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156

BEFORE

HEARING
U.S
THE COMMITTEE ON AGRICULTURE.

HOUSE OF REPRESENTATIVES

SEVENTY-SIXTH CONGRESS

THIRD SESSION

ON

H. R. 8748

TO REDUCE PERMANENTLY THE INTEREST RATES ON FED-
ERAL LAND BANK AND LAND BANK COMMISSIONER LOANS;
TO RELIEVE FEDERAL LAND BANK BORROWERS OF STOCK
LIABILITY; TO PLACE THE FEDERAL LAND BANKS ON A SELF-
SUPPORTING BASIS; TO REFUND AND GUARANTEE THE
BONDS OF SUCH BANKS; TO INCREASE THE FUNCTIONS AND
RESPONSIBILITIES OF NATIONAL FARM-LOAN ASSOCIATIONS
AND COUNTY COMMITTEES OF FARMERS; TO PROVIDE FOR
THE ADJUSTMENT AND REFINANCING OF FARM-MORTGAGE
DEBTS; TO LIMIT THE INSTITUTION OF FORECLOSURE
PROCEEDINGS AND THE TAKING OF DEFICIENCY

JUDGMENTS; AND FOR OTHER PURPOSES

MARCH 7 TO APRIL 5, 1940

Serial I

Printed for the use of the Committee on Agriculture

UNITED STATES
GOVERNMENT PRINTING OFFICE

WASHINGTON : 1940

224111

COMMITTEE ON AGRICULTURE

MARVIN JONES, Texas, Chairman
HAMPTON P. FULMER, South Carolina CLIFFORD R. HOPE, Kansas
WALL DOXEY, Mississippi

J. ROLAND KINZER, Pennsylvania JOHN W. FLANNAGAN, JR., Virginia

FRED C. GILCHRIST, Iowa HARRY P. BEAM, Illinois

AUGUST H. ANDRESEN, Minnesota JAMES G. POLK, Ohio

WILLIAM LEMKE, North Dakota RICHARD M. KLEBERG, Texas

RALPH O. BREWSTER, Maine FRED CUMMINGS, Colorado

ANTON J. JOHNSON, Illinois WALTER M. PIERCE, Oregon

REID F. MURRAY, Wisconsin HAROLD D. COOLEY, North Carolina

FRANK 0. HORTON, Wyoming FRANK E. HOOK, Michigan

CLIFF CLEVENGER, Ohio
HARRY B. COFFEE, Nebraska
ORVILLE ZIMMERMAN, Missouri

SAMUEL W. KING, Hawaii
PHIL FERGUSON, Oklahoma

BOLIVAR PAGÁN, Puerto Rico
STEPHEN PACE, Georgia

KATHERINE WHEELER, Clerk
ALTAVENE CLARK, Clerk

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NITED STATES OF AMERICA

May 3:40

HW SH-66-H

78 et-ti-to y

Statement of —

Page

Bell, Hon. Daniel W., Under Sec ary of the Treasury-

319

Benson, Ezra T., executive secretary, National Council of Farmer

Cooperatives

431

Black, Dr. Albert G., Governor of Farm Credit Administration --- 8, 31, 58

Boice, Frank S., vice president and chairman of legislative committee,
American National Livestock Association, Denver, Colo--

433

* Brown, A. G., deputy manager, American Bankers' Association. 489

Dickerson, Dr. M. F., president, Arkansas State Farmers Union, Little

Rock, Ark,

119

Doak, W. B., Clifton, Va--

524

Houston, Paul, vice president, Peoples Savings Bank, Cedar Rapids,

Iowa.

494

Goss, Albert S., retiring Land Bank Commissioner.

149, 181, 209

Lee, John E., Attorney, Farm Credit Administration.

107

McConnaughey, R. K., general counsel, Farm Credit Administration. 85

Marsh, Benjamin, Peoples Lobby, Washington, D. C

510

KMylander, Charles H., committee on Federal legislation, American

Bankers' Association, Columbus, Ohio..

441, 468

Murray, Hon. Reid F., of Wisconsin..

55

O'Connor, Hon. James F., of Montana -.

376

O'Neal, Edward A., president, American Farm Bureau Federation.. 379,

436, 375

Short, R. E., Arkansas State Farmers Union..

378, 413
Taber, L. J., master, National Grange, Columbus, Ohio.-

344
Thatcher, M. W., National Farmers Union legislative committee, St.
Paul, Minn.

77, 97
Wallace, Hon. Henry A., Secretary of Agriculture-

247, 275

Wiggins, A. L. M., chairman, committee on Federal legislation, Ameri-

can Bankers' Association.

439, 500

III

FARM CREDIT LEGISLATION

THURSDAY, MARCH 7, 1940

HOUSE OF REPRESENTATIVES,
COMMITTEE ON AGRICULTURE,

Washington, D. C. The committee met at 10:30 a. m., Hon. Marvin Jones (chairman) presiding.

The CHAIRMAN. The committee will come to order, please. Gentlemen of the committee, this hearing has been called on H. R. 8748, dealing with interest rates and other phases of farm credit. The bill reads as follows:

(H. R. 8748, 76th Cong., 3d Sess.] A BILL To reduce permanently the interest rates on Federal land bank and Land Bank Commissioner loans; to relieve Federal land bank borrowers of stock liability; to place the Federal land banks on a selfsupporting basis: to refund and guarantee the bonds of such banks; to increase the functions and responsibilities of national farm-loan associations and county committees of farmers; to provide for the adjustment and refinancing of farm-mortgage debts; to limit the institution of foreclosure proceedings and the taking of deficiency judgments; and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That this Act may be cited as the “Farm Credit Act of 1940”.

INTEREST RATES

SEC. 2. (a) The rate of interest payable on any loan made prior to the date of enactment of this Act, or made on or after such date and prior to June 30, 1946, by any Federal land bank under the Federal Farm Loan Act, as amended, or by the Land Bank Commissioner on behalf of the Federal Farm Mortgage Corporation, or otherwise, under the Emergency Farm Mortgage Act of 1933, as amended, shall be 3 per centum per annum for all interest payable on installment dates occurring after the date of enactment of this Act; and the interest payable with respect to any such loans made during any calendar quarter after June 30, 1946, shall be at a rate to be fixed for such quarter by the Governor of the Farm Credit Administration (hereinafter referred to as the “Governor”), with the approval of the Secretary of the Treasury, which may reasonably be expected to reimburse the Federal land bank, or such Corporation, as the case may be, for the cost to it of the capital required for such loans, plus 1 per centum per annum for administration and reserves against losses.

(b) Notwithstanding the provisions of paragraph Ninth of section 12 of the Federal Farm Loan Act, as amended, the rate of interest payable after the date of enactment of this Act by any borrower from any Federal land bank or from the Federal Farm Mortgage Corporation on defaulted payments, or on taxes, liens, judgments, or assessments not paid by the borrower when due and paid by the mortgagee, shall be the same as the rate of interest payable by such borrower under the provisions of subsection (a) of this section.

(c) If the average rate of interest estimated by the Governor to be payable during any calendar quarter prior to July 1, 1946, by any such bank, or by such Corporation, on its outstanding bonds and other obligations (exclusive of capital stock and paid-in surplus) is more than 2 percentum of the principal amount of such bonds and obligations, the Secretary of the Treasury shall pay to such bank or to the Corporation the amount of such excess. There is hereby authorized to be appropriated, out of any money in the Treasury not otherwise appropriated, for each fiscal year prior to the fiscal year beginning July 1, 1946, such sums as may be necessary to make such payments.

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