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FARM CREDIT ADMINISTRATION
Circular No. 20-A

Agricultural Short Term and Intermediate Credit, as
Compiled in Chapter 7, Title 12 of the
United States Code
As Amended to February 1, 1934

Farm Credit Administration
Federal Intermediate Credit Banks
Production Credit Corporations
Production Credit Associations
Banks for Cooperatives
Miscellaneous

IS S U E D B Y T H E

FARM CREDIT ADMINISTRATION
F E B R U A R Y 1334

U N IT E D S T A T E S
G O V E R N M E N T P R IN T IN G O FFIC E
W A S H I N G T O N : 1934




EDITORIAL NOTE
This circular contains all general provisions, by acts of Congress and
Executive Order, relating to the establishment and operation of the
Farm Credit Administration.
This circular also contains all provisions of law relative to the
organization and operation of the Federal intermediate credit banks,
production credit corporations, production credit associations, and
banks for cooperatives, together with certain miscellaneous provisions
of law relative to short term and intermediate credit.
The provisions of the acts of Congress and of the Executive Order
contained herein are set forth in accordance with the codification
thereof in chapter 7 of Title 12 of the official Code of Laws of the
United States of America in Force December 26, 1926, and supple­
ments thereto. Through the courtesy of the editor in charge of the
Code, it has been possible to include herein the provisions of an act
of January 31, 1934, in the form which will be used in the supple­
ment to Title 12 of the Code.
In the right margin of this circular, throughout Subchapter III,
opposite each section which was incorporated in Title II of the
Federal Farm Loan Act, either originally or by amendment to that
title, is printed the number of the Federal Farm Loan Act section in
which the provisions are contained.
The sections and subchapters into which this circular is divided
are numbered to correspond with the same material in the 7th
chapter of Title 12 of the Code. At the end of each section is a
parenthetical reference to the act of Congress from which the pro­
visions were derived, and to any subsequent amendatory acts.
Wherever a section has been affected by the Executive Order which
is set forth at the beginning of this circular, reference to the Order
is made in the parenthetical statement at the end of the section.




(in)

CONTENTS

F A R M C R E D IT A D M IN IS T R A T IO N , IN T R O D U C T O R Y

Page

Executive Order Reorganizing Agricultural Credit Agencies of the United
States_______________________________________________________________________
General Administrative Provisions:
Farm Credit Administration; provisions relating to organization____
Land Bank Commissioner; functions under Executive Orders________
Commissioners in Farm Credit Administration; designation; appoint­
ment; salaries and expenses__________________________________________
Governor of Farm Credit Administration; supplementary grant of
powers__________________________________________________________________
Seal of Farm Credit Administration____________________________________

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FE D E R A L IN T E R M E D IA T E C R E D IT B A N K S (SU B C H A P T E R III, C H A P T E R 7,
TITLE 12, U .S.C.)

Organization:
Number, names, and charters of banks_________________________________
Location; directors, officers, and employees____________________________
Corporate powers; suits by or against_________________________________
Fiscal agents for United States_________________________________________
Insolvency; receivership________________________________________________
Application for charter__________________________________________________
Discounts and Loans:
Lending powers; purchase and sale of debentures of intermediate
credit banks; loans to cooperative associations__________ »__________
Purchase or discount of paper from or for national banks, State banks,
trust companies, savings institutions, or corporations making loans
for agricultural or livestock purposes; limitations upon amount____
Maturity and sale of loans, advances, or discounts. ___________________
Interest rates or discount charges; rediscount of paper of other inter­
mediate credit banks__________________________________________________
Issue of Debentures:
Collateral trust debentures or similar obligations; security for; matur­
ity; limitation respecting amount____________________________________
Applicability of provisions of subchapter I; regulations governing
collateral and handling thereof; interest rates_______________________
Assumption of liability by Government prohibited; recital necessary
to be included_________________________________________________________
Discount Rates:
Establishment and approval of; limitation on_________________________
Limitation on interest rate charged original borrower on paper dis­
counted with bank____________________________________________________
Purchase by bank of debentures issued by it__________________________
Capital Stock:
Amount, shares; subscriptions to by United States; assessments
against other banks to restore capital impairment of one bank;
subscriptions to capital and surplus by Governor of Farm Credit
Administration________________________________________________________
Application of Earnings:
Salaries and expenses of Federal Farm Loan Bureau; assessment
against banks for proportionate share________________________________
Net earnings; surplus fund; franchise tax; disposition by United
States of sums received from net earnings of banks and from sur­
plus remaining after liquidation of banks____________________________
Liability on Debentures or Other Such Obligations:
Liability of one bank for debentures issued by other banks; agree­
ments by banks for transfer of funds for debenture payments_______
Examinations and Reports:
Reports of condition of banks and other lending institutions redis­
counting with credit banks; examinations and audits of credit
banks___________________________________________________________________




(IV)

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CONTENTS
E xam inations and R eports— Continued.
Submission and publication of reports of condition b y ba n k s__________
Investigations and reports by land bank appraisers and examiners for
credit ban ks________________________________________________________________
Cost of exam inations; assessments against organizations investigated_
Rules and Regulations:
Authority of Farm Credit A dm inistration________________________________
T ax Exem ption:
Capital and income; debentures instrumentalities of G o v e rn m e n t-_
Penalty Provisions:
Offenses b y officers, employees, or agents; em bezzlem ent; misapplica­
tion of funds; unauthorized m aking, issuing, or assigning instru­
m ents; false entries________________________________________________________
False statem ents to banks___________________________________________________
Overvaluation of property offered as security for loan ____________________
Offenses b y exam iners_______________________________________________________
Offenses by officers, em ployees, or agents of banks; receiving fees or
gifts__________________________________________________________________________
Forgery, counterfeiting, and like offenses relating to obligations of
ba n k s________________________________________________________________________
False representations as to debentures or other obligations of b a n k s.
Unlaw ful use of words “ Federal intermediate credit b a n k ” ___________
Charging of unauthorized fees or commissions by ban ks_______________

Page
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PRODUCTION CREDIT CORPORATIONS AND PRODUCTION CREDIT
ASSOCIATIONS (SUBCHAPTER IV, CHAPTER 7, TITLE 12, U.S.C.)
Production Credit Corporations:
E stablishm ent; num ber; location__________________________________________
Charters and by law s________________________________________________________
Capital stock; am ount; value of shares; am ount and subscription for
initial stock; paym ents for stock subscribed on behalf of United
S tates________________________________________________________________________
Purchase of stock in production credit associations; class of stock to
be purchased and held; am ount of stock; retirement of stock held
by corporations; application of earnings on stock held by corpora­
tions_________________________________________________________________________
Production Credit Associations:
Organization; articles of association; charters; by law s; powers of
governor respecting associations_________________________________________
Capital stock; value of shares; classes of stock; voting rights;
lim itation of transfer of class B stock; exchange of class B stock
upon holder ceasing to be borrower; dividends; ownership of
stock as entitling credit corporation to approve or remove officers
of association_______________________________________________________________
Application of earnings; losses in excess of reserve account; restor­
ation of capital im pairm ent; reserve account; guaranty fund;
dividends____________________________________________________________________
Loans to farmers; terms and conditions__________________________________
Borrowing from and rediscounting paper with Federal intermediate
banks; limitation on power to borrow from or rediscount paper
with other institutions____________________________________________________
R evolving F u nd ____________________________________________________________________

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REGIONAL BANKS FOR COOPERATIVES AND CENTRAL BANK FOR COOPER.
ATIVES (SUBCHAPTER V, CHAPTER 7, TITLE 12, U.S.C.)
Regional Banks:
E stablishm ent; num ber; location_______________________________________________31
Charters and bylaw s_____________________________________________________ _________31
Capital stock ; am ou n t; value of shares; paym ents from revolving
fund for stock purchased by G overnm ent___________________________________31
Lending pow er________________________________________________________________ ____ 32
Ownership of stock in banks by borrowing associations; earnings
and reserves of banks_____________________________________________________ ____ 32
R etirem ent of stock held by G overnm ent________________________________ ____ 32




(V)

CONTENTS
Central B ank:
Page
E stab lishm ent; location_____________________________________________________
Board of directors____________________________________________________________
Powers of board of directors; chairman of board________________________
Capital stock __________________________________________________________________
Lending power; prevention of duplication of effort on the part of
Central Bank and Banks for Cooperatives_____________________________
Ownership of stock by associations borrowing from bank; paym ent
into bank's guaranty fund by associations not authorized to pur­
chase stock__________________________________________________________________
Earnings and reserves; guaranty fund; surplus; dividends to stock­
holders and subscribers to guaranty fu n d; application of dividends
on Governm ent-ow ned stock_____________________________________________
Debentures; am ount; security; preparation and issue; custody of
collateral____________________________________________________________________

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PROVISIONS COMMON TO PRODUCTION CREDIT CORPORATIONS, PRODUC­
TION CREDIT ASSOCIATIONS, REGIONAL AND CENTRAL BANKS FOR COOPER­
ATIVES (SUBCHAPTER VI, CHAPTER 7, TITLE 12, U.S.C.)
General corporate pow ers
_____36
E xam in ation s; assessments against corporations for cost of ex a m in a tio n s._
37
Fiscal agents of U nited S tates
_____ 37
T a x exem ption ; realty and tangible personalty as subject to taxation*
term ination of tax exemption after retirement of Governm ent-ow ned
sto ck ______________________________________________________________________________ _____ 38
Offenses and penalties
_____ 38
R eceivership; voluntary liqu id ation_________________ _
_____ 41
Lim itation on compensation payable to director, officer, or em ployee
_____ 41
AGRICULTURAL MARKETING ACT (SUBCHAPTER VII, CHAPTER 7, TITLE 12,
U.S.C.)
H istorical note_____________________________________________________________________
d ecla ra tio n of p olicy; effective merchandising of agricultural com m odities;
speculation; cooperative m arketing; surpluses; administration of sub­
ch apter___________________________________________________________________________
Federal Farm B oard______________________________________________________________
General powers of Farm Credit A dm inistration_______________________________
Special powers of adm inistration________________________________________________
R evolving fu n d ____________________________________________________________________
Loans to cooperative associations_______________________________________________
Miscellaneous loan provisions____________________________________________________
Stabilization corporations________________________________________________________
Avoidance of duplication; cooperation with other governm ental establish­
m ents; obtaining information and d ata ; cooperation with States, T er­
ritories, and agencies or subdivisions thereof; indicating research prob­
lem s; transfer of offices, functions, e tc________________________________________
E xam ination of books and accounts; lim itation on purpose of exam ination
respecting expenditures from revolving fu n d -----------------------------------------------Miscellaneous provisions__________________________________________________________

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REGIONAL AGRICULTURAL CREDIT CORPORATIONS (SUBCHAPTER VIII,
CHAPTER 7, TITLE 12, U.S.C.)
Historical note_____________________________________________________________________
Regional agricultural credit corporations; creation; capital; m anagem ent;
loans; rediscounts; supervision___________________________________________ #
—
Reduction of capital stock of regional agricultural credit corporation;
revolving fund from stock proceeds__________________________________________




(VI)

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LAWS PERTAINING TO AGRICULTURAL
SHORT-TERM AND INTERMEDIATE
CREDIT
As amended to February 1, 1934

As Compiled in Chapter 7 of Title 12 of the United
States Code

FARM CREDIT ADMINISTRATION
FEDERAL INTERMEDIATE CREDIT BANKS
PRODUCTION CREDIT CORPORATIONS
PRODUCTION CREDIT ASSOCIATIONS
BANKS FOR COOPERATIVES
MISCELLANEOUS

FARM CREDIT ADMINISTRATION
INTRODUCTORY
E x e c u t i v e O r d e r N o . 6084
REORGANIZING AGRICULTURAL CREDIT AGENCIES
OF THE UNITED STATES

Whereas sections 401 and 403 of Title IV of Part
II of the Legislative Appropriation Act, fiscal year
1933, as amended by an act of Congress approved
March 3, 1933, provide:
S e c . 401. The Congress hereby declares that a
serious emergency exists by reason of the general
economic depression; that it is imperative to reduce
drastically governmental expenditures; and that
such reduction may be accomplished in great meas­
ure by proceeding immediately under the provisions
of this title.
Accordingly, the President shall investigate the
present organization of all executive and adminis­
trative agencies of the Government and shall de­
termine what changes therein are necessary to
accomplish the following purposes:
(a) To reduce expenditures to the fullest extent
consistent with the efficient operation of the Gov­
ernment;
(b) To increase the efficiency of the operations
of the Government to the fullest extent practicable
within the revenues;
(c) To group, coordinate, and consolidate execu­
tive and administrative agencies of the Govern­
(1)

12 U.S.C.




AGRICULTURAL CREDIT LAWS

ment, as nearly as may be, according to major
purposes;
(d) To reduce the number of such agencies by
consolidating those having similar functions under
a single head, and by abolishing such agencies
and/or such functions thereof as may not be neces­
sary for the efficient conduct of the Government;
(e) To eliminate overlapping and duplication of
effort; and
(f) To segregate regulatory agencies and func­
tions from those of an administrative and executive
character.
S ec . 403. Whenever the President, after investi­
gation, shall find and declare that any regrouping,
consolidation, transfer, or abolition of any execu­
tive agency or agencies and/or the functions thereof
is necessary to accomplish any of the purposes set
forth in section 401 of this title, he may by Execu­
tive order—
(a) Transfer the whole or any part of any execu­
tive agency and/or the functions thereof to the
jurisdiction and control of &ny other executive
agency;
(b) Consolidate the functions vested in any exec­
utive agency; or
(c) Abolish the whole or any part of any execu­
tive agency and/or the functions thereof; and
(d) Designate and fix the name and functions of
any consolidated activity or executive agency and
the title, powers, and duties of its executive head;
except that the President shall not have authority
under this title to abolish or transfer an executive
department and/or all the functions thereof.
Now, therefore, pursuant to the authority so
vested in me, and after investigation, it is found
and declared that the following changes in execu­
tive agencies and the functions thereof are necessary
to accomplish the purposes set forth in section 401
above recited, and it is hereby ordered that:
(1) The functions of the Secretary of Agriculture
as a member of the Federal Farm Board, and the
offices of the appointed members of the Federal
Farm Board, except the office of the member des­
ignated as chairman thereof, are abolished.
(2) The name of the Federal Farm Board is
changed to the Farm Credit Administration.
(3) The name of the office of Chairman of the
Federal Farm Board is changed to Governor of the
Farm Credit Administration, and he is vested with
all the powers and duties of the Federal Farm
Board.

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12 U.S.C.

AGRICULTURAL. CREDIT LAWS

(4) The functions of the Secretary of the Treas­
ury as a member of the Federal Farm Loan Board,
and the offices of the appointed members of the
Federal Farm Loan Board, except the office of the
member designated as farm loan commissioner,
are abolished, and all the powers and functions 01
the Federal Farm Loan Board are transferred to and
vested in the farm loan commissioner, subject to
the jurisdiction and control of the Farm Credit
Administration as herein provided.
(5) There are transferred to the jurisdiction and
control of the Farm Credit Administration:
(a)
The Federal Farm Loan Bureau and the
functions thereof ; together with the functions of the
Federal Farm Loan Board, including the functions
of the Farm Loan Commissioner;
(ib) The functions of the Treasury Department
and the Department of Agriculture, and the Secre­
taries thereof, under Executive authorizations to
give aid to farmers, dated July 26, 1918, and any
extensions or amendments thereof;
(c) The functions of the Secretary of Agriculture
under all provisions of law relating to the making
of advances or loans to farmers, fruit growers,
producers and owners of livestock and crops, and
to individuals for the purpose of assisting in forming
or increasing the capital stock of agriculturalcredit corporations, livestock-loan companies, or
like organizations, except Public Resolution No. 74,
Seventieth Congress, approved December 21, 1928,
providing for the Puerto Rican Hurricane Reliei
Commission ;
(d) The Crop Production Loan Office and the
Seed Loan Office of the Department of Agriculture,
and the functions thereof;
(e) The functions of the Reconstruction Finance
Corporation and its Board of Directors relating to
the appointment of officers and agents to manage
regional agricultural credit corporations formed
under section 201 (e) of the Emergency Relief and
Construction Act of 1932; relating to the establish­
ment of rules and regulations for such management;
and relating to the approval of loans and advances
made by such corporations and of the terms and
conditions thereof.
(6) The functions vested in the Federal Farm
Board by section 9 of the Agricultural Marketing
Act are abolished, except that such functions shall
continue to be exercised to such extent and for such
time as may be necessary to permit the orderly
winding up of the activities of stabilization corpo­
rations heretofore recognized under authority of
33546°— 34------ 2

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12 U.S.C.




