SUBCHAPTER II-A.-FEDERAL FARM MORTGAGE

CORPORATION

Farm Credit Administration, Federal Farm Mortgage Corporation, and Commodity Credit Corporation, and their functions and activities, together with their respective personnel, records, and property were transferred to Department of Agriculture by 1939 Reorg. Plan No. I, sec. 401, effective July 1, 1939, set out in note under section 133t of Title 5, Executive Departments and Government Officers and Employees.

Financial control of corporations, see Chap. 14 of Title 31, Money and Finance.

Establishment of corporation; directors; bylaws; regulations; officers and employees.-There is established a corporation to be known as the "Federal Farm Mortgage Corporation", in this subchapter referred to as the "corporation." The principal office of the corporation shall be located in the District of Columbia and the management of the corporation shall be vested in a board of directors consisting of the Secretary of the Treasury, or an officer of the Treasury designated by him, the Governor of the Farm Credit Administration, in this subchapter referred to as the "Governor", and the Land Bank Commissioner. The directors shall receive no additional compensation for their services as directors of the corporation, but may be allowed actual necessary traveling and subsistence expenses when engaged in the business of the corporation outside of the District of Columbia. The Governor shall be the chairman of the board of directors. The directors shall have power to adopt such bylaws, rules, regulations, and amendments thereto as they deem necessary for the conduct of the business of the corporation authorized under this subchapter. The directors shall have power, without regard to the provisions of other laws applicable to the employment and compensation of officers and employees of the United States to employ and fix the compensation and duties of such agents, officers, and employees of the corporation as may be necessary to carry out the powers and duties conferred upon the corporation by this subchapter, to require bonds of them and fix the penalties thereof and dismiss them at pleasure, and to prescribe the manner in which the obligations of the corporation shall be incurred and its expenses allowed and paid, but the rates of compensation of such agents, officers, and employees of the corporation shall not exceed the rates of compensation prescribed for comparable duties by sections 661-663, 664-669, 670-672, 673, and 674 of Title 5. (Jan. 31, 1934, c. 7, § 1, 48 Stat. 344.)

Federal Farm Mortgage Corporation was transferred to the Department of Agriculture. See note preceding this section.

United States obligations issued after February 28, 1941, subject to Federal taxation. See section 742a of Title 31, Money and Finance.

12 U. S. C., § 1020a

Period of succession; powers; free use of mails; use of Government facilities.-The corporation shall have succession until dissolved by Act of Congress; shall have power to sue and be sued in any court, to adopt and use a corporate seal, to make contracts, and to acquire, hold, and dispose of real and personal property necessary and

powers as may be necessary and incident to carrying out its powers and duties under this subchapter. The corporation shall be entitled to the free use of the United States mails 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 subchapter. (Jan. 31, 1934, c. 7, § 2, 48 Stat. 345.)

Authorization of Federal Farm Mortgage Corporation to act as fiscal agent of the United States, see § 1138b of this title.

12 U. S. C., § 1020a-1

Capital investment expenditures as nonadministrative expenses. All expenditures which under the accounting system prescribed for the Federal Farm Mortgage Corporation by the General Accounting Office are to be treated as capital investments, increasing the book value of acquired fixed property (real estate and chattel), shall be considered as nonadministrative expenses for the purposes of section 712a of title 15. (September 21, 1944, c. 412, title VI, § 603, 58 Stat. 741.)

12 U. S. C., § 1020b

Capital; amount; subscription by United States.-The capital of the corporation shall be in the sum of $200,000,000, which shall be subscribed by the Governor on behalf of the United States in such amounts and at such times as he deems necessary for the purposes of the corporation. For the purpose of such capital subscription, the funds and proceeds thereof made available to the Land Bank Commissioner under section 1016 of this title and the mortgages taken by the Commissioner and the credit instruments secured thereby are transferred to the Corporation. The Federal Farm Mortgage Corporation is authorized to repay to the Secretary of the Treasury on behalf of the United States from time to time such portions of the amounts subscribed to the capital stock of the Corporation as are found by the board of directors to be in excess of the capital necessary to enable the Corporation to carry out its functions as authorized by law. The proceeds of such repayments shall be held in the Treasury of the United States as a fund available for subscription, by the Governor on behalf of the United States with the approval of the Secretary of the Treasury, to the capital of the Corporation when, in the judgment of the directors of the Corporation, additional subscriptions to its capital are necessary. (Jan. 31, 1934, c. 7, § 3, 48 Stat. 345; June 25, 1940, c. 427, § 4, 54 Stat. 573; June 30, 1945, c. 204, § 14, 59 Stat. 269; July 12, 1946, c. 570, § 2, 60 Stat. 532.)

