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$ 822

$ 16

Voluntary liquidation.—Any joint stock land
bank organized and doing business under the pro-
visions of this chapter may go into voluntary liqui-
dation by making provision, to be approved by the
Farm Credit Administration, for the payment of
its liabilities: Provided, That such method of liqui-
dation shall have been duly authorized by a vote of
at least two-thirds of the shareholders of such joint
stock land bank at a regular meeting, or at a special
meeting called for that purpose, of which at least
ten days' notice in writing shall have been given to
stockholders. (July 17, 1916, c. 245, $ 16, 39 Stat.
374; May 29, 1920, c. 215, 41 Stat. 691; 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.
See also g 823 (note), and § 965.

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Assets of liquidating bank; purchase by Federal or joint stock land bank; assumption of liabilities.For the purpose of assisting in any such liquidation authorized as in section 822 of this chapter provided, any Federal land bank or joint stock land bank may, with the approval of the Farm Credit Administration, acquire the assets and assume the liabilities of any joint stock land bank, and in such transaction any Federal land bank may waive the provisions of this chapter requiring such bank to acquire its loans only through national farm loan associations or agents, and those relating to status of borrower, purposes of loan, and also the limitation as to the amount of individual loans. No Federal land bank shall assume the obligations of any joint stock land bank in such manner as to make its outstanding obligations more than twenty times its capital stock except by creation of a special reserve equal to one twentieth of the amount of such additional obligations assumed. No joint stock land bank shall assume the obligations of any other joint stock land bank in such manner as to make its outstanding obligations more than fifteen times the amount of its capital and surplus except by creation of a special reserve equal to one fifteenth of the amount of such additional obligations assumed. (July 17, 1916, c. 245, $ 16, 39 Stat. 374; May 29, 1920, c. 215, 41 Stat, 691; Mar. 4, 1925, c. 524, § 5, 43 Stat. 1263; Mar. 27, 1933, Ex. Or. 6084.)

HISTORICAL NOTE Joint stock land banks are now prohibited from making loans or issuing tax-exempt bonds, except in circumstances permitted under § 810 of this chapter. This prohibition constituted Section 29 of Part 2 of "The Emergency Farm Mortgage Act of 1933.” The remaining sections of Part 2 which are quoted in this note made provision for loans to be made to joint stock land banks during a limited period of time, to aid in the orderly liquidation of these corporations and to enable them to grant certain emergency relief to their borrowers. The citation for these sections is May 12, 1933, c. 25, $$ 30, 31, 48 Stat. 46, 47, as amended by the Act of June 16, 1933, c. 98, 80 (a), 48 Stat. 273.

LOANS TO

PROVIDE

FOR

JOINT STOCK LAND BANKS TO

ORDERLY LIQUIDATION

Sec. 30. (a) The Reconstruction Finance Corporation is authorized and directed to make available to the Land Bank Commissioner, out of the funds of the Corporation, the sum of $100,000,000, to be used, for a period not exceeding two years from the date of enactment of this Act, for the purpose of making loans to the joint stock land banks organized and doing business under the Federal Farm Loan Act, as amended, at a rate of interest not to exceed 4 per centum per annum, payable annually. Such loans shall be made upon application therefor by such banks and upon compliance with the requirements of this section. The amount which may be loaned hereunder to any such bank shall not exceed an amount having the same proportion to the said $100,000,000, as the unpaid principal of the mortgages held by such bank on the date of enactment of this Act bears to the total amount of the unpaid principal of the mortgages held by all the joint stock land banks on such date.

