(b) After the effective date of this Act, any person desiring to borrow through a national farm-loan association, or any mortgagor under section 12 of this Act, or any direct borrower from the Federal land bank of the district or borrower through a branch bank or agent, or vendee under a contract to purchase real estate from said Federal land bank, whom the Governor shall determine can be conveniently included as a member of such association, shall be entitled to membership therein by paying a membership fee, fixed by the board of directors of such association, in an amount not exceeding $10, to be paid for by such borrower or vendee on approval of his application for membership in such association, and any borrower whose stock is retired pursuant to section 6 of this Act shall, notwithstanding such retirement, retain membership in the national farm-loan association through which his loan was made, without being required to pay any membership fee therefor. All provisions of the Federal Farm Loan Act or any act amendatory thereof or supplementary thereto, not inconsistent with the provisions of this Act, which refer to shareholders or stockholders of national farm-loan associations shall hereafter be deemed to refer in lieu thereof to members of national farm-loan associations.

FARM-DEBT ADJUSTMENT COMMITTEES

SEC. 8. (a) The Governor is authorized and directed (except as provided in subsection (d) of this section) to appoint in each county in which he finds that there is need for debt adjustment under section 15 of this Act, or for refinancing proceedings under sections 9 to 12, inclusive, of this Act, a farm-debt adjustment committee (hereinafter referred to as the "committee"), to be composed of three farmers who reside in the county.

(b) Each member of the committee shall be allowed compensation at the rate of not to exceed $3 per day while engaged in the performance of duties under this Act. In addition, the members of the committee shall be allowed such amounts as the Governor may prescribe for necessary traveling and subsistence expenses. (c) Two members of the committee shall constitute a quorum. The Governor shall prescribe rules governing the procedure of the committee, furnish forms and equipment necessary for the performance of their duties, and authorize and provide for the compensation of such clerical assistance as he deems may be required by any committee.

(d) With respect to any county which is included within the territory of any national farm-loan association, the Governor may, in lieu of appointing a committee, designate the board of directors of such association as the agency to receive applications and submit certifications under the provisions of sections 9 to 12, inclusive, and 15 of this Act. A majority of such board of directors shall constitute a quorum, and such board and the members thereof, in the performance of such functions, shall be subject to all the provisions herein provided with respect to committees and the members thereof.

(e) There is authorized to be appropriated for each fiscal year commencing July 1, 1940, out of any money in the Treasury not otherwise appropriated, a sum not in excess of an amount certified by the Governor as reasonably necessary for the purpose of enabling the Governor to pay the compensation and necessary traveling and subsistence expenses of the members of the committees and to furnish forms and equipment necessary for the performance of their duties and provide for the compensation of such clerical assistance as the Governor deems may be required by any committee, as provided in this Act, during the fiscal year ending June 30, 1941, and during subsequent fiscal years.

REFINANCING OF MORTGAGES

SEC. 9. (a) Any farmer who is indebted under a mortgage to any Federal land bank or to the Corporation or to any other creditor, may make application for the refinancing of his mortgage indebtedness, and if he establishes to the satisfaction of the Governor that such indebtedness is in excess of the value of the mortgaged farm and (a) is in excess of the productive value of such farm or (b) that the payments periodically due on such indebtedness exceed the normal farm income available for such payments, and (c) that there is no reasonable expectation that the farmer can be financially rehabilitated through adjustments, authorized by law, of the time and amount of the payments required to be made on his existing mortgage indebtedness, he shall be entitled to refinance his mortgage indebtedness as hereinafter provided.

(b) Each such application shall be filed with the committee of the county in which the farm is located, shall be in such form and accompanied by such

records and data covering the farm and its crop yields as the Governor may prescribe, and shall include a covenant by the applicant that, upon the approval of the application, and in consideration of the refinancing benefits to be made available to him, he will comply with all the conditions hereinafter set forth.

(c) If the committee finds that the application has been filed in good faith, and that the mortgage indebtedness is in excess of the value of the mortgaged farm and (a) is in excess of the productive value of such farm or (b) that the payments periodically due on such indebtedness exceed the normal farm income available for such payments, and that the applicant by reason of his character, ability, and experience is likely successfully to carry out the undertakings required of him, it shall so certify to the Governor; and no mortgagor shall be entitled to such refinancing benefits unless such certification has been made by the committee.

SEC. 10. (a) Upon receiving any certification required by section 9 of this Act, the Governor shall make such further investigation as he may deem necessary with respect to the matters covered by such certification. If, after such investigation, the Governor is satisfied that all the requirements of section 9 of this Act have been met, he shall refinance the mortgage to which such certification relates. (b) Any farmer who is indebted under a mortgage to the Corporation shall be entitled to receive the refinancing benefits herein provided immediately upon the approval by the Governor of his application for such benefits.

