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Summa Theologiae/Second Part of the Second Part/Question 78

Treatise On The Cardinal Virtues
(E) BY SINS COMMITTED IN LOANS (Q[78])

Question. 78 - OF THE SIN OF USURY (FOUR ARTICLES)
We must now consider the sin of usury, which is committed in loans: and under this head there are four points of inquiry:

(1) Whether it is a sin to take money as a price for money lent, which is to receive usury?

(2) Whether it is lawful to lend money for any other kind of consideration, by way of payment for the loan?

(3) Whether a man is bound to restore just gains derived from money taken in usury?

(4) Whether it is lawful to borrow money under a condition of usury?

Art. 1 - Whether it is a sin to take usury for money lent?
Objection 1: It would seem that it is not a sin to take usury for money lent. For no man sins through following the example of Christ. But Our Lord said of Himself (Lk. 19:23): "At My coming I might have exacted it," i.e. the money lent, "with usury." Therefore it is not a sin to take usury for lending money.

Objection 2: Further, according to Ps. 18:8, "The law of the Lord is unspotted," because, to wit, it forbids sin. Now usury of a kind is allowed in the Divine law, according to Dt. 23:19,20: "Thou shalt not fenerate to thy brother money, nor corn, nor any other thing, but to the stranger": nay more, it is even promised as a reward for the observance of the Law, according to Dt. 28:12: "Thou shalt fenerate* to many nations, and shalt not borrow of any one." [*'Faeneraberis'---'Thou shalt lend upon usury.' The Douay version has simply 'lend.' The objection lays stress on the word 'faeneraberis': hence the necessity of rendering it by 'fenerate.'] Therefore it is not a sin to take usury.

Objection 3: Further, in human affairs justice is determined by civil laws. Now civil law allows usury to be taken. Therefore it seems to be lawful.

Objection 4: Further, the counsels are not binding under sin. But, among other counsels we find (Lk. 6:35): "Lend, hoping for nothing thereby." Therefore it is not a sin to take usury.

Objection 5: Further, it does not seem to be in itself sinful to accept a price for doing what one is not bound to do. But one who has money is not bound in every case to lend it to his neighbor. Therefore it is lawful for him sometimes to accept a price for lending it.

Objection 6: Further, silver made into coins does not differ specifically from silver made into a vessel. But it is lawful to accept a price for the loan of a silver vessel. Therefore it is also lawful to accept a price for the loan of a silver coin. Therefore usury is not in itself a sin.

Objection 7: Further, anyone may lawfully accept a thing which its owner freely gives him. Now he who accepts the loan, freely gives the usury. Therefore he who lends may lawfully take the usury.

On the contrary, It is written (Ex. 22:25): "If thou lend money to any of thy people that is poor, that dwelleth with thee, thou shalt not be hard upon them as an extortioner, nor oppress them with usuries."

I answer that, To take usury for money lent is unjust in itself, because this is to sell what does not exist, and this evidently leads to inequality which is contrary to justice. In order to make this evident, we must observe that there are certain things the use of which consists in their consumption: thus we consume wine when we use it for drink and we consume wheat when we use it for food. Wherefore in such like things the use of the thing must not be reckoned apart from the thing itself, and whoever is granted the use of the thing, is granted the thing itself and for this reason, to lend things of this kin is to transfer the ownership. Accordingly if a man wanted to sell wine separately from the use of the wine, he would be selling the same thing twice, or he would be selling what does not exist, wherefore he would evidently commit a sin of injustice. In like manner he commits an injustice who lends wine or wheat, and asks for double payment, viz. one, the return of the thing in equal measure, the other, the price of the use, which is called usury.

On the other hand, there are things the use of which does not consist in their consumption: thus to use a house is to dwell in it, not to destroy it. Wherefore in such things both may be granted: for instance, one man may hand over to another the ownership of his house while reserving to himself the use of it for a time, or vice versa, he may grant the use of the house, while retaining the ownership. For this reason a man may lawfully make a charge for the use of his house, and, besides this, revendicate the house from the person to whom he has granted its use, as happens in renting and letting a house.

Now money, according to the Philosopher (Ethic. v, 5; Polit. i, 3) was invented chiefly for the purpose of exchange: and consequently the proper and principal use of money is its consumption or alienation whereby it is sunk in exchange. Hence it is by its very nature unlawful to take payment for the use of money lent, which payment is known as usury: and just as a man is bound to restore other ill-gotten goods, so is he bound to restore the money which he has taken in usury.

Reply to Objection 1: In this passage usury must be taken figuratively for the increase of spiritual goods which God exacts from us, for He wishes us ever to advance in the goods which we receive from Him: and this is for our own profit not for His.

Reply to Objection 2: The Jews were forbidden to take usury from their brethren, i.e. from other Jews. By this we are given to understand that to take usury from any man is evil simply, because we ought to treat every man as our neighbor and brother, especially in the state of the Gospel, whereto all are called. Hence it is said without any distinction in Ps. 14:5: "He that hath not put out his money to usury," and (Ezech. 18:8): "Who hath not taken usury [*Vulg.: 'If a man . . . hath not lent upon money, nor taken any increase . . . he is just.']." They were permitted, however, to take usury from foreigners, not as though it were lawful, but in order to avoid a greater evil, lest, to wit, through avarice to which they were prone according to Is. 56:11, they should take usury from the Jews who were worshippers of God.

Where we find it promised to them as a reward, "Thou shalt fenerate to many nations," etc., fenerating is to be taken in a broad sense for lending, as in Ecclus. 29:10, where we read: "Many have refused to fenerate, not out of wickedness," i.e. they would not lend. Accordingly the Jews are promised in reward an abundance of wealth, so that they would be able to lend to others.

Reply to Objection 3: Human laws leave certain things unpunished, on account of the condition of those who are imperfect, and who would be deprived of many advantages, if all sins were strictly forbidden and punishments appointed for them. Wherefore human law has permitted usury, not that it looks upon usury as harmonizing with justice, but lest the advantage of many should be hindered. Hence it is that in civil law [*Inst. II, iv, de Usufructu] it is stated that "those things according to natural reason and civil law which are consumed by being used, do not admit of usufruct," and that "the senate did not (nor could it) appoint a usufruct to such things, but established a quasi-usufruct," namely by permitting usury. Moreover the Philosopher, led by natural reason, says (Polit. i, 3) that "to make money by usury is exceedingly unnatural."

Reply to Objection 4: A man is not always bound to lend, and for this reason it is placed among the counsels. Yet it is a matter of precept not to seek profit by lending: although it may be called a matter of counsel in comparison with the maxims of the Pharisees, who deemed some kinds of usury to be lawful, just as love of one's enemies is a matter of counsel. Or again, He speaks here not of the hope of usurious gain, but of the hope which is put in man. For we ought not to lend or do any good deed through hope in man, but only through hope in God.

Reply to Objection 5: He that is not bound to lend, may accept repayment for what he has done, but he must not exact more. Now he is repaid according to equality of justice if he is repaid as much as he lent. Wherefore if he exacts more for the usufruct of a thing which has no other use but the consumption of its substance, he exacts a price of something non-existent: and so his exaction is unjust.

Reply to Objection 6: The principal use of a silver vessel is not its consumption, and so one may lawfully sell its use while retaining one's ownership of it. On the other hand the principal use of silver money is sinking it in exchange, so that it is not lawful to sell its use and at the same time expect the restitution of the amount lent. It must be observed, however, that the secondary use of silver vessels may be an exchange, and such use may not be lawfully sold. In like manner there may be some secondary use of silver money; for instance, a man might lend coins for show, or to be used as security.

Reply to Objection 7: He who gives usury does not give it voluntarily simply, but under a certain necessity, in so far as he needs to borrow money which the owner is unwilling to lend without usury.

Art. 2 - Whether it is lawful to ask for any other kind of consideration for money lent?
Objection 1: It would seem that one may ask for some other kind of consideration for money lent. For everyone may lawfully seek to indemnify himself. Now sometimes a man suffers loss through lending money. Therefore he may lawfully ask for or even exact something else besides the money lent.

Objection 2: Further, as stated in Ethic. v, 5, one is in duty bound by a point of honor, to repay anyone who has done us a favor. Now to lend money to one who is in straits is to do him a favor for which he should be grateful. Therefore the recipient of a loan, is bound by a natural debt to repay something. Now it does not seem unlawful to bind oneself to an obligation of the natural law. Therefore it is not unlawful, in lending money to anyone, to demand some sort of compensation as condition of the loan.

Objection 3: Further, just as there is real remuneration, so is there verbal remuneration, and remuneration by service, as a gloss says on Is. 33:15, "Blessed is he that shaketh his hands from all bribes [*Vulg.: 'Which of you shall dwell with everlasting burnings? . . . He that shaketh his hands from all bribes.']." Now it is lawful to accept service or praise from one to whom one has lent money. Therefore in like manner it is lawful to accept any other kind of remuneration.

Objection 4: Further, seemingly the relation of gift to gift is the same as of loan to loan. But it is lawful to accept money for money given. Therefore it is lawful to accept repayment by loan in return for a loan granted.

Objection 5: Further, the lender, by transferring his ownership of a sum of money removes the money further from himself than he who entrusts it to a merchant or craftsman. Now it is lawful to receive interest for money entrusted to a merchant or craftsman. Therefore it is also lawful to receive interest for money lent.

Objection 6: Further, a man may accept a pledge for money lent, the use of which pledge he might sell for a price: as when a man mortgages his land or the house wherein he dwells. Therefore it is lawful to receive interest for money lent.

Objection 7: Further, it sometimes happens that a man raises the price of his goods under guise of loan, or buys another's goods at a low figure; or raises his price through delay in being paid, and lowers his price that he may be paid the sooner. Now in all these cases there seems to be payment for a loan of money: nor does it appear to be manifestly illicit. Therefore it seems to be lawful to expect or exact some consideration for money lent.

On the contrary, Among other conditions requisite in a just man it is stated (Ezech. 18:17) that he "hath not taken usury and increase."

I answer that, According to the Philosopher (Ethic. iv, 1), a thing is reckoned as money "if its value can be measured by money." Consequently, just as it is a sin against justice, to take money, by tacit or express agreement, in return for lending money or anything else that is consumed by being used, so also is it a like sin, by tacit or express agreement to receive anything whose price can be measured by money. Yet there would be no sin in receiving something of the kind, not as exacting it, nor yet as though it were due on account of some agreement tacit or expressed, but as a gratuity: since, even before lending the money, one could accept a gratuity, nor is one in a worse condition through lending.

