responsible for and capable of self-support in the amount of not more than $300 for individual support, plus not more than $100 for each dependent, but not exceeding a total of $500 for each household (as defined by general regulations of the corporation) for the specific purchase of goods and services designated in such manner and such detail as the corporation shall determine, for the purpose of combining so far as possible the satisfaction of the most urgent needs of said households with the maximum increase of employment through the increase of purchasing power so provided. Such credits shall be extended only upon promises to repay such advances in the manner and upon the terms hereinafter provided.

SEC. 7. In order to arrange to extend credits for the purchase of goods and services the corporation through its agencies shall license all producers and distributors and transporters who will agree to accept its credit certificates at face value and to conform to its published regulations concerning the terms and conditions under which purchases shall be made and goods or services produced. No purchases shall be made or goods or service supplied on credit extended by the corporation or by its agencies except through such licensees; but all responsible producers, distributors, and transporters shall be entitled to become and to remain licensees upon the making of, and during compliance with, the aforesaid agreement with the corporation, and upon and during compliance with all other agreements with or regulations prescribed by the corporation.

SEC. 8. All licensees of the corporation shall be required to agree that wage scales and basic wage rates for employees shall not be reduced while acting as a licensee below the wage scales and basic wage rates effective on June 1, 1932, and that all employees shall be free from any form of employer coercion operating to prevent or hamper said employees in their efforts to organize themselves, to choose their own representatives and by collective bargaining to fix the terms and conditions of employment (subject to the limitations upon compensation hereinbefore provided). This freedom from coercion shall not be subject to waiver by the employee as a condition of employment or otherwise. No licensee shall be required or permitted by virtue of any provision of this paragraph to modify or abrogate the provisions of any contract (or any modification thereof) now in effect or hereafter put in effect between an employer and its employees as the result of collective bargaining as heretofore described. These requirements shall be imposed in addition to conformity with any other regulations which the corporation shall make, and which the corporation is hereby directed and authorized to make, for the purpose of requiring goods and services to be furnished without discrimination at reasonable prices, which shall not exceed the cost of labor and materials and the lowest percentage of profit consistent with maintaining the solvency of a conservatively financed and economically operated enterprise.

SEC. 9. All applicants for credits extended by the corporation shall sign a note for each purchase from a licensed distributor in the form provided by the corporation, promising to pay to the corporation on or before ten years after date the amount of the purchase with interest, for the first year at 1 per centum, for the second year at 2 per centum, and for the third year at 3 per centum, and thereafter at 4 per centum until paid, which note, together with a credit certificate in the same amount signed by an accredited agent of the corporation, must be deposited with the distributor upon ordering goods or services and transferred to the distributor by an indorsement on the note upon delivery of the goods. The aggregate amount of all credit certificates issued by the corporation agents in any State shall not exceed the total allotment of credit by the corporation to that State, and the total allotted credits for consumers shall be apportioned among the several States in approximately the proportion which their several populations bear to the total population of all the States according to the Fifteenth Decennial Census, unless the corporation shall find and establish a more accurate method of apportioning relief in accordance with volume of demand. Proration of applications necessary because of insufficient credit to fill all demands, and other reductions or limitations necessary to apportion available credits most fairly to meet most urgent needs, shall be regulated by general regulations without any discrimination or preference between individuals or localities except in accordance with such general regulations.

SEC. 10. Every licensee of the corporation shall agree, and all other persons (natural or corporate) shall also be required, when employing any person during the life of the corporation, to ascertain whether such person is indebted

to the corporation upon a note or notes and shall require any such person so indebted, in accordance with the terms of his or her indebtedness, to authorize said employer to deduct 10 per centum of the wages, or 10 per centum of the current money value of any other compensation, paid from every payment to said employee and to remit the same to the corporation to be applied on said indebtedness. The corporation is hereby authorized to enforce this requirement by appropriate regulations to the full extent permitted or authorized by the laws of the several States and of the United States. The corporation shall give public notice of the termination of said requirement when no longer necessary to reimburse the corporation for all moneys expended.

