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date of the expiration of the term for which his predecessor was appointed, except that any person appointed to fill a vacancy occurring prior to the expiration of the term for which his predecessor was appointed shall be appointed only for the unexpired term of such predecessor. If such vacancy shall be filled during the recess of the Senate a commission shall be granted which shall expire at the end of the next regular session.

(d) One of the members shall be designated biennially by the President as the Governor who shall be the chairman and active executive officer of the Board and of the Corporation.

(e) Before entering upon his duties, each of the directors and each officer of the Corporation shall take an oath faithfully to discharge the duties of his office. No director, officer, attorney, agent, or employee of the Corporation shall in any manner, directly or indirectly, participate in the deliberation upon or the determination of any question affecting his personal interests or the interests of any corporation, partnership, or association in which he is interested.

(f) No director of the Corporation shall, durir.g his continuance in office, be an officer or director of any other corporation, institution, association, or partnership engaged in banking, or in the business of makirg loans or of buying and/or selling mortgages or securities. Before entering upon duties as a director of the Corporation each director shall certify under oath to the President that he is eligib under this section.

Sec. 4. (a) The Corporation shall have power to adopt, alter, and use a corporate seal; to make contracts; to lease or purchase real estate; to sue and be sued, to complain and defend, in any court of competent jurisdiction, State or Federal; to select, employ, dismiss, and fix the compensation of such officers, attorveys, and technical experts, as shall be necessary for the transaction of the busiress of the Corporation without regard to the provisions of the Civil Service Act of January 16, 1883, and amendments thereto or any rule or regulation made in pursuance thereof; to define the authority and duties of all employees, require bonds of them and fix penalties thereof; and to prescribe, amend, and repeal bylaw's, rules, and regulations governing the manner in which its business may be conducted and the powers granted to it by law may be exercised and enjoyed.

(b) The Corporation shall have succession until it is dissolved by an Act of Congress.

(c) The Corporation shall annually make a full report of its operations to the President, who shall cause same to be printed for the information of the Congress. It shall be the duty of the Corporation to prepare from time to time bulletins setting forth the principal features of this Act and to distribute the same, particularly to the press, to industrial and commercial journals, and to professional associations of firms or individuals engaged in commerce or industry; to prepare and distribute in the same manner circulars or other publications setting furth the principles and advantages of loans made pursuant to this Act.

(d) The Corporation shall determine and prescribe the manner in which its obligations shall be incurred and its expenses allowed and paid.

(e) The Corporation shall make special efforts to simplify insofar as possible the procedures and information required of applicants for loans to expedite the consideration and decision upon the merits of the applications for loans, and to arrange that the applicant is put to as little expense as possible in the execution of his application or in the negotiations subsequent thereto: Provided, That such special efforts shall not be carried to such point as will prevent the obtaining of sufficient information to give reasoned judgment upon the merits of such applications for loans.

(f) The Corporation shall have free use of the United States mails in the same manner as the executive departments of the Government.

Sec. 5. (a) The Corporation shall have power

(1) To rediscount for or purchase from any member institution of the Federal Reserve System, or any State bank, trust company, industrial or commercial credit corporation, incorporated loan and finance company, savings institution, cooperative bank, building and loan association, cooperative credit or marketing association, or other financial organization as aforementioned, organized under the laws of any State, Territory, or the District of Columbia, any note, draft, bill of exchange, debenture, or other such obligation, the proceeds of which have been advanced or used originally for any industrial or commercial purpose: Provided, That such member institution of the Federal Reserve System, State bark, trust company, industrial or commercial credit corporation, incorporated loan or finance company, savings institution, cooperative bank, building and loan association, cooperative credit or marketing association, or other financial organization, which accepts deposits, maintains or establishes a separate and distinct department for the acceptance of time deposits and the making of intermediate-term or long-term loans and such business is entirely separated from its commercial business and is subject to the supervision of the Intermediate Industria! Credit Corporation. * (2) To make loans to any corporation, partnership, association, or individual, in, or organized under the laws of any State or Territory or the District of Columbia, and composed of a person or persons engaged in producing or marketing goods or services if the notes or other such obligations representing such loans are secured by warehouse receipts, or shipping documents covering such goods, or mortgages upon land, other real estate, plants, warehouses, or equipment, or other evidences of probability of repayment of the loan when due: Provided, That no such loan or advance shall exceed 75 per centum of the appraised market value of the goods covered by said warehouse receipts, or shipping documents, or of the land, other real estate, plants, warehouses, or equipment covered by said mortgages or of said other evidences of probability of repayment of the loan when due.

