may prescribe; except that any fund which receives a loan under this paragraph shall be required to assign to the corporation, to the extent of such loan, all amounts which may be received by such fund as dividends or otherwise from the liquidation of any such bank or depository in which deposits of such public moneys were made. As used in this paragraph, the term "State" includes the several States and Alaska, Hawaii, and Puerto Rico.

SEC. 5a. The corporation is authorized and empowered to accept drafts and bills of exchange drawn upon it which grow out of transactions involving the exportation of agricultural or other products actually sold or transported for sale subsequent to the enactment hereof and in process of shipment to buyers in foreign countries: Provided, That the corporation shall not make any such acceptances growing out of transactions involving the sale or shipment of armaments, munitions, or other war materials, or the sale or shipment into countries which are at war of any merchandise or commodities except food and supplies for the actual use of noncombatants. No bill of exchange or draft shall be eligible for acceptance if such bill shall have at time of acceptance a maturity of more than twelve months. All drafts and bills of exchange accepted under this section shall be in terms payable in the United States, in currency of the United States, and in addition to the draft or bill of exchange shall at all times be fully secured by American securities deposited as collateral or shall be guaranteed by a bank or trust company of undoubted solvency organized under the laws of the United States or any State, Territory, or insular possession thereof: Provided, That such securities shall not include goods stored or in process of shipment in foreign countries or the obligation of any foreign government, corporation, firm, or person.

SEC. 5b. Notwithstanding any other provision of law

(1) The maturity of drafts or bills of exchange which may be accepted by the Corporation under section 5a of this Act, and the period for which the Corporation may make loans or advances under sections 201 (c) and 201 (d) of the Emergency Relief and Construction Act of 1932, as amended, and under section 5 of this Act, may be five years, or any shorter period, from February 1, 1935: Provided, That in respect of loans or advances under such section 5 to railroads, railways, and receivers or trustees thereof, the Corporation may require as a condition of making any such loan or advance for a period longer than three years that such arrangements be made for the reduction or amortization of the indebtedness of the railroad or railway, either in whole or in part, as may be approved by the Corporation after the prior approval of the Interstate Commerce Commission.

(2) The Corporation may at any time, or from time to time, extend, or consent to the extension of, the time of payment of any loan or advance made by it, through renewal, substitution of new obligations, or otherwise, but the time for such payment shall not be extended beyond five years from February 1, 1935: Provided, That the time of payment of loans or advances to railroads, railways, and receivers or trustees thereof, shall not be so extended except with the prior approval of the Interstate Commerce Commission, and, in the case of a loan to a railroad or railway, with the prior certification of the Interstate Commerce Commission that the railroad or railway is not in need of financial reorganization in the public interest. (3) In connection with the reorganization under section 77 of the Federal Bankruptcy Act, approved July 1, 1898, as amended, or with receivership proceedings in a court or courts, of any railroad or railway indebted to the Corporation, or of any railroad or railway the receivers or trustees of which are indebted to the Corporation, the Corporation may, with the prior approval of the Interstate Commerce Commission, adjust or compromise its claim against such railroad or railway, or any such receiver or trustee, by accepting, in connection with any such reorganization or receivership proceedings and in exchange for securities or any part thereof then held, new securities which may have such terms as to interest, maturity, and otherwise as may be approved by the Corporation, or part cash and part new securities so approved: Provided, That any such adjustment or compromise shall not be made on less favorable terms than those provided in the reorganization of the railroad or railway for holders of claims of the same class and rank as the claim of the Corporation.