SEC. 11. To aid in creating employment through extending the credits herein provided, the corporation is authorized to make loans to any licensed producer for the employment of workers or the purchase of materials to the extent of 75 per centum of the producer's interest in orders received from licensed distributors based on credit certificates. Such loans must be secured by assignment of the entire interest of the producer in the orders so received. Credit certificates accompanied by the corresponding purchasers' notes when presented to the corporation by licensed distributors in multiples of $50 will be honored by payment in cash or at the option of the corporation by transfer of the corporation bonds in the amount of the face value of said credit certificates and notes without interest. Any interest due on the transfer of the corporation bonds shall be accounted for by a credit or cash payment to the corporation. The corporation shall require satisfactory assurances that transporters and distributors have been or will be paid their share of the consumers' payment. The corporation is authorized by regulations duly published to provide for honoring credit certificates and notes in the hands of distributors or transporters when receiving satisfactory assurances that producers and transporters have been or will be paid their share of the consumers' payment.

SEC. 12. The corporation is authorized and empowered in its discretion to make loans to railroads and to other corporate enterprises essential to meet the reasonably anticipated future demand for necessary goods or services (when eventual payment is adquately secured in the judgment of the board of directors by the obligation of the borrower, with or without any collateral as may be deemed necessary) for the purpose of financing deferred maintenance of existing properties which will be essential to supply a reasonably anticipated future demand for necessary goods or services, but only upon the express condition that the proceeds of such a loan must be used exclusively for employment of additional labor and the cost of necessary additional supplies to be used by such labor, and on the further condition that such a borrower will conform to the standards required of licensees as hereinbefore provided in section 8 of this act.

No such loans shall be made except after a public report by a delegated agent of the corporation, or a report of the Interstate Commerce Commission in the case of railroads, showing the need for the proposed maintenance work and an estimate of the extent of increased employment which would result directly from the loan under consideration. No more than an aggregate amount of $250,000,000 shall be loaned for such purposes and no such loan shall be made after one year from the effective date of this act, unless previously applied for. Loans may be made by use of cash or bonds in the same manner as credit certificates may be honored, as provided in section 11 of this act and provision shall be made for their payment within not more than ten years in equal annual or semiannual installments, and they shall bear interest at not less than 4 per centum or more than 6 per centum as may be fixed by the corporation from time to time by general regulation.

SEC. 13. The corporation is authorized and empowered, in its discretion and within its credit limitations, to make loans to responsible States or municipalities or their responsible agencies for the purpose of purchasing necessary goods and services for the charitable support of persons incapable of selfsupport and without adequate support from private sources when such persons because of incapacity for present or future self-support can not obtain credit under the provisions of this act or otherwise, when such responsible public agencies have exhausted other sources for public credit provided by State or Federal law and available to meet such needs. Such loans may be made upon the direct obligations of such public agencies upon such terms as may be fixed by general regulations of the corporation but not in an aggregate amount exceeding $250,000,000.

SEC. 14. The corporation is authorized and empowered, with the approval of the Secretary of the Treasury, to issue and have outstanding at any one time in an amount aggregating not more than five times its subscribed capital its notes, debentures, bonds, or other such obligations, such obligations to mature not more than five years from their respective dates of issue, to be redeemable at the option of the corporation before maturity in such manner as may be stipulated in such obligations, and to bear such rate or rates of interest as may be determined by the corporation: Provided, That the corporation, with the approval of the Secretary of the Treasury, may sell on a discount basis short-term obligations payable at maturity without interest. The notes, debentures, bonds, and other obligations of the corporation may be secured by assets of the corporation in such manner as shall be prescribed by its board of directors: Provided, That the aggregate of all obligations issued under this section shall not exceed five times the amount of the subscribed capital stock. Such obligations may be issued in payment of any loan authorized by this act or may be offered for sale at such price or prices as the corporation may determine with the approval of the Secretary of the Treasury. The said obligations 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. In the event that the corporation shall be unable to pay upon demand, when due, the principal of or interest on notes, debentures, bonds, or other such obligations issued by it, the Secretary of the Treasury shall pay 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 amounts so paid the Secretary of the Treasury shall succeed to all the rights of the holders of such notes, debentures, bonds, or other obligations. The Secretary of the Treasury, in his discretion, is authorized to purchase any obligations of the corporation to be issued hereunder, and for such purpose the Secretary of the Treasury is authorized to use, as a public-debt transaction, the proceeds from the sale of any securities hereafter issued under the second Liberty bond act, as amended, and the purposes for which securities may be issued under the second Liberty bond act, as amended, are extended to include any purchases of the corporation's obligations hereunder. The Secretary of the Treasury may, at any time, sell any of the obligations of the corporation acquired by him under this section. All redemptions, purchases, and sales by the Secretary of the Treasury of the obligations of the corporation shall be treated as public-debt transactions of the United States. Such obligations shall not be eligible for discount or purchase by any Federal reserve bank.

