"A national farm loan association may be organized in any community where 10 citizens owning land desire to borrow an aggregate of not less than $20,000. The land must be unencumbered or the proceeds of the loan must be used, in part, to remove any lien. Loans may be as small as $100 or as large as $10,000.

"They must first make application, in writing, for a charter to the Federal land bank of the district in which the association desires to do business. This application, called "articles of association," must be signed by all those desiring to form the association, stating specifically the name under which they desire to do business, the amount each one desires to borrow, the estimated value of the security each one offers, the territory in which the association desires to do business, how the proceeds of the loan are to be used, and other details set forth in the blank forms which are furnished.

"The articles of association having been signed, the applicants become a tentative organization and elect an agent to represent them, called a "secretary-treasurer"; they also select a committee of three, called a "loan committee." This agent will then receive, from each of the applicants, a subscription to the stock of the association they are forming equal to 5 per cent of the loan they severally desire, which is not required to be paid unless the loan is granted. That is, each borrower must subscribe for such stock to the amount of 5 per cent of his own loan and no more.

"The application for the charter having been signed, the signatures must be acknowledged before a notary public or other officer qualified to administer oaths, and then it must be forwarded by the secretary-treasurer to the Federal land bank of the district.

"Upon its receipt the bank will send its agent to examine into the representations made in the application and, if found satisfactory, a charter will be granted.

"Upon the granting of the charter, the individuals signing the application become a body corporate, which gives it the right to do the business authorized by the farm loan act, to extend its benefits to others by taking in new members from time to time, and to have succession indefinitely. New members must be applicants for loans, which may be as small as $100 or as large as $10,000."