Full text of Agricultural Credits Act of 1923

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[ P u b l i c — N o . 5 0 3 — 6 7 t h C o n g k b §5 .]\

[S. 4280.]
An Act To provide additional credit facilities for the agricultural
and live-stock industries of the United States; to amend the Federal Farm Loan Act;
to amend the Federal Reserve Act; and for other purposes.”

Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
TITLE I.— FEDERAL INTERMEDIATE CREDIT BANKS.
S e c t i o n 1. That section 1 of the Federal Farm Loan Act is
amended to read as follows:

“TITLE I.— FEDERAL FARM LOANS.
1. That this Act may be cited as the ‘ Federal Farm
Loan Act.’ Its administration shall be under the direction and con­
trol of the Federal Farm Loan Board hereinafter created.”
S e c . 2. That the Federal Farm Loan Act is amended by adding at
the end thereof a new title, to read as follows:
“ S e c t io n

“TITLE II.— FEDERAL INTERMEDIATE CREDIT BANKS.
“ ORGANIZATION.
“ S e c . 2 0 1 . (a) That the Federal Farm Loan Board shall have
power to grant charters for 1 2 institutions to be known and styled as
4Federal Intermediate Credit Banks.’
“ (b) Such institutions shall be established in the same cities as the
12 Federal Land Banks. The officers and directors of the several
Federal Land Banks shall be ex officio officers and directors of the
several Federal Intermediate Credit Banks hereby provided for and
shall have power to employ and pay all clerks, bookkeepers, account­
ants and other help necessary to carry on the business authorized by
this title.
“ (c) Each Federal Intermediate Credit Bank shall have all the
usual powers of corporations, and shall have power to sue and be sued
both in law and equity, and for purposes of jurisdiction shall be
deemed a citizen of the State where it is located.
“ (d) Federal Intermediate Credit Banks, when designated for
that purpose by the Secretary of the Treasury, shall act as fiscal
agents of the United States Government and perform such duties as
shall be prescribed by the Secretary of the Treasury.
“ (e) Upon default of any obligation any Federal Intermediate
Credit Bank may be declared insolvent and placed in the h a n d s of a
receiver by the Federal Farm Loan Board, and proceedings shall
thereupon be had in accordance with the provisions of section 29 of
this Act regarding National Farm Loan Associations.

u(f) The charters to such Federal Intermediate Credit Banks
shall be granted upon application of the directors of the Federal




(l)

2

[P ub . SOS.)

Land Banks which application shall be in such form as the Federal
Farm Loan Board shall prescribe.
DISCOUNTS AND LOANS.

“ S e c . 202. (a) That Federal Intermediate Credit Banks, when
chartered and established, shall have power, subject solely to such
restrictions, limitations, and conditions as may be imposed by the
Federal Farm Loan Board not inconsistent with the provisions of
this Act,—
(1) To discount for, or purchase from, any national bank, and/
or any State bank, trust company, agricultural credit corporation,
incorporated live-stock loan company, savings institution, coopera­
tive bank, cooperative credit or marketing association of agricul­
tural producers, organized under the laws of any State, and/or any
other Federal Intermediate Credit Bank, with its indorsement, any
note, draft, bill of exchange, debenture, or oth.er such obligation the
proceeds of which have been advanced or used in the first instance
for any agricultural purpose or for the raising, breeding, fattening,
or marketing of live stock;
(2) To buy or sell, with or without recourse, debeqtures issued by
any other Federal Intermediate Credit Bank; and
(3) To make loans or advances direct to any cooperative associa­
tion organized under the laws of any State and composed of persons
engaged in producing, or producing and marketing, staple agricul­
tural products, or live stock, if the notes or other such obligations
representing such loans are secured by warehouse receipts, and/or
shipping documents covering such products, and/or mortgages on
live stock: Provided, That no such loan or advance shall exceed 75
per centum of the market value of the products covered by said ware­
house receipts and/or shipping documents, or of the live stock cov­
ered by said mortgages.
“ (b) No paper shall be purchased from or discounted for any
national bank. State bank, trust company, or savings institution
under this section, if the amount of such paper added to the aggre­
gate liabilities of such national bank, State bank, trust company or
savings institution, whether direct or contingent (other than bona
fide deposit liabilities), exceeds the amount of such liability per­
mitted under the laws of the jurisdiction creating the same; or ex­
ceeds twice the paid in and unimpaired capital and surplus of such
national bank, State bank, trust company, or savings institution,
^o paper shall under this section be purchased from or discounted
for any other corporation engaged in making loans for agricultural
purposes or for the raising, breeding, fattening, or marketing of live
stock, if the amount of such paper added to the aggregate liabilities
of such corporation exceeds the amount of stich liabilities per­
mitted under the laws of the jurisdiction creating the same; or ex­
ceeds ten times the paid in and unimpaired capital and surplus of
such corporation. It shall be unlawful for any national bank which
is indebted to any Federal Intermediate Credit Bank upon paper
discounted or purchased under this section, to incur any additional
indebtedness, if by virtue of such additional indebtedness its aggre­
gate liabilities, direct or contingent, will exceed the limitations herein
contained.”




fPtTB.503.

3

(c) Loans, advances, or discounts made under this section shall
have a maturity at the time they are made or discounted by the Fed­
eral Intermediate Credit Bank of not less than six months nor more
than three years. Any Federal Intermediate Credit Bank may in
its discretion sell loans or discounts made under this section, with
or without its indorsement.
(d) Rates of interest or discount charged by the Federal Inter­
mediate Credit banks upon such loans and discounts shall be subject
to the approval of the Federal Farm Loan Board. On the majority
vote of the members of the Federal Farm Loan Board any Federal
Intermediate Credit Bank shall be required to rediscount the dis­
counted paper of any other Federal Intermediate Credit Bank at
rates of interest to be fixed by the Federal Farm Loan Board.
ISSUE OF DEBENTURES.
“ S e c . 2 0 3 . (a) That Federal Intermediate Credit Banks, when
chartered and established, shall have power, subject to the approval
of the Federal Farm Loan Board, to borrow money and to issue and
to sell collateral trust debentures or other similar obligations with a
maturity at the time of issue of not more than five years, which shall
be secured by at least a like face amount of cash, or notes or other
such obligations discounted or purchased or representing loans made
under section 2 0 2 : Provided, That no Federal Intermediate Credit
Bank shall have power to issue or obligate itself for debentures or
other obligations under the provisions of this section in excess of
ten times the amount of the paid-up capital and surplus of such bank.
(b)
The provisions of Title I relating to the preparation and issuo
of farm loan bonds shall, so far as applicable, govern the prepara­
tion and issue of debentures or other such obligations issued under
this section; but the Federal Farm Loan Board shall prescribe rules
and regulations governing the receipt, custody, substitution, and re­
lease of collateral instruments securing such debentures or other ob­
ligations, the ri^ht of substitution being hereby granted. Rates of
interest upon debentures and other such obligations issued under this
section shall, subject to the approval of the Federal Farm Loan
Board, be fixed by the Federal Intermediate Credit Bank making
the issue, not exceeding 6 per centum per annum.
“ (c) The United States Government shall assume no liability, di­
rect or indirect, for any debentures or other obligations issued under
this section, and all such debentures and other obligations shall con­
tain conspicuous and appropriate language, to be prescribed in form
and substance by the Federal Farm Loan Board and approved by
the Secretary of the Treasury, clearly indicating that no such liabil­
ity is assumed.
DISCOUNT RATES.

“ Sec. 204. (a) That before making any discounts under the pro­
visions of this title, each Federal Intermediate Credit Bank snail
establish and promulgate a rate of discount to be approved bv the
Federal Farm Loan Board. Any Federal Intermediate Credit Bank
which has made an issue of debentures under the provision of this
title may thereafter establish, with the approval of tne Federal Farm
Loan Ekmrd, a rate of discount not exceeding by more than 1 per




4

[P u b . 503.]

centum per annum the rate borne by its last preceding issue of
debentures.
“ (b) Xo organization entitled to the privileges of this title, shall,
without the approval of the Federal Farm Loan Board, be allowed
to discount with any Federal Intermediate Credit Bank any note or
other obligation, upon which the original borrower has been charged
a rate of interest exceeding by more than 1| per centum per annum
the discount rate of the Federal Intermediate Credit Bank at the
time such loan was made.
“ (c) A Federal Intermediate Credit Bank may, subject to the
approval of the Federal Farm Loan Boardt buy in the open market
at or below par for its own account and retire at or before maturity
any such debentures or obligations issued by it.
CAPITAL STOCK.

“ S e c . 205. That for the purpose of exercising the powers con­
ferred by this title, each Federal Intermediate Credit Bank shall
have a subscribed capital stock of $5,000,000. Capital stock of such
amount shall be divided into shares of $5 each and shall be sub­
scribed, held, and paid by the Government of the United States.
It shall be the duty of the Secretary of the Treasury to subscribe
to such capital stocK on behalf of the United States, such subscrip­
tion to be subject to call in whole or in part by directors of the
said banks upon 30 days’ notice to the Secretary of the Treasury and
with the approval of the Federal Farm Loan Board. The Secretary
of the Treasury is authorized and directed to take out shares as
railed and to pay for the same out of any money in the Treasury
not otherwise appropriated.
APPLICATION OF EARNINGS.

“ S e c . 206. (a) That the Federal Farm Loan Board shall equitably
apportion the joint expenses incurred in behalf of Federal Land
Banks, Joint Stock Land Banks, and Federal Intermediate Credit
Banks, and shall assess against £ach Federal Intermediate Credit
Bank its proportionate share of the expenses of any additional per­
sonnel in the Federal Farm Loan Bureau made necessary in connec­
tion with the operation of this provision.

“ (b) After all necessary expenses of a Federal Intermediate
Credit Bank have been paid or provided for, the net earnings shall
be divided into equal parts and one-half thereof shall be paid to
the United States and the balance shall be paid into a surplus
fund until it shall amount to 100 per centum of the subscribed capi­
tal stock of such bank and that thereafter 10 per centum of such
earnings shall be paid into the surplus. After the aforesaid require­
ments have been fully met, the then net earnings shall be paid to
the United States as a franchise tax. The net earnings derived by
the United States from Federal Intermediate Credit Banks shall,
in the discretion of the Secretary of the Treasury, be used to sup­
plement the gold reserve held against outstanding United States
notes, or shall be applied to the reduction of the outstanding bonded
indebtedness of the United States under regulations to be prescribed
by the Secretary of the Treasury. Should a Federal Intermediate




IPUB. 503.)