AGRICULTURAL CREDIT LAWS

such section, and the governor of the Farm Credit
Administration shall take appropriate action for
winding up at the earliest practicable date the
activities of such corporations and all affairs related
to the exercise of such functions.
(7) The records, property (including office equip­
ment), and personnel used and employed in the
execution of the functions hereinbefore transferred
are transferred to the jurisdiction and control of
the Farm Credit Administration.
(8) The sum of $2,000,000 of the unexpended
balances of appropriations made to the Federal
Farm Board by Public Resolutions No. 43 and No.
61 of the Seventy-second Congress shall be im­
pounded and returned to the Treasury, which sum
shall be in addition to the other savings to be
effected by the Farm Credit Administration as a
result of this order.
(9) The unexpended balances of appropriations
to the Secretary of Agriculture, the Federal Farm
Loan Bureau, and the Federal Farm Board for
salaries, expenses, and all other administrative
expenditures in the execution of the functions herein
vested in the Farm Credit Administration shall be
transferred to and vested in the Farm Credit Ad­
ministration as a single fund for its use for salaries,
expenses, and all other administrative expenditures
for the execution of any or all of such functions
without restriction as to the particular functions
for the execution of which the same were originally
appropriated. All other appropriations, allot­
ments, and other funds available for use in connec­
tion with the functions and executive agencies
hereby transferred and consolidated are hereby
transferred to and vested in the Farm Credit Ad­
ministration, and shall be available for use by it,
for the same purposes as if the Farm Credit Admin­
istration were named in the law or authority pro­
viding such appropriations, allotments, or other
funds.
(10) All power, authority, and duties conferred
by law upon any officer, executive agency, or head
thereof, from w^hich or from whom transfer is here­
inbefore made, in relation to the executive agency
or function transferred, are transferred to and
vested in the Governor of the Farm Credit Admin­
istration.
(11) The Governor of the Farm Credit Admin­
istration is directed to dismiss, furlough, transfer,
or make other appropriate disposition of such of
the officers and employees under his jurisdiction and

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12 U.S.C,

AGRICULTURAL CREDIT LAWS

control as are not required for the proper execution
of the functions of the Farm Credit Administration.
(12) The Governor of the Farm Credit Admin­
istration is authorized to execute any and all func­
tions and perform any and all duties vested in him
through such persons as he shall by order designate
or employ.
(13) The Governor of the Farm Credit Adminis­
tration, by order or rules and regulations, may
consolidate, regroup, and transfer offices, bureaus,
activities, and functions in the Farm Credit Admin­
istration, so far as may be required to carry out the
purposes to which this order is directed, and may
fix or change the names of such offices, bureaus,
and activities and the duties, powr
ers, and titles of
their executive heads.
This order shall take effect upon the sixty-first
calendar day after its transmission to Congress
unless otherwise determined in accordance with the
provisions of section 407 of the act cited above, as
amended.
FRANKLIN D. ROOSEVELT.
T

he

W

h it e

H

ouse,

March 27, 1938.

GENERAL ADMINISTRATIVE PROVISIONS

§ 636




Farm Credit Administration; provisions relating
to organization.— The Governor of the Farm Credit
Administration is authorized, in carrying out the
powers and duties now or hereafter vested in him
or the Farm Credit Administration by law or under
any Executive order made under title IV of part II
of the Legislative Appropriation Act of 1933, as
amended, to establish, and to fix the powers and
duties oi, such divisions, agencies, corporations,
and instrumentalities as he may deem necessary to
the efficient functioning of the Farm Credit Ad­
ministration and the successful execution of the
powers and duties so vested in the Governor and
the Farm Credit Administration. This section
shall not be construed to restrict the authority of
the President under title IV of such Act, as
amended: Provided, That no salary or compensa­
tion shall be paid to any officer, agent, or other per­
son employed under this section in excess of $10,000
per annum (May 12, 1933, c. 25, § 40, 48 Stat. 31).

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12 U.S.C.

AGRICULTURAL CREDIT LAWS

§ 637

Land Bank Commissioner; functions under
Executive Orders.—If and when any Executive

Order heretofore transmitted to the Congress pur­
suant to title IV of part II of the Legislative Appro­
priation Act of 1933, as amended, shall become
effective, all functions, powers, authority, and
duties conferred upon or vested in the Land Bank
Commissioner by the Emergency Farm Mortgage
Act of 1933 [sections 723, 771 {seventh) and (twelfth),
823 (note), 963a, 991 (second paragraph), and
1016-1019 of this chapter] shall be held and exer­
cised by him subject to all the terms and conditions
in any such Executive order the same as if such
functions, powers, authority, and duties were spe­
cifically named in such Executive order or orders
(May 12, 1933, c. 25, § 39, 48 Stat. 31; June 16,
1933, c. 98, § 80 (a), 48 Stat. 273).
§ 638

Commissioners in Farm Credit Administration;
designation; appointment; salaries and expenses—
(a) Land Bank Commissioner.—After June 16,

1933, the office of Farm Loan Commissioner shall
be known as the office of the Land Bank Commis­
sioner and the Farm Loan Commissioner shall be
known as the Land Bank Commissioner. The pro­
visions of section 653 of this chapter, prescribing a
term of office of eight years, shall not apply to
incumbents hereafter appointed to the office of
Land Bank Commissioner.
See Sections 652-655 of this chapter, for provisions relative to eligibility,
appointm ent, salary, traveling expenses, etc., of Com m issioner.

(b)
Production Credit Commissioner; Coopera­
tive Bank Commissioner ;
Intermediate Credit
Commissioner.—There shall be in the Farm Credit

Administration three commissioners who shall be
known, respectively, as the Production Credit Com­
missioner, the Cooperative Bank Commissioner,
and the Intermediate Credit Commissioner. Such
commissioners shall be appointed by the President,
by and with the advice and consent of the Senate.
They shall receive an annual salary of $10,000, pay­
able monthly, together with actual necessary trav­
eling expenses. Such commissioners shall perform
such duties as may be assigned to them by law or
by the governor of the Farm Credit Administration
(June 16, 1933, c. 98, § 80, 48 Stat. 273).
§ 639




Governor of Farm Credit Administration; sup­
plementary grant of powers.—The authority and

powers conferred upon the governor under the
Farm Credit Act of 1933 [subchapters IV, V, and VI
6

12U.S.C.

AGRICULTURAL CREDIT LAWS

FJ’J^Acrti

of this chapter] shall not be construed to be in sub­
stitution for authority and powers conferred upon
him under existing law but shall be construed to be
supplementary to such authority and powers (June
16, 1933, c, 98, § 82, 48 Stat. 273).
§ 640

Seal of Farm Credit Administration.—The Farm
Credit Administration shall have a seal, as adopted
by the governor, which shall be judicially noticed
(June 16, 1933, c. 98, § 85, 48 Stat. 273).
E d i t o r i a l N o t e .— Subchapters I, II, and II-A of Chapter
7 of Title 12 of the United States Code are not included in
this circular, since [they pertain to farm mortgage loans.
These subchapters are contained in Farm Credit Adminis­
tration Circular No. 20.

SUBCHAPTER III— FEDERAL INTERMEDIATE
CREDIT BANKS
H IS T O R IC A L N O T E

The provisions of this subchapter relative to Federal inter­
mediate credit banks constitute Title II of the “ Federal
Farm Loan A c t” (July 17, 1916, chapter 245, Thirty-ninth
Statutes, page 360). See section 641 of this chapter. This
Act was amended on March 4, 1923 (chapter 252, Forty-sec­
ond Statutes, page 1454), by the addition of a second title
relative to Federal intermediate credit banks, the provisions
of which, as amended, are included in this subchapter. The
office of Intermediate Credit Commissioner was created by
the Act of June 16, 1933. (See section 638, under “ Intro­
ductory” , at the beginning of this chapter.)

ORGANIZATION

§ 1021

Number, names, and charters of banks.—The §201 (a)
Farm Credit Administration shall have power to
grant charters for twelve institutions to be known
and styled as “ Federal intermediate credit banks ”
(July 17, 1916, c. 245, § 201 (a); Mar. 4, 1923, c.
252, § 2, 42 Stat. 1454; Mar. 27, 1933, Ex. Or. 6084.)
“ Farm Credit Administration” mentioned in the text was substituted
for “ Federal Farm Loan Board” pursuant to the Executive Order cited
thereto, which is set out in full at the beginning of this chapter.

§ 1022




Location; directors, officers, and employees.— § 201(b)

Such institutions shall be established in the same
cities as the twelve Federal Land Banks. The di­
rectors of the several Federal Land Banks shall be
ex officio directors of the several Federal Interme­
diate Credit Banks hereby provided for and shall
have power, subject to the approval of the Gov­
ernor of the Farm Credit Administration, to em­
7

12 Ü.S.C.

AGRICULTURAL CREDIT LAWS

FJ\L. Act

ploy and fix the compensation of such officers and
employees of such Federal Intermediate Credit
Banks as may be necessary to carry on the busi­
ness authorized by this subchapter (July 17,1916, c.
245, § 201 (b); Mar. 4, 1923, c. 252, § 2, 42 Stat.
1454; June 16, 1933, c, 98, § 76 (a), 48 Stat. 271).
§ 1023

Corporate powers; suits by or against.—Each § 201(c)
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 (July 17, 1916, c.
245, § 201 (c); Mar. 4, 1923, c. 252, § 2, 42 Stat.
1454).

§ 1024

Fiscal agents for United States.—Federal inter- § 201(d)
mediate 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 (July 17, 1916, c.
245, § 201 (d); Mar. 4, 1923, c. 252, § 2, 42 Stat.
1454).

§ 1025

Insolvency; receivership.—Upon default of any § 201(e)
obligation any Federal intermediate credit bank
may be declared insolvent and placed in the hands
of a receiver by the Farm Credit Administration,
and proceedings shall thereupon be had in accord­
ance with the provisions of sections 961-966 of
this chapter regarding national farm loan associa­
tions (July 17, 1916, c. 245, § 201 (e); Mar. 4, 1923,
c. 252, § 2, 42 Stat. 1454; Mar. 27, 1933, Ex. Or.
6084).
“ Farm Credit Administration” mentioned in the text was substituted
for “ Federal Farm Loan Board” pursuant to the Executive Order cited
thereto, which is set out in full at the beginning of this chapter.

§ 1026




Application for charter.—The charters to such § 201(f)
Federal intermediate credit banks shall be granted
upon application of the directors of the Federal
land banks, which application shall be in such form
as the Farm Credit Administration shall prescribe
(July 17, 1916, c. 245, § 201 (f); Mar. 4, 1923, c.
252, § 2, 42 Stat. 1454; Mar. 27, 1933, Ex. Or.
6084).
“ Farm Credit Administration” mentioned in the text was substituted
for “ Federal Farm Loan Board” pursuant to the Executive Order cited
thereto, which is set out in full at the beginning of this chapter.

8

12U.S.C.

AG RICULTURAL CREDIT LAW S

FJT.L. Act

DISCOUNTS AND LOANS

§ 1031




Lending powers; purchase and sale of deben­ § 202 (a)
tures of intermediate credit banks ; loans to cooper­
ative associations.— Federal intermediate credit
banks, when chartered and established, shall have
power, subject solely to such restrictions, limita­
tions, and conditions as may be imposed by the
Farm Credit Administration not inconsistent
with the provisions of this subchapter—
(1) To discount for, or purchase from, any na­
tional bank, and/or any State bank, trust company,
agricultural credit corporation, incorporated live­
stock loan company, savings institution, coopera­
tive bank, credit union, cooperative association of
agricultural producers, organized under the laws of
any State or of the Government of the United
States, and/or any other Federal Intermediate
Credit Bank, with its endorsement, any note, draft,
bill of exchange, debenture, or other 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
livestock; and to make loans or advances direct to
any such organization, secured by such obligations ;
and to discount for, or purchase from, any Produc­
tion Credit Association organized under subchapter
IV of this chapter, or any production credit asso­
ciation in which a Production Credit Corporation
organized under such subchapter holds stock, with
its endorsement, any note, draft, bill of exchange,
debenture, or other such obligation presented by
such association, and to make loans and advances
direct to any such association secured by such col­
lateral as may be approved by the Governor of the
Farm Credit Administration;
(2) To buy or sell, with or without recourse,
debentures issued by any other Federal interme­
diate credit bank; and
(3) To make loans or advances direct to any co­
operative association organized under the laws of
any State and composed of persons engaged in pro­
ducing, or producing and marketing, staple agri­
cultural products, or livestock, 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, and/or such other collateral as may be ap­
proved by the Governor of the Farm Credit Admin­
istration: Provided, That no such loan or advance,
when secured only by warehouse receipts and/or
shipping documents, and/or mortgages on livestock,

9

12 U.S.C.

AGRICULTURAL CREDIT LAWS

F.F.L. Act

shall exceed 75 per centum of the market value of
the products covered by said warehouse receipts
and/or shipping documents, or of the livestock
covered by said mortgages; and to accept drafts or
bills of exchange issued or draw^n by any such asso­
ciation when secured by warehouse receipts and/or
shipping documents covering staple agricultural
products as herein provided (July 17, 1916, c. 245,
§ 202 (a); Mar. 4, 1923 c. 252, § 2, 42 Stat. 1455;
June 26, 1930, c. 616, § 1, 46 Stat. 816; May 19,
1932, c. 191, § 1, 47 Stat. 159; June 16, 1933, c. 98,
§ 76 (b), (c), 48 Stat. 271; Mar. 27, 1933, Ex. Or.
6084).
“ Farm Credit Administration” mentioned in the text was substituted
for “ Federal Farm Loan Board” pursuant to the Executive Order cited
thereto, which is set out in full at the beginning of this chapter.

§ 1032




Purchase or discount of paper from or for § 202 (b)
national banks, State banks, trust companies,
savings institutions, or corporations making loans
for agricultural or livestock purposes; limitations
upon amount.—No paper shall be purchased from

or discounted for any national bank, State bank,
trust company, or savings institution under section
1031, if the amount of such paper added to the
aggregate 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 permitted under the laws of the jurisdic­
tion creating the same; or exceeds twice the paid
in and unimpaired capital and surplus of such
national bank, State bank, trust company, or
savings institution. No paper shall under section
1031 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 livestock, if the amount
of such paper added to the aggregate liabilities of
such corporation exceeds the amount of such
liabilities permitted under the laws of the juris­
diction creating the same; or exceeds 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 interme­
diate credit bank upon paper discounted or pur­
chased under section 1031, to incur any additional
indebtedness, if by virtue of such additional
indebtedness its aggregate liabilities, direct or
contingent, will exceed the limitations herein con­
tained (July 17, 1916, c. 245, § 202 (b); Mar. 4,
1923, c. 252, § 2, 42 Stat. 1455).
10

12 u.s.e.

