8

The producer further agrees:

III. FURTHER AGREEMENT ̋BY”PRODUCER

18. The Secretary or his authorized agent shall have the privilege of requiring either (1) that the producer shall limit in the year 1934 the acreage of this farm for tobacco to fifty percent (50%) of the base tobacco acreage chosen for this farm in paragraph 3, or (2) that any increase beyond such fifty percent (50%) shall not exceed an amount to be hereafter designated by the Secretary or his authorized agent. Such privilege may be exercised by notice thereof in writing mailed prior to April 1, 1934, to the producer at the above address. In the event that the Secretary or his authorized agent shall exercise said privilege, that portion of the base tobacco acreage which is thereby to be taken out or kept out of tobacco production (referred to herein as "the contracted acreage of 1934") shall, during the year 1934, be subject to all the terms and conditions of paragraphs 4, 5, 8, 9, 10, 11, 12, 13, 14, and 15, and to the further conditions that the quantity of commercial fertilizer used per acre for tobacco on this farm in 1934 shall not exceed the amount used per acre in 1932 and no attempt shall be made in 1934 to increase materially the yield of tobacco per acre on this farm by adopting unusual cultural practices thereon.

19. The Secretary or his authorized agent shall have the privilege of requiring either (1) that the producer shall limit in the year 1935 the acreage of this farm for tobacco to fifty percent (50%) of the base tobacco acreage chosen for this farm in paragraph 3, or (2) that any increase beyond such fifty percent (50%) shall not exceed an amount to be hereafter designated by the Secretary or his authorized agent. Such privilege may be exercised by notice thereof in writing mailed prior to April 1, 1935, to the producer at the above address. In the event that the Secretary or his authorized agent shall exercise said privilege, that portion of the base tobacco acreage which is thereby to be taken out or kept out of tobacco production (referred to herein as "the contracted acreage of 1935") shall, during the year 1935, be subject to all the terms and conditions of paragraphs 4, 5, 8, 9, 10, 11, 12, 13, 14, and 15, and to the further conditions that the quantity of commercial fertilizer used per acre for tobacco on this farm in 1935 shall not exceed the amount used per acre in 1932 and no attempt shall be made in 1935 to increase materially the yield of tobacco per acre on this farm by adopting unusual cultural practices thereon.

20. In the event that the Secretary or his authorized agent exercises the privilege set forth in paragraph 18 and/or the privilege set forth in paragraph 19, the Secretary or his authorized agent shall have the further privilego or privileges, as the case may be, of requiring that the producer shall, during the year or years with respect to which such privilege or privileges may be exercised, grow no crops other than soil-maintenance crops on the contracted acreage of such year or years or on any part thereof which the Secretary or his authorized agent may designate..

The Secretary further agrees:

IV. FURTHER AGREEMENT BY SECRETARY

21. In respect of each of the privileges set forth in paragraphs 18 and 19, the producer shall receive two payments in the event that the Secretary exercises said privilege and in the event that the producer fully performs the terms and conditions hereof applicable with respect to said privilege. The amount of these payments shall be determined as follows: The first payment, which shall be made on or before October 1 of the year in which such privilege is exercised, shall be for an amount to be determined by the Secretary which amount shall be not less than twelve dollars ($12.00) for each acre of the contracted acreage of the year in which the first payment is made. The second payment shall be for an amount to be determined by the Secretary, which amount shall be not less, for each acre of said contracted acreage than thirty percent (30%) of the average market value per acre of the tobacco harvested on this farm during said year, and in no event shall the second payment be for an amount of less than eight dollars ($8.00) for each acre of said contracted acreage. Said second payment shall be made within sixty (60) days after presentation to the Secretary or his authorized agent of proof of said average market value and proof of the performance by the producer of all the terms and conditions hereof to be performed by the producer in the year in which such privilege is exercised, provided such proof of performance and average market value shall be so presented prior to May 1 of the following year, and provided further that the method of determining average market value shall be subject to the terms and conditions of paragraph 17, with appropriate changes of dates. In each year in which the Secretary, pursuant to paragraph 20, requires that the producer shall grow no crops other than soil-maintenance crops on a larger part than one-half of the contracted acreage of such year, then the first payment to the producer for such year shall be for an amount not less than fifteen dollars ($15.00) per acre of the contracted acreage of such year, and the second payment shall be for an amount not less, for each acre of the contracted acreage of such year, than forty percent (40%) of the average market value per acre of the tobacco harvested on this farm in such year and in no event shall be less than nine dollars ($9.00) for each acre of the contracted acreage of such year.

