The Glasgow courier., 1916-07-28
Total. 16O4.89 604.89 100000

SV ......:.l CV.Oo O.Co 1O.OV ........-..
Total: l604: :89! 604:s9 l000:0 :0O .:..
After a Federal land bank has loan.
ed on first mortgage $4,000, it car
obtain permission from the Farm Loar
Board to issue $4,000 in farm loar
bonds based on these mortgages, sci
such bonds in the open market, ane
use the money thus obtained to lenC
on other mortgages.
This process Of lending on mort.
cages and selling bonds in issues of
$4,000 may be repeated until bonds
to the amount Of twenty times the
banks paid-up capital are outstand-
ing. If each bank should have only
its required minimum paid-up cap
ital Of $750,O00, this plan will pro-
vide eventually if all the authorized
bonds of the IL banks are sold, over
$18O,00O,000 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 cap
ital stock Of the Federal land banks
is also exempt from taxation. Fed
eral reserve banks and member banks
Of that system are empowered to buy
and sell these bonds. They are to
be issued. in denominations. Of. 500,
$50, 500, $500 and $1,000.
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,
600 regular directors are to be ap-
pointed 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
stockholders in the bank. The Fed
eral Farm Loan Board shall desig-
nate one of its appointees to act as
chairman. The act requires that ct
least one of the three district direct
ors shall be experienced in farming
and actually engaged at the time of
his appointment in farming opera
tios within the district. Any COM
pensation paid to the directors must
be approved by the Federal Farm
Loan Board
Each loan association must have
a board of directors and secretary
treasurer. The directors shall serve
without pay. The secretary treas
urer shall receive such compensation
as may be determined by the board
of directors. The association must
appoint an appraisal committee for
the purpose of valuing lands offered
as security for loans. No member of
such committee shall have any in
terest in the property upon which he
passes.
To provide funds for current ex-
penses, the loan association may re-
tain as commission from each in
terest payment not to 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. If the commissions are
not adequate, and an association does
not wish to assess members for cur.
rent expenses, it may borrow at {
per cent from the Federarl land bank
to an amount not to exceed in the az.
gregate one-fourth of its bank stock
The law requires both the lnad bank.
and the farm loan associations tt
stitutions, chartered by the State
They may receive as compensation
the actual expense involved in trans
acting the loan and in addition there
to q sum not to. exceed one-half O
l per cent per annum on the unpai.
principal Of the loans made through
them. When the Farm Loan Boar,
decides that locality is adequatel.
served by farm loan associations, n,