Section 7
SEC. 7. The Coconut Products Board shall not purchase bonds of any corporation except under the following terms. and conditions, among others: That the amount of bonds issued by the corporation shall not exceed sixty per centum of the value of the property offered as security; that before such purchase is made, such corporation shall have contracts with the owners of coconut plantations, obligating such owners to deliver and sell to the corporation all the coconuts produced on such land or copra made from said nuts, and to convey to the corporation such rights of way as the corporation may deem necessary for roads and railroads connecting the dryer or factory with the fields; that the majority of the owners of said lands shall be stockholders in the corporations shall provide for sinking fund to be deposited with the Insular Treasurer for the retirement of the bonds; that the payment for the retirement of the bonds shall have preference over any dividends or profits of the stockholders and shall be sufficient for the total extinction of the debt in not exceeding twenty years; but until all bonds issued by such corporation shall be fully paid or money sufficient to pay the same safely deposited for that purpose with the Insular Treasurer, no dividend in excess of ten per centum per annum shall be paid upon the stock of such corporation, and the net earnings over and above said dividend shall be used in additions, betterments, or improvements to the property offered as security or in the redemption of the bonds of such corporation: Provided further, That the Coconut Products Board shall not make any loan except upon first mortgage on the dryer or factory and the land or part of the land of the corporation, or both, and in a sum not to exceed sixty per centum of the value of the property offered as security, and that the corporation provide for the payment in each year of an annual installment, such annual installments to have the preference over any dividends or profits of the stockholders and to be sufficient for the total extinction of the debt in not exceeding twenty years.