75TH CONGRESS HOUSE OF REPRESENTATIVES 3d Session { REPORT No. 2308 INTEREST RATE ON LAND-BANK AND COMMISSIONER LOANS MAY 6, 1938.-Committed to the Committee of the Whole House on the state of the Union and ordered to be printed Mr. DoXEY, from the Committee on Agriculture, submitted the following REPORT [To accompany H. R. 10530] The Committee on Agriculture, to whom was referred the bill (H. R. 10530) to extend for 2 additional years the 32-percent interest rate on certain Federal land-bank loans, and to provide for a 4-percent interest rate on Land Bank Commissioner's loans until July 1, 1940, having considered the same, report thereon with a recommendation that it do pass. Section 1 (a) of the bill provides that, with respect to loans made through national farm-loan associations, interest falling due on installment dates occurring within a period of 5 years commencing July 1, 1935, and ending June 30, 1940, shall be charged at a rate not exceeding 31⁄2 percent per annum. Corresponding alterations would be effected in the temporarily reduced interest rates applicable to direct loans made by the Federal land banks. The existing provisions of law authorizing temporary reductions in the interest charges on Federal land-bank loans require, with respect to loans made through national farm-loan associations, that interest falling due on installment dates occurring within a period of 3 years commencing July 1, 1935, and ending June 30, 1938, shall be charged at a rate not exceeding 31⁄2 percent per annum, and that interest falling due on installment dates occurring within a period of 1 year commencing July 1, 1938, and ending June 30, 1939, shall be charged at a rate not exceeding 4 percent per annum. Section 1 (b) makes the necessary technical amendment extending the period for which payments are made by the United States to the land banks on account of the reduction in interest payments to them. Section 2 of the bill provides that in the case of loans made by the Land Bank Commissioner (under sec. 32 of the Emergency Farm Mortgage Act), either on his own behalf or on behalf of the Federal Farm Mortgage Corporation, the interest rate shall not exceed 4 percent per annum for interest payable on installment dates occurring on or after July 22, 1937, and prior to July 1, 1940. The existing provisions of law authorizing temporary reductions in the interest charges on Land Bank Commissioner loans require that interest falling due on installment dates occurring within a period of 2 years commencing July 22, 1937, and ending July 22, 1939, shall be charged at a rate not exceeding 4 percent per annum. CHANGES IN EXISTING LAW In compliance with pragraph 2a of rule XIII of the Rules of the House of Representatives, changes in existing law made by the bill are shown as follows: Existing law proposed to be omitted is enclosed in black brackets, new matter is printed in italics, existing law in which no change is proposed is shown in roman. Federal Farm Loan Act, as amended, section 12, paragraph "Twelfth", first four sentences: Twelfth. Notwithstanding the provisions of paragraph "Second", the rate of interest on any loans on mortgage made through national farm-loan associations or through agents as provided in section 15, or purchased from joint-stock land banks, by any Federal land bank, outstanding on the date this paragraph takes effect or made through national farm-loan associations after such date, shall not exceed 3% per centum per annum for all interest payable on installment dates [occurring within a period of three years, commencing July 1, 1935, and shall not exceed 4 per centum per annum for all interest payable on installment dates occurring within a period of one year commencing July 1, 1938】 occurring within a period of five years, commencing July 1, 1935; and no payment of the principal portion of any installment of any such loan outstanding on the date of the enactment of the Farm Credit Act of 1935 shall be required prior to July 11, 1938, if the borrower shall not be in default with respect to any other condition or covenant of his mortgage. The foregoing provisions shall apply to loans made by Federal land banks through branches, except that the rates of interest paid for the respective periods above specified shall be one-half of 1 per centum per annum in excess of the rates of interest paid during the corresponding periods by borrowers on mortgage loans made through national farm-loan associations. The Secretary of the Treasury shall pay each Federal land bank, as soon as practicable after October 1, 1933, and after the end of each quarter thereafter, such amount as the Land Bank Commissioner certifies to the Secretary of the Treasury is equal to the amount by which interest payments on mortgages held by such bank have been reduced, during the preceding quarter, by reason of this paragraph; but in any case in which the Land Bank Commissioner finds that the amount of interest payable by such bank during any quarter has been reduced by reason of the refinancing of bonds under section 32 of this Act, the amount of the reduction so found shall be deducted from the amount payable to such bank under this paragraph. No payments shall be made to a bank with respect to any period after June 30, [1939] 1940. Emergency Farm Mortgage Act: REDUCTION OF DEBTS AND REDEMPTION OF FORECLOSED FARMS SEC. 32. 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. 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. 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 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. 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. 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. 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. Until February 1, 1940, 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 February 1, 1940, 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. 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. Notwithstanding the foregoing provisions of this section, the rate of interest on loans made under this section [outstanding when this amendatory paragraph takes effect or made on or after such date,] shall not exceed 4 per centum per annum for all interest payable on installment dates occurring [within a period of two years commencing on the date when this amendatory paragraph takes effect on or after July 22, 1937, and prior to July 1, 1940. O 75TH CONGRESS HOUSE OF REPRESENTATIVES 3d Session { REPORT No. 2309 EXTENSION OF FOREIGN AIR-MAIL CONTRACTS MAY 6, 1938.-Committed to the Committee of the Whole House on the state of the Union and ordered to be printed Mr. HILDEBRANDT, from the Committee on the Post Office and Post Roads, submitted the following REPORT [To accompany H. J. Res. 650] The Committee on the Post Office and Post Roads, having had under consideration the resolution (H. J. Res. 650) to authorize the extension of existing foreign air-mail contracts for a period not exceeding 1 year in each case, report the same back to the House with the following amendments, and, so amended, recommend that the resolution do pass. In line 6, after "United States" insert the words "and Canada". In line 8, after "Numbered" insert "1,". The effect of this resolution would be to extend certain foreign air-mail contracts for 1 year from the date of expiration. This would permit the Post Office Department to hold advertisements for new contracts in abeyance until pending aviation legislation now before the House is considered and passed upon. The amendments inserted by the committee are for the purpose of including the route between Newark, N. J., and Montreal, Canada, so that the air-mail contract on that route may also be extended. Below is printed the letter from the Postmaster General urging the enactment of this legislation. Hon. JAMES M. MEAD, Chairman, Committee on the Post Office and Post Roads, APRIL 21, 1938. House of Representatives, Washington, D. C. MY DEAR MR. MEAD: The receipt is acknowledged of your letter of the 13th instant, requesting a report upon H. J. Res. 650, being a joint resolution to authorize the extension of existing foreign air-mail contracts for a period not exceeding 1 year in each case. It is our judgment that the Department should favor this resolution. The effect of it would be to extend certain foreign air-mail contracts for 1 year from the date of expiration. This would permit the Department to hold advertise H. Repts., 75-3, vol. 2-67 |