established in each 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 5 of the Farm Credit Act of 1937, as amended, shall be ex officio the directors of the respective banks for cooperatives. Such directors shall have power, subject to the approval of the Governor, to employ and fix the compensatoin of such officers and employees of such banks as may be necessary to carry out the powers and duties conferred upon such banks under this Act."

(b) Section 3 of the Farm Credit Act of 1933 is amended by striking from the first sentence the words "the production credit corporations and" and by striking from the second sentence the words "corporations and".

(c) Section 4 of the Farm Credit Act of 1933 is hereby repealed.

(d) Section 5 of the Farm Credit Act of 1933, as amended, is amended (1) by changing "$120,000,000" in subsection (a) thereof to "$60,000,000"; (2) by striking from subsection (b) thereof the words "the production credit corporations and"; (3) by changing "$40,000,000" in subsection (e) thereof to "$100,000,000"; and (4) by striking from subsection (e) thereof the words "and/or paid-in surplus". (e) Section 6 of the Farm Credit Act of 1933, as amended, is amended to read as follows:

"INVESTMENT BY

GOVERNOR IN STOCK OF PRODUCTION CREDIT ASSOCIATIONS

"SEC. 6. The Governor may purchase class A stock of any production credit association in such amounts as he determines are required to meet the credit needs of farmers in the area served by such association. Payments for such stock purchased by the Governor shall be made out of the revolving fund authorized by section 5 (a) of this Act and such stock shall be held by him on behalf of the United States. The Governor may at any time require any production credit association to retire and cancel any class A stock held by him in such association if, in his judgment, the association has resources available therefor, and the proceeds of such stock retirements shall be paid into such revolving fund."

(f) Section 20 of the Farm Credit Act of 1933 is amended by changing the fourth sentence to read as follows: "Such articles shall be signed by the individuals uniting to form the association and a copy thereof shall be furnished to the Governor."

(g) Section 21 of the Farm Credit Act of 1933, as amended, is amended (1) by striking from the first sentence the words "production credit corporations" and substituting in lieu thereof the words "the Governor'; and (2) by deleting the last sentence thereof.

(h) Section 22 of the Farm Credit Act of 1933, as amended, is amended by striking out the words "production credit corporation", wherever they appear therein, and substituting in lieu thereof "Federal intermediate credit bank."

(i) Section 23 of the Farm Credit Act of 1933, as amended, is amended (1) by changing the first sentence to read as follows: "Each production credit association shall, under such rules and regulations as may be prescribed by the farm credit board of the district with the approval of the Farm Credit Administration, invest its funds and make loans to farmers for general agricultural purposes and other requirements of the borrowers"; (2) by deleting the second sentence; (3) by striking from the third sentence the word "corporation" and inserting in lieu thereof the words Federal immediate eredit bank" "Farm Credit Administration"; and (4) by changing the period at the end of next to the last sentence to a colon and adding the following: "Provided, That an association may, under rules and regulations issued by the Farm Credit Administration, make loans to any class B stockholder secured by warehouse receipts covering agricultural commodities stored in bonded warehouses without the purchase of additional class B stock." (j) Section 34 of the Farm Credit Act of 1933, as amended, is hereby amended by adding before the semicolon at the end of "(b)" the words "or to Federal land banks or Federal intermediate credit banks."

(k) Section 41 of the Farm Credit Act of 1933, as amended, is hereby amended by adding before the semicolon at the end of "(b)" the words "or to Federal land banks or Federal intermediate credit banks."

(1) Section 60 of the Farm Credit Act of 1933, as amended, is amended (1) by striking from the first sentence the words "the production credit corporations," (2) by striking from the second sentence the words "association, or corporation" and substituting in lieu thereof the words "or association"; and (3) by striking from the third sentence the words "production credit corporation or", "or corporation", and "corporation or", wherever they appear therein.

(m) Section 61 of the Farm Credit Act of 1933 is amended (1) by striking from the first sentence the words "production credit corporation,"; and (2) by striking from the second and third sentences the words "association. or corporation' wherever they appear therein, and substituting in lieu thereof the words "or association".

