750

Rules .

Division of refunds.

Ante, p . 620 .

Annual appropriations authorized .

Post, pp . 1115, 1881 .

Administrative expenses.

Federal Social Security Board .

Local cooperation

with, directed.

Effective date.

August 24, 1935.

[H . R . 8492.]

[Public, No. 320.]

Agricultural Adjustment Act, amendments .

Vol . 48, p. 32; U . S .

C., p. 155 .

Declaration of policy ;

base periods for commodity prices .

Vol . 48, p . 32 ; U. S .

C ., p . 156 .

74TH CONGRESS. SESS. I. CHS. 640, 641 . AUGUST 24, 1935 .

such property, or a proper part thereof, upon the first grant of such

assistance, or at any time thereafter that it deems advisable for the

purpose of safeguarding the interest of an applicant or for the protection of the funds of the District of Columbia . Such agency shall

establish such rules and regulations regarding the care, management,

transfer, and sale of such property as it deems advisable and shall

provided 1 for the return of the balance of the claimant's property

into his hands whenever the assistance is withdrawn or the claimant

ceases to request it . If the District of Columbia collects from the

estate of any recipient of old-age assistance any amount with respect

to old-age assistance furnished him under this Act, one half of the

net amount so collected shall be paid to the United States in accordance with the provisions of Title I of the Social Security Act .

SEC. 13. Congress shall appropriate annually and make available

to the order of the Board of Commissioners of the District of Columbia such sums as may be needed to pay the share of the District of

Columbia for old-age assistance, provided under this Act together

with a sufficient sum to defray its share 1 administrative expenses to

be incurred in connection therewith, and include such sums in the

annual District of Columbia appropriation Act . Should the sums

so appropriated, however, be expended or exhausted during the year

for the purposes for which it was appropriated, additional sums

shall be appropriated by Congress as occasion demands to carry out

the provisions of this Act.

SEC. 14. All necessary expenses incurred by the District of Columbia in carrying out the provision' of this Act shall be paid in the

same manner as other expenses of the District of Columbia are paid .

SEC. 15. The Board of Commissioners or its designated agency is

hereby authorized and directed to cooperate in all necessary respects

with the Social Security Board of the United States Government in

the administration of this Act, and to accept any sums allotted or

apportioned by such Board as are available under the provisions of

the Social Security Act .

SEC. 16. This Act shall take effect ninety days after its passage .

Approved, August 24, 1935 .

[CHAPTER 641 .1

AN ACT

To amend the Agricultural Adjustment Act, and for other purposes .

Be it enacted by the Senate and House of Representatives of the

United States o f America in Congress assembled, That (a) the first

sentence of subsection (1) of section 2 of the Agricultural Adjustment Act, as amended, is amended by striking out the first word

and inserting in lieu thereof the following : " Through the exercise of

the powers conferred upon the Secretary of Agriculture under this

title, to", and by inserting before the period at the end thereof a

semicolon and the following : "and, in the case of all commodities

for which the base period is the pre-war period, August 1909 to

July 1914, will also reflect current interest payments per acre on

farm indebtedness secured by real estate and tax payments per acre

on farm real estate, as contrasted with such interest payments and

tax payments during the base period " .

(b) Section 2 of the Agricultural Adjustment Act, as amended,

is amended by striking out subsections (2) and (3) and inserting

in lieu thereof the following

1 So in original .
74Tx CONGRESS. SESS. I . CH. 641. AUGUST 24, 1935.

751

"(2) To protect the interest of the consumer by (a) approaching

sumerfnt

Protection of conthe level of prices which it is declared to be the policy of Congress

to establish in subsection (1) of this section by gradual correction

of the current level at as rapid a rate as the Secretary of Agriculture deems to be in the public interest and feasible in view of the

current consumptive demand in domestic and foreign markets, and

(b) authorizing no action under this title which has for its purpose

the maintenance of prices to farmers above the level which it is

declared to be the policy of Congress to establish in subsection (1)

of this section ."

SEC. 2. Section 8 of the Agricultural Adjustment Act, as amended, Vol. 48, p . 34 ; U . S.

is amended by striking out everything preceding subsection (2) and C commoditybenefits. inserting in lieu thereof the following

"(1) Whenever the Secretary of Agriculture has reason to believe Investigations by

Secretary of Agriculthat :

tore .

"(a) The current average farm price for any basic agricultural

commodity is less than the fair exchange value thereof, or the

average farm price of such commodity is likely to be less than the

fair exchange value thereof for the period in which the production

of such commodity during the current or next succeeding marketing

year is normally marketed, and

"(b) The conditions of and factors relating to the production,

marketing, and consumption of such commodity are such that the

exercise of any one or more of the powers conferred upon the

Secretary under subsections (2) and (3) of this section would tend

to effectuate the declared policy of this title,

he shall cause an immediate investigation to be made to determine

such facts. If, upon the basis of such investigation, the Secretary

ia

Proclamation of findfinds the existence of such facts, he shall proclaim such determination

and shall exercise such one or more of the powers conferred upon him Exercise of conferred

under subsections (2) and (3) of this section as he finds, upon the

powers .

basis of an investigation, administratively practicable and best

calculated to effectuate the declared policy of this title .

"(2) Subject to the provisions of subsection (1) of this section, the Agreements with

Secretary of Agriculture shall provide, through agreements with

producer` . producers or by other voluntary methods,

"(a) For such adjustment in the acreage or in the production for Adjustments in acremarket, or both, of any basic agricultural commodity, as he finds,

ag e or production.

upon the basis of the investigation made pursuant to subsection (1)

of this section, will tend to effectuate the declared policy of this

title, and to make such adjustment program practicable to operate

and administer, and

"(b) For rental or benefit payments in connection with such Rental or benefit

agreements or methods in such amounts as he finds, upon the basis

payments ; amounts .

of such investigation j to be fair and reasonable and best calculated

to effectuate the declared policy of this title and to make such program practicable to operate and administer, to be paid out of any

moneys available for such payments or, subject to the consent of

the producer, to be made in quantities of one or more basic agricultural commodities acquired by the Secretary pursuant to this

title .

"(3) Subject to the provisions of subsection (1) of this section, the

Additional pay_

Secretary of Agriculture shall make payments, out of any moeys

ments .

available for such payments, in such amounts as he finds, upon the

basis of the investigation made pursuant to subsection (1) of this

section, to be fair and reasonable and best calculated to effectuate the

declared policy of this title

"(a) To remove from the normal channels of trade and commerce

quantities of any basic agricultural commodity or product thereof ;
752

74TH CONGRESS . SESS. I. CFI. 641 . ATIGUST 24, 1935.

"(b) To expand domestic or foreign markets for any basic

agricultural commodity or product thereof ;

"(c) In connection with the production of that part of any

basic agricultural commodity which is required for domestic

consumption.

"(4) Whenever, during a period during which any of the powers

conferred in subsection (2) or (3) is being exercised, the Secretary

of Agriculture has reason to believe that, with respect to any basic

agricultural commodity :

When it appears that

"(a) The current average farm price for such commodity is not current average farm

price not less than fair less than the fair exchange value thereof, and the average farm

exchange value. price for such commodity is not likely to be less than the fair

exchange value thereof for the period in which the production of

such commodity during the current or next succeeding marketing

year is normally marketed, or

"(b) The conditions of and factors relating to the production, marketing, and consumption of such commodity are

such that none of the powers conferred in subsections (2)

and (3), and no combination of such powers, would, if

exercised, tend to effectuate the declared policy of this title,

he shall cause an immediate investigation to be made to determine

such facts . If, upon the basis of such investigation, the Secretary

finds the existence of such facts, he shall proclaim such determination, and shall not exercise any of such powers with respect to such

commodity after the end of the marketing year current at the time

when such proclamation is made and prior to a new proclamation

under subsection (1) of this section, except insofar as the exercise

of such power is necessary to carry out obligations of the Secretary

assumed, prior to the date of such proclamation made pursuant to

this subsection, in connection with the exercise of any of the powers

conferred upon him under subsections (2) or (3) of this section .

"(5) In the course of any investigation required to be made under

subsection (1) or subsection (4) of this section, the Secretary of

Agriculture shall hold one or more hearings, and give due notice

and opportunity for interested parties to be heard .

"(6) No payment under this title made in an agricultural commodity acquired by the Secretary in pursuance of this title shall be

made in a commodity other than that in respect of which the

payment is being made . For the purposes of this subsection, hogs

and field corn may be considered as one commodity .

Sugar beets or sugar-

" (7) In the case of sugar beets or sugarcane, in the event that it cane.

Payments when re- shall be established to the satisfaction of the Secretary of Agriturns to producers reduced by payment of culture that returns to rowers or producers, ~, oducers t under the contracts for

processing tax or floor the 1933-1934 crop of sugar beets or sugarcane, entered into by and stocks

48, p . 676 . between the processors and producers and/or growers thereof, were

reduced by reason of the payment of the processing tax, and/or the

corresponding floor stocks tax, on sugar beets or sugarcane, in addition to the foregoing rental or benefit payments, the Secretary of

Agriculture shall make such payments, representing in whole or in

production

Agreement to

required.

curtail part such tax, as the Secretary deems fair and reasonable, to producers who agree, or have agreed, to participate in the program for

reduction in the acreage or reduction in the production for market,

or both, of sugar beets or sugarcane .

"(8) In the case of rice, the Secretary of Agriculture, in exercising the power conferred upon him by subsection (2) of this section

to provide for rental or benefit payments, is directed to provide in

any agreement entered into by him with any rice producer pursuant

to such subsection, upon such terms and conditions as the Secretary

Investigations .

When exercise of

powers would not effectuate policy .

Proclamation of findings .

Exercise of powers

thereafter .

Hearings ; notice .

Restriction on

ments .

payHogs and field corn .

Rice .

Agreements with producers to pledge right

to rental or benefit

payments .

Ante, p . 46.
74TH CONGRESS . SESS. I . CH. 641 . AUGUST 24, 1935 .

753

determines will best effectuate the declared policy of this title, that

the producer may pledge for production credit in whole or in part

his right to any rental or benefit payments under the terms of such

agreement and that such producer may designate therein a payee to

receive such rental or benefit payments.

"(9) Under regulations of the Secretary of Agriculture requiring

adequate facilities for the storage of any nonperishable agricultural

commodity on the farm, inspection and measurement of any such

commodity so stored, and the locking and sealing thereof, and such

other regulations as may be prescribed by the Secretary of Agriculture for the protection of such commodity and for the marketing

thereof, a reasonable percentage of any benefit payment may be

advanced on any such commodity so stored. In any such case, such

deduction may be made from the amount of the benefit payment as

the Secretary of Agriculture determines will reasonably compensate

for the cost of inspection and sealing but no deduction may be made

for interest ."

SEC. 3 . The first sentence of subsection (b) of section 12 of the

Agricultural Adjustment Act, as amended, is amended to read as

follows : " In addition to the foregoing, for the purpose of effectuating the declared policy of this title, a sum equal to the proceeds

derived from all taxes imposed under this title is hereby appropriated to be available to the Secretary of Agriculture for (1) the

acquisition of any agricultural commodity pledged as security for

any loan made by any Federal agency, which loan was conditioned

upon the borrower agreeing or having agreed to cooperate with a

program of production adjustment or marketing adjustment adopted

under the authority of this title, and (2) the following purposes

under part 2 of this title : Administrative expenses, payments

authorized to be made under section 8, and refunds on taxes ."

SEC. 4. Subsection (2) of section 8 of the Agricultural Adjustment

Act, as amended, is amended by designating said subsection as section

8b, by inserting said section at the end of section 8a, and by amending the first sentence thereof to read as follows : "In order to effectuate the declared policy of this title, the Secretary of Agriculture

shall have the power, after due notice and opportunity for hearing,

to enter into marketing agreements with processors, producers,

associations of producers, and others engaged in the handling of any

agricultural commodity or product thereof, only with respect to

such handling as is in the current of interstate or foreign commerce

or which directly burdens, obstructs, or affects, interstate or foreign

commerce in such commodity or product thereof ."

SEC. 5 . The Agricultural Adjustment Act, as amended, is amended

by striking out section 8 (3) thereof and by adding after section

8b, the following new section

"ORDERS

Orders .

" SEC. 8c. (1) The Secretary of Agriculture shall, subject to the Authority to issue.

provisions of this section, issue, and from time to time amend,

orders applicable to processors, associations of producers, and others

engaged in the handling of any agricultural commodity or product

thereof specified in subsection (2) of this section . Such persons are stru d

andlers" conreferred to in this title as `handlers' . Such orders shall regulate,

in the manner hereinafter in this section provided, only such handling of such agricultural commodity, or product thereof, as is in

the current of interstate or foreign commerce, or which directly

burdens, obstructs, or affects, interstate or foreign commerce in such

commodity or product thereof.

104019°-36	48

Benefit payment on

stored nonperishable

commodity .

Deduction of inspection and sealing costs.

Vol . 48, p. 38 ; U . S.

C., p. 162.

Appropriation .

Sum available.

Purposes.

Vol . 48, pp . 34, 528,

672 ; U . S . C ., p . 158.

Marketing agreements ; authority to

enter .

Vol . 48, p. 35 .
754

Commodities to

which orders applicable .

Enumeration .

Notice and bearing .

Finding and issue of

order .

Terms of orders.

Milk and its products .

Post, p. 756 .

Classification according to use ; minimum

price.

Price as to handlers ;

adjustments .

Payment of uniform

prices to producers .

Proviso .

Approval of producers .

74TH CONGRESS. SESS. I. CH. 641. AUGUST 24, 1935. .

" COMMODITIES TO WHICH APPLICABLE

"(2) Orders issued pursuant to this section shall be applicable

only to the following agricultural commodities and the products

thereof (except products of naval stores), or to any regional, or

market classification of any such commodity or product : Milk, fruits

(including pecans and walnuts but not including apples and not

including fruits, other than olives, for canning), tobacco, vegetables

(not including vegetables, other than asparagus, for canning' ), soybeans and naval stores as included in the Naval Stores Act and

standards established thereunder (including refined or partially

refined oleoresin) .

" NOTICE AND HEARING

"(3) Whenever the Secretary of Agriculture has reason to believe

that the issuance of an order will tend to effectuate the declared

policy of this title with respect to any commodity or product thereof

specified in subsection (2) of this section, he shall give due notice

of and an opportunity for a hearing upon a proposed order .

" FINDING AND ISSUANCE OF ORDER

"(4) After such notice and opportunity for hearing, the Secretary

of Agriculture shall issue an order if he finds, and sets forth in

such order, upon the evidence introduced at such hearing (in addition to such other findings as may be specifically required by this

section) that the issuance of such order and all of the terms and

conditions thereof will tend to effectuate the declared policy of this

title with respect to such commodity .

" TERMS-MILK AND ITS PRODUCTS

"(5) In the case of milk and its products, orders issued pursuant

to this section shall contain one or more of the following terms and

conditions, and (except as provided in subsection (7)) no others

"(A) Classifying milk in accordance with the form in which or the

purpose for which it is used, and fixing, or providing a method for

fixing, minimum prices for each such use classification which all

handlers shall pay, and the time when payments shall be made, for

milk purchased from producers or associations of producers . Such

prices shall be uniform as to all handlers, subject only to adjustments

for (1) volume, market, and production differentials customarily

applied by the handlers subject to such order, (2) the grade or

quality of the milk purchased, and (3) the locations at which delivery

of such milk, or any use classification thereof, is made to such

handlers.

P

"Providing :

(i) for the payment to all producers and associations of producers delivering milk to the same handler of uniform prices for

all milk delivered by them : Provided, That, except in the case of

orders covering milk products only, such provision is approved or

favored by at least three-fourths of the producers who, during a

representative period determined by the Secretary of Agriculture,

have been engaged in the production for market of milk covered

in such order or by producers who, during such representative

period, have produced at least three-fourths of the volume of such

milk produced for market during such period ; the approval

required hereunder shall be separate and apart from any other

approval or disapproval provided for by this section ; or
74TH CONGRESS . SESS. I . CH. 641 . AUGUST 24, 1935 .

755

"(ii) for the payment to all producers and associations of pro- P

niforo prices irreducers delivering milk to all handlers of uniform prices for all milk

so delivered, irrespective of the uses made of such milk by the

individual handler to whom it is delivered ;

subject, in either case, only to adjustments for (a) volume, market, Adjustments .

and production differentials customarily applied by the handlers

subject to such order, (b) the grade or quality of the milk delivered,

(c) the locations at which delivery of such milk is made, and (d)

a further adjustment, equitably to apportion the total value of the

milk purchased by any handler, or by all handlers, among producers

and associations of producers, on the basis of their production of

milk during a representative period of time .

"(C) In order to accomplish the purposes set forth in paragraphs

equal Ta

Total

sd

paid

eaBred (A) and (B) of this subsection (5), providing a method for mak- milk . ing adjustments in payments, as among handlers (including producers who are also handlers), to the end that the total sums paid

by each handler shall equal the value of the milk purchased by him

at the prices fixed in accordance with paragraph (A) hereof .

"(D) Providing that, in the case of all milk purchased by handlers produmra during fie from any producer who did not regularly sell milk during a period of three months of de30 days next preceding the effective date of such order for consumplivery . tion in the area covered thereby, payments to such producer, for the

period beginning with the first regular delivery by such producer and

continuing until the end of two full calendar months following the

first clay of the next succeeding calendar month shall be made at

the price for the lowest use classification specified in such order,

subject to the adjustments specified in paragraph (B) of this subsection (5) .

"(E) Providing (i) except as to producers for whom such services tion t producers ; veri Ma

o rn veri-• are being rendered by a cooperative marketing association, qualified fication of weights . as provided in paragraph (F) of this subsection (5), for market

information to producers and for the verification of weights, sampling, and testing of milk purchased from producers, and for making

appropriate deductions therefor from payments to producers, and

(ii) for assurance of, and security for, the payment by handlers for

milk purchased .

"(F) Nothing contained in this subsection (5) is intended or shall ;ng ° apotIve maonbe construed to prevent a cooperative marketing association quali- tracts with producers;

fied under the provisions of the Act of Congress of February 18,

rights continued.