Any and all notes, debentures, bonds, or other such obligations issued by the corporation shall be exempt both as to principal and interest from all taxation (except surtaxes, estate, inheritance, and gift taxes) now or hereafter imposed by the United States, by any Territory, dependency, or possession thereof, or by any State, county, municipality, or local taxing authority; except that any real property of the corporation shall be subject to State, Territorial, county, municipal, or local taxation to the same extent according to its value as other real property is taxed.

In order that the corporation may be supplied with such forms of notes, debentures, bonds, or other such obligations as it may need for issuance under this act, the Secretary of the Treasury is authorized to prepare such forms as shall be suitable and approved by the corporation to be held in the Treasury subject to delivery, upon order of the corporation. The engraved plates, dies, bed pieces, and so forth, executed in connection therewith shall remain in the custody of the Secretary of the Treasury. The corporation shall reimburse the Secretary of the Treasury for any expenses incurred in the preparation, custody, and delivery of such notes, debentures, bonds, or other obligations.

When designated for that purpose by the Secretary of the Treasury, the corporation shall be a depositary of public money, except receipts from customs, under such regulations as may be prescribed by said Secretary; and it may also be employed as a financial agent of the Government; and it shall perform all such reasonable duties, as depositary of public money and financial agent of the Government, as may be required of it. Obligations of the corporation 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. SEC. 15. Upon the expiration of the period of two years within which the corporation may extend credit and make loans, or any extension thereof by the President under the authority hereby conferred to extend said period,

the board of directors of the corporation shall, except as otherwise herein specifically authorized or authorized by further act of Congress, proceed to. liquidate its assets and wind up its affairs. It may with the approval of the Secretary of the Treasury deposit with the Treasurer of the United States as a special fund any money belonging to the corporation or from time to time received by it in the course of liquidation or otherwise, for the payment of principal and interest of its outstanding obligations or for the purpose of redemption of such obligations in accordance with the terms thereof, which fund may be drawn upon or paid out for no other purpose. The corporation may also at any time pay to the Treasurer of the United States as miscellaneous receipts any money belonging to the corporation or from time to time received by it in the course of liquidation or otherwise in excess of reasonable amounts reserved to meet its requirements during liquidations. Upon such deposit being made, such amount of the capital stock of the corporation as may be specified by the corporation with the approval of the Secretary of the Treasury but not exceeding in par value the amount so paid in shall be canceled and retired. Any balance remaining after the liquidation of all the corporation's assets and after provision has been made for payment of all legal obligations of any kind and character shall be paid into the Treasury of the United States and miscellaneous receipts. Thereupon the corporation shall be dissolved and the residue, if any, of its capital stock shall be canceled and retired. If at the expiration of the ten years for which the corporation has succession hereunder its board of directors shall not have completed the liquidation of its assets and the winding up of its affairs, the duty of completing such liquidation and winding up of its affairs shall be transferred to the Secretary of the Treasury, who for such purpose shall succeed to all the powers and duties of the board of directors of the corporation under this act. In such event he may assign to any officer or officers of the United States in the Treasury Department the exercise and performance, under his general supervision and direction, of any such powers and duties; and nothing herein shall be construed to affect any right or privilege accrued, any penalty or liability incurred, any criminal or civil proceeding commenced, or any authority conferred hereunder, except as herein provided in connection with the liquidation of the remaining assets and the winding up of the affairs of the corporation, until the Secretary of the Treasury shall find that such liquidation will no longer be advantageous to the United States and that all of its legal obligations have been provided for, whereupon he shall retire any capital stock then outstanding, pay into the Treasury as miscellaneous receipts the unused balance of the moneys belonging to the corporation, and make the final report of the corporation to the Congress. Thereupon the corporation shall be deemed to be dissolved.

SEC. 16. All the business of the corporation shall be public business and all decisions, regulations, and actions taken shall be public, except that executive sessions of the board of directors and advisory council may be held and the deliberations upon or tentative plans and administration of the details of its business need not be made public. The corporation shall make and publish a report quarterly of its operations to the Congress, stating the aggregate credits extended or loans made in each class of such credits or loans and the number of debtors by States in each class. The statement shall show the assets and liabilities of the corporation, and the first report shall be made on December 1, 1932, and quarterly thereafter. The report shall also show the names and compensation of all persons employed by the corporation whose compensation exceeds $400 a month.

