12 U.S. C., § 1138f

Limitation on compensation payable to director, officer, or employee. No director, officer, or employee of the Central Bank for Cooperatives, or of any Production Credit Corporation, Production Credit Association, or Bank for Coperatives shall be paid compensation at a rate in excess of $10,000 per annum. No officer or employee of the Farm Credit Administration engaged in carrying out the provisions of this subchapter and subchapters IV and V of this chapter shall be paid compensation at a rate in excess of $10,000 per annum. (June 16, 1933, c. 98, § 66, 48 Stat. 269.)

SUBCHAPTER VII.-AGRICULTURAL MARKETING

HISTORICAL NOTE

This subchapter contains the Agricultural Marketing Act (approved June 15, 1929), as amended.

In view of the amendments to the Agricultural Marketing Act made by the Farm Credit Act of 1933 (approved June 16, 1933) and by the Farm Credit Act of 1935 (approved June 3, 1935), and of the transfer of its administration to the Governor of the Farm Credit Administration by Executive Order No. 6084, set forth at the beginning of this chapter under "Introductory," the provisions of the Act as amended have been transferred to this chapter from Title 7.

From the provisions of subchapter V of this chapter, it will be noted that many of the functions defined in this subchapter may now be exercised through regional banks for cooperatives and a central bank for cooperatives. Subchapter V provides for the establishment of banks for cooperatives with capital stock purchased from the revolving fund created under section 1141d of this subchapter; and the loaning powers of the banks for cooperatives, under subchapter V, are similar to those originally created under this subchapter and not rescinded by amendments thereto.

The Agricultural Marketing Act was entitled "An Act to establish a Federal Farm Board to promote the effective merchandising of agricultural commodities in interstate and foreign commerce, and to place agriculture on a basis of economic equality with other industries."

12 U. S. C., § 1141

Declaration of policy; effective merchandising of agricultural commodities; speculation; cooperative marketing; surpluses; administration of subchapter.-(a) It is declared to be the policy of Congress to promote the effective merchandising of agricultural commodities in interstate and foreign commerce, so that the industry of agriculture 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 agricultural commodities and their food products

(1) by minimizing speculation.

(2) by preventing inefficient and wasteful methods of distribution. (3) by encouraging the organization of producers into effective associations or corporations under their own control for greater unity of effort in marketing and by promoting the establishment and financing of a farm marketing system of producer-owned and producercontrolled cooperative associations and other agencies.

(4) by aiding in preventing and controlling surpluses in any agricultural commodity, through orderly production and distribution, so as to maintain advantageous domestic markets and prevent such surpluses from causing undue and excessive fluctuations or depressions in prices for the commodity.

(b) There shall be considered as a surplus for the purposes of this subchapter any seasonal or year's total surplus, produced in the United States and either local or national in extent, that is in excess. of the requirements for the orderly distribution of the agricultural commodity or is in excess of the domestic requirements for such commodity.

(c) The Farm Credit Administration shall execute the powers vested in it by this subchapter only in such manner as will, in the judgment of the administration, aid to the fullest practicable extent in carrying out the policy above declared. (June 15, 1929, c. 24, § 1, 46 Stat. 11; Mar. 27, 1933, Ex. Or. 6084.)

"Farm Credit Administration" and "administration" mentioned in the text were substituted for "Federal Farm Board" and "board," respectively, pursuant to the Executive Order cited thereto, which is set out in full at the beginning of this chapter.

12 U.S. C., § 1141a

Governor of the Farm Credit Administration.-The Governor of the Farm Credit Administration shall be appointed by the President, by and with the advice and consent of the Senate. A successor to a Governor of the Farm Credit Administration shall have a term of office expiring six years from the date of the expiration of the term for which his predecessor was appointed, except that any person appointed to fill a vacancy in the office occurring prior to the expiration of the term for which his predecessor was appointed, shall be appointed. for the remainder of such term. The Governor of the Farm Credit Administration shall be a citizen of the United States and shall not actively engage in any other business, vocation, or employment than that of serving as Governor; nor shall he during his term of office engage in the business (except such business as is necessary to the operation of his own farm or farms) of buying and selling, or otherwise be financially interested in, any agricultural commodity or product thereof. He shall receive a salary of $12,000 a year, together with necessary traveling and subsistence expenses, or per diem allowance in lieu thereof, within the limitations prescribed by law, while away from his official station upon official business. (June 15, 1929, c. 24, § 2, 46 Stat. 11; Ex. Ord. No. 6084, Mar. 27, 1933.)

