time any such director, secretary-treasurer, or other officer may, at any time, be removed by the president of the Production Credit Corporation. (June 16, 1933, sec. 21, 48 Stat. 260; 12 U. S. C., sec. 1131e.) 638-253. Application of earnings; losses in excess of reserve account; restoration of capital impairment; reserve account; guaranty fund; dividends. Each Production Credit Association shall, at the end of its fiscal year, apply the amount of its earnings in excess of operating expenses during such fiscal year, first, to making up any losses in excess of its reserve for bad and doubtful debts; second, to the restoration of the amount of the impairment, if any, of capital; third, to the creation and maintenance of a reserve account for bad and doubtful debts, the amount of which account shall be prescribed by the Production Credit Corporation; and fourth, to the creation and maintenance of a guaranty fund equal to at least 25 per centum of the paid-in capital of the association. Any sums remaining may, with the approval of the Production Credit Corporation, be devoted to the payment of dividends but no rate of dividend in excess of 7 per centum per annum shall be paid. Sums in the guaranty fund herein provided for shall be invested subject to such rules and regulations as may be prescribed by the Production Credit Corporation. (June 16, 1933, sec. 22, 48 Stat. 261; 12 U. S. C., sec. 1131f.)

638-254. Loans to farmers; terms and conditions.-Each Production Credit Association shall, under such rules and regulations as may be prescribed by the Production Credit Corporation of the district with the approval of the governor, invest its funds and make loans to farmers for general agricultural purposes, but such part of its funds as is represented by the guaranty fund provided for in section 22 shall not be devoted to making loans to farmers. Such loans shall be made on such terms and conditions, at such rates of interest, and with such security as may be prescribed by the Production Credit Corporation. No loan shall be made for a less amount than $50, nor shall any one borrower be indebted to the association at any one time in an amount in excess of 20 per centum of the capital and guaranty fund of the association or, if the loan is secured by collateral approved by the Corporation, in an amount in excess of 50 per centum of the capital and guaranty fund, but loans may be made to any borrower in an amount in excess of 50 per centum of the capital and guaranty fund if the loan is approved by the Production Credit Commissioner of the Farm Credit Administration. Borrowers shall be required to own, at the time the loan is made, class B stock in an amount equal in fair book value (not to exceed par), as determined by the association, to $5 per $100 or fraction thereof of the amount of the loan. Such stock shall not be canceled or retired upon payment of the loan but may be transferred or exchanged as provided in section 21. (June 16, 1933, sec. 23, 48 Stat. 261; 12 U. S. C., sec. 1131g.)

638-255. Same; for home alterations, repairs, and improvements; sale of loans; insurance of loans. With the approval of the Governor of the Farm Credit Administration and under rules and regulations to be Prescribed by the Production Credit Commissioner, production credit associations organized under the provisions of the Farm Credit Act of 1933 are authorized and empowered (without regard to the provisions of this Act relating to the requirement for the ownership of Class B stock or any other limitations therein contained) (1) to make loans to farmers for the purpose of enabling them to make home

alterations, repairs, and improvements, (2) to sell, discount, assign, or otherwise dispose of any loans made by them under the provisions of this section, under such restrictions and limitations as to endorsement and liability as may be approved by the Governor of the Farm Credit Administration, (3) to avail themselves of the benefits of insurance under the provisions of section 2 of the National Housing Act, and (4) to do all such things as may be reasonably necessary to carry out the provisions of this section. (June 16, 1933, sec. 86 (a); June 27, 1934, sec. 504, 48 Stat. 1263; 12 U. S. C., sec. 1131gg.)

638-256. Borrowing from and rediscounting paper with Federal intermediate credit banks; limitation on power to borrow from or rediscount paper with other institutions.-Production Credit Associations doing business under this Act are authorized to borrow from, and rediscount paper with, Federal Intermediate Credit Banks subject to the restrictions, limitations, and conditions applicable under title II of the Federal Farm Loan Act, as amended (U. S. C., title 12, ch. 8). Except with the approval of the Governor, Production Credit Associations shall not have the power to borrow from or rediscount paper with any other bank or agency. (June 16, 1933, sec. 24, 48 Stat. 261; 12 U. S. C., sec. 1131h.)

