The Ocala evening star. [volume] (Ocala, Fla.) 1895-1943, 1913-08-19

lof the private banks. II may bring
them more business. as thrifty peO-
pie who first borrow money from
|,Ee government prosper and desire
70 extend their operations.
+ Senator Fletcher proposes the es-.
Establishment OF three separate classes
o. institutions. 10 be called, respec-
ci,eIg, the local national rural
bank" the state national rural
bank" AMI the national rural bank
Of the United States
The local national rural bank is
Ito have a minimum capital Of So
600. is 10 confne its operations to a
lsmall district or neighborhood. and
is TO he owned and operated by
local farmers. The capital stock.
I which is non-raXabIe, is divided into
shares OF the par value of $40 each,
and is sold at the price Of $25 per
share. Possible control OF the bank
by any individual is prevented. The
character of business is limited, so
that the banks operations will con-
fict as little as possible with COM
ImerciaI banking. While the opera
tons Of the local banks are confined
to the small political subdivision Of
the state. no limit is placed on the
| number of banks in that subdivis-
len. The net earnings are used to
tpay dividend of per cent on the
amount of the investment and then
to create a surplus. The stOckhold-
| Iers have a double liability until this
. learned surplus is equal in amount to
the capital and paid-in surplus.
Thereafter one-half of the net earn
Iings, over and above the dividend,
: are used to create an additional sur
plus, the balance being refunded to
borrowers, so as to reduce their in
terest rate. When the earned sur
; plus is double the amount originally
invested, the stock is bought in by
f the bank at what it originally cost.
The bank then becomes a mutual
bank without capital stock, lending
+ its money so as simply to pay its cur
rent expenses and maintain it's exist
ing surplus, thereby still further re-
ducing the rate of interest on loans.
In case of dissolution, the surplus OF
the bank, after the stockholders
have received back the money in
vested, is to be used for building or
maintaining good roads in the po-
liticaI subdivisions where the bank
is located, under the direction of the
department of agriculture.
The plan provides that there shall
be one state national rural bank"
for each state. The stock of the
state bank is owned and its opera
tons are controlled entirely by the
local banks in that state. The state
bank acts as a clearing house and
as a reserve agent for the local
banks of the state. It's net earnings
are used to create a surplus and to
pay dividends to the local banks as
its stockholders. All of its profits
ultimately go to the local banks.
The national rural bank of the
, United States" is to be- located at
i, Washington. Its stock is to be own
ed entirely by the local national
rural banks and by the state ma
= tional rural banks. 1t will be con-
. trolled by nine directors, five being
selected by the banks, to serve for
eight years, and four being selected
by the president of the United
Estates, subject to the confirmation of
. the Senate, to serve during good be-
havior or for life. From the five
selected by the banks, these same
banks will nominate two, and from
the four selected by the president
these same banks will nominate one.
These three nominees of the banks
will be submitted to the president,
o who, from the three names. must
appoint the president and the two
9 vice presidents of the central ma
= tiOnal rural bank. A new selection
o of these officers will take place ev-
p cry eight years.
. The net earnings of the national
? rural bank of the United States" are
o Ito be used to pay fixed dividend to
o the local and state national rural
banks owning its stock and to create
@ a surplus. Ultimately all the earn
O ings of the national rural banks of
the United States will go to the
n IstOckholding banks.
= CLARK Is CORRECT