5

Credit Bank be dissolved or go into liquidation, after the payment
of all debts and other obligations as hereinbefore provided, any
surplus remaining shall be paid to and become the property of
the United States and shall be similarly applied.
LIA B IL IT Y ON DEBENTURES.

“ S e c . 207. That any Federal Intermediate Credit Bank issuing
debentures or other such obligations under this title shall be pri­
marily liable therefor, and shall also be liable, upon presentation of
the coupons for interest payments due upon any such debentures or
obligations issued by any other Federal Intermediate Credit Bank
and remaining unpaid in consequence of the default of the other
Federal Intermediate Credit Bank. Any Federal Intermediate
Credit Bank shall likewise be liable for such portion of the prin­
cipal of debentures or obligations so issued as are not paid after
the assets of such other Federal Intermediate Credit Bank have
been liquidated and distributed. Such losses, if any, either of in­
terest or of principal, shall be assessed by the Federal Farm Loan
Board against solvent Federal Intermediate Credit Banks liable
therefor in proportion to the amount of capital stock, surplus, and
debentures or other such obligations which each may have outstand­
ing at the time of such assessment. Every Federal Intermediate
Credit Bank shall, by appropriate action of its board of directors
duly recorded in its minutes, obligate itself to become liable on
debentures and other such obligations as provided in this section.
EXAMINATIONS AND REPORTS.

“ S e c . 208. (a) That in order to enable each Federal Intermediate
Credit Bank to carry out the purpose of this title, the Comptroller of
the Currency is hereby authorized and directed, upon the request of
any Federal Intermediate Credit Bank, (1) to furnish for the con­
fidential use of such bank such reports, records, and other informa­
tion, as he may have available, relating to the financial condition of
national banks through or for which the Federal Intermediate Credit
Bank has made or contemplates making discounts, and (2) to make
through his examiners, for the confidential use of the Federal Inter­
mediate Credit Bank, examinations of organizations through or for
which the Federal Intermediate Credit Bank has made or contem­
plates making discounts or loans: Provided, That no such examina­
tion shall be made without the consent of such organization except
where such examination is required by law: Provided, That any or­
ganization, except State banks, trust companies and savings associa­
tions, shall, as a condition precedent to securing rediscount privileges
with the Federal Intermediate Credit Bank of its district, file with
such bank its written consent to its examination as may be directed
by the Federal Farm Loan Board by land bank examiners; and State
banks, trust companies and savings associations may be in like man­
ner required to file their written consent that reports of their exami­
nation by constituted authorities may be furnished by such authori­
ties upon request to the Federal Intermediate Credit Bank of their
district. Each Federal Intermediate Credit Bank shall be exam­
ined and audited at least once each year by the Federal Farm Loan




6

[P ub . 503.]

B o a r d , and the results o f such ex am in ation and audit shall be m ade
p u b lic b y the board.

(b) Every Federal Intermediate Credit Bank shall make to the
Federal Farm Loan Board not less than three rf-ports during each
year as requested by the board and according to the form which may
be prescribed by the board, verified by the oath or affirmation of the
president, or secretary, or treasurer, of each Federal Intermediate
Credit Bank and attested by the signature of at least three of the
directors. Each report shall exhibit, in detail and under appropriate
heads, the resources and liabilities of the Federal Intermediate Credit
Bank at the close of business on any past day specified by the Fed­
eral Farm Loan Board within five days from the receipt of a request
or requisition therefor from the board, and in the same form in which
it is made to the Federal Farm Loan Board shall be published in a
newspaper published in the place where such Federal Intermediate
Credit Bank is established, or if there is no newspaper in the place,
then in the one published nearest thereto, in the same county, at the
expense of the bank; and such proof of publication shall be furnished
as may be required by the Federal Farm Loan Board. The Federal
Farm Loan Board shall also have power to call for special reports
from any particular Federal Intermediate Credit Bank whenever in
its judgment the same are necessary for a full and complete knowl­
edge of is condition.
(c) Land bank appraisers are authorized, upon the request of any
Federal Intermediate Credit Bank and with the approval of the
Federal Farm Loan Board, to investigate and make a written report
upon the products covered by warehouse receipts or shipping docu­
ments, and the live stock covered by mortgages, which are security
for notes or other such obligations representing any loan to any or­
ganization, under this title. Land bank examiners are authorized,
upon the request of any Federal Intermediate Credit Bank and with
the approval of the Federal Farm Loan Board, to examine and make
a written report upon the condition of any organization, except na­
tional banks, to which the Federal Intermediate Credit Bank contem­
plates making any such loan.
“ (d) The Federal Farm Loan Board shall assess the cost of all
examinations made by the examiners of the board under the provi­
sions of this title, upon the bank, trust company, savings institution,
or organization investigated, in accordance with the regulations to
be prescribed by the board.
RULES AND REGULATIONS.
“ S e c . 209. That the Federal Farm Loan Board is authorized to
make such rules and regulations, not inconsistent with law, as it
deems necessary for the efficient execution of the provisions of this
title.
TAX EXEMPTION.

w S e c . 210. That the privileges of tax exemption accorded under sec­
tion 26 of this Act snail apply also to each Federal Intermediate
Credit Bank, including its capital, reserve, or surplus, and the in­
come derived therefrom, and the debentures issued under this title




(P ub . 503.1

7

shall be deemed and held to be instrumentalities of the Government
and shall enjoy the same tax-exemptions as are accorded farm loan
bonds in said section.
“ PENALTY PROVISIONS.

“ S e c . 211. (a) That any officer, director, agent, or employee of a
Federal Intermediate Credit Bank who embezzles, abstracts, pur­
loins, or willfully misapplies any of the moneys, funds, or credits of
such bank, or who, without authority from such bank, draws any
order or bill of exchange, makes any acceptance, issues, puts forth,
or assigns any note, debenture, bond, draft, bill of exchange, mort­
gage, judgment, or decree, or who makes any false entry in any book,
report, or statement of such bank with intent in any case to injure
or defraud such bank or any other company or person, or to deceive
any officer of such bank or the Federal Farm Loan Board, or any
agent or examiner appointed to examine the affairs of such bank:
and every receiver or such bank who with like intent to defraud or
injure embezzles, abstracts, purloins, or willfully misapplies any of
the moneys, funds, or assets of such bank, and every person who
with like intent aids or abets any officer, director, agent, employee,
or receiver in any violation of this section, shall be deemed guilty
of a misdemeanor, and upon conviction thereof in any district court
of the United States, shall be fined not more than $5,000, or shall be
imprisoned for not more than five years, or both, at the discretion
of the court.
“ ( b ) W h o e v e r m akes any statem ent, k n o w in g it to be fa lse , fo r
th e pu rpose o f o b ta in in g fo r h im se lf or fo r a n y oth er person, firm ,
c o rp o ra tio n , o r association a n y advance, o r extension or ren ew al o f
a n advan ce, or any release or su b stitu tion o f secu rity fr o m such ban k ,
o r fo r th e purpose o f influ en cin g in any o th er w a y the action o f such
b a n k , sh a ll be p u nish ed b y a fine o f n o t m ore th an $ 1 0 ,0 0 0 , or by
im p riso n m en t fo r not m ore th an five y ea rs, o r both.

u(c) Whoever willfully overvalues any property offered as se­
curity for any such advance shall be punished by a fine of not more
than $5,000, or by imprisonment for not more than two years, or both.
“ (d) Any examiner appointed under this Act wrho shall accept a
loan or gratuity from any organization examined by him, or from
any person connected with any such organization in any capacity,
or who shall disclose the names of borrowers to other than the proper
officers of such organization, without first having obtained express
permission in writing from the Farm Loan Commissioner or from
the board of directors of such organization, except when ordered
to do so by a court of competent jurisdiction or by direction of the
Congress of the United States or of either House thereof, or any com­
mittee of Congress or of either House duly authorized, shall be pun­
ished by a fine of not exceeding $5,000 or by imprisonment of not
exceeding one year, or both, and may be fined a further sum equal
to the money so loaned or gratuity given, and shall forever there­
after bo, disqualified from holding office as an examiner under the
provisions or this Act. No examiner while holding such office shall
perform any other service for compensation for any bank or bank­

ing or loan association or for any person connected therewith in
any capacity.




8

[PUB. 503.]

“ (e) Whoever, being an officer, director, employee, agent or
attorney of a Federal Intermediate Credit Bank, stipulates for or
receives or consents or agrees to receive any fee, commission, gift,
or thing of value, from any person, firm, or corporation for procur­
ing or endeavoring to procure for such person, firm, or corporation,
or for any other person, firm, or corporation any loan from any such
corporation or extension or renewal of loan or substitution of security,
or the purchase or discount or acceptance of any paper, note, draft,
check, or bill of exchange by any such corporation, shall be deemed
guilty of a misdemeanor and shall upon conviction thereof be
imprisoned for not more than one year and fined not more than
$5,000, or both.
“ (f) Any person who shall falsely make, forge, or counterfeit
or cause or procure to be falsely made, forged, or counterfeited or
willingly aid or assist in falsely making, forging, or counterfeiting
any debenture, coupon, or other obligation in imitation of or pur­
porting to be in imitation of the debenture, coupon, or other obli­
gation issued by any Federal Intermediate Credit Bank, or any
person who shall pass, utter, or publish or attempt to pass, utter,
or publish any false, forged, or counterfeited, debenture, coupon,
or other obligation purporting to be issued by any such bank know­
ing the same to be falsely made, forged, or counterfeited, or any
person who shall falsely alter or cause or procure to be falsely
altered or shall willingly aid or assist in falsely altering any such
debenture, coupon, or other obligation or who shall pass, utter, or
publish as true any falsely altered or spurious debenture, coupon,
or other obligation issued or purporting to have been issued by any
such bank knowing the same to be falsely altered or spurious, shall
be punished by a fine of not exceeding $5,000 or by imprisonment
not to exceed five years, or both.
“ (g) Any person who shall deceive, defraud, or impose upon or
who shall attempt to deceive, defraud, or impose upon any person,
partnership, corporation, or association by making any false pre­
tense or representation concerning the character, issue, security,
contents, conditions, or terms of any debenture, coupon, or other
obligation issued under the terms of this title, shall upon conviction
be fined not exceeding $500, or imprisoned not to exceed one year, or
both.
“ (h) All corporations not organized under the provisions of this
title are prohibited from using the words ‘ Federal Intermediate
Credit Bank’ as part of their corporate name, and any violation
of this prohibition shall subject the party charged therewith to a
civil penalty of $50 for each day during which the violation
continues.
“ S e c . 212. That no Federal Intermediate Credit Bank shall
charge or receive any fee, commission, bonus, gift, or other consid­
eration not herein specifically authorized.”

