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by a fine of not exceeding $5,000 or by imprisonment not exceeding five years, or both. (July 17, 1916, sec. 31, 39 Stat. 382; 12 U. S. C., sec. 984.)
638–178. False pretenses as to character of bonds or coupons.-Any person who shall deceive, defraud, or impose upon, or who shal attempt to deceive, defraud, or impose upon, any person, firm, or corporation by making any false pretense or representation regarding the character, issue, security, or terms of any farm loan bond, or coupon, issued under the terms of this Act; or by falsely pretending or representing that any farm loan bond, or coupon, issued under the terms of this Act by one class of land banks is a farm loan bond, or coupon, issued by another class of banks; or by falsely pretending or representing that any farm loan bond, or coupon, issued under the terms of this Act, or anything contained in said farm loan bond, or coupon, is anything other than, or different from, what it purports to be on the face of said bond or coupon, shall be fined not exceeding $500 or imprisoned not exceeding one year, or both. (July 17, 1916, sec. 31, 39 Stat. 382; 12 U.S.C., sec. 985.)
638–179. Detection and arrest of violators.—The Secretary of the Treasury is hereby authorized to direct and use the Secret Service Division of the Treasury Department to detect, arrest, and deliver into custody of the United States marshal having jurisdiction, any person or persons violating any of the provisions of this section. (July 17, 1916, sec. 31, 39 Stat. 382; 12 U.S.C., sec. 986.)
638–180. False statements by mortgagee relating to sale of mortgage to Federal land bank; overvaluation of land securing such mortgage.Any mortgagee who shall knowingly make any false statement in any paper, proposal, or letter, relating to the sale of any mortgage, to any Federal land bank under the provisions of section 13 of this Act, as amended, or any appraiser provided for in this Act who shall willfully overvalue any land securing such mortgage, shall be punished by a fine of not exceeding $5,000 or by imprisonment not exceeding one year, or both. (July 17, 1916, sec. 31, 39 Stat. 382; June 16, 1933, sec. 78, 48 Stat. 272; 12 U. S. C., sec. 987.)
638–181. Government deposits in land bank; interest rate; security; maximum amount.—That the Secretary of the Treasury is authorized, in his discretion, upon the request of the Federal Farm Loan Board (now 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, sec. 32, 39 Stat. 384; 12 U. S. C., sec. 991.)
638–182. 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
*Seo Ex. Or. 6084. p. 254, this volume.
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 this paragraph takes effect, Federal land banks may issue farm loan bonds as authorized under this Act, for the purpose of making new loans, or for purchasing mortgages or exchanging bonds for mortgages as provided in paragraph "Second” of section 13 of this Act. 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 hereby 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 the date this paragraph takes effect, 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 the date this paragraph takes effect for the purpose of such refinancing. (July 17, 1916, sec. 32, 39 Stat. 384; May 12, 1933, sec. 21, 48 Stat. 41; June 16, 1933, sec. 80 (a), 48 Stat. 273; 12 U.S.C., sec. 992.)
638–183. Limitation of paragraph 638-182.- After ninety days after the enactment of this Act, no Federal land bank shall issue any bonds under the provisions of the last paragraph of section 32 of the Federal Farm Loan Act, as amended, 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, sec. 5, 48 Stat. 346; 12 U.S. C., sec. 992a.)
638–184. Bonds issued under paragraph 638-182; delivery in payment of certain mortgages.-Any borrower who obtains a loan from a Federal land bank after the date this paragraph takes effect 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 this paragraph 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, sec. 32,39 Stat. 384; May 12, 1933, sec. 21, 48 Stat. 41; 12 U. S. C., sec. 993.)
638–185. Organization expenses; appropriation for expenses.—That 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 (now Farm Credit Administration]*, for the purpose of carrying into effect the provisions of this Act, including the rent and equipment of necessary offices. (July 17, 1916, sec. 33, 39 Stat. 384; 12 U.S. C., sec. 1001.)
638–186. Limitation of court decisions respecting validity of provi. sions.—That if any clause, sentence, paragraph, or part of this Act 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 this Act, 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, sec. 34, 39 Stat. 384; 12 U.S. C., sec. 1011.)
