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ments. One sample of corn from each crib to be placed under seal shall be submitted by the sealer to the County Agricultural Conservation Committee for the county in which the corn is stored for moisture-test purposes. The moisture content will be determined by the State Agricultural Conservation Committee through the use of Tag Heppenstall electric moisture meters, and the results of the test will be submitted on the Moisture Test Form (1937-38 CCC Corn Form H) to the county committee submitting the sample.
The sealer, while on the premises, will complete the measurements, secure the representative sample (s) of corn, and seal the crib (s) of corn.*t
201.8 Certificate of seller. The Certificate of seller, as contained in 1937-38 CCC Corn Form A, must be executed by the seller of the corn in connection with all loans in which any part of the corn pledged was not grown by the producer but was purchased from another producer as outlined in § 201.1 (b) (2).**
201.9 Listing of lienholders. The corn collateral must be free and clear of all liens except in favor of the lienholders listed in the space provided therefor in 1937-38 CCC Corn Form A. The names of the holders of all existing liens on the pledged corn, such as landlord, laborers, or mortgagees, must be listed in the space provided therefor in Section 11 of the loan agreement.
Producers should read carefully all real estate or other mortgages previously given by them in order to be sure that crops are not covered thereby. A misrepresentation as to prior liens, or otherwise, will render the producer personally liable for the amount of the loan, plus insurance and other charges under the terms of the loan agreement. Any misrepresentation of fact made in the execution of the note and loan agreement and related forms will render the person or persons parties to the misrepresentation, subject to the provisions of the United States Criminal Code and section 16 (a) of the Reconstruction Finance Corporation Act (47 Stat. 11; 15 U.S.C. 616 (a)).*+
201.10 Tenant loans. Where the borrower is a tenant farmer, the expiration date of the lease must be given in Section 3 (c) of the loan agreement. If the expiration date of the lease is prior to sixty (60) days after the maturity date of the note, the landlord must execute the consent for storage agreement, Section 13 of 1937-38 CCC Corn Form A. The consent agreements must also be signed by any other party or parties entitled to possession.*†
201.11 Insurance. All producers who obtain loans are required, at their own expense, to keep the corn collateral insured, so long as the loan is unpaid, against loss by fire, lightning, cyclone, tornado, windstorm, and with or without hail coverage, for not less than the amount of the loan with accrued interest to maturity. Producers must also obtain at their own expense any insurance coverage desired with respect to their equity in the pledged corn.
To comply with this requirement there must be attached to each producer's note a certificate in the form printed in 8 201.19, issued by a company or association licensed to do business in the State in
*For statutory citation, see note to § 201.1.
which the corn is stored. The insurance coverage may be obtained through the customary channels and the form of certificate required will be furnished by the agent writing same. Certificates of insurance issued by official State sealers or inspectors will not be accepted by the Commodity Credit Corporation.
Commodity Credit Corporation has obtained a blanket policy to protect it against loss on account of theft, conversion, and certain other risks not covered by the primary insurance carried by producers. The cost of this coverage is one and one-half (12) cents per $100 per month on the daily average balance of loans outstanding, and this amount will be added as a charge against the corn while the note is held by Commodity Credit Corporation as provided under the terms of the loan agreement.
Banks and other lending agencies desirous of insurance coverage in addition to the primary insurance carried by the producer, until the notes are purchased by Commodity Credit Corporation, must obtain such coverage at their own expense. Such coverage may be obtained through the customary channels or under the blanket policy carried by the Commodity Credit Corporation.
