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Mr. BUCHANAN. Is any report of the stewardship rendered to this committee; if not, to what committee?

Mr. HOFFMAN. Under the Reconstruction Finance Corporation act, I think the secretary renders his report to the Reconstruction Finance Corporation, who will no doubt include it in their report to Congress.

Mr. SANDLIN. That would go before the committee handling the appropriation bill for independent offices.

Mr. Jump. It is a Government corporation.
Mr. HOFFMAN. A Government corporation.

Mr. SANDLIN. Has Mr. Clark been transferred to the Reconstruction Finance Corporation?

Mr. HOFFMAN. Yes, sir.

Mr. BUCHANAN. What does the secretary do with the money he collects?

Mr. Jump. That money goes back into the corporation funds, does it not?

Mr. HOFFMAN. Heretofore it has been put in a special account. The unexpended balance that the crop-production loan office had this spring from the amount allocated to the secretary was turned back, in accordance with the provisions in the emergency relief and construction act of 1932, which provided for the creation of 12 regional agricultural corporations with a paid-up capital of not less than $3,000,000, to be subscribed by the Reconstruction Finance Corporation and paid for out of the unexpended balances allocated to the secretary. As collections have been made, the Reconstruction Finance Corporation have requested, from time to time, to return this money to be used for the above-mentioned purpose.

Mr. BUCHANAN. That is sort of a revolving fund. You stated that your field men in the collection service had been consolidated with the field men on the production loans authorized in the Reconstruction Finance Corporation act: Do you know how much money was allotted or turned over to the Secretary of Agriculture to make those production loans?

Mr. HOFFMAN. I believe there was first $50,000,000 turned over to him.

Mr. BUCHANAN. Well there was a great deal more than that later on, was there not?

Mr. HOFFMAN. I believe there were other allotments.


Mr. BUCHANAN. Do you know how much has been loaned?
Mr. HOFFMAN. $64,000,000 was loaned.
Mr. BUCHANAN. Do you know how much of that has been collected?
Mr. HOFFMAN. Up to November 30, $14,922,751, in cash.
Mr. BUCHANAN. Do you know how much is collateralized?

Mr. HOFFMAN. Not exactly; no, sir. I do not have the full detailed figures from each office.


Mr. BUCHANAN. To whom does the Secretary of Agriculture make report of his stewardship in administering those loans and collecting them?

Mr. HOFFMAN. I think he makes his report direct to the Reconstruction Finance Corporation.

Mr. BUCHANAN. And to whom does the Reconstruction Finance Corporation make report, if you know?

Mr. HOFFMAN. I think under the terms of the Reconstruction Finance Corporation act they are required, periodically, to make a report to Congress of their activities. Mr. Jump. Undoubtedly they have to make report to Congress. Mr. HOFFMAN. Yes.

Mr. BUCHANAN. I know they make report to Congress on the loan they make and file it with the Clerk of the House; but I do not know that there is any provision requiring them to report to Congress on the loans made by the Secretary of Agriculture.

Mr. JUMP. Undoubtedly they report to Congress everything they do. Certainly the original act must make provision for that.

Mr. BUCHANAN. What I want to get at is what committee of Congress, or subcommittee, either of the Appropriations Committee or any other committee, will review the expenditure or has the right to review the expenditure, collection, and the disposition of the funds. Do you know of any?

Mr. Jump. Of any committee in Congress?
Mr. BUCHANAN. Yes; or any subcommittee.

Mr. JUMP. I would have to know what the relationship to Congress of the Reconstruction Finance Corporation is. When the Clerk finds that section, I think it will throw some light on that subject. I am sure the Secretary, though, would be glad to give any information this committee wants.

Mr. BUCHANAN. I feel sure of that; but what I am driving at is whether or not this is the proper committee to hear an account of his stewardship of this fund, of the collections, the amount loaned, the amount of principal and interest collected, and the disposition of that principal and interest—whether it goes back into the Treasury, or whether it goes into a revolving fund of some sort, or what becomes of it. I want to keep track of it.

Mr. SANDLIN. They have to account. Do the Reconstruction Corporation officials and the Secretary of Agriculture handle this together?

Mr. HOFFMAN. No, sir. Section 2 allocated the amount directly to the Secretary of Agriculture.

Mr. Jump. He is the agent, then, of the corporation? Mr. HOFFMAN. Of the corporation. Mr. SANDLIN. Then in his disposition of these funds, the handling of them, does he have to report to the Reconstruction Finance Corporation?

Mr. Jump. Yes; he does. He gets this money from the Treasury of the United States on their order, in the form of one check, as I understand it, and then he acts as their agent and must report to them, of course.

Mr. BUCHANAN. Then, as I understand, the Secretary of Agriculture in making and collecting those crop production loans acts as an agent of the Reconstruction Finance Corporation?

Mr JUMP. I think he is a little more than just an ordinary agent. I heard some legal term used that I had never heard used before, in connection with the word “agent.” Did not the lawyers use some other word?

Mr. HOFFMAN. They did. The Attorney General rendered an opinion to the effect he was not loaning exactly as an agent, nor was he doing it in his individual capacity, but it was a sort of separate set-up under the corporation, where he handled the corporation's money for them as Secretary of Agriculture in name only and not as Secretary of Agriculture of the United States. He is acting as a statutory agent of the corporation.


Mr. BUCHANAN. Are you prepared to put in the record, Mr. Hoffman, an account of these loans and collections?

Mr. HOFFMAN. I have that here. It is public information and I am sure the Secretary would be very glad to have it put in the record-showing the amount of the loans, which total $64,204,503.06, and showing our collections, for instance, of one day, the collections so far this present month, the collections of last month, and showing the total amounts collected up to date, in cash, and also showing the percentage collected.