638–187. Reservation of right to amend.—That all Acts or parts of Acts inconsistent with this Act are hereby repealed, and this Act shall take effect upon its passage. The right to amend, alter, or repeal this Act is hereby expressly reserved. (July 17, 1916, sec. 35, 39 Stat. 384; 12 U. S. C., sec. 1012.)
638–188. Loans to farmers by Land Bank Commissioner; provisions governing
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. 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 Federal Farm Loan Act, 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 livelihood 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.
Provisions to be included in mortgage; interest rate; repayment of prin. cipal 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
*See Ex. Or. 6084, p. 254, this volume.
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 within an agreed period no greater than that for which loans may be made under the Federal Farm Loan Act, as amended, 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.
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 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.
Purposes 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 VIII of the Bankruptcy Act of July 1, 1898, 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 13 of the Federal Farm Loan Act, 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.
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 corporation (A) unless all the stock of the corporation is owned by individuals themselves personally actually engaged in the raising of livestock on the land to be mortgaged as security for the loan, except in a case where the Land Bank Commissioner permits the loan if at least 75 per centum in value and number of shares of the stock of the corporation is owned by the individuals personally actually so engaged, and (B) unless the owners of at least 75 per centum in value and number of shares of the stock of the corporation assume personal liability for the loan. No loan shall be made to any corporation which is a subsidiary of, or affiliated (either directly or through substantial identity of stock ownership) with, a corporation ineligible to procure a loan in the amount applied for.
Loans by Commissioner on behalf of Federal Farm Mortgage Corporation; loans in cash or bonds; amount available. Until June 1, 1942, the Land Bank Commissioner shall, in his name, make loans under this section on behalf of the Federal Farm Mortgage Corporation, and may make such loans in cash or in bonds of the corporation, or if acceptable to the borrower, in consolidated farm loan bonds; but no such loans shall be made by him after June 1, 1942, except for the purpose of refinancing loans previously made by him under this section. As much as may be necessary of the assets of the corporation, including the bonds (and proceeds thereof) issued under section 4 of the Federal Farm Mortgage Corporation Act, may be used for the purposes of this section.
Execution of instruments by Federal land banks; presumption of authority. Any Federal land bank, when duly authorized by the Land Bank Commissioner and the Federal Farm Mortgage Corporation, shall have the power to execute any instrument relating to any mortgage taken to secure a loan made or to be made under this section, or relating to any property included in any such mortgage, or relating to any property acquired by the Land Bank Commissioner and/or the Federal Farm Mortgage Corporation. Any such instrument heretofore or hereafter executed on behalf of the Land Bank Commissioner and/or the Federal Farm Mortgage Corporation by a Federal land bank, through its duly authorized officers, shall be conclusively presumed to have been duly authorized by the Land Bank Commissioner and the Federal Farm Mortgage Corporation.
Rate of interest payable on certain installment dates. Notwithstanding the foregoing provisions of this section, the rate of interest on loans made under this section shall not exceed 4 per centum per annum for all interest payable on installment dates occurring on or after July 22, 1937, and prior to July 1, 1940, and shall not exceed 31, per centum per annum for all interest payable on installment dates occurring on or after July 1, 1940, and prior to July 1, 1942. (May 12, 1933, sec. 32, 48 Stat. 48; June 16, 1933, sec. 80 (a), 48 Stat. 273; Jan. 31, 1934, secs. 9, 10, 48 Stat. 347; June 11, 1934, 48 Stat. 929; May 28, 1935, sec. 32, 49 Stat. 300; June 3, 1935, sec. 2 (a), (b), (c), (d), (e), 49 Stat. 313, 314; July 22, 1937, sec. 2, 50 Stat. 521; Aug. 19, 1937, secs. 13, 14, 50 Stat. 708 ; June 16, 1938, sec. 2, 52 Stat. 709; Feb. 1, 1940,-54 Stat. 15; June 29, 1940, sec. 2,54 Stat. 684; 12 U.S. C., sec. 1016 (a) to (i).)
638–189. 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 title and to make the relief contemplated by this title immediately avail. able, 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, sec. 33, 48 Stat. 49; June 16, 1933, sec. 80 (a), 48 Stat. 273; 12 U. S. C., sec. 1017.)
638-190. 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 title.