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Public Law 202 - 83d Congress
Chapter 335 - 1st Session
H. R. 4353
A ll 67 S ta t. 390.
To increase farmer participation in ownership and control of the Ftnleral Farm
Credit System; to create a Federal Farm Credit Board; to abolish certain
offices; to impose a franchise tax upon certain farm credit institutions: and for
other purposes.

Be it emoted by the Senate and House of Representative* of the Farm C red it
United States of America in Congress assembled,
Aot o f 1953.
TITLE

S e c tio n

1. This Act may be cited as the “ Farm Credit Act o f 1953”.
DECLARATION OF POLICY

S e c . 2. It is declared to be the policy of the Congress to encourage
and facilitate increased borrower participation in the management,
control, and ultimate ownership of the permanent system o f agri­
cultural credit made available through institutions operating under
the supervision of the Farm Credit Administration, and the provisions
of this Act shall be construed in keeping with this policy. The Federal
Farm Credit Board hereinafter provided for shall within one year
after appointment make recommendations to the Congress of means,
supplemental to those provided by this Act, of carrying into effect
such declared policy, including, but not limited to, means of increasing
borrower participation in ownership of the Federal Farm Credit
System to the end that the investment of the United States in the
Federal intermediate credit banks, production credit corporations,
Central Bank for Cooperatives, and regional banks for cooperatives
may be retired.
FARM CREDIT ADMINISTRATION

S ec . 3. The Farm Credit Administration shall be an independent
agency in the executive branch of the Government. It shall be housed
in the Department of Agriculture in the District of Columbia, and it
may, with the consent o f the Secretary of Agriculture, utilize the
services and facilities of the Department of Agriculture. The Federal
Farm Credit Board, hereinafter provided for, shall have direction,
supervision, and control o f the Farm Credit Administration and of
its operations and functions, as in this Act provided.
FEDERAL FARM CREDIT BOARD

S e c . 4. (a) There shall be established, in the Farm Credit Admin­
istration, a Federal Farm Cmlit Board (hereinafter referred to as
the 4
*Board“ ) . Said Board shall consist of thirteen members. Twelve
o f the members, one from each of the farm credit districts o f the
United States, shall be known as api>ointed members and shall be
appointed by the President with the advice and consent o f the Senate.
In making appointments to the Board the President shall have due
regard to a fair representation of the public interest, the welfare o f
all farmers and the various types o f cooperative agricultural credit
interests; shall give special consideration to ]>ersons who are experi­
enced in cooperative agricultural cm lit; and shall, before making
such appointments, receive and consider nominations made as follows:
The national farm loan associations in the district shall designate one
nominee, the production credit associations in the district shall desig­
nate one nominee, and the cooperatives which are stockholders or
subscribers to the guaranty funa o f the bank for cooperatives o f the




