Be it enacted by the Senate and House o f Representatives o f the

United States o f America in Congress assembled, That this Act may

be cited as the "Agricultural Adjustment Act of 1938" .

DECLARATION OF POLICY

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

continue the Soil Conservation and Domestic Allotment Act, as

amended, for the purpose of conserving national resources 2 preventing the wasteful use of soil fertility, and of preserving, maintaining,

and rebuilding the farm and ranch land resources in the national

public interest ; to accomplish these purposes through the encouragement of soil-building and soil-conserving crops and practices ; to

assist in the marketing of agricultural commodities for domestic

consumption and for export ; and to regulate interstate and foreign

commerce in cotton, wheat, corn, tobacco, and rice to the extent necessary to provide an orderly, adequate, and balanced flow of such commodities in interstate and foreign commerce through storage of

reserve supplies, loans, marketing quotas, assisting farmers to obtain,

insofar as practicable, parity prices for such commodities and parity

of income, and assisting consumers to obtain an adequate and steady

supply of such commodities at fair prices.

TITLE I-AMENDMENTS TO SOIL CONSERVATION AND

DOMESTIC ALLOTMENT ACT

POWERS UNDER SOIL-CONSERVATION PROGRAM

SEC. 101. Section 8 (b) and (c) of the Soil Conservation and

Domestic Allotment Act, as amended, are amended to read as follows

"(b) Subject to the limitations provided in subsection (a) of this

section, the Secretary shall have power to carry out the purposes

specified in clauses (1), (2), (3), (4), and (5) of section 7 (a) by

making payments or grants of other aid to agricultural producers,

including tenants and sharecroppers, in amounts determined by the

Secretary to be fair and reasonable in connection with the effectuation

of such purposes during the year with respect to which such payments

or grants are made, and measured by (1) their treatment or use of

their land, or a part thereof, for soil restoration, soil conservation, or

the prevention of erosion ; (2) changes in the use of their land ; (3)

their equitable share, as determined by the Secretary, of the normal

national production of any commodity or commodities required for

domestic consumption ; or (4) their equitable share, as determined

by the Secretary : of the national production of any commodity or

commodities required for domestic consumption and exports adjusted

to reflect the extent to which their utilization of cropland on the farm

conforms to farming practices which the Secretary determines will

best effectuate the purposes specified in section 7 (a) ; or (5) any

combination of the above . In arid or semiarid sections, (1) and (2)

above shall be construed to cover water conservation and the beneficial

use of water on individual farms, including measures to prevent

run-off, the building of check dams and ponds, and providing facilities for applying water to the land . In determining the amount of

any payment or grant measured by (1) or (2) the Secretary shall

take into consideration the productivity of the land affected by the

farming practices adopted during the year with respect to which such

Agricultural Adjustment Act of 1938.

Declaration of

policy .

Title I-Amendments to Soil Conservation and Domestic

Allotment Act .

Powers of Secretary

under soil-conservation program .

49 Stat. 1150 ; 50 Stat.

329 .

16 U . S . C ., Supp .

III, §590h .

Post, p . 744 .

Aid to agricultural

producers, etc .

Conditions govern .

ing amounts.

Arid or semiarid seetions, facilities for applying water.

Productivity of land

to be considered .

52 STAT.]75TH CONG ., 3D SESS .-CH. 30-FEB. 16, 1938 31

[CHAPTER 30]

AN ACT

To provide for the conservation of national soil resources and to provide an

February 16, 1938

[El . R . 8505]

adequate and balanced flow of agricultural commodities in interstate and [Public, No. 4301

foreign commerce and for other purposes .
32

Utilization of local,

etc ., committees.

Administrative

areas ; restriction .

Selection of local

committees.

County committee,

election, composition,

etc .

Selection of secretary ; eligibility of

county agent .

State committee,

composition, etc .

Ex officio members

of State and county

committees .

Protection of interests of tenants and

sharecroppers .

Producer-controlled

cooperative associations .

Power to acquire

land, etc ., denied .

Rules, etc ., governing payments.

Acreage allotments,

apportionment .

Adjustments.

PUBLIC LAWS-CH. 30---FEB. 16, 1938

[52 STAT.

payment is made. In carrying out the provisions of this section in

the continental United States, the Secretary is directed to utilize the

services of local and State committees selected as hereinafter provided .

The Secretary shall designate local administrative areas as units for

administration of programs under this section . No such local area

shall include more than one county or parts of different counties .

Farmers within any such local administrative area, and participating

or cooperating in programs administered within such area, shall elect

annually from among their number a local committee of not more

than three members for such area and shall also elect annually from

among their number a delegate to a county convention for the election of a county committee . The delegates from the various local

areas in the county shall, in a county convention, elect, annually, the

county committee for the county which shall consist of three members

who are farmers in the county. The local committee shall select a

secretary and may utilize the county agricultural extension agent for

such purpose. The county committee shall select a secretary who

may be the county agricultural extension agent. If such county

agricultural extension agent shall not have been elected secretary of

such committee, he shall be ex officio a member of the county committee . The county agricultural extension agent shall not have the

power to vote. In any county in which there is only one local

committee the local committee shall also be the county committee .

In each State there shall be a State committee for the State composed

of not less than three or more than five farmers who are legal residents of the State and who are appointed by the Secretary . The

State director of the Agricultural Extension Service shall be ex

officio a member of such State committee . The ex officio members of

the county and State committees shall be in addition to the number

of members of such committees hereinbefore specified . The Secretary shall make such regulations as are necessary relating to the

selection and exercise of the functions of the respective committees,

and to the administration, through such committees, of such programs. In carrying out the provisions of this section, the Secretary-shall, as far as practicable, protect the interests of tenants

and sharecroppers ; is authorized to utilize the agricultural extension

service and other approved agencies ; shall accord such recognition

and encouragement to producer-owned and producer-controlled cooperative associations as will be in harmony with the policy toward

cooperative associations set forth in existing Acts of Congress and

as will tend to promote efficient methods of marketing and distribution ; shall not have power to acquire any land or any right or

interest therein ; shall, in every practicable manner, protect the interests of small producers ; and shall in every practical way encourage

and provide for soil-conserving and soil-rebuilding practices rather

than the growing of soil-depleting crops . Rules and regulations

governing payments or grants under this subsection shall be as simple

and direct as possible, and, wherever practicable, they shall be classified on two bases : (a) Soil-depleting crops and practices, (b) soilbuilding crops and practices.

"(c) (1) In apportioning acreage allotments tinder this section in

the case of wheat and corn, the National and State allotments and

the allotments to counties shall be apportioned annually on the basis

of the acreage seeded for the production of the commodity during

the ten calendar years immediately preceding the calendar year in

which the national acreage allotment is determined (plus, in applicable years, the acreage diverted under previous agricultural adjustment and conservation programs), with adjustments for, abnormal

weather conditions and trends in acreage during the applicable

period.
52 STAT.]

75TH CONG ., 3D SESS.-CH. 30-FEB. 16, 1938

"(2) In the case of wheat, the allotment to any county shall be

apportioned annually by the Secretary, through the local committees,

among the farms within such county on the basis of tillable acres,

crop-rotation practices, type of soil, and topography . Not more than

3 per centum of such county allotment shall be apportioned to farms

on which wheat has not been planted during any of the three marketing years immediately preceding the marketing year in which the

allotment is made .

"(3) In the case of corn, the allotment to any county shall be

apportioned annually by the Secretary, through the local committees,

among the farms within such county on the basis of tillable acreage,

type of soil, topography, and crop-rotation practices .

"(4) Notwithstanding any other provision of this subsection, if,

for any reason other than flood or drought, the acreage of wheat,

cotton, corn, or rice planted on the farm, is less than 80 per centum

of the farm acreage allotment for such commodity for the purpose of

payment, such farm acreage allotment shall be 25 per centum in

excess of such planted acreage.

"(5) In determining normal yield per acre on any farm under

this section in the case of wheat or corn, the normal yield shall be

the average yield per acre thereon for such commodity during the

ten calendar years immediately preceding the calendar year in which

such yield is determined, adjusted for abnormal weather conditions

and trends in yields . If for any reason there is no actual yield, or

the data therefor are not available for any year, then an appraised

yield for such year, determined in accordance with regulations of the

Secretary, shall be used . If, on account of drought, flood, insect

pests, plant disease, or other uncontrollable natural cause, the yield

in any year of such ten-year period is less than 75 per centum of the

average (computed without regard to such year), such year shall be

eliminated in calculating the normal yield per acre .

"(d) Any payment or grant of aid made under subsection (b)

shall be conditioned upon the utilization of the land, with respect to

which such payment is made, in conformity with farming practices

which the Secretary finds tend to effectuate any one or more of the

purposes specified in clause (1), (2), (3) . (4), or (5) of section 7 (a) .

"Any payment made under subsection (b) with respect to any

farm (except for lands which the Secretary determines should not

be utilized for the harvesting of crops but should be permanently

used for grazing purposes only) shall, if the number of cows kept

on such farm, and in the county in which such farm is located, for

the production of milk or products thereof (for market), exceeds

the normal number of such cows, be further conditioned upon the

utilization of the land, with respect to which such payment is made,

so that soil-building and soil-conserving crops planted or produced

on an acreage equal to the land normally used for the production

of soil-depleting crops but, as a condition of such payment, not

permitted to be so used, shall be used for the purpose of building

and conserving the fertility of the soil, or for the production of

agricultural commodities to be consumed on the farm, and not for

market. Whenever it is determined that a county, as a whole, is

in substantial compliance with the provisions of this paragraph,

no payment shall be denied any individual farmer in the county by

reason of this paragraph ; and no payment shall be denied a farmer

by reason of this paragraph unless it has been determined that the

farmer has not substantially complied with the provisions of this

paragraph . Whenever the Secretary finds that by reason of drought,

flood, or other disaster, a shortage of feed exists in any area, he

shall so declare, and to the extent and for the period he finds

36525'-38	3

Wheat .

Corn .

33

Acreage planted less

than allotment .

Wheat or corn, nor

mal yield determination .

Post, pp . 204, 205 .

Appraisal, if no actual yield .

Yield less than 73

percent due to

drought, etc .

Payments conditioned upon conforming to prescribed practices .

Permanent grazing

lands .

Soil-building, etc .,

crops .

Payments where

county complies with

provisions.

Shortage of feed due

to drought, etc.
34

Term "for market"

defined .

Farm consumption

excluded ; term construed .

Investigations of adverse effects of programs on livestock,

etc., producer .

Reductions and increases in payments

under soil conservation program .

49 Stat. 1149 ; 50 Stat .

329 .

19 U . S . C ., Supp .

III, § 590h .

Division of payments between landlords, tenants, etc.

Exceptions .

Direct payments .

Rates to permit setting aside funds to

cover specified increases .

Ranges of increased

payments .

PUBLIC LAWS-CH. 3&--FEB. 16, 1938[52 STAT.

necessary to relieve such shortage, the operation of the condition

provided in this paragraph shall be suspended in such area and,

if necessary to relieve such shortage, in other areas defined by him.

As used in this paragraph, the term `for market' means for disposition by sale, barter, or exchange, or by feeding (in any form) to

dairy livestock which, or the products of which, are to be sold,

bartered, or exchanged ; and such term shall not include consumption

on the farm . An agricultural commodity shall be deemed consumed

on the farm if consumed by the farmer's family, employees, or household, or if fed to poultry or livestock other than dairy livestock on

his arm ; or if fed to dairy livestock on his farm and such dairy

livestock, or the products thereof, are to be consumed by his family,

employees, or household . Whenever the Secretary has reason to

believe the income of producers of livestock (other than dairy cattle)

or poultry in any area from such sources is being adversely affected

by increases in the supply for market of such livestock or poultry,

as the case may be, arising as a result of programs carried out under

this Act, he shall make an investigation with respect to the existence

of such facts . If, upon investigation, the Secretary finds that the

income of producers of such livestock or poultry, as the case may

be, in any area from any such source is being adversely affected by

such increases, he shall, as soon as practicable, make such provisions

in the administration of this Act with respect to the use of diverted

acres as he may find necessary to protect the interests of producers

of such livestock or poultry in the affected area ."

REDUCTIONS AND INCREASES IN PAYMENTS UNDER SOIL CONSERVATION

PROGRAM

SEC. 102. Section 8 of the Soil Conservation and Domestic Allotment Act, as amended, is further amended by adding a new subsection as follows

"(e) Payments made by the Secretary to farmers under subsection

(b) shall be divided among the landlords, tenants, and sharecroppers

of any farm, with respect to which such payments are made, in the

same proportion that such landlords, tenants, and sharecroppers are

entitled to share in the proceeds of the agricultural commodity

with respect to which such payments are made, except that payments

based on soil-building or soil-conserving practices shall be divided

in proportion to the extent which such landlords, tenants, and sharecroppers contribute to the carrying out of such practices . Such

payments shall be paid by the Secretary directly to the landlords,

tenants, or sharecroppers entitled thereto, and shall be computed at

rates which will permit the Secretary to set aside out of the funds

available for the making of such payments for each year an amount

sufficient to permit the increases herein specified to be made within

the limits of the funds so available . If with respect to any farm

the total payment to any person for any year would be

"(1) Not more than $20, the payment shall be increased by

40 per centum ;

"(2) More than $20 but not more than $40, the payment shall

be increased by $8, plus 20 per centum of the excess over $20 ;

"(3) More than $40 but not more than $60, the payment shall

be increased by $12, plus 10 per centum of the excess over $40 ;

"(4) More than $60 but not more than $186, the payment shall

be increased by $14 ; or

"(5) More than $186 but less than $200, the payment shall be

increased to $200.
52 'ST-AT.]

75TH CONG., 313 SESS .-CH. 3a-FEB. 16, 1938

In the case of payments of more than $1, the amount of the payment

which shall be used to calculate the 40-, 20-, and 10-per-centum

increases under clauses (1), (2), and (3) shall not include that part,

if any, of the payment which is a fraction of a dollar.

"Beginning with the calendar year 1939, no total payment for any

year to any person under such subsection (b) shall exceed $10,000 .

In the case of payments made to any individual, partnership, or

estate on account of performance on farms in different States, Territories, or possessions, the $10,000 limitation shall apply to the total

of the payments for each State, Territory, or possession, for a year

and not to the total of all such payments ."

TENANT PROVISIONS

SEC. 103 . Section 8 of the Soil Conservation and Domestic Allotment Act, as amended, is further amended by adding the following

new subsections

"(f) Any change between the landlord and the tenants or sharecroppers, with respect to any farm, that would increase over the

previous year the amount of payments or grants of other aid under

subsection (b) that would otherwise be made to any landlord shall

not operate to increase such payment or grant to such landlord . Any

reduction in the number of tenants below the average number of

tenants on any farm during the preceding three years that would

increase the payments or grants of other aid under such subsection

that would otherwise be made to the landlord shall not hereafter

operate to increase any such payment or grant to such landlord .

Such limitations shall apply only if the county committee finds that

the change or reduction is not justified and disapproves such change

or reduction.

"(g) A payment which may be made to a farmer under this section,

may be assigned, without discount, by him in writing as security for

cash or advances to finance making a crop . Such assignment shall

be acknowledged by the farmer before the county agricultural extension agent and filed with such agent. The farmer shall file with

such county agricultural extension agent an affidavit stating that

the assignment is not made to pay or secure any pre-existing

indebtedness. This provision shall not authorize any suit against or

impose any liability upon the Secretary or any disbursing agent if

payment to the farmer is made without regard to the existence of

any such assignment ."

APPORTIONMENT OF FUNDS

SEC. 104. Section 15 of the Soil Conservation and Domestic Allotment Act, as amended, is amended by inserting at the end thereof the

following new paragraph

"The funds available for payments (after allowing for estimated

administrative expenses, and not to exceed 5 per centum for payments with respect to range lands, noncrop pasture lands, and naval

stores) shall be allocated among the commodities produced with

respect to which payments or grants are to be computed . In allocating funds among the commodities the Secretary shall take into consideration and give equal weight to (1) the average acreages planted

to the various commode ies (including rotation pasture) . for tile ten

years 1928 to 1937, adjusted for abnormal weather and other conditions, including acreage diverted from production under the agricultural adjustment and soil conservation programs ; (2) the value at

parity prices of the production from the allotted acreages of the

various commodities for the year with respect to which the payment

35

Maximum amount

for any year.

Tenant provisions.

49 Stat . 1149 ; 50 Stat.

329.

16 r . s. C ., Supp . nl, § 59 oh .

Change in relationship between landlord

and tenants, etc.

Reduction in number of tenants below

average .

Finding by county

committee .

Assignment of payment .

P08t, p . 205.

Noliability

imposed .

Apportionment of

funds .

49 Stat . 1161.

16 U . S . C ., Supp.

III, § 5900 .

Allocation of funds

available for payments.

Post, pp . 744, 819 .

Basis of apportionment .
36

Rate of payment .

Use of funds for purpose of computing

payments .

16 U . S . C ., Supp.

III, 3 590h.

Proviso .

Wheat acreage

allotments, 1938.

Effective time of

sections 101-104 .

Post, p . 202.

Title 11-Adjustment in =rates,

new uses rkets,

and disposition of surpluses.

Transportation of

farm products, complaints as to rates,

charges, practices, etc.,

to Interstate Commerce Commission .

Secretary a party to

proceeding if complaint affects public

interest.

Liability of Secretary.

Use of facilities of

Department of Agriculture .

PUBLIC LAWS-CH. 30-FEB. 16, 1938

[52 STAT.

is made ; (3) the average acreage planted to the various commodities

during the ten years 1928 to 1937, including the acreage diverted

from production under the agricultural adjustment and soil conservation programs, in excess of the allotted acreage for the year

with respect to which the payment is made ; and (4) the value based

on average prices for the preceding ten years of the production of

the excess acreage determined under item (3) . The rate of payment

used in making payments to the producers of each commodity shall

be such that the estimated payments with respect to such commodity

shall equal the amount of funds allocated to such commodity as

herein provided. For the purpose of allocating, funds and computing payments or grants the Secretary is authorized to consider as a

commodity a group of commodities or a regional or market classification of a commodity. For the purpose of computing payments or

grants, the Secretary is authorized to use funds allocated to two or

more commodities produced on farms of a designated regional or

other classification to compute payments with respect to one of such

commodities on such farms, and to use funds, in an amount equal

to the estimated payments which would be made in any county, for

making payments pursuant to a special program under section 8

approved by the Secretary for such county : Provided, That farm

acreage allotments shall be made for wheat in 1938, but in determining compliance wheat shall be considered in the group with other

crops for which special acreage allotments are not made ."

EFFECTIVE TIME OF SECTIONS 101, 102, 103, AND 104

SEC. 105. The amendments made by sections 101, 102, 103, and 104

shall first be effective with respect to farming operations carried out

in the calendar year 1938 . Nothing contained herein shall require

reconstituting, for 1938, any county or other local committee which

has been constituted prior to February 1, 1938 .

