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12 U.S.C., $ 693

F. F. L. Act, 85 Transfer of stock held by national farm loan associations.Stock held by national farm loan associations shall not be transferred or hypothecated, and the certificates therefor shall so state. (July 17, 1916, c. 245, § 5, 39 Stat. 364.) 12 U.S.C., 8 694

F. F. L. Act, 85 Dividends; voting stock.–Stock owned by the Government of the United States in Federal land banks shall receive no dividends, but all other stock shall share in dividend distributions without preference. Each national farm loan association and the Government of the United States shall be entitled to one vote for each share of stock held by it in deciding all questions at meetings of shareholders, and no other shareholder shall be permitted to vote. Stock owned by the United States shall be voted by the Land Bank Commissioner, as directed by the Farm Credit Administration. (July 17, 1916, c. 245, 85, 39 Stat. 364; Mar. 27, 1933, Ex. Or. 6084; June 16, 1933, c. 98, $ 80 (a), 48 Stat. 273.)

Stock issued to the United States under the provisions of § 698 is nonvoting. See that section. For voting privileges of borrowers through agencies in election of members of farm credit boards, see $ $ 6406–640g. 12 U.S.C., 8 695

F.F. L. Act, 85 Subscriptions to original stock; subscriptions by United States for unsubscribed balance of original capital stock.-It shall be the duty of the Farm Credit Administration, as soon as practicable after July 17, 1916, to open books of subscription for the capital stock of a Federal land bank in each farm credit district. If within thirty days after the opening of said books any part of the minimium capitalization of $750,000 herein prescribed for Federal land banks shall remain unsubscribed, it shall be the duty of the Secretary of the Treasury to subscribe the balance thereof on behalf of the United States, said subscription to be subject to call in whole or in part by the board of directors of said land bank upon thirty days' notice with the approval of the Farm Credit Administration; and the Secretary of the Treasury is authorized and directed to take out shares corresponding to the unsubscribed balance as called, and to pay for the same out of any moneys in the Treasury not otherwise appropriated. Thereafter no 'stock shall be issued except as hereinafter provided. (July 17, 1916, c. 245, 85, 39 Stat. 364; Mar. 27, 1933, Ex. Dr. 6084; Aug. 19, 1937, c. 704, § 5 (a), 50 Stat. 764.)

"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. 12 U.S.C., 8 696

F.F. L. Act, $5 Retirement of original stock. After the subscriptions to capital stock by national farm loan associations shall amount to $750,000 in any Federal land bank, said bank shall apply semiannually to the payment and retirement of the shares of stock which were issued to represent the subscriptions to the original capital twenty-five per

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centum of all sums thereafter subscribed by national farm loan associations, by borrowers through agencies, and by borrowers through branch banks to capital stock until all such original capital stock is retired at par. (July 17, 1916, c. 245, § 5, 39 Stat. 364; Jan. 23, 1932, c. 9, § 1, 47 Stat. 12.)

12 U.S.C., § 697

F. F. L. Act, $ 5 Proportion held in quick assets.-At least twenty-five per centum of that part of the capital of any Federal land bank for which stock is outstanding in the name of national farm loan associations shall be held in quick assets, and may consist of cash in the vaults of said land bank, or in deposits in member banks of the Federal reserve system, or in readily marketable securities which are approved under rules and regulations of the Farm Credit Administration: Provided, That not less than five per centum of such capital shall be invested in United States Government bonds. (July 17, 1916, c. 245, § 5, 39 Stat. 364; Mar. 27, 1933, Ex. Or. 6084.)

12 U.S.C., 8 698

F. F. L. Act, 85 Subscriptions by United States; terms; amount; retirement.It shall be the duty of the Secretary of the Treasury on behalf of the United States, upon the request of the board of directors of any Federal land bank made with the approval of the Farm Credit Administration, to subscribe from time to time for capital stock of such bank in an amount or amounts specified in such approval or approvals, such subscriptions 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 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 Secretary of the Treasury to pay for stock issued hereunder there is authorized to be appropriated the sum of $125,000,000, such stock to be nonvoting. Shares of stock issued pursuant to this section 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 section may at any time, in the discretion of the directors and with the approval of the Farm Credit Administration, 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 Administration the bank has resources available therefor. The proceeds of all repayments on account of stock issued pursuant to this section 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 section. (July 17, 1916, c. 245, 85, 39 Stat. 364; Jan. 23, 1932, c. 9, § 2, 47 Stat. 12; Mar. 27, 1933, Ex. Or. 6084.)

