First. To accept deposits of current funds payable upon demand except from its own stockholders, or to transaction any banking or other business not expressly authorized by the provisions of this Act. Second. To loan on first mortgage except through national farmloan associations as provided in section 7 and section 8 of this Act, or through agents as provided in section 15, or direct to borrowers as provided in section 7.

Third. To accept any mortgages on real estate except first mortgages created subject to all limitations imposed by section twelve of this Act, and those taken as additional security for existing loans.

Fourth. To issue or obligate itself for outstanding farm loan bonds (including consolidated bonds issued on its behalf) in excess of twenty, times the amount of its capital and surplus, or to receive from any national farm loan association additional mortgages when the principal remaining unpaid upon mortgages already received from such association shall exceed twenty times the amount of its capital stock owned by such association.

Fifth. To demand or receive, under any form or pretense, any commission or charge not specifically authorized in this Act.

Sixth. To accept as additional security for any loan to any borrower under this Act, or any installment on any such loan, any personal property which is exempt from execution upon judgment under the laws of the State in which the land with respect to which the mortgage is given is situated. (July 17, 1916, sec. 14, 39 Stat. 372; Mar. 4, 1933, sec. 5(a) and (b), 47 Stat. 1549; June 16, 1933, secs. 71, 75 (a), 48 Stat. 271; 12 U. S. C., sec. 791.)

638-82. Loans by Federal land banks through agents; when authorized. That whenever, after this Act shall have been in effect one year, it shall appear to the Federal Farm Loan Board [now Farm Credit Administration]* that national farm loan associations have not been formed, and are not likely to be formed, in any locality, because of peculiar local conditions, said board [now administration]* may, in its discretion, authorize Federal land banks to make loans on farm lands through agents approved by said board [now administration].* (July 17, 1916, sec. 15, 39 Stat. 373; 12 U. S. C., sec. 801.)

638-83. Manner of making.-Such loans shall be subject to the same conditions and restrictions as if the same were made through national farm loan associations, and each borrower shall contribute five per centum of the amount of his loan to the capital of the Federal land bank, and shall become the owner of as much capital stock of the land bank as such contribution shall warrant. (July 17, 1916, sec. 15, 39 Stat. 373; 12 U. S. C., sec. 802.)

638-84. Who may be employed as agent.-No agent other than a duly incorporated bank, trust company, mortgage company, or savings institution, chartered by the State in which it has its principal office, shall be employed under the provisions of this section. (July 17, 1916, sec. 15, 39 Stat. 373; 12 U. S. C., sec. 803.)

638-85. Expenses of and commissions to agents.-Federal land banks may pay to such agents the actual expense of appraising the land. offered as security for a loan, examining and certifying the title thereof, and making, executing, and recording the mortgage papers; and in addition may allow said agents not to exceed one-half of one

*See Ex. Or. 6084, p. 254, this volume.

per centum per annum upon the unpaid principal of said loan, such commission to be deducted from dividends payable to the borrower on his stock in the Federal land bank. (July 17, 1916, sec. 15, 39 Stat. 373; 12 U. S. C., sec. 804.)

638-86. Expenses of agents added to loans.-Actual expenses paid to agents under the provisions of this section shall be added to the face of the loan and paid off in amortization payments subject to the limitations provided in subsection ninth of section thirteen of this Act. (July 17, 1916, sec. 15, 39 Stat. 373; 12 U. S. C., sec. 805.)

638-87. Collection of loan payments.-Said agents, when required by the Federal land banks, shall collect and forward to such banks without charge all interest and amortization payments on loans indorsed by them. (July 17, 1916, sec. 15, 39 Stat. 373; 12 U. S. C., sec. 806.)