TITLE II.—NATIONAL AGRICULTURAL CREDIT CORPO­
RATIONS.
FORMATION.

S e c . 201. That corporations for the purpose of providing credit
facilities for the agricultural and live-stock industries of the United




[P ub . 503.1

9

States, to be known as National Agricultural Credit Corporations,
may be formed by an}' number of natural persons not less in any
case than five. Such persons shall enter into articles of association
which shall specify the object for which the corporation is formed.
Such articles of association shall be signed by the persons intending
to participate in the organization of the corporation and be for­
warded to the Comptroller of the Currency to be filed and preserved
in his office.
REQUISITES OF ARTICLES AND CERTIFICATE.
S e c . 202. (a) That persons signing such articles of association shall
make an organization certificate which shall specifically state the
name of the corporation to be organized, the place where its office is
to be located, the State or States in which its operations are to be
carried on, the amount of its capital stock, and the number of shares
into which the same shall be divided, and that the certificate is made
to enable the subscribers to avail themselves of the advantages of
this title.
(b) The name of each corporation organized under this title shall
include the words “ National Agricultural Credit Corporation.”
(c) The organization certificate and articles of association shall
be acknowledged before some judge of a court of record or notary
public and shall, together with the acknowledgment thereof duly
authenticated by the seal of such court or notary, be transmitted to
the Comptroller of the Currency, who shall file, record, and care­
fully preserve the same in his office.
(а) Upon making and filing the articles of association and organi­
zation certificate with the Comptroller of the Currency, and when
the Comptroller of the Currency has approved the same and issued a
written permit to begin business, the corporation shall be and become
a body corporate, and shall have power—
(1) To adopt and use a corporate seal.
(2) To have succession for a period of 50 years unless sooner dis­
solved by the act of shareholders owning two-thirds of its stock or
by Act of Congress or unless its charter shall be forfeited for viola­
tion of law.
(3) To make contracts.
(4) To sue and be sued, complain and defend in any court of law
or equity, and for purposes of jurisdiction shall be deemed a citizen
of the State where it is located.
(5) To elect or appoint directors and by its board of directors to
appoint such officers and employees as may be deemed proper; to
define their authority and duties; to fix their salaries; in its discre­
tion to require bonds of any of them and to fix the penalty thereof;
and to dismiss at pleasure any of such officers or employees.
(б) To prescribe by its board of directors by-laws not inconsistent
with law or the regulations of the Comptroller of the Currency de­
fining the manner m which its general business may be conducted, its
shares of stock be transferred, its directors and officers be elected or
appointed, its property transferred, and the privileges granted to it
by law be exercised and enjoyed.
(T) To exercise by its board of directors or duly authorized
officers or agents all powers specifically granted by the provisions




10

tfub. 503.j

of this title, and such incidental powers as shall be necessary to
carry on the business for which it is incorporated, within the limi­
tations prescribed by this title, but such corporation shall transact
no business except such as is incidental and necessarily preliminary
to its organization until authorized in writing by the Comptroller
of the Currency to commence business under the provisions of this
title.
(8) The affairs of each National Agricultural Credit Corporation
shall be managed by not less than five directors, who shall be
elected by the stockholders at a meeting to be held at any time
before the corporation is authorized by the Comptroller of the
Currency to commence business, and afterwards at meetings to be
held on such day in January of each year as may be provided in
the articles of association. The directors so elected shall hold office
for one year, and until their successors are elected and have qualified.
Every director and other officer of the corporation shall, before
entering upon the duties of his office, take and subscribe an oath
before a notary public or other official having a seal and authorized
to administer oaths, conditioned for the faithful performance of
the duties of his office. Such oath shall be in such form as may
be prescribed by the Comptroller of the Currency, and shall be
filed in the office of the Comptroller of the Currency. Any vacancy
in the board shall be filled by appointment bv the remaining direc­
tors. and any director so appointed shall hold his place until the next
election.
S e c . 2 0 3 . (a) That each National Agricultural Credit Corpora­
tion shall have power, under such rules and regulation as the Comp­
troller of the Currency may prescribe—
(1) To make advances upon, to discount, rediscount, or purchase,
and to sell or negotiate, with or without its indorsement or guar­
anty, notes, drafts, or bills of exchange, and to accept drafts or
bills of exchange, which—
(A ) Are issued or drawn for an agricultural purpose, or the
proceeds of which have been or are to be used for an agricultural
purpose;
(B) Have a maturity, at the time of discount, purchase, or accept­
ance, not exceeding nine months; and
(C) Are secured at the time of discount, purchase, or accept­
ance by warehouse receipts or other like documents conveying or
securing title to nonperishable and readily marketable agricultural
products, or by chattel mortgages or other like instruments con­
ferring a first and paramount lien upon live stock which is being
fattened for market.
(2) To make advances upon or to discount, rediscount, or pur­
chase, and to sell or negotiate with or without its indorsement or
guaranty, notes secured by chattel mortgages conferring a first
and paramount lien upon maturing or breeding live stock or dairy
herds, and having a maturity at the time of discount, rediscount,
or purchase not exceeding three years.

(3) To subscribe for, acquire, own, buy, sell, and otherwise deal
in Treasury certificates of indebtedness, bonds or other obligations
of the United States to such extent as its board of directors may
determine.
(4) To act, when requested by the Secretary of the Treasury,
as fiscal agent of the United States, and to perform such services




11

(P ub . 503.]

as the Secretary of the Treasury may require in connection with
the issue, sale, redemption or repurchase of bonds, notes, Treasury
certificates of indebtedness, or other obligations of the United
States.
(5) To purchase, hold, acquire, and dispose of shares of the capi­
tal stock of any corporation organized under the provisions of sec­
tion 207, of this title, in an amount not to exceed at any time 20 per
centum of its paid in and unimpaired capital and surplus.
(6) To purchase, hold, and convey real estate for the following
purposes, and for no others:
(A) Such as shall be necessary for its accommodation in the trans­
action of its business.
(B) Such as shall be mortgaged to it in good faith by way of
security for debts previously contracted.
(C) Such as shall be conveyed to it in satisfaction of loans or
advances made or debts previously contracted in the course of its
dealings.
(D) Such as it shall purchase at sales under judgments, decrees, or
mortgages held by the corporation or shall purchase to secure debts
due to it.
(7) To act as custodian, trustee, or agent for holders of notes,
drafts, or bills of exchange sold or negotiated under paragraphs (1)
and (2) of subdivision (a) of this section or under section 207.
(8) To issue, subject to such regulations as the Comptroller of the
Currency may prescribe, collateral trust notes or debentures, with a
maturity not exceeding three years, and to pledge as security for
such notes or debentures any notes, drafts, bills of exchange, or other
securities held by the corporation under the terms of this title. The
regulations of the Comptroller of the Currency may prescribe the
form of notes or debentures, and of notes, drafts, bills of exchange,
warehouse receipts, chattel mortgages, or other instruments which
may be pledged as security therefor, the provisions which may be
made with regard to release, substitution, (ft* exchange of such se­
curities, and with regard to protection, supervision, inspection, and
reinspection of the agricultural commodities or live stock pledged
or mortgaged as security therefor.
(b) 'fiie United States Government shall assume no liability, di­
rect or indirect, for any debentures or other obligations issued under
this title, and all such debentures and other obligations shall con­
tain conspicuous and appropriate language, to be prescribed in form
and substance by the Comptroller of the Currency and approved
by the Secretary of the Treasury, clearly indicating that no such
liability is assumed.
(c) Any obligation referred to in paragraphs (1) or (2) of sub­
division (a) of this section, which is secured by chattel mortgage
upon live stock of an estimated market value at least equal to the face
amount of such obligation, may be additionally secured by mortgage
or deed of trust upon real estate or by other securities, under such
regulations as may be made by the Comptroller of the Currency.
LIMITATIONS.

S ec.

204. Except as hereinafter provided in section 207 of this

title, no National Agricultural Credit Corporation shall incur Iia-




12

[P ub . 503J

bilities, whether direct or contingent, in excess of ten times its paid
in and unimpaired capital and surplus; nor shall any such corpo­
ration make advances to or hold notes or other direct obligations of
any person or corporation, or have outstanding acceptances for any
person or corporation, in an amount exceeding 20 per centum of the
paid in and unimpaired capital and surplus of such corporation, un­
less such advances, notes, acceptances, or other obligations are ade­
quately secured bv warehouse receipts representing readily market­
able and nonperisliable agricultural commodities, in which event the
amount of such advances to, or notes or other direct obligations of,
or acceptances for, such one person, association, or corporation shall
not exceed 50 per centum of such paid in and unimpaired capital and
surplus. No such corporation snail purchase, own, or deal in any
live stock except live stock taken in the course of liquidation of
obligations held by it.
INTEREST RATES.
S e c . 2 0 5 . (a) Any National Agricultural Credit Corporation may
charge on any loan or discount made, or upon any note, bill of ex­
change, or other evidence of debt, interest at the rate allowed by the
laws of the State in which such corporation's located.
(b)
The taking, receiving, reserving, or charging a rate of interest
greater than is allowed by subdivision (a), when knowingly done,
shall be deemed a forfeiture of the entire interest which the note,
bill, or other evidence of debt carries with it or which has been
agreed to be paid thereon. In case the greater rate of interest has
been paid, the person by whom it has been paid, or his legal repre­
sentative, may recover fcack in an action in the nature of an action
for debt twice the amount of the interest thus paid from the cor­
poration taking or receiving the same, provided such action is com­
menced within two years from the time the usurious interest was
collected.
CAPITAL STOCK.
S e c . 2 0 6 . (a) That no National Agricultural Credit Corporation
shall be permitted to commence business with a paidin capital of
less than $ 2 5 0 ,0 0 0 ; and no permit to begin business shall be issued
to any such corporation by the Comptroller of the Currency until
there shall have been filed with him a certificate signed by the presi­
dent or treasurer and by individuals comprising a majority of the
board of directors of such corporation showing that at least 5 0 per
centum of the authorized capital stock of such corporation has been
paid in in cash; and the remainder of the capital stock of such cor­
poration shall be paid in installments of at least 10 per centum each
on the whole amount of the capital, and the entire authorized capi­
tal stock shall be paid in within six months from the date upon
which such corporation shall be authorized by the Comptroller of
the Currency to commence business. The payment of each install­
ment shall oe certified to the Comptroller of the Currency under
oath by the president or cashier of such corporation.