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202

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All 67 Stat, 391*_______________
district shall designate one nominee, in accordance with the procedure
50 stat. 705. presci*ibed in sections 5 (e) and 5 (f) of the Farm Credit Act of 1937
12 use 640e,
for t,]le nomination and election of members of a district farm credit
640f*
board, except that only the two persons receiving the highest number
of votes shall be included in the list of nominees prepared as a result
of the voting under the procedure prescribed in said section 5 ( e ) :
Provided , That the names of all those who are tied for second place as
a result of said voting shall be included in the list; and in case of a
tie in the voting under the procedure prescribed in said section 5 ( f )
the procedure prescribed therein shall be followed again until the tie
is broken: A na provided further, That if the same person would other­
wise be on the list of nominees of more than one of said groups as a
result of the voting under said section 5 (e) he majr choose the one
list on which his name shall appear, and otherwise his name shall
appear only on the list of the two highest nominees of the group which
gave him the highest percentage of its votes. Subsequent appoint­
ments shall be made after receiving and considering nominations
made in like manner.
Board m em
(b ) Each appointed member of said Board shall be a citizen of the
bers.
United States and shall have been a resident of the farm credit district
Eligibility,
from which appointed for not less than ten years next preceding his
tenns, eto.
appointment, and the removal o f residence from the district during
his tenure shall operate as a termination o f his membership on said
Board. No appointed member o f said Board shall be eligible to serve
for more than one full term of six years, and, in addition, a term o f less
than six years if he is one of the first members to be appointed, or is
appointed to fill, the unexpired portion of one term expiring before
his appointment to a full term. No person shall be eligible for nomina­
tion or appointment to membership as an appointed member on said
Board if such person has within one year next preceding the com­
mencement o f the term been a salaried officer or employee or the Farm
Credit Administration, or a salaried officer or employee o f any corpo­
ration operating under the supervision o f the Farm Credit Adm inis­
tration. A n y person who is a member of the district farm credit board
when appointed as a member of the Federal Farm Credit Board shall
resign as a member o f the district board before assuming his duties as
a member o f the Federal Farm Credit Board. No person who becomes
an appointed member o f said Board shall be eligible to continue to
serve as a member thereof if such person becomes a member o f any
district farm credit board, or an officer or employee o f the Farm Credit
Administration, or an officer or employee o f any corporation operating
under the supervision o f the Farm Credit Administration.
(c ) The term o f office o f the appointed members o f said Board shall
be six years, beginning with the first day of the calendar month in
which this A c t takes effect, and such members shall serve until their
successors are duly appointed and qualified; however, of the first
appointed members appointed hereunder, two shall be appointed for a
term o f one year from said date, two for a term o f two years, two for
a term of three years, two for a term of four years, two for a term of
five years, and two for a term of six years. A ll vacancies in the offices
o f appointed members on said Board shall be filled for the unexpired
portion o f the term upon like nominations and by like appointments
as herein provided for the appointment o f the first such members of
said Board.
(d ) The thirteenth member o f the Board shall be designated by the
Secretary o f Agriculture, shall serve at the pleasure o f the Secretary,
and shall be known as the Secretary’s Representative on said Board.
H e shall be a citizen o f the United States and shall have been a resident
o f the United States for not less than ten years next preceding his
designation to membership on said Board. iSfo person shall be eligible




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to be designated by the Secretary or to serve as the Secretary’s Repre­
sentative on said Board, if such person is a member o f a district farm
credit board, an officer or employee o f any corporation operating under
the supervision o f the Farm Credit Administration. The Secretary's
representative shall not be eligible to serve as Chairman, Vice Chair­
man, or Secretary o f the Board, but shall otherwise possess all rights
and privileges o f membership on said Board.
(e) A s soon as practicable after the memberships on said Board
have been filled as in this A ct provided, the members o f said Board
shall meet, subscribe the oath o f office, and organize by electing from
the appointed members a Chairman and a Vice Chairm an; and said
Board shall appoint a secretary from within or without its member­
ship as it m ay see fit. The Board shall elect annually for a term o f
one year the Chairman, Vice Chairman, and Secretary, who shall
serve until their successors are elected and take office. The Chairman
shall preside at all meetings and the Vice Chairman shall preside in
the absence or disability o f the Chairman. The Board may, in the
absence o f both the Chairman and Vice Chairman, elect any appointed
member to act as Chairman pro tempore. Seven members shall consti­
tute a quorum o f the Board for the transaction of business. The Board
may function notwithstanding vacancies provided a quorum as herein
established shall be present. The Board shall meet at such times
and places as it may fix and determine, but shall hold at least four
regularly scheduled meetings a year; and special meetings may be
held on call o f the Chairman or any three members o f the Board.
( f ) Each member o f the Board shall receive the sum o f $50 for each Compensation of
day or part thereof spent in the performance o f his official duties, Board members,
which compensation, however, shall not be paid for more than seventyfive days (or parts o f days) in any calendar year; and shall not be paid
to the Secretary’s representative if he is a full-tim e officer or employee
o f the United States, or such payment is otherwise prohibited by la w ;
and in addition, shall be reimbursed for necessary travel, subsistence,
and other expenses incurred in the discharge o f his official duties, with­
out regard to other laws with respect to allowances which may be
made on account o f travel and subsistence expenses o f officers and em­
ployed personnel o f the United States.
(g ) The Board shall adopt such rules as it may see fit for the trans­
action o f its business, and shall keep permanent and complete records
and minutes of its acts and proceedings.
GOVERNOR OF FARM CREDIT ADMINISTRATION

