of 3 per cent. It would be supposed, that with this demand for debentures of the intermediate credit banks, that a much greater loan volume would be obtained. The outstanding loans of the Federal land banks and the joint-stock land banks are approximately $1,774,000,000. It will be seen that in comparison the intermediate credit banks are not being actively operated. Many remedies have been offered for this condition, but the committee feels that the two helpful proposals which will do more to expand the loan volume and increase the usefulness of the intermediate credit banks without impairing the fundamental purpose of the law are those embraced in S. 4287. The amendments will permit loans direct to eligible banks on the security already defined by the act. This should stimulate and increase the direct loans of the intermediate credit banks. The latter part of S. 4287 will make possible loans for shorter periods than six months and will make available intermediate credit money to those cooperatives that may want to use the loans for a period of three or four months, or other periods less than six months. The 6-month limitation prevents the use of intermediate credit bank facilities by certain processors and also feeders of livestock, because they can not bind themselves to retain the money borrowed for a period longer than six months. The committee believes that these two amendments will make this system more elastic and will increase its service to agricultural producers. The enactment of S. 4287 is recommended by the Secretary of the Treasury in his letter of approval to the chairman of this committee under date of May 10, 1930, which reads as follows, and is made a part of this report: TREASURY DEPARTMENT, DEAR MR. CHAIRMAN: Receipt is acknowledged of your letter of April 26, in which you ask for a report upon Senate bill 4287, introduced by Mr. Steiwer on April 21 (calendar day, April 25), 1930, entitled "A bill to amend section 202 of Title II of the Federal farm loan act by providing for loans by Federal intermediate credit banks to financing institutions on bills payable and by eliminating the requirement that loans, advances, or discounts shall have a minimum maturity of six months." The first section of bill S. 4287 would amend section 202 (c) of Title II of the Federal farm loan act so as to permit Federal intermediate credit banks, in addition to discounting certain classes of paper of financing institutions mentioned in the act, to make loans or advances direct to such institutions on the security of the same classes of paper. It is the view of the Federal Farm Loan Board that such an amendment would simplify and facilitate the business transactions of the Federal intermediate credit banks with eligible financing institutions, without in any respect departing from the fundamental purpose of the law, as it would permit the Federal intermediate credit banks to accept as security for the bills payable of such institutions the same paper that may now be discounted or purchased. As to the second section of bill S. 4287, you will recall that in my letter to you of February 25, 1930, I made the following statement: "In the course of orderly marketing, cooperative marketing associations usually require commodity credit for shorter periods than six months, as well as for periods extending beyond six months, and many of them feel that they should be in a position to utilize the facilities of the intermediate credit banks for both their short time and long time requirements. Other agencies-country banks, agricultural credit corporations, and livestock loan companies-eligible to do business with the Federal intermediate credit banks also find it desirable at times to discount agricultural paper which has a maturity at the time of discount of less than six months. In the circumstances, the removal of the present limitation would, it is believed, make it possible for the banks to serve the needs of market 4 ing and production credit more satisfactorily and adequately without departing from or impairing the fundamental purposes of the system." It is observed that the amendment proposed by section 2 of bill S. 4287 would accomplish the purpose thus recommended in my letter of February 25, 1930. In the circumstances, it is the opinion of this department that the legislation proposed in bill S. 4287 would be desirable. Very truly yours, SENATE 71ST CONGRESS 2d Session } { REPORT No. 818 AMENDING ACT PERMITTING TAXATION OF LANDS OF HOMESTEAD AND DESERT-LAND ENTRYMEN UNDER THE RECLAMATION ACT MAY 29 (calendar day, JUNE 4), 1930.—Ordered to be printed Mr. WALSH of Montana, from the Committee on Public Lands and Surveys, submitted the following REPORT [To accompany S. 4318] That the Committee on Public Lands and Surveys, to whom was referred the bill (S. 4318) to amend the act entitled "An act to permit taxation of lands of homestead and desert-land entrymen under the reclamation Act," approved April 21, 1928, having considered the same, report favorably thereon with the recommendation that the bill do pass with the following amendments: On page 3, line 2, beginning with the word "under" strike out all down to and including the word "amended" before the period in line 3, and insert in lieu thereof the following: "of such entryman on ceded Indian lands or of an assignee under the provisions of the act of June 23, 1910, as amended, or of any such entries in a Federal reclamation project constructed under said act of June 17, 1902, as supplemented