BOARD OF FISHERY COOPERATIVE LOAN CORPORATION

SEC. 3 (a) The board of directors of the Fishery Cooperative Loan Corporation shall consist of seven members, one of whom shall be the Commissioner of the Bureau of Fisheries, ex-officio chairman, Chief of the Division of Fishery Industries of the Bureau of Fisheries, and the Director of Fishery Cooperative Marketing Work of the Bureau of Fisheries, hereinafter provided, who shall be executive secretary of the board and administrative officer of the Fishery Cooperative Loan Corporation. The other six directors shall be appointed by the Secretary, of whom the successors of three directors first appointed shall be appointed from nominees selected by borrowers as provided in subsection (b). The terms of the directors first appointed shall be for one, two, and three years as designated by the Secretary at the time of appointment and their successors shall hold their offices during a term of three years, but a director appointed to fill a vacancy shall hold his office for the unexpired term of the director whose place he is selected to fill. Any appointed director may at any time be removed for cause by the Secretary. No compensation shall be paid any director as a director of the Corporation but the Corporation, subject to the approval of the Secretary, may allow directors a reasonable per diem and expenses.

(b) The successors of three of the directors first appointed shall be selected one each year by the Secretary from among individuals nominated by borrowers. The Secretary shall, not less than sixty days prior to the end of the term of any director whose successor is to be appointed from among nominees as herein provided, or as soon as practicable after a vacancy occurs in the office of such director other than by the expiration of his term, cause notice of the vacancy to be sent to each borower eligible to vote for nominees. Each such borrower shall be eligible to cast one vote. The Secretary shall not count any ballot received after the expiration of thirty days after the sending of notice. From those (not exceeding three) receiving highest number of votes, as shown by his count, the Secretary shall appoint the director.

POWERS OF CHAIRMAN AND BOARD

SEC. 4.The chairman of the board of the Corporation shall be the executive officer of the Corporation and the powers of the board of directors shall be such powers as may be prescribed in the charter and bylaws of the Corporation. The executive secretary of the board shall be the administrative officer and his duties and responsibilities shall be delegated by the chairman and the board.

CAPITAL STOCK OF FISHERY COOPERATIVE CORPORATION

SEC. 5. The capital stock of the Corporation shall be in such amount as the Secretary determines is required for the purpose of meeting the credit needs of eligible borrowers from the Corporations as provided herein, and the Secretary may from time to time increase or decrease such amount in accordance with such needs. The stock of such corporation shall be divided into shares of $100 each. Out of the revolving fund provided herein, the Secretary, on behalf of the United States, shall subscribe for and make payments for stock in the Corporation and such payments shall be subject to call in whole or in part by the chairman of the board of the Corporation with the approval of the Secretary.

LENDING POWER OF FISHERY COOPERATIVE LOAN CORPORATION

SEC. 6. (a) Upon application by any fishery cooperative association, the Fishery Cooperative Loan Corporation is authorized to make loans to it subject to the conditions and limitations set forth in this Act, and to make loans, by way of discount or otherwise in accordance with such terms and conditions as may be prescribed by the articles of incorporation and the board of directors of the Fishery Cooperative Loan Corporation to assist it in

(1) The collective planting, cultivating, propagating, producing, harvesting, catching, taking, collecting, or gathering of aquatic products;

(2) The effective merchandising of aquatic products, the byproducts thereof, or manufactured therefrom, and the financing of its operations; and

(3) The construction or acquisition by purchase or lease, or refinancing the cost of such construction or acquisition of physical facilities.

(b) No loan shall be made to any fishery cooperative association unless, in the judgment of the Secretary, the loan is in furtherance of the policy declared

in section 1 and the fishery cooperative association applying for the loan has an organization and management and business policies of such character as to insure the reasonable safety of the loan and the furtherance of such policy.

(c) Loans for the construction or acquisition by purchase or lease of physical facilities, or for refinancing the cost of such construction or acquisition, shall be subject to the following conditions:

(1) No loans shall be made in an amount in excess of 60 per centum of the appraised value of the security therefor;

(2) No loan for the purchase or lease of such facilities shall be made unless the Secretary of the Department of Commerce finds that the purchase price or rent to be paid is reasonable; and

(3) No loan for the construction, purchase, or lease of such facilities shall be made unless the Secretary finds that there are not available suitable existing facilities that will furnish their services to the cooperative association at reasonable rates; and in addition to the preceding limitation, no loan for the construction of facilities shall be made unless the Secretary finds that suitable existing facilities are not available for purchase or lease at a reasonable price or rent.