References to the Federal Farm Board were changed to Governor of the Farm Credit Administration and provisions relating to the creation and number of members of the Federal Farm Board, membership of Secretary of Agriculture, representation of the major agricultural commodities upon the Board, terms of office of its original members, designation of chairman and vice chairman, effect of vacancies, and quorum of the Board, were omitted on authority of Ex. Ord. No. 6084, cited to text, and set out in note preceding section 636 of this title, which changed the name of the Federal Farm Board to Farm Credit Administration, abolished the offices of its appointed members, except that of the chairman, and the functions of the Secretary of Agriculture as a member, changed the name of the chairman to Governor of the Farm Credit Administration, and vested him with all the powers and duties of the Federal Farm Board.

12 U. S. C., § 1141b

General powers of Farm Credit Administration.-The Farm Credit Administration

(1) shall maintain its principal office in the District of Columbia, and such other offices in the United States as in its judgment are nec

shall have an official seal which shall be judicially noticed. (3) shall make an annual report to Congress upon the administration of this subchapter and any other matter relating to the better effectuation of the policy declared in section 1141 of this title, including recommendations for legislation.

(4) may make such regulations as are necessary to execute the functions vested in it by this subchapter.

(5) may appoint and fix the salaries of a secretary and such experts, and, in accordance with sections 661-663, 664-669, 670-672, 673 and 674 of Title 5, and subject to the provisions of the civil service laws, such other officers and employees, as are necessary to execute such functions.

(6) may make such expenditures (including expenditures for rent and personal services at the seat of government and elsewhere, for law books, periodicals, and books of reference, and for printing and binding) as are necessary to execute such functions. Expenditures by the administration shall be allowed and paid upon the presentation of itemized vouchers therefor approved by the governor of the administration.

(7) may sell at public or private sale to the highest responsible bidder, upon such terms and after such public advertisement as the Farm Credit Administration may deem in the public interest, any property, real or personal, or any interest therein, acquired by the United States on account of or as a result of any loans made from the revolving fund authorized by section 1141d of this title; may lease any such property, pending its sale, on such terms and for such period, not in excess of five years, as the Farm Credit Administration may deem in the public interest; and may incur and pay, from the said revolving fund, obligations and expenses for the operation, upkeep, maintenance, repair, disposition, insurance, and protection of any such property: Provided, That section 5 of Title 41 shall not be construed to apply to any purchase or service on account of such property. (June 15, 1929, c. 24, § 4, 46 Stat. 13; Mar. 27, 1933, Ex. Or. 6084; Aug. 19, 1937, c. 704, § 37, 50 Stat. 717.)

"Farm Credit Administration" and "administration" mentioned in the text were substituted for "Federal Farm Board" and "board," respectively, and "governor" was substituted for "chairman" pursuant to the Executive Order cited thereto, which is set out in full at the beginning of this chapter.

12 U. S. C., § 1141c

Special powers of administration.-The administration is authorized and directed

(1) to promote education in the principles and practices of cooperative marketing of agricultural commodities and food products thereof,

(2) to encourage the organization, improvement in methods, and development of effective cooperative associations.

(3) to keep advised from any available sources and make reports as to crop prices, experiences, prospects, supply, and demand, at home and abroad. (June 15, 1929, c. 24, 85, 46 Stat. 13; Mar. 27, 1933, Ex. Or. 6084; June 16, 1933, c. 98, § 50 (a), 48 Stat. 265.)

"Administration" mentioned in the text was substituted for "board" pursuant to the Executive Order cited thereto, which is set out in full at the beginning of this chapter.

Act of June 16, 1933, c. 98, § 50 (a), 48 Stat. 265, repealed paragraph (4) relating to investigations of overproduction and paragraph (5) relating to miscellaneous investigations.

