LOANS TO THE CORPORATION OF FOREIGN SECURITY HOLDERS

The Corporation of Foreign Bondholders Act, 1933, which is not to take effect until the President finds that such action is in the public interest and by proclamation so declares, creates a body corporate with the name "Corporation of Foreign Security Holders" for the purpose of protecting, conserving, and advancing the interests of the holders of foreign securities in default. The Reconstruction Finance Corporation is authorized to lend not to exceed $75,000 for the use of the Corporation of Foreign Security Holders.

ADVANCES TO THE RECLAMATION FUND

Section 37 of the Emergency Farm Mortgage Act of 1933 authorizes the Corporation, upon request of the Secretary of the Interior, to advance funds to the reclamation fund created by the act of June 17, 1902, not exceeding $5,000,000, for the completion of projects or divisions of projects now under construction, or projects approved and authorized.

PURCHASE OF MARKETABLE SECURITIES FROM THE FEDERAL EMERGENCY ADMINISTRATION OF PUBLIC WORKS

The Corporation is authorized, pursuant to the provisions of title II of the Emergency Appropriation Act, fiscal year 1935, to purchase marketable securities, satisfactory to the Corporation, acquired or to be acquired by the Federal Emergency Administration of Public Works. The amount that the Corporation may have invested at any one time in such securities shall not exceed $400,000,000.

PURCHASE OF DEBENTURES OR OBLIGATIONS OF THE FEDERAL DEPOSIT INSURANCE

CORPORATION

Section 5e (b) of the Reconstruction Finance Corporation Act, as amended, authorizes the Corporation to purchase at par value such debentures or other obligations of the Federal Deposit Insurance Corporation as are authorized to be issued under subsection (o) of section 12B of the Federal Reserve Act, as amended, upon the request of the board of directors of the Federal Deposit Insurance Corporation, whenever in the judgment of said board additional funds are required for insurance purposes. The Reconstruction Finance Corporation may not purchase or hold at any time said debentures or other obligations in excess of $250,000,000 par value.

FUNDS OF RECONSTRUCTION FINANCE CORPORATION ALLOCATED AND MADE AVAILABLE TO OTHER GOVERNMENTAL AGENCIES

SECRETARY OF AGRICULTURE AND FARM CREDIT ADMINISTRATION

Under section 2 of the Reconstruction Finance Corporation Act, the Corporation was authorized to allocate and make available to the Secretary of Agriculture a certain part of its funds in order to enable the Secretary to make loans to farmers for crop-production purposes during 1932. Pursuant to the provisions of section 201 (e) of the Emergency Relief and Construction Act of 1932, the Corporation paid for the capital stock of the regional agricultural credit corporations, created by it under such section 201 (e) out of the unexpended balance of the amounts allocated and made available to the Secretary of Agriculture under section 2 of the Reconstruction Finance Corporation Act. By the act approved February 4, 1933, the authority of the Secretary of Agriculture was extended with respect to the use of funds allocated and made available to him by the Reconstruction Finance Corporation so as to enable him to make loans, within certain limitations, to farmers during 1933.

The funds made available and allocated under the foregoing provisions of law were transferred to and vested in the Farm Credit Administration by the Executive order of March 27, 1933, and to the Governor of the Farm Credit Administration by section 5 of the Farm Credit Act of 1933, as amended.

LAND BANK COMMISSIONER

The Corporation is authorized and directed under section 30 (a) of the Emergency Farm Mortgage Act of 1933, as amended, to make available to the Land Bank Commissioner the sum of $100,000,000, to be used for a period not exceeding 4 years from the date of the enactment of such act, i. e., May 12, 1933, for the purpose of making loans to joint-stock land banks.

Under section 32 of the same act, the Corporation is authorized and directed also to allocate and make available to the Land Bank Commissioner the sum of $200,000,000, or so much thereof as may be necessary, to be used for the purpose of making loans to farmers. By section 3, Federal Farm Mortgage Corporation Act, the funds and proceeds thereof made available to the Land Bank Commissioner under section 32 of the Emergency Farm Mortgage Act of 1933, and the mortgages taken by the Commissioner and the credit instruments secured thereby were transferred to the Federal Farm Mortgage Corporation as capital of that Corporation.

FEDERAL EMERGENCY RELIEF ADMINISTRATOR

Section 2 (a) of the Federal Emergency Relief Act of 1933 authorizes and directs the Corporation to make available not to exceed $500,000,000, for expenditure in accordance with the terms stated in the act, upon certification by the Federal Emergency Relief Administrator, for the purpose of furnishing relief to needy and distressed people.