TITLE II-ADJUSTMENT IN FREIGHT RATES, NEW USES

AND MARKETS, AND DISPOSITION OF SURPLUSES

ADJUSTMENTS IN FREIGHT RATES FOR FARM PRODUCTS

SEC. 201. (a) The Secretary of Agriculture is authorized to make

complaint to the Interstate Commerce Commission with respect to

rates, charges, tariffs, and practices relating to the transportation of

farm products, and to prosecute the same before the Commission .

Before hearing or disposing of any complaint (filed by any person

other than the Secretary) with respect to rates, charges, tariffs, and

practices relating to the transportation of farm proclucts, the Commission shall cause the Secretary to be notified, and, upon application

by the Secretary, shall permit the Secretary to appear and be heard .

(b) If such rate, charge, tariff, or practice complained of is one

affecting the public interest, upon application by the Secretary, the

Commission shall make the Secretary a party to the proceeding . In

such case the Secretary shall have the rights of a party before the

Commission and the rights of a party to invoke and pursue original

and appellate judicial proceedings involving the Commission's determination . The liability of the Secretary in any such case shall

extend only to liability for court costs .

(c) For the purposes of this section, the Interstate Commerce

Commission is authorized to avail itself of the cooperation, records,

services, and facilities of the Department of Agriculture .
52 STAT.]

751E CONG., 3D SESS.-CH. 30-FEB. 16, 1938

(d) The Secretary is authorized to cooperate with and assist cooperative associations of farmers making complaint to the Interstate

Commerce Commission with respect to rates, charges, tariffs, and

practices relating to the transportation of farm products .

NEW USES AND NEW MARKETS FOR FARM COMMODITIES

SEC. 202. (a) The Secretary is hereby authorized and directed to

establish, equip, and maintain four regional research laboratories,

one in each mayor farm producing area, and, at such laboratories, to

conduct researches into and to develop new scientific, chemical, and

technical uses and new and extended markets and outlets for farm

commodities and products and byproducts thereof. Such research

and development shall be devoted primarily to those farm commodities in which there are regular or seasonal surpluses, and their

products and byproducts .

(b) For the purposes of subsection (a), the Secretary is authorized

to acquire land and interests therein, and to accept in the name of

the United States donations of any property, real or personal, to any

laboratory established pursuant to this section, and to utilize voluntary or uncompensated services at such laboratories . Donations to

any one of such laboratories shall not be available for use by any

other of such laboratories .

(c) In carrying out the purposes of subsection (a), the Secretary

is authorized and directed to cooperate with other departments or

agencies of the Federal Government, States, State agricultural experiment stations, and other State agencies and institutions, counties,

municipalities, business or other organizations, corporations, associations, universities, scientific societies, and individuals, upon such

terms and conditions as he may prescribe.

(d) To carry out the purposes of subsection (a), the Secretary is

authorized to utilize in each fiscal year, beginning with the fiscal year

beginning July 1, 1938, a sum not to exceed $4,000,000 of the funds

appropriated pursuant to section 391 of this Act, or section 15 of the

Soil Conservation and Domestic Allotment Act, as amended, for such

fiscal year. The Secretary shall allocate one-fourth of such sum

annually to each of the four laboratories established pursuant to this

section.

(e) The Secretary shall make a report to Congress at the beginning of each regular session of the activities of, expenditures by, and

donations to the laboratories established pursuant to subsection (a) .

(f) There is hereby allocated to the Secretary of Commerce for

each fiscal year, beginning with the fiscal year beginning July 1,

1938, out of fluids appropriated for such fiscal year pursuant to

section 391 of this Act, or section 15 of the Soil Conservation and

Domestic Allotment Act, as amended, the sum of $1,000,000 to be

expended for the promotion of the sale of farm commodities and

products thereof in such manner as he shall direct . Of the sum

allocated under this subsection to the Secretary of Commerce for

the fiscal year beginning July 1, 1938, $100,000 shall be devoted to

making a survey and investigation of the cause or causes of the

reduction in exports of agricultural commodities from the United

States, in order to ascertain methods by which the sales in foreign

countries of basic agricultural commodities produced in the United

States may be increased .

(g) It shall be the duty of the Secretary to use available funds

to stimulate and widen the use of all farm commodities in the United

States and to increase in every practical way the flow of such commodities and the products thereof into the markets of the world .

New uses and new

markets for farm commodities.

Regional research

laboratories, establishment, etc .

Post, p . 745.

Real or personal

property, acquisitions .

Donations.

37

Assistance to cooperative associations of

farmers making complaint.

Cooperation with

other agencies, etc . ;

terms and conditions.

Sums authorized .

Post, pp . 69, 744 ; 49

Stat . 11 .51 .

Annual allocation to

each laboratory.

Report to Congress .

Promotion of sale of

farm commodities,

etc.

Post, p . 745 .

Post, p . 69 ; 49 Stat .

1151 .

Survey of causes of

reduction in exports of

American agricultural

commodities .

Use of funds for

stimulating, etc ., use

of farm commodities .
38

Exportation of unmanufactured cotton .

49 Stat . 775 .

7 U. S . C ., Supp . III,

§ 6120.

Allocation to any

one commodity limited .

Federal Surplus

Commodities Corporation .

Continuation until

dune 30, 1942.

50 Stat. 323 .

7 LT . S . C ., Supp .

III, § 6120.

CONTINUATION OF FEDERAL SURPLUS COMMODI I S CORPORATION

SEC. 204. The Act entitled "An Act to extend the time for purchase and distribution of surplus agricultural commodities for relief

purposes and to continue the Federal Surplus Commodities Corporation", approved June 28, 1937 (Public, Numbered 165, Seventy-fifth

Congress), is amended by striking out "continued, until June 30,

1939," and inserting in lieu thereof "continued, until June 30, 1942,",

The Federal Surplus Commodities Corporation shall submit to Congress on the first day of each regular session an annual report setting

forth a statement of the activities, receipts, and expenditures of the

Corporation during the previous fiscal year .

TITLE III-LOANS, PARITY PAYMENTS, CONSUMER

SAFEGUARDS, AND MARKETING QUOTAS

Subtitle A-Defini- SUBTITLE A-DEFINITIONS, LOANS, PARITY PAYMENTS, AND CONtions, etc.

SUMER SAFEGUARDS

Report to Congress .

Title III-Loans,

parity payments, etc.

Definitions .

"Parity", as applied

to prices for any agricultural commodity.

Base period .

"Parity", as applied

to income.

"Interstate and foreign commerce ."

PUBLIC LAWS-CH. 30-FEB. 16, 1938[52 STAT.

SEC. 203 . Section 32, as amended, of the Act entitled "An Act to

amend the Agricultural Adjustment Act, and for other purposes",

approved August 24, 1935, is amended by striking out " : Provided

further, That no part of the funds appropriated by this section shall

be used for the payment of benefits in connection with the exportation of unmanfactured 1 cotton", and is further amended by adding

at the end thereof the following : "Notwithstanding any other provision of this section, the amount that may be devoted, during any

fiscal year after June 30, 1939, to any one agricultural commodity or

the products thereof in such fiscal year, shall not exceed 25 per

centum of the funds available under this section for such fiscal year ."

DEFINITIONS

SEC. 301. (a) GENERAL DEFINITIONS .-For the purposes of this

title and the declaration of policy-

(1) "Parity", as applied to prices for any agricultural commodity,

shall be that price for the commodity which will give to the commodity a purchasing power with respect to articles that farmers

buy equivalent to the purchasing power of such commodity in the

base period ; and, in the case of all commodities for which the base

period is the period August 1909 to July 1914, which will also reflect

current interest payments per acre on farm indebtedness secured by

real estate, tax payments per acre on farm real estate, and freight

rates, as contrasted with such interest payments, tax payments, and

freight rates during the base period. The base period in the case of

all agricultural commodities except tobacco shall be the period August

1909 to July 1914, and, in the case of tobacco, shall be the period

August 1919 to July 1929.

(2) "Parity", as applied to income, shall be that per capita net

income of individuals on farms from farming operations that bears

to the per capita net income of individuals not on farms the same

relation as prevailed during the period from August 1909 to July

1914 .

(3) The term "interstate and foreign commerce" means sale, marketing, trade, and traffic between any State or Territory or the District of Columbia or Puerto Rico, and any place outside thereof ; or

between points within the same State or Territory or within the

District of Columbia or Puerto Rico, through any place outside

thereof ; or within any Territory or within the District of Columbia

or Puerto Rico.

'So in original .
52 STAT .]

75TH CONG., 31) SESS.-01. 30--1'EB . 16, 1=38

(4) The term "affect interstate and foreign commerce" means,

among other things, in such commerce, or to burden or obstruct such

commerce or the free and orderly flow thereof ; or to create or tend

to create a surplus of any agricultural commodity which burdens or

obstructs such commerce or the free and orderly flow thereof .

(5) The term "United States" means the several States and Territories and the District of Columbia and Puerto Rico .

(6) The term "State" Includes a Territory and the District of

Columbia and Puerto Rico .

(7) The term "Secretary" means the Secretary of Agriculture,

and the term "Department" means the Department of Agriculture .

(8) The term "person" means an individual, partnership, firm,

joint-stock company, corporation, association, trust, estate, or any

agency of a State .

(9) The term "corn" means field corn .

(b) DEFINITIONS APPLICABLE TO ONE OR MORE (OM17ODITIT,s.-For the

purposes of this title-

(1) (A) "Actual production" as applied to any acreage of corn

means the number of bushels of corn which the local committee determines would be harvested as grain from such acreage if all the corn

on such acreage were so harvested . In case of a disagreement between the farmer and the local committee as to the actual production of the acreage of corn on the farm . or in case the local

committee determines that such actual production is substantially

below normal, the local committee, in accordance with regulations

of the Secretary, shall weigh representative samples of ear corn

taken from the acreage involved, make proper deductions for moisture content, and determine the actual production of such acreage

on the basis of such samples .

(B) "Actual production" of any number of acres of cotton on a

farm means the actual average yield for the farm times such number of acres .

(2) "Bushel" means in the case of ear corn that amount of ear

corn, including not to exceed 15i% per centum of moisture content,

which weighs seventy pounds, and in the case of shelled corn, means

that amount of shelled corn including not to exceed 15'A per centum

of moisture content, which weighs fifty-six pounds .

(3) (A) "Carry-over", in the case of corn and rice, for any marketing year shall be the quantity of the commodity on hand * in the

United States at the beginning, of such marketing year, which was

produced in the United States prior to the beginning of the calendar

year then current .

(B) "Carry-over" of cotton for any marketing year shall be the

quantity of cotton on hand either within or without . the United

States at the beginning of such marketing year, which was produced

in the United States prior to the beginning of the calendar year

then current .

(C) "Carry-over" of tobacco for any marketing year shall be the

quantity of such tobacco on hand in the United States at the he-inning of such marketing year, which was produced in the United

States prior to the beginning of the calendar year then current,

except that in the case of cigar-filler and cigar-binder tobacco the

quantity of type 46 on hand and theretofore produced in the United

States curing such calendar year shall also be included .

(D) "Carry-over" of wheat, for any marketing year shall be the

quantity of wheat on hand in the United States at the beginning of

such marketing year, not including any wheat which was produced

in the United States during the calendar year then current, and not

including any wheat. held by the Federal Crop Insurance Corporation under Title V .

"United States ."

"State ."

"Secretary" ; "De39

"Affect interstate

and foreign commerce."

"Corn ."

Definitions applicable to one or more

commodities .

"Actual produetion" as applied to

any acreage of corn .

"Actual production" of any number

of acres of cotton on a

farm .

"Bushel", ear and

shelled corn .

"Carry-over", in

the case of corn and

rice .

Cotton .

Tobacco .

Wheat.

partment .-"Person ."

J' oof, p . 72 .
40

"Commercial cornproducing area" ; counties included .

Counties bordering

area producing prescribed average .

E sclusionfrom area,

investigation .

"Farm consumption" of corn.

"Market", in the

case of cotton, wheat,

and tobacco .

Post, p . 72 .

Corn.

Rice.

"Marketed" "marketing market .", and `for

"Marketing year",

in the case of specified

commodities .

PUBLIC LAWS-CH. 30-FEB. 16, 1938[52 STAT.

(4) (A) "Commercial corn-producing area" shall include all

counties in which the average production of corn (excluding corn

used as silage) during the ten calendar years immediately preceding

the calendar year for which such area is determined after adjustment for abnormal weather conditions, is four hundred and fifty

bushels or more per farm and four bushels or more for each acre of

farm land in the county.

(B) Whenever prior to February 1 of any calendar year the Secretary has reason to believe that any county which is not included

in the commercial corn-producing area determined pursuant to the

provisions of subparagraph (A), but which borders upon one of the

counties in such area, or that any minor civil division in a county

bordering on such area, is producing (excluding corn used for silage)

an average of at least four hundred and fifty bushels of corn per

farm and an average of at least four bushels for each acre of farm

land in the county or in the minor civil division, as the case may be,

he shall cause immediate investigation to be made to determine such

fact . If, upon the basis of such investigation, the Secretary finds that

such county or minor civil division is likely to produce corn in such

average amounts during such calendar year, he shall proclaim such

determination, and, commencing with such calendar year, such county

shall be included in the commercial corn-producing area . In the case

of a county included in the commercial corn-producing area pursuant to this subparagraph, whenever prior to February 1 of any

calendar year the Secretary has reason to believe that facts justifying

the inclusion of such county are not likely to exist in such calendar

year, he shall cause an immediate investigation to be made with

respect thereto . If, upon the basis of such investigation, the Secretary finds that such facts are not likely to exist in such calendar year,

he shall proclaim such determination, and commencing with such

calendar year, such county shall be excluded from the commercial

corn-producing area .

(5) "Farm consumption" of corn means consumption by the

farmer's family, employees, or household, or by his work stock ; or

consumption by poultry or livestock on his farm if such poultry or

livestock, or the products thereof, are consumed or to be consumed

by the farmer's family, employees, or household.

(6) (A) "Market", in the case of cotton, wheat, and tobacco, means

to dispose of by sale, barter, or exchange, but, in the case of wheat,

does not include disposing of wheat as premium to the Federal Crop

Insurance Corporation under Title V.

(B) "Market", in the case of corn, means to dispose of by sale,

barter, or exchange, or by feeding (in any form) to poultry or livestock which, or the products of which, are sold, bartered, or

exchanged, or to be so disposed of .

(C) "Market", in the case of rice, means to dispose of by sale,

barter, or exchange of rice used or to be used for human consumption .

(D) "Marketed", "marketing", and "for market" shall have corresponding meanings to the term "market" in the connection in which

they are used.

(7) "Marketing year" means, in the case of the following commodities, the period beginning on the first and ending with the second

date specified below :

Corn, October 1-September 30 ;

Cotton, August 1-July 31 ;

Rice, August 1-July 31 ;

Tobacco (flue-cured), July 1-June 30 ;

Tobacco (other than flue-cured), October 1-September 30 ;

Wheat, July 1-June 30 .
52 STAT.]

75TH CONG., 3D SESS .-CH. 30-FEB. 16, 1938

(8) "National average yield" as applied to cotton or wheat shall

be the national average yield per acre of the commodity during the

ten calendar years in the case of wheat, and during the five calendar

years in the case of cotton, preceding the year in which such national

average yield is used in any computation authorized in this title,

adjusted for abnormal weather conditions and, in the case of wheat,

but not in the case of cotton, for trends in yields .

(9) "Normal production" as applied to any number of acres of

corn, cotton, or wheat means the normal yield for the farm times

such number of acres .

(10) (A) "Normal supply" in the case of corn, cotton, rice, and

wheat shall be a normal year's domestic consumption and exports of

the commodity, plus 7 per centum in the case of corn, 40 per centum

in the case of cotton, 10 per centum in the case of rice, and 15 per

centum in the case of wheat, of a normal year's domestic consumption

and exports, as an allowance for a normal carry-over .

(B) The ` - normal supply" of tobacco shall be a normal year's

domestic consumption and exports plus 175 per centum of a normal

year's domestic consumption and 65 per centum of a normal year's

exports as an allowance for a normal carry-over .

(11) (A) "Normal `ear's domestic consumption", in the case of

corn and wheat, shall be the yearly average quantity of the commodity, wherever produced, that was cosumed in the United States

during the ten marketing years immediately preceding the marketing

year in which such consumption is determined, adjusted for current

trends in such consumption .

(B) "Normal year's domestic consumption", in the case of cotton

and tobacco, shall be the yearly average quantity of the commodity

produced in the United States that was consumed in the United

States during the ten marketing years immediately )receding the

marketing year in which such consumption is determined, adjusted

for current trends in such consumption .

(C) "Normal year's domestic consumption", in the case of rice,

shall be the yearly average quantity of rice produced in the United

States that was consumed in the United States during the five

marketing years immediately preceding the marketing year in which

such consumption is determined, adjusted for current trends in such

consumption.

(12) "Normal year's exports" in the case of corn, cotton, rice,

tobacco, and wheat shall be the yearly average quantity of the commodity produced in the United States that was exported from the

United States during the ten marketing years (or, in the case of

rice, the five marketing years) immediately preceding the marketing

year in which such exports are determined, adjusted for current

trends in such exports .

(13) (A) "'Normal yield" for any farm, in the case of corn, shall

be the average yield per acre of corn for the farm during the ten

calendar years immediately preceding the year in which such normal

yield is used in computing any farm marketing quota or adjustment

thereof, adjusted for abnormal weather conditions and trends in

yields .

(B) "Normal yield" for any farm, in the case of wheat or cotton,

shall be the average yield per acre of wheat or cotton for the farm,

adjusted for abnormal weather condition :, . and, in the case of wheat

but not in the case of cotton, for trends in Yields, during the ten

calendar years in the case of wheat, and five calendar years in the

' So in original .

Tobacco .

Rice .

41

"National average

yield" as applied to

cotton or wheat .

"Normal production" as applied to

corn, cotton, or wheat .

"Normal supply" in

the case of corn, cotton, rice, and wheat.

"Normal year's domestic consumption"

in the case of corn and

wheat .

Cotton and tobacco .

".Normal year's exports" in the case of

corn, cotton, rice, tobacco, and wheat .

"Normal yield" for

any farm in the case of

corn .

Po.,t, 1, . 2„_ .

Wheat or cotton .

Post, p . 202.
42 PUBLIC LAWS-CH. 30--FEB. 16, 1938

[52 STAT.

case of cotton, immediately preceding the year with respect to which

such normal yield is used in any computation authorized under

this title.

Appraisal in absence

of available data . (C) In applying subparagraph (A) or (B), if for any such year

the data are not available, or there is no actual yield, an appraised

yield for such year, determined in accordance with regulations issued

by the Secretary, shall be used as the actual yield for such year .

Drought, flood, etc . I n applying such subparagraphs, if, on account of drought, flood,

insect pests, plant disease, or other uncontrollable natural cause,

the yield in any year of such ten-year period or five-year period,

as the case may be, is less than 75 per centum of the average (computed without regard to such year) such year shall be eliminated

in calculating the normal yield per acre .