Sec. 5. (a ) The Board shall appoint a Governor o f the Farm Credit
Administration (hereinafter referred to as the “ Governor” ) who shall
serve at the pleasure o f the Board, and who shall, subject to the general
supervision and direction of the Board as to matters o f a broad and
general supervisory, advisory, or policy nature, and except as other­
wise herein specifically provided, be responsible for the execution o f
this A ct, all Acts amendatory thereof and supplemental thereto, and
all Acts creating the powers, functions, and duties o f the Farm Credit
Adm inistration: Provided, however, That pending retirement o f
Government capital in institutions supervised by the Farm Credit
Administration, the appointment o f the Governor shall be subject to
the approval o f the President; and during such period the President
shall nave power to require the removal o f the Governor.
(b )
The Board shall fix the compensation o f the G overnor: Pro- S a la r y .
videa, That the salary o f the Governor shall not exceed $17,500 a year,
together with necessary traveling and subsistence expenses, or per
diem allowance in lieu thereof w ithin the limitations prescribed by
T
law, while away from his official station upon official business.




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Personnel*

(c)
I t shall be the duty o f the Governor to comply with all orders
and directions which he receives from the B oard; as to all third per­
sons, all acts o f the Governor shall be conclusively presumed to be in
compliance with the orders and directions of the Board.
(d ) The Governor shall appoint such other personnel as may be
necessary to carry out the functions, powers, and duties vested in the
Farm Credit Administration. The Farm Credit Administration shall
consist of the Board, the Governor, and such other personnel as are
employed in carrying out the functions, powers, and duties vested
in the Farm Credit Administration. A ll functions, powers, and duties
of the Farm Credit Administration, except those herein conferred upon
the Board, shall be exercised and performed by the Governor and may
be exercised and performed by him through such officers and employees
o f the Farm Credit Administration as lie shall designate.
(e) The term of office o f the incumbent of the office of Governor
o f the Farm Credit Administration appointed before the effective date
o f this A ct and holding office on that date shall terminate on that
date and said office shall thereby become vacant: Provided , That if as
o f that date a Governor has not been appointed, and qualified, under
this A ct, the Secretary o f Agriculture shall designate an assistant to
the Secretaiy to serve as Acting Governor of the Farm Credit A dm in­
istration and such A cting Governor shall exercise and perform all
functions, powers, and duties vested in the Farm Credit Administra­
tion until the appointment and qualification o f a Governor as in this
A ct provided. The A cting Governor shall be subject to the powers of
the Board when the Board has been appointed and qualified.
RESPONSIBILITIES OF TH E BOABD

Report.

Skc. 6. It shall be the function and duty of the Board (1 ) to see
that the policies fixed by the Board hereunder are carried out; (2) to
require such reports as it deems necessary from the Governor and from
any o f the officials or corporations under the control or supervision of
the Farm Credit Administration; (3 ) to make an annual report to
Congress, including therein any recommendations o f amendments to
the laws relative to Federal agricultural credit; and (4) to exercise
general direction and supervision over the performance of all func­
tions, powers, and duties vested in the Governor when relating in the
judgment of the Board to matters of a broad and general supervisory,
advisory, or policy nature. It shall function as a unit without dele­
gating authority to individual members and shall not operate in an
administrative capacity; and all administrative powers, functions, and
duties of the Farm Credit Administration shall be exercised and per­
formed by the Governor.
OFFICES ABOLISHED AND FUNDS TRANSFERRED

Central Bank
for Cooperate,ves*

Federal Farm
Mortgage
CorP
»

S ec. 7. (a) The offices of the Land Bank Commissioner, Production
Credit Commissioner, Cooperative Bank Commissioner, and Intermediate Credit Commissioner are hereby abolished. The Governor
shall designate an officer or employee of the Farm Credit Administra­
lion to serve at the pleasure of the Governor as a member of the board
of directors of the Central Bank for Cooperatives, as chairman of
said board of directors, and as executive officer of said bank, in lieu
G the Cooperative Bank Commissioner. The Governor shall designate
f
an officer or employee of the Farm Credit Administration to serve at
the pleasure of the Governor as a member of the board of directors of
the Federal Farm Mortgage Corporation, in lieu of the Land Bank
Commissioner. The Federal Farm Mortgage Corporation and its
functions and activities are hereby transferred to the Farm Credit