§ 1033

AGRICULTURAL CREDIT LAWS

F.F.L. Act

Maturity and sale of loans, advances, or dis- § 202 (c)
counts.—Loans, advances, or discounts made under

section 1031 shall have a maturity at the time they
are made or discounted by the Federal intermediate
credit bank of not more than three years. Any Fed­
eral intermediate credit bank may in its discretion
sell loans or discounts made under section 1031,
with or without its indorsement (July 17, 1916,
c. 245, § 202 (c); Mar. 4, 1923, c. 252, § 2, 42 Stat.
1456; June 26, 1930, c. 616, § 2, 46 Stat. 816).
§ 1034

Interest rates or discount charges ; rediscount § 202 (d)
of paper of other intermediate credit banks.—

Rates of interest or discount charged by the Fed­
eral intermediate credit banks upon such loans
and discounts shall be subject to the approval of the
Farm Credit Administration. On the majority
vote of the members of the Federal Farm Loan
Board any Federal intermediate credit bank shall be
required to rediscount the discounted paper of any
other Federal intermediate credit bank at rates of
interest to be fixed by the Federal Farm Loan Board
(July 17,1916, c. 245, § 202 (d) ; Mar. 4,1923, c. 252,
§ 2, 42 Stat. 1456; Mar. 27, 1933, Ex. Or. 6084).
“ Farm Credit Administration ” mentioned in the text was substituted
for “ Federal Farm Loan B oard" pursuant to the Executive Order cited
thereto, which is set out in full at the beginning of this chapter.
The offices of the appointed members of the Federal Farm Loan Board
were abolished by subdivision 4 of Executive Order No. 6084, set out at
the beginning of this chapter, and the powers and duties of the Board
transferred to the jurisdiction and control of the Farm Credit Administra­
tion by subdivision (5a) of said order.

ISSUE OF DEBENTURES
§ 1041




Collateral trust debentures or similar obliga- § 203 (a)
tions; security for; maturity; limitation respecting
amount.—Federal intermediate credit banks, when

chartered and established, shall have power, sub­
ject to the approval of the Farm Credit Admin­
istration, 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, wiiieh shall be secured by
at least a like face amount of cash, or notes or other
such obligations discounted or purchased or repre­
senting loans made under section 1031: 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 (July 17,
1916, c. 245, § 203 (a); Mar. 4, 1923, c. 252, § 2, 42
Stat. 1456; Mar. 27, 1933, Ex. Or. 6084).
“ Farm Credit Administration” mentioned in the text was substituted
for “ Federal Farm Loan Board” pursuant to the Executive Order cited
thereto, which is set out in full at the beginning of this chapter.
33546'> -M —

a

i i

12U.S.0.

§ 1042

AGRICULTURAL CREDIT LAWS

F.F.L. Act

Applicability of provisions of subchapter I; regu- § 203 (b)
lations governing collateral and handling thereof;
interest rates.—The provisions of subchapter I of

this chapter relating to the preparation and issue
of farm loan bonds shall, so far as applicable, govern
the preparation and issue of debentures or other
such obligations issued under the preceding section ;
but the Farm Credit Administration shall prescribe
rules and regulations governing the receipt, custody,
substitution, and release of collateral instruments
securing such debentures or other obligations, the
right of substitution being hereby granted. Rates
of interest upon debentures and other such obliga­
tions issued under the preceding section shall, sub­
ject to the approval of the Farm Credit Administra­
tion, be fixed by the Federal intermediate credit
bank making the issue, not exceeding 6 per centum
per annum (July 17, 1916, c. 245, § 203 (b); Mar. 4,
1923, c. 252, § 2, 42 Stat. 1456; Mar. 27, 1933,
Ex. Or. 6084).
“ Farm Credit Administration” mentioned in the text was substituted
for “ Federal Farm Loan Board” pursuant to the Executive Order cited
thereto, which is set out in full at the beginning of this chapter.

§ 1043

Assumption of liability by Government prohib- §203 (c)
ited ; recital necessary to be included.—The United

States Government shall assume no liability, direct
or indirect, for any debentures or other obligations
issued under section 1041, and all such debentures
and other obligations shall contain conspicuous
and appropriate language, to be prescribed in form
and substance by the Farm Credit Administration
and approved by the Secretary of the Treasury,
clearly indicating that no such liability is assumed
(July 17, 1916, c. 245, § 203 (c); Mar. 4, 1923, c.
252, § 2, 42 Stat. 1456 ; Mar. 27, 1933, Ex. Or. 6084).
“ Farm Credit Administration” mentioned in the text was substituted
for “ Federal Farm Loan Board” pursuant to the Executive Order cited
thereto, which is set out in full at the beginning of this chapter.

DISCOUNT RATES

81051




Establishment and approval of; limitation on.— §204 (a)

Before making any discounts under the provisions of
this chapter, each Federal intermediate credit bank
shall establish and promulgate a rate of discount
to be approved by the Farm Credit Administra­
tion. Any Federal intermediate credit bank
which has made an issue of debentures under the
provision of this chapter may thereafter establish,
with the approval of the Farm Credit Administra­
tion, a rate of discount not exceeding by more than
1 per centum per annum the rate borne by its last
preceding issue of debentures: Provided, That the
12

12 U.S.C.

AGRICULTURAL CREDIT LAWS

F.F.L. Act

Farm Credit Administration may classify loans and
debentures according to maturity, and if deben­
tures of different classes sell at a different rate the
Federal Intermediate Credit Banks may differenti­
ate in rates on like classes of loans in the same ratio
(July 17,1916, c. 245, § 204(a); Mar. 4, 1923, c. 252,
§ 2, 42 Stat. 1456; Mar. 4, 1925, c. 524, § 2, 43 Stat.
1262; Mar. 27, 1933, Ex. Or. 6084).
“ Farm Credit Administration” mentioned in the text was substituted
for “ Federal Farm Loan Board” pursuant to the Executive Order cited
thereto, which is set out in full at the beginning of this chapter.

§ 1052

Limitation on interest rate charged original bor- § 204 (b)
rower on paper discounted with bank.—No organi­

zation entitled to the privileges of this subchapter,
shall, without the approval of the Farm Credit Ad­
ministration, be allowed to discount with any Fed­
eral 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 (July 17, 1916, c. 245, § 204(b);
Mar. 4, 1923, c. 252, § 2, 42 Stat. 1456; Mar. 27,
1933, Ex. Or. 6084).
“ Farm Credit Administration ” mentioned in the text was substituted
for “ Federal Farm Loan Board” pursuant to the Executive Order cited
thereto, which is set out in full at the beginning of this chapter.

§ 1053

Purchase by bank of debentures issued by it.— § 204 (c)
A Federal intermediate credit bank may, subject
to the approval of the Farm Credit Administra­
tion, 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 (July
17, 1916, c. 245, § 204 (c); Mar. 4, 1923, c. 252,
§ 2, 42 Stat. 1456; Mar. 27, 1933, Ex. Or. 6084).
“ Farm Credit Administration” mentioned in the text was substituted
for “ Federal Farm Loan Board” pursuant to the Executive Order cited
thereto, which is set out in full at the beginning of this chapter.

CAPITAL STOCK

§ 1061




Amount, shares; subscriptions to by United
States; assessments against other banks to restore
capital impairment of one bank; subscriptions to
capital and surplus by Governor of Farm Credit
Administration.— (a) For the purpose of exercising
the powers conferred by this subchapter, each
Federal intermediate credit bank shall have a
subscribed capital stock of $5,000,000, which
amount may be increased from time to time with
the approval of the Governor of the Farm Credit
Administration. Capital stock of such amouni
shall be divided into shares of $5 each and shall be
subscribed, held, and paid by the Government ol
the United States.

18

§205




0.

AGRICULTURAL CREDIT LAWS

It shall be the duty of the Secretary of the
Treasury to subscribe to such capital stock on behalf
of the United States, such subscription to be sub­
ject to call in whole or in part by directors of the
said banks upon thirty days’ notice to the Secre­
tary of the Treasury and with the approval of the
Farm Credit Administration. The Secretary of
the Treasury is authorized and directed to take out
shares as called and to pay for the same out of any
money in the Treasury not otherwise appropriated.
‘ 'Farm Credit Administration” mentioned in the text was substituted
for “ Federal Farm Loan Board” pursuant to the Executive Order cited
thereto, which is set out in full at the beginning of this chapter.

(b) In the event that there shall be an impair­
ment of the paid-in capital of any Federal inter­
mediate credit bank, the Farm Credit Adminis­
tration, at such time or times as it deems advisa­
ble, may determine and assess the amount thereof
against the other Federal intermediate credit banks
on such equitable basis of apportionment as it
shall prescribe. Each bank against which such
an assessment is made shall, out of its surplus
and/or to an extent up to 50 per centum of its net
earnings, in accordance with the terms of such
assessment, pay the amount thereof as soon as
possible to the bank having the impairment. In
such event payments into the surplus fund and
payments of the franchise tax prescribed by this
chapter shall be determined on the basis of the net
earnings remaining after providing for the pay­
ment of any such assessment.
“ Farm Credit Administration ” mentioned in the text was substituted
for “ Federal Farm Loan Board” pursuant to the Executive Order cited
thereto, which is set out in full at the beginning of this chapter.

(c) With the approval of the Secretary of the
Treasury, the Governor of the Farm Credit Admin­
istration is hereby authorized to subscribe from time
to time to the capital stock and/or paid-in surplus
of any Federal intermediate credit bank on behalf
of the United States, in such amounts as he may
determine are necessary for the purpose of meeting
the credit needs of eligible borrowers from the bank,
and the amount of the capital stock and paid-in
surplus of such bank may be increased or decreased
from time to time by the Governor, in accordance
with such needs. Such stock shall be divided into
shares of $100 each and subscriptions to such paidin surplus shall be made in multiples of $100 out
of the revolving fund created under subsection (e)
of section 1131i of this chapter, as amended. The

14

F.F.L. Act

12 u.s.c.

AGRICULTURAL CREDIT LAWS

F X L Act

Governor on behalf of the United States shall make
payment for stock and paid-in surplus of such bank
and such payment shall be subject to call in whole
or in part by the board of directors of the bank,
with the approval of the Governor (July 17, 1916,
c. 245, § 205; Mar. 4, 1923, c. 252, § 2, 42 Stat.
1457; May 19, 1932, c. 191, § 2, 47 Stat. 159; Mar.
*
27, 1933, Ex. Or. 6084; Jan. 31, 1934, c. 7, § 15,
48 Stat. 344).
APPLICATION OF EARNINGS

§ 1062

Salaries and expenses of Federal Farm Loan § 206 (a)
Bureau; assessment against banks for proportion­
ate share.— The Farm Credit Administration
shall equitably apportion the joint salaries and
expenses incurred in behalf of Federal land banks,
joint stock land banks, and Federal intermediate
credit banks, and shall assess against each Federal
intermediate credit bank its proportionate share of
the salaries and expenses of the Federal Farm
Loan Bureau made necessary in connection with
the operation of this provision (July 17, 1916,
c. 245, § 206 (a); Mar. 4, 1923, c. 252, § 2, 42 Stat.
1457; Mar. 4, 1925, c. 524, § 1, 43 Stat. 1262; Mar.
27, 1933, Ex. Or. 6084).
“ Farm Credit Administration’ ' mentioned in the text was substituted
for “ Federal Farm Loan B oard " pursuant to the Executive Order cited
thereto, which is set out in full at the beginning of this chapter.
For salaries and expenses to be included in assessments, see § 657, of
this chapter. See also § 1094, below, for assessment of examination costs.

§ 1072




Net earnings; surplus fund; franchise tax; dis- § 206(b)
position by United States of sums received from
net earnings of banks and from surplus remaining
after liquidation of banks.— After all necessary
expenses of a Federal intermediate credit bank
have been paid or provided for, the net earnings
shall be paid into a surplus fund until it shall
amount to 100 per centum of the subscribed
capital stock of such bank, and thereafter 50 per
centum of such earnings shall be paid into the
surplus. Whenever the surplus thus paid in shall
have been impaired it shall be fully restored before
payment of the franchise tax herein prescribed.
After the aforesaid requirements of this section
have been fully met and, except as otherwise
provided in this subchapter, 50 per centum of the
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 supplement the gold reserve

15

12 Ü.S.C.

F.F.L. Act

AGRICULTURAL CREDIT LAWS

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 credit
bank be dissolved or go into liquidation, after the
ayment of all debts and other obligations as
ereinbefore provided, any surplus remaining shall
be paid to and become the property of the United
States and shall be similarly applied (July 17, 1916,
c. 245, § 206 (b); Mar. 4, 1923, c. 252, § 2, 42 Stat.
1457; May 19, 1932, c. 191, § 3, 47 Stat. 159).

E

LIABILITY

§1081




ON

DEBENTURES OR
OBLIGATIONS

OTHER

SUCH

Liability of one bank for debentures issued by
other banks ; agreements by banks for transfer of
funds for debenture payments.—Any Federal

intermediate credit bank issuing debentures or
other such obligations under this subchapter shall
be primarily liable therefor, and shall also be liable,
upon presentation of the coupons for interest pay­
ments 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 principal
of debentures or obligations so issued as are not
paid after the assets of such other Federal inter­
mediate credit bank have been liquidated and dis­
tributed. Such losses, if any, either of interest or
of principal, shall be assessed by the Farm Credit
Administration against solvent Federal inter­
mediate credit banks liable therefor in proportion
to the amount of capital stock, surplus, and deben­
tures or other such obligations which each may
have outstanding 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: Provided, That in view of
the liability of all Federal intermediate credit banks
for the debentures and other such obligations of
each bank under this chapter, the banks shall, in
accordance with rules, regulations, and orders of
the Farm Credit Administration, enter into
adequate agreements and arrangements among
themselves by which funds shall be transferred
16

§207

12 u.s.a

AGRICULTURAL CREDIT LAWS

F.F.L. Act

and/or made available from time to time for the
payment of all such debentures and other such
obligations and the interest thereon when due in
accordance with the terms thereof (July 17, 1916,
c. 245, § 207; Mar. 4, 1923, c. 252, § 2, 42 Stat.
1458; May 19, 1932, c. 191, § 4, 47 Stat. 159; Mar.
27, 1933, Ex. Or. 6084).
“ Farm Credit Administration” mentioned in the text was substituted
for “ Federal Farm Loan Board” pursuant to the Executive Order cited
thereto, which is set out in full at the beginning of this chapter.

EXAMINATIONS AND REPORTS

§1091




Reports of condition of banks and other lending § 208 (a)
institutions rediscounting with credit banks; ex­
aminations and audits of credit banks.—In order to

enable each Federal intermediate credit bank to
carry out the purpose of this subchapter, the
Comptroller of the Currency is hereby authorized
and directed, upon the request of any Federal inter­
mediate credit bank, (1) to furnish for the confiden­
tial use of such bank such reports, records, and other
information, 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 intermediate credit bank, ex­
aminations of organizations through or for which
the Federal intermediate credit bank has made or
contemplates making discounts or loans: Provided,
That no such examination shall be made without
the consent of such organization except where such
examination is required by law: Provided, That any
organization, except State banks, trust companies
and savings associations, shall, as a condition prece­
dent to securing rediscount privileges with the
Federal intermediate credit bank of its district, file
with such bank its written consent to its examina­
tion as may be directed by the Farm Credit Admin­
istration by land bank examiners; and State banks,
trust companies and savings associations may be in
like manner required to file their written consent
that reports of their examination by constituted
authorities may be furnished by such authorities
upon request to the Federal intermediate credit
bank of their district. Each Federal intermediate
credit bank shall be examined and audited at least
once each year by the Farm Credit Administration,
and the results of such examination and audit shall

17

12 U.S.C.

AGRICULTURAL CREDIT LAWS

F.F.L. Act

be made public by the administration (July 17,
1916, c. 245, § 208 (a); Mar. 4, 1923, c. 252, § 2, 42
Stat. 1458; Mar. 27, 1933, Ex. Or. 6084).
“ Farm Credit Administration” and “ administration” mentioned in
the text were substituted for “ Federal Farm Loan Board” and “ board” ,
respectively, pursuant to the Executive Order cited thereto, which is set
out in full at the beginning of this chapter.