T3 9-3318

V. AUTHORIZATION BY PRODUCER

The producer authorizes the Secretary or the latter's authorized agent:

22. To make payment of any money due to the producer under the terms of this contract to as trustee for the producer and the following-named persons,

by mailing the same to said trustee at.

(Post-office address)

and the Secretary shall not be

obliged to see to the application of the proceeds of any such payments so made to said trustee:

The undersigned, in consideration of and in order to induce the execution of this contract by the Secretary of Agriculture, hereby grant (s) to the producer permission to enter into and execute this contract and agree (s) that the Secretary or his authorized agent may deal with the producer as if he were the sole party having interest in said tobacco land or crop.

In consideration of and in reliance upon the foregoing representations and agreements of the producer, and in consideration of and in reliance upon the execution of the above Statement of Consent by the other interested party

APPENDIX J

EXHIBIT 28.-THE ACT AS AMENDED

AGRICULTURAL ADJUSTMENT ACT 1

DECLARATION OF EMERGENCY

That the present acute economic emergency being in part the consequence of a severe and increasing disparity between the prices of agricultural and other commodities, which disparity has largely destroyed the purchasing power of farmers for industrial products, has broken down the orderly exchange of commodities, and has seriously impaired the agricultural assets supporting the national credit structure, it is hereby declared that these conditions in the basic industry of agriculture have affected transactions in agricultural commodities with a national public interest, have burdened and obstructed the normal currents of commerce in such commodities, and render imperative the immediate enactment of title I of this act.

DECLARATION OF POLICY

SEC. 2. It is hereby declared to be the policy of Congress

(1) To establish and maintain such balance between the production and consumption of agricultural commodities, and such marketing conditions therefor, as will reestablish prices to farmers at a level that will give agricultural commodities a purchasing power with respect to articles that farmers buy, equivalent to the purchasing power of agricultural commodities in the base period. The base period in the case of all agricultural commodities except tobacco shall be the pre-war period, August 1909-July 1914. In the case of tobacco, the base period shall be the post-war period, August 1919-July 1929.

(2) To approach such equality of purchasing power by gradual correction of the present inequalities therein at as rapid a rate as is deemed feasible in view of the current consumptive demand in domestic and foreign markets.

(3) To protect the consumers' interest by readjusting farm production at such level as will not increase the percentage of the consumers' retail expenditures for agricultural commodities, or products derived therefrom, which is returned to the farmer, above the percentage which was returned to the farmer in the pre-war period, August 1909-July 1914.

PART 1-COTTON OPTION CONTRACTS

SEC. 3. The Federal Farm Board and all departments and other agencies of the Government, not including the Federal intermediate credit banks, are hereby directed

(a) To sell to the Secretary of Agriculture at such price as may be agreed upon, not in excess of the market price, all cotton now owned by them.

(b) To take such action and to make such settlements as are necessary in order to acquire full legal title to all cotton on which money has been loaned or advanced by any department or agency of the United States, including futures contracts for cotton or which is held as collateral for loans or advances and to make final settlement of such loans and advances as follows:

(1) In making such settlements with regard to cotton, including operations to which such cotton is related, such cotton shall be taken over by all such departments or agencies other than the Secretary of Agriculture at a price or sum equal to the amounts directly or indirectly loaned or advanced thereon and outstanding, including loans by the Government department or agency and any loans senior