SEC. 5c. To assist in the reestablishment of a normal mortgage market, the Reconstruction Finance Corporation may, with the approval of the President, subscribe for or make loans upon the nonassessable stock of any class of any national mortgage association organized under Title III of the National Housing Act and of any mortgage loan company, trust company, savings and loan association, or other similar financial institution, now or hereafter incorporated under the laws of the United States, or of any State, or of the District of Columbia, the principal business of which institutio is that of making loans upon mortgages, deeds of

trust, or other instruments conveying, or constituting a lien upon, real estate or any interest therein. In any case in which, under the laws of its incorporation, such financial institution is not permitted to issue nonassessable stock, the Reconstruction Finance Corporation is authorized, for the purposes of this section, to purchase the legally issued capital notes or debentures of such financial institutions. The total face amount of loans outstanding, nonassessable stock subscribed for, and capital notes and debentures purchased and held by the Reconstruction Finance Corporation, under this section, shall not exceed at any one time $100,000,000. Notwithstanding any other provision of law, the Reconstruction Finance Corporation may, under such rules and regulations as it may prescribe (which regulations shall include at least sixty days' notice of any proposed sale to the issuer or maker), sell, at public or private sale, the whole or any part of the stock, capital notes, or debentures acquired by the Corporation pursuant to this section, and the preferred stock, capital notes, or debentures acquired pursuant to any other provision of law. The amount of notes, bonds, debentures, and other such obligations which the Reconstruction Finance Corporation is authorized and empowered to issue and to have outstanding at any one time under existing law is hereby increased by an amount sufficient to carry out the provisions of this section.

SEC. 5d. For the purpose of maintaining and promoting the economic stability of the country or encouraging the employment of labor the Corporation is authorized and empowered, under such terms, conditions, and restrictions as the Corporation may determine, to make loans to, or contracts with, States, municipalities, and political subdivisions of States, with public agencies and instrumentalities of one or more States, municipalities, and political subdivisions of States, and with public corporations, boards, and commissions, to aid in financing projects authorized under Federal, State, or municipal law, such loans or contracts to be made through the purchase of their securities, or otherwise, and for such purpose the Corporation is authorized to bid for such securities. The Corporation is further authorized and empowered to purchase the securities and obligations of, and to make loans to, any business enterprise when capital or credit, at prevailing rates for the character of loan applied for, is not otherwise available: Provided, That all such purchases of securities and obligations and all such loans shall be, in the opinion of the board of directors, of such sound value, or so secured, as reasonably to assure retirement or repayment; may be made or effected either directly or in cooperation with banks or other lending institutions through agreements to participate or by the purchase of participations, or otherwise; shall be made only when, in the opinion of the board of directors, the business enterprise is solvent; and shall be made under such terms, conditions, and restrictions as the corporation may determine: Provided further, That in carrying out the provisions of this section, the Corporation may purchase securities and obligations, and may make loans, with such maturities as the Corporation may determine, notwithstanding any other provision of law.

The powers granted to the Corporation by this section shall terminate on June 30, 1939, or on such earlier date as the President shall determine; but no provision of law terminating any of the functions of the Corporation shall be construed (1) to prohibit disbursement of funds on purchases of securities and obligations, on loans, or on commitments or agreements to make such purchases or loans, made under this section prior to the close of business on June 30, 1939, or such earlier date, or (2) to affect the validity or performance of any agreement to participate in any purchase or loan authorized by this section.

Nothing in this section shall be construed to authorize the Corporation (1) to purchase, or to make any commitment or agreement to purchase, any securities or obligations of any railroad engaged in interstate commerce the obligations of which may be purchased or guraranteed by the Corporation under section 5 of this Act only with the approval of the Interstate Commerce Commission, or (2) to make any loan, or any commitment or agreement to make a loan, to any such railroad or to any receiver or trustee thereof.

SEC. 5e. (a) The Corporation is authorized and empowered to make ivans upon or purchase the assets, or any portion thereof, of any bank, savings bank, or trust company, which has been closed on or after December 31, 1929, and prior to January 1, 1934, and the affairs of which have not been fully liquidated or wound , upon such terms and conditions as the Corporation may by regulations prescribe. If in connection with the reorganization, stabilization, or liquidation of any such bank, assets have been trusteed or are otherwise held for the benefit of depositors or depositors and others, the authority, subject to regulations, as provided in the preceding sentence shall be extended for the purpose of authorizing the Corporation to purchase or make loans on such assets, or any portion

thereof held for the benefit of such depositors or depositors and others. This authority shall also extend to any such institution that has reopened without payment of deposits in full. In making any purchase of or loan on the assets of any closed bank, the Corporation shall appraise such assets in anticipation of an orderly liquidation over a period of years, rather than on the basis of forced selling values in a period of business depression. This authority shall also extend to assets of the character made eligible by this section as security for loans without regard to whether the Corporation has heretofore made loans thereon.