§1092

Submission and publication of reports of condi- § 208 (b)
tion by banks.—Every Federal intermediate credit

bank shall make to the Farm Credit Administration
not less than three reports during each year as
requested by the administration and according to
the form which may be prescribed by the adminis­
tration, verified by the oath or affirmation of the
president, or secretary, or treasurer, of each Federal
intermediate credit bank and attested by the signa­
ture of at least three of the directors. Each report
shall exhibit, in detail and under appropriate heads,
the resources and habilites of the Federal inter­
mediate credit bank at the close of business on any
past day specified by the Farm Credit Administra­
tion, within five davs from the receipt of a request
or requisition therefor from the administration, and
in the same form in which it is made to the Farm
Credit Administration shall be published in a news­
paper 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 pub­
lished 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 Farm
Credit Administration. The Farm Credit Ad­
ministration 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 knowledge of its
condition (July 17, 1916, c. 245, § 208 (b); Mar. 4,
1923, c. 252, § 2, 42 Stat. 1458; Mar. 27, 1933, Ex.
Or. 6084).
“ Farm Credit Administration” and “ administration” mentioned in the
text substituted for “ Federal Farm Loan Board” and “ board” , respec­
tively, pursuant to the Executive Order cited thereto, which is set out
In full at the beginning of this chapter.

§ 1093




Investigations and reports by land bank ap- § 208 (c)
praisers and examiners for credit banks.—Land

bank appraisers are authorized, upon the request of
any Federal intermediate credit bank and with the
approval of the Farm Credit Administration, to
investigate and make a wTitten report upon the
products covered by warehouse receipts or shipping
18

12 U.S.C.

AGRICULTURAL CREDIT LAWS

F.F.L. Act

documents, and the livestock covered by mortgages,
which are security for notes or other such obliga­
tions representing any loan to any organization,
under this subchapter. Land bank examiners are
authorized, upon the request of any Federal inter­
mediate credit bank and with the approval of the
Farm Credit Administration, to examine and make
a written report upon the condition of any organiza­
tion, except national banks, to which the Federal inter­
mediate credit bank contemplates making any such
loan (July 17, 1916, c. 245, § 208 (c) ; Mar.4,1923, c.
252, § 2, 42 Stat. 1459; Mar. 27,1933, Ex. Or. 6084).
“ Farm Credit Administration” mentioned in the text was substituted
for “ Federal Farm Loan Board” pursuant to the Executive Order cited
thereto, which is set out in full at the beginning of this chapter.

§ 1094

Cost of examinations; assessments against or- § 208 (d)
ganizations investigated.—The Farm Credit Ad­

ministration shall assess the cost of all examina­
tions made by the examiners of the administra­
tion under the provisions of this subchapter upon
the bank, trust company, savings institution, or
organization investigated, in accordance with the
regulations to be prescribed by the administration.
(July 17, 1916, c. 245, § 208(d); Mar. 4, 1923, c.
252, § 2,42 Stat. 1459; Mar. 27,1933, Ex. Or. 6084.)
“ Farm Credit Administration” and “ administration” mentioned in
the text were substituted for “ Federal Farm Loan Board” and “ board” ,
respectively, pursuant to the Executive Order cited thereto, which is set
out in full at the beginning of this chapter.

RULES AND REGULATIONS

§ 1101

Authority of Farm Credit Administration.— The

§209

Farm Credit Administration 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 subchapter. (July 17,
1916, c. 245, § 209; Mar. 4, 1923, c. 252, § 2, 42
Stat. 1459; Mar. 27, 1933, Ex. Or. 6084.)
“ Farm Credit Administration” mentioned in the text was substituted
for “ Federal Farm Loan Board” pursuant to the Executive Order cited
thereto, which is set out in full at the beginning of this chapter.

TAX EXEMPTION

§ 1111




Capital and income; debentures instrumentalities of Government.—The privileges of tax ex­

emption accorded under section 931 of this chapter
shall apply also to each Federal intermediate credit
bank including its capital, reserve, or surplus, and
the income derived therefrom, and the debentures
issued under this subchapter shall be deemed and
held to be instrumentalities of the Government and
83546°—34----- i
19

§210

12 U.S.C.

AGRICULTURAL CREDIT LAWS

F.F.L. Act

shall enjoy the same tax exemptions as are ac­
corded farm loan bonds in said section (July 17,
1916, c. 245, § 210; Mar. 4, 1923, c. 252, § 2, 42
Stat. 1459).
PENALTY PROVISIONS
§

1121

Offenses by officers, employees, or agents; em- § 211 (a)
bezzlement; misapplication of funds; unauthorized
making, issuing, or assigning instruments; false
entries.—Any officer, director, agent, or employee

of a Federal intermediate credit bank who embez­
zles, abstracts, purloins, 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, mortgage, judgment, or de­
cree, 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 Farm Credit Administration,
or any agent or examiner appointed to examine the
affairs of such bank; and every receiver of such
bank who with like intent to defraud or injure,
embezzles, abstracts, purloins, or willfully misap­
plies 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 re­
ceiver in any violation of this section, shall be
deemed guilty of a misdemeanor, and upon con­
viction 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. (July 17,1916, c. 245,
§ 211 (a); Mar. 4, 1923, c. 252, § 2, 42 Stat, 1459;
Mar. 27, 1933, Ex. Or. 6084.)
“ Farm Credit Administration” mentioned in the text was substituted
for “ Federal Farm Loan Board” pursuant to the Executive Order cited
thereto, which is set out in full at the beginning of this chapter.

§1122




False statements to banks.—Whoever makes any §211 (b)
statement, knowing it to be false, for the purpose of
obtaining for himself or for any other person, firm,
corporation, or association any advance, or exten­
sion or renewal of an advance, or any release or sub­
stitution of security from such bank, or for the pur­
pose of influencing in any other way the action of
such bank, shall be punished by a fine of not more
than $10,000, or by imprisonment for not more than
five vears, or both (July 17, 1916, c. 245, § 211 (b);
Mar" 4, 1923, c. 252, §2, 42 Stat. 1460).
20

12 Ü.S.C.

§1123

AGRICULTURAL CREDIT LAWS

F.F.L. Act

Overvaluation of property offered as security for § 211 (c)
loan.—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
(July 17, 1916, c. 245, §211 (c); Mar. 4, 1923,
c. 252, § 2, 42 Stat. 1460).
§1124

Offenses by examiners.—Any examiner ap- § 211 (d)
pointed under this subchapter or subchapter I here­
of who shall accept a loan or gratuity from any or­
ganization examined by him, or from any person
connected with any such organization in any capac­
ity, 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 Land Bank Commissioner or from
the board of directors of such organization except
when ordered to do so by a court of competent juris­
diction 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
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 be disqualified from holding office as an exam­
iner under the prvisions of this subchapter and
subchapter I hereof. No examiner while holding
such office shall perform any other service for com­
pensation for any bank or banking or loan associa­
tion or for any person connected therewith in any
capacity (July 17, 1916, c. 245, § 211 (d); Mar. 4,
1923, c. 252, § 2, 42 Stat. 1460; June 16, 1933, c. 98,
§ 80 (a) 48 Stat. 273).

§ 1125

Offenses by officers, employees, or agents of § 211(e)
banks ; receiving fees or gifts.—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 procuring 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 dis­
count 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 con­
viction thereof be imprisoned for not more than one
21

12 Ü.S.C.

AGRICULTURAL CREDIT LAWS

F.F.L. Act

year and fined not more than $5,000 or both (July
17, 1916, c, 245, § 211 (e); Mar. 4, 1923, c. 252, § 2,
42 Stat. 1460).
§ 1126

Forgery, counterfeiting, and like offenses relating §211 (f)
to obligations of banks.—Any person who shall

falsely make, forge, or counterfeit, or cause
or procure to be falsely made, forged, or counter­
feited, or willingly aid or assist in falsely making,
forging, or counterfeiting any debenture, coupon, or
other obligation in imitation of or purporting 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
knowing 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 will­
ingly aid or assist in falsely altering any such de­
benture, 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 exceed­
ing $5,000 or by imprisonment not to exceed five
years, or both (July 17, 1916, c. 245, § 211 (f); Mar.
4, 1923, c. 252, § 2, 42 Stat. 1460).
§ 1127

False representations as to debentures or other § 211(g)
obligations of banks.—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 pretense or representation con­
cerning the character, issue, security, contents,
conditions, or terms of any debenture, coupon, or
other obligation issued under the terms of this
subchapter, shall upon conviction be fined not ex­
ceeding $500, or imprisoned not to exceed one year,
or both (July 17, 1916, c. 245, § 211 (g); Mar. 4,
1923, c. 252, § 2, 42 Stat. 1461.)
§1128




Unlawful use of words “ Federal intermediate § 211 (h)
credit bank/ 5
—All corporations not organized

under the provisions of this subchapter are pro­
hibited from using the words “ Federal inter­
mediate credit bank” as part of their corporate
name, and any violation of this prohibition shall
22

12 U.S.C.

AGRICULTURAL CREDIT LAWS

subject the party charged therewith to a civil
penalty of $50 for each day during which the
violation continues (July 17, 1916, c. 245, § 211 (h);
Mar. 4, 1923, c. 252, § 2, 42 Stat. 1461).
§1129

Charging of unauthorized fees or commissions by
banks.—No Federal intermediate credit bank shall

charge or receive any fee, commission, bonus, gift,
or other consideration not herein specifically
authorized (July 17, 1916, c. 245, § 212; Mar. 4,
1923, c. 252, § 2, 42 Stat. 1461).
SUBCHAPTER IV.— PRODUCTION CREDIT
CORPORATIONS A N D P R O D U C T I O N
CREDIT ASSOCIATIONS1
PRODUCTION CREDIT CORPORATIONS

§1131

Establishment; number; location.—The Gover­
nor of the Farm Credit Administration, hereinafter
in this subchapter and subchapter VI referred to as
the “ governor ” , is authorized and directed to
organize and charter twelve corporations to be
known as “ Production Credit Corporations.”
One such corporation shall be established in each
city in which there is located a Federal land bank.
The directors of the several Federal land banks
shall be ex officio the directors of the respective
Production Credit Corporations. Such directors
shall have power, subject to the approval of the
governor, to employ and fix the compensation of
such officers and employees of such corporations as
may be necessary to carry out the powers and duties
conferred upon such corporations under this sub­
chapter and subchapter VI (June 16, 1933, c. 98,
§ 2, 48 Stat. 257).
Organization of Banks for Cooperatives, see § 1134.

§ 1131a




Charters and bylaws. — The charters of the
Production Credit Corporations shall be granted by
the governor upon application of the directors of
the Federal land bank of the proper district, and
applications and charters shall be in such form as
the governor shall prescribe. The directors shall
have power, subject to the approval of the governor,
to adopt such bylaws as may be necessary for the
conduct of the business of the corporations (June
16, 1933, c. 98, § 3, 48 Stat. 257).
Charters of Banks for Cooperatives, see § 1134a.
i See also subchapter V I.

23

§212

12 U.S.C.

§ 1131b

AGRICULTURAL CREDIT LAWS

Capita! stock; amount; value of shares; amount
and subscription for initial stock; payments for
stock subscribed on behalf of United States.—

The capital stock of each Production Credit Cor­
poration shall be in such amount as the governor
determines is required for the purpose of meeting
the credit needs of the district to be served by such
corporation, and such amount may be increased or
decreased from time to time by the governor in
accordance with such credit needs. Such capital
stock shall be divided into shares of $100 each.
The initial capital stock of each such corporation
shall be $7,500,000, which shall be subscribed for
by the governor and held by him on behalf of the
United States. Payments on subscriptions to
stock by the governor shall be subject to call in
whole or in part by the board of directors of the
corporation with the approval of the governor.
The governor shall make such payments out of the
revolving fund created in section 113li of this chap­
ter. The stock ownership of the United States in
such corporation shall be evidenced by such means
as the governor shall determine (June 16, 1933, c.
98, § 4, 48 Stat. 257).

§ 1131c




Purchase of stock in production credit associa­
tions; class of stock to be purchased and held;
amount of stock; retirement of stock held by
corporations ; application of earnings on stock
held by corporations— (a) Stock in associations
organized under this subchapter.—Each Produc­

tion Credit Corporation shall have powder to
invest its funds in stock of production credit
associations as provided in this section. Such
corporation is authorized to subscribe and pay
for class A stock in each Production Credit Associ­
ation located in the district served by such cor­
poration in amounts sufficient to maintain the
amount of class A stock held by it and other
holders of class A stock equal, as nearly as may
be, to 20 per centum of the volume of loans made
or to be made by such association, as estimated
by the corporation, but at no time shall the
amount of class A stock outstanding be less than
$5,000 except with the consent of the association.
Notwithstanding the provisions of the preceding
sentence, (1) the governor, under rules and regu­
lations prescribed b}^ him, may permit a Produc­
tion Credit Corporation to maintain the class A
holdings of stock by the corporation and other
24

12 TJ.S.C.

AGRICULTURAL CREDIT LAWS

§ 1131c investors at such amount, in excess of 20 per centum
of such loans, as may he necessary, and (2) the cor­
poration may at any time require the association to
retire and cancel stock held by the corporation in
such association, if, in the judgment of the corpora­
tion, the association has resources available therefor
(June 16, 1933, c, 98, § 6 (a), 48 Stat. 259).
(b) Stock in associations not organized under




this subchapter; restrictions and limitations.—

Under such rules and regulations as may be pre­
scribed by the governor and subject to such
restrictions and limitations as he may prescribe,
each Production Credit Corporation is authorized
to subscribe and pay for stock in production
credit associations not organized under this sub­
chapter if such associations are controlled by
cooperative associations as defined in section
1141 j (a) of subchapter VII of this chapter.
Only stock which is preferred as to assets on
liquidation and is entitled to participate in
dividend distributions without discrimination may
be subscribed for. The amount of the stock sub­
scribed for by any Production Credit Corporation
in any such association shall not at any one
time exceed 75 per centum of the total paid-in
capital of such association (June 16, 1933, c.
98, § 6 (b), 48 Stat. 259).
(c) Earnings on stock in associations; applica­
tion of ; establishment and investment of surplus.—

The amount of the excess of earnings on stock
held by the corporation above amounts necessary
to pay operating expenses and restore losses and
impairment of capital, if any, of the corporation
shall be devoted to the creation and maintenance
of a surplus equal to at least 25 per centum of
the paid-in capital of the corporation. The
amount of the surplus shall be invested as the
governor shall prescribe in direct obligations of
the United States or in class A stock of produc­
tion credit associations, or both (June 16, 1933,
c. 98, § 6 (c), 48 Stat. 259).
(d) Application of excess earnings on stock in
associations; retirement of stock in corporations
held by Government.—The amount of such excess

of earnings not required in order to comply with
the provisions of subsection (c) shall be paid
into the revolving fund authorized in section
1131i. Stock held by the governor in the Pro­

25

12 u.s.a

AGRICULTURAL CREDIT LAW S

duction Credit Corporation shall be retired upon
such payment in an amount equal to the amount
of such payment (June 16, 1933, c. 98, § 6 (d),
48 Stat. 259).
PRODUCTION CREDIT ASSOCIATIONS

§ 1131d




Organization; articles of association; charters;
bylaws; powers of governor respecting associa­
tions.—The governor is authorized and directed

to organize and charter corporations to be known as
“ Production Credit Associations.” Such associa­
tions may be organized by ten or more farmers
desiring to borrow money under the provisions of
this section and sections 1131e to 1131h. Such
individuals shall enter into articles of incorporation
which shall specify in general terms the objects for
which the association is formed and the powers to
be exercised by it in carrying out the functions con­
ferred upon it by this subchapter. Such articles
shall be signed by the individuals uniting to form
the association and a copy thereof shall be for­
warded to the Production Credit Corporation of the
district, and such copy shall be filed and preserved
in its office. The governor may, for good cause
shown, deny a charter to such individuals. Upon
the approval of such articles by the governor, the
association shall become as of the date of such ap­
proval a body corporate. The governor shall have
power, under rules and regulations prescribed by
him, or by prescribing the terms of the charter of the
association, or both, to provide for the organization,
management, and conduct of the business of the
association; and the power of the governor shall
extend to prescribing the amount of the stock of
such association; fixing the territory within which
its operations may be carried on; fixing the method
of election and appointment of, and the amount and
payment of the compensation of, directors, officers,
and employees ; fixing the maximum amount of indi­
vidual loans which may be made; prescribing the
conditions under which the stock may be retired;
and providing for the consolidation of two or more
such associations. The governor may, at any time,
direct such changes in the charter of any such asso­
ciation as he finds necessary in accomplishing the
purposes of this section and sections 113le to 1131h.
feylaws of any such association may be adopted by
the directors but shallnotbe valid unless approved by
the governor (June 16,1933, c. 98, § 20,48 Stat. 259).

