An Act "To provide capital for agricultural development, to create a standard upon farm loans, to furnish a market for United States bonds, to create Government depositaries and financial agents for the United States, and for other purposes." WITH MARGINAL NOTES AND INDEX PREPARED BY W. W. FLANNAGAN Secretary, Joint Committee on Rural Credits PRESENTED BY MR. FLETCHER WASHINGTON GOVERNMENT PRINTING OFFICE 1916 135 F233 916 PERSONNEL OF THE SEVERAL COMMITTEES OF THE SIXTY-FOURTH CONGRESS WHICH CONSIDERED THE BILL. THE FEDERAL FARM LOAN ACT. AN ACT To provide capital for agricultural development, to create standard forms Purpose." Short title. Farm Loan Act. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That the short title of this Act shall be "The Federal Farm Loan Act." Its administration shall be under the direction and control of the Federal Farm Loan Board Board. hereinafter created. DEFINITIONS. under Farm Loan fined. SEO. 2. That wherever the term "first mortgage" is used in this Act it shall be held to include such classes of first liens on farm lands First mortgage deas shall be approved by the Federal Farm Loan Board, and the credit instruments secured thereby. The term "farm loan bonds" shall be held to include all bonds secured by collateral deposited Farm loan with a farm loan registrar under the terms of this Act; they shall be defined. distinguished by the addition of the words "Federal," or "joint stock," as the case may be. FEDERAL FARM LOAN BOARD. loan bonds Federal Farm Loan SEO. 3. That there shall be established at the seat of government in the Department of the Treasury a bureau charged with the execution of this Act and of all Acts amendatory thereof, to be known as Bureau established. the Federal Farm Loan Bureau, under the general supervision of a Federal Farm Loan Board. pointed by the Presi Said Federal Farm Loan Board shall consist of five members, To consist of five members, including including the Secretary of the Treasury, who shall be a member and Secretary of Treasury chairman ex officio, and four members to be appointed by the Presi- (ex officio), to be ap dent of the United States, by and with the advice and consent of the dent. Senate. Of the four members to be appointed by the President, not more than two shall be appointed from one political party, and all Bipartisan; must be four of said members shall be citizens of the United States and shall citizens, and devote devote their entire time to the business of the Federal Farm Loan Board; they shall receive an annual salary of $10,000 payable Salaries and expenses. monthly, together with actual necessary traveling expenses. entire time. One of the members to be appointed by the President shall be designated by him to serve for two years, one for four years, one for Terms of office. six years, and one for eight years, and thereafter each member so appointed shall serve for a term of eight years, unless sooner removed for cause by the President. One of the members shall be designated Designate by the President as the Farm Loan Commissioner, who shall be the active executive officer of said board. Each member of the Federal Farm Loan Board shall within fifteen days after notice of his appointment take and subscribe to the oath of office. Farm Loan Commissioner. oath of office to be taken within 15 days. First meeting must The first meeting of the Federal Farm Loan Board shall be held in Washington as soon as may be after the passage of this Act, at a be held in Washington. date and place to be fixed by the Secretary of the Treasury. Members can not be associated with other No member of the Federal Farm Loan Board shall, during his banking or mortgage continuance in office, be an officer or director of any other institution, association, or partnership engaged in banking, or in the business of making land mortgage loans or selling land mortgages. Before entering upon his duties as a member of the Federal Farm Loan Board each member shall certify under oath to the President that he is eligible under this section. Oath taken. Vacancies in board filled by the President. Board to appoint farm loan registrar for appraisers and land All to be public offi ignated The President shall have the power, by and with the advice and consent of the Senate, to fill any vacancy occurring in the membership of the Federal Farm Loan Board; if such vacancy shall be filled during the recess of the Senate a commission shall be granted which shall expire at the end of the next session. The Federal Farm Loan Board shall appoint a farm loan registrar each district, land-bank in each land bank district to receive applications for issues of farm bank examiners. loan bonds and to perform such other services as are prescribed by this Act. It shall also appoint one or more land bank appraisers for each land bank district and as many land bank examiners as it shall deem cials, not interested in necessary. Farm loan registrars, land bank appraisers, and land other institutions, des- bank examiners appointed under this section shall be public officials and shall, during their continuance in office, have no connection with or interest in any other institution, association, or partnership engaged in banking or in the business of making land mortgage loans Temporary employ or selling land mortgages: Provided, That this limitation shall not apply to persons employed by the board temporarily to do special work. Salaries and expenses The salaries and expenses of the Federal Farm Loan Board, and Board to fix comper- of farm loan registrars and examiners authorized under this section, sation of land bank ap. shall be paid by the United States. Land bank appraisers shall respective land banks. receive such compensation as the Federal Farm Loan Board shall fix, and shall be paid by the Federal land banks and the joint stock land banks which they serve, in such proportion and in such manner as the Federal Farm Loan Board shall order. ment for special work allowed. paid by United States. praisers to be paid by Board may employ necessary administrative force. exempted from law. pro The Federal Farm Loan Board shall be authorized and empowered to employ such attorneys, experts, assistants, clerks, laborers, and other employees as it may deem necessary to conduct the business Salaries and fees fixed of said board. All salaries and fees authorized in this section and in advance: paid by United States. not otherwise provided for shall be fixed in advance by said board and shall be paid in the same manner as