(b) The Corporation shall purchase at par value such debentures or other obligations of the Federal Deposit Insurance Corporation as are authorized to be issued under subsection (o) of section 12B of the Federal Reserve Act, as amended, upon request of the board of directors of the Federal Deposit Insurance Corporation, whenever in the judgment of said board additional funds are required for insurance purposes: Provided, That the Corporation shall not purchase or hold at any time said debentures or other obligations in excess of $250,000,000 par value: Provided further, That the proceeds derived from the purchase by the Corporation of any such debentures or other such obligations shall be used by the Federal Deposit Insurance Corporation solely in carrying out its functions with respect to such insurance.

(c) The amount of notes, bonds, debentures, and other such obligations which the Corporation is authorized and empowered to issue and to have outstanding at any one time under existing law is hereby increased by $250,000,000.

"SEC. 5f. To provide for the public safety, to preserve transportation facilities, or to encourage the employment of labor, the Corporation, notwithstanding any other provision of law, may, with the approval of the Interstate Commerce Commission and on such terms, conditions, and restrictions as the Corporation may determine (1) make loans to railroads engaged in interstate commerce, or to receivers or trustees thereof, to aid in financing the acquisition of rail, and shop appliances, rolling stock, and other equipment, (2) purchase the obligations of such railroads, or of receivers or trustees thereof (including equipment trust certificates and obligations guaranteed by any such railroad, receiver, or trustee), or guarantee the payment of the principal of, and/or interest on, such obligations, to aid in financing any such acquisition, or (3) make loans to such railroads not in receivership or trusteeship, to aid in the financing of track and equipment maintenance and replacements: Provided, That in the case of each loan made under clause (3) the railroad shall agree that the proceeds of the loan shall be used for the employment of employees who have been furloughed or separated from employment or given partial employment and for the purchase of, or in reimbursement of the purchase of, materials to be used for the track and equipment maintenance and replacements in connection with which such employees will be employed, provided further that the railroad shall agree that the employment herein provided for shall be at the wage rates and in accordance with the working conditions covered by agreements between the employees and the carriers prevailing at the time the loan is disbursed by the railroad. Any such railroad, or receiver or trustee thereof, may become obligated in such form as shall be prescribed by the Corporation, and may otherwise comply with the requirements of the Corporation, with respect to the deposit or assignment of security hereunder, without the authorization or approval of any authority, State or Federal, and without compliance with any requirement, State or Federal, as to notification,, other than such as may be imposed by the Interstate Commerce Commission and the Corporation under the provisions of this section. Nothing in section 77 of the Bankruptcy Act approved July 1, 1898, as amended, shall affect in any manner (1) the title of any owner, whether as trustee or otherwise, to any property, leased or conditionally sold to a railroad, or to a receiver or trustee thereof, which the Corporation has aided in financing under this Act, (2) the right of any such owner to take possession of such property in compliance with the provisions of any lease or conditional sales contract, (3) the title of any owner of a collateral note evidencing a loan heretofore or hereafter made by the Corporation to a railroad, or to a receiver or trustee thereof, or (4) the right of the owner of any such note to acquire title to the collateral securing such note in compliance with the terms of the pledge of such collateral.

75TH CONGRESS 3d Session

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HOUSE OF REPRESENTATIVES S

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REPORT No. 2352

TERM OF DISTRICT COURT AT NEWPORT NEWS, VA.

MAY 12, 1938.-Committed to the Committee of the Whole House on the state of the Union and ordered to be printed

Mr. SATTERFIELD, from the Committee on the Judiciary, submitted the following

REPORT

[To accompany H. R. 8794]

The Committee on the Judiciary, to whom was referred the bill (H. R. 8794) to provide for the terms of the district court at Newport News, Va., having had the same under consideration, report it back without amendment and recommend that the bill do pass.

