sold, coupons cashed and bonds redeemed, at any and all postoffices. Make federal farm loan bonds the one universal, popular and constantly available investment for every man, woman and child, institution, corporation, town, city, county or state, public or private fund, in any sum from a petty $25 up to millions. CHAPTER FIFTEEN JOINT STOCK LAND BANKS THE HE foregoing pages have been devoted to an exposition of the farm loan system as conducted through federal land banks, their agents or their member national farm loan associations. Large as may be the development of the method through those institutions, however, the vastness of the farm loan business and the number of individuals, firms or corporations already engaged directly or indirectly in lending money to farmers or in selling farm mortages or the paper evidence thereof, are such as to be taken full cognizance of by the federal farm loan act. Joint Stock Land Banks. The law provides that such a bank may be formed by any number of natural persons, not less than ten, who shall have the same voting privileges as holders of shares in national banks. Stockholders are liable to the banks' creditors for double the amount of their shares, the same as is the case with national banks. Each joint stock land bank must obtain its charter from the federal farm loan board, and shall be in all respects under the supervision of the board. Its shares are taxable the same as shares in national banks, but its bonds, also its capital and surplus, enjoy the same exemption from tax that is granted to federal land banks. It shall not receive deposits or transact any banking or other business not expressly authorized by the statute. Capital Required. A joint stock land bank may be chartered with a subscribed capital of at least $250,000, one half of which must be paid up in cash, and the balance subject to call, but it cannot issue any bonds until its capital is entirely paid up. No limit is imposed upon the extent to which a joint stock land bank may increase its capital. The government shall not purchase or subscribe for any capital stock of any joint stock land bank. Bond Issues. The mortgages and notes owned by any joint stock land bank which it wishes to use as collateral for a bond issue, must be deposited with the registrar appointed by the federal farm loan board for the federal land bank district in which is situated the principal office of the joint stock land bank. Having deposited its securities with the federal registrar, the issue of bonds against them by a joint stock land bank may be made only with the approval of the federal board. Such bonds must be so engraved as not to be mistaken for securities issued by federal land banks. The amount of bonds it may issue is limited to fifteen times the amount of the capital and surplus of any joint stock land bank, whereas a twenty-fold limit is allowed to federal land banks. Lends Money. Joint stock land banks may make loans at an interest rate of not more than six per centum per annum, or at not to exceed one per centum more than the rate paid on the same bank's last previous issue of bonds, provided this does not lift the rate above 6%. "Joint stock land banks shall in no case demand or receive, under any form or pretense, any commission or charge not specifically authorized in this act." "No loan made by any joint stock land bank shall exceed 50 per centum of the value of the land mortgaged, and 20 per centum of the value of the permanent insured improvements thereon, said value to be ascertained by appraisal as provided" elsewhere in the act. Subject to the limitations enumerated, the rates of interest charged by a joint stock land bank are not subject to any control whatever. It may make loans on first mortgages on farm lands within the state in which it has its principal office, or within some one state contiguous thereto. It can lend only upon farm property, improved or unimproved. There is no limitation as to the purposes for which such loans may be made, nor their amount. Neither is there any limitation as to the ownership of the mortgaged premises with respect to whether the owner and borrower is engaged in the cultivation thereof, or is or is not occupying the same otherwise, or is or is not merely holding the same for speculation, investment or as landlord for rental purposes. Advantages of Federal Charter. Within the prescribed lines, therefore, joint stock land banks may prosecute their business in their own way, subject only to powers over them |