Pursuant to the provisions of title II, Emergency Appropriation Act, fiscal year 1935, not exceeding $500,000,000 in the aggregate of any savings or unobligated balances in funds of the Corporation may, in the discretion of the President, be transferred and applied to the purposes of the Federal Emergency Relief Act of 1933 and/or title II of the National Industrial Recovery Act.

FUNDS MADE AVAILABLE FOR THE PURPOSES OF THE EMERGENCY RELIEF APPROPRIATION ACT OF 1935

Under section 1 of the Emergency Relief Appropriation Act of 1935, not exceeding $500,000,000 in the aggregate of any savings or unobligated balances in funds of the Reconstruction Finance Corporation, are immediately available and remain available until June 30, 1937, to be used in the discretion and under the direction of the President for the purposes of the Emergency Relief Appropriation Act of 1935.

FEDERAL HOUSING ADMINISTRATOR

Section 4 of the National Housing Act provides that the Corporation shall make available to the Federal Housing Administrator such funds as he may deem necessary for the purposes of carrying out the provisions of titles I, II, and III of such act.

SECRETARY OF THE TREASURY

Section 6 (f) of the Federal Home Loan Bank Act amended the Reconstruction Finance Corporation Act to provide that $125,000,000, or as much thereof as may be necessary for the purpose, be allocated and made available by the Corporation to the Secretary of the Treasury in order to enable him to pay for the capital stock of Federal home-loan banks subscribed for by the United States. Section 4 (b) of the Home Owners' Loan Act of 1933 authorizes and directs the Reconstruction Finance Corporation to allocate and make available to the Secretary of the Treasury the sum of $200,000,000, or so much thereof as may be necessary, in order to enable him to make payments for subscriptions for the capital stock of the Home Owners' Loan Corporation, created by such act.

FUNDS OF THE RECONSTRUCTION FINANCE CORPORATION

CAPITAL STOCK

The capital stock of the Corporation was fixed by section 2 of the Reconstruction Finance Corporation Act at $500,000,000, all of which was subscribed by the Secretary of the Treasury on behalf of the Government of the United States on February 2, 1932. The entire capital stock has been paid in by the Secretary of the Treasury and is held by the United States.

ISSUE OF NOTES, DEBENTURES, BONDS, OR OTHER SUCH OBLIGATIONS

The Reconstruction Finance Corporation Act, as amended by the Emergency Relief and Construction Act of 1932, authorizes the Corporation, with the approval of the Secretary of the Treasury, to issue, and to have outstanding at any one time, its notes, debentures, bonds, or other such obligations in an amount aggregating not more than six and three-fifths times its subscribed capital stock. However, the National Industrial Recovery Act provides that the amount of notes, debentures, bonds, or other such obligations which the Reconstruction Finance Corporation is authorized to have outstanding at any one time is decreased $400,000,000. On the other hand, the amount of notes,

debentures, bonds, or other such obligations which the Corporation is authorized to issue and have outstanding at any one time is increased by the provisions of other laws, as follows:

(a) By an amount not to exceed $125,000,000, in order to enable the Secretary of the Treasury to make payments for subscriptions for capital stock of the Federal home-loan banks, as provided in section 2 of the Reconstruction Finance Corporation Act, as amended.

(b) By such amount as may be necessary-

(1) To enable the Corporation to subscribe for preferred stock of National or State banks or trust companies, to make loans secured by such stock as collateral, and to purchase capital notes or debentures of State banks or trust companies, as provided by section 304 of an act approved March 9, 1933, as amended.

(2) To enable the Corporation to make loans to the Secretary of Agriculture upon cotton in his possession or control, as provided by section 5 of the Agricultural Adjustment Act, as amended.

(3) To provide funds for the Federal Housing Administrator to enable him to carry out the provisions of titles I, II, and III of the National Housing Act, as provided by section 4 of said act.

(c) By an amount not to exceed $75,000,000 to enable the Corporation to subscribe for preferred stock, to purchase capital notes of insurance companies, and to make loans secured by such stock or notes as collateral, as provided by the act approved June 10, 1933, as amended.

(d) By $500,000,000 to enable the Federal Emergency Relief Administrator to make grants to States and Territories (including Alaska, Hawaii, the Virgin Islands, and Puerto Rico) and the District of Columbia to aid in meeting the costs of furnishing relief and work relief and in relieving the hardship and suffering caused by unemployment, as provided by the Federal Emergency Relief Act of 1933; and to make such expenditures, not to exceed $350,000, as are necessary to carry out the provisions thereof.

(e) By $300,000,000 in order to provide funds for allocation to the Land Bank Commissioner for the purpose of making loans to joint-stock land banks and to farmers, as provided by the Emergency Farm Mortgage Act of 1933, and for the purpose of providing capital for the Federal Farm Mortgage Corporation, pursuant to section 3, Federal Farm Mortgage Corporation Act.

