Circular

board of directors of any Federal land bank made
with the approval of the Farm Credit Administra-
tion, to subscribe from time to time for cap-
ital stock of such bank in an amount or amounts
specified in such approval or approvals, such sub-
scriptions to be subject to call in whole or in part
by the board of directors of said bank upon thirty
days' notice, with the approval of the Farm Credit
Administration. The Secretary of the Treasury
is hereby authorized and directed to take out and
pay for shares having an aggregate par value equal
to the amounts so called; and to enable the Secre-
tary of the Treasury to pay for stock issued here-
under there is hereby authorized to be appropriated
the sum of $125,000,000, such stock to be nonvot-
ing. Shares of stock issued pursuant to this para-
graph shall be paid off at par and retired in the
same manner as the original capital stock of said
bank after said original stock outstanding, if any,
has been paid off and retired: Provided, however,
That stock issued pursuant to this paragraph may
at any time, in the discretion of the directors and
with the approval of the Farm Credit Administra-
tion, be paid off at par and retired in whole or in
part; and that said Administration may at any time
require such stock to be paid off at par and retired
in whole or in part if in the opinion of the Adminis-
tration the bank has resources available therefor.
The proceeds of all repayments on account of stock
issued pursuant to this paragraph shall be held in
the Treasury of the United States and shall be
available for the purpose of paying for other stock
thereafter issued pursuant to this paragraph. (July
17, 1916, c. 245, § 5, 39 Stat. 364; Jan. 23, 1932,
c. 9, § 2, 47 Stat. 12; Mar. 27, 1933, Ex. Or. 6084.)

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

8 701

LAND BANKS AS GOVERNMENT DEPOSITARIES AND
AGENTS

Federal and joint stock land banks as Govern-
ment depositaries and financial agents; surety
bonds; investment of funds.-All Federal land
banks and joint stock land banks organized under
this chapter, when designated for that purpose by
the Secretary of the Treasury, shall be depositaries
of public money, except receipts from customs,
under such regulations as may be prescribed by said
Secretary; and they may also be employed as finan-
cial agents of the Government; and they shall per-

form all such reasonable duties, as depositaries of
public money and financial agents of the Govern-
ment, as may be required of them. And the Sec-
retary of the Treasury shall require of the Federal
land banks and joint stock land banks thus desig-
nated satisfactory security, by the deposit of United
States bonds or otherwise, for the safe-keeping 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
Government funds deposited under the provisions
of this section shall be invested in mortgage loans
or farm loan bonds. (July 17, 1916, c. 245, § 6, 39
Stat. 365.)

Special deposits for temporary use, see § 991 of this chapter.

8 711

8 712

NATIONAL FARM LOAN ASSOCIATIONS GENERALLY
Organization; articles of association; signature;
copies for land banks.-Corporations to be known
as national farm loan associations, may be organized
by persons desiring to borrow money on farm mort-
gage security under the terms of this subchapter.
Such persons shall enter into articles of association
which shall specify in general terms the object for
which the association is formed and the territory
within which its operations are to be carried on,
and which may contain any other provision, not
inconsistent with law, which the association may
see fit to adopt for the regulation of its business
and the conduct of its affairs. Said articles shall
be signed by the persons uniting to form the asso-
ciation, and a copy thereof shall be forwarded to
the Federal land bank for the district, to be filed
and preserved in its office. (July 17, 1916, c. 245,
§ 7, 39 Stat. 365.)

Directors; officers; loan committee.-Every national farm loan association shall elect, in the manner prescribed for the election of directors of national banking associations, a board of not less. than five directors, who shall hold office for the same period as directors of national banking associations. It shall be the duty of said board of directors to choose in such manner as they may prefer a secretary-treasurer, who shall receive such compensation as said board of directors shall determine. The board of directors shall elect a president, a vice president, and a loan committee of three members. (July 17, 1916, c. 245, § 7, 39 Stat. 365.)

§ 713

8 714

Compensation and qualifications of directors.The directors and all officers except the secretarytreasurer shall serve without compensation, unless the payment of salaries to them shall be approved by the Farm Credit Administration. All officers and directors except the secretary-treasurer shall, during their term of office, be bona fide residents of the territory within which the association is authorized to do business, and shall be shareholders of the association. (July 17, 1916, c. 245, § 7, 39 Stat. 365; 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.

