An Act to provide for retirement of the Government capital in certain institutions operating under the supervision of the Farm Credit Administration to increase borrower participation in the management and control of the Federal Farm Credit System and for other
PL 84-347 (H.R.5168), enacted 08/11/1955

69 
S T A T . ] 
PUBLIC LAW 347-AUG. 11, 1955 
655 
Public Law 347 
CHAPTER 785 
AN ACT 
To provide for retirement of the Government capital in certain institutions op-
erating under tlie supervision of tlie Farm Credit Administration; to increase 
borrower participation in tlie management and control of the Federal Farm 
Credit System; and for other purposes. 
August 11, 1955 
[H. R. 5168] 
Be it enacted hy the Senate and House of Representatives 
of the 
United States of America in Congress assembled., That this Act may o/i^s.^'**^" '^'^* 
be cited as the "Farm Credit Act of 1955". 
TITLE I—BANKS FOR COOPERATIVES 
SEC. 101. Section 42 of the Farm Credit Act of 1933, as amended, is 
amended to read as follows: 
"SEC. 42. 
(a) 
CLASSES OF STOCK; OWNERSHIP; VOTING 
RIGHTS; 
DIVIDENDS; AND RETIREMENT or STOCK.—Except as provided in sec-
tion 111 of the Farm Credit Act of 1955, each regional bank for 
cooperatives shall have the following classes of stock, all of which 
shall have a par value of $100 per share: 
"(1) Class A stock shall be issued to and held by the Governor 
of the Farm Credit Administration on behalf of the United States, 
and stock of such banks held by the Governor on the effective date 
of title I of the Farm Credit Act of 1955 shall be exchanged, share 
for share, for class A stock of the respective banks. Class A stock 
shall be nonvoting and no dividends shall be paid thereon. At the 
end of each fiscal year, each of such banks, subject to the provisions 
of sections 33 and 40, shall determine the amount of class A stock 
that shall be retired at par by that bank. The minimum amount of 
class A stock that shall be retired shall be the equivalent in dollar 
value of the amount of class C stock issued for that year, except that 
class C stock issued by a regional bank on account of class C stock 
issued to it by the central bank, class C stock issued by a regional 
bank in exchange for class B stock the proceeds of which were 
used to retire an equivalent amount of class A stock, and class C 
stock issued by a regional bank in exchange for capital stock of 
the bank outstanding on the effective date of title I of the Farm Credit 
Act of 1955, shall not be included in such bank's calculation. 
Any 
amount of class A stock retired in excess of such minimum amount 
in one year may be used to reduce to that extent the amount of such 
stock required to be retired in any subsequent year. Funds from the 
retirement of class A stock shall be paid into the revolving fund 
authorized by the Agricultural Marketing Act, as amended, and shall 
continue to be available for the purchase of class A stock in the banks 
in accordance with sections 33 and 40. 
"(2) Class B stock may be issued in series and amounts approved 
by the Farm Credit Administration, and may be sold or transferred 
to any person subject to the approval of the issuing bank. Such stock 
shall be issued only at par and shall be nonvoting. 
Any bank may 
pay dividends of not to exceed 4 per centum per annum on class B 
stock if declared by the board of directors and approved by the Farm 
Credit Administration and if the surplus account of the bank, after 
payment of such dividends, will not be less than 25 per centum of 
the sum of all its outstanding capital stock. 
Dividends on class B 
stock shall not be cumulative, but no bank shall distribute in any year 
any of its net savings as patronage refunds as provided in section 
36 (a) unless for that year a dividend of at least 2 per centum is 
declared and paid upon outstanding class B stock of the bank. 
Each 
series of class B stock shall be issued only with the appi;oval of the 
48 Stat. 264. 
12 u s e 1134d, 
Class A stock. 
12 u s e 
11341, 
114Id, 1134b. 
Post, p. 662. 
46 Stat. 11. 
12USeH41j (f). 
eiass B stock. 
656 
PUBLIC LAW 347-AUG. 11, 1955 
[69 ST 
A T . 
Class C stock. 
Farm Credit Administration and shall carry on the face of each 
certificate a statement of the maximum dividend which may be 
declared and paid thereon and of the minimum dividend which shall 
be declared and paid thereon before the bank may distribute any of 
its net savings as patronage refunds: Promded^ That such maximum 
and minimum dividends may be the same amount. 
After all class 
A stock has been retired, class B stock may be called for retirement 
at par with the approval of the Farm Credit Administration and 
shall be called in such manner that the oldest outstanding stock at 
any given time will be retired first. Any holder of class B stock 
whose stock has been called for retirement may elect, with the approval 
of the issuing bank, to leave Ms stock in the bank subject to its being 
included in the next call for retirement. 
"(3) Class C stock, except as approved by the Farm Credit Admin-
istration and consented to by the issuing bank, may be issued only to 
banks for cooperatives and farmers' cooperative associations as defined 
12 use ii4ij. 
jj^ section 15 (a) of the Agricultural Marketing Act, as amended. 
