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SEC. 2. Any person who shall knowingly make any material false representation for the purpose of obtaining an advance, loan, or sale, or in assisting in obtaining such loan, advance, or sale, under this resolution shall, upon conviction thereof, be punished by a fine of not exceeding $1,000 or by imprisonment not exceeding six months, or both.

The committee, after giving due consideration to the numerous bills pending before it, determined to authorize an appropriation of $7,000,000 to make advances or loans to farmers in the storm, flood, and/or drought stricken areas of Alabama, Florida, Georgia, North Carolina, South Carolina, Virginia, Ohio, Indiana, Illinois, Minnesota, North Dakota, Montana, and New Mexico.

A letter from the Secretary of Agriculture, dated January 25, 1930, reporting on several similar bills pending before the committee reads, in part, as follows:

Hon. GILBERT N. HAUGEN,

Chairman Committee on Agriculture,

House of Representatives.

DEAR MR. HAUGEN: In compliance with your request of December 10, I am submitting a report on H. J. Res. 145, by Mr. Stevenson, a joint resolution making applicable for the year 1930 the provisions of the act of February 25, 1929, for relief to farmers in the storm and flood stricken areas. This is identical with H. J. Res. 131, introduced by Mr. Crisp, on which you request a report in your letter of December 14. Its purposes are similar to those of H. J. Res. 138, introduced by Mr. Steagall; H. J. Res. 148, introduced by Mr. Edwards; H. J. Res. 183, introduced by Mr. Hammer; and H. R. 5719, introduced by Mr. Vinson. All of these resolutions and bills propose appropriations for loans to farmers in the storm and flood stricken areas of the southeastern States, H. J. Res. 131, 145, and 183 proposing to reappropriate collections on the loans made in that region in 1929; H. R. 5719 to authorize an appropriation of $2,000,000; H. J. Res. 138 to authorize an appropriation of $10,000,000; and H. J. Res. 148 to authorize an appropriation of $20,000,000.

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The table which follows shows the amounts loaned under the several authorizations of Congress, the amount of principal collected to December 31, 1929, the percentage of the total repaid, and the amounts still outstanding. The table also shows the interest payments made on the several loans.

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Of the $5,754,351.69 loaned to farmers in the Southeastern States in 1929, $211,060.85 was loaned in the fall of 1929 to Florida vegetable growers on notes which are not yet due. Of the $5,548,290.84 loaned last spring, 77.5 per cent has been repaid. The following table shows the amounts loaned in each of the several States last spring, the amounts repaid to December 31, 1929, percentages repaid, number of loans originally made, number fully repaid, number on which partial payments have been made, and number of borrowers who have paid nothing. This table shows that of the 20,373 borrowers only 1,295, or 6.3 per cent, have made no payment. In addition to the cash payments received, the

department has in hand storage receipts on cotton in warehouses valued at around $150,000, owners of which desire to hold until a later date in the hope of receiving a higher price. Sale of this cotton and further collections which will be made during the next few months will materially reduce the amount of loans outstanding.

Statement of seed loans and collections, Southeastern States, December 31,

1929

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The foregoing statement shows how the policy of making direct loans to farmers for the purchase of seed following crop failures in major crop areas has grown to include loans for seed, feed for work stock, and fertilizer. Further extension of the purposes of these loans would be authorized in S. J. Res. 73, passed by the Senate on December 10, 1929, "for the purchase of suitable seeds for planting, feed for work stock, and of farm machinery and tools, and for the purchase of materials and employment of labor for the replacement of damaged or destroyed irrigation ditches," these loans to be made to farmers in the Rio Grande Valley, in the State of New Mexico, on a comparatively small area overflowed in August and September, 1929.

It is the department's view that in general the financing of crop production is a problem for local financial agencies, and that it is only in times of widespread crop failure from drought, floods, or storms that the Federal Government is justified, if ever, in extending direct aid. No such widespread disaster occurred in the Southeastern States in 1929, but local storms and floods did material damage, and drought reduced yields in some sections. Borrowers in general have exerted every effort to repay their loans, those who have made full or partial payments being in many cases no better able to finance themselves than they were in 1929. The situation is further complicated by the numerous bank failures which have occurred in the Southeastern States in recent years. In view of all these facts, making available an amount for loans not in excess of the amount authorized by the joint resolution approved February 25, 1929, would appear to be justified. While the agricultural appropriation bill recently passsed by the House includes funds for collection of 1929 loans during the fiscal year 1931, the amount is insufficient to cover the cost of collecting further loans which may be made in 1930 if authority is given for such loans. If favorable consideration is to be given to the legislation here discussed, authority should be included for necessary administrative expenses in the making and collection of the loans to June 30, 1931.

If this legislation is favorably considered it will be desirable to include in it specific mention of the amendment to the original authorization contained in the joint resolution approved May 17, 1929. (Pub. Res. No. 2, 71st Cong.) Further, there should be definite authority to make loans within such areas in the States named as may be determined by this department to be in need of assistance, without limitation to areas in which loans were made in 1929, as there are some sections, particularly in the State of Georgia, where loans were not made in 1929 and in which storm and flood damage during that year make assistance to farmers desirable at this time.

The department has always been handicapped, as have farmers who have received loans, because of the late date at which funds for loans have been made available. If, therefore, legislation of the nature here discussed is to be favorably acted upon, it is hoped that the action may be prompt in order to enable the department to carry out the desires of Congress in the most efficient manner.

Sincerely,

*

ARTHUR M. HYDE, Secretary.