"Normal yield" per

(D) "Normal yield" per acre of rice for any land planted to rice acre of rice . In any year shall be the average yield per acre thereof during the

five calendar years immediately preceding the calendar year for

which such normal yield is determined. If, for any reason, there

is no actual yield or the data therefor are not available for any

year, then an appraised yield for such year, determined in accordance

with the regulations of the Secretary, shall be used . If the average

of the normal yields for all lands planted to rice in any year in

the State (weighted by the acreage allotments therein) exceeds the

average yield per acre for the State during the period used in determining normal yields, the normal yields for such lands in the State

shall be reduced pro rata so that the average of such normal yields

Post, p . 202,

shall not exceed such State average yield .

"Reserve supply

level" in the case of (14) (A) "Reserve supply level", in the case of corn, shall be a

corn . normal year's domestic consumption and exports of corn plus 10

per centum of a normal year's domestic consumption and exports,

to insure a supply adequate to meet domestic consumption and export

needs in years of drought, flood, or other adverse conditions, as well

as in years of plenty .

Tobacco. (B) "Reserve supply level" of tobacco shall be the normal supply

plus 5 per centum thereof, to insure a supply adequate to meet

domestic consumption and export needs in years of drought, flood,

or other adverse conditions, as well as in years of plenty.

"Tobacco" defined . (15) "Tobacco" means each one of the kinds of tobacco listed

below comprising the types specified as classified in Service and

Regulatory Announcement Numbered 118 of the Bureau of Agricultural Economics of the Department :

Flue-cured tobacco, comprising types 11, 12, 13, and 14 ;

Fire-cured and dark air-cured tobacco, comprising types 21,

22, 23, 24, 35, 36, and 37 ;

Burley tobacco, comprising type 31 ;

Maryland tobacco, comprising type 32 ;

Cigar-filler and cigar-binder tobacco, comprising types 42, 43,

44, 45, 46, 51, 52 53, 54, and 55 ; Cigar-filler tobacco, comprising type 41 .

The provisions of this title shall apply to each of such kinds of

tobacco severally .

"Total supply" of

w

(16) (A) "Total supply" of corn, cotton, rice, and wheat for any h t

otton, rice, and

marketing year shall be the carry-over of the commodity for such

marketing year plus the estimated production of the commodity in

the United States during the calendar year in which such marketing

year begins .

Tobacco . (B) "Total supply" of tobacco for any marketing year shall be

the carry-over at the beginning of such marketing year plus the

estimated production thereof in the United States during the calendar year in which such marketing year begins, except that the
52 STAT.]

75ra CONG., 3n SESS .-CH. 30-FEB. 16, 1933

estimated production of type 46 tobacco daring the marketing year

with respect to which the determination is being made shall be used

in lieu of the estimated production of such type during the calendar

year in which such marketing year begins in determining the total

supply of cigar-filler and cigar-binder tobacco .

(c) The latest available statistics of the Federal Government shall

be used by the Secretary in making the determinations required to

be made by the Secretary under this Act .

LOANS ON AGRICULTURAL COMMODITIES

SEC. 302. (a) The Commodity Credit Corporation is authorized,

upon recommendation of the Secretary and with the approval of

the President, to make available loans oil agricultural conlnloditie

(including dairy products) . Except as otherwise provided in this

section, the amount, terms, and conditions of such loans shall be fixed

by the Secretary, subject to the approval of the Corporation and the

President .

(b) The Corporation is directed to make available to cooperators

loans upon wheat during any marketing year beginning in a calendar

year in which the farm price of wheat on June 15 is below 52 per

centuin of the parity price on such date, or the July crop estimate

for wheat is in excess of a normal year's domestic consumption and

exports, at rates not less than 52 per centum and not more than 75

per centum of the parity price of wheat at the beginning of the

marketing year . In case marketing quotas for wheat are in effect

in any marketing Year, the Corporation is directed to make available,

during such marketing year, to noncooperators, loans upon wheat at

60 per centum of the rate applicable to cooperators . A loan on wheat

to a noncooperator shall be made only on so much of his wheat as

would be subject to penalty if marketed .

(c) The Corporation is directed to make available to cooperators

loans upon cotton during any marketing year beginning in a calendar year in which the average price on August 1 of seven-eighths

Middling spot cotton on the ten markets designated by the Secretary

is below 52 per centum of the parity price of cotton on such date,

or the August crop estimate for cotton is in excess of a normal

year's domestic consumption and exports, at rates not less than 52

per centum and not more than 75 per centum of the parity price of

cotton as of the beginning of the marketing year, In case marketing

quotas for cotton are in effect in any marketing year, the Corporation is directed to make available, during such marketing year, to

noncooperators, loans upon cotton at 60 per centum of the rate

applicable to cooperators . A loan on cotton to a noncooperator shall

be made only on so much of his cotton as would be subject to penalty

if marketed .

(d) The Corporation is directed to make available loans upon corn

during any marketing year beginning in the calendar year in which

the November crop estimate for corn is in excess of a normal year's

domestic consumption and exports, or in any marketing year when

on November 15 the farm price of corn is below 75 per centum of the

parity price, at the following rates :

75 per centum of such parity price if such estimate does not

exceed a normal year's consumption and exports and the farm

price of corn is below 75 per centum of the parity price on

November 15 ;

70 per centum of such parity price if such estimate exceeds

a normal year's domestic consumption and exports by not more

than 10 per centum ;

43

Latest statistics to

be used in making

determinations.

Loans on agricultural commodities .

Authority of Commodity Credit Corl-oration .

Amount, terms, and

conditions .

Loans upon wheat

if price below b2 per

centum of parity price .

Post, p . 820.

if July estimate is

in excess of normal

year's domestic consumption and exports .

Loans to noncooperators .

Lur itation .

Loans upon cotton,

when made .

Loans to noncooperators .

Limitation .

Loans upon corn,

when made.

Post . p. 820 .

Rates .
44

65 per centum of such parity price if such estimate exceeds a

normal year's domestic consumption and exports by more than

10 per centum and not more than 15 per centum ;

60 per centum of such parity price if such estimate exceeds

a normal year's domestic consumption and exports by more than

15 per centum and not more than 20 per centum ;

55 per centum of such parity price if such estimate exceeds a

normal year's domestic consumption and exports by more than

20 per centum and not more than 25 per centum ;

52 per centum of such parity price if such estimate exceeds a

normal year's domestic consumption and exports by more than

25 per centum.

Loans to cooperators

a n d noncooperators Loans shall be made to cooperators in the commercial corn-producing

within prescribed area at the applicable rate of the above schedule . Loans shall be area .

made to noncooperators within such commercial corn-producing area

but only during a marketing year in which farm marketing quotas

are in effect and only on corn stored under seal pursuant to section

324, and the rate of such loans shall be 60 per centum of the appliLoans to cooper- cable rate under the above schedule. Loans shall be made to ators outside pre.

scribed area. cooperators outside such commercial corn-producing area, and the

rate of such loans shall be 75 per centum of the applicable rate

under the above schedule.

Vodifieation of (e) The rates of loans under subsections (b), (c), and (d) on

wheat, cotton, and corn not of standard grade, type, staple, or

quality shall be increased or decreased in relation to the rates above

provided by such amounts as the Secretary prescribes as properly

reflecting differences from standard in grade, type, staple, and

quality.

Cooperators, prop-

(f) For the purposes of subsections (b), (c), and (d), a cooper- sions governing . ator shall be a producer on whose farm the acreage planted to the

commodity for the crop with respect to which the loan is made does

not exceed the farm acreage allotment for the commodity under this

title, or, in the case of loans upon corn to a producer outside the

commercial corn-producing area, a producer on whose farm the

acreage planted to soil-depleting crops does not exceed the farm

acreage allotment for soil-depleting crops for the year in which the

loan is made under the Soil Conservation and Domestic Allotment

Producer innocently Act as amended. For the purposes of this subsection a producer mending his allot

shall not be deemed to have exceeded his farm acreage allotment

unless such producer knowingly exceeded his farm acreage allotment .

Adverse referendum

(g) Notwithstanding any other provision of this section, if the on marketing quotas;

loan restriction . farmers producing cotton, wheat, corn, or rice indicate by vote in a

referendum carried out pursuant to the provisions of this title that

marketing quotas with respect to such commodity are opposed by

more than one-third of the farmers voting in such referendum, no

loan shall be made pursuant to this section with respect to the commodity during the period from the date on which the results of the

referendum are proclaimed by the Secretary until the beginning of

the second succeeeding 1 marketing year for such commodity . This

subsection shall not limit the availability or renewal of any loan

previously made .

Personal liability

(h) No producer shall be personally liable for any deficiency for deficiencies arising

from sale of collater- arising from the sale of the collateral securing any loan under this

al, etc'

section unless such loan was obtained through fraudulent representations by the producer.

Facilities and per.

(i) In carrying out this section the Corporation is directed, with sonnel. the consent of the Secretary, to utilize the services, facilities, and

personnel of the Department.

1 So in original.

PUBLIC LAWS-CH. 3&-FEB . 16, 1938

[52 STAN,
52 STAT.]

75TH CONG ., 3D SESS .-CH. 30-FEB. 10, 1938

PARITY PAYMENTS

SEC. 303. If and when appropriations are made therefor, the Secretary is authorized and directed to make payments to producers of

corn, wheat, cotton, rice, or tobacco, on their normal production of

such commodities in amounts which, together with the proceeds

thereof, will provide a return to such producers which is as nearly

equal to parity price as the funds so made available will permit . All

funds available for such payments with respect to these commodities

shall, unless otherwise provided by law, be apportioned to these

commodities in proportion to the amount by which each fails to reach

the parity income . Such payments shall be in addition to and not

in substitution for any other payments authorized by law .

CONSUMER SAFEGUARDS

SEC. 304. The powers conferred under this Act shall not be used to

discourage the production of supplies of foods and fibers sufficient to

maintain normal domestic human consumption as determined by the

Secretary from the records of domestic human consumption in the

years 1920 to 1929, inclusive, taking into consideration increased

population, quantities of any commodity that were forced into domestic consumption by decline in exports during such period, current

trends in domestic consumption and exports of particular commodities, and the quantities of substitutes available for domestic consumption within any general class of food commodities . In carrying

out the purposes of this Act it shall be the duty of the Secretary to

give clue regard to the maintenance of a continuous and stable supply

of agricultural commodities from domestic production adequate to

meet- consumer demand at prices fair to both producers and

consumers.

,SUBTITLE B-MARKETING QUOTAS

PART I-MARKETING QUOTAS-TOBACCO

LEGISLATIVE FINDING

SEC. 311 (a) The marketing of tobacco constitutes one of the great

basic industries of the United States with ramifying activities which

directly affect interstate and foreign commerce at every point, and

stable conditions therein are necessary to the general welfare .

Tobacco produced for market is sold on a . Nation-wide market and,

with its products, moves almost wholly in interstate and foreign

commerce from the producer to the ultimate consumer. The farmers producing such commodity are subject in their operations to

uncontrollable natural causes, are widely scattered throughout the

Nation, in many cases such farmers carry on their farming operations

on borrowed money or leased lands, and are not so situated as to be

able to organize effectively, as can labor and industry through unions

and corporations enjoying Government protection and sanction .

For these reasons, among others, the farmers are unable without

Federal assistance to control effectively the orderly marketing of

such commodity with the result that abnormally excessive supplies

thereof are produced and dumped indiscriminately on the Nationwide market .

(b) The disorderly marketing of such abnormally excessive supplies affects, burdens, and obstructs interstate and foreign commerce

by (1) materially affecting the volume of such commodity marketed

therein, (2) disrupting the orderly marketing of such commodity

therein, (3) reducing the price for such commodity with consequent

injury and destruction of interstate and foreign commerce in such

45

Parity payments on

normal production.

Post, p . 819 .

Apportionment of

funds .

Consumer safeguards .

Production sufficient to maintain normal domestic human

consumption.

Continuous supply

adequate to meet consumer demand .

Subtitle n-Marketing quotas.

Part I-Tobacco .

Legislative finding.
46

National marketing

quota.

Proclamation b y

Secrotary when supply exceeds reserve

supply level .

Post, P. 205 .

Date quota effective .

Amount .

Date of proclamation.

Burley tobacco, and

fire-cured and dark

air-cured tobacco,

marketing quota.

Amount .

Effective date of

subsection .

Referendum .

Effect of vote .

PUBLIC LAWS-CH. 30-FEB. 16, 1938(52 STAT.

commodity, and (4) causing a disparity between the prices for such

commodity in interstate and foreign commerce and industrial products therein, with a consequent diminution of the volume of interstate and foreign commerce in industrial products .

(c) Whenever an abnormally excessive supply of tobacco exists,

the marketing of such commodity by the producers thereof directly

and substantially affects interstate and foreign commerce in such

commodity and its products, and the operation of the provisions of

this Part becomes necessary and appropriate in order to promote,

foster, and maintain an orderly flow of such supply in interstate and

foreign commerce .

NATIONAL MARKETING QUOTA

SEC. 312. (a) Whenever, on the 15th day of November of any

calendar year, the Secretary finds that the total supply of tobacco

as of the beginning of the marketing year then current exceeds the

reserve supply level therefor, the Secretary shall proclaim the amount

of such total supply, and, beginning on the first day of the marketing

year next following and continuing throughout such year, a national

marketing quota shall be in effect for the tobacco marketed during

such marketing year. The Secretary shall also determine and specify

in such proclamation the amount of the national marketing quota

in terms of the total quantity of tobacco which may be marketed,

which will snake available during such marketing year a supply of

tobacco equal to the reserve supply level . Such proclamation shall

be made not later than the 1st day of December in such year .

(b) Whenever in the case of burley tobacco, and fire-cured and

dark air-cured tobacco, respectively, the total supply proclaimed

pursuant to the provisions of subsection (a) of this section exceeds

the reserve supply level by more than 5 per centuin and a national

marketing quota is not in effect for such tobacco during the marketing year then current, a national marketing quota shall also be in

effect for such tobacco marketed during the period from the date

of such proclamation to the end of such current marketing year,

and the Secretary shall determine and shall specify in such proclamation the amount of such national marketing quota in terms of

the total quantity which may be marketed, which will make available during such current marketing year a supply of tobacco equal

to the reserve supply level . The provisions of this subsection shall

not be effective prior to the beginning of the marketing year beginning in the calendar year 1938 .

(c) Within thirty days after the date of the issuance of the proclamation specified in subsection (a) of this section, the Secretary shall

conduct a referendum of farmers who were engaged in production

of the crop of tobacco harvested prior to the holding of the referendum to determine whether such farmers are in favor of or opposed

to such quota. If in the case of burley tobacco, or fire-cured and

dark air-cured tobacco, respectively, farmers would be subject to a

national quota for the next succeeding marketing year pursuant to

the provisions of subsection (a) of this section, and also to a national

marketing quota for the current marketing year pursuant to the

provisions of subsection (b) of this section, the referendum shall

provide for voting with respect to each such quota. If more than

one-third of the farmers voting in the referendum oppose such

quota, the Secretary shall prior to the 1st day of January, proclaim

the result of the referendum and such quota shall not be effective

thereafter.
52 ST-XT .]

75TH CONG., 3D SESS .-CH. 30-FEB. 16, 1938

(d) In connection with the determination and proclamation of

any marketing quota for the 1935-1939 marketinn year, the determination by the Secretary pursuant to subsection Fa) of this section

shall be made and proclaimed within fifteen days following the date

of the enactment of this Act, and the proclamation of the Secretary

pursuant to subsection (c) of this section shall be made within fortyfive days following the date of the enactment of this Act.

(e) Marketing quotas shall not be in effect with respect to cigarfiller tobacco comprising type 41 during the marketing year beginning in 1938 or the marketing year beginning in 1939 .

_APPORTIONMENT OF N ATIO\ AL )l APKETING QUOTA

SEC. 313. (a) The national marketing quota for tobacco established

pursuant to the provisions of section 312, less the alnoumit to be

allotted under subsection (c) of this section, shall be apportioned by

the Secretary among the several States on the basis of the total production of tobacco in each State during the five calendar years

immediately preceding the calendar year in which the quota is

proclaimed (plus, in applicable years, the normal production on the

net acreage diverted under previous agricultural adjustment and

conservation programs), with such adjustments as are determined

to be necessary to make correction for abnormal conditions of production, for small farms, and for trends in production, giving due

consideration to seed bed and other plant diseases during such fiveyear period : Provided, hozcevev, That to prevent in any case too

sharp and sudden reduction in acreage of tobacco production in any

State, the marketing quota for flue-cured tobacco for any State for

any marketing year shall not be reduced to a point less than 75 per

centum of the production of flue-cured tobacco in such State for the

year 1937.

(b) The Secretary shall provide, through the local conmiittees, for

the allotment of the marketing quota for any State among the farms

on which tobacco is produced, on the basis of the following :Past

marketing of tobacco, making due allowance for drought, flood, hail,

other abnormal -weather conditions, plant bed, and other diseases ;

land, labor, and equipment available for the production of tobacco ;

crop-rotation practices ; and the soil and other physical factors affecting the production of tobacco : Provided, That, except for farms on

which for the first time in fire years tobacco is produced to be marketed in the marketing year for which the quota is effective, the

marketing quota for any farm shall not be less than the smaller of

either (1) three thousand t-,vo hundred pounds, in the case of fluecured tobacco, and two thousand four hundred pounds, in the case

of other kinds of tobacco, or (2) the average tobacco production for

the farm during the preceding three years, plus the average normal

production of any tobacco acreage diverted under agricultural adjustment and conservation programs during such preceding three years .

(c) The Secretary shall provide, through local committees, for

the allotment of not in excess of 5 per centum of the national marketing quota (1) to farms in any State whether it has a State quota

or not on which for the first time in five years tobacco is produced

to be marketed in the year for which the quota is effective and (2)

for further increase of allotments to small farms pursuant to the

proviso in subsection (b) of this section on the basis of the following

Land, labor, and equipment available for the production of tobacco ;

crop-rotation practices ; and the soil and other physical factors affecting the production of tobacco : Provided, That farm marketing quotas

established pursuant to this subsection for farms on which tobacco

is produced for the first time in five years shall not exceed 75 per

Referendum .

47

Quota for 1938-1939

marketing year, determination and proclamation .

Cigar-filler tobacco,

typo 41 .

Post, p . 120 .

Apportionment of

national marketing

quota

Basis .

Post, p . 202 .

Proviso .

Flue-cured tobacco,

basis for fixing quota.

Allotments through

local committees .

Basis .

Proviso .

Quota, cscept for

farms on which tobacco produced for

first time in 5 years .

Allotment among

farms producing tobacco for first time in

5 years .

Increased allotments

to small farms .

Preriso.

Limitation .
48

Transfers restricted .

Post, p . 202 .

Penalties .

Marketing in excess

of marketing quota

for farm on which produced ; exceptions .

Penalty .

Payment of penalty.

Proviso.

Tobacco marketed

directly to person outside United States .

Part II-Marketing

quotas-Corn .

Legislative finding.

PUBLIC LAWS-CH. 30-FEB. 16, 1938[52 STAT.

centum of the farm marketing quotas established pursuant to subsection (b) of this section for farms which are similar with respect

to the following : Land, labor, and equipment available for the production of tobacco, crop-rotation practices, and the soil and other

physical factors affecting the production of tobacco .