1922, as amended, known as the ` Capper-Volstead Act', engaged in ~•V ool

. 42, p

. ass ; U. S . making collective sales or marketing of milk or its products for the

P 134

producers thereof, from blending the net proceeds of all of its sales

in all markets in all use classifications, and making distribution

thereof to its producers in accordance with the contract between the

association and its producers : Provided, That it shall not sell milk Pr° ri s ~

bIinimu .n sale price . or its products to any handler for use or consumption in any market

at prices less than the prices fixed pursuant to paragraph (A) of

this subsection (5) for such milk.

"(G) No marketing agreement or order applicable to milk and area .

on sales

its products in any marketing area shall prohibit or in any manner

limit, in the case of the products of milk, the marketing in that area

of any milk or product thereof produced in any production area in

the United States .

c

. TERMS-OTHER COMMODITIeS

Terms of orders .

"(6) In the case of fruits (including pecans and walnuts but not commodities generally . including apples and not including fruits, other than olives, for can- Terms and condining) and their products, tobacco and its products, vegetables (not

including vegetables, other than asparagus, for canning) and their
75674TH CONGRESS. SESS. I . CH. 641. AUGUST 24, 1935.

products, soybeans and their products, and naval stores as included

401 . 42, p. 1435;

U. S . C ., p . 115.

in the Naval Stores Act and standards established thereunder (includLimitation Limitation on total

quantity marketed .

Allotment of amount

handler may purchase .

Uniform rule required.

Allotment of amount

handler may market.

Uniform rule required .

Surpluses ; determination of extent.

Control and disposition.

Reserve pools; establishment .

Distribution of net

return from.

Terms common to all

orders .

Unfair methods of

competition .

Handlers' sale price.

ing refined or partially refined oleoresin), orders issued pursuant to

this section shall contain one or more of the following terms and conditions, and (except as provided in subsection (7)) no others

"(A) Limiting, or providing methods for the limitation of, the

total quantity of any such commodity or product, or of any grade,

size, or quality thereof, produced during any specified period or

periods, which may be marketed in or transported to any or all

markets in the current of interstate or foreign commerce or so as

directly to burden, obstruct, or affect interstate or foreign commerce

in such commodity or product thereof, during any specified period

or periods by all handlers thereof.

"(B) Allotting, or providing methods for allotting, the amount of

such commodity or product, or any grade, size, or quality thereof,

which each handler may purchase from or handle on behalf of any

and all producers thereof, during any specified period or periods,

under a uniform rule based upon the amounts produced or sold by

such producers in such prior period as the Secretary determines to be

representative, or upon the current production or sales of such producers, or both, to the end that the total quantity thereof to be purchased or handled during any specified period or periods shall be

apportioned equitably among producers.

"(C) Allotting, or providing methods for allotting, the amount of

any such commodity or product, or any grade, size, or quality thereof,

which each handler may market in or transport to any or all markets

in the current of interstate or foreign commerce or so as directly to

burden, obstruct, or affect interstate or foreign commerce in such

commodity or product thereof, under a uniform rule based upon the

amounts which each such handler has available for current shipment, or upon the amounts shipped by each such handler in such

prior period as the Secretary determines to be representative, or both,

to the end that the total quantity of such commodity or product, or

any grade, size, or quality thereof, to be marketed in or transported

to any or all markets in the current of interstate or foreign commerce or so as directly to burden, obstruct, or affect interstate or

foreign commerce in such commodity or product thereof, during

any specified period or periods shall be equitably apportioned among

all of the handlers thereof .

"(D) Determining, or providing methods for determining, the

existence and extent of the surplus of any such commodity or product, or of any grade, size, or quality thereof, and providing for the

control and disposition of such surplus, and for equalizing the burden of such surplus elimination or control among the producers and

handlers thereof.

"(E) Establishing, or providing for the establishment of, reserve

pools of any such commodity or product, or of any grade, size, or

quality thereof, and providing for the equitable distribution of the

net return derived from the sale thereof among the persons beneficially interested therein .

cc TERMS COMMON TO ALL ORDERS

"(7) In the case of the agricultural commodities and the products

thereof specified in subsection (2) orders shall contain one or more

of the following terms and conditions

"(A) Prohibiting unfair methods of competition and unfair trade

practices in the handling thereof .

"(B) Providing that (except for milk and cream to be sold for

consumption in fluid form) such commodity or product thereof, or
74TH CONGRESS. SESS. I . CH. 641 . AUGUST 24, 1935 .

757

any grade, size, or quality thereof shall be sold by the handlers

thereof only at prices filed by such handlers in the manner provided

in such order .

"(C) Providing for the selection by the Secretary of Agriculture

Administrative agencies ; selection ; powers

or a method for the selection, of an agency or agencies and defining and duties . their powers and duties, which shall include only the powers

"(i) To administer such order in accordance with its terms and

provisions ;

"(ii) To make rules and regulations to effectuate the terms and

provisions of such order ;

"(iii) To receive, investigate, and report to the Secretary of

Agriculture complaints of violations of such order ; and

"(iv) To recommend to the Secretary of Agriculture amendments to such order.

No person acting as a member of an agency established pursuant to

this paragraph (C) shall be deemed to be acting in an official capacity, within the meaning of section 10 (g) of this title, unless such

person receives compensation for his personal services from funds

of the United States .

"(D) Incidental to, and not inconsistent with, the terms and con- Specified terms and

ditions specified in subsections (5), (6), and (7) and necessary to

conditions nt75I.

effectuate the other provisions of such order .

"ORDERS WITH MARKETING AGREEMENT

Orders with marketing agreement .

"(8) Except as provided in subsection (9) of this section, no order eiWben

. orders to be

issued pursuant to this section shall become effective until the han- Requirement of mardlers (excluding cooperative associations of producers who are not

keting agreement .

engaged in processing, distributing, or shipping the commodity or

product thereof covered by such order) of not less than 50 per

centum of the volume of the commodity or product thereof covered

by such order which is produced or marketed within the production

or marketing area defined in such order have signed a marketing

agreement, entered into pursuant to section 8b of this title, which

regulates the handling of such commodity or product in the same

manner as such order, except that as to citrus fruits produced in any citrus fruits . area producing what is known as California citrus fruits no order

issued pursuant to this subsection (8) shall become effective until

the handlers of not less than 80 per centum of the volume of such

commodity or product thereof covered by such order have signed such

a marketing agreement : Provided, That no order issued pursuant to Piteq 'niiement of apthis subsection shall be effective unless the Secretary of Agriculture proval by producers . determines that the issuance of such order is approved or favored

"(A) By at least two-thirds of the producers who (except that as

to citrus fruits produced in any area producing what is known as

California. citrus fruits said order must be approved or favored by

three-fourths of the producers), during a representative period determined by the Secretary, have been engaged, within the production

area specified in such marketing agreement or order, in the production for market of the commodity specified therein, or who, during

such representative period, have been engaged in the production of

such commodity for sale in the marketing area specified in such

marketing agreement, or order, or

"(B) By producers who, during such representative period, have

produced for market at least two-thirds of the volume of such commodity produced for market within the production area specified

in such marketing agreement or order, or who, during such representative period, have produced at least two-thirds of the volume of

such commodity sold within the marketing area specified in such

marketing agreement or order .
758

74TH CONGRESS. SESS. I. CH. 641. AUGUST 24, 1935.

Orders with or with-

" ORDERS WITH OR WITHOUT MARKEtiNG AGREEMENT out marketing agreement.

Effectiveness of order "(9) Any order issued pursuant to this section shall become effec- on refusal of majority of

handlers to sign agree- Live in the event that, notwithstanding the refusal or failure of

went. handlers (excluding cooperative associations of producers who are

not engaged in processing, distributing, or shipping the commodity

or product thereof covered by such order) of more than 50 per

centum of the volume of the commodity or product thereof (except

that as to citrus fruits produced in any area producing what is

known as California citrus fruits said per centum shall be 80 per

centum) covered by such order which is produced or marketed within

the production or marketing area defined in such order to sign a

marketing agreement relating to such commodity or product thereof,

on which a hearing has been held, the Secretary of Agriculture,

with the approval of the President, determines

If refusal tends to

prevent effectuation of "(A) That the refusal or failure to sign a marketing agreement

declared policy . (upon which a hearing has been held) by the handlers (excluding

cooperative associations of producers who are not engaged in processing, distributing, or shipping the commodity or product thereof

covered by such order) of more than 50 per centum of the volume

of the commodity or product thereof (except that as to citrus fruits

produced in any area producing what is known as California citrus

fruits said per centum shall be 80 per centum) specified therein

which is produced or marketed within the production or marketing

area specified therein tends to prevent the effectuation of the declared

policy of this title with respect to such commodity or product, and

If issuance advances "(B) That the issuance of such order is the only practical means producers' interests . of advancing the interests of the producers of such commodity

pursuant to the declared policy, and is approved or favored

Approval of produc- " ( i) By at least two-thirds of the producers (except that as to citrus

ers required . fruits produced in any area producing what is known as California

citrus fruits said order must be approved or favored by three-fourths

of the producers) who, during a representative period determined

by the Secretary, have been engaged, within the production area

specified in such marketing agreement or order, in the production

for market of the commodity specified therein, or who, during such

representative period, have been engaged in the production of such

commodity for sale in the marketing area specified in such marketing

agreement, or order, or

" (ii) By producers who, during such representative period, have

produced for market at least two-thirds of the volume of such commodity produced for market within the production area specified

in such marketing agreement or order, or who, during such representative period, have produced at least two-thirds of the volume of

such commodity sold within the marketing area specified in such

marketing agreement or order .

Manner of regulation

" MANNER OF REGULATION AND APPLICABILITY

and applicability.

"(10) No order shall be issued under this section unless it regulates

the handling of the commodity or product covered thereby in the

same manner as, and is made applicable only to persons in the respective classes of industrial or commercial activity specified in, a

Advertising of com- marketing agreement upon which a hearing has been held. No

moditles. order shall be issued under this title prohibiting, regulating, or

restricting the advertising of any commodity or product covered

thereby, nor shall any marketing agreement contain any provision

prohibiting, regulating, or restricting the advertising of any commodity or product covered by such marketing agreement .
74TI» CONGRESS. SESS. I . CH. 641 . AUGUST 24, 1935 .

759

" REGIONAL APPLICAtiON

Regional application .

"(11) (A) No order shall be issued under this section which is Issue of general order

~chen several orders

applicable to all production areas or marketing areas, or both, of inadectuatee

any commodity or product thereof unless the Secretary finds that

the issuance of several orders applicable to the respective regional

production areas or regional marketing areas, or both, as the case

may be, of the commodity or product would not effectively carry out

the declared policy of this title .

" B Except in the case of milk and its products, orders issued

Application of orders

( )

to regional production

under this section shall be limited in their application to the smallest areas. regional production areas or regional marketing areas, or both, as the

case may be, which the Secretary finds practicable, consistently with

carrying out such declared policy .

"(C) All orders issued under this section which are applicable to differ nt areas

.cable to

the same commodity or product thereof shall, so far as practicable,

prescribe such different terms, applicable to different production

areas and marketing areas, as the Secretary finds necessary to give

due recognition to the differences in production and marketing of

such commodity or product in such areas .

" COOPERATIVE ASSOCIAtiON REPRESENTATION

Cooperative association representation .

"(12) Whenever, pursuant to the provisions of this section, the

Aconsetio of

of

proSecretary is required to determine the approval or disapproval of ducers . producers with respect to the issuance of any order, or any term or

condition thereof, or the termination thereof, the Secretary shall

consider the approval or disapproval by any cooperative association

of producers, bona fide engaged in marketing the commodity or

product thereof covered by such order, or in rendering services for

or advancing the interests of the producers of such commodity, as

the approval or disapproval of the producers who are members of,

stockholders in, or under contract with, such cooperative association

of producers .

Retailer and proRETAILER AND PRODUCER EXEMPTION

ducer exemption .

"(13) (A) No order issued under subsection (9) of this section

deLSappl7cabilityoforshall be applicable to any person who sells agricultural commodities

or products thereof at retail in his capacity as such retailer, except

to a_ retailer in his capacity as a retailer of milk and its products .

"(B) No order issued under this title shall be applicable to any

producer in his capacity as a producer .

" VIOLATION OF ORDER

Violation of order .

"(14) Any handler subject to an order issued under this section,

Penalty provision.

or any officer, director, agent, or employee of such handler, who violates any provision of such order (other than a provision calling for

payment of a pro rata share of expenses) shall, on conviction, be fined

not less than $50 or more than $500 for each such violation, and each

day during which such violation continues shall be deemed a separate

violation : Provided, That if the court finds that a petition pursuant Poiponement of

to subsection (15) of this section was filed and prosecuted by the de- penalt y. fendant in good faith and not for delay, no penalty shall be imposed

under this subsection for such violations as occurred between the date

upon which the defendant's petition was filed with the Secretary, and

the date upon which notice of the Secretary's ruling thereon was

given to the defendant in accordance with regulations prescribed

pursuant to subsection (15) .
760

Petition by handler

and review .

Filing .

Hearing .

Ruling.

Jurisdiction of courts

to review.

Time for filing petition.

Service of process.

Remand of proceedings if ruling unlawful .

Proceedings and relief under section 8 (a) .

Vol . 48, pp . 34, 675 .

Post, p . 762.

Termination of orders and marketing

agreements .

Orders .

Marketing agreements .

When termination

favored by majority

producers .

Proviso .

Requirement that

majority producers

have produced more

than 50 per centum of

volume of commodity .

74TH CONGRESS. SESS. I . CH. 641 . AUGUST 24, 1935 .

" PETITION BY HANDLER AND REVIEW

"(15) (A) Any handler subject to an order may file a written

petition with the Secretary of Agriculture, stating that any such

order or any provision of any such order or any obligation imposed

in connection therewith is not in accordance with law and praying

for a modification thereof or to be exempted therefrom . He shall

thereupon be given an opportunity for a hearing upon such petition,

in accordance with regulations made by the Secretary of Agriculture,

with the approval of the President . After such hearing, the Secretary shall make a ruling upon the prayer of such petition which shall

be final, if in accordance with law .

"(B) The District Courts of the United States (including the

Supreme Court of the District of Columbia) in any district in which

such handler is an inhabitant, or has his principal place of business,

are hereby vested with jurisdiction in equity to review such ruling,

provided a bill in equity for that purpose is filed within twenty days

from the date of the entry of such ruling. Service of process in such

proceedings may be had upon the Secretary by delivering to him a

copy of the bill of complaint . If the court determines that such

ruling is not in accordance with law, it shall remand such proceedings to the Secretary with directions either (1) to make such ruling

as the court shall determine to be in accordance with law, or (2) to

take such further proceedings as, in its opinion, the law requires .

The pendency of proceedings instituted pursuant to this subsection

(15) shall not impede, hinder, or delay the United States or the Secretary of Agriculture from obtaining relief pursuant to section 8a,

(6) of this title . Any proceedings brought pursuant to section 8a

(6) of this title (except where brought by way of counterclaim in

proceedings instituted pursuant to this subsection (15)) shall abate

whenever a final decree has been rendered in proceedings between the

same parties, and covering the same subject matter, instituted pursuant to this subsection (15) .

" TERMINATION OF ORDERS AND MARKEtiNG AGREeMENTS

"(16) (A) The Secretary of Agriculture shall, whenever he finds

that any order issued under this section, or any provision thereof,

obstructs or does not tend to effectuate the declared policy of this

title, terminate or suspend the operation of such order or such provision thereof .

"(B) The Secretary shall terminate any marketing agreement

entered into under section 8b, or order issued under this section, at

the end of the then current marketing period for such commodity,

specified in such marketing agreement or order, whenever he finds

that such termination is favored by a majority of the producers who,

during a representative period determined by the Secretary, have

been engaged in the production for market of the commodity specified in such marketing agreement or order, within the production

area specified in such marketing agreement or order, or who, during

such representative period, have been engaged in the production of

such commodity for sale within the marketing area specified in

such marketing agreement or order : Provided, That such majority

have, during such representative period, produced for market more

than 50 per centum of the volume of such commodity produced for

market within the production area specified in such marketing agreement or order, or have, during such representative period, produced

more than 50 per centum of the volume of such commodity sold in

the marketing area specified in such marketing agreement or order,

but such termination shall be effective only if announced on or before
74Tx CONGRESS . SESS. I . CH. 641 . AUGUST 24, 1935 .

761

such date (prior to the end of the then current marketing period)

as may be specified in such marketing agreement or order .

"(C) The termination or suspension of any order or amendment

thereto or provision thereof, shall not be considered an order within

the meaning of this section .

" PROVISIONS APPLICABLE TO AMENDMENTS

"(17) The provisions of this section, section 8d, and section 8e

applicable to orders shall be applicable to amendments to orders

Provided, That notice of a hearing upon a proposed amendment to

any order issued pursuant to section 8c, given not less than three

days prior to the date fixed for such hearing, shall be deemed due

notice thereof ."

SEC. 6. The Agricultural Adjustment Act, as amended, is further

amended by striking out subsection (4) of section 8 thereof and

adding after section 8c thereof the following new sections

" BOOKS AND RECORDS

" SEC. 8d. (1) All parties to any marketing agreement, and all

handlers subject to an order, shall severally, from time to time, upon

the request of the Secretary, furnish him with such information as

he finds to be necessary to enable him to ascertain and determine the

extent to which such agreement or order has been carried out or has

effectuated the declared policy of this title, and with such information as he finds to be necessary to determine whether or not there

has been any abuse of the privilege of exemptions from the antitrust

laws. Such information shall be furnished in accordance with forms

of reports to be prescribed by the Secretary. For the purpose of

ascertaining the correctness of any report made to the Secretary pursuant to this subsection, or for the purpose of obtaining the information required in any such report, where it has been requested and

has not been furnished, the Secretary is hereby authorized to examine

such books, papers, records, copies of income-tax reports, accounts,

correspondence, contracts, documents, or memoranda, as he deems

relevant and which are within the control (1) of any such party

to such marketing agreement, or any such handler, from whom such

report was requested or (2) of any person having, either directly

or indirectly, actual or legal control of or over such party or such

handler or (3) of any subsidiary of any such party, handler, or

person .

