The Julesburg grit-advocate., 1918-03-28

S-foi o2A4o SA&noA8%8ooe lug
registered bonds. which in turn are
reexchanGeshle for coupon hoaAs.
denominations. $1,000. $500. 500.
$50 and $25.
Interest payable senia,nually. Nay
land November I. At any Federal land
bank. Principal payable at the hank
of issue. Both principal and inter-
est payable in gold or lawful money.
Price 1904 and accrued interest.
Netting about 4.AO per cent to the
redeemable date (l922) and ~ per
cent so long as they may remain out
standing thereafter.
Exempt from Federal, State, Mu-
nicipal, and Local taxation.
Under authority of act of Congress,
approved July II, 1916, the United
States was divided into IL districts
and Federal land bank WAS created
in each district. Farm loan bonds
are primarily the obligation of the
bank issuing the same. All ~ banks.
however, are ultimately liable for tn.
payment Of each bond.
The United States Government owns
over IS $500 900 Of the capital stock
Of the Federal land banks, which was
originally $9,OOO,OOO and has since
been increased to over $4,000, ,OOC.
These banks operate under Federal
authority and governmental super
vision.
As security for these bonds, there
are pledged either United States
Government bonds, or guaranteed
first mortgages on farm lands cult
waited by the owner. at least equal in
amount to the bonds outstanding.
No mortgage lean may exceed one-half
the appraised value of the land mort
Iaged and 20 re- cont Of the appraised
value of permanent insured improve
ments thereon as confirmed in both
cases by Government appraisers.
Those bonds are dec'ar d by the act
to be "irstrumentalities of the Govern
ment of the United States," and as
such the principal and interest there
of are exempt from Federal, State,
municipal. and local taxation. This
includes the Federal i.ccmc tax, and
income from these bonds need not be
included in income tax returns.
In Europe farm loan bonds of this
same general character have long been
favorite form of investment, sell
ing at Approximately the same prices
rs direct Government obligations.
the bolds are acceptable at par as
security for all Government deposits.
including postal savings deposits. and
are legal investments for trust funds,
and for savings banks and insurance
companies in a majority of the States
The constitutionality of the act and
the validity of the provisions exempt
ing the bonds from taxation have been
approved by the Attorney General of
the United States on behalf of tn.
Government and by eminent counsel
on behalf of private interests.
Description of Bonds
The Federal farm loan act was en-
acted by Congress and approved July
II, 1916. It created bureau in tn:
Treasury Department of the United
States Government. under the general
supervision of Federal Farm Loan
Board consisting of the Secretary of
the Treasury as chairman and four
members appointed by the President
The act is entitled:
An Act to provide capital for
agricultural development, to Gre
ate standard form of investment
based upon farm mortgages. to
equal!ze rates of interest upon
farm loans, to furnish a market
for United States bonds, to ere
ate Government depositaries and
financial agents for the United
States, and for other purposes.
Under its provisions the United
States has been divided into II dis
tricts and Federal land bank orga-
nized in each district. These banks,
which operate under Federal author
ity and governmental supervision, are
authorized to issue the bonds offered
herein.
Each Federal land bank is liable for
interest payments upon presentation
of farm loan bond coupons OF any Fed
eral land bank, and every Federal land
bank is liable for such portion of the
principal of farn, loan bonds of any
Federal land bank as shall not be paid
after the assets of such bank shall
have been liquidated and distributed.
There are deposited with the regis
trar Ga public pfficia! appointed by
the Farm Loan Board) as collateral
security for the bonds. United States
Government bonds or first mortgages
on farm lands cultivated by the own
cr. TIE amount OF leans to a,y one
borrower can in no case exceed $1O,-
900. No loan shall exceed 80 per cent
of the appraised value of the lana
mortgaged and 90 per cent of the ap-
praised value of the permanent insur-
I'D ;r,provap,optS fharanp