26

12 U.S.C.

AGRICULTURAL CREDIT LAWS

§ 1131e

Capital stock; value of shares; classes of stock;
voting rights; limitation on transfer of class B
stock; exchange of class B stock upon holder" ceas­
ing to be borrower; dividends; ownership of stock
as entitling credit corporation to approve or remove
officers of association.—The stock of such associa­
tions shall be divided into shares of $5 each; and
there shall be two classes of such stock: (1) Class A
stock which is to be held by Production Credit Cor­
porations, and which may be purchased and held by
investors, and (2) class B stock which may be pur­
chased only by farmer borrowers from the associa­
tion and individuals eligible to become borrowers.
Class B stock only shall be entitled to voting rights
but each holder of such stock shall be entitled to no
more than one vote. No class B stock, or any
interest therein or right to receive dividends there­
on, shall be transferred by act of parties or operation
of law except to another farmer borrower or an indi­
vidual eligible to become a borrower, and then only
with the approval of the directors of the association.
Each holder of class B stock, within two years after
he has ceased to be a borrower, shall exchange such
class B stock at the fair book value (not to exceed
par) thereof, as determined by the association, for
class A stock. All stock shall share in dividend
distributions without preference, but the directors
of the association may, in their discretion, apply
the amount of any dividend payable to a holder of
class B stock to any indebtedness of such holder to
the association. Class A stock shall be preferred as
to assets of the association upon liquidation. Dur­
ing such time as any Production Credit Corporation
is a holder of any stock of any such association, the
appointment or election of directors, the secretarytreasurer, and the loan committee of such associa­
tion shall be subject to the approval of the president
of the Production Credit Corporation and during
such time any such director, secretary-treasurer, or
other officer may, at any time, be removed by the
president of the Production Credit Corporation
(June 16, 1933, c. 98, § 21, 48 Stat. 260).

§ 113If

Application of earnings; losses in excess of re­
serve account; restoration of capital impairment;
reserve account; guaranty fund; dividends.—Each
Production Credit Association shall, at the end of
its fiscal year, apply the amount of its earnings in
excess of operating expenses during such fiscal year,
first, to making up any losses in excess of its reserve




27

12 U.S.C.

AGRICULTURAL CREDIT LAWS

for bad and doubtful debts; second, to the restora­
tion of the amount of the impairment, if any, of
capital; third, to the creation and maintenance of a
reserve account for bad and doubtful debts, the
amount of which account shall be prescribed by the
Production Credit Corporation; and fourth, to the
creation and maintenance of a guaranty fund equal
to at least 25 per centum of the paid-in capital of
the association. Any sums remaining may, with
the approval of the Production Credit Corporation,
be devoted to the payment of dividends but no rate
of dividend in excess of 7 per centum per annum
shall be paid. Sums in the guaranty fund herein
provided for shall be invested subject to such rules
and regulations as may be prescribed by the Pro­
duction Credit Corporation (June 16, 1933, c. 98,
§ 22, 48 Stat. 261).
§ 1131g




Loans to farmers; terms and conditions.—Each
Production Credit Association shall, under such
rules and regulations as may be prescribed by the
Production Credit Corporation of the district with
the approval of the governor, invest its funds and
make loans to farmers for general agricultural pur­
poses, but such part of its funds as is represented by
the guaranty fund provided for in section 113If
shall not be devoted to making loans to farmers.
Such loans shall be made on such terms and condi­
tions, at such rates of interest, and with such
security as may be prescribed by the Production
Credit Corporation. No loan shall be made for a
less amount than $50, nor shall any one borrower
be indebted to the association at any one time in an
amount in excess of 20 per centum of the capital
and guaranty fund of the association or, if the loan
is secured by collateral approved by the Corpora­
tion, in an amount in excess of 50 per centum of the
capital and guaranty fund, but loans may be made
to any borrower in an amount in excess of 50 per
centum of the capital and guaranty fund if the loan
is approved by the Production Credit Commissioner
of the Farm Credit Administration. Borrowers
shall be required to own, at the time the loan is
made, class B stock in an amount equal in fair book
value (not to exceed par), as determined by the
association, to $5 per $100 or fraction thereof of the
amount of the loan. Such stock shall not be can­
celed or retired upon payment of the loan but may
be transferred or exchanged as provided in section
1131e (June 16, 1933, c. 98, § 23, 42 Stat. 261).

28

Ü.S.C.

AGRICULTURAL CREDIT LAWS

1131h

Borrowing from and rediscounting paper with
Federal intermediate credit banks; limitation on
power to borrow from or rediscount paper with
other institutions.—Production Credit Associations
doing business under this subchapter and subchapters V and VI of this chapter are authorized to
borrow from, and rediscount paper with Federal
Intermediate Credit Banks subject to the restric­
tions, limitations, and conditions applicable under
subchapter III of this chapter, as amended.
Except with the approval of the Governor, Pro­
duction Credit Associations shall not have the
power to borrow from or rediscount paper with
any other bank or agency. (June 16, 1933, c. 98,
§ 24, 48 Stat. 261.)
REVOLVING FUND

1131i




Revolving fund.— (a) There is hereby created a
revolving fund of not to exceed $120,000,000, which
shall be made up as follows:
(1) The Reconstruction Finance Corporation is
authorized and directed to make available to the
Governor of the Farm Credit Administration all
unobligated balances of the following funds and all
sums heretofore returned or released to the corpora­
tion from such funds:
(A) Any balances of funds for, and all collections
on loans by, the Secretary of Agriculture pursuant
to section 602 of Title 15;
(B) All collections on loans made or to be made
pursuant to the Act of February 4, 1933 (Pub. No.
327, 72d Cong.);
(C) All balances of funds authorized and
directed to be made available to the Secretary of
Agriculture by such act and not used for loans
pursuant thereto; and
(D) Any balances of the funds originally directed
to be allocated and made available to the Secretary
of Agriculture by such acts except as expended pur­
suant to subsection (e) of section 605(b) of Title 15.
(2) There are hereby made available to the
Governor of the Farm Credit Administration all
unobligated balances of appropriations and funds
available thereunder to enable the Secretary of
Agriculture to make advances or loans under the
following Acts and resolutions, and all repay­
ments of such advances and loans: March 3, 1921
(41 Stat. 1347), March 20, 1922 (42 Stat. 467),
April 26, 1924 (43 Stat. 110), February 28, 1927
(44 Stat. 1251), Feburarv 25, 1929 (45 Stat. 1306),
as amended May 17, 1929 (46 Stat. 3), March 3,
29

12 U.S.G.

AGRICULTURAL CREDIT LAWS

§ 1131i 1930 (46 Stat. 78, 79), December 20, 1930 (46 Stat.
1032), as amended February 14, 1931 (46 Stat.
1160), and February 23, 1931 (46 Stat. 1276), and
Public Resolution Numbered 11, Seventy-second
Congress, approved March 3, 1932, and the notes
or other obligations evidencing such advances and
loans and the security therefor are hereby trans­
ferred to the Governor of the F ami Credit Adminis­
tration.
(3)
There is hereby authorized to be appropriated
the sum of $40,000,000 out of any money in the
Treasury not otherwise appropriated.
(b) There is hereby authorized to be appro­
priated the sum of $2,000,000, which shall remain
available until expended, for all necessary ad­
ministrative expenses in connection with the estab­
lishment and supervision of the Production Credit
Corporations and the Production Credit Associa­
tions.
(c) The authority of the Governor of the Farm
Credit Administration to allocate and expend out
of the funds covered by subsection (a) of this sec­
tion such amounts as he shall deem necessary for
salaries, expenses, and all other administrative
expenditures in the execution of the functions for
which such funds have hitherto been available shall
not be deemed to be restricted by this section.
(d) The authority to make loans during the
calendar year 1933 pursuant to the Act of February
4, 1933 (Public Numbered 327, Seventy-second
Congress), as amended, out of funds made avail­
able by that Act shall not be deemed to be restricted
by this section.
(e) The amount of all balances, collections, and
appropriations allocated under subsection (a) to the
revolving fund created thereunder, which is in ex­
cess of $120,000,000, is hereby made available to
the Governor of the Farm Credit Administration
for the establishment of a revolving fund of not to
exceed $40,000,000. Out of such revolving fund,
the Governor is authorized to allocate and, with the
approval of the Secretary of the Treasury, to expend
such amounts as he deems necessaiy for subscrip­
tions to the capital stock and/or paid-in surplus of
Federal intermediate credit banks. (June 16,1933,
c. 98, § 5, 48 Stat. 258; Jan. 31, 1934, c. 7, § 15, 48
Stat. 344.)




80

12 U.&O.

AGRICULTURAL CREDIT LAWS

SUBCHAPTER V.— REGIONAL BANKS FOR
COOPERATIVES AND CENTRAL BANK FOR
COOPERATIVES 2
REGIONAL BANKS

§1134

Establishment; number; location.—The Gov­
ernor of the Farm Credit Administration, herein­
after in this subchapter and in subchapter VI re­
ferred to as the “ governor” , is authorized and
directed to organize and charter twelve banks to
be known as “ Banks for Cooperatives.” One
such bank shall be established in each city in which
there is located a Federal land bank. The directors
of the several Federal land banks shall be ex officio
the directors of the respective Banks for Coopera­
tives. Such directors shall have powder, subject to
the approval of the governor, to employ and fix the
compensation of such officers and employees of such
banks as may be necessary to carry out the powers
and duties conferred upon such banks under this
subchapter and subchapter VI (June 16, 1933, c.
98, § 2, 48 Stat. 257).
Organization of Production Credit Corporations, see § 1131.

§ 1134a

Charters and bylaws.—The charters of the
Banks for Cooperatives shall be granted by the
governor upon application of the directors of the
Federal land bank of the proper district, and appli­
cations and charters shall be in such form as the
governor shall prescribe. The directors shall have
power, subject to the approval of the governor, to
adopt such bylaws as may be necessary for the
conduct of the business of the banks (June 16,
1933, c. 98, § 3, 48 Stat. 257).
Charters of Production Credit Corporations, see § 1131a.

§ 1134b




Capital stock; amount; value of shares; payments
from revolving fund for stock purchased by Gov­
ernment.—The capital stock of each Bank for

Cooperatives established under section 1134 shall
be in such amount as the governor determines is
required for the purpose of meeting the credit needs
of eligible borrowers from the bank under this
subchapter, and such amount may be increased or
decreased from time to time by the governor in
accordance with such needs. Such stock shall be
divided into shares of $100 each. Out of the re­
volving fund created under section 1141d of this
chapter, as amended, the governor, on behalf of the
2 See also subchapter V I.

81

12 U.S.C.

AGRICULTURAL CREDIT LAWS

United States, shall make payments for stock in
the banks and such payments shall be subject to
call in whole or in part by the board of directors of
the bank with the approval of the governor (June
16, 1933, c. 98, § 40, 48 Stat. 264).
§ 1134c

Lending power.—The Banks for Cooperatives
are authorized to make loans to cooperative associa­
tions for any of the purposes and subject to the
conditions and limitations set forth in subchapter
VII of this chapter, and subject to such terms and
conditions as may be prescribed by the board of the
bank with the approval of the governor (June 16,
1933, c. 98, § 41, 48 Stat. 264).
See also sec. 1134j.

§ 1134d

Ownership of stock in banks by borrowing associ­
ations; earnings and reserves of banks.—The

provisions of sections 1134k and 11341 of this chap­
ter shall apply in the case of Banks for Coopera­
tives 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 shall
be exercised by the boards of directors of the Banks
for Cooperatives, subject to the approval of the
governor (June 16, 1933, c. 98, § 42, 48 Stat. 264).
§ 1134e

Retirement of stock held by Government.—The
governor may at any time require any such
bank to retire and cancel stock held by the gover­
nor in such bank, if, in the judgment of the governor,
the bank has resources available therefor, and
amounts received by the governor in any such case
shall be credited to the revolving fund created
under section 1141d of this chapter, as amended
(June 16, 1933, c. 98, § 43, 48 Stat. 265).

CENTRAL BANK

§ 1134f




Establishment; location.—The governor is au­
thorized and directed to organize and charter a
corporation to be known as the “ Central Bank for
Cooperatives” with its principal office in the Dis­
trict of Columbia and such other offices as in the
opinion of the governor may be necessary (June 16,
1933, c. 98, § 30, 48 Stat. 261).

32

12 U.S.C.

AGRICULTURAL CREDIT LAWS

§1134g

Board of directors.— (a) The board of directors
of the Central Bank for Cooperatives shall consist of
seven members, one of whom shall be the Coopera­
tive Bank Commissioner of the Farm Credit Admin­
istration, who shall be chairman of the board of
directors. The other six directors shall be
appointed by the governor, of whom the successors
of three first appointed shall be appointed from
nominees selected by borrowers as provided in sub­
section (b). The terms of the directors first
appointed shall be for one, two, and three years as
designated by the governor at the time of appoint­
ment and their successoiis shall hold their offices
during a term of three years, but a director
appointed to fill a vacancy shall hold his office for
the unexpired term of the director whose place he
is selected to fill. Any appointed director may at
any time be removed for cause by the governor.
No compensation shall be paid any director as a
director of the corporation but the corporation,
subject to the approval of the governor, may allow
directors a reasonable per diem and expenses.
(b) The successors of three of the directors first
appointed shall be selected one each year by the
governor from among individuals nominated by
borrowers (except Banks for Cooperatives). The
governor shall, not less than sixty days prior to the
end of the term of any director whose successor is to
be appointed from among nominees as herein pro­
vided, or as soon as practicable after a vacancy
occurs in the office of such director other than by
the expiration of his term, cause notice of the
vacancy to be sent to each borrower eligible to
vote for nominees. Each such borrower shall be
eligible to cast one vote. The governor shall not
count any ballot received after the expiration of
thirty days after the sending of notice. From
those (not exceeding three) receiving the highest
number of votes, as shown by his count, the gov­
ernor shall appoint the director (June 16, 1933,
c. 98, § 31, 48 Stat. 262).

§ 1134h

Powers of board of directors; chairman of
board.—The chairman of the board of the corpora­




tion shall be the executive officer of the corporation
and the powers of the board of directors shall be
such powers as may be prescribed in the charter and
bylaws (June 16, 1933, c. 98, § 32, 48 Stat. 262).

