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or standing-rent tenant, and is placing under loan cotton in which both he and a share tenant or sharecropper have an interest.

(7) Such cotton must not have been received in payment of standing or fixed rent.

(8) The persons having an interest in the cotton must all be entitled to a loan on the cotton at the full loan rate.

(d) Certificate of indemnity. Cotton covered by a Certificate of Indemnity (Form FCI-74, issued by Federal Crop Insurance Corporation) will also be eligible for direct loans by Commodity Credit Corporation, in accordance with § 239.1a.

(e) Lending agency. Any bank, corporation, partnership, association, or person making a loan to a producer, pursuant to a Form A, in accordance with the instructions in this part.

(Form

(f) Eligible paper. Form A duly executed subsequent to July 31, 1943, and prior to May 1, 1944. State documentary revenue stamps should be affixed thereto where required by law. A executed by an administrator, executor, or trustee will be acceptable only where valid in law and must be submitted for a direct loan in accordance with §239.11 unless accompanied by a repurchase agreement of the lending agency. Copies of this agreement may be obtained from the regional office of Commodity Credit Corporation, New Orleans, Louisiana.)

§ 239.1a Instructions for making loans on cotton covered by a Certificate of Indemnity (Form FCI-74, issued by the Federal Crop Insurance Corporation)-(a) Eligible certificate. An eligible certificate shall be a certificate representing 400 pounds or more of cotton against which no collateral assignment is outstanding.

(b) Amount. Direct loans on cotton covered by certificates will be made at the base loan rate shown in the "Schedule of Basic Rates by Cities and Counties for Cotton Entering the 1943 Loan", adjusted for the appropriate premium or discount for grade and staple length as shown in Table No. 1 attached to the 1943 Cotton Loan Instructions (1943 C.C.C. Cotton Form 1-Instructions, as amended). In determining the loan rate the location and the grade and staple shown in the certificate shall be used.

(c) Eligible producer. Loans will be made only on certificates issued to "Eligible producers" as defined in the 1943 Cotton Loan Instructions. (§ 239.1 (b))

(d) Forms. The following documents must be delivered in connection with every loan:

1. 1943 Cotton Producer's Note and Loan Agreement (1943 C.C.C. Cotton Form A).

2. Certificate of Indemnity (FCI-74, issued by the Federal Crop Insurance Corporation). 3. Producer's Letter of Transmittal (C. C. C. Cotton Form B).

(e) Manner of obtaining loans. An eligible producer desiring to obtain a loan on indemnity cotton should present his certificate to the county agricultural conservation committee. The county committee will prepare 1943 Cotton Producer's Note and Loan Agreement, hereinafter referred to as note, and Producer's Letter of Transmittal, for the producer's signature, and mail the executed documents, together with the related certificate, directly to the Regional Office of Commodity Credit Corporation, New Orleans, Louisiana. Upon approval of the forms, Commodity Credit Corporation will make payment of the amount of the loan in accordance with the directions of the producer contained in the note.

(f) Service fee. To meet the cost of preparing loan documents in the county agricultural conservation office a service fee of twenty-five cents shall be collected from each producer obtaining a loan on a cotton crop insurance indemnity.

(g) Repayment. If the producer desires to repay the loan from the cash equivalent to the certificate and obtain the balance of such cash equivalent, he should notify the appropriate branch office of the Federal Crop Insurance Corporation. The Federal Crop Insurance Corporation will establish the amount of the cash equivalent, make payment to Commodity Credit Corporation of the amount due on the loan, and remit any balance, after repayment of the loan, to the producer. Upon receipt of payment, Commodity Credit Corporation will stamp the note "paid" and return it to the producer. The certificate will be delivered to the Federal Crop Insurance Corporation. [1943 C.C.C. Cotton Form 1, Supp. 2, Sept. 27, 1943, 8 F.R. 14036] NOTE: § 239.1a appears at 8 F.R. 14036 as §239.1 (d) 1.

$239.2 Forms. The following documents must be delivered in connection with every loan:

(a) Form A.

(b) Warehouse receipts complying with the provisions of § 239.8.

