Full text of The Federal Farm Loan Act as Amended to July 16, 1932

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U. S. TREASURY DEPARTMENT
FEDERAL FARM LOAN BUREAU

Circular No. 20

THE

FEDERAL FARM LOAN ACT

AS AMENDED TO JULY 16, 1932
Exclusive o f Provisions relating to
Federal Intermediate Credit Banks

Appendix, containing certain other Acts of the Congress having
a direct relation to the Federal Farm Loan Act

INDEX

ISSUED BY THE

FEDERAL FARM LOAN BOARD
JULY, 1932

UNITED STATES
GOVERNMENT PRINTING OFFICE
WASHINGTON : 1932

EDITORIAL NOTE
This circular contains all provisions of the Federal Farm Loan
Act and amendments thereto relating to Federal land banks, joint
stock land banks, and national farm loan associations in effect on
July 16, 1932.
The provisions of the act have been classified in accordance with
the codification thereof in title 12 of the official Code of Laws of
the United States of America in Force December 26, 1926, and
supplements thereto.
In the left margin of this circular opposite each provision is
printed the section number of such provision in title 12 of the
Code. In the right margin is printed the number of the section
of the Federal Farm Loan Act, as amended, of which the pro
vision is a part. At the end of each provision is a parenthetical
reference to the act of Congress from which the provision was
derived and to any subsequent amendatory acts.
The symbol “ 12 U. S. C.” refers to United States Code, title 12.
The symbol “ F. F. L. Act” refers to the Federal Farm Loan Act,
as amended.
The official Code has been followed in its editing of the text of
the act and amendments thereto, by the omission of “ that55 at the
opening of paragraphs, the omission of obsolete provisions, etc. The
Code has also been followed in its use of the word “ subdivision,” to
designate a group of paragraphs under a subheading.
The Code has not been followed in its manner of referring to
the act as “ this (7th) chapter,” but the phraseology of the original
and amendatory statutes has been retained, and the references have
been made to “ this act ” or “ the Federal Farm Loan Act.” Eeferences in the text to other sections of the Code and to other acts of
Congress have been amplified to conform to the plan of this circular
and indicate the corresponding sections of the original statutes. In
other respects this circular follows the text of the official Code, with
minor exceptions, which are indicated by footnotes.
129307 0— 32

(1)

THE
FEDERAL FARM LOAN ACT
As Amended to July 16, 1932, Exclusive of Provisions Relating
to Federal Intermediate Credit Banks
AN A C T1 to provide capital for agricultural development, to create
standard forms of investment based upon farm mortgage, to
equalize rates of interest upon farm loans, to furnish a market for
United States bonds, to create Government depositaries and finan
cial agents for the United States, and for other purposes. (July
17, 1916, c. 245, 39 Stat. 360.)
1 This long title is not incorporated in 12 U. S. C.

(3)

12 u. s.a

FEDERAL, FARM LOAN ACT

F. F. L. Act

INTRODUCTORY

641

"Federal Farm Loan Act” ; administration by
Federal Farm Loan Board.—The Act of July 17,
1916 (c. 245, § 1, 39 Stat. 360), as amended by Act
of March 4, 1923 (c. 252, Title I, § 1, 42 Stat.
1454), to include Federal intermediate credit banks
may be cited as the “ Federal Farm Loan Act.”
Its administration shall be under the direction and
control of the Federal Farm Loan Board herein
after created. (July 17, 1916, c. 245, § 1, 39 Stat.
360; Mar. 4,1923, c. 252, Title 1, § 1, 42 Stat. 1454.)

§ 1

§ 642

“ First mortgage99 and “ farm loan bonds99 defined.—Wherever the term “ first mortgage ” is
used in this Act it shall be held to include such
classes of first liens on farm lands as shall be ap
proved by the Federal Farm Loan Board, and the
credit instruments secured thereby. The term
“ farm loan bonds ” shall be held to include all
bonds secured by collateral deposited with a farm
loan registrar under the terms of this Act; they
shall be distinguished by the addition of the words
“ Federal,” or “ joint stock,” as the case may be.
(July 17, 1916, c. 245, § 2, 39 Stat. 360.)

§ 2

FEDERAL FARM LOAN BOARD

§ 651

Federal Farm Loan Bureau; creation; supervision by board*—There shall be established at the
seat of government in the Department of the
Treasury a bureau charged with the execution of
this Act and of all Acts amendatory thereof, to be
known as the Federal Farm Loan Bureau, under
the general supervision of a Federal Farm Loan
Board. (July 17, 1916, c. 245, § 3, 39 Stat. 360.)

§ 3

§ 652

Composition of Board; number of members;
appointment; salaries; expenses.—The Federal
Farm Loan Board shall consist of seven members,
including the Secretary of the Treasury, who shall
be a member and chairman ex officio, and six mem
bers to be appointed by the President of the United
States, by and with the advice and consent of the
Senate. Of the six members to be appointed by

§ 3

12 U.S. C.

FEDERAL FARM LOAN ACT

F. F. L. Act

the President, not more than three shall be ap
pointed from one political party, and all six of
said members shall be citizens of the United States
and shall devote their entire time to the business of
the Federal Farm Loan Board; they shall receive
an annual salary of $10,000, payable monthly,
together with actual necessary traveling expenses.
One of the additional members of the Federal
Farm Loan Board, hereby provided for, shall be
appointed for a term expiring August 6, 1929, and
one for a term expiring August 6, 1931, and there
after the terms of all members of the Federal Farm
Loan Board shall be as in 12 U. S. C. 653 [F. F. L.
Act § 3] otherwise provided for. (July 17, 1916,
c. 245, § 3, 39 Stat. 360; Mar. 4, 1923, c. 252, T. I ll,
§ 301, 42 Stat. 1473.)

§ 653

Terms of office; oath; farm loan commissioner.—One of the members of the Federal Farm
Loan Board to be appointed by the President shall
be designated by him to serve for two years, one for
four years, one for six years, and one for eight
years, and thereafter each member so appointed
shall serve for a term of eight years, unless sooner
removed for cause by the President. One of the
members shall be designated by the President as
the farm loan commissioner, who shall be the active
executive officer of said board. Each member of
the Federal Farm Loan Board shall within fifteen
days after notice of his appointment take and sub
scribe to the oath of office. (July 17, 1916, c. 245,
§ 3, 39 Stat. 360.)

§ 3

§ 654

Eligibility of members; restriction on right to
engage in other business.—No member of the Fed
eral Farm Loan Board shall, during his continu
ance in office, be an officer or director of any other
institution, association, or partnership engaged in
banking, or in the business of making land mort
gage loans or selling land mortgages. Before en
tering upon his duties as a member of the Federal
Farm Loan Board each member shall certify under
oath to the President that he is eligible under this
section. (July 17, 1916, c. 245, § 3, 39 Stat. 360.)

§ 3

12 U. S. G.

FEDERAL FARM LOAN ACT

F. F. L. Act

§ 655

Filling vacancies on board.—The President shall
have the power, by and with the advice and con
sent of the Senate, to fill any vacancy occurring in
the membership of the Federal Farm Loan Board;
if such vacancy shall be filled during the recess of
the Senate a commission shall be granted which
shall expire at the end of the next session.— (July
17, 1916, c. 245, § 3, 39 Stat. 360.)

§ 3

§ 656

Registrars, appraisers, and examiners; appointment; restriction on right to engage in other busi
ness.—The Federal Farm Loan Board shall appoint
a farm loan registrar in each land bank district to
receive applications for issues of farm loan bonds
and to perform such other services as are pre
scribed by this Act, and may appoint a deputy reg
istrar who shall during the unavoidable absence or
disability of the registrar perform the duties of that
office. It shall also appoint one or more land bank
appraisers for each land bank district and as many
land bank examiners as it shall deem necessary.
Farm loan registrars, deputy registrars, land bank
appraisers, and land bank examiners appointed
under this section shall be public officials and shall,
during their continuance in office, have no connec
tion with or interest in any other institution, asso
ciation, or partnership engaged in banking or in
the business of making land mortgage loans or sell
ing land mortgages: Provided, That this limitation
shall not apply to persons employed by the board
temporarily to do special work. (July 17, 1916, c.
245, § 3, 39 Stat. 361; Apr. 20, 1920, c. 154, § 1, 41
Stat. 570.)

§ 3

§ 657

Salaries and expenses; provision for payment.1—The salaries and expenses of the Federal
Farm Loan Board, its officers and employees, farm
loan registrars, deputy registrars, examiners, and
reviewing appraisers authorized under this Act, or
any subsequent amendments thereof, shall be paid
by the Federal land banks, joint stock land banks,
and the Federal intermediate credit banks, as fol
lows :
The Federal Farm Loan Board shall, prior to
the first days of January and July of each year,
estimate the expenses and salaries of the Federal
Farm Loan Board, its officers and employees,

§ 2

1 See 12 U. S. C. 657 (a), below, for provision affecting assess
ments under this section.
1

12 U. S. C.

FEDERAL FARM LOAN ACT

F. F. L. Act

farm loan registrars and deputy registrars, exam
iners, and reviewing appraisers, and apportion the
same among the Federal land banks, joint stock
land banks, and the Federal intermediate credit
banks on such equitable basis as the Federal Farm
Loan Board shall determine, giving due considera
tion to time and expense necessarily incident to the
supervision of the operation of each type of bank,
and make an assessment upon each of such banks
pursuant to such apportionment, payable on the
1st days of January and July next ensuing. The
funds collected pursuant to such assessments shall
be deposited with the Treasurer of the United
States under the miscellaneous receipts title “As
sessments on Federal and joint stock land banks
and Federal intermediate credit banks, salaries
and expenses Federal Farm Loan Board,” to be
disbursed in payment of such salaries and ex
penses on appropriations duly made by Congress:
Provided, That the present legal status as to as
sessments against Federal intermediate credit
banks shall continue until June 30, 1926, without
appropriations by Congress.
If any deficiency shall occur in such fund during
the half-year period for which it was estimated,
the Federal Farm Loan Board shall have author
ity to make immediate assessment covering such
deficiency against the Federal land banks, jointstock land banks, and Federal intermediate credit
banks upon the same basis as the original assess
ment. If at the end of the six months’ period there
shall remain a surplus in such fund, it shall be de
ducted from the estimated expenses of the next six
months’ period when assessment is made for such
period. (July 17, 1916, c. 245, § 3, 39 Stat. 361;
Mar. 4, 1923, c. 252, T. I ll, § 302, 42 Stat. 1473;
Mar. 4, 1925, c. 524, § 3, 43 Stat. 1262.)

§ 657 a

Assessments under 12 U. S. C. 657 [F. F. L.
Act § 3]; expenses included.1—Effective as to ap
propriations for and expenditures of the Federal
Farm Loan Board for the fiscal year beginning
July 1, 1930, and thereafter, the assessments to be
made under 12 U. S. C. 657 [F. F. L. Act § 3] by
said board against the Federal land banks, joint
stock land banks, and Federal intermediate credit
banks shall be the amount of the expenses and
1 T h is paragraph wns incorporated
amendment with no designation of a F .
it should be added.

in
F.

the F . F . L. Act as an
L. Act section to which

12 U. S. C.

FEDERAL FARM LOAN ACT

F. F. L. Ac t

salaries of the employees engaged in the work of
the division of examinations of the Federal Farm
Loan Bureau as estimated by the said board, such
expenses and salaries, together with all other ex
penses and salaries of the said board, to be dis
bursed on appropriations duly made by the Con
gress. (June 26, 1930, c. 613, 46 Stat. 815.)
§ 658

Appraisers and inspectors; compensation; manner of payment.—Federal land bank appraisers,
and appraisers or inspectors of Federal inter
mediate credit banks, shall receive such compen
sation as the Federal Farm Loan Board shall fix
and shall be paid by the Federal land banks, joint
stock land banks, and the Federal intermediate
credit banks they serve, in such proportion and in
such manner as the Federal Farm Loan Board
shall order. (July 17,1916, c. 245, § 3, 39 Stat. 361 ;
Mar. 4, 1923, c. 252, Title III, § 302, 42 Stat. 1473;
Mar. 4,1925, c. 524, § 3, 43 Stat. 1262.)

§ 3

659

Attorneys, experts, and other employees; employment; salaries and fees.—The Federal Farm
Loan Board shall be authorized and empowered
to employ such attorneys, experts, assistants,
clerks, laborers, and other employees as it may
deem necessary to conduct the business of said
board. All salaries and fees authorized in 12
U. S. C. 652; 653, and 655 to 659 [F. F. L. Act § 3]
and not otherwise provided for shall be fixed in
advance by said board and shall be paid in the
same manner as the salaries of the Federal Farm
Loan Board. All such attorneys, experts, assist
ants, clerks, laborers, and other employees, and
all registrars, examiners, and appraisers shall be
appointed without regard to the provisions of
5 U. S. C. 632, 635, 637, 638, and 640 to 642, Execu
tive Departments and Government Employees
[Jan. 16, 1883, 22 Stat. 403], and amendments there
to, or any rule or regulation made in pursuance
thereof and may be classified without regard to
5 U. S. C., c. 13, Executive Departments and Gov
ernment Employees [Classification Act of 1923] :
Provided, That nothing herein shall prevent the
President from placing said employees 'in the classi
fied service. (July 17, 1916, c. 245, § 3, 39 Stat.
361; Mar. 4, 1925, c. 524, § 4, 43 Stat. 1263.)

§ 3

12 U. S. C.

FEDERAL FARM LOAN ACT

F. F. L. Act

§ 660

Statements of salaries paid by land banks.—
Every Federal land bank shall semiannually submit
to the Federal Farm Loan Board a schedule show
ing the salaries or rates of compensation paid to
its officers and employees. (Julv 17, 1916, c. 245,
§ 3, 39 Stat. 361.)

§ 3

§ 661

Annual report.—The Federal Farm Loan Board
shall annually make a full report of its operations
to the Speaker of the House of Representatives,
who shall cause the same to be printed for the in
formation of the Congress. (July 17, 1916, c. 245,
§ 3, 39 Stat. 361.)

§ 3

§ 662

Examinations and reports; appraisals of farm
land ; amortization tables.—The Federal Farm
Loan Board shall from time to time require exami
nations and reports of condition of all land banks
established under the provisions of this Act and
shall publish consolidated statements of the results
thereof. It shall cause to be made appraisals of
farm lands as provided by this Act, and shall pre
pare and publish amortization tables which shall
be used by national farm loan associations and land
banks organized under this Act. (July 17, 1916,
c. 245, § 3, 39 Stat. 361.)

§ 3

§ 663

Statements of condition of loan associations
and land banks.—The Federal Farm Loan Board
shall prescribe a form for the statement of condi
tion of national farm loan associations and land
banks under its supervision, which shall be filled
out quarterly by each such association or bank and
transmitted to said board. (July 17, 1916, c. 245,
§ 3, 39 Stat. 361.)

§ 3

§ 664

Bulletins and circulars.—It shall be the duty of
the Federal Farm Loan Board to prepare from
time to time bulletins setting forth the principal
features of this Act and through the Department
of Agriculture or otherwise to distribute the same,
particularly to the press, to agricultural journals,
and to farmers’ organizations; to prepare and dis
tribute in the same manner circulars setting forth
the principles and advantages of amortized farm

§ 3

u. s. c.

FEDERAL FARM LOAN ACT

F. F. L. Act

loans and the protection afforded debtors under
this Act, instructing farmers how to organize and
conduct farm loan associations, and advising in
vestors of the merits and advantages of farm loan
bonds; and to disseminate in its discretion infor
mation for the further instruction of farmers re
garding the methods and principles of cooperative
credit and organization. Said board is hereby
authorized to use a reasonable portion of the organ
ization fund provided in 12 U. S. C. 1001 [F. F. L.
Act § 33] for the objects specified in this para
graph, and is instruoted to lay before the Con
gress at each session its recommendations for fur
ther appropriations to carry out said objects.
(July 17,1916, c. 245, § 3, 39 Stat. 361.)
665

Rules and regulations.1—The Federal Farm
Loan Board is authorized to make such rules and
regulations, not inconsistent with law, as it deems
necessary or requisite for the efficient execution of
the provisions of the Federal Farm Loan Act,
and/or any Act or Acts amendatory thereof or
supplementary thereto. (Jan. 23, 1932, c. 9, § 6,
47 Stat. 14.)
ORGANIZATION OF FEDERAL LAND BANKS

671

Federal land bank districts; boundaries; Hawaii.—As soon as practicable the Federal Farm
Loan Board shall divide the continental United
States, excluding Alaska, into twelve districts,
which shall be known as Federal land bank dis
tricts, and may be designated by number. Said dis
tricts shall be apportioned with due regard to the
farm loan needs of the country, but no such district
shall contain a fractional part of any State. The
boundaries thereof may be readjusted from time to
time in the discretion of said board. The Federal
Farm Loan Board shall include the Territory of
Hawaii in a Federal land bank district. (July 17,
1916, c. 245, § 4, 39 Stat. 362; Mar. 10, 1924, c. 46,
§ 2, 43 Stat. 17.)

§ 4

672

Establishment; titles; branches; Puerto Rico
and Alaska; Hawaii; loans by branches.—The
Federal Farm Loan Board shall establish in each
Federal land bank district a Federal land bank, with

§ 4

1 T h is provision w as n o t specifically m ade a p a rt o f an y section
th e F ederal F a rm L oan A c t.

12 U. S. C.

FEDERAL FARM LOAN ACT

F. F L. Act

its principal office located in such city within the
district as said board shall designate. Each Federal
land bank shall include in its title the name of the
city in which it is located. Subject to the approval
of the Federal Farm Loan Board, any Federal land
bank may establish branches within the land bank
district. Subject to the approval of the Federal
Farm Loan Board and under such conditions as it
may prescribe, the provisions of this Act are ex
tended to the island of Puerto Rico and the Ter
ritories of Alaska and Hawaii; and the Federal
Farm Loan Board shall designate a Federal land
bank which is hereby authorized to establish a
branch bank in Puerto Bico and a Federal land
bank which is hereby authorized to establish a
branch bank in the Territory of Alaska. Such Fed
eral land bank as the board may designate is
authorized to establish branch banks in the Terri
tory of Hawaii. Loans made by each such branch
bank shall not exceed the sum of $25,000 to any one
borrower and shall be subject to the restrictions
and provisions of this Act, except that each such
branch bank may loan direct to borrowers, and,
subject to such regulations as the Federal Farm
Loan Board may prescribe, the rate charged bor
rowers may be 1y2 per centum in excess of the rate
borne by the last preceding issue of farm loan
bonds of the Federal land bank with which such
branch bank is connected: Provided, That no loan
shall be made in Puerto Bico or Alaska by such
branch bank for a longer term than twenty years.
Each borrower through such branch bank shall
subscribe and pay for stock in the Federal land
bank with which it is connected in the sum of $5
for each $100 or fraction thereof borrowed; such
stock shall be held by such Federal land bank as
collateral security for the loan of the borrower;
shall participate in all dividends; and upon full
payment of the loan shall be canceled at par and
proceeds paid to borrower, or the borrower may
apply the same to the final payments on his loan.
(July 17, 1916, c. 245, § 4, 39 Stat. 362; Feb. 27,
1921, c. 78, 41 Stat. 1148; Mar. 4, 1923, c. 252, Title
III, § 303, 42 Stat. 1474; Mar. 10, 1924, c. 46, § 2,
43 Stat. 17; Mar. 4,1929, c. 700, 45 Stat. 1558.)
672 (a) Loans by branches regulated; collateral.—
Each borrower through such branch bank shall
subscribe and pay for stock in the Federal land
bank with which it is connected in the sum of $5

§ 4

12 U. S. C.

FEDERAL FARM LOAN ACT

F. F. L. Act

for each $100 or fraction thereof borrowed; such
stock shall be held by such Federal land bank as
collateral security for the loan of the borrower;
shall participate in all dividends; and upon full
payment of the loan shall be canceled at par and
proceeds paid to borrower, or the borrower may
apply the same to the final payments on his loan.
(July 17, 1916, c. 245, § 4, 39 Stat. 362; Feb. 27,
1921, c. 78, 41 Stat. 1148.)
§ 673

Temporary directors; bonds; officers; attorneys
and employees.—Each Federal land bank shall be
temporarily managed by five directors appointed
by the Federal Farm Loan Board. Said directors
shall be citizens of the United States and residents
of the district. They shall each give a surety
bond, the premium on which shall be paid from
the funds of the bank. They shall receive such
compensation as the Federal Farm Loan Board
shall fix. They shall choose from their number,
by majority vote, a president, a vice president, a
secretary, and a treasurer. They are further au
thorized and empowered to employ such attorneys,
experts, assistants, clerks, laborers, and other em
ployees as they may deem necessary, and to fix
their compensation, subject to the approval of the
Federal Farm Loan Board. (July 17,1916, c. 245,
§ 4, 39 Stat. 362.)

