which the Corporation is authorized to issue and have outstanding at any one time under the provisions of law in force on June 25, 1940, shall not be decreased by reason of any retirement of capital stock under this paragraph, and such aggregate amount is hereby increased by an amount sufficient to carry out the provisions of this paragraph and of the second paragraph of section 51d of Title 12, as amended.

The Corporation, on or before June 30, 1941, may retire its capital stock and pay dividends under the preceding paragraph of this section, and may purchase stock of the Federal home-loan banks under section 51d of Title 12, as amended, in an aggregate amount of not to exceed $300,000,000 to be determined by the Secretary of the Treasury; but the Corporation, with the approval of the Federal Loan Administrator, shall determine that portion of such aggregate amount which may be used for the retirement of the capital stock of the Corporation, the payment of dividends, and the purchase of such stock of the Federal home-loan banks. (Jan. 22, 1932, ch. 8, § 2, 47 Stat. 5; July 21, 1932, ch. 520, § 205 (b), 47 Stat. 714; July 22, 193, ch. 522, § 6 (f), 47 Stat. 728; June 25, 1940, ch. 427, § 2, 54 Stat. 572.)

CROSS REFERENCES

Additional loans by Corporation to Secretary of Agriculture for purpose of making rural rehabilitation loans to needy farmers, see section 6091 of this title.

§ 605. Loans and advances by Corporation; allocation; security; form; limitation on amount; period of loan; fees and commissions. To aid in financing agriculture, commerce, and industry, including facilitating the exportation of agricultural and other products, the Corporation is authorized and empowered to make loans, upon such terms and conditions not inconsistent with sections 601-604, 605, 606-606b, 606g, 607, 608, 609, 610, 611, 612, 613, 614-616, and 617 of this title, as it may determine, to any bank, savings bank, trust company, building and loan association, insurance company, mortgage-loan company, credit union, Federal land bank, joint-stock land bank, Federal intermediate credit bank, agricultural credit corporation, livestock credit corporation, organized under the laws of any State or of the United States, including loans secured by the assets of any bank, savings bank, or building and loan association that is closed, or in process of liquidation to aid in the reorganization or liquidation of such banks or building and loan associations, upon application of the receiver or liquidating agent of such bank or building and loạn association, and any receiver of any national bank is hereby authorized to contract for such loans and to pledge any assets of the bank for securing the same.

All loans made under the foregoing provisions shall be fully and adequately secured. The corporation, under such conditions as it shall prescribe, may take over or provide for the administration and liquidation of any collateral accepted by it as security for such loans. Such loans may be made directly upon promissory notes or by way of discount or rediscount of obligations tendered for the purpose, or otherwise in such form and in such amount and at such interest or discount rates as the corporation may ap

prove: Provided, That no loans or advances shall be made upon foreign securities or foreign acceptances as collateral or for the purpose of assisting in the carrying or liquidation of such foreign securities and foreign acceptances. In no case shall the aggregate amount of advances made under this section to any one corporation and its subsidiary or affiliated organizations exceed at any one time 25% per centum of (1) the authorized capital stock of the Reconstruction Finance Corporation plus (2) the aggregate amount of bonds of the corporation authorized to be outstanding when the capital stock is fully subscribed: Provided, That such limitation shall not apply to advances to receivers or other liquidating agents of closed banks when made for the purpose of liquidation or reorganization.

Each such loan may be made for a period not exceeding three years, and the corporation may from time to time extend the time of payment of any such loan, through renewal, substitution of new obligations, or otherwise, but the time for such payment shall not be extended beyond five years from the date upon which such loan was made originally. The corporation may make loans under this section at any time prior to the expiration of one year from January 22, 1932; and the President may from time to time postpone such date of expiration for such additional period or periods as he may deem necessary, not to exceed two years from January 22, 1932. Within the foregoing limitations of this section, the Corporation, notwithstanding any limitation of law as to maturity, with the approval of the Interstate Commerce Commission, including approval of the price to be paid, may, to aid in the financing, reorganization, consolidation, maintenance, or construction thereof, purchase for itself, or for account of a railroad obligated thereon, the obligations of railroads, engaged in interstate commerce, or of receivers or trustees thereof, including equipment trust certificates, or guarantee the payment of the principal of, and/or interest on, such obligations, including equipment trust certificates, or, when, in the opinion of the Corporation, funds are not available on reasonable terms through private channels, make loans, upon full and adequate security, to such railroads or to receivers or trustees thereof for the purposes aforesaid: Provided, That in the case of loans to or the purchase or guarantee of obligations, including equipment trust certificates, of railroads not in receivership or trusteeship, the Interstate Commerce Commission shall, in connection with its approval thereof, also certify that such railroad, on the basis of present and prospective earnings, may reasonablly be expected to meet its fixed charges, without a reduction thereof through judicial reorganization, except that such certificate shall not be required in case of such loans, purchases, or guaranties made for the maintenance of, or purchase of equipment for, such railroads: Provided further, That for the purpose of determining the general funds of the Corporation available for further loans or commitments, such guaranties shall, to the extent of the principal amount of the obligations guaranteed, be interpreted as loans or commitments for loans: And provided further, That the total amount of loans and commitments to railroads, receivers, and