(d) Loans for the construction or purchase of physical facilities, together with interest on the loans, shall be repaid upon an amortization plan over a period not in excess of twenty years.

MISCELLANEOUS LOAN PROVISIONS

SEC. 7. (a) Loans to any fishery cooperative association shall bear such rates of interest as the Secretary of the Department of Commerce shall from time to time determine to be necessary for the needs of the lending agencies and shall by regulation prescribe (but in no case shall the rate of interest exceed 6 per centum per annum on the unpaid principal): Provided, however, That the rate of interest on any loan made under the provisions of section 2 (a) (2) hereof, other than upon the security of commodities, shall conform as nearly as may be practicable to a rate 1 per centum in excess of the prevailing interest rate paid by production credit associations to the Federal intermediate credit bank of the land bank district in which the principal business office of the borrower is located; the rate of interest on any loan made upon the security of commodities shall conform, as nearly as may be practicable, to the prevailing interest rate on commodity loans charged borrowers from the Federal intermediate credit bank of the land bank district in which the principal business office of the borrower is located; and that the rate of interest on any loan made under the provisions of section 2 (a) (3) hereof shall conform as nearly as may be practicable to the prevailing rate on mortgage loans made to members of national farm loan associations.

(b) Cooperative associations borrowing from the Fishery Cooperative Loan Corporation shall be required to own, at the time the loan is made, an amount of stock of the Corporation equal in fair book value (not to exceed par), as determined by the Corporation, to $100 per $2,000 or fraction thereof of the amount of the loan. Upon discharge of the loan the stock held by the borrowing association shall be retired and canceled and the association shall be paid therefor, or in case the stock subscription is included in the amount of the loan there shall be credited on the final payment of the loan, an amount equal to the amount paid for the stock or loaned to subscribe for the stock, as the case may be, minus the pro-rata impairment, if any, of capital and guaranty fund of the Fishery Cooperative Loan Corporation, as determined by the chairman of the board of the Fishery Cooperative Loan Corporation.

(c) In any case in which a cooperative association applying for a loan is not authorized, under the law of the State in which it is organized, to subscribe for stock in the Fishery Cooperative Loan Corporation, the Corporation shall, in lieu of stock subscription, require the borrowing association to pay into a guaranty fund, or the Corporation may retain out of the amount of the loan and credit to the guaranty fund, an amount equal to the amount which the borrowing association would have been required to own in stock if such association has been authorized to hold such stock. Upon discharge of its loan, the provisions of the last sentence of subsection (b) shall apply with respect to sums of such association in the guaranty fund in the same manner as if such sums were represented by stock.

EARNINGS AND RESERVES OF FISHERY COOPERATIVE LOAN CORPORATION

SEC. 8. The Fishery Cooperative Loan Corporation shall, at the end of its fiscal year, apply the amount of its earnings in excess of operating expenses during such fiscal year, first, to making up any losses incurred; second, to the restoration of the amount of the impairment, if any, of capital and guaranty fund as determined by the chairman of the board; and at least 25 per centum of the remainder of such excess of earnings shall be applied to the creation and maintenance of a surplus equal to at least 25 per centum of the amount of the capital and guaranty fund. Any sums remaining may, with the approval of the chairman of the board, be devoted to the payment of dividends. Subscribers to the guaranty fund shall be entitled to dividends in the same amount as subscribers to stock. No rate of dividend in excess of per centum per annum shall be paid. Dividends on stock held by the Secretary, when paid, shall be credited to the revolving fund created herein.

REVOLVING FUND AND ADMINISTRATIVE APPROPRIATIONS

SEC. 9. (a) There is hereby authorized to be appropriated the sum of $1,000,000, which shall be made available by the Congress as soon as practicable after the approval of this Act and shall constitute a revolving fund to be administered by the Secretary as provided in this Act.

(1) The Treasury shall make available to the Secretary sums from this revolving fund in such amounts and at such times as the Secretary may direct for the purposes and within the limitations herein expressed.

(b) There is hereby authorized to be appropriated, from any money in the Treasury not otherwise appropriated, the sum of $100,000 for all necessary executive and administrative expenses incurred prior to July 1, 1938, in connection with establishing and operating the Fishery Cooperative Loan Corporation.