(b)
The capital stock of any such corporation may be increased
at any time with the approval of the Comptroller of the Currency
by a vote of two-thirds of the holders of its issued and outstanding




[P ub . 503.]

13

capital stock, or by written consent of all of its shareholders with­
out a meeting and without a formal vote; and may be reduced in
like manner: Provided, That in no event shall such capital stock be
reduced to an amount less than one-tenth of its then outstanding in­
debtedness, direct or contingent, or to an amount less than $250,000,
nor without at the same time reducing proportionately outstanding
liabilities. No National Agricultural Credit Corporation, except as
herein provided, shall withdraw or permit to be withdrawn, either
in the form of dividends or otherwise, any portion of its paidin capi­
tal, and section 5204 of the Revised Statutes, prohibiting the pay­
ment of unearned dividends or the withdrawal of capital of national
banks, shall be held to apply to National Agricultural Credit Cor­
porations.
(c) The provisions and limitations contained in section 5139 of
the Revised Statutes, relative to transfer of the shares of the capital
stock of national banks, shall apply to National Agricultural Credit
Corporations.
(d) Whenever any shareholder or his assign fails, upon demand
of the Comptroller of the Currency, to pay his subscription or any
part thereof on stock of any National Agricultural Credit Corpora­
tion subscribed to by him, the directors of the corporation, after 15
days’ notice, shall proceed in the manner prescribed by section 5141
of the Revised Statutes for the collection of unpaid subscriptions to
stock of national banks.
(e) Section 5144 of the Revised Statutes, which relates to the
right of shareholders of national banks to vote by proxy, shall be
held to apply to shareholders of National Agricultural Credit Corpo­
rations.
REDISCOUNT CORPORATIONS.

S e c . 207. (a) That National Agricultural Credit Corporations
having an authorized capital stock of $1,000,000 or over may be
organized under the provisions of this title, to exercise all the powers
enumerated in section 203, except that in lieu of the powers con­
ferred in paragraphs (1) and (2) of subdivision (a) of such section,
such corporations shall have powers,—
(1) Upon the indorsement of any National Agricultural Credit
Corporation, or of any bank or trust company which is a member of
the Federal Reserve System, to rediscount for such corporation,
bank, or trust company, notes, drafts, bills of exchange, and accept­
ances, which conform to the requirements of paragraphs (1) and (2)
of subdivision (a) of section 203. Such indorsement shall be deemed
to be a waiver of demand notice and protest by such corporation as
to its own indorsement exclusively.
(2) To discount or purchase notes, drafts, or bills of exchange is­
sued or drawn by cooperative associations of producers of agricul­
tural products, provided such notes, drafts, or bills of exchange are
secured at the time of discount or purchase by warehouse receipts or
other like documents conveying or securing title to nonperishable
and readily marketable agricultural products, and have a maturity
at the time of discount or purchase not exceeding nine months*.
(3) To sell or negotiate with or without recourse any note, draft,
or biJl of exchange discounted or purchased hereunder.




14

[Pub. 503.|

(b) National Agricultural Credit Corporations organized under
the provisions of this section, shall not be subject to tne limitations
contained in section 204, but the Comptroller of the Currency may,
by general regulations, from time to time prescribe the amount of
indebtedness, direct or contingent, which such corporations may
incur, and the aggregate amount of paper of different types which
such corporations may rediscount for any one corporation.
(c) Corporations with powers limited, as provided in this section,
shall not be subject to tne requirements as to deposit of bonds or
other obligations of the United States, as provided in section 208 of
this title.
PERMIT TO BEGIN BUSINESS.
S e c. 208. (a) That no National Agricultural Credit Corporation,
except corporations with powers limited as provided in section 207,
shall commence business until it -has deposited with the Federal
reserve bank of the district wherein it has its place of business,
bonds or other obligations of the United States in an aggregate
face amount at least 25 per centum of its paidin capital stock.
Each such corporation shall at all times keep on deposit with such
Federal reserve bank an amount of such bonds or other obligations
of the United States at least equal in face value to
per centum
of the aggregate indebtedness of such corporation, direct or con­
tingent, said amount to include the 25 per centum deposited as
hereinbefore by this section provided. Except as hereinafter pro­
vided, such bonds or other obligations shall be held by such Federal
reserve bank, subject to the direction and control of tne Comptroller
of the Currency, in trust for the equal and pro rata protection and
benefit of all holders of notes, debentures, drafts, bills of exchange,
or acceptances upon which such corporation may be directly or
contingently liable. Upon receipt of proper evidence that the
amount of such bonds or other obligations of the United States so
deposited exceeds 7£ per centum of such aggregate indebtedness,
the Comptroller of the Currency may release such excess, provided
that the amount remaining on deposit shall in no event be reduced
below 25 per centum of the paid-in capital stock of such corpora­
tion. Under such regulations as the Comptroller of the Currency
may prescribe, a Federal reserve bank may, upon request of the
corporation which deposited the same, sell any such bonds or obli­
gations for account of such corporation, and permit such corpora­
tion to use the proceeds thereof for the protection or preservation
of any property pledged or mortgaged as security for obligations
owned or indorsed by the corporation. I f by reason of such sale
the face amount of such bonds or other obligations of the United
States remaining on deposit with such Federal reserve bank shall
be less than 7£ per centum of such aggregate indebtedness of the
corporation, no further advances shall be made, or notes, drafts,
or Dills o f exchange discounted, rediscounted, accepted, or pur­
chased, by such corporation until sufficient additional bonds or other
obligations of the United States have been deposited to make good
the deficiency.

(b)
In determining whether to grant permission to do business_
to any National Agricultural Credit Corporation, the Comptroller
of the Currency shall take into account the extent to which the laws




[Pub.

503J

15

of the State or States in which the corporation will do business
afford adequate protection to advances made upon the security of
warehouse receipts covering: agricultural commodities or chattel
mortgages upon live stock with respect to (1) bonding, licensing,
and inspection of warehouses; (2) recordation of chattel mortgages
or deeds of trust on live stock; (3) recordation of brands or other
identifying marks on live stock; (4) reporting and recording of
interstate shipments and slaughter of live stock; and (5) right of
mortgagee to release a portion of the mortgaged property without
prejudice to the priority of lien as against junior lienors or other
creditors of the mortgagor.
MISCELLANEOUS ADMINISTRATIVE PROVISIONS.

S e c . 209. (a) That all National Agricultural Credit Corporations
shall be under the supervision of the Comptroller of the Currency,
who shall be charged with the execution of all laws of the United
States relating to the organization, regulation, and control of such
corporations. The Comptroller of the Currency shall exercise the
same general power of supervision over such corporations as he now
exercises over national banks organized under the laws of the United
States.
(b)
In addition to the two Deputy Comptrollers of the Currency
now provided for by law, there shall be in the Bureau of the Comp­
troller of the Currency a third Deputy Comptroller of the Currency
who shall be appointed in the same manner and shall take a like
oath of office and give a like bond as the Deputy Comptrollers noif
provided for by law. Under the direction of the Comptroller of the
Currency, such additional Deputy Comptroller shall have charge of
the administration of the provisions of this title relating to the or­
ganization and operation of National Agricultural Credit Corpora­
tions and shall perform such other duties as shall be assigned to him
by the Comptroller of the Currency. The Comptroller of the Cur­
rency is hereby authorized to employ such additional examiners,
clerks, and other employees as he deems necessary to carry out the
provisions of this title and to assign to duty in the office of his
bureau in Washington such examiners and assistant examiners as he
shall deem necessary to assist in the performance of the work of
that bureau. The salaries of the Deputy Comptrollers of the Cur­
rency and of such additional examiners, assistant examiners, clerks,
and other employees shall be fixed in advance by the Comptroller
of the Currency. The salaries of the two Deputy Comptrollers now
provided for by law and of all national bank examiners and as­
sistant examiners assigned to duty in the office of the bureau in
Washington in connection with the supervision of national banks
shall be considered part of the expenses of the examinations pro­
vided for by section 5240 of the Revised Statutes, as amended;
and the salaries of such additional Deputy Comptroller and of all

examiners, assistant examiners, clerks, and other employees ap­
pointed under the terms of this title and assigned to duty in con­
nection with the administration of this title shall be considered
part of the expenses of the administration of this title: Provided,
lunaeper, That the salary of the additional Deputy Comptroller
ptfovjded for by this subdivision shall be considered partijan ex­




16

[P u b . 503.]

pense of the administration of this title in proportions to be deter­
mined from time to time by the Comptroller of the Currency with
a view to a fair apportionment of such expense, until such time as
it shall be necessary for such additional Deputy Comptroller to
give his full time to the administration of this title. The Comp­
troller of the Currency shall have power to levy semi-annually upon
the National Agricultural Credit Corporations operating under the
provisions of this title, in proportion to their total assets, an assess­
ment sufficient to pay the expenses of the administration of this title
for the ensuing half year, together with any deficit carried for­
ward from the preceding half year. Each such corporation shall
pay the amount so assessed against it to the Treasurer of the
United States subject to the order of the Comptroller of the Cur­
rency to be disbursed by the Comptroller in payment of expenses
incurred, in the administration of this title.
(c) The Comptroller of the Currency shall have power to appoint
and fix the compensation of examiners to examine National Agri­
cultural Credit Corporations or to use national bank examiners for
this purpose. All examiners appointed by him shall be subject to
existing provisions of law relating to national bank examiners and
to the provisions of the Federal Reserve Act which prohibit national
bank examiners from performing any service for compensation for
any bank or officer and from disclosing the names of borrowers or
the collateral for loans without obtaining the written consent of the
Comptroller of the Currency, and such provisions shall be held to
apply to examiners appointed to examine corporations organized
under the provisions of this title.
(d) The expense of all of the examinations of National Agricul­
tural Credit Corporations shall be assessed by the Comptroller of
the Currency upon the corporations examined in proportion to
assets or resources h3ld by the corporations upon the dates of exami­
nation of the various corporations: Provided, That a minimum
charge of $50 shall be made for each such examination.
(e) The provisions of the Federal Reserve Act which prohibit
any member bank from making loans or granting a gratuity to any
national bank examiner shall be applicable to National Agricultural
Credit Corporations.
(f) National Agricultural Credit Corporations shall be required
to make reports to the Comptroller of the Currency at the time
and in the manner required by sections 5211 and 5212 of the Revised
Statutes, and shall be subject to the provisions, so far as the same
may be held by said Comptroller to be applicable, of section 5213
of the Revised Statutes.
(g) The Secretary of Agriculture may issue a license to any
person, upon presentation to him of satisfactory evidence that" such
person is competent to inspect live stock as a basis for loans. The
Secretary of Agriculture may suspend or revoke any license issued
by him under this subdivision whenever, after opportunity for hear­
ing has been given to the licensee, the Secretary shall determine that
such licensee is incompetent, or has knowingly or carelessly made
false or erroneous inspection reports with respect to any live stock,
or has accepted any money or other consideration, directly or indi­
rectly, for any neglect or improper performance of dnty, or has in

any other manner shown himself to be nnfit to act as a live-stock




[P ub . 503.1

17

inspector. Pending investigation, the Secretary of Agriculture,
whenever he deems it necessary, may suspend a license temporarily
without a hearing. It shall be unlawful for any person other than
a holder of a license duly issued under this subdivision, or any per­
son whose license has been suspended or revoked under the terms
of this subdivision, to represent that he is a Federally licensed live­
stock inspector, and any violation of this provision shall be punish­
able by a fine of not more than $1,000, or by imprisonment for not
more than one year, or both.
(h) Any inspector licensed under the provisions of subdivisions
(g) who makes any statement in any inspection report or to any per­
son for the purpose of obtaining for himself, or any other person,
any advance on the security of the live stock inspected, knowing the
same to be false, or who willfully overvalues any security by which
an advance is secured, shall he punishable by a fine of not more than
$5,000, or by imprisonment for not more than five years, or both.

