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in fair book value (not to exceed par), as determined by the bank, to $100 per $2,000 or fraction thereof of the amount of the loan. Upon discharge of the loan the stock held by the borrowing association shall be retired and canceled and the association shall be paid therefor, or in case the stock subscription is included in the amount of the loan there shall be credited on the final payment of the loan, an amount equal to the amount paid for the stock or loaned to subscribe for the stock, as the case may be, minus the pro rata impairment, if any, of capital and guaranty fund of the Central Bank, as determined by the chairman of the board of the Central Bank.

(b) In any case in which a cooperative association applying for a loan is not authorized, under the law of the State in which it is organized, to subscribe for stock in the Central Bank, the bank shall, in lieu of stock subscription, require the borrowing association to pay into a guaranty fund, or the bank may retain out of the amount of the loan and credit to the guaranty fund, an amount equal to the amount which the borrowing association would have been required to own in stock if such association had been authorized to hold such stock. Upon discharge of its loan, the provisions of the last sentence of subsection (a) shall apply with respect to sums of such association in the guaranty fund in the same manner as if such sums were represented by stock (June 16, 1933, c. 98, § 35, 48 Stat. 263).

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Earnings and reserves; guaranty fund; surplus; dividends to stockholders and subscribers to guaranty fund; application of dividends on Governmentowned stock.-The Central Bank for Cooperatives shall, at the end of its fiscal year, apply the amount of its earnings in excess of operating expenses during such fiscal year, first, to making up any losses incurred; second, to the restoration of the amount of the impairment, if any, of capital and guaranty fund as determined by the chairman of the board; and at least 25 per centum of the remainder of such excess of earnings shall be applied to the creation and maintenance of a surplus equal to at least 25 per centum of the amount of the capital and guaranty fund. Any sums remaining may, with the approval of the chairman of the board, be devoted to the payment of dividends. Subscribers to the guaranty fund shall be entitled to dividends in the same amounts as subscribers to stock. No rate of dividend in excess of 7 per centum per annum

shall be paid. Dividends on stock held by the governor, when paid, shall be credited to the revolving fund created under section 1141d of this chapter, as amended (June 16, 1933, c. 98, $ 36, 48 Štat. 263).

$1134m Debentures; amount; security; preparation and

issue; custody of collateral.—The Central Bank is authorized to issue debentures, but the amount of debentures which may be outstanding may not exceed at any one time five times the paid-in capital and surplus of the bank. Such debentures shall be issued at such times and subject to such terms and conditions as the board of directors shall determine but shall bear such interest rates as may be fixed by the chairman of the board. Such debentures shall be secured by collateral which shall be at least equal in value to the amount of debentures outstanding and which shall consist of cash, direct obligations of the United States, or notes or other obligations discounted or purchased or representing. loans made under section 1134j. The provisions of law applicable to the preparation and issue of Federal intermediate credit bank debentures shall, so far as applicable, govern the preparation and issue of debentures issued under this section. The governor shall appoint a custodian of such collateral who shall have power subject to such rules and regulations as the governor may prescribe to approve and accept substitutions of collateral (June 16, 1933, c. 98, $ 37, 48 Stat. 263).

SUBCHAPTER VI.-PROVISIONS COMMON

TO PRODUCTION CREDIT CORPORA-
TIONS, PRODUCTION CREDIT ASSOCIA-
TIONS, REGIONAL AND CENTRAL BANKS
FOR COOPERATIVES

$ 1138

General corporate powers.—The Central Bank for Cooperatives, and the Production Credit Corporations, the Production Credit Associations, and the Banks for Cooperatives, organized under the two preceding subchapters, shall have succession, until dissolved in accordance with this subchapter or any other Act of Congress; shall have power to sue and be sued in any court, to adopt and use a corporate seal, to make contracts, to acquire, hold, and dispose of real and personal property necessary and incident to the conduct of their business, to prescribe fees and charges (which

in any case shall be subject to the rules and regulations prescribed by the governor) for loans and other services; and shall have such other powers necessary and incident to carrying out their powers and duties under this subchapter, or any other Act of Congress as may be provided by the governor in their charters or in any amendments thereto. Each such bank, association, or corporation shall, for the purposes of jurisdiction, be deemed a citizen of the State or District within which its principal office is located. No district court of the United States shall have jurisdiction of any action or suit by or against any Production Credit Corporation or Production Credit Association upon the ground that it was incorporated under this chapter or that the United States owns a majority of the stock in it, nor shall any district court of the United States within the land bank district served by such association or corporation have jurisdiction by removal or otherwise of any suit by or against any such association or corporation except in cases by or against the United States or by or against any officer of the United States and except in cases by or against any receiver of any such corporation or association appointed in accordance with section 1138e (June 16, 1933, c. 98, $ 60, 48 Stat. 266).

