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TO CREATE THE FARM TENANT HOMES CORPORATION
TUESDAY, MARCH 5, 1935
UNITED STATES SENATE,
Washington, D.O. The subcommittee met, pursuant to call, at 10:30 a. m., in the committee room, 324 Senate Office Building, Senator John H. Bankhead presiding, having under consideration the bill (S. 1800) to create the Farm Tenant Homes Corporation, to promote more secure occupancy of farms and farm homes, to correct the economic instability resulting from some present forms of farm tenancy, and for other purposes.
Senator BANKHEAD. The committee will come to order.
This is a hearing conducted by a subcommittee on S. 1800, creating a farm tenant homes corporation, to promote more secure occupancy of farms and farm homes, to correct the economic instability resulting from some present forms of farm tenancy, and for other purposes. I desire that a copy of the bill be inserted in the hearing at this point.
(Bill referred to is as follows:)
[S. 1800, 74th Cong., 1st sess.] A BILL To create the Farm Tenant Homes Corporation, to promote more
occupancy of farms and farm homes, to correct the economic instability resulting from some present forms of farm tenancy, 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 Tenant Homes Act of 1935."
The powers conferred in this Act shall be exercised with a view to checking the rapid increase of tenancy in the United States, reducing unwarranted speculation in farm real estate, lessening the economic instability of tenant operators, and reducing the waste of soil resources which characterize the predominant systems of farm tenancy in the United States, alleviating conflicts between landowners and tenants which tend to develop, providing types of farm homes better adapted to the requirements of persons engaged in farming, promoting a more secure occupancy of farms and farm homes, improving farming systems and modes of living, contributing to agricultural adjustment, returning to the control of farm operators lands that have reverted to corporate ownership through foreclosure, and, in accordance with the example of many other civilized countries, providing, in general, a democratic system of land tenure.
SEO. 2. (a) There is hereby created a Corporation to be known as Farm Tenant Homes Corporation (hereafter in this Act referred to as “ the Corporation "), which shall be an instrumentality of the United States, and shall be under the direction of the Secretary of Agriculture (hereafter in this Act referred to as the Secretary"), and operated by him under bylaws, rules, and regulations to be prescribed by him for the accomplishment of the purposes of this Act. The number of directors to constitute the board, the members of
which shall be appointed by, and be subject to removal by, the Secretary, shall be three. The board of directors first appointed shall be deemed the incorporators, and the incorporation shall be deemed to have been effected from the date of the first meeting of the board.
(b) The Secretary shall determine the minimum amount of capital stock of the Corporation and is authorized to increase such capital stock from time to time in such amounts as may be necessary, but not to exceed in the aggregate $100,000,000. Such stock shall be subscribed for by the Secretary of the Treasury on behalf of the United States, and payments for such subscriptions shall be subject to call in whole or in part by the Secretary and shall be made at such time or times as the Secretary of the Treasury deems advisable. The Corporation shall issue to the Secretary of the Treasury receipts for payments by him for or on account of such stock, and such receipts shall be evidence of the stock ownership of the United States. In order to enable the Secretary of the Treasury to make such payments when called, the Reconstruction Finance Corporation is authorized and directed to allocate and make available to the Secretary of the Treasury the sum of $100,000,000, or so much thereof as may be necessary, and for such purposes the amount of notes, bonds, debentures, or other such obligations which the Reconstruction Finance Corporation is authorized and empowered under the provisions of the Reconstruction Finance Corporation Act, as amended, to have outstanding at any one time, is hereby increased by such amounts as may be necessary.
(c) The Corporation is authorized to issue bonds in an aggregate amount not to exceed $1,000,000,000, which may be sold by the Corporation to obtain funds for carrying out the purposes of this Act. Such bonds shall be in such forms and denominations, shall mature within such periods from the date of their issue, shall bear such rates of interest, shall be subject to such terms and conditions, and shall be issued in such manner and sold at such prices, as may be prescribed by the Corporation, with the approval of the Secretary of the Treasury. Such bonds 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, and such bonds shall be lawful investments, and may be accepted as security for all fiduciary, trust, and public funds, the investment or deposit of which shall be under the authority or control of the United States or any officer or officers thereof. In the event that the Corporation shall be unable to pay upon demand, when due, the principal of, or interest on, such bonds, the Secretary of the Treasury shall pay to the holder the amount thereof which is hereby authorized to be appropriated, out of any moneys in the Treasury not otherwise appropriated, and thereupon to the extent of the amount so paid the Secretary of the Treasury shall succeed to all the rights of the holders of such bonds. The Secretary of the Treasury, in his discretion, is authorized to purchase any bonds of the Corporation issued under this subsection which are guaranteed as to interest and principal, and for such purpose the Secretary of the Treasury is authorized to use as a public-debt transaction the proceeds from the sale of any securities hereafter issued under the Second Liberty Bond Act, as amended, and the purposes for which securities may be issued under such Act, as amended, are extended to include any purchases of the Corporation's bonds hereunder. The Secretary of the Treasury may, at any time, sell any of the bonds of the Corporation acquired by him under this subsection. All redemptions, purchases, and sales by the Secretary of the Treasury of the bonds of the Corporation shall be treated as public-debt transactions of the United States. The bonds issued by the Corporation under this subsection shall be exempt, both as to principal and interest, from all taxation (except surtaxes, estate, inheritance, and gift taxes) now or hereafter imposed by the United States or any District, Territory, dependency, or possession thereof, or by any State, county, municipality, or local taxing authority. The Corporation, including its franchise, its capital, l'eserves and surplus, its loans and income, and its real and personal property shall likewise be exempt from such taxation. The Corporation shall have power, however, to make payments to States and governmental subdivisions thereof, for the furnishing of such public services and facilities as are customarily provided for out of taxes and assessments, to the farm, farm homes, and farm communities established as provided for hereinafter. The Corporation shall have power to purchase in the open market at any time and at any price, not to exceed par, any of the bonds issued by it. Any such bonds so purchased may, with the approval of the Secretary of the Treasury, be sold or resold at any time and at any price. (d) Any person indebted to the Corporation may make payment to it in part or in full by delivery to it of bonds, which shall be accepted for such purpose at face value.