(3) To buy or sell, with or without recourse, securities issued by the United States or any instrumentality thereof.

(b) No notes or other obligations shall be purchased from or discounted for any member institution of the Federal Reserve System, State bank, trust company, industrial or commercial credit corporation, incorporated loan or finance company, savings institution, cooperative bank, building and loan association, cooperative credit or marketing association, or other financial organization as aforementioned, if the amount of such notes or other obligations added to the aggregate liabilities of such member institution of the Federal Reserve System, State bank, trust company, industrial or commercial credit corporation, incorporated loan or finance company, savings institution, cooperative bank, building and loan association, cooperative credit or marketing association, or other financial organization as aforementioned, whether direct or contingent (other than bona fide deposit liabilities), exceeds the amount of such liability permitted under the laws of the jurisdiction creating the same; or exceeds twice the paid-in and unimpaired capital and surplus of such member institution of the Federal Reserve System, State bank, trust company, industrial or commercial credit corporation, incorporated loan or finance company, savings institution, cooperative bank, building and loan association, cooperative credit or marketing association, or other financial organization as aforementioned. No notes or other obligations shall under this section be purchased from or discounted for any corporation other than types specified in this subsection engaged in the business of making loans, if the amount of such added to the aggregate liabilities of such corporation exceeds the amount of such liabilities permitted under the laws of the jurisdiction creating the same. It shall be unlawful for any member institution of the Federal Reserve System, State bank, trust company, industrial or commercial credit corporation, incorporated loan or finance company, savings institution, cooperative bank, building and loan association, cooperative credit or marketing association, or other financial organization as aforementioned which is indebted to the corporation upon paper discounted or purchased under this section, to incur any additional indebtedness, if by virtue of such additional indebtedness its aggregate liabilities, direct or contingent, will exceed the limitations herein contained.

(c) Loans, discounts, or rediscounts made under this section shall have a maturity at the time they are made, discounted, or rediscounted by the Corporation of not less than six months nor more than five years: Provided, That the borrower may repay the amount of the loan, discount, or rediscount in part or in full, at any time before maturity: Provided further, That the Corporation may from time to time extend the time of payment of such loans, discount, or rediscount through renewal, substitution of new obligations, or otherwise, but the time for such payment shall not be extended beyond 10 years from the date upon which such loans were made originally. The Corporation may in its discretion sell notes or other obligations representing loans, discounts, or rediscounts made under this section, with or without its endorsement.

(d) In no case shall the aggregate amount of loans made under this section directly or indirectly to any original borrower engaged in commerce or industry, or service, exceed at any one time $500,000.

(e) Any person indebted to the Corporation may make payment in part or in full by delivery to it of the Corporation's notes, debentures, bonds, or other such obligations which shall be accepted for such purpose at face value.

Sec. 6. (a) No bank or financial institution entitled to the privileges of this Act shall be allowed to rediscount with the Corporation any note or other obligations, upon which the original borrower has been charged a rate of interest exceeding by more than 2 per centum per annum the rediscount rate of the Corporation at the time such loan was made.

(b) The Corporation shall establish a rate of rediscount not exceeding by more than 1% per centum per annum the average rate of interest or discount, paid by the Corporation on its outstanding notes, debentures, bonds, or other such obligations.

