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APPLICATION OF AMORTIZATION AND INTEREST

PAYMENTS

891

§ 22

Payments upon mortgages pledged as collateral for bond issue; notice to registrar; cancellation of mortgage and discharge of lien upon full payment.-Whenever any Federal land bank, or joint stock land bank, shall receive any interest, amortization, or other payments upon any first mortgage or bond pledged as collateral security for the issue of farm loan bonds, it shall forth with notify the farm loan registrar of the items so received. Said registrar shall forth with cause such payment to be duly credited upon the mortgage entitled to such credit. Whenever any such mortgage is paid in full, said registrar shall cause the same to be canceled and delivered to the proper land bank, which shall promptly satisfy and discharge the lien of record and transmit such canceled mortgage to the original maker thereof, or his heirs, administrators, executors, or assigns. (July 17, 1916, c. 245, $ 22, 39 Stat. 378.)

§ 892

$ 22

Withdrawal of collateral and substitution of other security.–Upon written application by any Federal land bank, or joint stock land bank, to the farm loan registrar, it may be permitted, in the discretion of said registrar, to withdraw any mortgages or bonds pledged as collateral security under this chapter, and to substitute there for other similar mortgages or United States Government bonds not less in amount than the mortgages or bonds desired to be withdrawn. (July 17, 1916, c. 245, $ 22, 39 Stat. 378.)

8893

8 22

Place and mode of payment of bonds or interest thereon; cancellation on payment.-Whenever any farm loan bonds, or coupons or interest payments of such bonds, are due under their terms, they shall be payable at the land bank by which they were issued, in gold or lawful money, and upon payment shall be duly canceled by said bank. At the discretion of the Farm Credit Administrattion, payment of any farm loan bond or coupon or interest payment may, however, be authorized to be made at any Federal land bank, any joint stock land bank, or any other bank, under rules and regula

tions to be prescribed by the Farm Credit Admin-
istration. (July 17, 1916, c. 245, $ 22, 39 Stat. 378;
Mar. 27, 1933, Ex. Or. 6084.)

“Farm Credit Administration" mentioned in the text was sub-
stituted for "Federal Farm Loan Board” pursuant to the Execu-
tive Order cited thereto, which is set out in full at the beginning
of this chapter.

§ 894

§ 22

Withdrawal of collateral security on surrender of bonds. When any land bank shall surrender to the proper farm loan registrar any farm loan bonds of any series, canceled or uncanceled, said land bank shall be entitled to withdraw first mortgages and bonds pledged as collateral security for any

of said series of farm loan bonds to an amount equal to the farm loan bonds so surrendered, and it shall be the duty of said registrar to permit and direct the delivery of such mortgages and bonds to such land bank. (July 17, 1916, c. 245, $ 22, 39 Stat. 378.)

§ 895

8 22

Interest payments on pledged mortgages.Interest payments on hypothecated first mortgages shall be at the disposal of the land bank pledging the same, and shall be available for the payment of coupons and the interest of farm loan bonds as they become due. (July 17, 1916, c. 245, $ 22, 39 Stat. 378.)

8 896

§ 22

Payment of bonds, coupons and interest at maturity.--Whenever any bond matures, or the interest on any registered bond is due or the coupon on any coupon bond matures, and the same shall be presented for payment as provided in this subchapter, the full face value thereof shall be paid to the holder. (July 17, 1916, c. 245, $ 22, 39 Stat. 378.)

8 897

§ 22

Payment of bonds, coupons and interest at maturity; trust fund from payments on mortgages held as collateral.-Amortization and other payments on the principal of first mortgages held by a farm loan registrar as collateral security for the issue of farm loan bonds shall constitute a trust fund in the hands of the Federal land bank or joint stock land bank receiving the same, and shall be applied or employed as follows:

In the case of a Federal land bank

(a) To pay off farm loan bonds issued by or in behalf of said bank as they mature.

(6) To purchase at or below par Federal Farm loan bonds.

(c) To loan on first mortgages on farm lands within the farm credit district, qualified under this chapter as collateral security for an issue of farm loan bonds,

(d) To purchase United States Government bonds.

(e) To purchase Federal Farm Mortgage Corporation bonds.

In the case of a joint stock land bank

(a) To pay off farm loan bonds issued by said
bank as they mature,
() To purchase at or below par farm loan bonds.

To loan on first mortgages qualified under
sections 811-821 of this title.

(d) To purchase United States. Government bonds.

(e) To purchase Federal Farm Mortgage Corporation bonds. (July 17, 1916, c. 245, $ 22, 39 Stat. 378; Mar. 4, 1923, c. 252, 309, 42 Stat. 1477; Jan. 31, 1934, c. 7, 98 (b), 48 Stat. 347; Aug. 19, 1937, c. 704, $$ 5 (a), 15 (c), 50 Stat. 704, 708.)

New loans by joint stock land banks probibited after May 12, 1933, except in circumstances permitted under $ 810 of this

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$ 898

8 22

Payment of bonds, coupons and interest at maturity; deposit of trust funds with registrars as substituted collateral security.-The farm loan bonds, first mortgages, United States Government bonds, or cash constituting the trust funds aforesaid, shall be forthwith deposited with the farm loan registrar as substituted collateral security in place of the sums paid on the principal of indorsed mortgages held by him in trust. (July 17, 1916, c. 245, § 22, 39 Stat. 378.)

