The executive committee of the several local associations shall set apart one-half of the net profits so certified to by the United States auditor as a part of its surplus account and may carry the balance as undivided profits, or may declare and pay such a dividend out of the undivided profits as in their judgment seems wise.
Section 142. That when the surplus account of the National Land Credit Bank shall be equal to 50 per centum of the capital money so paid over to it by the several associations, the board of directors may declare such additional dividend as in their judgment may seem wise: Provided, however, That no such increase, or extra dividend, shall ever reduce the surplus below said 50 per centum of the capital so held by it. The same rule herein laid down for the payment of dividends by the National Land Credit Bank shall apply to the several State associations and each and all of the local associations.
Section 143. That if it shall become necessary at any time for a local association to take possession of real estate upon which a loan has been made and sell the same, the profit or loss thereon shall be shared by the several institutions in the same proportion as the capital is held by them; that is, the National Land Credit Bank shall share one-half of the profit or loss, the State institution making the loan shall share one-quarter of the profit or loss, and the local association recommending the loan shall share one-quarter of the profit or loss.
Comment:—First: Sufficient responsibility should be imposed upon each local association to compel it to look after all delinquents diligently.
Second: Sufficient responsibility should be imposed upon each State association to compel it to look after every loan in the State with promptness and persistency.
Section 144. That if any local association shall be formed at any time after the organization of the National Land Credit Bank, before it goes into actual operation such local association desiring to become a member of a State association shall first be compelled to obtain the unanimous consent of the board of managers of the State association in which the proposed local association is situated and shall pay for its shares such a price as may be fixed from time to time by the board of directors of the National Land Credit Bank for the admission of new associations.
Section 145. That all the expenses of whatsoever kind growing out of the management of the National Land Credit Bank shall be paid out of the earnings thereof.
Section 146. That the entire surplus of the National Land Credit Bank and the surplus of the State associations and the surplus of the local associations shall be held as a working balance, and also as a fund which may be withdrawn for investment in bonds or other securities of the United States. The President of the United States may direct that the whole of said surplus be invested in the bonds or other securities of the United States if, in his judgment, the general welfare and the interests of the United States require.
Section 147. That for the purpose of creating and establishing the organization provided for in this Act and putting the same into operation there is hereby appropriated the sum of three hundred thousand dollars, or so much thereof as may be necessary, as a loan to the National Land Credit Bank, at the rate of 3 per centum per annum until paid: Provided, however, That this loan shall not extend beyond the period of ten years.
Section 148. That to accomplish the purpose of this Act the governor of each State is hereby authorized and empowered to appoint some citizen of his State to organize at least twenty local associations in his State in accordance with the provisions of this Act, and such appointee is hereby authorized to expend not to exceed six thousand dollars in such undertaking. Upon the completion of the organization of at least twenty local associations under and in accordance with the provisions of this Act the amount of money so expended not to exceed six thousand dollars will be repaid to such appointee of any governor upon the presentation of vouchers for the money so actually expended duly signed by the governor of the State to the Treasurer of the United States.
Section 149. That the governor of the State in which at least twenty of such local associations have been organized as in this Act provided shall thereupon report in detail to the President of the United States, giving him the names and addresses of the local associations so organized, the names of the chairmen of the respective executive committees and their post-office addresses, and the names of the banks and their respective post-office addresses in which the several local associations have deposited the paid-up capital of twenty-five thousand dollars each, together with duplicate letters of receipt of the money from said bank.