(c) Producer's Letter of Transmittal (С. С. C. Cotton Form B) or Lending Agency's Letter of Transmittal (C. C. C. Cotton Form C).

§239.3 Amount. The base loan rate applicable at each approved warehouse will be shown on the "Schedule of Approved Warehouses" issued by Commodity Credit Corporation and available at the office of the county agricultural conservation committee. Premiums and discounts applicable to each grade and staple length are shown in Table No. 1 attached. Loans will not be made on grades or staple lengths of cotton not shown in such table. Loans will be made at the rates shown in the "Schedule of Approved Warehouses" adjusted for appropriate premium or discount for each grade and staple. All loans will be made on the net weight of the lint cotton.

§239.4 Classification of cotton. All cotton must be classified by a Board of Cotton Examiners of the United States Department of Agriculture. Warehousemen should forward samples to the Board of Cotton Examiners serving the district in which the warehouse is located, and a list showing the class of the cotton will be returned by said board. Instructions have been issued to approved warehouses concerning sampling and forwarding of samples and recording the class of the cotton in the loan agreement. No separate charge is to be made to producers for this service as it is included in the Warehousemen's Storage Agreement. A Form 1 classification memorandum of the United States Department of Agriculture will also be accepted as evidence of the class of cotton.

A charge of 15 cents per bale will be made for classing the cotton. The Board of Cotton Examiners will make collections for classing charges from the warehousemen at the end of each month. A certified check, cashier's check, or postal money order, payable to Commodity Credit Corporation, must be sent to the Board of Cotton Examiners by the warehouseman in payment of these charges, The warehouseman should collect this charge from the producer.

§239.5 Preparation of documents. A producer desiring to obtain a loan may

1 Plus 2 cents for each bale over 10. 2 Plus 1 cent for each bale over 20.

All blanks must be filled in with ink, indelible pencil, or typewriter, in the manner indicaed therein, and no documents containing additions, alterations, or erasures will be accepted by Commodity Credit Corporation. Only the original copy of Form A is to be signed, the copy marked duplicate is to be retained by the producer.

The schedule of warehouse receipts must represent cotton of only one grade and staple length.

The representations in subsection 3 (f) of the Loan Agreement in Form A respecting the issuance of white marketing cards shall be ineffective, since marketing cards will not be issued by the Agricultural Adjustment Agency for cotton of the 1943 crop.

§ 239.6 Certification of producer. As evidence that the producer is entitled to a loan at the full loan rate, Commodity Credit Corporation will accept the Clerk's Certificate in Form A. The certification in the Clerk's Certificate that the producer has exhibited white marketing cards shall be ineffective. County agricultural conservation committees will furnish approved clerks with lists of producers who have knowingly exceeded their allotment on any farm which does not come within the provisions of § 239.1 (b) (1). A clerk shall not execute the Clerk's Certificate on a Form A if the producer's name is contained on any such list but shall refer the producer to the county agricultural conservation committee, which will execute its certificate on the Form A if the producer is entitled to a loan because the farm on which the cotton was produced comes within the provisions of § 239.1 (b) (1). Such certificate must also be completed on any Form A tendered to Commodity Credit Corporation for a direct loan pursuant to § 239.11.

§239.7 Approved warehouses. Warehouse receipts representing eligible cotton will be accepted as security for loans made pursuant to Form A only if issued by warehousemen approved by Commodity Credit Corporation. Warehousemen desiring to be approved should communicate with the regional office of the Commodity Credit Corporation, New Orleans, Louisiana. When warehouses are approved, notification will be given either by letter or published lists. All cotton pledged as security for any one loan must be in the same warehouse.

The warehouseman is required, as provided in the Warehouseman's Certificate and Storage Agreement in Form A, to draw representative samples from the bales and to deliver or forward such samples to a Board of Cotton Examiners for classing, except where Form 1 classification memorandum of the United States Department of Agriculture is used.

Since the loan will be made on net weight, it will be necessary for the warehouseman to determine the amount of tare on each bale and show the tare in the Schedule of Pledged Cotton in Form A. Instructions will be issued to the warehousemen for their guidance in determining tare.