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All 67 Stat. 394,

Administration and shall be administered therein under the general
direction and supervision thereof.
(b) Employees in the Department of Agriculture who are being
utilized on the effective date o f this A ct primarily for the performance
o f functions, powers, and duties heretofore or by this A ct vested in
the Farm Credit Administration, shall be transferred to the jurisdic­
tion and control o f the Farm Credit Administration in those instances
in which the Governor determines that they are qualified and necessary
to carry out the functions, powers, and duties o f the Farm Credit
Administration.
(c) A ll assets, funds, contracts, property, and records used and
employed in the execution of the functions, powers, and duties here­
tofore or by this A ct vested in the Farm Credit Administration are
hereby transferred to the jurisdiction and control of the Farm Credit
Administration.
(d ) So much o f the unexpended balances o f appropriations, allo­
cations, and other funds available or to be made available for salaries,
expenses, and all other administrative expenditures as the Director of
the Bureau o f the Budget shall determine for use in the execution o f
the functions heretofore or bv this A c t vested in the Farm Credit
Administration, shall be transferred to and vested in the Farm Credit
Administration.
(e) A ll unexpended balances o f appropriations, allocations, or other
funds, other than those mentioned in subsection (d ) o f this section,
available (including those available for the fiscal year ending June 30,
1953) for the Farm Credit Administration and/or for the Secretary
o f Agriculture on account o f the functions and activities o f Farm
Credit Administration, shall be transferred to the Farm Credit A d m in­
istration and shall remain available for the exercise o f the functions
and activities o f the Farm Credit Administration.
DELEGATIONS TO DISTRICT INSTITUTIONS

Sec. 8. The Farm Credit Administration is authorized and directed,
by order or rules and regulations, to delegate to a Federal land bank
such of the duties, powers, and authority o f the Farm Credit A d m in ­
istration with respect to and over Xational Farm Loan Associations,
their officers and employees, in the farm credit district wherein such
Federal land bank is located, as may be determined to be in the interest
of effective administration; and, in like manner, to delegate to a pro­
duction credit corporation such of the duties, powers, and authority
of the Farm Credit Administration with respect to and over produc­
tion credit associations, their officers and employees, in the farm credit
district wherein such production credit corporation is located, as may
be determined to be in the interest of effective administration; and, in
either case the duties, powers, and authority so delegated shall be
performed and exercised under such conditions and requirements and
upon such terms as the Farm Credit Administration may specify.
A n y Federal land bank or production credit corporation to which any
such duties, powers, or authority may be delegated is hereby authorized
and empowered to accept, perform, and exercise such duties, powers,
and authority as may be so delegated to it.
DIVISION OF COOPERATIVE MARKETING TRANSFERRED

S ec. 9. There is hereby transferred from the Farm Credit Admin­
istration to the jurisdiction and control of the Secretary of Agricul­
ture the Division of Cooperative Marketing (by whatever name now
called) authorized and created under and by virtue of an Act of
Congress of July 2, 1926 (Public, Numbered 450, Sixty-ninth Con­ 44 Stat. 802.




7 U C 451-457.
S

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All 67 Stat . 395.

gress), entitled “An A ct to create a Division of Cooperative Marketing
in the Department of Agriculture; to provide for the acquisition and
dissemination o f information pertaining to cooperation; to promote
the knowledge of cooperative principles and practices; to provide for
calling advisers to counsel with the Secretary of Agriculture on coop­
erative activities; to authorize cooperative associations to acquire,
interpret, and disseminate crop and market information, and for other
purposes”, together with all functions pertaining to the work and
services of such Division, its personnel, property (including office
equipment), assets, funds, contracts, and records used and employed
in the execution of its functions, powers, and duties, and so much of
the unexpended balances o f appropriations, allocations, and other
funds available or to be made available for salaries, expenses, and all
other administrative expenditures as the Director of the Bureau of
the Budget shall determine, for use in the execution of the functions,
powers, and duties of said Division.
FRANCHISE TAX PROVISIONS