By an amount not to exceed $200,000,000 in order to provide funds for allocation to the Secretary of the Treasury for the purpose of making payments for subscriptions for the capital stock of the Home Owners' Loan Corporation, as provided by section 4 (b) of the Home Owners' Loan Act of 1933.

(g) By $850,000,000, as provided by section 3 of the act approved January 20, 1934.

(h) By an amount not to exceed $250,000,000 at any one time for the purchase at par value of debentures and other obligations of the Federal Deposit Insurance Corporation, as provided by section 5e (b) of the Reconstruction Finance Corporation Act, as amended.

(i) By an amount not to exceed $250,000,000 at any one time for the purchase of marketable securities acquired or to be acquired by the Federal Emergency Administration of Public Works, as provided by title II of the Emergency Appropriation Act, fiscal year 1935.

A face amount not to exceed $100,000,000 at any one time outstanding, to enable the Corporation to subscribe for or make loans upon nonassessable stock of any class of any national mortgage association organized under title III of the National Housing Act and of any mortgage loan company, trust company, savings and loan association, or other similar institution, and to purchase capital notes or debentures of such financial institutions.

Section 13 of the act approved January 31, 1935, provides that, notwithstanding any other provision of law, the Corporation is authorized and empowered to use as general funds all receipts arising from the sale or retirement of any of the stock, notes, bonds, or other securities acquired by it pursuant to any provision of law. Notes, debentures, bonds, or other such obligations issued by the Corporation, with the approval of the Secretary of the Treasury, are to mature not more than 5 years from their respective dates of issue, to be redeemable at the option of the Corporation before maturity in such manner as may be stipulated in such obligations, and to bear such rate or rates of interest as may be determined by the Corporation. The Corporation, with the approval of the Secretary of the Treasury, also may sell on a discount basis short-term obligations payable at maturity without interest. The law provides that the notes, debentures, bonds, or other such obligations of the Corporation shall be fully and unconditionally guaranteed

both as to interest and principal by the United States and such guaranty shall be expressed on the face thereof. The Secretary of the Treasury, in his discretion, is authorized to purchase any obligations of the Corporation which may be issued pursuant to the provisions of the law, and may, at any time, sell any of the obligations of the Corporation acquired by him. He is further authorized, at the request of the Reconstruction Finance Corporation, to market for the Corporation its notes, debentures, bonds, and other such obligations, using therefor all the facilities of the Treasury Department authorized by law for the marketing of obligations of the United States. The Reconstruction Finance Corporation Act also provides that any and all notes, debentures, bonds, or other such obligations issued by the Corporation shall be exempt both as to principal and interest from all taxation (except surtaxes, estate, inheritance, and gift taxes) at any time imposed by the United States, by any Territory, dependency, or possession thereof, or by any State, county, municipality, or local taxing authority.

REGIONAL AGRICULTURAL CREDIT CORPORATIONS

The Executive order issued on March 27, 1933, effective on May 27, 1933, transferred the management and functions, records, equipment, and personnel of the Regional Agricultural Credit Corporations from the Reconstruction Finance Corporation to the jurisdiction and control of the Farm Credit Administration. The Reconstruction Finance Corporation pays all expenses incurred in connection with the operations of these corporations, and may rediscount paper for them, as provided in section 201 (e) of the Emergency Relief and Construction Act of 1932.

FUNDS FOR RELIEF OF DESTITUTION

The power of the Corporation to make funds available to States and Territories under section 1 of the Emergency Relief and Construction Act of 1932 for the relief of destitution was terminated at the close of June 1, 1933, pursuant to section 2 (c) of the Federal Emergency Relief Act of 1933, which created the Federal Emergency Relief Administration.

REPORTS

QUARTERLY REPORTS

Section 15 of the Reconstruction Finance Corporation Act provides that the Corporation shall make and publish a report quarterly of its operations to the Congress stating the aggregate loans made to each of the classes of borrowers provided for and the number of borrowers by States (including the District of Columbia, Alaska, Hawaii, and Puerto Rico) in each class. The law further provides that the statement shall show the assets and liabilities of the Corporation and the names and compensation of all persons employed by the Corporation whose compensation exceeds $400 per month.

MONTHLY REPORTS

Under section 201 (b) of the Emergency Relief and Construction Act of 1932, the Corporation is required to submit monthly to the President and to the Senate and the House of Representatives (or the Secretary of the Senate and the Clerk of the House of Representatives, if those bodies are not in session) a report of its activities and expenditures under the Reconstruction Finance Corporation Act and under section 201 of the Emergency Relief and Construction Act of 1932, together with a statement showing the names of the borrowers to whom loans and advances were made, and the amount and rate of interest involved in each

case.

