1 F. F. L. Act, § 208 (e) 12 U.S. C., § 1095 Reports on condition of. institutions receiving loans or deposits. The executive departments, boards, commissions, and independent establishments of the Government, the Reconstruction Finance Corporation, the Federal Deposit Insurance Corporation, the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, and the Federal Reserve banks are severally authorized under such conditions as they may prescribe, upon the request of the Farm Credit Administration to make available to the Farm Credit Administration or any district bank or district corporation operating under its supervision, in confidence, all reports, records or other information they may have relating to the condition of any institution to which the Administration, such district bank, or corporation has made or contemplates making loans or for which it has discounted or contemplates discounting paper, or which it is using or contemplates using as a custodian of securities or other credit instruments, or as a depositary. (July 17, 1916, c. 245, § 208 (e); June 3, 1935, c. 164, § 8, 49 Stat. 316; Aug. 23, 1935, c. 614, § 203 (a), 49 Stat. 704; Aug. 19, 1937, c. 704, § 31, 50 Stat. 716.) § 203 (a) of the Act of Aug. 23, 1935, cited to the text, changed the name of the Federal Reserve Board to "Board of Governors of the Federal Reserve System." RULES AND REGULATIONS 12 U. S. C., § 1101 F. F. L. Act, § 209 Authority of Farm Credit Administration.-The Farm Credit Administration is authorized to make such rules and regulations, not inconsistent with law, as it deems necessary for the efficient execution of the provisions of this subchapter. (July 17, 1916, c. 245, § 209; Mar. 4, 1923, c. 252, § 2, 42 Stat. 1459; Mar. 27, 1933, Ex. Or. 6084.) TAX EXEMPTION 12 U. S. C., § 1111 F. F. L. Act, § 210 Capital and income; debentures instrumentalities of Government. The privileges of tax exemption accorded under section 931 of this title shall apply also to each Federal intermediate credit bank, including its capital, reserve, or surplus, and the income derived therefrom, and the debentures issued under this subchapter shall be deemed and held to be instrumentalities of the Government and shall enjoy the same tax exemptions as are accorded farm loan bonds in said section. (July 17, 1916, c. 245, § 210; Mar. 4, 1923, c. 252, § 2, 42 Stat. 1459.) United States obligations and evidences of ownership issued after March 27, 1942, as subject to Federal Taxation. See Sec. 742a of Title 31, Money and Finance. 12 U. S. C., § 1129 F. F. L. Act, § 212 Charging of unauthorized fees or commissions by banks.-No Federal intermediate credit bank shall charge or receive any fee, commission, bonus, gift, or other consideration not herein specifically authorized. (July 17, 1916, c. 245, § 212; Mar. 4, 1923, c. 252, § 2, 42 Stat. 1461.) SUBCHAPTER IV.-PRODUCTION CREDIT CORPORATIONS AND PRODUCTION CREDIT ASSOCIATIONS* 12 U. S. C., § 1131 PRODUCTION CREDIT CORPORATIONS Establishment; number; location. The Governor of the Farm Credit Administration, hereinafter in this subchapter and subchapter VI referred to as the "governor", is authorized and directed to organize and charter twelve corporations to be known as "Production Credit Corporations." One such corporation shall be established in each farm credit district in the city in which there is located a Federal land bank. The members of the several farm credit boards of the farm credit districts provided for in section 640a of this title shall be ex officio the directors of the respective Production Credit Corporations. Such directors shall have power, subject to the approval of the governor, to employ and fix the compensation of such officers and employees of such corporations as may be necessary to carry out the powers and duties conferred upon such corporations under this subchapter and subchapter VI of this chapter. June 16, 1933, c. 98, § 2, 48 Stat. 257; Aug. 19, 1937, c. 704, § 11, 50 Stat. 708.) *See also subchapter VI. Financial control of corporations, see Chap. 14, Title 31, Money and Finance. Person convicted of felony or adjudged liable in damages for fraud ineligible to be administrative or executive official of Production Credit Corporation, see § 640i of this title. 12 U. S. C., § 1131a Charters and bylaws.-The charters of the Production Credit Corporations shall be granted by the governor upon application of the directors of the Federal land bank of the proper district, and applications and charters shall be in such form as the governor shall prescribe. The directors shall have power, subject to the approval of the governor, to adopt such bylaws as may be necessary for the conduct of the business of the corporations. (June 16, 1933, c. 98, §3, 48 Stat. 257.) Charters of Banks for Cooperatives, see § 1134a. 12 U. S. C., § 1131b Capital stock; amount; value of shares; amount and subscription for initial stock; payments for stock subscribed on behalf of United States.