SEC. 17. The corporation and its agencies shall be authorized to enlist the aid of volunteer workers employed without compensation to carry out the detailed administration of its business, but no such volunteer worker shall have any authority as an agent of the corporation, or of any of its agencies, to enter into any obligation binding upon the corporation except upon and after ratification in writing of such an obligation by a duly authorized agent of the corporation.

SEC. 18. (a) Whoever makes any statement knowing it to be false, or whoever willfully overvalues any security, for the purpose of obtaining for himself or for any applicant any loan, or extension thereof by renewal, deferment of action, or otherwise, or the acceptance, release, or substitution of security therefor, or for the purpose of influencing in any way the action of the corporation, or for the purpose of obtaining money, property, or anything of value, under this act, shall be punished by a fine of not more than $5,000 or by imprisonment for not more than two years, or both.

(b) Whoever (1) falsely makes, forges, or counterfeits any note, debenture, bond, or other obligation, or coupon, or credit certificate, in imitation of or purporting to be a note, debenture, bond, or other obligation, or coupon, or credit certificate, issued or authorized by the corporation; or (2) passes, utters, or publishes, or attempts to pass, utter, or publish, any false, forged, or counterfeited note, debenture, bond, or other obligation, or coupon or credit certificate, purporting to have been issued or authorized by the corporation, knowing the same to be false, forged, or counterfeited; or (3) falsely alters any note, debenture, bond, or other obligation, or coupon, or credit certificate, issued or purporting to have been issued or authorized by the corporation; or (4) passes, utters or publishes, or attempts to pass, utter or publish, as true any falsely altered or spurious note, debenture, bond, or other obligation, or coupon or credit certificate, issued or purporting to have been issued or authorized by the corporation, knowing the same to be falsely altered or spurious, or any person who willfully violates any other provision of this act, shall be punished by a fine of not more than $10,000 or by imprisonment for not more than five years, or both.

(c) Whoever, being connected in any capacity with the corporation, (1) embezzles, abstracts, purloins, or willfully m sapplies any moneys, funds, securities, or other things of value, whether belonging to it or pledged or otherwise intrusted to it; or (2) with intent to defraud the corporation or any other hody politic or corporate, or any individual, or to deceive any officer, auditor; or examiner of the corporat on, makes any false entry in any book, report, or statement of or to the corporation, or, without being duly authorized, draws any order or issues, puts forth or assigns any note, debenture, bond, or other obligation, or draft, bill of exchange, mortgage, judgment, or decree thereof; o (3) with intent to defraud participate, shares, receives directly or indirectly any money, profit, property, or benefit through any transaction, loan, commission, contract, or any other act of the corporation; or (4) gives any unauthorized information concerning any future action or plan of the corporation which might affect the value of securities, or, having such knowledge, invests or speculates, directly or indirectly, in the securities or property of any company, bank, or corporation receiv ng loans or other assistance from the corporation, shall be punished by a fine of not more than $10,000 or by imprisonment for not more than five years, or both.

(d) No individual, association, partnership, or corporation shall use the words "United States Exchange Corporation" or a combination of these four words, as the name or a part thereof under which he or it shall do business. Every individual, partnership, association, or corporation violating this prohibition shall be guilty of a misdemeanor and shall be punished by a fine of not exceeding $1,000 or imprisonment not exceeding one year, or both.

(e) The provisions of sections 112, 113, 114, 115, 116, and 117 of the Criminal Code of the United States (U. S. C., title 18, ch. 5, secs. 202 to 207, inclusive), in so far as applicable, are extended to apply to contracts or agreements with the corporation under this act, which for the purposes hereof shall be held to include loans, advances, discounts, and rediscounts; extensions and renewals thereof; and acceptances, releases, and substitutions of security therefor.

The right to alter, amend, or repeal this act is hereby expressly reserved. 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 s'll have been rendered.

Senator COSTIGAN. Mr. Richberg, will you take the witness stand?

STATEMENT OF DONALD R. RICHBERG, AN ATTORNEY, OF
CHICAGO, ILL.

Senator CoSTIGAN. It may be stated that other Senators who are not in attendance have authorized their attendance to be entered for the purpose of the hearing so that there is an authorized quorum. Please give your address and occupation.

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