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TITLE 15. -COMMERCE AND TRADE

§ 601. Reconstruction Finance Corporation Creation; capital stock; principal office and branches; short title. (a) There is created a body corporate with the name "Reconstruction Finance Corporation" (herein called the Corporation), with a capital stock of $100,000,000 subscribed by the United States of America. Its principal office shall be located in the District of Columbia, but there may be established agencies or branch offices in any city or cities of the United States under rules and regulations prescribed by the Board of Directors. This chapter may be cited as the "Reconstruction Finance Corporation Act".

(b) Annual report to Congress; contents; payment of dividends to Treasury. Within six months after the close of each fiscal year the Corporation shall make a report to the Congress of the United States which shall contain financial statements for the fiscal year, including a balance sheet, a statement of income and expense, and an analysis of accumulated net income. The accumulated net income shall be determined after provision for reasonable reserves for uncollectibility of loans and investments outstanding. Such statements shall be prepared from the financial records of the Corporation which shall be maintained in accordance with generally accepted accounting principles applicable to commercial corporate transactions. The report shall contain schedules showing, as of the close of the fiscal year, each direct loan to any one borrower of $100,000 or more, each loan to any one borrower of $100,000 or more in which the Corporation has a participation or an agreement to participate, and the investments in the securities and obligations of any one borrower which total $100,000 or more. Within six months after the end of each fiscal year, beginning with the fiscal year ended June 30, 1948, the Corporation shall pay over to the Secretary of the Treasury as miscellaneous receipts, a dividend on its capital stock owned by the United States of America, in the amount by which its accumulated net income exceeds $250,000,000.

(c) Retirement of capital stock. - Within sixty days after May 25, 1948, the Corporation shall retire all its outstanding capital stock in excess of $100,000,000 and shall pay to the Treasury as miscellaneous receipts the par value of the stock so retired. (Jan. 22, 1932, ch. 8, § 1, 47 Stat. 5; June 30, 1947, ch. 166, Title I, § 1, 61 Stat, 202; May 25, 1948, ch. 334, § 1, 62 Stat. 261.)

1948 Amendment. -Subsecs. (b) and (c) added by Act May 25, 1948, cited to

text.

1947 Amendment.-Act June 30, 1947, cited to text, inserted provision relating to amount and ownership of capital stock.

Effective date. --Section 210 of Act June 30, 1947, cited to text, provided: "This Act shall take effect as of midnight June 30, 1947."

Separability clause. - Section 13 of Act Jan. 22, 1932, as amended by section 1 of Act June 30, 1947, both cited to text, provided: "If any provision of this Act [this chapter] or the application of such provision to any person or circumstances shall be held invalid, the validity of the remainder of this Act [this chapter], and the applicability of such provision to other persons or circumstances, shall not be affected thereby."

U. S. Commercial Company; termination date. - Section 202 of Act June 30, 1947, cited to text, provided: "The succession of U. S. Commercial Company, a corporation created by the Reconstruction Finance Corporation pursuant to tion 5d (3) of the Reconstruction Finance Corporation Act, as amended, is

section

hereby extended through June 30, 1948."

Payment of administrative expenses until 1948 fiscal funds available. Section 209 of Act June 30, 1947, amended by section 8 of Act May 25, 1948, both cited to text, provided that: "During the period between June 30, 1948, and the date of enactment of legislation making funds available for administrative expenses for the fiscal year ending June 30, 1949, the Corporation is authorized to incur, and pay out of its general funds, administrative expenses in accordance with laws in effect on June 30, 1948, such obligations and expenditures to be charged against funds when made available for administrative expenses for the fiscal year 1949."

Transfer of functions. --Functions, powers and duties of Federal Loan Agency and Federal Loan Administrator relating to Reconstruction Finance Corporation and other agencies transferred to Department of Commerce by Ex.Ord.No.9071, set out in note under section 601 of Appendix to Title 50, War and National Defense.

