Executive Order 7143—Prescribing Rules and Regulations Governing the Making of Loans by the Resettlement Administration Under the Emergency Relief Appropriation Act of 1935

REGULATION NO. 5

By virtue of and pursuant to the authority vested in me by the Emergency Relief Appropriation Act of 1935, approved April 8, 1935 (Public Res. 11, 74th Cong.), I hereby prescribe the following rules and regulations governing the making of loans by the Resettlement Administration:

Sec. 1. Loans may be made by the Resettlement Administration (a) for the purpose of financing, in whole or in part, the purchase of farm lands and necessary equipment by farmers, farm tenants, croppers, or farm laborers, and (b) for such other purposes as may be necessary in the administration of approved projects involving rural rehabilitation or relief in stricken agricultural areas.

Sec. 2. Loans for the purposes mentioned in section 1 (b) hereof may be made by the Resettlement Administration either to individuals or to such bona fide agencies or cooperative associations as the Administrator shall approve: Provided, however, That such loans shall be made to such agencies or associations only upon condition (a) that they impose no inequitable restrictions upon membership or participation therein, and (b) that they be so conducted under the supervision of the Resettlement Administration as to protect adequately the interests of the members or participants therein.

Sec. 3. Interest shall be charged on all loans made by the Resettlement Administration at rates to be fixed by the Administrator, which rates shall not be greater than 5 percent or less than 3 percent per annum, and need not be uniform (a) throughout the United States or (b) on loans of different classes. Where circumstances so require, the Administrator may reduce the rate at which unaccrued interest shall be payable on outstanding loans, but in no case to a rate less than 3 percent per annum.

Sec. 4. All loans shall be for such a period, not to exceed 40 years, as the Administrator shall prescribe. The period for any loan or class of loans shall be fixed by the Administrator upon the basis of (a) the use to which the proceeds thereof are to be put, (b) the financial resources and earning capacity of the borrower, and (c), in the case of loans to finance the purchase of specific property, the probable rate of depreciation, the estimated life thereof, and the amount of the loan as compared with the total purchase price.

Sec. 5. Unless otherwise authorized by the President, all loans for a period of 2 years or more shall provide for repayment in equal annual installments, which may include interest in the discretion of the Administrator, except that when the loan is for a period of 5 years or more, and in the opinion of the Administrator the financial condition of the borrower so justifies, there need be no requirement that any payment be made on the principal during the first 3 years after the loan is made.

Sec. 6. Upon default in the repayment of any loan or payment of interest, the Resettlement Administration may (a) enforce payment by realizing upon the security and by legal proceedings, (b) extend the time of payment where the circumstances so justify, or (c) refinance such loan upon terms and conditions not inconsistent with the provisions of this regulation.

Sec. 7. In the case of any person who has entered into a contract for a loan from any State rural rehabilitation corporation operating, in whole or in part, with funds directly or indirectly granted by the United States, and who is unable to receive the full amount of the loan from the corporation, the Resettlement Administration, upon receiving an assignment of such contract from the corporation, may complete such loan according to its terms, and enforce such contract to the extent of the interest of the Resettlement Administration therein.

FRANKLIN D. ROOSEVELT

The White House,
August 19, 1935.