33

12 U.S.C.

AGRICULTURAL CREDIT LAWS

§ 1134i

Capital stock.—The capital stock of the central
bank shall be in such amount as the governor
determines is required for the purpose of meeting
the credit needs of eligible borrowers from the bank
under this subchapter, and the governor may from
time to time increase or decrease such amount, sub­
ject to the limitations contained in sections 1134k
and 1134m in accordance with such needs. The
stock of such bank shall be divided into shares of
$100 each. Out of the revolving fund created under
section 1141d of this chapter, as amended, the gov­
ernor, on behalf of the United States, shall sub­
scribe for and make payments for stock in the
Central Bank and such payments shall be subject
to call in whole or in part bj the chairman of the
board of the Central Bank with the approval of the
governor (June 16, 1933, c. 98, § 33, 48 Stat. 262).

§ 1134j

Lending power; prevention of duplication of
effort on the part of Central Bank and Banks for
Cooperatives.—The Central Bank is authorized to

make loans to cooperative associations, as defined
in subchapter VII of this chapter, as amended, for
any of the purposes and subject to the conditions
and limitations set forth in such subchapter, as
amended, and to make loans, by way of discount or
otherwise and subject to such terms and conditions
as may be prescribed by the chairman of the board
of the Central Bank, to Banks for Cooperatives
established under section 1134 of this subchapter.
The governor shall, by regulation or by pre­
scribing the terms of the charters issued to the
Central Bank for Cooperatives and the Banks for
Cooperatives, or both, provide such limitations,
as between the two types of banks, on the classes of
borrowers to which loans may be made and the
amount of the loans which may be made to indi­
vidual borrowers, as will best insure the absence
of duplication of effort by the two types of banks
and will secure the greatest efficiency in extending
the benefits of this subchapter to borrowers (June
16, 1933, c. 98, §§ 34, 38, 48 Stat. 262, 264).

§ 1134k




Ownership of stock by associations borrowing
from bank; payment into bank’s guaranty fund by
associations not authorized to purchase stock.— (a)

Cooperative associations borrowing from the Cen­
tral Bank shall be required to own, at the time the
loan is made, an amount of stock of the bank equal
34

12 U.S.C.

AGRICULTURAL CREDIT LAWS

in fair book value (not to exceed par), as deter­
mined by the bank, to $100 per $2,000 or fraction
thereof of the amount of the loan. Upon discharge
of the loan the stock held by the borrowing associa­
tion shall be retired and canceled and the associa­
tion shall be paid therefor, or in case the stock
subscription is included in the amount of the loan
there shall be credited on the final payment of the
loan, an amount equal to the amount paid for the
stock or loaned to subscribe for the stock, as the
case may be, minus the pro rata impairment, if any,
of capital and guaranty fund of the Central Bank,
as determined by the chairman of the board of the
Central Bank.
(b)
In any case in which a cooperative associa­
tion applying for a loan is not authorized, under the
law of the State in which it is organized, to sub­
scribe for stock in the Central Bank, the bank shall,
in lieu of stock subscription, require the borrowing
association to pay into a guaranty fund, or the bank
may retain out of the amount of the loan and credit
to the guaranty fund, an amount equal to the
amount which the borrowing association would
have been required to own in stock if such associa­
tion had been authorized to hold such stock. Upon
discharge of its loan, the provisions of the last
sentence of subsection (a) shall apply with respect
to sums of such association in the guaranty fund
in the same manner as if such sums were repre­
sented by stock (June 16, 1*933, c. 98, § 35, 48 Stat.
263).
§11341




Earnings and reserves; guaranty fund; surplus;
dividends to stockholders and subscribers to guar­
anty fund; application of dividends on Governmentowned stock.—The Central Bank for Cooperatives

shall, at the end of its fiscal year, apply the amount
of its earnings in excess of operating expenses dur­
ing such fiscal year, first, to making up any losses
incurred; second, to the restoration of the amount
of the impairment, if any, of capital and guaranty
fund as determined by the chairman of the board;
and at least 25 per centum of the remainder of such
excess of earnings shall be applied to the creation
and maintenance of a surplus equal to at least 25
per centum of the amount of the capital and guar­
anty fund. Any sums remaining may, with the
approval of the chairman of the board, be devoted
to the payment of dividends. Subscribers to the
guaranty fund shall be entitled to dividends in the
same amounts as subscribers to stock. No rate
of dividend in excess of 7 per centum per annum
35

12 Ü.S.C.

AGRICULTURAL CREDIT LAWS

shall be paid. Dividends on stock held by the
governor, when paid, shall be credited to the
revolving fund created under section 1141d of this
chapter, as amended (June 16, 1933, c. 98, § 36,
48 Stat. 263).
§ 1134m

Debentures; amount; security; preparation and
issue; custody of collateral.—The Central Bank is
authorized to issue debentures, but the amount of
debentures which may be outstanding may not
exceed at any one time five times the paid-in capi­
tal and surplus of the bank. Such debentures shall
be issued at such times and subject to such terms
and conditions as the board of directors shall deter­
mine but shall bear such interest rates as may be
fixed by the chairman of the board. Such deben­
tures shall be secured by collateral which shall be
at least equal in value to the amount of debentures
outstanding and which shall consist of cash, direct
obligations of the United States, or notes or other
obligations discounted or purchased or represent­
ing loans made under section 1134j. The pro­
visions of law applicable to the preparation and
issue of Federal intermediate credit bank deben­
tures shall, so far as applicable, govern the prepara­
tion and issue of debentures issued under this
section. The governor shall appoint a custodian
of such collateral who shall have power subject to
such rules and regulations as the governor may
prescribe to approve and accept substitutions of
collateral (June 16, 1933, c. 98, § 37, 48 Stat. 263).
SUBCHAPTER VI.— PROVISIONS COMMON
TO PRODUCTION CREDIT CORPORA­
TIONS, PRODUCTION CREDIT ASSOCIA­
TIONS, REGIONAL AND CENTRAL BANKS
FOR COOPERATIVES

§1138




General corporate powers.—The Central Bank
for Cooperatives, and the Production Credit
Corporations, the Production Credit Associations,
and the Banks for Cooperatives, organized under
the two preceding subchapters, shall have suc­
cession, until dissolved in accordance with this
subchapter or any other Act of#Congress; shall
have power to sue and be sued in any court, to
adopt and use a corporate seal, to make contracts,
to acquire, hold, and dispose of real and personal
property necessary and incident to the conduct of
their business, to prescribe fees and charges (which
36

12 Ü.S.C.

AGRICULTURAL CREDIT LAWS

in any case shall be subject to the rules and regula­
tions prescribed by the governor) for loans and
other services; and shall have such other powers
necessary and incident to carrying out their powers
and duties under this subchapter, or any other Act
of Congress as may be provided by the governor in
their charters or in any amendments thereto.
Each such bank, association, or corporation shall,
for the purposes of jurisdiction, be deemed a citizen
of the State or District within which its principal
office is located. No district court of the United
States shall have jurisdiction of any action or suit
by or against any Production Credit Corporation
or Production Credit Association upon the ground
that it was incorporated under this chapter or that
the United States owns a majority of the stock in
it, nor shall any district court of the United States
within the land bank district served by such asso­
ciation or corporation have jurisdiction by removal
or otherwise of any suit by or against any such
association or corporation except in cases by or
against the United States or by or against any
officer of the United States and except in cases by
or against any receiver of any such corporation or
association appointed in accordance with section
1138e (June 16, 1933, c. 98, § 60, 48 Stat. 266).
§ 1138a

Examinations; assessments against corpora­
tions for cost of examinations.—At least once

each year and at such other times as the governor
deems necessary, the Central Bank for Coopera­
tives, and each Production Credit Corporation,
Production Credit Association, and Bank for Co­
operatives, organized under this chapter, shall be
examined by examiners designated by the gover­
nor. The governor shall assess the cost of such
examinations against the bank, association, or
corporation examined, which shall pay such costs
to the governor. The amount so assessed and
unpaid shall be a prior lien on all assets of the bank,
association, or corporation examined except on
assets pledged to secure loans (June 16, 1933, c.
98, § 61, 48 Stat. 267).
§ 1138b




Fiscal agents of United States.—The Central
Bank for Cooperatives, the Production Credit
Corporations, Production Credit Associations, and
Banks for Cooperatives, organized under this
chapter, when designated for that purpose by the
Secretary of the Treasury, shall act as fiscal agents

37

u.s.c.

AGRICULTURAL CREDIT LAWS

of the United States Government and when acting
as such shall perform such duties as shall be pre­
scribed by the Secretary of the Treasury (June 16,
1933, c. 98, § 62, 48 Stat. 267).
1138c

Tax exemption; realty and tangible personalty as
subject to taxation; termination of tax exemption
after retirement of Government-owned stock.—

The Central Bank for Cooperatives, and the Pro­
duction Credit Corporations, Production Credit
Associations, and Banks for Cooperatives, organ­
ized under this chapter, and their obligations, shall
be deemed to be instrumentalities of the United
States, and as such, any and all notes, debentures,
bonds, and other such obligations issued by such
banks, associations, or corporations shall be exempt
both as to principal and interest from all taxation
(except surtaxes, estate, inheritance, and gift taxes)
now or hereafter imposed by the United States or
by any State, Territorial, or local taxing authority.
Such banks, associations, and corporations, their
property, their franchises, capital, reserves, surplus,
and other funds, and their income, shall be exempt
from all taxation now or hereafter imposed by the
United States or by any State, Territorial, or local
taxing authority; except that any real property and
any tangible personal property of such banks, asso­
ciations, and corporations shall be subject to Fed­
eral, State, Territorial, and local taxation to the
same extent as other similar property is taxed.
The exemption provided herein shall not apply with
respect to any Production Credit Association or its
property or income after the stock held in it by the
Production Credit Corporation has been retired,
or with respect to the Central Bank for Coopera­
tives, or any Production Credit Corporation or
Bank for Cooperatives, or its property or income
after the stock held in it by the United States has
been retired (June 16, 1933, c. 98, § 63, 48 Stat.
263).
______
1138d




Offenses and penalties— (a) False representa­
tion; overvaluation of property.—Whoever makes

any material representation knowing it to be false,
or whoever willfully overvalues any property or
security, for the purpose of influencing in any way
the action of the Farm Credit Administration,
any Federal intermediate bank, or the Federal
Farm Mortgage Corporation, or any division,
ofBcer, or emplo}ree thereof, or of any corporation
organized under subchpater IV or V of this chap­
ter, or in which a Production Credit Corporation
organized under this chapter holds stock, or of any
regional agricultural credit corporation estab88

12 U.S.C.

AGRICULTURAL CREDIT LAWS

§ 1138d lished pursuant to subsection (e) of section 605b
of Title 15, upon any application, advance, dis­
count, purchase or repurchase agreement, or loan,
or any change or extension of any of the same, by
renewal, deferment of action or otherwise, or the
acceptance, release, oi 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 (June 16, 1933, c, 98, § 64 (a),
48 Stat. 267; Jan. 31, 1934, c, 7, § 13, 48 Stat. 344).




(b) Forgery, counterfeiting, alteration, etc., of
obligations of corporation or of Farm Credit Admin­
istration.—Whoever (1) falsely makes, forges, or

counterfeits any note, debenture, bond, or other
obligation, coupon, or paper in imitation of or pur­
porting to be a note, debenture, bond, or other
obligation, coupon, or paper issued by the Farm
Credit Administration, any Federal Intermediate
Credit Bank, or the Federal Farm Mortgage Cor­
poration, or by any corporation referred to in sub­
section (a) of this section; or (2) passes, utters, or
publishes, or attempts to pass, utter, or publish,
any false, forged, or counterfeited note, debenture,
bond, or other obligation, coupon, or paper, pur­
porting to have been issued by the Farm Credit
Administration or by any such corporation, know­
ing the same to be false, forged, or counterfeited;
or (3) falsely alters any note, debenture, bond, or
other obligation, coupon, or paper issued or pur­
porting to have been issued by the Farm Credit
Administration or by any such corporation; or (4)
passes, utters, or publishes, or attempts , to pass,
utter, or publish, any of the same as true, knowing
it to be falsely altered or spurious, shall be punished
by a fine of not more than $10,000 or by imprison­
ment for not more than five years, or both (June 16,
1933, c. 98, § 64 (b), 48 Stat. 267; Jan. 31, 1934,
c. 7, § 13, 48 Stat, 344).
(c) Embezzlement, misapplication, etc., of any­
thing of value belonging to corporation or to admin­
istration; false entries; unauthorized making,
issuing, or assigning of instrument; personally
benefiting from business of corporation.—Whoever

being an employee, officer, or agent of the Farm
Credit Administration, any Federal Intermediate
Credit Bank, or the Federal Farm Mortgage Cor­
poration, or connected in any capacity with any
corporation referred to in subsection (a) of this
section, (1) embezzles, abstracts, purloins, or will­
fully misapplies any moneys, funds, securities, or
other things of value, whether belonging to the
Farm Credit Administration, any Federal Inter39

12 Ü.S.C.

AGRICULTURAL CREDIT LAWS

§ 1138d mediate Credit Bank, or the Federal Farm Mort­




gage Corporation, or such corporation or pledged
or otherwise intrusted to the same; or (2) with
intent to defraud the United States, or any such
corporation, or any other body politic or corporate,
or any individual, or to deceive any officer, auditor,
or examiner of the Farm Credit Administration,
any Federal Intermediate Credit Bank, or the Fed­
eral Farm Mortgage Corporation, or of any such
corporation, makes any false entry in any book,
report, or statement of or to the Farm Credit Ad­
ministration, any Federal Intermediate Credit
Bank, or the Federal Farm Mortgage Corporation,
or any such corporation, or draws any order, or
issues, puts forth, or assigns any note, debenture,
bond, or other obligation, or draft, mortgage, judg­
ment, or decree thereof; or (3) with intent to
defraud the United States or any corporation re­
ferred to in subsection (a) of this section, partici­
pates or share in or receives directly or indirectly
any money, profit, property, or benefits through
any transaction, loan, commission, contract, or any
other act of any such corporation, shall be punished
by a fine of not more than $10,000, or by imprison­
ment for not more than five years, or both (June
16, 1933, c. 98, § 64 (c), 48 Stat. 267; Jan. 31, 1934,
c. 7, § 13, 48 Stat. 344).
(d) Concealment, conversion, etc., of property
mortgaged or pledged to, or held by corporation or
administration.—Whoever knowingly, with intent
to defraud the United States or any corporation
referred to in subsection (a) of this section, shall
conceal, remove, dispose of, or convert, to his own
use or to that of another, any property mortgaged
or pledged to, or held by, the Farm Credit Adminis­
tration, any Federal Intermediate Credit Bank, or
the Federal Farm Mortgage Corporation, or any
such corporation, as security for any obligation,
shall be punished by a fine of not more than $5,000,
or by imprisonment for not more than two years,
or both (June 16, 1933, c. 98, § 64 (d), 48 Stat. 267;
Jan. 31, 1934, c. 7, § 13, 48 Stat, 344).
(e) Applicability of criminal code provisions to
transactions of corporations and administration.—
The provisions of sections 202 to 207, inclusive, of
Title 18, insofar as applicable, are extended to apply
to contracts or agreements made by the Farm
Credit Administration, any Federal Intermediate
Credit Bank, or the Federal Farm Mortgage Cor­
poration, its divisions, officers, and employees, and
by the corporations referred to in subsection (a) of
this section, which, for the purposes hereof, shall
be held to include advances, loans, discounts, and
40

12 U.S.C.

AGRICULTURAL CREDIT LAWS

§ 1138d purchase and repurchase agreements; extensions
and renewals thereof; and acceptances, releases, and
substitutions of security therefor (June 16, 1933,
c. 98, § 64 (e), 48 Stat. 267; Jan. 31, 1934, c. 7,
§ 13, 48 Stat. 344).
(f)
Conspiracy.— Whoever conspires with an­
other to accomplish any of the acts made unlawful
by the preceding provisions of this section, shall, on
conviction thereof, be subject to the same fine or
imprisonment, or both, as is applicable in the case
of conviction for doing such unlawful act (June 16,
1933, c. 98, § 64 (f), 48 Stat. 267).
§ 1138e

Receivership; voluntary liquidation.—Upon de­
fault of any obligation of any Production Credit
Corporation, Production Credit Association, or
regional Bank for Cooperatives, such bank, associ­
ation, or corporation may be declared insolvent and
placed in the hands of a receiver by the governor
and proceedings shall thereupon be had in accord­
ance with the provisions of law relating to the in­
solvency of national farm loan associations. Any
such bank, association, or corporation may, with
the consent of the governor, liquidate voluntarily,
but only in accordance with such rules and regula­
tions as the governor may prescribe (June 16, 1933,
c. 98, § 65, 48 Stat. 269).