(i) The Comptroller of the Currency shall allot to the Department
of Agriculture from time to time such sums as may be estimated to
be necessary for the administration of the functions vested in that
department by this title, and may ratabhr assess the same from time
to time against National Agricultural Credit Corporations.
BANKS MEMBERS OF THE FEDERAL RESERVE SYSTEM M A Y BECOME STOCK
HOLDERS.

S eo. 210. That any member bank of the Federal reserve system m ay
file application with the Comptroller of the Currency for permission
to invest an amount not exceeding in the aggregate iO per centum of
its paid in capital stock and surplus in the stock of one or more of the
National Agricultural Credit Corporations, and upon approval of
such application may purchase such stock. The Comptroller of the
Currency shall have discretion to approve or reject such application
in whole or in part.
TAXATION.
S e c . 211. That taxation by a State of the shares in National Agri­
cultural Credit Corporations, or of dividends derived therefrom, or
of the income of said corporations, or real estate owned by them, shall
be such only as is or may be authorized by law in the case of national
banking associations; and taxation by a State of the debentures or
other obligations of such corporations shall not be at a higher rate
than the rate applicable to other moneyed capital in the hands of
individual citizens thereof.
DEPOSITS.

S e c. 212. That the moneys of National Agricultural Credit Cor­
porations may be kept on deposit subject to check in any member
bank o f the Federal reserve system.
c o n v e r s i o n o f c o r p o r a t io n s .

S ec . 213. (a ) T h a t any a g ricu ltu ra l o r liv e -sto ck fin a n cin g co r­
p ora tion in corp ora ted b y sp ecia l law o f an y S tate o r org a n ized u n d er
Pub. No. 50s£— 2




18

(FOB. 503.]

the general laws of any State and having an unimpaired capital
sufficient to entitle it to become a National Agricultural Credit Cor­
poration may, by the rote of the shareholders owning not less than
51 per centum ox the capital stock of such corporation, with the ap­
proval of the Comptroller of the Currency, be converted into a Na­
tional Agricultural Credit Corporation under this title, with any
name approved by the Comptroller of the Currency: Provided, That
the said conversion shall not be in contravention of the State law.
(b) In such case the articles of association and organization Cer­
tificate may be executed by a majority of the directors of the cor­
poration, and the certificate shall declare that the owners of 51 per
centum of the capital stock have authorized the directors to make
such certificate and to change or convert the corporation into a Na­
tional Agricultural Credit Corporation. A majority of the di­
rectors, alter executing the articles of association and the organiza­
tion certificate, shall have power to execute all other papers and to
do whatever may be required to make its organization perfect and
complete as a National Agricultural Credit Corporation. The
shares of any such corporation may continue to bie lor the same
amount each as they Were before the conversion, and the directors
may continue to be directors of the corporation nntil others are
elected or appointed.
(c) When the Comptroller of the Currency has given to such cor­
poration a certificate that the provisions of this title have been com­
plied with, such corporation, and all its stockholders, owners, and
employees, shall have the same ]>owers and privileges and shall be
subject to the same duties, liabilities, and regulations, in. all respects*'
as shall have been prescribed by this title for corporations, orig­
inally organized as National Agricultural Credit Corporations. .
CONSOLIDATION OF CORPORATIONS.

"

Sec. 214. (a) That any two or more National Agricultural Credit
Corporations, with the approval of the Comptroller of the Cur­
rency, may consolidate into one corporation under the charter of
either or any of the existing corporations on such terms and condi­
tions as may be lawfully agreed upon by a majority of the board of
directors o f each corporation proposing to consolidate, such agree­
ment to be ratified and confirmed by the affirmative vote of the share­
holders of each of. such corporations owning at least two-thirds of
its capital stock outstanding, at a meeting to be held, on the call of
tlie directors after publishing notice of the time, place, and object
of the meeting for four consecijtive weeks in some newspaper pub­
lished in the place where the said corporation is located, and if no
newspaper is published in the place then in a paper published near­
est thereto, and after sending such notice to each shareholder, of
record by registered mail at least ten days prior,to said meeting:
Provided, That the capital stock of such c< .solidated corporation
shall not be less than $250,0P0 paid in if the corporations consoli­
dated are organized to exercise tne powers covered by section 203, or
less than $1,000,000 paid in i f the corporations consolidated are those
organized under section 207.- .
■
* (b) When such consolidation shall have been effected and ap­
proved by the Comptroller of the Currency any shareholder of either




19

[P u b . 503.1

of the corporations so consolidated who has not voted for such con­
solidation may give notice to the board of directors of the corpora­
tion in which" he is interested, within 20 days from the date of the
certificate of approval of the Comptroller of the Currency, that he
dissents from the plan of consolidation as adopted and approved,
whereupon he shall be entitled to receive the value of the shares so
held by him, to be ascertained by an appraisal made by a committee
of three persons, one to be selected by the shareholder, one by the
directors, and the third by the two so chosen: and in case the value
so affixed shall not be satisfactory to the shareholder, he may within
five days after being notified of the appraisal appeal to the Comp­
troller of the Currency, who shall cause a reappraisal to be made,
which shall be final and binding:: and if said reappraisal shall exceed
the value affixed by said committee, the corporation shall pay the ex­
pense of the reappraisal, otherwise the appellant shall pay said ex­
pense; and the value so ascertained and determined shall be deemed
to be a debt due and be forthwith paid to said shareholder by said
corporation, and the shares so paid shall be surrendered and after
due notice sold at public auction within 30 days after the final ap­
praisement provided for by this title.
(c)
Where corporations consolidate under the provisions of this
title, all of the rights, franchises, and interest of said corporations
shall be consolidated in and to every species of property, personal
and mixed, and choses in action thereto belonging, and shall be
deemed to be transferred to and vested in the corporation into which
it is consolidated without any deed or other transfer, and the said
consolidated corporation shall hold and enjoy the same and all
rights of property, franchises, and interest, in the same manner and
to the same extent as they were held and enjoyed by the corporations
so consolidated therewith.
INSOLVENCY, RECEIVERSHIP, AND LIQUIDATION.

S ec. 215. (a) That whenever any National Agricultural Credit
Corporation shall be dissolved and its rights, privileges, and
franchises declared forfeited as prescribed in the preceding section,
or whenever any creditor of any such corporation shall have ob­
tained a judgment against it in any court of record and made appli­
cation accompanied by a certificate from the clerk of the court, stat­
ing that such judgment has been rendered and has remained unpaid
for the space of 30 days or whenever the Comptroller of the Cur­
rency shall become satisfied of the insolvency of such corporation, he
may, after due examination of its affairs in either case, appoint a
receiver who shall proceed to wind up the affairs of such corpora­
tion. The receiver so appointed shall exercise the powers and be
subject to the restrictions of receivers of national banks; and the
Comptroller of the Currency shall have the same powers and duties
in connection with the administration of such receivership as he has
in reference to the receivership of national banks.
(b)
Shareholders’ agents for shareholders of National Agricul­
tural Credit Corporations may be appointed in the manner pre­
scribed by section 3 of the Act of June 30, 1876, as amended, and
shall have the same general powers and duties and be subject to the
same restrictions as shareholders’ agents of a national bank.




20

[P ub . 503-1

(c)
Any National Agricultural Credit Corporation may go into
liquidation and be closed by the vote of its shareholders owning twothirds of its stock. Whenever a vote is taken to go into liquidation it
shall be the duty of the board of directors to cause notice of this
fact to be certified under the seal of the corporation by its president
or cashier to the Comptroller of the Currency and publication thereof
to be made for a period of two months in a newspaper published in
the city or town in which the corporation is located, or if no news­
paper is there published, in the newspaper published nearest thereto,
that the corporation is closing up its affairs and notifying the credit­
ors to present their claims against the corporation for payment. All
such claims shall be presented to and approved by a liquidating
agent to be appointed by the board of directors of such corporation,
with the approval of the Comptroller of the Currency, and the affairs
of such corporation shall be liquidated by such agent and under
the supervision of the Comptroller of the Currency.
PENALTY PROVISIONS.
S e c . 216. (a) That any officer, director, agent, or employee of a
National Agricultural Credit Corporation who embezzles, abstracts,
purloins, or willfully misapplies any of the moneys, funds, or credits
of such corporation, or who, without authority from the directors,
draws any order or bill of exchange, makes any acceptance, issues,
puts forth, or assigns any note, debenture, bond, draft, bill of ex­
change, mortgage, judgment, or decree, or who makes any false entry
in any book, report, or statement of such corporation with intent in
any case to injure or defraud such corporation or any other com­
pany or person, or to deceive any officer of such corporation or
the Comptroller of the Currency, or any agent or examiner appointed
to examine the affairs of such corporation; and every receiver of
such corporation who with like intent to defraud or injure embezzles,
abstracts, purloins, or willfully misapplies any of the moneys, funds,
or assets of the corporation, and every person who with like intent
aids or abets any officer, director, agent, employee, or receiver in any
violation of this section shall be deemed guilty of a misdemeanor,
and upon conviction in any district court of the United States, shall
be fined not more than $5,000, or shall be imprisoned for not more
than five years, or both, at the discretion of the court.