On the other hand it is lawful to exact compensation for a loan, in respect of such things as are not appreciated by a measure of money, for instance, benevolence, and love for the lender, and so forth.

Reply to Objection 1: A lender may without sin enter an agreement with the borrower for compensation for the loss he incurs of something he ought to have, for this is not to sell the use of money but to avoid a loss. It may also happen that the borrower avoids a greater loss than the lender incurs, wherefore the borrower may repay the lender with what he has gained. But the lender cannot enter an agreement for compensation, through the fact that he makes no profit out of his money: because he must not sell that which he has not yet and may be prevented in many ways from having.

Reply to Objection 2: Repayment for a favor may be made in two ways. In one way, as a debt of justice; and to such a debt a man may be bound by a fixed contract; and its amount is measured according to the favor received. Wherefore the borrower of money or any such thing the use of which is its consumption is not bound to repay more than he received in loan: and consequently it is against justice if he be obliged to pay back more. In another way a man's obligation to repayment for favor received is based on a debt of friendship, and the nature of this debt depends more on the feeling with which the favor was conferred than on the greatness of the favor itself. This debt does not carry with it a civil obligation, involving a kind of necessity that would exclude the spontaneous nature of such a repayment.

Reply to Objection 3: If a man were, in return for money lent, as though there had been an agreement tacit or expressed, to expect or exact repayment in the shape of some remuneration of service or words, it would be the same as if he expected or exacted some real remuneration, because both can be priced at a money value, as may be seen in the case of those who offer for hire the labor which they exercise by work or by tongue. If on the other hand the remuneration by service or words be given not as an obligation, but as a favor, which is not to be appreciated at a money value, it is lawful to take, exact, and expect it.

Reply to Objection 4: Money cannot be sold for a greater sum than the amount lent, which has to be paid back: nor should the loan be made with a demand or expectation of aught else but of a feeling of benevolence which cannot be priced at a pecuniary value, and which can be the basis of a spontaneous loan. Now the obligation to lend in return at some future time is repugnant to such a feeling, because again an obligation of this kind has its pecuniary value. Consequently it is lawful for the lender to borrow something else at the same time, but it is unlawful for him to bind the borrower to grant him a loan at some future time.

Reply to Objection 5: He who lends money transfers the ownership of the money to the borrower. Hence the borrower holds the money at his own risk and is bound to pay it all back: wherefore the lender must not exact more. On the other hand he that entrusts his money to a merchant or craftsman so as to form a kind of society, does not transfer the ownership of his money to them, for it remains his, so that at his risk the merchant speculates with it, or the craftsman uses it for his craft, and consequently he may lawfully demand as something belonging to him, part of the profits derived from his money.

Reply to Objection 6: If a man in return for money lent to him pledges something that can be valued at a price, the lender must allow for the use of that thing towards the repayment of the loan. Else if he wishes the gratuitous use of that thing in addition to repayment, it is the same as if he took money for lending, and that is usury, unless perhaps it were such a thing as friends are wont to lend to one another gratis, as in the case of the loan of a book.

Reply to Objection 7: If a man wish to sell his goods at a higher price than that which is just, so that he may wait for the buyer to pay, it is manifestly a case of usury: because this waiting for the payment of the price has the character of a loan, so that whatever he demands beyond the just price in consideration of this delay, is like a price for a loan, which pertains to usury. In like manner if a buyer wishes to buy goods at a lower price than what is just, for the reason that he pays for the goods before they can be delivered, it is a sin of usury; because again this anticipated payment of money has the character of a loan, the price of which is the rebate on the just price of the goods sold. On the other hand if a man wishes to allow a rebate on the just price in order that he may have his money sooner, he is not guilty of the sin of usury.

Art. 3 - Whether a man is bound to restore whatever profits he has made out of money gotten by usury?
Objection 1: It would seem that a man is bound to restore whatever profits he has made out of money gotten by usury. For the Apostle says (Rom. 11:16): "If the root be holy, so are the branches." Therefore likewise if the root be rotten so are the branches. But the root was infected with usury. Therefore whatever profit is made therefrom is infected with usury. Therefore he is bound to restore it.

Objection 2: Further, it is laid down (Extra, De Usuris, in the Decretal: 'Cum tu sicut asseris'): "Property accruing from usury must be sold, and the price repaid to the persons from whom the usury was extorted." Therefore, likewise, whatever else is acquired from usurious money must be restored.

Objection 3: Further, that which a man buys with the proceeds of usury is due to him by reason of the money he paid for it. Therefore he has no more right to the thing purchased than to the money he paid. But he was bound to restore the money gained through usury. Therefore he is also bound to restore what he acquired with it.

On the contrary, A man may lawfully hold what he has lawfully acquired. Now that which is acquired by the proceeds of usury is sometimes lawfully acquired. Therefore it may be lawfully retained.

I answer that, As stated above (A[1]), there are certain things whose use is their consumption, and which do not admit of usufruct, according to law (ibid., ad 3). Wherefore if such like things be extorted by means of usury, for instance money, wheat, wine and so forth, the lender is not bound to restore more than he received (since what is acquired by such things is the fruit not of the thing but of human industry), unless indeed the other party by losing some of his own goods be injured through the lender retaining them: for then he is bound to make good the loss.

On the other hand, there are certain things whose use is not their consumption: such things admit of usufruct, for instance house or land property and so forth. Wherefore if a man has by usury extorted from another his house or land, he is bound to restore not only the house or land but also the fruits accruing to him therefrom, since they are the fruits of things owned by another man and consequently are due to him.

Reply to Objection 1: The root has not only the character of matter, as money made by usury has; but has also somewhat the character of an active cause, in so far as it administers nourishment. Hence the comparison fails.

Reply to Objection 2: Further, Property acquired from usury does not belong to the person who paid usury, but to the person who bought it. Yet he that paid usury has a certain claim on that property just as he has on the other goods of the usurer. Hence it is not prescribed that such property should be assigned to the persons who paid usury, since the property is perhaps worth more than what they paid in usury, but it is commanded that the property be sold, and the price be restored, of course according to the amount taken in usury.

Reply to Objection 3: The proceeds of money taken in usury are due to the person who acquired them not by reason of the usurious money as instrumental cause, but on account of his own industry as principal cause. Wherefore he has more right to the goods acquired with usurious money than to the usurious money itself.

Art. 4 - Whether it is lawful to borrow money under a condition of usury?
Objection 1: It would seem that it is not lawful to borrow money under a condition of usury. For the Apostle says (Rom. 1:32) that they "are worthy of death . . . not only they that do" these sins, "but they also that consent to them that do them." Now he that borrows money under a condition of usury consents in the sin of the usurer, and gives him an occasion of sin. Therefore he sins also.

Objection 2: Further, for no temporal advantage ought one to give another an occasion of committing a sin: for this pertains to active scandal, which is always sinful, as stated above (Q[43], A[2]). Now he that seeks to borrow from a usurer gives him an occasion of sin. Therefore he is not to be excused on account of any temporal advantage.

Objection 3: Further, it seems no less necessary sometimes to deposit one's money with a usurer than to borrow from him. Now it seems altogether unlawful to deposit one's money with a usurer, even as it would be unlawful to deposit one's sword with a madman, a maiden with a libertine, or food with a glutton. Neither therefore is it lawful to borrow from a usurer.

On the contrary, He that suffers injury does not sin, according to the Philosopher (Ethic. v, 11), wherefore justice is not a mean between two vices, as stated in the same book (ch. 5). Now a usurer sins by doing an injury to the person who borrows from him under a condition of usury. Therefore he that accepts a loan under a condition of usury does not sin.

I answer that, It is by no means lawful to induce a man to sin, yet it is lawful to make use of another's sin for a good end, since even God uses all sin for some good, since He draws some good from every evil as stated in the Enchiridion (xi). Hence when Publicola asked whether it were lawful to make use of an oath taken by a man swearing by false gods (which is a manifest sin, for he gives Divine honor to them) Augustine (Ep. xlvii) answered that he who uses, not for a bad but for a good purpose, the oath of a man that swears by false gods, is a party, not to his sin of swearing by demons, but to his good compact whereby he kept his word. If however he were to induce him to swear by false gods, he would sin.

Accordingly we must also answer to the question in point that it is by no means lawful to induce a man to lend under a condition of usury: yet it is lawful to borrow for usury from a man who is ready to do so and is a usurer by profession; provided the borrower have a good end in view, such as the relief of his own or another's need. Thus too it is lawful for a man who has fallen among thieves to point out his property to them (which they sin in taking) in order to save his life, after the example of the ten men who said to Ismahel (Jer. 41:8): "Kill us not: for we have stores in the field."

Reply to Objection 1: He who borrows for usury does not consent to the usurer's sin but makes use of it. Nor is it the usurer's acceptance of usury that pleases him, but his lending, which is good.

Reply to Objection 2: He who borrows for usury gives the usurer an occasion, not for taking usury, but for lending; it is the usurer who finds an occasion of sin in the malice of his heart. Hence there is passive scandal on his part, while there is no active scandal on the part of the person who seeks to borrow. Nor is this passive scandal a reason why the other person should desist from borrowing if he is in need, since this passive scandal arises not from weakness or ignorance but from malice.

Reply to Objection 3: If one were to entrust one's money to a usurer lacking other means of practising usury; or with the intention of making a greater profit from his money by reason of the usury, one would be giving a sinner matter for sin, so that one would be a participator in his guilt. If, on the other hand, the usurer to whom one entrusts one's money has other means of practising usury, there is no sin in entrusting it to him that it may be in safer keeping, since this is to use a sinner for a good purpose.


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 9 2 STAT. 2 5 8

PUBLIC LAW 95-283—MAY 21, 1978 in which such allowances are to be paid by S I P C without reasonable expectation of recoupment thereof as provided in this Act and there is n o difference between the amounts requested and the amounts recommended by S I P C, the court shall a w a r d the amounts recommended by S I P C. I n determining the amount of allowances in all other cases, the court shall give due consideration to the nature, extent, and value of the services rendered, and shall place considerable reliance on the recommendation of S I P C. " (E) APPLICABLE RESTRICTIONS.—The restrictions on shar-

Post, p. 2549.

ing of compensation set forth in the B a n k r u p t c y Act shall apply to allowances. " (F) CHARGE AGAINST ESTATE.—Allowances g r a n t e d by the

court, including interim allowances, shall be charged against the general estate of the debtor as a cost and expense of administration. I f the general estate is insufficient to pay allowances in whole or in part, S I P C shall advance such funds as are necessary for such payment. (6) DISINTERESTEDNESS.—

Notice, publication.