All duties and responsibilities with respect to disposal of surplus war property were transferred from Department of Commerce to War Assets Corporation, now War Assets Administration by y Ex.Ord.No.9689, Jan. 31, 1946, as amended by Ex.Ord.No.9707, Mar. 25, 1946, set out as a note under section 1614a of Appendix to Title 50, War and National Defense.

1939 Reorg. Plan No. I, § 402, eff. July 1, 1939, 4 F.R. 2727, 53 Stat. 1429, set out in note under section 133t of Title 5, Executive Departments and Government Officers and Employees, provided that the administration of the Reconstruction Finance Corporation should be supervised by the Federal Loan Administrator and its functions coordinated with other agencies within the Federal Loan Agency.

Federal Loan Agency. - By Act Feb. 24, 1945, ch. 4, 59 Stat. 5, sections 18011804 of Title 12, the Federal Loan Agency was reconstituted an independent establishment of the Federal Government.

Cross References. - Financial control of Corporation, see chapter 14 of Title 31, Money and Finance.

Powers of Corporation as unaffected by mobilization of small business, see section 1111 of Appendix to Title 50, War and National Defense.

EXECUTIVE ORDER NO. 9643

Oct. 19, 1945, 10 F.R. 13039

TRANSFERRING OF CERTAIN PERSONNEL, RECORDS, PROPERTY, AND FUNDS OF THE
DEPARTMENT OF COMMERCE WITH RESPECT TO SURPLUS PROPERTY, TO THE RECON-
STRUCTION FINANCE CORPORATION
:

By virtue of the authority vested in me by the Constitution and Statutes, including Title I of the First War Powers Act, 1941 [sections 601-605 of Appendix to Title 50], and as President of the United States, and consonant with the designation of the Reconstruction Finance Corporation by the Surplus Property Administrator pursuant to the provisions of the Surplus Property Act of 1944 [sections 611-646 of Appendix to Title 50], as amended, as the disposal

agency for certain categories of surplus property for which the Department of Commerce has heretofore been the disposal agency, it is hereby ordered, ordered, effecti as of the opening of business November 5, 1945, that the Office of Surplus Property in the Department of Commerce is hereby terminated, and that all personnel, records, property, contracts, obligations, and funds of the Office, together with so much of the other personnel, records, property, contracts, obligations, and funds of the Department of Commerce as relates primarily to the surplus property disposal functions placed under the Reconstruction Finance Corporation by the aforesaid designation, are hereby transferred to the Reconstruction Finance Corporation for use in connection with such functions. Such measures and dispositions as may be determined by the Director of the Bureau of the Budget to be necessary to effectuate the transfers and termination provided for in this order }

shall be carried out in such manner as the Director may direct and by such agencies as he may designate.

§ 604. Loans and advances-Purpose; types of allowable loans.(a) To aid in financing agriculture, commerce, and industry, to encourage small business, to help in maintaining the economic stability of the country, and to assist in promoting maximum employment and production, the Corporation, within the limitations hereinafter provided, is authorized

(1) To purchase the obligations of and to make loans to any business enterprise organized or operating under the laws of any State or the United States: Provided, That the purchase of obligations (including equipment trust certificates) of, or the making of loans to, railroads engaged in interstate commerce or air carriers engaged in air transportation as defined in the Civil Aeronautics Act of 1938, as amended or receivers or trustees thereof, shall be with the approval of the Interstate Commerce Commission or the Civil Aeronautics Board, respectively: Provided further, That in the case of such railroads or air carriers which are not in receivership or trusteeship, the Commission or the Board, as the case may be, in connection with its approval of such purchases or loans, shall also certify that such railroad or air carrier, on the basis of present and prospective earnings, may be expected to meet its fixed charges without a reduction thereof through judicial reorganization except that such certificates shall not be required in the case of loans or purchases made for the acquisition of equipment or for maintenance.