-The capital stock of each Production Credit Corporation shall be in such amount as the governor determines is required for the purpose of meeting the credit needs of the district to be served by such corporation, and such amount may be increased or decreased from time to time by the governor in accordance with such credit needs. Such capital stock shall be divided into shares of $100 each. The initial capital stock of each such corporation shall be $7,500,000, which shall be subscribed for by the governor and held by him on behalf of the United States. Payments on subscriptions to stock by the governor shall be subject to call in whole or in part by the board of directors of the corporation with the approval of the governor. The governor shall make such payments out of the revolving fund created in section 1131i of this title. The stock ownership of the United States in such corporation shall be evidenced by such means as the governor shall determine. (June 16, 1933, c. 98, § 4, 48 Stat. 257.) 12 U. S. C., § 1131c Purchase of stock in production credit associations; class of stock to be purchased and held; amount of stock; retirement of stock held by corporations; application of earnings on stock held by corporations-(a) Stock in associations organized under this subchapter. Each Production Credit Corporation shall have power to invest its funds in stock of production credit associations as provided in this section. Such corporation is authorized to subscribe and pay for class A stock in each Production Credit Association located in the district served by such corporation in amounts sufficient to maintain the amount of class A stock held by it and other holders of class A stock equal, as nearly as may be, to 20 per centum of the volume of loans made or to be made by such association, as estimated by the corporation, but at no time shall the amount of class A stock outstanding be less than $5,000 except with the consent of the association. Notwithstanding the provisions of the preceding sentence, (1) the governor, under rules and regulations prescribed by him, may permit a Production Credit Corporation to maintain the class A holdings of stock by the corporation and other investors at such amount, in excess of 20 per centum of such loans, as may be necessary, (2) the corporation may at any time require the association to retire and cancel stock held by the corporation in such association, if, in the judgment of the corporation, the association has resources available therefor. (June 16, 1933, c. 98, § 6 (a), 48 Stat. 259.) and (b) Stock in associations not organized under this subchapter; restrictions and limitations.-Under such rules and regulations as may be prescribed by the governor and subject to such restrictions and limitations as he may prescribe, each Production Credit Corporation is authorized to subscribe and pay for stock in production credit associations not organized under this subchapter if such associations are controlled by cooperative associations as defined in section 1141j (a) of this title. Only stock which is preferred as to assets on liquidation and is entitled to participate in dividend distributions without discrimination may be subscribed for. The amount of the stock subscribed for by any Production Credit Corporation in any such association shall not at any one time exceed 75 per centum of the total paid-in capital of such association. (June 16, 1933, c. 98, §6 (b), 48 Stat. 259.) (c) Earnings on stock in associations; application of; establishment and investment of surplus.-The amount of the excess of earnings on stock held by the corporation above amounts necessary to pay operating expenses and restore losses and impairment of capital, if any, of the corporation shall be devoted to the creation and maintenance of a surplus equal to at least 25 per centum of the paid-in capital of the corporation. The amount of the surplus shall be invested as the governor shall prescribe in direct obligations of the United States or in class A stock of production credit associations, or both. (June 16, 1933, c. 98, § 6 (c), 48 Stat. 259.) (d) Application of excess earnings on stock in associations; retirement of stock in corporations held by Government.-The amount of such excess of earnings not required in order to comply with the provisions of subsection (c) shall be paid into the revolving fund authorized in section 1131i of this title. Stock held by the governor in the Production Credit Corporation shall be retired upon such payment in an amount equal to the amount of such payment. (June 16, 1933, c. 98, § 6 (d), 48 Stat. 259.) 12 U. S. C., § 1131d PRODUCTION CREDIT ASSOCIATIONS Organization; articles of association; charters; bylaws; powers of governor respecting associations.