(n) Section 62 of the Farm Credit Act of 1933, as amended, is amended by striking out the words "production credit corporations,".

(o) Section 63 of the Farm Credit Act of 1933, as amended, is amended (1) by striking from the first sentence the words "the production credit corporations,"; (2) by striking from the first and second sentences the words "associations, or corporations" and "associations, and corporations," and substituting in lieu thereof the words "or associations" and "and associations,", respectively; and (3) by changing the last sentence to read as follows: "The exemption provided herein shall not apply with respect to any production credit association or its property or income after the class A stock held in it by the Governor has been retired, or with respect to any bank for cooperatives or its property or income after the stock held in it by the United States has been retired."

(p) Section 65 of the Farm Credit Act of 1933, as amended, is amended (1) by striking out the words "production credit corporation,"; and (2) by striking out the words "association or corporation", wherever they appear therein, and substituting in lieu thereof the words "or association".

(q) Section 86a of the Farm Credit Act of 1933 is hereby repealed.

SEC. 106. (a) Section 5 of the Farm Credit Act of 1937, as amended, is amended (1) by striking from subsection (d) (2) (B) the words "production credit corporation of the district" and substituting in lieu thereof the words "Governor of the Farm Credit Administration"; and (2) by striking from subsection (h) the words "production credit corporation,".

(b) Section 6 of the Farm Credit Act of 1937 is amended (1) by striking from the first sentence of subsection (a) the words "production credit corporation,"; (2) by striking from the third sentence of subsection (a) the word "three"; (3) by striking from the first sentence of subsection (b) the words "the bank for cooperatives, and the production credit corporation" and substituting in lieu thereof the words "and the bank for cooperatives"; and (4) by striking from the last sentence of subsection (b) the words "production credit corporation,".

SEC. 107. (a) Section 8 of the Farm Credit Act of 1853 is amended by striking out the words "production credit corporation", wherever they appear therein, and substituting in lieu thereof the words "Federal intermediate eredit bank." "District Farm Credit Administration".

(b) Subsection (a) of section 16 of the Farm Credit Act of 1953 is amended to read as follows:

"(a) Any other provisions of law to the contrary notwithstanding, after the effective date of this Act any production credit association may, with the approval of the Farm Credit Administration, issue nonvoting preferred stock, to be known as class C stock, which may be purchased and held by the Governor of the Farm Credit Administration and by investors: Provided, That the issuance of such stock shall be authorized by vote of not less than two-thirds of the outstandiug shares of class A stock of the association (other than shares held by the Governor of the Farm Credit Administration) by the holders thereof in person or by proxy and by vote of not less than two-thirds of the outstanding shares of class B stock of the association by the holders thereof in person or by proxy; and for this purpose holders of class A stock (other than the Governor of the Farm Credit Administration) and holders of class B stock shall be entitled to one vote for each share of stock held by them. Payments for such stock purchased by the Governor shall be made out of the revolving fund created by section 5 (a) of the Farm Credit Act of 1933, as amended, and the proceeds from the retirement of any such stock shall be paid into such revolving fund."

SEC. 108. Section 601 of the Department of Agriculture Organic Act of 1944, as amended, is hereby amended (1) by striking from subsection (a) the words "production credit corporations,", wherever they appear therein, and the word "corporations,"; (2) by striking from subsection (b) the words "the Federal intermediate credit banks, and the production credit corporations" and substituting in lieu thereof the words "and the Federal intermediate credit banks"; and (3) by striking from subsections (b) and (c) the words "and corporation", "and corporations", and "corporation,”, wherever they appear therein.

SEC. 109. Sections 658 and 1014 of title 18, United States Code, are hereby amended by striking from each such section the words "or in which a production credit corporation holds stock".

