poration is hereby dissolved. The duty of liquidating the assets and winding up the affairs of such Corporation shall devolve upon the Secretary of the Treasury who shall proceed with such liquidation of assets and winding up of affairs as expeditiously as possible in accordance with the provisions of section 10 of the Reconstruction Finance Corporation Act; except that the unused balance of the moneys belonging to the Corporation, required by such section to be paid into the Treasury, shall be used exclusively for the reduction of the public debt.

SEC. 2. The functions of the Reconstruction Finance Corporation with respect to the administration and supervision of the rubber program (Rubber Act of 1948, as amended), the tin program (Public Law 125, Eightieth Congress, as amended), and the abaca program (Public Law 683, Eighty-first Congress), together with all properties, assets, funds, contracts, loans, liabilities, commitments, authorizations, allocations, personnel, and records necessary in connection with the exercise of such functions, are hereby transferred to the Office of Defense Mobilization. Except as specifically provided herein, this section shall not be construed to modify or repeal any of the Acts under which such programs are carried out.

[S. 1123, 82d Cong., 1st sess.]

A BILL To amend the Defense Production Act of 1950 and the Reconstruction Finance Corporation Act, as amended

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That section 302 of the Defense Production Act of 1950 (Public Law 774, Eighty-first Congress) is amended to read as follows: "SEC. 302. To expedite production and deliveries or services to aid in carrying out Government contracts for the procurement of materials or the performance of services for the national defense, the President may make provision for participations in, and guarantees of, loans to private business enterprises (including research corporations not organized for profit) for the expansion of capacity, the development of technological processes, or the production of essential materials, including the exploration, development, and mining of strategic and critical metals and minerals. Such participations in, and guarantees of, loans may be made without regard to the limitations of existing law and on such terms and conditions as the President deems necessary except that financial assistance may be extended only to the extent that it is not otherwise available on reasonable terms.'

SEC. 2. So much of subsection (a) of section 303 of the Defense Production Act of 1950 (Public Law 774, Eighty-first Congress) as precedes the proviso is amended to read as follows: "To assist in carrying out the objectives of this Act, the President may authorize the Secretary of the Interior, the Secretary of Agriculture, or the Administrator of General Services to make provision (1) for purchases of or commitments to purchase metals, minerals, and other raw materials, including liquid fuels, for Government use or for resale; and (2) for the encouragement of exploration, development, and mining of critical and strategic minerals and metals:".

SEC. 3. The Defense Production Act of 1950 (Public Law 774, Eighty-first Congress) is amended by adding a new section immediately after section 304, as follows:

"SEC. 305. The administration and supervision of the rubber program (Rubber Act of 1948, as amended), the tin program (Public Law 125, Eightieth Congress, as amended), and the abacá program (Public Law 683, Eighty-first Congress), all now under the administration of the Reconstruction Finance Corporation, together with all functions, property, assets, funds, contracts, loan, liabilities, commitments, authorizations, allocations, personnel, and records necessary in connection with such programs are hereby transferred to the Secretary of ComExcept as specifically provided herein, this section shall not be construed to modify or repeal any of the Acts under which said programs are carried out." SEC. 4. (a) The first sentence of section 3 (a) of the Reconstruction Finance Corporation Act, as amended, is amended by striking out "June 30, 1956" and inserting in lieu thereof "June 30, 1951".

merce.

(b) Subsection (f) of section 4 of the Reconstruction Finance Corporation Act, as amended, is amended by striking out "June 30, 1954" and inserting in lieu thereof "June 30, 1951".

tions to that Board from time to time with respect to the operations of porations organized under this Act, the lending and investment policies corporations, and the administration of the provisions of this section.

3. ELIGIBLE ENTERPRISES.-The Secretary of Commerce shall pror standards to determine the eligibility of small or independent business ent for the purposes of this section. In promulgating such standards, whic differ according to the types of financing or other relevant factors, there s considered the relative size and position of businesses in relation to the t industry in which they are engaged, the size and nature of the area of their tions, the size and independence of the group supplying capital or holding ship or control of the business, and the independence of their manageme no enterprise shall be considered to be a small or an independent business prise which is affiliated through stock ownership or otherwise with any enterprise which is determined to be dominant in the trade or industry or business in which it is engaged, unless such other enterprise otherwise qua a small or independent business enterprise under this section.