" (A) STANDARDS.—For purposes of paragraph (3), a person shall not be deemed disinterested if— " (i) such person is a creditor (including a customer), stockholder, or part n e r of the debtor; " ( i i) such person is or was an underwriter of any of the outstanding securities of the debtor or within five years prior to the filing date was the underwriter of any securities of the debtor; " ( i i i) such person is, or was within t w o years prior to the filing date, a director, partner, officer, or employee of the debtor or such an underwriter, or an attorney for the debtor or such an under w r i t e r; or " (iv) i t appeal's that such person has, by reason of any other direct or indirect relationship to, connection with, or interest in the debtor or such an underwriter, or for any other reason, an interest materially adverse to the interests of any class of creditors (including customers) or stockholders, except that S I P C shall in all cases be deemed disinterested. and an employee of S I P C shall be deemed disinterested if such employee would, except for his association with S I P C, meet the standards set forth in this subparagraph. " (B) HEARING.—The court shall fix a time for a hearing on disinterestedness, to be held promptly after the appointment of a trustee. Notice of such hearing shall be mailed at least ten days prior thereto to each person who, from the books and records of the debtor, appears to have been a customer of the debtor with an open account within the past twelve months, to the address of such person as it appears from the books and records of the debtor, and to the creditors and stockholders of the debtor, to S I P C, and to such other persons as the court may designate. The court may, in its discretion, also require that notice be given by publication in such newspaper or newspapers of general circulation as it may designate. A t such hearing, at any adjournment thereof, or upon application, the court shall hear objections to the

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 PUBLIC LAW 95-283—MAY 21, 1978

92 STAT. 259

retention in office of a trustee or attorney for a trustee on the grounds that such person is not disinterested.", (c) Section 5 of such Act (15 U.S.C. 78eee) is amended by adding at the end thereof the following new subsection: "(d) SIPC PARTICIPATION.—SIPC shall be deemed to be a party in interest as to all matters arising in a liquidation proceeding, with the right to be heard on all such matters, and shall be deemed to have intervened with respect to all such matters with the same force and effect as if a petition for such purpose had been allowed by the court.". GENERAL PROVISIONS OF A LIQUIDATIOX PROCEEDIXG

SEC. 8. Section 6 of such Act (15 U.S.C. 78fff) is amended to read as follows: "SEC. 6. GENERAL PROVISIONS OF A LIQUIDATION PROCEEDING.

"(a) PURPOSES.—The purposes of a liquidation proceeding under this Act shall be— "(1) as promptly as possible after the appointment of a trustee in such liquidation proceeding, and in accordance with the provisions of this Act— "(A) to deliver customer name securities to or on behalf of the customers of the debtor entitled thereto as provided in section 8(c)(2); and Post, p. 261. "(B) to distribute customer propert}^ and (in advance thereof or concurrently therewith) otherwise satisfy net equity claims of customers to the extent provided in this section; "(2) to sell or transfer offices and other productive units of the business of the debtor; "(3) to enforce rights of subrogation as provided in this Act; and " (4) to liquidate the business of the debtor. "(b) APPLICATION OF BANKRUPTCY ACT.—To the extent consistent Post, p. 2549. with the provisions of this Act, a liquidation proceeding shall be conducted in accordance with, and as though it were being conducted under, the Bankruptcy Act. For purposes of applying the Bankruptcy Act to this Act, any reference in the Bankruptcy Act to the date of commencement of proceedings under the Bankruptcy Act shall be deemed to be a reference to the filing date under this Act. "(c) DETERMINATION OF CUSTOMER STATUS.—In a liquidation proceeding under this Act, whenever a person has acted with respect to cash or securities with the debtor after the filing date and in a manner which would have given him the status of a customer with respect to such cash or securities had the action occurred prior to the filing date, and the trustee is satisfied that such action was taken by the customer in good faith and prior to the appointment of the trustee, the date on which such action was taken shall be deemed to be the filing date for purposes of determining the net equity of such customer with respect to such cash or securities. "(d) APPORTIONMENT.—In a liquidation proceeding under this Act, any cash or securities remaining after the liquidation of a lien or pledge made by a debtor shall be apportioned between his general estate and customer property in the proportion in which the general property of the debtor and the cash and securities of the customers of such debtor contributed to such lien or pledge. Securities apportioned

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 9 2 STAT. 260

Post, p. 271.

PUBLIC LAW 95-283—MAY 21, 1978 to the general estate under this subsection shall be subject to the provisions of section 1 6 (5)(A). "(e)

Post, p. 2549. Post, p. 261. Infra.

15 USC 78fff-l.

OF ADMINISTRATION.—All costs

and

expenses of administration of the estate of the debtor and of the liquidation proceeding shall be borne by the general estate of the deotor to the extent it is sufficient therefor, and the priorities of distribution from the general estate shall be as provided in the Bankruptcy Act. Costs and expenses of administration shall include payments pursuant to section 8(e) and section 9(c)(1) (to the extent such payments recovered securities which were apportioned to the general estate pursuant to subsection (d)) and costs and expenses of S I P C employees utilized by the trustee pursuant to section 7(a)(2). All funds advanced by S I P C to a trustee for such costs and expenses of administration shall be recouped from the general estate as a first priority under the Bankruptcy Act.". XEW

15 USC 78o, '78ggg-78W/.

COSTS AXD EXPEXSES

SECTIOXS o r THE SECURITIES IXVESTOR PROTECTION ACT OF 1970

SEC. 9. The Securities Investor Protection Act of 1970 (15 U.S.C. 78aaa et seq.) is amended by redesignating sections 7 through 12 as sections 11 through 16, respectively, and by inserting immediately after section 6 the following new sections: "SEC. 7. POWERS AND DUTIES OF A TRUSTEE. " (a) TRUSTEE POWERS.—A trustee shall be vested with the same powers and title with respect to the debtor and the property of the debtor, including the same rights to avoid preferences, as a trustee in bankruptcj' under the Bankruptcy Act has with respect to a bankrupt and the property of a bankrupt. I n addition, a trustee may, with the approval of S I P C but without any need for court approval— " (1) hire and fix the compensation of all personnel (including officers and employees of the debtor and of its examining authority) and other persons (including accountants) that are deemed by the trustee necessary for all or any purposes of the liquidation proceeding; " (2) utilize S I P C employees for all or any purposes of a liquidation proceeding; and "'(3) margin and maintain customer accounts of the debtor for the purposes of section 8(f). " (b) TRUSTEE DUTIES.—To the extent consistent with the provisions of this Act or as otherwise ordered by the court, a trustee shall be subject to the same duties as a trustee in bankruptcy, except that a trustee may, but shall have no duty to, reduce to money any securities constituting customer property or in the general estate of the debtor. I n addition, the trustee shall— " (1) deliver securities to or on behalf of customers to the maximum extent practicable in satisfaction of customer claims for securities of the same class and series of an issuer; and " (2) subject to the prior approval of S I P C but without any need for court approval, pay or guarantee all or any part of the indebtedness of the debtor to a bank, lender, or other person if the trustee determines that the aggregate market value of securities to be made available to the trustee upon the payment or guarantee of such indebtedness does not appear to be less than the total amount of such payment or guarantee.

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 PUBLIC LAW 95-283—MAY 21, 1978 "(c)

92 STAT. 2 6 1

REPORTS BY TRUSTEE TO COURT.—The trustee shall make to

the court and to S I P C such written reports as may be required by the Bankruptcy Act, and shall include in such reports information with Post p. 2549. respect to the progress made in distributing cash and securities to customers. Such reports shall be in such form and detail as the Commission determines by rule to present fairly the results of the liquidation proceeding as of the date of or for the period covered by such reports, having due regard for the requirements of section 17 of the 1934 Act and the rules prescribed under such section and the magni- 15 USC 78q. tude of items and transactions involved in connection with the operations of a broker or dealer. " (d) IxvESTiOATioxs.—The trustee shall— " (1) as soon as practicable, investigate the acts, conduct, property, liabilities, and financial condition of the debtor, the operation of its business, and any other matter, to the extent relevant to the liquidation proceeding, and report thereon to the court; " (2) examine, by deposition or otherwise, the directors and officers of the debtor and any other witnesses concerning any of the matters referred to in paragraph (1); " (3) report to the court any facts ascertained by the trustee with res]:)ect to fraud, misconduct, mismanagement, and iregularities, and to any causes of action available to the estate; and " (4) as soon as practicable, prepare and submit, to S I P C and such other persons as the court designates and in^such form and manner as the court directs, a statement of his investigation of matters referred to in paragraph (1). "SEC. 8. SPECIAL PROVISIONS OF A LIQUIDATION PROCEEDING.

15 USC 78fff-2.

" (a) XoTicE AXD C L A I M S. —

" (1) XoTiCE OF PROCEEDiXGS.—Promptly after the appointment Publication, of the trustee, such trustee shall cause notice of the commencement of proceedings under this section to be published in one o r more newspapers of general circulation in the form and manner determined by the court, and at the same time shall cause a copy of such notice to be mailed to each person who, from the books and records of the debtor, appears to have been a customer of the debtor with an open account within the past twelve months, to the address of such pereon as it ai3pears from the books and records of the debtor. Notice to creditors other than customers shall be given in the manner prescribed by the Bankruptcy Act, except that such notice shall be given by the trustee. " (2) STATEMENT OF CLAIM.—A customer shall file with the trustee a written statement of claim but need not file a foniial proof of claim, except that no obligation of the debtor to any person associated with the debtor within the meaning of section 3 (a) (18) or section 3(a) (21) of the 1934 Act, any beneficial owner 15 USC 78c. of 5 per centum or more of the voting stock of the debtor, or any member of the immediate family of any such person or owner may be satisfied without formal proof of claim. " (3) T I M E LIMITATIOXS.—Xo claim of a customer or other creditor of the debtor which is received by the trustee after the expiration of the six-month period beginning on the date of publication of notice under paragraph (1) shall be allowed, except that the court may, upon application within such period and for cause shown, g r a n t a reasonable, fixed extension of time for the filing of a claim by the United States, by a State or political subdivision

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Page:United States Statutes at Large Volume 92 Part 1.djvu/316