(d) Farm marketing quotas may be transferred only in such manner and subject to such conditions as the Secretary may prescribe

by regulations .

PENALTIES

SEC. 314. The marketing of any tobacco in excess of the marketing

quota for the farm on which the tobacco is produced, except the

marketing of any such tobacco for nicotine or other byproduct uses,

shall be subject to a penalty of 50 per centum of the market price

of such tobacco on the date of such marketing, or, if the following

rates are higher, 3 cents per pound in the case of flue-cured, Maryland, or burley, and 2 cents per pound in the case of all other kinds

of tobacco. Such penalty shall be paid by the person who acquires

such tobacco from the producer but an amount equivalent to the

penalty may be deducted by the buyer from the price paid to the

producer in case such tobacco is marketed by sale ; or, if the tobacco

is marketed by the producer through a warehouseman or other agent,

such penalty shall be paid by such warehouseman or agent who may

deduct an amount equivalent to the penalty from the price paid to

the producer : Provided, That in case any tobacco is marketed directly

to any person outside the United States the penalty shall be paid and

remitted by the producer.

PART II-MARKETING QUOTAS-CORN

LEGISLATIVE FINDING

SEC. 321. Corn is aa basic source of food for the Nation, and corn

produced in the commercial corn-producing area moves almost wholly

in interstate and foreign commerce in the form of corn, livestock,

and livestock products .

Abnormally excessive and abnormally deficient supplies of corn

acutely and directly affect, burden, and obstruct interstate and foreign

commerce in corn, livestock, and livestock products. When abnormally excessive supplies exist, transportation facilities in interstate

and foreign commerce are overtaxed, and the handling and processing facilities through which the flow of interstate and foreign commerce in corn, livestock, and livestock products is directed become

acutely congested. Abnormally deficient supplies result in substantial decreases in livestock production and in an inadequate flow of

livestock and livestock products in interstate and foreign commerce,

with the consequence of unreasonably high prices to consumers .

Violent fluctuations from year to year in the available supply of

corn disrupt the balance between the supply of livestock and livestock products moving in interstate and foreign commerce and the

supply of corn available for feeding . When available supplies of

corn are excessive, corn prices are low and farmers overexpand livestock production in order to find outlets for corn . Such expansion,

together with the relative scarcity and high price of corn, forces

farmers to market abnormally excessive supplies of livestock in interstate commerce at sacrifice prices, endangering the financial stability

of producers, and overtaxing handling and processing facilities

through which the flow of interstate and foreign commerce in livestock and livestock products is directed . Such excessive marketings

deplete livestock on farms, and livestock marketed in interstate and
52 STAT.]

75TH CONG., 3D SESS .-CH. 30-FER 16, 1938

foreign commerce consequently becomes abnormally low, with resultant high prices to consumers and danger to the financial stability

of persons engaged in transporting, handling, and processing livestock in interstate and foreign commerce . These high prices in turn

result in another ov erexpansion of livestock production .

Recurring violent fluctuations in the price of corn resulting from

corresponding violent fluctuations in the supply of corn directly

affect the movement of livestock in interstate commerce from the

range cattle regions to the regions where livestock is fattened for

market in interstate and foreign commerce, and also directly affect

the movement in interstate commerce of corn marketed as corn which

is transported from the regions where produced to the regions where

livestock is fattened for market in interstate and foreign commerce .

Substantially all the corn moving in interstate commerce, substantially all the corn fed to livestock transported in interstate commerce for fattening, and substantially all the corn fed to livestock

marketed in interstate and foreign commerce, is produced in the

commercial corn-producing area . Substantially all the corn produced in the commercial corn-producing area, with the exception of

a comparatively small amount used for farm consumption, is either

sold or transported in interstate commerce, or is fed to livestock

transported in interstate commerce for feeding, or is fed to livestock

marketed in interstate and foreign commerce . Almost all the corn

produced outside the commercial corn-producing area is either consumed, or is fed to livestock which is consumed, in the State in which

such corn is produced .

The conditions affecting the production and marketing of corn

and the livestock products of corn are such that, without Federal

assistance, farmers, individually or in cooperation, cannot effectively

prevent the recurrence of disparities between the supplies of livestock moving in interstate and foreign commerce and the supply of

corn available for feeding, and provide for orderly marketing of

corn in interstate and foreign commerce and livestock and livestock

products in interstate and foreign commerce.

The national public interest requires that the burdens on interstate and foreign commerce above described be removed by the exercise of Federal power . By reason of the administrative and physical

impracticability of regulating the movement of livestock and livestock products in interstate and foreign commerce and the inadequacy of any such regulation to remove such burdens, such power

can be feasibly exercised only by providing for the withholding from

market of excessive and burdensome supplies of corn in times of

excessive production, and providing a . reserve supply of corn available for market in times of deficient production, in order that a

stable and continuous flow of livestock and livestock products in

interstate and foreign commerce may at all times be assured and

maintained .

FARM MARKETING QUOTAS

SEC. 322. (a) W'henever in any calendar year the Secretary determines from available statistics of the Department, including the

August production estimate officially published by the Division of

Crop and Livestock Estimates of the Bureau of Agricultural Economics of the Department, that the total supply of corn as of October 1

will exceed the normal supply thereof by more than 10 per centum,

marketing quotas shall be in effect in the commercial corn-producing

area for the crop of corn grown in such area in such calendar year,

and shall remain in effect until terminated in accordance with the

provisions of this title .

36325 5	4

49

Farm marketing

quotas .

When effective; termination .
50

. Determination of

acreage .

"Marketing percentage."

Post, p . 52 .

Proclamation by

Secretary.

Referendum .

Effect of vote.

September production estimates, use of,

in determining continuation of marketing quotas .

Amount of farm

marketing quota .

Computation .

Quota not applicable ; when .

Storage amounts.

Determination of .

PUBLIC LAWS-CH, 30-FEB. 1&, 1938[52 STAT.

(b) The Secretary shall determine, on the basis of the estimated

average yield of corn in such area for such crop, the acreage in such

area which the Secretary determines would make available for the

marketing year beginning October 1 a supply of corn (together with

the estimated production of corn in the United States outside such

area) equal to the normal supply. The percentage which the number of acres so determined is of the total number of acres of the

acreage allotment under section 328 shall be proclaimed by the Secretary. Such percentage is referred to herein as the "marketing

percentage".

(c) The Secretary shall proclaim his determinations of facts under

subsection (a) and his determination of the marketing percentage

under subsection (b) not later than August 15 .

(d) Within twenty days after the date of the issuance of the

proclamation provided for in subsection (c) of this section, the

Secretary shall conduct a referendum, by secret ballot, of farmers

who would be subject to such quotas to determine whether such

farmers are in favor of or opposed to such quotas . If more than

one-third of the farmers voting in the referendum oppose such

quotas, the Secretary shall, prior to September 10, proclaim the

result of the referendum and such quotas shall not become effective .

(e) Whenever it shall appear from the September production estimates officially published by the Division of Crop and Livestock

Estimates of the Bureau of Agricultural Economics of the Department, that the total supply of corn as of the beginning of the next

succeeding marketing year will not exceed the normal supply by

more than 10 per centum thereof, the Secretary shall proclaim such

fact prior to September 20, if farm marketing quotas have been proclaimed for such marketing year . Thereupon such quotas shall not

become effective .

AMOUNT OF FARM MARKETING QUOTA

SEc. 323. (a) The farm marketing quota for any farm with respect

to any crop of corn shall be an amount of corn equal to the sum of-

(1) The amount of corn used as silage ; and

(2) The actual production of the acreage of corn not used as

silage less the amount required for farm consumption and less

the storage amount applicable to the farm as ascertained under

section 324 .

(b) No farm marketing quota with respect to any crop of corn

shall be applicable to any farm on which the normal prouction of

the acreage planted to corn is less than three hundred bushels .

STORAGE AMOUNTS

SEc. 324. (a) If the acreage of corn on the farm does not exceed

the marketing percentage of the farm acreage allotment, there shall

be no storage amount .

(b) If the acreage of corn on the farm exceeds the marketing percentage of the farm acreage allotment, the storage amount shall be

a number of bushels equal to the smallest of the following amounts-

(1) The normal production of the acreage of corn on the farm

in excess of the marketing percentage of the farm acreage

allotment ;

(2) The amount by which the actual production of the acreage

of corn on the farm exceeds the normal production of the marketing percentage of the farm acreage allotment ; or

(3) The amount of the actual production of the acreage of

corn on the farm not used for silage .
52 STAT.]

75TH LONG., 3D SESS.-CH. 30-YEB. 10, 1038

(c) If the storage amount ascertained under subsection (b) is less

than 100 bushels, there shall be no storage amount .

PENALTIES

SEC. 325. (a) Any farmer who, while any farm marketing quota is

in effect for his farm with respect to any crop of corn, markets corn

produced on the farm in an amount which is in excess of the aggregate of the farm marketing quotas for the farm in effect at such

time, shall be subject to a penalty of 15 cents per bushel of the excess penalty . so marketed. Liability for such penalty shall not accrue until the

Liability based on

amount of corn stored under seal on such farm or in storage cribs

storage provisions .

rented by the farmer or under his control is less than the storage

amount applicable to such crop plus the storage amounts, if any,

applicable to other crops .

(b) If there is stored under seal on the farm or in such cribs an Presnntptionofnonn

amount of corn equal at least to the storage amount applicable to

violation ; then .

such crop plus such storage amounts applicable to such other crops,

the farmer shall be presumed not to be violating the provisions of

subsection (a) . 'Mien the amount of corn stored under seal on the '

Presumption of

farm or in such cribs is less than the storage amount applicable to

la .

such crop plus such storage amounts applicable to such other crops,

the farmer shall be presumed to have marketed, while farm marketing quotas were in effect, corn in violation of the provisions of subsection (a) to the extent that the amount of corn so stored is less than

the aggregate of such storage amounts. In any action brought to Burden of proof. enforce the collection of penalties provided for in this section, the

farmer, to the extent that the amount of corn so stored is less than

the aggregate of such storage amounts shall have the burden of

proving that he did not market corn in violation of the provisions of

subsection ( a) .

(c) For the purposes of this Part, corn shall be deemed to be Stora ge re g ulations . stored by the farmer under seal only if stored in such manner as

to conform to the requirements of such regulations as the Secretary

shall prescribe in order more effectively to administer this Part .

ADJUSTMENT OF FARM MARKETING QUOTAS

SEC. 326. (a) Whenever in any county or other area the Secretary

finds that the actual production of corn plus the amount of corn

stored under seal in such county or other area is less than the normal

production of the marketing percentage of the farm acreage allotments in such county or oler area, the Secretary shall terminate

farm marketing quotas for corn in such county or other area .

(b) Whenever, upon any farm, the actual production of the acreage

of corn is less than the normal production of the marketing percentage of the farin acreage allotment, there may be marketed, without

penalty, from such farm an amount of corn from the corn stored

under seal pursuant to section 324 which, together with the actual

production of the then current crop, will equal the normal production

of the marketing percentage of the farm acreage allotment .

(c) Whenever, in any marketing year, marketing quotas are not

in effect with respect to the crop of corn produced in the calendar

year in which such marketing year begins, all marketing quotas

applicable to previous crops of corn shall be terminated .

PROCLAMATIONS OF SUPPLIES AND COMMERCIAL CORN-PRODUCING AREA

SEC. 327. Not later than September 1, the Secretary shall ascertain

and proclaim the total supply, the normal supply, and the reserve

supply level for such marketing year. Not later than February 1,

Penalties .

51

Farmer marketing

amount in excess of

aggregate quotas .

Adjustment of farm

marketing quotas .

Production less

than normal production of marketing percentage of farm acreage allotment .

Ante, p . 5.i.

When quotas not in

effect, termination of

previous quotas .

Proclamations of

supplies and commercial corn-producing

area .

Po,,t, p . 205
52

Acreage allotment .

Post, pp . 202, 205.

Apportionment of

acreage allotment.

Proviso.

Limitation .

County allotment .

Part III-Marketing quotas-Wheat .

Legislative findings.

PUBLIC LAWS-CH. 30-FEB. IC, 1938[52 STAT.

the Secretary shall ascertain and proclaim the commercial cornproducing area . The ascertainment and proclamation of the commercial corn-producing area for 1938 shall be made not later than

ten days after the date of the enactment of this Act .

ACREAGE ALLOTMENT

SEC. 328. The acreage allotment of corn for any calendar year shall

be that acreage in the commercial corn-producing area which, on the

basis of the average yield for corn in such area during the ten

calendar years immediately preceding such calendar year will produce an amount of corn in such area which the Secretary determines

will, together with corn produced in the United States outside the

commercial corn-producing area, make available a supply for the

marketing year beginning in such calendar year, equal to the reserve

supply level. The Secretary shall proclaim such acreage allotment

not later than February I of the calendar year for which such acreage

allotment was determined. The proclamation of the acreage allotment for 1938 shall be made as soon as practicable after the date of

the enactment of this Act .

APPORTIONMENT OF ACREAGE ALLOTMENT

SEC. 329. (a) The acreage allotment for corn shall be apportioned

by the Secretary among the counties in the commercial corn-producing area on the basis of the acreage seeded for the production of

corn during the ten calendar years immediately preceding the calendar year in which the apportionment is determined (plus, in

applicable years, the acreage diverted under previous agricultural

adjustment and conservation programs), with adjustments for

abnormal weather conditions and for trends in acreage during such

period and for the promotion of soil-conservation practices : Provided, That any downward adjustment for the promotion of soilconservation practices shall not exceed 2 per centum of the total

acreage allotment that would otherwise be made to such county.

(b) The acreage allotment to the county for corn shall be apportioned by the Secretary, through the local committees, among the

farms within the county on the basis of tillable acreage, crop-rotation

practices, type of soil, and topography.

PART III-MARKETING QUOTAS-WHEAT

LEGISLATIVE FINDINGS

SEC. 331. Wheat is a basic source of food for the Nation, is produced throughout the United States by more than a million farmers,

is sold on the country-wide market and, as wheat or flour, flows

almost entirely through instrumentalities of interstate and foreign

commerce from producers to consumers .

Abnormally excessive and abnormally deficient supplies of wheat

on the country-wide market acutely and directly affect, burden, and

obstruct interstate and foreign commerce . Abnormally excessive

supplies overtax the facilities of interstate and foreign transportation, congest terminal markets and milling centers in the flow of

wheat from producers to consumers, depress the price of wheat in

interstate and foreign commerce, and otherwise disrupt the orderly

marketing of such commodity in such commerce . Abnormally deficient supplies result in an inadequate flow of wheat and its products

in interstate and foreign commerce with consequent injurious effects

to the instrumentalities of such commerce and with excessive increases

in the prices of wheat and its products in interstate and foreign

commerce.
52 STAT.] 	75TH CONG. . 3n SESS.-CH. 30--FEB . 16, 1938

It is in the interest of the general welfare that interstate and

foreign commerce in wheat and its products be protected from such

burdensome surpluses and distressing shortages, and that a supply

of wheat be maintained which is adequate to meet domestic consumption and export requirements in years of drought, flood, and other

adverse conditions as well as in years of plenty, and that the soil

resources of the Nation be not wasted in the production of such

burdensome surpluses. Such surpluses result in disastrously low

prices of wheat and other grains to wheat producers, destroy the

purchasing power of grain producers for industrial products, and

reduce the value of the agricultural assets supporting the national

credit structure . Such shortages of wheat result in unreasonably

high prices of flour and bread to consumers and loss of market

outlets by wheat producers .

The conditions affecting the production and marketing of wheat

are such that, without Federal assistance, farmers, individually or

in cooperation, cannot effectively prevent the recurrence of such surpluses and shortages and the burdens on interstate and foreign

commerce resulting therefrom, maintain normal supplies of wheat,

or provide for the orderly marketing thereof in interstate and foreign

commerce.

The provisions of this Part affording a cooperative plan to wheat

producers are necessary in order to minimize recurring surpluses

and shortages of wheat in interstate and foreign commerce, to

provide for the maintenance of adequate reserve supplies thereof,

and to provide for an adequate flow of wheat and its products in

interstate and foreign commerce . The provisions hereof for regulation of marketings by producers of wheat whenever an abnormally

excessive supply of such commodity exists are necessary in order

to maintain an orderly flow of wheat in interstate and foreign

commerce under such conditions .

PROCLAMATIONS OF SUPPLIES AND ALLOTMENTS

SEC. 332. Not later than July 15 of each marketing year for wheat,

the Secretary shall ascertain and proclaim the total supply and the

normal supply of wheat for such marketing year, and the national

acreage allotment for the next crop of wheat .

NATIONAL ACREAGE ALLOTMENT

SEC. 333. The national acreage allotment for any crop of wheat

shall be that acreage which the Secretary determines will, on the

basis of the national average yield for wheat, produce an amount

thereof adequate, together with the estimated carry-over at the

beginning of the marketing year for such crop, to make available a

supply for such marketing year equal to a normal year's domestic

consumption and exports plus 30 per centum thereof . The national

acreage allotment for wheat for 1938 shall be sixty-two million five

hundred thousand acres .

APPORTIONMENT OF NATIONAL ACREAGE ALLOTMENT

SEC. 334. (a) The national acreage allotment for wheat shall be

apportioned by the. Secretary among the several States on the basis

of the acreage seeded for the production of wheat during the ten

calendar years immediately preceding the calendar year in which the

national acreage allotment is determined (plus, in applicable years,

the acreage diverted under previous agricultural adjustment and

conservation programs), with adjustments for abnormal weather

conditions and for trends in acreage during such period .

Proclamations of

supplies and allotments .

National acreage

allotment .

Post, p . 775 .

Apportionment .

53
54

State acreage allotment .

Post, p . 203 .

County allotment .

Effective upon

proclamation of the

Secretary .

Amount of national

marketing quota, computation.

PUBLIC LAWS-CH. 30-FEB. 16, 1938

[52 STAT.

(b) The State acreage allotment for wheat shall be apportioned

by the Secretary among the counties in the State, on the basis of the

acreage seeded for the production of wheat during the ten calendar

years immediately preceding the calendar year in which the national

acreage allotment is determined (plus, in applicable years, the net

acreage diverted under previous agricultural adjustment and conservation programs), with adjustments for abnormal weather conditions

and trends in acreage during such period and for the promotion of

soil-conservation practices .

(c) The allotment to the county shall be apportioned by the Secretary, through the local committees, among the farms within the

county on the basis of tillable acres, crop-rotation practices, type of

soil, and topography . Not more than 3 per centum of such county

allotment shall be apportioned to farms on which wheat has not been

planted during any of the three marketing years immediately preceding the marketing year in which the allotment is made .

Marketing quotas.

