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The bill contains other provisions either complementary to the principal functions of the Corporation or to cover related points noted during the work of the select committee.

The proposed provisions concerning insurance of tenant purchase mortgages are based to a large extent upon H. R. 716, introduced on January 6, 1943, by Mr. Pace, of Georgia, a member of this committee, which, in turn, is based to a considerable degree upon H. R. 10779, Seventy-fifth Congress, third session, introduced on May 27, 1938, by Mr. Marvin Jones, of Texas, and S. 4107, Seventy-fifth Congress, third session. Another similar mortgage insurance bill, S. 1836, Seventy-sixth Congress, was passed by the Senate with amendments on July 6, 1939. This latter bill was referred to the House Committee on Agriculture and reported with amendments on February 26, 1940. A bill, S. 1499, introduced by Senator Bankhead, of Alabama, on November 1, 1943, and now pending in the Senate, would also make provision for the insurance of tenant purchase mortgages similar in some respects to the legislative proposals previously referred to, and also would provide preferences for war veterans in the matter of tenant purchase loans and insured mortgages.

In submitting H. R. 4384, the committee has sought to make such changes in the Farm Security Administration program as would confine that program to traditional American policies and customs and provide a permanent basis for the furnishing of reasonable Government assistance to worthy low-income farmers when they could not obtain financing from commercial banks and other responsible cooperative and private lenders.

The tenant-purchase program, which has done much good, must be continued. That program apparently has formed a workable pattern for helping to check the high tenancy ratio which was indicated in 1937 and was threatening to destroy the traditional American system of independent family-type farms owned by the people who work upon them, and was resulting in land depletion and lower living standards among farm tenants. There is great demand for the financial aid and assistance such as is provided by the tenant purchase program, as evidenced by the fact that the Farm Security Administration has received approximately 20 applications for each tenant purchase loan that could be made from funds available during the last fiscal

year. The failure to provide for the continuance of this program would bring great disappointment to many worthy citizens who are able to meet all of the eligibility requirements for loans such as are authorized by the Bankhead-Jones Farm Tenant Act, the paramount purpose of which is to encourage farm ownership. Congress has authorized the tenant purchase program and the committee has found no reason which would justify an abandonment of the program at this time.

The proposed bill would retain all of the good features of the present program. In addition, it would permit expansion of the tenant purchase program by the provisions for mortgage insurance. These latter provisions should not only increase the trend of ownership of familysize farms, but should accomplish this with a smaller use of Federal funds, due to the incentives which would be offered to private lenders to finance the purchase of farms by tenants.

The proposed Farmers' Home Corporation Act of 1944 does not afford any opportunity for the administrative indiscretions practiced by the previous Administrators of Resettlement Administration and

Farm Security Administration. The proposed bill has as one of its purposes the granting of credit to low-income farm families, but loans to such families would be limited to items normally needed by farmers in the planting, cultivating, harvesting, and other steps in the production and preservation of agricultural commodities, and for family subsistence.

The Farm Security Administration, the regional agricultural credit corporations, and the emergency crop and feed loan offices of the Farm Credit Administration make loans of analogous kinds. Under the term “rehabilitation," Farm Security Administration has loaned funds to meet almost every conceivable wish of a farmer. The regional agricultural credit corporations are authorized to make loans “for an agricultural purpose (including crop production), or for the raising, breeding, fattening, or marketing of livestock.” The emergency crop and feed loan offices of the Farm Credit Administration are authorized to make loans for "fallowing, for planting, for cultivation, for production of crops, for harvesting of crops, for supplies incident and necessary to such production or harvesting, and for feed for livestock, or for any such purposes.'

The proposed definition for rural credit loans in the Farmers' Home Corporation Act of 1944 is substantially a restatement of the authority in title II of the Bankhead-Jones Farm Tenant Act, under which it was originally anticipated that Farm Security Administration would function. The definition is to make "loans to farmers and stockmen who are citizens of the United States for the purchase of livestock, farm equipment and supplies, other farm needs, the refinancing of indebtedness, and for family subsistence.” It is believed that this definition is broad enough to eliminate the need for the separate types of loans made by all three of these agencies and, at the same time, to enable the Corporation to perform those functions which are necessary for the Government to provide for low-income farmers.

The proposed bill prohibits loans to any cooperative association. This is not done because of any desire to prejudice the interests of farmers' cooperative associations. These associations, including some associations financed by Farm Security Administration, have performed and are performing a valuable service to the farmers of this country and the Congress has several times recognized the responsibility of Government to assist them. A means for Government aid to cooperative associations has been provided through the banks for cooperatives, organized pursuant to the Farm Credit Act of 1933. To authorize the Farmers' Home Corporation to finance such cooperatives would, in effect, be providing for additional duplication of services to farmers, whereas the fundamental purpose of the proposed bill is to eliminate such duplication,

