The Richmond Virginian. (Richmond, Va.) 1910-1920, 1916-07-30

CURED minimum paid-up capital OF
$3.50 coo. this plan will provide even
tuaiiy. If all the authorized bonds -
the twelve banks are sold, over $3.50
600. 900 10 lend on first mortgages on
farm land, The banks, however. can
increase their capital stock above the
required minimum and so increase the
amount OF bonds they can sell. ana
thus increase the total amount OF
money available for loans on farm
mortgages.
To make these bonds attractive to
investors the bonds. together with
the mortgages upon which they are
based, are exempted from Federal
State. municipal and local taxetio1
and are made legal investments for
flduciary and trust funds, The CAPT
tai stock OF the Federal land banks
as also exempt from taxation. Fed
/ eral reserve banks and mem Der banks
Of that system are empowered 10 bug
and sell these bonds. They are TO
/ be issued in denominations OF see. $50,
500. $500 and $1,000.
Organization of Banks.
The temporary management OF the
Federal land banks is TO be in the
hands of FIVE directors appointed by
the Federal Farm Loan Board As
soon. however. az the subscriptions
frers the loan associations total si1e- =
$50 regular directors are TO be APP
pointed as follows, Three district
directors. resident in the district, shall
he appointed by the Federal Farm
Loan Board to represent the public
interest, and six local directors, re~i
dent in the district. shall be elected
by the farm loan associations who
must be stockholders In the bank The
Federal Farm Loan Board shall desig-
nate one of its appontees 10 act as
chairman. The act requires that at
least one Of the three district direc-
tors shall he experienced in farming
and actually engaged at the time %
| his appointment in farming operations
within the district. Any com pensa-
ton paid to the directors must DE
approved by the Federal Farm Loan
Board.
| Officers Of Loan Associations.
! Each loan association must have a
/ board OF directors and secretary
treasurer. The directors shall serve
| without pay. The secretary treasurer
shall receive such compensation as
may be determined by the board of
directors The association must APP
point an appraisal committee for the
purpose OF valuing lands offered as
i security for loans. No member of
such committee shall have any inter-
est in the property upon which he
passes
/ Funds for Current Expenses.
! To provide funds for current ex-
penses, the loan association may re-
tain as commission from each in
terest payment not 10 exceed. one
+ eighth OF l per cent semi annually
upon the unpaid principal of the loan.
| This commission is to be deducted
/ from the dividends payable to such
farm loan association by the Federal
land bank. II the commissions are
not adequate. and an association does
not wish to assess members for cur
rent expenses. it may borrow 4, 8
per cent from the Federal land bank
to an amount not to exceed in the
aggregate one-fourth of its bank
stock,
! Reserves and Dividends.
! The law requires both The land
banks and the farm loan associations
to make provision for certain reserves
before they can pay any dividends
Agents and Land Eanks.
In sections where local condition 8
do not make the formation OF asso-
Citations practicable. the Farm Loan
Board may authorize the Federal land
bank to make loans through agents
are to be banks, trust companies,
| mortgage companies. or savings in
situations. chartered by the State. They
may receive as compensation the ac-
tual expense involved In transactins
the loan and in addition thereto a
sum not to exceed one-half OF l per
cent per annum on the unpaid orin-
cipal OF the loans made through them.
When the Farm Loan Board decides
that locality Ia adequately served by
farm loan associations. no further
loans are to be made through agents.
JOint-Stock Land Banks.
In addition TO the System OF twelve
Federal land banks and the national
farm loan associations of borrowers.
the act permits the establishment of
toint-stock land banks and authoriz -
them to carry on the business Of lend
Ing directly to borrowers on farm
/ mortgage security and issuing farm
loan bonds. These banks must have
n capital OF not less than S350.00o.
They are under the supervision Of the
ffsaUktses - -. sUkAsvs1 = - sSsf