LAND BANKS AS GOVERNMENT DEPOSITARIES AND AGENTS

12 U.S.C., $ 701

F.F.L. Act, 8 6 Federal and joint stock land banks as Government 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 financial agents of the Government; and they shall perform all such reasonable duties, as depositaries of public money and financial agents of the Government, as may be required of them. And the Secretary of the Treasury shall require of the Federal land banks and joint stock land banks thus designated satisfactory security, by the deposit of United States bonds or otherwise, for the safekeeping 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 title.

NATIONAL FARM LOAN ASSOCIATIONS GENERALLY

12 U.S.C., 8711

F.F.L. Act, 8 7 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 mortgage 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 association, 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.) 12 U.S.C., $712

F.F. L. Act, 87 Directors; officers; loan committee. The board of directors of every national farm loan association shall consist of not less than five nor more than seven members, who shall be elected by the shareholders of the association. Elections of such directors shall be held once ch year at an annual meeting of the shareholders. Every national farm loan association shall at the first annual meeting of its shareholders subsequent to August 19, 1937, elect two directors for a term of three years, two directors for a term of two years, and the remainder of its board of directors for a term of one year. Thereafter directors shall be chosen to serve for terms of three years, and the shareholders of

necessary to fill the places of those directors whose terms expire during the year. Any vacancy that may occur in the board of directors through death, resignation or other cause shall be filled at the next annual meeting of shareholders by the election of a director to serve out the unexpired portion of the term, or a special meeting of shareholders may be called for this purpose. Until such election the remaining directors shall have power to fill the vacancy for the time being by appointing a temporary director to serve until the next meeting of shareholders. All directors shall hold office until their successors are elected and have qualified. 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 or more members. The secretary-treasurer shall be eligible for membership on the loan committee. The board of directors may empower (a) the loan committee to elect applicants to membership and (b) any three members of said committee to act as the loan committee in approving loans on behalf of the association and in electing applicants to membership in the association. No action by the loan committee shall be valid where the full committee is acting unless unanimously approved by all members or where any three of its members are acting as herein provided unless approved by all such members. (July 17, 1916, c. 245, $ 7,39 Stat. 365; Aug. 19, 1937, c. 704, $ 21,50 Stat. 710; June 30, 1945, c. 204, § 1 (a), 59 Stat. 266.) 12 U.S.C., 8 713

F.F. L. Act, $ 7 Compensation and qualifications of directors. The directors and all officers except the secretary-treasurer 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.)

12 U.S.C., 8714

F.F.L. Act, 87 Secretary-treasurer; powers and duties; bond; 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 secretary-treasurer, 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 associa

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tion. 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 secretary-treasurer 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 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 secretarytreasurer shall engage in the making of land mortgage loans eligible at a Federal land bank through or for any other land mortgage company or agency, and the making of any such loan by any secretarytreasurer shall forthwith work a forfeiture of his office. (July 17, 1916, c. 245, 87,39 Stat. 365; Mar. 4, 1923, c. 252, $ 305, 42 Stat. 1476; Mar. 27, 1933, Ex. Or. 6084.)

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12 U.S.C., 8715

F.F. L. Act, 87 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 associations, and the salary of the secretary-treasurer, shall be paid from the general funds of the association, 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 dividends 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.) 12 U.S.C., & 716

F.F.L. Act, 87 Number of incorporators; organization; directors; secretarytreasurer.-Ten or more persons who are the owners, or about to become the owners, of farm lands qualified as security for a mortgage loan under sections 771 and 772 of this title, 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 title, 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 secretary-treasurer, who need not be a shareholder of the association.

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