pursuant to subsection (e) of section 201 of the Emergency Relief and Construction Act of 1932, upon any application, advance, discount, purchase or repurchase agreement, or loan, or any change or extension of any of the same, by renewal, deferment of action or otherwise, or the acceptance, release, or substitution of security therefor, shall be punished by a fine of not more than $5,000, or by imprisonment for not more than two years, or both.

(b) Whoever (1) falsely makes, forges, or counterfeits any note, debenture, bond, or other obligation, coupon, or paper in imitation of or purporting to be a note, debenture, bond, or other obligation, coupon, or paper issued by the Farm Credit Administration or by any corporation referred to in subsection (a) of this section; or (2) passes, utters, or publishes, or attempts to pass, utter, or publish, any false, forged, or counterfeited note, debenture, bond, or other obligation, coupon, or paper, purporting to have been issued by the Farm Credit Administration or by any such corporation, knowing the same to be false, forged, or counterfeited; or (3) falsely alters any note, debenture, bond, or other obligation, coupon, or paper issued or purporting to have been issued by the Farm Credit Administration or by any such corporation; or (4) passes, utters, or publishes, or attempts to pass, utter, or publish, any of the same as true, knowing it to be falsely altered or spurious, shall be punished by a fine of not more than $10,000, or by imprisonment for not more than five years, or both.

(c) Whoever, being an employee, officer, or agent of the Farm Credit Administration or connected in any capacity with any corporation referred to in subsection (a) of this section, (1) embezzles, abstracts, purloins, or willfully misapplies any moneys, funds, securities, or other things of value, whether belonging to the Farm Credit Administration or such corporation or pledged or otherwise intrusted to the same; or (2) with intent to defraud the United States, or any such corporation, or any other body politic or corporate, or any individual, or to deceive any officer, auditor, or examiner of the Farm Credit Administration or of any such corporation, makes any false entry in any book, report, or statement of or to the Farm Credit Administration or any such corporation, or draws any order, or issues, puts forth, or assigns any note, debenture, bond, or other obligation, or draft, mortgage, judgment, or decree thereof; or (3) with intent to defraud the United States or any corporation referred to in subsection (a) of this section, participates or shares in or receives directly or indirectly any money, profit, property, or benefits through any transaction, loan, commission, contract, or any other act of any such corporation, shall be punished by a fine of not more than $10,000, or by imprisonment for not more than five years, or both.

(d) Whoever knowingly, with intent to defraud the United States or any corporation referred to in subsection (a) of this section, shall conal, remove, dispose of, or convert, to his own use or to that of another, any property mortgaged or pledged to, or held by, the Farm Credit Administration, or any such corporation, as security for any obligation, shall be punished by a fine of not more than $5,000, or by imprisonment for not more than two years, or both.

(e) The provisions of sections 112, 113, 114, 115, 116, and 117 of the Criminal Code of the United States (U.S.C., title 18, secs. 202 to 207, inclusive), in so far as applicable, are extended to apply to contracts or agreements made by the Farm Credit Administration, its divisions, officers, and employees, and by the corporations referred to in subsection (a) of this section, which, for the purposes hereof, shall be held to include advances, loans, discounts, and purchase and repurchase agreements; extensions and renewals thereof; and acceptances, releases, and substitutions of security therefor.

(f) Whoever conspires with another to accomplish any of the acts made unlawful by the preceding provisions of this section shall, on conviction thereof, be subject to the same fine or imprisonment, or both, as is applicable in the case of conviction for doing such unlawful act.

LIQUIDATION

SEC. 65. Upon default of any obligation of any Production Credit Corporation, Production Credit Association, or regional Bank for Cooperatives, such bank, association, or corporation may be declared insolvent and placed in the hands of a receiver by the governor and proceedings shall thereupon be had in accordance with the provisions of law relating to the insolvency of national farm-loan associations. Any such bank, association, or corporation may, with the consent of the governor, liquidate voluntarily, but only in accordance with such rules and regulations as the governor may prescribe.

SEC. 66. No director, officer, or employee of the Central Bank for Cooperatives, or of any Production Credit Corporation, Production Credit Association, or Bank for Cooperatives 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 titles I to VI, inclusive, of this Act shall be paid compensation at a rate in excess of $10,000 per annum.

