may approve or determine, and the Federal home loan bank shall have a lien upon and shall hold the stock of such member as further collateral security for all indebtedness of the member to the Federal home loan bank. At no time shall the aggregate outstanding advances made by any Federal home loan bank to any member exceed twelve times the amounts paid in by such member for capital stock subscribed for by it.

(d) The applying subscriber shall enter into a primary and unconditional obligation to pay off all advances, together with interest and any unpaid costs and expenses in connection therewith according to the terms under which they were made, in such form as shall meet the requirements of the bank and the approval of the board. The bank shall reserve the right to require at any time, when deemed necessary for its protection, deposits of additional collateral security or substitutions of security by the member, and each member shall assign additional or substituted security when and as so required. Subject to the approval of the board, any Federal home loan bank shall have power to sell to any other Federal home loan bank, with or without recourse, any advance made under the provisions of this act, or to allow to such bank a participation therein, and any other Federal home loan bank shall have power to purchase such advance or to accept a participation therein, together with an appropriate assignment of security therefor, including a proportionate part of any proceeds of the retirement of capital stock of the selling bank subscribed for by the member to which such advances were made.

GENERAL POWERS AND DUTIES OF BANKS

SEC. 9. (a) Each Federal home loan bank shall have power, subject to the approval of the board, (1) to borrow money, to give security therefor, and to pay interest thereon, and (2) to issue bonds and debentures having such maturities as may be determined by the board, secured by the deposit of home mortgages,

(b) The board shall prescribe rules and regulations governing the assignment, deposit, custody, substitution, and release of home mortgages securing such bonds and debentures, the forms and terms of such bonds and debentures, and the conditions under which they may be issued and retired, including any option with respect to payment and retirement thereof in advance of maturity, and such regulations shall provide for the deposit in trust, under such terms and conditions as it may deem advisable, of the home mortgages securing such bonds and debentures.

(c) Such deposits in trust shall be so maintained that the aggregate unpaid principal of the home mortgage loans secured by the home mortgages deposited as security for any issue of bonds or debentures shall, as nearly as possible, be at all times not less than an amount equal to 190 per centum of the total outstanding amount of such issue, Cash deposited under authority of subsection (d) shall be included in the computation of the aggregate unpaid principal of home mortgage loans under this subsection.

(d) The board may at any time require any Federal home loan bank to deposit additional home mortgages or to make substitutions of home mortgages to secure such bonds and debentures, except that when in the opinion of the board home mortgages are not available for such purpose, it may permit, for such limited periods as it may deem advisable, the deposit of cash in lieu of the deposit of substitute or additional home loan mortgages,

(e) The board shall approve or determine the rates of interest to be paid by the Federal home loan banks upon the notes, debentures, or bonds which it may issue except that no bond or debenture issued within seven years after the enactment of this act shall bear a rate of interest in excess of 5% per centum per annum, and no bond or debenture issued thereafter shall bear a rate of interest in excess of 5 per centum per annum and shall provide such margins between interest rates received upon advances made to members and interest paid upon obligations which the Federal home loan bank may issue as will cover expenses of operation and reserves and, under such regulations as may be provided by the board, some part of such reserve may be devoted to retirement of the stock subscribed by the United States.

(f) The Federal Home Loan Banks shall be jointly and severally liable for the payment when due of all bonds and debentures, and of notes and other obligations issued by any Federal Home Loan Bank, and interest thereon, in accordance with their terms: Provided, That this shall not prevent any par

an Bank, when specifically so authorized by the board, mporarily under the terms of obligations which shall nce in such manner as shall be approved by the board r is confined to the issuing bank. The Federal Home ime to time in accordance with rules, regulations, and › adequate agreements and arrangements among themyment of the bonds, debentures, notes, or other obligajointly and severally liable, and the interest thereon, d arrangements shall not restrict in any respect the y herein established.