(c) There is hereby authorized to be appropriated, from any money in the Treasury not otherwise appropriated, the sum of $25,000 for expenditures incurred prior to July 1, 1938, in establishing the fishery cooperative marketing section hereinafter provided, and in executing and administering the functions authorized by section 10 hereof.

(d) No part of the moneys appropriated in pursuance of the authorizations in subsections (b) and (c) of this section shall be available for expenditures, including loans and advances for the payment of which the revolving fund is authorized to be used.

(e) The Secretary shall have authority to allocate and expend out of the funds covered by this section such amounts as he shall deem necessary for salaries, expenses, and all other administrative expenditures in the execution of the functions for which such funds are herein specified.

ESTABLISHMENT OF A COOPERATIVE MARKETING SECTION

SEC. 10. (a) The Secretary of Commerce is hereby authorized and directed to establish a Fishery Cooperative Marketing Section in the Bureau of Fisheries of the Department of Commerce for the following purposes and functions:

(1) To conduct marketing and economic studies and make analyses of fishery cooperative associations, to encourage the organization and development of effective cooperative associations, and the improvement in cooperative methods; (2) To make marketing and economic studies and surveys of the cooperative production or marketing of aquatic products, the byproducts thereof, and of areas in which aquatic products are cooperatively produced or marketed for the purpose of analyzing existing fishery cooperative activities or to determine the probable success of contemplated fishery cooperative marketing activity; such studies, surveys, and analyses may include any or all phases, functions, and activities in connection with the cooperative production and/or merchandising of aquatic products, the byproducts thereof, or products manufactured therefrom; and

(3) To promote education in the principles and practices of cooperative production or marketing of aquatic products, the byproducts thereof or manufactured therefrom, and to aid and assist fishery cooperative associations, and fishermen or planters of aquatic products in organizing and operating fishery cooperative associations through field or extension service, and through studies, surveys, and analyses authorized in this section, and to publish reports and provide other information and literature pertaining to the cooperative produc

tion or marketing of aquatic products, the byproducts thereof or manufactured therefrom.

(b) As provided in sections 3 and 4 of this Act, the Director of the Cooperative Marketing Section of the Bureau of Fisheries shall be the executive secretary of the board of the Fishery Cooperative Loan Corporation and administrative officer of said Corporation, and the Secretary shall take such action as he deems necessary to coordinate the work, personnel, functions, and services of the cooperative section with the purposes, functions, and activities of the Fishery Cooperative Loan Corporation as are provided in this Act and as shall be set forth in the articles of incorporation and bylaws of the Corporation.

MISCELLANEOUS PROVISIONS

SEC. 11. (a) As used in this Act "cooperative association" or "fishery cooperative association" means any association in which fishermen or planters of aquatic products act together in the legal catching, collecting, taking, planting. cultivating, propagating, producing or harvesting aquatic products, or in processing, handling, preparing for market, and/or marketing the aquatic products of said persons so engaged, and also means any association in which fishermen or planters of aquatic products act together in purchasing, testing, grading, processing, distributing, and/or furnishing fishery and marine supplies and equipment and/or fishery business services: Provided, however, That such associations are operated for the mutual benefit of the members thereof as such producers or purchasers and conform to one or both of the following requirements:

First. That no member of the association is allowed more than one vote because of the amount of stock or membership capital he may own therein; or Second. That the association does not pay dividends on stock or membership capital in excess of 8 per centum per annum.

And in any case to the following:

Third. That the association shall not deal in aquatic products, fishery and marine supplies and equipment, and fishery business services with or for nonmembers in an amount greater in value than the total amount of such business transacted by it with or for members.

(b) All business transacted by any fishery cooperative association for or on behalf of the United States or any agency or instrumentality thereof shall be disregarded in determining the volume of member and nonmember business transacted by such association.

(c) As used in this Act the term "aquatic products" shall mean fish, mollusca, crustacea, seaweeds, and all other aquatic forms of animal and vegetable life legally caught, collected, taken, planted, cultivated, propagated, produced, or harvested by lawful methods, as a means of livelihood.

(d) For the purpose of carrying out the provisions of this Act, the Secretary of Commerce may make such rules, regulations, and orders consistent with the provisions hereof as may be necessary; may cooperate with any department or agency of the Federal Government or State, county, municipality, public or private agency; shall have the power within the civil-service rules and regulations to appoint, remove, and fix the compensation of necessary officers and employees; and may make such expenditures in the District of Columbia and elsewhere for communications, travel, books, periodicals, printing, stationery, rent, furniture, office equipment, supplies, and materials, and other expenses as he may consider necessary.