§ 4

§ 674

Organization certificates; contents.—Said temporary directors shall, under their hands, forthwith
make an organization certificate, which shall spe
cifically state:
First. The name assumed by such bank.
.Second. The district within which its operations
are to be carried on, and the particular city in which
its principal office is to be located.
Third. The amount of capital stock and the num
ber of shares into which the same is to be divided:
Provided, That every Federal land bank organized
under this Act shall by its articles of association
permit an increase of its capital stock from time to
time for the purpose of providing for the issue of
shares to national farm loan associations and stock
holders who may secure loans through agents of
Federal land banks in accordance with the pro
visions of this Act.
Fourth. The fact that the certificate is made to
enable such persons to avail themselves of the ad
vantages of this Act. The organization certificate

§ 4

12 U. S. O.

FEDERAL FARM LOAN ACT

F. F. L. Act

shall be acknowledged before a judge or clerk of
some court of record or notary public, and shall be,
together with the acknowledgment thereof, authen
ticated by the seal of such court or notary, trans
mitted to the Farm Loan Commissioner, who shall
record and carefully preserve the same in his office,
where it shall be at all times open to public inspec
tion. (July 17, 1916, c. 245, § 4, 39 Stat. 362.)
§ 675

Changes in organization certificate,—The Federal Farm Loan Board is authorized to direct such
changes in or additions to any such organization
certificate, not inconsistent with this Act, as it may
deem necessary or expedient. (July 17, 1916, c.
245, § 4, 39 Stat. 363.)

§ 4

§ 676

Time of commencement of corporate existence
of land banks; powers enumerated.—Upon duly
making and filing such organization certificate the
bank shall become, as from the date of the execu
tion of its organization certificate, a body corporate,
and as such, and in the name designated in the or
ganization certificate, it shall have power—
First. To adopt and use a corporate seal.
Second. To have succession until it is dissolved
by Act of Congress or under the provisions of this
Act.
Third. To make contracts.
Fourth. To sue and be sued, complain, inter
plead, and defend, in any court of law or equity,
as fully as natural persons.
Fifth. To elect or appoint directors, and by its
board of directors to elect a president and a vice
president, appoint a secretary and a treasurer and
other officers and employees, define their duties, re
quire bonds of them, and fix the penalty thereof;
by action of its board of directors dismiss such
officers and employees, or any of them, at pleasure
and appoint others to fill their places.
Sixth. To prescribe, by its board of directors, sub
ject to the supervision and regulation of the Federal
Farm Loan Board, by-laws not inconsistent with
law, regulating the manner in which its stock shall
be transferred, its directors elected, its officers
elected or appointed, its property transferred, its
general business conducted and the privileges
granted to it by law exercised and enjoyed.
Seventh. To exercise, by its board of directors
or duly authorized officers or agents, subject to law,

§ 4

12 U,S. 0.

FEDERAL, FARM LOAN ACT

F. F. L. Act

all such incidental powers as shall be necessary
to carry on the business herein described. (July
17, 1916, c. 245, § 4, 39 Stat. 363.)
§ 677

Time of election of directors.—After the subscriptions to stock in any Federal land bank by
national farm loan associations, hereinafter au
thorized, shall have reached the sum of $100,000,
the officers and directors of said land bank shall
be chosen as herein provided and shall, upon be
coming duly qualified, take over the management
of said land bank from the temporary officers se
lected under this section. (July 17, 1916, c. 245,
§ 4, 39 Stat. 363.)

§ 4

678

Directors; number and qualifications; local and
district directors; election and appointment.—
The board of directors of every Federal land bank
shall be selected as hereinafter specified and shall
consist of seven members. Three of said directors
shall be known as local directors and shall be
chosen by and be representative of national farm
loan associations, and borrowers through agencies;
three shall be known as district directors and shall
be appointed by the Federal Farm Loan Board and
represent the public interest. The term of office of
local and district directors shall be three years.
(July 17, 1916, c. 245, § 4, 39 Stat. 363; Mar. 4,
1923, c. 252, Title III, § 304, 42 Stat. 1474.)

§ 4

679

Divisions of districts; local directors; nomination of candidates.—At least two months before
each election, the Federal Farm Loan Board shall
divide each land bank district into three divisions,
as nearly equal as possible according to number ox
borrowers and the voting strength of national farm
loan associations and borrowers through agencies,
and the Farm Loan Commissioner shall thereupon
notify each association and agency in writing that
an election is to be held for one local director from
each of said divisions and requesting each associa
tion and agency to nominate one candidate for
each division. Within ten days of receipt of such
notice each national farm loan association and bor
rower through agencies shall forward nominations
of residents of their respective divisions for one di
rector for such division to said Farm Loan Com
missioner. The Farm Loan Commissioner shall

§ 4

1 2 9 3 0 7 °— 3 2 -------- 2

12 u. s. a

FEDERAL. FARM LOAN ACT

F. F.

L. Act

then prepare a list of candidates for local directors,
consisting of the ten persons receiving the highest
number of votes from national farm loan associa
tions and borrowers through agencies for each di
vision. (July 17, 1916, c. 245, § 4, 39 Stat. 363;
Mar. 4,1923, c. 252, Title III, § 304, 42 Stat. 1474.)
§ 680

Local directors; election.—At least one month
before said election the Farm Loan Commissioner
shall mail to each national farm loan association
and to each borrower through agencies the list of
candidates for their respective divisions. The di
rectors of each national farm loan association shall
cast the vote of said association for one of the
candidates on said list and shall forward said vote
to the said Farm Loan Commissioner within ten
daj^s after said list of candidates is received. In
voting under this section each association shall
be entitled to cast a number of votes equal to the
total voting strength of the stockholders in asso
ciation meetings, and each borrower through
agencies shall be entitled to cast one vote for each
share of stock held by him in the Federal land bank
not exceeding twenty shares, and shall forward
said vote to the said Farm Loan Commissioner
within ten days after said list of candidates is re
ceived. The candidate receiving the highest num
ber of votes in his division shall be declared elected
as local director of the Federal land bank district
from his division. In case of a tie, the Farm Loan
Commissioner shall determine the choice. The
nominations from which the list of candidates is
prepared, and the votes of the respective associations
and borrowers through agencies for such candi
dates, as counted, shall be tabulated and preserved,
subject to examination by any candidate, for at
least one year after the result of the election is
announced. (July 17, 1916, c. 245, § 4, 39 Stat.
363; Mar. 4, 1923, c. 252, Title III, § 304, 42 Stat.
1475.)

§ 4

§ 681

District directors; director at large; appointment and election; vacancies.—The Federal Farm
Loan Board shall designate one of the district di
rectors to serve until December 31,1924, one to serve
till December 31,1925, and one to serve till Decem
ber 31, 1926. After their first appointment each
district director shall be appointed for a term of
three years. At the first regular meeting of the
board of directors of each Federal land bank the

§ 4

12 U. S. C.

FEDERAL, FARM LOAN ACT

F. F. L. Act

local directors shall designate one of their members
to serve till December 31, 1924, one to serve till
December 31, 1925, and one to serve till Decem
ber 31, 1926. Thereafter each local director shall
be chosen as hereinbefore provided and shall hold
office for a term of three years. Any vacancies
that may occur in the board of directors shall
be filled for the unexpired term in the manner
provided herein for the original selection of such
directors. At the same time that the associations
and borrowers through agencies nominate the can
didates for the local directors, each association and
each borrower through agencies shall also nomi
nate one candidate for director at large for the
entire district, and from the three persons having
the greatest number of votes for nominee for di
rector at large, the Federal Farm Loan Board
shall select a director at large, whose term of
office shall terminate on the 31st day of December,
1925, and every three years thereafter. Such sev
enth director may be removed by the Federal
Farm Loan Board for neglect of duty, incapac
ity for the work, or malfeasance in office, after
charges duly preferred and a hearing had thereon,
and in such cases the associations of the district
shall in like manner nominate candidates for an
other director at large, to fill the vacancy, for
whom the Federal Farm Loan Board shall in
same manner select a successor, but any person
who is removed can not be nominated to succeed
himself. The board of directors thus selected
shall, upon qualification, immediately take over
the management of each bank. (July 17, 1916,
c. 245, § 4, 39 Stat. 363; Mar. 4, 1923, c. 252,
Title III, § 304, 42 Stat. 1475.)
§ 682

Qualifications of directors.—Directors of Federal land banks shall have been, for at least two
years, residents of the district for which they are
appointed or elected, and a local director shall be
a resident of his division when elected. No dis
trict director of a Federal land bank shall, during
his continuance in office, act as an officer, director,
or employee of any other institution, association,
or partnership engaged in banking or in the busi
ness of making or selling land mortgage loans.
(July 17, 1916, c. 245, § 4, 39 Stat. 363; Mar. 4,
1923, c. 252, Title III, | 304, 42 Stat. 1476.)

§ 4

12 U. S. C,

§ 683

FEDERAL FARM LOAN ACT

F. F. L. Act

Directors, officers, and employees; compensation and allowances,—Directors of the Federal
land bank shall receive, in addition to any com
pensation otherwise provided, a reasonable allow
ance for necessary expenses in attending meetings
of their boards, to be paid by the respective Fed
eral land banks. Any compensation that may be
provided by boards of directors of the Federal land
banks for directors, officers, or employees shall be
subject to the approval of the Federal Farm Loan
Board. (July 17, 1916, c. 245, § 4, 39 Stat. 363;
Mar. 4, 1923, c. 252, Title III, § 304, 42 Stat. 1476.)

§ 4

CAPITAL STOCK OF FEDERAL LAND BANKS

§ 691

Minimum amount of [original] capital; regulation of subscriptions.—Every Federal land bank
shall have, before beginning business, a subscribed
capital of not less than $750,000. The Federal
Farm Loan Board is authorized to prescribe the
times and conditions of the payment of subscrip
tions to [original] capital stock, to reject any sub
scription in its discretion, and to require subscribers
to furnish adequate security for the payment
thereof. (July 17, 1916, c. 245, § 5, 39 Stat. 364.)

§ 5

§ 692

Shares; value; who may subscribe [to original
stock.1]—The capital stock of each Federal land
bank shall be divided into shares of $5 each, and
may be subscribed for and held by any individual,
firm, or corporation, or by the Government of any
State or of the United States. (July 17, 1916,
c. 245, § 5, 39 Stat. 364.)

§ 5

§ 693

Transfer of stock held by national farm loan
associations.—Stock held by national farm loan
associations shall not be transferred or hypothe
cated, and the certificates therefor shall so state.
(July 17,1916, c. 245, § 5, 39 Stat. 364.)

§ 5

§ 694

Dividends; voting stock.2—Stock owned by the
Government of the United States in Federal land
banks shall receive no dividends, but all other stock

§ 5

* T h e provision fo r subscriptions by any individual, firm, or cor
poration applies only to original stock.
See 12 U . S. C. 6 9 5 , below .
2 Stock issued to the U n ited S tates under the provisions o f 12
U . S. C., § 6 9 8 , is nonvoting.
See th a t section.
F o r vo tin g privi
leges o f borrowers through agencies in election o f directors o f
F ederal L a n d B anks, see 1 2 U . S. C ., § § 6 7 8 - 6 8 0 .

12 U. S. O.

FEDERAL» FARM LOAN ACT

F. F. L. Act

shall share in dividend distributions without pref
erence. Each national farm loan association and
the Government of the United States shall be en
titled to one vote for each share of stock held by it
in deciding all questions at meetings of shareholders,
and no other shareholder shall be permitted to vote.
Stock owned by the United States shall be voted
by the Farm Loan Commissioner, as directed by
the Federal Farm Loan Board. (July 17, 1916, c.
245, § 5, 89 Stat. 364.)
§ 695

Subscriptions to [original] stock; subscriptions
by United States for unsubscribed balance [of
original capital stock,]—It shall be the duty of the
Federal Farm Loan Board, as soon as practicable
after July 17, 1916, to open books of subscription
for the capital stock of a Federal land bank in each
Federal land bank district. I f within thirty days
after the opening of said books any part of the mini
mum capitalization of $750,000 herein prescribed for
Federal land banks shall remain unsubscribed, it
shall be the duty of the Secretary of the Treasury
to subscribe the balance thereof on behalf of the
United States, said subscription to be subject to
call in whole or in part by the board of directors of
said land bank upon thirty days’ notice with the
approval of the Federal Farm Loan Board; and
the Secretary of the Treasury is hereby author
ized and directed to take out shares corresponding
to the unsubscribed balance as called, and to pay for
the same out of any moneys in the Treasury not
otherwise appropriated. Thereafter no stock shall
be issued except as hereinafter provided. (July
17, 1916, c. 245, § 5, 39 Stat. 364.)

§ 6

§ 696

Retirement of original stock.—After the subscriptions to capital stock by national farm loan
associations shall amount to $750,000 in any Fed
eral land bank, said bank shall apply semiannually
to the payment and retirement of the shares of
stock which were issued to represent the subscrip
tions to the original capital twenty-five per centum
of all sums thereafter subscribed by national farm
loan associations, by borrowers through agencies,
and by borrowers through branch banks to capital
stock until all such original capital stock is retired
at par. (July 17, 1916, c. 245, § 5, 39 Stat. 364 j
Jan. 23, 1932, c. 9, § 1, 47 Stat. 12.)

§ 5

12 U. S. 0 .

FEDERAL FARM LOAN ACT

F. F. L, Act

§ 697

Proportion held in quick assets.—At least
twenty-five per centum of that part of the capital
of any Federal land bank for which stock is out
standing in the name of national farm loan associa
tions shall be held in quick assets, and may consist
of cash in the vaults of said land bank, or in de
posits in member banks of the Federal reserve sys
tem, or in readily marketable securities which are
approved under rules and regulations of the Fed
eral Farm Loan Board: Provided, That not less than
five per centum of such capital shall be invested in
United States Government bonds. (July 17, 1916,
c. 245, § 5, 39 Stat. 364.)

§ 5

§ 698

Subscriptions to stock; subscriptions by United
States upon request of directors of Federal land
bank; terms; amount; retirement.—It shall be the
duty of the Secretary of the Treasury on behalf of
the United States, upon the request of the board
of directors of any Federal land bank made with
the approval of the Federal Farm Loan Board,
to subscribe from time to time for capital stock ox
such bank in an amount or amounts specified in
such approval or approvals, such subscriptions to
be subject to call in whole or in part by the board
of directors of said bank upon thirty days’ notice
with the approval of the Federal Farm Loan
Board. The Secretary of the Treasury is hereby
authorized and directed to take out and pay for
shares having an aggregate par value equal to
the amounts so called; and to enable the Secretary
of the Treasury to pay for stock issued hereunder
there is hereby authorized to be appropriated 1 the
sum of $125,000,000 such stock to be nonvoting.
Shares of stock issued pursuant to this paragraph
shall be paid off at par and retired in the same
manner as the original capital stock of said bank
after said original stock outstanding, if any, has
been paid off and retired: Provided, however, That
stock issued pursuant to this paragraph may at any
time, in the discretion of the directors and with the
approval of the Federal Farm Loan Board, be paid
off at par and retired in whole or in part; and that
said board may at any time require such stock to
be paid off at par and retired in whole or in part
if in the opinion of the board the bank has re
sources available therefor. The proceeds of all
repayments on account of stock issued pursuant to
this paragraph shall be held in the Treasury of the

§ 5

1 See Appendix B fo r ap propriation .

12 U. S. C.

FEDERAL, FARM LOAN ACT

F. F. L. Act

United States and shall be available for the purpose
of paying for other stock thereafter issued pur
suant to this paragraph. (Jan. 23, 1932, c. 9, § 2,
47 Stat. 12.)
LAND BANKS AS

§ 701

Land banks and joint stock land banks as depositaries and agents; bonds; investment of
funds.—All Federal land banks and joint stock
land banks organized under this Act, when desig
nated for that purpose by the Secretary of the
Treasury, shall be depositaries of public money,
except receipts from customs, under such regula
tions as may be prescribed by said Secretary; and
they may also be employed as financial agents of
the Government; and they shall perform all such
reasonable duties, as depositaries of public money
and financial agents of the Government, as may be
required of them. And the Secretary of the Treas
ury shall require of the Federal land banks and
joint stock land banks thus designated satisfactory
security, by the deposit of United States bonds or
otherwise, for the safekeeping and prompt payment
of the public money deposited with them, and for
the faithful performance of their duties as financial
agents of the Government. No Government funds
deposited under the provisions of this section shall
be invested in mortgage loans or farm loan bonds.
(July 17, 1916, c. 245, § 6, 39 Stat. 365.)
NATIONAL

§ 711

GOVERNMENT DEPOSITARIES
AND AGENTS

§ 6

FARM LOAN ASSOCIATIONS
GENERALLY

Organization; articles of association; signature; copies for land banks.—Corporations to be
known as national farm loan associations, may be
organized by persons desiring to borrow money on
farm mortgage security under the terms of this
Act. Such persons shall enter into articles of asso
ciation which shall specify in general terms the ob
ject for which the association is formed and the
territory within which its operations are to be car
ried on, and which may contain any other provi
sion, not inconsistent with law, which the associa
tion may see fit to adopt for the regulation of its
business and the conduct of its affairs. Said arti
cles shall be signed by the persons uniting to form
the association, and a copy thereof shall be for-

§ 7

12 U. S. 0.

FEDERAL FARM LOAN ACT

F. F. L. Act

warded to the Federal land bank for the district,
to be filed and preserved in its office. (July 17,
1916, c. 245, § 7, 39 Stat. 365.)
§ 712

Directors; officers; loan committee.—Every national farm loan association shall elect, in the man
ner prescribed for the election of directors of na
tional banking associations, a board of not less
than five directors, who shall hold office for the
same period as directors of national banking asso
ciations. It shall be the duty of said board of di
rectors to choose in such manner as they may pre
fer a secretary-treasurer, who shall receive such
compensation as said board of directors shall de
termine. The board of directors shall elect a pres
ident, a vice president, and a loan committee of
three members. (July 17, 1916, c. 245, § 7, 39 Stat.
365.)

§ 7

§ 713

Compensation and qualifications of directors.—
The directors and all officers except the secretarytreasurer shall serve without compensation, un
less the payment of salaries to them shall be ap
proved by the Federal Farm Loan Board. All
officers and directors except the secretary-treas
urer shall, during their term of office, be bona fide
residents of the territory within which the associa
tion is authorized to do business, and shall be share
holders of the association. (July 17, 1916, c. 245,
§ 7, 39 Stat. 365.)