Such stock may be issued in fractional shares, shall be issued at its fair 
book value not exceeding par, as determined by the bank, and no divi-
dends shall be paid on it. Each holder of one or more shares of class C 
stock which is eligible to borrow from a bank for cooperatives shall be 
entitled to one vote only: Provided^ That any such holder which within 
the period of two years next preceding a date, fixed by the Farm Credit 
Administration, prior to commencement of the voting has not been a 
borrower from a bank of which it holds class C stock shall not be 
entitled to vote. From time to time each bank for cooperatives shall 
obtain information concerning its class C stockholders to determine 
whether they continue to be eligible to borrow from the bank and to 
vote. Any class C stockholder found by the bank to be ineligible to 
borrow shall not be entitled to vote until its eligibility is reestablished 
to the satisfaction of the bank. 
Whenever in section 5 of the Farm 
12 uic 6
4
0
*
a et Credit Act of 1937, as amended, and section 4 (a) of the Farm Credit 
eg. 
Act of 1953, provision is made for a nomination or election by coopera-
i2u#c 63*6c. 
tives which are stockholders or subscribers to the guaranty fund of 
Post, p. 666. 
^y^y bank for cooperatives the term 'cooperatives which are stock-
holders or subscribers to the guaranty fund' or the equivalent of that 
term, shall mean such cooperatives which are eligible to vote. 
Each 
borrower from a bank for cooperatives shall be required to own at the 
time the loan is made at least one share of class C stock. 
The purchase 
price of such stock may be retained out of the loan. 
In addition, each 
borrower as defined by the Farm Credit Administration for purposes 
of this sentence, shall be required to invest quarterly in class C stock 
an amount equal to not less than 10 nor more than 25 per centum, as 
prescribed by the board of directors of the bank with the approval of 
the Farm Credit Administration, of the amount of interest payable by 
it to the bank during the calendar quarter. 
Payments for such stock 
shall be made quarterly or when the regular interest payments of the 
borrower are payable, out the stock shall be issued to the borrower as 
of the end of each fiscal year in the amount of the payments for stock 
made by it during the year. 
Each regional bank shall purchase at 
least one share of class C stock of the central bank. 
In addition, the 
regional bank shall be required to invest quarterly in class C stock of 
the central bank an amount equal to not less than 10 nor more than 
25 per centum, as prescribed by the board of directors of the central 
bank with the approval of the Farm Credit Administration, of the 
amount of interest payable by the regional bank to the central bank 
during the calendar quarter by reason of any interest purchased by the 
central bank in a loan made by the regional bank. 
Payments for such 
stock shall be made to the central bank and the stock shall be issued to 
69 S T A T . ] 
PUBLIC LAW 3 4 7 - A U G . 11, 1955 
657 
the regional bank in the same manner, insofar as practicable, as is pro-
vided in this section for payments for and issuance of stock on account 
of loans by the regional bank in which the central bank does not pur-
chase any interest. 
Subject to rules prescribed by the board of direc-
tors of the lending bank with the approval of the Farm Credit Admin-
istration a borrower may convert class B stock into class C stock for 
the purpose of making the investment in class C stock required by this 
paragraph. 
After retirement of all class A stock, class C stock also 
may be retired at par by calling the oldest outstanding class C stock, 
but class C stock that was issued for a fiscal year period shall not be 
called for retirement until all class B stock that was issued during or 
prior to that fiscal year has been called for retirement. 
"(b) GUARANTY FUND SUBSCRIPTIONS IN LIEU OF STOCK.—If a coop-
erative association is not authorized under the laws of the State in 
which it is organized to take stock in the bank, the bank shall, in lieu 
thereof, require the association to pay into or have on deposit in a 
guaranty fund of the bank, or the bank may retain out of the amount 
of the loan and credit to the guaranty fund, a sum equal to the amount 
of class C stock which the association would otherwise be required 
by subsection (a) (3) of this section to own at the time the loan is 
made and to purchase thereafter. 
Any such association may make 
additional payments into the guaranty fund from time to time in lieu 
of the purchase of class B stock, and shall receive credits to such fund 
in lieu of patronage refunds payable in class C stock. 
Each reference 
in this Act to capital stock or class B or class C stock shall include 
also the guaranty fund equivalents of such stock, and, to the extent 
permitted under the laws of a State in which a cooperative association 
IS organized, a holder of guaranty fund equivalents of either class 
B or class C stock shall have the same rights and status as a holder 
of class B or class C stock, respectively. 
The rights and obligations 
of the bank as respects such.guaranty fund equivalents shall be iden-
tical to its rights and obligations as respects class B or class C stock, 
respectively. 
*'(c) LIEN ON STOCK.—Except as hereinafter provided in the case 
of an association which is a direct borrower from the central bank, 
each bank for cooperatives shall have a first lien on all stock in the 
bank owned by each cooperative association as additional collateral 
for any indebtedness of such association to the bank. 
In the case of 
an association which is a direct borrower from the central bank, the 
central bank shall have a first lien on any amount of class C stock 
which the borrowing association owns in any regional bank on 
account of direct loans of such association from the central bank; and 
the regional bank shall have a lien on such stock junior only to the 
lien of the central bank. 
In any case where the debt of a borrower 
is in default, the bank may, in accordance with regulations of the 
Farm Credit Administration, retire and cancel all or a part of the 
stock of the defaulting borrower at the fair book value thereof, not 
exceeding par, in total or partial liquidation of the debt, as the case 
may be, and, to the extent required, corresponding shares held by a 
regional bank in the central bank shall be retired. 