me Loan Bank shall have power to accept only such y members of such bank, or by other Federal Home osits shall not be subject to check, and no rate of r centum per annum shall be paid thereon. No Federal transact any banking or other business not expressly

orized and empowered to permit, or, whenever in the r members of the board an emergency exists requiring ederal Home Loan Banks to rediscount the discounted y other Federal Home Loan Banks, or to purchase the er Federal Home Loan Bank, or to make deposits with n Banks. In any case in which the board requires the oard shall fix the price therefor, or requires the accept11 fix the security therefor. The rediscount rates and De paid upon deposits shall be fixed by the board. ne Loan Bank shall at all times have an amount equal outstanding capital subscriptions of its members, plus current deposits received from its members, invested overnment securities, (2) interest-bearing deposits in 3, and (3) advances with maturity not greater than one upon such terms and conditions as the board may

assets of each Federal Home Loan Bank (except reprovided for in subsection (i)) as such bank may deem be invested otherwise than in advances to members. be made subject to such regulations, restrictions, and escribed by the board.

ATIONS OF BANKS, AND CORPORATE POWERS

of each Federal Home Loan Bank shall, in accordance gulations as the board may prescribe, make and file arliest practicable date after the establishment of such ertificate which shall contain such information as the on the making and filing of such organization certificate k shall become, as of the date of the execution of its a body corporate, and as such and in its name as it shall have power to adopt, alter, and use a corporate ; to purchase or lease and hold or dispose of such real sary or convenient for the transaction of its business; complain, and to defend, in any court of competent ederal; to select, employ, and fix the compensation of , attorneys, and agents as shall be necessary for the ss, subject to the approval of the board; to define their them and fix the penalties thereof, and to dismiss at mployees, attorneys, and agents; and, by its board of amend, and repeal by-laws, rules, and regulations govhich its affairs may be administered; and the powers ay be exercised and enjoyed subject to the approval of nt of a Federal home loan bank may also be a member rs thereof, but no other officer, employee, attorney, or ho receives compensation, may be a member of the ch such bank shall have all such incidental powers, not provisions of this act, as are customary and usual in

EXEMPTION FROM TAXATION

SEC. 11. Every Federal Home Loan Bank, including the capital and reserve or surplus therein and the income derived therefrom, shall be exempt from Federal, State, municipal, and local taxation, except taxes upon real estate held, purchased, or taken by said bank. The bonds and debentures issued by each Federal Home Loan Bank shall be deemed and held to be instrumentalities of the Government of the United States, and as such they and the income derived therefrom shall be exempt from Federal, State, municipal, and local taxation. SEC. 12. When designated for that purpose by the Secretary of the Treasury each Federal Home Loan Bank shall be a depositary of public money, except receipts from customs, under such regulations as may be prescribed by said Secretary; and it may also be employed as a financial agent of the Government; and it shall perform all such reasonable duties as depositary of public money and financial agent of the Government as may be required of it.

SEC. 13. Obligations of the Federal Home Loan Banks issued with the approval of the board under this act shall be lawful investments, and may be accepted as serurity for all fiduciary, trust, and public funds the investment or deposit of which shall be under the authority or control of the United States or any officer or officers thereof. The Federal reserve banks are authorized to act as depositaries, custodians, and/or fiscal agents for Federal Home Loan Banks in the general performance of their powers under this act.

RESERVES AND DIVIDENDS

SEC. 14. Each Federal Home Loan Bank shall carry to a reserve account semiannually 50 per centum of its net earnings until said reserve account shall show a credit balance equal to 100 per centum of the paid-in capital of such bank. After said reserve has reached 100 per centum of the paid-in capital of said bank, 25 per centum of its net earnings shall be added thereto semiannually. Whenever said reserve shall have been impaired below 100 per centum of the paid-in capital it shall be restored before any dividends are paid. Each Federal Home Loan Bank shall establish such additional reserves and/or make such charge-offs on account of depreciation or impairment of its assets as the board shall require from time to time. No dividends shall be paid except out of net earnings remaining after all reserves and charge-offs required under this act have been provided for, and then only with the approval of the board. The reserves of each Federal Home Loan Bank shall be invested subject to such regulations, restrictions, and limitations as may be prescribed by the board. If a Federal Home Loan Bank be dissolved or go into liquidation without transfer of its assets to another Federal Home Loan Bank, there shall be paid to the United States any reserves or surplus re maining after the payment of all debts, and after payments to members of any amounts paid in by them for stock of such dissolved or liquidated bank, not exceeding the par value thereof, and accrued dividends on such stock.