"(2) Notwithstanding the provisions of section 7, all information

furnished to or acquired by the Secretary of Agriculture pursuant

to this section shall be kept confidential by all officers and employees

of the Department of Agriculture and only such information so

furnished or acquired as the Secretary deems relevant shall be disclosed by them, and then only in a suit or administrative hearing

brought at the direction, or upon the request, of the Secretary of

Agriculture, or to which he or any officer of the United States is a

party, and involving the marketing agreement or order with reference to which the information so to be disclosed was furnished or

acquired . Nothing in this section shall be deemed to prohibit (A)

the issuance of general statements based upon the reports of a number of parties to a marketing agreement or of handlers subject to

an order, which statements do not identify the information furnished

by any person, or (B) the publication by direction of the Secretary,

of the name of any person violating any marketing agreement or

any order, together with a statement of the particular provisions

Termination not considered an order.

Provisions applicable

to amendments.

Post, p. 762.

Proviso.

Notice of hearing.

Vol . 48, p . 35 ; U . S .

C ., p . 158 .

Books and records .

Information from

parties to marketing

agreement.

Form of reports .

Access to books, etc.

Confidential nature

of information .

Issuance of general

statements.

Publication of violations of marketing

agreements.
762

Penalty for divulging

information .

Determination of

base period .

When post-war period to be used as base

period .

Vol. 48, p. 35 ; U . S .

C ., p . 158 .

Removal of commodity from warehouse

without cancelation of

receipt.

Vol . 48, p . 672 .

Sugar beets and

sugarcane as basic agricultural commodity .

Vol . 48, p . 675.

Jurisdiction vested in

district court .

Ante, p. 760.

Vol . 48, p . 675 .

Enforcement proceedings.

Investigation of violation of provisions of

order .

Hearing.

Vol . 48, pp. 35, 676;

U. S . C ., p. 160 .

Processing tax .

74TH CONGRESS . SESS. I . CH. 641 . AUGUST 24, 1935.

of the marketing agreement or order violated by such person . Any

such officer or employee violating the provisions of this section shall

upon conviction be subject to a fine of not more than $1,000 or to

imprisonment for not more than one year, or to both, and shall be

removed from office .

" DETeRMINAtiON OF BASe PERIOD

" SEC. 8e. In connection with the making of any marketing agreement or the issuance of any order, if the Secretary finds and proclaims that, as to any commodity specified in such marketing agreement or order, the purchasing power during the base period specified

for such commodity in section 2 of this title cannot be satisfactorily

determined from available statistics of the Department of Agriculture, the base period, for the purposes of such marketing agreement or order, shall be the post-war period, August 1919-July 1929,

or all that portion thereof for which the Secretary finds and proclaims that the purchasing power of such commodity can be satisfactorily determined from available statistics of the Department of

Agriculture ."

SEC. 7. Subsection (5) of section 8 of the Agricultural Adjustment Act, as amended, is further amended by designating said

subsection as section 8f, by inserting said section at the end of section 8e, and by striking out the last sentence thereof .

SEC. 8. Subsection (1) of section 8a of the Agricultural Adjustment Act, as amended, is amended as follows

(a) by striking out the word "handlers " wherever it appears and

by inserting in lieu thereof the words " persons engaged in the

handling " ;

(b) by striking out the phrase " or in competition with " and the

comma following such phrase in paragraph (B) ;

(c) by inserting the word "directly " before the words " to

burden " in paragraph (B) ;

(d) by striking out the words "in any way" in paragraph (B) .

SEC. 9 . Subsection (6) of section 8a of the Agricultural Adjustment Act, as amended, is amended by inserting the word " or " after

the comma following the word " regulation," and by striking out

the words " or license " .

SEC. 10. Subsection (7) of section 8a of the Agricultural Adjustment Act, as amended, is amended by inserting at the end thereof the

following new sentence : " Whenever the Secretary, or such officer or

employee of the Department of Agriculture as he may designate for

the purpose, has reason to believe that any handler has violated, or is

violating, the provisions of any order or amendment thereto issued

pursuant to this title, the Secretary shall have power to institute an

investigation and, after due notice to such handler, to conduct a

hearing in order to determine the facts for the purpose of referring

the matter to the Attorney General for appropriate action ."

SEC. 11. (a) Subsection (a) of section 9 of the Agricultural

Adjustment Act, as amended, is amended by striking out all of the

second sentence preceding the semicolon and inserting in lieu thereof

the following : "When the Secretary of Agriculture determines that

any one or more payments authorized to be made under section 8

are to be made with respect to any basic agricultural commodity, he

shall proclaim such determination, and a processing tax shall be in

effect with respect to such commodity from the beginning of the

marketing year therefor next following the date of such

proclamation ".
74TH CONGRESS. SESS. I . CII. 641 . AUGUST 24, 1935.

763

(b) The eighth sentence of such subsection (a) is amended by

Termination of.

striking out " rental or benefit payments " and inserting in lieu

thereof : " all payments authorized under section 8 which are in

effect ".

SeC. 12. Subsection (b) of section 9 of the Agricultural Adjust- c .v-l: ico: p

. 36 ; U

. S .

anent Act, as amended, is amended to read as follows :Ante, p . 46 .

" TAX RATE GENERALLY

Tax rate generally.

"(b) (1) The processing tax shall be at such rate as equals the

Computation.

difference between the current average farm price for the commodity

and the fair exchange value of the commodity, plus such percentage

of such difference, not to exceed 20 per centum, as the Secretary of

Agriculture may determine will result in the collection, in any

marketing year with respect to which such rate of tax may be in

effect pursuant to the provisions of this title, of an amount of tax

equal to (A) the amount of credits or refunds which he estimates

will be allowed or made during such period pursuant to section 15 (c)

with respect to the commodity and (B) the amount of tax which he

estimates would have been collected during such period upon all

processings of such commodity which are exempt from tax by reason

of the fact that such processings are done by or for a State, or a

political subdivision or an institution thereof, had such processings

been subject to tax . If, prior to the time the tax takes effect, or at Sniff

he

s

tax

us

rate

any time thereafter, the Secretary has reason to believe that the tax

at such rate, or at the then existing rate, on the processing of the

commodity generally or for any designated use or uses, or on the

processing of the commodity in the production of any designated

product or products thereof for any designated use or uses, will cause

or is causing such reduction in the quantity of the commodity or

P

ndepression of farm

products thereof domestically consumed as to result in the accumulation of surplus stocks of the commodity or products thereof or in the

depression of the farm price of the commodity, then the Secretary maaaestigation to be

shall cause an appropriate investigation to be made, and afford due

notice and opportunity for hearing to interested parties . If there- Changing tax rate.

upon the Secretary determines and proclaims that any such result

will occur or is occuring, then the processing tax on the processing

of the commodity generally or for any designated use or uses, or on

the processing of the commodity in the production of any designated

product or products thereof for any designated use or uses, shall be

at such lower rate or rates as he determines and proclaims will

prevent such accumulation of surplus stocks and depression of the

farm price of the commodity, and the tax shall remain during its

effective period at such lower rate until the Secretary, after due notice

and opportunity for hearing to interested parties, determines and

proclaims that an increase in the rate of such tax will not cause such

accumulation of surplus stocks or depression of the farm price of the

commodity. Thereafter the processing tax shall be at the highest

rate which the Secretary determines will not cause such accumulation of surplus stocks or depression of the farm price of the

commodity, but it shall not be higher than the rate provided in the

first sentence of this paragraph .

" SPECIFIC TAX RATES

Specific tax rates.

" (2) In the case of wheat, cotton, field corn, hogs, peanuts,

no modities desig.

tobacco, paper, and jute, and (except as provided in paragraph (8)

of this subsection) in the case of sugarcane and sugar beets, the

tax on the first domestic processing of the commodity generally or

for any particular use, or in the production of any designated product for any designated use, shall be levied, assessed, collected, and
764

74Tx CONGRESS. SESS. I. CH. 641. AUGUST 24, 1935 .

paid at the rate prescribed by the regulations of the Secretary of

Agriculture in effect on the date of the adoption of this amendment,

during the period from such date to December 31, 1937, both dates

inclusive.

Rate on rice .

a SPECIFIC TAX RATE-RICE

cc (3) For the period from April 1, 1935, to July 31, 1936, both

inclusive, the processing tax with respect to rice shall be levied,

assessed, collected, and paid at the rate of 1 cent per pound of

rough rice.

On rye .

C"

SPECIFIC TAX RATE-MARKETING YEAR-FLOOR STOCKS-RYE

~~ (4) For the period from September 1, 1935, to December 31, 1937,

both inclusive, the processing tax with respect to rye shall be levied,

assessed, collected, and paid at the rate of 30 cents per bushel of

Marketing year . fifty-six pounds . In the case of rye, the first marketing year shall

be considered to be the period commencing September 1, 1935, and

ending June 30, 1936 . Subsequent marketing years shall commence

Vol. 48, pp . 40, 678, on July 1 and end on June 30 of the succeeding year . The provi- 1241 ; Ante, p . 48; Post,

pp . 768_769,sions of section 16 of this title shall not apply in the case of rye .

Rate on barley. " SPECIFIC TAX RATe-FLOOR STOCKS-BARLEY

"(5) If at any time prior to December 31, 1937, a tax with respect

to barley becomes effective pursuant to proclamation as provided

in subsection (a) of this section, such tax shall be levied, assessed,

collected, and paid during the period from the date upon which

such tax becomes effective to December 31, 1937, both inclusive, at

the rate of 25 cents per bushel of forty-eight pounds . The provisions

of section 16 of this title shall not apply in the case of barley .

Adjustment of rate.

~' ADJLSTMENT OF RATE

Decrease u rate to "(6) prevent accumulation

(

n (A) Any rate of tax which is prescribed in paragraph (2)

of surplus . (3), 4), or (5) of this subsection or which is established pursuant

to this paragraph (6) on the processing of any commodity generally

or for any designated use or uses, or on the processing of the commodity in the production of any designated product or products

thereof for any designated use or uses, shall be decreased (including

a decrease to zero) in accordance with the formulae, standards, and

requirements of paragraph (1) of this subsection, in order to prevent

such reduction in the quantity of such commodity or the products

thereof domestically consumed as will result in the accumulation of

surplus stocks of such commodity or the products thereof or in the

depression of the farm price of the commodity, and shall thereafter

be increased in accordance with the provisions of paragraph (1) of

this subsection but subject to the provisions of subdivision (B) of

this paragraph (6) .

when increased rate "(B) If the average farm price of any commodity, the rate of tax antbonzed,

on the processing of which is prescribed in paragraph (2), (3), (4),

or (5) of this subsection or is established pursuant to this paragraph

(6), during any period of twelve successive months ending after July

1, 1935, consisting of the first ten months of any marketing year

and the last two months of the preceding marketing year-

"(i) is equal to, or exceeds by 10 per centum or less, the fair

exchange value thereof, or, in the case of tobacco, is less than the

fair exchange value by not more than 10 per centum, the rate of

such tax shall (subject to the provisions of subdivision (A) of this

paragraph (6)) be adjusted, at the beginning of the next succeeding marketing year, to such rate as equals 20 per centum of the

fair exchange value thereof.
74TH CONGRESS. SESS. I . CH. 641. AUGUST 24, 1935 .

765

"(ii) exceeds by more than 10 per centum, put not more than 20

per centum, the fair exchange value thereof, the rate of such tax

shall (subject to the provisions of subdivision (A) of this paragraph (6)) be adjusted, at the beginning of the next succeeding

marketing year, to such rate as equals 15 per centum of the fair

exchange value thereof.

"(iii) exceeds by more than 20 per centum the fair exchange

value thereof, the rate of such tax shall (subject to the provisions

of subdivision (A) of this paragraph (6)) be adjusted, at the

beginning of the next succeeding marketing year, to such rate as

equals 10 per centum of the fair exchange value thereof.

"(C) Any rate of tax which has been adjusted pursuant to this

paragraph (6) shall remain at such adjusted rate unless further

adjusted or terminated pursuant to this paragraph (6), until December 31, 1937, or until July 31, 1936, in the case of rice .

"(D) In accordance with the formulae, standards, and require .

iifents prescribed in this title, any rate of tax prescribed in paragraph

(2), (3), (4), or (5) of this subsection or which is established pursuant to this paragraph (6) shall be increased .

"(E) Any tax, the rate of which is prescribed in paragraph (2),

(3), (4), or (5) of this subsection or which is established pursuant

to this paragraph (6), shall terminate pursuant to proclamation as

provided in section 9 (a) of this title or pursuant to section 13 of

this title . Any such tax with respect to any basic commodity which

terminates pursuant to proclamation as provided in section 9 (a)

of this title shall again become effective at the rate prescribed in

paragraph (2), (3), (4), or (5) of this subsection, subject however

to the provisions of subdivisions (A) and (B) of this paragraph

(6), from the beginning of the marketing year for such commodity

next following the date of a new proclamation by the Secretary as

provided in section 9 (a) of this title, if such marketing year begins

prior to December 31, 1937, or prior to July 31, 1936, in the case of

rice, and shall remain at such rate until altered or terminated

pursuant to the provisions of section 9 or terminated pursuant to

section 13 of this title .

"(F) After December 31, 1937 (in the case of the commodities

specified in paragraphs (2), (4), and (5) of this subsection), and

after July 31, 1936 (in the case of rice), rates of tax shall be

determined by the Secretary of Agriculture in accordance with

the formulae, standards, and requirements prescribed in this title

but not in this paragraph (6), and shall, subject to such formulae,

standards, and requirements, thereafter be effective .

"(G) If the applicability to any person or circumstances of any

tax, the rate of which is fixed in pursuance of this paragraph (6),

is finally held invalid by reason of any provision of the Constitution, or is finally held invalid by reason of the Secretary of Agriculture's exercise or failure to exercise any power conferred on him

tinder this title, there shall be levied, assessed, collected, and paid

(in lieu of all rates of tax fixed in pursuance of this paragraph (6)

with respect to all tax liabilities incurred under this title on or after

the effective date of each of the rates of tax fixed in pursuance of

this paragraph (6)), rates of tax fixed under paragraph (2), (3),

(4), or (5), and such rates shall be in effect (unless the particular

tax is terminated pursuant to proclamation, as provided in section 9

(a) or pursuant to section 13) until altered by Act of Congress ;

except that, for any period prior to the effective date of such holding

of invalidity, the amount of tax which represents the difference between the tax at the rate fixed in pursuance of this paragra h (6) and

the tax at the rate fixed under paragraphs (2), (3), ( 4) , and (5)

shall not be levied, assessed, collected, or paid .

Permanency of adjusted rate.

In case of rice .

Increase of rates according to formulae,

etc .

Termination of tax . Ante, p . 763 .

Reestablishment of

rates.

Determination of

rates after December

31, 1937 .

Tax rates if fixed

rates held invalid .

Effectiveness of rates.
766

Rice-special rule.

Weight to which tax

rate to be applied.

Sugar-special rule.

Tax rate applied to

direct-consumption

sugar .

Vol. 48, p. 671 .

Higher rates .

Wheat premiums.

Computation of current average farm price .

Vol . 48, p . 36 ; U. S.

C ., p . 160 .

"Fair exchange

value" construed .

Ascertainment of current average farm price

and fair exchange value .

Current processing

tax not affected hereby .

Vol . 48, p . 36 ; U. S .

C ., p . 160 .

Processing" construed as to rye and

barley .

74TH CONGRESS . SESS. I . CH. 641. AUGUST 24, 1935 .

" RICE--SPECIAL RULE

"(7) In the case of rice, the weight to which the rate of tax

shall be applied shall be the weight of rough rice when delivered

to a processor, except that, where the producer processes his own

rice, the weight to which the rate of tax shall be applied shall be

the weight of rough rice when delivered to the place of processing .

" SUGAR-SPeCIAL RULE

`` (8) In the case of sugar beets or sugarcane the rate of tax shall

be applied to the direct-consumption sugar, resulting from the first

domestic processing, translated into terms of pounds of raw value

according to regulations to be issued by the Secretary of Agriculture,

and in the event that the Secretary increases or decreases the rate

of tax fixed by paragraph (2) of this subsection, pursuant to the

provisions of paragraph (6) of this subsection, then the rate of tax

to be so applied shall be the higher of the two following quotients

The difference between the current average farm price and the fair

exchange value (A) of a ton of sugar beets and (B) of a ton of

sugarcane, divided in the case of each commodity by the average

extraction' therefrom of sugar in terms of pounds of raw value

(which average extraction shall be determined from available

statistics of the Department of Agriculture) ; the rate of tax fixed

by paragraph (2) of this subsection or adjusted pursuant to the

provisions of paragraph (6) of this subsection shall in no event

exceed the amount of the reduction by the President on a pound

of sugar raw value of the rate of duty in effect on January 1, 1934,

under paragraph 501 of the Tariff Act of 1930, as adjusted to the

treaty of commercial reciprocity concluded between the United

States and the Republic of Cuba on December 11, 1902, and/or the

provisions of the Act of December 17, 1903, chapter 1 .

" WHEAT PREMIUMS

"(9) In computing the current average farm price in the case of

wheat, premiums paid producers for protein content shall not be

taken into account ."

SEC. 13. Subsection (c) of section 9 of the Agricultural Adjustment Act, as amended, is amended to read as follows

"(c) For the purposes of part 2 of this title, the fair exchange

value of a commodity shall be the price therefor that will give the

commodity the same purchasing power, with respect to articles

farmers buy, as such commodity had during the base period specified

in section 2 ; and, in the case of .all commodities where the base

period is the pre-war period, August 1909 to July 1914, will also

reflect interest payments per acre on farm indebtedness secured by

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

contrasted with such interest payments and tax payments during

said base period ; and the current average farm price and the fair

exchange value shall be ascertained by the Secretary of Agriculture

from available statistics of the Department of Agriculture . The

rate of tax upon the processing of any commodity, in effect on the

date on which this amendment is adopted, shall not be affected by

the adoption of this amendment and shall not be required to be

adjusted or altered, unless the Secretary of Agriculture finds that

it is necessary to adjust or alter any such rate pursuant to section

9 (a) of this title ."

SEC. 14. (a) Paragraph (1) of subsection (d) of section 9 of the

Agricultural Adjustment Act, as amended, is amended by inserting

following the word " wheat " in the two instances in which it occurs,

a comma, and the following : " rye, barley,"
74TH CONGRESS . SESS. I . CH. 641 . AUGUST 24, 1935.

(b) Paragraph (5) of subsection (d) of section 9 of the Agricultural Adjustment Act, as amended, is hereby repealed .

