24 UNITED STATES - CO-OPEKATION AND ASSOCIATION 



reserve banks for the IvOcal Banks. All profits would go ultimately to the 

 lyocal Banks which are the shareholders in their respective State Banks. 

 The National Rural Bank of the United States would be estabUshed in 

 Washington, and be owned entirely by the Local and State Rural Banks. 

 It would be controlled by nine Directors, five elected by the Banks and four 

 nominated by the President of the United States. 



The distinguishing feature of the whole system is the power which, 

 it is proposed, shall be given to each and all of the Banks to use their credit, 

 as well as their cash assets, to meet the needs of the farmer. The Bill 

 contemplates the creation of long-term bonds secured by first-mortgages on 

 farms, to a maximum of 60 per cent, of their assessed value. These would 

 be guaranteed in turn by the Local Banks, the State Banks and the National 

 Bank, and would, it is hoped, thus be raised into the status of high-grade 

 investment securities, readily acceptable all over the world. 



The Bill proposes to estabUsh, in the Treasury Department, a special 

 Division of Rural Banking to exercise control over the whole system. 



(From A National Rural Bankinq, System. Washington, 1913, and Senate Document 

 No. 158. 631(1 Congress: ist Session). 



