[PUBLIC NO. 430-72D CONGRESS]

[S. 5337]

AN ACT

To amend the Federal Farm Loan Act, as amended, to permit loans for additional purposes, to extend the powers of Federal land banks in the making of direct loans, to authorize upon certain terms the reamortization of loans by Federal and joint-stock land banks, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That section 7 of the Federal Farm Loan Act, as amended (U. S. C., title 12, chap. 7, secs. 711-722), is amended by adding at the end thereof the following new paragraph:

"Whenever it shall appear to the Federal Farm Loan Board that national farm-loan associations have not been formed in any locality in the continental United States, or that the farmers residing in the territory covered by the charter of a national farm-loan association are unable to apply to the Federal land bank of the district for loans on account of the inability of such association to indorse such loans, the Federal Farm Loan Board may, in its discretion, authorize said bank, at any time within five years after this paragraph takes effect, to make direct loans to borrowers secured by first mortgages on farm lands situated within any such locality or territory. Except as herein otherwise specifically provided, all provisions of this Act applicable with respect to loans made through national farm-loan associations shall, in so far as practicable, apply with respect to such direct loans, and the Federal Farm Loan Board is authorized to make such rules and regulations as it may deem necessary with respect to such direct loans: Provided, That no such loan shall be made for more than $15,000. Each borrower who obtains a direct loan from a Federal land bank shall subscribe and pay for stock in such bank in the sum of $5 for each $100 or fraction thereof borrowed."

SEC. 2. Paragraph "Fourth" of section 12 of the Federal Farm Loan Act, as amended (U. S. C., title 12, ch. 7, sec. 771), is amended to read as follows:

"Fourth. Such loans may be made for the following purposes and for no other:

"(a) To provide for the purchase of land for agricultural uses.

"(b) To provide for the purchase of equipment, fertilizers, and livestock necessary for the proper and reasonable operation of the mortgaged farm; the term 'equipment' to be defined by the Federal Farm Loan Board.

"(c) To provide buildings and for the improvement of farm lands; the term 'improvement' to be defined by the Federal Farm Loan Board.

"(d) To liquidate indebtedness of the owner of the land mortgaged gaged incurred for agricultural purposes, or incurred prior to January 1, 1933.

"(e) To provide the owner of the land mortgaged with funds for general agricultural uses."

SEC. 3. Subparagraph (b) of paragraph "Fourth" of section 18 of the Federal Farm Loan Act, as amended (U. S. C., title 12, ch. 7, sec. 781), is amended by adding at the end thereof a new sentence to read as follows: "Every such bank may carry real estate as an asset, for a period of not exceeding five years, at its normal value but not to exceed the amount of the bank's investment therein at the time of acquirement of such real estate."

SEC. 4. Section 13 of the Federal Farm Loan Act, as amended (U. S. C., title 12, chap. 7, sec. 771), is amended by adding at the end thereof the following new paragraphs:

"Eleventh. At any time within five years after the date this paragraph takes effect, any borrower who has obtained a loan from a Federal land bank may on application to such' Federal land bank and upon approval of such application by the directors of the bank postpone the payment of any unpaid installment or installments in the manner herein provided in this section. Such postponed payment shall be made by paying at the time each succeeding annual installment is due, one-tenth of the amount of the postponed payment, and, in the case of semiannual installments, by paying at the time each succeeding semiannual installment is due, one-twentieth of the postponed payment, until the amount of such postponed payment has been paid. In any case in which the number of remaining installments due on the mortgage is less than ten, in the case of annual installments, or less than twenty, in the case of semiannual installments, the amount of the postponed payment shall be distributed proportionately over the remaining number of installment payments.

"Twelfth. For the period of five years after the date this paragraph takes effect, every borrower shall pay simple interest on extended payments at the same rate of interest as stipulated in the mortgage securing the loan as to payments not in default and by express covenant in his mortgage deed shall undertake to pay when due all taxes, liens, judgments, or assessments which may be lawfully assessed against the land mortgaged. Taxes, liens, judgments, or assessments not paid when due, and paid by the mortgagee, shall become a part of the mortgage debt and shall bear interest at the rate provided in the mortgage.

