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examination in the case of any State, the Farm Credit Administration may declare first mortgages on farm lands situated within such State ineligible as the basis for an issue of farm loan bonds; and if said examination shall show that the laws of any such State afford insufficient protection to the holder of first mortgages of the kinds provided in this subchapter, said Farm Credit Administration may declare said first mortgages on land situated in such State ineligible during the continuance of the laws in question. In making his examination of the laws of the several States and forming his conclusions thereon said Land Bank Commissioner may call upon the office of the Attorney General of the United States for any needed legal advice or assistance, or may employ special counsel in any State where he considers such action necessary. (July 17, 1916, c. 245, § 30, 39 Stat. 382; Mar. 27, 1933, Ex. Or. 6084; June 16, 1933, c. 98, § 80 (a), 48 Stat. 273.)

"Farm Credit Administration" mentioned in the text was substituted for “Federal Farm Loan Board” pursuant to the Executive Order cited thereto, which is set ont in full at the beginning of this chapter.

12 U.S.C., & 973

F. F. L. Act, 8 30 Statement to State Executive.--At the request of the Executive of any State the Farm Credit Administration shall prepare a statement setting forth in what respects the requirements of said administration cannot be complied with under the existing laws of such State. (July 17, 1916, c. 245, 8 30, 39 Stat. 382; Mar. 27, 1933, Ex. Or. 6084.)

“Tarm Credit Administration" and "administration" mentioned in the text were substituted for “Federal Farm Loan Board" and "board,” respectively, pursuant to the Executive Order cited thereto, which is set out in full at the beginning of this chapter.

GOVERNMENT DEPOSITS IN LAND BANKS

12 U. S.C., $ 991

F.F.L. Act, $ 32 Interest rate; security; maximum amount.—The Secretary of the Treasury is authorized, in his discretion, upon the request of the Farm Credit Administration, to make deposits for the temporary use of any Federal land bank, out of any money in the Treasury not otherwise appropriated. Such Federal land bank shall issue to the Secretary of the Treasury a certificate of indebtedness for any such deposit, bearing a rate of interest not to exceed the current rate charged for other Government deposits, to be secured by farm loan bonds or other collateral, to the satisfaction of the Secretary of the Treasury. Any such certificate shall be redeemed and paid by such land bank at the discretion of the Secretary of the Treasury. The aggregate of all sums so deposited by the Secretary of the Treasury shall not exceed the sum of $6,000,000 at any one time. (July 17, 1916, c. 245, $ 32, 39 Stat. 384; Mar. 27, 1933, Ex. Or. 6084.)

"Farm Credit Administration” mentioned in the text was substituted for "Federal Farm Loan Board” pursuant to the Executive Order cited thereto, which is set out in full at the beginning of this chapter.

Federal land banks as depositaries of public money, see $ 701 of this title.

12 U.S.C., $ 992

F.F.L. Act, 8 32 Government guaranty of interest on qualified Federal land bank bonds issued during limited period; use of proceeds of such bonds; limitation on aggregate amount of such bonds; payment of interest by Government upon inability of issuing bank; rights of Government after such payment.—Until such time as the Land Bank Commissioner determines that Federal farm loan bonds (other than those issued under this paragraph) are readily salable in the open market at a yield not in excess of 4 per centum per annum, but in no case more than two years after May 12, 1933, Federal land banks may issue farm loan bonds as authorized under this subchapter, for the purpose of making new loans, or for purchasing mortgages or exchanging bonds for mortgages as provided in paragraph "Second” of section 781 of this title. "The aggregate amount of the bonds issued under this paragraph shall not exceed $2,000,000,000, and such bonds shall be issued in such denominations as the Land Bank Commissioner shall prescribe, shall bear interest at a rate not in excess of 4 per centum per annum, and shall be fully and unconditionally guaranteed as to interest by the United States, and such guaranty shall be expressed on the face thereof. In the event that it shall appear to the Land Bank Commissioner that the issuing bank or banks will be unable to pay upon demand, when due, the interest on any such bonds, the Secretary of the Treasury shall, upon the request of the Commissioner, pay the amount thereof, which is authorized to be appropriated out of any money in the Treasury not otherwise appropriated. Upon the payment of such interest by the Secretary of the Treasury the amount so paid shall become an obligation to the United States of the issuing bank or banks and shall bear interest at the same rate as that borne by the bonds upon which the interest has been so paid. After the expiration of one year from May 12, 1933, if in the opinion of the Land Bank Commissioner any part of the proceeds of the bonds authorized to be issued under this paragraph is not required for the purpose of making new loans or for purchasing mortgages or exchanging bonds for mortgages as herein provided, such bonds may be issued within the maximum limit herein specified for the purpose of refinancing any outstanding issues of Federal farm loan bonds; but no such bonds shall be issued after two years from May 12, 1933, for the purpose of such refinancing. (July 17, 1916, c. 245, $ 32, 39 Stat. 384; May 12, 1933, c. 25, $ 21, 48 Stat. 41; June 16, 1933, c. 98, $ 80 (a), 48 Stat. 273.)

Limitation on issuance of Londs under this section, see § 992a of this title.

12 U. S. C., § 992a

Limitation of section 992.–After ninety days after January 31, 1934, no Federal land bank shall issue any bonds under the provisions of section 992 of this title, subject to the guarantee of interest on such bonds by the United States except for the purpose of refinancing any bond which is or has been issued subject to such guarantee of interest. (Jan. 31, 1934, c. 7, § 5, 48 Stat. 346.)

