§ 1016 SUBCHAPTER II-LOANS TO FARMERS BY Loans to farmers by Land Bank Commissioner; provisions governing-(a) Funds available to Commissioner; security for Commissioner's loans. The Reconstruction Finance Corporation is authorized and directed to allocate and make available to the Land Bank Commissioner the sum of $200,000,000, or so much thereof as may be necessary, to be used for the purpose of making loans as hereinafter provided to any farmer, secured by a first or second mortgage upon the whole or any part of the farm property, real or personal, including crops, of the farmer. (May 12, 1933, c. 25, § 32, 48 Stat. 48; June 16, 1933, c. 98, § 80 (a), 48 Stat. 273.) (b) Maximum loan; value of security for loan.The amount of the mortgage given by any farmer, together with all prior mortgages or other evidences of indebtedness secured by such farm property of the farmer, shall not exceed 75 per centum of the normal value thereof, as determined upon an appraisal made pursuant to the preceding subchapter, as amended; nor shall a loan in excess of $7,500 be made to any one farmer. (May 12, 1933, c. 25, § 32, 48 Stat. 48; Jan. 31, 1934, c. 7, § 10, 48 Stat. 344.) (c) Provisions to be included in mortgage; interest rate; repayment of principal in installments; maximum terms of loans as affected by character of security; privilege of deferring principal payments during first three years of loan.Every mortgage made under this section shall contain an agreement providing for the repayment of the loan on an amortization plan by means of a fixed number of annual or semiannual installments, sufficient to cover (1) interest on unpaid principal at a rate not to exceed 5 per centum per annum and (2) such payments equal in amount to be applied on principal as will extinguish the debt within an agreed period of not more than ten years or, in the case of a first or second mortgage secured wholly by real property and made for the purpose of reducing and refinancing an existing mortgage within an agreed period no greater than that for which loans may be made under the preceding subchapter, as amended, from the date the first payment on principal is due: Provided, That during the first three years the loan is in effect payments of interest only may be required if the borrower shall not be in default with respect to any other condition or covenant of his mortgage. (May 12, 1933, c.25, § 32, 48 Stat. 48.) (d) Requirement of waiver by prior lien holder.No loan shall be made under this section unless the § 1016 holder of any prior mortgage or instrument of indebtedness secured by such farm property arranges to the satisfaction of the Land Bank Commissioner to limit his right to proceed against the farmer and such farm property for default in payment of principal. (May 12, 1933, c. 25, § 32, 48 Stat. 48; June 16, 1933, c. 98, § 80 (a), 48 Stat. 273.) (e) Purposes of loans.-Loans under this section shall be made for the following purposes only: (1) Refinancing, either in connection with proceedings under chapter VIII of the Bankruptcy Act of July 1, 1898, as amended (relating to agricultural compositions and extensions), or otherwise, any indebtedness, secured or unsecured, of the farmer, (2) providing working capital for his farm operations, and (3) enabling any farmer to redeem and/or repurchase farm property owned by him prior to foreclosure which has been foreclosed at any time between July 1, 1931, and May 12, 1933, or which is foreclosed after the enactment of this Act. The provisions of paragraph "Ninth" of section 781 of this chapter, as amended (relating to charges to applicants for loans and borrowers from the Federal land banks), shall, so far as practicable, apply to loans made under this section. (May 12, 1933, c. 25, 32, 48 Stat. 48.) (f) "Farmer" defined.-As used in this section, the term "farmer" means any individual who is bona fide engaged in farming operations, either personally or through an agent or tenant, or the principal part of whose income is derived from farming operations, and includes a personal representative of a deceased farmer. (May 12, 1933, c. 25, § 32, 48 Stat. 48.) (g) Loans by Commissioner on behalf of Federal Farm Mortgage Corporation; loans in cash or bonds; amount available.-Until February 1, 1936, the Land Bank Commissioner shall, in his name, make loans under this section on behalf of the Federal Farm Mortgage Corporation, either in cash or in bonds of the corporation at his election, but no such loans shall be made by him after February 1, 1936, except for the purpose of refinancing leans previously made by him under this section. Not to exceed $600,000,000 of the bonds and proceeds thereof issued under section 1020c of this chapter are hereby made available for the purposes of this section, in addition to the amounts transferred to such corporation under section 1020b of this chapter. (May 12, 1933, c. 25, § 32, 48 Stat. 48; Jan. 31, 1934, c. 7, § 9, 48 Stat. 344.) § 1017 § 1018 § 1019 Rules and regulations; appointment, employment, and compensation of officers, employees, and agents. The Land Bank Commissioner is authorized to make such rules and regulations, and to appoint, employ, and fix the compensation of such officers, employees, attorneys, and agents as may be necessary to carry out the purposes of this subchapter and to make the relief contemplated by this subchapter immediately available, without regard to the provisions of other laws applicable to the employment and compensation of officers and employees of the United States: Provided, That no salary or compensation in excess of $10,000 shall be paid to any person employed under the terms of the foregoing section. (May 12, 1933, c. 25, § 33, 48 Stat. 49; June 16, 1933, c. 98, § 80 (a), 48 Stat. 273.) Facilities of Federal land banks and national farm loan associations available to Commissioner.