§ 7

§ 714

Secretary-treasurer; powers and duties; bond;
reports; misconduct in office.—It shall be the duty
of the secretary-treasurer of every national farm
loan association to act as custodian of its funds and
to deposit the same in such bank as the board of
directors may designate, to pay over to borrowers
all sums received for their account from the Federal
land bank upon first mortgage as in this Act pre
scribed, and to meet all other obligations of the asso
ciation, subject to the orders of the board of direc
tors and in accordance with the by-laws of the asso
ciation. It shall be the duty of the secretary-treas
urer, acting under the direction of the national farm
loan association, to collect, receipt for, and trans
mit to the Federal land bank payments of interest,
amortization installments, or principal arising out
of loans made through the association. He shall be
the custodian of the securities, records, papers, cer-

§ 7

12 U .S . C.

FEDERAL FARM LOAN ACT

tificates of stock, and all documents relating to or
bearing upon the conduct of the affairs of the asso
ciation. He shall furnish a suitable surety bond to
be prescribed and approved by the Federal Farm
Loan Board for the proper performance of the
duties imposed upon him under this Act, which
shall cover prompt collection and transmission of
funds. He shall make a quarterly report to the
Federal Farm Loan Board upon forms to be pro
vided for that purpose. Upon request from said
board said secretary-treasurer shall furnish infor
mation regarding the condition of the national
farm loan association for which he is acting, and
he shall carry out all duly authorized orders of said
board. He shall assure himself from time to time
that the loans made through the national farm loan
association of which he is an officer are applied to
the purposes set forth in the application of the
borrower as approved, and shall forthwith report
to the land bank of the district any failure of any
borrower to comply with the terms of his applica
tion or mortgage. He shall also ascertain and re
port to said bank the amount of any delinquent
taxes on land mortgaged to said bank and the name
of the delinquent. No such secretary-treasurer
shall engage in the making of land mortgage loans
eligible at a Federal land bank through or for
any other land mortgage company or agency, and
the making of any such loan by any secretarytreasurer shall forthwith work a forfeiture of his
office. (July 17, 1916, c. 245, § 7, 39 Stat. 365;
Mar. 4,1923, c. 252. T. I l l , § 305, 42 Stat. 1476.)
§715

Expenses of secretary-treasurer; payment.—
The reasonable expenses of the secretary-treasurer,
the loan committee, and other officers and agents
of national farm loan associations, and the salary
of the secretary-treasurer, shall be paid from the
general funds of the association, and the board of
directors is authorized to set aside such sums as it
shall deem requisite for that purpose and for other
expenses of said association. When no such funds
are available, the board of directors may levy an
assessment on members in proportion to the amount
of stock held by each, which may be repaid as soon
as funds are available, or it may secure an advance
from the Federal land bank of the district, to be
repaid with interest at the rate of six per centum
per annum, from dividends belonging to the said
association. Said Federal land bank is hereby au23

W L. Act

12 U. S. C.

FEDERAL FARM LOAN ACT

F. F. L. Act

thorized ¿0 make such advance and to deduct such
repayment. (July 17,1916, c. 245, § 7,39 Stat. 365.)
§ 716

Number of incorporators; organization; directors; consolidation of offices of secretary and
treasurer.—Ten or more natural persons who are
the owners, or about to become the owners, of farm
land qualified as security for a mortgage loan under
12 U. S. C. 771 [F. F. L. Act § 12J, may unite to
form a national farm loan association. They shall
organize subject to the requirements and the con
ditions specified in this subdivision and in 12
U. S. C. 671-683 [F. F. L. Act § 4], so far as the
same may be applicable: Provided, That the board
of directors may consist of five members only, and
instead of a secretary and a treasurer there shall be
a secretary-treasurer, who need not be a shareholder
of the association. (July 17, 1916, c. 245, § 7, 39
Stat. 365.)

§ 7

§ 717

Report and affidavit accompanying articles of
association.—When the articles of association are
forwarded to the Federal land bank of the district
as provided in this subdivision, they shall be accom
panied by the written report of the loan committee
as required in section 12 U. S. C. 751 [F. F. L.
Act § 10], and by an affidavit stating that each of
the subscribers is the owner, or is about to become
the owner, of farm land qualified under 12 U. S. C.
771 [F. F. L. Act § 12] as the basis of a mortgage
loan; that the loan desired by each person is not
more than $10,000, nor less than $100, and that the
aggregate of the desired loans is not less than $20,000; that said affidavit is accompanied by a sub
scription to stock in the Federal land bank equal to
5 per centum of the aggregate sum desired on mort
gage loans; and that a temporary organization of
said association has been formed by the election of a
board of directors, a loan committee, and a secretary-treasurer who subscribes to said affidavit,
giving his residence and post-office address. (July
17, 1916, c. 245, § 7, 39 Stat. 365.)

§ 7

§718

Investigation of solvency of applicants for incorporation.—Upon receipt of such articles of asso
ciation, with the accompanying affidavit and stock
subscription, the directors of said Federal land
bank shall send an appraiser to investigate the sol
vency and character 01 the applicants and the value

§ 7

12 U. S. G.

FEDERAL FARM LOAN ACT

F. F. L. Act

of their lands, and shall then determine whether
in their judgment a charter should be granted to
such association. They shall forward such articles
of association and the accompanying affidavit to
the Federal Farm Loan Board with their recom
mendation. I f said recommendation is unfavor
able, the charter shall be refused. (July 17, 1916,
c. 245, § 7, 39 Stat. 365.)
§ 719

Grant or refusal of charter.—If said recommendation is favorable, the Federal Farm Loan
Board shall thereupon grant a charter to the appli
cants therefor, designating the territory in which
such association may make loans, and shall forward
said charter to said applicants through said Fed
eral land bank: Provided, That said Federal Farm
Loan Board may for good cause shown in any case
refuse to grant a charter. (July 17, 1916, c. 245,
§ 7, 39 Stat. 365.)

§ 7

§ 720

Loans to associations.—Upon receipt of its charter such national farm loan association shall be au
thorized and empowered to receive from the Fed
eral land bank of the district sums to be loaned to
its members under the terms and conditions of this
Act. (July 17, 1916, c. 245, § 7, 39 Stat. 365.)

§ 7

§ 721

Loans to members; subscriptions to stock of
land banks as collateral; retirement of stock.—
Whenever any national farm loan association shall
desire to secure for any member a loan on first
mortgage from the Federal land bank of its district
it shall subscribe for capital stock of said land bank
to the amount of 5 per centum of such loan, such
subscription to be paid in cash upon the granting
of the loan by said land bank. Such capital stock
shall be held by said land bank as collateral se
curity for the payment of said loan, but said asso
ciation shall be paid any dividends accruing and
payable on said capital stock while it is outstand
ing. Such stock may, in the discretion of the di
rectors, and with the approval of the Federal Farm
Loan Board, be paid off at par and retired, and it
shall be so paid off and retired upon full payment
of the mortgage loan. In such case the national
farm loan association shall pay off at par and retire
the corresponding shares of its stock which were is
sued when said land bank stock was issued. (July
17,1916, c. 245, § 7, 39 Stat. 365.)

§ 7

F. F. L. Act

12 U. S.

FEDERAL FARM LOAN ACT

§ 722

Reduction of capital stock of Federal land
banks.—The capital stock of a Federal land bank
shall not be reduced to an amount less than five per
centum of the principal of the outstanding farm
loan bonds issued by it. (July 17, 1916, c. 245,
§ 7, 39 Stat. 365.)

§ 7

CAPITAL STOCK OF NATIONAL FARM LOAN
ASSOCIATIONS

§ 731

Par value of shares.—The shares in national
farm loan associations shall be of the par value of
$5 each. (July 17, 1916, c. 245, § 8, 39 Stat. 367.)

§ 8

§ 732

Voting stock*—-Every shareholder shall be en
titled to one vote on each share of stock held by him
at all elections of directors and in deciding all ques
tions at meetings of shareholders : Provided, That
the maximum number of votes which may be cast
by any one shareholder shall be twenty. (July 17,
1916, c. 245, § 8, 39 Stat. 367.)

§ 8

§ 733

Borrowers only to be members; amount of
stock to be held by borrowers; stock held as col
lateral; retirement of stock.—No persons but bor
rowers on farm land mortgages shall be members
or shareholders of national farm loan associations.
Any person desiring to borrow on farm land mort
gage through a national farm loan association shall
make application for membership and shall sub
scribe for shares of stock in such farm loan associa
tion to an amount equal to 5 per centum of the face
of the desired loan, said subscription to be paid in
cash upon the granting of the loan. If the appli
cation for membership is accepted and the loan is
granted, the applicant shall, upon full payment
therefor, become the owner of one share of capital
stock in said loan association for each $100 of the
face of his loan, or any major fractional part
thereof. Said capital stock shall be paid off at par
and retired upon full payment of said loan. Said
capital stock shall be held by said association as
collateral security for the payment of said loan, but
said borrower shall be paid any dividends accruing
and payable on said capital stock while it is out
standing. (July 17, 1916, c. 245, § 8, 39 Stat. 367.)

§ 8

12 U. S. C.

§ 734

FEDERAL. FARM LOAN ACT

F. F. L. Act

Increase of stock*—Every national farm loan
association formed under this Act shall by its
articles of association provide for an increase of its
capital stock from time to time for the purpose of
securing additional loans for its members and pro
viding for the issue of shares to borrowers in ac
cordance with the provisions of this Act. Such in
creases shall be included in the quarterly reports to
the Federal Farm Loan Board. (July 17, 1916,
c. 245, § 8, 39 Stat. 367.)

§ 8

NATIONAL FARM LOAN ASSOCIATIONS; SPECIAL
PROVISIONS

§741

Right of members to loans.—Any person whose
application for membership is accepted by a na
tional farm loan association shall be entitled to
borrow money on farm land mortgage upon filing
his application in accordance with 12 U. S. C. 733
[F. F. L. Act § 8], and otherwise complying with
the terms of this Act whenever the Federal land
bank of the district has funds available for that
purpose, unless said land bank or the Federal Farm
Loan Board shall, in its discretion, otherwise de
termine. (July 17, 1916, c. 245, § 9, 39 Stat. 368.)

§ 9

§ 742

Loans to members to pay for shares; repayment.—Any person desiring to secure a loan
through a national farm loan association under the
provisions of this Act may, at his option, borrow
from the Federal land bank through such associa
tion the sum necessary to pay for shares of stock
subscribed for by him in the national farm loan as
sociation, such sum to be made a part of the face of
the loan and paid off in amortization payments:
Provided, however, That such addition to the loan
shall not be permitted to increase said loan above
the limitation imposed in subsection 5 of 12 U. S. C.
771 [F. F. L. Act § 12 (5th)]. (July 17, 1916, c.
245, § 9, 39 Stat. 368.)

§ 9

§ 743

Commissions on interest payments; deduction
from dividends; loans by land banks to associa
tions; rate of interest.—Subject to rules and regu
lations prescribed by the Federal Farm Loan
Board, any national farm loan association shall be
entitled to retain as a commission from each inter

§ 9

12 ü. S. C.

FEDERAL FARM LOAN ACT

F. F. L. Act

est payment on any loan indorsed by it an amount
to be determined by said board not to exceed oneeighth of 1 per centum semiannually upon the un
paid principal of said loan, any amounts so re
tained as commissions to be deducted from divi
dends payable to such farm loan association by the
Federal land bank, and to make application to
the land bank of the district for loans not exceed
ing in the aggregate one-fourth of its total stock
holdings in said land bank. The Federal land
banks shall have power to make such loans to asso
ciations applying therefor and to charge interest
at a rate not exceeding 6 per centum per annum.
(July 17, 1916, c. 245, § 9, 39 Stat. 368.)
§ 744

Individual liability of shareholders.—Shareholders of every national farm loan association
shall be held individually responsible, equally and
ratably, and not one for another, for all contracts,
debts, and engagements of such association 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 bv their shares. (July 17,1916,
c. 245, § 9, 39 Stat. 368.)

§ 9

§ 745

New members.—After a charter has been
granted to a national farm loan association, any
natural person who is the owner, or about to be
come the owner, of farm land qualified under 12
U. S. C. 771 [F. F. L. Act § 12] as the basis
of a mortgage loan, and who desires to borrow on a
mortgage of such farm land, may become a member
of the association by a two-thirds vote of the direc
tors upon subscribing for one share of the capital
stock of such association for each $100 of the face
of his proposed loan or any major fractional part
thereof. He shall at the same time file with the
secretary-treasurer his application for a mortgage
loan, giving the particulars required by 12 U. S. C.
771 [F. F. L. Act § 12]. (July 17,1916, c. 245, § 9,
39 Stat. 368.)

§ 9

APPRAISAL FOR FARM LOANS

§ 751

Investigation by loan committee of character
and solvency of applicant; sufficiency of security
offered; report.—Whenever an application for a
mortgage loan is made through a national farm
28

§ 10

12 U. S. C.

FEDERAL FARM LOAN ACT

F. F. L. Act

loan association, the loan committee provided for
in 12 IT. S. C. 712 [F. F. L. Act § 7], shall
forthwith make, or cause to be made, such investi
gation as it may deem necessary as to the character
and solvency of the applicant, and the sufficiency
of the security offered, and cause written report
to be made of the result of such investigation, and
shall, if it concurs in such report, approve the
same in writing. No loan shall be made unless the
report is favorable, and the loan committee is
unanimous in its approval thereof. (July 17, 1916,
c. 245, § 10, 39 Stat. 369; Apr. 20, 1920, c. 154,
§ 2, 41 Stat. 570.)
§ 752

Submission to land bank of report and loan application; weight given appraisal.—The written
report required in 12 U. S. C. 751 [F. F. L. Act
§ 10] shall be submitted to the Federal land bank,
together with the application for the loan, and
the directors of said land bank shall examine said
written report when they pass on the loan applica
tion which it accompanies, but they shall not be
bound by said appraisal. (July 17, 1916, c. 245,
§ 10, 39 Stat. 369.)

§ 10

§ 753

Submission to land bank appraisers of report
and loan application.—Before any mortgage loan
is made by any Federal land bank, or joint stock
land bank, it shall refer the application and writ
ten report of the loan committee to one or more of
the land bank appraisers appointed under the au
thority of 12 U. S. C. 656 [F. F. L. Act § 3],
and such appraiser or appraisers shall investi
gate and make a written report upon the land
offered as security for said loan. No such loan
shall be made by said land bank unless said writ
ten report is favorable. (July 17,1916, c. 245, § 10,
39 Stat. 369.)

§ 10

754

Forms for reports.—Forms for appraisal reports
for farm loan associations and land banks shall
be prescribed by the Federal Farm Loan Board.
(July 17,1916, c. 245, § 10, 39 Stat. 369.)

§ 10

§ 755

Examinations by land bank appraisers as to
farm loan bonds and first mortgages.—Land bank
appraisers shall make such examinations and ap
praisals and conduct such investigations, concern-

§ 10

12 U. S. C

F. F. L. Act

FEDERAL, FARM LOAN ACT

ing farm loan bonds and first mortgage, as the
Federal Farm Loan Board shall direct. (July
17, 1916, c. 245, § 10, 39 Stat. 369.)

§ 756

Borrowers as appraisers or members of loan
committees.—No borrower under this Act shall be
eligible as an appraiser under this subdivision but
borrowers may act as members of a loan committee
in any case where they are not personally interested
in the loan under consideration. When any member
of a loan committee or of a board of directors is
interested, directly or indirectly, in a loan, a
majority of the board of directors of any national
farm loan association shall appoint a substitute to
act in his place in passing upon such loan. (July
17,1916, c. 245, § 10, 39 Stat. 369.)

POWERS

§ 761

NATIONAL FARM
ASSOCIATIONS

LOAN

Enumerated powers.—Every national farm loan
association shall have power:
First. Indorsing mortgages.—To indorse, and
thereby become liable for the payment of, mort
gages taken from its shareholders by the Federal
land of its district. (July 17, 1916, c. 245, § 11,
39 Stat. 369.)
Second. Receiving advances from banks and
loaning to shareholders.—To receive from the Fed
eral land bank of its district funds advanced by
said land bank, and to deliver said funds to its
shareholders on receipt of first mortgages qualified
under 12 U. S. C. 771 [F. F. L. Art. § 12]. (July
17, 1916, c. 245, § 11, 39 Stat. 369.)
Third. Fixing charges for applications for
loans.— To fix reasonable initial charges to be made
against applicants for loans and to borrowers in
order to meet the necessary expenses of the associa
tion : Provided, That such charges shall not exceed
amounts to be fixed by the Farm Loan Board, and
shall in no case exceed 1 per centum of the amount
of the loan applied for; to acquire and dispose
of property, real and personal, that may be neces
sary or convenient for the transaction of its busi
ness. (July 17, 1916, c. 245, § 11, 39 Stat. 369;
Apr. 20, 1920, c. 154, § 3, 41 Stat. 570.)
Fourth. Issuing interest-bearing certificates
against deposits of current funds.—To issue certifi80

§ 10

§ 11

12 U. S.C.

FEDERAL FARM LOAN ACT

F. F. L. Act

cates against deposits of current funds bearing
interest for not longer than one year ^at not to
exceed 4 per centum per annum after six days from
date, convertible into farm loan bonds when pre
sented at the Federal land bank of the district
in the amount of $25 or any multiple thereof.
Such deposits, when received, shall be forthwith
transmitted to said land bank, and be invested by
it in the purchase of farm loan bonds issued by a
Federal land bank or in first mortgages as defined
by this Act. (July 17. 1916, c. 245, § 11, 39 Stat.
369.)
RESTRICTIONS ON LOANS OF FEDERAL LAND
BANKS BASED ON FIRST MORTGAGES
(Applicable also to loans of joint stock land banks)

§ 771

Restrictions enumerated.—No Federal land bank
organized under this Act shall make loans except
upon the following terms and conditions:
First,1 Security by first mortgage.—Said loans
shall be secured by duly recorded first mortgages
on farm land within the land bank district in which
the bank is situated. (July 17, 1916, c. 245, § 12,
39 Stat. 370.)
Second. Agreement for repayment on amortiza
tion plan.—Every such mortgage shall contain an
agreement providing for the repayment of the loan
on an amortization plan by means of a fixed number
of annual or semiannual installments sufficient to
cover, first, a charge on the loan at a rate not ex
ceeding the interest rate in the last series of farm
loan bonds issued by the land bank making the
loan; second, a charge for administration and
profits at a rate not exceeding 1 per centum per
annum on the unpaid principal, said two rates com
bined constituting the interest rate on the mort
gage ; and, third, such amounts to be applied on
the principal as will extinguish the debt within an
agreed period, not less than five years nor mor6
than forty years: Provided, That after five years
from the date upon which a loan is made the
mortgagor may, upon any regular installment date,
make in advance any number of payments or any
portion thereof on account of the principal of his
loan as provided by his contract or pay the entire
principal of such loan, under the rules and regula
tions of the Federal Farm Loan Board: And pro1 This subsection not applicable to joint stock land bank loans.
See 12 U. S. C. 818 [F. F. L. Act, § 161, below.

1 2 9307 °— 32------- 3

§ 12

i2tj,s;o.

FEDERAL FARM LOAN ACT

F. F. L. Act

vided further, That before the first issues of farm
loan bonds by any land bank the interest rate on
mortgages may be determined in the discretion of
said land bank, subject to the provisions and lim
itations of this Act. (July 17, 1916, c. 245, § 12,
39 Stat, 370; Apr. 20, 1920, c. 154, § 4, 41 Stat. 570.)
Third. Maximum interest rate.—No loan on mort
gage shall be made under this Act at a rate of
interest exceeding 6 per centum per annum, ex
clusive of amortization payments. (July 17, 1916,
c. 245, § 12, 39 Stat. 370.)
Fourth.1 Purposes of loans enumerated.—Such
loans may be made for the following purposes and
for no other :
(a)
To provide for the purchase of land for
agricultural uses.
(&) To provide for the purchase of equipment,
fertilizers, and livestock necessary for the proper
and reasonable operation of the mortgaged farm;
the term “ equipment ” to be defined by the Fed
eral Farm Loan Board.
(tf) To provide buildings and for the improve
rsent of farm land ; the term u improvement ” to be
defined by the Federal Farm Loan Board.
(d)
To liquidate indebtedness of the owner of
the land mortgaged incurred for agricultural pur
poses, or incurred prior to January 1, 1922. (July
17, 1916, c. 245, § 12, 39 Stat. 370; Apr. 20, 1920,
c. 154, § 4, 41 Stat, 570; Mar. 4, 1923, c. 252, Title
III, § 306, 42 Stat. 1476.)
Fifth. Limitation on amount of loans; ap
praisal; reappraisal.—No such loan shall exceed
50 per centum of the value of the land mortgaged
and 20 per centum of the value of the permanent,
insured improvements thereon, said value to be
ascertained by appraisal, as provided in 12 U. S. C.
751. [F. F. L. Act § 10.] In making said ap
praisal the value of the land for agricultural pur
poses shall be the basis of appraisal and the earning
power of said land shall be a principal factor.
A reappraisal may be permitted at any time in
the discretion of thé Federal land bank, and such
additional loan may be granted as such reappraisal
will warrant under the provisions of this para
graph. Whenever the amount of the loan applied
for exceeds the amount that may be loaned under
the appraisal as herein limited, such loan may
be granted to the amount permitted under the
terms of this paragraph without requiring a new
1 This subsection not applicable to joint stock land bank loans.
See 12 U. S. C. 818 [F. F. L. Act § 16], below.