TITLE VII-AMENDMENTS TO FEDERAL FAI
LOAN ACT

SECTION 70. Effective January 1, 1934, the fourteenth paragraph of section 4 of the Federal Farm Loan Act, as amended (U.S.C., title 12, sec. 683), is amended by adding after the first sentence the following: "Not more than one director of a Federal land bank may serve the bank or the Farm Credit Administration as an officer or employee. Except with the approval of the Farm Loan Commissioner, no director (other than the director who may be an officer or employee) shall receive compensation or allowances for any services rendered any Federal land bank in his capacity as director for more than thirty days in any one calendar year exclusive of the period for which compensation is paid for attendance at directors' meetings.' SEC. 70a. (a) Effective one year after the enactment of this Act, section 4 of the Federal Farm Loan Act, as amended, is amended as follows:

(1) The ninth paragraph of such section (U.S.C., title 12, sec. 678) is amended to read as follows:

"The board of directors of every Federal land bank shall be selected as hereinafter specified and shall consist of seven members. Three of said directors shall be known as local directors of whom

one shall be chosen by and be representative of national farm-loan associations and borrowers through agencies, one shall be chosen by and be representative of Production Credit Associations organized under the Farm Credit Act of 1933, and one shall be chosen by and be representative of borrowers from regional Banks for Cooperatives organized under the Farm Credit Act of 1933. Three of the seven directors shall be known as district directors and shall be appointed by the Governor of the Farm Credit Administration of whom two shall represent the public interest and one shall represent national farm-loan associations and borrowers through agencies and such director shall be a borrower from a Federal land bank. The terms of office of local and district directors shall be three years."

(2) The tenth paragraph of such section (U.S.C., title 12, sec. 679) is amended to read as follows:

"At least two months before an election of a local director the Land Bank Commissioner shall cause notice in writing to be sent to those entitled to nominate candidates for such local director. In the case of an election of a director to represent national farm-loan associations and borrowers through agencies, such notice shall be sent to all national farm-loan associations and borrowers through agencies in the district; in the case of an election to represent Production Credit Associations, such notice shall be sent to all Production Credit Associations in the district; and in the case of a director to represent borrowers from Banks for Cooperatives, such notice shall be sent to all cooperatives which are borrowers at the time of sending notice. Within ten days of receipt of such notice those entitled to nominate the director shall forward nominations of residents of the district to the Land Bank Commissioner. The Land Bank Commissioner shall, from such nominations, then prepare a list of candidates for such local director consisting of the ten nominees receiving the highest number of votes."

(3) The eleventh paragraph of such section (U.S.C., title 12, sec. 680) is amended to read as follows:

"At least one month before the election of a local director the Land Bank Commissioner shall mail to each person or organization entitled to elect the local director the list of the ten candidates nominated in accordance with the tenth paragraph of this section. In the case of an election of a director to represent national farm-loan associations and borrowers through agencies, the directors of each farm-loan association shall cast the vote of such association for one of the candidates on the list. In voting under this section each such association shall be entitled to cast a number of votes equal to the number of stockholders of such association and each borrower through agencies shall be entitled to cast one vote. In voting under this section each Production Credit Association shall be entitled to cast a number of votes equal to the number of the class B stockholders of such associations. In voting under this section each cooperative which is a holder of stock in a Bank for Cooperatives (except the Governor of the Farm Credit Administration) shall be entitled to cast one vote. The votes shall be forwarded to the Land Bank Commissioner and no vote shall be counted unless forwarded to him within ten days after the list of candidates is received. In case of a tie the Land Bank Commissioner shall determine the choice.

The nominations from which the list of candidates is prepared, and the votes of the respective voters, as counted, shall be tabulated and preserved and shall be subject to examination by any candidate for at least one year after the results of the election is announced."

(4) The sixth and seventh sentences of the twelfth paragraph of such section (U.S.C., title 12, sec. 681) are amended to read as follows: "The Governor of the Farm Credit Administration shall select a director at large for the district who shall hold his office during a term of three years. Such seventh director may be removed by the Governor of the Farm Credit Administration at any time.' (b) Subsection (a) shall apply only to the appointment or election of the successors of directors of land banks whose regular terms expire after the effective date of such subsection. The successors of the first local director whose regular term so expires shall be elected by and be representative of Production Credit Associations and the successors of the second local director whose regular term so expires shall be elected by and be representative of borrowers from Banks for Cooperatives. The successors of the third local director whose regular term so expires shall be elected by and be representative of national farm-loan associations and borrowers through agencies.