638-88. Indorsement of loans; liability thereon.-Any agent negotiating any such loan shall indorse the same and become liable for the payment thereof, and for any default by the mortgagor, on the same terms and under the same penalties as if the loan had been originally made by said agent as principal and sold by said agent to said land bank, but the aggregate of the unpaid principal of mortgage loans received from any such agent shall not exceed ten times its capital and surplus. (July 17, 1916, sec. 15, 39 Stat. 373; 12 U. S. C., sec. 807.) 638-89. When loans to cease.-If at any time the district represented by any agent under the provisions of this section shall, in the judg ment of the Federal Farm Loan Board [now Farm Credit Administration]*, be adequately served by national farm loan associations, no further loans shall be negotiated therein by agents under this section. (July 17, 1916, sec. 15, 39 Stat. 373; 12 U. S. C., sec. 808.) 638-90. Joint stock land banks; restriction against making loans or issuing bonds after May 12, 1933.-After the date of enactment of this Act, no joint-stock land bank shall issue any tax-exempt bonds or make any farm loans except such as are necessary and incidental to the refinancing of existing loans or bond issues or to the sale of any real estate now owned or hereafter acquired by such bank. (May 12, 1933, sec. 29, 48 Stat. 46; 12 U. S. C., sec. 810.)

638-91. Organization; directors.-That corporations, to be known as joint stock land banks, for carrying on the business of lending on farm mortgage security and issuing farm loan bonds, may be formed by any number of natural persons not less than ten. They shall be organized subject to the requirements and under the conditions set forth in section four of this Act, so far as the same may be applicable: Provided, That the board of directors of every joint stock land bank shall consist of not less than five members. (July 17, 1916, sec. 16, 39 Stat. 374; 12 U. S. C., sec. 811.)

638-92. Individual liability of shareholders.-Shareholders of every joint stock land bank organized under this Act shall be held individually responsible, equally and ratably, and not one for another, for all contracts, debts, and engagements of such bank to the extent of the amount of stock owned by them at the par value thereof, in addition to the amount paid in and represented by their shares. (July 17, 1916, sec. 16, 39 Stat. 374; 12 U. S. C., sec. 812.)

638-93. Powers, duties, and liabilities; stock.-Except as otherwise provided, joint stock land banks shall have the powers of, and be subject to all the restrictions and conditions imposed on, Federal

land banks by this Act, so far as such restrictions and conditions are applicable: Provided, however, That the Government of the United States shall not purchase or subscribe for any of the capital stock of any such bank; and each shareholder of any such bank shall have the same voting privileges as holders of shares in national banking associations. (July 17, 1916, sec. 16, 39 Stat. 374; 12 U. S. C., sec. 813.)

638-94. Limitation on amount of issue of bonds; transacting unauthorized business. No joint stock land bank shall have power to issue or obligate itself for outstanding farm loan bonds in excess of fifteen times the amount of its capital and surplus, or to receive deposits or to transact any banking or other business not expressly authorized by the provisions of this Act. (July 17, 1916, sec. 16, 39 Stat. 374; 12 U. S. C., sec. 813.)

638-95. Minimum capital stock.-No joint stock land bank shall be authorized to do business until capital stock to the amount of at least $250,000 has been subscribed, one-half thereof paid in cash and the balance subject to call by the board of directors, and a charter has been issued to it by the Federal Farm Loan Board [now Farm Credit Administration]*. (July 17, 1916, sec. 16, 39 Stat. 374; 12 U. S. C., sec. 815.)

638-96. Issuing bonds before payment of stock.-No joint stock land bank shall issue any bonds until after the capital stock is entirely paid up. (July 17, 1916, sec. 16, 39 Stat. 374; 12 U, S. C., sec. 816.) 638-97. Form of bonds.-Farm loan bonds issued by joint stock land banks shall be so engraved as to be readily distinguished in form and color from farm loan bonds issued by Federal land banks, and shall otherwise bear such distinguishing marks as the Federal Farm Loan Board [now Farm Credit Administration]* shall direct. (July 17, 1916, sec. 16, 39 Stat. 374; 12 U. S. C., sec. 817.)

638-98. Interest rates; restrictions on mortgage loans.-Joint stock land banks shall not be subject to the provisions of subsection (b) of section seventeen of this Act as to interest rates on mortgage loans or farm loan bonds, nor to the provisions of subsections first, fourth, sixth, seventh, and tenth of section twelve as to restrictions on mortgage loans: Provided, however, That no loans shall be made which are not secured by first mortgages on farm lands within the State in which such joint stock land bank has its principal office, or within some one State contiguous to such State, except as hereinafter provided. Such joint stock land banks shall be subject to all other restrictions on mortgage loans imposed on Federal land banks in section twelve of this Act. (July 17, 1916, sec. 16, 39 Stat. 374; Mar. 4, 1931, sec. 1, 46 Stat. 1548; 12 U. S. C., sec. 818.)