Banks and other lending agencies desiring coverage under the Corporation's blanket policy should write Commodity Credit Corporation, Washington, D. C., and appropriate instructions will be issued, together with the necessary forms for reporting thereunder.** 201.12 Liability of producer. If the producer has made no misstatement or misrepresentation and complied with the terms of the loan agreement he will not be personally liable for any deficiency upon the sale of the pledged corn. The note and loan agreement governs the liability of the producer and should be read carefully.*+
201.13 Direct loans. It is contemplated that producers will ordinarily obtain loans from a local bank or other lending agency which, in turn, may sell the paper evidencing such loans to Commodity Credit Corporation. Arrangements, however, have been made for making direct loans to producers. In such cases the note must be made payable to Commodity Credit Corporation and must be delivered to a Loan Agency of the Reconstruction Finance Corporation shown in § 201.16. Paper for direct loans tendered by mail, in person, or otherwise, must be accompanied by a Producer's Letter of Transmittal on 1937-38 CCC Corn Form B, in duplicate, and must be delivered or postmarked prior to April 1, 1938. The triplicate copy of this letter is to be retained by the producer as a memorandum. Upon delivery of all necessary documents properly executed and upon approval of the loan by the Manager of the Loan Agency, payment will be made pursuant to the letter.*†
201.14 Conditions of loans and purchases. Commodity Credit Corporation will purchase eligible paper, as defined above, only from lending agencies which have executed and delivered to the Loan Agency to which notes are submitted Contract to Purchase 1937-38 CCC Čorn Form D, obtainable only from Loan Agencies of the Reconstruction Finance Corporation. Under the terms of this contract, lending agencies are required to report monthly on 1937-38 CCC Corn Form E all payments or collections on producers' notes held by
*For statutory citation, see note to § 201.1.
them, and to remit promptly to Commodity Credit Corporation at Washington, D. C., an amount equivalent to one and one-half percent interest per annum on the principal amount collected from the date of the note to the date of payment.**
201.15 Obligation of lending agency. The lending agency may endorse the notes of producers to Commodity Credit Corporation without recourse as provided in 1937-38 CCC Corn Form A, provided, however, that the lending agency has executed 1937-38 CCC Corn Form D in accordance with instructions given in § 201.1 (d). No producer's notes are to be endorsed to Reconstruction Finance Corporation. A lending agency desiring to tender producer's notes to Commodity Credit Corporation should execute the last form of endorsement printed on the reverse of such notes. Care should be exercised by the lending agency to determine the authenticity of the signatures to the note and loan agreement and to be assured that the warehouse certificates are genuine and represent merchantable corn in existence.**
201.16 Reconstruction Finance Corporation loan agencies. The location of the Loan Agencies of the Reconstruction Finance Corporation previously referred to herein are shown below:
Kansas City, Mo.
201.17 Federal Reserve Banks as fiscal agents of Reconstruction Finance Corporation. The Federal Reserve banks and branches thereof will act as fiscal agents of the Reconstruction Finance Corporation in making disbursements on eligible paper approved by the Loan Agency of the Reconstruction Finance Corporation in that district. Such notes, together with the farm warehouse certificates securing the same, will be held by the Federal Reserve banks or branches thereof as security for the loans made by the Reconstruction Finance Corporation to Commodity Credit Corporation.**
201.18 Release of collateral. A producer may obtain the release of the collateral pledged upon his request in writing and payment of the amount due thereon with accrued interest and proper charges. If the release of all collateral is desired the producer's note and loan agreement, with the farm warehouse certificate or certificates securing same, will be transmitted to an approved bank with instructions to deliver the note and the farm warehouse certificate, or certificates, to the producer, or his agent, upon the payment of the amount due thereon with accrued interest and proper charges. Where such paper is sent to an approved bank for collection, instructions will be given to return such paper to the sender if payment and release are not effected within 15 days. All charges and expenses of the collecting bank are to be paid by the producer.
Partial releases of collateral will be made on the same basis as stated above, except that the certificate or certificates desired to be released must cover separate cribs and will be sent to an approved bank for delivery to the producer, or his agent, upon the payment of the amount loaned thereon together with accrued interest and
*For statutory citation, see note to § 201.1. †For source citation, see note to § 201.2.