the salaries of the Federal Administrative force Farm Loan Board. All such attorneys, experts, assistants, clerks, visions of civil-service laborers, and other employees, and all registrars, examiners, and appraisers shall be appointed without regard to the provisions of the Aet of January sixteenth, eighteen hundred and eighty-three (volume twenty-two, United States Statutes at Large, page four hundred and three), and amendments thereto, or any rule or regulation made in President may place pursuance thereof: Provided, That nothing herein shall prevent the President from placing said employees in the classified service. Every Federal land bank shall semiannually submit to the Federal to board semiannually Farm Loan Board a schedule showing the salaries or rates of compaid to officers and pensation paid to its officers and employees. employees in classified service. Federal land banks must furnish schedule employees. Board must make annual report to Speak reports of condition of The Federal Farm Loan Board shall annually make a full report of er of the House its operations to the Speaker of the House of Representatives, who shall cause the same to be printed for the information of the Congress. Examinations and The Federal Farm Loan Board shall from time to time require land banks to be made examinations and reports of condition of all land banks established lished and pub- under the provisions of this Act, and shall publish consolidated stateBoard must require ments of the results thereof. It shall cause to be made appraisals appraisal of farm land; of farm lands as provided by this Act, and shall prepare and publish tion tables to be pub amortization tables which shall be used by national farm loan associations and land banks organized under this Act. to board must cause amortiza lished for statement of condi The Federal Farm Loan Board shall prescribe a form for the state- Must prescribe forms ment of condition of national farm loan associations and land banks tion; require quarterly under its supervision, which shall be filled out quarterly by each reports. such association or bank and transmitted to said board. Bulletins of informa advantages of amor structions for organiz It shall be the duty of the Federal Farm Loan Board to prepare tion must be prepared from time to time bulletins setting forth the principal features of this and distributed showAct and through the Department of Agriculture or otherwise to dis-tization and giving intribute the same, particularly to the press, to agricultural journals, and conducting and to farmers' organizations; to prepare and distribute in the same farm-loan associations. manner circulars setting forth the principles and advantages of amortized farm loans and the protection afforded debtors under this Act, instructing farmers how to organize and conduct farm loan associations, and advising investors of the merits and advantages of farm Investors to be adloan bonds; and to disseminate in its discretion information for the vantages of farm-loan further instruction of farmers regarding the methods and principles honds; principles and of cooperative credit and organization. Said board is hereby author- credit to be explained. ized to use a reasonable portion of the organization fund provided in made availal le. section thirty-three of this Act for the objects specified in this paragraph, and is instructed to lay before the Congress at each session Further appropriaits recommendations for further appropriations to carry out said tions to be asked from objects. FEDERAL LAND BANKS. vised of merits and ad methods of cooperative Organization fund Congress as needed. vided into 12 districts, Apportioned with SEC. 4. That as soon as practicable the Federal Farm Loan Board United States to be di-" shall divide the continental United States, excluding Alaska, into none to include a frac twelve districts, which shall be known as Federal land bank districts, tional part of a State. and may be designated by number. Said districts shall be appor- reference to farm-loan appor-reference tioned with due regard to the farm loan needs of the country, but no needs. such district shall contain a fractional part of any State. The boundaries thereof may be readjusted from time to time in the discretion of said board. bank in each district. : of city where located. The Federal Farm Loan Board shall establish in each Federal land One Federal land bank district a Federal land bank, with its principal office located in such city within the district as said board shall designate. Each Federal Title to include name land bank shall include in its title the name of the city in which it is located. Subject to the approval of the Federal Farm Loan Board, any Federal land bank may establish branches within the land bank district. Branches. ment vested in five To receive compen Each Federal land bank shall be temporarily managed by five Temporary manage directors appointed by the Federal Farm Loan Board. Said directors resident bonded direc shall be citizens of the United States and residents of the district. tors. They shall each give a surety bond, the premium on which shall be paid from the funds of the bank. They shall receive such compensation and choose oflisation as the Federal Farm Loan Board shall fix. They shall choose cers. from their number, by majority vote, a president, a vice president, a secretary and a treasurer. They are further authorized and empowered to employ such attorneys, experts, assistants, clerks, laborers, and other employees as they may deem necessary, and to fix their May employ ade compensation, subject to the approval of the Federal Farm Loan qute force; fix comBoard. pensation. Must make organi zation certificate, to include Name assumed. principal office. Said temporary directors shall, under their hands, forthwith make an organization certificate, which shall specifically state: First. The name assumed by such bank. Second. The district within which its opérations are to be carried District and city of on, and the particular city in which its principal office is to be located. Third. The amount of capital stock and the number of shares into which the same is to be divided: Provided, That every Federal land bank organized under this Act shall by its articles of association permit an increase of its capital stock from time to time for the purpose, Increase of stock for of providing for the issue of shares to national farm loan associations borrowers. Capital stock; number of shares. issuance of shares to |