(b) Any joint stock land bank applying for a loan under this section shall deliver to the Land Bank Commissioner as collateral security therefor first mortgages or purchasemoney mortgages on farm lands, first mortgages on farm real estate owned by the bank in fee simple, or such other collateral as may be available to said bank, including sales contracts and sheriff's certificates on farm lands. The real estate upon which such collateral is based shall be appraised by appraisers appointed under the Federal Farm Loan Act, as amended, and the borrowing bank shall be entitled to borrow not to exceed 60 per centum of the normal value of such real estate as determined by such appraisal. Fees for such appraisals shall be paid by the applicant

banks in such amounts as may be fixed by the Land Bank Commissioner, No such loan shall be made until the applicant bank, under regulations to be prescribed by the Land Bank Commissioner, (1) shall have agreed to grant to each borrower then indebted to the bank under the terms of a first mortgage a reduction to 5 per centum per annum in the rate of interest specified in such mortgage, beginning at his next regular installment date occurring more than sixty days after the date of enactment of this Act, and (2) shall have agreed to the satisfaction of the Commissioner that during a period of two years from the date of enactment of this Act the bank will not proceed against the mortgagor on account of default in the payment of interest or principal due under the terms of its mortgage and will not foreclose its mortgage unless the property covered by such mortgage is abandoned by the mortgagor or unless, in the opinion of the Commis

sioner, such foreclosure is necessary for other reasons. Such loans shall be made to aid the orderly liquidation of any such bank in accordance with such plan as may be approved by the Land Bank Commissioner. Before any such plan is approved by the Commissioner he shall be satisfied that the plan carries out the purposes of this section and that such part of the proceeds of the loan as is devoted to settlements with bondholders will be used only to effect an equitable settlement with all bondholders. After the plan has been approved by the Commissioner he shall.require the bank to mail a copy thereof to all its known bondholders and to publish a notice setting forth its provisions in at least three newspapers having general circulation.

LOANS BY THE LAND BANK COMMISSIONER TO JOINT STOCK

LAND BANKS FOR EMERGENCY PURPOSES

SEC. 31. (a) Out of the funds made available to him under section 30, the Land Bank Commissioner is authorized to make loans, in an aggregate amount not exceeding $25,000,000, at a rate of interest not to exceed 4 per centum per annum, to any joint stock land bank for the purpose of securing the postponement for two years from the date of the enactment of this Act of the foreclosure of first mortgages held by such banks on account of (1) default in the payment of interest and principal due under the terms of the mortgage, and (2) unpaid delinquent taxes, excluding interest and penalties, which may be secured by the lien of said mortgage: Provided, That during the period of postponement of foreclosure such banks shall charge the mortgagor interest at a rate not exceeding 4 per centum per annum on the aggregate amount of such delinquent taxes and defaulted interest and principal with respect to which loans are made pursuant to this section. The annount loaned to any joint stock land bank under this section shall be made without reappraisal: Provided, That the amount loaned with respect to any mortgage on account of unpaid principal shall not exceed 5 per centum of the total unpaid principal of such mortgage, and the total amount loaned to any such land bank with respect to any mortgage shall not exceed 25 per centum of the total unpaid principal of such mortgage

(b) No such loan shall be made with respect to any mortgage unless the Land Bank Commissioner is satisfied that the mortgagor, after exercising ordinary diligence to pay his accrued delinquent taxes, and meet accrued interest and principal payments, has defaulted thereon; and unless the bank shall have agreed to the satisfaction of the Land Bank Commissioner that during such two-year period the bank will not foreclose such mortgage unless the property covered thereby is abandoned by the mortgagor or unless in the opinion of the Land Bank Commissioner such foreclosure is necessary for other reasons.

(c) Each such loan shall be secured by an assignment to the Land Bank Commissioner of the lien of the taxes and/or of the bank's mortgage with respect to which the loan is made: Provided, That the part of each such lien so assigned representing the interest and principal due and unpaid in any such mortgage which has been assigned to the farm loan registrar shall be subordinate to the existing lien of the bank for the balance of the indebtedness then or thereafter to become due under the terms of such mortgage; but the Land Bank Commissioner may require the bank to furnish additional collateral as security for such loan, if such collateral is available to the bank.