(c) Any farmer who is indebted under a mortgage to a Federal land bank shall be entitled to receive such benefits upon the approval by the Governor of his application for such benefits and the assignment of his mortgage by such bank to the Corporation. Upon receiving notice from the Governor that any farmer's application for such benefits has been approved, the Federal land bank shall assign his mortgage to the Corporation and the Corporation shall deliver to such bank, in exchange for such mortgage, cash or bonds issued or held by such Corporation in an amount equal to the value of the property covered by such mortgage as agreed to by the Governor and such bank.

(d) Any farmer who is indebted under a mortgage on his farm property to any creditor other than the Corporation or a Federal land bank, shall be entitled to receive such benefits upon the approval by the Governor of his application for such benefits and the assignment of such mortgage to the Corporation with the consent of the holder of such mortgage. The Corporation shall deliver to such holder, in exchange for the mortgage so assigned, cash or bonds issued or held by the Corporation in an amount not in excess of the value of the property covered by such mortgage as determined by the Governor.

SEC. 11. (a) Any farmer who is entitled to the refinancing benefits herein provided shall, as a condition to obtaining such benefits, forthwith convey to the Corporation full title to the property covered by his mortgage free and clear of all liens and encumbrances. Such conveyance shall constitute a waiver by the mortgagor of all rights of redemption under the mortgage, and the acceptance of such conveyance by the Corporation shall constitute a full release and satisfaction of the mortgage debt. Upon receiving such conveyance, the Corporation shall enter into a lease with the mortgagor which shall—

(1) be for a period of not to exceed five years at a rental agreed upon between the parties thereto, which shall, so far as practicable, be in accordance with the rental arrangements prevailing in the locality, and may be either on a cash basis or for a share of the crop;

(2) be in such form and contain such covenants as the Governor shall prescribe to assure the payment of the agreed rental, and to assure that the farm will be maintained in repair and that waste and exhaustion of the property will be prevented;

(3) provide that the tenant, or the Corporation on his behalf out of the rental fixed under paragraph (1) hereof, shall pay taxes and assessments on the farm to the proper taxing authorities, and, unless otherwise provided for by the Governor, shall insure and pay for insurance on farm buildings; and (4) provide that upon the assignment, sale, or other disposition of the lease, or any involuntary transfer or sale thereof, or upon default in the performance of, or failure to comply with, any covenant or condition contained in the lease, the Governor may terminate the lease.

(b) If the tenant complies with all of the terms and conditions of his lease and gives notice to the Corporation of his desire to purchase the property covered by such lease, the Corporation shall, as of the date of termination of the lease, or at such time prior thereto as the Governor shall approve, convey the property to the tenant at a price to be determined by the Governor on the basis of its value at the time of the conveyance, or for the amount of the mortgage indebtedness on

such property at the time it was conveyed to the Corporation, whichever shall be less. The tenant shall be entitled to credit toward the amount of such purchase price all rental payments made by him in excess of such amount as will compensate the Corporation (1) for interest on such purchase price during the period of the lease at the rate currently payable on loans inade by the Federal land bank of the district in which the property is located, as determined pursuant to section 2 of this Act, and (2) for any expenditures made by the Corporation for current repairs or maintenance during the period of the lease which are necessary to preserve such property. In determining the value of the property as the basis for such purchase price, there shall be excluded any increases in the value of the property which the Governor determines are attributable to expenditures by the tenant.

(c) Upon such conveyance of any property by the Corporation, the purchaser shall deliver to the Corporation a first mortgage or deed of trust to secure the payment of the purchase price which shall

(1) provide for the payment of the purchase price within an agreed period of not more than forty years from the date of the conveyance;

(2) provide for the payment of interest on the unpaid balance of the purchase price at the rate of interest currently payable on loans made by the Federal land bank of the district in which the property is located, as determined pursuant to section 2 of this Act;

(3) provide for the payment of such purchase price, together with interest thereon, in installments in accordance with amortization schedules prescribed by the Governor;

(4) be in such form and contain such covenants às the Governor shall prescribe to secure the payment of the purchase price, together with interest thereon, to protect the security, and to assure that the farm will be maintained in repair, and waste and exhaustion of the property will be prevented; (5) provide that the purchaser shall pay taxes and assessments on the property to the proper taxing authorities, and, unless otherwise provided for by the Governor, shall insure and pay for insurance on farm buildings; and (6) provide that upon the assignment, sale, or other disposition of the property, or of any interest therein, without the consent of the Governor, or upon default in the performance of, or failure to comply with, any covenant or condition contained in the mortgage or deed of trust, or upon the involuntary transfer on sale of the property, the Governor may declare the amount unpaid immediately due and payable.