SEC. 15. Section 9 of the Agricultural Adjustment Act, as

amended, is amended by adding at the end thereof the following new

subsection

"(g) Nothing contained in this title shall be construed to

authorize any tax upon the processing of any commodity which

processing results in the production of newsprint ."

SEC. 16. Subsection (b) of section 10 of the Agricultural Adjustment Act, as amended, is amended to read as follows

"(b) (1) The Secretary of Agriculture is authorized to establish,

for the more effective administration of the functions vested in him

by this title, State and local committees, or associations of producers,

and to permit cooperative associations of producers, when in his

judgment they are qualified to do so, to act as agents of their members

and patrons in connection with the distribution of payments authorized to be made under section 8 . The Secretary, in the administration

of this title, 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 .

"(2) Each order issued by the Secretary under this title shall provide that each handler subject thereto shall pay to any authority or

agency established under such order such handler's pro rata share

(as approved by the Secretary) of such expenses as the Secretary may

find will necessarily be incurred by such authority or agency, during

any period specified by him, for the maintenance and functioning of

such authority or agency, other than expenses incurred in receiving,

handling, holding, or disposing of any quantity of a commodity

received, handled, held, or disposed of by such authority or agency

for the benefit or account of persons other than handlers subject to

such order . The pro rata share of the expenses payable by a cooperative association of producers shall be computed on the basis of the

quantity of the agricultural commodity or product thereof covered

by such order which is distributed, processed, or shipped by such

cooperative association of producers . Any such authority or agency

may maintain in its own name, or in the names of its members, a suit

against any handler subject to an order for the collection of such

handler's pro rata share of expenses . The several District Courts of

the United States are hereby vested with jurisdiction to entertain

such suits regardless of the amount in controversy ."

SEC. 17. Subsection (e) of section 10 of the Agricultural Adjustment Act, as amended, is amended by striking out "rental or benefit

payment" and inserting in lieu thereof "payment authorized to be

made under section 8 15.

SEC. 18. Section 10 of the Agricultural Adjustment Act, as

amended, is amended by inserting at the end thereof the following

new subsection

"(i) The Secretary of Agriculture upon the request of the duly

constituted authorities of any State is directed, in order to effectuate

the declared policy of this title and in order to obtain uniformity in

the formulation, administration, and enforcement of Federal and

State programs relating to the regulation of the handling of agricultural commodities or products thereof, to confer with and hold joint

hearings with the duly constituted authorities of any State, and is

authorized to cooperate with such authorities ; to accept and utilize,

with the consent of the State, such State and local officers and

employees as may be necessary ; to avail himself of the records and

767

Vol . 48, p . 36 ; U. S .

C ., p . 160.

Vol . 48, p . 37 .

Processing tax on

newsprint commodities .

Vol . 48, p . 37 ; U . S .

C ., p . 161 .

Administrative agencies ; establishment.

Producers' cooperative associations as

agents of members .

Agency expenses ;

payments by handlers .

Computation of share

of producers' cooperative associations .

Collection of pro rata

shares .

Jurisdiction of courts.

Vol . 48, p . 37 ; i; . S .

C . p . 161 .

2?teview of determination of amount of

payments .

Vol . 48, p. 38.

Cooperation with

States .

Joint hearings .
768

74z CONGRESS. SESS. I. CH. 641 . AUGUST 24, 1935 .

facilities of such authorities ; to issue orders (subject to the provisions

of section 8c) complementary to orders or other regulations issued by

such authorities ; and to make available to such State authorities the

records and facilities of the Department of Agriculture : Provided,

That information furnished to the Secretary of Agriculture pursuant

to section 8d (1) hereof shall be made available only to the extent

that such information is relevant to transactions within the regulatory jurisdiction of such authorities, and then only upon a written

agreement by such authorities that the information so furnished shall

be kept confidential by them in a manner similar to that required of

Federal officers and employees under the provisions of section 8d (2)

hereof."

SEC. 19. The first sentence of subsection (a) of section 12 of the

Agricultural Adjustment Act, as amended, is amended by striking out

"rental and benefit payments made with respect to reduction in acreage or reduction in production for market under part 2 of this title"

and inserting in lieu thereof " payments authorized to be made under

section 8 " .

Vol . 48, pp. 39, 677; SEC. 20. (a) The second sentence of section 13 of the Agricultural U. S . C ., p . 162.

Termination of pow. Adjustment Act, as amended, is amended by striking out " at the end ors' of three years after the adoption of this amendment " and inserting

in lieu thereof " on December 31, 1937 ".

(b) Subsection (c) of section 16 of the Agricultural Adjustment

Act, as amended, is amended by striking out the last sentence thereof .

Vol. 48, pp. 39, 1241 ;

U. S . C ., p. 162 .

SEC. 21. Subsection (a) of section 15 of the Agricultural AdjustExemptions and ment Act, as amended, is amended by striking out the period at the compensating taxes . end of the subsection and inserting in lieu thereof a comma and the

following : " or shall credit against any tax due and payable under

this title the amount of tax which would be refundable . During the

period in which any certificate under this section is effective, the provisions of subsection (e) of this section shall be suspended with respect

to all imported articles of the kind described in such certificate ; and

notwithstanding the provisions of section 21, any compensating taxes,

which have heretofore during the period in which any certificate

under this section has been effective, become due and payable upon

imported articles of the kind described in such certificate, shall be

refunded by the Secretary of the Treasury if the same have been

paid, or, if the same have not been paid the amount thereof shall be

abated. Notwithstanding the provisions of section 21, the Secretary

of the Treasury shall refund or credit any processing tax paid on or

before June 12, 1934, with respect to such amount of cotton as was

used in the manufacture of large cotton bags (as defined in the Certificate of the Secretary of Agriculturee dated June 12, 1934) between

June 13 and July 7, 1934, both inclusive .".

SEC. 22. Subsection (c) of section 15 of the Agricultural Adjustment Act, as amended, is amended by striking out the next to the last

sentence, which reads as follows : " No refund shall be allowed under

this section unless claim therefor is filed within six months after

delivery of the products to the organization for charitable distribution, or use ." .

SEC. 23. The first sentence of subsection (d) of section 15 of the

Agricultural Adjustment Act, as amended, is amended by adding

after the word " processors " the words " or producers " .

SEC. 24. Subsection (e) of section 15 of the Agricultural Adjustment Act, as amended, is amended by inserting after the words "with

respect to domestic processing of such commodity" the following :

" into such an article ".

SEC. 25. Subsection (a) of section 16 of the Agricultural Adjustment Act, as amended, is amended by striking out subdivision (2)

thereof and inserting in lieu thereof the following

Proviso .

Confidential nature

of information furnished.

Ante, p . 761 .

Vol . 48, p . 38 ; U. S .

C ., p . 162.

Appropriation available for making payments .

Vol. 48, p . 678 .

Vol. 48, p . 973 .

Post, p. 1753 .

Refund of tax on

products for charitable

distribution .

Taxes causing disadvantages in competition .

Vol. 48, p . 39 ; U . S.

C ., p . 162 .

Equalizing tax imposed on imports .

Vol . 48, pp . 40, 676 ;

U. S . C ., p . 162 .

Ante, p. 48.

Vol . 48, pp. 40, 676;

U. S . C ., p . 163.

Floor stocks.
74TH CONGRESS . SESS. I . CH. 641. AUGUST 24, 1935.

769

"

Whenever the processing tax is wholly terminated, (A) there

Stocksonhandwhey

(2)

1~ p processing tax termshall be refunded or credited in the case of a person holding such nates .

stocks with respect to which a tax under this title has been paid, or

(B) there shall be credited or abated in the case of a person holding

such stocks with respect to which a tax under this title is payable,

where such person is the processor liable for the payment of such tax,

or (C) there shall be refunded or credited (but not before the tax has Sum to be refunded .

been paid) in the case of a person holding such stocks with respect

to which a tax under this title is payable, where such person is not the

processor liable for the payment of such tax, a sum in an amount

equivalent to the processing tax which would have been payable with

respect to the commodity from which processed if the processing had

occurred on such date : Provided, That in the case of any commodity Amounth

with respect to which there was any increase, effective prior to June

1, 1934, in the rate of the processing tax, no such refund, credit, or

abatement, shall be in an amount which exceeds the equivalent of

the initial rate of the processing tax in effect with respect to such

commodity."

SEC. 26. The second sentence of subsection (b) of section 16 of the tail stocks

on

re stcks of Persons

Agricultural Adjustment Act, as amended, is amended to read as engaged

p

retail trade .

follows : " Except as to flour and prepared flour, and cereal preparations made chiefly from wheat, as classified in Wheat Regulations,

Series 1, Supplement 1, and as to any article processed wholly or in

chief value from cotton, the tax refund, credit, or abatement provided

in subsection (a) of this section shall not apply to the retail stocks of

persons engaged in retail trade, nor to any article (except sugar)

processed wholly or in chief value from sugar beets, sugarcane, or any

product thereof, nor to any article (except flour, prepared flour and

cereal preparations made chiefly from wheat, as classified in Wheat

Regulations, Series 1, Supplement 1) processed wholly or in chief

value from wheat, held on the date the processing tax is wholly

terminated ."

SEC. 27. (a) Paragraph (1) of subsection (e) of section 16 of the p 48

1.48, p . 1241 ; Ave,

Agricultural Adjustment Act, as amended, is amended by inserting Processing tax ; adafter the first word in the first sentence a comma and the following :

lups npp . 1464, 1740,

" subsequent to June 26, 1934," by inserting in the proviso after the

753,

word "made ". the following : " in the case of hogs " ; and by inserting

In case of hogs. -

at the end of such paragraph the following : "In the case of wheat of wheat . the provisions of this paragraph and of paragraph (2) of this subsection shall apply to flour, prepared flour and cereal preparations

made chiefly from wheat, as classified in Wheat Regulations, Series 1,

Supplement 1 only ; in the case of sugarcane and sugar beets the

of sug ar beets and

provisions of this paragraph and of paragraph (2) of this subsection

sugarcane . shall apply to sugar only .

(b) Section 16 of the Agricultural Adjustment Act, as amended,

Vol .

Floor4 sio °

is amended by adding at the end thereof the following new subsection

"(g) No refund, credit, or abatement of any amount of an tax

Time for filing claims

>> y for refunds . shall be made or allowed under this section, unless, within one Post, p . 1740 .

hundred and twenty days after the right to such refund, credit, or

abatement accruedror within one hundred and twenty days after

the date of the adoption of this amendment, whichever is the later,

a claim for such refund, credit, or abatement (conforming to such

regulations as the Commissioner of Internal Revenue, with the

approval of the Secretary of the Treasury, may prescribe) is filed

by the person entitled to such refund, credit, or abatement, and no

such claim shall be allowed for an amount less than $10"

104019°-36-49
770

Vol . 48, p . 676.

Exportations.

Refunds on goods exported.

Payments .

Vol. 48, pp. 41, 1242 ;

U. S . C ., p . 164 .

Collection of taxes .

Postponements .

Vol . 48, p . 41.

Returns ; filing .

Vol . 48, pp . 41, 677.

Prohibitions .

Suits for recovery of

taxes paid prior hereto;

jurisdiction of courts .

Claims of United

States in bankruptcy,

etc ., proceedings .

74m CONGRESS. SESS. I . CSI. 641. AUGUST 24, 1935.

SEC. 28. Subsection (a) of section 17 of the Agricultural Adjustment Act, as amended, is amended by striking out the first two sentences thereof and inserting in lieu thereof the following : " Upon the

exportation to any foreign country (and/or to the Philippine Islands,

the Virgin Islands, American Samoa, the Canal Zone, and the island

of Guam) of any product processed wholly or partly from a commodity with respect to which product or commodity a tax has been

paid or is payable under this title, the tax due and payable or due and

paid shall be credited or refunded . Under regulations prescribed by

the Commissioner of Internal Revenue, with the approval of the

Secretary of the Treasury, the credit or refund shall be allowed to

the consignor named in the bill of lading under which the product is

exported or to the shipper or to the person liable for the tax provided

the consignor waives any claim thereto in favor of such shipper or

person liable for the tax ."

SEC. 29. (a) Subsection (b) of section 19 of the Agricultural Adjustment Act, as amended, is amended by inserting in the proviso,

after the words " of the payment of " the following : " not exceeding

three-fourths of the amount of the ", and by adding at the end of the

proviso the following : "but postponement of all taxes covered by

returns under this title for a period not exceeding one hundred and

eighty days may be permitted in cases in which the Secretary of the

Treasury authorizes such taxes to be paid each month on the amount

of the commodity marketed during the next preceding month "

(b) Section 19 of the Agricultural Adjustment Act, as amended,

is amended by adding at the end thereof the following new subsection

"(d) Under regulations made by the Commissioner of Internal

Revenue, with the approval of the Secretary of the Treasury, any

person required pursuant to the provisions of this title to file a return

may be required to file such return and pay the tax shown to be due

thereon to the collector of internal revenue for the district in which

the processing was done or the liability was incurred . Whenever the

Commissioner of Internal Revenue deems it necessary, he may require

any person or class of persons handling or dealing in any commodity

or product thereof, with respect to which a tax is imposed under the

provisions of this title, to make a return, render under oath such

statements, or to keep such records, as the Commissioner deems sufficient to show whether or not such person, or any other person, is

liable for the tax."

SEC. 30. The Agricultural Adjustment Act, as amended, is amended

by adding after section 20 the following new section

"SEC. 21. (a) No suit, action, or proceeding (including probate,

administration, receivership, and bankruptcy proceedings) shall be

brought or maintained in any court if such suit, action, or proceeding

is for the purpose or has the effect (1) of preventing or restraining

the assessment or collection of any tax imposed or the amount of

any penalty or interest accrued under this title on or after the date

of the adoption of this amendment, or (2) of obtaining a declaratory judgment under the Federal Declaratory Judgments Act in connection with any such tax or such amount of any such interest or

penalty. In probate, administration, receivership, bankruptcy, or

other similar proceedings, the claim of the United States for any such

tax or such amount of any such interest or penalty, in the amount

assessed by the Commissioner of Internal Revenue, shall be allowed

and ordered to be paid, but the right to claim the refund or credit

thereof and to maintain such claim pursuant to the applicable provisions of law, including subsection (d) of this section, may be reserved

in the court's order .
74TH CONGRESS . SESS. I. CH. 641. AUGUST 24, 1935 .

771

"(b) The taxes imposed under this title as determined prescribed Taxes ; imposition

77 and collection . proclaimed and made effective by the proclamations and certificates Legalization and ratof the Secretary of Agriculture or of the President and by the reguification .

lations of the Secretary with the approval of the President prior to

the date of the adoption of this amendment, are hereby legalized

and ratified, and the assessment, levy, collection, and accrual of all

such taxes (together with penalties and interest with respect thereto)

prior to said date are hereby legalized and ratified and confirmed

as fully to all intents and purposes as if each such tax had been

made effective and the rate thereof fixed specifically by prior Act

of Congress . All such taxes which have accrued and remain unpaid taxes,

of unpaid

on the date of the adoption of this amendment shall be assessed and

collected pursuant to section 19, and to the provisions of law made

applicable thereby. Nothing in this section shall be construed to heretos done prior

import illegality to any act, determination, proclamation, certificate,

or regulation of the Secretary of Agriculture or of the President

done or made prior to the date of the adoption of this amendment .

"(c) The making of rental and benefit payments under this title, payments ; andhart

benefit

prior to the date of the adoption of this amendment, as determined, of,

prescribed, proclaimed and made effective by the proclamations of

the Secretary of Agriculture or of the President or by regulations of

the Secretary, and the initiation, if formally approved by the Secretary of Agriculture prior to such date of adjustment programs under

section 8 (1) of this title, and the making of agreements with Producers .

with

producers prior to such date, and the adoption of other voluntary

methods prior to such date, by the Secretary of Agriculture under

this title, and rental and benefit payments made pursuant thereto, are

hereby legalized and ratified, and the making of all such agreements

and payments, the initiation of such programs, and the adoption of

all such methods prior to such date are hereby legalized, ratified,

and confirmed as fully to all intents and purposes as if each such

agreement, program, method, and payment had been specifically

authorized and made effective and the rate and amount thereof fixed

specifically by prior Act of Congress specifically .

(1) No recovery, recoupment, set-off, refund, or credit shall Prohibition on making refunds of taxes

be made or allowed of, nor shall any counter claim be allowed for, asubsequent

any amount of any tax, penalty, or interest which accrued before, sePot, p . 1747 . on, or after the date of the adoption of this amendment under this

title (including any overpayment of such tax), unless, after a claim

has been duly filed, it shall be established, in addition to all other

facts required to be established, to the satisfaction of the Commissioner of Internal Revenue, and the Commissioner shall find and

declare of record, after due notice by the Commissioner to such

claimant and opportunity for hearing, that neither the claimant

nor any person directly or indirectly under his control or having

control over him, has, directly or indirectly, included such amount in

the price of the article with respect to which it was imposed or of

any article processed from the commodity with respect to which it

was imposed, or passed on any part of such amount to the vendee or

to any other person in any manner, or included any part of such

amount in the charge or fee for processing, and that the price paid

by the claimant or such person was not reduced by any part of such

amount. In any judicial proceeding relating to such claim, a tran- consideration of

script of the hearing before the Commissioner shall be duly certiclaims.

fied and filed as the record in the case and shall be so considered by

the court. The provisions of this subsection shall not apply to any

124i

l- 4S,

PP. 4a; 7 6 , refund or credit authorized by subsection (a) or (c) of section 15,

section 16, or section 17 of this title, or to any refund or credit
772

74Th CONGRESS. SESS. I. CH. 641 . AUGUST 24, 1935.

C Vpol i 406, p . 696; u. S . to the processor of any tax paid by him with respect to the provisions

of section 317 of the Tariff Act of 1930 .

