The Weston leader. [volume] (Weston, Umatilla County, Or.) 189?-1946, 1916-09-29
THE FEDERAL FARM LOAN ACT
Continued from Flint Page. }

tNuhtt1uC4 Afvm rtttk AAke.l
eeed one per cent together with sucl
amounts Is Y car earn on its paid
in cash capital. the hank must sci
aside certain reserves and meet al
its expenses. ANY balance or mel
profits can be distributed as divi-
dends 10 the loan associations os
other stockholders. The loan as.
sociations. from their bank divi-
dends, after setting aside the re-
quired reserves and meeting ex.
penses. can declare association divi-
dends to their members. In this
way the profits. il any. will be dis
tributed among the borrowers and
will, 10 that extent reduce the
amount Of interest actually paid by
them.
Restrictions on Fees and Commits.
sicns.
The Federal land banks are
specifically prohibited from eharg-
ing. in connection with making a
loan, any fees or commissions which
are not authorized by the Farm Loan
Board. The authorised fees need
not be paid in advance. but may be
made part Of the loan.
Amortization Plan Of Repaying
II has been said that all loans are
to be repaid on the amortization
plan. Tins plan calls for a num-
ber Of fixed annual or semiannual
payments. which include not only
aIl interest and charges due the
bank. but the principal as well.
These payments are so calculated
IS to sxnnEuish the debs in gwen
number Of years. After five years
the borrower has the right on any in
tsrest date TO make additional pay
ments on the principal in sums Of s25
or any multiple thereof, thus dischar-
ging the debt more quickly.
After Federal land bank has Loan
ed on first mortgage $4,000. it can
obtain permission from the Farm
Loan Board to issue $4,000 in farm
loan bonds based on the mortgages.
sell such bonds in the open market,
and use the money thus obtained 70
lend on other mortgages.
This process Of lending on mortga-
gss and selling bonds in issues Of SOU
900 may be repeated until bonds %
the amount Of twenty times the banks
paid-up capital are outstanding. If
each bank should have only its re-
quired minimum paid up capital OF
$3.50, 900, this plan will proviue even-
tuaIIy, if all the authorized bonds Of
the IL banks are sold, oyer $lS0, ,0O0- !
-z-------------A------
farm land. The banks, however, can !
increase their capital stock above the
minimum and SO increase the
amount Of bonds they can sell. and
thus increase the total amount Of mo-
ney available for loans on farm mort
cages.
To make these bonds attractive to
Investors, the bondss together with the
upon which they are based.
are exempted from Federal. State,
NJ, n'cipal, ami local tax .llon and al
i..adc legal investments for iiduciary
Aai t.ust fuEns. Inc capital st.~k
u the Federal land banks is also ex~
,mpt from taxation. Federal reserve
ranks and member banks Of that sys-
sem are empowered to buy and sell
.hese bonds. They are to be issued
n denominations OF so, 500, sioO,
md $1,000.
Organization Of Banks.
The temporary management Of the
Federal land banks Is TO De In the
lands of tive directors appointed by
he Federal Farm Loan k3oard. As
oon, however, as the subscriptions ]
rom the loan associations total Sl0O,-
40 regular directors are to be APP !
'ointed as follows: Three district di-
eetors, resident in the district, shall .
e appointed by the Federal Loan
,oard to represent the public inter- {
1t, and six local directors, resident !
d the district, shall be elected BY the 1
arm loan associations VINO must be q
In the bank. The Fed
raj farm Loan Board shall designate
ne Of its appointees to act as chair
ian. The act requires that At least
ne Of the three directors snail be ex- Q
erienced in farming and actually en- !
aged at the time OF his appointment Q
! farming operations within the dis 9
net. ANY compensation paid 70 the
Irectors must be approved BY the re- {
sral Farm Loan Board. s
Oficsrs Of Loan Associations 9
Each loan association must have
board Of directors and . secretary =