12 U. S. O.

FEDERAL, FARM LOAN ACT

F. F. L. Act

application or appraisal. (July 17, 1916, c. 245,
§ 12, 39 Stat. 370.)
Sixth.1 Persons entitled to loans; sales; death of
mortgagor.—No such loan shall be made to any
person who is not at the time, or shortly to become,
engaged in the cultivation of the farm mortgaged.
In case of the sale of the mortgaged land, the Fed
eral land bank may permit said mortgage and the
stock interests of the vendor to be assumed by the
purchaser. In case of the death of the mortgagor,
his heir or heirs, or his legal representative or
representatives, shall have the option within sixty
days of such death, to assume the mortgage and
stock interests of the deceased. (July 17, 1916, c.
245, § 12, 39 Stat. 370.)
Seventh.1 Maximum and minimum of loans.—
The amount of loans to any one borrower shall in
no case exceed a maximum of $25,000, nor shall any
one loan be for a less sum than $100, but preference
shall be given to applications for loans of $10,000
and under. (July 17, 1916, c. 245, § 12, 39 Stat.
370; Mar. 4, 1923, c. 252, Title III, § 307, 42 Stat.
1476.)
Eighth. Form of applications for loans.—Every
applicant for a loan under the terms of this Act
shall make application on a form to be prescribed
for that purpose by the Federal Farm Loan Board,
and such applicant shall state the objects to which
the proceeds of said loan are to be applied, and
shall afford such other information as may be
required. (July 17, 1916, c. 245, § 12, 39 Stat.
370.)
Ninth. Interest on defaulted payments; payment
of taxes and liens; insurance.—Every borrower
shall pay simple interest on defaulted payments at
the rate of 8 per centum per annum, and by express
covenant in his mortgage deed shall undertake to
pay when due all taxes, liens, judgments, or assess
ments which may be lawfully assessed against the
land mortgaged. Taxes, liens, judgments, or assess
ments not paid when due, and paid by the mort
gagee, shall become a part of the mortgage debt
and shall bear simple interest at the rate of 8 per
centum per annum. Every borrower shall under
take to keep insured to the satisfaction of the
Federal Farm Loan Board all buildings the value
of which was a factor in determining the amount of
the loan. Insurance shall be made payable to the
mortgagee as its interest may appear at time of
1 This subsection not applicable to joint stock land bank loans.
See 12 U. S. C. 818 [F. F. L. Act § 16], below.

12 U. S. C.

FEDERAL FARM LOAN ACT

F. F. L. Act

loss, and at the option of the mortgagor and sub
ject to general regulations of the Federal Farm
Loan Board, sums so received may be used to pay
for reconstruction of the buildings destroyed.
(July 17,1916, c. 245, § 12, 39 Stat. 370.)
Tenth.1 Agreement by borrowers as to use of
loans.—Every borrower who shall be granted a
loan under the provisions of this Act shall enter
into an agreement, in form and under conditions
to be prescribed by the Federal Farm Loan Board,
that if the whole or any portion of his loan shall
be expended for purposes other than those specified
in his original application, or if the borrower shall
be in default in respect to any condition or
covenant of the mortgage, the whole of said loan
shall, at the option of the mortgagee, become due
and payable forthwith: Provided, That the bor
rower may use part of said loan to pay for his
stock in the farm loan association, and the land
bank holding such mortgage may permit said loan
to be used for any purpose specified in subsection
fourth of this section. (July 17, 1916, c. 245, § 12,
39 Stat. 370.)
Eleventh. Loans not invalidated by unauthor
ized acts by banks or associations.—No loan or the
mortgage securing the same shall be impaired or
invalidated by reason of the exercise of any power
by any Federal land bank or national farm loan
association in excess of the powers herein granted
or any limitations thereon. (July 17, 1916, c.
245, § 12, 39 Stat. 370.)
§ 772

Loans to be current funds or farm loan bonds.—
Funds transmitted to farm loan associations by
Federal land banks to be loaned to its members
shall be in current funds, or farm loan bonds,
at the option of the borrower. (July 17, 1916,
c. 245, § 12, 39 Stat. 370.)

§ 773

Mortgages2on farm lands under United States
reclamation projects.—The term “ first mortgage,”
as used in 12 U. S. C. 771 [F. F. L. Act § 12] shall
be construed to include mortgages on farm lands
under United States reclamation projects, notwith
standing there may be against such lands a reserved

1 T h is subsection not applicable to jo in t stock land bank loans.
See 12 U. S. C. 8 1 8 [ F . F . L . A c t § 1 6 ] , below.
2 T h is provision w as not specifically m ade a pa rt o f an y section
o f the Federal F a rm Loan A c t.

§ 12

12 U. S. C.

F. F. L. Act

FEDERAL FARM LOAN ACT

or created lien in favor of the United States for
construction or other charges as provided in 43
U. S. C., 372, 381, 383, 391, 392, 411, 416, 419, 421,
431, 432, 434, 439, 461, 476, 491, 498, Public Lands
[June 17, 1902, c. 1093, 32 Stat. 388, as amended],
and acts amendatory thereof and supplementary
thereto, known as the reclamation law: Provided,
That such lands are otherwise eligible for loans
under the Federal Farm Loan act: And provided
further, That the amount and date of maturity of
such lien shall be given due consideration in fixing
the value of such lands for loan purposes. (May
15, 1922, c. 190, § 3, 42 Stat. 542.)

POWERS

§ 781

FEDERAL LAND
GENERALLY

BANKS

Enumerated powers.—Every Federal land bank
shall have power, subject to the limitations and
requirements of this Act—
First. Issuing and selling farm loan bonds.—To
issue, subject to the approval of the Federal Farm
Loan Board, and to sell farm loan bonds of the
kinds authorized in this Act, to buy the same for its
own account, and to retire the same at or before
maturity. (July 17, 1916, c. 245, § 13, 39 Stat.
372.)
Second. Investing funds in farm first mort
gages.—To invest such funds as may be in its pos
session in the purchase of qualified first mortgages
on farm lands situated within the Federal land
bank district within which it is organized or for
which it is acting. (July 17, 1916, c. 245, § 13, 39
Stat. 372.)
Third. Receipt and deposit of mortgages as
collateral for bonds; collection of moneys payable
under mortgages and bonds.—To receive and to
deposit in trust with the farm loan registrar for the
district, to be by him held as collateral security for
farm loan bonds, first mortgages upon farm land
qualified under 12 U. S. C. 771 [F. F. L. Act § 12],
and to empower national farm loan associations,
or duly authorized agents, to collect and immedi
ately pay over to said land banks the dues, interest,
amortization installments and other sums payable
under the terms, conditions, and covenants of the
mortgages and of the bonds secured thereby.
(July 17,1916, c. 245, § 13, 39 Stat 372.)
Fourth. Acquiring and disposing of property.—
To acquire and dispose of—
35

§ 13

12 U. S. C.

FEDERAL FARM LOAN ACT

F. F. L. Act

(a) Such property, real or personal, as may be
necessary or convenient for the transaction of its
business, which, however, may be in part leased to
others for revenue purposes.
(b) Parcels of land acquired in satisfaction of
debts or purchased at sales under judgments,
decrees, or mortgages held by it. But no such bank
shall hold title and possession of any real estate
purchased or acquired to secure any debt due to it,
for a longer period than five years, except with the
special approval of the Federal Farm Loan Board
in writing. (July 17, 1916, c. 245, § 13, 39 Stat.
372.)
Fifth. Depositing securities and funds with
reserve banks.—To deposit its securities, and its
current funds subject to check, with any member
bank of the Federal Reserve System, and to receive
interest on the same as may be agreed. (July 17,
1916, c. 245, § 13, 39 Stat. 372.) *
Sixth. Receiving deposits from associations.—To
accept deposits of securities or of current funds
from national farm loan associations holding its
shares, but to pav no interest on such deposits.
(July 17,1916, c. 245, § 13, 39 Stat. 372.)
Seventh. Borrowing money.—To borrow money,
to give security therefore, and to pay interest
thereon. (July 17, 1916, c. 245, § 13, 39 Stat. 372.)
E i g h t h . Buying and selling United States
bonds.—To buy and sell United States bonds.
(July 17, 1916, c. 245, § 13, 39 Stat. 372.)
Ninth. Charging fees for loans.—To charge ap
plicants for loans and borrowers, under rules and
regulations promulgated by the Federal Farm
Loan Board, reasonable fees not exceeding the ac
tual cost of appraisal and determination of title.
Legal fees and recording charges imposed by law in
the State where the land to be mortgaged is located
may also be included in the preliminary costs of ne
gotiating mortgage loans. The borrower may pay
such fees and charges or he may arrange with the
Federal land bank making the loan to advance the
same, in which case said expenses shall be made a
part of the face of the loan and paid off in amorti
zation payments. Such addition to the loan shall
not be permitted to increase said loan above the
limitations provided in 12 U. S. C. 771 [F. F. L.
Act. § 12]. (July 17, 1916, c. 245, § 13, 39 Stat.
372.)
Tenth. When in the judgment of the directors
conditions justify it, to extend, in whole or in part,
any obligation that may be or become unpaid under
36

12 U. S. C.

FEDERAL FARM LOAN ACT

F, F. L. Act

the terms of any mortgage, and to accept payment
of any such obligation during a period of five years
or less from the date of such extension in such
amounts as may be agreed upon at the date of mak
ing such extension. The sum of $25,000,000 1 of
the amount authorized to be appropriated under 12
U. S. C. 698 [F. F. L. Act § 5, as amended], shall
be used exclusively for the purpose of supplying
any bank with funds to use in its operations in
place of any amounts of which such bank may be
deprived by reason of extensions made as provided
in this paragraph. (Jan. 23, 1932, c. 9, § 5, 47
Stat. 14.)
RESTRICTIONS ON FEDERAL LAND BANKS

§ 791

Enumeration of restrictions.—No Federal land
bank shall have power—
First. Limiting deposits.—To accept deposits of
current funds payable upon demand except from
its own stockholders, or to transact any banking or
other business not expressly authorized by the pro
visions of this Act. (July 17, 1916, c. 245, § 14, 39
Stat. 372.)
Second. Loaning on first mortgages except
through associations.—To loan on first mortgage
except through national farm loan associations as
provided in 12 U. S. C. 720, 721, 733, and 734 [F.
F. L. Act § § 7 and 8], or through agents as pro
vided in 12 U. S. C. 801-808 [F. F. L. Act § 15].
(July 17,1916, c.#245, § 14, 39 Stat, 372.)
Third. Accepting other than first mortgages.—
To accept any mortgages on real estate except first
mortgages created subject to all limitations im
posed by 12 U. S. C. 771-773 [F. F. L. Act § 12],
and those taken as additional security for existing
loans. (July 17, 1916, c. 245, § 14, 39 Stat. 372.)
Fourth. Issuing excess of bonds; receiving excess
of mortgages from associations.—To issue or obli
gate itself for outstanding farm loan bonds in ex
cess of twenty times the amount of its capital and
surplus, or to receive from any national farm loan
association additional mortgages when the prin
cipal remaining unpaid upon mortgages already
received from such association shall exceed twenty
times the amount of its capital stock owned by such
1 F o r appropriation, see A p pen dix B .

§ 14

l2 U. S. O.

FEDERAL» FARM LOAN ACT

F. F.

L. Act

association. (July 17, 1916, c. 245, § 14, 39 Stat.
372.)
Fifth. Demanding unauthorized commissions.—
To demand or receive, under any form or pre
tense, any commission or charge not specifically
authorized in this Act. (July 17, 1916, c. 245, § 14,
39 Stat. 372.)
LOANS BY FEDERAL LAND BANKS THROUGH
AGENTS

§ 801

Loans; when authorized.—Whenever it shall
appear to the Federal Farm Loan Board that na
tional farm loan associations have not been formed,
and are not likely to be formed, in any lo
cality, because of peculiar local conditions, said
board may, in its discretion, authorize Fed
eral land banks to make loans on farm lands
through agents approved by said board. (July 17,
1916, c. 245, § 15, 39 Stat. 373.)

§ 15

§ 802

Manner of making.—Loans authorized by 12
TJ. S. C. 801 [F. F. L. Act § 15] shall be subject to
the same conditions and restrictions as if the same
were made through national farm loan associa
tions, and each borrower shall contribute 5 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
contributon shall warrant. (July 17, 1916, c. 245,
§ 15, 39 Stat. 373.)

§ 15

§ 803

Who may be employed as agent.—No agent
other than a duly incorporated bank, trust com
pany, mortgage company, or savings institution,
chartered by the State in which it has its princi
pal office, shall be employed under the provisions of
this subdivision. (July 17, 1916, c. 245, § 15, 39
Stat. 373.)

§ 15

§ 804

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

§ 15

12 ü. S, 0.

FEDERAL» FARM LOAN ACT

F. F. L. Act

agents not to exceed one-half of 1 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, c. 245, § 15, 39 Stat. 373.)

805

Expenses of agents added to loans.—Actual expenses paid to agents under the provisions of this
subdivision shall be added to the face of the loan
and paid off in amortization payments subject to
the limitations provided in subsection ninth of 12
U. S. C. 781 [F. F. L. Act § 13]. (July 17, 1916,
c. 245, § 15, 39 Stat. 373.)

§ 15

§ 806

Collecting interest and 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, c. 245, § 15, 39
Stat. 373.)

§ 15

§ 807

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 ex
ceed ten times its capital and surplus, (July 17,
1916, c. 245, § 15, 39 Stat. 373.)

§ 15

§ 808

When loans to cease.—If at any time the district represented by any agent under the provisions
of this subdivision shall, in the judgment of the
Federal Farm Loan Board, be adequately served by
national farm loan associations, no further loans
shall be negotiated therein by agents under this
subdivision. (July 17, 1916, c. 245, § 15, 39 Stat.
373.)

§ 15

12 ü . S. O.

FEDERAL FARM LOAN ACT

F. F. L. Act

JOINT STOCK LAND BANKS

§ 811

Power to organize; organization; directors.—
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 condi
tions set forth in 12 U. S. C. 671-683 [F. F. L. Act
§ 4], so far as the same may be applicable: Pro
vided, That the board of directors of every joint
stock land bank shall consist of not less than five
members. (July 17,1916, c. 245, § 16, 39 Stat. 374.)

§ 16

§ 812

Individual liability of shareholders.—Shareholders of every joint stock land bank organized
under this Act shall be held individually respon
sible, 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, c. 245, § 16, 39 Stat. 374.)

§ 16

§ 813

Powers, duties, and liabilities; stock.—Except
as otherwise provided, joint stock land banks shall
have the powers of, and be subject to all the restric
tions 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 associa
tions. (July 17, 1916, c. 245, § 16, 39 Stat. 374.)

§ 16

§ 814

Limitation on amount of issue of bonds; transacting banking business.—No joint stock land
bank shall have power to issue ot obligate itself
for outstanding farm loan bonds in excess of fif
teen 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, c. 245, § 16.
39 Stat. 374.)

§ 16

12 U. S. C.

FEDERAL FARM LOAN ACT

F. F. L. Act

§ 815

Minimum capital stock required.—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. (July 17, 1916,
c. 245, § 16, 39 Stat. 374.)

§ 16

§ 816

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, c. 245, § 16, 39 Stat. 374.)

§ 16

§ 817

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 shall direct. (July 17,
1916, c. 245, § 16, 39 Stat. 374.)

§ 16

§ 818

Interest rates; restrictions on mortgage
loans.—Joint stock land banks shall not be subject
to the provisions of subsection (b) of 12 U. S. C.
831 [F. F. L. Act § 17] as to interest rates on mort
gage loans or farm loan bonds, nor to the provisions
of subsections first, fourth, sixth, seventh, and tenth
of 12 U. S. C. 771 [F. F. L. Act § 12] as to restric
tions 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 restric
tions on mortgage loans imposed on Federal land
banks in 12 U. S. C. 771 [F. F. L. Act § 12]. (July
17, 1916, c. 245, § 16, 39 Stat. 374; Mar. 4, 1931, c.
518, § 1, 46 Stat. 1548.)

§ 16

§ 819

Limitation on interest rates.—Joint stock land
banks shall in no case charge a rate of interest on
farm loans exceeding by more than 1 per centum
the rate of interest established for the last series
of farm loan bonds issued by them. (July 17,1916,
c. 245, § 16, 39 Stat. 374.)

§ 16

12 U. S. C.

FEDERAL FARM LOAN ACT

F. F. L. Act

§ 820

Unauthorized commissions or charges.—Joint
stock land banks shall in no case demand or re
ceive, under any form or pretense, any commission
or charge not specifically authorized in this Act.
(July 17, 1916, c. 245, § 16, 39 Stat. 374.)

§ 16

§ 821

Bonds; power to issue; 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 pre
scribed by the Federal Farm Loan Board, and it
shall be stated in such bonds that such bank is
organized under section sixteen of this Act [12
U. S. C. 811-824], is under Federal supervision,
and operates under the provisions of this Act.
(July 17,1916, c. 245, § 16, 39 Stat. 374.)

§ 16

§ 822

Voluntary liquidation.—Any joint stock land
bank organized and doing business under the pro
visions of this Act may go into voluntary liquida
tion by making provision, to be approved by the
Federal Farm Loan Board, for the payment of its
liabilities : Provided, That such method of liquida
tion 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 stockholders. (July 17, 1916, c. 245, § 16, 39
Stat. 374; May 29, 1920, c. 215, 41 Stat. 691.)

§ 16

§ 823

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 12 U. S. C. 822
[F. F. L. Act § 16] provided, any Federal land bank
or joint stock land bank may, with the approval of
the Federal Farm Loan Board, 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

§ 16

12 U. S. C.

FEDERAL FARM LOAN ACT

F. F. L. Act

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 onefifteenth of the amount of such additional obliga
tions assumed. (July 17, 1916, c. 245, § 16, 39
Stat. 374; May 29, 1920, c. 215, 41 Stat. 691;
Mar. 4, 1925, c. 524, § 5, 43 Stat. 1263.)

§ 824

Insolvency of joint stock land bank; acquisition of assets by other banks; first mortgage
loans by acquiring bank.—In any case where a
joint stock land bank has been, or may be, declared
insolvent and placed in the hands of a receiver by
the Federal Farm Loan Board, any Federal land
bank or joint stock land bank may, in the manner as
may be prescribed by the Federal Farm Loan Board
and with the approval of the Federal Farm Loan
Board, acquire the assets and assume the liabilities
of said joint stock land bank in the hands of a
receiver. Any joint stock land bank which has ac
quired or may hereafter acquire the assets and
which has assumed or may hereafter assume the
liabilities of another joint stock land bank may,
if authorized by the Federal Farm Loan Board,
make loans secured by first mortgages on farm
lands within the States in which the other joint
stock land bank was authorized to make loans at
the time of such acquisition, and the acquiring
bank may, with the approval of the Federal Farm
Loan Board, continue to make loans in the States
where it was authorized to make loans at the time
of such acquisition: Provided, however, That the
acquiring bank shall not be authorized to make
loans at any one time in more than five States, of
which one shall be the State in which the bank has
its principal office, one shall be contiguous to such
State, the other shall be the States in which the
acquired joint stock land banks were authorized to
make loans at the time of such acquisition, and all
of said five States shall be situated in contiguous
territory. (Mar. 4,1931, c. 518, § 2,46 Stat. 1548.)