39 Stat. 379.
12 U C 901,
S
902.

48 Stat. 259.
12 U C 11310.
S

48 Stat. 263.
12 U C 11341.
S

Sec. 10. Section 28 o f the Federal Farm Loan A ct, as amended, is
further amended by adding at the end thereof a new paragraph as
fo llow s:
“ Notwithstanding any other provision o f this A ct, in the case o f a
Federal land bank having outstanding capital stock held by the United
States during the whole or any part o f a fiscal year, saicl bank shall,
after complying with the reserve requirements o f the preceding para­
graphs o f this section and before declaring any dividends to share­
holders, pay to the United States a franchise tax equal to 25 per centum
o f its net earnings then remaining, not to exceed, however, a rate o f
return o f such Government capital calculated at a rate equal to the
computed average annual rate of interest on all public issues of public
debt obligations of the United States issued during the fiscal year end­
ing next before such tax is due, as certified to the Farm Credit A dm in­
istration by the Secretary o f the Treasury.”
Sec. 11. Section 6 o f the Farm Credit A ct of 1933 is amended by
adding at the end thereof a new paragraph as follow s:
“ (e) Each production credit corporation shall, at the end o f each
fiscal year (1) apply its earnings described in subsection (c) o f this
section in accordance with the provisions o f subsections (c) and (d ) of
this section; and (2) apply its earnings from all other sources, first,
to the payment o f any operating expenses for the year remaining
unpaid; second, to restore losses and impairment o f capital, if any,
o f the corporation; third, to the creation and maintenance of a surplus
equal to 25 per centum o f the paid-in capital o f the corporation;
fourth, to the payment o f 25 per centum o f its earnings from all
sources then remaining to the United States as a franchise tax, and
fifth, to the payment o f the remaining earnings into its surplus
account.”
S ec. 12. Section 36 o f the Farm Credit A ct o f 1933 is amended to
read as follow s:
“ The Central Bank for Cooperatives shall, at the end of its fiscal
year, apply the amount o f its earnings in excess o f operating expenses
during such fiscal year: First, to making up any losses incurred;
second, to the restoration o f the amount o f the impairment, if any,
o f capital and guaranty fund as determined by the chairman o f the
board; third, 25 per centum o f the remainder o f such excess o f earn­
ings shall be applied to the creation and maintenance of a surplus
equal to at least 25 per centum o f the amount o f the capital and
guaranty fu n d ; fourth, i f said bank shall have outstanding capital
stock held by the United States during the whole or any part o f the




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202

_____________ All 67 Stat. 396,
fiscal year, it shall next pay to the United States as a franchise tax,
a sum equal to 25 per centum of its net earnings then remaining, not
exceeding, however, a rate of return on such Government capital cal­
culated at a rate equal to the computed average annual rate o f interest
on all public issues of public debt obligations of the United States
issued during the fiscal year ending next before such tax is due, as
certified to the Farm Credit Administration by the Secretary o f
Treasury; and fifth, any sums remaining shall be carried into its sur­
plus account or devoted to the payment o f dividends, as may be deter­
mined by the chairman of the board. Subscribers to the guaranty fund
shall be entitled to dividends in the same amounts as the subscribers
to the stock. No rate o f dividend in excess o f 7 per centum per annum
shall be paid. Dividends on stock held by the Farm Credit Adm inis­
tration or the Governor thereof, when paid, shall be credited to the
revolving fund created under section 6 o f the Agricultural Marketing
A c t, as amended.”
Sec. 13. Section 42 o f the Farm Credit A ct o f 1933 is amended to
read as follow s:
“ The provisions o f section 35, as amended, and the provisions of
section 36, as amended, shall apply in the case of Banks for Cooperatives in the same manner and to the same extent as such provisions are
applicable to the Central Bank for Cooperatives, except that powers
conferred on the Chairman of the Board of the Central Bank for
Cooperatives shall be exercised by the Boards of Directors of the
Banks for Cooperatives, subject to the approval of the Farm Credit
Administration.”

46 stat. 14.
12 use H4ld*
48 stat. 264.
12 use li34d.
12 use 1134k,
H341.