(d) No provision of section 75, as amended, or of chapters XI, XII, and XIII of the Act entitled "An Act to establish a uniform system of bankruptcy throughout the United States," approved July 1, 1898 (U. S. C., 1934 edition, title 11, sec. 203: Supp. IV, 1938, title 11, sec. 203: and chs. XI, XII, and XIII), shall in any way affect, apply to, extend, or impair any obligation incurred by any person pursuant to this section.

REPURCHASE OF FORECLOSED PROPERTY

SEC. 12. (a) Any farmer whose property was acquired under foreclosure by any Federal land bank or by the Corporation and has not been disposed of by such bank or the Corporation, and who is aggrieved by the refusal of such bank or the Corporation to permit him to repurchase the foreclosed property, shall be entitled to appeal to the committee of the county in which the property is located. Such appeal shall be filed with such committee within six months after such acquisition of such property by the Federal land bank or by the Corporation, as the case may be, whether outright or subject to redemption rights of the former owner, except that with respect to such property title to which has been so acquired within six months prior to the effective date of this Act, such appeal shall be so filed within six months from the effective date of this Act. Such appeal shall be in such form and accompanied by such records and data covering the property and its crop yields as the Governor may prescribe, and shall include a covenant by the person so appealing that, upon the allowance of his appeal, and in consideration of the benefits to be made available to him, he will comply with all the conditions hereinafter set forth.

(b) If the committee finds that the appeal has been taken in good faith, that the foreclosure of the mortgage was occasioned by causes beyond the control of the person so appealing, and that such person, by reason of his character, ability, and experience, is likely successfully to carry out the undertakings required of him, it shall so certify to the Governor; and no such person shall be entitled to

the benefits herein provided unless such certification has been made by the committee.

(c) Upon receiving any such certification, the Governor shall make such further investigation as he may deem necessary with respect to the matters covered by such certification. If, after such investigation, the Governor approves the findings of the committee the person so appealing shall be entitled to lease and purchase the foreclosed property, and if such property is held by a Federal land bank, such bank shall convey such property to the Corporation, on the same terms and conditions as those provided in section 11 of this Act in the case of property covered by mortgages which are refinanced under such section.

VARIABLE PAYMENTS AND ADJUSTMENT OF FARM UNITS

SEC. 13. (a) The Governor may provide for the payment of any obligation or indebtedness under sections 9 to 12, inclusive, of this Act, or of any loan heretofore or hereafter made under the Federal Farm Loan Act, as amended, or section 32 of the Emergency Farm Mortgage Act of 1933, as amended, by means of a system of variable payments under which amounts in addition to the required payments may be collected in periods of above-normal production or prices and employed to reduce the required payments in periods of subnormal production or prices.

(b) Whenever the Governor finds that any property otherwise eligible for refinancing or repurchase under the provisions of sections 9 to 12, inclusive, of this Act, is either too large or too small to constitute an efficient farm-management unit, or requires land or building improvements necessary to enable a diligent farm family to carry on successful farming of a type which the Governor deems can be successfully carried on in the locality in which the property is situated, he is authorized, on behalf of the Corporation, to make the improvements so found to be necessary or to adjust the size of such property. For the purpose of making such adjustment, the Governor may either subdivide the property into smaller units or purchase such additional land as may be required to make the property an efficient farm-management unit.

DEFICIENCY CLAIMS AND JUDGMENTS

SEC. 14. After the effective date of this Act no suits for a deficiency judgment shall be instituted and no deficiency claim or judgment shall be enforced by any Federal land bank or by the Corporation in connection with any indebtedness secured by a mortgage on farm land except to the extent the deficiency claim or judgment, as the case may be, represents interest matured or accrued on such indebtedness, advances made under the mortgage securing such indebtedness, or damages caused to the mortgaged premises by willful neglect of the debtor while the debtor was in possession of the property; and any such deficiency claim or judgment shall, at the request of the debtor, be released to the extent that it exceeds the amount to which it may be enforced as herein provided.

ADJUSTMENT OF INDEBTEDNESS

SEC. 15. (a) Each committee is authorized to assist in the voluntary adjustment of indebtedness between farm debtors and their creditors. Services furnished by the committee shall be without charge to the debtor or creditor. Except in cases provided for in subsection (b) of this section, such adjustments need not be reviewed or approved by the Governor.

(b) Whenever the Government is a creditor of any debtor for whom debtadjustment proceedings may be brought before any committee, by reason of any loan or loans made pursuant to the acts set forth in subsection (c) of this section, and the committee finds that an adjustment should be made of the debt of the Government, the committee shall certify to the Governor the basis upon which such debt shall be adjusted. If the Governor approves such certification, he may adjust the indebtedness of the Government by the compromise, reduction, or release thereof, upon such terms and conditions as he deems appropriate; but no such adjustment shall be made with respect to any loan which has not been in default for a period of at least three years prior to such adjustment.