"Thirteenth. When in the judgment of the directors conditions justify it, and with the approval of the Federal Farm Loan Board, to reamortize, in whole or in part, the aggregate amount remaining unpaid under the terms of any mortgage, and to accept payment of such aggregate amount on an amortization plan by means of a fixed number of annual or semiannual installments sufficient to cover the interest payable on the mortgage, and in addition thereto such amounts to be applied upon the principal as will extinguish the debt within an agreed period of not more than forty years from the date of the reamortization; to deposit such mortgages with the farm loan registrar as collateral security for farm-loan bonds at an amount not exceeding the principal of the original loan remaining unpaid at the date of such amortization; and with the approval of the Federal Farm Loan Board to charge the borrower an amount not to exceed the actual cost incurred in connection with such reamortization."

SEC. 5. (a) Paragraph "Second" of section 14 of the Federal Farm Loan Act, as amended (U. S. C., title 12, ch. 7, sec. 791), is amended to read as follows:

"Second. To loan on first mortgage except through national farm-loan associations as provided in section 7 and section 8 of this Act, or through agents as provided in section 15, or direct to borrowers as provided in section 7."

(b) Section 14 of the Federal Farm Loan Act, as amended, is further amended by adding at the end thereof the following new paragraph:

"Sixth. To accept as additional security for any loan to any borrower under this Act, or any installment on any such loan, any security other than Federal land-bank stock or mortgages on farm real estate; and the transfer to any Federal land bank of any security if it may not be accepted by the bank under this paragraph shall be void: Provided, That any bank may accept an assignment of the landlord's rent to the amount of any taxes paid on such land by the bank, or any interest due."

SEC. 6. (a) The fourth paragraph of section 19 of the Federal Farm Loan Act, as amended (Ü. Ŝ. C., title 12, ch. 7, sec. 854), is amended to read as follows:

"No mortgage shall be accepted by a farm-loan registrar from a land bank as part of an offering to securing farm-loan bonds, either originally or by substitution, except first mortgages made subject to the conditions prescribed in sections 4, 7, 12, 15, and 16: Provided, That such registrar, when authorized and directed to do so by the Federal Farm Loan Board, shall accept or retain in his custody as collateral, if otherwise eligible under the provisions of such sections, any first mortgage in connection with which the land bank depositing the same has agreed to defer for a period of not more than ten years the collection of the principal portion of maturing installments and to accept payment of the aggregate amount of such principal on an amortization plan by means of a fixed number of annual or semiannual installments sufficient to cover the interest payable thereon and in addition thereto such amounts to be applied on the principal after the expiration of the period of deferment as will extinguish the debt within an agreed period of not more than forty years from the date of such agreement."

(b) Section 19 of the Federal Farm Loan Act, as amended (U. S. C., title 12, chap. 7, secs. 851-856), is further amended by adding at the end thereof the following new paragraph:

"Such farm-loan registrar shall also accept purchase money mortgages as collateral security in place of mortgages withdrawn. The banks shall have power to execute all necessary conveyances, transfers, and assignments to carry out this provision."

SEC. 7. The eleventh paragraph of section 21 of the Federal Farm Loan Act, as amended (U. S. C., title 12, ch. 7, sec. 881), is amended by substituting in lieu thereof the following:

"When any Federal land bank shal' desire to participate in a consolidated issue of farm-loan bonds it shall make application to the Federal Farm Loan Board for the approval on its behalf of such issue and tender to the registrar approved farm mortgages, or obligations of the United States Government, as security therefor,