(e) This Act may be cited as the "Fishery Credit Act."

[H. R. 7309, 75th Cong., 1st sess.]

A BILL To establish a Fishery Credit Corporation, to promote the cooperative production and merchandising of aquatic products in interstate and foreign commerce, and to provide for organizations within the Bureau of Fisheries of the Department of Commerce for service in connection therewith

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

DECLARATION OF POLICY

SECTION 1. That it is hereby declared to be the policy of Congress to promote cooperative activity among producers of aquatic products in the collective planting, cultivating, propagating, producing, harvesting, catching, taking,

collecting, or gathering of aquatic products, and the eective merchandising of aquatic products in interstate and foreign commerce, so that the fishery industry will be placed on a basis of economic equality with other industries, and to that end to protect, control, and stabilize the currents of interstate and foreign commerce in the marketing of aquatic products

(1) By minimizing speculation;

(2) By preventing inefficient and wasteful distribution;

(3) By encouraging the organization of producers of aquatic products into effective associations in accordance with the provisions of an Act of Congress approved June 25, 1934 (Public, Numbered 464, Seventy-third Congress), for greater unity of effort in marketing and purchasing, and by promoting the establishment and financing of a fishery marketing and purchasing system of producer-owned and producer-controlled fishery cooperative associations.

ESTABLISHMENT OF THE "FISHERY CREDIT CORPORATION"

SEC. 2. The Secretary of Commerce, hereinafter referred to as the Secretary, is hereby authorized and directed to organize and charter a corporation to be known as the "Fishery Credit Corporation", hereinafter referred to as the Corporation, with its principal office in the District of Columbia and branch offices in such other places as in the opinion of the Secretary may be necessary or convenient for the exercise of the powers and functions of such Corporation as hereinafter set forth.

SEC. 3. The Corporation shall have succession until dissolved in accordance with any Act of Congress; shall have power to sue and be sued in any court, to adopt and use a corporate seal, to prescribe bylaws regulating the general conduct of its business and the manner in which the privileges granted to it by law shall be exercised, to make contracts, to acquire, hold, and dispose of real and personal property necessary and incident to the conduct of its business, to prescribe fees and charges for loans and other services; and shall have such other powers necessary and incident to carrying out the powers and duties herein provided and as may be provided in the charter of the Corporation, or in any amendment thereto, not inconsistent with this Act or any other Act of Congress. The Corporation shall be entitled to the free use of the United States mail in the same manner as the executive departments of the Government. The Corporation, with the consent of any board, commission, independent establishment, or executive department of the Government, may avail itself of the use of information, services, facilities, officers, agents, and employees thereof in carrying out the provisions of this Act.

BOARD OF DIRECTORS OF CORPORATION

SEC. 4. (a) The board of directors of the Corporation, hereinafter referred to as the board, shall consist of seven members, of whom the Commissioner of the Bureau of Fisheries, the Chief of the Division of Fishery Industries of the Bureau of Fisheries, and the Director of the Fishery Cooperative Marketing Section (hereinafter provided for) shall be members ex officio. The Commissioner of the Bureau of Fisheries shall be chairman of the board, and the Director of the Fishery Cooperative Marketing Section shall be executive secretary of the board and administrative officer of the Corporation. Three of the other four directors shall be appointed by the Secretary for one, two, and three years, respectively, as designated by the Secretary at the time of appointment. The successors of three of the directors so appointed shall be appointed by the Secretary from nominees, as provided in subsection (b) hereof, and shall hold their offices for a term of three years, but a director appointed to fill a vacancy shall hold his office for the unexpired term of the director whose place he is selected to fill. Any appointed director may be removed by the Secretary at any time. No compensation shall be paid any director as such, but the Corporation, subject to the approval of the Secretary, may allow directors a reasonable per diem and expenses while traveling to and from and while in attendance at meetings of the board, or while engaged in other official business of the Corporation authorized by the board: Provided, however, That no director, except with the approval of the Secretary, shall receive compensation, exclusive of per diem and expenses for attendance at meetings of the board, for services rendered the Corporation for more than a total of thirty days in any calendar year.

(b) The successors of three of the directors first appointed shall be selected one each year by the Secretary from among individuals nominated by borrowers. The Secretary shall, not less than sixty days prior to the end of the