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proper charges. The producer's note will be credited by the Commodity Credit Corporation with the amount of such payment when received. Notwithstanding the privilege of partial release, it is suggested that producers borrowing upon more than one crib of corn, and desiring to obtain the release of a crib, or cribs, before the entire loan is repaid, execute separate notes and loan agreements for crib, or cribs, to be released before the entire loan is repaid.
If the producer's note was made payable directly to Commodity Credit Corporation and he desires to obtain the release of collateral upon payment as aforesaid, he should notify the Federal Reserve bank or branch thereof serving the district in which the corn is sealed as above provided. If his note was made payable to payee other than Commodity Credit Corporation the producer should notify the payee
201.19 Insurance certificate referred to in § 201.11; form.
(subject to all the terms and conditions of Open Policy No. this company or association)
dollars premium issued by
(Company or association) against all direct loss or damage by fire, lightning, cyclone, tornado, windstorm, and hail1 in the sum of dollars on bushels of corn as specified in Warehouse Certificate stored and sealed in cribs and/or buildings on the
township for the term of 1 year from the 19, at 12 o'clock noon, to the
quarter State 19, at 12 o'clock
Any loss which may be ascertained and proven to be due the insured under this contract shall be payable to the insured and/or holder of note and grain storage certificate as their respective interests may appear.
*[1937-38 CCC Corn Form 1, 3 F.R. 126]
201.20 Special (corn) endorsement providing the basis of adjustment in case of loss; form.
All or any part of the corn described in this policy and/or certificate having been pledged under the CCC Corn Loan Form A of the Commodity Credit Corporation as security for loan granted by said Commodity Credit Corporation or Lending Agencies, it is a condition of this insurance that in the event of loss or damage to any of such corn so pledged the basis of adjustment shall be the actual cash value at the time and place of the loss, as set out elsewhere in the printed conditions of this policy or certificate, except that if such actual cash value is less than 50 cents per bushel, plus accrued interest at 2 percent per annum, then such actual cash value shall be disregarded and the value of any corn so pledged shall be deemed to be 50 cents per bushel plus interest.
The provisions of this endorsement shall apply and cover until note has been paid and/or released and/or corn sold.
This special adjustment clause does not apply to any corn not pledged in the manner hereinbefore described.
*For statutory citation, see note to § 201.1.
IN WITNESS WHEREOF, this company has executed and attested these presents, but this certificate shall not be valid until countersigned by a duly authorized agent of this company or association.
*[1937-38 CCC Corn Form 1, 3 F.R. 126]
PART 202-WOOL OR MOHAIR LOANS
Section 202.1 Definitions. As used in the instructions in this part, unless the context otherwise requires, the following terms will be construed respectively to mean:
(a) Producer. Any person, partnership, association, or corporation producing wool or mohair.
(b) Wool pool. Any informal pool organized by and consisting of two or more producers of wool or mohair which is represented by a bank or trust company or agricultural or livestock credit corporation acting as a borrowing representative or agent for such producers, pursuant to Producer's Authority to Pool (1938 CCC Wool Form G). (c) Eligible wool. Wool or mohair produced in 1937 or 1938, the beneficial title to which is and always has been in the producer. (d) Lending agency. Any bank, cooperative marketing association, or other corporation, partnership, association, or person making loans on 1938 CCC Wool Form A, B, or C, or holding notes on these forms evidencing such loans. (A Loan Agency of the Reconstruction Finance Corporation is not included within this definition.) (e) Eligible paper. Notes on 1938 CCC Wool Forms A, B, or Ć or any form hereinafter approved by Commodity Credit Corporation dated subsequent to April 15, 1938, and on or before October 31, 1938, and executed in accordance with the instructions in this part with State documentary revenue stamps affixed thereto when required by law. All notes submitted on 1938 CCC Wool Forms A, B and C must be dated not later than thirty days after the date of the Appraiser's Certificate (1938 CCC Wool Form D) covering the wool or mohair pledged as security therefor. (Notes executed by an administrator, executor, or trustee will be acceptable only where valid in law, and all such notes must be submitted for direct loans in accordance with
*For statutory citation, see note to § 201.1