(d) The Land Bank Commissioner is authorized to make such rules and regulations as may be necessary to carry out the purposes of this section and to make the relief contemplated immediately available.

“Farm Credit Administration” mentioned above 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.

$ 824

$ 16

Insolvency; receivership; acquisition of assets by other banks; loans by acquiring bank in additional States.-In any case where a joint stock land bank has been, or may be, declared insolvent and placed in the hands of a receiver by the Farm Credit Administration any Federal land bank or joint stock land bank may, in the manner as may be prescribed by the Farm Credit Administration and with the approval of the Farm Credit Administration, acquire the assets and assume the liabilities of said joint stock land bank in the hands of a receiver. Any joint stock land bank which has acquired or may hereafter acquire the assets and which has assumed or may hereafter assume the liabilities of another joint stock land bank may, if authorized by the Farm Credit Administration, make loans secured by first mortgages on farm lands within the States in which the other joint stock land bank was authorized to make loans at the time of such acquisition, and the acquiring bank may, with the approval of the Farm Credit Administration, continue to make loans in the States where it was authorized to make loans at the time of such acquisition: Provided, however, That the acquiring bank shall not be authorized to make loans at any one time in more than five States, of which one shall be the State in which the bank has its principal office, one shall be contiguous to such State, the other shall be the States in which the acquired joint stock land banks were authorized to make loans at the time of such acquisition, and all of said five States shall be situated in contiguous territory. (July 17, 1916, c. 245, $ 16, 39 Stat. 374; Mar. 4, 1931, c. 518, $ 2, 46 Stat. 1548; 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.

Making loans or issuing tax-exempt bonds prohibited after May 12, 1933,
except in circumstances permitted under $ 810 of this chapter. See that
section.
For receivers of joint stock land banks, see also $ 963 of this chapter.

GENERAL POWERS OF FARM CREDIT ADMINIS

TRATION UNDER THIS SUBCHAPTER

$831

$ 17

16

Enumeration. The Farm Credit Administration shall have power

(a) Organizing and chartering banks and loan associations; authorizing increase of stock. --To organize and charter Federal land banks, and to charter national farm loan associations and joint stock land banks subject to the provisions of this subchapter, and in its discretion to authorize them to increase their capital stock. (July 17, 1916, c. 245, § 17, 39 Stat. 375; Mar. 27, 1933, Ex, Or. 6084.)

(6) Reviewing and altering interest rates. To review and alter at its discretion the rate of interest to be charged by Federal land banks for loans made by them under the provisions of this subchapter, said rates to be uniform so far as practicable. (July 17, 1916, c. 245, § 17, 39 Stat. 375.)

(c) Granting or refusing authority to issue bonds. To grant or refuse to Federal land banks, or joint stock land banks, authority to make any specific issue of farm loan bonds. (July 17, 1916, c. 245, 17, 39 Stat. 375.)

(d) Making rules and regulations as to charges on loans. To make rules and regulations respecting the charges made to borrowers on loans under this subchapter for expenses in appraisal, determination of title, and recording. (July 17, 1916, c. 245, § 17, 39 Stat. 375.

(e) Requiring reports, etc.; examining banks and associations.To require reports and statements of condition and to make examinations of all banks or associations doing business under the provisions of this subchapte (July 17, 1916, c. 245, $ 17, 39 Stat. 375.)

(f) Prescribing form and terms of bonds and surety bonds.- To prescribe the form and terms of farm loan bonds, and the form, terms, and penal sums of all surety bonds required under this subchapter and of such other surety bonds as they shall deem necessary, such surety bonds to cover financial loss as well as faithful performance of duty. (July 17, 1916, c. 245, $ 17, 39 Stat. 375.

(9) Regulating payments between banks.-T. require Federal land banks to pay forthwith to any Federal land bank their equitable proportion of any sums advanced by said land bank to pay the coupons of any other land bank, basing said required payments on the amount of farm loan

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