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behalf of that Corporation. This subsection provides for the United States the same rights as those provided in the so-called “Graham Act”, entitled “An act to permit the United States to be a party defendant in certain cases”, enacted March 4, 1931, except that the United States is given no period of redemption. This subsection provides, in addition, that if the Federal Land Bank of Baltimore or the Federal Farm Mortgage Corporation acquires any property through action brought under its provisions, any amounts over and above the investment of the land bank or the Corporation, which are received upon the ultimate disposition of such property, shall be paid to the Hurricane Relief Commission, to the extent of its lien.

Subsection (b) gives authority to the Hurricane Relief Commission to waive any priorities it may have or claim which arise out of reamortization agreements entered into between the Federal Land Bank of Baltimore and any of its borrowers who are also indebted to the commission.

Subsection (c) provides a method of extinguishing the lien of the Hurricane Relief Commission without judicial proceedings. In cases where the proceeds from the sale of the property would be insufficient to satisfy in whole or in part the lien of the United States or where the claim of the United States has been satisfied, or where by the lapse of time or otherwise it has become unenforceable, the commission may so report to the Comptroller General, who may certify that the lien of the United States has been released. This subsection contains substantially the same provisions as those in subsection (a) respecting the matter of payments to the Hurricane Relief Commission, to the extent of its lien, if land acquired under this subsection by the Federal land bank or the Federal Farm Mortgage Corporation is subsequently resold at more than the amount of the investment in such land.

Subsection (d) defines the terms “Puerto Rican Hurricane Relief Commission", "Hurricane Relief Commission", and "Commission" for the purposes of this section.

EXPLANATION OF AMENDMENTS

The committee amendments to this resolution strike out the references to the Land Bank Commissioner, all of which are unnecessary and inappropriate. The provisions of the Federal Farm Mortgage Corporation Act, approved January 31, 1934, vested in the Federal Farm Mortgage Corporation the legal and equitable title to all mortgages taken by the Land Bank Commissioner prior to that time and also vests in the Corporation the legal and equitable title to all mortgages taken subsequent to that date by the Commissioner on behalf of the Corporation. These provisions make the Corporation the real party in interest; and consequently, in giving effect thereto, it is the practice of the officers of the Farm Credit Administration who are charged with its administration not to join the Commissioner with the Corporation in any suit affecting security held by it.

The amendments to lines 3 to 4 on page 2, 6 to 7 on page 2, 21 to 23 on page 4, and 6 to 8 on page 6 (except as otherwise mentioned) are clarifying and do not change the substance. The new paragraph added at the end of the resolution is also clarifying.

The following letter was addressed to the Chairman of the Committee on Insular Affairs by Gov. W. I. Myers, of the Farm Credit Administration:

FARM CREDIT ADMINISTRATION,

Washington, D. C., January 21, 1935. Hon. John McDUFFIE, Chairman Committee on Insular Affairs,

House of Representatives. DEAR MR. McDUFFIE: You will doubtless recall that during the last session of Congress, at the request of the Farm Credit Administration, you introduced a measure (H. J. Res. 344) intended to provide an expedient method for the enforcement of real-estate liens in Puerto Rico under mortgages heretofore or hereafter taken by the Federal Land Bank of Baltimore and by the Land Bank Commissioner and the Federal Farm Mortgage Corporation in cases where the United States has a subordinate lien through loans made by the Puerto Rican Hurricane Relief Commission under the provisions of the joint resolution approved December 31, 1928. This resolution was reported favorably in both the House and the Senate and passed the House, but was not voted on by the Senate due to the congested condition of the calendar at the close of the session.

The procedural difficulties which this legislation was intended to remedy still exist, notwithstanding the fact that the United States has recently dismissed its appeal from the decision of the Supreme Court of Puerto Rico, which held that the term "State court” as used in the Graham Act, included the insular courts of Puerto Rico. The Farm Credit Administration is, therefore, very desirous of seeing this legislation adopted during the present session of Congress. As you know, the Secretary of War, the Secretary of the Treasury, and the Secretary of Agriculture, constituting the Puerto Rican Hurricane Relief Commission, have signed an order supporting the Farm Credit Administration in its attempt to secure this legislation, or legislation of a like nature. It is our suggestion that the proposed legislation be introduced in the Seventy-fourth Congress in a form identical to House Joint Resolution No. 344. The comments contained in House Report No. 1717 could, with some slight revision, be used in connection with the reintroduced proposal.

I sincerely recommend this proposed legislation for the consideration of your committee and trust that you will find it possible to take the matter up at an early date. We shall be pleased to furnish any additional information and assistance which you may desire.