Refunds if imposition " (2) In the event that any tax imposed by this title is finally held of tax held invalid. invalid by reason of any provision of the Constitution, or is finally

held invalid by reason of the Secretary of Agriculture's exercise or

failure to exercise any power conferred on him under this title, there

shall be refunded or credited to any person (not a processor or other

person who paid the tax) who would have been entitled to a refund

Ante, p . 768 .

or credit pursuant to the provisions of subsections (a) and (b) of

section 16, had the tax terminated by proclamation pursuant to the

Amount . provisions of section 13, and in lieu thereof, a sum in an amount

equivalent to the amount to which such person would have been entitled had the Act been valid and had the tax with respect to the particular commodity terminated immediately prior to the effective date

conditions. of such holding of invalidity, subject, however, to the following

condition : Such claimant shall establish to the satisfaction of the

Commissioner, and the Commissioner shall find and declare of

record, after due notice by the Commissioner to the claimant and

opportunity for hearing, that the amount of the tax paid upon the

processing of the commodity used in the floor stocks with respect

to which the claim is made was included by the processor or other

person who paid the tax in the price of such stocks (or of the maclaims ; considera- terial from which such stocks were made) . In any judicial pro- tion of

ceeding relating to such claim, a transcript of the hearing before

the Commissioner shall be duly certified and filed as the record in

the case and shall be so considered by the court. Notwithstanding

Time for fling . any other provision of law : (1) no suit or proceeding for the recovery, recoupment, set-off, refund or credit of any tag imposed by

this title, or of any penalty or interest, which is based upon the invalidity of such tax by reason of any provision of the Constitution

or by reason of the Secretary of Agriculture's exercise or failure to

exercise any power conferred on him under this title, shall be maintained in any court, unless prior to the expiration of six months

after the date on which such tax imposed by this title has been

finally held invalid a claim therefor (conforming to such regulations as the Commissioner of Internal Revenue with the approval

of the Secretary of the Treasury, may prescribe) is filed by the

person entitled thereto ; (2) no such suit or proceeding shall be begun

before the expiration of one year from the date of filing such claim

unless the Commissioner renders a decision thereon within that

time, nor after the expiration of five years from the date of the payment of such tax, penalty, or sum, unless suit or proceeding is begun

within two years after the disallowance of the part of such claim to

notification of disal- which such suit or proceeding relates . The Commissioner shall lowance.

within 90 days after such disallowance notify the taxpayer thereof

by mail .

Jurisdiction of courts.

" ( 3) The District Courts of the United States shall have jurisdiction of cases to which this subsection applies, regardless of the

amount in controversy, if such courts would have had jurisdiction

of such cases but for limitations under the Judicial Code, as

amended, on jurisdiction of such courts based upon the amount in

controversy.

Access to books, rec- cc

ords, etc. (e) In connection with the establishment b an claimant, of

y y 9

Post, p . 1747. the facts required to be established in subsection (d) of this section,

the Commissioner of Internal Revenue is hereby authorized, by any

officer or employee of the Bureau of Internal Revenue, including the

field service, designated by him for that purpose, to examine any

books, papers, records, or memoranda, relative to any matter affecting the findings to be made by the Commissioner pursuant to subsec-
74TH CONGRESS . SESS. I. CH. 641 . AUGUST 24, 1935 .

773

tion (d) of this section, to require the attendance of the claimant ~Attendance of claimor of any officer or employee of the claimant, or the attendance of

any other person having knowledge in the premises, and to take, or

cause to be taken, his testimony with reference to any such matter,

with power to administer oaths to such person or persons . It shall witnesses.

be lawful for the Commissioner, or any collector designated by him,

to summon witnesses on behalf of the United States or of any

claimant to appear before the Commissioner, or before any person

designated by him, at a time and place named in the summons, and

to produce such books, papers, correspondence, memoranda, or other

records as the Commissioner may deem relevant or material, and to

give testimony or answer interrogatories, under oath, relating to

any matter affecting the findings to be made by the Commissioner

pursuant to subsection (d) of this section . The provisions of Re- IT .

. S . s 1). 1191 ., p 609 ;

vised Statutes 3174 and of Revised Statutes 3175 shall be applicable

with respect to any summons issued pursuant to the provisions of

this subsection . Any witness summoned under this subsection shall me

tgneess fees and

be paid, by the party on whose behalf such witness was summoned,

the same fees and mileage as are paid witnesses in the courts of the

United States . All information obtained by the Commissioner purAvailability of inforsuant to this subsection shall be availabe to the Secretary of

mation .

Agriculture upon written request therefor . Such information shall confidential nature .

be kept confidential by all officers and employees of the Department

of Agriculture, and any such officer or employee who violates this

requirement shall, upon conviction, be subject to a fine of not more

than $1,000 or to imprisonment for not more than one year, or both,

and shall be removed from office .

"(f) No refund, credit, or abatement shall be made or allowed of foc

menfoor filing claim

the amount of any tax, under section 15, or section 17, unless, within Ante, p . 771 .

one year after the right to such refund, credit, or abatement has

Pest, p . 1710.

accrued, a claim for such refund, credit, or abatement (conforming

to such regulations as the Commissioner of Internal Revenue, with

the approval of the Secretary of the Treasury, may prescribe) is

filed by the person entitled to such refund, credit, or abatement,

except that if the right to any such refund, credit, or abatement

accrued prior to the date of the adoption of this amendment, then

such one year period shall be computed from the date of this amendment. No interest shall be allowed or paid, or included in any Interest payments .

j

udgment, with respect to any such claim for refund or credit .

"

The rovisions of section 3226, Revised Statutes, as amended

R. S .,see .3226,p .R19 ; (g)

p > > u. S . C ., p . 1202. are hereby extended to apply to any suit for the recovery of any Recovery of taxes erroneously collected. amount of any tax, penalty, or interest, which accrued, before, on, Pest, p . 1747. or after the date of the adoption of this amendment under this title

(whether an overpayment or otherwise), and to any suit for the

recovery of any amount of tax which results from an error in the

computation of the tax or from duplicate payments of any tax, or

any refund or credit authorized by subsection (a) or (c) of section

15, section 16, or section 17 of this title or any refund or credit to

the processor of any tax paid by him with respect to articles

exported pursuant to the provisions of section 317 of the Tariff Act

of 1930 ."

SEC. 31 . The Agricultural Adjustment Act, as amended, is amended

by inserting after section 21 the following

u IMPORTS

Imports .

" SeC. 22. (a) Whenever the President has reason to believe that investigations by

Tariff Commission; auany one or more articles are being imported into the United States thority of President to

under such conditions and in sufficientt quantities as to render or tend Cause ; pen .

1

152. to render ineffective or materially interfere with any program or
774

74TH CONGRESS. SESS. I . CH. 641 . AUGUST 24, 1935.

operation undertaken, or to reduce substantially the amount of any

product processed in the United States from any commodity subject

to and with respect to which an adjustment program is in operation,

under this title, he shall cause an immediate investigation to be made

by the United States Tariff Commission, which shall give precedence

to investigations under this section to determine such facts . Such

Notice required . investigation shall be made after due notice and opportunity for

hearing to interested parties and shall be conducted subject to such

regulations as the President shall specify .

Proclamation impos- a

ing import restrictions (b) If on the basis of such investigation and report to him of .7

findings and recommendations made in connection therewith, the

President finds the existence of such facts, he shall by proclamation

impose such limitations on the total quantities of any article or

articles which may be imported as he finds and declares shown by

such investigation to be necessary to prescribe in order that the entry

of such article or articles will not render or tend to render ineffective

or materially interfere with any program or operation undertaken,

or will not reduce substantially the amount of any product processed

in the United States from any commodity subject to and with respect

to which an adjustment program is in operation, under this title :

Totalotal quantity of Provided, That no limitation shall be imposed on the total quantityY

imports . of any article which may be imported from any country which

reduces such permissible total quantity to less than 50 per centum

of the average annual quantity of such article which was imported

from such country during the period from July 1, 1928, to June 30,

1933, both dates inclusive.'

Effective date of im.

" ( c) No import restriction proclaimed by the President under this port restriction . section nor anv revocation, suspension,, or modification thereof shall

become effective until fifteen days after the date of such proclamation, revocation, suspension, or modification .

Finality of Presi- " ( d) Any decision of the President as to facts under this section dent's decision . shall be final .

Suspension or modi- " ( e) After investigation, report, finding, and declaration in the fication of proclamation . manner provided in the case of a proclamation issued pursuant to

subsection (b) of this section, any proclamation or provision of such

proclamation may be suspended by the President whenever he finds

that the circumstances requiring the proclamation or provision

thereof no longer exist, or may be modified by the President whenever he finds that changed circumstances require such modification

to carry out the purposes of this section ."

Annual appropria- SEC. 32. There is hereby appropriated for each fiscal year beginning t

Amount.with the fiscal year ending June 30, 1936 an amount equal to 30 per

Post, pp . 1151, 1755 . centum of the gross receipts from duties collected under the customs

laws during the period January 1 to December 31, both inclusive, preseparate fund to be ceding the beginning of each such fiscal year. Such sums shall be

maintained ; uses. maintained in a separate fund and shall be used by the Secretary of

Agriculture only to (1) encourage the exportation of agricultural

commodities and products thereof by the payment of benefits in

connection with the exportation thereof or of indemnities for losses

incurred in connection with such exportation or by payments to producers in connection with the production of that part of any agricultural commodity required for domestic consumption ; (2) encourage

the domestic consumption of such commodities or products by diverting them, by the payment of benefits or indemnities or by other means,

from the normal channels of trade and commerce ; and (3) finance

adjustments in the quantity planted or produced for market of agriExpenditu e . cultural commodities . The amounts appropriated under this section

shall be expended for such of the above-specified purposes, and at

such times, in such manner, and in such amounts as the Secretary of

Agriculture finds will tend to increase the exportation of agricultural
74TH CONGRESS. SESS. I . CH. 641 . AUGUST 24, 1935.

775

commodities and products thereof, and increase the domestic consumption of agricultural commodities and products thereof : Pro- provi sos • vided, That no part of the funds appropriated by this section shall

Restrictions .

be expended pursuant to clause (3) hereof unless the Secretary of

Agriculture determines that the expenditure of such part pursuant

to clauses (1) and (2) is not necessary to effectuate the purposes of

this section : 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 unmanufactured cotton .

SEC. 33. Section 7 of Title 1 of the Agricultural Adjustment Act, Vool. 11, p . 210 ; U . S .

as amended by section 221 of the National Industrial Recovery Act cr cotton option con-

(48 Stat . 210, 15 U. S . C ., art . 607), is amended by striking it out

and inserting in lieu thereof the following :

" SEC. 7. The Secretary shall sell cotton held or acquired by him

6

Sal ff3cototf n ~heelld

b

pursuant to authority of this Act at his discretion subject only to two .

the conditions and limitations of Title 1 of this Act : Provided, That Proviso- Authority to make

the Secretary shall have authority to enter into option contracts with cotton option contracts .

producers of cotton to sell to or for the producers such cotton held

and/or acquired by him in such amounts and at such prices and upon

such terms and conditions as he, the Secretary, may deem advisable,

and such option contracts may be transferred or assigned in such

manner as the Secretary of Agriculture may prescribe.

" Notwithstanding any provisions contained in option contracts Validity of contracts

heretofore issued and/or any provision of law, assignments made ass, li,

1934.or co

prior to January 11, 1934, of option contracts exercised prior to

January 18, 1934, shall be deemed valid upon determination by the

Secretary that such assignment was an assignment in good faith of

the full interest in such contract and for full value and is free from

evidence of fraud or speculation by the assignee.

" Notwithstanding any provision of existing law, the Secretary matuobllication of infor .

of Agriculture may, in the administration of the Agricultural

Adjustment Act, make public such information as he deems

necessary in order to effectuate the purposes of such Act ."

SEC. 34. Section 6 of the Agricultural Adjustment Act, is hereby C Vol.1 41, p. 33 ; L .s .

.1 P

.

repealed.

SEC. 35. Section 4 (b) of Title 1 of the Agricultural Adjustment Vol . 48, p . 1058 ; Ante,

Act, as amended by the Emergency Appropriation Act, fiscal year

p .115.

1935, is amended by striking out the words " to be available until Availability of apMarch 1, 1936 " and inserting at the end of said section a new propriations

.

sentence to read as follows : "This sum shall be available until the

cotton acquired by the Secretary of Agriculture under authority of

Title 1 of this Act, including cotton futures, shall have been finally

marketed by any agency which may have been or may be established

by the Secretary of Agriculture for the handling, carrying, insuring,

or marketing of any cotton acquired by the Secretary of Agriculture ."

SEC. 36. Section 4 (f) of Title 1 of the Agricultural Adjustment V°1 .48, p . 1059 ; Ante,

Act as amended by the Emergency Appropriation Act fiscal

p •

115 . year

1935, is amended by adding at the end thereof a new paragraph to

read as follows

" The word ` obligation' when used in this section shall include 't ru

edbligation" con.

.

(without being limited to) administrative expenses, warehouse

charges, insurance, salaries, interest, costs, commissions, and other

expenses incident to handling, carrying, insuring, and marketing of

said cotton."

SEC. 37. There is hereby authorized to be appropriated the sum Diseased dairy and

beef cattle .

of $40,000,000, of which sum $10,000,000 is hereby appropriated, Appropriation auout of any money in the Treasury not otherwise appropriated

s

toum

iava for removal ;

YY Y ilable.

enable the Secretary of Agriculture, under rules and

regulations

ns to ti

nsles and regula •

be promulgated by him and upon such terms as he may prescribe, post, pp .1152, 1450 .

to eliminate diseased dairy and beef cattle, including cattle suffer-
776

74TH CONGRESS. SESS. I. CII. 641. AUGUST 24, 1935.

ing from tuberculosis or Bang's disease, and to make payments to

Experimentation ; owners with respect thereto. The Secretary of Agriculture is sums available,

authorized to use for scientific experimentation and efforts to eradicate disease in cattle, as much as he finds advisable of the funds

appropriated by or in pursuance of the authorization contained in

this section and the funds appropriated by the second paragraph of

Vol . 48, pp . 528, 805. Public Resolution Numbered 27, Seventy-third Congress, approved

May 25, 1934, to carry out section 6 of the Act entitled "An Act to

amend the Agricultural Adjustment Act so as to include cattle and

other products as basic agricultural commodities, and for other purSums to remain avail- poses ", approved April 7, 1934 . The sums appropriated or reappro- able until June 30, 1936'

Administrative ex- priated by this section shall remain available until June 30, 1936,

penses, and such sums and the sums appropriated in pursuance of the

authorization contained in this section shall be available to carry

out the purposes of both this section and such section 6, and may

be used for all necessary expenses in connection therewith, including the employment of persons and means in the District of Columbia and elsewhere . The unexpended balance of the funds approVol . 48, pp . 528, 805. priated by the second paragraph of such Public Resolution Numbered 27 to carry out the purposes of section 2 of such Act of April

7, 1934, shall remain available for the purposes of such section 2

until June 30, 1936.

Agreements and rem- SEC. 38. Nothing contained in this Act shall (a), invalidate any edies not invalidated

hereby. marketing,, agreement or license in existence on the date of the enactment hereof, or any provision thereof, or any act done pursuant

thereto, either before or after the enactment of this Act, or (b)

impair any remedy provided for on the date of the enactment thereof

for the enforcement of any such marketing agreement or license, or

Vol . 48, p. 34; Ante, (c) invalidate any agreement entered into pursuant to section 8 (1) of p .46. the Agricultural Adjustment Act prior to the enactment of this Act,

or subsequent to the enactment of this Act in connection with a

program the initiation of which has been formally approved by the

Secretary of Agriculture under such section 8 (1) prior to the

enactment of this Act, or any act done or agreed to be done or any

payment made or agreed to be made in pursuance of any such agreement, either before or after the enactment of this Act, or any change

in the terms and conditions of any such agreement, or any voluntary

arrangements or further agreements which the Secretary finds necessary or desirable in order to complete or terminate such program

pursuant to the declared policy of the Agricultural Adjustment Act :

Proviso .

Provided, That the Secretary shall not prescribe, pursuant to any such Adjustments in acreage or production . agreement or voluntary arrangement, any adjustment in the acreage

or in the production for market of any basic agricultural commodity

to be made after July 1, 1937 except pursuant to the provisions of

section 8 of the Agricultural Adjustment Act as amended by this Act .

$an Cotto Cotton

Act (Cotton ControlAMeNDMENTS TO BANKHEAD COTTON ACT

Act), amendments .

Po . 48, p. 699.

o

st, p

. 1106. SEC. 39 . (a) Section 2 and the first sentence of section 3 (a) of the

Period of applicabil- Act entitled "An Act to place the cotton industry on a sound com- ity of Act ; cotton ginning tax. mercial basis, to prevent unfair competition and practices in putting

cotton into the channels of interstate and foreign commerce, to provide funds for paying additional benefits under the Agricultural Adjustment Act, and for other purposes ", approved April 21, 1934,

as amended, are amended by inserting after the phrase " the crop

year 1935-1936 ", wherever such phrase appears, the phrase " or the

crop year 1936-1937 or the crop year 1937-1938 " .
74T u CONGRESS. SESS. I . CH. 641 . AUGUST 24, 1935 .

(b) Section 3 (a) of such Act, as amended, is amended by adding

at the end thereof the following new sentence : "In ascertaining the

sentiment of the producers with respect to the crop year 1936-1937

or the crop year 1937-1938, the vote in favor of the compulsory tax

features of this Act, by two-thirds of the producers voting, shall be

deemed sufficient for the purposes of this subsection ."

(c) Section 5 (a) of an Act entitled "An Act to place the cotton

industry on a sound commercial basis, to prevent unfair competition

and practices in putting cotton into the channels of interstate and

foreign commerce, to provide funds for paying additional benefits

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

approved April 21, 1934, as amended, is amended by inserting after

the sentence " that no State shall receive an allotment of less than

200,000 bales of cotton if in any one year of five years prior to this

date the production of the State equaled 250,000 bales" the following : "And be it further provided that after the year 1935 no State

shall receive an allotment of less than 80,000 bales of cotton if in

any one year of five years prior to the date of the

bales.'

of said

Act the production of the State equaled 100,000 bales

(d) The action of the Secretary of Agriculture in ascertaining and

proclaiming, pursuant to section 3 (a) and (b) of such Act, as

amended, 10,500,000 bales as the maximum amount of cotton of

the crop harvested in the crop year 1935-1936 that may be marketed

exempt from payment of the tax levied by such Act, as amended, is

hereby legalized and ratified, and all apportionments and other action

taken pursuant to such ascertainment and proclamation are legalized

and ratified and confirmed as fully to all intents and purposes as if

such amount had been fixed and such apportionments and action

had been authorized and made effective specifically by Act of

Congress.