12 U.S. C., 993

F.F. L. Act, 832 Bonds issued under section 992; delivery in payment of certain mortgages.-Any borrower who obtains a loan from a Federal land bank after May 12, 1933, may, at any time after the expiration of five years from the date such loan was made, tender to such bank on any regular installment date, bonds issued under section 992 of this title in an amount not to exceed the unpaid principal of his loan, and the bonds so tendered shall be accepted by the bank at par in payment of any part of such unpaid principal. (July 17, 1916, C. 245, § 32, 39 Stat. 384; May 12, 1933, c. 25, $ 21, 48 Stat. 41.)

ORGANIZATION EXPENSES

12 U.S.C., & 1001

F.F.L. Act, 8 33 Appropriation for expenses.--The sum of $100,000, or so much thereof as may be necessary, is hereby appropriated, out of any money in the Treasury not otherwise appropriated, to be expended under the direction of the Federal Farm Loan Board, for the purpose of carrying into effect the provisions of this subchapter, including the rent and equipment of necessary offices. (July 17, 1916, c. 245, $ 33, 39 Stat. 384.)

The United States Code omits the text of this section, with an explanatory note.

LIMITATION OF COURT DECISIONS

12 U.S. C., § 1011

F.F. L. Act, $ 34 Limitation of court decisions respecting validity of provisions.If any clause, sentence, paragraph, or part of this subchapter or of subchapter III hereof shall for any reason be adjudged by any court of competent jurisdiction to be invalid, such judgment shall not affect, impair, or invalidate the remainder of said subchapters, but shall be confined in its operation to the clause, sentence, paragraph, or part thereof directly involved in the controversy in which such judgment shall have been rendered. (July 17, 1916, c. 245. § 34, 39 Stat. 384.)

AMENDMENTS TO CHAPTER

12 U. S. C., § 1012

F. F. L. Act, $ 35 Reservation of right to amend.--The right to amend, alter, or repeal this subchapter or subchapter III of this chapter is hereby expressly reserved. (July 17, 1916, c. 245, § 35, 39 Stat. 384.)

SUBCHAPTER II-LOANS TO FARMERS BY LAND

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12 U.S.C., & 1016

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.)

This subsection is omitted in the United States Code, with an explanatory note. subsection is inoperative, by virtue of the provisions of Act June 30, 1947, Chapter 166, title II, section 206 (h), 61 Stat. 208, which repealed so much of section 32 of Act May 12, 1933, cited to text, as authorized or directed the Reconstruction Finance Corporation to make funds available to the Land Bank Commissioner.

(b) Maximum loan; value of security for loan; valuation of farm property.-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. For the purposes of this section, farm property may be valued at an amount representing a prudent investment, consistent with community standards and rentals, if (1) the person occupying the property is not entirely dependent upon farm income for his liveliħood but receives a part of his income from other dependable sources, and (2) the farm income from the property, together with earnings from other dependable sources ordinarily available in the community to a person operating such property, would be sufficient to support his family, to pay operating expenses and fixed charges, and to discharge the interest and amortization payments on the loan. (May 12, 1933, c. 25, $ 32, 48 Stat. 48; Jan. 31, 1934, c. 7, § 10, 48 Stat. 347; May 28, 1935, c. 150, $ 32, 49 Stat. 300.)

(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 of 1 per centum per annum higher than the rate on loans through national farm loan associations made at the same time by the Federal land bank in the farm credit district in which the security for the loan under this section is located: Provided, however, That loans guaranteed under sections 694–694e of Title 38 may be made at such lower rate as may be necessary to qualify them for such guaranty 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 within an agreed period no greater than that for which loans may be made under the preceding subchapter, from the date the first payment on principal is due: Provided, That when in the judgment of the Land Bank Commissioner conditions justify it, any mortgage made under this section may provide 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.

(1) Substitution of Federal land bank loan.--The instruments under which each loan under this section is made and security given therefor shall provide that if at any time it shall appear to the lender that the borrower may be able to obtain a Federal land bank loan on the mortgaged property, the borrower shall, on request of the lender, apply for a Federal land bank loan to pay off the loan under this section, and shall accept such loan as may be offered to him by the Federal land bank, if sufficient in amount to pay the loan under this section and pay for any stock which it is necessary for him to purchase in obtaining the loan from the Federal land bank. (May 12, 1933, c. 25, $ 32, 48 Stat. 48; June 3, 1935, c. 164, § 2 (a), 49 Stat. 313; Aug. 19,1937, c. 704, $ 14, 50 Stat. 708, June 30, 1945, c. 204, $$ 11-13, 59 Stat. 269.)

(d) Requirement of waiver by prior lien holder.—No loan shall be made under this section unless the holder of any prior mortgage or instrument of indebtedness secured by such farra 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) Purpose of loans.-Loans may be made under this section for any of the purposes for which Federal land banks are authorized by law to make loans, and for the following additional purpose, and none other: Refinancing, in connection with proceedings under chapter 8 of Title 11 [U. S. Code), as amended, any indebtedness, secured or unsecured, of the farmer, or which is secured by a lien on all or any part of the farm property accepted as security for the loan. The provisions of paragraph “Ninth" of section 781 of this title (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; June 11, 1934, c. 446, 48 Stat. 929; June 3, 1935 c. 164, § 2 (b), 49 Stat. 313; Aug. 19, 1937, c. 704, § 13, 50 Stat. 708.)

(f) Definitions; loans to corporations; exceptions.-As used in this section, (1) the term "farmer” means any person who is at the time, or shortly to become, 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 or livestock raising, and includes a personal representative of a deceased farmer; (2) the term “person" includes an individual or a corporation engaged in the raising of livestock; and (3) the term "corporation" includes any incorporated association; but no such loan shall be made to a

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