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638_31. Time of commencement of corporate existence; powers enumerated.—Upon duly making and filing such organization certificate the bank shall become, as from the date of the execution of its organization certificate, a body corporate, and as such, and in the name designated in the organization certificate, it shall have power
First. To adopt and use a corporate seal.
Second. To have succession until it is dissolved by Act of Congress or under the provisions of this Act.
Third. To make contracts.
Fourth. To sue and be sued, complain, interplead, and defend, in any court of law or equity, as fully as natural persons.
Fifth. To elect or appoint directors, and by its board of directors to elect a president and a vice president, appoint a secretary and a treasurer and other officers and employees, define their duties, require bonds of them, and fix the penalty thereof; by action of its board of directors dismiss such officers and employees, or any of them, at pleasure and appoint others to fill their places.
Sixth. To prescribe, by its board of directors, subject to the supervision and regulation of the Federal Farm Loan Board [now Farm Credit Administration],* by-laws not inconsistent with law, regulating the manner in which its stock shall be transferred, its directors elected, its officers elected or appointed, its property transferred, its general business conducted, and the privileges granted to it by law exercised and enjoyed.
Seventh. To exercise, by its board of directors or duly authorized officers or agents, subject to law, all such incidental powers as shall be necessary to carry on the business herein described. (July 17, 1916, sec. 4, 39 Stat. 363; 12 U. S. C., sec. 676.)
638–32. Time of termination of temporary management. After the subscriptions to stock in any Federal land bank by national farm loan associations, hereinafter authorized, shall have reached the sum of $100,000, the officers and directors of said land bank shall be chosen as herein provided and shall, upon becoming duly qualified, take over the management of said land bank from the temporary officers selected under this section. (July 17, 1916, sec. 4, 39 Stat. 363; 12 U. S. C., sec. 677.)
638_33. Directors; compensation of officers and employees.—The members of the farm credit board of each farm credit district provided for in the Farm Credit Act of 1937 shall be ex officio the directors of the Federal land bank located in that district. Any compensation that may be provided by the board of directors of any Federal land bank for officers or employees shall be subject to the approval of the Farm Credit Administration. (July 17, 1916, sec. 4, 39 Stat. 363; Aug. 19, 1937, sec. 7 (b), 50 Stat. 707; 12 Ú. S. C., sec. 677a.)
638–34. Capital stock of Federal land banks; minimum amount of original capital; regulation of subscriptions.—That every Federal land bank shall have, before beginning business, a subscribed capital of not less than $750,000. The Federal Farm Loan Board (now Farm Credit Administration]* is authorized to prescribe the times and conditions of the payment of subscriptions to capital stock, to reject any subscription in its discretion, and to require subscribers to furnish adequate security for the payment thereof. (July 17, 1916, sec. 5, 39 Stat. 364; 12 U.S. C., sec. 691.)
*See Ex. Or. 6084, p. 254, this volume.
638-35. Shares; value; who may subscribe to original stock.—The capital stock of each Federal land bank shall be divided into shares of $5 each, and may be subscribed for and held by any individual, firm, or corporation, or by the Government of any State or of the United States. (July 17, 1916, sec. 5, 39 Stat. 364; 12 U.S. C., sec. 692.)
638–36. Transfer of stock held by national farm loan associations.Stock held by national farm loan associations shall not be transferred or hypothecated, and the certificates therefor shall so state. (July 17, 1916, sec. 5, 39 Stat. 364; 12 U.S. C., sec. 693.)
638–37. Dividends; voting stock.–Stock owned by the Government of the United States in Federal land banks shall receive no dividends, but all other stock shall share in dividend distributions without preference. Each national farm loan association and the Government of the United States shall be entitled to one vote for each share of stock held by it in deciding all questions at meetings of shareholders, and no other shareholder shall be permitted to vote. Stock owned by the United States shall be voted by the Land Bank Commissioner, as directed by the Federal Farm Loan Board (now Farm Credit Administration).* (July 17, 1916, sec. 5, 39 Stat. 364; June 16, 1933, sec. 80 (a), 48 Stat. 273; 12 U. S. C., sec. 694.)
638–38. Subscriptions to original stock; subscriptions by United States for unsubscribed balance of original capital stock. - It shall be the duty of the Federal Farm Loan Board (now Farm Credit Administration),* as soon as practicable after the passage of this act, to open books of subscription for the capital stock of a Federal land bank in each farm credit district. If within thirty days after the opening of said books any part of the minimum capitalization of $750,000 herein prescribed for Federal land banks shall remain unsubscribed, it shall be the duty of the Secretary of the Treasury to subscribe the balance thereof on behalf of the United States, said subscription to be subject to call in whole or in part by the board of directors of said land bank upon thirty days' notice with the approval of the Federal Farm Loan Board (now Farm Credit Administration]*; and the Secretary of the Treasury is hereby authorized and directed to take out shares corresponding to the unsubscribed balance as called, and to pay for the same out of any moneys in the Treasury not otherwise appropriated. Thereafter no stock shall be issued except as hereinafter provided. (July 17, 1916, sec. 5, 39 Stat. 364; Aug. 19, 1937, sec. 5 (a), 50 Stat. 704; 12 U.S. C., sec. 695.)