trustees, and purchases and guaranties of obligations of railroads, under this paragraph, as amended, shall not exceed at any one time $500,000,000, in addition to loans and commitments made prior to January 31, 1935, and renewals of loans and commitments so made: Provided, That no fee or commission shall be paid by any applicant for a loan under the provisions hereof in connection with any such application or any loan made or to be made hereunder, and the agreement to pay or payment of any such fee or commission shall be unlawful. Any such railroad may obligate itself in such form as shall be prescribed and otherwise comply with the requirements of the Interstate Commerce Commission and the corporation with respect to the deposit or assignment of security hereunder, without the authorization or approval of any authority, State or Federal, and without compliance with any requirement, State or Federal, as to notification, other than such as may be imposed by the Interstate Commerce Commission and the corporation under the provisions of this section. The title of any owner, whether as trustee or otherwise, to any property leased or conditionally sold to a railroad, or a receiver or trustee thereof, which the Corporation has financed, or in the financing of which the Corporation has aided, any right of such owner to take possession of such property in compliance with the provisions of any such lease or conditional sales contract, and the title of any owner of a collateral note evidencing a loan from the Corporation to a railroad not now in receivership or involved in proceedings under section 205 of Title 11, or a receiver or trustee thereof, and the right of any such owner to acquire title to the collateral securing such note, free and clear of any equity of redemption, in compliance with the contract of pledge, and thereafter to deal with the same as the absolute owner thereof, shall not be affected, restricted, or restrained by or pursuant to the provisions of Title 11, as amended, or by or pursuant to any other provision of law applicable to any proceedings thereunder.

The Reconstruction Finance Corporation is further authorized and empowered to make loans if adequately secured to any State insurance fund established or created by the laws of any State for the purpose of paying or insuring payment of compensation to injured workmen and those disabled as a result of disease contracted in the course of their employment, or to their dependents. As used in this paragraph, the term "State" includes the several States and Alaska, Hawaii, and Puerto Rico.

The Reconstruction Finance Corporation is further authorized and empowered to make loans if adequately secured to any fund created by any State for the purpose of insuring the repayment of deposits of public moneys of such State or any of its political subdivisions in banks or depositories qualified under the law of such State to receive such deposits. Such loans may be made at any time prior to January 23, 1934, and upon such terms and conditions as the corporation may prescribe; except that any fund which receives a loan under this paragraph shall be required to assign to the corporation, to the extent of such loan, all amounts which may be received by such fund as dividends or

otherwise from the liquidation of any such bank or depository in which deposits of such public moneys were made. As used in this paragraph, the term "State" includes the several States and Alaska, Hawaii, and Puerto Rico. (Jan. 22, 1932, ch. 8, § 5, 47 Stat. 6; July 21, 1932, ch. 520, §§ 202, 203, 211, 47 Stat. 714, 715; June 10, 1933, ch. 55, §§ 10, 12, 13, 48 Stat. 121, 122; June 14, 1933, ch. 72, 48 Stat. 141; June 21, 1934, ch. 692, 48 Stat. 1198; Jan. 31, 1935, ch. 2, § 4, 49 Stat. 2; June 25, 1940, ch. 427, § 3 (a), 54 Stat. 573; Sept. 18, 1940, ch. 722, title III, § 331 (a, b), 54 Stat. 955.)

§ 605b. Same; additional loans authorized.