§ 899

8 22

Payment of bonds, coupons and interest at maturity; notice to registrar of disposition of principal payments on mortgages held as collateral; transfer to registrar on demand.-Every Federal land bank, or joint stock land bank, shall notify the farm loan registrar of the disposition of all payments made on the principal of

mortgages held as collateral security for an issue of farm loan bonds, and said registrar is authorized, at his dis

cretion, to order any of such payments, or the pro-
ceeds thereof, wherever deposited or however in-
vested, to be immediately transferred to his account
as trustee aforesaid. (July 17, 1916, c. 245, § 22,
39 Stat. 378.)

RESERVES AND DIVIDENDS OF LAND BANKS

§ 901

8 23

Amount carried to reserve account; making good impairment; debit to reserve account.

(a) Federal land banks; amount carried to reserve; making good impairment.-Every Federal land bank shall semiannually carry to reserve account a sum not less than 50 per centum of its net earnings until said reserve account shall show a credit balance equal to the outstanding capital stock of said land bank. After said reserve is equal to the outstanding capital stock 10 per centum of the net earnings shall be added thereto semiannually. Whenever said reserve shall have been impaired it shall be fully restored before any dividends are paid. (July 17, 1916, c. 245, § 23, 39 Stat. 379; Jan. 23, 1932, c. 9, § 3 (a), 47 Stat. 13.)

(b) Joint stock land banks; amount carried to reserve; making good impairment.--Every joint stock land bank shall semiannually carry to reserve account 25 per centum of its net earnings until said reserve account shall show a credit balance equal to 20 per centum of the outstanding capital stock of said land bank. After said reserye has reached the sum of 20 per centum of the outstanding capital stock, 5 per centum of the net earnings shall be annually added thereto. Whenever said reserve shall have been impaired, said balance of 20 per centum shall be fully restored before any dividends are paid. (July 17, 1916, c. 245, $ 23, 39 Stat. 379.)

(c) Débit to reserve account. For the period of two years from the date when any default occurs in the payment to any land bank of the interest, amortization installments, or principal on any first mortgage, by both mortgagor and indorser, the amount so defaulted shall be carried to a suspense account, and at the end of the two-year period specified, unless collected, shall be debited to reserve account. (July 17, 1916, c. 245, $ 23, 39 Stat. 379.)

$ 902

$ 23

Dividends on balance of net earnings; investment of reserves.

(a) Federal land bank dividends.-After deducting the 50 per centum or the 10 per centum

12 0. S.C.

LAND BANK SYSTEM

F.F. L. Act

$ 23

directed to be deducted for credit to reserve account
by section 901 of this title, any Federal land bank
may declare a dividend or dividends to shareholders
of the whole or any part of the balance of its net
earnings, but only with the approval of the Farm
Credit Administration. (July 17, 1916, c. 245, $ 23,
39 Stat. 379; Jan. 23, 1932, c. 9, § 3 (a), 47 Stat. 13;
Mar. 27, 1933, Ex. Or. 6084.)

(b) Joint stock land bank dividends. After
deducting the 25 per centum or the 5 per centum di-
rected to be deducted for credit to reserve account
by section 901 of this title, any joint stock land bank
may declare a dividend to shareholders of the whole
or any part of the balance of its net earnings: Pro-
vided, That any dividend or dividends declared by
any joint stock land bank shall be subject to the ap-
proval of the Farm Credit Administration. (July
17, 1916, c. 245, $ 23, 39 Stat. 379; Jan. 23, 1932, c. 9,
§ 3 (b), 47 Stat. 13; Mar. 27, 1933, Ex. Or. 6084.)

(c) Investment of reserves.—The reserves of land banks shall be invested in accordance with rules and regulations to be prescribed by the Farm Credit Administration. (July 17, 1916, c. 245, $ 23, 39 Stat. 379; Mar. 27, 1933, Ex. Or. 6084.)

"Farm Credit Administration” mentioned in the text was substituted for "Federal Farm Loan Board” pursuant to the Executive Order cited thereto, which is set out in full at the beginning of this chapter.

RESERVES AND DIVIDENDS OF NATIONAL FARM

LOAN ASSOCIATIONS

8 911

8 24

Amount carried to reserve account. Every national farm loan association shall, out of its net earnings, semiannually carry to reserve account a sum not less than 10 per centum of such net earnings until said reserve account shall show a credit balance equal to 25 per centum of the outstanding capital stock of said association. After said reserve has reached the sum of 25 per centum of the outstanding capital stock, 5 per centum of the net earnings shall be semiannually added thereto. (July 17, 1916, c. 245, $ 24, 39 Stat. 379; Jan. 23, 1932, c. 9, $ 4,47 Stat. 13.)

8 912

8 24

Making good impairment of reserve.—Whenever the reserve shall have been impaired it shall be fully restored before any dividends are paid. (July 17, 1916, c. 245, $ 24, 39 Stat. 379; Jan. 23, 1932, c. 9, § 4, 47 Stat. 13.)

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