The proposed bill would undoubtedly result in substantial savings to the Government in the expense of administering the program of credit for low-income farmers. Farm Security Administration uses so many employees on a part-time basis that the customary manner of referring to its employment record is in man-years. A man-year represents 1 employee working full time for a year. The peak of its employment apparently was reached in the fiscal year 1942, when the total employment was 19,789 man-years, at a salary cost of $35,394,219. Employment for the fiscal year 1944 is estimated at 11,573 man-years, at a salary cost of $27,850,359, although Farm

Security Administration may be able to make savings below this figure. (See the Budget for fiscal year 1945, pp. 340–350.) The emergency crop and feed loan offices of Farm Credit Administration, which also utilize services of a number of part-time employees, estimates the need for 1,227 man-years of work during the fiscal year 1944, at a salary cost of $3,204,967. There has been a time when the number of employees and salary cost incident to crop and feed loans was much heavier than at present, but data as to the number of employees and salary cost is not readily available.

The regional agricultural credit corporations, of which there were originally 12, bave been reduced to 1. During the fiscal year 1943, these corporations had the equivalent of 10 man-years and the salary cost was $33,535. Comparable figures for the fiscal year 1944 are estimated to be 20 man-years and $74,079. Much of the work for the regional agricultural credit corporations is done by utilizing the services of employees on the pay rolls of other agencies of the Department of Agriculture, such as the Farm Security_Administration, the Production Credit Associations, the National Farm Loan Associations, and the Farm Credit Administration district personnel, on a reimbursable basis. On December 31, 1933, which appears to be about the peak of Regional Agricultural Credit Corporation employment, there were 2,087 full-time employees, in addition to ī,821 field inspectors paid on a per diem basis; see Second Annual Report of the Farm Credit Administration, 1934, pp. 62–63.

In addition to savings in manpower and salary costs, there are many potential savings in the matter of consolidation and other changes with respect to field offices. During the fiscal year 1944, Farm Security Administration has about 13 regional offices, 4 area (finance) offices, 48 State offices, 135 district offices, and 2,103 county and project offices. The Emergency Crop and Feed Loan Division of Farm Credit Administration has 11 regional offices, 1 branch office in Puerto Rico, about 30 State offices, 1 Territorial office, and about 488 county offices. The Regional Agricultural Credit Corporations have only about 3 offices at the present time, but they do have local points of contact with the farmers through the representatives of other agencies employed on a part-time or reimbursable basis. At the peak of employment, there were 12 of these corporations with a number of local offices.

The bill would also help to meet the problem of Government competition with private lending agencies. During the past year, it was charged repeatedly that the Regional Agricultural Credit Corporations were proving a destructive competitive force to local banks. The same charges have been made from time to time, but to a much lesser degree, concerning the activities of Farm Security Administration. The proposed bill would require that loans may not be made to applicants who could obtain credit elsewhere on reasonable rates and terms. As provided for in the bill, this feature is not an administrative admonition to be read and forgotten. A certification that such credit was not available to the applicant would be required from the local county committee considering the application. In addition, the Corporation itself would have to make an administrative determination that the applicant could not be financed adequately elsewhere upon reasonable terms. This provision, coupled with the benefits

which would accrue to private lenders from carrying insured mortgages, should bring about more effective cooperation between the Government and those responsible private lenders who have assisted so much in the past in financing the American farmer.

At the present time, one of the more immediate problems facing the Government and one of the most pressing of Government obligations is to assist those war veterans desiring to do so to become farmers and to find the land upon which to pursue this occupation. The proposed bill would provide effective preferences to veterans in the matter of obtaining loans or insured mortgages to enable them to acquire farms.

The resolution under which the committee is now acting confines its official action to the investigation of and recommendations as to the Farm Security Administration only. The investigation conducted by' this select committee clearly indicates the urgent need of an immediate investigation and study of all the cooperative lending agencies now being administered by the Farm Credit Administration. The committee believes that in the interest of good government and economy in the administration of governmental affairs, House Resolution 119, under which this committee has investigated the Farm Security Administration and other agencies of the Government engaged in making direct loans to low-income farmers, should be amended so that the scope of the investigation might be broadened and to the end that the committee be authorized to make a thorough study and investigation of all agencies now being administered by the Farm Credit Administration. The committee does not believe that Congress can intelligently appraise the activities of such agencies and provide such additional legislation as may be needed until such an investigation and study has been made.

HAROLD D. COOLEY, Chairman,
JOHN W. FLANNAGAN, Jr.,
ORVILLE ZIMMERMAN,
STEPHEN PACE,
CLIFFORD R. HOPE,
ANTON J. JOHNSON,
Ross RIZLEY.

(H. R. 4384, 78th Cong., 2d sess.) A BILL To simplify and improve credit services to farmers and promote farm ownership by abolishing certain agricultural lending agencies and functions, by transferring assets to the Farmers' Home Corporation, by enlarging the powers of the Farmers' Home Corporation, by authorizing Government insurance of loans to farmers, by creating preferences for loans and insured mortgages to enable veterans to acquire farms, by providing additional specific authority and directions with respect to the liquidation of resettlement projects and rural rehabilitation projects for resettlement purposes, and for other purposes

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

SHORT TITLE

SECTION 1. This Act may be cited as the "Farmers' Home Corporation Act of 1944”.