FEDERAL HOME LOAN BANK BOARD

SEC. 15. For the purposes of this act there shall be a board, to be known as the “Federal Home Loan Bank Board," which shall consist of five members appointed by the President of the United States, by and with the advice and consent of the Senate. Each member shall devote his time not otherwise required by the business of the United States principally to the business of the board. Before entering upon his duties each of the members shall take an oath faithfully to discharge the duties of his office. Nothing contained in this or in any other act shall be construed to prevent the appointment as a member of the board of any officer or employee under the United States. The President of the United States shall designate one of the members of the board to serve for a term of two years, one for three years, one for four years, one for five years, and one for six years from the date of the enactment hereof, and thereafter the term of each member shall be six years from the date of the expiration of the term for which his predecessor was appointed. Whenever a vacancy shall occur among the members the person appointed to fill such vacancy shall hold office for the unexpired portion of the term of the member whose place he is selected to fill. Each of the members of the board shall receive a salary at the rate of $12,000 per annum: Provided, That any member receiving from the United States any salary or compensation

ot receive as salary as a member of the board any e the combined salary or compensation paid to him The President shall designate one of the members The chairman shall be the chief executive officer bsence or disability the duties of his office shall be the other members to be designated as acting chairsuch order as he may determine. The board shall me loan banks created by this act, shall perform lly prescribed by this act, and shall have power to re the observance of such rules, regulations, and try from time to time for carrying out the purposes act. The board shall have power to suspend or er, employee, or agent of any Federal Home Loan uspension or removal to be communicated in writing or, officer, employee, or agent and to such Federal

ADMINISTRATIVE EXPENSES

hereby authorized to be appropriated the sum of avel and subsistence expenses, rents, printing and quipment, law books, books of reference, periodicals, et stenographic reporting services, telephone and telether necessary expenses of the board, together with the organization and establishment of the banks the end of the calendar year 1932.

ave power to levy semiannually upon the banks, and quitable basis as the board shall determine, an assessIgment to provide for the payment of its estimated ar succeeding the levying of each such assessment, half of the calendar year 1933. All expenses of the g out the provisions of this act, as determined by it, 3, shall be paid from the proceeds of such assessments, ll occur in such fund at any time between such semioard shall have power to make an immediate assessto cover such deficiency on the same basis as the any surplus shall remain from any assessment after niannual period for which it was levied, such surplus e next following assessment.

all have power to select, employ, and fix the compenmployees, attorneys, and agents as shall be necessary its duties under this act without regard to the prolicable to the employment or compensation of officers, d agents of the United States. The board shall be of the United States mails for its official business in executive departments of the Government; and shall expenditures under this act and the manner in which lowed, and paid.

EXAMINATIONS AND REPORTS

all from time to time, at least twice annually, require Is of conditions of all Federal Home Loan Banks in shall prescribe and shall furnish periodically stateeports of the banks to the board. For the purposes appointed by the board shall be subject to the same lities, and penalties as are applicable to examiners act and the Federal reserve act, and shall have the ges as are vested in such examiners by law.