 92 STAT. 262

PUBLIC LAW 95-283—MAY 21, 1978 thereof, or by an infant or incompetent person without a guardian. Any claim of a customer for net equity which is received by the trustee after the expiration of such period of time as may be fixed by the court (not exceeding sixty days after the date of publication of notice under paragraph (1)) need not be paid or satisfied in whole or i n part out of customer property, and, to the extent such claim is satisfied from moneys advanced by S I P C, it shall be satisfied in cash or securities ( o r both) as the trustee determines is most economical to the estate. " (4) EFFECT ON CLAIMS.—Except as otherwise provided i n this sciction, and without limiting the powers and duties of the trustee to discharge obligations promptly as specified in this section, nothing in this section shall limit the right of any person, including any subrogee, to establish by formal proof or otherwise as the court may provide such claims as such person may have against the debtor, including claims for the payment of money and the delivery of specific securities, without resort to moneys advanced by S I P C to the trustee. " (b) P A Y M E N T S TO CUSTOMERS.—After receipt of a w r i t t e n statement

of claim pursuant to subsection (a)(2), the trustee shall promptly discharge, in accordance with the provisions of this section, all obligations of the debtor to a customer relating to, or net equity claims based upon, securities or cash, by the delivery of securities or the making of payments to or for the account of such customer (subject to the provisions of subsection (d) and section 9(a)) insofar as such obligations a r e ascertainable from the books and records of the debtor or a r e otherwise established to the satisfaction of the trustee. For purposes of distributing securities to customers, all securities shall be valued as of the close of business on the filing date. For purposes of this subsection, the court shall, among other things— " (1) with respect to net equity claims, authorize the trustee to satisfy claims out of moneys made available to the trustee by S I P C notwithstanding the fact that there has not been any showing or determination that there are sufficient funds of the debtor available to satisfy such claims; and " (2) with respect to claims relating to, or net equities based upon, securities of a class and series of an issuer which are ascertainable from the books and records of the debtor or are otherwise established to the satisfaction of the trustee, authorize the trustee to deliver securities of such class and series if and to the extent available to satisfy such claims in whole or in part, with partial deliveries to be made p r o r a t a to the greatest extent considered practicable by the trustee. Any payment or delivery of property pursuant to this subsection may be conditioned upon the trustee requiring claimants to execute, in a form to be detcnnined by the trustee, appropriate receipts, supporting affidavits, releases, and assignments, but shall be without prejudice to any right of a claimant to file formal proof of claim within the period specified in subsection (a)(3) for any balance of securities or cash to which such claimant considers himself entitled. " (c) CUSTOMER RELATED PROPERTY.— " (1) ALLOCATION OF CUSTOMER PROPERTY.—The trustee shall allo-

cate customer property of the debtor as follows: " (A) first, to S I P C in repayment of advances made by S I P C pursuant to section 9(c)(1), to the extent such

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 9 2 STAT. 2 6 3

PUBLIC LAW 95-283—MAY 21, 1978

advances recovered securities which were apportioned to customer property pursuant to section 6(d); Ante, p. 259. " (B) second, to customers of such debtor, who shall share ratably i n such customer property on the basis and to the extent of their respective net equities; " (C) t h i r d, to S I P C as subrogee for the claims of customers; " (D) fourth, to S I P C in repayment of advances made by S I P C pursuant to section 9(c)(2). Any customer property remaining after allocation in accordance with this jjaragraph shall become part of the general estate of the debtor. To the extent customer property and S I P C advances pursuant to section 9(a) are not sufficient to p a y or otherwise satisfy in full the net equity claims of customers, such customers shall be entitled, to the extent only of their respective unsatisfied net equities, to participate in the general estate as unsecured creditors. For purposes of allocating customer property under this paragraph, securities to be delivered in payment of net equity claims for securities of the same class and series of an issuer shall be valued as of the close of business on the filing date. "(2)

DELIVERY OF CUSTOMER XAME SECURITIES.—The trustee

shall deliver customer name securities to or on behalf of a customer of the debtor entitled thereto if the customer is not indebted to the debtor. I f the customer is so indebted, such customer may, with the approval of the trustee, reclaim customer name securities upon payment to the trustee, within such period of time as the trustee determines, of all indebtedness of such customer to the debtor. "(3)

RECOVERY OF TRANSFERS.—Whenever customer

property

is not sufficient to p a y in full the claims set forth in subparagraphs (A) through (D) of paragraph (1), the trustee may recover any proj^erty transferred by the debtor which, except for such transfer, would have been customer property if and to the extent that such transfer is voidable or void under the provisions of the B a n k r u p t c y Act. Such recovered property shall be treated as Post, p. 2549. customer property. For purposes of such recovery, the property so transferred shall be deemed to have been the property of the debtor and, if such transfer was made to a customer or for his benefit, such customer shall be deemed to have been a creditor, the laws of any State to the contrary notwithstanding. " (d) PURCHASE OF SECURITIES.—The trustee shall, to the extent that securities can be purchased in a fair and orderly market, purchase securities as necessary for the delivery of securities to customers in satisfaction of their claims for net equities based on securities under section 7(b)(1) and for the transfer of customer accounts under subsection (f), in order to restore the accounts of such customers as of the filing date. To the extent consistent with subsection (c), customer property and moneys advanced by S I P C may be used by the trustee to paj for securities so purchased. Moneys advanced by S I P C for each account of a separate customer may not be used to purchase securities to the extent that the aggregate value of such securities on the filing date exceeded the amount permitted to be advanced by S I P C under the provisions of section 9(a).

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 9 2 STAT. 2 6 4

PUBLIC LAW 95-283—MAY 21, 1978 " (e) CLOSEOUTS.—

" (1) IN GENERAL.—Any contract of the debtor for the purchase or sale of securities in the ordinary course of its business with other brokers or dealers which is wholly executory on the filing date shall not be completed by the trustee, except to the extent permitted by S I P C rule. Upon the adoption by S I P C of rules with respect to the closeout of such a contract but prior to the adoption of rules with respect to the completion of such a contract, the other broker o r dealer shall close out such contract, without unnecessary delay, in the best available market and pursuant to such S I P C rules. U n t i l such time as S I P C adopts rules with respect to the completion or closeout of such a contract, such a contract shall be closed out in accordance with Commission Rule S 6 (d) - 1 as in effect on the date of enactment of this section, or any comparable rule of the Commission subsequently adopted, to the extent not inconsistent with the provisions of this subsection. " (2) N E T PROFIT OR LOSS.—A broker or dealer shall net all profits and losses on all contracts closed out under this subsection and— " (A) if such broker or dealer shows a net profit on such contracts, he shall pay such net profit to the trustee; and " (B) if such broker or deader sustains a net l o ^ on such contracts, he shall be entitled to file a claim against the debtor with the trustee in the amount of such net loss. To the extent that a net loss sustained by a broker or dealer arises from contracts pursuant to which such broker or dealer was acting for its own customer, such broker or dealer shall be entitled to receive funds advanced by S I P C to the trustee in the amount of such loss, except that such broker or dealer may not n>ceive more than $40,000 for each separate customer with respect to whom i t sustained a loss. W i t h respect to a net loss which is not payable under the preceding sentence from funds advanced by S I P U, the broker or dealer shall be entitled to participate in the general estate as an unsecured creditor. "(3)

REGISTERED CLEARING AGENCIES.—Neither

a

registered

clearing agency which by its rules has an established procedure for the closeout of open contracts between an insolvent broker or dealer and its participants, nor its participants to the extent such participants' claims are or may be processed within the registered clearing agency, shall be entitled to receive S I P C funds in payment of any losses on such contracts, except as S I P C may otherwise provide by rule. I f such registered clearing agency or its participants sustain a net loss on the closeout of such contracts with the debtor, they shall have the r i g h t to participate in the general estate as unsecured creditors to the extent of such loss. Any funds or other property owed to the debtor, after the closeout of such contracts, shall be promptly paid to the trustee. Rules adopted by S I P C under this paragraph shall provide that in no case may a registered clearing agency or its participants, to the extent such participants' claims are or may be processed within the registered clearing agency, be entitled to receive funds advanced by S I P C in an amount greater, in the aggregate, than could be received by the participants if such participants proceeded individually under paragraph s (1) and (2). " (4) DEFINITION. — For purposes of this subsection, the term 'customer' does not include any person who—

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 PUBLIC LAW 95-283—MAY 21, 1978

92 STAT. 265

"(A) is a broker or dealer; "(B) had a claim for cash or securities which by contract, agreement, or understanding, or by operation of law, was part of the capital of the claiming broker or dealer or was subordinated to the claims of any or all creditors of such broker or dealer; or "(C) had a relationship of the kind specified in section 9(a)(5) with the debtor. A claiming broker or dealer shall be deemed to have been acting on behalf of its customer if it acted as agent for such customer or if it held such customer's order which was to be executed as a part of its contract with the debtor. "(f) TRANSFER OF CUSTOMER ACCOUNTS.—In order to facilitate the prompt satisfaction of customer claims and the orderly liquidation of the debtor, the trustee may, pursuant to terms satisfactory to him and subject to the prior approval of SIPC, sell or otherwise transfer to another member of SIPC, without consent of any customer, all or any part of the account of a customer of the debtor. In connection with any such sale or transfer to another member of SIPC and subject to the prior approval of SIPC, the trustee may— "(1) waive or modify the need to file a written statement of claim pursuant to subsection (a)(2); and "(2) enter into such agreements as the trustee considers appropriate under the circumstances to indemnify any such member of SIPC against shortages of cash or securities m the customer accounts sold or transferred. The funds of S I P C may be made available to guarantee or secure any indemnification under paragraph (2). The prior approval of SIPC to such indemnification shall be conditioned, among such other standards as SIPC may determine, upon a determination by SIPC that the probable cost of any such indemnification can reasonably be expected not to exceed the cost to SIPC of proceeding under section 9(a) and section 9(b). "SEC. 9. SIPC ADVANCES.