$ 1138a

Examinations; assessments against corporations for cost of examinations. - At least once each year

and at such other times as the governor deems necessary, the Central Bank for Cooperatives, and each Production Credit Corporation, Production Credit Association, and Bank for Cooperatives, organized under this chapter, shall be examined by examiners designated by the governor. The governor shall assess the cost of such examinations against the bank, association, or corporation examined, which shall pay such costs to the governor. The amount so assessed and unpaid shall be a prior lien on all assets of the bank, association, or corporation examined except on assets pledged to secure loans (June 16, 1933, c. 98, § 61, 48 Stat. 267).

81138b

Fiscal agents of United States.-The Central Bank for Cooperatives, the Production Credit Corporations, Production Credit Associations, and Banks for Cooperatives, organized under this chapter, when designated for that purpose by the Secretary of the Treasury, shall act as fiscal agents

$ 1138c

of the United States Government and when acting
as such shall perform such duties as shall be pre-
scribed by the Secretary of the Treasury (June 16,
1933, c. 98, $ 62, 48 Stat. 267).

Tax exemption; realty and tangible personalty as
subject to taxation; termination of tax exemption
after retirement of Government-owned stock.
The Central Bank for Cooperatives, and the Pro-
duction Credit Corporations, Production Credit
Associations, and Banks for Cooperatives, organ-
ized under this chapter, and their obligations, shall
be deemed to be instrumentalities of the United
States, and as such, any and all notes, debentures,
bonds, and other such obligations issued by such
banks, associations, or corporations shall be exempt
both as to principal and interest from all taxation
(except surtaxes, estate, inheritance, and gift taxes)
now or hereafter imposed by the United States or
by any State, Territorial, or local taxing authority.
Such banks, associations, and corporations, their
property, their franchises, capital, reserves, surplus,
and other funds, and their income, shall be exempt
from all taxation now or hereafter imposed by the
United States or by any State, Territorial, or local
taxing authority; except that any real property and
any tangible personal property of such banks, asso-
ciations, and corporations shall be subject to Fed-
eral, State, Territorial, and local taxation to the
same extent as other similar property is taxed.
The exemption provided herein shall not apply with
respect to any Production Credit Association or its
property or income after the stock held in it by the
Production Credit Corporation has been retired,
or with respect to the Central Bank for Coopera-
tives, or any Production Credit Corporation or
Bank for Cooperatives, or its property or income
after the stock held in it by the United States has
been retired (June 16, 1933, c. 98, $ 63, 48 Stat.
263).

Offenses and penalties-(a) False representation; overvaluation of property. Whoever makes any material representation knowing it to be false, or whoever willfully overvalues any property or security, for the purpose of influencing in any way the action of the Farm Credit Administration, any Federal intermediate bank, or the Federal Farm Mortgage Corporation, or any division, officer, or employee thereof, or of any corporation organized under subchpater IV or V of this chapter, or in which a Production Credit Corporation organized under this chapter holds stock, or of any regional agricultural credit corporation estab

8 1138d

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§ 1138d lished pursuant to subsection (e) of section 605b

of Title 15, upon any application, advance, discount, purchase or repurchase agreement, or loan, or any change or extension of any of the same, by renewal, deferment of action or otherwise, or the acceptance, release, oi substitution of security therefor, shall be punished by a fine of not more than $5,000, or by imprisonment for not more than two years, or both (June 16, 1933, c. 98, § 64 (a), 48 Stat. 267; Jan. 31, 1934, c. 7, § 13, 48 Stat. 344).

(b) Forgery, counterfeiting, alteration, etc., of obligations of corporation or of Farm Credit Administration.—Whoever (1) falsely makes, forges, or counterfeits any note, debenture, bond, or other obligation, coupon, or paper in imitation of or purporting to be a note, debenture, bond, or other obligation, coupon, or paper issued by the Farm Credit Administration, any Federal Intermediate Credit Bank, or the Federal Farm Mortgage Corporation, or by any corporation referred to in subsection (a) of this section; or (2) passes, utters, or publishes, or attempts to pass, utter, or publish, any false, forged, or counterfeited note, debenture, bond, or other obligation, coupon, or paper, purporting to have been issued by the Farm Credit Administration or by any such corporation, knowing the same to be false, forged, or counterfeited; or (3) falsely alters any note, debenture, bond, or other obligation, coupon, or paper issued or purporting to have been issued by the Farm Credit Administration or by any such corporation; or (4) passes, utters, or publishes, or attempts to pass, utter, or publish, any of the same as true, knowing it 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 (June 16, 1933, c. 98, § 64 (b), 48 Stat. 267; Jan. 31, 1934, c. 7, § 13, 48 Stat. 344).

(c) Embezzlement, misapplication, etc., of any. thing of value belonging to corporation or to administration; false entries; unauthorized making, issuing, or assigning of instrument; personally benefiting from business of corporation.—Whoever being an employee, officer, or agent of the Farm Credit Administration, any Federal Intermediate Credit Bank, or the Federal Farm Mortgage Corporation, or connected in any capacity with any corporation referred to in subsection (a) of this section, (1) embezzles, abstracts, purloins, or willfully misapplies any moneys, funds, securities, or other things of value, whether belonging to the Farm Credit Administration, any Federal Inter

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