"(d) 
CALCULATION or PROPORTIONATE INTERESTS IN BANKS.—For 
the purpose of determining pursuant to section 5 (d) (2) (C) of the 
Farm Credit Act of 1937, as amended, the amount of the capital 
i2usc640d. 
stock and subscriptions to the guaranty fund of a regional bank for 
cooperatives held by cooperatives the term 'capital stock and subscrip-
tions to the guaranty fund held by cooperatives' or the equivalent of 
that term shall also mean all outstanding class B and class C stock 
and the guaranty fund equivalents thereof." 
54402 O - 55 - 4? 
658 
PUBLIC LAW 347-AUG. 11, 1955 
[69 STAT. 
12 use 1134k. 
SEC. 102. Section 35 of the Farm Credit Act of 1933, as amended, is 
amended to read as follows: 
"SEC. 35. APPLICATION OF REGIONAL BANK STOCK PROVISIONS TO 
CENTRAL BANK.—All provisions of law with respect to class A, class 
B, and class C stock in the regional banks for cooperatives shall 
apply to the Central Bank for Cooperatives except as they may be 
inconsistent with the provisions of this section. Each borrower from 
the central bank shall be required to own at the time the loan is 
made at least one share of class C stock in such regional bank as the 
Farm Credit Administration shall designate and shall be required 
to invest quarterly in class C stock in such regional bank or banks 
as the Farm Credit Administration shall designate an amount equal 
to not less than 10 nor more than 25 per centum, as prescribed by 
the board of directors of the central bank with the approval of the 
Farm Credit Administration, of the amount of interest payable by 
such borrower to the central bank during the calendar quarter. 
Paj^-
ments for such stock shall be made quarterly or when the regular 
interest payments of such borrower are payable; but the stock shall 
be issued to the borrower as of the end of each fiscal year in the 
amount of the payments for stock made by it during such year. The 
regional bank whose stock is so issued to such borrower shall purchase 
a corresponding amount of class C stock in the central bank." 
12 use 1134/. 
SEC. 103. (a) Section 36 of the Farm Credit Act of 1933, as amended, 
is amended to read as follows: 
"SEC. 36. (a) APPLICATION OF SAVINGS.—Each bank for cooper-
atives, at the end of each fiscal year, shall determine the amount of its 
net savings after paying or providing for all operating expenses 
(including reasonable valuation reserves and losses in excess of any 
such applicable reserves) and shall apply such savings as follows: 
(1) To the restoration of the amount of the impairment, if any, of 
capital stock, as determined by its board of directors; (2) 25 per 
centum of any remaining savings shall be used to create and maintain 
a surplus account; (3) if said bank shall have outstanding capital 
stock held by the United States during the whole or any part of the 
fiscal year, it shall next pay to the United States as a franchise tax, 
a sum equal to 25 per centum of its net savings then remaining, not 
exceeding, however, a rate of return on such Government capital cal-
culated at a rate equal to the computed average annual rate of interest 
on all public issues of public debt obligations of the United States 
issued during the fiscal year ending next before such tax is due, as 
certified to the Farm Credit Administration by the Secretary of the 
Treasury; (4) reasonable contingency reserves may be established; 
(5) dividends on class B stock may be declared as provided in section 
42 (a) (2); and (6) any remaining net savings shall be distributed 
as patronage refunds as provided in subsection (b) of this section: 
Provided, That any patronage refunds received by a regional bank 
from the central bank shall be excluded from net savings of the 
regional bank for the purpose of computing such franchise tax. 
Amounts applied as provided in (2) and (4) above after the effective 
date of title I of the Farm Credit Act of 1955 shall be allocated on 
a patronage basis approved by the Farm Credit Administration. At 
the end of any fiscal year, any portion of the reserve established under 
(4) above which is no longer deemed necessary shall be transferred 
to the surplus account and, if the surplus account of any such bank 
for cooperatives exceeds 25 per centum of the sum of all its outstand-
ing capital stock, the bank may distribute in the same manner as a 
patronage refund any part or all of such excess which has been 
allocated: Provided, That any surplus and contingency reserves shown 
on the books of the banks as of the effective date of title I of the Farm 
Credit Act of 1955 shall not be distributed as patronage refunds. 
69 S T A T . ] 
PUBLIC LAW 347-AUG. 11, 1955 
659 
In making such distributions, the oldest outstanding allocations shall 
be distributed first. Wherever used in this Act, the words 'surplus co'unt"''^^"^ °'^' 
account' as applied to any bank for cooperatives shall mean any sur-
pluses and contingency reserves shown on the books of the banks as 
of the effective date of title I of the Farm Credit Act of 1955 and any 
amounts applied as provided in (2) above after the effective date of 
said title I. Said surplus account shall be divided to show the amounts 
thereof subject to allocation as provided in this section and may be 
further subdivided as prescribed by the Farm Credit Administration. 
In the event of a net loss in any fiscal year after providing for all 
operating expenses (including reasonable valuation reserves and losses 
in excess of any such applicable reserves), such loss shall be absorbed 
by: first, charges to allocated contingency reserves; second, charges 
to allocated surplus; third, charges to other contingency reserves and 
surplus; fourth, the impairment of class C stock; and fifth, the impair-
ment of all other stock. 