"4. ORGANIZATION OF CORPORATIONS.-(a) Corporations, not exceed number the total number of Federal Reserve banks and branches thereof, ized for the purpose of operating under this section, may be organized 1 number of persons not less than five, who shall subscribe to the articles of poration; except that any such corporation in whose stock one or more Reserve banks invest shall be formed by a Federal Reserve bank, which shall subscribe to the articles of incorporation. The articles of incorpora such corporation shall specify in general terms the objects for which the co tion is formed and may contain any other provisions not inconsistent wi section that the corporation may see fit to adopt for the regulation of its b and the conduct of its affairs, including provision for cumulative voting election of directors. Such articles shall be subject to the approval of the of Governors of the Federal Reserve System, and with such approval m amended from time to time. Articles of incorporation and amendments t shall be forwarded to the Board of Governors for consideration and appro disapproval. Such articles shall specifically state

"first, the name assumed by such corporation;

"second, the area or areas where its operations are to be carried on, may be anywhere within the United States, its Territories and island sions, but as long as any of its stock is owned by any Federal Reserve the Board may restrict the geographical area of its operations; "third, the place where its principal office is to be located, which sh within the Federal Reserve district in which it is established; and

of the United States as may be specified in its articles of incorporation; and shall have the other powers set forth in this section and such incidental powers as may be reasonably necessary to carry on the business for which the corporation is established.

"(c) The board of directors of each corporation organized under this section shall consist of nine members, all of whom shall be elected annually by the holders of the shares of stock of the corporation authorized and issued under the provisions of this section. Subject to the provisions of this section the directors of any corporation organized under this section shall have wide discretion in directing the affairs of such corporation to carry out the purposes of this section.

"5. CAPITAL STOCK PROVISIONS. Each corporation organized under this section shall have a paid-in capital and surplus equal to at least $5,000,000 before it shall commence business. Each Federal Reserve bank which organizes a corporation under this section shall invest in shares of stock of such corporation in an amount equal to at least $5,000,000, or an amount which, when added to the amounts, if any, of shares subscribed by other Federal Reserve banks, member banks, nonmember banks, financial institutions, corporations, partnerships, or other persons, shall equal the sum of $5,000,000; and each Federal Reserve bank is hereby authorized, notwithstanding any other provisions of law, to invest in the shares of stock of one or more corporations organized under this section: Provided, That in no event shall any Federal Reserve bank invest in shares of corporations organized under this Act if as a result thereof it will hold an amount of such shares aggregating more than 2 per centum of the aggregate amount of the combined capital and surplus of all its member banks, or $5,000,000, whichever is greater. The shares of stock in any corporations organized under this Act shall be eligible for purchase by member banks of the Federal Reserve System, and each such member bank is hereby authorized, notwithstanding any other provision of Federal law, to acquire and hold an amount of such shares equal to not more than 2 per centum of the capital and surplus of such member bank. Subject to the provisions of this section, any nonmember bank, financial institution, corporation, partnership, or other person may acquire shares of stock in any corporations organized under this Act. Upon the demand of any member bank, a Federal Reserve bank which holds shares of stock in a corporation organized under this Act shall, with the approval of the Board of Governors, sell to such member bank all or a portion of such shares up to the amount which such member bank is authorized to acquire and hold under the provisions of this paragraph; and

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a Federal Reserve bank holding such shares of stock may, with the approval of the Board of Governors, sell such shares to any nonmember bank, financial institution, corporation, partnership, or to any other person. The price at which such shares may be sold by a Federal Reserve bank under this paragraph shall be subject to the approval of the Board of Governors. The aggregate amount of shares in any such corporation or corporations which may be owned or controlled by any member bank, by any nonmember bank, financial institution, corporation, partnership, or by any other person, or by any group or class of persons, may be limited by the Board in accordance with its general policies; and no one stockholder, other than a Federal Reserve bank, shall at any time, without the approval of the Board in accordance with such policies, own or control more than 10 per centum of the total outstanding shares of any such corporation.

"6. BORROWING POWER.-Each corporation shall have authority to borrow money and to issue debentures, bonds, promissory notes, or other obligations under such general conditions and subject to such limitations and regulations as the Board of Governors may prescribe, but in no event shall any such corporation issue obligations which would cause the amount outstanding at any one time to exceed the amount of its paid-in capital stock and surplus. Notwithstanding any limitation contained in section 5136 of the Revised Statutes, each member bank is authorized to purchase and hold obligations of corporations organized under this section in an aggregate amount not exceeding 10 per centum of such bank's capital and surplus.