MARKETING QUOTAS

SEC.335 . (a) Whenever it shall appear that the total supply of

wheat as of the beginning of any marketing year will exceed a normal year's domestic consumption and exports by more than 35 per

centum, the Secretary shall, not later than the May 15 prior to the

beginning of such marketing year, proclaim such fact and, during the

marketing year beginning July 1 and continuing throughout such

marketing year, a national marketing quota shall be in effect with

contents of proclamation . respect to the marketing of wheat . The Secretary shall ascertain

and specify in the proclamation the amount of the national marketing quota in terms of a total quantity of wheat and also in terms of

a marketing percentage of the national acreage allotment for the

current crop which he determines will, on the basis of the national

average yield of wheat, produce the amount of the national marketing quota. Marketing quotas for any marketing year shall be in

effect with respect to wheat harvested in the calendar year in which

such marketing year begins notwithstanding that the wheat is marketed prior to the beginning of such marketing year . No marketing

quota with respect to the marketing of wheat shall be in effect for

the marketing year beginning July 1, 1938, unless prior to the date of

the proclamation of the Secretary, provision has been made by law

for the payment, in whole or in part, in 1938 of parity payments with

respect to wheat.

(b) The amount of the national marketing quota for wheat shall

be equal to a normal year's domestic consumption and exports plus

30 per centum thereof, less the sum of (1) the estimated carry-over

of wheat as of the beginning of the marketing year with respect to

which the quota is proclaimed and (2) the estimated amount of wheat

which will be used on farms as seed or livestock feed during the

marketing year .

quota,

Farm

teeing

(c) The farm marketing quota for any farm for any marketing

year shall be a number of bushels of wheat equal to the sum of-

(1) A number of bushels equal to the normal production of

anumber of acres determined by applying the marketing percentage specified in the quota proclamation to the farm acreage

allotment for the current crop ; and

(2) A number of bushels of wheat equal to the amount, or

part thereof, of wheat from any previous crop which the farmer

has on hand which, had such amount, or part thereof, been marketed during the preceding marketing year in addition to the

wheat actually marketed during such preceding marketing year,

could have been marketed without penalty.
52 STAT.]

75TH CONG ., 3n SESS .-CH. 30-FEB. 18, 1938

In no event shall the farm marketing quota for any farm be less

than the normal production of half the farm acreage allotment for

the farm .

(d) No farm marketing quota with respect to wheat shall be

applicable in any marketing year to any farm on which the normal

production of the acreage planted to wheat of the current crop is

less than one hundred bushels.

REFERENDUM

SEC. 336. Between the date of the issuance of any proclamation

of any national marketing quota for wheat and June 10, the Secretary shall conduct a referendum, by secret ballot, of farmers who

will be subject to the quota specified therein to determine whether

such farmers favor or oppose such quota . If more than one-third

of the farmers voting in the referendum oppose such quota, the Secretary shall, prior to the effective date of such quota, by proclamation

suspend the operation of the national marketing quotas with respect

to wheat.

ADJUSTMENT AND SUSPENSION OF QUOTAS

SEC. 337. (a) If the total supply as proclaimed by the Secretary

within forty-five (lays after the beginning of the marketing year is

less than that specified in the proclamation by the Secretary under

section 335 (a), then the national marketing quota specified in the

proclamation under such section shall be increased accordingly .

(b) Whenever it shall appear from either the July or the August

production estimates, officially published by the Division of Crop

and Livestock Estimates of the Bureau of Agricultural Economics

of the Department, that the total supply of wheat as of the beginning of the marketing year was less than a normal year's domestic

consumption and exports plus 30 per centum thereof, the Secretary

shall proclaim such fact prior to July 20, or August 20, as the case

may be, if farm marketing quotas have been announced with respect

to the crop grown in such calendar year . Thereupon such quotas

shall become ineffective .

TRANSFER OF QUOTAS

SEC. 338. Farm marketing quotas for wheat shall not be transferable, but, in accordance with regulations prescribed by the Secretary for such purpose,_ any farm marketing quota in excess of the

supply of wheat for such farm for any marketing year may be allocated to other farms on which the acreage allotment has not been

exceeded .

PENALTIES

SEC. 339. Any farmer who, while farm marketing quotas are in

effect, markets wheat in excess of the farm marketing quota for the

farm on which such wheat was produced, shall be subject to a

penalty of 15 cents per bushel of the excess so marketed .

PART Iv-MARKETING QUOTAS-COTTON

LEGISLATIVE FINDINGS

SEC . 341. American cotton is a basic source of clothing and industrial products used by every person in the United States and by substantial numbers of people in foreign countries . American cotton

is sold on a world-wide market and moves from the places of proSmall crop farms .

Referendum .

55

Minimum farm

marketing quota .

Effect of vote on

quota .

Adjustment and

suspension of quotas .

Transfer of quotas .

Penaitias .

Part IV-Marketing quotas-Cotton .

Legislative findings.
56

Finding and proclamation of supplies,

etc.

Amount of national

allotment .

PUBLIC LAWS-CH. 36-FEB . 16, 1938

[52 STAT .

duction almost entirely in interstate and foreign commerce to processing establishments located throughout the world at places outside

the State where the cotton is produced.

Fluctuations in supplies of cotton and the marketing of excessive

supplies of cotton in interstate and foreign commerce disrupt the

orderly marketing of cotton in such commerce with consequent injury

to and destruction of such commerce. Excessive supplies of cotton

directly and materially affect the volume of cotton moving in interstate and foreign commerce and cause disparity in prices of cotton

and industrial products moving in interstate and foreign commerce

with consequent diminution of the volume of such commerce in

industrial products.

The conditions affecting the production and marketing of cotton

are such that, without Federal assistance, farmers, individually or

in cooperation, cannot effectively prevent the recurrence of excessive

supplies of cotton and fluctuations in supplies, cannot prevent indiscriminate dumping of excessive supplies on the Nation-wide and

foreign markets, cannot maintain normal carry-overs of cotton, and

cannot provide for the orderly marketing of cotton in interstate and

foreign commerce.

It is in the interest of the general welfare that interstate and foreign commerce in cotton be protected from the burdens caused by the

marketing of excessive supplies of cotton in such commerce, that

a supply of cotton be maintained which is adequate to meet domestic

consumption and export requirements in years of drought, flood, and

other adverse conditions as well as in years of plenty, and that the

soil resources of the Nation be not wasted in the production of excessive supplies of cotton .

The provisions of this hart affording a cooperative plan to cotton

producers are necessary and appropriate to prevent the burdens on

interstate and foreign commerce caused by the marketing in such

commerce of excessive supplies, and to promote, foster, and maintain

an orderly flow of an adequate supply of cotton in such commerce .

FINDING AND PROCLAMATION OF SUPPLIES, AND SO FORTH

SEC. 342. Not later than November 15 of each year the Secretary

shall find and proclaim (a) the total supply, the normal supply, and

the carry-over of cotton as of August 1 of such year, (b) the probable domestic consumption of American cotton during the marketing

year commencing August 1 of such year, (c) the probable exports

of American cotton during such marketing year, and (d) the estimated carry-over of cotton as of the next succeeding August 1. For

the marketing year 1937-1938 the Secretary shall make all the findings and proclamations provided for in this section not later than ten

days after the date of the enactment of this Act .

AMOUNT OF NATIONAL ALLOTMENT

SEC. 343. (a) Not later than November 15 of each year the Secretary shall find and proclaim the amount of the national allotment of

cotton for the succeeding calendar year in terms of standard bales

of five hundred pounds gross weight. The national allotment shall

be the number of bales of cotton adequate, together with the estimated carry-over as of August 1 of such succeeding calendar year,

to make available a supply of cotton, for the marketing year begin-
52 SWAT .] 	75TH CONG., 3D SESS .-CH. 30-FEB . 16, 1938

ping on such August 1, equal to the normal supply. The finding

and proclamation of the national allotment for the calendar year

1938 shall be made not later than ten days after the date of the

enactment of this Act .

(b) If the national allotment for 1938 or 1939 is determined to be

less than ten million bales, the national allotment for such year

shall be ten million bales for such year, as the case may be. If the

national allotment for 1938 or 1939 is determined to be more than

eleven million five hundred thousand bales, it shall be eleven million

five hundred thousand bales for such year, as the case may be .

(c) Notwithstanding the foregoing provisions of this section, the

national allotment for 1938 and for 1939 shall be increased by a

number of bales equal to the production of the . acres allotted under

section 344 (e) for such year .

57

Finding and proclamation of, for 1938;

time limitation .

Determination of,

for 1935 or 1939 .

Increase, for 1938

and 1939 .

Post, p . 203 .

APPORTIONMENT OF NATIONAL ALLOTMENTApportionment of

national allotment . SEC . 344. (a) The national allotment for cotton for each year Basis. (excluding that portion of the national allotment provided for in

section 343 (c)) shall be apportioned by the Secretary among the

several States on the basis of the average, for the five years preceding the year in which the national allotment is determined, of the

normal production of cotton in each State . The normal production Normal production

of a State for a year shall be (1) the quantity produced therein plus

defined .

(2) the normal yield of the acres diverted in each county in the State

under the previous agricultural adjustment or conservation programs. The normal yield of the acres diverted in any county in any

year shall be the average yield per acre of the planted acres in such

county in such year Clines the number of acres diverted in such

county in such year .

(b) The Secretary shall ascertain, on the basis of the average yield m"Stateeacreageallotper acre in each State, a number of acres in such State which will Post, p . 203,

produce a number of bales equal to the allotment made to the State

under subsection (a) . Such number of acres is referred to as the

"State acreage allotment" . The average yield per acre for any State

shall be determined on the basis of the average of the normal production for the State for the years used in computing the allotment to

the State, and the average, for the same period, of the acres planted

and the acres diverted in the State .

(c) (1) The State acreage allotment (less the amount required

me

County apportionfor apportionment under paragraph (2)) shall be apportioned

annually by the Secretary to the counties in the State . The apportionment to the counties shall be made on the basis of the acreage

planted to cotton during the five calendar years immediately preceding the calendar year in which the State allotment is apportioned

(plus, in applicable years, the acreage diverted under previous agricultural adjustment and conservation programs), with adjustments

for abnormal weather conditions and trends in acreage during such

five-year period .

(2) Not more than 2 per centum of the State acreage allotment Farms not used for

cotton production shall be apportioned to farms in such State which were not used for during preceding three

cotton production during any of the three calendar years immedi- ately preceding the year for which the allotment is made, on the

basis of land, labor, and equipment available for the production of

cotton ; crop rotation practices ; and the soil and other physical facilities affecting the production of cotton .
58

Allotment to

county, apportionment among farms

through local committees .

Basis.

Allotments under

other provisions.

Remainder to farms

on which cotton

planted during any of

previous 3 years ; exception .

Post, p . 203.

Proviso . Acreage allotment

restriction.

Allotment to

counties for 1938 and

1939 .

Post, p. 203.

Consideration of different conditions in

apportioning allotments .

Post, p . 203 .

Marketing quotas .

Post, p . 205.

PUBLIC LAWS-CH. 30-FEB . 16, 1938152 ST.T.

(d) The allotment apportioned to the county under subsection

(c) (1), plus any amount allotted to the county under subsection (e),

shall be apportioned by the Secretary, through the local committees,

among the farms within the county on the following basis

(1) To each farm on which cotton has been planted during

any of the previous three years there shall be allotted the smaller

of the following-

(A) Five acres ; or

(B) The highest number of acres planted to cotton (plus

the acres diverted from the production of cotton under the

agricultural adjustment or conservation programs) in any

year of such three-year period ;

(2) Not more than 3 per centum of the amount remaining,

after making the allotments provided for under paragraph (1),

shall be allotted, upon such basis as the Secretary deems fair and

equitable, to farms (other than farms to which an allotment has

been made under paragraph (1) (B)) to which an allotment of

not exceeding fifteen acres may be made under other provisions

of this subsection ; and

(3) The remainder of the total amount available to the county

shall be allotted to farms on which cotton has been planted

during any of the previous three years (except farms to which

an allotment has been made under paragraph (1) (B) ) . The

allotment to each farm under this paragraph, together with the

amount of the allotment to such farm under paragraph (1) (A),

shall be a prescribed percentage (which percentage shall be the

same for all such farms in the county or administrative area)

of the acreage, during the preceding year, on the farm which is

tilled annually or in regular rotation, excluding from such acreage the acres devoted to the production of wheat, tobacco, or

rice for market or for feeding to livestock for market : Provided,

however, That if a farm would be allotted under this paragraph

an acreage, together with the amount of the allotment to such

farm under paragraph (1) (A), in excess of the largest acreage

planted to cotton plus the acreage diverted from the production

of cotton under the agricultural adjustment or conservation program during any of the preceding three years, the acreage allotment for such farm shall not exceed such largest acreage so

planted and diverted in any such year .

(e) For 1938 and 1939, the Secretary shall allot to the several

counties, to which an apportionment is made under subsection (c),

a number of acres required to provide a total acreage for allotment

under this section to such counties of not less than 60 per centum of

the sum of (1) the acreage planted to cotton in such counties in

1937, plus (2) the acreage therein diverted from cotton production

in 1937 under the agricultural adjustment and conservation program .

The acreage so diverted shall be estimated in case data are not available at the time of making such allotment .

(f) In apportioning the county allotment among the farms within

the county, the Secretary, through the local committees, shall take

into consideration different conditions within separate administrative

areas within a county if any exist, including types, kinds, and

productivity of the soil so as to prevent discrimination among the

administrative areas of the county.

MARKETING QUOTAS

SEC . 345 . Whenever the Secretary determines that the total supply

of cotton for any marketing year exceeds by more than 7 per

centum the normal supply thereof for such marketing year, the
52 STAT .]

75i CO\G ., 3D SESS .--CII . 30-FEY. 1G, i us

Secretary shall proclaim such fact not later than November 15 of

such marketing year (or, in case of the marketing year 1937-1938,

within ten days after the date of enactment of this Act), and

marketing quotas shall be in effect during the next succeeding

marketing year with respect to the marketing of cotton . Cotton

produced in the calendar year in which such marketing; year begins

shall be subject to the quotas in effect for such marketing year notwithstanding that it may be marketed prior to August 1 .

AMOUNT OF FARM MARKETING QUOTAS

SEC. 346. (a) The farm marketing quota for cotton for any

farm for any marketing year shall be a number of bales of cotton

equal to the sum of-

(1) A number of bales equal to the normal production or the

actual production, whichever is the greater, of the farm acreage

allotment, and

(2) A number of bales equal to the amount, or part thereof,

of cotton from any previous crop which the farmer has oil baud,

which, had such amount, or part thereof, been marketed during

the preceding marketing year in addition to the cotton actually

marketed during such preceding marketing year, could have been

marketed without penalty .

(b) The penalties provided for in section 318 shall not apply to

the marketing of cotton produced on any farm for which a farm

acreage allotment has been made for the current crop if the production of the current crop does not exceed one thousand pounds of

lint cotton .

REFERENDUM

SEC. 347. Not later than December 15 of any calendar year in which

a proclamation of farm marketing quotas pursuant to the provisions

of this Part has been made, the Secretary shall conduct a referendum,

by secret ballot, of farmers who were engaged in production of the

crop harvested prior to the holding of the referendum to determine

whether they favor or oppose such quotas . If more than one-third

of the farmers voting in the referendum oppose such quotas, the

Secretary shall, prior to the end of such calendar year, proclaim the

result of the referendum, and upon such proclamation the quotas

shall become ineffective. If a proclamation under section 345 is

made with respect to the 1938 crop . the referendum with respect to

such crop shall be held not later than thirty days after the date

of the enactment of this Act and the result thereof shall be proclaimed not later than forty-five days after such date .

FEN 3LTI ES

SEC. 348. Any farmer who, while farm marketing quotas are in

effect, markets cotton in excess of the farm marketing quota for the

marketing year for the farm on which such cotton was produced,

shall be subject to the following penalties with respect to the excess

so marketed : 2 cents per pound if marketed during the first marketing year when farm marketing quotas are in effect ; and 3 cents per

pound if marketed during any subsequent year, except that the

penalty shall be 2 cents per pound if cotton of the crop subject to

penalty in the first year is marketed subject to penalty in any subsequent year .

INELIGIBILITY FOP PAYMENTS

SEC. 349. (a) Any person who knowingly plants cotton on his

farm in any year on acreage in excess of the farm acreage allotment

59

Amount of farm

marketing quotas .

Referendum .

Post, p . 205 .

Penalties .

Ineligibility for payments .
60

Ante, p . 57 .

Sworn statement to

be filed .

Post, p . 204 .

Part V-Marketing

quotas-Rice .

PUBLIC LAWS-CH. 30-FEB. 16, 1938[52 STAT.

for cotton for the farm for such year under section 344 shall not be

eligible for any payment for such year under the Soil Conservation

and Domestic Allotment Act, as amended .

(b) All persons applying for any payment of money under the

Soil Conservation and Domestic Allotment Act, as amended, shall

file with the application a statement verified by affidavit that the

applicant has not knowingly planted, during the current year, cotton

on land on his farm in excess of the acreage allotted to the farm

under section 344 for such year . Any person who knowingly swears

falsely in any statement required under this subsection shall be

guilty of perjury .

LONG STAPLE COTTON

Long staple cotton .

SEC. 350. The provisions of this Part shall not apply to cotton the

staple of which is 11/2 inches or more in length .

PART V-MARKETING QUOTAS-RICE

LEGISLATIVE FINDING

Legislative finding. SEC. 351. (a) The marketing of rice constitutes one of the great

basic industries of the United tates with ramifying activities which

directly affect interstate and foreign commerce at every point, and

stable conditions therein are necessary to the general welfare . Rice

produced for market is sold on a Nation-wide market, and, with its

products, moves almost wholly in interstate and foreign commerce

from the producer to the ultimate consumer. The farmers producing such commodity are subject in their operations to uncontrollable

natural causes, in many cases such farmers carry on their farming

operations on borrowed money or leased lands, and are not so situated as to be able to organize effectively, as can labor and industry,

through unions and corporations enjoying Government sanction and

protection for joint economic action . For these reasons, among

others, the farmers are unable without Federal assistance to control

effectively the orderly marketing of such commodity with the result

that abnormally excessive supplies thereof are produced and dumped

indiscriminately on the Nation-wide market .

(b) The disorderly marketing of such abnormally excessive supplies affects, burdens, and obstructs interstate and foreign commerce

by (1) materially affecting the volume of such commodity marketed

therein, (2) disrupting the orderly marketing of such commodity

therein, (3) reducing the prices for such commodity with consequent

injury and destruction of such commerce in such commodity, and (4)

causing a disparity between the prices for such commodity in interstate and foreign commerce and industrial products therein, with a

consequent diminution of the volume of interstate and foreign commerce in industrial products.

(c) Whenever an abnormally excessive supply of rice exists, the

marketing of such commodity by the producers thereof directly and

substantially affects interstate and foreign commerce in such commodity and its products, and the operation of the provisions of this

Part becomes necessary and appropriate in order to promote, foster,

and maintain an orderly flow of such supply in interstate and foreign

commerce.

NATIONAL ACREAGE ALLOTMENT

National acreage allotment . SEC. 352. The national acreage allotment of rice for any calendar

year shall be that acreage which the Secretary determines will, on

the basis of the national average yield of rice for the five calendar

years immediately preceding the calendar year for which such
62 STAT.]