"(b) 
PATRONAGE REFUNDS.—The patronage refunds of each re-
gional bank for cooperatives shall be paid in class C stock to borrowers, 
as defined by the Farm Credit Administration for the purposes of 
this subsection, during the fiscal year for which the refunds are 
declared. Patronage refunds of the Central Bank for Cooperatives 
shall be paid in class C stock to the regional banks for cooperatives 
upon the basis of interests held by the central bank in loans made 
by the regional banks and upon direct loans made by the central 
bank to cooperative associations; and any part of such refunds derived 
from such direct loans of the central bank shall be paid in class C 
stock issued to the regional bank or banks which issued to the borrower 
the stock incident to the loans, or to a regional bank or banks desig-
nated by the Farm Credit Administration, and such bank or banks 
shall issue a like amount of class C stock to the borrowers. 
All 
patronage refunds shall be paid in the proportion that the amount 
of interest earned on the loans of each borrower bears to the total 
interest earned on the loans of all borrowers during the fiscal year. 
"(c) 
APPLICATION OF ASSETS ON LIQUIDATION OR DISSOLUTION.—In 
the case of liquidation or dissolution of any bank for cooperatives, 
after the payment or retirement, as the case may be, first, of all 
liabilities; second, of all capital stock issued before the effective date 
of title I of the Farm Credit Act of 1955 held by cooperative associa-
tions at par, all class A stock at pfir, and all class B stock at par; and 
third, of all class C stock at par; any surpluses and contingency 
reserves existing on the effective date of said title I shall be paid to 
the holders of outstanding capital stock issued before the effective 
date of said title I, class A stock and class C stock pro rata, and any 
remaining surplus and contingency reserves shall be distributed to 
those entities to which they are allocated on the books of the bank. 
If it should become necessary to use any surplus or contingency 
reserves to pay any liabilities or to retire any capital stock, allocated 
contingency reserves and surplus shall be exhausted first in accord-
ance with rules prescribed by the Farm Credit Administration." 
(b) For purposes of applying the amendment in subsection (a) 
separation of 
of this section, that part of the fiscal year 195G preceding the effective 
^^^^ years, 
date of title I of this Act and that part of such year following said 
effective date shall be deemed to be separate fiscal years. 
SEC. 104. Section 31 of the Farm Credit Act of 1933 is amended 
12 use n34g. 
to read as follows: 
"SEC. 31. BOARD OF DIRECTORS or CENTRAL BANK.—The Central 
Bank for Cooperatives shall have seven directors. Of this number 
four shall be appointed by the Governor of the Farm Credit Admin-
istration, by and with the advice and consent of the Federal Farm 
660 
PUBLIC LAW 347-AUG. 11, 1955 
[69 ST A T . 
Removal. 
Rules 
nations. for nomi-
etCo 
Credit Board, and three shall be elected by the regional banks for 
cooperatives and cooperative associations: Provided^ That the terms 
of office of directors established prior to the effective date of title I 
of the Farm Credit Act of 1955 shall continue through the thirty-first 
day of December next following the effective date of said title I and 
shall expire at the end of that day. Three of the directors appointed 
by the Farm Credit Administration shall be appointed for terms of 
one year, two years, and three years, respectively, as designated at 
the time of appointment and the fourth appointed director shall be 
appointed for a term of three years and thereafter each appointed 
director shall be appointed for a term of three years. Any appointed 
director may be removed at pleasure at any time by the Farm Credit 
Administration. 
The Farm Credit Administration shall prescribe 
rules and regulations for the nominations and elections required by 
this section. Sufficiently in advance of the first day of January next 
following the effective date of title I of the Farm Credit Act of 
1955, and at any time subsequent to the enactment thereof, the Farm 
Credit Administration shall take all action necessary in order to 
permit the elections hereby provided and shall group the several 
farm credit districts into three areas, each of which shall be com-
prised of four contiguous farm credit districts, and a director shall 
be elected from nominees from each of such areas by regional banks 
for cooperatives of the area and cooperative associations of the area 
eligible to vote. The three elected directors shall be elected for terms 
of one year, two years, and three years, respectively, as shall be 
designated by the Farm Credit Administration and thereafter elected 
directors shall be elected for terms of three years: Provided^ That 
whenever, as determined by the Farm Credit Administration, the 
sum of the capital stock and subscriptions to the guaranty fund of 
the central bank held by persons other than the Governor of the 
Farm Credit Administration on behalf of the United States and 
surplus and reserve accounts of said bank shall equal or exceed 06% 
per centum of the total capital stock, subscriptions to the guaranty 
fund and surplus and reserve accounts of said bank as of the date 
six months before the expiration of the term of office of any appointed 
director, except the fourth appointed director, whose term next ex-
pires, the successor to such director shall be elected from nominees 
for a term of three years by regional banks for cooperatives of the 
area and cooperative associations of the area eligible to vote on a 
basis of areas comprised of two contiguous farm credit districts as 
designated by the Farm Credit Administration. Appointed directors 
except the fourth appointed director shall continue to be replaced 
by elected directors in accordance with the foregoing provisions until 
the total number of elected directors shall be six, elected one from 
each of six such areas comprised of two contiguous farm credit dis-
tricts. Whenever, as determined by the Farm Credit Administra-
tion, the sum of the capital stock and subscriptions to the guaranty 
fund of the central bank held by persons other than the Governor 
of the Farm Credit Administration on behalf of the United States 
and surplus and reserve accounts of said bank shall not equal or 
exceed 66% per centum of the total capital stock, subscriptions to 
the guaranty fund and surplus and reserve accounts of the banks 
as of the date six months before the expiration of the term of office 
of any elected director whose term next expires, the successor to 
such elected director shall, if the number of elected directors then 
exceeds three, be appointed by the Governor of the Farm Credit 
Administration by and with the advice and consent of the Federal 
Farm Credit Board for a term of three years. In any such case where 
only one additional appointed director is needed in order to increase 
69 
S T A T . ] 
PUBLIC LAW 347-AUG. 11, 1955 
661 
the total number of appointed directors to four, and the terms of 
office of more than one elected director next expire, the Farm Credit 
Administration shall designate the one of such next expiring terms 
of office which shall be replaced by the additional appointed director. 