§ 16

12 U. S. C.

FEDERAL FARM LOAN ACT

F. F. L. Act

POWERS OF FEDERAL FARM LOAN BOARD
GENERALLY

§ 831

Enumeration.—The Federal Farm Loan Board
shall have power—
(a) Organizing and chartering banks and loan
associations ; authorizing increase of stock.—To or
ganize and charter Federal land banks, and to
charter national farm loan associations and joint
stock land banks subject to the provisions of this
Act, and in its discretion to authorize them to in
crease their capital stock. (July 17, 1916, c. 245,
§ 17, 39 Stat. 375.)
(b) Reviewing and altering interest rates}—To
review and alter at its discretion the rate of interest
to be charged by Federal land banks for loans made
by them under the provisions of this Act, said rates
to be uniform so far as practicable. (July 17, 1916,
c. 245, § 17, 39 Stat. 375.)
(c) Granting or refusing authority to issue
bonds.—To grant or refuse to Federal land banks,
or joint stock land banks, authority to make any
specific issue of farm loan bonds. (July 17, 1916,
c. 245, § 17, 39 Stat. 375.)
(d) Making rules and regulations as to charges
on loans.—To make rules and regulations respect
ing the charges made to borrowers on loans under
this Act for expenses in appraisal, determination
of title, and recording. (July 17, 1916, c. 245,
§ 17, 39 Stat. 375.)
(e) Requiring reports, etc.; examining banks
and associations.—To require reports and state
ments of condition and to make examinations of
all banks or associations doing business under the
provisions of this Act. (July 17, 1916, c. 245,
§ 17, 39 Stat. 375.)
(/) Prescribing form and terms of bonds and
surety bonds.—To prescribe the form and terms of
farm loan bonds, and the form, terms, and penal
sums of all surety bonds required under this Act
and of such other surety bonds as they shall deem
necessary, such surety bonds to cover financial loss
as well as faithful performance of duty. (July
17,1916, c. 245, %17, 39 Stat. 375.)
(g)
Regulating payments betioeen banks.—To
require Federal land banks to pay forthwith to
any Federal land bank their equitable proportion
of any sums advanced by said land bank to pay
1 T h is subsection not applicable to interest rates on m ortgage
loans o f jo in t stock land banks.
See 12 XJ. S. C. 8 18 [ F . F . L . A c t
§ 1 6 ] , above.

§ 17

12 U. S. O.

FEDERAL. FARM LOAN ACT

F. F. L. Act

the coupons of any other land bank, basing said
required payments on the amount of farm loan
bonds issued by each land bank and actually out
standing at the time of such requirement. (July
17,1916, c. 245, § 17, 89 Stat. 375.)
(h) Suspending or removal of directors, regis
trars, appraisers, and examiners.—To suspend or to
remove for cause any district director or any regis
trar, appraiser, examiner, or other official ap
pointed by said board under authority of 12 U. S.
C. 651-664 [F. F. L. Act § 3], the cause of such
suspension or removal to be communicated forth
with in writing by the Federal Farm Loan Board
to the person suspended or removed, and in case of
a district director to the proper Federal land bank.
(July 17, 1916,#c.#245, § 17, 39 Stat. 375.)
(i) E x e r c i s i n g supervisory authority over
banks.—To exercise general supervisory author
ity over the Federal land banks, the national farm
loan associations, and the joint stock land banks
herein provided for. (July 17, 1916, c. 245, § 17,
39 Stat. 375.)
{]) Incidental powers}—To exercise such inci
dental powers as shall be necessary or requisite to
fulfill its duties and carry out the purposes of this
Act. (July 17, 1916, c. 245, § 17, 39 Stat. 375.)
APPLICATIONS FOR FARM LOAN BONDS

§ 841

Application; to whom made; collateral security;
schedule.—Any Federal land bank, or joint stock
land bank, which shall have voted to issue
farm loan bonds under this Act, shall make
written application to the Federal Farm Loan
Board, through the farm loan registrar of the
district, for approval of such issue. With said ap
plication said land bank shall tender to said farm
loan registrar as collateral security first mortgages
on farm lands qualified under the provisions of 12
U. S. C. 771, 801-807, or 811-821 [F. F. L. Act §§ 12,
15 and 16], or United States Government bonds,
not less in aggregate amount than the sum of the
bonds proposed to be issued. Said bank shall fur
nish with such mortgages a schedule containing a
description thereof and such further information
as may be prescribed by the Federal Farm Loan
Board. (July 17, 1916, c. 245, § 18, 39 Stat. 375.)
1 See also 12 U . S. C. 6 6 5 , above, w ith respect to rules and regu
latio n s.

§ 18

12 U. S.

FEDERAL FARM LOAN ACT

§ 842

Verifying schedule; transmission to Loan
Board; investigation and appraisal of securities
tendered.—Upon receipt of the application pro
vided for in 12 U. S. C. 841 [F. F. L. Act § 18]
said farm loan registrar shall verify the schedule
also provided for in said section and shall trans
mit said application and said schedule to the Fed
eral Farm Loan Board, giving such further infor
mation pertaining thereto as he may possess. The
Federal Farm Loan Board shall forthwith cause to
be made such investigation and appraisement of the
securities tendered as it shall deem wise, and it
shall grant in whole or in part, or reject entirely,
such application. (July 17, 1916, c. 245, § 18, 39
Stat. 375.)

§ 18

§ 843

Transmission of decisions of Loan Board to land
bank and farm loan registrar; information by
registrar to board of issue of loan bonds.—The
Federal Farm Loan Board shall promptly trans
mit its decision as to any issue of farm loan bonds
to the land bank applying for the same and to the
farm loan registrar of the district. Said registrar
shall furnish, in writing, such information regard
ing any issue of farm loan bonds as the Federal
Farm Loan Board mav at any time require. (July
17, 1916, c. 245, § 18, 39 Stat. 375.)

§ 18

844

Approval by Loan Board of issue of bonds.—No
issue of farm loan bonds shall be authorized unless
the Federal Farm Loan Board shall approve such
issue in writing. (July 17, 1916, c. 245, § 18, 39
Stat. 375.)

§ 18

F. F. L. Act

ISSUE OF FARM LOAN BONDS

§ 851

Duties of registrars on approval of bond
issue.—Whenever any farm loan registrar shall re
ceive from the Fédéral Farm Loan Board notice
that it has approved any issue of farm loan bonds
under the provisions of 12 U. S. C. 841-844 [F. F.
L. Act § 18] he shall forthwith take such steps as
may be necessary, in accordance with the provi
sions of this Act, to insure the prompt execution of
said bonds and the delivery of the same to the land
bank applying therefor. (July 17, 1916, c. 245, §
19, 39 Stat. 376.)
46

§ 19

12 U. S. C.

FEDERAL FARM LOAN ACT

F. F. L. Act

§ 852

Rejection of application; return of collateral
security.—Whenever the Federal Farm Loan
Board shall reject entirely any application for an
issue of farm loan bonds, the first mortgages and
bonds tendered to the farm loan registrar as col
lateral security therefor shall be forthwith re
turned to said land bank by him. (July 17, 1916,
c. 245, §19, 39 Stat. 376.)

§ 19

§ 853

Disposition of collateral security on approval
of application.—Whenever the Federal Farm
Loan Board shall approve an issue of farm loan
bonds, the farm loan registrar having the custody
of the first mortgages and bonds tendered as col
lateral security for such issue of bonds shall retain
in his custody those first mortgages and bonds
which are to be held as collateral security, and
shall return to the bank owning the same any of
said mortgages and bonds which are not to be held
by him as collateral security. The land bank which
is to issue said farm loan bonds shall transfer to
said registrar, by assignment, in trust, all first mort
gages and bonds which are to be held by said regis
trar as collateral security, said assignment provid
ing for the right of redemption at any time by pay
ment as provided in this Act and reserving the right
of substitution of other mortgages qualified under
12 U. S. C. 771 and 811-821 [F. F. L. Act, §§ 12,
15, and 16]. Said mortgages and bonds shall be
deposited in such deposit vault or bank as the Fed
eral Farm Loan Board shall approve, subject to the
control of said registrar and in his name as trustee
for the bank issuing the farm loan bonds and for
the prospective holders of said farm loan bonds.
(July 17,1916, c. 245, § 19, 39 Stat. 376.)

§ 19

§ 854

Mortgages acceptable as collateral security.—No mortgage shall be accepted by a farm loan reg
istrar from a land bank as part of an offering
to secure an issue of farm loan bonds, either orig
inally or by substitution, except first mortgages
made subject to the conditions prescribed in 12
U. S. C. 771, 801-808, and 811-821 [F. F. L. Act,
§§ 12, 15, and 16.] July 17, 1916, c. 245, § 19,
*39 Stat. 376.)

§ 19

129307°—32------ 4

12 U. S. O.

FEDERAL FARM LOAN ACT

F. F. L. Act

§ 855

Amount of issue as affected by amount of collateral security; United States bonds or cash in
lieu of security withdrawn.—It shall be the duty
of each farm loan registrar to see that the farm
loan bonds delivered by him and outstanding do
not exceed the amount of collateral security
pledged therefor. Such registrar may, in his dis
cretion, temporarily accept, in place of mortgages
withdrawn, United States Government bonds or
cash. (July 17, 1916, c. 245, § 19, 39 Stat. 376.)

§ 19

§ 856

Additional security.—The Federal Farm Loan
Board may, at any time, call upon any land bank
for additional security to protect the bonds issued
by it. (July 17, 1916, c. 245, § 19, 39 Stat. 376.)

§ 19

FORM OF FARM LOAN BONDS

§ 861

Denominations; minimum and maximum periods; interest coupons; rates of interest.—Bonds
provided for in this Act shall be issued in denomi
nations of $40, $100, $500, $1,000, and such larger
denominations as the Federal Farm Loan Board
may authorize; they shall run for specified mini
mum and maximum periods, subject to payment
and retirement, at the option of the land bank, at
any time after the minimum period specified in
the bonds, which shall not be longer than ten years
from the date of their issue. They shall have
interest coupons attached, payable semiannually,
and shall be issued in series of not less than
$50,000, the amount and terms to be fixed by the
Federal Farm Loan Board. They shall bear a
rate of interest not to exceed 5y2 per centum per
annum, but no bonds issued or sold after June 30,
1923, shall bear a rate of interest to exceed 5 per
centum per annum. (July 17, 1916, c 245, § 20,
39 Stat. 377.)

§ 20

§ 862

Rules and regulations as to payment.—The Federal Farm Loan Board shall prescribe rules and
regulations concerning the circumstances and man
ner in which farm loan bonds shall be paid and
retired under the provisions of this Act. (July 17,
1916, c. 245, § 20, 39 Stat. 377.)

§ 20

12 U. S. C.

FEDERAL FARM LOAN ACT

F. F. L. Act

§ 863

Delivery to bank.—Farm loan bonds shall be delivered through the registrar of the district to the
bank applying for the same. (July 17, 1916, c.
245, § 20, 39 Stat. 377.)

§ 20

§ 864

Preparation; custody of plates and dies; exchange for registered bonds; reexchange for
coupons.—In order to furnish farm loan bonds for
delivery at the Federal land banks and joint stock
land banks, the Secretary of the Treasury is hereby
authorized to prepare suitable bonds in such form,
subject to the provisions of this Act, as the Federal
Farm Loan Board may approve, such bonds when
prepared to be held in the Treasury subject to de
livery upon order of the Federal Farm Loan Board.
The engraved plates, dies, bed-pieces, and so forth,
executed in connection therewith shall remain in
the custody of the Secretary of the Treasury. Any
expenses incurred in the preparation, custody, and
delivery of such farm loan bonds shall be paid by
the Secretary of the Treasury from any funds in
the Treasury not otherwise appropriated: Pro
vided, however, That the Secretary shall be reim
bursed for such expenditures by the Federal Farm
Loan Board through assessment upon the farm
land banks in proportion to the work executed.
They may be exchanged into registered bonds of
any amount, and reexchanged into coupon bonds,
at the option of the holder, under rules and regu
lations to be prescribed by the Federal Farm Loan
Board. (July 17, 1916, c. 245, § 20, 39 Stat. 377.)

§ 20

SPECIAL PROVISIONS OF FARM LOAN BONDS

§ 871

Land banks as bound by acts of officers and
Loan Board in issue of bonds.—That each land
bank shall be bound in all respects by the acts of its
officers in signing and issuing farm loan bonds and
by the acts of the Federal Farm Loan Board in
authorizing their issue. (July 17,1916, c. 245, § 21,
39 Stat. 377.)

§ 21

§ 872

Liability of land banks for interest and principal of loan bonds.—Every Federal land bank
issuing farm loan bonds shall be primarily liable
therefor, and shall also be liable, upon presentation
of farm loan bond coupons, for interest payments

§ 21

12 u. s. a

FEDERAL. FARM LOAN ACT

F. F. L. Act

due upon any farm loan bonds issued by other Fed
eral land banks and remaining unpaid in conse
quence of the default of such other land banks;
and every such bank shall likewise be liable for
such portion of the principal of farm loan bonds
so issued as shall not be paid after the assets of any
such other land banks shall have been liquidated
and distributed: Provided, That such losses, if any,
either of interest or of principal, shall be assessed
by the Federal Farm Loan Board against solvent
land banks liable therefor in proportion to the
amount of farm loan bonds which each may have
outstanding at the time of such assessment. (July
17,1916, c. 245, § 21, 39 Stat. 377.)

§ 873

Record on minutes of land banks respecting
liability.—Every Federal land bank shall by appro
priate action of its board of directors, duly re
corded in its minutes, obligate itself to become
liable on farm loan bonds as provided in this sub
division. (July 17, 1916, c. 245, § 21, 39 Stat. 377.)

§ 21

§ 874

Signing and attesting bonds; certificate of farm
loan commissioner.—Every farm loan bond issued
by a Federal land bank shall be signed by its presi
dent or vice president and attested by its secretary
or assistant secretary. For the purpose of signing
such bonds the board of directors of any Federal
land bank is authorized to select a vice president
who need not be a member of the board of direc
tors; such bonds shall also contain in the face
thereof a certificate signed by the Farm Loan Com
missioner to the effect that it is issued under the
authority of the Federal Farm Loan Act, has the
approval in form and issue of the Federal Farm
Loan Board, and is legal and regular in all re
spects; that it is not taxable by National, State,
municipal, or local authority; that it is issued
against collateral security of United States Govern
ment bonds, or indorsed first mortgages on farm
lands, at least equal in amount to the bonds is
sued; and that all Federal land banks are liable for
the payment of each bond. (July 17, 1916, c. 245,
§ 21, 39 Stat. 377; Apr. 20, 1920, c. 154, § 6, 41 Stat,
571.)

§ 21

FEDERAL FARM LOAN ACT

12 U. S. C.

F. F. L. Act

§ 875

Consolidated bonds; authority of land banks to
issue and sell.—Whenever it shall appear desirable
to issue consolidated bonds of the twelve Federal
land banks and to sell them through a common sell
ing agency, and the Federal land banks shall, by
resolution, consent to the same, the banks may issue
and sell said bonds as hereinafter provided. (July
17, 1916, c. 245, § 21, 39 Stat. 377; Mar. 4, 1923, c.
252, Title III, § 308, 42 Stat. 1476.)

§ 21

§ 876

Signing and attesting consolidated bonds; recitais.—Every bond so issued shall be signed by the
Farm Loan Commissioner and attested by the sec
retary of the Federal Farm Loan Board, and their
signatures may be either written or engraved
thereon and shall recite in the face of the bond the
fact that it is the joint and several obligation of
the twelve Federal land banks, and shall in all re
spects be governed by the provisions of the Federal
Farm Loan Act not inconsistent herewith. (July
17, 1916, c. 245, § 21, 39 Stat. 377; Mar. 4, 1923, c.
252, Title III, § 308, 42 Stat. 1476.)

§ 21

§ 877

Consolidated bonds; when payable.—The consolidated bonds issued under this provision shall be
made payable at any Federal land bank, and may be
made payable at any Federal reserve bank or banks
designated in the face of the bond. (July 17, 1916,
c. 245, § 21, 39 Stat. 377; Mar. 4, 1923, c. 252, Title
III, § 308, 42 Stat. 1476.)

§ 21

§ 878

Land banks as bound by acts of officers in issue
of consolidated bonds.—Each Federal land bank on
whose behalf consolidated bonds shall be issued
under this provision shall in all respects be bound
by the Act of the Farm Loan Commissioner and the
Secretary of the Federal Farm Loan Board. (July
17, 1916, c. 245 § 21, 39 Stat. 377; Mar. 4, 1923,
c. 252, Title III, § 308, 42 Stat. 1476; Mar. 4, 1925,
c. 524, § 6, 43 Stat. 1264.)

§ 21

§ 879

Participation of land bank in consolidated issue
as dependent on assumption of liability respecting
loan bonds.—Every Federal land bank, before par
ticipation in a consolidated issue, as herein pro-

§ 21

12 U. S. C.

FEDERAL FARM LOAN ACT

F. F. L. Act

vided, shall by appropriate action of its board of
directors, duly recorded in its minutes, obligate
itself to become liable on Federal farm loan bonds
as provided in 12 U. S. C. 873 [F. F. L. Act § 21],
and be bound by the action of the Farm Loan Com
missioner and the secretary of the Federal Farm
Loan Board in executing the same. (July 17,1916,
c. 245, § 21, 39 Stat. 377; Mar. 4, 1923, c. 252, Title
III, § 308, 42 Stat. 1476.)

§ 880

Certificate of farm loan commissioner.—Every
farm loan bond issued hereunder shall contain on
the face thereof a certificate signed by the Farm
Loan Commissioner to the effect that it is issued
under the authority of Title I of the Federal Farm
Loan Act, has the approval in form and issue of the
Federal Farm Loan Board, and is legal and regular
in all respects; that it is not taxable by National,
State, municipal, or local authority ; that it is issued
against collateral security consisting of obliga
tions of the United States Government, or indorsed
first mortgages on farm lands, at least equal in
amount to the bonds issued; and that all Federal
land banks are liable for the payment of each bond.
(July 17, 1916, c. 245, § 21, 39 Stat. 377 ; Mar. 4,
1923, c. 252, Title III, § 308, 42 Stat. 1476.)

§ 21

§ 881

Prerequisites to participation of land bank in
consolidated issue; payment of bonds and cou
pons.—When any Federal land bank shall desire to
participate in a consolidated issue of farm loan
bonds it shall make application to the Federal
Farm Loan Board for the approval on its behalf of
such issue and tender to the registrar approved
farm mortgages, or obligations of the United States
Government, as security therefor, and no banks
shall participate in such consolidated issue until
such application has been approved by the Federal
Farm Loan Board. Each bank shall pay when due,
without notice, all bonds and coupons issued on its
behalf hereunder. (July 17, 1916, c. 245, § 21, 39
Stat. 377; Mar. 4, 1923, c. 252, Title III, § 308,
42 Stat. 1476.)

§ 21

§ 882

Failure to pay proportion of interest or principal of consolidated issue; liability of partici
pating banks.—If any Federal land bank shall fail
to pay its proportion of interest or principal as

§ 21

12 U. S. G.

FEDERAL FARM LOAN ACT

F. F. L. Act

prescribed 12 U. S. C. 881 [F. F. L. Act § 21],
the Federal Farm Loan Board shall immediately
call upon the other Federal land banks for the
amount necessary to make said payment, the assess
ments to be made in proportion to the capital stock
of each, which assessments shall be forthwith paid
by said banks. (July 17, 1916, c. 245, § 21, 39 Stat.
377; Mar. 4, 1923, c. 252, Title III, § 308, 42 Stat.
1477.)
§ 883

Bond committee.—The presidents of the twelve
Federal land banks shall constitute the bond com
mittee of the Federal land banks and shall select
a chairman from among their number. The vice
president may act in place of the president on the
president’s request or in case he fails to act. (July
17, 1916, c. 245, § 21, 39 Stat. 377; Mar. 4, 1923,
c. 252, Title III, § 308, 42 Stat. 1476.)