75TH CONG., 3D SESS .-CH. 39-FEB. 16, 1938

national average yield is determined, produce an amount of rice adequate, together with the estimated carry-over from the marketing

year ending in such calendar year, to make available a supply for

the marketing year commencing in such calendar year not less than

the normal supply . Such national acreage allotment shall be proclaimed not later than December 31 of each year .

APPORTIONMENT OF NATIONAL ACREAGE ALLOTMENT

SEC. 353. (a) The national acreage allotment of rice for each calendar year shall be apportioned by the Secretary among the several

States in which rice is produced in proportion to the average number

of acres of rice in each State during the five-year period immediately

preceding the calendar year for which such national acreage allotment of rice is determined (plus, in applicable years, the acreage

diverted under previous agricultural adjustment and conservation

programs) with adjustments for trends in acreage during the

applicable period.

(b) Not less than 97 per centum of the acreage allotted to any

State shall be apportioned annually by the Secretary through local

and State committees of farmers among the persons producing rice

within such State on the basis of past production of rice ; land, labor,

and available equipment for the production of rice ; crop-rotation

practices, soil fertility, and other physical factors affecting the production of rice : Provided, That not exceeding 3 per centum of the

acreage allotted to each State shall be apportioned annually by the

Secretary through local and State committees of farmers among

persons who for the first time in the past five years are producing

rice on the basis of the applicable standards of apportionment set

forth in this subsection : Provided further, That a person producing

rice for the first time in five years shall not be allotted an acreage

in excess of 75 per centum of the allotment that would be made to

him if he were not producing rice for the first time in such five years .

DOMESTIC ALLOTMENT OF RICE

SEC. 354. (a) Not later than December 31 of each year the Secretary shall ascertain from the latest available statistics of the Department and shall proclaim the total amount of rice which will be

needed during the next succeeding marketing year to meet the

requirements of consumers in the United States . Such amount is

hereinafter referred to as the "domestic allotment of rice".

(b) The domestic allotment of rice for each marketing year shall

be apportioned by the Secretary among the several States in which

rice is produced in proportion to the average amount of rice produced

in each State during the five-year period including the calendar year

in which such domestic allotment is announced (plus, in applicable

years, the normal production of any acreage diverted under previous

agricultural adjustment and conservation programs), with adjustments for abnormal weather conditions and trends in acreage during

the applicable period.

(c) The Secretary shall provide, through local and State committees of farmers, for the allotment of each State apportionment

among persons producing rice in such State . The apportionment of

the domestic allotment of rice among persons producing rice in each

State shall be on the basis of the aggregate normal yields of the

acreage allotments established with respect to such persons .

61

Apportionment of

national acreage allotment .

Allotments to States,

apportionment

through local, etc .,

committees .

Provisos .

Apportio anent to

persons producing rice

for first time in five

years .

Acreage restriction .

Domestic allotment

of rice .

Annual apportionment among rice-producing States.

Apportionment of

allotment to producers; basis .
62

Marketing quotas .

Ante, p. 61 .

Secretary's proclamation; effect of.

Proviso.

No quota, marketing year commencing

August 1, 1938 .

Amount of national

quota .

Referendum .

Effect of vote on

quota .

Apportionment

among States and rice

producers .

Ante, p . 61 .

Transfers .

Penalties .

Subtitle C-Administrative provisions.

Part I-Publication

and review of quotas .

Application of Part .

Ante, p. 45 .

Publication and notice of quota .

PUBLIC LAWS-CH. 30-FEB. 16, 1938[52 STAT.

MARKETING QUOTAS

SEC. 355. (a) If at the. time of any proclamation made under the

provisions of section 354 (a) it shall appear from the latest available

statistics of the Department that the total supply of rice exceeds

the normal supply thereof for the current marketing year by more

than 10 per centum of such normal supply, the Secretary shall also

proclaim that, beginning on the first day of the marketing year next

following and continuing throughout such year a national marketing

quota shall be in effect for marketings of rice by producers : Provided,

That no marketing quota shall be in effect for the marketing year

commencing August 1, 1938 . The Secretary shall also ascertain and

specify in such proclamation the amount of the national marketing

quota in terms of the total quantity thereof which may be marketed

by producers which shall be that amount of rice which the Secretary

determines will make available during such marketing year a normal

supply.

(b) Within thirty days after the date of the issuance of the

proclamation specified in subsection (a) of this section, the Secretary shall conduct a referendum, by secret ballot, of producers who

would be subject to the national marketing quota for rice to determine whether such producers are in favor of or opposed to such

quota. If more than one-third of the producers voting in the referendum oppose such quota, the Secretary shall, prior to the 15th day

of February, proclaim the result of the referendum, and such quota

shall not become effective .

(c) The national marketing quota shall be apportioned among

States and persons producing rice in each State, including new

producers, in the manner and upon the basis set forth in section 354

for the apportionment of the domestic allotment of rice .

(d) -Marketing quotas may be transferred only in such manner

and subject to such conditions as the Secretary may prescribe by

regulations.

PENALTIES

SEC. 356. Any producer who markets rice in excess of his marketing quota shall be subject to a penalty of one-quarter of 1 cent

per pound of the excess so marketed .

SUBTITLE G-ADMINISTRATIVE PROVISIONS

PART I-PUBLICATION AND REVIEW OF QUOTAS

APPLICATION OF PART

SEC. 361. This Part shall apply to the publication and review of

farm marketing quotas established for tobacco, corn, wheat, cotton,

and rice, established under subtitle B .

PUBLICATION AND NOTICE OF QUOTA

SEC. 362. All acreage allotments, and the farm marketing quotas

established for farms in a county or other local administrative area

shall, in accordance with regulations of the Secretary, be made and

kept freely available for public inspection in such county or other

local administrative area. An additional copy of this information

shall be kept available in the office of the county agricultural extension agent or with the chairman of the local committee . Notice of

the farm marketing quota of his farm shall be mailed to the farmer.
52 STAT .] 	75TH CONS ., 3fu S1>8.-Cll . 30-1'Eh . 16, 1938

REVIEW BY REVIEW COMSIITPEE

SEC. 363. Any farmer who is dissatisfied with his farm marketing

quota may, within fifteen days after mailing to him of notice as provided in section 362, have such quota reviewed by a local review

committee composed of three farmers appointed by the Secretary .

Such committee shall not include any member of the local committee

which determined the farm acreage allotment, the normal yield, or

the farm marketing quota for such farm . Unless application for

review is made within such period, the original determination of the

farm marketing quota shall be final .

REVIEW COMMITTEE

SEC. 364. The members of the review committee shall receive as

compensation for their services the same per diem as that received

by the members of the committee utilized for the purposes of the

Soil Conservation and Domestic Allotment Act, as amended . The

members of the review committee shall not be entitled to receive

compensation for more than thirty days in any one year .

INSTITUTION OF PROCEEDINGS

SEC. 365. If the farmer is dissatisfied with the determination of the

review committee, lie may, Within fifteen days after a notice of such

determination is mailed to him by registered mail, file a bill in equity

against the review committee as defendant in the United States district court, or institute proceedings for review in any court of record

of the State having general jurisdiction, sitting in the county or the

district in which his farm is located, for the purpose of obtaining a

review of such determination . Bond shall be given in an amount and

with surety satisfactory to the court to secure the United States for

the costs of the proceeding . The bill of complaint in such proceeding

may be served by delivering a copy thereof to any one of the members of the review committee . Thereupon the review committee shall

certify and file in the court a transcript of the record upon which the

determination complained of was made, together with its findings of

fact.

COURT REVIEW

63

Review by review

committee.

Ante, p . 62 .

Review committee

members, compensation .

Institution of proceedings for review .

Bond .

Bill of complaint,

service cf .

Certif cation and filing of transcript of

record .

SEC. 366. The review by the court shall be limited to questions of Court review . law, and the findings of fact by the review committee, if supported

by evidence, shall be conclusive . If application is made to the court

for leave to adduce additional evidence, and it is shown to the satisfaction of the court that such additional evidence is material and that

there Were reasonable grounds for failure to adduce such evidence

in the hearing before the review committee, the court may direct

such additional evidence to be taken before the review committee in

such manner and upon such terms and conditions as to the court may

seem proper . The review committee may modify its findings of fact

or its determination by reason of the additional evidence so taken,

and it shall file With the court such modified findings or determination, Which findings of fact shall be conclusive . At the earliest

convenient time, the court, in term time or vacation, shall hear and

determine the case upon the original record of the hearing before

the review committee, and upon such record as supplemented if

supplemented, by further hearing before the review committee pursuant to direction of the court . The court shall affirm the review

committee's determination, or modified determination, if the court

determines that the same is in accordance with law . If the court

determines that such determination or modified determination is
64

Stay of proceedings

and exclusive jurisdiction .

No effect on other

quotas .

Part II-Adjustment of quotas and

enforcement .

General adjustments of quotas .

Emergencies, etc .

National marketing

quota increase ; effect

of.

Corn .

PUBLIC LAWS-CH. 30-FEB. 16, 1938[52 STAT.

not in accordance with law, the court shall remand the proceeding

to the review committee with direction either to make such determination as the court shall determine to be in accordance with law

or to take such further proceedings as, in the court's opinion, the

law requires.

STAY OF PROCEEDINGS AND EXCLUSIVE JURISDICTION

SEC. 367. The commencement of judicial proceedings under this

Part shall not, unless specifically ordered by the court, operate as a

stay of the review committee's determination . Notwithstanding any

other provision of law, the jurisdiction conferred by this Part to

review the legal validity of a determination inade by a review committee pursuant to this Part shall be exclusive . No court of the

United States or of any State shall have jurisdiction to pass upon

the legal validity of any such determination except in a proceeding

under this Part .

NO EFFECT ON OTHER QUOTAS

SEC. 368. Notwithstanding any increase of any farm marketing

quota for any farm as a result of review of the determination thereof

under this Part, the marketing quotas for other farms shall not be

affected .

PART II.-ADJUSTMENT OF QUOTAS AND ENFORCEMENT

GENERAL ADJUSTMENTS OF QUOTAS

SEC. 371. (a) If at any time the Secretary has reason to believe

that in the case of corn, wheat, cotton, rice, or tobacco the operation

of farm marketing quotas in effect will cause the amount of such

commodity which is free of marketing restrictions to be less than

the normal supply for the marketing year for the commodity then

current, he shall cause an immediate investigation to be made with

respect thereto. In the course of such investigation due notice and

opportunity for hearing shall be given to interested persons. If

upon the basis of such investigation the Secretary finds the existence

of such fact, he shall proclaim the same forthwith. He shall also

in such proclamation specify such increase in, or termination of,

existing quotas as he finds, on the basis of such investigation, is

necessary to make the amount of such commodity which is free of

marketing restrictions equal the normal supply.

(b) If the Secretary has reason to believe that, because of a

national emergency or because of a material increase in export

demand, any national marketing quota for corn, wheat, cotton, rice,

or tobacco should be increased or terminated, he shall cause an immediate investigation to be made to determine whether the increase or

termination is necessary in order to effectuate the declared policy

of this Act or to meet such emergency or increase in export demand .

If, on the basis of such investigation, the Secretary finds that such

increase or termination is necessary, lie shall immediately proclaim

such finding (and if he finds an increase is necessary, the amount of

the increase found by him to be necessary) and thereupon such

quota shall be increased, or shall terminate, as the case may be .

(c) In case any national marketing quota for any commodity is

increased under this section, each farm marketing quota for the commodity shall be increased in the same ratio .

(d) In the case of corn, whenever such proclamation specifies an

increase in marketing quotas, the storage amounts applicable to

corn shall be adjusted downward to the amount which would have

been required to be stored if such increased marketing quotas had
52 ST.T .]

75TH CONG ., 3D SESS .-CH. 30-FEB. 16, 1938

been in effect . Whenever in the case of corn, such proclamation

provides for termination of marketing quotas, storage under seal

shall no longer be required .

PAYMENT AND COLLECTION OF PENALTIES

SEC. 372 . (a) The penalty with respect to the marketing, by sale,

of wheat, cotton, or rice, if the sale is to any person within the United

States, shall be collected by the buyer.

(b) All penalties provided for in Subtitle B shall be collected and

paid in such manner, at such times, and under such conditions as

the Secretary may by regulations prescribe . Such penalties shall

be remitted to the Secretary by the person liable for the penalty,

except that if any other person is liable for the collection of the

penalty, such other person shall remit the penalty . The amount of

such penalties shall be covered into the general fund of the Treasury of the United States .

REPORTS AND RECORDS

SEC. 373. (a) This subsection shall apply to warehousemen, proces- Reports and recsors, and common carriers of corn, wheat, cotton, rice, or tobacco, ords§ and all ginners of cotton, all persons engaged in the business of purchasing corn, wheat, cotton, rice, or tobacco from producers, and all

persons engaged in the business of redrying, prizing, or stemming

tobacco for producers. Any such person shall, from time to time on

request of the Secretary, report to the Secretary such information

and keep such records as the Secretary finds to be necessary to enable

him to carry out the provisions of this title . Such information shall

be reported and such records shall be kept in accordance with forms

which the Secretary shall prescribe . For the purpose of ascertain- Examination of

ing the correctness of any report made or record kept, or of obtaining

books, etc.

information required to be furnished in any report, but not so furnished, the Secretary is hereby authorized to examine such books,

papers, records, accounts, correspondence, contracts, documents, and

memoranda as he has reason to believe are relevant and are within

the control of such person. Any such person failing to make any Penalt y provision,

report or keep any record as required by this subsection or making

any false report or record shall be deemed guilty of a misdemeanor

and upon conviction thereof shall be subject to a fine of not more

than $500 .

(b) Farmers engaged in the production of corn, wheat, cotton, maoo fng f e a re., by

rice, or tobacco for market shall furnish such proof of their acreage, farmers . yield, storage, and marketing of the commodity in the form of

records, marketing cards, reports, storage under seal, or otherwise

as the Secretary may prescribe as necessary for the administration

of this title .

(c) All data reported to or acquired by the Secretary pursuant k ppt i. nflae

atafto be

to this section shall be kept confidential by all officers and employees

of the Department, and only such data so reported or acquired as

the Secretary deems relevant shall be disclosed by them, and then only

in a suit or administrative hearing under this title .

MEASUREMENT OF FARMS AND REPORT OF PLANTINGS

SEC. 374. The Secretary shall provide, through the county and

local committees, for measuring farms on which corn, wheat, cotton,

or rice is produced and for ascertaining whether the acreage planted

for any year to any such commodity is in excess of the farm acreage

allotment for such commodity for the farm under this title . If in

the case of any farm the acreage planted to any such commodity on

:!( ;525)c-38-5

Penalties .

Payment and collection .

Ante, p . 45 .

Post, p . 204 .

65

Measurement of

farms and report of

plantings .
66

Regulations .

Court Jurisdiction .

Subtitle D-Miscellaneous provisions and

appropriations .

Part I-Miscellaneous .

Cotton price adjustment payments, 1937

crop.

50 Stat. 792 .

Post, pp . 204, 745.

50 Stat . 754.

49 Stat . 163, 1148.

16 U . S . C ., Supp.

111, °° 590a-590q.

Ante, p . 57 .

Producer innocently

exceeding his allotment .

In cases of crop failure, etc .

Status of cotton not

sold prior to July 1,

1938 .

Filing of applications for payment,

time limitation .

PUBLIC LAWS-CH. 39-FEB. 16, 1938[52 STAT.

the farm is in excess of the farm acreage allotment for such commodity for the farm, the committee shall file with the State committee a written report stating the total acreage on the farm in

cultivation and the acreage planted to such commodity .

REGULATIONS

SEC. 375 . (a) The Secretary shall provide by regulations for the

identification, wherever necessary, of corn, wheat, cotton, rice, or

tobacco so as to afford aid in discovering and identifying such

amounts of the commodities as are subject to and such amounts

thereof as are not subject to marketing restrictions in effect under

this title .

(b) The Secretary shall prescribe such regulations as are necessary

for the enforcement of this title.

COURT JURISDICTION

SEC. 376. The several district courts of the United States are hereby

vested with jurisdiction specifically to enforce the provisions of this

title. If and when the Secretary shall so request, it shall be the

duty of the several district attorneys in their respective districts,

under the direction of the Attorney General, to institute proceedings

to collect the penalties provided in this title . The remedies and penalties provided for herein shall be in addition to, and not exclusive

of, any of the remedies or penalties under existing law .

SUBTITLE D-MISCELLANECUS PROVISIONS AND APPROPRIATIONS

PART I-MISCELLANEOUS

COTTON PRICE ADJUSTMENT PAYMENTS

SEC. 381 . (a) For the purposes of the provisions (relating to cotton price adjustment payments with respect to the 1937 cotton crop)

of the Third Deficiency Appropriation Act, fiscal year 1937, a producer shall be deemed to have complied with the provisions of the

1938 agricultural adjustment program formulated under the legislation contemplated by Senate Joint Resolution Numbered 207,

Seventy-fifth Congress, if his acreage planted to cotton in 1938 does

not exceed his farm acreage allotment for 1938 under the Soil Conservation and Domestic Allotment Act, as amended (including the

amendments made by this Act), or under section 344 of this Act,

whichever is the lesser. For the purposes of this subsection a producer shall not be deemed to have exceeded his farm acreage allotment unless such producer knowingly exceeded his farm acreage

allotment. Such compliance shall not be required in any case where

the producer is not engaged in cotton production in 1938 . In cases

where in 1937 a total or partial crop failure resulted from hail,

drought, flood, or boll-weevil infestation, if the producer is otherwise

eligible for payment, payment shall be made at the rate of 3 cents

per pound on the same percentage of the producer's normal base

production established by the Secretary as in the case of other producers . For the purpose of such provisions of the Third Deficiency

Appropriation Act, fiscal year 1937, cotton not sold prior to July 1,

1938, shall be held and considered to have been sold on June 30, 1938,

and all applications for price adjustment payments shall be filed

with the Secretary not later than July 15, 1938 . Such payments

shall be made at the earliest practicable time . Application for payment may be made by the 1937 operator of a farm on behalf of all

persons engaged in cotton production on the farm in 1937 and need

be signed only by such operator, but payment shall be made directly
52 STAT.]

75TH CONS ., 3D SESS .-C3. 30-FEB. 1C, 193S

to each of the persons entitled thereto . In case any person who is

entitled to payment hereunder dies, becomes incompetent, or disappears before receiving such payment, or is succeeded by another who

renders or completes the required performance, payment shall, without regard to any other provisions of law, be made as the Secretary

may determine to be fair and reasonable in all the circumstances and

provide by regulations.