(e) The Corporation shall have power to fix the compensation of its directors, and to select, employ, and fix the compensation of such officers, employees, attorneys, or agents as shall be necessary for the performance of its duties under this Act, without regard to the provisions of other laws applicable to the employment or compensation of officers, employees, attorneys, or agents of the United States. No director, officer, employee, attorney, or agent shall be paid compensation at a rate in excess of $10,000 per annum. Insofar as applicable, the benefits of the Act entitled "An Act to provide compensation for employees of the United States suffering injuries while in the performance of their duties, and for other purposes ”, approved September 7, 1916, as amended, shall extend to persons given employment under the provisions of this Act. The Corporation shall be entitled to the free use of the United States mails for its official business in the same manner as the executive departments of the Government, and shall determine its necessary expenditures under this Act, and the manner in which they shall be incurred, allowed, and paid, without regard to the provisions of any other law governing the expenditure of public funds.
(f) The Secretary is authorized to make such bylaws, rules, and regulations, not inconsistent with the provisions of this Act, as may be necessary for the proper conduct of the affairs of the Corporation.
SEC. 3. The Corporation shall have succession in its corporate name, and shall have power
(a) To sue and be sued in its corporate name in any court of competent jurisdiction, Federal or State.
(b) To adopt and use a corporate seal which shall be judicially noticed.
(c) To make loans to farm tenant and share-croppers, to buy farm homes and farm supplies and equipment, including livestock.
(d) To acquire through purchase, gift, assignment, or in any other manner farm lands and personal property needed in equipping and operating farms, and any or all rights required in connection with the purposes authorized in this Act.
(e) In carrying out the provisions and purposes of this Act, to improve, develop, and to sell, or lease any property acquired by it to farm tenants and share-croppers. It may make loans to farm tenants and share-croppers to aid them in purchasing and operating farm homes.
(f) When any farm property, real or personal, has been acquired, it may execute contracts to convey the property to the purchaser (who must be a farm tenant or share-cropper) or his heirs, upon full compliance with all the requirements of said contract. It is authorized to provide in said contracts for a conveyance of the property, prior to the full payment of the amount due with respect thereto, on the execution of a mortgage thereon to secure the balance due. The Corporation is authorized to make conveyances under the terms of said contract. The Corporation may, when the purchaser or borrower so desires, convey or cause to be conveyed the land to the purchaser or borrower and take a mortgage on said land to secure the loan and interest thereon, and to satisfy the record thereof when the indebtedness secured by the mortgage has been paid in full.
(g) Preference shall be given applicants for loans who are married or who have dependent families and have good moral character and are experienced in farming and are familiar with farm operations.
(h) The principal shall be made payable in not less than thirty nor more than fifty annual installments beginning three years from the date the land is acquired if the purchaser or borrower so desires.
(i) The rate of interest shall be as low as the Corporation can secure the money plus a reasonable charge for administration.
(j) The purchase of farm homes shall be confined, as far as it reasonably can be done, to aiding tenant farmers and share-croppers to acquire farm homes on lands now in cultivation. Special effort shall be made by the Corporation to avoid, as far as practicable, the expansion of production for the market of crops as to which there exists a sufficient supply. The provisions of section 355 of the Revised Statutes, as amended, shall not apply to lands acquired, or construction work undertaken by the Corporation under the provisions of this Act.
(k) To pay all expenses incident to the examination and survey of the necessary areas and the acquisition of title to lands to be acquired, including fees for the services of abstractors, title attorneys, and escrows, recording fees, and options when deemed necessary, to assist the beneficiaries of the program to secure and maintain appropriate fire-insurance policies, and to pay such other expenses as may be determined necessary to the efficient carrying out of the programs herein authorized.
(1) The Corporation may accept and utilize such voluntary and uncompensated services, cooperate with such Federal and State agencies, and utilize, with the consent of the State, such State and local officers and employees as may be necessary.