638-39. Retirement of original stock.—After the subscriptions to capital stock by national farm loan associations shall amount to $750,000 in any Federal land bank, said bank shall apply semiannually to the payment and retirement of the shares of stock which were issued to represent the subscriptions to the original capital twentyfive per centum of all sums thereafter subscribed by national farm loan associations, by borrowers through agencies, and by borrowers through branch banks to capital stock until all such original capital stock is retired at par. (July 17, 1916, sec. 5, 39 Stat. 364; Jan. 23, 1932, sec. 1, 47 Stat. 12; 12 U. S. C., sec. 696.)
*See Ex. Or. 6084, p. 254, tbis volume.
638–40. Proportion held in quick assets.—At least twenty-five per centum of that part of the capital of any Federal land bank for which stock is outstanding in the name of national farm loan associations shall be held in quick assets, and may consist of cash in the vaults of said land bank, or in deposits in member banks of the Federal reserve system, or in readily marketable securities which are approved under rules and regulations of the Federal Farm Loan Board [now Farm Credit Administration]*: Provided, That not less than five per centum of such capital shall be invested in United States Government bonds. (July 17, 1916, sec. 5, 39 Stat. 364; 12 U.S. C., sec. 697.)
638-41. Subscriptions by United States; terms; amount; retirement.It shall be the duty of the Secretary of the Treasury on behalf of the United States, upon the request of the board of directors of any Federal land bank made with the approval of the Federal Farm Loan Board (now Farm Credit Administration],* to subscribe from time to time for capital stock of such bank in an amount or amounts specified in such approval or approvals, such subscriptions to be subject to call in whole or in part by the board of directors of said bank upon thirty days' notice with the approval of the Federal Farm Loan Board [now Farm Credit Administration).* The Secretary of the Treasury is hereby authorized and directed to take out and pay for shares having an aggregate par value equal to the amounts so called; and to enable the Secretary of the Treasury to pay for stock issued hereunder there is hereby authorized to be appropriated the sum of $125,000,000 such stock to be nonvoting. Shares of stock issued pursuant to this paragraph shall be paid off at par and retired in the same manner as the original capital stock of said bank after said original stock outstanding, if any, has been paid off and retired: Provided, however, That stock issued pursuant to this paragraph may at any time, in the discretion of the directors and with the approval of the Federal Farm Loan Board [now Farm Credit Administration],* be paid off at par and retired in whole or in part; and that said board [now administration]* may at any time require such stock to be paid off at par and retired in whole or in part if in the opinion of the board (now administration]* the bank has resources available therefor. The proceeds of all repayments on account of stock issued pursuant to this paragraph shall be held in the Treasury of the United States and shall be available for the purpose of paying for other stock thereafter issued pursuant to this paragraph. (July 17, 1916, sec. 5, 39 Stat. 364; Jan. 23, 1932, sec. 2, 47 Stat. 12; 12 U. S. C., sec. 698.)
638–42. Federal and joint stock land banks as Government depositaries and financial agents; surety bonds; investment of funds.--That all Federal land banks and joint stock land banks organized under this Act, when designated for that purpose by the Secretary of the Treasury, shall be depositaries of public money, except receipts from customs, under such regulations as may be prescribed by said Secretary; and they may also be employed as financial agents of the Government; and they shall perform all such reasonable duties, as depositaries of public money and financial agents of the Government, as may be
*Seo Ex. Or. 6084, p. 254, tbis volume.
required of them. And the Secretary of the Treasury shall require of the Federal land banks and joint stock land banks thus designated satisfactory security, by the deposit of United States bonds or otherwise, for the safekeeping and prompt payment of the public money deposited with them, and for the faithful performance of their duties as financial agents of the Government. No Government funds deposited under the provisions of this section shall be invested in mortgage loans or farm loan bonds. (July 17, 1916, sec. 6, 39 Stat. 365; 12 U. S. C., sec. 701.)