(b) Whoever makes any statement, knowing it to be false, for the
purpose of obtaining for himself or for any other person, firm, cor­
poration, or association any advance, or extension or renewal of an
- advance, or any release or substitution of security, from a National
Agricultural Credit Corporation, or for the purpose of influencing
in any other way the action of such corporation, shall be punished
by a fine of not more than $10,000 or b}r imprisonment for not more
than five years, or both.
(c) WHoever willfully overvalues any property offered as security
for any such advance shall be punished by a fine of not more than
$5,000, or by imprisonment for not more than two years, or both.
(d) Any examiner appointed under this title who shall accept
a loan or gratuity from any organization examined by him, or from
any person connected with any such organization in any capacity, or
who shall disclose the names of borrowers to other than the proper




tPuB. 503.)

21

officers of such organization, without first having obtained expressed
permission in writing from the Comptroller of the Currency or
from the board of directors of such organization, except when
ordered to do so by a court of competent jurisdiction or by direction
of the Congress of the United States or of either House thereof, or
any committee of Congress or of either House duly authorized,
shall be punished by a fine of not exceeding $5,000 or by imprison­
ment of not exceeding one year, or both, and may be fined a fur­
ther sum equal to the money so loaned or gratuity given, and shall
forever thereafter be disqualified from holding office as an examiner
under the provisions of this title. No examiner while holding such
office shall perform any other service for compensation for any
bank or banking or loan association or for any person connected
therewith in any capacity.
(e) Whoever, being an officer, director, employee, agent or at­
torney of a National Agricultural Credit Corporation stipulates
for or receives or consents or agrees to receive any fee, commission,
gift, or thing of value from any person, firm, or corporation for
procuring or endeavoring to procure for such person, firm, or cor­
poration, or for any other person, firm, or corporation any loan
from any such corporation or extension or renewal of loan or sub­
stitution of security, or the purchase or discount or acceptance of
any paper, note, draft, check, or bill of exchange by any such cor­
poration, shall be deemed guilty of a misdemeanor and upon con­
viction shall be imprisoned for not more than one year or fined not
more than $5,000, or both.
(f) Any person who shall falsely make, forge, or counterfeit, or
cause or procure to be falsely made, forged, or counterfeited, or
willingly aid or assist in falsely makingj forging, or counterfeiting
any debentures, coupons, or other obligations in imitation of or pur­
porting to be an imitation of the debentures, coupons, or other obli­
gations issued by any National Agricultural Credit Corporation,
and any person who shall pass, utter, or publish or attempt to pass,
utter, or publish any false, forged, or Counterfeited debenture, cou­
pon, and other obligation purporting to be issued by any such cor­
poration Imowing the same to be falsely made, forged, or counter­
feited, and any person who shall falsely alter or cause or procure to
be falsely altered, or shall willingly aid or assist in falsely altering
any such debenture, coupon, or other obligation, or who shall pass,
utter, or publish as true any falsely altered or spurious debenture,
coupon, or other obligation issued or purporting to have been issued
by any such corporation knowing the same to be falsely altered or
spurious shall be punished by a fine of not exceeding $5,000 or by
imprisonment not to exceed five years, or both.
(g) Any person who shall deceive, defraud, or impose upon or
who shall attempt to deceive, defraud, or impose upon any person,
partnership, corporation, or association by making any false pre­
tense or representation concerning the character, issue, security,
contents, conditions, or terms of any debenture, coupon, or other
obligation issued under the terms of this title, shall be fined not
exceeding $500, or imprisoned not to exceed one year, or both.

(h) All corporations not organized under the provisions of this
title are prohibited from using the words “ National Agricultural
Credit Corporation ” as part of their corporate name, and any vio­




22

(P u b . 503.1

lation of this prohibition shall subject the party charged therewith
to a civil* penalty of $50 for each day during which the violation
continues.
RESERVATION OF RIGHT TO AMEND.

S e c . 217. That the right to amend, alter, or repeal the provisions
of this title is hereby expressly reserved.

TITLE III.— AMENDMENTS TO FEDERAL FARM LOAN
ACT.
S e c . 301. That the second paragraph of section 3 of the Federal
Farm Loan Act is amended to read as follows:
“ Said Federal Farm Loan Board shall consist of seven members,
including the Secretary of the Treasury, who shall be a member and
chairman ex officio, and six members to be appointed by the Presi­
dent of the United States, by and with the advice and consent of the
Senate. Of the six members to be appointed by the President, not
more than three shall be appointed from one political party, and
all six of said members shall be citizens of the United States and
shall devote their entire time to the business of the Federal Farm
Loan Board; they shall receive an annual salary of $10,000 payable
monthly, together with actual necessary traveling expenses. One of
the additional members of the Federal Farm Loan Board, hereby
provided for, shall be appointed for a term expiring August 6, 1929,
and one for a term expiring August 6, 1931, and thereafter the
terms of all members of the Federal Farm Loan Board shall be as
in this section otherwise provided for.”
S e c . 302. That the eighth paragraph of section 3 of the Federal
Farm Loan Act is amended and divided into three paragraphs to
read as follows:
“ The salaries and expenses of the Federal Farm Loan Board and
farm loan registrars and examiners authorized under this section
shall, after June 30,1923, be paid by the Federal and joint-stock land
banks in proportion to their gross assets, as follows:
“ The Federal Farm Loan Board shall, prior to June 30, 1923, and
each six months thereafter, estimate the expenses and salaries'of the
Federal Farm Loan Board, its officers and employees, farm loan
registrars, deputy registrars, the examiners and reviewing appraisers,
and apportion the same among the Federal and joint-stock land
banks in proportion to their gross assets at the time of such appor­
tionment and make an assessment upon each of such banks pursuant
to such apportionment, payable on the 1st of July or January next
ensuing. The funds collected pursuant to such assessments shall be
deposited with the Treasurer of the United States to be disbursed
in payment of such salaries and expenses on appropriations duly
made by Congress for such purpose.

“ I f any deficiency shall occur in such fund during the half-year
period for which it was estimated,.the Federal Farm Loan Board
shall have authority to make immediate assessment covering such
deficiency against the Federal and joint-stock land banks upon the
same basis as the original assessment. If at the end of the six
months’ period there shall remain a surplus in such fund, it shall be




iPoB.5034

23

deducted from the estimated expenses of the next ensuing six months'
period when assessment is made for such period. Land bank ap­
praisers shall receive such compensation as the Federal Farm Loan
Board shall fix and shall be paid by the Federal land banks and the
joint-stock land banks which they serve in such proportion and in
such manner as the Federal Farm Loan Hoard shall order.”
S ec. 303. That the second paragraph of section 4 of the Federal
Farm Loan Act is amended to read as follows:
“ The Federal Farm Loan Board shall establish in each Federal
land bank district a Federal land bank, with its principal office
located in such city within the district as said board shall designate.
Each Federal lanct bank shall include in its title the name of the city
in which it is located. Subject to the approval of the Federal Farm
Loan Board, any Federal land bank may establish branches within
the land bank district. Subject to the approval of the Federal Farm
Loan Board and under such conditions as it may prescribe, the pro­
visions of this Act are extended to the island of Porto Rico and the
Territory of Alaska; and the Federal Farm Loan Board shall desig­
nate a Federal land bank which is hereby authorized to establish a
branch bank in Porto Rico, and a Federal land bank which is hereby
authorized to establish a branch bank in the Territory of Alaska.
Loans made by each such branch bank shall not exceed the sum of
$10,000 to any one borrower and shall be subject to the restrictions
and provisions of this Act. except that each such bfanch bank may
loan direct to borrowers, and subject to such regulations as the Fed­
eral Farm Loan Board may prescribe, the rate charged borrowers
may be H per centum in excess of the rate borne by the last preceding
issue of farm loan bonds of the Federal land bank with which such
branch bank is connected: Provided, That no loan shall be made in
Porto Rico or Alaska by such branch bank for a longer term than
20 years.”
S ec. 304. That the twentieth to twenty-fifth paragraphs, inclu­
sive, of section 4 of the Federal Farm Loan Act are amended to read
as follows:
“ The board of directors of every Federal land bank shall be se­
lected as hereinafter specified and shall consist of seven members.
Three of said directors shall be known as local directors and shall
be chosen by and be representative of national farm-loan associa­
tions, and borrowers through agencies: three shall be known as dis­
trict directors and shall be appointed by the Federal Farm Loan
Board and represent the public interest. The term of office of local
and district directors shall be three years.
“ Within 30 days from the date of passage of the Agricultural
Credits Act of 1923 and thereafter, at least two months before each
election, the Federal Farm Loan Board shall divide each land bank
district into three divisions, as nearly equal as possible, according
to number of borrowers and the voting strength of national farmloan associations and borrowers through agencies, and the Farm
Loan Commissioner shall thereupon notify each association and
agency in writing that an election is to be held for one local director
from each of said divisions and requesting each association and
agency to nominate one candidate for each division. Within ten
days of receipt of such notice each national farm-loan association
and borrower through agencies shall forward nominations of resi­




24

[P ub . 503.]

dents of their respective divisions for one director for such division
to said Farm Loan Commissioner. The Farm Loan Commissioner
shall then prepare a list of candidates for local directors, consisting
of the ten persons receiving the highest number of votes from na­
tional farm-loan associations and borrowers through agencies for
each division.
“At least one month before said election the Farm Loan Commis­
sioner shall mail to each national farm-loan association and to each
borrower through agencies the list of candidates for their respective
divisions. The directors of ench national farm-loan association shall
cast the vote of said association for one of the candidates on said
list and shall forward said vote to the said Farm Loan Commissioner
within ten days after said list of candidates is received. In voting
under this section each association shall be entitled to cast a number
of votes equal to the total voting strength of the stockholders in
association meetings, and each borrower through agencies shall be
entitled to cast one vote for each share of stock held by him in the
Federal land bank not exceeding twenty shares, and shall forward
said vote to the said Farm Loan Commissioner within ten days after
said list of candidates is received. The candidate receiving the
highest number of votes in his division shall be declared elected as
local director of the Federal land bank district from his division. In
case of a tie, the Farm Loan Commissioner shall determine the
choice. The nominations from which the list of candidates is pre­
pared, and the votes of the respective associations and borrower?
through agencies for such candidates, as counted, shall be tabulated
and preserved, subject to examination by any candidate, for at least
one year after the result of the election is announced.
. “ The Federal Farm Loan Board shall designate one of the dis­
trict directors to serve until December 31, 1924, one to serve till
December 31, 1925, and one to serve till December 31, 1926. After
their first appointment each district director shall be appointed for
a term of three years. At the first regular meeting of the board of
directors of each Federal land bank the local directors shall desig­
nate one of their members to serve till December 31, 1924, one to
serve till December 31, 1925, and one to serve till December 31, 1926.
Thereafter each local director shall be chosen as hereinbefore pro­
vided and shall hold office for a term of three years. Any vacancies
that may occur in the board of directors shall be filled for the un­
expired term in the manner provided herein for the original selec­
tion of such directors. At the same time that the associations and
borrowers through agencies nominate the candidates for the local
directors, each association and each borrower through agencies shall
also nominate one candidate for director at large for the entire dis­
trict, and from the three persons having the greatest number of
votes for nominee for director at large, the Federal Farm Loan
Board shall select a director at large, whose term of office shall ter­
minate on the 31st day of December, 1925, and every three years
thereafter. Such seventh director may be removed by the Federal
Farm Loan Board for neglect of duty, incapacity for the work, or
malfeasance in office, after charges duly preferred and a hearing
had thereon, and in such cases the associations of the district shall
in like manner nominate candidates for another director at large,
to fill the vacancy, for whom the Federal Farm Loan Board shall in




(P ub . 503.)