(b) Any producer for whom a loan has been made or arranged

for by the Commodity Credit Corporation on cotton of his 1937

crop and who has complied with all the provisions of the loan agreement except section 8 thereof, may, at any time before July 1, 1938,

transfer his right, title, and interest in and to such cotton to the

Corporation ; and the Corporation is authorized and directed to

accept such right, title, and interest in and to such cotton and to

assume all obligations of the producer with respect to the loan on

such cotton, including accrued interest and accrued carrying charges

to the date of such transfer . The Corporation shall notify the Secretary of Agriculture of each such transfer, and upon receipt of

such notice, the Secretary shall as soon as compliance is shown, or

a national marketing quota for cotton is put into effect, forthwith

pay to such producer a sum equal to 2 cents per pound of such cotton, and the amount so paid shall be deducted from any price adjustment payment, to which such producer is entitled .

(c) The Commodity Credit Corporation is authorized on behalf of

the United States to sell any cotton of the 1937 crop so acquired by it,

but no such cotton or any other cotton held on behalf of the United

States shall be sold unless the proceeds of such sale are at least

sufficient to reimburse the United States for all amounts (including

any price-adjustment payment) paid out by any of its agencies with

respect to the cotton so sold . After July 31, 1939, the Commodity

Credit Corporation shall not sell more than three hundred thousand

bales of cotton in any calendar month, or more than one million five

hundred thousand bales in any calendar year . The proceeds derived

from the sale of any such cotton shall be used for the purpose of

discharging the obligations assumed by the Commodity Credit Corporation with respect to such cotton, and any amounts not expended

for such purpose shall be covered into the Treasury as miscellaneous

receipts .

INSURANCE OF COTTON AND RECONCENTRATION OF COTTON

SEC. 383. (a) The Commodity Credit Corporation shall place all

insurance of every nature taken out by it on cotton, and all renewals,

extensions, or continuations of existing insurance, with insurance

agents who are bona fide residents of and doing business in the State

where the cotton is warehoused : Provided, That such insurance may

be secured at a cost not greater than similar insurance offered on said

cotton elsewhere .

(b) Cotton held as security for any loan heretofore or hereafter

made or arranged for by the Commodity Credit Corporation shall

not hereafter be reconcentrated without the written consent of the

producer or borrower .

67

Payment in case of

death, etc .

Commodity Credit

Corporation, cotton

transfers Co .

Notice to Secretary .

Sale of acquired 1937

crop .

Limitation .

Use of proceeds from

sales .

Insurance of cotton .

Proviso . Cost .

Reconcentraticn of

cotton .

Post, p . S'

EXTENSION OF 1937 COTTON LOAN

SEC. 382. The Commodity Credit Corporation is hereby authorized Extension of 1937

and directed to provide for the extension, from July 31, 1938, to July

31, 1939, of the maturity date of all notes evidencing a loan made or

arranged for by the Corporation on cotton produced during the crop

year 1937-1938. This section shall not be construed to prevent the

sale of any such cotton on request of the person liable on the note .

cotton loan .
68

Report of benefits .

49 Stat . 163, 1148.

16 U . S . C ., Supp.

III, °° 590a-590q .

Finality of farmers'

payments and loans.

Interest of Members

of Congress .

Provisions not to

apply to loans, etc .,

hereunder ;exception .

R. S . ° 3741 ; 41

U.S .C .°22 .

18 U . S . C . °° 204,

205 .

Ante, p . 67 .

Photographic reproductions and maps .

Utilization of local

agencies .

49 Stat.1149; 50 Stat .

329 .

16 U . S . C ., Supp .

III, °° 590b, k.

Ante, p . 31.

49 Stat . 1148-1151 .

Local administrative areas .

Payments tocounty

committees for administrative expenses.

Post, p . 746.

Pro rata deductions

from payments .

PUBLIC LAWS-CH. 30-FEB. 16, 1938

REPORT OF BENEFITS

SEC. 384. The Secretary shall submit to Congress an annual report

of the names of persons to whom, during the preceding year, payments were made under the Soil Conservation and Domestic Allotment Act, as amended, together with payments under section 303 of

this Act, if any, if the total amount paid to such person exceeded

$1,000 .

FINALITY OF FARMERS' PAYMENTS AND LOANS

SEC. 385. The facts constituting the basis for any Soil Conservation

Act payment, parity payment, or loan, or the amount thereof, when

officially determined in conformity with the applicable regulations

prescribed by the Secretary or by the Commodity Credit Corporation, shall be final and conclusive and shall not be reviewable by any

other officer or agency of the Government.

SEC. 386. The provisions of section 3741 of the Revised Statutes

(U. S . C., 1934 edition, title 41, sec . 22) and sections 114 and 115 of

the Criminal Code of the United States (U . S. C., 1934 edition,

title 18, sees . 204 and 205) shall not be applicable to loans or payments

made under this Act (except under section 383 (a) ) .

PHOTCGRAPHIC REPRODUCTIONS AND MAPS

SEC. 387. The Secretary may furnish reproductions of such aerial

or other photographs, mosaics, and maps as have been obtained in

connection with the authorized work of the Department to farmers

and governmental agencies at the estimated cost of furnishing such

reproductions, and to persons other than farmers at such prices (not

less than estimated cost of furnishing such reproductions) as the

Secretary may determine, the money received from such sales to be

deposited in the Treasury to the credit of the appropriation charged

with the cost of making such reproductions. This section shall not

affect the power of the Secretary to make other disposition of such

or similar materials under any other provisions of existing law .

UTILIZATION OF LOCAL AGENCIES

SEC. 388. (a) The provisions of section 8 (b) and section 11 of the

Soil Conservation and Domestic Allotment Act, as amended, relating

to the utilization of State, county, local committees, the extension

service, and other approved agencies, and to recognition and encouragement of cooperative associations, shall apply in the administration of this Act ; and the Secretary shall, for such purposes, utilize

the same local, county, and State committees as are utilized under

sections 7 to 17, inclusive, of the Soil Conservation and Domestic

Allotment Act, as amended . The local administrative areas designated under section 8 (b) of the Soil Conservation and Domestic

Allotment Act, as amended, for the administration of programs

under that Act, and the local administrative areas designated for the

administration of this Act shall be the same .

(b) The Secretary is authorized and directed, from any funds

made available for the purposes of the Acts in connection with

which county committees are utilized, to make payments to county

committees of farmers to cover the estimated administrative expenses

incurred or to be incurred by them in cooperating in carrying out

the provisions of such Acts. All or part of such estimated administrative expenses of any such committee may be deducted pro rata

from the Soil Conservation Act payments, parity payments, or

loans, or other payments under such Acts, made unless payment of

such expenses is otherwise provided by law. The Secretary may

[52 STAT .
52 STAr .]

75TH CONG., 3o SESS .-CH. 30-FEB. 10, 1038

make such payments to such committees in advance of determination of performance by farmers.

PERSONNEL

SEC. 389 . The Secretary is authorized and directed to provide for

the execution by the Agricultural Adjustment Administration of

such of the powers conferred upon him by this Act as he deems

may be appropriately exercised by such Administration ; and for

such purposes the provisions of law applicable to appointment and

compensation of persons employed by the Agricultural Adjustment

Administration shall apply.

SEPARABILITY

SEC. 390. If any provision of this Act, or the application thereof

to any person or circumstance, is held invalid, the validity of the

remainder of the Act and the application of such provision to other

persons or circumstances, and the provisions of the Soil Conservation and Domestic Allotment Act, as amended, shall not be affected

thereby. Without limiting the generality of the foregoing, if any

provision of this Act should be held not to be within the power of

the Congress to regulate interstate and foreign commerce, such provision shall not be held invalid if it is within the power of the

Congress to provide for the general welfare or any other power of

the Congress. If any provision of this Act for marketing quotas

with respect to any commodity should be held invalid, no provision

of this Act for marketing quotas with respect to any other coinmodity shall be affected thereby . If the application of any provision

for a referendum should be held invalid, the application of other

provisions shall not be affected thereby. If by reason of any provision for a referendum the application of any such other provision

to any person or circumstance is held invalid, the application of

such other provision to other persons or circumstances shall not be

affected thereby .

PART II-APPROPRIATIONS AND ADMINISTRATIVE EXPENSES

APPROPRIATIONS

SEC. 391. (a) Beginning with the fiscal year ending June 30, 1938,

there is hereby authorized to be appropriated, for each fiscal, year for

the administration of this Act and for the making of soil conservation and other payments such sums as Congress may determine, in

addition to any amount made available pursuant to section 15 of the

Soil Conservation and Domestic Allotment Act, as amended .

(b) For the administration of this Act (including the provisions

of title V) during the fiscal year ending June 30, 1938, there is

hereby authorized to be made available from the funds appropriated

for such fiscal year for carrying out the purposes of sections 7 to 17

of the Soil Conservation and Domestic Allotment Act, as amended,

a sum not to exceed $5,000.000.

ADMINISTRATIVE EXPENSES

SEC. 392. (a) The Secretary is authorized and directed to make

such expenditures as he deems necessary to carry out the provisions

of this Act, including personal services and rents in the District of

Columbia and elsewhere, traveling expenses (including the purchase,

maintenance, and repair of passenger-carrying vehicles), supplies and

equipment, law books, books of reference, directories, periodicals, and

newspapers .

Personnel .

69

Separability pray) .

lion .

Part II-Appropriations and administrative expenses .

Appropriations for

each fiscal year, authorized .

Sums additional

to amount available .

49 Stat .1151 .

Amount for adininistration, fiscal year

1939 .

Post, pp . 84, 744,

1128 .

49 Stat . 1148-1151 .

Administrative ex.

pensea .

Post, p . 745.
70

Limitation on expenditure .

49 Stat. 1148-1151 ;

50 Stat. 329.

16 U. S . C ., Supp.

11, ° 5907-590q .

Deductions from

payments or loans .

County, etc ., committee personnel,

names, etc ., to be

posted annually .

Allotment of appropriations .

Title TV-Cotton

pool participation

trust certificates .

Appropriation authorized .

Post, p . 747.

Secretary authorized

to draw any part or

all of sum ; deposit

under special symbol

number .

Sum available for

cotton pool participation trust certificates.

Post, p . 204 .

PUBLIC LAWS-CH. 30-FEB . 16, 1938[52 STAT.

(b) In the administration of this title, sections 7 to 17, inclusive,

of the Soil Conservation and Domestic Allotment Act, as amended,

and section 32, as amended, of the Act entitled "An Act to amend

the Agricultural Adjustment Act, and for other purposes", approved

August 24, 1935, the aggregate amount expended in any fiscal year,

beginning with the fiscal year ending June 30, 1939, for administrative expenses in the District of Columbia, including regional offices,

shall not exceed 1 per centum of the total amount available for such

fiscal year for carrying out such Acts, and the aggregate amount

expended in any fiscal year for administrative expenses in the several

States (not including the expenses of county and local committees)

shall not exceed 2 per centum of the total amount available for such

fiscal year for carrying out such Acts. In the event any administrative expenses of any county or local committee are deducted in

any fiscal year, beginning with the fiscal year ending June 30, 1939,

from Soil Conservation Act payments, parity payments, or loans,

each farmer receiving benefits under such provisions shall be

apprised, in the form of a statement to accompany the check evidencing such benefit payment or loan, of the amount or percentage

deducted from such benefit payment or loan on account of such

administrative expenses. The names and addresses of the members

and employees of any county or local committee, and the amount of

such compensation received by each of them, shall be posted annually

in a conspicuous place in the area within which they are employed .

ALLOTMENT OF APPROPRIATIONS

SEC. 393. All funds for carrying out the provisions of this Act shall

be available for allotment to bureaus and offices of the Department,

and for transfer to such other agencies of the Federal Government,

and to such State agencies, as the Secretary may request to cooperate

or assist in carrying out the provisions of this Act .

TITLE IV-COTTON POOL PARTICIPATION TRUST

CERTIFICATES

SEC. 401 . There is hereby authorized to be appropriated, from any

moneys in the Treasury of the United States not otherwise appropriated, the sum of $1,800,000, or so much thereof as may be required

by the Secretary to accomplish the purposes hereinafter declared and

authorized . The Secretary of the Treasury is hereby authorized and

directed to pay to, or upon the order of, the Secretary, such a part

or all of the sum hereby authorized to be appropriated at the request

of the Secretary.

SEC. 402. The Secretary is hereby authorized to draw from the

Treasury of the United States any part or all of the sum hereby

authorized to be appropriated, and to deposit same to his credit with

the Treasurer of the United States, under special symbol number, to

be available for disbursement for the purposes hereinafter stated .

SEC. 403. The Secretary is hereby authorized to make available,

from the sum hereby authorized to be appropriated, to the manager

of the cotton pool, such sum or sums as may be necessary to enable

the manager to purchase, take up, and cancel, subject to the restrictions hereinafter reserved, pool participation trust certificates, form

C-5-I, where such certificates shall be tendered to the manager, cotton pool, by the person or persons shown by the records of the

Department to have been the lawful holder and owner thereof on
;13 STAT.]

751. 11 LONS., 3n S ESS.-CH. 30-FEB . 1G . 1 .13 .S

May 1, 1937, the purchase price to be paid for the certificates so

purchased to be at the rate of $1 per five-hundred-pound bale for

every bale or fractional part thereof represented by the certificates

C-5-I. The Secretary is further authorized to pay directly, or to

advance to, the manager of the cotton pool, to enable him to pay

costs and expenses incident to the purchase of certificates as aforesaid, and any balance remaining to the credit of the Secretary, or

the manager, cotton pool, not required for the purchase of these

certificates in accordance with provisions of this Act, shall, at the

expiration of the purchase period, be covered into the Treasury of

the United States as miscellaneous receipts .

SEC. 404. The authority of the manager, cotton pool, to purchase

and pay for certificates hereunder shall extend to and include the

31st (lay of July 1938 : Provided, That after expiration of the said

Limit, the purchase may be consummated of any certificates tendered

to the manager, cotton pool, on or before July 31, 1938, but where for

any reason the purchase price shall not . have been paid by the manager, cotton pool . The Secretary is authorized to promulgate such

rules, regulations, and requirements as in his discretion are proper

to effectuate the general purposes of this title, which purpose is here

stated to be specifically to authorize the purchase of outstanding pool

participation trust certificates, form C-5-I, for a purchase price to

be determined at the rate of $1 per bale, or twenty one-hundredths

cent per pound, for the cotton evidenced by the said certificates,

provided such certificates be tendered by holders thereof in accordance with regulations prescribed by the Secretary not later than the

31st day of July 1938, and provided such certificates may not be

purchased from persons other than those shown by the records of

the Department to have been holders thereof on or before the 1st

day of May 1937.

SEC. 405. The Secretary is authorized to continue in existence the

1933 cotton producers pool so long as may be required to effectuate

the purposes of this title . All expense incident to the accomplishment of purposes of this title may be paid from funds hereby

authorized to be appropriated, for which purpose the fund hereby

authorized to be appropriated shall be deemed as supplemental to

such funds as are now to the credit of the Secretary, reserved for

the purpose of defraying operating expenses of the pool .

SEC. 406. After expiration of the time limit herein established, the

certificates then remaining outstanding and not theretofore tendered

to the manager, cotton pool, for purchase, shall not be purchased

and no obligation on account thereof shall exist .

SEC. 407. Nothing in this title shall be construed to authorize the

manager, cotton pool, to pay the assignee or any holder of such

cotton pool participation trust certificates, form C-5-I, transferred

on or before ~1ay 1, 1937, as shown by the records of the Department

of Agriculture, more than the purchase price paid by the assignee

or holder of such certificate or certificates with interest at the rate

of 4 per centum per annum from the date of purchase, provided the

amount paid such assignee shall not exceed $1 per bale . Before

making payment to any assignee, whose certificates were transferred

on or before flay 1, 1937, such assignee shall file . with the manager,

cotton pool, an affidavit showing the amount paid by him for such

certificate and the date of such payment, and the manager, cotton

pool, is authorized to make payment to such assignee based upon the

facts stated in said affidavit as aforesaid .

Purchase prier,

71

Costs and inI al

expenses .

Palance covered

into Treasury .

Purchase and payment for certificates ;

time limitation .

Post, p . 204 .

Proviso . Consummation after

expiration of timo

limit .

Rules, regulations,

etc .

Continuation of 1433

pool.

Payment of expenses .

Certificates outstanding, etc ., after

expiration of time

limit .

Payment to assignee, etc . ; restriction .

Post, p . 204 .
Short title ; application of other provisions .

Declaration of purpose .

Federal Crop Insurance Corporation ; creation, principal, etc.,

offices .

Capital stock .

Amount, subscription, etc.

Post, P . 747.

Stock impairment

restoration .

Sum authorized for

purchase of stock .

Limitation on appropriations to be

ma e .

49 Stat . 1151 .

16 U . S . C ., Supp .

III, ° 5900 .

Receipts for U . S .

payments .

Management of

Corporation .

Board of Directors .

Composition, appointment .

Vacancies, quorum,

etc .

SHORT TITLE AND APPLICATION OF OTHER PROVISIONS

SEC. 501. This title may be cited as the "Federal Crop Insurance

Act". Except as otherwise expressly provided the provisions in

titles I to IV, inclusive, shall not apply with respect to this title, and

the term "Act" wherever it appears in such titles shall not be construed to include this title .

DECLARATION OF PURPOSE

SEC. 502. It is the purpose of this title to promote the national

welfare by alleviating the economic distress caused by wheat-crop

failures due to drought and other causes, by maintaining the purchasing power of farmers, and by providing for stable supplies of wheat

for domestic consumption and the orderly flow thereof in interstate

commerce.

SEC. 503. To carry out the purposes of this title, there is hereby

created as an agency of and within the Department of Agriculture

a body corporate with the name "Federal Crop Insurance Corporation" (herein called the Corporation) . The principal office of the

Corporation shall be located in the District of Columbia, but there

may be established agencies or branch offices elsewhere in the United

States under rules and regulations prescribed by the Board of

Directors .

CAPITAL STOCK

SEC. 504. (a) The Corporation shall have a capital stock of

$100,000,000 subscribed by the United States of America, payment

for which shall, with the approval of the Secretary of Agriculture

be subject to call in whole or in part by the Board of Directors of

the Corporation.

Any impairment of the capital stock described in this subsection

shall be restored only out of operating profits of the Corporation .

(b) There is hereby authorized to be appropriated not more than

$100,000,000 for the purpose of subscribing to said stock . No part of

such sum shall be available prior to July 1, 1938 . The appropriation

for such purpose for the fiscal year ending June 30, 1939, shall not

exceed $20,000,000 and shall be made only out of the unexpended

balances for the fiscal year ending June 30, 1938, of the sums appropriated pursuant to section 15 of the Soil Conservation and Domestic

Allotment Act, as amended.

(c) Receipts for payments by the United States of America for or

on account of such stock shall be issued by the Corporation to the

Secretary of the Treasury and shall be evidence of the stock ownership by the United States of America.

MANAGEMENT OF CORPORATION

SEC. 505. (a) The management of the Corporation shall be vested

in a Board of Directors (hereinafter called the "Board") subject

to the general supervision of the Secretary of Agriculture . The

Board shall consist of three persons employed in the Department

of Agriculture who shall be appointed by and hold office at the

pleasure of the Secretary of Agriculture .

(b) Vacancies in the Board so long as there shall be two members

in office shall not impair the powers of the Board to execute the

functions of the Corporation, and two of the members in office shall

constitute a quorum for the transaction of the business of the Board .