638-257. Revolving fund.-(a) There is hereby created a revolving fund of not to exceed $120,0000,000 which shall be made up as foHows:

(1) The Reconstruction Finance Corporation is authorized and directed to make available to the Governor of the Farm Credit Administration all unobligated balances of the following funds and all sums heretofore returned or released to the corporation from such funds:

(A) Any balances of funds for, and all collections on loans by, the Secretary of Agriculture pursuant to section 2 of the Reconstruction Finance Corporation Act as amended;

(B) All collections on loans made or to be made pursuant to the Act of February 4, 1933 (Public, Numbered 327, Seventysecond Congress);

(C) All balances of funds authorized and directed to be made available to the Secretary of Agriculture by such Act and not used for loans pursuant thereto; and

(D) Any balances of the funds originally directed to be allocated and made available to the Secretary of Agriculture by such Acts except as expended pursuant to subsection (e) of section 201 of the Emergency Relief and Construction Act of 1932. (2) There are hereby made available to the Governor of the Farm Credit Administration all unobligated balances of appropriations and funds available thereunder to enable the Secretary of Agriculture to make advances or loans under the following Acts and resolutions, and all repayments of such advances and loans: March 3, 1921 (41 Stat. 1347), March 20, 1922 (42 Stat. 467), April 26, 1924 (43 Stat. 110), February 28, 1927 (44 Stat. 1251), February 25, 1929 (45 Stat. 1306), as amended May 17, 1929 (46 Stat. 3), March 3, 1930 (46 Stat 78, 79), December 20, 1930 (46 Stat. 1032), as amended February 14, 1931 (46 Stat. 1160), and February 23, 1931 (46 Stat. 1276), and Public Resolution Numbered 11, Seventy-second Congress, approved

March 3, 1932, and the notes or other obligations evidencing such advances and loans and the security therefor are hereby transferred to the Governor of the Farm Credit Administration.

(3) There is hereby authorized to be appropriated the sum of $40,000,000 out of any money in the Treasury not otherwise appropriated.

(b) There is hereby authorized to be appropriated the sum of $2,000,000, which shall remain available until expended, for all necessary administrative expenses in connection with the establishment and supervision of the Production Credit Corporations and the Production Credit Associations.

(c) The authority of the Governor of the Farm Credit Administration to allocate and expend out of the funds covered by subsection (a) of this section such amounts as he shall deem necessary for salaries, expenses, and all other administrative expenditures in the execution of the functions for which such funds have hitherto been available shall not be deemed to be restricted by this section.

(d) The authority to make loans during the calendar year 1933 pursuant to the Act of February 4, 1933 (Public Numbered 327, Seventy-second Congress), as amended, out of funds made available by that Act shall not be deemed to be restricted by this section.

(e) The amount of all balances, collections, and appropriations allocated under subsection (a) to the revolving fund created thereunder, which is in excess of $120,000,000, is hereby made available to the Governor of the Farm Credit Administration for the establishment of a revolving fund of not to exceed $40,000,000. Out of such revolving fund, the Governor is authorized to allocate and, with the approval of the Secretary of the Treasury, to expend such amounts as he deems necessary for subscriptions to the capital stock and/or paid-in surplus of Federal Intermediate Credit Banks. (June 16, 1933, sec. 5, 48 Stat. 258; Jan. 31, 1934, secs. 14, 15 (a), 48 Stat. 348; 12 U. S. C., sec. 11311.)

638-258. Loans to oyster planters; purchase and discounting paper by Federal intermediate credit banks.-That, subject to the approval of the Governor of the Farm Credit Administration and under rules and regulations to be prescribed by the Production Credit Commissioner, production credit associations organized under the Farm Credit Act of 1933 are authorized to make loans to oyster planters; to sell, discount, assign, or otherwise dispose of any loans made by them under the provisions of this Act; and to do any and all other things necessary to carry these provisions into effect. With the approval of the Governor of the Farm Credit Administration and under rules and regulations to be prescribed by the Intermediate Credit Commissioner, the Federal intermediate credit banks are authorized and empowered to discount for or purchase from any production credit association any note, draft, or other such obligation representing a loan or loans made under the provisions of this Act; and to make loans or advances direct to any such organization secured by such obligations. (June 18, 1934, 48 Stat. 983; June 3, 1935, sec. 17 (c), 49 Stat. 318; 12 U. S. C., sec. 1131j.)

638-259. Regional banks; establishment; number; location.-The Governor of the Farm Credit Administration, hereinafter in this Act referred to as the "governor", is authorized and directed to organize

and charter twelve corporations to be known as "Production Credit Corporations" and twelve banks to be known as "Banks for Cooperatives." One such corporation and one such bank shall be established in each farm credit district in the city in which there is located a Federal land bank. The members of the several farm credit boards of the farm credit districts provided for in the Farm Credit Act of 1937 shall be ex officio the directors of the respective production credit corporations and banks for cooperatives. Such directors shall have power, subject to the approval of the governor, to employ and fix the compensation of such officers and employees of such corporations and banks as may be necessary to carry out the powers and duties conferred upon such corporations and banks under this Act. (June 16, 1933, sec. 2, 48 Stat. 257; Aug. 19, 1937, sec. 11, 50 Stat. 708; 12 U. S. C., sec. 1134.)