Cancellation of notes, indebtedness, etc, of Reconstruction Finance Corporation. See Section 611a of Title 15, Commerce and Trade.

12 U. S. C., § 1020c

Bonds, aggregate amount; guaranty by United States; purchase and sale of by United States; exchange of for consolidated farm loan bonds. With the approval of the Secretary of the Treasury, the corporation is authorized to issue and have outstanding at any one time bonds in an aggregate amount not exceeding $2,000,000,000. Such bonds shall be in such forms and denominations, shall have such maturities, shall bear such rates of interest, 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 bonds 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 bonds shall be lawful investments, and may be accepted as security, for all fiduciary, trust, and public funds the investment or deposit of which shall be under the authority or control of the United States or any officer or officers thereof. In the event that the corporation shall be unable to pay upon demand, when due, the principal of, or interest on, such bonds, the Secretary of the Treasury shall pay to the holder the amount thereof which is hereby authorized to be appropriated, out of any moneys in the Treasury not otherwise appropriated, and thereupon to the extent of the amount so paid the Secretary of the Treasury shall succeeed to all the rights of the holders of such bonds. The Secretary of the Treasury, in his discretion, is authorized to purchase any bonds of the corporation issued hereunder, 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 sections 745, 747, 752-754b, 757, 757b, 757c, 758, 760, 764-766, 769, 771, 773, 774 (2), and 801 of Title 31 [U. S. Code], and the purposes for which securities may be issued under such sections are extended to include any purchases of the corporation's bonds hereunder. The Secretary of the Treasury may, at any time, sell any of the bonds of the corporation acquired by him under this section. All redemptions, purchases, and sales by the Secretary of the Treasury of the bonds of the corporation shall be treated as public debt transactions of the United States. No such bonds shall be issued in excess of the assets of the corporation, including the assets to be obtained from the proceeds of such bonds, but a failure to comply with this provision shall not invalidate the bonds or the guaranty of the same. The corporation shall have power to purchase such bonds in the open market at any time and at any price. On such terms and conditions as may be agreed upon, the corporation may exchange such bonds, upon application of any Federal land bank for consolidated farm loan bonds of equal face value issued under subchapter I of this chapter, and may exchange such consolidated farm loan bonds held by it for bonds of the corporation of equal face value. (Jan. 31, 1934, c. 7, § 4 (a), 48 Stat. 345; April 27, 1934, c. 168, § 14, 48 Stat. 647.)

The Government Corporations Appropriation Act, 1949, provides that "the aggregate amount of bonds the Corporation may issue and have outstanding at any one time shall not exceed $500,000,000."

12 U. S. C., § 1020d

Purchase of consolidated farm loan bonds; loans to Federal and joint stock land banks; investment in mortgages; extensions; sale and assignment of notes and mortgages.-The corporation is further authorized to purchase from time to time, for cash, such consolidated farm loan bonds at such prices and upon such terms as may be approved by the board of directors of the corporation; to make loans to Federal land banks and joint stock land banks on the security of real estate mortgages, sheriff's certificates, sales contracts and real estate, upon such terms and conditions as shall be prescribed by the board of directors of the corporation: Provided, however, That loans outstanding to joint stock land banks under this section shall not at any one time exceed in the aggregate $10,000,000; to make loans to Federal land banks on the security of consolidated farm loan bonds; and to invest its funds in mortgage loans made under section 1016 of this title.

When in the judgment of the directors conditions justify it, the corporation shall have power to extend, in whole or in part, any unpaid obligation under the terms of any mortgage, and to accept payment of any such obligation together with interest thereon, at a rate not exceeding 5 per centum per annum, during such period and in such amounts as may be agreed upon at the date of making such extension. The Corporation is authorized and empowered to sell and assign, without recourse and without warranty, its notes and mortgages representing loans made by the Land Bank Commissioner pursuant to section 1016 of this title, to the Federal land bank located in the farm credit district in which the mortgaged farm properties are situated and to sell and assign in like manner purchase money mortgages and contracts for the sale of farms held by the Federal Farm Mortgage Corporation in connection with the sale of farm property situated in such district. (Jan. 31, 1934, c. 7, § 4(b), 48 Stat. 346; Aug. 19, 1937, c. 704, §§ 2, 4, 50 Stat. 703; June 30, 1945, c. 204, § 15, 59 Stat. 264.)

