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73D CONGRESS

2d Session

) HOUSE OF REPRESENTATIVES j
j
\

RBPOKT

No. 2056

DIRECT LOANS FOR INDUSTRIAL PURPOSES^ Y FEDERAL
RESERVE BANKS

JUNE 15 (calendar day, JUNE 16), 1934.—Ordered to be printed

Mr.

STEAGALL,

from the committee of conference, submitted the
following

CONFERENCE REPORT
[To accompany S. 3487]
The committee of conference on the disagreeing votes 6i the two
House on the amendment of the House to the hill (S. 3487) relating
to direct loans for industrial purposes by Federal Reserve banks, and
for other purposes, having met, after full and free conference, have
agreed to recommend and do recommend to their respective Houses
as follows:
That the Senate recede from its disagreement to the amendment
of the House and agree to the same with an amendment as follows:
In lieu of the matter proposed to be inserted by the House amendment insert the following:
That the Federal Reserve Act, as amended, is amended by adding after
section 13a thereof a new section reading as follows:
"SEC. 13b. (a) In exceptional circumstances, when it appears to the
satisfaction of a Federal Reserve bank that an established industrial or
commercial business located in its district is unable to obtain requisite
financial assistance on a reasonable basis from the usual sources, the
Federal Reserve bank, pursuant to authority granted by the Federal
Reserve Board, may make loans to, or purchase obligations of, such
business, or may make commitments with respect thereto, on a reasonable
and sound basis, for the purpose of providing it with working capitalf
but no obligation shall be acquired or commitment made hereunder with
a maturity exceeding five years.
" (b) Each Federal Reserve bank shall also have power to discount
for, or purchase from, any bank, trust company, mortgage company,
credit corporation for industry, or other financing institution operating
in its district, obligations having maturities not exceeding five years,
entered into for the purpose of obtaining working capital for any such
established industrial or commercial business; to make loans or advances




2

DIRECT LOANS BY FEDERAL RESERVE BANKS

direct to any such financing institution on the security of such obligations;
and to make commitments with regard to such discount or purchase of
obligations or with respect to such loans or advances on the security
thereof, including commitments made in advance of the actual undertaking of such obligations. Each such financing institution shall obligate itself to the satisfaction of the Federal Reserve bank for at least
20 per centum of any loss which may be sustained by such bank upon
any of the obligations acquired from such financing institution, the
existence and amount of any such loss to be determined in accordance
with regulations of the Federal Reserve Board: Provided, That in lieu
of such obligation against loss any such financing institution may
advance at least 20 per centum of such working capital for any established
industrial or commercial business without obligating itself to the Federal
Reserve ba*nk against loss on the amount advanced by the Federal Reserve
bank: Provided, however, That such advances by the financing institution and the Federal Reserve bank shall be considered as one advance,
and repayment shall be made pro rata under such regulations as the
Federal Reserve Board may prescribe.
li
(c) The aggregate amount of loans, advances, and commitments of
the Federal Reserve banks outstanding under this section at any one
time, plus the amount of purchases and discounts under this section held
at the same time, shall not exceed the. combined surplus of the Federal
Reserve banks as of July 1, 1984, V^us a^ amounts paid to ihe Federal
Reserve banks by the Secretary of the Treasury under subsection (e)
of this section, and all operations of the Federal Reserve banks under
this sectioi} shall be subject to such regulations as the Federal Reserve
Board may prescribe.
" (d) For the purpose of aiding the Federal Reserve banks in carrying
out the provisions of this section, there is hereby established in each
Federal Reserve district an industrial advisory committee, to be appointed
by the Federal Reserve bank subject to the approval and regulations of
the Federal Reserve Board, and to be composed of not less than three nor
more than five members as determined by the Federal Reserve Board.
Each member of such committee shall be actively engaged in some industrial pursuit within the Federal Reserve district in which ihe committee
is established, and each such member shall serve without compensation
but shall be entitled to receive from ihe Federal Reserve bank of such
district his necessary expenses while engaged, in the business of the committee, or a per diem allowance in lieu thereof to be fixed by the Federal
Reserve Board. Each application for any such loan, advance, purchase,
discount, or commitment shall be submitted to the appropriate committee
and, after an examination by it of the business with respect to which the
application is made, the application shall be transmitted to the Federal
Reserve bank, together with the recommendation of the committee.
" (e) In order to enable the Federal Reserve banks to make the loans,
discounts, advances, purchases, and commitments provided for in this
section, the Secretary of the Treasury, upon the date this section takes
effect, is authorized, under such rules and regulations as he shall prescribe, to pay to each Federal Reserve bank not to exceed such portion of
the sum of $139,299,557 as may be represented by the par value of the
holdings of each Federal Reserve bank of Federal Deposit Insurance
Corporation stock, upon the execution by each Federal Reserve bank of
its agreement (to be endorsed on the certificate of such stock) to hold such




