SENATE 71ST CONGRESS 2d Session } { REPORT No. 916 RECEIVERSHIPS OF JOINT-STOCK LAND BANKS UNDER FEDERAL FARM LOAN ACT JUNE 9 (calendar day, JUNE 13), 1930.-Ordered to be printed Mr. NORBECK, from the Committee on Banking and Currency, submitted the following REPORT [To accompany S. 3444] The Committee on Banking and Currency, to whom was referred the bill (S. 3444) to amend the Federal farm loan act with respect to receiverships of joint-stock land banks, and for other purposes, having considered the same, report favorably thereon with the recommendation that the bill do pass without amendment. This is a departmental bill, the enactment of which is urgently recommended by the Secretary of the Treasury and the members of the Federal Farm Loan Board. The Secretary's letter to the President of the Senate, setting forth the situation with which the Farm Loan Board is now confronted with respect to certain joint-stock land bank receiverships and the vital importance that legislation be promptly enacted clarifying and defining the powers of the board with respect to these receiverships, appears as follows, and is made a part of this report: The PRESIDENT OF THE SENATE, THE SECRETARY OF THE TREASURY, Washington, D. C. SIR: No doubt your attention has already been directed to the fact that on November 4, 1929, the Supreme Court of the United States, in case No. 39, October term, 1929, J. R. Wheeler, petitioner, v. Howard Greene, receiver Bankers Joint Stock Land Bank of Milwaukee, Wis., on writ of certiorari, _reversed the Circuit Court of Appeals of the Seventh Circuit and held that the Federal Farm Loan Board and a receiver appointed by it under the Federal farm loan act do not have the power to enforce the liability of shareholders created by section 16 of the Federal farm loan act, but that it is a liability to creditors which the creditors may be left to enforce. The opinion delivered in the case indicates that the decision of the court was based upon a comparison of certain provisions of the national bank act with provisions of section 29 of the Federal farm loan act relating to receiverships, and discloses what appears to be a misunderstanding of the operation of the Federal farm loan system. As you are aware, receiverships have been instituted under the Federal farm loan act for three joint-stock land banks, the outstanding liabilities of which according to their books are more than $70,000,000-the Kansas City Joint Stock Land Bank of Kansas City, Mo.; the Bankers Joint Stock Land Bank of Milwaukee, Wis.; and the Ohio Joint Stock Land Bank of Cincinnati, Ohio, with headquarters now at Indianapolis, Ind. These receiverships are in various stages of administration and, in the case of the Bankers Joint Stock Land Bank of Milwaukee and the Ohio Joint Stock Land Bank of Cincinnati, dividends of nearly $2,700,000 have already been paid to bondholders from the proceeds of pledged assets. In addition, the receiver of the Kansas City bank has accumulated more than $10,000,000 proceeds of liquidated assets, and over $800,000 has been collected by the three receivers upon the assessments against the shareholders. According to the records of the three receiverships there are about 9,000 bondholders and stockholders scattered throughout the United States and in some instances outside this country. In the circumstances, it is essential for the welfare of the Federal farm loan system that the receiverships be administered to a conclusion by the Federal Farm Loan Board in the most expeditious and economical manner practicable for the benefit of the bondholders, stockholders, and others interested, and, for reasons which are set out in considerable detail in a statement attached, there is an urgent and pressing need for the passage by the Congress as soon as possible of legislation clarifying and defining the powers of the Federal Farm Loan Board. Therefore, a draft of a proposed bill has been prepared, which is submitted herewith, to amend the Federal farm loan act, as explained in the attached statement. In this connection, I am advised that during a recent meeting the legislative committee of the Joint Stock Land Bankers' Association agreed that there should be legislation making it clear that the Federal Farm Loan Board, in the handling of receiverships under the Federal farm loan act, is vested with the powers possessed by the Comptroller of the Currency in connection with receiverships under the national bank act, and that the proceedings heretofore of the Federal Farm Loan Board in the administration of the existing receiverships should be ratified and confirmed by the Congress. As the matter is one of vital importance to the system, I trust that it will receive early and favorable consideration by the Congress. Respectfully, A. W. MELLON, Secretary of the Treasury. An extensive explanation of the entire situation accompanied draft of proposed bill and the Secretary's letter of recommendation, which also included a statement regarding the administration of the three joint-stock land banks in receivership and the powers of the Farm Board with respect thereto in connection with this proposed bill, and statements of condition of Federal land banks, joint-stock land banks, and the Federal