12 U. S. C., § 1141d

Revolving fund.-There is authorized to be appropriated the sum of $500,000,000 which shall be made available by the Congress as soon as practicable after the approval of this subchapter and shall constitute a revolving fund to be administered by the administration as provided in this subchapter. Any and all funds derived from the sale, lease, operation, or other disposition of any property, real or personal, acquired by the United States on account of or as a result of any loan made pursuant to the provisions of this subchapter, shall be covered into and become a part of said revolving fund. (June 15, 1929, c. 24, § 6, 46 Stat. 14; Mar. 27, 1933; Ex. Or. 6084; June 16, 1933, c. 98, §§ 33, 34, 40, 41, 48 Stat. 262, 264; Aug. 19, 1937, c. 704, § 38, 50 Stat. 718.)

"Administration" mentioned in the text was substituted for "board" pursuant to the Executive Order cited thereto, which is set out in full at the beginning of this chapter. For use of revolving fund in purchasing capital stock in regional and central banks for cooperatives, see sections 1134b and 11341 of subchapter V.

12 U. S. C., § 1141d-1

Interest rates on loans made from revolving fund.-Interest rates in excess of the rates set forth in notes or other obligations taken by the Federal Farm Board or the Farm Credit Administration for loans made from the revolving fund authorized by section 1141d of this title shall not be charged or collected or any of said loans, whether such loans have been heretofore or are hereafter paid in whole or in part, except that in those cases where a borrower by specific contract has agreed to pay a higher rate of interest, the contract rate shall be charged for the period agreed upon; and the amount of any interest collected in excess of the rates thus set forth or contracted for shall be refunded out of said fund or credited on the borrower's indebted(June 22, 1939, c. 239, 53 Stat. 853.)

ness.

This section not a part of Agricultural Marketing Act.

12 U. S. C., § 1141e

Loans to cooperative associations.-(a) Upon application by any cooperative association the administration is authorized to make loans to it from the revolving fund [provided for in section 1141d] to assist in

(1) the effective merchandising of agricultural commodities and food products thereof and the financing of its operations;

(2) the constructive 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 cooperative association unless, in the judgment of the administration, the loan is in furtherance of the policy declared in section 1141 of this title and the 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 acquistion,* shall be subject to the following conditions:

*So in original.

(1) No loan 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 Governor of the Farm Credit Administration finds that the purchase price or rent to be paid is reasonable.

(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. (June 15, 1929, c. 24, § 7, 46 Stat. 14; Mar. 27, 1933, Ex. Or. 6084; June 16, 1933, c. 98, §§ 50-53, 48 Stat. 265; June 3, 1935, c. 164, §§ 9, 10, 49 Stat. 316.)

"Administration" mentioned in the text was substituted for "board" pursuant to the Executive Order cited thereto, which is set out in full at the beginning of this chapter. Subsection (a) of this section originally contained a fifth paragraph, as follows: "(5) enabling the cooperative association applying for the loan to advance to its members a greater share of the market price of the commodity delivered to the association than is practicable under other credit facilities." This paragraph was repealed by section 50 (a) of the Farm Credit Act of June 16, 1933, subject to the following provisions of section 50 (b) of that Act:

"The repeal of section 7 (a) (5) shall not be construed to prohibit the extension, renewal, or refinancing of any loan made thereunder and outstanding on the date of the enactment of this Act, but loans to extend, renew, or refinance any such loan shall bear interest rates as determined under section 8 (a) of the Agricultural Marketing Act as amended by section 54 of this Act."

See sections 1134c and 1134j of subchapter V for loans to cooperative associations by banks for cooperatives, established under the Farm Credit Act of June 16, 1933, and capitalized from the revolving fund provided for in § 1141d hereof.

12 U. S. C., § 1141f

Miscellaneous loan provisions. (a) Loans to any cooperative association shall bear such rates of interest as the Governor of the Farm Credit Administration 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 1141e (a) (1) hereof, other than upon the security of commodities, shall conform as nearly as may be practicable to a rate of 1 per centum in excess of the prevailing interest rate paid by production credit associations to the Federal intermediate credit bank of the farm credit 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 farm credit 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 1141e (a) (2) of this title shall conform as nearly as may be practicable to the prevailing rate on mortgage loans made to members of national farm loan associations.

(b) Payments of principal or interest upon any such loan or advance shall be covered into the revolving fund [provided for in section 1141d].

(c) Loans to any cooperative association or stabilization corporation shall be made upon the terms specified in this subchapter and upon such other terms not inconsistent therewith and upon such security as the administration deems necessary.

(d) No loan or insurance agreement shall be made by the administration if in its judgment the agreement is likely to increase unduly