DIRECT LOANS BY FEDERAL RESERVE BANKS

3

stock unencumbered and to pay to the United States all dividends, all payments on liquidation, and all other proceeds oj such stock, for which
dividends, payments, and proceeds the United States shall be secured by
such stock itself up to the total amount paid to each Federal Reserve
bank by the Secretary of the Treasury under this section. Each Federal
Reserve bank, in addition, shall agree that, in the event such dividends,
payments, and other proceeds in any calendar year do not aggregate 2 per
centum of the total payment made by the Secretary of the Treasury under
this section, it will pay to the United States in such year such further
amount, if any, up to 2 per centum of the said total payment, as shall be
covered by the net earnings of the bank for that year derived from the use
of the sum so paid by the Secretary of the Treasury, and that for said
amount so due the United States shall have a first claim against such
earnings and stock, and further that it will continue such payments until
the final liquidation of said stock by the Federal Deposit Insurance Corporation.
The sum so paid to each Federal Reserve bank by the Secretary
of the Treasury shall become a part of the surplus fund of such Federal
Reserve bank within the meaning of this section. All amounts required
to be expended by the Secretary of the Treasury in order to carry out the
provisions of this section shall be paid out of the miscellaneous receipts
of the Treasury created by the increment resulting from the reduction of
the weight of the gold dollar under the President's proclamation of January 31, 1934; and there is hereby appropriated, out of such receipts,
such sum as shall be required for such purpose.'1
SEC. 2. Section 5202 of the Revised Statutes of the United States, as
amended, is hereby amended by adding at the end thereof the following
new paragraph:
" Tenth. Liabilities incurred under the provisions of section 13b of the
Federal Reserve Act.-7
SEC. 3. Section 22 of the Federal Reserve Act is amended by adding at
the end thereof the following new paragraphs:
" (h) Whoever makes any material statement, knowing it to be false,
or whoever willfully overvalues any security, for the purpose of influencing
in any way the action of a Federal Reserve bank upon any application,
commitment, advance, discount, purchase, or loan, or any extension
thereof by renewal, deferment of action, or otherwise, or the acceptance,
release, or substitution of security therefor, shall be punished by a fine
of not more than $5,000 or by imprisonment for not more than two years,
or both.
" (i) Whoever, being connected in any capacity with a Federal Reserve
bank (1) embezzles, abstracts, purloins, or willfully misapplies any
moneys, funds, securities, or other things of value, whether belonging to
it or pledged or otherwi.se entrusted to it, or (2) with intent to defraud any
Federal Reserve bank, or any other body politic or corporate, or any
individual, or to deceive any officer, auditor, or examiner, makes any
false entry in any book, report, or statement of or to a Federal Reserve
bank, or, without being duly authorized, draws any order or issues, puts
forth, or assigns any note, debenture, bond, or other obligation, or draft,
mortgage, judgment, or decree shall be punished by a fine of not more than
$10,000 or by imprisonment for not more than five years, or both.
"(j) The^provisions of sections 112, 113, \ll±, 115, 116, and 117 of
the Criminal Code of the United States, insofar as applicable, are
extended to apply to contracts or agreements of any Federal Reserve bank