1 The Agricultural Adjustment Act constitutes title I of the act approved May 12, 1933, entitled "An act to relieve the existing national economic emergency by increasing agricultural purchasing power, to raise revenue for extraordinary expenses incurred by reason of such emergency, to provide emergency relief with respect to agricultural indebtedness, to provide for the orderly liquidation of joint stock land banks, and for other purposes." 48 Stat. 31; as amended June 16, 1933, ch. 90, 48 Stat. 195, 210, sec. 221, and ch. 98, 48 Stat. 257, 273, sec. 86.

thereto, plus any sums required to adjust advances to growers to 90 percent of the value of their cotton at the date of its delivery in the first instance as collateral to the department or agency involved, such sums to be computed by subtracting the total amount already advanced to growers on account of pools of which such cotton was a part, from 90 percent of the value of the cotton to be taken over as of the time of such delivery as collateral, plus unpaid accrued carrying charges and operating costs on such cotton, less, however, any existing assets of the borrower derived from net income, earnings, or profits arising from such cotton, and from operations to which such cotton is related; all as determined by the department or agency making the settlement.

(2) The Secretary of Agriculture shall make settlements with respect to cotton held as collateral for loans or advances made by him on such terms as in his judgment may be deemed advisable, and to carry out the provisions of this section, is authorized to indemnify or furnish bonds to warehousemen for lost warehouse receipts and to pay the premiums on such bonds.

When full legal title to the cotton referred to in (b) has been acquired, it shall be sold to the Secretary of Agriculture for the purposes of this section, in the same manner as provided in (a).

(c) The Secretary of Agriculture is hereby authorized to purchase the cotton specified in paragraphs (a) and (b).

SEC. 4. The Secretary of Agriculture shall have authority to borrow money upon all cotton in his possession or control and deposit as collateral for such loans the warehouse receipts for such cotton.

SEC. 5. The Reconstruction Finance Corporation is hereby authorized and directed to advance money and to make loans to the Secretary of Agriculture to acquire such cotton and to pay the classing, carrying, and merchandising costs thereon, in such amounts and upon such terms as may be agreed upon by the Secretary and the Reconstruction Finance Corporation, with such warehouse receipts as collateral security: Provided, however, That in any instance where it is impossible or impracticable for the Secretary to deliver such warehouse receipts as collateral security for the advances and loans herein provided to be made, the Reconstruction Finance Corporation may accept in lieu of all or any part thereof such other security as it may consider acceptable for the purposes aforesaid, including an assignment or assignments of the equity and interest of the Secretary in warehouse receipts pledged to secure other indebtedness. The amount of notes, bonds, debentures, and other such obligations which the Reconstruction Finance Corporation is authorized and empowered to issue and to have outstanding at any one time under existing law is hereby increased by an amount sufficient to carry out the provisions of this section.

SEC. 6. (a) The Secretary of Agriculture is hereby authorized to enter into option contracts with the producers of cotton to sell to any such producer an amount of cotton to be agreed upon not in excess of the amount of reduction in production of cotton by such producer below the amount produced by him in the preceding crop year, in all cases where such producer agrees in writing to reduce the amount of cotton produced by him in 1933, below his production in the previous year, by not less than 30 per centum, without increase in commercial fertilization per acre.

(b) To any such producer so agreeing to reduce production the Secretary of Agriculture shall deliver a nontransferable-option contract agreeing to sell to said producer an amount, equivalent to the amount of his agreed reduction, of the cotton in the possession and control of the Secretary.

(c) The producer is to have the option to buy said cotton at the average price paid by the Secretary for the cotton procured under section 3, and is to have the right at any time up to January 1, 1934, to exercise his option, upon proof that he has complied with his contract and with all the rules and regulations of the Secretary of Agriculture with respect thereto, by taking said cotton upon payment by him of his option price and all actual carrying charges on such cotton; or the Secretary may sell such cotton for the account of such producer, paying him the excess of the market price at the date of sale over the average price above referred to after deducting all actual and necessary carrying charges: Provided, That in no event shall the producer be held responsible or liable for financial loss incurred in the holding of such cotton or on account of the carrying charges therein: Provided further, That such agreement to curtail cotton production shall contain a further provision that such cotton producer shall not use the land taken out of cotton production for the production for sale, directly or indirectly, of any other nationally produced agricultural commodity or product.

