punished by a fine of not more than $5,000 or by imprisonment for not more than two years, or both.

"(b) Whoever (1) falsely makes, forges, or counterfeits any note, debenture, bond, or other obligation, or coupon, in imitation of or purporting to be a note, debenture, bond, or other obligation, or coupon, issued by the Corporation; or (2) passes, utters, or publishes, or attempts to pass, utter, or publish any false, forged, or counterfeited note, debenture, bond, or other obligation, or coupon, purporting to have been issued by the Corporation, knowing the same to be false, forged, or counterfeited; or (3) falsely alters any note, debenture, bond or other obligation, or coupon, issued or purporting to have been issued by the Corporation; or (4) passes, utters, or publishes, or attempts to pass, utter, or publish, as true any falsely altered or spurious note, debenture, bond, or other obligation, or coupon, issued or purporting to have been issued by the Corporation, knowing the same to be falsely altered or spurious, or any person who willfully violates any other provision of this Act, shall be punished by a fine of not more than $10,000, by imprisonment for not more than five years, or both.

"(c) Whoever, being connected in any capacity with the Corporation, (1) embezzles, abstracts, purloins, or willfully misapplies any moneys, funds, securities, or other things of value, whether belonging to it or pledged or otherwise entrusted to it; or (2) with intent to defraud the Corporation or any other body politic or corporate, or any individual, or to deceive any officer, auditor, or examiner of the Corporation, makes any false entry in any book, report, or statement of or to the Corporation, or, without being duly authorized, draws any order or issues, puts forth, or assigns any note, debenture, bond, or other obligation, or draft, bill of exchange, mortgage, judgment, or decree thereof; or (3) with intent to defraud participates, shares, receives directly or indirectly any money, profit, property, or benefit through any transaction, loan, commission, contract, or any other act of the Corporation; or (4) gives any unauthorized information concerning any future action or plan of the Corporation which might affect the value of securities, or having such knowledge, invests or speculates, directly or indirectly, in the securities or property of any company, bank, or corporation receiving loans or other assistance from the Corporation, shall be punished by a fine of not more than $10,000 or by imprisonment for not more than five years, or both.

"(d) No individual, association, partnership, or corporation shall use the words 'Reconstruction Finance Corporation' or a combination of these three words, as the name or a part thereof under which he or it shall do business. Every individual, partnership, association, or corporation violating this prohibition shall be guilty of a misdemeanor and shall be punished by a fine of not exceeding $1,000 or imprisonment not exceeding one year, or both.

"SEC. 14. The Corporation is authorized to exercise the functions, powers, duties, and authority transferred to the Corporation by Public Law 109, Seventyninth Congress, approved June 30, 1945, but only with respect to programs, projects, or commitments outstanding on June 30, 1947.

"SEC. 15. If any provision of this Act or the application of such provision to any person, or circumstances shall be held invalid, the validity of the remainder of this Act, and the applicability of such provision to other persons or circumstances, shall not be affected thereby."

SEC. 2. This Act shall take effect sixty days after the date of its enactment, and the offices, powers, and duties of the Board of Directors of the Reconstruction Finance Corporation shall thereupon terminate.

[S. 1116, 82d Cong., 1st sess.]

A BILL To dissolve the Reconstruction Finance Corporation, and to provide for the transfer of certain functions heretofore vested in the Reconstruction Finance Corporation with respect to the administration of the rubber, tin, and abaca programs.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That, notwithstanding any other provision of law with respect to the date upon which the powers granted to the Reconstruction Finance Corporation by section 4 of the Reconstruction Finance Corporation Act shall be terminated, or the date upon which the succession of the Reconstruction Finance Corporation shall expire, the Reconstruction Finance Cor

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 Commerce. Except 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".

(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".

[S. 1329, 82d Cong., 1st sess.]