4

DIRECT LOANS BY FEDERAL RESERVE BANKS

under this Act, which, for the purposes hereof, shall be held to include
advances, loans, discounts, purchase and repurchase agreements;
extensions and renewals thereof; and acceptances, releases, and substitutions of security therefor.
" (k) It shall be unlawful for any person to stipulate for or give or
receive, or consent or agree to give or receive, any fee, commission, bonus,
or thing of value for procuring or endeavoring to procure from any
federal Reserve bank any advance, loan, or extension of credit or discount or purchase of any obligation or commitment with respect thereto,
either directly from such Federal Reserve bank or indirectly through any
financing institution unless such fee, commission, bonus, or thing of
value and all material facts with respect to the arrangement or understanding therefor shall be disclosed in writing in the application or request
for such advance, loan, extension of credit, discount, purchase, or commitment. Any violation of the provisions of this paragraph shall be punishable by imprisonment for not more than one year or by a fine of not
exceeding $5,000, or both. If a director, officer, employee, or agent of
any Federal Reserve bank shall knowingly violate this paragraph, he
shall be held liable in his personal and individual capacity for any loss
or damage sustained by such Federal Reserve bank in consequence of
such violation."
SEC. 4- Section 10 of the Federal Reserve Act, as amended, is further
amended by changing the period at the end of the third paragraph thereof
to a comma and inserting thereafter the following: uand such assessments may include amounts sufficient to provide for the acquisition by
the Board in its own name of such site or building in the District of
Columbia as in its judgment alone shall be necessary for the purpose of
providing suitable and adequate quarters for the performance of its functions. After approving such plans, estimates, and specifications as it
shall have caused to be prepared, the Board may, notwithstanding any
other provision of law, cause to be constructed on the site so acquired by
it a building suitable and adequate in its judgment for its purposes and
proceed to take al$ such steps as it may deem necessary or appropriate in
connection with the construction, equipment, and furnishing of such
building. The Board may maintain, enlarge, or remodel any building
so acquired or constructed and shall have sole control of such building
and space therein."
SEC. 5. That the Reconstruction Finance Corporation Act, as amended
(U.S.C., Supp. VII, title 15, ch. 14), is amended by inserting before
section 6 thereof the following new section:
1
SEC. 5d. For the purpose of maintaining and increasing the employment of labor, when credit at prevailing bank rates for the character of
loans applied for is not otherwise available at banks, the Corporation is
authorized and empowered to make loans to any industrial or commercial
business, which shall include the fishing industry, established prior to
January 1,1934.
Such loans shall in the opinion of the board of directors
oi the Corporation be adequately secured, may be made directly, or in
cooperation with banks or other lending institutions, or by the purchase
of participations, shall have maturities not to exceed five years, shall be
made only when deemed to offer reasonable assurance of continued or
increased employment of labor, shall be made only when, in the opinion
of the board oj directors of the Corporation, the borrower is solvent, shall
not exceed $300,000,000 in aggregate amount at any one time outstanding,
and shall be subject to such terms, conditions, and restrictions as the