(d) If any cotton held by the Secretary of Agriculture is not disposed of under subsection (c), the Secretary is authorized to enter into similar option contracts with respect to such cotton, conditioned upon a like reduction of production in 1934, and permitting the producer in each case to exercise his option at any time up to January 1, 1935.

SEC. 7.2 The Secretary shall sell the cotton held by him at his discretion, but subject to the foregoing provisions: Provided, That he shall dispose of all cotton held by him by March 1, 1936: Provided further, That, notwithstanding the provisions of section 6, the Secretary shall have authority to enter into option contracts with producers of cotton to sell to the producers such cotton held by him, in such amounts and at such prices and upon such terms and conditions as the Secretary may deem advisable, in combination with rental or benefit payments provided for in part 2 of this title.

Notwithstanding any provisions of existing law, the Secretary of Agriculture may in the administration of the Agricultural Adjustment Act make public such information as he deems necessary in order to effectuate the purposes of such PART 2-COMMODITY BENEFITS

act.

GENERAL POWERS

SEC. 8. In order to effectuate the declared policy, the Secretary of Agriculture shall have power

(1) To provide for the reduction in the acreage or reduction in the production for market, or both, of any basic agricultural commodity, through agreements with producers or by other voluntary methods, and to provide for rental or benefit payments in connection therewith or upon that part of the production of any basic agricultural commodity required for domestic consumption, in such amounts as the Secretary deems fair and reasonable, to be paid out of any moneys available for such payments. Under regulations of the Secretary of Agriculture requiring adequate facilities for the storage of any nonperishable agricultural commodity on the farm, inspection and measurement of any such commodity so stored, and the locking and sealing thereof, and such other regulations as may be prescribed by the Secretary of Agriculture for the protection of such commodity and for the marketing thereof, a reasonable percentage of any benefit payment may be advanced on any such commodity so stored. In any such case, such deduction may be made from the amount of the benefit payment as the Secretary of Agriculture determines will reasonably compensate for the cost of inspection and sealing, but no deduction may be made for interest.

(2) To enter into marketing agreements with processors, associations of producers, and others engaged in the handling, in the current of interstate or foreign commerce of any agricultural commodity or product thereof, after due notice and opportunity for hearing to interested parties. The making of any such agreement shall not be held to be in violation of any of the antitrust laws of the United States, and any such agreement shall be deemed to be lawful: Provided, That no such agreement shall remain in force after the termination of this act. the purpose of carrying out any such agreement the parties thereto shall be eligible for loans from the Reconstruction Finance Corporation under section 5 of the Reconstruction Finance Corporation Act. Such loans shall not be in excess of such amounts as may be authorized by the agreements.

For

(3) To issue licenses permitting processors, associations of producers, and others to engage in the handling, in the current of interstate or foreign commerce, of any agricultural commodity or product thereof, or any competing commodity or product thereof. Such licenses shall be subject to such terms and conditions, not in conflict with existing acts of Congress or regulations pursuant thereto, as may be necessary to eliminate unfair practices or charges that prevent or tend to prevent the effectuation of the declared policy and the restoration of normal economic conditions in the marketing of such commodities or products and the financing thereof. The Secretary of Agriculture may suspend or revoke any such license, after due notice and opportunity for hearing, for violations of the terms or

2 By section 221 of the National Industrial Recovery Act, section 7 was amended by striking out all of its terms and substituting the terms as they appear above. As originally enacted section 7 read as follows: "The Secretary shall sell the cotton held by him at his discretion, but subject to the foregoing provisions: Provided, That he shall dispose of all cotton held by him by March 1, 1936: Provided further, That the Secretary shall have authority to enter into additional option contracts for so much of such cotton as is not necessary to comply with the provisions of section 6, in combination with benefit payments as provided for in part 2 of this title."

So in original.