"(a) ADVANCES FOR CUSTOMERS' CLAIMS.—In order to provide for prompt payment and satisfaction of net equity claims of customers of the debtor, SIPC shall advance to the trustee such moneys, not to exceed $100,000 for each customer, as may be required to pay or otherwise satisfy claims for the amount by which the net equity of each customer exceeds his ratable share of customer property, except that— "(1) if all or any portion of the net equity claim of a customer in excess of his ratable share of customer property is a claim for cash, as distinct from a claim for securities, the amount advanced to satisfy such claim for cash shall not exceed $40,000 for each such customer; " (2) a customer who holds accounts with the debtor in separate capacities shall be deemed to be a different customer in each capacity; "(3) if all or any portion of the net equity claim of a customer in excess of his ratable share of customer property is satisfied by the delivery of securities purchased by the trustee pursuant to section 8(d), the securities so purchased shall be valued as of the filing date for purposes of applying the dollar limitations of this subsection;

15 USC 78£ff-3.

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Page:United States Statutes at Large Volume 92 Part 1.djvu/320

 92 STAT. 266

PUBLIC LAW 95-283—MAY 21, 1978 " (4) no advance shall be made by SIPC to the trustee to pay or otherwise satisfy, directly or indirectly, any net equity claim of a customer who is a general partner, officer, or director of the debtor, a beneficial owner of five per centum or more of any class of equity security of the debtor (other than a nonconvertible stock having fixed preferential dividend and liquidation rights), a limited partner with a participation of five per centum or more in the net assets or net profits of the debtor, or a person who, directly or indirectly and through agreement or otherwise, exercised or had the power to exercise a controlling influence over the management or policies of the debtor; and "(5) no advance shall be made by SIPC to the trustee to pay or otherwise satisfy any net equity claim of any customer who is a broker or dealer or bank, other than to the extent that it shall be established to the satisfaction of the trustee, from the books and records of the debtor or from the books and records of a broker or dealer or bank, or otherwise, that the net equity claim of such broker or dealer or bank against the debtor arose out of transactions for customers of such broker or dealer or bank (which customers are not themselves a broker or dealer or bank or a person described in paragraph (4)), in which event each such customer of such broker or dealer or bank shall be deemed a separate customer of the debtor. To the extent moneys are advanced by SIPC to the trustee to pay or otherwise satisfy the claims of customers, in addition to all other rights it may have at law or in equity, SIPC shall be subrogated to the claims of such customers with the rights and priorities provided in this Act, except that SIPC as subrogee may assert no claim against customer property until after the allocation thereof to customers as provided in section 8(c). "(b) OTHER ADVANCES.—SIPC shall advance to the trustee—

"(1) such moneys as may be required to carry out section 8(e); and "(2) to the extent the general estate of the debtor is not sufficient to pay any and all costs and expenses of administration of the estate of the debtor and of the liquidation proceeding, the amount of such costs and expenses. "(c) DISCRETIONARY ADVANCES.—SIPC may advance to the trustee

such moneys as may be required to— "(1) pay or guarantee indebtedness of the debtor to a bank, lender, or other person under section 7(b)(2); " (2) guarantee or secure any indemnity under section 8(f); and " (3) purchase securities under section 8(d). 15 USC 78fff-4.

15 USC 78eee.

"SEC. 10. DIRECT PAYMENT PROCEDURE. "(a) DETERMINATION REGARDING DIRECT PAYMENTS.—If

SIPC

determines that— " (1) any member of SIPC (including a person who was a member within one hundred eighty days prior to such determination) has failed or is in danger of failing to meet its obligations to customers; "(2) one or more of the conditions specified in section 5(b)(1) exist with respect to such member; "(3) the claim of each customer of the member is within the limits of protection provided in section 9(a);

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92 STAT. 2(57

"(4) the claims of all customers of the member aggregate less than $250,000; "(5) the cost to SIPC of satisfying customer claims under this section will be less than the cost under a liquidation proceeding; and "(6) such member's registration as a broker-dealer under section 15(b) of the 1934 Act has been terminated, or such member 15 USC 78o. has consented to the use of the direct payment procedure set forth in this section, SIPC may, in its discretion, use the direct payment procedure set forth in this section in lieii of instituting a liquidation proceeding with respect to such member. "(b) NOTICE.—Promptly after a determination under subsection Publication, (a) that the direct payment procedure is to be used with respect to a member, SIPC shall cause notice of such direct payment procedure to be published in one or more newspapers of general circulation in a form and manner detenmined by SIPC, and at the same time shall cause to be mailed a copy of such notice to each person who appears, from the books and records of such member, to have been a customer j* of the member with an open account within the past twelve months, to the address of such person as it appears from the books and records of such member. Such notice shall state that SIPC will satisfy customer claims directly, without a liquidation proceeding, and shall set forth the form and manner in which claims may be presented. A direct payment procedure shall be deemed to commence on the date of fii"st publication under this subsection and no claim by a customer shall be paid or otherwise satisfied by SIPC unless received within the six-month period beginning on such date, except that SIPC shall, upon application within such period, and for cause shown, grant a reasonable, fixed extension of time for the filing of a claim by the United States, by a State or political subdivision thereof, or by an infant or incompetent person without a guardian. "(c) PAYMENTS TO CUSTOMERS.—SIPC shall promptly satisfy all •-,,j obligations of the member to each of it customers relating to, or net etjuity claims based upon, securities or cash by the delivery of securities or the effecting of payments to such customer (subject to the provisions of section 8(d) and section 9(a)) insofar as such obligations are ascertainable from the books and records of the member or are otherwise established to the satisfaction of SIPC. For purposes of distributing securities to customers, all securities shall be valued as of the close of business on the date of publication under subsection (b). Any payment or delivery of securities pursuant to this section may be conditioned upon the execution and delivery, in a form to be determined by SIPC, of appropriate receipts, supporting affidavits, releases, and assignments. To the extent moneys of SIPC are used to satisfy the claims of customers, in addition to all other rights it may have at law or in equity, SIPC shall be subrogated to the claims of such customers against the member. "(d) EFFECT ON CLAIMS.—Except as otherwise provided in this section, nothing in this section shall limit the right of any person, including any subrogee, to establish h^ formal proof or otherwise such claims as such person may have agamst the member, including claims for the payment of money and the delivery of specific securities, without resort to moneys of SIPC.

39-194 O—80—pt. 1

21: QL3

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 9 2 STAT. 2 6 8

PUBLIC LAW 95-283—MAY 21, 1978 " (e) JURISDICTION OF DISTRICT COURTS.—After S I P C has published

notice of the institution of a direct payment procedure under this section, any person aggrieved by any determination of S I P C with respect to h i s claim under subsection (c) may, within six months following mailing by S I P C of its determination with respect to such claim, seek a final adjudication of such claim. The district courts of the I ' n i t e d States shall have original and exclusive jurisdiction of any civil action for the adjudication of such claim, without regard to the citizenship of the parties or the amount in controversy. Any such action shall be brought in the judicial district where the head office of the debtor is located. Any determination of the rights of a customer under subsection (c) shall not prejudice any other right or remedy •"* of the customer against the member. " (f) DiscoxTixuAXCE OF DiRECT P A Y M E X T PROCEDURES.—If, a t any time after the institution of a direct payment procedure with respect to a member, S I P C determines, in its discretion, that continuation of such direct payment procedure is not appropriate, S I P C may cease such direct payment procedure and. uix)n so doing, may seek a protec15 USC 78eee. five decree pursuant to section 5. To the extent payments of cash, distributions of securities, o r determinations with respect to the validity of a customer's claim are made under this section, such payments, distributions, and determinations shall be recognized and given full eifect in the event of any subsequent liquidation proceeding. Any action brought under subsection (e) and pending at the time of the appointment of a trustee under section 5(b)(3) shall be permanently stayed by the court a t the time of such appointment, and the court shall enter an order directing the transfer or removal to i t of such suit. Upon such removal or transfer the complaint in such action shall constitute > the plaintiff's claim in the liquidation proceeding, if appropriate, and shall be deemed received by the trustee on the date of his appointment regardless of the date of actual transfer or removal of such action. " (g) REFERENCES.—For purposes of this section, a n v reference Post, p. 271. to the trustee in sections 7(b)(1). 8 (d), 8 (f), 9 (a). 16(5)^and 16(12) shall be deemed a reference to S I P C. and any reference to the date of publication of notice under section 8(a) shall be deemed a reference to the publication of notice under this section.". COMMISSION FUNCTIONS

SEC. 10. Section 1 1 (a) of such Act (15 U.S.C. 7 8 g g g (a)), as redesignated by this Act, is amended by striking out "or regulations pursuant to section 3(e) and section 9(f) " and inserting "pursuant to section 3(e)(3) and section 13(f)*'. EXAMINING AUTHORITY FUNCTIONS

\

SEC. 11. Section 12 of such Act (15 U.S.C. 7 8 h h h), as redesignated by this Act, is amended— (1) by inserting ", or collection agent if a collection agent has been designated pursuant to section 1 3 (a), " immediately after "examining authority " the first place it a p p e a r s; and (2) by inserting " o r collection agent" immediately after "examining authority " the second place it appears.

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 PUBLIC LAW 95-283—MAY 21, 1978 f

.,

92 STAT. 2 6 9

FlTNCTIOXS o r SELF-REGULATORY ORGANIZATIONS

SEC. 12. Section 13(a) of such Act (15 U.S.C. 7 8 i i i (a)), as redesignated by this Act, is amended to read as follows: " (a) COLLECTION AGENT.—Each self-regulatory organization shall act as collection agent for S I P C to collect the assessments payable by all members of S I P C for whom such self-regulatory organization is the examining authority, unless S I P C designates a self-regulatory organization other than the examining authority to act as collection agent for any member of S I P C who is a member of or participant in more than one self-regulatory organization. I f the only self-regulatory organization of which a member of S I P C is a member or in which it is a participant is a registered clearing agency that is not the examining authority for the member, S I P C may, nevertheless, designate such registered clearing agency as collection agent for the member or may require that payments be made directly to S I P C. The collection agent shall be obligated to remit to S I P C assessments made under section 4 only to the extent that payments of such assessment are 15 USC 78ddd. received by such collection agent. Members of S I P C who are not members of or Participants in a self-regulatory organization shall make payments directly to S I P C ". (b) Section 13(b) of such Act (15 U.S.C. 7 8 i i i (b)), as redesignated by this Act, is amended by inserting " and section 5(a)(2) " immediately after "section 5(a)(1) ". (c) Section 13(c) of such Act (15 U.S.C. 7 8 i i i (c)), as redesignated by this Act, is amended to read as follows: " (c) INSPECTIONS.—The self-regulatory organization of which a member of S I P C is a member or in which it is a participant shall inspect or examine such member for compliance with applicable financial responsibility rules, except that— " (1) if the self-regulatory organization is a registered clearing agency, the Commission may designate itself as responsible for the examination of such member for compliance with applicable financial responsibility rules; and " (2) if a member of S I P C is a member of or participant in more than one self-regulatory organization, the Commission, pursuant to section 17(d) of the 1934 Act, shall designate one of such 15 USC 78q, self-regulatory organizations or itself as responsible for the examination of such member for compliance with applicable financial responsibility rules.". (d) Section 13(f) of such Act (15 U.S.C. 7 8 i i i (f)), as redesignated by this Act, is amended to read as follows: " (f) F I N A N C I A L CONDITION OF MEMBERS.—The Commission may, by

such rules as it determines necessary or appropriate in the public interest and to carry out the purposes of this Act, require any self-regulatory organization to furnish S I P C with reports and records (or copies thereof) relating to the financial condition of members of or participants in such self-regulatory organization.". PROHIBITED ACTS

SEC. 13. (a) Section 14(a) of such Act (15 U.S.C. 7 8 j j j (a)), as redesignated by this Act, is amended— (1) by inserting " and penalty" immediately after "interest"; and

Rules,

Reports.