DIRECT LOANS BY FEDERAL RESERVE BANKS

5

board of directors of the Corporation may determine. The aggregate
amount oj loans to any one borrower under this section shall not exceed
$500,000.
"The power to make loans given herein shall terminate on January
31, 1935, or on such earlier da teas the President shall by proclamation
fix; but no provision oj law terminating any oj the junctions oj the Corporation shall be construed to prohibit disbursement oj junds on loans
and commitments, or agreements to make loans, made under this section
prior to January 31, 1935, or such earlier date.11
SEC. 6. (a) Section 882 oj the Revised Statutes (U.S.C., title 28, sec.
661) is amended to read asjollows:
"SEC. 882. (a) Copies oj any books, records, papers, or other documents in any oj^ the executive departments, or oj any corporation all oj
the stock oj which is beneficially owned by the United States, either
directly or indirectly, shall be admitted in evidence equally with the
originals thereof, when duly authenticated under the seal oj such department or corporation, respectively.
"(b) Books or records oj account in whatever form, and minutes (or
portions thereoj) oj proceedings, oj any such executive department or
corporation, or copies of such books, records, or minutes authenticated
under the seal oj such department or corporation, shall be admissible as
evidence of any act, transaction, occurrence, or event as a memorandum
oj which such books, records, or minutes were kept or made.
"(c) The seal oj any such executive department or corporation shall be
judicially noticed.''
(b) Section 4 oj the Reconstruction Finance Corporation Act, as
amended (U.S.C., Supp. VII, title 15, sec. 604), is amended by inserting
immediately before the semicolon following the words "corporate
seal11 a
comma and the words "which shall be judicially noticed11.
SEC. 7. Section 1001 oj the Revised Statutes, as amended (U.S.C.,
title 28, sec. 870),
is amended by inserting immediately ajter the word
" Government11 the jollowing: "or any corporation all the stock oj which
is
beneficially owned by the United States, either directly or indirectly11.
SEC. 8. The Reconstruction Finance Corporation Act, as amended
(U.S.G., Supp. VII, title 15, ch. 14), is further amended by inserting
after section 5a thereof the following new section:
"SEC. 5b. Notwithstanding any other provision of law—
" (1) The maturity of drafts or bills of exchange which may be accepted by the Corporation under section 5a of this Act, and the period
for which the Corporation may make loans or advances under sections
201 (c) and 201 (d) of the Emergency Relief and Construction Act of 1932,
as amended, and under section 5 of this Act, may be five years, or any
shorter period, from February 1, 1935: Provided, That in respect of
loans or advances under such section 5 to railroads, railways, and receivers or trustees thereof, the Corporation may require as a condition of
making any such loan or advance for a period longer than three years
that such arrangements be made for the reduction or amortization of the
indebtedness of the railroad or railway, either in whole or in part, as
may be approved by the Corporation after the prior approval of the
Interstate Commerce Commission.
"(2) The Corporation may at any time, or from time to time, extend,
or consent to the extension of, the time of payment of any loan or advance
made by it, through renewal, substitution of new obligations, or otherwise,
but the time for such payment shall not be extended beyondfiveyears from