(c) Financing sales of agricultural products in foreign markets. In order that the surpluses of agricultural products may not have a depressing effect upon current prices of such products, the corporation is authorized and directed to make loans, in such amounts as may in' its judgment be necessary, for the purpose of financing sales of such surpluses in the markets of foreign countries in which such sales cannot be financed in the normal course of commerce; but no such sales shall be financed by the corporation if, in its judgment such sales will affect adversely the world markets for such products: Provided, however, That no such loan shall be made to finance the sale in the markets of foreign countries of cotton owned by the Federal Farm Board or the Cotton Stabilization Corporation.

(d) Financing, carrying, and marketing of agricultural products and livestock.-The Reconstruction Finance Corporation is authorized and empowered to make loans to bona fide institutions, organized under the laws of any State or of the United States and having resources adequate for their undertakings, for the purpose of enabling them to finance the carrying and orderly marketing of agricultural commodities and livestock produced in the United States.

(e) Creation of regional agricultural credit corporations; loans to farmers and stockmen.-The Reconstruction Finance Corporation is further authorized to create in any of the twelve Federal land-bank districts where it may deem the same to be desirable a regional agricultural credit corporation with a paid-up capital of not less than $3,000,000, to be subscribed for by the Reconstruction Finance Corporation and paid for out of the unexpended balance of the amounts allocated and made available to the Secretary of Agriculture under section 602 of this title. Such corporations shall be managed by officers and agents to be appointed by the Reconstruction Finance Corporation under such rules and regulations as its board of directors may prescribe. Such corporations are hereby authorized and empowered to make loans or advances to farmers and stockmen, the proceeds of which are to be used for an agricultural purpose (including crop production), or for the raising, breeding, fattening, or marketing of livestock, to charge such rates of interest or discount thereon as in their judgment are fair and equitable, subject to the approval of the Reconstruction Finance Corporation, and to rediscount with the

Reconstruction Finance Corporation and the various Federal reserve banks and Federal intermediate credit banks any paper that they acquire which is eligible for such purpose. All expenses incurred in connection with the operation of such corporations shall be supervised and paid by the Reconstruction Finance Corporation under such rules and regulations as its board of directors may prescribe.

(f) Security for loans; terms and conditions.-All loans made under this section, and all contracts of the character described in paragraph (1) of subsection (a), shall be fully and adequately secured. The corporation, under such conditions as it shall prescribe, may take over or provide for the administration and liquidation of any collateral accepted by it as security for such loans. Such loans shall be made on such terms and conditions, not inconsistent with sections 602, 603, 605-605d, 608, 609, and 609a of this title and section 343 of Title 12 as the corporation may prescribe, and may be made directly upon promissory notes or by way of discount or rediscount of obligations tendered for the purpose, or otherwise in such form and in such amount and at such interest or discount rates as the corporation may approve: Provided, That no loans or advances (except loans under subsection (c)) shall be made upon foreign securities or foreign acceptances as collateral.

(g) Period of loan; extending time of repayment.-Each such loan may be made for a period not exceeding three years, and the corporation may, from time to time, extend the time of payment of any such loan, through renewal, substitution of new obligations, or otherwise, but the time for such payment shall not be extended beyond five years from the date upon which such loan was made originally: Provided, That loans or contracts of the character described in subsection (a) may be made for a period not exceeding ten years: Provided further, That loans or contracts of the character described in paragraph (1) or (5) of subsection (a) may be made for a period exceeding ten years when it is the judgment of the board of directors of the corporation that it is necessary to purchase securities as provided in such paragraphs and that it is not practicable to require the reimbursement of the corporation, within ten years, through the repurchase or payment of such securities, or in any other manner. (h) Limitation on time when loans may be made. The corporation may make loans under this section at any time prior to January 23, 1934.

(i) Fees and commissions.-No fee or commission shall be paid by an applicant for a loan under the provisions of this section in connection with any such application or any loan made or to be made under this section, and the agreement to pay or payment of any such fee or commission shall be unlawful.

(July 21, 1932, ch. 520, § 201, 47 Stat. 711; Mar. 23, 1933, ch. 5, 48 Stat. 20; May 29, 1933, ch. 42, title I, 48 Stat. 99; June 10, 1933, ch. 55, §§ 5-9, 48 Stat. 120, 121; June 16, 1933, ch. 100, § 5, 48 Stat. 283.)