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Page:United States Statutes at Large Volume 92 Part 1.djvu/324

 92 STAT. 2 7 0

PUBLIC LAW 95-283—MAY 21, 1978 (2) by striking out " h e " each place it appears and inserting "it" in lieu thereof. (b) Section 14(b) of such Act (15 U.S.C. 78jjj (b)), as redesignated by this Act, is amended— (1) by inserting "or for whom a direct payment procedure has been initiated" immediately after " Act " each place it a p p e a r s; and (2) in the subsection heading, by inserting "OR INITIATION OF DIRECT P A Y M E N T PROCEDURE" immediately after " T R U S T E E ".

(c) Section 14(c) of such Act (15 U.S.C. 7 8 ] ] ] (c)), as redesignated by this Act, is amended to read as follows: "(c)

.i}&''

'-j'

CONCEALMENT OP A S S E T S; F A I ^ E STATEMENTS OR C L A I M S. — " (1) SPECIFIC PROHIBITED ACTS.—Any person who, directly or

indirectly, in connection with or in contemplation of any liquidation proceeding or direct payment procedure— " (A) employs any device, scheme, or artifice to defraud; " (B) engages in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any person; or " (C) fraudulently or with intent to defeat this Act— " (i) conceals or transfers any property belonging to the estate of a debtor; " ( i i) makes a false statement or account; " ( i i i) presents or uses any false claim for proof against the estate of a debtor; " ( i v) receives any material amount of property from a debtor; " (v) gives, offers, receives, transfers, or obtains any money or property, remuneration, compensation, reward, advantage, other consideration, or promise thereof, for acting or forebearing to a c t; " ( v i) conceals, destroys, mutilates, falsifies, makes a false entry in, or otherwise falsifies any document affecting or relating to the property or affairs of a debtor; or " ( v i i) withholds, from any person entitled to its possession, any document affecting or relating to the property or affairs of a debtor, shall be fined not more than $50,000 or imprisoned for not more than five years, or both. "(2)

FRAUDULENT CONVERSION.—Any person who, directly o r

indirectly steals, embezzles, o r fraudulently, or with intent to defeat this Act, abstracts or converts to his own use or to the use of another any of the moneys, securities, or other assets of S I P C, or otherwise defrauds or attempts to defraud S I P C or a trustee by any means, shall be fined not more than $50,000 o r imprisoned not more than five years, o r both.". LIABILITY, ADVERTISING, AND OTHER MISCELLANEOUS PROVISIONS

SEC. 14. (a) Section 15(d) of such Act (15 U.S.C. 7 8 k k k (d)), as redesignated by this Act, is amended— (1) by inserting ", officers, or employees" immediately after "Directors"; and (2) i n the subsection heading, by inserting ", OFFICERS, OR E M P L O Y E E S " immediately after "DIRECTORS".

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Page:United States Statutes at Large Volume 92 Part 1.djvu/325

 PUBLIC LAW 95-283—MAY 21, 1978

92 STAT. 271

(b) Section 15(e) of such Act (15 U.S.C. 78kkk(e)), as redesignated by this Act, is amended to read as follows: "(e) ADVERTISIXG.—SIPC shall by bylaw prescribe the manner in which a member of SIPC may display any sign or signs (or include in any advertisement a statement) relating to the protection to customers and their accounts, or any other protections, afforded under this Act. No member may display any such sign, or include in an advertisement any such statement, except in accordance with such bylaws. SIPC may also by bylaw prescribe such minimal requirements as it considers necessary and appropriate to require a member of SIPC to i^rovide public notice of its membership in S I P C ". (c) Section 15(b) of such Act of (15 U.S.C. 78kkk(b)), as redes- Repeal. ignated by this Act, is repealed, and subsections (c) through (h) of section 15 are redesignated as subsections (b) through (g), respectively. DEFINITIONS

SEC. 15. Section 16 of such Act (15 U.S.C. 78111), as redesignated by this Act, is amended to read as follows: "SEC. 16. DEFINITIONS.

?'?.'] cl

"For purposes of this Act. including the application of the Bankruptcy Act to a liquidation proceeding: "(1) BANKRUPTCY ACT.—The term 'Bankruptcy Act' means, except where the context indicates otherwise, those provisions of the Bankruptcy Act relating to ordinary bankruptcy (chapters I through VII) as now in effect or as amended from time to time, r r and includes the rules of bankruptcy procedure promulgated ' with respect to such provisions, but does not include the provisions of section 60e of the Bankruptcy Act, relating to stock- fo^'> p- 2549 broker bankruptcies. "(2) COMMISSION.—The term 'Commission' means the Securities and Exchange Commission. "(3) CUSTOMER.—The term 'customer' of a debtor means any person (including any person with whom the debtor deals as principal or agent) who has a claim on account of securities received, acquired, or held by the debtor in the ordinary course of its business as a broker or dealer from or for the securities accounts of such person for safekeeping, with a view to sale, to cover consummated sales, pursuant to purchases, as collateral security, or for purposes of effecting transfer. The term 'customer' includes any person who has a claim against the debtor arising out of sales or conversions of such securities, and any person who has deposited cash with the debtor for the purpose of purchasing securities, but does not include— " (A) any person to the extent that the claim of such person arises out of transactions with a foreign subsidiary of a member of S I P C; or "(B) any person to the extent that such person has a claim ^ for (msh or securities which bj' contract, agreement, oi- understanding, or by operation of law, is part of the capital of the debtor, or is subordinated to the claims of any or all creditors of the debtor, notwithstanding that some ground exists for declaring such contract, agreement, or understanding void or voidable in a suit between the claimant and the debtor.

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Page:United States Statutes at Large Volume 92 Part 1.djvu/326

 92 STAT. 272

15 USC 78o.

Ante, p. 259.

Ante, p. 254. Ante, p. 266.

Post, p. 2549.

PUBLIC LAW 95-283—MAY 21, 1978 "(4) CUSTOMER XAME SECURITIES.—The term 'customer name securities' means securities which were held for the account of a customer on the filing date by or on behalf of the debtor and which on the filing date were registered in the name of the customer, or were in the process of being so registered pursuant to instructions from the debtor, but does not include securities registered in the name of the customer which, by endorsement or otherwise, were in negotiable form. "(5) CUSTOMER PROPERTY.—The term 'customer property' means cash and securities (except customer name securities delivered to the customer) at any time received, acquired, or held by or for the account of a debtor from or for the securities accounts of a customer, and the proceeds of any such property transferred by the debtor, including property unlawfully converted. The term 'customer property' includes— " (A) securities held as property of the debtor to the extent that the inability of the debtor to meet its obligations to • customers for their net equity claims based on securities of the same class and series of an issuer is attributable to the debtor's noncompliance with the requirements of section 15 (c)(3) of the 1934 Act and the rules prescribed under such section; "(B) resources provided through the use or realization of customers' debit cash balances and other customer-related debit items as defined by the Commission by rule; "(C) any cash or securities apportioned to customer property pursuant to section 6(d); and "(D) any other property of the debtor which, upon compliance with applicable laws, rules, and regulations, would have been set aside or held for the benefit of customers, unless the trustee determines that including such property within the meaning of such term would not significantly increase customer property, " (6) DEBTOR.—The term 'debtor' means a member of SIPC with respect to whom an application for a protective decree has been filed under section 5(a)(3) or a direct payment procedure has been instituted under section 10(b). "(7) ExAMixiXG AUTHORITY.—The term 'examining authority" means, with respect to any member of SIPC (A) the self-regulatory organization which inspects or examines such member of SIPC, or (B) the Commission if such member of SIPC is not a member of or participant in any self-regulatory organization or if the Commission has designated itself examining authority for such member pursuant to section 13(c). "(8) FiLixcr DATE.—The term 'filing date' means the date on which an application for a protective decree is filed under section 5(a)(3), except that— "(A) if a petition was filed before such date by or against the debtor under the Bankruptcy Act, or under chapter X or X I of such Act. as now in eft'ect or as amended from time to time, the term 'filing date' means the date on which such petition was filed; "(B) if the debtor is the subject of a proceeding pending in any court or before any agency of the United States or any State in which a receiver, tnistee, or liquidator for such debtor

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Page:United States Statutes at Large Volume 92 Part 1.djvu/327

 PUBLIC LAW 95-283—MAY 21, 1978

92 STAT. 273

has been appointed and such proceeding was commenced before the date on which such application was filed, the term 'filing date' means the date on which such proceeding was commenced; or "(C) if the debtor is the subject of a direct payment procedure or was the subject of a direct payment procedure discontinued by SIPC pursuant to section 10(f), the term Ante, p. 266. 'filing date' means the date on which notice of such direct payment procedure was published under section 10(b). " (9) P'oREiGN SUBSIDIARY.—The term 'foreign subsidiary' means any subsidiary of a member of S I P C which has its principal place of business in a foreign country or which is organized under the laws of a foreign country. "(10)

GROSS REVENUES ITIOM: THE SECURITIES BUSINESS.—The

term 'gross revenues from the securities business' means the sum of (but without duplication) — "(A) commissions earned in connection with transactions in securities effected for customers as agent (net of commissions paid to other brokers and dealers in connection with such transactions) and markups with lespect to purchases or sales of securities as principal; "(B) charges for executing or clearing transactions in securities for other brokers and dealers; "(C) the net realized gain, if any, from principal transactions in securities in trading accounts; "(D) the net profit, if any, from the management of or participation in th& underwriting or distribution of securities; " (E) interest earned on customers' securities accounts; " (F) fees for investment advisory services (except when rendered to one or more registered investment companies or insurance company separate accounts) or account supervision with respect to securities; "(G) fees for the solicitation of proxies with respect to, or tenders or exchanges of, securities; " (H) income from service charges or other surcharges with respect to securities; " (I) except as otherwise provided by rule of the Commission, dividends and interest received on securities in investment accounts of the broker or dealer; " (J) fees in connection with put, call, and other option transactions in securities; " (K) commissions earned from transactions in (i) certificates of deposit, and (ii) Treasury bills, bankers acceptances, or commercial paper which have a matuiity at the time of issuance of not exceeding nine months, exclusive of days of grace, or any renewal thereof, the maturity of which is likewise limited, except that SIPC shall by bylaw include in the aggregate of gross levenues only an appropriate percentage of such commissions based on SIPC's loss experience with respect to such instruments over at least the preceding five years; and " (L) fees and other income from such other categories of the securities business as SIPC shall provide by bylaw. Such term does not include revenues received by a broker or dealer in connection with the distribution of shares of a resdstered

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Page:United States Statutes at Large Volume 92 Part 1.djvu/328

 92 STAT. 274

^rafe, p. 254.