(2) To make loans to any financial institution organized under the laws of any State or of the United States. If the Secretary of the Treasury certifies to the Corporation that any insurance company is in need of funds for capital purposes, the Corporation may subscribe for or make loans upon nonassessable preferred stock in such insurance company. In any case in which, under the laws of the State in which it is located, any such insurance company so certified is not permitted to issue nonassessable preferred stock, or if such laws permit such issue of preferred stock only by unanimous consent of stockholders, the Corporation is authorized to purchase the legally issued capital notes or debentures of such insurance company.

(3) In order to aid in financing projects authorized under Federal, State, or municipal law, to purchase the securities and obligations of, or make loans to, (A) States, municipalities, and political subdivisions of States, (B) public agencies and instrumentalities of one or more States, municipalities, and political subdivisions of States, and (C) public corporations, boards, and commissions: Provided, That no such purchase or loan shall be made for payment of ordinary governmental or nonproject operating expenses as distinguished from purchases and loans to aid in financing specific public projects.

(4) To make such loans as it may determine to be necessary or appropriate because of floods or other catastrophes.

(b) Restrictions and limitations. - The powers granted in section 4 (a) of this Act shall be subject to the following restrictions and limitations:

(1) No financial assistance shall be extended pursuant to paragraphs (1), (2), and (3) of subsection (a) of this section, unless the financial assistance applied for is not otherwise available on reasonable terms. All securities and obligations purchased and all loans made under paragraphs (1), (2), and (3) of subsection (a) of this section shall be of such sound value or so secured as reasonably to assure retirement or repayment and such loans may be made either directly or in cooperation with banks or other lending institutions through agreements to participate or by the purchase of participations, or otherwise.

(2) No loan, including renewals or extensions thereof, may be made under subsections (a) (1), (2), and (4) of this section for a period or periods exceeding ten years and no securities or obligations maturing more than ten years from date of purchase by the Corporation may be purchased thereunder: Provided, That the foregoing restriction on maturities shall not apply to securities or obligations received by the Corporation as a claimant in bankruptcy or equitable reorganization or as a creditor in proceedings under section 20b of Title 49: Provided further, That any loan made or securities and obligations purchased prior to July 1, 1947, may in aid of orderly liquidation thereof or the interest of national security, be renewed or the maturity extended for such period not in excess of ten years and upon such terms as the Corporation may determine: Provided further, That any loan made under subsection (a) (1) of this section for the purpose of constructing industrial facilities may have a maturity of ten years plus such additional period as is estimated may be required to complete such construction. The Corporation may, in carrying out the provisions of subsection (a) (3) of this section, purchase securities and obligations, or make loans, including renewals or extensions thereof, with maturity dates not in excess of forty years, as the Corporation may determine.

(3) In agreements to participate in loans, wherein the Corporation's disbursements are deferred, such participations by the Corporation shall be limited to 70 per centum of the balance of the loan outstanding at the time of the disbursement, in those cases where the total amount borrowed is $100,000 or less, and shall be limited to 60 per centum of the balance outstanding at the time of disbursement, in those cases where the total amount borrowed is over $100,000.

(c) Limitation on amount. The total amount of investments, loans, purchases, and commitments made subsequent to June 30, 1947, pursuant to this section shall not exceed $1,500,000,000 outstanding at any one time: Provided, That the aggregate amount outstanding at any one time shall not exceed (1) under subsection (a) (4) $40,000,000, (2) for construction purposes under subsection (a) (3) $200,000,000, and (3) under the last two sentences of subsection (a) (2) $15,000,000.

(d) Fees or commissions. -No fee or commission shall be paid by any applicant for financial assistance under the provisions of this chapter in connection with any such application, and any agreement to pay or payment of any such fee or commission shall be unlawful.

(e) Loans affecting officers or employees. - No director, officer, attorney, agent, or employee of the Corporation in any manner, directly or indirectly, shall participate in the deliberation upon or the determination of any question affecting his personal interests, or the interests of any corporation, partnership, or association in which he is directly or indirectly interested.