(e) Section 7 of such Act, as amended, is amended by adding at the

end thereof the following new subsection

"(d) For each crop year subsequent to the crop year 1934-1935 in

which this Act is in effect the Secretary of Agriculture shall make

(1) to each farm with an established average production for the

applicable base period of 956 pounds or less of lint cotton an allotment equal to the full amount of such production and (2) to each

farm with an established average production for such base period

of more than 956 pounds of lint cotton an allotment of not less than

956 pounds . For each crop year subsequent to the crop year 1935-

1936, the amount of each such allotment (and for the crop year

1935-1936 and subsequent crop years, the additional amount required

for apportionment under the provisions of the Public Resolution

entitled " Public Resolution To provide for certain State allotments

under the Cotton Control Act ") which is in excess of the allotment

which, without regard to this subsection or such Public Resolution,

would have been made to any farm, shall be in addition to the

national allotment and the allotments to the State and county in

which such farm is situated. The first sentence of this subsection

shall not be held to increase any allotment to any farm for the crop

year 1935-1936 which allotment was made under regulations of the

Secretary of Agriculture prior to the date of the adoption of this

amendment, or to require any reallotment ."

SEC. 40. Section 17 of such Act of April 21, 1934, as amended, is

amended by inserting "(a)" before the first sentence thereof and by

inserting at the end thereof the following new subsection

"(b) Appropriations for administrative expenses under this Act

are authorized to be made available to enable the Secretary of Agriculture to pay any person, who, in connection with the operation of

Ascertainment of sentiment of producers.

Vol . 48, p . 599 .

Vol . 48, p . 600.

Ante, p . 570 .

Minimum allotment .

Validation of act establishing maximum

number of tax exempt

bales in 1935-1936 crop

year.

Vol . 48, p . 599.

Vol. 48, p . 601 .

Allotments to individual farms.

Crop year subsequentto 1934-1935 .

1935-1936.

Ante, p . 570.

777

Vol. 48, p . 605.

Officers and employees.

Appropriations for

administrative expenses .
778

Vol . 48, p . 603 .

Exemption certificates ; assignment.

Vol . 48, p. 599 .

Tax and exemptions.

Cotton retained for

household use .

Rerr Tobacco Act

(Tobacco Control Act),

amendments.

Vol. 48, p. 1275.

Pest, p. 1106 .

Title.

Definitions.

"Puerto Rican tobacco ."

"Cigar-wrapper tobacco."

Vol . 48, p . 1276 .

Declared policy.

Vol . 48, p . 1276 .

Imposition of tax;

exemption .

Authority to impose

tax after 1935-1936 crop

harvested .

74TH CONGRESS . SESS. I. OH. 641 . AUGUST 24, 1935.

any cotton gin, incurred additional expenses in connection with the

administration of this Act with respect to cotton ginned during the

crop year 1935-1936 or any subsequent crop year in which this Act

is in effect, and who applies to the Secretary therefor, compensation

in the amount of such additional expenses, but not in excess of the

rate of 25 cents per bale of such cotton ginned by such person,

provided proof satisfactory to the Secretary of Agriculture is

furnished that the additional expenses for which such person makes

application have not been passed on in any manner whatsoever ."

SEC. 41. Section 9 (d) of such Act of April 21, 1934, as amended

(relating to transfer of exemption certificates), is amended by

inserting after the first sentence thereof the following new sentence .

" No rule or regulation of the Secretary of Agriculture shall prohibit

the transfer or assignment by a cotton producer of certificates issued

or reissued to him if such transfer or assignment is to another cotton

producer who is a resident of the same State ."

SEC. 42. Section 4 of such Act of April 21, 1934, as amended, is

amended by inserting at the end thereof the following new subsection

"(h) The Secretary of Agriculture is directed to exempt by regulation from the payment of the tax on the ginning of cotton as levied

under authority of this Act, an amount of lint cotton not in excess

of one hundred and ten pounds, produced by or for any producer

and retained for domestic use in his hpusehold ."

AMENDMENTS TO RFRR TOBACCO ACT

SEC. 43. The title of the Act entitled "An Act to place the tobaccogrowing industry on a sound financial and economic basis, to prevent

unfair competition and practices in the production and marketing

of tobacco entering into the channels of interstate and foreign

commerce, and for other purposes ", approved June 28, 1934, is

amended to read as follows

"An Act to place the tobacco-growing industry on a sound financial

and economic basis, to prevent unfair competition and practices in

the production and marketing of tobacco entering into the channels

of interstate and foreign commerce, to raise revenue, and for other

purposes ."

SEC. 44. Section 1 of said Act is amended by adding at the end

thereof the following new subsections

"(1) The term `Puerto Rican tobacco' means all leaf tobacco

classified as type 46 in the United States Department of Agriculture, Bureau of Agricultural Economics, Service and Regulatory

Announcements Numbered 118."

"(m) The term 'cigar-wrapper tobacco' means all leaf tobacco

classified in class 6 in the United States Department of Agriculture, Bureau of Agricultural Economics, Service and Regulatory

Announcements Numbered 118."

SEC. 45. Section 2 of said Act is amended by inserting after the

words " consumption of tobacco " a comma and the words " to raise

revenue,".

SEC. 46. Subsection (b) of section 3 of said Act is amended by

striking out the period and the remainder of the subsection following

the first sentence and inserting in lieu thereof the following : " and to

all tobacco harvested in the crop year 1935-1936, except Maryland

tobacco, Puerto Rican tobacco, and cigar wrapper tobacco . Thereafter whenever the Secretary of Agriculture determines (1) that the

imposition of the tax upon any particular type of tobacco is necessary

for the orderly marketing of such tobacco in interstate and foreign
74TH CONGRESS . SESS. I . CH. 641 . AUGUST 24, 1935 .

779

commerce and to effectuate the declared policy of this Act, and (2)

that two-thirds of the land engaged in the production of such type of

tobacco during the crop year in which such determination is made is

voted in favor of the levy of the tax upon the sale of such type of

tobacco, he shall proclaim such determination at least sixty days

prior to the next succeeding crop year, and the tax shall thereafter

apply to the sale of tobacco of such type harvested during the crop

year next following the date of such proclamation . All persons who Producers' right to

have the right, during the crop year in which such determination is vo

te .

made, to sell or to receive a share of the proceeds derived from the

sale of tobacco of any type produced by them, or produced on land

owned or leased by them, shall be entitled to vote, and the proportion

of all the votes cast in each county which are cast in favor of levying

the tax upon the sale of such type of tobacco shall determine the

proportion of the total amount of tobacco land in such county which

shall be deemed to have been voted in favor of levying such tax .

The tax provided for by subsection (a) of this section shall not apply provision .

of taxing

to any tobacco harvested after April 30, 1939 .

SEC. 47. Subsection (a) of section 5 of said Act is amended by Vol . 4s, p . 1277 .

inserting after the designation "(a)" at the beginning thereof the

following : "(1)" ; and by inserting at the end of said subsection the

following paragraph

"(2) The Secretary of Agriculture shall issue to any person, who, Tax payment War•

rants ; issue . because of religious or moral scruples, is unwilling or unable to

become a contracting producer, similar tax-payment warrants covering the quantity of tobacco produced by such person : Provided, proviso . That the Secretary determines that such person has not planted a

Restriction .

greater acreage of tobacco nor sold a greater quantity of tobacco than

he could have planted or sold as a contracting producer ."

SEC. 48. Subsection (b) of section 5 of said Act is amended by Vol . 48, p . 1277 .

striking out the first sentence of said subsection and inserting in lieu

thereof the following :

" There shall be available for issuance by the Secretary of Agricul- warrants to persons

not contracting proture further warrants, covering an amount of tobacco of any type d Limit on number . equal to 3 per centum of the amount of tobacco of such type covered

by the warrants issuable or issued to all contracting producers under

the provisions of subsection (a) of this section, to persons engaged

in the production of tobacco of such type who do not enter into such

contracts and as to whom the Secretary determines that no equitable

allotment of tobacco acreage or production is possible under such

tobacco contracts. Such warrants shall be issued, upon application Application for .

therefor, upon such basis or classification as the Secretary deems will

effectuate the declared policy of this Act and will be fair and just,

and as will apply to all persons eligible to receive warrants under

this subsection uniformly on the basis or classification adopted : Pro- proviso .

Persons to whom

vided, That warrants covering two-thirds of the amount of any type may be issued . of tobacco to cover which warrants are available under this subsection shall be issued, upon application therefor, only to persons who

receive warrants covering one thousand five hundred pounds or less

of any type of tobacco."

SEC. 49. Subsection (d) of section 5 of said Act is amended to Vol . 48, p . 1277.

read as follows

"If any tax-payment warrant is erroneously issued to any person,

raTa

payment a r- or if the Secretary of Agriculture determines pursuant to this sub- turn .

section that any person to whom any tax-payment warrant is issued

has failed to comply in any crop year with any provision of any

agreement entered into by such person pursuant to the Agricultural

Adjustment Act or has failed to comply with any rule or regulation

issued by the Secretary of Agriculture pursuant to this Act or
780

74TH CONGRESS. SESS. I . CH. 641. AUGUST 24, 1935.

the Agricultural Adjustment Act, any warrant issued during such

crop year to such person shall be void upon demand in writing for

the return of such warrant made by the Secretary of Agriculture to

when accepted in the person to whom such warrant was issued . If any tax-payment

payment of tax ; liability of person to who,,, warrant which has been accepted in payment of the tax imposed by

issued . this Act upon the sale of tobacco becomes void pursuant to this

subsection either before or after such acceptance, the person to whom

such warrant was issued shall, notwithstanding such acceptance of

such warrant, be liable for the full amount of the tax upon such sale ."

Vol . 48, p. 1278. SEC. 50. Section 8 of said Act is amended by striking out subsection (b) of that section and inserting in lieu thereof two new

subsections as follows

Returns respecting

"(b) All persons, in whatever capacity acting, including producers, tobacco produced or

sold ; requirement . warehousemen, processors of tobacco, and common carriers, having

information with respect to tobacco produced or sold, may be

required to make a return in regard thereto, setting forth the amount

of tobacco produced sold, or delivered, the name and address of the

person who produced, sold, or delivered said tobacco, or to whom said

tobacco was sold or delivered, the price paid on such sale, and any

other and further information which the Commissioner of Internal

Revenue, with the approval of the Secretary of the Treasury and the

Secretary of Agriculture, shall by regulations prescribe as necessary

for the proper administration and collection of the tax . Any person

required to make any such return shall render a true and accurate

return to the Commissioner of Internal Revenue .

Penalty on refusal to

"(c) Any person willfully failing or refusing to file any return file . required to be filed under this section, or filing willfully any false

return, shall be guilty of a misdemeanor and upon conviction thereof

shall be punished by a fine of not more than $1,000 ."

Vol. 48, p . 1278 .

SEC. 51. Section 9 of said act is amended by adding at the end

thereof the following new subsection

Administrative agen- "(c) Any person who is authorized in writing by the Secretary ties; powers . of Agriculture to act as his agent in the administration of this Act

shall, while he is acting as such agent, have the power to administer

oaths in connection with the execution of forms required by regulations issued pursuant to sections 7 and 8 of this Act, but no fee or

compensation shall be charged or received by any such agent for

administering such an oath ."

Vol. 48, p .1279 .

SEC. 52. The first sentence of subsection (a) of section 10 of said Appropriation available for rental and ben- Act is amended to read as follows : "The proceeds heretofore and

eat payments. hereafter derived from the tax are hereby appropriated to be available to the Secretary of Agriculture for rental and benefit payments

under the Agricultural Adjustment Act to contracting producers,

Administrative ex- for administrative expenses, refunds of taxes, redemption of taxpenses, etc. payment warrants heretofore or hereafter received by contracting

producers subsequent to the sale of the tobacco covered by said

warrants and subsequent to payment of the tax imposed upon such

sale by section 3 of this Act, and other payments under this Act ."

Vol . 48, p .1279 .SEC. 53 . Subsection (a) of section 11 of said Act is amended effec- Refunds; presenting

claims for . tive as of the date of the enactment of the said Act by striking out

the words "six months " and by inserting in lieu thereof the words

" one year ".

Vol . 48, p . 128o .

SEC. 54. Section 14 of said Act is amended to read as follows :

Offer to become con- " The Secretary of Agriculture is directed not to refuse on the

tracting producer . ground of lateness any offer by a tobacco producer to become a contracting producer, if such offer is filed with the Secretary of Agriculture within thirty days after the date of the proclamation by the

Secretary of Agriculture, pursuant to subsection (b) of section 3

of this Act ."
74TH CONGRESS. SESS. I . CH. 641. AUGUST 24, 1935.

781

SEC. 55. There is hereby made available, out of any money appro- ab

ppropriationsavailpriated by the Emergency Relief Appropriation Act of 1935, such Ante, p . 115 .

amount as the President may allot for the development of a national

program of land conservation and land utilization. The sums so Acquisition of suballotted may be used, in the discretion and under the direction of

marginal lands,

the President, for the acquisition of submarginal lands and their

use for such public purposes as the President shall prescribe .

In carrying out the provisions of this section, the President is Powers of President . authorized

(a) To make contracts and grants ; and

(b) To acquire, by purchase, any real property or any interest

therein (with or without reservations) in accordance with the policy

herein set forth .

ANti-HOG-CHOLERA SERUM AND HOG-CHOLERA VIRUS

Anti-hog-cholera serum and hog-cholera

virus . SEC. 56. It is hereby declared to be the policy of Congress to insure Declarationofpolicyn

the maintenance of an adequate supply of anti-hog-cholera serum

Pest, p . lsv .

and hog-cholera virus by regulating the marketing of such serum

and virus in interstate and foreign commerce, and to prevent undue

and excessive fluctuations and unfair methods of competition and

unfair trade practices in such marketing.

SEC. 57. In order to effectuate the policy declared in section 56 of

11larketing agreements with manufacthis Act the Secretary of Agriculture shall have the power, after turers .

due notice and opportunity for hearing, to enter into marketing

agreements with manufacturers and others engaged in the handling

of anti hog-cholera serum and hog-cholera virus only with respect

to such handling as is in the current of interstate or foreign commerce

or which directly burdens, obstructs, or affects interstate or foreign

commerce in such serum and virus . Such persons are hereafter in "Handlers" con .

this Act referred to as " handlers." The making of any such agree- st Application of antiment shall not be held to be in violation of any of the antitrust laws

trust laws.

of the United States, and any such agreement shall be deemed to be

lawful .

SEC. 58 . Marketing agreements entered into pursuant to section 57 Terms and condiof this Act shall contain such one or more of the following terms and

tions in agreements .

conditions and no others as the Secretary finds, upon the basis of the

hearing provided for in section 57, will tend to effectuate the policy

declared in section 56 of this Act

(a) One or more of the terms and conditions specified in subsection (7) of section 8c of the Agricultural Adjustment Act, as

amended.

(b) Terms and conditions requiring each manufacturer to have

available on May 1 of each year a supply of completed serum equivalent to not less than 40 per centum of his previous year's sales .

SEC. 59 . Whenever all the handlers of not less than 75 per centum Orders; issuance of ;

of the volume of anti-hog-cholera serum and hog-cholera virus which

when.

i s handled in the current of interstate or foreign commerce, or so as

directly to burden, obstruct, or affect interstate or foreign commerce,

have signed a marketing agreement entered into with the Secretary

of Agriculture pursuant to section 57 of this Act, the Secretary of

Agriculture shall issue an order which shall regulate only such handling in the same manner as, and contain only such terms and conditions as are contained in such marketing agreement, and shall from

time to time amend such order in conformance with amendments to

such marketing agreement . Such order shall terminate upon termi- Termination of .

nation of such marketing agreement as provided in such marketing

agreement.
782

Provisions made applicable to .

Vol . 48, p. 675 ; Ante,

pp. 753, 781 .

Ante, p. 767.

Potato Control Act

of 1935 .

Potatoes as basic

agricultural commodity.

Vol. 48, p . 38.

"Potatoes" construed .

Base period .

Vol . 48, p . 32.

Title II .

Definitions .

Post, pp . 1106, 1163.

"Person."

"Commissioner .",

"Collector."

"Sale."

"Allotment year."

"Change in the form

of potatoes ."

"Tax stamp ."

74TH CONGRESS. SESS. I. CHI. 641 . AUGUST 24, 1935.

SeC. 60. Subject to the policy declared in section 56 of this act, the

provisions of subsections (6), (7), (8), and (9) of section 8a and of

subsections (14) and (15) of section 8c of the Agricultural Adjustment Act, as amended, are hereby made applicable in connection with

orders issued pursuant to section 59 of this Act, and the provisions

of section 8d of the Agricultural Adjustment Act, as amended, are

hereby made applicable in connection with marketing agreements

entered into pursuant to section 57 and orders issued pursuant to

section 59 of this Act . The provisions of subsections (a), (b) (2),

(c), (f), (h), and (i) of section 10 of the Agricultural Adjustment

Act, as amended, are hereby made applicable in connection with the

administration of sections 56 to 60, inclusive, of this Act .

POTATO CONTROL

SEC. 61. Section 11 of the Agricultural Adjustment Act, as

amended, is amended by adding after the word " rice " a comma and

the word " potatoes " and by adding at the end of said section 11 a

new sentence as follows : "As used in this title, the term `potatoes'

means all varieties of potatoes included in the species Solarium

tuberosum."

SEC. 62. Subsection 1 of section 2 of the Agricultural Adjustment

Act, as amended, is amended by adding after the word "tobacco",

in both the second and third sentences of said subsection, the words

" and potatoes ".

TITLE II

DEFINITIONS

SeC. 201. When used in this title, unless the context otherwise

requires-

(a) The term "person" includes an individual, a corporation, a

partnership, a business trust, a joint-stock company, an association,

a syndicate, group, pool, joint venture, or any other unincorporated

organization or group.

(b) The term " Commissioner " means the Commissioner of Internal Revenue.

The term

cc collector" means a collector of internal revenue . N The term "sale" includes any agreement or delivery whereby

the seller transfers the property in, or right to consume, potatoes to

another for a consideration, and any sum of money, services, property, or anything of value whatsoever, may constitute consideration

for such transfer, but does not include the transfer of the right to

consume potatoes to a member of the household of a producer of such

potatoes or a transfer for consumption by the household of a person

employed in the farming operations of the producer of such potatoes .

(e) The term " allotment year " means the period commencing

December 1 and ending November 30 : Provided, That the first allotment year shall commence December 1, 1935, and shall end November

30, 1936.