-The Federal land banks and the national farm loan associations are authorized, upon request of the Land Bank Commissioner, to make available to him their services and facilities to aid in administering the provisions of this subchapter. (May 12, 1933, c. 25, § 34, 48 Stat. 49; June 16, 1933, c. 98, § 80 (a), 48 Stat. 273.) Penalties for false representation in obtaining loan. Any person who shall knowingly make any material false representation for the purpose of obtaining any loan under this subchapter of this title, or in assisting in obtaining any such loan, shall, upon conviction thereof, be fined not more than $1,000, or imprisoned not more than six months, or both. (May 12, 1933, c. 25, § 35, 48 Stat. 49.) SUBCHAPTER II-A.-FEDERAL FARM MORTGAGE § 1020 HISTORICAL NOTE The provisions of this subchapter were contained in the Federal Farm Mortgage Corporation Act of January 31, 1934. Establishment of corporation; directors; bylaws; regulations; officers and employees. There is hereby established a corporation to be known as the Federal Farm Mortgage Corporation", in this subchapter referred to as the "corporation." The principal office of the corporation shall be located in the District of Columbia and the manage §1020a ment of the corporation shall be vested in a board of directors consisting of the Secretary of the Treasury, or an officer of the Treasury designated by him, the Governor of the Farm Credit Administration, in this subchapter referred to as the "Governor", and the Land Bank Commissioner. The directors shall receive no additional compensation for their services as directors of the corporation, but may be allowed actual necessary traveling and subsistence expenses when engaged in the business of the corporation outside of the District of Columbia. The Governor shall be the chairman of the board of directors. The directors shall have power to adopt such bylaws, rules, regulations, and amendments thereto as they deem necessary for the conduct of the business of the corporation authorized under this subchapter. The directors shall have power, without regard to the provisions of other laws applicable to the employment and compensation of officers and employees of the United States, to employ and fix the compensation and duties of such agents, officers, and employees of the corporation as may be necessary to carry out the powers and duties conferred upon the corporation by this subchapter, to require bonds of them and fix the penalties thereof and dismiss them at pleasure, and to prescribe the manner in which the obligations of the corporation shall be incurred and its expenses allowed and paid, but the rates of compensation of such agents, officers, and employees of the corporation shall not exceed the rates of compensation prescribed for comparable duties by chapter 13 of Title 5 [U.S. Code]. (Jan. 31, 1934, c. 7, § 1, 48 Stat. 344.) Period of succession; powers; free use of mails; use of Government facilities. The corporation shall have succession until dissolved by Act of Congress; shall have power to sue and be sued in any court, to adopt and use a corporate seal, to make contracts, and to acquire, hold, and dispose of real and personal property necessary and incident to the conduct of its business; and shall have such other powers as may be necessary and incident to carrying out its powers and duties under this subchapter. The corporation shall be entitled to the free use of the United States mails in the same manner as the executive departments of the Government. The corporation, with the consent of any board, commission, independent establishment, or executive department of the Government, may avail itself of the use of information, services, $1020b §1020c facilities, officers, agents, and employees thereof, in carrying out the provisions of this subchapter. (Jan. 31, 1934, c. 7, § 2, 48 Stat. 344.) Capital; amount; subscription by United States.The capital of the corporation shall be in the sum of $200,000,000, which shall be subscribed by the Governor on behalf of the United States in such amounts and at such times as he deems necessary for the purposes of the corporation. For the purpose of such capital subscription, the funds and proceeds thereof made available to the Land Bank Commissioner under section 1016 of this chapter and the mortgages taken by the Commissioner and the credit instruments secured thereby are hereby transferred to the corporation. (Jan. 31, 1934, c. 7, §3, 48 Stat. 344.) Bonds; aggregate amount; guaranty by United States; purchase and sale of by United States; exchange of for consolidated farm loan bonds.— With the approval of the Secretary of the Treasury, the corporation is authorized to issue and have outstanding at any one time bonds in an aggregate amount not exceeding $2,000,000,000. Such bonds shall be in such forms and denominations, shall have such maturities, 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 |