Mr. SANDLIN. That is since he has been connected with the Reconstruction Finance Corporation?

Mr. HOFFMAN. Yes, sir.
Mr. BUCHANAN. Does it show the amount collaterialized?

Mr. HOFFMAN. No, sir. We have not those figures up to date. We can supply those figures as of November 29, within the next day or so.

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$16, 559, 651.11 $46, 970.04 $93, 366. 16 $91, 263.03 $5,731, 083.85

4,053, 536. 27 17, 513. 87 39, 042. 64 18. 450. 60 1, 132, 822.35
13, 232, 633. 45 23, 209. 26 37, 799.90 46, 781. 67 4, 331, 863. 53

3, 906, 689, 36 15, 248.08 30, 061.47 37, 524. 60 1, 490, 765.76
23, 274, 697.00 56, 668.74 145, 300. 19 35, 799.68 1, 385, 872. 53
2, 208, 657. 87 19, 800.84 37, 751.82 10, 129. 41 644, 213. 80

968, 638.00 3, 674. 07 9,979.00 4, 842. 62 276, 129.78
64, 204, 503. 06 183, 084. 90 393, 301.18 244, 791. 61 14,992, 751. 60

183, 085.00 196, 651.00 122, 396.00 1 96, 727.00

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1 Average per day computed from July 1, 1932.

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Mr. BUCHANAN. You have a heading here "Farmers' seed loans, deposits.” What do you mean by “deposits?

Mr. HOFFMAN. Deposits in the Federal reserve branches throughout the country each day.

Mr. BUCHANAN. Then what becomes of that money thus collected and deposited ?

Mr. HOFFMAN. As to the feed loans it is immediately transferred from the Federal reserve banks, through the disbursing officer of the department, to the various appropriations from which payment of the original loan was made. It goes back to the appropriations.

Mr. JUMP. And in the case of the reconstruction fund, to what appropriation does it go?

Mr. HOFFMAN. It goes back to the Secretary of Agriculture's account.

Mr. BUCHANAN. You are talking about Reconstruction Finance Corporation loans now?

Mr. HOFFMAN. The first answer I gave referred to the farmers' seed loans.

Mr. BUCHANAN. But this refers Mr. HOFFMAN. That is a consolidated report of the two officestwo reports.

Mr. BUCHANAN. What becomes of the money collected and deposited by the Secretary of Agriculture as agent, under the Reconstruction Finance Corporation act?

Mr. Hoffman. It is deposited to the Secretary's credit in the
Treasury Department.

Mr. Buchanan. To the credit of the Secretary of Agriculture?
Mr. HOFFMAN. Yes, sir.
Mr. BUCHANAN. Is he authorized to check on it?
Mr. HOFFMAN. To pay expenses, yes, sir.
Mr. BUCHANAN. To do what?

Mr. HOFFMAN. To pay administrative expenses and the salaries of the employees engaged in the collection work.

Mr. Buchanan. Is he authorized to check on it for anything else? Mr. Hoffman. No, sir. We have no authority at this time to make loans; it is only the expenses we are permitted to pay. The law

itself limited loans to the crop of 1932 and that period was passed about the 1st of June last. Therefore, since about the 1st of June, there has been no money spent for any purpose except administrative expenses.

Mr. BUCHANAN. So the amount collected would be deposited in the Treasury to the credit of the Secretary of Agriculture in a separate account?

Mr. HOFFMAN. Yes, sir.

Mr. BUCHANAN. And can not be checked on for any purpose except to pay administrative expenses by the Secretary or the Reconstruction Finance Corporation, either?

Mr. HOFFMAN. I would not say as to them; because I believe on several occasions some of this fourteen or fifteen million dollars, at the request of the Reconstruction Finance Corporation, has been turned back to the Reconstruction Corporation,

Mr. BUCHANAN. According to that, then, this money is allocated to the Secretary of Agriculture for crop-production loans; he loans it, and the collections he makes are ultimately turned back to the Reconstruction Finance Corporation, or their agent, or order?

Mr. HOFFMAN. I think that is correct, sir.

Mr. Jump. And that would seem to be logical, because the money came from the corporation in the first place.

Mr. BUCHANAN. Yes; but it came from the corporation under a law of Congress, specifically to be used for crop-production loans.

Mr. JUMP. Yes.
Mr. BUCHANAN. And how could they use it for any other purpose?

Mr. JUMP. I do not know; but they will have to account to Congress.

Mr. BUCHANAN. Now, will they?

Mr. JUMP. I feel sure the clerk will still be able to find in that act that the corporation is required to account to Congress. I can not conceive it would be otherwise.

Mr. BUCHANAN. When you get your testimony, I wish you would put in an answer to this question: Is there any provision in the Reconstruction Finance Corporation act that requires them to make annual reports to Congress of their expenditures, or on their dealings with crop-production loans? I want to limit it to crop-production loans, showing a complete account of the allocation of this money to the Secretary of Agriculture by the Treasury, and the loaning of it by the Secretary of Agriculture, his collection of it, and the disposition of the money that is made when collected, and subject to whose check this money is that has been collected, after it has been deposited in the Treasury to the credit of a special account of the Secretary of Agriculture.

Mr. JUMP. We will look that up and insert it.


15 OF




JANUARY 22, 1932

Sec. 15. The corporation shall make and publish a quarterly report of its operations to the Congress stating the aggregate loans made to each of the classes of borrowers provided for and the number of borrowers by States in each class

. The statement shall show the assets and liabilities of the corporation, and the first report shall be made on April 1, 1932, and quarterly thereafter. It shall also show the names and compensation of all persons employed by the corporation whose compensation exceeds $400 a month.

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