Ante, p. 261.

15 USC 78eee.

15 USC 77a.

PUBLIC LAW 95-283—MAY 21, 1978 open end investment company or unit investment trust or revenues derived by a broker or dealer from the sale of variable annuities or from the conduct of the business of insurance. "(11) LIQUIDATION PROCEEDING.—The term 'liquidation proceeding' means any proceeding for the liquidation of a debtor under this Act in which a trustee has been appointed under section 5(b)(3), "(12) NET EQUITY,—The term 'net equity' means the dollar amount of the account or accounts of a customer, to be determined by"(A) calculating the sum which would have been owed by the debtor to such customer if the debtor had liquidated, by sale or purchase on the filing date, all securities positions of such customer (other than customer name securities reclaimed by such customer); minus " (B) any indebtedness of such customer to the debtor on the filing date: plus "(C) any payment by such customer of such indebtedness to the debtor which is made with the approval of the trustee and within such period as the trustee may determine (but in no event more than sixty days after the publication of notice under section 8(a)). In determining net equity under this paragraph, accounts held by a customer in separate capacities shall be deemed to be accounts of separate customers, "(13) PERSONS REGISTERED AS BROKERS OR DEALERS.—The term 'persons registered as brokers or dealers' includes any person who is a member of a national securities exchange. "(14) PROTECTIVE DECREE.—The term 'protective decree' means a decree, issued by a court upon application of SIPC under section 5(a)(3), that the customers of a member of SIPC are in need of the protection provided under this Act, "(15) SECURITY.—The term 'security' means any note, stock, treasury stock, bond, debenture, evidence of indebtedness, any collateral trust certificate, preorganization certificate or subscription, transferable share, voting trust certificate, certificate of deposit, certificate of deposit for a security, any investment contract or certificate of interest or participation in any profit-sharing agreement or in any oil, gas, or mineral royalty or lease (if such investment contract or interest is the subject of a registration statement with the Commission pursuant to the provisions of the Securities Act of 1933), any certificate of interest or participation in, temporary or interim certificate for, receipt for, guarantee of, or warrant or right to subscribe to or purchase or sell any of the foregoing, and any other instrument commonly known as a security. The term 'security' does not include any currency, or any commodity or related contract or futures contract, or any warrant or right to subscribe to or purchase or sell any of the foregoing,". AMENDMENT TO THE SECURITIES EXCHANGE ACT OF 1934

SEC, 16 Section 3(a) of the Securities Exchange Act of 1934 (15 U,S,C, 78c(a)) is amended by adding at the end thereof the following new paragraph:

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Page:United States Statutes at Large Volume 92 Part 1.djvu/329

 PUBLIC LAW 95-283—MAY 21, 1978 "(40) The term 'financial responsibility rules' means the rules and regulations of the Commission or the rules and regulations prescribed by any self-regulatory organization relating to financial responsibility and related practices which are designated by the Commission, by rule or regulation, to be financial responsibility rules.".

92 STAT. 275 "Financial responsibility rules."

TABLE OF CONTENTS

SEC. 17. The table of contents of the Securities Investor Protection Act of 1970 (15 U.S.C. 78aaa et seq.) is amended to read as follows: "TABLE OF CONTENTS "Sec. •'Sec. "Sec. "Sec. •'Sec. "Sec. "Sec. "Sec. "Sec. "Sec. "Sec. "Sec. "Sec. "Sec. "Sec. "Sec.

1. Short title. 2. Application of Securities Exchange Act of 1934. 3. Securities Investor Protection Corporation, 4. SIPC Fund. 5. Protection of customers. 6. General provisions of a liquidation proceeding. 7. Powers and duties of trustee. 8. Special provisions of a liquidation proceeding. 9. SIPC advances. 10. Direct payment procedure. 11. SEC functions. 12. Examining authority functions. 13. Functions of self-regulatory organizations. 14. Prohibited acts. 15, Miscellaneous provisions. 16. Definitions.". SMALL ISSUE EXEMPTION

SEC. 18. Section 3(b) of the Securities Act of 1933 (15 U.S.C. 77c(b)) is amended by striking out "$500,000" and inserting in lieu thereof "$1,500,000". AMENDMENT TO THE SECURITIES EXCHANGE ACT OF 1934

SEC. 18. (a) Section 11(a)(3) of the Securities Exchange Act of 1934 (15 U.S.C. 78k(a)(3)) is amended by striking out "May 1, 1975" and inserting in lieu thereof "February 1, 1978" and by striking out "May 1, 1978" each place it appears and inserting in lieu thereof "February 1, 1979". (b) The amendment made by subsection (a) of this section shall be effective as of May 1, 1978. Approved May 21, 1978. LEGISLATIVE HISTORY: HOUSE REPORT No. 95-746 (Comm. on Interstate and Foreign Commerce). SENATE REPORT No. 95-763 (Comm. on Banking, Housing, and Urban Affairs). CONGRESSIONAL RECORD: Vol. 123 (1977): Nov. 1, considered and passed House. Vol. 124 (1978): Apr. 26, considered and passed Senate, amended. May 2, House agreed to certain Senate amendments; disagreed to Senate amendment No. 8; and disagreed to Senate amendment No. 9 with an amendment. May 4, Senate insisted on its amendment No. 8; agreed to House amendment of No. 9 with an amendment. May 9, House agreed to Senate amendment No. 9; concurred in Senate amendment of No. 8 with an amendment. May 10, Senate concurred on House amendment of No. 8.

Effective date. 15 USC 78k note.

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Page:United States Statutes at Large Volume 92 Part 1.djvu/330

 92 STAT. 276

PUBLIC LAW 95-284—MAY 21, 1978

Public Law 95-284 95th Congress Joint Resolution May 21, 1978 [HJ. Res. 873]

Supplemental appropriations for fiscal year 1978.

Making an urgent supplemental appropriation for the disaster loan program of the Small Business Administration for the fiscal year ending September 30, 1978, and for other purposes.

Resolved by the Senate and House of Representatives of the United States of America in Congress assembled, That the following sums are appropriated, out of any money in the Treasury not otherwise appropriated, for the fiscal year ending September 30, 1978: SMALL BUSINESS ADMINISTRATION DISASTER LOAN FUND

For an additional amount for the "Disaster loan fund", $758,000,000: Provided, That $750,000,000 of such amount shall remain available without fiscal year limitation and $8,000,000 shall be transferred to "Salaries and expenses". DEPARTMENT OF LABOR EMPLOYMENT AND TRAINING ADMINISTRATION EMPLOYMENT AND TRAINING ASSISTANCE

For an additional amount for "Employment and Training Assistance," $63,000,000, to remain available until September 30, 1979. SENATE PAYMENTS TO WIDOWS AND HEIRS OF DECEASED MEMBERS OF CONGRESS

For payment to Norma C. McClellan, widow of John L. McClellan, late a Senator from the State of Arkansas, $57,500. For payment to Donna H. Metcalf, widow of Lee Metcalf, late a Senator from the State of Montana, $57,500. For payment to Muriel Humphrey, widow of Hubert H. Humphrey, late the Deputy President Pro Tempore of the Senate and a Senator from the State of Minnesota, $65,000. Approved May 21, 1978.

LEGISLATIVE HISTORY: HOUSE REPORT No. 95-1105 (Comm. on Appropriations). SENATE REPORT No. 95-801 (Comm. on Appropriations). CONGRESSIONAL RECORD, Vol. 124 (1978): May 8, considered and passed House. May 11, considered and passed Senate, amended. May 12, House concurred in Senate amendments.

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Page:United States Statutes at Large Volume 92 Part 1.djvu/331

 PUBLIC LAW 95-285—MAY 25, 1978

92 STAT. 277

Public Law 95-285 95th Congress An Act To name the lake located behind Lower Monumental Lock and Dam, Washington, "Lake Herbert G. West".

May 25, 1978 [S. 1568]

Be it enacted by the SeTiate and House of Representatives of the United States of America in Congress assembled, That the lake located Lake Herbert C. behind the Lower Monumental Lock and Dam. Washington, a part of West, memorial the project authorized by the Act of March 2, 1945 (Public Law 14, Seventy-ninth Congress, first session), in accordance with the plan 59 Stat. 10 submitted in House Document Numbered 704, Seventy-fifth Congress, third session, shall hereafter be known as Lake Herbert G. West, and any law, regulation, document, or record of the United States in which such lake is designated or referred to as "Lower Monumental Lake" or is referred to by any other name, shall be held to refer to such lake under and by the name of "Lake Herbert G. West". Approved May 25, 1978.

LEGISLATIVE HISTORY: HOUSE REPORT No. 95-1095 accompanying H.R. 10838 (Comm. on Public Works and Transportation). SENATE REPORT No. 95-721 (Comm. on Environment and Public Works). CONGRESSIONAL RECORD, Vol. 124 (1978): Apr. 5, considered and passed Senate. May 15, H.R. 10838 considered and passed House; proceedings vacated and S.1568 passed in lieu.

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Page:United States Statutes at Large Volume 92 Part 1.djvu/332

 92 STAT. 278

PUBLIC LAW 95-286—MAY 26, 1978

Public Law 95-286 95th Congress

COv)

An Act May 26. 1978 [H.R. 10392]

Woodrow Wilson Memorial Act of 1968, amendment.

20 USC

To establish a Hubert H. Humphrey Fellowship in Social and Political Thought at the Woodrow Wilson International Center for Scholars at the Smithsonian Institution and to establish a trust fund to provide a stipend for such fellowship.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That the Woodrow Wilson Memorial Act of 1968 (20 U.S.C. 80e-80j) is amended— (1) by redesignating sections 5 through 7 as sections 6 through 8, respectively, and (2) by inserting after section 4 the following new section:

80h-80j. " H U B E R T H. H U M P H R E Y FELLOWSHIP IX SOCIAL AND POLITICAL THOUGHT

Establishment.

20 USC 80g-l.

Hubert H. Humphrey Fellowship Trust Fund. Establishment.