TITLE II-MISCELLANEOUS PROVISIONS

Sec. 201. (a) The Government Corporation Control Act, as amended, is amended (1) by striking from section 101 the words "Federal Intermediate Credit Banks; Production Credit Corporations;"; (2) by inserting in section 201 immediately following "(3)" the words "Federal Intermediate Credit Banks, (4)"; (3) by changing "(4)" in section 201 to “(5)"; and (4) by striking from sections 302 and 303 the words "production credit corporations,".

(b) After the effective date of this Act, the Federal intermediate credit banks may utilize their funds for administrative expenses without regard to the limitations contained in any other Act of Congress governing the expenditure of appropriated funds.

(c) Paragraph Seventh of section 5136 of the Revised Statutes as amended, is amended (1) by inserting in next to the last sentence immediately before the words "Federal Home Loan Banks", the words "thirteen banks for cooperatives or any of them or the"; and (2) by changing the last sentence to read as follows: "The limitations and restrictions herein contained as to dealing in and underwriting investment securities shall not apply to obligations issued by the International Bank for Reconstruction and Development which are at the time eligible for purchase by a national bank for its own account: Provided, That no association shall hold obligations issued by said bank as a result of underwriting, dealing, or purchasing for its own account (and for this purpose obligations as to which it is under commitment shall be deemed to be held by it) in a total amount exceeding at any one time 10 per centum of its capital stock actually paid in and unimpaired and 10 per centum of its unimpaired surplus fund."

SEC. 202. (a) This Act shall become effective on January 1 next following its

enactment.

(b) For purposes of applying the amendment in section 103 of this Act, that part of the fiscal year 1957 preceding the effective date of this Act shall be deemed to be a separate fiscal year.

SEC. 203. (a) If any provision of this Act, or the application thereof to any person or circumstance, is held invalid, the remainder of the Act, and the application of such provisions to other persons or circumstances, shall not be affected thereby.

(b) The right to alter, amend, or repeal this Act is hereby expressly reserved. Amend the title so as to read: "To liquidate production credit corporations; to provide for retirement of Government capital in Federal intermediate credit banks; to provide for supervision of production credit associations; and for other purposes.

Senator HOLLAND. Next is Mr. James Crouch.

STATEMENT OF JAMES CROUCH, SECRETARY, 10TH FARM CREDIT DISTRICT PRODUCTION CREDIT ASSOCIATIONS COMMITTEE, BURLESON, TEX.

Mr. CROUCH. Mr. Chairman and gentlemen of the committee, I am James Crouch, of Burleson, Tex. I have been a member of the Stephenville Production Credit Association since 1945, on the board of directors of this association since 1949, now vice president of this board, and a member and secretary of the 10th Farm Credit District PCA Committee.

I operate a dairy and general farm near Burleson, Tex., and my father was one of the early users of production credit, being one of those whom the system saved during the depression.

The 10th district PCA committee has met many times during the past year to represent the associations in our disrtict, and in more recent months to consider proposed farm-credit legislation.

At a meeting on March 3 of this year, the committee as a whole selected Mr. D. T. Northcutt, chairman, Mr. J. B. Chambers, and myself, to represent the PCA's of the 10th district at this hearing. Mr. Northcutt and Mr. Chambers were not able to attend at this time.

It is a pleasure to appear before you and express the desires of the 36 production credit associations in the 10th Farm Credit District concerning S. 3564 and identical bills, which would combine the production credit corporations and Federal intermediate credit banks into 1 organization, and to provide a means by which this institution could become wholly farmer owned.

The associations of the 10th district have had a desire for several years to own these two organizations and have not changed our views in this matter.

Our district was divided in opinions regarding section 201 of the bill, which became the Farm Credit Act of 1955, to the extent that further unity within the district appeared doubtful.

We are now convinced that deletion of section 201 of that bill was justified to the extent that we have been able to iron out most of our differences and become more unified in our line of thinking.

In August of 1955, the Federal Farm Credit Board held a hearing in Houston, Tex., which was attended by representatives of all 36 associations and most OFI's of the district.

