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registrar as substituted collateral security in place
of the sums paid on the principal of indorsed mort-
gages held by him in trust. (July 17, 1916, c. 245,
8 22, 39 Stat. 378.)

8 899

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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 discretion, to order any of such payments, or the proceeds thereof, wherever deposited or however invested, to be immediately transferred to his account as trustee aforesaid. (July 17, 1916, c. 245, § 22, 39 Stat. 378.)

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8 901

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, 89 Stat. 379; Jan. 23, 1937, c. 9, 88 (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 reserve 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) 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, 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.)

8 902

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, $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 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 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

§ 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 earn

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ings 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 out-
standing capital stock, 5 per centum of the net earn-
ings 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

§ 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. 9,8 4, 47 Stat. 13.)

8 913

8 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: Provided, That the declaration and payment of any such dividend shall be subject to the approval of the Land Bank Commissioner. (July 17, 1916, c. 245, $ 24, 39 Stat. 379; Jan. 23, 1932, c. 9, 84, 47 Stat. 13, June 3, 1935, c. 164, § 4, 49 Stat. 315.)

8 914

§ 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 Board” pursuant to the Executive Order cited thereto, which is set out in full at the beginning of this chapter.

8 918

8 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 foan association may be a shareholder. (July 17, 1916, c. 245, 8 24, 89 Stat. 879.)

DEFAULTED FARM LOANS

8 921

8 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, č. 252, § 310, 42 Stat. 1477.)

EXEMPTION FROM TAXATION

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8 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, 8 26, 39 Stat. 380.)

8 932

8 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 Title 12 [U. S. Code] with refer-
ence to the shares of national banking associations.
(July 17, 1916, c. 245, $ 26, 39 Stat. 380.)

S 933

8 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

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$ 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

8 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 section 14 (b) of the Federal Reserve Act of December 23, | 1913 [section 355 of chapter 3 of Title 12, U. S. Code]. (July 17, 1916, c. 245, § 27, 39 Stat. 380.)

EXAMINATIONS

§ 951

8 28

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

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