MEMBERSHIP OF DISTRICT FARM CREDIT BOARDS

Sec. 14. Section 5 (b) of the Farm Credit A ct o f 1937 is amended 50 stat. 704.
to read as follow s:
12 use 640b.
“ (b) There shall be in each farm credit district a farm credit board
which shall be selected as hereinafter specified and shall be composed
o f seven members. Each farm credit board shall include in its title
the name o f the city in which the Federal land bank, Federal interme­
diate credit bank, production credit corporation, and regional bank
for cooperatives o f the district are located. Three o f the seven mem­
bers of said board shall be known as elected directors, o f whom one
shall be chosen by national farm loan associations, one shall be chosen
by production credit associations o f the district, and one shall be
chosen by cooperatives which are stockholders or subscribers to the
guaranty fund of the regional bank for cooperatives in the district.
Subject to the other provisions hereof, three o f the seven members
shall be known as district directors and shall be appointed by the
Governor o f the Farm Credit Administration by and with the advice
and consent o f the Federal Farm Credit Board. The seventh member
o f such board shall be known as director-at-large and shall be
appointed by the Governor o f the Farm Credit Administration by and
with the advice and consent of the Federal Farm Credit Board. No
person shall be eligible hereafter for nomination or appointment to
membership as an appointed member 011 said Board if such person
has within one year next preceding the commencement o f the term
been a salaried officer or employee o f the Farm Credit Administration,
or a salaried officer or employee of any corporation operating under
the supervision of the Farm Credit Administration. Each farm
credit board shall elect from its members a chairman and vice chair­
man, and shall appoint a secretary from within or without its member­
ship as it may see fit. The chairman, vice chairman, and secretary
shall each be elected for a term o f one year and until their successors
are elected and take office and the board shall elect such officers each




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All 67 Stat. 397.

12 use 640d*

L a w 202

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year. The chairman shall preside at all meetings and the vice chair­
man shall preside in the absence or disability of the chairman. The
board may, in the absence of both the chairman and vice chairman,
elect a member to act as chairman pro tempore.”
S ec. 15. Section o of the Farm Credit A ct of 1937 is amended by
striking out the entire text of subdivision (d) thereof and inserting
in lieu thereof the follow in g:
“ (d ) (1) The member o f the farm credit board o f each farm credit
district known as the ‘third district director’, who is in office on the
effective date of the Farm Credit A ct of 1953, shall serve as such until
his term o f office expires. Thereafter, there shall be no member o f
the district farm credit board to be known as the ‘ third district
director’.
“ (2) Notwithstanding the above provision with respect to the
appointment o f district directors, one additional member of said board
shall be elected by each o f the groups aforesaid (national farm loan
associations and borrowers through agencies, production credit asso­
ciations, and cooperatives w hich are stockholders or subscribers to the
T
guaranty fund of the regional bank for cooperatives of the district),
and serve in lieu o f a district director, under the following circum­
stances and conditions:
“ ( A ) Whenever, as determined by the Farm Credit Administra­
tion, the sum o f the capital stock held by national farm loan associa­
tions, surplus, and reserves o f a Federal land bank shall equal or
exceed 6G% per centum o f the total of the capital stock, surplus, and
reserves of such bank as of the date three months before the expiration
of the term o f office of the district director (or third district director)
whose term next expires, the successor to such director shall be elected
by the national farm loan associations of the district in the manner
herein provided, shall be known as an elected director, and successors
to that office shall be so elected and known from term to term while
such conditions obtain: Provided , That if and when, as determined by
the Farm Credit Administration, such conditions do not obtain as o f
the date three months before the expiration of the term of office of
any director so elected under the provisions o f this subparagraph, the
successor to such director shall be appointed by the Governor of the
Farm Credit Administration by and with the advice and consent of
the Federal Farm Credit Board, shall be known as a district director,
and successors to that office shall be so appointed and known from
term to term for such terms as appointment is not precluded by the
election o f an additional director by one o f tlie groups aforesaid as
herein provided: And provided further, That such national farm loan
associations shall again and from time to time elect one additional
director as aforesaid i f and when the required conditions named in
this subparagraph shall be determined to obtain as aforesaid.

