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Recent hearings before the Flood Control Committee disclose that by reason of setbacks, extensions, or other changes in the levee lines found necessary in the execution of the adopted project as recommended by the engineers, large areas of valuable and highly improved lands will be used for the passage of the flood waters of the Mississippi River, because such lands will be included and embraced between the new levee lines and the main river channel. As illustrations of this fact, the following examples are cited:

ARKANSAS

A challenging illustration of the effects of the relocation of levee lines, the actuating motives and destructive effects visited upon property interests may be found in the situation at Pecan Point in Arkansas. The name indicates the shape of the land in that place. The area comprises 3,200 acres, of which 3,000 acres are in a high state of cultivation with all necessary building improvements, including commodious farm homes occupied by the owners. The lands enjoyed levee protection under structures provided by local agencies from the inception of flood stages. When the adopted project was placed in execution, the Army engineers investigated the situation at Pecan Point and caused an estimate to be made, disclosing that the cost of bringing the existing levee lines to the increased grade and section fixed under such project would be $650,000, whereas, the cost of constructing a levee of same grade and section 2 miles in length, joining the levees above and below could be constructed for $250,000. The first method would provide the standard levee and afford complete protection to the 3,200 acres involved. The latter would save $400,000 and destroy the 3,200 acres. The engineers adopted the latter plan, constructing the cut-off levee and condemning the property.

Another instance is at Helena, in Arkansas, where, in order to locate the permanent levee line according to the standard of good engineering it was considered necessary to change the location. The area was immediately south of the corporate limits of the city, and as usual in such instances, the industrial section abutted the municipal limits, rendering necessary the acquisition of the rights of way through such developed area at an unusual expense, from the standpoint of actual foundation values and the cost of moving existing structures and destruction of so much of the limited space necessary to the proper operation of the industries as to destroy convenient and accessible operations thereon. The local agency was financially unable to procure the rights of way, which in turn resulted in the abandonment of the plan based on proper engineering theory, and in order to avoid a weak link in the levee system it became necessary for the engineers to increase the size of the existing levee, the site of which was condemned by their expert knowledge.

LOUISIANA

A striking example and an impressive instance of the effect of proposed setbacks and changes in levee lines may be found in northeast Louisiana in the territory comprising the fifth Louisiana levee district.

At Duckport, Madison Parish, the proposed change places between the new levee and the Mississippi River about 12,000 acres of valuable land, the major portion of which is in a high state of cultivation with homes and improvements on it.

At Somerset, in Tensas Parish, a setback and relocation of the levee moves the line back from 4 to 6 miles, and throws outside the new levee, or between the same and the Mississippi River, 20,000 acres, the major portion of which is improved property in cultivation.

At White Oak Lake, Tensas Parish, the setback in the proposed levee will take in 8,000 acres.

The change in location of the levee at the town of Port Allen, opposite the city of Baton Rouge, destroys a portion of the business section of this community involving an estimated loss of $100,000.

At the town of Plaquemine, the county seat of the Parish of Iberville, the relocation and construction of the new levee will destroy a portion of the business section involving a loss of some $250,000. The same is true of Bayou Goula, where the portion of that village sacrificed would amount to about $100,000.

At Wilson Point or Bunches Bend in East Carroll Parish, the setback and relocation of the levee line cuts across the bend and places what is known as Wilson Point, comprising 9,600 acres of land, all improved and in cultivation, between the newly located levee and the main river channel. This property has been protected from floods since 1840. In flood time in the future it will be used for all intents and purposes as part of the main channel to carry excessive flood waters.

The distance around the bend is three and one-half times that across the point. The new location will save thousands of dollars to the United States in the execution of the project, yet unless the flood control act is amended as proposed, the owners of the land and improvements so taken, will be deprived of their property without remuneration.

MISSISSIPPI When the flood control act of May 15, 1928, was passed, practically all of the rights of way for levees in Mississippi had been acquired and paid for by the local interests. In the execution of the project, however, many setbacks have been made and many relocations have been constructed.

There are two levee boards in Mississippi, and each of these levee boards, for rights-of-way set backs, and damages in relocations, thus far has expended annually since the adoption of the flood control act, substantially as much as their local contributions amounted to prior to the adoption of the said flood control act of 1928.