UNLAWFUL ACTS, AND PENALTIES

makes any statement, knowing it to be false, or whos any security, for the purpose of influencing in any eral Home Loan Bank or the board upon any applicapurchase, or repurchase agreement, or loan, under on thereof by renewal, deferment, or action or otherrelease, or substitution of security therefor, shall be ot more than $5,000, or by imprisonment for not more

(b) Whoever (1) falsely makes, forges, or counterfeits any note, debenture, bond, or other obligation, or coupon, in imitation of or purporting to be a note, debenture, bond, or other obligation, or coupon, issued by a Federal Home Loan Bank; or (2) passes, utters, or publishes, or attempts to pass, utter, or fab lish, any false, forged, or counterfeited note, debenture, bond, or other obligation, or coupon, purporting to have been issued by a Federal Home Loan Bark, knowing the same to be false, forged, or counterfeited; or (3) falsely alters any note, debenture, bond, or other obligation, or coupon, Issued or purprting to have been issued by a Federal Home Loan Bank; or (4) passes, utters, or publishes, or attempts to pass, utter, or publish, as true any falsely altered or spurious note, debenture, bond, or other obligation, or coupon, issued or purporting to have been issued by a Federal Home Loan Bank, knowing the same to be falsely altered or spurious, shall be punished by a fine of not more than $10,000, or by imprisonment for not more than five years, or both.

(c) Whoever, being connected in any capacity with the board or a Federal Home Loan Bank, (1) embezzles, abstracts, purloins, or willfully misapplies any moneys, funds, securities, or other things of value, whether belonging to it or pledged or otherwise intrusted to it; or (2) with intent to defraud the board or any Federal Home Loan Bank, or any other body politic or corporate, or any individual, or to deceive any officer, auditor, or examiners of the board or a Federal Home Loan Bank, makes any false entry in any book, report, or statement of or to the board or a Federal Home Loan Bank, or, without being duly authorized, draws any order or issues, puts forth, or assists any note, debenture, bond, or other obligation, or draft, mortgage, judgment, or decree thereof, shall be punished by a fine of not more than $10,000, or by imprisonment for not more than five years, or both.

(d) It shall be unlawful for any individual, partnership, association, or cors poration (1) which is not a Federal Home Loan Bank to use the words “Federal home loan bank," or a combination of all such words, as a name or a part of a name under which he or it shall do business (except in the case of a name under which business is being done at the time of the enactment of this act), or (2) which is not a Federal Home Loan Bank, to advertise or represent in any way that he or it is a Federal Home Loan Bank, or to pub»lish or display any sign, symbol, or advertisement reasonably calculated to convey the impression that be or it is a Federal Home Loan Bank, or (3) which is not a member, to advertise or represent in any way that he or it is a member, or to publish or display any sign, symbol, or advertisement reasonably calculated to convey the impression that he or it is a member. Violations of this section shall be punishable by a fine of not exceeding $1,000, or by imprisonment of not exceeding one year, or both.

(e) The provisions of section 112, 113, 114, 115, 116, and 117 of the Criminal Code of the United States (U. S. C., title 18, secs. 202 to 207, incl.), in so far as applicable, are extended to apply to contracts or agreements of any Federal Home Loan Bank under this act, which, for the purposes hereof, shall be held to include advances, loans, discounts, and purchase and repur chase agreements; extensions and renewals thereof; and acceptances, releases, and sulestitutions of security therefor.

(f) The Secret Service Division of the Treasury Department is authorized to detect, arrest, and deliver into the custody of the United States marshal having jurisdiction any person committing any of the offenses punishable under this act,

MISCELLANEOUS

Src. 20 (a) In order to enable the board to carry out the provisions of this act, the Treasury Department, the Comptroller of the Currency, the Federal Reserve Board, and the Federal reserve banks are hereby authorized, under such conditions as they may prescribe, to make available to the board in confidence for its use and the use of any Federal Home Loan Bank such reports, records, or other information as may be available, relating to the condi ton of institutions with respect to which any such Federal Home Loan Bank has had or contemplates having trasactions under this act or relating to persons whose obligations are offered to or held by any Federal Home Loan Bank and to make through their examiners or other employees, for the confidential use of the bourd or any Federal Home Loan Bank, examinations of such institutions,

(b) Every institution which shall apply for advances under this act shall. as a condition precedent thereto, consent to such examination as the bank of