"SEC. 5. (a) There is hereby established in the Center a Hubert H. Humphrey Fellowship in Social and Political Thought. " (b) Each year the Board shall select a distinguished scholar, statesman, or cultural figure, from the United States or abroad, to serve at the Center for a period of up to one year as the Hubert H. Humphrey Fellow in Social and Political Thought (hereinafter in this section referred to as the 'Humphrey Fellow'). Each Humphrey Fellow shall receive compensation in an amount, determined by the Board, not to exceed the annual income of the trust fund established under subsection (d). "(c) Each Humphrey Fellow shall— "(1) deliver a Hubert H. Humphrey Memorial Lecture; and "(2) carry out such projects and work as are consistent with the Humphrey Fellowship. The Board shall provide for the publication and dissemination of the Hubert H. Humphrey Memorial Lectures. "(d)(1) There is hereby established in the Treasury of the United States a trust fund to be known as the Hubert H. Humphrey Fellowship Trust Fund (hereinafter in this section referred to as the 'fund'). The Secretary of the Treasury shall deposit in the fund such sums as may be appropriated to the fund under subsection (f) and shall receive into the Treasury and deposit into the fund such sums as may be received as contributions to the fund. " (2) The Secretary of the Treasury shall invest amounts in the fund in public debt securities with maturities suitable for the needs of the fund and bearing interest at prevailing market rates; and the interest on such investments shall be credited to and fotm a part of the fund. "(3) Notwithstanding section 4(a)(2) any gift, bequest, or devise of money, securities or other property for the benefit of the Hubert H. Humphrey Fellowship in Social and Political Thought received by the Board shall, upon receipt, be deposited into the fund as provided by paragraph (1). "(e) The Secretary of the Treasury shall pay to the Board from amounts received as interest on investments under subsection (d)(2) such sums as the Board determines are necessary and appropriate for the purposes of the Humphrey Fellowship.

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Page:United States Statutes at Large Volume 92 Part 1.djvu/333

 PUBLIC LAW 95-286~MAY 26, 1978

92 STAT. 279

"(f) There is authorized to be appropriated to the fund for the fiscal Appropriation year beginning October 1, 1978, $1,000,000.". authorization. SEC. 2. Section 4(a)(2) of the Woodrow Wilson Memorial Act of 1968 (20 U.S.C. 80g(a)(2)) is amended by striking out "devices" and inserting in lieu thereof "devises". Approved May 26, 1978.

LEGISLATIVE HISTORY: HOUSE REPORT No. 95-1062 (Coram, on House Administration). SENATE REPORT No. 95-794, accompanying S. 2730 (Comm. on Rules and Administration). CONGRESSIONAL RECORD, Vol. 124 (1978): May 1, considered and failed of passage in House. May 15, considered and passed House. May 16, S. 2730 considered and passed Senate; proceedings vitiated and H.R. 10392 passed in lieu. WEEKLY COMPILATION OF PRESIDENTIAL DOCUMENTS, Vol. 14, No. 22: May 30, Presidential statement.

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Page:United States Statutes at Large Volume 92 Part 1.djvu/334

 92 STAT. 280

PUBLIC LAW 95-287—MAY 30, 1978

Public Law 95-287 95th Congress Joint Resolution May 30. 1978 [SJ. Res. 137]

North Atlantic Alliance.

Reaffirming the unity of the North Atlantic Alliance commitment.

Whereas thirty years ago the Congress passed the Vandenberg Resolution, which has come to represent the highest qualities of bipartisan statesmanship; and Whereas the North Atlantic Alliance has preserved the peace in Europe for an entire generation, allowing its members to attain unprecedented levels of prosperity and well-being for their people; and Whereas the leaders of the Alliance will gather in Washington, D.C., on May 30 and 31, 1978, to renew their adherence to its principles and rededicate themselves to its objectives; and Whereas this meeting will be the capstone of efforts to ensure that the needs of collective security will be met over the next decade: Now, therefore, be it Resolved by the Senate and the House of Representatives of the United States of America in Congress assembled, That the North Atlantic Alliance be reaffirmed as a vital commitment and cornerstone of United States foreign policy, and that the bipartisan spirit that inspired its birth be rededicated to the purpose of strengthening it further in the cause of peace and security. SEC. 2. The Congress recognizes the extraordinary success of the North Atlantic Alliance in fulfilling its goals of safeguarding the freedom, common heritage and civilization of its peoples, founded on the principles of democracy, individual liberty and the rule of law. SEC. 3. On the occasion of the NATO summit meeting in Washington, the Congress declares its support for efforts to reaffirm the unity of the North Atlantic Alliance, to strengthen its defensive capabilities to meet threats to the peace, and on this basis to persevere in attempts to lessen tensions with the Warsaw Pact States. Approved May 30, 1978.

LEGISLATIVE HISTORY: CONGRESSIONAL RECORD, Vol. 124 (1978): May 24, considered and passed Senate. May 25, considered and passed House.

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Page:United States Statutes at Large Volume 92 Part 1.djvu/335

 PUBLIC LAW 95-288—JUNE 5, 1978

92 STAT. 281

Public Law 95-288 95th Congress An Act Making appropriations for the government of the District of Columbia and other activities chargeable in whole or in part against the revenues of said District for the fiscal year ending September 30, 1978, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of Amer-i^a in Congress assembled, That the following sums are appropriated, out of any money in the Treasury not otherwise appropriated, for the District of Columbia for the fiscal year ending September 30, 1978, and for other purposes, namely:

June 5, 1978 [H.R. 90051

District of Columbia Appropriation Act, 1978.

TITLE I—TEMPORARY COMMISSION ON FINANCIAL OVERSIGHT O F THE DISTRICT OF COLUMBIA SALARIES AND EXPENSES

For salaries and expenses necessary to carry out the provisions of the Act creating the Temporary Commission on Financial Oversight of the District of Columbia (Public Law 94-:)99), $3,00,{)0, which shall be available until expended: Provided, That the Temporary Commission on Financial Oversight of the District of Columbia shall have the power to appoint, fix the compensation of, and remove an Executive Director and additional staff members without regard to chapter 51, subchapters III and VI of chapter 53, and chapter 75 of title 5, United States Code, and those provisions of such title relating to the appointment in the competitive service. The Executive Director may be paid compensation at a rate not to exceed the rate prescribed for level IV of the Federal Executive Salary Schedule.

D.C. Code 47-101 note.

5 USC seq. 5 USC 5 USC 5 USC seq. 5 USC

5101 et 5331. 5361. 7501 et 5315.

TITLE II—DISTRICT O F COLUMBIA FEDERAL PAYMENT TO THE DISTRICT OF COLUMBIA

For payment to the District of Columbia for the fiscal year ending September 30, 1978, $276,000,000, as authorized by the District of Columbia Self-Government and Governmental Reorganization Act, Public Law 93-198, as amended (D.C. Code 47-2501d); and $28,116,000 in lieu of reimbursements for charges for water and water services and sanitary sewer services furnished to facilities of the United States Government as authorized by the Act of May 18, 1954, as amended (D.C. Code 43-1541 and 1611)': Provided, That notwithstanding any other provision of law, the Mayor is authorized to request, within the limit of appropriations made therefore in this title, payment in lieu of reimbursements for water and water services and sanitary sewer services furnished to facilities of the United States Government prior to October 1, 1977, and to be furnished in the fiscal year beginning October 1, 1977, and the Secretary of the Treasury is authorized to pay to the District of Columbia on October 1, 1977, such sums as the Mayor may certify are required to furnish such services.

An. ! i I' - -

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Page:United States Statutes at Large Volume 92 Part 1.djvu/336

 92 STAT. 282

PUBLIC LAW 9 5 - 2 8 8 — J U N E 5, 1978 LOANS

TO THE

DISTKICT

OF

COLUMBIA

FOR

CAPITAL

OUTLAY

For loans to the District of Columbia, as authorized by the District of Columbia Self-Government and Governmental Reorganization Act, D.C. Code 1-121 Public Law 93-198; the District of Columbia Appropriation Act, 1976, note. Public Law 94-333; and the District of Columbia Appropriation Act, 90 Stat. 785. 1977 Public Law 94-446; $92,000,000, which together with balances of previous appropriations for this purpose, shall remain available until expended and be advanced upon request of the Mayor. DIVISION OF

EXPENSES

The following amounts are appropriated for the District of Columbia for the current fiscal year out of the general fund of the District of Columbia, except as otherwise specifically provided: GENERAL OPERATING

D.C. Code 47-101 note.

EXPENSES

General operating expenses, $90,862,600, of which $799,300 shall be payable from the revenue sharing trust f u n d: Provided, That not to exceed $2,500 for the Mayor and $2,500 for the C h a i r m a n of the Council of the District of Columbia shall be available from this appropriation for expenditures for official purposes: Provided furtlier^ That, for the purpose of assessing and reassessing real property in the District of Columbia, $5,000 of t h i s appropriation shall be available for services as authorized by 5 U.S.C. 3109, but at rates for individuals not in excess of $100 per diem: Provided further, That not to exceed $7,500 of this appropriation shall be available for test borings and soil investigations: Provided further, That $5,838,600 of this appropriation (to remain available until expended) shall be available solely for District of Columbia employees' disability compensation: Provided further, That not to exceed $325,000 of this appropriation shall be available for settlement of property damage claims not in excess of $1,500 each and personal injury claims not in excess of $5,000 each: Provided further, That not to exceed $50,000 of any appropriations available to the District of Columbia may be used to match financial contributions from the Department of Defense to the District of Columbia Office of Emergency Preparedness for the purchase of civil defense equipment and supplies approved by the Department of Defense, when authorized by the May o r: Provided further, That $3,000,000 of this appropriation (to remain available until expended) shall be for the District of Columbia's contribution toward the expenses of the Temporary Commission on Financial Oversight of the District of Columbia, as authorized by Public Law 94-399, September 4, 1976: Provided further. That funds appropriated in fiscal year 1977 as the District of Columbia's contribution toward the expenses of the Temporary Commission on Financial Oversight of the District of Columbia shall remain available until expended. For an additional amount for "General operating expenses", fiscal year 1977, $625,100: Provided, That obligational authority of $1,279,070 is authorized for expenditures incurred in the fiscal year ending J im e 30, 1976, and the period July 1, 1976 through September 30, 1976, for disability compensation payments as required by 5 U.S.C. 8139: Provided further. That obligational authority of

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text: Narrative of a Voyage Round the World (Belcher)/Annotated/Volume 1/Hydrographic Instructions