12 U. S. C., § 1020e

Preparation of bonds.-In order to furnish bonds for delivery by the Federal Farm Mortgage Corporation, the Secretary of the Treasury is authorized to prepare suitable bonds in such form, subject to the provisions of this subchapter, as the board of directors may approve, such bonds when prepared to be held in the Treasury subject to delivery upon order of the corporation. The engraved plates, dies, bedpieces, 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 expenditures made in the preparation, custody, and delivery of such bonds. (Jan. 31, 1934, c. 7, § 4 (c), 48 Stat. 346.)

12 U. S. C., § 1020f

Exemptions from taxation.—(a) The corporation, including its franchise, its capital, reserves, and surplus, and its income shall be exempt from all taxation now or hereafter imposed by the United States, by any Territory, dependency, or possession thereof, or by any State, county, municipality, or local taxing authority; except

that any real property of the corporation shall be subject to State, Territorial, county, municipal, or local taxation to the same extent according to its value as other real property is taxed.

(b) Mortgages executed to the Land Bank Commissioner and mortgages held by the corporation, and the credit instruments secured thereby, and bonds issued by the corporaton under the provisions of this subchapter, shall be deemed and held to be instrumentalities of the Government of the United States, and as such they and the income derived therefrom shall be exempt from Federal, State, municipal, and local taxation (except surtaxes, estate, inheritance, and gift taxes). (Jan. 31, 1934, c. 7, § 12, 48 Stat. 347; Feb. 26, 1934, c. 33, 48 Stat. 360.)

Interest upon obligations, and dividends, earnings, or other income from shares, certificates, stock, or other evidences of ownership, and gain from the sale or other disposition of such obligations and evidences of ownership issued on or after March 28, 1942, by the United States or any agency or instrumentality thereof have no exemption, as such, and loss from the sale or other disposition of such obligations or evidences of ownership shall not have any special treatment, as such, under the Internal Revenue Code, or laws amendatory or supplementary thereto. (31 U. S. C. 742a.)

12 U. S. C., § 1020g

Severability clause; reservation of right to amend.-(a) If any provision of this subchapter, or the application thereof to any person or circumstances, is held invalid, the remainder of the subchapter, and the application of such provision to other persons or circumstances, shall not be affected thereby.

(b) The right to alter, amend, or repeal this subchapter is hereby expressly reserved. (Jan. 31, 1934, c. 7, § 17, 48 Stat. 348.)

12 U. S. C., § 1020h

Citation of subchapter.-This subchapter may be cited as the "Federal Farm Mortgage Corporation Act." (Jan. 31, 1934, c. 7, § 18, 48 Stat. 349.)

SUBCHAPTER III-FEDERAL INTERMEDIATE
CREDIT BANKS

HISTORICAL NOTE

The provisions of this subchapter relative to Federal intermediate credit banks constitute Title II of the "Federal Farm Loan Act" (July 17, 1916, c. 245, 39 Stat. 360). See section 641 of this chapter. This Act was amended on March 4, 1923 (c. 252, 42 Stat. 1454), by the addition of a second title relative to Federal intermediate credit banks, the provisions of which, as amended, are included in this subchapter. The office of Intermediate Credit Commissioner was created by the act of June 16, 1933. (See section 638 at the beginning of this chapter.)

12 U. S. C., § 1021

ORGANIZATION

F. F. L. Act, § 201 (a)

Number, names, and charters of banks.-The Farm Credit Administration shall have power to grant charters for twelve institutions to be known and styled as "Federal Intermediate Credit Banks." (July 17, 1916, c. 245, § 201 (a); Mar. 4, 1923, c. 252, § 2, 42 Stat. 1454; Mar. 27, 1933, Ex. Or. 6084.)

Financial Control of Corporations, see Chap. 14, Title 31, Money and Finance.