cate must be duly ticated, and forwarded to public inspection. and stockholders who may secure loans through agents of Federal land banks in accordance with the provisions of this Act. Organization certifi- Fourth. The fact that the certificate is made to enable such persons acknowledged, authen- to avail themselves of the advantages of this Act. The organization to commissioner to be certificate shall be acknowledged before a judge or clerk of some recorded and filed; open court of record or notary public, and shall be, together with the acknowledgment thereof, authenticated by the seal of such court or notary, transmitted to the Farm Loan Commissioner, who shall record and carefully preserve the same in his office, where it shall be at all times open to public inspection. Board may order changes in organization certificate. corporate. The Federal Farm Loan Board is authorized to direct such changes in or additions to any such organization certificate, not inconsistent with this Act, as it may deem necessary or expedient. Thus made a body Upon duly making and filing such organization certificate the bank shail 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 With powers to Adopt and use seal. Have succession. Contract. Sue and defend. Elect officers and directors. Require bonds. 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 Dismiss officers and directors dismiss such officers and employees, or any of them, at pleasure and appoint others to fill their places. employees. Make by-laws; provide method for stock business conducted. Sixth. To prescribe, by its board of directors, subject to the supertransfer, election of di- vision and regulation of the Federal Farm Loan Board, by-laws not rectors, and its general 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. Exercise incidental powers necessary for conduct of business. When $100,000 stock is subscribed' by farm manent officers and di 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. After the subscriptions to stock in any Federal land bank by loan associations, per- national farm loan associations, hereinafter authorized, shall have rectors to be chosen reached the sum of $100,000, the officers and directors of said land and take over manage 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. ment. Permanent directors, nine in number, six The board of directors of every Federal land bank shall be selected elected by farm loan as hereinafter specified and shall consist of nine members, each holding pointed by Farm Loan office for three years. Six of said directors shall be known as local associations, three ap Board. Notice of election of directors and method scribed. directors, and shall be chosen by and be representative of national farm loan associations; and the remaining three directors shall be known as district directors, and shall be appointed by the Federal Farm Loan Board and represent the public interest. At least two months before each election the Farm Loan Commisof nominations pre- sioner shall notify each national farm loan association in writing that such election is to be held, giving the number of directors to be elected for its district, and requesting each association to nominate one candidate for each director to be elected. Within ten days of the receipt of such notice each association shall forward its nominations to said Farm Loan Commissioner. Said commissioner shall prepare a list of candidates for local directors consisting of the twenty persons securing the highest number of votes from national farm loan associations making such nominations. directors. At least one month before said election said Farm Loan Commissioner shall mail to each national farm loan association the list of candidates. The directors of each national farm loan association shall Casting votes for local cast the vote of said association for as many candidates on said list as there are vacancies to be filled, and shall forward said vote to the Farm Loan Commissioner within ten days after said list of candidates is received by them. The candidates receiving the highest number of votes shall be elected as local directors. In case of a tie the Farm Loan Commissioner shall determine the choice. designates district di office. The Federal Farm Loan Board shall designate one of the district Farm Loan Board directors to serve for three years and to act as chairman of the board rectors; fixes terms of of directors. It shall designate one of said directors to serve for term of two years and one to serve for a term of one year. After the first appointments each district director shall be appointed for a term of three years. nates respective terms At the first regular meeting of the board of directors of each Federal Land bank desig land bank it shall be the duty of the local directors to designate two of office for local direcof the local directors whoso term of office shall expire in one year tors. from the date of such meeting, two whose term of office shall expire in two years from said date, and two whose term of office shall expire in three years from said date. Thereafter every local director of a Federal land bank chosen as herein before provided shall hold office first designation, three for a term of three years. Vacancies that may occur in the board Vacancies filled for of directors shall be filled for the unexpired term in the manner pro- tion. vided for the original selection of such directors. Regular term after years. unexpired term by elec residents of district two gaged in farming. Directors of Federal land banks shall have been for at least two Directors must be years residents of the district for which they are appointed or elected, years previous to elecand at least one district director shall be experienced in practical in one must be enfarming and actually engaged at the time of his appointment in Can not be connected farming operations within the district. No director of a Federal with other banking or land bank shall, during his continuance in office, act as an officer, tution or partnership. director, or employee of any other institution, association, or partnership engaged in banking or in the business of making or selling land mortgage loans. mortgage-selling insti necessary expenses in Compensation sub Directors of Federal land banks shall receive, in addition to any Directors allowed compensation otherwise provided, a reasonable allowance for necessary addition to compensaexpenses in attending meetings of their respective boards, to be paid tion. by the respective Federal land banks. Any compensation that may Ject to approval of be provided by boards of directors of Federal land banks for directors, Farm Loan Board. officers, or employees shall be subject to the approval of the Federal Farm Loan Board. CAPITAL