The Kennewick courier-reporter. [volume] (Kennewick, Wash.) 1914-1938, 1916-10-19

lIOll LdAdLlOHs II COOA "a 1851 VS OesAAAAS
and member banks of that system are
empowered to buy and sell these
bonds. They are to be issued in de-
nominations Of $50, $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,
900 regular directors are to be ap-
pointed as follows: Three district di-
rectors, resident in the district, shall
be appointed by the Federal Farm
Loan Board to represent the public
interest, and six local directors, resi-
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 des-
ignate one Of it's appofntees to act as
chairman. The act requires that at
least one of the three district direc-
tors shall be experienced in farming
and actually engaged at the time Of
his appointment in farming operations
within the district. Any compensa-
ton paid to the directors must be ap-
proved by the Federal Farm Loan
Board.
Officers of Loan Associations
Each loan association must have q
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 ap-
point an appraisal committee for the
purpose of valuing lands offered as
security for loans. No member of
such committee 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 may re-
tain as a commission from each in
terest payment not to exceed one
eigth of one per cent semi-annually
upon the unpaid principal of the loan.
This commission is to be deducted
from the dividends payable to sucn
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 6 per
cent from the Federal land bank to
an amount not to exceed in the aggre-
gate one-fourth of it's bank stock.
Reserves and Dividends
The law requires both the land bank
ard the farm loan association to make
provision for certain reserves before
they can pay any dividends.
Agents and Land Banks
In sections where local conditions
do not make the formation Of ASSOC
Citations practicable, the Farm Loan
Board may authorize the Federal land
bank to mako loans thru agents APP
proved by the board. These agents
are to BE- banks, trust companies,
mortgage companies, or savings insti-
buttons, chartered by tho state. They
may receive as compensation the ac-
tual expense involved in transacting
the loan and in addition thereto a
sum not to exceed one-half Of per
cent per annum on the unpaid prin-
cipal of the loans made thru them.
When the Farm Loan Board decides
that a locality is adequately served ty
farm loan associations, no further
loans are to be made thru agents.
Joint Stock Land Banks
In addition to the system of IL Fed
eral land banks and the national farm
loan association of borrowers, the act
permits the establishment of joint
stock land banks and authorizes them
to carry on the business of lending di-
rectly to borrowers on farm-motgage
security and issuing farm loan bonds
These banks must have capital OF
not less than $25O,OO0. They are un.
der the supervision of the Federal
Farm Loan Board, but the govern.
ment 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 tx
the so and 20 per cent value lmita
J ton and the limitation as to territory
the joint-stock lard bank may lent
more tLan $4,000 to single individ
ual, and it If not restricted to making
, loans for the purposes specified in tn
, case of the Federal land bank.
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