25

same manner select a successor, but any person who is removed can
not be nominated to succeed himself. The board of directors thus
selected shall, upon qualification, immediately take over the man­
agement of each bank.
‘‘ Directors of Federal land banks shall have been, for at least two
years, residents of the district for which the3' are appointed or
elected, and a local director shall be a resident of his division when
elected. No district director of a Federal land bank shall, during
his continuance in office, act as an officer, director, or employee of any
other institution, association, or partnership engaged in banking or
in the business of making or selling land-mortgage loans.
“ Directors of the Federal land bank shall receive, in addition to
any compensation otherwise provided, a reasonable allowance for
necessary expenses in attending meetings of their boards, to be paid
by the respective Federal land banks. Any compensation that may
be provided by boards of directors of the Federal land banks for
directors, officers, or employees shall be subject to the approval of
the Federal Farm Loan Board.”
S e c . 305. That the fourth paragraph of section 7 of the Federal
Farm Loan Act is amended by adding thereto the following: “ No
such secretary-treasurer shall engage in the making of land mortgage
loans eligible at a Federal land bank through or for any other land
mortgage company or agency, and the making of any such loan by
any secretary-treasurer shall forthwith wrork a forfeiture of his
office.”
S e c . 306. That subdivision (d) of paragraph “ Fourth” of section
12 of the Federal Farm Loan Act is amended to read as follows:
“ (d) To liquidate indebtedness of the owner of the land mort­
gaged incurred for agricultural purposes, or incurred prior to Jan­
uary 1, 1922.”
S e c . 307. That paragraph “ Seventh ” o f section 12 o f the Federal
Farm Loan Act is amended to read as fo llo w s :
“ Seventh. The amount of loans to any one borrower shall in no
case exceed a maximum of $25,000, nor shall any one loan be for a
less sum than $100, but preference shall be given to applications for
loans of $10,000 and under.
S e c . 308. That section 21 of the Federal Farm Loan Act is
amended by adding at the end thereof twelve new paragraphs to
read as follows:
“ Whenever it shall appear desirable to issue consolidated bonds
of the twelve Federal land banks and to sell them through a common
selling agency, and the Federal land banks shall, by resolution,
consent to the same, the banks may issue and sell said bonds as
hereinafter provided.
“ Every bond so issued shall be signed by the Farm Loan Com­
missioner and attested by the secretary of the Federal Farm Loan
Board, and their signatures may be either written or engraved
thereon and shall recite in the face of the bond the fact that it is
the joint and several obligation of the twelve Federal land banks,
and shall in all respects be governed by the provisions of the Fed­
eral Farm Loan Act not inconsistent herewith.
“ The consolidated bonds issued under this provision shall be made
payable at any Federal land bank, and may be made payable at any
Federal reserve bank or banks designated in the face of the bond. *




26

(Pl B. 503.|

“ Each Federal land bank on whose behalf consolidated bonds
shall be issued under this provision shall in all respects be bound
by the act of the Farm Loan Commissioner and the secretary of the
federal reserve bank or banks designated in the face of the bond.
‘•Every Federal land bank, before participation in a consolidated
issue, as herein provided, .shall by appropriate action of its board
of directors, duly recorded in its minutes, obligate itself to become
liable on Federal farm loan bonds as provided in this section, and
be bound by the action of the Farm Luan Commisi'ioner and the
secretary of the Federal Farm Loan Hoard in executing the samp.
” Every farm loan bond issued hereunder shall contain on the
face thereof a certificate signed by the Farm Loan Commissioner to
the effect that it is issued under the authority of Title I of the
Federal Farm Loan Act. has the approval in form and issue of the
Federal Farm Loan Hoard, and is legal and regular in all respects;
that it is not taxable by National. State, municipal, or local author­
ity: that it is issued against collateral security consisting of obliga­
tions of the United States Government, or indorsed first mortgages
on farm lands, at least equal in amount to the bonds issued; and
that all Federal land banks are liable for the payment of each bond.
** When any Federal land bank shall desire to participate in a
consolidated issue of farm loan bonds it shall make application to the
Federal Farm Loan Hoard for the approval on its behalf of such
issue and tender to the registrar approved farm mortgages, or obli­
gations of the United States Government, as security therefor, and
no banks shall participate in such consolidated issue until such
application has been approved by the Federal Farm Loan Hoard.
Each bank shall pay when due. without notice, all bonds and cou­
pons issued on its behalf hereunder.
“ I f any Federal land bank shall fail to pay its proportion of in­
terest or principal as herein prescribed, the Federal Farm Loan
Hoard shall immediately call upon the other Federal land banks for
the amount necessary to make said payment, the assessments to be
made in proportion to the capital stock of each, which assessments
shall be forthwith paid by said banks.
•*The presidents of the twelve Federal land banks shall constitute
the bond committee of the Federal land banks and shall select a
chairman from among their number. The vice president may art in
place of the president on the president's request or in case he fails to
act.
"W hen an issue of consolidated bonds is contemplated, the bond
committee shall determine the amount of such issue, the rate of in­
terest which it is to bear, and the participation of the several banks
therein, and submit their recommendations to the Federal Farm
Loan Board for approval. When approved by the Federal Farm
Loan Board the bonds shall be executed by the Farm Loan Commis­
sioner and the secretary of the Federal Farm Loan Board, as herein
provided.

••The expenses of the bond committee and of the sale of bonds
shall be charged against the several land banks in proportion to
their participation in the proceeds.
**The presidents of the Federal land banks shall receive no addi­
tional compensation for their services as members of the bond com­
mittee, but shall be paid necessary traveling expenses.”




(P o t . 503.1

21

S e c . 309. That subdivisions (a) and (b) of'the eighth paragraph
of section 22 of the P'ederal Farm Loan Act are amended to read as
follows:
‘‘ (a) To pay off farm loan bonds issued by or in behalf of said
bank as they mature.
“ (b) To purchase at or below par Federal farm loan bonds.”
S ec . 310. That section 25 o f the Federal Farm Loan Act is
amended to read as follows:
“ S e c . 25. That if there shall be default under the terms of an}r
indorsed first mortgage held by a Federal land bank under the pro­
visions of this title, the National Farm Loan Association through
which said mortgage was received by said Federal land bank shall
be notified of said default. Said association may thereupon be re­
quired, within 30 days after such notice, to make good such default,
either by payment of the amount unpaid thereon in cash or by the
substitution of an equal amount of Federal farm loan bonds, with all
unmatured coupons attached.”
S ec . 311. That section 29 of the Federal Farm Loan Act is
amended by adding at the end thereof a new paragraph to read as
follows:
“ Upon liquidation of any national farm loan association, the
stock m the Federal land bank held by such association shall be can­
celed and the Federal land bank shall thereupon issue to the bor­
rowers through sucli association an amount of stock in the Federal
land bank equal to the amount of stock held by such borrowers in the
liquidated association, such stock to be held by the bank as collateral
to the loans of such borrowers and to be paid off and retired at par in
the same manner as stock held by borrowers in farm loan associa­
tions, and the Federal land bank shall pay to the borrowers holding
such stock the same dividends as are paid to national farm loan asso­
ciations by such bank. The personal liability of the stockholders in
such liquidated association to the association shall survive such
liquidation and shall be vested in the bank in that district, which
may enforce the same as fully as the association could if in ex­
istence.”

TITLE IV.— AMENDMENTS TO THE FEDERAL RESERVE
ACT.
S e c . 401. That the ninth paragraph of section 9 of the Federal
Reserve Act is amended to read as follows:
“ No applying bank shall be admitted to membership in a Federal
reserve bank unless (a) it possesses a paid-up. unimpaired capital
sufficient to entitle it to become a national banking association in the
place where it is situated under the provisions of the National Bank
Act, or (b) it possesses a paid-up, unimpaired capital of at least 60
per centum of the amount sufficient to entitle it to become a national
banking association in the place where it is situated under the pro­
visions of the National Bank Act and, under penalty of loss of mem­
bership complies with rules and regulations which the Federal Re­
serve Board shall prescribe filing the time within which and the

method by which tne unimpaired capital of such bank shall be in­
creased out of net income to equal the capital which would have been
required if such bank had been admitted to membership under the




28

[P ub . 503.)