-The governor is authorized and directed to organize and charter corporations to be known as "Production Credit Associations." Such associations may be organized by ten or more farmers desiring to borrow money under the provisions of sections 1131d-1131g and 1131h of this title. Such individuals shall enter into articles of incorporation which shall specify in general terms the objects for which the association is formed and the powers to be exercised by it in carrying out the functions conferred upon it by this subchapter. Such articles shall be signed by the individuals uniting to form the association and a copy thereof shall be forwarded to the Production Credit Corporation of the district, and such copy shall be filed and preserved in its office. The governor may, for good cause shown, deny a charter to such individuals. Upon the approval of such articles by the governor, the association shall become as of the date of such approval a body corporate. The governor shall have power, under rules and regulations prescribed by him, or by prescribing the terms of the charter of the association, or both, to provide for the organization, management, and conduct of the business of the association; and the power of the governor shall extend to prescribing the amount of the stock of such association; fixing the territory within which its operations may be carried on; fixing the method of election and appointment of, and the amount and payment of the compensation of, directors, officers, and employees; fixing the maximum amount of individual loans which may be made; prescribing the conditions under which the stock may be retired; and providing for the consolidation of two or more such associations. The governor may, at any time, direct such changes in the charter of any such association as he finds necessary in accomplishing the purposes of sections 1131d-1131g and 1131h of this title. Bylaws of any such association may be adopted by the directors but shall not be valid unless approved by the governor. (June 16, 1933, c. 98, § 20, 48 Stat. 259.) Person convicted of felony or adjudged liable in damages for fraud ineligible to be administrative or executive official of production credit association, see § 640i of this title. 12 U. S. C., § 1131e Capital stock; value of shares; classes of stock; voting rights; limitation on transfer of class B stock; exchange of class B stock upon holder ceasing to be borrower; dividends; ownership of stock as entitling credit corporation to approve or remove officers of association.-The stock of such associations shall be divided into shares of $5 each; and there shall be two classes of such stock: (1) Class A stock which is to be held by Production Credit Corporations, and which may be purchased and held by investors, and (2) class B stock which may be purchased only by farmer borrowers from the association and individuals eligible to become borrowers. Class B stock only shall be entitled to voting rights but each holder of such stock shall be entitled to no more than one vote. No class B stock, or any interest therein or right to receive dividends thereon, shall be transferred by act of parties or operation of law except to another farmer borrower or an individual eligible to become a borrower, and then only with the approval of the directors of the association. Each holder of class B stock, within two years after he has ceased to be a borrower, shall exchange such class B stock at the fair book value (not to exceed par) thereof, as determined by the association, for class A stock. All stock shall share in dividend distributions without preference, but the directors of the association may, in their discretion, apply the amount of any dividend payable to a holder of class B stock to any indebtedness of such holder to the association. Class A stock shall be preferred as to assets of the association upon liquidation. During such time as any Production Credit Corporation is a holder of any stock of any such association, the appointment or election of directors, the secretary-treasurer, and the loan committee of such association shall be subject to the approval of the president of the Production Credit Corporation and during such time any such director, secretary-treasurer, or other officer may, at any time, be removed by the president of the Production Credit Corporation. (June 16, 1933, c. 98, § 21, 48 Stat. 260.) 12 U. S. C., § 1131f Application of earnings; losses in excess of reserve account; restoration of capital impairment; reserve account; guaranty fund; dividends. Each Production Credit Association shall, at the 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 in excess of its reserve for bad and doubtful debts; second, to the restoration of the amount of the impairment, if any, of capital; third, to the creation and maintenance of a reserve account for bad and doubtful debts, the amount of which account shall be prescribed by the Production Credit Corporation; and fourth, to the creation and maintenance of a guaranty fund equal to at least 25 per centum of the paid-in capital of the association. Any sums remaining may, with the approval of the Production Credit Corporation, be devoted to the payment of dividends but no rate of dividend in excess of 7 per centum per annum shall be paid. Sums in the guaranty fund |