638-260. Charters and bylaws.-The charters of the Production Credit Corporations and the Banks for Cooperatives shall be granted by the governor upon application of the directors of the Federal land banks of the proper district, and applications and charters shall be in such form as the governor shall prescribe. The directors shall have power, subject to the approval of the governor, to adopt such bylaws as may be necessary for the conduct of the business of the corporations and banks. (June 16, 1933, sec. 3, 48 Stat. 257; 12 U. S. C., sec. 1134a.)

638-261. Capital stock; amount; values of shares; payments from revolving fund for stock purchased by Government.-The capital stock of each Bank for Cooperatives established under section 2 shall be in such amount as the governor determines is required for the purpose of meeting the credit needs of eligible borrowers from the bank under this title, and such amount may be increased or decreased from time to time by the governor in accordance with such needs. Such stock shall be divided into shares of $100 each. Out of the revolving fund created under section 6 of the Agricultural Marketing Act, as amended, the governor, on behalf of the United States, shall make payments for stock in the banks and such payments shall be subject to call in whole or in part by the board of directors of the bank with the approval of the governor. (June 16, 1933, sec. 40, 48 Stat. 264; 12 U. S. C., sec. 1134b.)

638-262. Lending power.-Subject to such terms and conditions as may be prescribed by the Farm Credit Administration, the banks for cooperatives are authorized (a) to make loans to cooperative associations as defined in the Agricultural Marketing Act, as amended, for any of the purposes and subject to the conditions and limitations set forth in such Act, as amended; (b) to make loans (by way of discount or otherwise) to any bank organized under this Act; (c) to buy from, and sell to, any such bank or any Federal intermediate credit bank any note, draft, bill of exchange, debenture, or other obligation, or any interest therein; and (d) to borrow from, and discount or rediscount paper with, any and all such banks and commercial banks. (June 16, 1933, sec. 41, 48 Stat. 264; June 3, 1935, sec. 14, 49 Stat. 316; Aug. 19, 1937, sec. 36, 50 Stat. 717; 12 U. S. C., sec. 1134c.) 638-263. Ownership of stock in banks by borrowing associations; earnings and reserves of banks.-The provisions of sections 35 and 36 shall apply in the case of Banks for Cooperatives in the same manner and to the same extent as such provisions are applicable to the Central

Bank for Cooperatives, except that powers conferred on the chairman of the board of the Central Bank shall be exercised by the boards of directors of the Banks for Cooperatives, subject to the approval of the governor. (June 16, 1933, sec. 42, 48 Stat. 264; 12 U. S. C., sec. 1134d.)

638-264. Retirement of stock held by Government.-The governor may at any time require any such bank to retire and cancel stock held by the governor in such bank, if, in the judgment of the governor, the bank has resources available therefor, and amounts received by the governor in any such case shall be credited to the revolving fund created under section 6 of the Agricultural Marketing Act, as amended. (June 16, 1933, sec. 43, 48 Stat. 265; 12 U. S. C., sec. 1134e.)

638-265. Central bank; establishment; location.-The governor is authorized and directed to organize and charter a corporation to be known as the "Central Bank for Cooperatives" with its principal office in the District of Columbia and such other offices as in the opinion of the governor may be necessary. (June 16, 1933, sec. 30, 48 Stat. 261; 12 U. S. C., sec. 1134f.)

638-266. Board of directors.-(a) The board of directors of the Central Bank for Cooperatives shall consist of seven members, one of whom shall be the Cooperative Bank Commissioner of the Farm Credit Administration, who shall be chairman of the board of directors. The other six directors shall be appointed by the governor, of whom the successors of three first appointed shall be appointed from nominees selected by borrowers as provided in subsection (b). The terms of the directors first appointed shall be for one, two, and three years as designated by the governor at the time of appointment and their successors shall hold their offices during a term of three years, but a director appointed to fill a vacancy shall hold his office for the unexpired term of the director whose place he is selected to fill. Any appointed director may at any time be removed for cause by the governor. No compensation shall be paid any director as a director of the corporation but the corporation, subject to the approval of the governor, may allow directors a reasonable per diem and expenses.

(b) The successors of three of the directors first appointed shall be selected one each year by the governor from among individuals nominated by borrowers (except Banks for Cooperatives). The governor shall, not less than sixty days prior to the end of the term of any director whose successor is to be appointed from among nominees as herein provided, or as soon as practicable after a vacancy occurs in the office of such director other than by the expiration of his term, cause notice of the vacancy to be sent to each borrower eligible to vote for nominees. Each such borrower shall be eligible to cast one vote. The governor shall not count any ballot received after the expiration of thirty days after the sending of notice. From those (not exceeding three) receiving the highest number of votes, as shown by his count, the governor shall appoint the director. (June 16, 1933, sec. 31, 48 Stat. 262; 12 U. S. C., sec. 1134g.)

638-267. Powers of board of directors; chairman of board.-The chairman of the board of the corporation shall be the executive officer of the corporation and the powers of the board of directors shall