§ 21

§ 884

Duties of bond committee as to issue of consolidated bonds.—When an issue of consolidated
bonds is contemplated, the bond committee shall
determine the amount of such issue, the rate of in
terest which it is to bear, and the participation of
the several banks therein, and submit their recom
mendations to the Federal Farm Loan Board for
approval. When approved by the Federal Farm
Loan Board the bonds shall be executed by the
Farm Loan Commissioner and the secretary of the
Federal Farm Loan Board, as herein provided.
(July 17, 1916, c. 245, § 21, 39 Stat. 377; Mar. 4,
1923, c. 252, Title III, § 308, 42 Stat. 1476.)

§ 21

§ 885

Expenses of bond committee and bond sale.—
The expenses of the bond committee and of the sale
of bonds shall be charged against the several land
banks in proportion to their participation in the
proceeds. (July 17,1916, c. 245, § 21, 39 Stat. 377;
Mar. 4,1923, c. 252, Title III, § 308, 42 Stat. 1476.)

§ 21

§ 886

Compensation of members of bond committee.—
The presidents of the Federal land banks shall re
ceive no additional compensation for their services
as members of the bond committee, but shall be
paid necessary traveling expenses. (July 17, 1916,
c. 245, § 21, 39 Stat. 377; Mar. 4,1923, c. 252, Title
III, § 308, 42 Stat. 1476.)

§ 21

12 U. S. O.

F. F. L. Act

FEDERAL FARM LOAN ACT

APPLICATION OF AMORTIZATION
INTEREST PAYMENTS

AND

§ 891

Payments upon mortgages pledged as collateral
for loan bond issue; application of payments; can
cellation of mortgages.—Whenever any Federal
land bank, or joint stock land bank, shall receive
any interest, amortization or other payments upon
any first mortgage or bond pledged as collateral
security for the issue of farm loan bonds, it shall
forthwith notify the farm loan registrar of the
items so received. Said registrar shall forthwith
cause such payment to be duly credited upon the
mortgage entitled to such credit. Whenever any
such mortgage is paid in full, said registrar shall
cause the same to be canceled and delivered to the
proper land bank, which shall promptly satisfy and
discharge the lien of record and transmit such can
celed mortgage to the original maker thereof, or
his heirs, administrators, executors, or assigns.
(July 17, 1916, c. 245, § 22, 39 Stat. 378.)

§ 22

§ 892

Withdrawal of collateral and substitution of
other security.—Upon written application by any
Federal land bank, or joint stock land bank, to the
farm loan registrar, it may be permitted, in the dis
cretion of said registrar, to withdraw any mort
gages or bonds pledged as collateral security under
this Act, and to substitute therefor other similar
mortgages or United States Government bonds not
less in amount than the mortgages or bonds de
sired to be withdrawn. (July 17, 1916, c. 245, § 22,
39 Stat. 378.)

§ 22

§ 893

Place and mode of payment of loan bonds or
interest; cancellation on payment.—Whenever any
farm loan bonds, or coupons or interest payments
of such bonds, are due under their terms, they shall
be payable at the land bank by which they were
issued, in gold or lawful money, and upon payment
shall be duly canceled by said bank. At the dis
cretion of the Federal Farm Loan Board, payment
of any farm loan bond or coupon or interest pay
ment may, however, be authorized to be made at
any Federal land bank, any joint stock land bank,
or any other bank, under rules and regulations to
be prescribed by the Federal Farm Board. (July
17,1916, c. 245, § 22, 39 Stat. 378.)

§ 22

F. F. L. Act

12 U. S. G.

FEDERAL FARM LOAN ACT

894

Withdrawal of collateral security on surrender
of loan bonds.—When any land bank shall sur
render to the proper farm loan registrar any farm
loan bonds of any series, canceled or uncanceled,
said land bank shall be entitled to withdraw first
mortgages and bonds pledged as collateral security
for any of said series of farm loan bonds to an
amount equal to the farm loan bonds so surren
dered, and it shall be the duty of said registrar to
permit and direct the delivery of such mortgages
and bonds to such land bank. (July 17,1916, c. 245,
§ 22, 39 Stat. 378.)

§ 22

§ 895

Interest payments on hypothecated first mortgages.—Interest payments on hypothecated first
mortgages shall be at the disposal of the land bank
pledging the same, and shall be available for the
payment of coupons and the interest of farm loan
bonds as they become due. (July 17, 1916, c. 245,
§ 22, 39 Stat. 378.)

§ 22

§ 896

Face value of bonds or interest coupons to
holders.—Whenever any bond matures, or the in
terest on any registered bond is due, or the coupon
on any coupon bond matures, and the same shall be
presented for payment as provided in this Act, the
full face value thereof shall be paid to the holder.
(July 17,1916, c. 245, § 22, 39 Stat. 378.)

§ 22

§ 897

Payments on principal of first mortgages held
as collateral as constituting trust fund.—Amor
tization and other payments on the principal of
first mortgages held by a farm loan registrar as
collateral security for the issue of farm loan bonds
shall constitute a trust fund in the hands of the
Federal land bank or joint stock land bank receiv
ing the same, and shall be applied or employed as
follows:
In the case of a Federal land bank—
(a) To pay off farm loan bonds issued by or in
behalf of said bank as they mature.
(b) To purchase at or below par Federal farm
loan bonds.
(c) To loan on first mortgages on farm lands
within the land bank district, qualified under this
Act as collateral security for an issue of farm loan
bonds.
(d) To purchase United States Government
bonds.
55

§ 22

12 U. S. C.

FEDERAL FARM LOAN ACT

F. F. L. Act

In the case of a joint stock land bank—
(a)
To pay off farm loan bonds issued by said
bank as they mature.
(i)
To purchase at or below par farm loan
bonds.
(c) To loan on first mortgages qualified under 12
U. S. C. 811-821 [F. F. L. Act § 16].
(d) To purchase United States Government
bonds. (July 17, 1916, c. 245, § 22, 39 Stat. 378;
Mar. 4,1923, c. 252, Title III, § 309, 42 Stat. 1477.)
§ 898

Deposit of trust fund with registrars as substituted collateral security.—The farm loan bonds,
first mortgages, United States Government bonds,
or cash constituting the trust funds aforesaid (12
U. S. C. 897), shall be forthwith deposited with the
farm loan register as substituted collateral security
in place of the sums paid on the principal of in
dorsed mortgages held by him in trust. (July 17,
1916, c. 245, § 22, 39 Stat. 378.)

§ 22

§ 899

Notice to registrars of disposition of payments
on principal of mortgages.—Every Federal land
bank, or joint stock land bank, shall notify the
farm loan registrar of the disposition of all pay
ments made on the principal of mortgages held as
collateral security for an issue of farm loan bonds,
and said registrar is authorized, at his discretion,
to order any of such payments, or the proceeds
thereof, wherever deposited or however invested, to
be immediately transferred to his account as trustee
aforesaid. (July 17, 1916, c. 245, § 22, 39 Stat.
378.)

§ 22

RESERVES AND DIVIDENDS OF LAND BANKS

§ 901

Amount carried to reserve account; making
good impairment; debit to reserve account.—
{a) Federal land tank; amount carried to reserve;
making good impairment.*—Every Federal land
bank shall semiannually carry to reserve account a
sum not less than 50 per centum of its net earnings
until said reserve account shall show a credit bal
ance equal to the outstanding capital stock of said
land bank. After said reserve is equal to the out
standing capital stock 10 per centum of the net
1 Effective July 1, 1932.

§ 23

12 U. S. G.

FEDERAL FARM LOAN ACT

F. F . L. Act

earnings shall be added thereto semiannually.
Whenever said reserve shall have been impaired it
shall be fully restored before any dividends are
paid. (July 17, 1916, c. 245, § 23, 39 Stat. 379;
Jan. 23, 1932, c. 9, § 3 (a), 47 Stat. 13.)
(b) Joint stock land banks; amount carried to
reserve; making good impairment.—Every joint

stock land bank shall semiannually carry to reserve
account 25 per centum of its net earnings until said
reserve account shall show a credit balance equal to
20 per centum of the outstanding capital stock of
said land bank. After said reserve has reached the
sum of 20 per centum of the outstanding capital
stock, 5 per centum of the net earnings shall be
annually added thereto. Whenever said reserve
shall have been impaired, said balance of 20 per
centum shall be fully restored before any dividends
are paid. (July 17,1916, c. 245, § 23, 39 Stat. 379.)
(c) Debit to resei've account.—For the period of
two years from the date when any default occurs in
the payment to any land bank of the interest, amor
tization installments, or principal on any first mort
gage, by both mortgagor and indorser, the amount
so defaulted shall be carried to a suspense account,
and at the end of the two-year period specified,
unless collected, shall be debited to reserve account.
(July 17, 1916, c. 245, § 23, 39 Stat. 379.)
§ 902

Dividends on balance of net earnings; invest
§ 23
ment of reserves.— {a) Federal land bank divi
dends.1—After deducting the 50 per centum or the
10 per centum directed to be deducted for credit to
reserve account by 12 U. S. C. 901 (a) [F. F. L.
Act § 23], any Federal land bank may declare a
dividend or dividends to shareholders of the whole
or any part of the balance of its net earnings, but
only with the approval of the Federal Farm Loan
Board. (July 17, 1916, c. 245, § 23, 39 Stat. 379;
Jan. 23,1932, c. 9, § 3 (a), 47 Stat. 13.)
(b)
Joint stock la/nd bank dividends.—After de
ducting the 25 per centum or the 5 per centum
directed to be deducted for credit to reserve account
by 12 U. S. C. 901 (b) [F. F. L. Act § 23], any
joint stock land bank may declare a dividend to
shareholders of the whole or any part of the balance
of its net earnings: Providedj1 That any dividend
or dividends declared by any joint stock land bank
shall be subject to the approval of the Federal
Farm Loan Board. (July 17, 1916, c. 245, § 23,
39 Stat. 379; Jan. 23,1932, c. 9, § 3 (b), 47 Stat. 13.)
*As amended, effective July 1, 1932.

12 U. S. C.

FEDERAL FARM LOAN ACT

F. F. L. Act

(c)
Investment of reserves.—The reserves of land
banks shall be invested in accordance with rules and
regulations to be prescribed by the Federal Farm
Loan Board. (July 17, 1916, c. 245, § 23, 39 Stat.
379.)
RESERVE AND DIVIDENDS OF NATIONAL
FARM LOAN ASSOCIATIONS

§ 911

Reserves1; amount.—Every national farm loan
association shall, out of its net earnings, semiannu
ally carry to reserve account a sum not less than 10
per centum of such net earnings until said reserve
account shall show a credit balance equal to 25 per
centum of the outstanding capital stock of said as
sociation. After said reserve has reached the sum
of 25 per centum of the outstanding capital stock,
5 per centum of the net earnings shall be semi
annually added thereto. (July 17, 1916, c. 245,
§ 24, 39 Stat. 379; Jan. 23, 1932, c. 9, § 4, 47 Stat.
13.)

§ 24

§ 912

Making good impairment of reserve.1—Whenever the reserve shall have been impaired it shall
be fully restored before any dividends are paid.
(July 17, 1916, c. 245, § 24, 39 Stat. 379; Jan. 23,
1932, c. 9, § 4, 47 Stat. 13.)

§ 24

§ 913

Dividends on balance of net earnings.1—After
deducting the 10 per centum or the 5 per centum
hereinbefore directed to be credited to reserve ac
count, said association may at its discretion declare
a dividend to shareholders of the whole or any
part of the balance of said net earnings. (July 17,
1916, c. 245, § 24, 39 Stat. 379; Jan. 23, 1932, c. 9,
§ 4, 47 Stat. 13.)

§ 24

§ 914

Investment of reserves.—The reserves of farm
loan associations shall be invested in accordance
with rules and regulations to be prescribed by the
Federal Farm Loan Board. (July 17,1916, c. 245,
§ 24, 39 Stat. 379.)

§ 24

§ 915

Disposition of reserve on liquidation.—Whenever any farm loan association shall be voluntarily
liquidated a sum equal to its reserve account as
herein required shall be paid to and become the

§ 24

*As anrended, effective July 1, 1932.

12 V. S. C.

FEDERAL 3?ARM LOAN ACT

F. F. L. Act

property of the Federal land bank in which such
loan association may be a shareholder. (July 17,
1916, c. 245, § 24, 39 Stat. 379.)
DEFAULTED FARM LOANS

§ 921

Notice to associations or agents of default under
mortgage; making good.—If there shall be default
under the terms of any indorsed first mortgage
held by a Federal land bank under the provisions
of this Act the national farm loan association
through which said mortgage was received by said
Federal land bank shall be notified of said default.
Said association may thereupon be required, within
30 days after such notice, to make good such de
fault, either by payment of the amount unpaid
thereon in cash or by the substitution of an equal
amount of Federal farm loan bonds, with all un
matured coupons attached. (July 17, 1916, c. 245,
§ 25, 39 Stat. 380; Mar. 4, 1923, c. 252, Title III,
§ 310, 42 Stat. 1477.)

§ 25

EXEMPTION FROM TAXATION

§ 931

Land banks and loan associations; exemption
from taxation; exceptions; first mortgages and
bonds as instrumentalities of Government.—
Every Federal land bank and every national farm
loan association, including the capital and reserve
or surplus therein and the income derived there
from, shall be exempt from Federal, State, munici
pal, and local taxation, except taxes upon real es^
tate held, purchased, or taken by said bank or asso
ciation under the provisions of 12 U. S. C. 761
and 781 [F. F. L. Act §§ 11 and 13]. First mort
gages executed to Federal land banks, or to joint
stock land banks, and farm loan bonds issued under
the provisions of this Act, shall be deemed and
held to be instrumentalities of the Government of
the United States, and as such they and the income
derived therefrom shall be exempt from Federal,
State, municipal, and local taxation. (July 17,
1916, c. 245, § 26, 39 Stat. 380.)

§ 26

§ 932

Shares in joint stock banks included in valuation of personalty for State taxation.—Nothing
herein shall prevent the shares in any joint stock
land bank from being included in the valuation of

§ 26

12 U. S. C.

FEDERAL FARM LOAN ACT

F. F. L. Act

the personal property of the owner or holder of
such shares, in assessing taxes imposed by authority
of the State within which the bank is located;
but such assessment and taxation shall be in man
ner and subject to the conditions and limitations
contained in 12 U. S. C. 548 [R. S. 5219] with ref
erence to the shares of national banking associa
tions. (July 17, 1916, c. 245, § 26, 39 Stat. 380.)
§ 933

Real property subject to taxation.—Nothing
herein shall be construed to exempt the real prop
erty of Federal and joint stock land banks and
national farm loan associations from either State,
county, or municipal taxes, to the same extent,
according to its value, as other real property is
taxed. (July 17, 1916, c. 245, § 26, 39 Stat. 380.)

§ 26

INVESTMENT IN FARM LOAN BONDS

§ 941

Fiduciary and trust funds; security for public
deposits.—Farm loan bonds issued under the provi
sions of this Act by Federal land banks or joint
stock land banks shall be a lawful investment
for all fiduciary and trust funds, and may be
accepted as security for all public deposits. (July
17,1916, c. 245, § 27, 39 Stat. 380.)

§ 27

§ 942

Buying and selling by member banks of Federal
reserve system.—Any member bank of the Federal
Reserve System may buy and sell farm loan bonds
issued under the authority of this Act. (July
17,1916, c. 245, § 27, 39 Stat. 380.)

§ 27

§ 943

Buying and selling by reserve banks.—Any
Federal reserve bank may buy and sell farm loan
bonds issued under this Act to the same extent
and subject to the same limitations placed upon
the purchase and sale by said banks of State,
county, district, and municipal bonds under 12
U. S. C. 355 [Dec. 23, 1913, Federal Reserve Act,
§ 14 (b)]. (July 17, 1916, c. 245, § 27, 39 Stat.
380.)

§ 27

EXAMINATIONS

§ 951

Land bank examiners; appointment; number.—
The Federal Farm Loan Board shall appoint as
many land bank examiners as in its judgment may
60

§ 28

12 U. S. C.

FEDERAL FARM LOAN ACT

F. F. L. Act

be required to make careful examinations of the
banks and associations permitted to do business
under this Act. (July 17, 1916, c. 245, § 28, 39
Stat. 381.)
§ 952

Powers, duties, liabilities, and penalties;1 examinations; reports.—Land bank examiners shall
be subject to the same requirements, responsibili
ties and penalties as are applicable to national
bank examiners under the national bank Act, the
Federal Reserve Act and other provisions of law.
Whenever directed by the Federal Farm Loan
Board, said examiners shall examine the condition
of any national farm loan association and report
the same to the Farm Loan Commissioner. They
shall examine and report the condition of every
Federal land bank and joint stock land bank at
least twice each year. (July 17, 1916, c. 245 § 28,
39 Stat. 381.)

§ 28

§ 953

Salaries of examiners.—Land bank examiners
shall receive salaries to be fixed by the Federal
Farm Loan Board. (July 17, 1916, c. 245 § 28,
39 Stat. 381.)

§ 28

§ 954

Expenses and salaries of employees in divi
sion of examinations; assessment against banks;
proceeds as miscellaneous receipts.—The amount
of the expenses and salaries of the employees en
gaged in the work of the division of examinations
of the Federal Farm Loan Bureau shall be assessed
in accordance with the provisions of existing law
by the Federal Farm Loan Board against Federal
land banks, joint stock land banks and Federal in
termediate credit banks, and the proceeds covered
into the Treasury as miscellaneous receipts. (Feb.
23, 1931, c. 277, Title I, § 1, 46 Stat. 1221; July 5,
1932, c. 430, Title I, § 1, 47 Stat. 584.)
DISSOLUTION AND APPOINTMENT OF
RECEIVERS

§ 961

Insolvency of farm loan associations; receivers;
powers and duties.—Upon receiving satisfactory
evidence that any national farm loan association
has failed to meet its outstanding obligations of
any description the Federal Farm Loan Board
1 Latter part of first sentence is omitted from 12 U. S. C.

§ 29

12 U. S. 0.

FEDERAL FARM LOAN ACT

F. F. L. Act

may forthwith declare such association insolvent
and appoint a receiver and require of him such
bond and security as it deems proper: Provided,
That no national farm loan association shall be
declared insolvent by said board until the total
amount of defaults of current interest and amor
tization installments on loans indorsed by national
farm loan associations shall amount to at least
$150,000 in the Federal land bank district, unless
such association shall have been in default for a
period of two years. Such receiver, under the
direction of the Federal Farm Loan Board, shall
take possession of the books, records, and assets
of every description of such association, collect all
debts, dues, and claims belonging to it, and, with
the approval of the Federal Farm Loan Board, or
upon the order of a court of record of competent
jurisdiction, may sell or compound all bad or
doubtful debts, and, on a like approval or order,
may sell all the real and personal property of such
association, on such terms as the Federal Farm
Loan Board or said court shall direct. (July 17,
1916, c. 245, § 29, 39 Stat. 381.)
§ 962

Disposition of moneys collected by receiver;
reports.—Such receiver shall pay over all money
so collected to the Treasurer of the United States,
subject to the order of the Federal Farm Loan
Board, and also make report to said board of all his
acts and proceedings. The Secretary of the Treas
ury shall have authority to deposit at interest any
money so received. (July 17, 1916, c. 245, § 29,
39 Stat. 381.)

§ 29

963

Insolvency of land banks; receivers; powers
and duties.—Upon default of any obligation, Fed
eral land banks and joint stock land banks may be
declared insolvent and placed in the hands of a
receiver by the Federal Farm Loan Board, and
proceedings shall thereupon be had in accordance
with the provisions of this subdivision regarding
national farm loan associations. (July 17, 1916,
c. 245, § 29, 39 Stat. 381.)