STOCK OF FEDERAL LAND BANKS. SEC. 5. That every Federal land bank shall have, before beginning. Minimum business, a subscribed capital of not less than $750,000. The Federal capital stock $750,000. tion. · Farm Loan Board is authorized to prescribe the times and conditions conditions of payment; of the payment of subscriptions to capital stock, to reject any sub- may reject any subscrip scription in its discretion, and to require subscribers to furnish adequate security for the payment thereof. Par value of shares $5; may be subscribed 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 indi- by anyone. vidual, firm, or corporation, or by the Government of any State or of the United States. Stock held by farm loan associations may not be transferred or hypothecated. Stock held by United Stock held by national farm loan associations shall not be transferred or hypothecated, and the certificates therefor shall so state. Stock owned by the Government of the United States in Federal land banks shall receive no dividends, but all other stock shall share States receives no diviin dividend distributions without preference. Each national farm No stock allowed any loan association and the Government of the United States shall be by United States and dends. Vote except that held t they being entitled to United States stock farm loan associations, entitled to one vote for each share of stock held by it in deciding one vote on each share. all questions at meetings of shareholders, and no other shareholder voted by commissioner shall be permitted to vote. Stock owned by the United States shall as directed by board. be voted by the Farm Loan Commissioner, as directed by the Federal Farm Loan Board. Books of subscription opened by board. States subscribes all of otherwise taken. It shall be the duty of the Federal Farm Loan Board, 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 Federal land bank After 30 days United district. If within thirty days after the opening of said books any minimum capital not 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 Subscription subject whole or in part by the board of directors of said land bank upon to call after 30 days' no- thirty days' notice with the approval of the Federal Farm Loan Secretary of Treasury Board; and the Secretary of the Treasury is hereby authorized and to take shares and pay directed to take out shares corresponding to the unsubscribed balance No increase of stock as called, and to pay for the same out of any moneys in the Treasury borrowers on mortgage not otherwise appropriated. Thereafter no stock shall be issued except as hereinafter provided. tice. for same. thereafter except to loans. Original stock retired at par when farm loan $750,000. After the subscriptions to capital stock by national farm loan assoassociations Subscribe ciations 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 twenty-five per centum of all sums thereafter subscribed to capital stock until all such original capital stock is retired at par. Land banks may be designated as public custom receipts; and 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: Provided, That not less than five per centum of such capital shall be invested in United States Government bonds. GOVERNMENT DEPOSITARIES. SEC. 6. That all Federal land banks and joint stock land banks depositaries, except for organized under this Act, when designated for that purpose by the employed as United Secretary of the Treasury, shall be depositaries of public money, States financial agents. 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 Satisfactory security of the Government, as may be required of them. And the Secretary required of land banks 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 public deposits No Government funds deposited under the provisions of this section mortgage loans or in shall be invested in mortgage loans or farm loan bonds. thus designated. may be invested in farm loan bonds. loan associations. NATIONAL FARM LOAN ASSOCIATIONS. Organization farm SEC. 7. That corporations, to be known as national farm loan associations, may be organized by persons desiring to borrow money Articles of associa On farm mortgage security under the terms of this Act. Such performation and territory Sons shall enter into articles of association which shall specify in general terms the object for which the association is formed and the tion to state object of served. any contain other provision not territory within which its operations are to be carried on, and which may contain any other provision, not inconsistent with law, which May the association may see fit to adopt for the regulation of its business inconsistent with law. and the conduct of its affairs. Said articles shall be signed by the Signed copy must be persons uniting to form the association, and a copy thereof shall be forwarded to Federal forwarded to the Federal land bank for the district, to be filed and land bank and filed. preserved in its office. Associations elect not manner national banks. as Every national farm loan association shall elect, in the manner less than five directors, prescribed for the election of directors of national banking associa-in same tions, a board of not less than five directors, who shall hold office for Directors hold office the same period as directors of national banking associations. It one year. shall be the duty of said board of directors to choose in such manner Choose a secretaryas they may prefer a secretary-treasurer, who shall receive such com- treasurer, fix his compensation as said board of directors shall determine. The board of pensation, elect other directors shall elect a president, a vice president, and a loan commit-mittee of three. tee of three members. officers and loan com pensation, unless Farm The directors and all officers except the secretary-treasurer shall, Serve without com. serve without compensation, unless the payment of salaries to them Loan Board approves shall be approved by the Federal Farm Loan Board. All officers and otherwise. directors except the secretary-treasurer shall, during their term of office, be bona fide residents of the territory within which the asso- Must be residents of ciation is authorized to do business, and shall be shareholders of the be shareholders. association. territory served; must over proceeds of board and in accord Pay over all collecbank. tions for Federal land Custodian of securidocuments. ties, records, and all formance of duties. port. It shall be the duty of the secretary-treasurer of every national Duties of secretarytreasurer specified; act farm loan association to act as custodian of its funds and to deposit as custodian of funds; the same in such bank as the board of directors may designate, to loans; meet all obligapay over to borrowers all sums received for their account from the tions under orders of Federal land bank upon first mortgage as in this Act prescribed, and ance with by-laws. 