The purpose of the bill is to provide for terms of the District Court of the United States for the Eastern District of Virginia to be held at Newport News, Va., on the first Monday in February and the second Monday in July, the clerk of the court for the eastern district of Virginia to maintain an office in charge of a deputy at Newport News, which shall be kept open at all times for the transaction of the business of the court.

The bill has the favorable recommendation of the Attorney General and of the Bureau of the Budget as will appear from the letter below. While the letter of the Attorney General refers to a bill, H. R. 8402, the bill H. R. 8794 is a shorter form providing for terms of the court without reciting the existing law which is section 111 of the Judicial Code. H. R. 8402 recited the existing law and added the words "and at Newport News on the H. R. 8794 accomplishes

the same purpose in shorter form and prescribes the times at which the court is to be held.

The proposal for terms of the court has the strong endorsement of Judge Way, the resident district judge at Norfolk, and the United States attorney for the eastern district of Virginia.

Newport News is situated on the southern tip of the peninsula between the York and James Rivers. The counties of Elizabeth City, Warwick, York, and James City are located on this peninsula and the counties of Gloucester and Mathews are located on the peninsula immediately north of the York River. Cases originating in this local

ity are now heard at Norfolk, but would properly be heard in Newport News if terms of the court are provided for that city.

Newport News is separated from Norfolk by Hampton Roads and the James River. The transportation facilities between the two cities are such that frequent delays are encountered by persons from the peninsula to Norfolk. Difficulty is experienced in obtaining jurors from this section due to the inconvenience and expense incident upon their attendance upon the court at Norfolk.

In a letter from the United States attorney for the eastern district of Virginia to the patron of the bill, he stated that he was of the opinion that occasional sessions of the district court in Newport News would result in substantial savings of expense and considerable convenience to the interested parties.

In another letter from the resident district judge to the patron of the bill, it was stated that it would result in great convenience and very substantial savings of expense to litigants, jurors, witnesses, and counsel to have sessions of the court held in Newport News where petit juries from the peninsula could be drawn to hear cases pertaining to that section and that it would also be possible by court order to enlarge such division of court so as to include additional counties from the peninsula.

The district judge also said that the amount of litigation due to commercial activities in and about Newport News and the Government activities in that section are steadily increasing and that he had already assured members of the bar from that section that he was always willing to cooperate with them in holding a session of the court at Newport News for the convenience of litigants, citizens, and attorneys in that section.

In a letter to the Assistant to the Attorney General, the judge advised that the establishment of a court at Newport News would be a very substantial aid to the administration of justice in the eastern. district of Virginia and that the expense of the additional court would in no true sense be out of proportion to the importance of business arising in the peninsula section.

(The letter of the Attorney General follows:)

Hon. HATTON W. SUMNERS,

Chairman, Committee on the Judiciary,

House of Representatives.

MAY 2, 1938.

MY DEAR MR. CHAIRMAN: I have your letter of December 1 requesting my views relative to the bill (H. R. 8402) to provide for terms of court at Newport News, Va.

The State of Virginia is divided into two judicial districts-eastern and western. There are two judges in the eastern district. Existing law provides that terms of the United States District Court for the Eastern District shall be held at Richmond, Norfolk, and Alexandria (U. S. C., title 28, sec. 192). The bill under consideration proposes to authorize terms of court to be held at Newport News. Newport News is situated in the county of Elizabeth City on the southern tip of the peninsula between the York and James Rivers. The counties of Elizabeth City, Warwick, York, James City, Gloucester, and Mathews are located on this peninsula. Cases originating there are now heard at Norfolk but would probably be heard at Newport News in the event terms of court are provided for that city. Newport News is separated from Norfolk by Hampton Roads and the James River. I am informed that the transportation facilities between the two cities are such that frequent delays are encountered by persons traveling from the peninsula to Norfolk. In fact difficulty has been experienced in obtaining jurors from the peninsular section due to the inconvenience and expense incident to their attendance upon the court at Norfolk.