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stock, 5 per centum of the net earnings shall be an-
nually 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) Debit 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, amor-
tization installments, or principal on any first mort-
gage, 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, un-
less collected, shall be debited to reserve account.
(July 17, 1916, c. 245, $ 23, 39 Stat. 379.)

22

$ 902

8 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 directed to be deducted for credit to reserve account by section 901 of this chapter, 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, 83 (a), 47 Stat. 13; Mar. 27, 1933, Ex.

. Or. 6084.)

(6) Joint-stock land bank dividends.-After deducting the 25 per centum or the 5 per centum directed to be deducted for credit to reserve account by section 901 of this chapter, any joint stock land bank may declare a dividend to shareholders of the whole or any part of the balance of its net earnings: Provided, That any dividend or dividends declared by any joint stock land bank shall be subject to the approval 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 subsituted 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

§ 911

§ 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.)

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$ 912

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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.)

$ 913

§ 24

Dividends on balance of net earnings.-After deducting the 10 per centum or the 5 per centum hereinbefore directed to be credited to reserve account, said association may at its discretion declare a dividend to shareholders of the whole or any part of the balance of said net earnings. (July 17, 1916, C. 245, § 24, 39 Stat. 379; Jan. 23, 1932, c. 9, § 4, 47 Stat. 13.)

§ 914

§ 24

Investment of reserves.—The reserves of farm loan associations shall be invested in accordance with rules and regulations to be prescribed by the Farm Credit Administration. (July 17, 1916, c. 245, $ 24,39 Stat. 379; Mar. 27, 1933, Ex. Or. 6084.)

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

$ 915

§ 24

Disposition of reserve on liquidation. Whenever any farm loan association shall be voluntarily liquidated a sum equal to its reserve account as herein required shall be paid to and become the property of the Federal land bank in which such loan association may be a shareholder. (July 17, 1916, c. 245, § 24, 39 Stat. 379.)

DEFAULTED FARM LOANS

$ 921

§ 25

Mortgage held by Federal land bank; notice to indorsing association; making good default.- If there shall be default under the terms of any indorsed first mortgage held by a Federal land bank under the provisions of this chapter the national farm loan association through which said mortgage was received by said Federal land bank shall be notified of said default. Said association may thereupon be required, within 30 days after such notice, to make good such default, either by payment of the amount unpaid thereon in cash or by the substitution of an equal amount of Federal farm loan bonds, with all unmatured coupons attached. (July 17, 1916, c. 245, $ 25, 39 Stat. 380; Mar. 4, 1923, c. 252, § 310, 42 Stat. 1477.)

EXEMPTION FROM TAXATION

$ 931

§ 26

Federal land banks; national farm loan associations; mortgages and bonds as instrumentalities of Government.-Every Federal land bank and every national farm loan association, 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 or association under the provisions of sections 761 and 781 of this chapter. First mortgages executed to Federal land banks, or to joint stock land banks, and farm loan bonds issued under the provisions of this chapter, 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. (July 17, 1916, c. 245, $ 26, 39 Stat. 380.)

$ 932

§ 26

Joint stock land banks; State taxation of shareholder, limitations on.-Nothing herein shall prevent the shares in any joint stock land bank from being included in the valuation of the personal property of the owner or holder of such shares, in assessing taxes imposed by authority of the State within which the bank is located; but such assessment and taxation shall be in manner and subject to the conditions and limitations contained in section 548 of this title with reference to the shares of national banking associations. (July 17, 1916, C. 245, § 26, 39 Stat. 380.)

$ 933

$ 26

Federal and joint stock land banks; real property not exempt.-Nothing herein shall be construed to exempt the real property of Federal and joint stock land banks and national farm loan associations from either State, county, or municipal taxes, to the same extent, according to its value, as other real property is taxed. (July 17, 1916, c. 245, $ 26, 39 Stat. 380.)

INVESTMENT IN FARM LOAN BONDS

§ 941

§ 27

Fiduciary and trust funds; security for public deposits.-Farm loan bonds issued under the provisions of this chapter by Federal land banks or joint stock land banks shall be a lawful investment. for all fiduciary and trust funds, and may be accepted as security for all public deposits. (July, 17, 1916, c. 245, § 27, 39 Stat. 380.)

§ 942

$ 27

Buying and selling by member banks of Federal reserve system.--Any member bank of the Federal reserve system may buy and sell farm loan bonds issued under the authority of this chapter. (July 17, 1916, c. 245, $ 27, 39 Stat. 380.)

§ 943

§ 27

Buying and selling by reserve banks.—Any
Federal reserve bank may buy and sell farm loan
bonds issued under this chapter to the same extent
and subject to the same limitations placed upon
the purchase and sale by said banks of State,
county, district, and municipal bonds under sec-
tion 14 (b) of the Federal Reserve Act of December
23, 1913 [section 355 of chapter 3 of this Title).
(July 17, 1916, c. 245, $ 27, 39 Stat. 380.)

EXAMINATIONS

$ 951

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Land bank examiners; appointment; number. The Farm Credit Administration shall appoint as many land bank examiners as in its judgment may be required to make careful examinations of the banks and associations permitted to do business under this subchapter and subchapter III of this chapter. (July 17, 1916, c. 245, § 28, 39 Stat. 381; Mar. 4, 1923, c. 252, § 2, 42 Stat. 1454; Mar. 27, 1933, Ex. Or. 6084.)

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

$ 952

§ 28

Requirements, responsibilities, and penalties applicable to examiners; examinations; reports. Land bank examiners shall be subject to the same requirements, responsibilities, and penalties as are applicable to national bank examiners under chapters 2 and 3. of this title and other provisions of law. Whenever directed by the farm Credit Administration, said examiners shall examine the condition of any national farm loan association and report the same to the Land Bank Commissioner. They shall examine and report the condition of every Federal land bank and joint stock land bank at least twice each year. (July 17, 1916, C. 245, § 28, 39 Stat. 381; Mar. 27, 1933, Ex, Or. 6084; June 16, 1933, c. 98, § 80 (a), 48 Stat. 273.)

“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.

$ 953

$ 28

Salaries of examiners.-Land bank examiners
shall receive salaries to be fixed by the Farm Credit
Administration. (July 17, 1916, c. 245, 28, 39
Stat. 381; Mar. 27, 1933, Ex. Or. 6084.)

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

For assessments on banks for amount of salaries and expenses, see $ 567 of this chapter.

DISSOLUTION AND APPOINTMENT OF RECEIVERS

$ 961

$ 29

National farm loan associations; institution and conduct of receivership; duties and powers of receivers.-Upon receiving satisfactory evidence that any national farm loan association has failed to meet its outstanding obligations of any description the Farm Credit Administration may forthwith declare such association insolvent and appoint a receiver and require of him such bond and security as it deems proper: Provided, That no national farm loan association shall be declared insolvent by said administration until the total amount of defaults of current interest and amortization installments on loans indorsed by national farm loan associations shall amount to at least $150,000 in the Federal land bank district, unless such association shall have been in default for a period of two years. Such receiver, under the direction of the Farm Credit Administration, shall take possession of the books, records, and assets of every description of such association, collect all debts, dues, and claims belonging to it, and, with the approval of the Farm Credit Administration,

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