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 secretary-treasurer, 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 Furnish bond for perFederal Farm Loan Board 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 Make quarterly reto the Federal Farm Loan Board upon forms to be provided for that purpose. Upon request from said board said secretary-treasurer shall furnish information regarding the condition of the national farm loan Furnish statement of association for which he is acting, and he shall carry out all duly authorized orders of said board. 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 Report failure or noncomply with the terms of his application or mortgage. He shall also cation by borrower; asascertain and report to said bank the amount of any delinquent certain and report detaxes on land mortgaged to said bank and the name of the delinquent. gaged land. 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 Expenses and salary the general funds of the association, and the board of directors is paid by association. authorized to set aside such sums as it shall deem requisite for that purpose and for other expenses of said association. When no such Directors may levy funds are available, the board of directors may levy an assessment on bers if necessity arises. members in proportion to the amount of stock held by each, which 60237°-S. Doc. 500, 64–1- -2 condition. Must satisfy himself properly applied. proceeds of loans are compliance with appli of secretary-treasurer assessment on mem May secure advance from Federal land dividends. Ten persons owning land may form a farm may be repaid as soon as funds are available, or it may secure an bank in anticipation of advance from the Federal land bank of the district, to be repaid with interest at the rate of six per centum per annum, from dividends belonging to said association. Said Federal land bank is hereby authorized to make such advance and to deduct such repayment. Ten or more natural persons who are the owners, or about to become loan association. the owners, of farm land qualified as security for a mortgage loan under section twelve of this Act, may unite to form a national farm Organize subject to loan association. They shall organize subject to the requirements having directors not and the conditions specified in this section and in section four of this less than five; combine Act, so far as the same may be applicable: Provided, That the board in one individual, who of directors may consist of five members only, and instead of a secreneed not beshareholder. tary and a treasurer there shall be a secretary-treasurer, who need not be a shareholder of the association. specified requirements secretary and treasurer pany articles of associa secretary-treasurer that loans. . Report of loan com- When the articles of association are forwarded to the Federal land mittee must accom- bank of the district as provided in this section, they shall be accomtion, with affidavit of panied by the written report of the loan committee as required in applicants own lands section ten of this Act, and by an affidavit stating that each of the available for mortgage subscribers is the owner, or is about to become the owner, of farm land qualified under section twelve of this Act as the basis of a mortgage loan; that the loan desired by each person is not more than Loans can not exceed $10,000, nor less than $100, and that the aggregate of the desired nor aggregate less than loans is not less than $20,000; that said affidavit is accompanied by $20,000 with originalap, a subscription to stock in the Federal land bank equal to five per subscription to stock of centum of the aggregate sum desired on mortgage loans; and that a less than $1,000. Ap- temporary organization of said association has been formed by the plication must state election of a board of directors, a loan committee, and a secretarytion has been effected. treasurer who subscribes to said affidavit, giving his residence and post-office address. $10,000 to one person, plication, so that initial land bank can not be temporary organiza to investigate by direc granted. Appraiser then sent Upon receipt of such articles of association, with the accompanying tors, who determine if affidavit and stock subscription, the directors of said Federal land bank charter ought to be shall send an appraiser to investigate the solvency and character of the applicants and the value of their lands, and shall then determine whether in their judgment a charter should be granted to such association. They shall forward such articles of association and the accompanying affidavit to the Federal Farm Loan Board with their recommendation. If said recommendation is unfavorable, the charter shall be refused. Application and affied to Farm Loan Board. davit must be forward Board may grant charter designating ter fuse same. If said recommendation is favorable, the Federal Farm Loan Board ritory and forward to shall thereupon grant a charter to the applicants therefor, designating applicants, or may re- the territory in which such association may make loans, and shall forward said charter to said applicants through said Federal land bank: Provided, That said Federal Farm Loan Board may for good cause shown in any case refuse to grant a charter. Sums to be loaned members may be regranted. Upon receipt of its charter such national farm loan association shall ceived after charter is be authorized and empowered to receive from the Federal land bank of the district sums to be loaned to its members under the terms and conditions of this Act. subscribe to stock of per cent of loans applied for. Association must Whenever any national farm loan association shall desire to secure Federal land bank to for any member a loan on first mortgage from the Federal land bank an amount equal to 5 of its district it shall subscribe for capital stock of said land bank to the amount of five per centum of such loan, such subscription to be paid in cash upon the granting of the loan by said land bank. Such Stock retained as col- capital stock shall be held by said land bank as collateral security dividends thereon to for the payment of said loan, but said association shall be paid any be paid association as dividends accruing and payable on said capital stock while it is outstanding. Such stock may, in the discretion of the directors, Stock may be paid and with the approval of the Federal Farm Loan Board, be paid when loans are paid. off at par and retired, and it shall be so paid off and retired upon lateral security, but off at par, and must be |