6

DIRECT LOANS BY FEDERAL RESERVE BANKS

February 1,1935: Provided, That the time oj payment oj loans or advances
to railroads, railways, and receivers or trustees thereoj, shall not be so
extended except with the prior approval oj the Interstate Commerce Commission, and, in the case oj a loan to a railroad or railway, with the prior
certification oj the Interstate Commerce Commission that the railroad or
railway is not in need ojjinancial reorganization in the public interest.
"(8) In connection with the reorganization under section 77 oj the
Federal Bankruptcy Act, approved July 1, 1898, as amended, or with
receivership proceedings in a court or courts, oj any railroad or railway
indebted to the Corporation, or oj any railroad or railway the receivers
or trustees oj which are indebted to the Corporation, the Corporation may,
with the prior approval oj the Interstate Commerce Commission, adjust
or compromise its claim against such railroad or railway, or any such
receiver or trustee, by accepting, in connection with any such reorganization or receivership proceedings and in exchange jor securities or any part
thereoj then held, new securities which may have such terms as to interest,
maturity, and otherwise as may be approved by the Corporation, or part
cash and part new securities so approved: Provided, That any such adjustment or compromise shall not be made on less javorable terms than those
provided in the reorganization oj the railroad or railway jor holders oj
claims oj the same class and rank as the claim oj the Corporation."
SEC. 9. Section 301 oj the National Industrial Becovery Act (U.S.C.,
Supp. VII, title 40, sec. 412) is amended by inserting bejore the period
at the end thereoj a colon and the jolio wing: "Provided jurther, That in
connection with any loan or contract or any commitment to make a loan
entered into by the Beconstruction Finance Corporation prior to June
26, 1933, to aid injinancing part or all oj the construction cost oj projects
pursuant to section 201 (a) (1) oj the Emergency Beliej and Construction Act oj 1932, as amended, the Corporation may make such jurther
loans and contracts jor the completion oj any such project, or jor improvements, additions, extensions, or equipment which are necessary or
desirable jor the proper junctioning oj any such project, or which will
materially increase the assurance that the borrower will be able to repay
the entire investment oj the Corporation in such project, including such
improvements, additions, extensions, or equipment; and the Corporation
may disburse junds to the borrower thereunder, at any time prior to January 23, 1939, notwithstanding any provisions to the contrary contained
in this section or in section 201 (h) oj the Emergency Beliej and Construction Act oj 1932, as amended: Provided jurther, That any such
jurther loans shall be made subject to all the terms and conditions set
jorth in the Emergency Beliej and Construction Act oj 1932, as amended,
with respect to the loans authorized by section 201 (a) (1) oj said Act"
SEC. 10. Notwithstanding any limitations on its power, the Beconstruction Finance Corporation, upon request oj any borrower under
section 201 (a) oj the Emergency Beliej and Construction Act oj 1932, as
amended, may adjust the maturities oj any obligations oj such borrower
now held by it, or hereafter acquired by it under lawful commitments, to
such periods as may in the discretion oj the Beconstruction Finance
Corporation be proper, but such adjustment shall not extend any such
maturity to more than twenty years jrom the advancing oj the sum or
sums evidenced thereby.
SEC 11. Section 36 oj the Emergency Farm Mortgage Act oj 1933, as
amended (U.S.C., Supp. VII, title 43, sec. 403), is amended asjollows:




DIRECT LOANS BY FEDERAL RESERVE BANKS

7

(1) By striking from the first sentence thereof "$50,000,000 to or for
the benefit of drainage districts, levee districts, levee and drainage districts,
irrigation districts, and similar districts," and inserting in lieu thereof
"$125,000,000 to or for the benefit of drainage districts, levee districts,
levee and drainage districts, irrigation districts, and similar
districts,
mutual nonprofit companies and incorporated water users1 associations".
(2) By striking from the second sentence thereof "district or political
subdivision" and inserting in lieu thereof "district, political subdivision,
company, or association".
(3) By amending clause (4) thereof to read as folio ws:
"(4) the borrower shall agree, insofar as it may lawfully do so, that
so long as any part of such loan shall remain unpaid the borrower will
in each year apply to the repayment of such loan or to the purchase or
redemption of the obligations issued, to evidence such loan, an amount
equal to the amount by which the assessments, taxes, and other charges
collected by it exceed (a) the cost of operation and maintenance of the
project, (b) the debt charges on its outstanding obligations, and (c) provision for such reasonable reserves as may be approved by the Corporation;
and".
(4) By adding at the end thereof the following new paragraph:
"When any loan is authorized pursuant to the provisions of this
section and it shall then or thereafter appear that repairs and necessary
extensions or improvements to the project of such district, political subdivision, company, or association are necessary or desirable for the proper
functioning of its project or for the further assurance of its ability to
repay such loan, and if it shall also appear that such repairs and necessary
extensions or improvements are not designed to bring new lands into
production, the Corporation, within the limitation as to total amount
provided in this section, may make an additional loan or loans to such
district, political subdivision, company, or association for such purpose
or purposes. When application therefor shall have been made by any
such district, political subdivision, company, or association any loan
authorized by this section may be made either to such district, political
subdivision, company, or association or to the holders or representatives
of the holders of their existing indebtedness, and such loans may be made
upon promissory notes collateraled by the obligations of such district,
political subdivision, company, or association or through the purchase
of securities issued or to be issued by such district, political subdivision,
company, or association."
SEC. 12. (a) Sections 2 and 3 of the Act entitled "An Act to authorize
the Reconstruction Finance Corporation to subscribe for preferred stock
and purchase the capital notes of insurance companies, and for other
purposes", approved June 10, 1933, as amended (U.S.C., Supp. VII,
title 15, sees. 605f and 605g), are amended to read as follows:
"SEC. 2. In the event that any such insurance company shall be incorporated under the laws of any State which does not permit it to issue
preferred stock, exempt from assessment or additional liability, or if
such laws permit such issue of preferred stock only by unanimous consent of stockholders, or upon notice of more than twenty days, or if the
insurance company is a mutual organization without capital stock, the
Reconstruction Finance Corporation is authorized for the purposes of
this Act to purchase the legally issued capital notes of such insurance
company, or, if the company is a mutual organization without capital
stock, such other form or forms of indebtedness as the laws of the State