In the Mississippi levee district, up to June 6, 1930, it was estimated that the costs of setback rights of way, and the costs of rights of way for the enlargement of existing levees already incurred and estimated would aggregate $1,031,594.83. Further relocations and setbacks since that date will materially increase this amount.

In the Yazoo-Mississippi Delta district, it was estimated that the costs of setbacks and relocations already incurred and estimated, will amount to $916,486.97.

The result is that the local interests are contributing to the flood control works along the Mississippi River substantially the amount that they contributed prior to the flood control act of 1928.

At the time of the passage of the flood control act of 1928, it was not foreseen, contemplated, nor shown in the engineering features of

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the adopted project that such extensive relocations, setbacks, and changes in levee lines would be made.

The burden of providing levee foundations and levee rights of way for the new locations remains upon the States and local levee districts as in the original act. This places upon the local interests, in the execution of this national project, a contribution, taxing their resources to the limit.

For the owners of many thousands of acres of valuable lands, improved and in cultivation, thrown between the new levee lines and the channel of the Mississippi River, no provision has heretofore been made by Congress. The policy pursued by the Government authorities in the execution of the project, by changing levee lines to new and higher locations, and by setbacks, cutting off bends and eliminating points, is saving many millions of dollars in expense to the United States.

At the same time and by the same work, the United States is making subject to flood waters of the Mississippi River many thousands of acres of highly improved land, comprising the homes and lifetime investments of its citizens.

It was the intention in the flood control act that the project dealing with the control of floods of the main river was to be executed at the expense of the Federal Government without local contributions. For instance in the spillway structures the Government pays for all rights of way as well as compensation for property taken and reimburses for damages caused. Certainly this should be the policy on the main stem of the river itself.

No change in the engineering features of the project is involved and no additional authorization is necessary. The money is provided in the original authorization.

In compliance with paragraph 2a of Rule XIII, the following shows the insertion made in the law by the bill:

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That the first paragraph of section 3 of the act entitled "An act for the control of floods on the Mississippi River and its tributaries, and for other purposes,” approved May 15, 1928, be, and the same is hereby, amended to read as follows:

"Sec. 3. In the execution of the adopted project, the United States shall provide flowage rights over all lands, including compensation for damages to improvements thereon at the time of the taking, which are not now betueen existing levees and the low-water channel of the Mississippi River and which will be between the levee lines of the adopted project and the low-water channel of the Mississippi River by reason of setbacks, exlensions, or other changes in the levee lines on the main stem of the Álississippi River between Cape Girardeau, Missouri, and the Head of the Passes. The States or levee districts may provide for the United States, upon its request and at its expense, such flowage rights, and the United States shall reimburse the States or levee districts in full for all payments made and expense incurred in providing such flowage rights upon proof that they have been obtained at fair valuation and at reasonable expense. Except when authorized by the Secretary of War upon the recommendation of the Chief of Engineers, no money appropriated under authority of this act shall be expended on the construction of any item of the project until the States or levee districts have given assurances satisfactory to the Secretary of War that they will (a) maintain all flood-control works after their completion, except controlling and regulating spillway structures, including special relief levees; maintenance includes normally such matters as cutting grass, removal of weeds, local drainage, and minor repairs of main river levees; (b) agree to accept land turned over to them under the provisions of section 4; (c) provide without cost to the United States all rights of way for levee foundations and levees on the main stem of the Mississippi River between Cape Girardeau, Missouri, and the Head of Passes."

Sec. 2. This act shall take effect from and after the date of the enactment of the flood control act of May 15, 1928.

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72D CONGRESS 2 1st Session

AGRICULTURAL CREDIT CORPORATIONS

FEBRUARY 15, 1932.--Committed to the Committee of the Whole House on the

state of the Union and ordered to be printed

Mr. JONES, from the Committee on Agriculture, submitted the

following

REPORT

[To accompany H. J. Res. 292]

The Committee on Agriculture, to whom was referred the joint resolution (H. J. Res. 292) to authorize the Secretary of Agriculture to aid in the establishment of agricultural-credit corporations, and for other purposes, having considered the same, report thereon with a recommendation that it be passed.