Any vacancy in the Board whether filled by appointment or by elec-
tion shall be filled for the unexpired term in the same manner in 
which the vacant office was filled. Each regional bank for coopera-
tives, each cooperative association which is a direct borrower from 
the central bank, each holder of one or more shares of class C stock 
in a regional bank for cooperatives which is eligible to vote under 
section 42 (a) (3), and each holder of one or more shares of stock 
in the central bank or any regional bank for cooperatives issued 
before the effective date of title I of the Farm Credit Act of 1955 
which is eligible to vote shall be eligible to vote for directors of the 
central bank and each such holder shall be entitled to one vote only 
without regard to the number of shares held in any one or more of 
said banks, and the vote of any such holder of stock in more than 
one bank shall be cast only with respect to elections in the area in 
which is located the main office of such holder. 
Elected direcjtors 
shall have been, for at least two years, residents of the area for 
which they are elected. No person shall be eligible for nomination, 
election, or appointment as a director if such person has Avithin one 
year next preceding the commencement of the term been a salaried 
officer or employee of the Farm Credit Administration or of any 
corporation operating urder its supervision. 
Any person who is a 
member of the Federal iVrm Credit Board or a district farm credit 
board when appointed or elected as director shall resign as a mem-
ber of the Federal Farm Credit Board or the district board before 
assuming his duties as director of the central bank. No person who 
becomes such director shall be eligible to continue to serve if he 
becomes a member of the Federal Farm Credit Board or any district 
farm credit board or an officer or employee of the Farm Credit Ad-
ministration or an officer or employee of any corporation operating 
under the supervision of the Farm Credit Administration." 
SEC. 105. Section 32 of the Farm Credit Act of 1933 is amended 
to read as follows: 
"SEC. 32. POWERS OF BOARD OF DIRECTORS OF CENTRAL BANK.—The 
Board of Directors of the Central Bank for Cooperatives shall elect 
a Chairman and a Vice Chairman from among its members. The 
powers of the Board of Directors shall be such powers as may be 
prescribed in the charter and bylaws with the approval of the Farm 
Credit Administration: Provided^ That said Board without limita-
tion of powers conferred by section 60 shall have power, subject to 
approval of the Farm Credit Administration, to appoint and fix 
the compensation of the chief executive officer and such other officers 
and employees, experts, and consultants as may be necessary for the 
efficient conduct of the bank's business: Provided further^ That the 
chief executive officer of the bank shall not be an officer or employee 
of the Farm Credit Administration." 
SEC. 106. Section 38 of the Farm Credit Act of 1933 is amended 
by adding at the end of said section the following new sentence: 
"After the effective date of title I of the Farm Credit Act of 1955 
any amendment in the terms of the charter issued to any bank for 
cooperatives and any regulation issued under authority of this section 
or otherwise affecting lending operations of any such bank shall be 
consistent with the principle that the central bank shall make loans 
only in cases where it is not practicable for the loan to be made by a 
regional bank." 
Vacancies. 
12 u s e 1134h. 
C h a i r m a n and 
Vice Chairman. 
12 u s e 1134J. 
Charter a m e n d -
ments, etc» 
662 
PUBLIC LAW 347-AUG. 
11, 1955 
[69 
S T A T 
12 u s e 
1134c, 
114 Id. 
12 u s e 
11341, 
114 Id. 
12 u s e 
1134j, 
1141d. 
12 u s e 114 If, 
12 u s e 1138e. 
12 use 1138f. 
12 u s e 636f. 
12 use 665. 
Prior loans, ap-
plicability of title, 
etc. 
Effective date. 
SEC. 107. Section 41 of the Farm Credit Act of 1938, as amended, 
is amended by adding a new paragraph as follows: 
"Notwithstanding any other provision of law, any officer or em-
ployee of the Farm Credit Administration or of any bank for coop-
eratives designated to act as custodian of collateral securing loans 
made by any such bank to any cooperative association eligible to bor-
row therefrom may, in accordance with regulations of the Farm Credit 
Administration, act at the same time as custodian of collateral secur-
ing loans made by any other lenders to aiiy cooperative association 
eligible to borrow from any such bank." 