(c) The provisions of this section shall apply to any loans to farmers pursuant to the Acts of July 1, 1918 (40 Stat. 635); March 3, 1921 (41 Stat. 1347); March 20, 1922 (42 Stat. 467); April 26, 1924 (43 Stat. 110); February 25, 1937 (44 Stat. 1245); 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), as amended, April 24, 1930 (46 Stat. 254); December 20, 1930 (46 Stat. 1032), as amended,

February 14, 1931 (46 Stat. 1160); February 23, 1931 (46 Stat. 1276); January 22, 1932 (47 Stat. 5); February 4, 1933 (47 Stat. 795); February 23, 1934 (48 Stat. 354); June 19, 1934 (48 Stat. 1056); February 20, 1935 (49 Stat. 28); March 21, 1935 (49 Stat. 50); April 8, 1935 (49 Stat. 115); Executive Order Number 7305, dated February 28, 1936; the Acts of January 29, 1937 (50 Stat. 5); and February 4, 1938 (52 Stat. 27).

(d) No member of any committee shall participate in the consideration of any adjustment, repurchase, or refinancing proceedings under this Act in which such member or any person related to such member within the third degree of consanguinity or affinity has any property interest, direct or indirect, or in which they or either of them had had such interest within one year prior to the date of certification. The Governor shall designate an alternate member of the committee to serve in the place of any such member who is so prohibited from participating in any such proceedings.

PENALTIES

SEC. 16. (a) Whoever makes any material representation, knowing it to be false, for the purpose of influencing in any way the action of any farm-debt adjustment committee or board of directors of any national farm-loan association, or any officer or employee of the Farm Credit Administration, any Federal land bank, or the Federal Farm Mortgage Corporation, upon any application, lease, contract, or appeal under this Act, or upon any change in or extension of any such application, lease, contract, or appeal shall be punished, upon conviction thereof, by a fine of not more than $1,000, or by imprisonment for not more than one year, or both.

(b) No officer, attorney, or employee of the Government, any Federal land bank, or the Federal Farm Mortgage Corporation, shall be the beneficiary of or receive any fee, commission, gift, or other consideration directly or indirectly, for or in connection with any transaction or business under this Act other than such salary, fee, or other compensation as he may receive as such officer, attorney, or employee. Any person violating any provision of this section or section 15 (d) shall, upon conviction thereof, be punished by a fine of not more than $1,000, or by imprisonment for not more than one year, or both.

AMENDMENTS TO EXISTING LAWS

SEC. 17. Section 6 of the Act approved January 23, 1932, as amended (47 Stat. 14; title 12, U. S. C. 665), is amended to read as follows:

"The Farm Credit Administration is authorized to make such rules and regulations, not inconsistent with law, as it deems necessary or requisite for the efficient execution of the provisions of the Federal Farm Loan Act, the Emergency Farm Mortgage Act of 1933, and/or any Act or Acts amendatory thereof or supplementary thereto."

SEC. 18. Section 5 of the Federal Farm Loan Act, as amended, is further amended by striking out the sixth and seventh paragraphs of said section (title 12, U. S. Č. 696-697) and the third sentence of the eighth paragraph of said section (title 12, U. S. C. 698) and substituting in lieu of said third sentence of the eighth paragraph the following:

"Stock issued pursuant so this section may at any time, in the discretion of the directors and with the approval of the Farm Credit Administration, be paid off at par and retired in whole or in part; and said Administration may at any time require such stock to be paid off at par and retired in whole or in part if in the opinion of the Administration the bank has resources available therefor."

SEC. 19. The seventh paragraph of section 7 of the Federal Farm Loan Act, as amended (title 12, U. S. C. 717), is amended by striking out the semicolon following "$20,000" in said paragraph and striking out the following "that said affidavit is accompanied by a subscription to stock in the Federal land bank equal to 5 per centum of the aggregate sum desired on mortgage loans."

SEC. 20. Section 7 of the Federal Farm Loan Act, as amended, is further amended by striking out the eleventh, twelfth, fourteenth, fifteenth, and sixteenth paragraphs thereof (title 12, U. S. C. 721, 722, 723 (b), (c), (d)).

SEC. 21. Section 25 of the Farm Credit Act of 1937 is amended by striking out subsection (b) thereof (title 12, U. S. C. 724).

SEC. 22. Section 8 of the Federal Farm Loan Act, as amended, is further amended by striking out the first paragraph thereof (title 12, U. S. C. 731); by striking out all of the third paragraph of said section following the word "membership" in the second sentence of said third paragraph (title 12, U. S. C. 733) and by striking out the fourth paragraph of said section (title 12 U. S. C. 734).