(f) The term "change in the form of potatoes" means an intentionally effected change in the form of potatoes in preparation for

the sale of such potatoes, or any product thereof, as such change is

defined by rules and regulations prescribed by the Commissioner,

with the approval of the Secretary of the Treasury.

(g) The term " tag stamp " means an appropriate stamp or other

means of identifying potatoes with respect to which a tax levied by

this title has been paid .
74TH CONGRESS . SESS. I . CH. 641. AUGUST 24, 1935 .

783

(h) The term "tax-exemption stamp" means an appropriate sc "Tpax - exemption

stamp or other means of identifying potatoes with respect to which

an exemption from a tax levied by this title has been established .

(i) The term " potatoes " means all varieties of potatoes included "Potatoes ."

in the species Solanum tuberosum .

(j) The term " producer " means a person who has the right to "Producer."

sell, or to receive a share of the proceeds derived from the sale of,

potatoes cultivated by him, or on land owned or leased by him .

(k) The term "continental United States" means the several "continental United

States of the United States and the District of Columbia and does

states .

not include any Territory or possession of the United States .

(1) The term "operator" means any person operating his own "Operator ."

farm, any tenant operating a farm rented for cash or for a fixedcommodity payment, any crop-share tenant, and any crop-share

landlord .

(m) The term " farm" means all the land operated by the pro- "Farm ."

ducer as a single operating unit with work stock, farm machinery,

and labor substantially separate from that of any other tract of

land.

IMPOSITION OF THe TAX Imposition of tax.

SEc. 202 . (a) There is hereby levied and assessed upon each first Assessment ; amount . sale of potatoes harvested on or after December 1, 1935, in the continental United States a tax, to be paid by the seller, at the rate of

three-fourths of 1 cent per pound : Provided, That when there is a Proviso .

when change in form

change in the form of potatoes harvested on or after December 1, prior to first sale. 1935, in the continental United States prior to the first sale thereof,

a tax at the rate of three-fourths of 1 cent per pound, to be paid Payment . by the owner at the time such change is ef fected, is hereby levied and

assessed upon the effecting of such change, and no tax shall be levied

upon the first sale of such potatoes or any product or products

thereof .

(b) If the Secretary of Agriculture finds at any time that the total menteseed

apportions pply

apportionments to producers in any potato-producing region or Producing region. regions (as established and defined pursuant to subsection (c) of

section 209 of this title) are in excess of the probable supply of

potatoes in the continental United States during the marketing

periods for such region or regions, he shall proclaim such determination, and the provisions of this title shall not be operative during such

marketing periods .

(c) At least thirty days prior to the beginning of each allotment Referendum at beyear after the first allotment year, the Secretary of Agriculture shall went year

. each allotconduct a referendum which will afford to producers of potatoes a

reasonable opportunity to vote in favor of or in opposition to

continuing in effect with respect to potatoes produced during the

succeeding allotment year the taxes levied by subsection (a) of this

section . Each producer who is entitled to an allotment for the last Entitlement to vote . allotment year for which such apportionments were made shall be

entitled to one vote ; and such taxes shall not be in effect and the

provisions of this title shall not be operative with respect to potatoes

produced in such succeeding year unless the majority of the votes cast

in such referendum are cast in favor of continuing such taxes in

effect.

(d) If the Secretary of Agriculture determines and proclaims that rai

d;ustment of tax

the taxes levied by subsection (a) of this section will at the rate

therein specified for such taxes, (1) tend to adversely affect the

orderly marketing of potatoes, or (2) tend to depress the farm price
784

Tax stamps; deposit

of proceeds.

Preparation .

Distribution and

sale .

Bond .

Accounting.

Transfer of collections .

Allotments.

Proclamation of production quantity for

allotment year .

Apportionment

of quantity.

Determination of apportionment to each

State.

Formula .

74TH CONGRESS. SESS. I. CH. 641. AUGUST 24, 1935.

of potatoes, or (3) tend to cause to producers of potatoes disadvantages in competition by reason of an excessive shift in consumption from potatoes to some other commodity or commodities, then

the rate of such taxes shall for such period as the Secretary of

Agriculture designates, be at the highest rate which is lower than

three-fourths of 1 cent (not less than one-half of 1 cent per pound)

as he finds and proclaims will not adversely affect such orderly

marketing, or cause such depression of the farm price, or cause such

disadvantages in competition .

(e) The taxes levied by subsection (a) of this section shall be

represented by tax stamps, and the proceeds of taxes levied under

this title shall be paid into the Treasury of the United States as

internal revenue collections .

(f) The Commissioner shall cause to be prepared, for the payment

of such taxes, tax stamps of suitable denominations and shall furnish

same to the collectors of internal revenue . The Commissioner shall

also furnish to the Postmaster General without prepayment a suitable quantity of such stamps to be distributed to, and kept on sale

by, the various postmasters in the United States . The Postmaster

General may require each such postmaster to give additional or

increased bond as postmaster for the value of the stamps so furnished,

and each such postmaster shall deposit the receipts from the sale of

such stamps to the credit of, and render accounts to, the Postmaster

General at such times and in such form as he may by regulations

prescribe . The Postmaster General shall at least once monthly

transfer all collections from this source to the Treasury as internal

revenue collections.

ALLOTMENTS

SEc. 203 . The Secretary of Agriculture shall investigate probable

production and market conditions for each allotment year and shall

determine from available statistics of the Department of Agriculture

and proclaim, at least thirty days prior to the beginning of each

allotment year, the quantity of potatoes which, if produced during

such year and sold during or after such year, will, in his opinion,

tend to establish and maintain such balance between the production,

sale, and consumption of potatoes and the marketing conditions

therefor as will, in his opinion, tend to establish prices to potato

producers at a level that would give potatoes a purchasing power

with respect to articles that farmers buy equivalent to the purchasing

power of potatoes in the period August 1919-July 1929 without

reducing the total net income of potato producers from potatoes

below the largest probable income of potato producers from potatoes produced during such allotment year, and without tending

to cause to producers of potatoes disadvantages in competition by

reason of an excessive shift in consumption from potatoes to some

other commodity or commodities ; and the quantity so proclaimed

shall, for each allotment year, be apportioned by the Secretary of

Agriculture as hereinafter provided .

Sec. 204. When a quantity is determined in accordance with section

203 of this title, the Secretary of Agriculture shall apportion such

quantity among the several States . The apportionment to each State

shall be determined on the basis of the ratio that the annual average

acreage of the four years in which the highest potato acreage was

harvested in such State in the years 1927-1934, inclusive, multiplied

by the average yield per acre for the four years that the yield of

potatoes per acre for such State was highest in the years 1927-1934,

inclusive, multiplied by the average annual percentage of the crop
74TH CONGRESS . SESS. I. CH. 641 . AUGUST 24, 1935.

785

produced in such State during the years 1929-1934, inclusive, which

was sold, bears to the sum of the products of such average acreages .

such average yields, and such percentages of sales for all States

Provided, That if the Secretary of Agriculture finds that the appli- Proviso .

apportionment

cation of the foregoing formula alone would, because of differences found unfair to an y

in production practices and marketing practices among the several

state . States, result in an inequitable and unfair apportionment to any

State or States, not in excess of 2 per centum of the quantity of

potatoes determined in accordance with section 203 of this title may

be deducted from such quantity and may be used by the Secretary

of Agriculture to adjust on the basis of equity and fairness the

apportionments made or to be made to any State or States.

SEC. 204a. The quantity determined and proclaimed by the fz ddjustments authorSecretary of Agriculture pursuant to Section 203, and the quantity

apportioned to each State pursuant to Section 204, may at such

intervals as the Secretary of Agriculture finds necessary to effectuate

the declared policy and purposes of this Act be adjusted by

him : Provided, That the quantity so determined and proclaimed Proviso

i

shall not be increased or decreased by more than 5 per cent.

Restriction .

SEC. 205. Ninety-five per centum of the quantity of potatoes Apportionment to

apportioned to any State pursuant to section 204 of this title shall

farms . be apportioned by the Secretary of Agriculture to farms on which

potatoes have been grown within such State during any one or more

years within the period 1932-1934, inclusive . Such apportionment Application therefor.

t o any farm shall be made upon application therefor and may, in

order to secure equitable apportionments to producers, be made by

the Secretary based upon eitherA percentage of the average sales of potatoes produced on

Methods of making (1)

h apportionment . such farm for a representative base period, prescribed by the Secretary, of any two or more years during the years 1932-1934, inclusive, providing the operators of such farm for the allotment year

for which the apportionment is made produced potatoes on such

farm during at least one of the base-period years . The representative base period prescribed by the Secretary and the percentage

applied to the average sales of potatoes produced during such period

in establishing apportionments for each farm under this paragraph

shall, so far as practicable, be uniform for farms similarly situated

upon the basis or classification prescribed by the Secretary of Agriculture, but in the case of any farm for which such average sales

are 300 pounds or less, such average sales shall be exempt from any

percentage reduction thereof and such farm shall receive an apportionment equal to such average sales ; or

(2) Such basis as the Secretary of Agriculture deems fair and

just and will apply to all farms to which an apportionment is made

under this paragraph 2 uniformly on the basis or classification

adopted . In making an apportionment to a farm under this paragraph, due consideration shall be given to the quantity of potatoes

produced and sold in the past by the operators who will operate

such farm for the allotment year for which the apportionment is

made, the quantity of potatoes produced on such farm and sold in

the past, and the acreage of the farm available for the production

of potatoes and which the operators are currently equipped to devote

to the production of potatoes .

SEC. 206. Not in excess of 5 per centum of the quantity of potatoes Percentage of quantity available for apapportioned to any State pursuant to section 204 of this title shall, portionment to farms

upon application therefor, be available for apportionment by the

otherwisemeligible . Secretary of Agriculture to farms operated by persons engaged or

evidencing a desire to engage in the production and sale of potatoes

104013°-26-	50
786

74TH CONGRESS. SESS. I. CH. 641 . AUGUST 24, 1935.

in such State and which farms are ineligible to receive an apportionment under section 205 or in respect to which the Secretary of

Agriculture determines that the apportionments made pursuant to

Proviso.section 205 are inequitable : Provided, That apportionments under

Basis of apportionments, this section shall be made upon such basis as the Secretary of Agriculture deems fair and just and which will, so far as practicable,

apply to all such farms uniformly upon the basis or classification

prescribed by the Secretary. Any quantity not apportioned under

this section shall be available for apportionment under section 205

of this title .

continuation of ap- SEC. 207 . If an apportionment is made to a farm under section 206

portionments . of this title for any allotment year, for each succeeding allotment

year that the operation of such farm is continued by the operators

who operated it during the allotment year for which such apportionment was made, the apportionment to such farm shall be made upon

the basis provided in section 206 of this title but shall be made from

the quantity available for apportionment under section 205 of this

title .

Apportionment of SEC. 208. For the purposes of the apportionments to be made pur- District of Columbia. suant to sections 204, 205, 206, and 207 of this title, the District of

Columbia shall be considered as a part of the State of Maryland .

Tax-exemption SEC. 209 . (a) The Secretary of Agriculture, or any agent or stamps ; issue . agency designated for such purpose by the Secretary of Agriculture,

shall, upon application therefor, issue for each farm tax-exemption

stamps for an amount of potatoes equal to the apportionment made

to such farm pursuant to sections 205, 206, and 207 of this title

Proviso .

Provided, That under such regulations as the Secretary of Agricul- Refusal to issue . ture shall prescribe he shall refuse to issue such tax-exemption

stamps to any applicant in any allotment year in which such applicant is not a bona fide producer of potatoes . Each such tax-exemption stamp, during the period of its validity as determined pursuant

to subsection (c) of this section, shall establish an exemption from

the taxes imposed by subsection (a) of section 202 of this title for

the amount of potatoes stated on the face of each such stamp .

Tax-exemption

stamps ; right to . (b) The right to tax-exemption stamps shall be evidenced in such

manner as the Secretary of Agriculture may by regulations prescribe,

Forms of. and such tax-exemption stamps shall be issued in such form or forms,

and under such terms and conditions as may be prescribed jointly by

the Secretary of Agriculture and the Secretary of the Treasury .

Potato -producing

regions ; establishment. (c) The Secretary of Agriculture shall establish and define potatoproducing regions for the continental United States upon the basis

of the marketing periods for potatoes produced in such regions during an allotment year, and shall from time to time by regulation

Period of validity of , and upon the basis of such marketing periods for each such region, tax-exemption stamps . determine and fix the period during which tax-exemption stamps

issued, or pursuant to subsection 1911)9 of this section transferred, to

producers in such regions for any allotment year shall be valid,

provided that all tax-exemption stamps shall be valid for a period of

at least the allotment year for which they are issued . Return of stamps

erroneously issued. (d) If any tax-exemption stamp is erroneously issued, the person

to whom such stamp is so issued shall, upon demand by the Secretary of Agriculture in writing and mailed to the last-known address

of such person, be obligated to return such stamp or pay to the Secretary a sum equal to the amount of the taxes imposed by subsection

(a) of section 202 of this title upon the amount of potatoes covered

by such stamp, at the rate in effect at the time such stamp was issued .

Assignment, etc., of

(e) Any sale, assignment, pledge, or transfer, and any agreement

delive

ednot actually

or power of attorney to sell, assign, apply, pledge, or transfer made

or entered into by any person of his right to or claim for tax-
74Tjr CONGRESS. SESS. I . CH. 641 . AUGUST 24, 1935.

7 87

exemption stamps or any part thereof not accompanied by actual

delivery of such stamps shall, for all purposes, be null and void ;

except agreements between landlords and share-tenants or share- Landlord and tenant

croppers which, in accordance with such regulations as the Secretary

agreements.

of Agriculture shall prescribe, provide for a division of the taxexemption stamps received or to be received by any such landlord .

any such share-tenant or any such share-cropper, or any or all of

them, in accordance with their respective shares in the potatoes or

the proceeds thereof to be produced by them .

(f) Where a farm is operated by share-tenants, or with the aid Farms operated by

share-tenants or shareof share-croppers, tax-exemption stamps issued for an apportion- croppers .

ment made to such farm shall be used by the landlord, the sharetenants, and/or the share-croppers in accordance with their respective

shares in the potatoes produced on such farm, during the allotment

year for which such apportionment is made, or the proceeds of such

potatoes, and the Secretary of Agriculture shall issue regulations Regulations.

protecting the interests of share-croppers and tenants in the issuance

and use of such tax-exemption stamps .

(g) If accompanied by delivery thereof, tax-exemption stamps Tax-exemption

stamps ; assignment . may be transferred or assigned in such manner and upon such terms Regulations.

and conditions, including conditions governing the consideration

which must be given therefor, as the Secretary of Agriculture may

determine are reasonably necessary to prevent (1) transfers and

assignments which would tend to depress the market price for

potatoes produced in any potato-producing area, (2) speculation in

tax-exemption stamps, or (3) fraud or coercion in the transfer of

such stamps, or which the Secretary of Agriculture finds to be necessary or desirable to facilitate the identification of tax-paid or taxexempt potatoes or which the Secretary of Agriculture finds to be

necessary or desirable to protect the interests of tenants and sharecroppers in the issuance and use of tax-exemption stamps.

SEC. 210 . Tax-exemption stamps issued to a person, and a person's i xeraption from

right to and claim for, tax-exemption stamps shall be exempt from

clmmscfcreditors

n

the claims of the creditors of such person and from any and all

process for the enforcement of such claims . The Secretary of Agriculture shall by regulation provide for the issuance to, and/or use

by, the person who by devise, bequest, or descent becomes the owner

of potatoes planted by a person dying during an allotment year, of

the tax-exemption stamps which have been, or would have been,

issued to such deceased person for such allotment year .

PACKAGING

SEC. 211 . (a) To facilitate the collection of the tax upon the first

sale of potatoes imposed by subsection (a) of section 202 of this title,

all potatoes harvested on and after December 1, 1935, and sold in the

continental United States, during any period such tax is in effect,

shall, in accordance with such rules and regulations as the Commissioner with the approval of the Secretary of the Treasury shall prescribe, be packed in closed and marked containers to which shall be

attached or affixed tax stamps or tax-exemption stamps equal in face

value to the amount of tax per pound in effect on the potatoes contained therein : Provided, That, subject to such regulations as the

Commissioner with the approval of the Secretary of the Treasury

may prescribe, packaging may be postponed beyond the time of the

first sale of potatoes which are to be stored in bulk, or which are to

be graded, at such places as may be designated by regulations prescribed by the Commissioner with the approval of the Secretary of

Packaging.

Requirement .

Affixing stamps

Proviso .

Postponement .
788

74Tir CONGRESS . SESS. I. CH. 641 . AUGUST 24, 1935.

Time and method of the Treasury. The time and method of such packaging and the time

tamps, adbreaking and method of attaching or affixing such stamps and the time and

packages. circumstances under which packages may be broken shall be established in accordance with such regulations as the Commissioner, with

the approval of the Secretary of the Treasury, may prescribe as

desirable or necessary to facilitate the collection of the taxes levied

Customs of the in- by this title. In prescribing and approving rules and regulations

dustry

. for the packaging of potatoes and the attaching or axing of

stamps, the Commissioner and the Secretary of the Treasury shall

give due weight to the customs of the industry .

Identification of po- b

tatoes

(b) To facilitate the collection of the tax upon a change in the .

form of potatoes imposed by subsection (a) of section 202 of this

title, the Commissioner, with the approval of the Secretary of the

Treasury, is authorized by regulation to prescribe appropriate means

of identifying potatoes, the change of form of which is subject to

such tax, and for the identification of the products of such potatoes .

Rules and regale

RULES AND REGULAtiONS

lions .

Prescribing and pub- SEC. 212. The Commissioner, with the approval of the Secretary lishing . of the Treasury, shall prescribe and publish such rules and regulations as he may deem needful in administering provisions of this

title relating to the revenue including rules and regulations for the

issue, sale, custody, production, cancelation, destruction, and disposition of tax stamps and the cancelation and destruction of

tax-exemption stamps, and the substitution or replacement of tax

stamps in cases of loss, destruction, or defacement thereof .

Authority of Secre- SEC. 213. The Secretary of AgT iculture is authorized to make such taryofAgriculture Agneultnre.

rules and regulations as may be necessary to carry out the powers

vested in him by the provisions of this title .