SEC. 108. (a) Section 38 of the Farm Credit Act of 1933 is amended 
by striking the words "Chairman of the Board" in the last sentence 
of said section and substituting in lieu thereof the words "Board 
of Directors". 
(b) Section 34 of the Farm Credit Act of 1983, as amended, is 
amended by striking the words "Chairman of its Board of Directors" 
in the first paragraph of said section and substituting in lieu thereof 
the words "Farm Credit Administration". 
SEC. 109. Subsection (a) of section 8 of the Agricultural Marketing 
Act, as amended, is amended to read as follows: 
"(a) Loans to cooperative associations made by any bank for coop-
eratives shall bear such rates of interest as the board of directors 
of the bank shall from time to time determine with the approval of 
the Farm Credit Administration, but in no case shall the rate of 
interest exceed 6 per centum per annum on the unpaid principal of 
a loan." 
SEC. 110. (a) Section 65 of the Farm Credit Act of 1933 is amended 
by striking the word "regional" in the first sentence of said section. 
(b) Section 66 of the Farm Credit Act of 1933, as amended, is 
hereby repealed. 
(c) The second sentence of section 7 (a) of the Farm (^redit Act 
of 1958 is hereby repealed. 
(d) Section 6 of the Act approved January 23, 1932 (47 Stat. 14), 
is amended by adding immediately following the comma after the 
word "Act" where it first appears the following: "the Farm Credit 
Act of 1933". 
SEC. 111. This title shall be applicable to loans made before its 
effective date from the date on which they may be changed by agree-
ment to conform hereto, otherwise, except as provided in this title, 
such loans shall be treated as though this title had not been enacted. 
Any cooperative association owning capital stock or guaranty fund 
credits in any bank for cooperatives issued before the effective date 
of this title which is eligible to vote shall, as long as such eligibility 
continues, be entitled to vote to the same extent as a holder of class 
C stock which is eligible to vote; any cooperative association owning 
such stock or guaranty fund credits shall be entitled to have such 
stock or credits retired as though this title had not been enacted; and 
any such association may with the consent of the bank have such stock 
or credits, if it is found eligible to own class B or class C stock, con-
verted in w^iole or in part into class B or class C stock or equivalent 
guaranty fund credits: Provided, That any bank for cooperatives 
with the approval of the Farm Credit Administration may retire at 
any time capital stock or guaranty fund credits issued before the 
effective date of this title held by any cooperative association and 
may hold the proceeds of such retired stock or guaranty fund credits 
as security for any indebtedness of the association to the bank. 
SEC. 112. This title shall take effect on the first day of the month 
]iext following one hundred and twenty days after its enactment. 
69 S T A T . J 
PUBLIC LAW 347-AUG. 11, 1955 
663 
TITLE II—PRODUCTION CREDIT SYSTEM 
SEC. 201. Section 21 of the Farm Credit Act of 1933 is amended by 
12 use 113le. 
striking out of the fifth sentence the words "all stock shall share in 
dividend distributions without preference" and substituting therefor 
the words "Dividends may be paid on class A and class B stock without 
preference or on class A stock alone, as the board of directors of the 
association may determine". 
SEC. 202. Section 22 of the Farm Credit Act of 1933 is amended to 
^^ use luif. 
read as follows: 
"SEC. 22. (a) Each production credit association shall, at the end 
of each fiscal year, apply the amount of its earnings in excess of oper-
ating expenses (including provision for reasonable valuation reserves) 
during such fiscal year, first, to the restoration of the impairment, if 
any, of capital; and, second, to the establishment and maintenance of 
a surplus account, the minimum amount of which shall be prescribed 
by the production credit corporation. 
"(b) A production credit association may pay dividends of not to 
exceed 7 per centum per annum when such payments are approved by 
the production credit corporation of the district and are consistent 
with policies established under regulations issued by the Farm Credit 
Administration." 
SEC. 203. The amounts in the guaranty fund reserve and the reserve 
account for bad and doubtful debts of each production credit associa-
tion shall, as of the effective date of this title, be transferred to the 
surplus account of such association established pursuant to the provi-
sions of section 22 of the Farm Credit Act of 1933 as amended by 
section 202 of this title. 
SEC. 204. Section 23 of the Farm Credit Act of 1933 is amended to 
^^ use uaig. 
read as follows: 
"SEC. 23. Each production credit association shall, under such rules lomTfo'flrmerir'* 
and regulations as may be prescribed by the production credit cor-
poration of the district with the approval of the Farm Credit Admin-
istration, invest its funds and make loans to farmers for general agri-
cultural purposes. Such loans shall be made on such terms and con-
ditions, at such rates of interest, and with such security as may be 
prescribed by the corporation. 
No borrower shall be indebted to 
the association at any one time in an amount in excess of 15 per 
centum of the capital and surplus of the association unless the loan 
has the prior approval of the corporation, or in excess of 35 per 
centum of the capital and surplus of the association unless the loan 
also has the prior approval of the Farm Credit Administration. 
Borrowers shall be required to own, at the time the loan is made, class 
B stock of the association in an amount equal in fair book value (not 
to exceed par), as determined by the association, to $5 per $100 or 
fraction thereof of the amount of the loan. Such stock shall not be 
canceled or retired upon payment of the loan but may be transferred 
or exchanged as provided in section 21 of this Act." 