638–43. National farm-loan associations; organization; articles of association; signature; copies for land banks. That corporations, to be known as national farm loan associations, may be organized by persons desiring to borrow money on farm mortgage security under the terms of this Act. Such persons shall enter into articles of association which shall specify in general terms the object for which the association is formed and the territory within which its operations are to be carried on, and which may contain any other provision, not inconsistent with law, which the association may see fit to adopt for the regulation of its business and the conduct of its affairs. * Said articles shall be signed by the persons uniting to form the association, and a copy thereof shall be forwarded to the Federal land bank for the district, to be filed and preserved in its office. (July 17, 1916, sec. 7, 39 Stat. 365; 12 U. S. C., sec. 711.)
638 44. Directors; officers; loan committee.-The board of directors of every national farm loan association shall consist of not less than five nor more than seven members, who shall be elected by the shareholders of the association. Elections of such directors shall be held once each year at an annual meeting of the shareholders. Every national farm loan association shall at the first annual meeting of its shareholders subsequent to the enactment of the Farm Credit Act of 1937 elect two directors for a term of three years, two directors for a term of two years, and the remainder of its board of directors for a term of one year. Thereafter directors shall be chosen to serve for terms of three years, and the shareholders of each association shall annually elect as many directors as may be necessary to fill the places of those directors whose terms expire during the year. Any vacancy that may occur in the board of directors through death, resignation or other cause shall be filled at the next annual meeting of shareholders by the election of a director to serve out the unexpired portion of the term, or a special meeting of shareholders may be called for this purpose. Until such election the remaining directors shall have power to fill the vacancy for the time being by appointing a temporary director to serve until the next meeting of shareholders. All directors shall hold office until their successors are elected and have qualified. It shall be the duty of said board of directors to choose in such manner as they may prefer a secretary-treasurer, who shall receive such compensation as said board of directors shall determine. The board of directors shall elect a president, a vice president, and a loan committee of three members." (July 17, 1916, sec. 7, 39 Stat. 365; Aug. 19, 1937, sec. 21, 50 Stat. 710; 12 U.S. C., sec. 712.)
638–45. Compensation and qualifications of directors. The directors and all officers except the secretary-treasurer shall serve without compensation, unless the payment of salaries to them shall be approved by the Federal Farm Loan Board (now Farm Credit Administration]*. All officers and directors except the secretary-treasurer shall, during their term of office, be bona fide residents of the territory within which the association is authorized to do business, and shall be shareholders of the association. (July 17, 1916, sec. 7, 39 Stat. 365; 12 U. S. C., sec. 713.)
638–46. Secretary-treasurer; powers and duties; bond; reports; misconduct in office. It shall be the duty of the secretary-treasurer of every naticnal farm loan association to act as custodian of its funds and to deposit the same in such bank as the board of directors may designate, to pay over to borrowers all sums received for their account from the Federal land bank upon first mortgage as in this Act prescribed, and to meet all other obligations of the association, subject to the orders of the board of directors and in accordance with the by-laws of the association. It shall be the duty of the secretarytreasurer, acting under the direction of the national farm loan association, to collect, receipt for, and transmit to the Federal land bank payments of interest, amortization installments, or principal arising out of loans made through the association. He shall be the custodian of the securities, records, papers, certificates of stock, and all documents relating to or bearing upon the conduct of the affairs of the association. He shall furnish a suitable surety bond to be prescribed and approved by the Federal Farm Loan Board (now Farm Credit Administration]* for the proper performance of the duties imposed upon him under this Act, which shall cover prompt collection and transmission of funds. He shall make a quarterly report to the Federal Farm Loan Board (now Farm Credit Administration]* upon forms to be provided for that purpose. Upon request from said board [now administration]* said secretary-treasurer shall furnish information regarding the condition of the national farm loan association for which he is acting, and he shall carry out all duly authorized orders of said board [now administration]* He shall assure himself from time to time that the loans made through the national farm loan association of which he is an officer are applied to the purposes set forth in the application of the borrower as approved, and shall forthwith report to the land bank of the district any failure of any borrower to comply with the terms of his application or mortgage. He shall also ascertain and report to said bank the amount of any delinquent taxes on land mortgaged to said bank and the name of the delinquent. No such secretary-treasurer shall engage in the making of land mortgage loans eligible at a Federal land bank through or for any other land mortgage company or agency, and the making of any such loan by any secretary-treasurer shall forthwith work a forfeiture of his office. (July 17, 1916, sec. 7, 39 Stat. 365; Mar. 4, 1923, sec. 305, 42 Stat. 1476; 12 U. S. C., sec. 714.)
638 47. Expenses and salaries; payment from general funds; assessments.—The reasonable expenses of the secretary-treasurer, the loan committee, and other officers and agents of national farm loan associations, and the salary of the secretary-treasurer, shall be paid from the general funds of the association, and the board of directors is authorized to set aside such sums as it shall deem requisite for that purpose and for other expenses of said association. When no such
*Seo Ex. Or. 6084, p. 254, this volume.