“(B) Whenever, as determined by the Farm Credit Administration,
the sum of the capital stock held by persons other than the production
credit corporation of the district, surplus, and reserves of the produc­
tion credit associations (collectively) of a farm credit district shall
equal or exceed 66% per centum of the total of the capital stock,
surplus, and reserves of the production credit associations (collec­
tively) of said district as of the date three months before the expiration
of the term of office of the district director (or third district director)
whose term next expires?the successor to such director shall be elected
by the production credit associations of the district in the manner
herein provided, shall be known as an elected director, and successors
to that office shall be so elected and known from term to term while
such conditions obtain: Provided, That, if and when, as determined by
the Farm Credit Administration, such conditions do not obtain as of
the date three months before the expiration of the term of office of




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___________ All 67 Stat. 398.

any director so elected under the provisions of this subparagraph,
the successor to such director shall be appointed by the Governor o f
the Farm Credit Administration by and with the advice and consent
o f the Federal Farm Credit Board, shall be known as a district direc­
tor, and successors to that office shall be so appointed and known from
term to term for such terms as appointment is not precluded by the
election o f an additional director by one of the groups aforesaid as
herein provided: And provided further, T hat such production credit
associations shall again and from time to time elect one additional
director as aforesaid, if and when the required conditions named in
this subparagraph shall be determined to obtain as aforesaid.
“ (C ) Whenever, as determined by the Farm Credit Administration,
the sum o f the capital stock and subscriptions to the guaranty fund
held by cooperatives which are stockholders or subscribers to the guar­
anty fund of a regional bank for cooperatives, surplus and reserves
o f said bank shall equal or exceed 66% per centum of the total capital
stock, subscriptions to the guaranty fund, surplus and reserves o f said
bank as o f the date three months before the expiration of the term o f
office o f the district director (or third district director) whose term
next expires, the successor to such director shall be elected by the
cooperatives which are stockholders or subscribers to the guaranty
fund o f said bank in the manner herein provided, shall be known as
an elected director, and successors to that office shall be so elected and
known from term to term while such conditions obtain: Provided ,
That if and when, as determined by the Farm Credit Administration,
such conditions do not obtain as of the date three months before the
expiration of the term of office o f any director so elected under the
provisions of this subparagraph, the successor to such director shall
be appointed by the Governor o f the Farm Credit Administration by
and with the advice and consent of the Federal Farm Credit Board,
shall be known as a district director, and successors to that office shall
be so appointed and known from term to term for such terms as
appointment is not precluded by the election of an additional director
by one of the groups aforesaid as herein provided: Provided further,
'fliat such cooperatives which are stockholders or subscribers to the
guaranty fund of said bank shall again and from time to time elect
one additional director as aforesaid if and when the required condi­
tions named in this subparagraph shall be determined to obtain as
aforesaid: Provided further, That at no time and under no conditions
shall there be in office less than one or more than two members o f said
board who are serving by election o f any one of the groups aforesaid
(national farm loan associations and borrowers through agencies,
production credit associations, and cooperatives which are stock­
holders or subscribers to the guaranty fund of the regional bank for
cooperatives o f the district) : And provided further, That if two or
more of said groups shall, under the terms and provisions hereof,
become qualified to elect an additional director pending the expiration
o f the term of office of the district director (or third district director)
whose term next expires, preference shall be given, first to national
farm loan associations and borrowers through agencies, next to pro­
duction credit associations, and next to cooperatives which are stock­
holders or subscribers to the guaranty fund of the regional bank for
cooperatives, to elect an additional director as herein provided as the
terms of office o f district directors, including the third district director
if he be still in office, expire.
“ (3 ) In any district which includes more than one State no person
shall be eliirikle to be elected by any group if he is a resident o f the
same Sta te'a s the other member elected by such group and then
serving. I f two directors are to be elected at the same election in any




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67 S t a t .

Ante, p. 396.
Ante, p. 397.

