No. 4.] AGRICULTURAL LEGISLATION. 297 



provided, that the surplus fund, when other funds of the bank are not 

 sufl&cient, may be expended in meeting the accruing obUgations and 

 necessary current expenses of conducting the business of the bank. Any 

 uninvested portion of the land reserve fund or the surplus fund may be 

 deposited, pending investment, in any national bank or trust company in 

 the commonwealth. 



HOLDINGS OF REAL ESTATE. 



Section 18. A farmland bank may purchase and hold real estate only 

 as provided in this section: 



First. — It may own the building in which its offices are located, and 

 may lease such portion of the building as may not be required for the busi- 

 ness of the bank: provided, that no part of the land reserve fund or the 

 surplus fund required by the provisions of this act shall be invested in 

 the pvuchase of such building. 



Second. — It may hold real estate acquired by the foreclosure of mort- 

 gages owned by it, or by purchase at sales made under the provisions of 

 such mortgages, or upon judgments for debts due to it, or in settlements 

 effected to secure such debts, but all such real estate shall be sold by the 

 bank within five years after the title thereof is vested in it, unless the com- 

 missioner upon petition of the committee on loans of such bank for cause 

 shall grant additional time for the sale of such real estate. 



LOANS. 



Section 19. Loans shall be made only upon security of first mortgages 

 upon farm lands. The rate of interest upon loans shall in no event be 

 more than six per cent, but an additional charge to the borrower may be 

 made, to be applied to the cost of administering the affairs of the bank, 

 which charge in no case shall exceed one per cent of the amount unpaid 

 on the loan and shall be paid in annual, semi-annual, or quarterly payments 

 at the same time that the interest is paid. The rate of interest upon loans 

 for a period longer than five years shaU not exceed the rate of interest 

 upon the bonds secured thereby by more than one per cent annually upon 

 the amount unpaid on the loan. 



Upon loans for a period longer than five years amortization payments 

 shall be made in such amounts as shall be stated in the mortgage note and 

 mortgage, which amounts shall be sufficient to pay the principal in full 

 at maturity and shall be payable in equal annual, semi-annual, or quarterly 

 payments at the same time that the interest is paid. A borrower may 

 pay the amount of his mortgage loan or any part thereof on any interest 

 day by surrendering at par and accrued interest bonds of the series for 

 which his mortgage is pledged as security. 



Fines may be imposed upon borrowers for failure to pay interest or 

 amortization payments promptly, but such fines shall not exceed one half 

 of one per cent per month upon the impaid part of the loan for the time 

 that the default continues. In no event shall fines for more than six 

 months upon any one default be collected. 