A BILL To establish corporations to assist financial institutions in making credit available to commercial and industrial enterprises and to provide capital for such enterprises

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That section 13b of the Federal Reserve Act is amended to read as follows:

"SEC. 13b. 1. PURPOSE.—The general purpose of this section, as amended, in the light of which its provisions shall be construed and applied, is to provide a means for supplementing the existing financial activities of banks and other financial institutions by the establishment of one or more regional investing corporations, privately owned and managed, their formation to be facilitated by authorizing the purchase of their capital stock by the Federal Reserve banks with a view to the ultimate disposal of such capital stock by the Federal Reserve banks to member banks of the Federal Reserve System and to other private investors. Such corporations shall be authorized to invest in and make loans to both small and independent business enterprises organized upon sound business principles which supply an economically useful product or service, where the investment in or loans to such enterprises are in the interest of the national defense during periods of national emergency, or are desirable to promote the growth and expansion of such enterprises.

"2. NATIONAL INVESTMENT ADVISORY COUNCIL.-(a) There is hereby established a National Investment Advisory Council, hereinafter called the 'Council', which shall consist of the Secretary of the Treasury, the Secretary of Commerce, who shall be Chairman of the Council, and the Chairman of the Board of Governors of the Federal Reserve System. The Council shall advise and consult with the Board of Governors of the Federal Reserve System and make recommendations to that Board from time to time with respect to the operations of the corporations organized under this Act, the lending and investment policies of such corporations, and the administration of the provisions of this section.

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

"4. ORGANIZATION OF CORPORATIONS. (a) Corporations, not exceeding in number the total number of Federal Reserve banks and branches thereof, organized for the purpose of operating under this section, may be organized by any number of persons not less than five, who shall subscribe to the articles of incorporation; except that any such corporation in whose stock one or more Federal Reserve banks invest shall be formed by a Federal Reserve bank, which alone shall subscribe to the articles of incorporation. The articles of incorporation of such corporation shall specify in general terms the objects for which the corporation is formed and may contain any other provisions not inconsistent with this section that the corporation may see fit to adopt for the regulation of its business and the conduct of its affairs, including provision for cumulative voting in the election of directors. Such articles shall be subject to the approval of the Board of Governors of the Federal Reserve System, and with such approval may be amended from time to time. Articles of incorporation and amendments thereto shall be forwarded to the Board of Governors for consideration and approval or 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, which may be anywhere within the United States, its Territories and island possessions, but as long as any of its stock is owned by any Federal Reserve bank, the Board may restrict the geographical area of its operations;

"third, the place where its principal office is to be located, which shall be within the Federal Reserve district in which it is established; and

"fourth, the amount of its capital stock and the number and classes of shares into which the same shall be divided, with or without par value, and the respective participations of such shares in the profits of the corporation. "(b) In determining whether to approve the establishment of such a corporation and its proposed articles of incorporation, the Board of Governors shall give due regard, among other things, to the need for the financing of small and independent business enterprises in the place or places where the proposed corporation is to commence operations, the general character of the proposed management of such corporation, the number of such corporations previously organized in the United States, and the volume of their operations. After consideration of all relevant factors, the Board of Governors may approve the articles of incorporation and issue a permit to begin business. Upon issuance of such a permit, the corporation shall thereafter become and be a body corporate and, as such, and in the name designated therein, shall have power to adopt and use a corporate seal; to have succession for a period of thirty years, unless extended as provided in this section, or unless sooner dissoved by the act of the shareholders owning two-thirds of the stock or by an Act of Congress or unless its franchise becomes forfeited by some violation of law; to make contracts; to sue and be sued; complain, and defend in any court of law or equity; by its board of directors, to appoint such officers and employees as may be deemed proper, define their authority and duties, require bonds of them as it deems advisable, and fix the penalty thereof, dismiss such officers or employees, or any thereof, at pleasure and appoint others to fill their places; to adopt bylaws regulating the manner in which its stock shall be transferred,. its officers and employees appointed, its property transferred, and the privileges granted to it by law exercised and enjoyed; to establish branch offices or agencies subject to the approval of the Board; to acquire, hold, operate, and dispose of any property (real, personal, or mixed) whenever necessary or appropriate to the carrying out of its lawful functions; to act as depository for fiscal agent of the United States when so designated by the Secretary of the Treasury; to operate in such Federal Reserve district or districts or Territories or possessions 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

85072-51-2

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 13b 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