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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 Industrial 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 exceed

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COMMITTEE ON BANKING AND CURRENCY

SEVENTY-FOURTH CONGRESS

HENRY B. STEAGALL, 'Alabama, Chairman
ALAN GOLDSBOROUGH, Maryland JOHN B. HOLLISTER, Ohio
MICHAEL K. REILLY, Wisconsin

JESSE P. WOLCOTT, Michigan FRANK W. HANCOCK, JR., North Carolina PETER A. CAVICCHIA, New Jersey CLYDE WILLIAMS, Missouri

HAMILTON FISH, JR., New York O. H. CROSS, Texas

CHARLES L. GIFFORD, Massachusetts BRENT SPENCE, Kentucky

EVERETT M, DIRKSEN, Illinois PRENTISS M. BROWN, Michigan

CLARE G. FENERTY, Pennsylvania FRED J. SISSON, New York JAMES I. FARLEY, Indiana JAMES A. MEEKS, Illinois HERMAN P. KOPPLEMANN, Connecticut MARTIN J. KENNEDY, New York THOMAS F. FORD, California PAUL BROWN, Georgia RICHARD M. RUSSELL, Massachusetts D. J. DRISCOLL, Pennsylvania D. WORTH CLARK, Idaho

J. T. CRAWFORD, Clerk

CONTENTS

Statement of

Dr. Theodore N. Beckman, Ohio State University, Columbus, Ohio..
Mr. Elmer Marx, 105 North Seventh Street, St. Louis, Mo.---
Mr. Robert P. Simpson, New York, N. Y..
Mr. J. W. Moss, Hampton, Va--
Mr. J. A. Martin, Liberty, N. C-
Mr. J. F. Deaton, Liberty, N. C.
Mr. W. K. Mullins, Birmingham, Ala
Mr. Theo. W. Osbahr, Newark, N. J.
Mr. Peter J. Braida, New York, N. Y.
Mr. Henry M. Johnson, Louisville, Ky-
Mr. Fred A. Berlin, Washington, D. Č.
Mr. Charles P. Bloome, Philadelphia, Pa-
Mr. E. S. Bullock, Williamsport, Pa---
Mr. R. O. Gill, Butler, Pa..
Mr. Marvin W. Krieger, Muskogee, Okla-
Dr. Charles A. Dice, Ohio State University, Columbus, Ohio.

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6 41 54 :56 63 69 76 79 84 88 93 97 103 115 118 127

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INTERMEDIATE CREDIT CORPORATION

MONDAY, MAY 27, 1935

HOUSE OF REPRESENTATIVES,
COMMITTEE ON BANKING AND CURRENCY,

Washington, D. C. The committee met at 10:30 a. m., Hon. Henry B. Steagall (chairman) presiding.

The CHAIRMAN. The committee will come to order. We have before us for consideration this morning H. R. 5918, introduced by Mr. Kopplemann, to provide for the creation of an Intermediate Credit Corporation for Commerce and Industry, to aid in financing small and medium-sized commercial and industrial establishments, and for other purposes.

(The bill referred to is as follows:)

(H. R. 5918, 74th Cong., 1st sess.) A BILL To provide for the creation of an Intermediate Credit Corporation for commerce and industry, to

aid in financing small and medium-sized commercial and industrial establishments, and for other pur. poses

Be it enacted by the Senate and House of Representatives of the United Sta’es of America in Congress assembled, That this Act may be cited as the “Intermediate Industrial Credit Corporation Act."

SEC. 2. (a) The Secretary of the Treasury is hereby authorized and directed to create a corporation to be known as the “Intermediate Industrial Credit Corporation” (hereinafter referred to as the Corporation”), which shall be an instrumentality of the United States.

(b) The principal office of the Corporation shall be located in the District of Columbia. The Corporation shall establish branch offices in the folowing cities of the United States: Boston, New York, Philadelphia, Cleveland, Richmond, Atlanta, Chicago, Saint Louis, Minneapolis, Kansas City, Dallas, and San Francisco. The Corporation may establish additiona branch offices in any other city or cities of the United States as deemed necessary by the Board of Directors: Provided, That there shall not be more than one branch office in any one State, the District of Columbia, the Territories of Alaska, the Canal Zone, Hawaii, Philippine Islands, Puerto Rico, or the Virgin Islands.

Sec. 3. (a) The control and management of the Corporation shall be vested in a board of nine directors, who shall be appointed by the President of the United States by and with the consent of the Senate. Of the nine members of the Board not more than five shall be members of any one political party, and all nine of said members shall be citizens of the United States and shall devote their entire time to the business of the Corporation; they shall receive an annual salary of $10,000, payable monthly, with the exception of the chairman of the Board, who shall receive $12,000 annually, payable monthly, and they shall receive actual necessary traveling expenses.

(b) Members to be appointed by the President shall be by experience or training qualified in the field of intermediate or long-term commercial and industrial credit.

(c) Of the directors first appointed, three shall continue in office for a term of two years, three for a term of four years, three for a term of six years, from the date this Act takes effect, the term of each to be designated by the President at the time of appointment. Their successors shall be appointed by the President with the advice and consent of the Senate, each for a term of six years from the

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