638-99. Limitation on interest rates.-Joint stock land banks shall in no case charge a rate of interest on farm loans exceeding by more than one per centum the rate of interest established for the last series of farm loan bonds issued by them. (July 17, 1916, sec. 16, 39 Stat. 374; 12 U. S. C., sec. 819.)

638-100. Unauthorized commissions or charges.-Joint stock land banks shall in no case demand or receive, under any form or pretense, any commission or charge not specifically authorized in this Act. (July 17, 1916, sec. 16, 39 Stat. 374; 12 U. S. C., sec. 820.)

*See Ex. Or. 6084, p. 254, this volume.

638-101. Bonds; form and contents.-Each joint stock land bank organized under this Act shall have authority to issue bonds based upon mortgages taken by it in accordance with the terms of this Act. Such bonds shall be in form prescribed by the Federal Farm Loan Board [now Farm Credit Administration]*, and it shall be stated in such bonds that such bank is organized under section sixteen of this Act, is under Federal supervision, and operates under the provisions of this Act. (July 17, 1916, sec. 16, 39 Stat. 374; 12 U. S. C., sec. 821.)

638-102. Voluntary liquidation.-Any joint stock land bank organized and doing business under the provisions of this Act may go into voluntary liquidation by making provision, to be approved by the Federal Farm Loan Board [now Farm Credit Administration]*, for the payment of its liabilities: Provided, That such method of liquidation shall have been duly authorized by a vote of at least two-thirds of the shareholders of such joint-stock land bank at a regular meeting, or at a special meeting called for that purpose, of which at least ten days' notice in writing shall have been given to stockholder. (July 17, 1916. sec. 16, 39 Stat. 374; May 29, 1920, 41 Stat. 691; 12 U. S. C., sec. 822.)

638-103. Assets of liquidating bank; purchase by Federal or joint stock land bank; assumption of liabilities.-For the purpose of assisting in any such liquidation authorized as in the preceding paragraph provided, any Federal land bank or joint-stock land bank may, with the approval of the Federal Farm Loan Board [now Farm Credit Administration]*, acquire the assets and assume the liabilities of any joint-stock land bank, and in such transaction any Federal land bank may waive the provisions of this Act requiring such bank to acquire its loans only through national farm loan associations or agents, and those relating to status of borrower, purposes of loan, and also the limitation as to the amount of individual loans. No Federal land bank shall assume the obligations of any joint-stock land bank in such manner as to make its outstanding obligations more than twenty times its capital stock except by creation of a special reserve equal to one-twentieth of the amount of such additional obligations assumed. No joint-stock land bank shall assume the obligations of any other joint-stock land bank in such manner as to make its outstanding obligations more than fifteen times the amount of its capital and surplus, except by creation of a special reserve equal to one-fifteenth of the amount of such additional obligations assumed. (July 17, 1916, sec. 16, 39 Stat. 374; May 29, 1920, 41 Stat. 691; Mar. 4, 1925, sec. 5, 43 Stat. 1263; 12 U. S. C., sec. 823.)

Loans to joint stock land banks to provide for orderly liquidation. (a) The Reconstruction Finance Corporation is authorized and directed to make available to the Land Bank Commissioner, out of the funds of the Corporation, the sum of $100,000,000, to be used, for a period not exceeding four years from the date of enactment of this Act, for the purpose of making loans to the joint-stock land banks organized and doing business under the Federal Farm Loan Act, as amended, at a rate of interest not to exceed 4 percentum per annum, payable annually. Such loans shall be made upon application therefor by such banks and upon compliance with the requirements of this section. The amount which may be loaned hereunder to any such bank shall not exceed an amount having the same proportion to the said $100,000,000 as the unpaid principal of the mortgages held by such bank on the date of *Seo Ex. Or. 6084, p. 254, this volume.

enactment of this Act bears to the total amount of the unpaid principal of the mortgages held by all the joint-stock land banks on such date.