The resolution reported herewith reads as follows:
JOINT RESOLUTION To authorize the Secretary of Agriculture to aid in the establishment of

Agricultural-credit corporations, and for other purposes Resolved by the Senate and House of Representatives of the United States of America in Congress assembled, That the Secretary of Agriculture is hereby authorized to make advances or loans to individuals, under such regulations as he may prescribe, for the purpose of assisting in forining local agricultural-credit corporations, livestock-loan companies, or like organizations, or of increasing the capital stock of such corporations, companies, or organizations qualified to do business with Federal intermediate credit banks, or to which such privileges may be extended.

Sec. 2. (a) No loans shall be made to individual stockholders on the capital stock of, or to create or increase the capital stock of such corporation, company, or organization in an amount in excess of 75 per centum of the par value of the capital stock of such corporation, company, or organization owned by or proposed to be subscribed to by such individual, nor unless such individual shall submit a credit statement (in such form as the Secretary of Agriculture may prescribe) wnich shall be verified by the investigation of the Secretary of Agriculture and shall show that such individual is not indebted in an amount in excess of one-half of the fair market value of his assets and that the value of such assets above such indebtedness shall be at least twice the value of the loan applied for; nor shall any loan be made to any individual on the capital stock of, or to create or to increase the capital stock of, any corporation devoted mainly to the financing and/or sale of special products to farmers.

(b) No loan shall be made upon the capital stock of any corporation until the Secretary of Agriculture shall find that the financial structure of such corporation is sound and unimpaired and by him approved, nor shall any loan be made upon the capital stock of such corporation until the management of such company shall be made known to and approved by the Secretary, and the Secretary shall have the right at any time to declare the indebtedness to the Government that may be created hereunder due whenever in his judgment the financial structure of the corporation shall become so impaired or the management become so unsatisfactory as to jeopardize the interests of the Government.

Sec. 3. No loan or advance shall be made to any individual upon the capital stock of or to create or increase the capital stock of any corporation, unless the capital stock of such corporation shall be at least $10,000.

SEC. 4. To carry out the provisions of this resolution, including all expenses incurred thereunder, there are authorized to be appropriated, out of the unexpended balances of appropriations made to carry out the provisions of Public Resolution Numbered 112, Seventy-first Congress (46 Stat. 1032), as amended by the Interior Department appropriation act for the fiscal year ending June 30, 1932, and as amended by Public Resolution Numbered i20 (46 Stat. 1167), and out of the collections from loans made under Public Resolution Numbered 112, as so amended, a sum not exceeding $10,000,000, which sum shall be paid into a revolving fund. Not to exceed 2 per centum of such fund may be used for expenses of administration. All moneys received from time to time upon the repayment of any advance or loan made pursuant to this act, together with the interest, shall be paid into the revolving fund and shall thereafter be available for the purposes and in the manner hereinbefore provided.

The purpose of the proposed measure is to enable credit corporations and livestock-loan companies to be organized to the end that they may secure the advantages of the intermediate credit banking facilities.

In many instances the regular commercial banks are not in a position to furnish the proper credit facilities for the type of paper that is sought to be covered by the proposed bill. Due to the long-term credit desired and to the fact that in some sections the banking facilities are inadequate for this type of credit, it is hoped that this measure will furnish a supplement to these facilities and will also enable the farmers and livestock men to have the necessary credit.

The measure does not require a new appropriation but makes available the unexpended balances of the drought-relief provision and collections therefrom to the extent of not exceeding $10,000,000.

Under the terms of the measure this fund may be used for the purpose of making loans to individuals of not to exceed 75 per cent of the par value of the capital stock of such corporations, companies, or organizations, to assist in forming or increasing the capital stock of same. In this way the major portion of the necessary funds will be made available for the original establishment of such companies. It is expected that these loans will be made at a low rate of interest.

Proper restrictions are sought to be thrown around these loans as well as the companies to be formed, or whose capital stock is to be increased. Under the terms of this measure, the Secretary of Agriculture is given supervision as to their management while the loans are outstanding:

It is further hoped that by establishing a sound system of credit suitable to the agricultural and livestock sections the need for making provision for individual crop production loans may be thereby reduced, and in so far as practicable to do so this arrangement be substituted for the practice of individual loans by the Government.

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