The purpose of this hearing was to give every association and OFI's an opportunity to express their views, and these views to be used by the Federal Board, along with the opinions of all other districts in the development of legislation more nearly representing the desires of the farmers using short-term credit.

In November of 1955 the Federal Board held a similar meeting in Houston, at which time a proposed bill was presented that resulted from the earlier hearings. We realize that this new bill could not be exactly as each individual wished and that it would of necessity represent majority thinking.

After detailed explanation of the proposed bill and lengthy discussions, we realized that the Federal Board had done a masterful piece of work that we concluded was fair to everyone concerned.

At the conclusion of this hearing every PCA in this district went on record supporting the proposed bill and desired that the 10th district be represented as 100 percent in favor of it. Minor changes in the bill since that time have made no difference in this position as expressed at our recent meeting of the district committee.

The OFI's of the 10th district have consistently opposed the wishes of the PCA's on legislative matters pertaining to the FICB's and PCC's. Recommendations made by the OFI's were of such nature that we could conclude only that they actually did not want any change made in the present setup, and wanted to eliminate all supervision that has been vital to past development of the PCA system.

Last year they opposed that part of section 201 of the Farm Credit Act of 1955 that pertained only to PCA's. Now they are opposing the purchase of the FICB's by the users of that institution.

We believe that the proposed Farm Credit Act of 1956 deals more than justly with the OFI's and others discounting with the FICB's because they are not required to make any form of initial payment yet have full access to us of the bank on the same terms as PCA's, and will participate in any dividends the same as if they were stockholders. We fail to find any part of this bill that could be construed as detrimental to any user of the bank.

76921-5612

The 10th Farm Credit District PCA committee unanimously requests and urges prompt passage of S. 3564 or an identical bill, in order to relieve the unsettled conditions in our district and in others. Senator HOLLAND. I have sketched through your statement. I know that you are strongly supporting.

Mr. CROUCH. Just exactly.

Then I would like to make a statement in regard to S. 3699.
Senator HOLLAND. All right, sir.

Mr. CROUCH. This bill in regard to S. 3699.

Senator HOLLAND. What is that bill?

Mr. CROUCH. That has been introduced. Our committee of the 10th district has discussed this matter in the past.

Senator HOLLAND. You mean the permitting of a manager for one of the Farm Credit Administration units to serve as a member of the board of directors of any other unit?

Mr. CROUCH. Yes, sir. We would be in very bitter opposition to that.

Senator HOLLAND. In other words, you think that managers should not be allowed to serve?

Mr. CROUCH. Should not be permitted to serve.

Senator HOLLAND. Thank you, sir.

Mr. CROUCH. And we would be in bitter opposition to this bill as submitted by the Budget Bureau, too.

Senator HOLLAND. On the principal matter?

Mr. CROUCH. Yes, sir.

Senator HOLLAND. In other words, you are favoring S. 3564?
Mr. CROUCH. Yes, sir.

Senator HOLLAND. And you are opposing S. 3699?

Mr. CROUCH. Yes, sir.

Senator HOLLAND. And you are acting for the whole group of associations mentioned in your statement?

Mr. CROUCH. Yes, sir.

Senator HOLLAND. Thank you very much.

Gentlemen, I am sorry; there is a quorum call. I will have to ask to be excused until I can get back here. It may be quite a little while. I hope you will bear with me.

If you can arrange to submit statements which do not mention what has already been covered, that will be satisfactory and that will expedite the hearing.

(Recess.)

Senator HOLLAND. Mr. Roy Davis.

STATEMENT OF ROY B. DAVIS, MANAGER, PLAINS COOPERATIVE OIL MILLS, LUBBOCK, TEX.

Mr. DAVIS. Mr. Chairman, I do not have a prepared statement to submit and I will make mine pretty brief because I know everything has been covered.

I am Roy B. Davis, manager of the Plains Cooperative Oil Mills, of Lubbock, Tex.

I own a small farm and am a director of the 10th district at Houston. I want to say in the beginning that I heartily endorse and our board has endorsed this Federal Farm Board bill highly, S. 3564.