(m) To establish such branch and local offices as it may deem necessary, but the principal office of the Corporation shall be in the District of Columbia.
(n) To exercise such other powers as may be necessary or appropriate to the efficient exercise of the powers specifically conferred.
SEC. 4. The jurisdiction, both civil and criminal, over persons resident on lands acquired under the provisions of this Act shall not be changed by reason of such acquisition, except so far as the punishment of offenses against the United States thereon is concerned; the intent of this provision being that the several States in which such lands are situated shall not, by reason of such acquisition, lose their jurisdiction, nor the inhabitants thereof, their rights and privileges as citizens, or be absolved from their duties as citizens of the States.
SEC. 5. The Federal Reserve banks are authorized, with the approval of the Secretary of the Treasury, to act as depositaries, custodians, and fiscal agents for the Corporation.
SEC. 6. (a) Whoever makes any statement, knowing it to be false, or whoever willfully overvalues any property, for the purpose of influencing in any way the action of the Corporation or the Secretary upon any application, advance, purchase or repurchase agreement, or loan, under this Act, or any extension thereof, or the acceptance, release, or substitution of security therefor, shall be 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 utter, pass, or publish any false, forged, or counterfeited note, debenture, or other obligation or coupon, purporting to have been issued by the Corporation, knowing the same to be false, forged or counterfeited; or (3) falsly 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 the Corporation, knowing the same to have been falsely altered or spurious, shall be punished by a fine of not more than $10,000, or 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 intrusted 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 examiners of the Secretary of the Corporation, makes any false entry in any book, report, or statement of or to the Secretary of 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, mortgage, judgment, or decree thereof, shall be punished by a fine of not more than $10,000, or by imprisonment for not more than five years, or both.
(d) The provisions of sections 112, 113, 114, 115, 116, and 117 of the Criminal Code of the United States (U. S. C., title 18, secs. 202–207, inclusive), insofar as applicable, are extended to apply to contracts or agreements of the Corporation, which for the purposes hereof shall be held to include advances, loans, purchase and repurchase agreements; and extensions and renewals thereof; acceptances, releases, and substitutions of security therefor; and sales of property to the Corporation.
(e) No person, partnership, association, or corporation, shall directly or indirectly solicit, contract for, charge or receive, or attempt to solicit, contract for, charge or receive any fee, charge or other consideration from any person applying to the Corporation for a loan or other assistance, whether bond or cash, except ordinary fees authorized and required by the Corporation for services actually rendered for examination and perfection of title, appraisal, and like necessary services. Any person, partnership, association, or corporation violating the provisions of this subsection shall, upon conviction thereof, be punished by a fine of not more than $10,000, or imprisonment for not more than five years, or both.
Sec. 7. If any provisions of this Act, or the application thereof to any person or circumstance, is held invalid, the remainder of the Act, and the application of such provision to other persons or circumstances, shall not be affected thereby.
We have invited a number of gentlemen who are interested in this subject to be here today and some are here. We are greatly pleased to have Secretary Wallace, who will make the first statement.
STATEMENT OF HON. HENRY A. WALLACE, SECRETARY OF
AGRICULTURE Secretary WALLACE. I may say, Senator, that it gives me very great personal pleasure indeed to appear before you in the discussion of this general subject of farm tenancy and what can be done to bring about in the long run a constructive solution. This legislation has not yet been passed upon or cleared by the Bureau of the Budget as required by Budget Circular No. 49, so that I do not know what the relationship of the expenditures contemplated will be to the financial program of the President. The Department's report on the bill will be submitted to the Budget Bureau in regular course, however, and when the report is sent to Congress we will indicate what the Budget Bureau reports. In the report on the bill, which will reach your committee in due course, we shall submit such suggestions for amendments as may appear desirable.
Senator BANKHEAD. We will be glad to have them, sir. We want constructive criticisms and suggestions from beginning to end. We realize we are embarking upon a new field of operations.
Secretary WALLACE. During the past half century the increase of farm tenancy has been one of the undesirable and yet wide-spread characteristics of rural America. Only two generations ago we were at the heights of the homestead movement, which had as one of its fundamental aims the creation of an agriculture made up predominantly of small-farm operators. Today we find that half of our farm lands are operated by tenants, and nearly that large a percentage of our farmers rent all of the land they farm.
By the homestead laws, and legislation of earlier years, the development of family-sized farms owned by resident farm operators was encouraged and promoted. This was a wise and highly desirable feature of our land policy. Unfortunately, however, our land policies failed to safeguard the permanent ownership of family-sized farms by the actual operators who farmed them. The land speculator was a pernicious counterpart of our early land-settlement activities. Along with the pioneer squatter and homesteader was the speculative " land grabber", into whose hands soon fell much of the virgin soil of America. The recent report of the Land Planning Committee of the National Resources Board declares:
The operation of farm land by the owner was no doubt the ideal of all who favored liberal land policies. European tenant-ridden countries were cited in