Submitted to the Bureau of the Budget, pursuant to Circular No. 49 of that bureau, and returned to the Department of Agriculture under date of January 24, 1930, with the advice that the expenditure of not to exceed $3,000,000 for the purposes contemplated by the several items of proposed legislation would not be in conflict with the financial program of the President.

Hon. G. N. HAUGEN,

DEPARTMENT OF AGRICULTURE,

Chairman Committee on Agriculture,

Washington, D. C., February 5, 1930.

House of Representatives.

DEAR MR. HAUGEN: Supplementing previous reports of this department concerning H. J. Res. 145, and other proposed legislation to authorize an appropriation for loans to farmers in the Southeastern States for seed, feed, and fertilizer for crop production in 1930, in the absence of the Secretary I am writing to advise you that the department has been informed by the Director of the Bureau of the Budget that this matter has been reconsidered and that the expenditure of not to exceed $6,000,000 for the purposes contemplated by the several items of proposed legislation would not be in conflict with the financial program of the President.

Sincerely yours,

W. A. JUMP, Budget Officer.

General drought in northeastern, central, and south central Montana resulted in greatly reduced yields, average yields of spring wheat in these sections being about 7 bushels per acre. Average yields of flax ranged from 2 to 3 bushels. Similarly, there was an area of low yields in west central and south central North Dakota. Crop yields generally in North Dakota and in some parts of the Red River Valley in Minnesota were unsatisfactory and many individual farmers had crop failures. The most serious condition in this area is in northeastern Montana.

Floods in August and September, 1929, did serious damage to a section along the Rio Grande in Valencia and Socorro Counties, N. Mex., destroying alfalfa and other crops, washing out banks of irrigation ditches, and drowning some livestock. Alfalfa not washed out by the floods was covered with silt, the August flood ruining the second cutting and the September flood coming just when the third crop was ready for harvest. The need here is for seed, feed for livestock, and, in some instances, labor and materials for repair of irrigation ditches.

In recent weeks floods have caused serious damage in bottom lands in southwestern Ohio, southern Indiana, and southern Illinois. While floods at this time of the year in that area are not likely to do serious agricultural damage, yet they destroyed hay and grain on farms and may cause farmers to be in need of assistance beyond that which can be rendered by local agencies..

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SEPARATE THE INSURANCE FROM THE FRATERNAL ACTIVITIES IN THE DISTRICT OF COLUMBIA

FEBRUARY 12, 1930.-Referred to the House Calendar and ordered to be printed

Mr. REID of Illinois, from the Committee on the District of Columbia, submitted the following

REPORT

[To accompany H. R. 7701]

The Committee on the District of Columbia, to which was referred the bill (H. R. 7701) to authorize fraternal and benevolent corporations heretofore created by special act of Congress to divide and separate the insurance activities from the fraternal activities by an act of its supreme legislative body, subject to the approval of the superintendent of insurance of the District of Columbia, having had the same under consideration, begs leave to report it back to the House with an amendment, with the recommendation that the bill as amended do pass.

The object of the bill is clearly stated in its title. While this proposed act is general in its terms and applies to any fraternal and benevolent corporation heretofore organized by special act of Congress, the occasion for and the particular purpose of this bill is to authorize the Supreme Lodge, Knights of Pythias of the World, to divide and separate its organization so that the insurance activities may hereafter be conducted as a mutual legal-reserve life-insurance corporation, separate and distinct from the fraternal activities of the order. The evidence before the committee shows conclusively that the fraternal insurance division of this great order is in a particularly enviable position, from a financial standpoint. It not only has on hand ample assets and a reserve based upon the American experience table at 32 per cent, but it also has a large surplus over and above the reserve. However, this great fraternal order, like all other fraternal orders, by reason of changed economic and social conditions, has suffered some diminution in its fraternal membership, so the board of control, the business organization in charge of the insurance department, with commendable foresight for the future and wishing to maintain its present enviable position, has suggested that the special

charter granted to it by Congress be amended as provided in this bill, so that its insurance activities can hereafter be conducted as a separate mutual legal-reserve life-insurance corporation without being confined to the membership of the fraternal division.

When this bill has passed and becomes a law, if the supreme legislative body, in the manner provided by the laws of the order, should authorize such a division of its activities and the superintendent of insurance for the District of Columbia should approve, then thereafter the insurance corporation will be a separate legal entity engaged in insurance activities for the mutual benefit of its members and their beneficiaries, without profit and subject to the supervision, restrictions, and limitations of the laws relating to similar legal reserve life insurance corporations. This act would not give the corporation any special privileges not granted by law to other similar corporations, and this corporation would still have to comply with the insurance laws of the different States in which it may hereafter conduct its business, just the same as any other similar insurance corporation. The prime object of this bill is to enable the order in ample time to take the necessary steps to protect its present policyholders by making it possible to inject new blood by the procuring of younger members in its insurance group. An examination of the bill discloses that proper provisions are included so as to insure ample protection of the policyholders. Under the bill the original corporation is not dissolved, but the resulting separate corporation takes over the insurance business, assuming and carrying out all the obligations and liabilities now existing. In another safeguarding provision it is expressly provided that nothing contained in this act and nothing done under its authority shall impair or operate to impair the obligation of any

contract.

In order that there can be no question that any special privilege is granted this corporation, the committee recommends an amendment by way of a new section, as follows:

SEC. 7. Such corporation shall be subject to all the laws of the respective States, including the District of Columbia, with respect to similar mutual legal reserve life insurance corporations.

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