§ 1138f

Limitation on compensation payable to director,
officer, or employee.—No director, officer, or em­




ployee of the Central Bank for Cooperatives, or of
any Production Credit Corporation, Production
Credit Association, or Bank for Cooperatives shall be
paid compensation at a rate in excess of $10,000 per
annum. No officer or employee of the Farm
Credit Administration engaged m carrying out the
provisions of this subchapter and subchapters IV
and V of this chapter shall be paid compensation at
a rate in excess of $10,000 per annum (June 16,
1933, c. 98, § 66, 48 Stat. 269).
SUBCHAPTER V II— AGRICULTURAL
MARKETING ACT
HISTORICAL NOTE
This subchapter contains the Agricultural Marketing Act
of June 15, 1929, as amended.
In view of the amendments to the Agricultural Market­
ing Act, and of the transfer of its administration to the
Governor of the Farm Credit Administration by Executive
Order No. 6084, set forth at the beginning of this chapter
under “ Introductory” , the provisions of the Act as amended
have been transferred to this chapter from Title 7.
From the provisions of subchapter V of this chapter, it
will be noted that many of the functions defined in this sub­

41

U.S.G.

AGRICULTURAL CREDIT LAWS
chapter may now be exercised through regional banks for
cooperatives and a central bank for cooperatives, rather
than direct, in the manner originally provided for by the
terms of this subchapter. The banks for cooperatives,
under subchapter V, are to be established with capital stock
purchased from the revolving fund created under section
1141d of this subchapter; and the loaning powers of the
banks for cooperatives, under subchapter V, are similar to
those originally created under this subchapter and not
rescinded by amendments thereto.
The Agricultural Marketing Act was entitled “ An Act to
establish a Federal Farm Board to promote the effective
merchandising of agricultural commodities in interstate and
foreign commerce, and to place agriculture on a basis of
economic equality with other industries.’ ’

1141




Declaration of policy; effective merchandising of
agricultural commodities; speculation; cooperative
marketing; surpluses; administration of subchap­
ter.— (a) It is hereby declared to be the policy of

Congress to promote the effective merchandising
of agricultural commodities in interstate and for­
eign commerce, so that the industry of agriculture
will be placed on a basis of economic equality with
other industries, and to that end to protect, con­
trol, and stabilize the currents of interstate and
foreign commerce in the marketing of agricultural
commodities and their food products—
(1) by minimizing speculation.
(2) by preventing inefficient and wasteful
methods of distribution.
(3) by encouraging the organization of producers
into effective associations or corporations under
their own control for greater unity of effort in mar­
keting and by promoting the establishment and
financing of a farm marketing system of producerowned and producer-controlled cooperative asso­
ciations and other agencies.
(4) by aiding in preventing and controlling sur­
pluses in any agricultural commodity, through
orderly production and distribution, so as to main­
tain advantageous domestic markets and prevent
such surpluses from causing undue and excessive
fluctuations or depressions in prices for the com­
modity.
(b) There shall be considered as a surplus for the
purposes of this subchapter any seasonal or year’s
total surplus, produced in the United States and
either local or national in extent, that is in excess
of the requirements for the orderly distribution of
the agricultural commodity or is in excess of the
domestic requirements for such commodity.
(c) The Farm Credit Administration shall exe­
cute the powers vested in it by this subchapter only
in such manner as will, in the judgment of the ad­
42

12 U.S.C.

AGRICULTURAL CREDIT LAWS

ministration aid to the fullest practicable extent in
carrying out the policy above declared (June 15,
1929, c. 24, § 1, 46 Stat. 11; Mar. 27, 1933, Ex. Or.
6084).
“ Farm Credit Administration” and “ administration” mentioned in
the text were substituted for “ Federal Farm Board” and “ board” ,
respectively, pursuant to the Executive Order cited threto, which is set out
in full at the beginning of this chapter.

§ 1141a




Federal Farm Board.—A Federal Farm Board
is hereby created, which shall consist of eight mem­
bers to be appointed by the President, by and
with the advice and consent of the Senate, and
of the Secretary of Agriculture, ex officio. In
making the appointments the President shall give
due consideration to having the major agricultural
commodities produced in the United States fairly
represented upon the board. The terms of office
of the appointed members of the board first taking
office after the date of the approval of this sub­
chapter shall expire, as designated by the President
at the time of nomination, two at the end of the
first year, two at the end of the second year, one at
the end of the third year, one at the end of the
fourth year, one at the end of the fifth year, and
one at the end of the sixth year after such date.
A successor to an appointed member of the board
shall have a term of office expiring six years from the
date of the expiration of the term for which his
predecessor was appointed, except that any person
appointed to fill a vacancy in the board occurring
prior to the expiration of the term for which his
predecessor was appointed, shall be appointed for
the remainder of such term. One of the appointed
members shall be designated by the President as
chairman of the board and shall be the principal
executive officer thereof. The board shall select
a vice chairman, who shall act as chairman in case
of the absence or disability of the chairman. The
board may function notwithstanding vacancies, and
a majority of the appointed members in office shall
constitute a quorum. Each appointed member
shall be a citizen of the United States and shall not
actively engage in any other business, vocation, or
employment than that of serving as a member of
the board; nor shall any appointed member during
his term of office engage in the business (except
such business as is necessary to the operation of
his own farm or farms) of bu}dng and selling, or
otherwise be financially interested in, any agricul­
tural commodity or product thereof. Each ap­
pointed member shall receive a salary of $12,000
43

12 U.S.C.

AGRICULTURAL CREDIT LAWS

a year, together with necessary traveling and
subsistence expenses, or per diem allowance in lieu
thereof, within the limitations prescribed by law,
while away from his official station upon official
business (June 15, 1929, c. 24, § 2, 46 Stat. 11).
This section rendered obsolete, by Executive Order 6084, except insofar
as it affects the qualifications, appointment, business engagements, salary,
and expenses of the Governor of the Farm Credit Administration,
formerly known as chairman of the Federal Farm Board. ;

§ 1141b

General powers of Farm Credit Administra­
tion.—The Farm Credit Administration—

(1) Shall maintain its principal office in the
District of Columbia, and such other offices in the
United States as in its judgment are necessary.
(2) shall have an official seal which shall be
judicially noticed.
(3) shall make an annual report to Congress
upon the administration of this subchapter and
any other matter relating to the better effectuation
of the policy declared in section 1141, including
recommendations for legislation.
(4) may make such regulations as are necessary
to execute the functions vested in it by this sub­
chapter.
(5) may appoint and fix the salaries of a secretary
and such experts, and, in accordance with sections
661-674 of Title 5, as amended, and subject to
the provisions of the civil service laws, such other
officers and employees, as are necessary to execute
such functions.
(6) may make such expenditures (including
expenditures for rent and personal services at the
seat of government and elsewhere, for law books,
periodicals, and books of reference, and for printing
and binding) as are necessary to execute such func­
tions. Expenditures by the administration shall
be allowed and paid upon the presentation of item­
ized vouchers therefor approved by the governor
of the administration (June 15, 1929, c. 24, § 4
46 Stat. 13; Mar. 27, 1933, Ex. Or. 6084).
“ Farm Credit Administration” and “ administration” mentioned in
the text were substituted for “ Federal Farm Board” and “ board,”
respectively, and “ governor” was substituted for “ chairman’ ’ pursuant
to the Executive Order cited thereto, which is set out in full at the
beginning of this chapter.

s 1141c




Special powers of administration.—The admin­
istration is authorized and directed—
(1)
to promote education in the principles and
practices of cooperative marketing of agricultural
commodities and food products thereof.

44

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AGRICULTURAL CREDIT LAWS

(2) to encourage the organization, improvement
in methods, and development of effective cooper­
ative associations.
(3) to keep advised from any available sources
and make reports as to crop prices, experiences,
prospects, supply, and demand, at home ana
abroad (June 15, 1929, c. 24, § 5, 46 Stat. 13; Mar.
27, 1933, Ex. Or. 6084; June 16, 1933, c. 98, § 50
(a), 48 Stat. 265).
“ Administration” mentioned in the text was substituted for “ board”
pursuant to the Executive Order cited thereto, which is set out in full at the
beginning of this chapter.

§ 1141d

Revolving fund.—There is hereby authorized
to be appropriated the sum of $500,000,000 which
shall be made available by the Congress as soon as
practicable after the approval of this subchapter
and shall constitute a revolving fund to be admin­
istered by the administration as provided in this
subchapter and subchapter V of this chapter (June
15, 1929, c. 24, § 6, 46 Stat. 14; Mar. 27, 1933, Ex.
Or. 6084; June 16, 1933, c. 98, §§ 33, 34, 40, 41, 48
Stat. 262, 264).
“ Administration” mentioned in the text was substituted for “ board”
pursuant to the Executive Order cited thereto, which is set out in full at the
beginning of this chapter.
For use of revolving fund in purchasing capital stock in regional and
central banks for cooperatives, see sections 1170 and 1183 of subchapter V .

§ 1141e




Loans to cooperative associations.— (a) Upon
application by any cooperative association the
administration is authorized to make loans to it
from the revolving fund [provided for in section
114Id] to assist in—
(1) the effective merchandising of agricultural
commodities and food products thereof and the
financing of its operations;
(2) the construction or acquisition by purchase
or lease, or refinancing the cost of such construc­
tion or acquisition, of physical marketing facilities
for preparing, handling, storing, processing, or
merchandising agricultural commodities or their
food products;
(b) No loan shall be made to any cooperative
association unless, in the judgment of the adminis­
tration, the loan is in furtherance *of the policy
declared in section 1141 and the cooperative
association applying for the loan has an organiza­
tion and management, and business policies, of such
character as to insure the reasonable safety of the
loan and the furtherance of such policy.
(c) Loans for the construction or acquisition by
purchase or lease of physical facilities, or for re­
45

12 U.S.O.

AGRICULTURAL CREDIT LAWS

financing the cost of such construction or acquistion
[acquisition], shall be subject to the following con­
ditions:
(1) No such loan shall be made in an amount in
excess of 60 per centum of the value of the facilities.
(2) No loan for the purchase or lease of such
facilities shall be made unless the Governor of the
Farm Credit Administration finds that the purchase
price or rent to be paid is reasonable.
(d)
Loans for the construction or purchase of
physical facilities, together with interest on the
loans, shall be repaid upon an amortization plan
over a period not in excess of twenty years (June 15,
1929, c. 24, § 7, 46 Stat. 14; Mar. 27, 1933, Ex. Or.
6084; June 16, 1933, c, 98, § § 50-53,48 Stat. 265).
“ Administration” mentioned in the text was substituted for “ board”
Order
full at the
Eursuant to the Executivesection cited thereto, which isaset out inparagraph,
eginning of this chapter.
Subsection (a) of this
originally contained
fourth
relating to loans for education in the advantages of cooperative marketing,
which was repealed by section 50 (a) of the Farm Credit Act of June 16, 1933.
Subsection (a) of this section originally contained a fifth paragraph, as
follows: “ (5) enabling the cooperative association applying for the loan
to advance to its members a greater share of the market price of the com­
modity delivered to the association than is practicable under other credit
facilities.”
This paragraph was repealed by section 50 (a) of the Farm Credit Act of
June 16,1933, subject to the following provision of section 50 (b) of that Act:
“ The repeal of section 1141e (a) (5] shall not be construed to prohibit the
extension, renewal, or refinancing or any loan made thereunder and out­
standing on the date of the enactment of this Act, but loans to extend, re­
new, or refinance any such loan shall bear interest rates as determined un­
der section 1141f (a) of this chapter, as amended.”
See sections 1134c and 1134j of subchapter V for loans to cooperative asso­
ciations by banks for cooperatives, established under the Farm Credit Act
of June 18, 1933, and capitalized from the revolving fund provided for in
§114ld hereof.

8 1141f




Miscellaneous loan provisions.— (a) Loans to
any cooperative association shall bear such rates of
interest as the Governor of the Farm Credit Ad­
ministration shall by regulation prescribe, but in
no case shall the rate be less than 3 per centum per
annum or more than 6 per centum per annum on the
unpaid principal. In fixing such rates of interest,
the governor shall fix such rates as he deems the
needs of the lending agencies require and in the case
of loans made for tne purposes of section 1141e (a)
(1) the rate shall, as nearly as practicable, conform
to a rate 1 per centum per annum in excess of the
Federal Intermediate Credit Bank discount rate at
the time the loan is made, and in the case of loans
made for the* purposes of section 1141e (a) (2) the
rate of interest shall, as nearly as practicable, con­
form to the prevailing rate on mortgage loans made
to members of national farm loan associations
at the time the loan is made.
(b)
Payments of principal or interest upon any
such loan or advance shall be covered into the re­
volving fund [provided for in section 1141d].
46

Ü.S.C.

AGRICULTURAL CREDIT LAWS

(c) Loans to any cooperative association or sta­
bilization corporation shall be made upon the terms
specified in this sub-chapter and upon such other
terms not inconsistent therewith and upon such
security as the administration deems necessary.
(d) No loan or insurance agreement shall be
made by the administration if in its judgment the
agreement is likely to increase unduly the produc­
tion of any agricultural commodity of which there
is commonly produced a surplus in excess of the
annual marketing requirements (June 15, 1929,
c. 24, § 8, 46 Stat. 14; Mar. 27, 1933, Ex. Or. 6084;
June 16, 1933, c. 98, § 54, 48 Stat. 264).
“ Administration” mentioned in the text was substituted for “ board”
pursuant to the Executive Order cited thereto, which is set out in full at
the beginning of this chapter.
See § 1141g and note thereto.