Secretary-treasurer; powers and duties; bonds; reports; misconduct in office.-It shall be the duty of the secretary-treasurer of every national farm loan association to act as custodian of its funds and to deposit the same in such bank as the board of directors may designate, to pay over to borrowers all sums received for their account from the Federal land bank upon first mortgage as in this chapter prescribed, and to meet all other obligations of the association, subject to the orders of the board of directors and in accordance with the bylaws of the association. It shall be the duty of the secretarytreasurer, 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 Farm Credit Administration for the proper performance of the duties imposed upon him under this chapter, which shall cover prompt collection and transmission of funds. He shall make a quarterly report to the Farm Credit Administration upon forms to be provided for that purpose. Upon request from said administration said secretarytreasurer shall furnish information regarding the condition of the national farm loan association for which he is acting, and he shall carry out all duly authorized orders of said administration. 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

& 7

8715

8 716

of the district any failure of any borrower to comply
with the terms of his application or mortgage. He
shall also ascertain and report to said bank the
amount of any delinquent taxes on land mortgaged
to said bank and the name of the delinquent. No
such secretary-treasurer shall engage in the making
of land mortgage loans eligible at a Federal land
bank through or for any other land mortgage com-
pany or agency, and the making of any such loan by
any secretary-treasurer shall forthwith work a for-
feiture of his office. (July 17, 1916, c. 245, § 7, 39
Stat. 365; Mar. 4, 1923, c. 252, § 305, 42 Stat. 1476;
Mar. 27, 1933, Ex. Or. 6084.)

Expenses and salaries; payment from general
funds; assessments.-The reasonable expenses of
the secretary-treasurer, the loan committee, and
other officers and agents of national farm loan asso-
ciations, and the salary of the secretary-treasurer,
shall be paid from the general funds of the associa-
tion, and the board of directors is authorized to set
aside such sums as it shall deem requisite for that
purpose and for other expenses of said association.
When no such funds are available, the board of
directors may levy an assessment on members in
proportion to the amount of stock held by each,
which may be repaid as soon as funds are available,
or it may secure an advance from the Federal land
bank of the district, to be repaid with interest at
the rate of six per centum per annum, from divi-
dends belonging to the said association. Said
Federal land bank is hereby authorized to make
such advance and to deduct such repayment.
(July 17, 1916, c. 245, § 7, 39 Stat. 365.)

Number of incorporators; organization; directors; secretary-treasurer.-Ten or more natural persons who are the owners, or about to become the owners, of farm land qualified as security for a mortgage loan under section 771 of this chapter, may unite to form a national farm loan association. They shall organize subject to the requirements and the conditions specified in sections 711-723 and in sections 671-683 of this chapter, so far as the same may be applicable: Provided, That the board of directors may consist of five members only, and instead of a secretary and a treasurer there shall be a secretarytreasurer, who need not be a share-holder of the association. (July 17, 1916, c. 245, § 7, 39 Stat. 365.)

717

Report and affidavit accompanying articles of association. When the articles of association are forwarded to the Federal land bank of the district as provided in this chapter, they shall be accompanied by the written report of the loan committee as required in section 751 of this chapter, and by an affidavit stating that each of the subscribers is the owner, or is about to become the owner, of farm land qualified under section 771 of this chapter as the basis of a mortgage loan; that the loan desired by each person is not more than $10,000, nor less than $100, and that the aggregate of the desired loans is not less than $20,000; that said affidavit is accompanied by a subscription to stock in the Federal land bank equal to 5 per centum of the aggregate sum desired on mortgage loans; and that a temporary organization of said association has been formed by the election of a board of directors, a loan committee, and a secretary-treasurer who subscribes to said affidavit, giving his residence and post-office address. (July 17, 1916, c. 245, § 7, 39 Stat. 365.)

See § 771 (Seventh), of this chapter, for maximum loan which may be made to any one borrower. The maximum limitation contained in the subsection last mentioned has twice been increased by amendments to the original provisions; and in the view of the Farm Credit Administration such amendments operated to increase the limitation stated in § 717.

8718

Investigation of solvency of applicants for incorporation. Upon receipt of such articles of association, with the accompanying affidavit and stock subscription, the directors of said Federal land bank 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 Farm Credit Administration with their recommendation. If said recommendation is unfavorable, the charter shall be refused. (July 17, 1916, c. 245, § 7, 39 Stat. 365; 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.

§ 719

Grant or refusal of charter.-If said recommendation is favorable, the Farm Credit Administration shall thereupon grant a charter to the applicants therefor, designating the territory in which such association may make loans, and shall forward

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