7. DIRECT LOANS.—Each corporation shall have authority to make or acquire loans with or without security to both small and independent business enterprises which are eligible therefor, or to purchase obligations of such enterprises. Such loans, purchases, or other acquisitions may be made either directly or in cooperation with banks or other lending institutions, through agreements to participate or by the purchase of participations, commitments to purchase, or otherwise, as the corporation may determine.

"8. EQUITY FINANCING.-Each corporation shall have authority to purchase and to resell to the issuer or to others, the income debentures, common or preferred stocks, or other capital shares of small and independent business enterprises eligible under this section.

9. AGGREGATE LIMITATION.-Without the approval of the Board of Governors, the aggregate amount of obligations or securities acquired or for which commitments may be issued by the corporation under the provisions of this section which exceed the sum of $300,000 for any single enterprise shall not exceed 33% per centum of the combined capital and surplus and maximum indebtedness of the corporation authorized by this section.

10. EXTENSIONS.-(a) The loans of any national banking association which are insured under this section or which are purchased by the corporation or for which a commitment to purchase is issued hereunder shall not be subject to the limitations on real-estate loans prescribed in section 24 of the Federal Reserve Act as amended.

"(b) Paragraph (2) of subsection (a) of section 3 of the Securities Act of 1933, as amended, is hereby amended by adding at the end of such paragraph the following: 'or any security issued by or representing an interest in or a direct obligation of a corporation organized under section 13b of the Federal Reserve Act, as amended;'. Paragraph (3) of subsection (c) of section 3 of the Investment Company Act of 1940, as amended, is hereby amended by changing the period at the end of such paragraph to a semicolon and adding the following: 'or any corporation organized under section 13b of the Federal Reserve Act, as amended. Paragraph (4) of subsection (a) of section 304 of the Trust Indenture Act of 1939 is hereby amended by changing the semicolon at the end of such paragraph to a comma and adding the following: 'or any security issued by or representing an interest in or a direct obligation of a corporation organized under section 136 of the Federal Reserve Act, as amended;'.

"(c) The corporation, its franchise, loans, and other assets, its capital stock, its surplus, its reserves, and its income, shall be exempt for a period of fifteen years from the date of its charter from all taxation now or hereafter imposed by the United States, by any Territory, dependency, or possession thereof, or by any State, county, municipality, or other taxing authority; except that any real property of the corporation shall be subject to State, Territorial, county, municipal, or local taxation to the same extent according to its value as other real property is taxed.

11. MISCELLANEOUS. (a) Wherever practicable the financing operations of the corporation shall be undertaken in cooperation with member banks of the

adjudged by a court of the United States of competent jurisdiction, in a suit brought for that purpose in the district or Territory in which the principal office of such corporation is located, which suit shall be brought by the United States at the instance of the Board of Governors of the Federal Reserve System or the Attorney General.

"(f) Any corporation organized under this section may at any time within the two years next previous to the date of the expiration of its corporate existence, by a vote of the shareholders owning two-thirds of its stock, apply to the Board of Governors for its approval to extend the period of its corporate existence for a term of not more than thirty years, and upon certified approval of the Board of Governors such corporation shall have its corporate existence for such extended period unless sooner dissolved by the act of the shareholders owning two-thirds of its stock, or by an Act of Congress or unless its franchise becomes forfeited as herein provided.

"(g) Whenever in the judgment of the Board of Governors of the Federal Reserve System any person has engaged or is about to engage in any acts or practices which constitute or will constitute a violation of any provision of this section or of any regulation thereunder, the Board may make application to the proper district court of the United States, or the United States courts of any Territory or other place subject to the jurisdiction of the United States, for an order enjoining such acts or practices, or for an order enforcing compliance with such provision, and such courts shall have jurisdiction of such actions and upon a showing by the Board that such person has engaged or is about to engage in any such acts or practices a permanent or temporary injunction, restraining order, or other order shall be granted without bond.

"(h) Section 1014 of title 18 of the United States Code is amended by inserting the phrase 'or a corporation organized under section 13b of the Federal Reserve Act' after the words 'Federal Reserve bank'.

"(i) Notwithstanding this amendment to this section 13b, the Federal Reserve banks, for a period of one year following the effective date of this amendment, shall continue to possess and have the right to exercise all authority conferred upon them by the provisions of this section as it existed prior to the effective date of this amendment. Nothing herein shall affect the power of any Federal Reserve bank to carry out, or protect its interest under, any agreement or transaction heretofore or hereafter made or entered into in carrying on operations pursuant to such authority. All or part of the assets held by any Federal Reserve bank which