Cresco plain dealer. (Cresco, Howard County, Iowa) 1913-1945, 1916-08-18

| payments Oh the principal in SUMS Of
| $25 or any multiple thereof, thus dis
| charging the debt more quickly.
| Funds Available For Loans.
After federal land bank has loaned
| to first mortgage $4,000 it can obtain
permission from the farm loan board
to issue $4,000 in farm loan bonds
based on these mortgages, sell such
bonds in the open market and use the
mortgages.
This process of lending on mortgages
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 outstanding. If
J each bank should have only its re-
CURED minimum paid up capital Of
} $4,000 this plan will provide eventu.
ally, If all the authorized bonds of
} the twelve banks are sold, over $780,
100000 to lend on first mortgages on
farm land. The banks, however, 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 in
vestors the bonds together with the
mortgages upon which they are based,
are exempted from federal, state, mu-
nicipal and local taxation and are
made legal investments for nduciary
and trust funds. The capital stock of
the federal land 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 denominations
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 100000 regular
directors are to be appointed as fol-
/ lows: Three district directors, resident
in the district, shall be appointed by
the federal farm loan board to repre-
sent the public interest, and six local
directors, resident in the district, shall
be elected by the farm loan associa.
lions. who must be stockholders 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 experienced in farm
ing and actually engaged at the time
OF his appointment in farming opera
tons within the district. ANY com
pensation paid to the directors must
be approved by the federal farm loan
board.
Each loan association must have
board Of directors and a secretary
treasurer. The directors shall serve
without pay. The secretary treasurer
shall receive such compensation as
may be determined by the board Of d.
rectors The association must appoint
an appraisal committee for the pur-
pose Of valuing lands offered as Sc
curfty for loans. No member Of such
committee shall have any interest In
the property upon which he passes
To provide funds for current ex-
penses the loan association may re-
tain as commission from each inter
est payment not to exceed one-eighth
Of l per cent semiannually upon the
unpaid principal Of the loan. This
is to be deducted from the
payable to such farm loan
by the federal land bank.
If the commissions are not adequate
and an association does not wish to
assess members for current 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.
The law requires both the land
banks and the farm loan associate
TO make provision for certain reserves
before they can pay any dividends.
In sections where local conditions do
not make the formation Of associations
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 COM
oanies or savings institutions chartered
oy the state. They may receive as
the actual expense in
Tolved in transacting the loan and in
addition thereto a sum not to exceed
,ne-half Of / per cent per annum on
he unpaid principal Of the loans made
through them. When the farm loan
BOARD decides that locality is ade-
Iuately served by farm loan associa-
ions no further loans are to be made
through agents.
ederal land banks and the national
arm loan associations of borrowers
he act permits the establishment Of
ONT stock land banks and authorizes
hem to carry on the business of lend
ng directly to borrowers on farm