(c) In making direct loans the Corporation shall charge a rate of interest not less than 1 per centum and not more than 2 per centum per annum over and above the rediscount rate.

(d) The Corporation may buy in the open market, or otherwise, at or below par for its own account and retire at or before maturity any such notes, debentures, bonds, or other such obligations issued by it.

Sec. 7. (a) For the purpose of exercising the powers conferred in this Act, the Corporation shall have a subscribed capital stock of $100,000,000. Capital stock of such amount to be divided into shares of $100 each and shall be subscribed, held, and paid for by the Government of the United States. It shall be the duty of the Secretary of the Treasury to subscribe to such capital stock on behalf of the United States, such subscriptions to be subject to call in whole or in part by the board of the Corporation upon 10 days' notice to the Secretary of the Treasury.

(b) The Corporation is authorized and empowered to issue notes, debentures, bonds, or other such obligations in an aggregate amount outstanding not to exceed $1,000,000,000 which may be sold by the Corporation to obtain funds for carrying out the purposes of this Act. Such notes, debentures, bonds, or other such obligations shall be in such forms and denominations, shall mature within such periods of not more than twenty years from the date of their issue, shall bear such rntes of interest not exceeding 4 per centum per annum, shall be subject to such terms and conditions, and shall be issued in such manner and sold at such prices, as may be prescribed by the Corporation, with the approval of the Secretary of the Treasury. Such notes, debentures, bonds, or other such 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, and such notes, debentures, bonds, or other such obligations shall be lawful investments, and may be accepted as security, for all fiduciary, trust, and public funds, the in vestment or deposit of which shall be under the authority or control of the United States cr any officer or officers thereof. The Secretary of the Treasury, in his discretion, is authorized to purchase any notes, debentures, bonds, or other such obligations of the Corporation issued under this subsection which are guaranteed as to interest and principal, 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 such Act, as amended, are extended to include any purchases of the Corporation's notes, debentures, bonds, or other such obligations hereunder. The Secretary of the Treasury may, at any time, sell any of the notes, debentures, bonds, or other such obligations of the Corporation acquired by him under this subsection. All redemptions, purchases, and sales by the Secretary of the Treasury of the notes, debentures, bonds, or other obligations of the Corporation shall be treated as public-debt transactions of the United States.

(c) The notes, debentures, bonds, or other such obligations issued by the Corporation under this section 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 or any District, Territory, dependency, or possession thereof, or by any State, county, municipality, or local taxing authority. The Corporation, including its franchise, its capital, reserves, and surplus, and its loans and income, shall likewise be exempt from such taxation; except that any real property of the Corporation shall be subject to taxation to the same extent, according to its value, as other real property is taxed. No such notes, debentures, bonds, or other such obligations shall be issued in excess of the assets of the Corporation, including the assets to be obtained from the proceeds of such notes, debentures, bonds, or other such obligations. The Corporation shall have the power to purchase in the open market at any time and at any price not to exceed 2 per centum above par any of the notes, debentures, bonds, or other such obligations issued by it. Any such notes, debentures, bonds, or other such obligations so purchased may, with the approval of the Secretary of the Treasury, be sold or resold.

Sec. 8. 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.

Sec. 9. All moneys of the Corporation not otherwise employed may be deposited with the Treasurer of the United States or with any Federal depository, subject to check by authority of the Corporation. Upon request of the Corporation, Federal depositories are authorized to act as depositories, custodians, and fiscal agents for the Corporation in the general performance of its powers conferred by this Act.