provisions of clause (a) of this paragraph: Provided, That every
such rule or regulation shall require the applying bank to set aside
annually not less than 20 per centum of its net income of the pre­
ceding year as a fund exclusively applicable to such capital in­
crease.”
S e c . 402. That the second paragraph of section 13 of the Federal
Reserve Act is amended and divided into two parapraphs to read
as follows:
“ Upon the indorsement of any of its member banks, which shall
be deemed a waiver of demand, notice and protest by such bank as
to its own indorsement exclusively, any Federal reserve bank may
discount notes, drafts, and bills of exchange arising out of actual
commercial transactions; that is, notes, drafts, and bills of exchange
issued or drawn for agricultural, industrial, or commercial pur­
poses, or the proceeds of which have been used, or are to be used,
for such purposes, the Federal Reserve Board to have the right to
determine or define the character of the paper thus eligible for dis­
count, within the meaning of this Act. Nothing in this Act con­
tained shall be construed to prohibit such notes, drafts, and bills
of exchange, secured by staple agricultural products, or other goods,
wares, or merchandise from being eligible for such discount, and
the notes, drafts, and bills of exchange of factors issued as such
making advances exclusively to producers of staple agricultural
products in their raw state shall be eligible for such discount; but
such definition shall not include notes, drafts, or bills covering
merely investments or issued or drawn for the purpose of carrying or
trading in stocks, bonds, or other investment securities, except bonds
and notes of the Government of the United States. Notes, drafts,
and bills admitted to discount under the terms of this paragraph
must have a maturity at the time of discount of not more than 90
days, exclusive of grace.
‘ Upon the indorsement of any of its member banks, which
shall be deemed a waiver of demand, notice, and protest by such
bank as to its own indorsement exclusively, and subject to regula­
tions and limitations to be prescribed by the Federal Reserve Board,
any Federal reserve bank may discount or purchase bills of ex­
change payable at sight or on demand which are drawn to finance
the domestic shipment of nonperishable, readily marketable staple
agricultural products and are secured by bills of lading or other
shipping documents conveying or securing title to such staples:
Provided, That all such bills of exchange shall be forwarded
promptly for collection, and demand for payment shall be made
with reasonable promptness after the arrival of such staples at
their destination: Provided further, That no such bill shall in any
event be held by or for the account of a Federal reserve bank for
a period in excess of 90 days. In discounting such bills Federal
reserve banks may compute the interest to be deducted on the
basis of the estimated life of each bill and adjust the discount
after payment of such bills to conform to the actual life thereof.”
Sec. 403. That the fourth paragraph of section 13 of the Federal
Reserve Act is amended to read as follows:
“ Any Federal reserve bank may discount acceptances of the kinds
hereinafter described, which have a maturity at the time of discount
of not more than 90 days1 sight, exclusive of days of grace, and




IPUB.503.)

29

which are indorsed by at least one member bank: Provided, That
such acceptances if drawn for an agricultural purpose and secured
at the time of acceptance by warehouse receipts or other such docu­
ments conveying or securing title covering readily marketable
staples may be discounted with a maturity at the time of discount
of not more than six months’ sight exclusive of days of grace.”
S e c . 404. That the Federal Reserve Act is amended b y adding
at the end of section 13 a new section to read as follows:
“ S e c . 13a. Upon the indorsement of any of its member banks,
which shall be deemed a waiver of demand., notice, and protest by
such bank as to its own indorsement exclusively, any Federal re­
serve bank may, subject to regulations and limitations to be pre­
scribed by the Federal Reserve Board, discount notes, drafts, and
bills of exchange issued or drawn for an agricultural purpose, or
based upon live stock, and having a maturity, at the time of dis­
count, exclusive of days of grace, not exceeding nine months, and
such notes, drafts, and bills of exchange may be offered as collateral
security for the issuance of Federal reserve notes under the pro­
visions of section 16 of this Act: Provided, That notes, drafts, and
bills of exchange with'maturities in excess of six months shall not
be eligible as a basis for the issuance of Federal reserve notes unless
secured by warehouse receipts or other such negotiable documents
conveying or securing title to readily marketable staple agricultural
products or by chattel mortgage upon live stock which is being
fattened for market.
“ That any Federal reserve bank may, subject to regulations and
limitations to be prescribed by the Federal Reserve Board, redis­
count such notes, drafts, and bills for any Federal Intermediate
f Credit Bank, except that no Federal reserve bank shall rediscount
for a Federal Intermediate Credit Bank any such note or obligation
which bears the indorsement of a nonmember State bank or trust
company which is eligible for membership in the Federal reserve
system, in accordance with section 9 of this Act.
“ Any Federal reserve bank may also buy and sell debentures and
other such obligations issued by a Federal Intermediate Credit Bank
or by a National Agricultural Credit Corporation, but only to the
same*extent as and subject to the same limitations as those upon which
it may buy and sell bonds issued under Title I of the Federal Farm
Loan Act.
“ Notes, drafts, bills of exchange or acceptances issued or drawn by
cooperative marketing associations composed of producers of agri­
cultural products shall be deemed to have been issued or drawn for an
agricultural purpose, within the meaning of this section, if the pro­
ceeds thereof have been or are to be advanced by such association to
any members thereof for an agricultural purpose, or have been or are
to be used by such association in making payments to any members
thereof on account of agricultural products delivered by such mem­
bers to the association, or if such proceeds have been or are to be used
by such association to meet expenditures incurred or to be incurred
by the association in connection with the grading, processing, pack­
ing, preparation for market, or marketing of any agricultural product
handled by such association for any of its members: Provided, That
the express enumeration in this paragraph of certain classes of
paper of cooperative marketing associations as eligible for redis-




30

[Pcb. 503.1

count shall not be construed as rendering ineligible any other class
of paper of such associations which is now eligible for rediscount.
“ The Federal Reserve Board may, by regulation, limit to a per­
centage of the assets of a Federal reserve bank the amount of notes,
drafts, acceptances, or bills having a maturity in excess of three
mo.nths, but not exceeding six months, exclusive of days of grace,
which may be discounted by such bank, and the amount of notes,
drafts, bills, or acceptances having a maturity in excess of six
months, but not exceeding nine months, which may be rediscounted
by such bank.”
Sec. 405. That section 14 of the Federal Reserve Act is amended
by adding at the end thereof a new paragraph to read as follows:
“ (f) To purchase and sell in the open market, either from or to
domestic banks, firms, corporations, or individuals, acceptances of
Federal Intermediate Credit Banks and of National Agricultural
Credit Corporations, whenever the Federal Reserve Board shall
declare that the public interest so requires.”
S e c . 406. That section 15 of the Federal Reserve Act is amended by
adding at the end thereof a new paragraph to read as follows :
“ The Federal reserve banks are hereby authorized to act as de­
positories for and fiscal agents of any National Agricultural Credit
Corporation or Federal Intermediate Credit Bank.”
S e c . 407. That the Act entitled “An act to amend the act approved
December 23, 1013, known as the Federal reserve act,” approved
April 13, 1920, is repealed.
TITLE V.—MISCELLANEOUS PROVISIONS.
AMENDMENTS TO WAR FINANCE CORPORATION ACT.

S ec. 501. That the time during which the War Finance Corpora­
tion may make advances and purchase notes, drafts, bills of exchange,
or other securities under the terms of sections 21,22, 23, and 24 of the
War Finance Corporation Act, as amended, is further extended up
to and including February 29, 1924: Provided, That if any applica­
tion for an advance or for the purchase by the War Finance Cor­
poration of notes, drafts, bills of exchange, or other securities is
received at the office of the corporation in the District of Columbia
on or before February 2i). 1924, such application may be acted upon
and approved, and the advance may be made or the notes, drafts, or
other securities purchased, at any time prior to March 31,1924.
S e c . 502. That the second paragraph of section 12 of Title I of the
War Finance Corporation Act, as amended, is further amended to
read as follows:
“ The power of the corporation to issue notes or bonds may be
exercised at any time prior to January 31,1927, but no such bonds or
notes shall mature later than June 30, 1927.”
S e c . 503 (a) That the third paragraph of section 15 of Title I of
such Act. as amended, is amended by striking out at the beginning of
such paragraph the words “ beginning July 1,1923,” and inserting in
lieu thereof the words “ beginning April 1, 1924.”
(b)
The fourth paragraph of such section, as amended, is amended
by striking out at the beginning of such paragraph the words “ After




IPCB.503.]
Julv

1,1 923,”
1924.”

31

and inserting in lieu thereof the words “ After April

1,

INDEBTEDNESS OF NATIONAL BANKS.

S e c . 504. That section 502 of the Revised Statutes, as amended, is
amended by adding at the end thereof a new paragraph to read as
follows:
“ Eighth. Liabilities incurred under the provisions of section 202
of the Federal Farm Loan Act, approved July 1 7 ,191G, as amended.
JOINT

CONGRESSIONAL COMMITTEE.

S e c . 506. (a) That a joint committee be appointed, to consist of
three Members of the Banking and Currencey Committee of the
Senate, to be appointed by the President thereof, and five Members of
the Banking and Currency Committee of the House of Representa­
tives, to be appointed by the Speaker thereof. Vacancies occurring
in the membership of the committee shall be filled in the same man­
ner as the original appointments.
(b) The joint committee is authorized to inquire into the effect of
the present limited membership of State banks and trust companies
in the Federal reserve system upon financial conditions in the agri­
cultural sections of the United States; the reasons which actuate
eligible State banks and trust companies in failing to Income mem­
bers of the Federal reserve system; what administrative measures
have been taken and are being taken to increase such membership;
and whether or not any change should be made in existing law, or
in rules and regulations of the Federal Reserve Board, or in methods
of administration, to bring about in the agricultural districts a
larger membership of such banks or trust companies in the Federal
reserve system.
(c) The committee is authorized to sit at any time during the ses­
sions or recesses of the Congress, to conduct its hearings at Washing­
ton or at any other place in the United States, to send for persons,
books and papers, to take testimony, to administer oaths, and to
employ experts deemed necessary by such committee, a clerk, and a
stenographer to report such hearings as may be had in connection
with any subject which mav he before said committee, such stenogra­
pher’s services to he rendered at a cost not exceeding $1.25 per
printed page. The expenses of such committee shall be paid out of
the contingent funds of the Senate and House of Representatives
in proportion to the membership of such committee from each House.
(d) The committee shall from time to time report to both the Sen­
ate and the House of Representatives the results of its inquiries,
together with its recommendations, ami may prepare and submit
bills or resolutions embodying such recommendations, and the final
report of said committee shall be submitted not later than January
31. 1924.
SEPARABILITY PROVISION.

S ec . 507. T h a t i f any clause, sentence, p a ra g ra p h , o r p a rt o f this*
A c t shall fo r any reason be ad ju d g ed b y any cou rt o f com petent
ju risd iction to be in v a lid , such ju d gm en t sh all n o t affect, im p a ir,




32

[P u b . 503-1

or invalidate the remainder of this Act, but shall be confined in its
operation to the clause, sentence, paragraph, or part thereof directly
involved in the controversy in which such judgment is rendered.
D E F IN IT IO N S.

S e c . 50 8. That when used in this Act, the term “ Federal Farm
Loan A ct” means the Federal Farm Loan Act approved July 17,
1916, as amended, and the term “ Federal Reserve A ct” means the
Federal Reserve Act approved December 2 3 , 1913 , as amended.
SHOKT TITLE.

S e c . 509. That this Act may be cited as the “ Agricultural Credits
Act of 1 9 2 3 .”
And the Senate agree to the same.
That the Senate recede from its disagreement to the amendment of
the House to the title of the bill, and agree to the same.
Approved, March 4, 1923.