SEC. 71. Paragraph "Sixth" of section 14 of the Federal Farm Loan Act, as amended, is amended to read as follows:

"Sixth. To accept as additional security for any loan to any borrower under this Act, or any installment on any such loan, any personal property which is exempt from execution upon judgment under the laws of the State in which the land with respect to which the mortgage is given is situated."

SEC. 72. Notwithstanding the provisions of the fourth paragraph of section 9 of the Federal Farm Loan Act, as amended (U.S.C., title 12, sec. 744), the shareholders of national farm-loan associations shall not be held individually responsible for any contract, debt, or engagement of such association entered into after the date of the enactment of this Act, but this section shall not be construed to relieve any other liability with respect to stock held by such shareholders.

SEC. 73. Paragraph "Second" of section 12 of the Federal Farm Loan Act, as amended (U.S.C., title 12, sec. 771), is amended by inserting after "exceeding " where it appears the second time a comma and the following: "except with the approval of the Governor of the Farm Credit Administration,".

SEC. 74. The first sentence of paragraph " Sixth " of section 12 of the Federal Farm Loan Act, as amended (U.S.C., title 12, sec. 771), is amended to read as follows:

"No such loan shall be made to any person who is not at the time, or shortly to become, engaged in farming operations or to any other person unless the principal part of his income is derived from farming operations."

SEC. 75. (a) Paragraph "Fourth" of section 14 of the Federal Farm Loan Act, as amended (U.S.C., title 12, sec. 791), is amended by inserting after "bonds" the following: "(including consolidated bonds issued on its behalf) ".

(b) Section 21 of the Federal Farm Loan Act, as amended, is amended by striking out of the fourth and tenth paragraphs thereof

(U.S.C., title 12, secs. 874 and 880) the word "indorsed" wherever the same appears in said paragraphs.

SEC. 76. (a) Section 201 (b) of the Federal Farm Loan Act, as amended (U.S.C., title 12, sec. 1022), is amended to read as follows: "(b) Such institutions shall be established in the same cities as the twelve Federal Land Banks. The directors of the several Federal Land Banks shall be ex officio directors of the several Federal Intermediate Credit Banks hereby provided for and shall have power, subject to the approval of the Governor of the Farm Credit Administration, to employ and fix the compensation of such officers and employees of such Federal Intermediate Credit Banks as may be necessary to carry on the business authorized by this title."

(b) Paragraph (1) of subsection (a) of section 202 of the Federal Farm Loan Act, as amended (U.S.C., title 12, sec. 1031), is amended to read as follows:

"(1) To discount for, or purchase from, any national bank, and/or any State bank, trust company, agricultural credit corporation, incorporated livestock loan company, savings institution, cooperative bank, credit union, cooperative association of agricultural producers, organized under the laws of any State or of the Government of the United States, and/or any other Federal Intermediate Credit Bank, with its endorsement, any note, draft, bill of exchange, debenture, or other such obligation the proceeds of which have been advanced or used in the first instance for any agricultural purpose or for the raising, breeding, fattening, or marketing of livestock; and to make loans or advances direct to any such organization, secured by such obligations; and to discount for, or purchase from, any Production Credit Association organized under the Farm Credit Act of 1933 or any production credit association in which a Production Credit Corporation organized under such Act holds stock, with its endorsement, any note, draft, bill of exchange, debenture, or other such obligation presented by such association, and to make loans and advances direct to any such association secured by such collateral as may be approved by the Governor of the Farm Credit Administration; "

(c) Paragraph (3) of subsection (a) of section 202 of the Federal Farm Loan Act, as amended (U.S.C., title 12, sec. 1031), is amended to read as follows:

66

(3) To make loans or advances direct to any cooperative association organized under the laws of any State and composed of persons engaged in producing, or producing and marketing, staple agricultural products, or livestock, if the notes or other such obligations representing such loans are secured by warehouse receipts, and/or shipping documents covering such products, and/or mortgages on livestock, and/or such other collateral as may be approved by the Governor of the Farm Credit Administration: Provided, That no such loan or advance, when secured only by warehouse receipts and/or shipping documents, and/or mortgages on livestock, shall exceed 75 per centum of the market value of the products covered by said warehouse receipts and/or shipping documents, or of the livestock covered by said mortgages; and to accept drafts or bills of exchange issued or drawn by any such association when secured