I am enclosing for your convenient reference a copy of House Joint Resolution No. 344 and a copy of House Report No. 1717. Sincerely,

W. I. MYERS, Governor. Likewise, the following letter was sent to the present Chairman of the Committee on Insular Affairs by Gov. W. I. Myers, of the Farm Credit Administration, urging consideration of House Joint Resolution 129:

FARM CREDIT ADMINISTRATION,

Washington, D. C., March 28, 1935. Hon. Leo KocialKOWSKI, Chairman Committee on Insular Affairs,

House of Representatives. DEAR MR. KOCIALKOWSKI: I refer to H. J. Res. 129, introduced by Congressman McDuffie on January 23, 1935, which pertains to the foreclosure of mortgages on properties in Puerto Rico on which the Puerto Rican Hurricane Relief Commission holds a junior lien.

An extreme emergency exists relative to the situation which this legislation is intended to remedy. As you are aware, the Federal Land Bank of Baltimore is practically powerless to act to protect its interest in properties in Puerto Rico on which it holds first mortgages and on which the Puerto Rican Hurricane Relief Commission holds junior liens, unless and until the Congress gives the consent of the United States to be made a party defendant in any suit brought for the purpose of securing an adjudication respecting such junior liens. In many instances the debtor, realizing this fact, has rented his farm and the tenant is gradually destroying the assets. There are cases, also, where the debtor himself is doing the same thing. Furthermore, many debtors have become lax in making payments and have permitted delinquencies to mount up, although many of them can well afford to make the payment.

I trust that you will find it possible to take this matter up with your committee at an early date. I shall appreciate it, also, if you will notify us as to the time when the matter will come before the committee and will permit us to have representatives present at the hearing in order that we may suggest a technical amendment to the resolution. Sincerely yours,

W. I. MYERS, Governor. O

1st Session

No. 825

AUTHORIZING THE VIRGIN ISLANDS CO. TO SETTLE

VALID CLAIMS OF ITS CREDITORS

MAY 4, 1935.- Referred to the House Calendar and ordered to be printed

Mr. KOCIALKOWSKI, from the Committee on Insular Affairs, sub

mitted the following

REPORT

[To accompany H. R. 7380]

The Committee on Insular Affairs, to whom was referred the bill (H. R. 7380) authorizing the Virgin Islands Co. to settle valid claims of its creditors, and for other purposes, having considered the same, report thereon with the recommendation that it do pass with the following amendment:

That the words, beginning on page 1, line 11, "and to pay and settle such other claims against the corporation as are or may be approved for payment by its board of directors as valid obligations duly incurred by the corporation in the course of business”, be stricken.

The letter of transmittal of the Department of the Interior is hereto appended.

March 19, 1935. Hon. LEO. KOCIALKOWSKI, Chairman Committee on Insular Affairs,

House of Representatives. MY DEAR MR. KOCIALKOWSKI: Enclosed herewith is a draft of a bill designed to authorize The Virgin Islands Co. to pay certain claims out of the funds of the corporation.

The Virgin Islands Co. was chartered by act of the Colonial Council of St. Thomas and St. John, Virgin Islands of the United States, approved by the Governor of the Virgin Islands on April 16, 1934. The corporation is authorized to operate solely as a quasi-public body through which projects for the rehabilitation of the Virgin Islands of the United States can be accomplished. The charter of the corporation precludes private profit from its operations and permits expenditures of any earned surplus only for the public benefit of the people of the Virgin Islands.

By license of the Public Works Administration, the corporation is now operating certain properties in the Virgin Islands which have been rehabilitated during the course of a Federal program of public works. It has also borrowed money from the Government. In these circumstances, the corporation has agreed that expenditures of its earnings and other funds shall be made only with the approval of the Comptroller General or pursuant to some authorization of Congress.

The Comptroller General has considered that he is without authority to authorize expenditures by the corporation which could not be made by executive agencies of the Government under the laws controlling their expenditures. As a result the corporation is unable to make needful and, from a business standpoint, proper disbursements. Typical of such items is a proposed expenditure of $1,735.81, payable to Phagan, Tillison & Tremble, an accounting firm, for establishing a general accounting and cost system for the corporation. It may be mentioned that the accounting system, which has been devised for the corporation by this firm, has been considered by the Comptroller General and approved with certain modification of detail.

It is to be emphasized that the proposed bill does not authorize any expenditure out of the general fund of the Treasury. Only the funds of the corporation now on hand, or to be earned by its future operations, are made available for the authorized expenditures.

If the proposed bill, as herein explained, meets with your approval, may I request that you cause the measure to be introduced in the House of Representatives and that you urge its favorable consideration. Sincerely yours,

T. A. WALTERS, Acting Secretary of the Interior.

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