714 Submi ssion of re- po rt
district Fed - or., land bank . Decision as to settl e- ment . New mem bers . Ante, p. 711 . Termination of eon- servatorship if in the affirmative . Procedure, if deci- sion in the negative . Condition of settle- ment. Payments from re- tired stock. Procedurewberefair boo k value of sto ck below par. 75 TH CONGRESS, 1ST SESSION-CH . 704-A UGUST 1 9, 193 7 tion's assets and indebtedness, the conservator shall determine the fair book value of the outstanding stock of said association and the claims of any retired shareholders based on their previous stock ownership. Upon its completion said report shall be submitted to the Federal land bank of the district and said bank shall thereupon indi- cate its approval thereof or note any exceptions thereto and submit such report together with its exceptions, if any, to the Farm Credit Administration for consideration . "If said report is approved, in whole or in part, by the Farm Credit Administration, upon recommendation of the Federal land bank of the district said Administration shall then decide whether such association shall be permitted to pay off and retire its capital stock at its fair book value, upon full payment of the mortgage loans in connection with which such stock was issued originally, and to settle on the same basis the claims of any of its stockholders who have previously paid their loans in full, but have not received credit for, or the proceeds of their stock in such association. At the same time the Farm Credit Administration shall also decide whether it will permit said association to admit new members pursuant to section 25 (b) of the Farm Credit Act of 1937 . If the decision of said Administration is in the affirmative, it may terminate the con- servatorship and turn the affairs of the association back to its board of di rectors . If sai d re port is not appr oved or the deci sion of said Administration is in the negative, it may, in its discretion, terminate the conservatorship and permit such association to resume the trans- action of its business subject to such terms, conditions, restrictions, and limitations as it may prescribe for the protection of the rights of creditors and stockhol ders, or said Administratio n may appoint a receiver for the association as elsewhere provided in this section . "Any settlement made with a retiring or retired shareholder on the basis of the fair book value of the stock of the association pursuant to this section shall be made only on condition that said shareholder agrees to accept such settlement as payment in full . If any shareholder or former shareholder does not desire to settle on such basis, he may, in lieu thereof, be given a participation certificate which will entitle him to share pro rata, on the basis of the number of shares of stock which he owned in the association, in the distribu- tion of any assets of the association which is made after all of its indebtedness to creditors has been satisfied . The Federal land bank of the district may pay to the association from the proceeds of bank stock retired in connection with the payment in full of loans endorsed by such association an amount sufficient to permit the association to make the settl ements provid ed for in thi s section and any balance of such proceeds shall be retained by the bank and applied as a credit on the indebte dness o f the associa tion to it . "After any determination by the Farm Credit Administration as herein provided, that the fair book value of the stock of a national farm loan association is less than the par value thereof, periodically thereafter any increase in the fair book value of said stock resulting from earnings of the association and actual recoveries in excess of the valuations used by the Farm Credit Administration in determining the fair book value of the stock of such association, as herein provided, shall, under rules and regulations of the Farm Credit Administration, be apportioned ratably on a per-share basis to all outstanding stock or participation certificates having a fair book value less than par until the fair book value of all such stock or participation certificates is equal to the par value thereof .