SEC. 205. The last sentence of section 63 of the Farm Credit Act 
^^ use lusc. 
of 1933 is hereby amended to read as follows: "The exemption pro-
vided herein shall not apply with respect to any production credit 
association or its property or income after the class A stock held in it 
by the production credit corporation has been retired, or with respect 
to the Central Bank for Cooperatives, or any production credit 
corporation or bank for cooperatives, or its property or income after 
the stock held in it by the United States has been retired." 
664 
PUBLIC LAW 347-,AUG. 11, 1955 
[69 STAT. 
TITLE 
III—FEDEEAL 
LAND 
BANK SYSTEM 
1 ? fiin' «?*«i:« 
SEC. 301. Sections 3, 7, and 8 of the Federal Farm Loan Act, as 
685, 659-664, 711- amended, are amended— 
723, 731-734. 
^^^ ^^ changing next to the last paragraph of section 3 to 
read as follows: "The Farm Credit Administration shall pre-
scribe a form for the statement of condition of national farm loan 
associations and land banks under its supervision, which shall 
be filled out by each such association or bank and transmitted to 
said administration as required by it."; 
(b) by changing the fiffti sentence of the fourth paragraph 
of section 7 to read as follows: "He shall make a report to the 
Farm Credit Administration as required by it upon forms to be 
provided for that purpose."; and 
(c) by deleting the last sentence of section 8. 
12 use 691-698. 
gj,^. gQg. The last paragraph of section 5 of the Federal Farm 
Loan Act, as amended, is repealed. 
12 use 751-756. 
g^c. 303. Scctiou 10 of the Federal Farm Loan Act, as amended, 
is amended by adding at the end thereof a new paragraph as follows: 
of^seffity^Vto"* 
"Notwithstanding any other provision of this Act to the contrary, 
subject to the approval of the Farm Credit Administration, the inves-
tigation and the written report or reports on the value of the security 
offered for a Federal land bank loan, which otherwise are required 
by this section to be made by land bank appraisers appointed under 
the authority of section 3 of this Act, may be made, in accordance 
with appraisal standards prescribed by the Farm Credit Adminis-
tration, by any person (including a person who is secretary-treasurer 
of a national farm loan association) designated so to do by the Federal 
land bank of the district; a Federal land bank is authorized to make 
a loan, if otherwise authorized, on the basis of such an investigation 
and report by a person so designated; and a loan so made shall be 
12 use 857. 
eligible as collateral for farm loan bonds under section 19 of this 
Act, if otherwise qualified thereunder: Provided, 
That, within one 
year, the land bank shall obtain a written report on the security for 
the loan by a land bank appraiser appointed under section 3 of this 
Act, in terms and form prescribed by the Farm Credit Administra-
tion, and such a loan shall be eligible as collateral for farm loan 
bonds thereafter only if such report by a land bank appraiser estab-
lishes that the security meets the standards prescribed by the Farm 
Credit Administration for a land bank loan, and in no event shall 
any such loan thereafter be carried as such collateral for bonds at 
more than 65 per centum of the normal value of the security as deter-
mined by such land bank appraiser. Except as otherwise specifically 
provided in this paragraph, all provisions of this Act relating to 
loans made through national farm loan associations shall, insofar as 
applicable, apply with respect to loans made on such investigations 
and written reports by such designated persons." 
12 use 771,772. 
SJC. 304. Section 12 of the Federal Farm Loan Act, as amended, 
is amended— 
(a) by changing paragraph "Fourth" to read as follows: "Such 
loans may be made for general agricultural purposes and other 
requirements of the owner of the land mortgaged, under rules 
and regulations of the Farm Credit Administration."; 
(b) by striking out the period at the end of the second sentence 
of paragraph "Fifth" and adding the following: "; and, con-
sistent with community standards, the appraisal may also reflect 
home advantages, and the availability to a typical operator of 
the property of earnings from other dependable sources to sup-
plement the normal earning power of the farm."; 
69 S T A T . ] 
PUBLIC LAW 3 4 7 - A U G . 11, 1955 
665 
(c) by striking out "the raising of livestock" wherever it ap-
pears in next to the last sentence of paragraph "Sixth" and 
substituting therefor "farming operations" and by striking out 
of such sentence "Land Bank Commissioner" and substituting 
therefor "Farm Credit Administration"; and 
(d) by striking out "$100,000" from paragraph "Seventh" and 
substituting therefor "$200,000" and by striking out of such sen-
tence "but loans to any one borrower shall not exceed $25,000 
unless approved by the Land Bank Commissioner," and sub-
stituting "but loans to any one borrower shall not exceed $100,000 
unless approved by the Farm Credit Administration,". 
SEC. 305. Paragraph "Nineteenth" of section 13 of the Federal Farm 
^^ use 781. 
Loan Act, as amended, is amended by adding at the end thereof a 
new sentence as follows: "Such a deferment may be permitted for 
other purposes for a period not exceeding five years under regulations 
prescribed by the Farm Credit Administration.". 
SEC. 306. (a) That part of section 23 of the Federal Farm Loan Act, 
^^ use 901.902. 
as amended, which precedes the last paragraph, is amended to read 
as follows: "Every Federal land bank shall semiannually carry to 
reserve account a sum not less than 50 per centum of its net earnings 
until said reserve account shall show a credit balance equal to the 
outstanding capital stock of said land bank. 
