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SUBCOMMITTEE OF THE
UNITED STATES SENATE
A BILL TO REDUCE PERMANENTLY THE INTEREST RATES ON
AND FOR OTHER PURPOSES
MAY 7, 8, 9, 10, 16, 17, AND JUNE 7, 1940
Printed for the use of the Committee on Banking and Currency
COMMITTEE ON BANKING AND CURRENCY
ROBERT F. WAGNER, New York, Chairman CARTER GLASS, Virginia
JOHN G. TOWNSEND, JR., Delaware · ALBEN W. BARKLEY, Kentucky
LYNN J. FRAZIER, North Dakota JAMES F. BYRNES, South Carolina
CHARLES W. TOBEY, New Hampshire JOHN H. BANKHEAD, Alabama
JOHN A. DANAHER, Connecticut
ROBERT A. TAFT, Ohio
PHILIP LEVY, Clerk
SUBCOMMITTEE ON AGRICULTURAL FINANCE, FARM MORTGAGES, AND RELATED
JAMES F. BYRNES, Chairman. ALBEN W. BARKLEY, Kentucky
LYNN J. FRAZIER, North Dakota
CHARLES W. TOBEY, New Hampshire
LIBRARY OF CONGRESS
JUL 19 1940
Cheek, Tom W., member of the National Board of Farmers' Union and
tional Farmers' Union and National Federation of Grain Coopera-
Taber, L. J., master, National Grange.
to questions submitted by Senator Taft
pending under section 75 of the Bankruptcy Act as of June 30, 1939.-
FARM CREDIT ACT OF 1940
TUESDAY, MAY 7, 1940
UNITED STATES SENATE, SUBCOMMITTEE OF COMMITTEE ON BANKING AND CURRENCY,
Washington, D. C. The Subcommittee on Agricultural Finance, Farm Mortgages, and Related Matters met at 10 a. m., pursuant to call, in room 310, Senate Office Building, Senator James F. Byrnes, chairman of the subcommittee, presiding.
Present: Senators Byrnes (chairman), Bankhead, Hughes, Miller, Clark of Idaho, and Frazier.
Present also: Senators Wheeler and La Follette.
Senator BYRNES (chairman of the subcommittee). The subcommittee will come to order.
This subcommittee of the Committee on Banking and Currency has under consideration S. 3509. The bill is as follows:
(S. 35C9, 76th Cong., 3d sess.] A BILL To reduce permanently the interest rates on Federal land-bank and Land Bank Commissioner loans; to relieve Federal land bank borrowers of stock liability; to place the Federal land banks on a selfsupporting basis; to refund and guarantee the bonds of such banks; to increase the functions and responsi. bilities of national farm-loan associations and county committees of farmers; to provide for the adjustment and refinancing of farm-mortgage debts; to limit the institution of foreclosure proceedings and the taking of deficiency judgments; and for other purposes
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That this Act may be cited as the “Farm Credit Act of 1940.”
Sec. 2. (a) The rate of interest payable on any loan made prior to the date of enactment of this Act, or made on or after such date and prior to June 30, 1946, by any Federal land bank under the Federal Farm Loan Act, as amended, or by the Land Bank Commissioner on behalf of the Federal Farm Mortgage Corporation, or otherwise, under the Emergency Farm Mortgage Act of 1933, as amended, shall be 3 per centum per annum for all interest payable
on installment dates occurring after the date of enactment of this Act; and the interest payable with respect to any such loans made during any calendar quarter after June 30, 1946, shall be at a rate to be fixed for such quarter by the Governor of the Farm Credit Administration (hereinafter referred to as the “Governor”), with the approval of the Secretary of the Treasury, which may reasonably be expected to reimburse the Federal land bank, or such Corporation, as the case may be, for the cost to it of the capital required for such loans, plus 1 per centum per annum for administration and reserves against losses.
(b) Notwithstanding the provisions of paragraph Ninth of section 12 of the Federal Farm Loan Act, as amended, the rate of interest payable after the date of enactment of this Act by any borrower from any Federal land bank or from the Federal Farm Mortgage Corporation on defaulted payments, or on taxes, liens, judgments, or assessments not paid by the borrower when due and paid by the mortgagee, skall be the same as the rate of interest payable by such borrower under the provisions of subsection (a) of this section.
(c) If the average rate of interest estimated by the Governor to be payable during any calendar quarter prior to July 1, 1946, by any such bank, or by such