscribes an equal amount of stock block in the federal land blink bank see sec 8 shares are paid for in cash or 0 the amount may be added to the face of the loan and retired in amortization payments nt at par in such case the face of tile the loan shall not exceed the 60 50 per cent and 20 per cent limitation It see sec 7 assessment on shares rally may ho he levied for operating expenses it if funds are not otherwise available POWERS 4 see sec 10 to appraise land for mortgage through its loan committee of three see sec 11 to indorse and become liable for the mortgages of its shareholders see sec 11 to receive and deliver the proceeds of loans to borrowers see sec ll 11 to ajro acquire and dispose of property necessary for the convenient transaction of its business sec 11 to issue certificates of deposit for foi not longer than one benr and to pay 4 per cent interest thereon convertible into farm loan bonds at the federal land bank of its district sec 7 to receive and transi transmit tilt to the federal land batik bank payments of interest and principal and amortization payments LOANS see sec 12 loans shall be secured by first mortgages on land within its land blink district section 12 to run ran from 6 5 to 40 yenni with amortization and with additional dit ional optional pre payments sitter after five years see rec 12 interest on loans shall not exceed 0 per cent per annum on the unpaid principal see sec 12 borrowers Ilor rowers shall pray pay 8 per cent simple interest on defaulted payments see sec 12 loans may be made for the following follow ing purposes and for no other under penalty a to purchase land tor for agricultural purposes b to purchase equipment fertilizer find and live stock for the operation of the mortgaged farm c to provide buildings and for the improvement of farm lands it to pay debts existing at time of organization of the first dional farm loan association within the county see sec 12 maximum loan minimum lonn loan see sec 12 no loan iona shall exceed CO 60 per cent of the he value of the land mortgaged and 20 per cent of the permanent insured improvements sec 12 no loans shall bo be made to tiny any person who Is not nt at the ume time or shortly to become engaged in the cultivation of the farm mortgaged note all applications for loans originate with the national farar loan associations or agents and all lo 10 loans ans are made and closed by the federal land banks this does not apply to joint stock land banks TAXATION see sec I 1 20 G same saine ns no applies to federal land banks SPECIAL provisions see sec 0 0 associations may retain as commission conr one eighth of I 1 per cent semiannually from interest intel cst payments on oil the unpaid principal of loans see sec 0 associations may borrow from federal land banks at 0 6 per cent annual interest up to one fourth of its total stockholdings stock holdings in said batik bank sec 24 He reserves serves and dividends no limit la Is placed on dividend distributions after the reserve account built up from net earnings equals 20 per cent of the capital stock and after 2 per cent of the net earnings annually thereafter tire are added to the reserve account see 25 defaults must be good within BO 80 days after notice see sec ad 20 provision Is matte made for dissolution and the appointment of a receiver beiver JOINT STOCK LAND BANKS organization section 10 A private corporation subject to the requirements under tinder this net act which nifty be formed by ten or more inure persons with a board boar dof of directors of five or more see sec 10 16 may operate within the state in which its principal Is in located and within some one ous 8 tilte state see sec 28 subject to semiannual examinations ami nations by the federal land batik bank examiner CAPITAL STOCK see sec 10 minimum see sec IO 10 double liability of shareholders sec 10 the united states government shall own none of the shares of stock see sec 10 16 no farm loan iona bonds can bo be issued until the capital stock Is fully paid although the alie batik bank may begin bu business when one half of the capital Is subscribed and alto paid tit in cash POWERS 30 16 to lend money on farill mortgage security see sec 11 10 to issue mid and sell farm loan bonds yoc see 10 to issue farm loan bonds up to ir in times the amount of its lt cupl till tal and sur surplus plug sec 16 except na its otherwise provided it has the powers or of mul and Is sub eject to tile restrictions imposed Impo seil on oil federal land banks PR privileges see sec IG may lend more than to any one borrower but not beyond 60 0 per cent of the bolua of tile land ond and 20 per cent of the permanent in improvements see bee lc IL loatis loam are r riot not restricted to the pur purposes pones prescribed for altu national onal farm loan associations sec 10 16 loans may be made mad tf t farm owners regardless of 0 whether engaged in cultivation of the land mortgaged or not sec 10 16 interest on loans shall not exceed moro more than I 1 per cent the interest rate established for its last series of bonds nor more than 0 per cent in ill any cose case see sec 10 commissions or other charges not specifically authorized by this net shall not be demanded or re calved BONDS see sec 20 issued in series of or more in denominations of 25 50 and 1000 see sec 20 may ilay bear maximum rate of 6 5 per cent interest per annual sec 10 16 ilonis shall be so engraved as to be readily distinguishable from federal land batik bank bonds see sec 10 19 mortgages and united a states government bonds equal tu amount to the form farm loan bonds iss issued u ed ore are retained as collateral security by the land bank registrar see sec 17 no issue Is authorized without the approval of the farm loan board see sec 27 federal reserve bonks banks are authorized to buy and sell the lie bonds of joint stock land bonks banks see sec 22 substitution of mortgages and united states government bonds held as collateral to farm loun loan bonds is permitted see sec 27 its bonds tire are lawful investments for fiduciary and trust funds and security for all ull public deposits TAXATION see sec 20 the capital stock surplus and earnings are subject to the taxing powers of the state see sec 20 its mortgages executed under this act and its farm loan bonds and all income derived are exempt from federal state and municipal and local taxation see sec 20 26 iteal heal property taken and held under tile provisions of sections 11 and 13 Is not tax exempt SPECIAL provisions see sec 0 6 joint stock land banks tire are matte made public depositories repositories deposit ories and financial agents of the united states government in ell t see sec C G public deposits cannot be invested in farm farin |