72 PUBLIC LAWS-CH. 30-FEB . 16, 1938 [52 STAT.

Title V-Crop insurance . TITLE V-CROP INSURANCE
52 ST-xT.]

75TH CONG., 3n SESS .-Cl. 3a-FEB. 1G, 1938

(c) The Directors of the Corporation appointed as hereinbefore

provided shall receive no additional compensation for their services

as such directors but may be allowed actual necessary traveling and

subsistence expenses when engaged in business of the Corporation

outside of the District of Columbia .

(d) The Board shall select, subject to the approval of the Secretary of Agriculture, a manager, who shall be the executive officer

of the Corporation with such power and authority as may be conferred upon him by the Board .

GENERAL POWERS

SEC. 506. The Corporation-

(a) shall have succession in its corporate name ;

(b) may adopt, alter, and use a corporate seal, which shall be

judicially noticed ;

(c) may make contracts and purchase or lease and hold such

real and personal property as it deems necessary or convenient in the

transaction of its business, and may dispose of such property held

by it upon such terms as it deems appropriate ;

(d) subject to the provisions of section 508 (c), may sue and be

sued in its corporate name in any court of competent jurisdiction,

State or Federal : Provided, That no attachment, injunction, garnishment, or other similar process, mesne or final, shall be issued against

the Corporation or its property ;

(e) may adopt, amend, and repeal bylaws, rules, and regulations

governing the manner in which its business may be conducted and the

powers granted to it by law may be exercised and enjoyed ;

(f) shall be entitled to the free use of the United States mails in

the same manner as the other executive agencies of the Government ;

(g) with the consent of any board, commission, independent . establishment, or executive department of the Government, including any

field service thereof, may avail itself of the use of information,

services, facilities, officials, and employees thereof in carrying out the

provisions of this title ;

(h) may conduct researches, surveys, and investigations relating

to crop insurance for wheat and other agricultural commodities ;

(i) shall determine the character and necessity for its expenditures

under this title and the manner in which they shall be incurred,

allowed, and paid, without regard to the provisions of any other laws

governing the expenditure of public funds and such determinations

shall be final and conclusive upon all other officers of the Government ; and

(j) shall have such powers as may be necessary or appropriate for

the exercise of the powers herein specifically conferred upon the

Corporation and all such incidental powers as are customary in

corporations generally .

PERSONNEL

SEC. 507. (a) The Secretary shall appoint such officers and employees as may be necessary for the transaction of the business of the

Corporation, which appointments may be made without regard to

the civil-service laws and regulations, fix their compensation in

accordance with the provisions of the Classification Act of 1923, as

amended, define their authority and duties, delegate to them such

of the powers vested in the Corporation as he may determine, require

bond of such of them as he may designate, and fix the penalties and

pay the premiums of such bonds . The appointment of officials and

the selection of employees by the Secretary shall be made only on

the basis of merit and efficiency .

Manager .

General powers.

Corporate name.

Seal .

73

Compensation, expenses.

Contracts, property

holdings, etc.

May sue and be

sued .

Post, p. 74 .

Proviso.

Attachments, in.

junctions, etc .

Bylaws, rules, etc.

Franking privilege .

-Use of facilities, etc .,

of Government agencies .

Researches, surveys, etc.

Expenditures.

Powers customary

in corporations.

Personnel.

Appointment without regard to civilservice laws.

Compensation according to Classification Act .

5 U . S . C . °° 661-674 ;

Supp . 111, °° 673, 673c.

Appointments based

on merit
74

Benefits of Employees' Compensation Act

extended to employees .

29 Stat . 742 .

5 U. S . C. °° 751-796.

Producer committees, utilization in

administration of Act.

Expenses .

Allotment of funds.

Post, p . 77 .

Producer-owned,

etc ., cooperative associations .

Crop insurance .

Authority of Corporation to insure

wheat against losses

due to unavoidable

causes .

Post, p . 835 .

Proviso. Terms, coverage

provisions, etc.

Minimum and maximum amount .

Condition .

Premiums .

Collection.

Claims, adjustment

and payment .

PUBLIC LAWS-CFI . 30-FEB . 16, 1938

[52 SPAT .

(b) Insofar as applicable, the benefits of the Act entitled "An Act

to provide compensation for employees of the United States suffering injuries while in the performance of their duties, and for other

purposes", approved September 7, 1916, as amended, shall extend to

persons given employment under the provisions of this title, including the employees of the committees and associations referred to

in subsection (c) of this section and the members of such committees .

(c) The Board may establish or utilize committees or associations

of producers in the administration of this title and make payments

to such committees or associations to cover the estimated administrative expenses to be incurred by them in cooperating in carrying

out this title and may provide that all or part of such estimated

expenses may be included in the insurance premiums provided for in

this title .

(d) The Secretary of Agriculture may allot to bureaus and offices

of the Department of Agriculture or transfer to such other agencies

of the State and Federal Governments as he may request to assist

in carrying out this title any funds made available pursuant to the

provisions of section 516 of this Act .

(e) In carrying out the provisions of this title the Board may, in

its discretion, utilize producer-owned and producer-controlled cooperative associations .

CROP INSURANCE

SEC. 508 . To carry out the purposes of this title the Corporation

is authorized and empowered-

(a) Commencing with the wheat crop planted for harvest in

1939, to insure, upon such terms and conditions not inconsistent with

the provisions of this title as it may determine, producers of wheat

against loss in yields of wheat due to unavoidable causes, including

drought, flood, hail, wind, winterkill, lightning, tornado, insect infestation, plant disease, and such other unavoidable causes as may be

determined by the Board : Provided, however, That for the first three

years of operation under this title contracts of insurance shall not

be made for periods longer than one year . Such insurance shall not

cover losses due to the neglect or malfeasance of the producer or to

the failure of the producer to reseed in areas and under circumstances

where it is customary to reseed. Such insurance shall cover not less

than 50 or more than 75 per centum, to be determined by the Board,

of the recorded or appraised average yield of wheat on the insured

farm for a representative base period subject to such adjustments as

the Board may prescribe to the end that the average yields fixed for

farms in the same area, which are subject to the same conditions, may

be fair and just . The Board may condition the issuance of such

insurance in any county or area upon a minimum amount of participation in a program of crop insurance formulated pursuant to this

title .

(b) To fix adequate premiums for such insurance, payable either

in wheat or cash equivalent as of the due date thereof, on the basis

of the recorded or appraised average crop loss of wheat on the

insured farm for a representative base period subject to such adjustments as the Board may prescribe to the end that the premiums

fixed for farms in the same area, which are subject to the same

conditions, may be fair and just. Such premiums shall be collected

at such time or times, in such manner, and upon such security as

the Board may determine.

(c) To adjust and pay claims for losses either in wheat or in cash

equivalent under rules prescribed by the Board. In the event that

any claim for indemnity under the provisions of this title is denied
52 STAT.]

75TH LONG ., 3D SESS .-CH. 30--FEB . 16, 1938

by the Corporation an action on such claim may be brought against

the Corporation in the district court of the United States in and

for the district in which the insured farm is located, and exclusive

jurisdiction is hereby conferred upon such courts to determine such

controversies without regard to the amount in controversy : Pro-vided,

That no suit on such claim shall be allowed under this section unless

the same shall have been brought within one year after the date

when notice of denial of the claim is mailed to the claimant .

(d) From time to time, in such manner and through such agencies

as the Board may determine, to purchase, handle, store, insure, provide storage facilities for, and sell wheat, and pay any expenses

incidental thereto, it being the intent of this provision, however,

that, insofar as practicable, the Corporation shall purchase wheat

only at the rate and to a total amount equal to the payment of

premiums in cash by farmers or to replace promptly wheat sold to

prevent deterioration ; and shall sell wheat only to the extent necessary to cover payments of indemnities and to prevent deterioration :

Provided, however, That nothing in this section shall prevent prompt

offset purchases and sales of wheat for convenience in handling .

The restriction on the purchase and sale of wheat provided in this

section shall be made a part of any crop insurance agreement made

under this title . Notwithstanding any provision of this title, there

shall be no limitation upon the legal or equitable remedies available

to the insured to enforce against the Corporation the foregoing

restriction with respect to purchases and sales of wheat .

INDEMNITIES EXEMPT FROM LEVY

SEC. 509. Claims for indemnities under this title shall not be liable

to attachment, levy, garnishment, or any other legal process before

payment to the insured or to deduction on account of the indebtedness of the insured or his estate to the United States except claims

of the United States or the Corporation arising under this title .

DEPOSIT OF r UNDS

SEC. 510. All money of the Corporation not otherwise employed

may be deposited with the Treasurer of the United States or in any

bank approved by the Secretary of the Treasury, subject to withdrawal by the Corporation at any time, or with the approval of the

Secretary of the Treasury may be invested in obligations of the

United States or in obligations guaranteed as to principal and interest by the United States. Subject to the approval of the Secretary

of the Treasury, the Federal Reserve banks are hereby authorized

and directed to act as depositories, custodians, and fiscal agents for

the Corporation in the performance of its powers conferred by this

title .

TAX EXEMPTION

SEC. 511. The Corporation, including its franchise, its capital,

reserves, and surplus, and its income and property, shall be exempt

from all taxation now or hereafter imposed by the United States or

by any Territory, dependency, or possession thereof, or by any State,

county, municipality, or local taxing authority .

FISCAL AGENT OF GOVERNMENT

SEC. 512. When designated for that purpose by the Secretary of

the Treasury, the Corporation shall be a depository of public money,

except receipts from customs, under such regulations as may be preP

roviso . Time for filing Snit .

Additional powers

of Board .

Provioo.

Offset purchases and

sales .

Indemnities exempt

from levy .

Deposit of funds .

Depositories .

Tax exemption .

75

Fiscal agent of Government.
76

Accounting.

Annual audit .

Report to Congress.

Proviso.

Prior examination.

Crimes and offenses.

False, etc., statements.

Penalty .

Speculating in any

agricultural commodity, etc .

Penalty.

Embezzlement, etc .

Penalty .

Concealment, etc .,

of property held by

Corporation as security .

Penalty.

PUBLIC LAWS-CH. 30-FEB . 16, 1938

152 STAT.

scribed by said Secretary ; and it may also be employed as a financial

agent of the Government ; and it shall perform all such reasonable

duties, as a depository of public money and financial agent of the

Govermuent, as may be required of it.

ACCOUNTING BY CORPORATION

SEC. 513. The Corporation shall at all times maintain complete

and accurate books of account and shall file annually with the Secretary of Agriculture a complete report as to the business of the Corporation . The financial transactions of the Corporation shall be

audited at least once each year by the General Accounting Office for

the sole purpose of making a report to Congress, together with such

recommendations as the Comptroller General of the United States

may deem advisable : Provided, That such report shall not be made

until the Corporation shall have had reasonable opportunity to

examine the exceptions and criticisms of the Comptroller General or

the General Accounting Office, to point out errors therein, explain

or answer the same, and to file a statement which shall be submitted

by the Comptroller General with his report .

CRIMES AND OFFENSES

SEC. 514 . (a) Whoever makes any statement knowing it to be false,

or whoever willfully overvalues any security, for the purpose of

influencing in any way the action of the Corporation, or for the

purpose of obtaining for himself or another money, property, or anything of value, under this title, shall be punished by a fine of not

more than $5,000 or by imprisonment for not more than two years,

or both.

(b) 10To person shall, while acting in any official capacity in the

administration of this title, speculate, directly or indirectly, in any

agricultural commodity or product thereof, to which this title

applies, or in contracts relating thereto, or in the stock or membership interests of any association or corporation engaged in handling,

processing, or disposing of any such commodity or product. Any

person violating this subsection shall upon conviction thereof be

fined not more than $10,000 or imprisoned not more than two years,

or both.

(c) Whoever, being connected in any capacity with the Corporation, (1) embezzles, abstracts, purloins, or willfully misapplies any

moneys, funds, securities, or other things of value, whether belonging

to the Corporation or pledged or otherwise entrusted to it ; or (2)

with intent to defraud the Corporation, or any other body politic or

corporate, or any individual, or to deceive any officer, auditor, or

examiner of the Corporation, makes any false entry in any book,

report, or statement of, or to, the Corporation or draws any order,

or issues, puts forth, or assigns any note or other obligation or draft,

mortgage, judgment, or decree thereof ; or (3) with intent to defraud

the Corporation, participates or shares in or receives directly or indirectly any money, profit, property, or benefits through any transaction,

loan, commission, contract, or any other act of the Corporation, shall

be punished by a fine of not more than $10,000 or by imprisonment

for not more than five years, or both.

(d) Whoever willfully shall conceal, remove, dispose of, or convert

to his own use or to that of another, any property mortgaged or

pledged to, or held by, the Corporation, as security for any obligation, shall be punished by a fine of not more than $5,000 or by imprisonment for not more than two years, or both .
52 STAT.]

75TH CONG ., 3D SESS .-CH. 30-FEB. 16. 1933

(e) Whoever conspires with another to accomplish any of the acts

made unlawful by the preceding provisions of this section shall, on

conviction thereof, be subject to the same fine or imprisonment, or

both, as is applicable in the case of conviction for doing such unlawful act.

(f) The provisions of sections 112, 113, 114, 115, 116, and 117

of the Criminal Code of the United States (U . S . C ., title 18, sees.

202 to 207, inclusive) insofar as applicable, are extended to apply

to contracts or agreements with the Corporation under this title

Provided, however, That the provisions of section 3741 of the

Revised Statutes (U. S . C., title 41, sec . 22) and sections 114 and 115

of the Criminal Code of the United States shall not apply to any

crop-insurance agreements made under this title .

ADVISORY COMMITTEE

SEC. 515. The Secretary of Agriculture is authorized to appoint

from time to time an advisory committee, consisting of not more

than five members experienced in agricultural pursuits and appointed

with due consideration to their geographical distribution, to advise

the Corporation with respect to carrying out the purposes of this

title . The compensation of the members of such committee shall be

determined by the Board but shall not exceed $10 per day each while

actually employed and actual necessary traveling and subsistence

expenses, or a per diem allowance in lieu thereof .

APPROPRIATIONS AND REGULATIONS

SEC. 516 . (a) There are hereby authorized to be appropriated such

sums, not in excess of $6,000,000 for each fiscal year beginning after

June 30, 1938, as may be necessary to cover the operating and administrative costs of the Corporation, ,N-hich shall be allotted to the

Corporation in such amounts and at such time or times as the

Secretary of Agriculture may determine : Provided, That expenses

in connection with the purchase, transportation . handling, or sale of

wheat may be considered by the Corporation as being nonadministrative or nonoperating expenses . For the fiscal year ending June

30, 1939, the appropriation authorized under this subsection is

authorized to be made only out of the unexpended balances for the

fiscal year ending June 30, 1938, of the sums appropriated pursuant

to section 15 of the Soil Conservation and Domestic Allotment Act,

as amended .

(b) The Secretary and the Corporation, respectively, are authorized to issue such regulations as may be necessary to carry out the

provisions of this title .

SEPARABILITY

SEC. 517. The sections of this title and subdivisions of sections are

hereby declared to be separable, and in the event any one or more

sections or parts of the same of this title be held to be unconstitutional, the same shall not affect the validity of other sections or

parts of sections of this title .

RIGHT TO AMEND

SEC. 518. The right to alter, amend, or repeal this title is hereby

reserved .

Approved, February 16, 1938, 3 p . m.

Conspiracy .

77

Application of designated sections of

Criminal Code.

26718 U

. S . C . °° 202-

.

Proviso. Interest of Members

of Congress .

R. S . ° 3741 .

41 U . S . C . ° 22 .

18 U .S . C. °°2G4,

205 .

Advisory committee .

Compensation.

Appropriations authorized

Post, 1 ; . 716

Prcriso .

Certain expenses

deemed nonadministrative .

Amount for fiscal

year 1939 .

49 Stat. 1151 .

16 U . S . C ., Supp .

Ill, 4 Sloe .

Regulations .

Separability.

Right to amend .
78

[CHAPTER 31]

AN ACT

	

February 18,1938

IS . 2194]	 To provide for the annual inspection of all motor vehicles in the District of

[Public, No. 4311

Columbia .

Motor vehicles, D istrict of Columbia .

Inspection fee for

1939; thereafter .

Payment to collector of taxes .

43 stat . 106 .

50 Stat . 676 .

Inclusion of estimates of expenses in

estimates for District

of Columbia.

Post, p . 1124 .

Motor vehicles of

Federal Government,

District government,

and representatives of

foreign governments .

Authority to refuse,

revoke, or suspend

registration .

Proviso.

Application of designated provisions .

44 Stat. 814 .

Penalty for violation.

Administrative regulations.

PUBLIC LAWS-CH. 31-FEB. 18, 1938[52 STAT.

Be it enacted by the Senate and House of Representatives of the

United States of America in Congress assembled, That at the time

of the registration of each motor vehicle there shall be levied and

collected a fee known as the "inspection fee" of $1 for the calendar

year 1939 for each motor vehicle registered in the District of Columbia, including electrics, and that during 1940 and each year thereafter

inspection fee thus levied shall be 50 cents on each vehicle .

SEC. 2. The inspection fee shall be paid to the collector of taxes

and shall be deposited in the Treasury of the United States to the

credit of the special fund created by the Act entitled "An Act to

provide for a tax on motor-vehicle fuels sold within the District of

Columbia, and for other purposes", approved April 23, 1924, and

the Act entitled "An Act to provide additional revenue for the District of Columbia, and for other purposes", approved August 17,

1937.

SEC. 3. The annual estimates of appropriations for the government

of the District of Columbia for the fiscal year 1939 and succeeding

fiscal years shall include estimates of appropriations for the construction and/or rental and/or leasing of ground and buildings, the purchase of equipment and supplies, and the payment of salaries of

mechanics, laborers, clerks, and other employees to carry out the

annual inspection of all motor vehicles in the District of Columbia.

SEC. 4. All motor vehicles owned and officially used by the Government of the United States or by the government of the District

of Columbia or by the representatives of foreign governments, shall

be subject to annual inspection, such inspections to be furnished

without charge.

SEC. 5 . The Commissioners of the District of Columbia or their

designated agent may refuse to register any motor vehicle or trailer

which has not been inspected as required, or which is unsafe or

improperly equipped, or otherwise unfit to be operated, and for like

reason they may revoke or suspend any registration already made

Provided, That the provisions of section 13 (a) of the Traffic Acts,

District of Columbia, shall be applicable in all cases where registration is refused, revoked, or suspended under the terms of this Act .

SEC. 6 . Any individual, partnership, firm, or corporation found

guilty of using or permitting the use of any unregistered motor

vehicle or trailer, or who is found guilty of using or permitting the

use of the same during the period for which any such vehicle's registration is revoked or suspended under the terms of this Act shall,

for each such offense, be fined not more than $300.

SEC. 7. The Commissioners of the District of Columbia shall make

such regulations as in their judgment are necessary for the administration of this Act, and may affix thereto such reasonable fines

and penalties as in their judgment are necessary to enforce such

regulations.

Approved, February 18, 1938 .