FARM CREDIT ADMINISTRATION

The Farm Credit Administration was created by an Executive Order of the President, No. 6084, which was submitted to Congress on March 27, 1933, and became effective on May 27, 1933. It provided for the consolidation within one organization of substantially all the powers and functions of Federal agencies dealing primarily with agricultural credit. These included the functions of the Federal Farm Loan Board and Federal Farm Loan Bureau, including those of the Farm Loan Commissioner, whose title was changed on June 16, 1933, to Land Bank Commissioner; the functions of the Federal Farm Board, except those relating to stabilization operations which were virtually abolished; the

functions of the Reconstruction Finance Corporation pertaining to the management of the regional agricultural credit corporations; and the functions of the crop production and seed loan offices of the United States Department of Agriculture. The Executive order transferred these functions to the jurisdiction and control of the Farm Credit Administration, and vested in its Governor all the powers, authority, and duties of the officers, executive agencies, and heads of the units whose functions were transferred to the Farm Credit Administration, or relating to the functions transferred.

As a result of this Executive order, the Federal land banks, the national farm loan associations, the Federal intermediate credit banks, the regional agricultural credit corporations, the emergency crop and feed loan offices, the Agricultural Marketing Act revolving fund, and the joint stock land banks were placed under the jurisdiction of the Farm Credit Administration. To this group, the production credit corporations, the production credit associations, the Central Bank for Cooperatives, and the district banks for cooperatives were added by the Farm Credit Act of 1933, approved June 16, 1933, and the Federal credit unions by the Federal Credit Union Act, approved June 26, 1934.

In the Farm Credit Administration the operations of the Federal land banks and the national farm loan associations and the making of Land Bank Commissioner loans are under the supervision of the Land Bank Commissioner. He also has general supervisory authority over the joint stock land banks, appoints receivers of joint stock land banks, and approves, in his discretion, acts of such receivers. The Federal intermediate credit banks, the production credit corporations and associations, and the banks for cooperatives are under the supervision of the Intermediate Credit Commissioner, the Production Credit Commissioner, and the Cooperative Bank Commissioner, respectively. The Farm Credit Administration is authorized to make such rules and regulations, not inconsistent with law, and to exercise such incidental powers as it deems necessary or requisite to fulfill the duties vested in it by law.

Land Bank Commissioner loans are made under the provisions of the Emergency Farm Mortgage Act of 1933, as amended. During 1933, 1934, and 1935 they were used principally for refinancing farm indebtedness either on security of second mortgages as a supplement to first-mortgage loans from the Federal land banks or other lenders or on security of first mortgages in cases where special risks were involved. However, since the passage of the Farm Credit Act of 1935, many young farmers and tenants have obtained these loans to aid them in purchasing farms.

The Federal Farm Mortgage Corporation was created by an act of Congress approved January 31, 1934, to aid in financing the lending operations of the Land Bank Commissioner and the Federal land banks in connection with the farm debt refinancing program begun in the spring of 1933. With the passing of the emergency the Federal land banks since January 1, 1936, again have been able to obtain necessary funds from the sale of their bonds directly to investors. The Corporation has its principal office in Washington, D. C., and is managed by a board of directors consisting of the Governor of the Farm Credit Administration as chairman, the Secretary of the Treasury or a Treasury officer designated by him, and the Land Bank Commissioner. To carry out its provisions of assisting in financing the lending operations of the Land Bank Commissioner and the Federal land banks, the Corporation was authorized to issue and have outstanding at any one time bonds in an amount not exceeding $2,000,000,000. These bonds are guaranteed fully and unconditionally as to principal and interest by the Government of the United States and the guaranty is expressed on the face of the bonds. The Corporation has a capital of $200,000,000 and its resources include the consolidated bonds of the Federal land banks obtained by purchase or in exchange for the Corporation's bonds and the farm mortgages obtained in connection with Land Bank Commissioner loans. All assets of the Corporation, of course, are available for the payment of the bonds.

The emergency crop and feed loan offices administer the emergency crop loans which have been made under various acts of Congress. These offices also administer the drought relief loans made under provisions of an act of Congress approved June 16, 1934. Both types of loans have been made to farmers having no other source from which loans could be obtained for the purchase of seed and feed, for summer fallowing, and similar purposes.

The original 12 regional agricultural credit corporations were chartered by The Reconstruction Finance Corporation in accordance with section 201-e of the Emergency Relief and Construction Act of 1932. They were created as temporary emergency institutions to meet the unusual demand for short-term credit