3

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such district by any group, the election of the director to be elected
by such group under section 5 (b) shall be first determined, and the
person receiving the most votes for election under section 5 (d) (2)
who is not a resident of the same State as the director elected under
section 5 (b) shall be declared elected.”
Sec. 16. (a) A ny other provisions o f law to the contrary notwith­
standing after the effective date of this A ct any production credit
association may, with the approval of the President o f the Production
Credit Corporation and of the Farm Credit Administration, issue nonvoting preferred stock, to be known as class C stock, which m ay be pur­
chased and held by production credit corporations and by investors:
. Provided, That the issuance o f such stock shall be authorized by vote
o f not less than two-thirds o f the outstanding shares o f class A stock
o f the association (other than shares held by the Production Credit
Corporation) by the holders thereof in person or by proxy and by
vote o f not less than two-thirds o f the outstanding shares o f class B
stock o f the association by the holders thereof in person or by proxy;
and for this purpose holders of class A stock (other than the
Production Credit Corporation) and holders o f class B stock shall be
entitled to one vote for each share o f stock held by them.
(b) Such class C stock of such associations shall be divided into
shares o f $5 each. The resolution o f the stockholders authorizing
the issuance o f class C stock and every certificate of class C stock
issued shall state and express the privileges, restrictions, limitations,
and qualifications affecting said stock, and the total amount o f the
authorized issue to which it belongs.
(c) Such class C stock may (1) be m
ade subject to redemption in

such manner, at such time or times, and at such price or prices; (2)
be given such preferences as to net assets upon dissolution of the
corporation, whether voluntary or involuntary; (3) be given the
right to receive such cumulative or noncumulative aividends payable
quarterly, semiannually, or annually, and payable as a whole or in
part before any dividend shall be set apart for or paid on class A and
class B stock; and (4 ) be made subject to such other restrictions, lim­
itations, and qualifications; as shall be stated and expressed in the
resolution of the stockholders authorizing the issuance thereof and
in the face of the stock certificates.
APPROPRIATIONS AND EXPENDITURES

S ec. IT. (a) There are authorized to be appropriated such sums as
may be necessary or appropriate for administering the provision o f
this A c t : Provided , T h at the cost of examination and of administra­
tive supervision of the Farm Credit Administration shall continue to
be supported by assessments against institutions supervised by the
Farm Credit Administration as provided in the Department o f A g r i58 sta t. 740, culture Organic Act o f 1944.
12 use 8 3 2 .
(b) Farm Credit Administration m ay, within the limits o f funds
available therefor, and subject to provisions o f law generally appli­
cable to Government agencies, make necessary expenditures for per­
sonnel services and rent at the seat o f government and elsewhere;
contract stenographic reporting services; purchase and exchange of
lawbooks, books o f reference, periodicals, newspapers, expenses of
attendance at meetings and conferences; purchase, operation, and
maintenance, at the seat o f government and elsewhere, o f motorpropelled passenger-carrying vehicles and other vehicles; printing
and binding; and for such other facilities and services as it may from
time to time find necessary for the proper administration o f this Act.
Effeotive
Sec. 18. This A c t shall take effect one hundred and twenty days
date.




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_______All 6 7 Stat. 400.
after the date of its enactment: Provided, however\ 1'hat immediately
following the enactment o f this Act the Farm Credit Administration
shall proceed with the designation of nominees as provided in section
4 (a) hereof and the members of the Federal Farm Credit Board Ante, p. 390.
shall be appointed or designated sufficiently in advance of the effective
date o f this A ct to enable said Board to prepare to enter upon the dis­
charge of its duties upon the effective date o f this A c t ; and after the
effective date o f this Act, the compensation and expenses o f the Board
members shall be paid, as provided herein, from the date on which
their appointments became effective, out of any funds available for
the payment of administrative expenses of the Farm Credit Adm inis­
tration.
S ec. 19. A ll Acts 01* parts of Acts inconsistent with the provisions of
this A ct are hereby repealed to the extent of such inconsistency.
S ec. 20. (a) I f any provision of this Act, or the application thereof Separability
to any person or circumstances, is held invalid, the remainder of the olause.
A ct, and the application o f such provisions to other persons or circum­
stances, shall not be affected thereby.
(b) The right to alter, amend, or repeal this A ct is hereby expressly
reserved.

A p p r o v e d A u g u s t 6, 1953.




U. s . GOVERNMENT PRINTING OFFICE : 1953 O - 37195