The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1916-07-21

banks paid-up capital are outstand-
ing. If each bank should have only
its required minimum paid-up capital
of $750,000, this plan will provide
eventually, If all the authorized bonds
of the twelve banks are sold, over
$50, 100000 to lend on first mort
cages on farm land. The banks, how
ever, can increase their capital stock
above the required minimum and so
increase the amount of bonds they
can sell, and 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 taxation and are
made legal investments for fiduciary
and trust funds. The capital stock of
the federal lard banks is also exempt
from taxation. Federal reserve banks
and member banks of that system are
empowered to buy and sell these.
bonds. They are to be issued in de-
nominations of $40, $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, as the subscriptions
from the loan associations total $780,
0UO, regular directors are to be APP
pointed as follows: Three district
directors, resident in the district, shall
be appointed by the federal farm loan
board to represent the public interest.
and six local directors, resident in the
district, shall be elected by the farm
loan associations who must be stock
holders in the bank. The federal farm
loan board shall designate one of its
appointees to act as chairman. The
act requires that at least one of the
three district directors shall be ex-
! perlenced in farming and actually en-
gagged at the time of his appointment
in farming operations within the dis
/ trict. Any compensation paid to the
directors must be approved by the
FEDERAL farm loan board.
Officers of Loan Associations.
Each loan association must have a
board of directors and a secretarv
treasurer. The directors shall serve
without pay. The secretary-treasurer
Shaii receive such compensation as may
De determined by the board of direc-
tors. The association must appoint an
appraisal committee for the purpose
OF valuing lands offered as security for
loans. No member of such commit
tee shall have any interest in the
property upon which he passes.
Funds for Current Expenses.
To provide funds for current ex-
penses. the loan association NAV re-
tain as a commission from each inter-
est payment not to exceed one-eightT,
of 1 per cent semi-annuallv uDon the
unpaid principal of the loan. This
commission is to be deducted from
the dividends payable to such farm
lean association by the federal land
bank If the commissions are not
adequate, and an association does not
wish to assess members for o,,rron+
I expenses, it may borrow at 6 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 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 companies
mortgage companies or savings insti-
tutions, chartered by the state. They
may receive as compensation the &C
tual expense involved in transacting
the loan and in addition thereto a
sum not to exceed one-half of l per
cent per annum on the unpaid prin-
cipal of the loans made through them
| When the farm loan board decides
that a locality is 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