and no banks shall participate in such consolidated issue until such application has been approved by the Federal Farm Loan Board. Such approved farm mortgages or obligations of the United States Government shall be held by each farin-loan registrar as collateral security for consolidated bonds, separate and apart from the mortgages and/or Government bonds held by him as collective security for the bonds previously issued or assumed individually by the Federal land bank of his district. Amortization and other payments on the principal of first mortgages held by a farm-loan registrar as collateral security for the issue of consolidated farm-loan bonds shall constitute a trust fund in the hands of the Federal land bank receiving the same and shall be applied or employed in the manner provided in section 22 with respect to payments on principal of first mortgages held as collateral for farm-loan bonds of individual banks. "Every Federal land bank shall notify the farm-loan registrar of the disposition of all payments made on the principal of mortgages held as collateral security for the issue of consolidated farmIoan bonds, and said registrar is authorized, at his discretion to order any of such payments, or the proceeds thereof, wherever deposited or however invested, to be immediately transferred to his account as trustee aforesaid. Each bank shall maintain with the farm-loan registrar of its district collateral security for the issue of consolidated farm-loan bonds in an amount at least equal to the face amount of such bonds issued on its behalf.

"When any Federal land bank shall surrender to the farm-loan registrar of its district any consolidated Federal farm-loan bonds, canceled or uncanceled, said land bank shall be entitled to withdraw first mortgages and bonds previously pledged as collateral in connection with any issue of consolidated farm-loan bonds to an amount equal to the consolidated farm-loan bonds so surrendered and it shall be the duty of such registrar to permit and direct the delivery of such mortgages and bonds to such land bank.

"The Federal Farm Loan Board may at any time call upon any Federal land bank for additional security to protect the consolidated bonds issued under the provisions of this section. Each bank shall pay when due, without notice, all bonds and coupons issued on its behalf hereunder.

"Every Federal land bank shall have power to exchange consolidated farm-loan bonds for farm-loan bonds previously issued or assumed by it individually, with the approval of and under rules and regulations promulgated by the Federal Farm Loan Board."

SEC. 8. The balance of the $125,000,000 provided for the Federal land banks by the Act of January 23, 1932, not heretofore used for the extension of loans or the making of new loans shall be used by such banks for the extension of loans and the making of new loans as authorized by this Act and the Federal Farm Loan Act, as amended. Approved, March 4, 1933.

(EXTRACT FROM)

[PUBLIC-No. 420-72D CONGRESS]

SEC. 75. AGRICULTURAL COMPOSITIONS AND EXTENSIONS.-(a) Courts of bankruptcy are authorized, upon petition of at least fifteen farmers within any county who certify that they intend to file petitions under this section, to appoint for such county one or more referees to be known as conciliation commissioners, or to designate for service in such county a conciliation commissioner previously appointed for an adjacent county. In case more than one conciliation commissioner is appointed for a county, each commissioner shall act separately and shall have such territorial jurisdiction within the county as the court shall specify. A conciliation commissioner shall have a term of office of one year and may be removed by the court if his services are no longer needed or for other cause. No individual shall be eligible to appointment as a conciliation commissioner unless he is eligible for appointment as a referee and in addition is a resident of the county, familiar with agricultural conditions therein and not engaged in the farm-mortgage business, the business of financing farmers or transactions in agricultural commodities or the business of marketing or dealing in agricultural commodities or of furnishing agricultural supplies. In each judicial district the court may, if it finds it necessary or desirable, appoint a suitable person as a supervising conciliation commissioner. The supervising conciliation commissioner shall have such supervisory functions under this section as the court may by order specify.

"(b) Upon filing of any petition by a farmer under this section there shall be paid a fee of $10 to be transmitted to the clerk of the court and covered into the Treasury. The conciliation commissioner shall receive as compensation for his services, including all expenses, a fee of $10 for each case docketed and submitted to him, to be paid out of the Treasury. A supervising conciliation commissioner shall receive, as compensation for his services, a per diem allowance to be fixed by the court, in an amount not in excess of $5 per day, together with subsistence and travel expenses in accordance with the law applicable to officers of the Department of Justice. Such compensation and expenses shall be paid out of the Treasury. If the creditors at any time desire supervision over the farming operations of a farmer, the cost of such supervision shall be borne by such creditors or by the farmer, as may be agreed upon by them, but in no instance shall the farmer be required to pay more than one-half of the cost of such supervision. Nothing contained in this section shall prevent a conciliation commissioner who supervises such farming operations from receiving such compensation therefor as may be so agreed upon. No fees, costs, or other charges shall be charged or taxed to any farmer or his creditors by