8

DIEECT LOANS BY FEDERAL RESERVE BANKS

under which such company is organized permit, or to make loans secured
by such notes or such other form or forms of indebtedness as collateral,
which may be subordinated in whole or in part or to any degree to claims
of other creditors.
" SEC. 3. The Reconstruction Finance Corporation shall not subscribe
for or purchase any preferred stock or capital notes of any applicant
insurance company, (J) until the applicant shows to the satisfaction of
the Corporation that it has unimpaired capital, or that it will furnish
new capital which will be subordinate to the preferred stock or capital
notes to be subscribed for or purchased by the Corporation, equal to the
amount of said preferred stock or capital not-es so subscribed for or purchased by the Corporation: Provided, That the Corporation may make
loans upon said preferred stock or capital notes, or other form or forms
of indebtedness permitted by the laws of the State under which said applicant is organized, if, in its opinion, such loans will be adequately
secured by said stock or capital notes or other form or forms of indebtedness and/or such other forms of security as the Corporation may require,
(2) if at the time of such subscription, purchase, or loan any officer, director, or employee of the applicant is receiving total compensation in a
sum in excess of $17,500 per annum from the applicant andjor any of
its affiliates, and (8) unless at such time, the insurance company agrees
to the satisfaction of the Corporation that while any part of the preferred
stock, notes, bonds, or debentures (or, in the case of a mutual insurance
company, other form or forms of indebtedness permitted by the laws of
the State under which the company is organized) of such insurance company is held by the Corporation, the insurance company, except with the
consent of the Corporation, will not (a) increase the compensation received by any of its officers, directors, or employees from the insurance
company and/or any of its affiliates, and in no event increase any such
compensation to an amount exceeding $17,500 per annum, or (6) retire
any of its stock, notes, bonds, debentures, or other forms of indebtedness
issued for capital purposes. For the purposes of this section, the term
'compensation' includes any salary, fee, bonus, commission, or other
payment, direct or indirect, in money or otherwise for personal services."
(b) Section 11 of such Act of June 10, 1933, as amended (U.S.C.,
Supp. VII, title 15, sec. 605i), is amended by adding at the end thereof
the following new sentence: "As used in this section and in sections 1, 2,
and 3, of this Act, the term 'State' means any State, Territory, or possession of the United States, the Canal Zone, and the District of Columbia."
SEC. 13. The Reconstruction Finance Corporation is authorized and
empowered to make loans upon full and adequate security, based on
mineral acreage, to recognized and established incorporated managing
agencies of farmers' cooperative mineral rights pools not engaged in
drilling or mining operations, said loans to be made for the purpose of
defraying the cost of organizing such pools.
SEC. 14- The Reconstruction Finance Corporation is authorized and
empowered to make loans upon adequate security, based on mineral
acreage to recognized and established incorporated agencies, individuals,
and partnerships engaged in the business of mining, milling, or smelting
of ores.
Sec. 15. The Corporation is authorized and empowered to make loans
under section 5 of the Reconstruction Finance Corporation Act, as
amended, to any person, association, or corporation organized under the




