Pullman herald. [volume] (Pullman, W.T. [Wash.]) 1888-1989, 1916-07-28

bank. The federal farm loan board
shall designate one of it's appointees
to act as chairman. The act requires
that at least one of the three district
directors shall be experienced in
farming and actually engaged at the
time of his appointment in farming
operations within the district. Any
compensation paid to the directors
must be approved by the federal
farm loan board.
Officers of Loan Associations
Each loan association must have
board of directors and a secretary
treasurer The directors shall serve
without pay. The secretary-treas-
urer shall receive such compensation
as may be determ ined by the board
of directors. The association must
appoint an appraisal committee for
the purpose OF yaluing lands offered
as security for loans. No member
OF such committee shall have any in
terest 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
tnrest payment not to exceed one
eighth Of one per cent semi-annually
upon the unpaid principal of the
loan. This commission is to be de-
Quoted from the dividends payable to
such farm loan association by the
federal land bank If the commits
siOns are not adequate, and an asso-
citation does not wish to assess mem
bers for current expenses, it may Dor
row at six per cent from the federal
land bank to an amount not to ex-
coed in the aggregate one-fourth of
its bank stock.
deserves and Dividends
The law requires both the land
banks and the farm loan associations
to make provision for certain re-
serves before they can pay any divi-
dends.
Agents of Land Banks
In sections where local conditions
do not make the formation of asso-
Citations practicable, the farm loan
board may authorize the federal land
bank to make loans through agents
approved by the board. These
agents are to be banks, trust COM
panies, mortgage companies or say
ings institutions, chartered by the
state. They may receive as compen-
sation the actual expense involved in
transacting the loan and in addition
thereto a sum not to exceed one-haIf
OF one per cent per annum on the
unpaid principal of the loans made
through them. When the farm loan
board decides that locality is ade-
quately served by farm loan associa-
tons. no further loans are to be
made through agents.
Joint Stock Land Banks
In addition to the system of ~
federal land banks and the national
farm loan associations of borrowers.
the act permits the establishment of
joint-stock land banks and author
ICES them to carry on the business of
lending directly to borrowers on farm
mortgage security and issuing farm
loan bonds. These banks must have
a capital of not less than $25O,00O.
They are under the supervision of
the federal farm loan board. but the
government does not lend them any
financial assistance
The joint-stock land bank is free
from many of the conditions imposed
on the federal land banks. Subject
to the 80 and 20 per cent value linn
itations and the limitation as to ter
ritory the joint stock land bank may
lend more than $4,000 to single
individual, and it is not restricted to
making loans for the purposes speci-
fled in the case of the federal land
bank.
The joint-stock bank, like the feu-
eral land banks, can not charge an
interest rate on farm mortgages in
excess of six per cent, nor shall such
interest rate exceed by more than one
per cent the rate of interest paid bv
the bank upon its last issue of bonds.
A joint stock bank is limited in its
bond issue to ) times its capital and
surplus.
Among the restrictions placed on
these banks under the act are On
that their mortgages must provide
for an amortization system of re-
payment such as is prescribed in the