Sec. 10. (a) In order to enable the Corporation to carry out the purpose of this Act, the Treasury Department, the Department of Commerce, the Comptroller of the Currency, the Federal Reserve Board, the Federal Reserve banks, the Federal Trade Commission, the Federal Securities and Exchange Commission, and other departments, divisions, commissions, and instrumentalities of the Government of the United States, are hereby authorized upon the request of the Corporation, to furnish, except where prohibited by existing Federal laws, for the confidential use of the Corporation, such reports, records, and other information, as each may have available, relating to the financial condition of the applicant whom the Corporation has made or contemplates making loans or discounts: Provided, That any organization, except a bank, trust company, or savings institution, shall, as a condition precedent to securing loan, discount, or rediscount privileges with the Corporation, file its written consent to its examination as may be directed by the Corporation's exan.iners; and banks, trust companies, and savings institutions may be in like manner required to file their written consent that reports of their examination by constituted authorities may be furnished by such authorities upon request to the Corporation. Each branch office of the Corporation shall be examined and audited by the Corporation at least once each year, and the results of such examination and audit included in the report to the President as hereinbefore directed.

(b) The Corporation shall have the power to charge costs incident to making the loan, discount, or rediscount: Provided, That such costs shall not exceed 2 per centum on loans up to $25,000, and shall not exceed 1/2 per centum on loans from $25,001 to $50,000, and shall not exceed 1 per centum on loans from $50,001 to $100,000, and shall not exceed one-half of 1 per centum on loans over $100,000.

SEC. 11. The Board of Directors of the Corporation is authorized to make such rules and regulations, not inconsistent with the law, as it deems necessary for the efficient execution of the provisions of this Act.

Sec. 12. The Corporation shall not charge or receive any fee, commission, bonus, gift, or other consideration not herein expressly authorized.

Sec. 13. (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, in imitation of or purporting to be a note, debenture, bond, or other obligation, or coupon, issued 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, purporting to have been issued 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, issued or purporting to have been issued by the Corporation, or (4) passes, utters, or publishes, or attempts to pass, utter, or publish, as true, any falsely altered cr spurious note, debenture, bond, or other obligation or coupon, issued or purporting to have been issued 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 misapplies any moneys, funds, securities, or other things of value, whether belonging to it or pledged or otherwise entrusted to it, or (2) with intent to defraud the Corporation or any other body politic or coporate, or any individual, or to deceive any officer, auditor, or examiner of the Corporation, 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, or (3) with intent to defraud, participates, shares, or 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) willfully and with intent 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 receiving 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 corporation, partnership, association, or individual not in existence on February 1935, shall use the words “Intermediate Industrial Credit Corporation” or a combination of these four words, as the name or a part thereof under which he or it shall do business. Every corporation, partnership, association, or individual 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, incl.), insofar 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.

Sec. 14. The right to alter, amend, or repeal this Act is hereby expressly reserved. If any provision of this Act, or the application thereof to any person or circumstances, is held invalid, the remainder of the Act, and the application of such provisions to other persons or circumstances, shall not be affected thereby.

The CHAIRMAN. Professor Beckman is here, at the request of Mr. Kopplemann, and we shall be glad to have a statement from him.

STATEMENT OF DR. THEODORE N. BECKMAN, OHIO STATE UNI

VERSITY, COLUMBUS, OHIO; AND CONSULTANT, UNITED STATES BUREAU OF THE CENSUS

Dr. BECKMAN. My name is Theodore N. Beckman; I am a professor at the Ohio State University and a consultant in the United States Bureau of the Census, in charge of the wholesale census. Those are my two major occupations.

The CHAIRMAN. How long has that been your profession?

Dr. BECKMAN. I have been teaching since 1920, and have occupied the position of consultant with the United States Government since 1929, on a part-time basis.

The CHAIRMAN. Professor Beckman desires to discuss the bill H. R. 5918, introduced by Mr. Kopplemann, and he would like to proceed without interruption for a while. I am going to ask the committee to allow him to do so, and not ask him any questions until he completes his formal statement.

Mr. KOPPLEMANN. In order that the committee may know a little bit more about Dr. Beckman, I would like to ask him one or two questions.

Will you state to the committee something more of your background in the field of credit?

Dr. BECKMAN. I have been studying and teaching the subject of credit since about 1921. The first book which I have written on the subject of credits and collections, which is used as a textbook in a number of universities, was published in 1924.

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