DIRECT LOANS BY FEDERAL RESERVE BANKS

9

laws of any State, the District of Columbia, Alaska, Hawaii, or Puerto
Rico, for the purpose oj financing the production, storage, handling,
packing, processing, carrying, and I or orderly marketing oj fish oj American fisheries and)or products thereof upon the same terms and conditions, and subject to the same limitations, as are applicable in case oj
loans made under said section 5, as amended.
Sec. 16. The Reconstruction Finance Corporation is hereby authorized
and empowered to make loans at any time prior to January 31,1935, out
ojthejunds oj the Corporation uponjull and adequate security, to publicschool districts or other similar public-school authorities organized pursuant to State law, jor the purpose oj payment oj teachers' salaries due
prior to June 1, 1934: Provided, That the aggregate amount oj such
loans at any time outstanding shall not exceed $75,000,000.
And the House agree to the same.




HENRY B. STEAGALL,
T. ALAN GOLDSBOROUGH,
ANNING S. PRALL,
ROBERT LUCE,

Managers on the part oj the House.
CARTER GLASS,
ROBERT F. WAGNER,
ALBEN W. BARKLEY,
JOHN G. TOWNSEND, JR.,
F. C. WALCOTT,

Managers on the part oj the Senate.

STATEMENT OF THE MANAGERS ON THE PART OF THE HOUSE

The managers on the part of the House at the conference on the
disagreeing votes of the two Houses on the amendment of the House
to the bill (S. 3487) relating to direct loans for industrial purposes
by Federal Reserve banks, and for other purposes, submit the following statement in explanation of the effect of the action agreed upon
by the conferees and recommended in the accompanying conference
report:
The House amendment contained a provision amending the Reconstruction Finance Corporation Act to authorize the establishment or
utilization by the Corporation of export or import trading and banking
corporations, in which the United States shall own the entire beneficial interest, and to authorize the Corporation to subscribe for and
purchase the stock and obligations of such corporations, for the
purpose of aiding in financing exports and imports between the
United States and other nations. The bill as agreed to in conference
eliminates this provision.
Section 6 of the Senate bill, which authorized direct loans to
industry to be made by the Reconstruction Finance Corporation,
limited the aggregate amount of loans to any one borrower to the sum
of $1,000,000. Section 13 of the House amendment provided an
aggregate limitation of $100,000. The conference agreement (sec. 5)
fixes the amount at $500,000.
Section 2 of the Senate bill provided with respect to direct loans to
industry by the Federal Reserve banks, that the Secretary of the
Treasury should pay to the Federal Reserve banks the sum of
$139,299,557 for the purpose of aiding in the making of such loans,
such amount to be paid back to the Treasury by the Federal Reserve
banks at a rate of at least 1 percent per annum. The House amendment, while it authorized the loans to industry by the Federal Reserve
banks, made no such provision. The bill as agreed to in conference
(sec. 1) carries into the new section 13b added to the Federal Reserve
act by the bill a provision which authorizes, but does not direct, the
payment of not to exceed an identical sum to the Federal Reserve
banks which is to be returned to the Treasury at a rate of not less
than 2 percent per annum.
Section 5 of the Senate bill contained a provision permitting the
Federal Reserve Board to construct, equip, and furnish a building to
provide suitable and adequate quarters for the performance of its
functions. The House amendment contained no such provision. The
bill as agreed to in conference (sec. 4) contains this provision.
HENRY B. STEAGALL,
T. ALAN GOLDSBOROUGH,
ANNING S. PRALL,
ROBERT LUCE,

Managers on the part of the House.
10




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