After said reserve is 
equal to the outstanding capital stock 10 per centum of the net earn-
ings shall be added thereto semiannually until said reserve account 
shall show a credit balance equal to 150 per centum of the outstanding 
capital stock of said land bank, and any land bank having a credit 
balance in said reserve account in excess of 150 per centum of its 
outstanding capital stock may withdraw such excess from said re-
serve account with the approval of the Farm Credit Administration. 
Whenever said reserve shall have been impaired it shall be fully 
restored before any dividends are paid. 
"After deducting the 50 per centum or the 10 per centum herein-
before directed to be deducted for credit to reserve account, any Federal 
land bank may declare a dividend or dividends to shareholders of the 
whole or any part of the balance of its net earnings, but only with the 
approval of the Farm Credit Administration. 
The reserves of land banks shall be invested in accordance with rules 
and regulations prescribed by the Farm Credit Administration." 
(b) The second sentence of section 24 of the Federal Farm Loan 
^^ ^^^ 9ii-9is. 
Act, as amended, is amended by striking out the period at the end 
thereof and adding the following: "until said reserve account shall 
show a credit balance equal to 50 per centum of the outstanding capital 
stock of said association, and any association having a credit balance 
in said reserve account in excess of 50 per centum of its outstanding 
capital stock may withdraw such excess from said reserve account w4th 
the approval of the Farm Credit Administration.". 
(c) The amendments made by (a) and (b) of this section shall 
Effective date, 
become effective on the next January 1, or July 1 whichever first 
succeeds enactment hereof. 
SEC. 307. Section 601 (a) of the Department of Agriculture Organic 
\l ^i}: J32; 
Act of 1944 is amended by inserting after "Federal land banks,", the 
second time it appears therein, "national farm loan associations,"; by 
striking out "joint-stock land banks," wherever it appears therein; 
and by striking out the period at the end thereof and inserting ", except 
that the amounts apportioned to national farm loan associations shall 
be assessed against and collected from the Federal land bank of the 
district which may in turn collect such amounts from the associations 
in a manner approved by the Farm Credit Administration.". 
PUBLIC DAW 348-,AUG. 11, 1955 
[69 
S T A T . 
TITLE IV—MISCELLANEOUS PROVISIONS 
12 use 640b. 
12 use 640d. 
12 use 636c. 
Separability. 
SEC. 401. (a) Section 5 (b) of the Farm Credit Act of 1937, as 
amended, is amended by changing the sixth sentence thereof to read 
as follo\N'S: "After the date of enactment of the Farm Credit Act of 
1955, no person shall be eligible for election or appointment to mem-
bership on said Board if such person has within one year next preced-
ing the commencement of the term been a salaried officer or employee 
of the Farm Credit Administration, or a salaried officer or employee 
of any corporation operating under the supervision of the Farm Credit 
Administration.". 
(b) Section 5 (d) of the Farm Credit Act of 1937, as amended, is 
amended— 
(1) by substituting "six months" for "three months" wherever 
it occurs in paragraph (2) thereof; and 
(2) by adding at the end thereof a new paragraph as follows: 
"(4) As directed by the Farm Credit Administration, the election 
of a director under section 5 (d) (2) by any group may be begun 
any time within six months before the expiration of the term of 
office to which the director is to succeed, subject to the required deter-
mination being made as of the date six months before the expiration 
of such term of office that a director so elected by such group is to 
serve in lieu of a district director (or third district director)." 
SEC. 402. Section 4 of the Farm Credit Act of 1953 is amended— 
(a) by inserting in the first proviso in subsection (a) "all 
persons so tied shall be considered designated as nominees" in 
lieu of "the procedure prescribed therein shall be followed again 
until the tie is broken"; 
(b) by inserting before the period at the end of the second 
sentence of subsection (b) ", except that one full term of six 
years shall be considered to include an additional four months 
if the particular term is one which was legally extended for an 
additional four m^dnths"; and 
(c) by adding the following additional sentence at the end 
of subsection (c) : "All terms of office which otherwise would 
expire on November 30 of any year following enactment of the 
Farm Credit Act of 1955 are extended four months to expire 
on the following March 31 so that the term of office of all suc-
cessors to the terms so extended shall begin with the first day of 
April.". 
SEC. 403. (a) If any provision of this Act, or the application 
thereof to any person or circumstance, is held invalid, the remainder 
of the Act, and the application of such provisions to other persons 
or circumstances, shall not be affected thereby. 
(b) The right to alter, amend, or repeal this Act is hereby expressly 
reserved. 
Approved August 11, 1955. 
August 11, 1955 
[8.2198] 
Public Law 348 
CHAPTER 786 
AN ACT 
To extend the period of restrictions on lands belonging to Indians of the Five 
Civilized Tribes in Oklahoma, and for other purposes. 
Be it enacted hy the Senate and House of Representatives 
of the 
TrTbVs* okia."^^*** United States of America in Congress assembled, That subject to 
tiikt."'* re8trie- ^^Q provisious of sectiou 2 of this Act, the period of restrictions 
against alienation, lease, mortgage, or other encumbrance of lands