DISPOSITION OF CERTAIN AGENCIES AND THEIR ASSETS AND PERSONNEL

Sec. 2. (a) The following agencies, functions, powers, and duties are hereby abolished and the following laws relating thereto repealed:

(1) The Farm Security Administration and all of its functions, powers, and duties. Title II of the Bankhead-Jones Farm Tenant Act (U. S. C., 1940 edition, title 7, secs. 1007 et seq.) (relating to rehabilitation loans) is hereby repealed.

(2) The Regional Agricultural Credit Corporation of Washington, District of Columbia, and the Regional Agricultural Credit Corporation of Minneapolis, Minnesota, their functions, powers, and duties, including those of their officers and boards of directors. Section 201 (e) of the Emergency Relief and Construction Act of 1932 (U. S. C., 1940 edition, title 12, sec. 1148), section 84 of the Farm Credit Act of 1933 (U. S. C., 1940 edition, title 12, sec. 1148a), and sections 32, 33, and 34 of the Farm Credit Act of 1937 (U. S. C., 1940 edition, title 12, secs. 1148h-1148d) (all relating to the creation and operation of regional agricultural credit corporations) are hereby repealed.

(3) All functions, powers, and duties of the Governor of the Farm Credit Administration which relate to the making, administration, and liquidation of (a) all loans to farmers under the Act entitled “An Act to provide for loans to farmers for crop production and harvesting during the year 1937, and for other purposes”, approved January 29, 1937 (U. S. C., 1940 edition, title 12, secs. 1020i-10200); (b) all loans identified or referred to in sections 5 (b), 5 (c), and 5 (d) of Executive Order Numbered 6084, dated March 27, 1933, and (c) all other emergency crop production, feed, seed, drought, and rehabilitation loans administered by the Farm Credit Administration on the effective date of this Act. The said Act approved January 29, 1937, is hereby repealed.

(4) All functions, powers, and duties of the National Housing Agency with respect to property, funds, and other_assets which were formerly under the administration or supervision of the Farm Security Administration and were transferred or directed to be transferred to or consolidated with the National Housing Agency by Executive Order Numbered 9070 of February 24, 1942, except housing projects.

(b) All assets, funds, contracts, property, and records and all liabilities of the agencies abolished by this Act and all assets, funds, contracts, property, and records which the Secretary of Agriculture, the War Food Administrator, the Governor of the Farm Credit Administration, and the National Housing Administrator have been using or have acquired primarily in the administration of any function, power, or duty so abolished and all liabilities chargeable thereto are hereby transferred to the Farmers' Home Corporation created by section 40 of the BankheadJones Farm Tenant Act, as amended (in this Act called the "Corporation”), for use in furtherance of its corporate purposes subject to the limitations prescribed in the Bankhead-Jones Farm Tenant Act or in this Act, except the assets, funds, contracts, property, records, and liabilities relative to the programs authorized pursuant to the item in the Department of the Interior Appropriation Act, 1940, "Water Conservation and Utility Projects” (53 Stat. 685, 719), the Act of August 11, 1939, entitled "An Act authorizing construction of water conservation and utilization projects in the Great Plains and arid and semiarid areas of the United States," as amended (U. S. C., 1940 edition, title 16, secs. 590y et seq.), the Act of August 28, 1937, entitled “An Act to promote conservation in the arid and semiarid areas of the United States by aiding in the development of facilities for water shortage and utilization, and for other purposes," as amended (U. S. C., 1940 edition, title 16, secs. 590r et seq.), and the Act of August 7, 1939, relating to the development of farm units on public lands pursuant to Federal reclamation projects with funds furnished by the Farm Security Administration (U. S. C., 1940 edition, title 43, note to sec. 433). The funds appropriated, authorized to be borrowed, and made available under the items "Farmers' crop production and harvesting loans" (under the heading "Farm Credit Administration'), “Loans, grants, and rural rehabilitation,”.“Farm tenancy,” and “Liquidation and management of resettlement projects,” in the Department of Agriculture Appropriation Act, 1944, and under the item “Department of Agriculture” in the Second Deficiency Appropriation Act, 1943 (57 Stat. 537), shall not lapse on June 30, 1944, but such funds appropriated or made available by such items and the authorizations therein contained shall be continued available for use by the Corporation in furtherance of its corporate purposes, subject to the limitations set forth herein. The Corporation shall fulfill all bona fide obligations and commitments applicable to the funds transferred by this section, shall recognize all pledges covering the assets transferred to it as security for loans heretofore made by the Reconstruction Finance Corporation to the Secretary of Agriculture or the War Food Administrator in connection with the administration of the Farm Security programs and shall discharge the obligations imposed by such loans in accordance with the terms of the applicable loan agreements. The outstanding certificates representing the capital of the regional agricultural credit corporations are hereby canceled.

H. Rept. 1430, 78-2--3

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