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X-7040 Sttmifoafry of M i l (H. R. 5060 - 72nd Congress, 1st Session.) "To provide emergency financing f a c i l i t i e s f o r "banks and other f i n a n c i a l i n s t i t u t i o n s , and f o r other purposes". The b i l l (H. R, 5060) would create a corporation, with c a p i t a l of $500,000,000, a l l subscribed by the United States of America, and with authority to i s s u e , and to have outstanding at any one time i n an amount aggregating not more than $1,500,000,000, i t s notes, debentures, bonds, or other such obligations. The Corporation w i l l be known as the "Reconstruction Finance Corporation." I t s Board of Directors w i l l consist of the Secretary of the Treasury, the Governor of the Federal Reserve Board, and the Farm Loan Commissioner, who s h a l l be members e x - o f f i c i o , and two other persons appointed by the President, each f o r a term of f i v e years, by and with the advice and consent of the Senate. The Corporation w i l l be authorized to make loans, upon such terms and conditions as i t may determine, to any bank, banker, savings bank, t r u s t company, clearing house or other a s s o c i a t i o n of banking i n s t i t u t i o n s , building and loan association, insurance company, or other f i n a n c i a l i n s t i t u t i o n in the United S t a t e s . All such loans must be f u l l y and adequately secured i n such manner as the Corporation s h a l l r e q u i r e , and they w i l l be made a t such i n t e r e s t or discount r a t e s as the Corporation may approve. The Corporation may make loans at any time p r i o r to the expiration of one year from the date of enactment of the b i l l , but i t i s provided t h a t the President may from time to time postpone such date of expiration f o r such additional period or periods as he may deem necessary, not to exceed two years from the date of the enactment of the b i l l . The loans of the Corporation may be made f o r periods not exceeding three years, with authority to grant extensions from time to time up to f i v e years from the dates on which the loans were o r i g i n a l l y made. In a d d i t i o n , the b i l l provides t h a t , within the l i m i t a t i o n s r e f e r r e d t o , the Corporation may make loans to or aid i n the temporary financing of steam r a i l r o a d s engaged i n i n t e r s t a t e commerce, when i n the opinion of the Board of Directors of the Corporation such r a i l roads a r e unable to obtain funds upon reasonable terms through banking channels or from the general public and the corporation w i l l be adequately secured. The maturity of notes, debentures, bonds, or other such obligations of the Corporation cannot exceed f i v e years from t h e i r r e spective dates of i s s u e , and short term obligations, payable at maturity without i n t e r e s t , may be sold on a discount b a s i s . The obligations of the Corporation, which w i l l be exempt from a l l Federal, s t a t e , municipal or local taxation, may be secured by a s s e t s of the Corporation i n such manner as may be prescribed by i t s Board of 600 6 X-7040 - 8 D i r e c t o r s. Except with respect to r e a l property ormed by i t , the Corporation, including i t s f r a n c h i s e , c a p i t a l , r e s e r v e s , surplus and. income, w i l l also "be exempt from t a x a t i o n . If the Corporation should be unable to pay upon demand, when due, the p r i n c i p a l of, or i n t e r e s t on, i t s o b l i g a t i o n s , the Secretary of the Treasury i s required to pay the amount t h e r e o f , which i s authorized to be appropriated out of any moneys i n the Treasury not otherwise appropriated. I t i s provided that the Federal reserve banks s h a l l have the sane powers (1) to discount notes, d r a f t s , and b i l l s of exchange secured by the obligations of the Corporation, (2) to make advances to member banks on t h e i r notes secured by such o b l i g a t i o n s , (3) to use a l l paper so acquired, and (4) to purchase and s e l l such obligations, as they have with respect to bonds and notes of the United S t a t e s . The r a t e at which any such discount or advance may be made by any Federal reserve bank s h a l l be one per cent per annum above i t s discount r a t e on 90-day commercial paper. Loans obtained by national banks from the Corporation are excepted from the l i m i t a t i o n contained i n Section 5202 of the Revised Statutes on the l i a b i l i t i e s of national banks. The Federal reserve banks also are authorized and directed to act as d e p o s i t a r i e s , custodians, and f i s c a l agents f o r the Corporat i o n , and the Treasury Department, the Comptroller of the Currency, the Federal Reserve Board, the Federal reserve banks, and the I n t e r s t a t e Commerce Commission may make available to the Corporation i n confidence r e p o r t s , records, or other information r e l a t i n g to the f i n a n c i a l i n s t i t u t i o n s or r a i l r o a d s with which i t has, or contemp l a t e s having, transactions under the Act. These agencies also may, through t h e i r examiners, make examinations of such i n s t i t u t i o n s or r a i l r o a d s f o r the confidential use of the Corporation. In addition, the Corporation may a v a i l i t s e l f of the services, f a c i l i t i e s , o f f i c e s , and employees of other branches of the Government s e r v i c e , with t h e i r consent. All moneys of the Corporation not otherwise employed may be deposited with the Treasurer of the United S t a t e s , or i n any Federal reserve bank, or may be used i n the purchase or redemption of the Corporation's obligations. When designated f o r the purpose by the Secretary of the Treasury, the Corporation i s required to act as a depositary of public money, except r e c e i p t s from customs; and i t may also be employed as a f i n a n c i a l agent of the Government. The o b l i gations of the Corporation w i l l be lawful investments, and may be accepted as . s e c u r i t y , f o r a l l f i d u c i a r y , t r u s t and public funds the investment or deposit of which i s under the authority or control of the United States or any of i t s o f f i c e r s . The b i l l contains various penalty provisions, p r o h i b i t s any «. 3 — X-7040 other organization from using the words "Reconstruction Finance Corporation", and authorizes the use of the Secret Service i n connection with possible v i o l a t i o n s of the criminal provisions of the Act. The b i l l also contains provisions r e l a t i n g to the appointment and compensation of i t s personnel, the adoption of "by-laws, and the payment of i t s expenses. The Corporation i s required annually to make a report of i t s operations to the Congress as soon as p r a c t i c a b l e a f t e r the f i r s t day of January i n each y e a r . Upon the expiration of the period during which i t may make loans, the Corporation i s required to proceed to l i q u i d a t e i t s assets and wind up i t s a f f a i r s , and the b i l l prescribes the procedure to be followed i n connection with the retirement of i t s c a p i t a l stock and the payment of i t s funds into the Treasury. I f , at the expiration of ten years, the l i q u i d a t i o n of the Corp o r a t i o n ' s a s s e t s has not been completed, the duty of winding up the Corporation's a f f a i r s w i l l be t r a n s f e r r e d to the Secretary of the Treasury.
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