§ 29

§ 964

Insolvency of farm loan associations; cancellation of stock held in land banks; application of
payments on stock; reduction of stock of land
banks.—I f any national farm loan association shall
be declared insolvent and a receiver shall be ap-

§ 29

12 ü. S. O.

FEDERAL FARM LOAN ACT

F. F. L. Act

pointed therefor by the Federal Farm Loan Board,
the stock held by it in the Federal land bank of its
district shall be canceled without impairment of its
liability and all payments on such stock, with ac
crued dividends, if any, since the date of the last
dividend shall be first applied to all debts of the
insolvent farm loan association to the Federal land
bank and the balance, if any, shall be paid to the
receiver of said farm loan association: Provided,
That in estimating said debts contingent liabilities
incurred by national farm loan associations under
the provisions of this Act on account of default of
principal or interest of indorsed mortgages shall be
estimated and included as a debt, and said contin
gent liabilities shall be determined by agreement be
tween the receiver and the Federal land bank of
the district, subject to the approval of the Fed
eral Farm Loan Board, and if said receiver and
said land bank can not agree, then by the decision
of the Farm Loan Commissioner, and the amount
thus ascertained shall be deducted in accordance
with the provisions of this section from the amount
otherwise due said national farm loan association
for said canceled stock. Whenever the capital
stock of a Federal land bank shall be reduced, the
board of directors shall cause to be executed a cer
tificate to the Federal Farm Loan Board, showing
such reduction of capital stock, and, if said reduc
tion shall be due to the insolvency of a national
farm loan association, the amount repaid to such
association. (July 17, 1916, c. 245, § 29, 39 Stat.
381.)
§ 965

Voluntary liquidation; consent of Farm Loan
Board; consolidation of farm loan associations.—
No national farm loan association, Federal land
bank or joint stock land bank shall go into volun
tary liquidation without the written consent of
the Federal Farm Loan Board, but national farm
loan associations may consolidate under rules and
regulations promulgated by the Federal Farm Loan
Board. (July 17, 1916, c. 245, § 29, 39 Stat. 381.)

§ 29

§ 966

Liquidation of farm loan associations; cancellation of stock and issue of new stock to borrowers;
personal liability of stockholders.—Upon liquida
tion of any national farm loan association, the
stock in the Federal land bank held by such asso
ciation shall be canceled and the Federal land bank
shall thereupon issue to the borrowers through such

§ 29

129307°—32---- 5

12 U. S. C.

F. F. L. Act

FEDERAL FARM LOAN ACT

association an amount of stock in the Federal land
bank equal to the amount of stock held by such
borrowers in the liquidated association, such stock
to be held by the bank as collateral to the loans of
such borrowers and to be paid off and retired at
par in the same manner as stock held by borrowers
in farm loan associations, and the Federal land
bank shall pay to the borrowers holding such stock
the same dividends as are paid to national farm
loan associations by such bank. The personal liabil
ity of the stockholders in such liquidated associa
tion to the association shall survive such liquida
tion and shall be vested in the bank in that district,
which may enforce the same as fully as the associa
tion could if in existence. (July 17, 1916, c. 245,
§ 29, 39 Stat. 381; Mar. 4, 1923, c. 252, Title III,
§ 811, 42 Stat. 1478.)

STATE

LEGISLATION IMPAIRING
OF FARM LOANS

SECURITY

§971

Examination of State laws as to conveying and
recordation.—It shall be the duty of the Farm
Loan Commissioner to make examination of the
laws of every State of the United States and to
inform the Federal Farm Loan Board as rapidly
as may be whether in his judgment the laws of each
State relating to the conveying and recording of
land titles, and the foreclosure of mortgages or
other instruments securing loans, as well as provid
ing homestead and other exemptions and granting
the power to waive such exemptions as respects
first mortgages, are such as to assure the holder
thereof adequate safeguards against loss in the event
of default on loans secured by any such mortgages.
(July 17,1916, c. 245, § 30, 39 Stat. 382.)*

§ 80

§ 972

First mortgages as basis of issue of bonds; assistance in examinations.—Pending the making of
such examination in the case of any State, the Fed
eral Farm Loan Board may declare first mortgages
on farm lands situated within such State ineligible
as the basis for an issue of farm loan bonds; and if
said examination shall show that the laws of any
such State afford insufficient protection to the
holder of first mortgages of the kinds provided in
this Act, said Federal Farm Loan Board may de
clare said first mortgages on land situated in such
State ineligible during the continuance of the laws

§ 30

12 ü. S. C.

FEDERAL FARM LOAN ACT

F. F. L. Act

in question. In making his examination of the laws
of the several States and forming his conclusions
thereon said Farm Loan Commissioner may call
upon the office of the Attorney General of the
United States for any needed legal advice or as
sistance, or may employ special counsel in any State
where he considers such action necessary. (July 17,
1916, c. 245, § 30, 39 Stat. 382.)
§ 973

Statement by Loan Board; noncompliance of
State laws with requirements of board.—At the
request of the Executive of any State the Federal
Farm Loan Board shall prepare a statement set
ting forth in what respects the requirements of said
board can not be complied with under the existing
law^s of such State. (July 17, 1916, c. 245, § 30,
39 Stat. 382.)

§ 30

P E N A L T IE S 1

981

False statements in applications for loans; willful overvaluation of land; acceptance of loan or
gratuity by examiners.—Any applicant for a loan
under this Act who shall knowingly make any false
statement in his application for such loan, and any
member of a loan committee or any appraiser pro
vided for in this Act who shall willfully overvalue
any land offered as security for loans under this
Act, shall be punished by a fine of not exceeding
$5,000, or by imprisonment not exceeding one year,
or both. Any examiner appointed under this Act
who shall accept a loan or gratuity from any land
bank or national farm loan association examined
by him, or from any person connected with any
such bank or association in any capacity, shall be
punished by a fine of not exceeding $5,000, or by
imprisonment not exceeding one year, or both, and
may be fined a further sum equal to the money so
loaned or gratuity given, and shall forever there
after be disqualified from holding office as an ex
aminer under the provisions of this Act. No exam
iner, while holding such office, shall perform any
other service for compensation for any bank or
banking or loan association, or for any person con
nected therewith in any capacity. (July 17, 1916,
c. 245, § 31, 39 Stat. 382.)
1 See also Appendix B.

§ 31

12 U. S. G.

FEDERAL FARM LOAN ACT

F. F. L. Act

§ 982

Falsely making, forging, or counterfeiting
bonds or coupons; passing false bonds or coupons;
falsely altering,—Any person who shall falsely
make, forge, or counterfeit, or cause or procure to
be falsely made, forged, or counterfeited, or will
ingly aid or assist in falsely making, forging, or
counterfeiting any bond, coupon, or paper in imita
tion of, or purporting to be in imitation of, the
bonds or coupons issued by any land bank or na
tional farm loan association, now or hereafter au
thorized and acting under the laws of the United
States; or any person who shall pass, utter, or pub
lish, or attempt to pass, utter, or publish any false,
forged, or counterfeited bond, coupon, or paper
purporting to be issued by any such bank or asso
ciation, knowing the same to be falsely made,
forged, or counterfeited; or whoever shall falsely
alter, or cause or procure to be falsely altered, or
shall willingly aid or assist in falsely altering any
such bond, coupon, or paper, or shall pass, utter, or
publish as true any falsely altered or spurious
bond, coupon, or paper issued, or purporting to
have been issued, by any such bank or association,
knowing the same to be falsely altered or spurious,
shall be punished by a fine of not exceeding $5,000
or by imprisonment not exceeding five years, or
both. (July 17, 1916, c. 245, § 31, 39 Stat. 382.)

§ 31

§ 983

Charging or receiving unauthorized fee or commission; disclosing names of borrowers.—Other
than the usual salary or director’s fee paid to any
officer, director, or employee of a national farm loan
association, a Federal land bank, or a ioint stock
land bank, and other than a reasonable fee paid by
such association or bank to any officer, director, at
torney, or employee for services rendered, no officer,
director, attorney, or employee of an association or
bank organized under this Act shall be a beneficiary
of or receive, directly or indirectly, any fee, com
mission, gift, or other consideration for or in con
nection with any transaction or business of such
association or bank. No land bank or national
farm loan association organized under this Act
shall charge or receive any fee, commission, bonus,
gift, or other consideration not herein specifically
authorized. No examiner, public or private, shall
disclose the names of borrowers to other than the
proper officers of a national farm loan association
or land bank without first having obtained express
permission in writing from the Farm Loan Com-

§ 31

12 U. S. C.

FEDERAL FARM LOAN ACT

F. F. L. Act

missioner or from the board of directors of such
association or bank, except when ordered to do so
by a court of competent jurisdiction or by direction
of the Congress of the United States, or of either
House thereof, or any committee of Congress or of
either House duly authorized. Any person violat
ing any provision of this paragraph shall be pun
ished by a fine of not exceeding $5,000 or by im
prisonment not exceeding one year, or both. (July
17, 1916, c. 245, § 31, 39 Stat. 382.)
§ 984

Fraud and embezzlement.—Any person connected in any capacity with any national farm loan
association, Federal land bank, or joint stock land
bank, who embezzles, abstracts, or willfully misap
plies any moneys, funds, or credits thereof, or who
without authority from the directors draws any
order, assigns any note, bond, draft, mortgage,
judgment, or decree thereof, or who makes any
false entry in any book, report, or statement of such
association or land bank with intent in either case
to defraud such institution or any other company,
body politic or corporate, or any individual person,
or to deceive any officer of a national farm loan as
sociation or land bank or any agent appointed to
examine into the affairs of any such association or
bank, and every person who with like intent aids
or abets any officer, clerk, or agent in any violation
of this section, shall be punished by a fine of not
exceeding $5,000 or by imprisonment not exceed
ing five years, or both. (July 17, 1916, c. 245,
§ 31, 39 Stat. 382.)

§ 31

§ 985

False pretenses as to character of bonds or
coupons.—Any person who shall deceive, defraud,
or impose upon, or who shall attempt to deceive,
defraud, or impose upon, any person, firm, or cor
poration by making any false pretense or represen
tation regarding the character, issue, security, or
terms of any farm loan bond, or coupon, issued
under the terms of this Act ; or by falsely pretend
ing or representing that any farm loan bond, or
coupon, issued under the terms of this Act by one
class of land banks is a farm loan bond, or coupon,
issued by another class of banks ; or by falsely pre
tending or representing that any farm loan bond,
or coupon, issued under the terms of this Act, or
anything contained in said farm loan bond, or
coupon, is anything other than, or different from,

§ 31

12 U. S. C.

FEDERAL FARM LOAN ACT

F. F. L. Act

what it purports to be on the face of said bond or
coupon, shall be fined not exceeding $500 or im
prisoned not exceeding one year, or both. (July 17,
1916, c. 245, § 31, 39 Stat. 382.)
§ 986

Arrest of violators of act.—The Secretary of the
Treasury is hereby authorized to direct and use
the Secret Service Division of the Treasury Depart
ment to detect, arrest, and deliver into custody of
the United States marshal having jurisdiction, any
person or persons violating any of the provisions
of this subdivision. (July 17, 1916, c. 245, § 31,
39 Stat. 382.)

§ 31

GOVERNMENT DEPOSITS IN LAND BANKS

§ 991

Government deposits in land banks authorized;
purchase of farm loan bonds by Secretary of
Treasury; continuance of temporary organization
of land banks.—The Secretary of the Treasury is
authorized, in his discretion, upon the request of the
Federal Farm Loan Board, to make deposits for the
temporary use of any Federal land bank, out of
any money in the Treasury not otherwise appropri
ated. Such Federal land bank shall issue to the
Secretary of the Treasury a certificate of indebted
ness for any such deposit, bearing a rate of interest
not to exceed the current rate charged for other
Government deposits, to be secured by farm loan
bonds or other collateral, to the satisfaction of the
Secretary of the Treasury. Any such certificate
shall be redeemed and paid by such land bank at the
discretion of the Secretary of the Treasury. The
aggregate of all sums so deposited by the Secretary
of the Treasury shall not exceed the sum of $6,000,000 at any one time.
The Secretary of the Treasury is further author
ized, in his discretion, upon the request of the
Federal Farm Loan Board, from time to time
during the fiscal years ending June 30, 1918, and
June 30, 1919, respectively, to purchase at par and
accrued interest with any funds in the Treasury not
otherwise appropriated, from any Federal land
bank, farm loan bonds issued by such bank.
Such purchases shall not exceed the sum of
$100,000,000 in either of such fiscal years. Any
Federal land bank may at any time repurchase at
par and accrued interest for the purpose of redemp
tion or resale any bonds so purchased from it and
held in the Treasury.
68

§ 32

12 XL S. G.

FEDERAL FARM LOAN ACT

F. F. L. Act

The bonds of any Federal land bank so pur
chased by the Secretary of the Treasury, and held
in the Treasury under the provisions of this amend
ment one year after the termination of the pending
war, shall upon thirty days’ notice from the Sec
retary of the Treasury be redeemed or repurchased
by such bank at par and accrued interest.
The temporary organization of any Federal land
bank as provided in 12 U. S. C. 671-683 [F. F. L.
Act § 4] shall be continued so long as any farm loan
bonds purchased from it under the provisions of
this amendment shall be held by the Treasury, and
until the subscriptions to stock in such bank by
national farm loan associations shall equal the
amount of stock held in such bank by the Govern
ment of the United States.
Until such time as the aggregate paid-in capital
stock of the twelve Federal land banks shall be
$50,000,000 or more, the Secretary of the Treasury
may in his discretion make deposits in addition to
those authorized by the preceding paragraph, to be
secured, redeemed, and paid in the same manner as
provided in such paragraph, except that any addiditional deposit made hereunder shall be called by
the Secretary of the Treasury and redeemed by the
bank or banks holding the same, within fifteen days
after the conclusion of each general offering of
farm loan bonds by such bank or banks. The ag
gregate of such additional deposits outstanding at
any time shall not exceed the difference between the
aggregate paid-in capital stock of the twelve Fed
eral land banks on the last day of the preceding
month, and the sum of $50,000,000. The certifi
cates of indebtedness issued to the Secretary of
the Treasury by the Federal land bank for such ad
ditional deposits shall bear a rate of interest not ex
ceeding by more than one-half of 1 per centum per
annum the rate borne by the last bond issue of the
land bank receiving such deposits. (July 17,
1916, c. 245, § 32, 39 Stat. 384; Jan. 18, 1918, c. 9,
§ 1, 40 Stat. 431; July 1, 1921, c. 39, 42 Stat. 105.)

ORGANIZATION EXPENSES

§ 1001

Appropriation for expenses.—The sum of $100,000, or so much thereof as may be necessary, is
hereby appropriated, out of any money in the
Treasury not otherwise appropriated, to be ex
pended under the direction of the Federal Farm
Loan Board, for the purpose of carrying into effect
69

§ 33

12 U. S. C.

FEDERAL FARM LOAN ACT

F. F. L. Act

the provisions of this Act, including the rent and
equipment of necessary offices. (July 17, 1916, c.
245, § 33, 39 Stat. 384.)
LIMITATION OF COURT DECISIONS

§ 1011

Effect of partial invalidity of Act,—I f any
clause, sentence, paragraph, or part of this Act
shall for any reason be adjudged by any court of
competent jurisdiction to be invalid, such judgment
shall not affect, impair, or invalidate the remainder
of this Act, but shall be confined in its operation to
the clause, sentence, paragraph, or part thereof
directly involved in the controversy in which such
judgment shall have been rendered. (July 17,
1916, c. 245, § 34, 39 Stat. 384.)

AMENDMENTS TO CHAPTER

§ 1012

Reservation 1 of right to amend.—All Acts or
parts of Acts inconsistent with this Act are hereby
repealed, and this Act shall take effect upon its
passage. The right to amend, alter, or repeal this
Act is hereby expressly reserved. (July 17, 1916,
c. 245, § 35, 39 Stat. 384.)
1 F ir s t sentence o f this section is om itted from 12 U . S. G.

§ 35

APPENDIXES
APPENDIX A 1
PENALTIES; OFFERING FOR SALE AS FEDERAL FARM
LOAN BONDS ANY SECURITIES NOT ISSUED UNDER PRO
VISIONS OF FEDERAL FARM LOAN ACT; USE OF WORD
“ FEDERAL,” ETC,—No bank, banking association, trust company,
corporation, association, firm, partnership, or person not organized
under the provisions of the Act of July 17,1916, known as the Federal
Farm Loan Act, as amended, shall advertise or represent that it
makes Federal farm loans or advertise or offer for sale as Fed
eral farm loan bonds any bond not issued under the provisions of the
Federal Farm Loan Act, or make use of the word “ Federal ” or the
words u United States ” or any other word or words implying Gov
ernment ownership, obligation, or supervision in advertising or
offering for sale any bond, note, mortgage, or other security not issued
by the Government of the United States or under the provisions of
the said Federal Farm Loan Act or some other Act of Congress.
Sec. 2. That no bank, banking association, trust company, corpo
ration, association, firm, partnership, or person engaged in the bank
ing, loan, building and loan, brokerage, factorage, insurance, in
demnity, or trust business shall use the word “ Federal,” the words
“ United States,” or the word “ reserve,” or any combination of such
words, as a portion of its corporate, firm, or trade name or title or
of the name under which it does business : Provided, however, That
the provisions of this section shall not apply to the Federal Reserve
Board, the Federal Farm Loan Board, the Federal Trade Com
mission, or any other department, bureau, or independent establish
ment of the Government of the United States, nor to any Federal
reserve bank, Federal land bank, or Federal reserve agent, nor to
the Federal Advisory Council, nor to any corporation organized
under the laws of the United States, nor to any bank, banking asso
ciation, trust company, corporation, association, firm, partnership,
or person actually engaged in business under such name or title prior
to the passage of this Act.
Sec. 3. That no bank, banking association, or trust company which
is not a member of the Federal Reserve system shall advertise or
represent in any way that it is a member of such system or publish
or display any sign, symbol, or advertisement reasonably calculated
to convey the impression that it is a member of such system.
Sec. 4. That any bank, banking association, trust company, cor
poration, association, firm, or partnership violating any of the pro1 T h e provision s o f the a ct set fo r th in A p pen dix A hereof h a v e been incorporated in

12 U. S. C., §§ 584—588.

(71)

12 U. S. C.

FEDERAL FARM LOAN ACT

F. F. L. Act

visions of this Act shall be guilty of a misdemeanor and shall be
subject to a fine of not exceeding $1,000. Any person violating any
of the provisions of this Act, or any officer of any bank, banking
association, trust company, corporation, or association, or member
of any firm or partnership violating any of the provisions of this
Act who participates in, or knowingly acquiesces in, such violations
shall be guilty of a misdemeanor and shall be subject to a fine of
not exceeding $1,000 or imprisonment not exceeding one year, or
both. Any such illegal use of such word or words, or any combi
nation of such words, or any other violation of any of the provisions
of this Act, may be enjoined by the United States district court
having jurisdiction, at the instance of any United States district
attorney, any Federal land bank, joint stock land bank, Federal
reserve bank, or the Federal Farm Loan Board or the Federal
Reserve Board.
Sec. 5. That if any clause, sentence, paragraph, or part of this
Act shall for any reason be adjudged by any court of competent
jurisdiction to be invalid, such judgment shall not affect, impair, or
invalidate the remainder of this Act, but shall be confined in its
operation to the clause, sentence, paragraph or part thereof directly
involved in the controversy in which such judgment shall have been
rendered. (May 24, 1926, c. 377, 44 Stat. 628.)
APPENDIX B
A N APPROPRIATION TO ENABLE THE SECRETARY
TREASURY TO PA Y FOR SUBSCRIPTIONS TO THE
STOCK OF FEDERAL LAND BANKS

OF THE
CAPITAL

There is hereby appropriated, out of any money in the Treasury
not otherwise appropriated, the sum of $125,000,000, to remain avail
able until expended, to enable the Secretary of the Treasury to pay
for subscriptions to the capital stock of Federal land banks in
accordance with the provisions of section 2 of the Act entitled “An
Act to amend the Federal Farm Loan Act, as amended, to provide
for additional capital for Federal land banks, and for other pur
poses,” approved January 23, 1932 [12 U. S. C. 698]: Provided,
That any proceeds of repayments on account of stock so issued shall
be credited to this appropriation and be available for the purpose
of paying for other stock thereafter issued pursuant to such Act.
(Feb. 2,1932, c. 14, 47 Stat. 36.)