1141g




Stabilization corporations.— (a) The adminis­
tration may, upon application of the advisory
commodity committee for any commodity, recog­
nize as a stabilization corporation for the com­
modity any corporation if—
(1) The administration finds that the marketing
situation with respect to the agricultural com­
modity requires or may require the establishment
of a stabilization corporation in order effectively to
carry out the policy declared in section 1141; and
(2) The administration finds that the corpora­
tion is duly organized under the laws of a State or
Territory; and
(3) The administration finds that all the out­
standing voting stock or membership interests in
the corporation are and may be owned only by
cooperative associations handling the commodity;
and
(4) The corporation agrees with the administra­
tion to adopt such bylaws as the administration
may from time to time require, which bylaws,
among other matters, shall permit cooperative
associations not stockholders or members of the
corporation to become stockholders or members
therein upon equitable terms.
(b)
Any stabilization corporation for an agri­
cultural commodity (1) may act as a marketing
agency for its stockholders or members in pre­
paring, handling, storing, processing, and merchan­
dising for their account any quantity of the agricul­
tural commodity or its food products, and (2) for
the purpose of controlling any surplus in the com­
modity in furtherance of the policy declared in
section 1141, may prepare, purchase, handle, store,
process, and merchandise, otherwise than for the
47

12 U.S.O.

AGRICULTURAL CREDIT LAWS

§ 1141g account of its stockholders or members, any quan­
tity of the agricultural commodity or its food prod­
ucts whether or not such commodity or products
are acquired from its stockholders or members.
(c) Upon request of the advisory committee for
any commodity the administration is authorized
to make loans from the revolving fund to the sta­
bilization corporation for the commodity for work­
ing capital to enable the corporation to act as a
marketing agency for its stockholders or members
as hereinbefore provided. Not less than 75 per
centum of all profits derived by a stabilization cor­
poration each year from its operations as such a
marketing agency shall be paid into a merchan­
dising reserve fund to be established by the cor­
poration. No such payment shall be required
whenever the fund is in such amount as, in the
judgment of the administration, constitutes a suffi­
cient reserve for such operations of the corporation.
Out of the remainder of such profits for the year
the corporation shall repay any outstanding loan
made under this subdivision and the accrued in­
terest thereon, or if all such loans and accrued
interest have been fully repaid, then it may dis­
tribute a patronage dividend to its stockholders or
members. Such patronage dividend shall be paid
to each stockholder or member on the basis of the
total volume of the commodity or its products for
the year marketed for his account through the
corporation.
(d) Upon request of the advisory committee for
any commodity the administration is authorized
to make loans from the revolving fund to the
stabilization corporation for the commodity to
enable the corporation to control any surplus in
the commodity as hereinbefore provided and for
meeting carrying and handling charges and other
operating expenses in connection therewith. The
administration shall require a stabilization cor­
poration to establish and maintain adequate
reserves from its profits from its surplus control
operations before it shall pay any dividends out of
such profits. All losses of the corporation from
such operations shall be paid from such reserves,
or if such reserves are inadequate, then such losses
shall be paid by the administration as a loan from
the revolving fund. Any amounts so loaned for
payment of losses shall be repaid into the revolving
fund by the corporation from future profits from
its surplus control operations. Any stabilization
corporation receiving loans under this subdivision
for surplus control operations shall exert every




48

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AGRICULTURAL CREDIT LAWS

reasonable effort to avoid losses and to secure
profits, but shall not withhold any commodity
from the domestic market if the prices have become
unduly enhanced, resulting in distress to domestic
consumers. Stockholders or members of the corbe subject to assessment
Î)oration shall not surplus control operationsfor any
osses incurred in
of the
corporation.
(e) A stabilization corporation shall keep such
accounts, records, and memoranda, and make such
reports with respect to its transactions, business
methods, and financial condition, as the admin­
istration may from time to time prescribe; shall
permit the administration to audit its accounts
annually and at such other times as the admin­
istration deems advisable; and shall permit the
administration, upon its own initiative or upon
written request of any stockholder or member, to
investigate the financial condition and business
methods of the corporation.
(f) No loan shall be made to any stabilization
corporation unless, in the judgment of the admin­
istration, the loan is in furtherance of the policy
declared in section 1141 (June 15, 1929, c. 24, § 9,
46 Stat. 14; Mar. 27, 1933, Ex. Or. 6084).
This section constituted § 9 of the Agricultural Marketing Act of June
15, 1929. The powers and duties originally vested in the Federal Farm
Board by this section were vested in the Farm Credit Administration, by
§ 3 of Executive Order N o. 6084, subject to the following provisions of
§ 6 of that Order:
“ The functions vested in the Federal Farm Board by section 9 of the
Agricultural Marketing Act are abolished, except that such functions shall
continue to be exercised to such extent and for such time as may be neces­
sary to permit the orderly winding up of the activities of stabilization cor­
porations heretofore recognized under authority of such section, and the
governor of the Farm Credit Administration shall take appropriate action
for winding up at the earliest practicable date the activities of such cor­
porations and all affairs related to the exercise of such functions.”
The “ Advisory Commodity C om m ittees" to which reference is made
in this section were provided for by § 3 of the Agricultural Marketing Act
of June 15, 1929, which section was repealed by section 50 (a) of the Farm
Credit Act of June 16, 1933.
“ Administration” mentioned in the text was substituted for “ board”
pursuant to the Executive Order cited thereto, which is set out in full at
the beginning of this chapter.

§ 1141h

Avoidance of duplication; cooperation with other
governmental establishments; obtaining informa­
tion and data; cooperation with States, Territories,
and agencies or subdivisions thereof; indicating
research problems; transfer of offices, functions,
etc.— (a) The administration shall, in cooper­
ation with any governmental establishment in the
Executive branch of the Government, including
any field service thereof at home or abroad, avail
itself of the services and facilities thereof in order to
avoid preventable expense or duplication of effort.
(b)
The President may by Executive order direct
any such governmental establishment to furnish




49

12 U.S.C.

AGRICULTURAL CREDIT LAWS

§ 1141h the administration such information and data as
such governmental establishment may have per­
taining to the functions of the administration
[under this subchapter]; except that the President
shall not direct that the administration be furnished
with any information or data supplied by any per­
son in confidence to any governmental establish­
ment in pursuance of any provision of law or of any
agreement with a governmental establishment.
(c) The administration may cooperate with any
State or Territory, or department, agency, or polit­
ical subdivision thereof, or with any person.
(d) The administration shall, through the gov­
ernor, indicate to the appropriate bureau or division
of the Department of Agriculture any special prob­
lem on which a research is needed to aid in carrying
out the provisions of this subchapter.
(e) The President is authorized, by Executive
order, to transfer to or retransfer from the jurisdic­
tion and control of the administration the whole or
any part of (1) any office, bureau, service, division,
commission, or board in the Executive branch of the
Government engaged in scientific or extension work,
or the furnishing of services, with respect to the
marketing of agricultural commodities, (2) its func­
tions pertaining to such work or services, and (3) the
records, property, including office equipment, per­
sonnel, and unexpended balances of appropriation,
pertaining to such work or services (June 15,1929,
c. 24, § 13, 46 Stat. 17 ; Mar. 27,1933, Ex. Or. 6084).
“ Administration" mentioned in the text was substituted for “ board"
pursuant to the Executive Order cited thereto, which is set out in full at
the beginning of this chapter.

§ 1141i




Examination of books and accounts; limitation
on purpose of examination respecting expenditures
from revolving fund.—Vouchers approved by the
Governor of the Farm Credit Administration for
expenditures from the revolving fund [provided
for in section 1141d] pursuant to any loan or ad­
vance or from insurance moneys pursuant to any
insurance agreement, shall be final and conlusive
upon all officers of the Government; except that all
financial transactions of the administration shall,
subject to the above limitations, be examined by
the General Accounting Office at such times and in
such manner as the Comptroller General of the
United States may by regulation prescribe. Such
examination, with respect to expenditures from the
revolving fund pursuant to any loan or advance or
from insurance moneys pursuant to any insurance
agreement, shall be for the sole purpose of making a
50

12 Ü.S.C.

AGRICULTURAL CREDIT LAWS

report to the Congress and to the board of expendi­
tures and of loan and insurance agreements in vio­
lation of law, together with such recommendations
thereon as the Comptroller General deems advis­
able (June 15, 1929, c. 24, § 14, 46 Stat. 18; Mar. 27,
1933, Ex. Or. 6084).
Insurance agreements, to which reference is made in this section, were
authorized to be made by § 11 of the Agricultural Marketing Act of June 15,
1929, which section was repealed by § 50 (a) of the Farm Credit Act of
June 16, 1933. The provision, as originally contained in the Agricultural
Marketing Act, authorized the Federal Farm Board, upon application of
cooperative associations, to enter into agreements, subject to specified
conditions for the insurance of the associations against loss through price
decline in the agricultural commodity handled by the associations and
produced by the members thereof.
“ Governor of the Farm Credit Administration” and “ administration”
mentioned in the text were substituted for “ chairman of the board” and
“ board” , respectively, pursuant to the Executive Order cited thereto,
which is set out in full at the beginning of this chapter.

§ 1141j




Miscellaneous provisions— (a) “ Cooperative as­
sociation” defined.—As used in this subchapter
the term “ cooperative association” means any
association in which farmers act together in col­
lectively processing, preparing for market, handling
and/or marketing the farm products of persons so
engaged and also means any association in w
rhich
farmers act together in collectively purchasing, test­
ing, grading, and/or processing their farm supplies:
Provided, however, That such associations are oper­
ated for the mutual benefit of the members thereof
as such producers or purchasers and conform to one
or both of the following requirements:
First. That no member of the association is
allowed more than one vote because of the amount
of stock or membership capital he may own
therein; and
Second. That the association does not pay
dividends on stock or membership capital in excess
of 8 per centum per annum.
And in any case to the following:
Third. That the association shall not deal in the
products of or supplies for nonmembers to an
amount greater in value than such as are handled
by it for members. (June 15, 1929, c. 24, § 15
(a), 46 Stat. 18; June 16, 1933, c. 98, § 55, 48
Stat. 266; Mar. 27, 1933, Ex. Or. 6084.)
(b)
Speculation prohibited.—It shall be un­
lawful for the governor, or any officer or employee
of the Farm Credit Administration [engaged in
the administration of this subchapter] to specu­
late, directly or indirectly, in any agricultural
commodity or product thereof, or in contracts
relating thereto, or in the stock or membership

51

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AGRICULTURAL CREDIT LAWS

§ 1141j interests of any association or corporation engaged
in handling, processing, or disposing of any such
commodity or product. Any person violating this
subdivision shall upon conviction thereof be fined
not more than $10,000, or imprisoned not more
than 10 years, or both. (June 15, 1929, c. 24, §
15 (b), 46 Stat. 18; Mar. 27, 1933, Ex. Or. 6084.)




“ The governor” and “ Farm Credit Administration” mentioned in the
text were substituted for “ any member” and “ board” , respectively, pur­
suant to the Executive Order cited thereto, which is set out in full at the
beginning of this chapter.

(c) Confidential information ; disclosure pro­
hibited.—It shall be unalwful (1) for any cooper­
ative association, stabilization corporation, clear­
ing house association, or commodity committee,
or (2) for any director, officer, employee, or mem­
ber or person acting on behalf of any such associ­
ation, corporation, or committee, to which or to
whom information has been imparted in confidence
by the administration, to disclose such informa­
tion in violation of any regulation of the admin­
istration. Any such association, corporation, or
committee, or director, officer, employee, or mem­
ber thereof, violating this subdivision, shall be
fined not more than $5,000, or imprisoned not
more than 5 years, or both (June 15, 1929, c. 24,
§ 15 (c), 46 Stat. 18; Mar. 27, 1933, Ex. Or. 6084).
“ Administration” mentioned in the text was substituted for “ board”
pursuant to the Executive Order cited thereto, which is set out in full at
the beginning of this chapter.

(d) Governmental publications; predictions as
to cotton prices prohibited.—The inclusion in
any governmental report, bulletin, or other such
publication hereafter issued or published of any
prediction with respect to cotton prices is hereby
prohibited. Any officer or employee of the United
States who authorizes or is responsible for the
inclusion in any such report, bulletin, or other
publication of any such prediction, or who know­
ingly causes the issuance or publication of any
such report, bulletin, or other publication con­
taining any such prediction, shall, upon conviction
thereof, be fined not less than $500 or more than
$5,000, or imprisoned for not more than 5 years,
or both: Provided, That this subdivision shall not
apply to the Governor of the Farm Credit Ad­
ministration when engaged in the performance
of his duties herein provided (June 15, 1929, c. 24,
§ 15 (d), 46 Stat. 18; Mar. 27, 1933, Ex. Or. 6084).
“ Governor of the Farm Credit Administration” mentioned in the text
was substituted for “ members of the board” , pursuant to the Executive
Order cited thereto, which is set out in full at the beginning of this chapter.

52

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AGRICULTURAL CREDIT LAWS

§ 1141j

(e) Separability clause.—If any provision of this
subchapter is declared unconstitutional, or the ap­
plicability thereof to any person, circumstance,
commodity, or class of transactions with respect to
any commodity is held invalid, the validity of the
remainder of the subchapter and the applicability
of such provision to other persons, circumstances,
commodities, and classes of transactions shall not
be affected thereby (June 15, 1929, c. 24, § 15 (e),
46 Stat. 18).
(f) Citation of subchapter.—This subchapter
may be cited as the “ Agricultural Marketing Act”
(June 15, 1929, c. 24, § 15 (f), 46 Stat. 18).
(g) “ Agricultural commodity” ; definition.—As
used in this subchapter, the term “ agricultural
commodity” includes, in addition to other agricul­
tural commodities, crude gum (oleoresin) from a
living tree, and the following products as processed
by the original producer of the crude gum (oleo­
resin) from which derived: Gum, spirits of turpen­
tine and gum rosin, as defined in section 92 of Title
7 (June 15, 1929, c. 24, § 15 (g), 46 Stat. 18; Mar.
4, 1931, c. 520, § 3, 46 Stat. 1550).

SUBCHAPTER VIII.— REGIONAL AGRICUL­
TURAL CREDIT CORPORATIONS
HISTORICAL NOTE

The Executive Order of March 27,1933, set forth at the be­
ginning of this chapter under “ Introductory” , transferred to
the jurisdiction and control of the Farm Credit Administra­
tion the functions defined in section 5 (e) of the Order, as
follows: “ The functions of the Reconstruction Finance Cor­
poration and its Board of Directors relating to the appoint­
ment of officers and agents to manage regional agricultural
credit corporations formed under section 201 (e) of the
Emergency Relief and Construction Act of 1932; relating
to the establishment of rules and regulations for such man­
agement; and relating to the approval of loans and advances
made by such corporations and of the terms and conditions
thereof.”
The section of the Emergency Relief and Construction
Act of July 21, 1932, to which reference is made in the above
quoted paragraph of the Executive Order, is contained in
section 805 (e) of Title 15, and is also incorporated in this
sub chapter.

§ 1148




Regional agricultural credit corporations; crea­
tion; capital; management; loans; rediscounts;
supervision.—The Reconstruction Finance Corpo­

ration is further authorized to create in any of the

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AGRICULTURAL CREDIT LAWS

twelve Federal land bank districts where it may
deem the same to be desirable a regional agricul­
tural credit corporation with a paid-up capital of not
less than $3,000,000, to be subscribed for by the Re­
construction Finance Corporation and paid for out
of the unexpended balance of the amounts allocated
and made available to the Secretary of Agriculture
under section 602 of Title 15. Such corporations
shall be managed by officers and agents to be ap­
pointed by the Farm Credit Administration under
such rules and regulations as it may prescribe.
Such corporations are hereby authorized and em­
powered to make loans or advances to farmers and
stockmen, the porceeds of which are to be used for
an agricultural purpose (including crop production),
or for the raising, breeding, fattening, or marketing
of livestock, to charge such rates of interest or dis­
count thereon as in their judgment are fair and
equitable, subject to the approval of the Farm
Credit Administration, and to rediscount with the
Reconstruction Finance Corporation and the vari­
ous Federal reserve banks and Federal intermediate
credit banks any paper that they acquire which is
eligible for such purpose. All expenses incurred
in connection with the operation of such corpora­
tions shall be supervised and paid by the Recon­
struction Finance Corporation under such rules and
regulations as its board of directors may prescribe
(July 21, 1932, c. 520, § 207, 47 Stat. 715; Mar. 27,
1933, Ex. Or. 6084).
“ Farm Credit Administration” mentioned in the text was substituted
for “ Reconstruction Finance Corporation” pursuant to the Executive
Order cited thereto, which is set out in full at the beginning of this chapter.

§ 1148a




Reduction of capital stock of regional agricultural
credit corporation; revolving fund from stock pro­
ceeds.—The Reconstruction Finance Corporation
is authorized, with the approval of the Governor
of the Farm Credit Administration, to reduce the
capital of any Regional Agricultural Credit Corpo­
ration by such action as may be suitable for the
purpose. The funds made available by any such
reduction shall constitute a revolving fund, all or
any part of which shall be available for use from
time to time by the Reconstruction Finance Corpo­
ration for the purpose of increasing, with the ap­
proval of the Governor of the Farm Credit Adminis­
tration, the capital of any Regional Agricultural
Credit Corporation (June 16, 1933, c. 98, § 84, 48
Stat. 273).
54

O