(f) Termination date. The powers granted to the Corporation by this section shall terminate at the close of business on June 30, 1954, but the termination of such powers shall not be construed (1) to prohibit disbursement of funds on purchases of securities and obligations, on loans, or on commitments or agreements to make such purchases or loans, made under this chapter prior to the close of business on such date, or (2) to affect the validity or performance of any other agreement made or entered into pursuant to law.

(g) Definition of State.-As used in this chapter, the term "State" includes the District of Columbia, Alaska, Hawaii, Puerto Rico, and the Virgin Islands.

(h) Subscription for nonassessable stock of Federal National Mortgage Association; limitation. - The Corporation may subscribe for the nonassessable stock of the Federal National Mortgage Association: Provided, That the total face amount of stock so subscribed for and held by the Corporation shall not exceed at any one time $20,000,000. (Jan. 22, 1932, ch. 8, § 4, 47 Stat. 6; June 19, 1934, ch. 653, §6(b), 48 Stat. 1109; June 25, 1940, ch. 427, § 6(b), 54 Stat. 574; June 30, 1947, ch. 166, Title I, § 1, Title II, § 206(z), 61 Stat. 202, 209; May 25, 1948, ch. 334, § 4, 62 Stat. 263; June 29, 1948, ch. 723, 62 Stat. 1101; July 1, 1948, ch. 784, §§ 3, 4, 62 Stat. 1209.)

1948 Amendment.-Act May 25, 1948, cited to text, amended section generally to include encouragement to small businesses through loans, to make eligible air carriers engaged in air transportation whether interstate or not, to permit loans upon nonassessable preferred stock in financial institutions, to extend aid to States in financing public projects, to place a limitation upon maturities of loans including renewals thereof, to terminate the powers of the Corporation under this section on June 30, 1954, and to include the Virgin Islands within the definition of State.

Subsec. (c) amended by Act June 29, 1948, cited to text, which increased the amount available for disaster loans from $25,000,000 to $40,000,000.

Subsec. (c) amended by Act July 1, 1948, §3, cited to text, to increase the bond limitation from $1,500,000,000 to $2,000,000,000.

Subsec. (b) added by Act July 1, 1948, § 4, cited to text.

1947 Amendment.-Act June 30, 1947, Title I, §1, cited to text, amended section generally. Former provisions of this section which related to powers and period of succession of corporation, are now covered by section 603 of this title. Repeals.-Act June 30, 1947, Title II, § 206(z), cited to text, repealed Act Aug. 7, 1946, ch. 811, § 1, 60 Stat. 901, formerly cited to text.

Disbursement of funds on Corporation Commitments prior to July 1, 1947.Section 201 of Act June 30, 1947, cited to text, provided: "No provision of this Act [this chapter] shall be construed so as to prevent the Corporation from disbursing funds on purchases of securities and obligations, on loans made, or on commitments or agreements to make such purchases or loans, or on liabilities incurred, pursuant to law prior to the effective date of this Act [this chapter]." RFC Mortgage Company; transfer of assets and liabilities; suits. Section 203 of Act June 30, 1947, cited to text, provided: "All assets and liabilities of every kind and nature, together with all documents, books of account, and records, of The RFC Mortgage Company, a corporation organized under the laws of the State of Maryland, all the capital stock of which is owned and held by the Reconstruction Finance Corporation, shall be transferred to the Reconstruction Finance Corporation. With respect to the assets, liabilities, and records transferred, 'Reconstruction Finance Corporation' for all purposes is hereby substituted for 'The RFC Mortgage Company', and no suit, action, or other proceeding lawfully commenced by or against such corporation shall abate by reason of the enactment of this Act, but the court, on motion or supplemental petition filed at any time within twelve months after the date of such enactment, showing a necessity for the survival of such suit, action, or other proceeding to obtain a

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