R e t u r n s ; require-

men t of; filing. SEC. 214. (a) All producers, warehousemen, processors, carriers,

retailers, factors, handlers, and any other person who the Commissioner has reason to believe to have information with respect to potatoes produced, or sold, or subject to a tax on a change in the form of

potatoes, may be required, under regulations prescribed jointly by

the Secretary of the Treasury and the Secretary of Agriculture, to

make such returns, render such statements, give such information,

and keep such records as they may deem necessary for the proper

administration of this title .

Refusal to file; penalty . (b) Any person willfully failing or refusing to file such a return,

render such statement, give such information, or keep such records,

or filing a willfully false return, or rendering or giving willfully

false statements or information or willfully keeping false records,

shall be guilty of a misdemeanor and upon conviction thereof, shall

be punished by a fine of not more than $1,000 or by imprisonment not

exceeding one year, or both .

Refunds.

Claims for ; time for

filing.

Recovery of tax erroneously collected ; jurisdiction of courts .

REFUNDS

SEC. 215. (a) No refund of any tax, penalty, interest, or sum of

money paid shall be allowed under this title unless claim therefor

is presented within one year after the date of payment of such tax,

penalty, interest, or sum .

(b) No suit or proceeding shall be maintained in any court for

the recovery of any tax under this title alleged to have been erroneously or illegally assessed or collected, or of any penalty claimed to

have been collected without authority, or of any sum alleged to have

been excessive or in any manner illegally or wrongfully collected

until a claim for refund or credit has been duly filed with the

Commissioner according to the provisions of law in that regard and

the regulations of the Secretary of the Treasury established in pur-
74TH CONGRESS. SESS. I. CH. 641 . AUGUST 24, 1935 .

789

suance thereof. N o suit or proceeding shall be begun before the Limitations .

expiration of six months from the date of filing such claim unless the

Commissioner renders a decision thereon within that time, nor after

the expiration of two years from the date of payment of such tax,

penalty, or stem, unless such suit or proceeding is begun within two

years after the disallowance of the part of such claim to which such

suit or proceeding relates . The Commissioner shall, within ninety

allow

Notification of disdays after such disallowance, notify the taxpayer thereof by

registered mail .

(c) The amount of the taxes imposed by subsection (a) of section Refunds allowed .

202, paid by a person, which taxes would not have been paid had the

tax-exemption stamps to which such person was entitled been delivered to such person prior to the payment of such taxes, shall be

refunded to such person.

APPROPRIATION

Appropriation.

SEc. 216. (a) The proceeds derived from the taxes imposed by sum authorized for

this title are hereby authorized to be appropriated to be available penses, refunds, etc

ex - this

the Secretary of Agriculture for administrative expenses, for all

purposes of the Agricultural Adjustment Act, as amended, for

refunds of taxes and for other payments under this title . The Advance of estimated

amount of taxes to be

Secretary of Agriculture and the Secretary of the Treasury shall c llected . estimate from time to time the amount of taxes which will be collected under this title during a period following any such estimate

not in excess of four months, and the Secretary of the Treasury

shall, out of any money in the Treasury not otherwise appropriated,

advance to the Secretary of Agriculture the amounts so estimated .

The amount of any such advance shall be deducted from such tax va eduction of adproceeds as shall subsequently become available under this subsection

Provided, That all taxes imposed by section 230 of this title, collected PrReg

° from possesupon potatoes coining from the possessions or territories of the sions and territories; United States, shall not be covered into the general fund of the

separate fund .

Treasury of the United States but shall be held as a separate fund

and paid into the treasuries of the said possessions and territories .

respectively, to be used and expended by the governments thereof Expenditure.

for the benefit of agriculture .

(b) The administrative expenses provided for under this section

expenses . shall include, among others, expenditures for personal services and

rent in the District of Columbia and elsewhere, for law books,

periodicals, newspapers, and books of references, for contract

stenographic reporting services, for the purchase or hire of vehicles,

including motor vehicles, and for printing and paper in addition to

allotments under the existing law .

(c) The Secretary of Agriculture may advance or transfer to

Transfer of funds.

the Treasury Department, to the Post Office Department, and to

any other department or agency, out of funds available for administrative expenses under this title, such sums as are required to pay

administrative expenses of, and refunds made by, such departments

or agencies in the administration of this title .

(d) There is hereby authorized to be appropriated to be available

autho zedP

riations

to the Secretary of Agriculture such sums as may be necessary for

administrative expenses, for refunds of taxes, and for other advances

or payments under this title.

GEneRAL AND PEnAL PROVISIONS

General and penal

provisions . SEc. 217 . If at any time the Secretary of Agriculture finds that any

oflo

Potatoes

or

products

product or products manufactured from potatoes is of such low value,

considering the quantity of potatoes used for its manufacture, that

the imposition of the taxes imposed by subsection (a) of section 202
790

74TH CONGRESS. SESS. I . CH. 641. AUGUST 24, 1935.

of this title would prevent wholly or in large part the use of potatoes

in the manufacture of such product or products or that potatoes used

for the feeding of livestock are of such low value that the imposition

of such taxes would prevent wholly or in large part the sale of potatoes for any such use, the Secretary of Agriculture shall proclaim

such finding and thereafter in accordance with regulations prescribed

jointly by the Secretary of Agriculture and the Secretary of the

Treasury, the sale, or change in form, of potatoes for such use or uses

by the purchaser thereof shall be exempt from the provisions of subsection (a) of section 211, and from the taxes imposed by subsection

(a) of section 202 of this title until such time as the Secretary of

Agriculture, after further investigation and due notice and opportunity for hearing to the interested parties, revokes such proclamation : Provided, That the right to any such exemption shall be

evidenced in such manner as joint regulations of the Secretary of

otTaxem t potatoes Agriculture and the Secretary of the Treasury shall prescribe . If

such purchaser uses any potatoes sold to him free of tax under this

section or uses any product of such potatoes, for other than an exempt

use as above specified, then he shall be liable for a tax in the same

manner as if such potatoes were sold by him at a first sale .

SEC. 218. The Secretary of Agriculture is authorized, in order to

carry out the provisions of this title, to appoint, without regard to

the provisions of the civil-service law, such officers, agents, and

employees and to utilize such Federal officers and employees and, with

the consent of the State, such State and local officers and employees,

as he may find necessary, to prescribe their authorities, duties, responsibilities, and tenure, and, without regard to the Classification Act of

1923, as amended, to fix the compensation of any officers, agents, and

employees so appointed .

SeC. 219 . (a) For the more effective administration of the functions vested in him by this title, the Secretary of Agriculture is

authorized to utilize committees and associations heretofore or hereafter established pursuant to subsection (b) of section 10 of the Agricultural Adjustment Act, as amended, and to establish regional,

State, and local committees and associations of producers of potatoes .

(b) The Secretary of Agriculture, out of any funds appropriated

for administrative expenses under this title, is authorized to advance

funds to the proper fiscal officer of associations established or utilized pursuant to subsection (a) of section 219 of this title, for

expenses incurred or to be incurred in the administration of this

title, with the approval of the Secretary of Agriculture by such associations. Payment of such expenses of such associations shall be

made upon such evidence and in such manner and at such time or

times as the Secretary of Agriculture may direct, and the accounting therefor by the associations shall be solely administrative and

to the Secretary of Agriculture only.

SEC. 220. Any person who knowingly sells, or offers for sale, or

knowingly offers to buy, or buys, potatoes not packaged as required

by this title, or any person who knowingly sells, or offers for sale,

or who knowingly offers to buy, or buys, potatoes to the packages

of which are not affixed or attached tax-exemption stamps or tax

stamps as required by this title shall, upon conviction thereof, be

fined not more than $1,000 . Any person convicted of a second

offense under the provisions of this title may, in addition to such

fine, be imprisoned for not more than one year .

SEC. 221 . Any person who, in violation of the regulations made by

the Secretary of Agriculture, speculates in tax-exemption stamps,

and any person securing tax-exemption stamps from another person

by fraud or coercion, shall, upon conviction thereof, be fined not

Exemptions .

Ante, pp . 783, 787 .

Proviso .

Right to exemptions.

Administration .

Appointment of officers, etc.

Cooperation of State

officers .

Compensation.

Cooperative production associations ; assistance of.

Vol. 48, p. 37; U . S .

C ., p . 161 .

Producers' associations ; establishment .

Advances for administrative expenses.

Payments .

Unlawful transactions; penalty .

Conviction of second

offense .

Speculation in taxexemption stamps;

penalty .
74TH CONGRESS . SESS. I . CH. 641 . AUGUST 24, 1935 .

more than $1,000 or sentenced to not more than one year's imprisonment, or both .

SEc. 222. Whenever any potato container, to which are affixed tax

stamps or tax-exemption stamps, is emptied, it shall be the duty of

the person in whose hands the same is to destroy utterly the stamps

affixed thereto . Any revenue officer may destroy the tax stamps or

tax-exemption stamps affixed to any emptied potato package .

SEC. 223. Any person who willfully violates any provision of

this title, or who willfully fails to pay, when due, any tax imposed

under this title, or who, with intent to defraud, falsely makes,

forges, orders,:' or counterfeits any tax stamps or tax-exemption

stamps made or used under this title or who uses, sells, or has in his

possession any such forged, ordered,' or counterfeited tax stamps or

tax-exemption stamps or any plate or die used, or which may be

used in the manufacture thereof, or has in his possession any tax

stamp or tax-exemption stamp which should have been destroyed

as required by this title, or who makes, uses, sells, or has in his

possession, any paper in imitation of the paper or other substance

used in the manufacture of any such tax stamp or tax-exemption

stamp, or who reuses any tax stamp or tax-exemption stamp

required to be destroyed by this title, or who places any potatoes in

any package which has been theretofore filled or stamped or otherwise identified under this title without destroying the tax stamps

and tax-exemption stamps previously affixed to such package, or

who gives away or accepts from another or who sells or buys any

emptied package which had been previously filled and stamped or

otherwise identified under this title without destroying the tax

stamps and tax-exemption stamps previously affixed or attached to

such package, or who makes any false statement in any application

for tax-exemption stamps under this title, or who has in his possession any tax-exemption stamps or tax stamps, obtained by him

otherwise than as provided in this title, shall, upon conviction, be

punished by a fine not exceeding $1,000 or by imprisonment for not

exceeding six months, or both .

SEC. 224. Any person who willfully violates any regulation issued

or approved pursuant to this title, for the violation of which a

special penalty is not provided by law, shall, upon conviction

thereof, be punished by a fine not exceeding $200 .

SEC. 225. All provisions of law, including penalties, applicable

with respect to the taxes imposed by sections 600 and 800 of the Revenue Act of 1926, except section 1121 of the Revenue Act of 1926,

and except section 614 of the Revenue Act of 1932, shall, insofar as

applicable and not inconsistent with the provisions of this title, be

applicable with respect to all taxes imposed by this title .

SEc. 226. In order to facilitate the making, of apportionments and

the collection of the taxes imposed by this title, every producer who

sells potatoes during any allotment year, or who affects a change in

the form of potatoes, shall keep such books and records as the

Commissioner, with the joint approval of the Secretary of the

Treasury and the Secretary of Agriculture, shall by regulations

require and such books and records shall be open to inspection by

any authorized agent of the Secretary of Agriculture or the

Commissioner.

SEc. 227. Whenever any potatoes, upon the sale of which a tax is

required to be paid, are sold, without the use of the proper stamps,

or whenever a change in the form of potatoes upon which a tax is

required to be paid occurs, without the payment of such tax, it shall

be the duty of the Commissioner, within a period of not more than

two years after such sale or change in the form, upon satisfactory

' So in original.

791

Destruction of

stamps .

Unlawful acts .

Default in tax

went .

Counterfeiting .

payPossession of stamps

which should have

been destroyed .

Reuse of stamp .

Refilling stamped

container .

Sale of stamped container .

False statements .

Penalty provision .

Regulations; violation of; penalty provision .

Provisions of laws

made applicable .

Vol . 44, pp . 93, 99,

121; U . S . C ., pp . 1107,

1110, 1133, 1134 .

Vol . 47, p. 264 ; U . S .

C., p. 1186 .

Producer's books and

records ; requirement .

Inspection of.

Assessment of unpaid

taxes .
792

74TH CONGRESS. SESS. I . CH. 641 . AUGUST 24, 1935.

proof, to estimate the amount of the tax which has been omitted to be

paid, and to make the assessment therefor, and certify the same

Assessment a d d i- to a collector. The tax so assessed shall be in addition to the tional to penalties. penalties imposed by law .

Exports .

Imposition of taxes

waived when sold for

export.

Refund of taxes erroneously collected .

Imports .

EXPORTS

SEC. 228. Under such rules and regulations as the Commissioner,

with the approval of the Secretary of the Treasury, may prescribe,

the taxes imposed under subsection (a) of section 202 of this title

shall not apply in respect to potatoes sold for export to any foreign

country or for shipment to a possession or Territory of the United

States, and in due course so exported or shipped . Under such rules

and regulations the amount of any such tax erroneously or illegally

collected in respect to such potatoes so exported or shipped may be

refunded to the exporter or shipper of the potatoes instead of the

taxpayer if the taxpayer waives any claim for the amount so to be

refunded .

IMPORTS

Authority of secre- SEC, 229. In order to secure equality between domestic and foreign taryofAgriculture. producers of potatoes and in order to prevent the taxes imposed by

subsection (a) of section 202 from resulting in disadvantages to producers of potatoes in the continental United States, the Secretary of

Agriculture is hereby authorized and directed to, from time to time

by orders and regulationsmentQ

.uotas; establish-

(a) For each allotment year or any part thereof that the taxes

imposed by subsection (a) of section 202 of this title are in effect,

establish quotas for the entry or the importation into the continental

United States of potatoes produced in any Territory or possession

of the United States, or any foreign country. Such quotas shall be

based upon that percentage of the annual average quantity of such

potatoes brought or imported into the continental United States during the years 1929-1934, inclusive, which is equal to the percentage

that the quantity proclaimed by the Secretary of Agriculture under

section 203 of this title is of the annual average of the quantities of

potatoes sold in the continental United States during the years 1929-

1934, inclusive ; and

Tax on imports in SEc. 230. After such quotas have been established, potatoes excess of quotas.

imported or brought into the continental United States in excess of

any such quotas shall, in addition to any import duties, be subject to

an internal-revenue tax equal to the amount of the tax then in effect

on the first sale of potatoes produced and sold in the continental

United States. The tax levied by this section shall be represented by

tax stamps and shall be paid by the owner or importer prior to release

from customs custody and control, or entry into the continental

United States.

Packaging imports

from possessions and

SEc. 231. During any period the tax imposed b subsection a

g

y y ()

territories . of section 202 is in effect all potatoes imported or brought into the

continental United States from any possession or Territory of the

United States or from any foreign country shall, prior to release

from customs custody and control, in accordance with such rules and

regulations as the Commissioner, with the approval of the Secretary

of the Treasury, shall prescribe as necessary or desirable to facilitate

the collection of the taxes levied by this title, be packed in closed and

Time and method . marked containers . The time and method of such packaging and

the time and method of attaching or affixing the stamps required by

the preceding section shall be established in accordance with such

regulations as the Commissioner shall prescribe . All sales of such

potatoes, after release thereof from customs custody and control or

entry in the continental United States, shall be in packages in the
74TH CONGRESS. SESS. I . CHS. 641, 642. AUGUST 24,1935.

793

same manner and under the same terms and conditions as required

for the sales of potatoes harvested and sold in the continental United

States .

SEC. 232 . The provisions of sections 229 and 230 shall not be appliImports from Cuba.

cable to potatoes produced in the Republic of Cuba and imported

and entered for consumption into the continental United States during the period from December 1 to the last day of the following

February, inclusive, in any years : Provided, That if the Secretary Appfcation of proviof Agriculture at any time finds that the importation of potatoes sions to .

from the Republic of Cuba during such period is, or threatens to

result in, unduly depressing the potato market in or for any potatoproducing area of the continental United States, he shall proclaim

such findings and the provisions of sections 229 and 230 shall be

applicable to all potatoes thereafter imported into the continental

United States from the Republic of Cuba.

SEC. 233 . This title may be cited as the " Potato Act of 1935."

Short title .

Approved, August 24, 1935 .

[CHAPTER 642.]

AN ACT

August 24, 1935. Requiring contracts for the construction, alteration, and repair of any public 	(u .R . 8519 .]	

building or public work of the United States to be accompanied by a perform- (Public, No. 321 .]

ance bond protecting the United States and by an additional bond for the

protection of persons furnishing material and labor for the construction, alteration, or repair of said public buildings or public work .

Be it enacted by the Senate and House of Representatives of the

United States o America in. Congress assembled That a before

Bonds of contractors

( )for public buildings. any contract, exceeding $2,000 in amount, for the construction, altera- Requirement, where

tion, or repair of any public building or public work of the United

contract exceeds $2,090.

States is awarded to any person, such person shall furnish to the

United States the following bonds, which shall become binding upon

the award of the contract to such person, who is hereinafter designated as "contractor" :

(1) A performance bond with a surety or sureties satisfactory to Performance bond .

the officer awarding such contract, and in such amount as he shall

deem adequate, for the protection of the United States .

(2) A payment bond with a surety or sureties satisfactory to such Payment bond .

officer for the protection of all persons supplying labor and material

in the prosecution of the work provided for in said contract for the

et Purposes, amount,

use of each such person . Whenever the total amount payable by

the terms of the contract shall be not more than $1,000,000 the said

payment bond shall be in a sum of one-half the total amount payable by the terms of the contract. Whenever the total amount payable by the terms of the contract shall be more than $1,000,000 and

not more than $5,000,000, the said payment bond shall be in a sum

of 40 per centum of the total amount payable by the terms of the

contract. Whenever the total amount payable by the terms of the

contract shall be more than $5,000,000 the said payment bond shall

be in the sum of $2,500,000 .

(b) The contracting officer in respect of any contract is authorized Contract work in a

to waive the requirement of a performance bond and payment bond

foreign country .

for so much of the work under such contract as is to be performed

in a foreign country if he finds that it is impracticable for the

contractor to furnish such bonds .

(c) Nothing in this section shall be construed to limit the authority

security for projects

of any contracting officer to require a performance bond or other

not herein designated.

security in addition to those, or in cases other than the cases specified

in subsection (a) of this section .