IN D E X
Farm Loan
Act Sec. N o.
Alaska, provisions of law extended to____________________ ________ ______________4 4
35
Amendment or repeal of law, reservation of right________ ______________
Amortization tables, preparation and publication_____ ______ ____________
3
10
Appraisals for farm loans.................. ..................... ....................................................
Bonds. See Farm loan bonds, infra.
Bulletins and circulars for information of farmers, duty of board to distribute.- 3
Definitions of statutory term s._______________ _________ _____ ___________________ 2 2
13 (10th)
Extension of unpaid obligations_____ _________________ ____ ____________
Farm loan associations. See National farm loan associations, infra.
Farm Loan Board. See Federal Farm Loan Board, infra.
Farm loan bonds:
Advertising or offering for sale as Federal farm loan bonds securities not
issued under Act. ( See Appendix A .)
31
Alteration, counterfeiting, etc., penalty_________ _____ ________________
22
16
18
18
21
Bond committee21
31
20
Definition......... ............................................... .................................................................. 2
20
Delivery to banks_________________ _______________________________ ________
Denominations_________ ____________________________________________________ 20
Expenses of preparing bonds, how paid____________________________________ 20
Federal land bank, liability for bonds issued by other Federal land banks. 21
Form of bonds_______________________________________________________________ 16,20
Interest on bonds issued by joint stock land banks________________________ 16
Interest on bonds, r a t e .,-_________ _________ ________________________________ 20
Investment in loan bonds.................................... ................. ............... ....................... 27
Issue of bonds__............................................................... . ............. ................................. 13,16,19
Land banks’ liability in respect of bonds issued___________ _______ ________
Member banks authorized to buy and sell______ ___________ __________ ____
Mortgages, deposit as collateral for bonds__________________________________
Passing false bonds or coupons, penalty____________________________________

Taxation, exemption from ._________ ________________ ______
Time to run____________________________________________ ____
Farm Loan Bureau. See Federal Farm Loan Bureau, infra.
Farm loan registrars:
Appointment and duties----------------------------------------------------Deputy registrars—
Appointment........... ..................................... .............................

21
27
13
31
20
20
32
16
16
21
26
20

Employees____ ___________
Examination of land bank
Farm loan bonds:
Approval of issue____
Authorizing issuance .
Prescribing form.........

656
656
657
656
657

1
3
3
3
3
3
17 (h)
3
3, 17 (e)

641
662
661
662
664
652
831 (h)
659
662, 831 (e)

18
17
17
17
17

844
831
831
831
831

3
17(a)
17 (i)
17 (d)

(73)

982
891 et seq.
814
841 et seq.
844
883 et seq.
875 et seq.
982
864
642
863
861
864
872
817, 861 et seq.
818,819
861
941
781,816,821,851
et seq.
871 et seq.
942
781
982
864
864
991
818
816
874
931
861

3
3
3
3

Land banks:
Supervisory power over.
Loans, regulating charges—

664
642
781 (10th)

Federal Farm Loan Board:

Bulletins and circulars.

12 U . S. O.
Sec. N o.
672
1012
662
751 et seq.

662
831 (a)
831 (i)
831 (d)

12 U. S. C.

FEDERAL FARM LOAN ACT

F. F. L. Act

I n d e x — C o n tin u e d
Farm Loan
12 U . S. O.
Federal Farm Loan Board— Continued.
Sec- N o.
Sec. N o.
Members:
Eligibility........................................................... .......................................................- 3
654
Number, appointment, and compensation..................................................... 3
652
Oath of office........................................... ........................... - ..................................... 3
653
Right to engage in other business................................................................... .... 3
654
Term of office.............................................................................................................. 3
653
National farm loan associations, power to incorporate and organize.............17 (a)
831 (a)
831 (g)
Payments between banks, regulation..................................................................... . 17 (g)
Powers generally.............................................. ..............................................................— 17
831
Registrars................................................................. ........................................................... 3
656
Rules and regulations..........................................................................................................
665
Salaries and expenses of officers and employees, provision for paym ent___ 3
657, 657 (a), 954
Statements of loan associations and land banks, power to prescribe,.form of. 3
663
Surety bonds, prescribing form, terms, etc....................................................... ..
17 (f)
831 (f)
Vacancies, how filled__________________ __________ __________ _____ ____ ______ 3
655
Federal, unlawful use of word. (See Appendix A .)
Federal Farm Loan Bureau:
Creation................................................ ....................... ....................................................... 3
651
Supervision by loan board...........................................................................................- 3
651
Federal land banks:
676
Actions, capacity to sue and be sued......... — ....................................................... - 4
Amortization tables for use of banks......................................................................... 3
662
Borrowing money................................ —.........................................................—............13 (7th)
781 (7th)
Branch banks:
Loans b y .............................................................................................. ....................... 4
672,672 (a)
Power to establish______________________ ___________________ ____________ 4
672
By-laws.................................................................. ................................... ........................... 4 (6th)
676 (6th)
Capital, proportion to be held in quick assets................................... ......... .......... 5
697
Capital stock. See Stock, infra.
Commissions, right to demand.................................................. ....... ............. ........... 14 (5th)
791 (5th)
Continuance of temporary organization____________________________________ 32
991
Contracts, power to make.............................. ......................... ........... ............. ........... 4 (3d)
676 (3d)
Corporate existence, commencement and duration---------- --------------------------- 4
676
Depositaries for public moneys, designation------------------------------------------------ 6
701
Deposit of securities and funds with reserve banks_________________________ 13 (5th)
781 (5th)
Deposits:
B y loan associations, power to accept............................................................... 13 (6th)
781 (6th)
Directors:
Compensation and allowances-------- -------------- -------------- -------------------------- 4
683
Connection with other banking concerns______________________________ 4
682
District directors...------------ ---------- --------------- -------------------------------- --------4.17 (i)
678 et seq., 631 (1)
Election and appointment............... ................... ............. ............... ....... ........... 4
677 et seq.
Interlocking directorates prohibited.............................. ................... ............... 4
682
Local directors----------------- ------------------------------- ----------------------------------------- 4
678 et seq.
Number and qualifications---------------------------- ------------ ------ --------- ----------- 4
678
681
One director at large__________ _________ _____ ________ __________ _______ 4
Power to elect or appoint______________________________ ________ ________ 4
676
Q ualifications........................................................... - ............... - ................. ......... 4
682
Removal of district directors by loan board------------------------------------------ 17 (h)
831 (h)
Removal of director at large by loan board.................................................... 4
681
Temporary appointment on organization...................................... ....... ......... 4
673
Term of office..-------------------------------------------------------------------------- --------- - - 4
681
Unauthorized fees and commissions, penalty for receiving.......................31
983
Districts, establishment by loan board......... .......................................................— 4
671
Dividends—
Limitations on declaration of............................................................................... 23
902
N o dividends on Government-owned shares_________________________ 5
694
Preferences in distribution prohibited.......................... ................................... 5
694
Duration of corporate existence— ....................... ....................... ......... ............... .. 4
676
Embezzlement or misappropriation of funds by officer or employee______ 31
984
Employment of attorneys, clerks, etc., by temporary directors.................... 4
673
Establishment of banks................................................................................................. 4
672
Examination of banks_______________________________________________________ 17 (e), 28
831 (e), 951
Examiners’ salaries........................................................................................................... 28
953
931,933
Exemption from taxation..................................................... ........... ............................. 26
Extension of unpaid obligations_____________ ______________________ _____ 13 (10th)
781 (10th)
Farm loan bonds. (See Farm loan bonds, supra.)
Power to issue and sell........................................................................................... 13
781
Fees and charges, restriction of_______________ _____ _______ ________________14 (5th)
791 (5th)
Fees for loans, power to charge....................................................................................13 (9th)
781 (9th)
Financial agents of Government, employment— ........................................ — 6
701
Government bonds, amount of holding required................ ................................ 5
697
Government deposits in land banks authorized.................. ............................. — 32
991
Incidental powers___________ _____ - ............................... - ............... - ................. ....... 4
676
Insolvency............................................................ .............................................................- 29
963
771 (3d)
Interest, maximum rate................................ - ............................................................ - 12 (3d)
Interest on defaulted payments_____________ ____________ __________________ 12 (9th)
771 (9th)
Investments—
In farm first mortgages........................................................................................... 13
781
In Government bonds............................... - ..................... ......... ........... ............... 5
697
Liquidation.......................................................................................................................... 29
965

12 U. S. 0.

F. F. L. Act

FEDERAL FARM LOAN ACT

Index— Continued
Farm Loan
Act Sec. N o.
Federal land banks— Continued.
Loans. ( See also Loans, infra.)
Defaulted loans, liability of farm loan association.......................................25
Restrictions on mortgage loans...........................................................................12,14
Through agents................................ ..... ■..... ............................................................ 15
Through farm loan associations..................................... .....................................7,8,9
To farm loan associations................................................................................... 9
Location in city designated by loan board..............................................................4
Mortgages, terms and conditions of_______________________ ____ _______ ____12
Name of bank to include city of location. ..............................................................4
Officers and employees—
Compensation subject to approval of loan board........................................ 4
Election or appointment of........................... ..................... ............. - ................. 4
Unauthorized fees and commissions, penalty for receiving.......................31
Organization, authority and control of loan board............................................... 17 (a)
Organization certificate—
Alteration........................ ....... ......... ....... ....................... ............................... .......... 4
Contents.............................. ............................. ............. .............................................4
Period of corporate existence........................................................................................4
Powers of land banks generally.... ................. ........... .................................................13
President, election b y directors........................... .......................................................4
Property, power to acquire and dispose of.......................................... ................... 13
Quick assets, amount required_________ __________________________ . . _______ 5
Real property, power to acquire and hold...................................................... ....... 13
Receivership................................... ................. ..................... ............. .............................29
Reports of condition, to be made quarterly to loan board................................3
Reserves...............................................................................................................................23
Restrictions on banks enumerated............................................................................. 14
Restrictions on loans.............................. ......................... ......... .....................................12
Salaries paid, semiannual reports to loan board....................................................3
S to c k Corporations permitted to subscribe (to original stock)............................ 5
Dividends on shares.................................................................................................5
M inim um amount_____________ _____ _____ ____________ ________ ________ 5,7
Partnerships permitted to subscribe (to original stock)......... ...................5
Par value of shares.............................................. .................................................... 5
Regulation of subscriptions........................ .......................................................... 5
Restriction as to reduction........................ ......... ................................................ 7
Retirement of original stock.................................................................................5
Right to subscribe (to original stock)................................................................5
States permitted to subscribe (to original stock)------- --------------------------- 5
Transfer of shares held b y farm loan association, prohibited--.............. 5
United States (subcriptions to original stock)_________________________ 5
United States, subscriptions upon request of directors of Federal
land banks............................................................................................................... 5
Voting shares............. ................................................................................................ 5
Tax exemptions................................................................................................................. 26
Temporary organization, provisions for, duration of......................... .............. 4.32
United States bonds, power to buy and sell................................ ................. ....... 13
Voluntary liquidation.................................................. ...................................................29
Voting shares, right restricted to shares held by farm loan associations
and to original stock held b y United States....................................................... 5
First mortgage, definition__________________________ _______ ________ ___________ - 2
Hawaii, provisions of law extended to.................................. ................................... .......
Interest on loans. (See Loans, infra.)
Joint stock land banks:
Bonds, authority to issue............................................................................................... 13,16,18,19
Business authorized...................................... ............................................. .....................
Commissions and charges, restriction of____________________________________
Depositaries for public moneys, designation..........................................................
Directors—
Num ber_______ ___________________ _______ _______ _____ ________ _________
Unauthorized fees and commissions, penalty for receiving......................
Dividends, subject to approval by loan board----------------------------------- --------Embezzlement or misappropriation of funds by officer or employee............
Farm loan bonds, limitation of amount of issu e..................................................
Financial agents of Government, employment.................... - ...............................
Liquidation................................................ — ..................................................................
Loans, restrictions on......................... ..... ......................................................................
M inimum capital stock required................................................ - ..................... —
Officers and employees, unauthorized fees and commissions, penalty for
receiving................................................................. .................................. .....................
Restrictions upon, same as upon Federal Land B anks.
Organization....................................................................................
Powers, duties, and liabilities generally................................
Stockholders, liability for corporate debts...........................
Voluntary liquidation..................................................................
Land bank appraisers:
Appointment..................................................................................
Borrowers not eligible to office of appraiser.........................
Compensation.................................................................................

12 U . S. C.
Sec. N o.
921
771 et seq., 791
801 et seq.
720,721,733,741,
742,745
743
672
771 et seq.
672
676
983
831 (a)
675
674
676
781
676 (5th)
781
697
781
963
663
901,902
791
771
660
694,902,903
691,722
691
722

931 et seq.
673,674,677,991
781
865
694
642,773
671

16
16
6

781,816,821,841
_____
844,851
811,814
820
701

16
31
23
31
16
6
16
12,16
16

811
983
902
984
814
701
822,823
771,818
815

31
23
16
16
16
16
16

983
901,902
813
811
813
812
822,823

3
10
3

656
756
658

12 U. S. C.

F. F. L. Act

FEDERAL FARM LOAN ACT

Index— Continued
Land bank appraisers— Continued.
Investigations and reports by appraisers...............
Removal from office---------------------------------------------Restriction on right to engage in other business..
Salaries and expenses.....................................................
Land bank examiners:
Appointment and number......... .................................

Loans:
Additional loan, how obtained, lin
Amendment or repeal of law, reser
Amortization plan for repayment.

Farm Loan
^ec- N o.
10
10
. 17(h)
3
3
28
31
31
31
28
28

771 (5th)
1012
771 (2d)
771 (5th)
771 (8th)
751 et seq.
672,672 (a)

12 (6th)
25
13(10)
31
15
13 (9th)
7,12
12 (9th)

771 (6th)
921
781(10)
981
801 et seq.
781 (9th)
720,772
771 (9th)

17 (d)
12 (9th)
4
(2d, 3d)
Rate on loans by Federal land ban ks.._________ ____ ________ __________ 12 (2d
12 (2d; 3d),
16
10
4
12 (2d)
Length of credit from Federal or joint stock land hank___
10
Loan committee, unanimous approval required for
t-kin^
12 (7th)
12 (1st), 16
National farm loan associations—
9
Loans from Federal land banks____
. 7,9,12
Persons eligible for loans through.
(6th)
9
34
Partial invalidity of law, effect.
4
12 (2d)
12 (6th), 14
(2d)
10
12 (4th)
12
Reclamation projects, farm lands as security for loans------ -----------------------------------------12,14,16
k
12 (6th)
12
30
12
12 (10th)

Mortgages to secure loans. See Loans, supra.
National farm loan associations:
Articles of association......... ......... ....................
Commissions on interest paid by borrowers.
Directors—
Compensation and qualifications.......... ..
Election of officers...........................................
Minimum number..........................................
Term of office........................ ......... .................
Dividends on shares..
Embezzlement or mis
Examination, authori

951
983
981
981
952
953

12 (5th)
35
12 (2d)
.. 12 (5th)
12 (8th)
10
4

Insurance of mortgaged property..
Interest—

12 IT. S. C.
Sec. No.
754
753
831(h)
656
657

831
771
672
771
771

(d)
(9th)
(2d, 3d)
(2d, 3d), 818

751
672
771 (2d)
751
771 (7th)
771,818
743
716, 745, 771
(6th)
741
1011
672
771 (2d)
771 (6th), 791
(2d)
751 et seq.
771 (4th)
771
773
771,791,818
771 (6th)
771
971 et seq.
771
771 (10th)

12 (11th)
31

771 (11th)
981

7
29
11
9

711
966
761
743

7
7
7
7
31
24
31
17 (e)
26

713
712
712
712
983
913
984
831 (e)
031

12 ü. S. C.

F. F. L. Act

FEDERAL FARM LOAN ACT

Index— Continued
National farm loan associations— Continued.
Grant or refusal of charter. ............................ .
Incorporators, number required....................
Liquidation........................................................... ..........................................
Loan committee—
Appointment--------- ----------- --------------------------- --------- ----------------Committee member, interest in loan passed on prohibited.
Investigation of applicants for loans------------------ -------------------Loans to loan associations—
Authority to make------- ---------------- -------------- - ..................... ...........
Rate of interest......................... .................................................... .........
Loans to members—
Funds obtained from land ban k................................... ..................
Right to obtain loans............- --------------------------- -----------------------

Farm Loan
Act Sec. N o.
7
7
29
11
29

Members—
Admission after organization........................................................... . . ...............
Limited to borrowers...... ................................................................. ............. .......
Limited to natural persons.._____________ ____________________ _______ _
Limited to owners of farm land qualified for Federal land bank loan.
Loans to pay for stock purchased____________ _______ ____________ _____ _
Personal liability for debts of association........................................................
Mortgages, indorsement...... .........................................................................
Officers and employees—
Bond required of secretary-treasurer............ ...................................
Election of officers by directors.............................................. ...........
Expenses of secretary-treasurer...........................................................
Powers and duties of secretary-treasurer----------------------------------Secretary-treasurer elected instead of secretary and treasurer.
Secretary-treasurer not required to be stockholder_____ ______
Unauthorized fees and commissions, penalty for receiving____
Organization........................ ..............................................................................
Powers of associations generally.............................................. ...................
Receivership.................................... ..................... . . . ........................... ...........
Report and affidavit with articles of association..................................
Reserves...................................- --------- ---------------------------------------- --------Solvency of applicants for incorporation, investigation____________
S toc k Borrowing from land bank to pay subscription.........
Holdings restricted to borrowers.......... ...........................
Increase................ ......................................... - .........................
Par value of shares................................................................
Voting shares......... .................................................. .............
Stockholders, personal liability for debts of association.
Tax exemptions_______________________ _____ _____________
Transfer of shares held in land banks_____ ______ _______
Voluntary liquidation.................................................................
Offenses:
Arrest of violators of act--------------- --------- ------------------- --------- ------ -----------------Charging or receiving unauthorized fee or commission...................................
Disclosing names of borrowers................................................................... ............ .
Embezzlement______________ ____________ _______ ___________________________
False pretenses as to character of bonds or coupons (see also Appendix A ) .
False stat<
“ Federal,1’ unlawful use of word. (See Appendix A.)
Fraud____
“ United States,” unlawful use of words.

“ United States,” unlawful use of words.
Violation of law. ( See Offenses, supra.)

7
10
10

712
756
751

9
9

743
743

7
9
7

720
741
721

9
8
9
9
9
9
9
11

745
733
745
745
742
744
741
761

714
712
715
714
712,716
716
983
711,716,831 (a)
761
961,962
717
911 et seq.
718
663

9
8
8
8
8
9
26
5
29

742
733
734
731
732
744
931 et seq.
693
965

31
31
31
31
31
31
31

981
986
983
983
984
985
981

31
31

984
981 et seq.

31
7,17 (a)
11 .
29
24

( See Appendix A.)

Offering for sale as farm loan bonds any other
(See
securities.
Appendix A.)
Penalties for violation of law (see also Appendix A ) ____
Puerto Rico, provisions of law extended to....... .................
Registrars. ( See Farm loan registrars, supra.)
Rules and regulations, power of Federal Farm Loan Board to make..
of farm loans.
State legislation impairing? security
seen
( See Appendix A .)

12 U . S. O.
Sec. N o.
719
716
961,964
761
965,966

981

31
4

981 et seq.
672

30
17 (f)

665
971 et seq.
831 (0

Full text of The Federal Farm Loan Act as Amended to July 16, 1932

FRASER