or amended". On page 3, line 4, beginning with the word "If", strike out all down to and including the word "lien", before the period in line 12, and insert in lieu thereof the following: If the lands of any such entryman shall at any time revert to the United States for any reason whatever, all such liens or tax titles resulting from assessments levied after the date of this amendatory act upon such lands in favor of the State or political subdivision thereof wherein the lands are located, shall be and shall be held to have been, thereupon extinguished; and the levying of any such assessment by such State or political subdivision shall be deemed to be an agreement on its part, in the event of such reversion, to execute and record a formal release of such lien or tax title. The above amendments were recommended by the Secretary of the Interior in his favorable letter of May 24, 1930. The purpose of the bill is to extend the operation of the act of April 21, 1928, so as to include ceded lands within an Indian reservation irrigation project as well as those within a project prosecuted under the act of 1902, generally known as the reclamation act. The injustice of allowing such lands to escape the payment of taxes necessary to the support of schools, the construction and maintenance of public roads, and to meet the other expenses of local government is too obvious to require argument. The bill is fully justified by the conditions which induced Congress to enact the law it seeks to amend. The Secretary of the Interior has indicated that he has no objection to the bill in its amended form, as set forth in his letter of May 24, 1930, which also sets forth facts concerning the proposed legislation, as follows: Hon. GERALD P. NYE, DEPARTMENT OF THE INTERIOR, Chairman Committee on Public Lands and Surveys, United States Senate. MY DEAR MR. CHAIRMAN: With further reference to your request of May 14 for a report on S. 4318, which would amend the act permitting taxation of lands of homestead and desert-land entrymen under the reclamation act, there is transmitted herewith a memorandum from the Commissioner of Reclamation, to which attention is invited. After a review of the proposed measure, I have no objection to offer to its passage if amended as recommended by Commissioner Mead. Very truly yours, RAY LYMAN WILBUR, Secretary. DEPARTMENT OF THE INTERIOR, Memorandum for the Secretary. There has been received by reference from the department letter dated May 14, 1930, from Hon. Gerald P. Nye, chairman of the Senate Committee on Public Lands and Surveys, inclosing a copy of S. 4318 for your report thereon. The bill proposes to amend the act of April 21, 1928 (45 Stat. 439), so as to make it applicable to ceded lands of entrymen under Indian irrigation projects, as well as to lands under the act of June 17, 1902 (32 Stat. 388). A new section is also added providing for the termination of the State tax liens if the lands of any such entryman should at any time revert to the United States. The new section is doubtful, both from the standpoint of legality and policy. Of legality, because the courts may not uphold the attaching by Congress of conditions to its consent to the taxation of Government land; and of policy, because tax titles, always weak, will be rendered of still less value by such a condition, operating, if valid, with a potentiality of upsetting titles over an indefinite period. From the standpoint of the United States, however, these objections are not material. It is believed that the last sentence of section 3 should be amended so as to read as follows: "The holder of such tax deed or tax title resulting from such tax shall be entitled to all the rights and privileges in the land of an assignee of such entryman on ceded Indian lands or of an assignee under the provisions of the act of June 23, 1910, as amended, or of any such entries in a Federal reclamation project constructed under said act of June 17, 1902, as supplemented or amended." The act of June 23, 1910, is not applicable to entries on ceded Indian lands, hence the foregoing change. The theory of section 4 of the bill is that the State officials by levying assessments upon Government land under the permission given by the bill, impliedly consent to the condition attached by Congress as stated in section 4. Such an implication can arise only as to State tax levies made after the date of the approval of the amendatory act, and tax levies made between April 21, 1928, the date of the original act, and the date of the approval of the amendatory act, would not be subject to such an implication. To make this clear, and to make the defeasance condition applicable to tax titles as well as to tax liens, it is suggested that section 4 be amended so as to read as follows: "SEC. 4. If the lands of any such entryman shall at any time revert to the United States for any reason whatever, all such liens or tax titles resulting from assessments levied after the date of this amendatory act upon such lands in favor of the State or political subdivision thereof wherein the lands are located, shall be and shall be held to have been, thereupon extinguished; and the levying of any such assessment by such State or political subdivision shall be deemed to be an agreement on its part, in the event of such reversion, to execute and record a formal release of such lien or tax title." With the changes above set out, this bureau has no objections to the enactment of the bill. ELWOOD MEAD, Commissioner. |