EXPLANATION OF ANNEXED BUDGETS AND SUPPLEMENTARY MATERIAL Part III presents detailed schedules and explanatory statements on two Government-sponsored enterprises which are outside the normal budget process. The annexed budgets have not been reviewed by the President but are presented in the amounts submitted by the agencies. These enterprises (Federal land banks and Federal home loan banks), although Government-sponsored, are now completely privately owned and therefore excluded from the budget totals. The Federal land bank system, consisting of 12 Federal land banks, is cooperative and is completely farmer-owned. The 12 Federal home loan 1122 banks, which are supervised by the Federal Home Loan Bank Board, obtain their funds from capital stock, issuance of their own obligations, and deposits of member institutions. The capital stock of these banks is entirely owned by member institutions. The material in this part is presented in the general format of similar material for public enterprise and trust revolving funds in Part I. No appropriation language appears because action by Congress is not required. This part also presents the receipts of the trust funds, organized by agency and fund. ANNEXED BUDGETS AND SUPPLEMENTARY MATERIAL are paid from their own resources and thus in no way do they affect the Budget of the United States. The expenses of the Farm Credit Administration are paid by assessments collected from all the banks and associations under its supervision. The last of the Government capital that had been invested in the banks was repaid in 1947. At June 30, 1967, the bank had over $306 million of privately owned capital stock, and $365 million of retained earnings. Revenue, Expense, and Retained Earnings (in thousands of dollars) 18,669 11,688 1 Balances of selected resources are identified on the statement of financial condition. 2 Includes as redemption of borrowing amounts deposited with the Treasurer of the United States for payment of bonds upon maturity, whether or not they have been presented for payment. The Federal land banks, through the nearly 700 Federal land bank associations, which are located at the local level, make long-term real estate loans to farmers and ranchers. These loans are based upon the normal value of the farm offered as security. A loan may not exceed 65% of the value, plus the amount of stock required to be purchased in the associations. The funds to finance these loans are obtained primarily from sale of the banks' bonds to the public and from their own net worth. These bonds are not guaranteed by the U.S. Government either as to principal or interest. The banks and the associations are under the supervision of the Farm Credit Administration. All of their expenses Mortgage loans... Delinquent installments, etc... Total assets.. Liabilities: Accounts payable and accrued liabilities 1 401 8,566 9,943 10.162 4,724,961 5,303,723 6,069,000 6,860,000 7,858 8,972 6,197 6,825 4,975,987 5,571,105 6,360,490 7,163,241 131,283 140,517 137,904 158,283 4,104,732 4,608,596 5,351,500 6,075,700 74,969 109,266 100,400 99,514 37,884 41,651 47,151 53,251 4,348,868 4,900,030 5,636,955 6,386,748 272,899 306,526 346,540 391,706 195,747 210,125 225,682 235,422 123,420 123,420 123,420 123,420 35,053 31,004 27,893 25,945 627,119 671,075 723,535 776,493 4,975,987 5,571,105 6,360,490 7,163,241 1 Excludes sums on deposit with the Treasurer of the United States for payment of principal and interest on matured bonds as follows: 1966, $3,278 thousand; 1967. $5,089 thousand; 1968, $5,000 thousand; and 1969, $5,000 thousand. 2 The changes in these items are reflected on the program and financing schedule. Operating expense. Miscellaneous___. 1, 170, 784 1,444, 734 1,581, 438 Obligated balance, end of year.. Expenditures.. Cash transactions: Gross expenditures. 2,517,757 4,710,242 -6,007,474 -2,781,534 -3,460, 349 1 Balances of selected resources are identified on the statement of financial condition. The 12 Federal home loan banks are chartered and supervised by the Federal Home Loan Bank Board under the authority of the Federal Home Loan Bank Act of 1932. The banks are financial institutions and their main function is to supply their members-principally savings and loan type institutions, and savings banks-with credit to smooth their operations and enhance their service to the public as savings media and home mortgage lenders in their own communities. Each bank operates in a geographic district designated by the Board and together the banks cover all of the United States as well as Puerto Rico, the Virgin Islands, and Guam. In 1967 the banks extended credit amounting to $2.1 billion and received repayments of $4.5 billion. Advances outstanding on June 30, 1967, totaled $4.3 billion. The principal source of funds for the lending operation is the sale of consolidated obligations of the banks to the public. On June 30, 1967, $4.6 billion of these obligations were outstanding. The consolidated obligations are not guaranteed by the U.S. Government as to principal or interest. Other sources of lendable funds include 25% of deposits from members (with total deposits amounting to $1.9 billion on June 30, 1967), and funds paid for the purchase of capital stock by member institutions, amounting to $1.4 billion at the end of 1967. Funds not immediately needed for advances to members are invested in obligations of the United States or agencies thereof. The capital stock of the Federal home loan banks is owned entirely by their members. Initially the U.S. Government purchased stock of the banks in the amount of $125 million. The banks had repurchased the Government's investment in full by mid-1951, and since that time the banks have been owned entirely by their members. The entire operating expenses of the banks are paid from their own income and are not included in the budget of the United States. Included in these expenses is the assessment by the Federal Home Loan Bank Board to cover a substantial portion of the Board's administrative and other costs. |