(b) Any joint-stock land bank applying for a loan under this section shall deliver to the Land Bank Commissioner as collateral security therefor first mortgages or purchase-money mortgages on farm lands, first mortgages on farm real estate owned by the bank in fee simple, or such other collateral as may be available to said bank, including sales contracts and sheriff's certificates on farm lands. The real estate upon which such collateral is based shall be appraised by appraisers appointed under the Federal Farm Loan Act, as amended, and the borrowing bank shall be entitled to borrow not to exceed 60 per centum of the normal value of such real estate as determined by such appraisal. Fees for such appraisals shall be paid by the applicant banks in such amounts as may be fixed by the Land Bank Commissioner. No such loan shall be made until the applicant bank, under regulations to be prescribed by the Land Bank Commissioner, (1) shall have agreed to grant to each borrower then indebted to the bank under the terms of a first mortgage a reduction to 5 per centum per annum in the rate of interest specified in such mortgage, beginning at his next regular installment date, and (2) shall have agreed to the satisfaction of the Commissioner that during a period of two years from the date of the enactment of the Farm Credit Act of 1935 the bank will not proceed against the mortgagor on account of default in the payment of interest or principal due under the terms of its mortgage and will not foreclose its mortgage unless the property covered by such mortgage is abandoned by the mortgagor or unless, in the opinion of the Commissioner, such foreclosure is necessary for other reasons. Such loans shall be made to aid the orderly liquidation of any such bank in accordance with such plan as may be approved by the Land Bank Commissioner. Before any such plan is approved by the Commissioner he shall be satisfied that the plan carries out the purposes of this section and that such part of the proceeds of the loan as is devoted to settlements with bondholders will be used only to effect an equitable settlement with all bondholders. After the plan has been approved by the Commissioner he shall require the bank to mail a copy thereof to all its known bondholders and to publish a notice setting forth its provisions in at least three newspapers having general circulation. (May 12, 1933, sec. 30, 48 Stat. 46; June 16, 1933, sec. 80 (a), 49 Stat. 273; June 3, 1935, sec. 16, 49 Stat. 318; 12 U. S. C., sec. 823.) [Historical note.]

Loans by the Land Bank Commissioner to Joint Stock Land Banks for Emergency Purposes.-(a) The Federal Farm Mortgage Corporation is authorized and directed to make available to the Land Bank Commissioner until July 1, 1938, out of the funds of the Corporation, the sum of $2,000,000, to be used for the purpose of making loans to the joint-stock land banks organized and doing business under the Federal Farm Loan Act, as amended. Loans made by the Land Bank Commissioner under this section shall be made in the name and on behalf of the Corporation and shall bear interest at a rate not to exceed 4 per centum per annum. No loan shall be made under this section to any joint-stock land bank except for the purpose of obtaining, for a period of one year from the date on which the loan is made, postponement of the foreclosure of first mortgages held by such bank on account of (1) default in the payment of interest and principal due under the terms of the mortgage, and (2) unpaid delinquent taxes, excluding interest and penalties, which may be secured by the lien of said mortgage: Provided, That during the period of postponement of foreclosure such bank shall charge the mortgagor interest at a rate not exceeding 4 per centum per annum on the aggregate amount of such delinquent taxes and defaulted interest and principal with respect to which loans are made pursuant to this section. The amount loaned to any joint-stock land bank under this section shall be made without reappraisal: Provided, That the amount loaned with respect to any mortgage on account of unpaid principal shall not exceed 5 per centum of the total unpaid principal of such mortgage, and the total amount loaned to any such land bank with respect to any mortgage shall not exceed 25 per centum of the total unpaid principal of such mortgage.

(b) No such loan shall be made with respect to any mortgage unless the Land Bank Commissioner is satisfied that the mortgagor, after exercising ordinary diligence to pay his accrued delinquent taxes, and meet accrued interest and principal payments, has defaulted thereon; and unless the bank shall have agreed to the satisfaction of the Land Bauk Commissioner that during the