intermediate credit banks. This information appears in Senate Document No. 77, Seventy-first Congress, second session. A duplicate set of this material was transmitted to the Speaker of the House of Representatives by the Secretary of the Treasury on January 23, 1930, and a bill H. R. 9433 corresponding to S. 3444 was introduced in the House of Representatives on February 3, 1930. In substance, the bill provides that the Federal Farm Loan Board and the receivers appointed by it, respectively, in connection with receiverships heretofore or hereafter instituted for banks or associations under the farm loan act are and shall be vested with all the powers and authority which at the date of the enactment of the bill are vested in the Comptroller of the Currency and receivers appointed by him, respectively, under the national bank laws with respect to national bank receiverships, as fully as if such powers and authority were specifically set forth in the farm loan act but without thereby limiting any of the provisions of the act or the general powers of the Federal Farm Loan Board thereunder. The bill would authorize the institution of suits by the board's receivers to enforce assessments made after the enactment of the bill by the Federal Farm Loan Board, at any time within three years after such assessments are made, so as to establish a Federal statute of limitations with respect to such litigation in order to remove the uncertainties arising out of conflicting and varying State statutes of limitations. The bill further provides for the ratification and confirmation by the Congress of all of the steps taken by the Federal Farm Loan Board and its receivers in the administration of the affairs of the banks heretofore placed in the hands of receivers, as fully to all intents and purposes as if the powers and authority vested by this act in the Federal Farm Loan Board and its receivers had by prior act of the Congress been specifically included in the Federal farm loan act. The bill would also incorporate in the Federal farm loan act an express declaration that the authority of a receiver of a bank includes the liquidation of collateral deposited with farm loan registrars as security for farm-loan bonds. The foregoing amendments would be added to section 29 of the Federal farm loan act. In addition, the bill would insert in the Federal farm loan act a further clause to be designated "k" in section 17 of the present act, following clause "j" thereof, expressly authorizing the Federal Farm Loan Board to prescribe all needful rules and regulations for the enforcement of the provisions of the act, together with certain incidental provisions which are set out in this connection in the bill. Because of the holding of the Supreme Court of the United States in the specific question before it in the case of Wheeler, petitioner, v. Greene, with respect to the enforcement of statutory liability of stockholders, and because of questions that have been raised as to the interpretation of the Federal farm loan act in other respects as to the powers of the Federal Farm Loan Board in receiverships, it is advisable to clarify the situation promptly by the enactment of legislation declaring the existence in the Federal Farm Loan Board of all the necessary powers. It is believed that this would simply be carrying out the intent of the Congress in the enactment of the original act, and that the enactment of this bill should result in clearing up many of the questions that have arisen, thereby facilitating the administration of the banks in receivership. Such action should not only be of immediate benefit to the security holders of these banks but would be a step in the directiou of the restoration of confidence on the part of the public in the banks of the system. O 718T CONGRESS 2d Session SENATE { REPORT No. 917 TO MAKE PERMANENT THE ADDITIONAL OFFICE OF DISTRICT JUDGE CREATED FOR THE EASTERN DISTRICT OF ILLINOIS BY THE ACT OF SEPTEMBER 14, 1922 JUNE 16, 1930.-Ordered to be printed Mr. STEIWER, from the Committee on the Judiciary, submitted the following REPORT [To accompany S. 3064] The Committee on the Judiciary, having considered the bill S. 3064, reports the same favorably with the recommendation that the bill do pass without amendment. The eastern district of Illinois is about 300 miles long. Its area is over 22,000 square miles. It contains 45 counties. In St. Clair, parts of Williamson, Franklin, and Vermilion Counties there are congested industrial centers not exceeded except in the great cities. Judge Lindley assumed office as district judge of the eastern district of Illinois in June, 1922. In the 10 years ending June 30, 1924, there were terminated in the eastern district of Illinois 3,942 criminal cases as compared with 2,075 in Indiana, 1,602 in the eastern district of Wisconsin, 2,740 in the western district of Wisconsin, 3,754 in the eastern district of Missouri (including St. Louis), 3,236 in the southern district of Illinois, and 6,171 in the northern district of Illinois (including Chicago). In the same period there were more contested trials in the eastern district of Illinois than in any other district of the seventh circuit; the figures, taken from the Attorney General's report, being: |