§239.8 Warehouse receipts. Only negotiable warehouse receipts issued by an approved warehouse, dated on or prior to the date of the producer's note and properly assigned by an endorsement in blank so as to vest title in the holders or issued to bearer, will be acceptable. They must set out in their written or printed terms a description by tag number and weight of the bale represented thereby and all other facts and statements required to be stated in the written or printed terms of a warehouse receipt under the provisions of section 2 of the Uniform Warehouse Receipts Act. Warehouse receipts issued prior to Au

gust 1, 1943, which by their terms will expire prior to August 1, 1944, must bear an endorsement of the warehouse extending the terms of the warehouse receipt for a period of 1 year from August 1, 1943. Block warehouse receipts will not be accepted.

§ 239.9 Warehouse charges. The warehouseman's charges are limited and his obligation defined by the Warehouseman's Certificate and Storage Agreement contained in Form A. This should be read carefully and must be executed by the warehouseman issuing the cotton warehouse receipts pledged as collateral to the producer's note.

§239.10 Liens. Eligible cotton must be free and clear of all liens except in favor of the warehouse in which the cotton is stored, as specified in the Warehouseman's Certificate and Storage Agreement in Form A. The names of the holders of all existing liens on cotton tendered as security for a loan, such as landlords, laborers, or mortgagees (but not warehousemen), must be listed in the space provided therefor in Form A, and the lienholders so listed must execute the Lienholders' Waiver in such form. If the borrower is a tenant or a sharecropper, the landlord must be listed in Form A and must sign the lien waiver whether or not he claims a lien, unless the producer's note is signed jointly by the landlord and the tenant or sharecropper. A misrepresentation as to prior liens, or otherwise, will render the producer personally liable under the terms of the loan agreement and subject him to criminal prosecution under the provisions of section 35 (A), of the Criminal Code of the United States (18 U.S.C. 80). The Lienholders' Waiver in Form A must be signed personally by all lienholders listed or by their agents, or, if a corporation, by the designated officer thereof customarily authorized to execute such instrument, in which case the duly executed authority need not be attached. A Form A will not be acceptable unless all prior lienholders are listed therein and have executed the Lienholders' Waiver.

§239.11 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. Arrange

ments, however, have been made for making direct loans to producers prior to May 1, 1944. In such cases, the note must be made payable to Commodity Credit Corporation and must be tendered to Commodity Credit Corporation, New Orleans, Louisiana, on a Producer's Letter of Transmittal (C. C. C. Cotton Form B) in duplicate, postmarked not later than April 30, 1944, if tendered by mail. Upon delivery of all necessary documents, properly executed, and upon approval, payment will be made in accordance with the directions of the producer contained in the C. C. C. Cotton Form B, which permits the producer, if he so desires, to designate persons other than himself to receive all or part of the proceeds of the loan.

Direct loans will also be made on Certificates of Indemnity (Form FCI-74, issued by the Federal Crop Insurance Corporation). Instructions with reference to the requirements of Commodity Credit Corporation in making such loans will be issued by Commodity Credit Corporation as a supplement to these instructions and will be made available through the county agricultural conservation committees.

NOTE: For direct loan instructions, see §239.1a, supra.

§239.12 Loans on farm-stored cotton. Loans will be made on eligible farmstored cotton covered by Cotton Chattel Mortgages (C. C. C. Cotton Form F). These loans may be obtained through lending agencies or direct from Commodity Credit Corporation through county agricultural conservation committees. Information concerning such loans may be obtained from county agricultural conservation committees.

Loans on farm-stored cotton of the 1943 crop will be made at the base loan rate shown in the schedule of Basic Loan Rates by Counties for Farm-Stored Cotton for the county in which the cotton is stored, adjusted for the appropriate premium or discount for grade and staple length as shown in Table 1, infra. Eligibility of a cotton producer for such a loan shall be governed by the provisions of these instructions and any amendments thereto, except that eligible cotton shall be cotton produced in 1943 by or for a producer, provided that the cotton meets the following requirements:

(1) Such cotton must be of a grade and staple specified in Table 1, infra.

(2) Such cotton must be covered by a Cotton Chattel Mortgage (C. C. C. Cotton Form F) which will give the payee of the Cotton Producer's Note (C. C. C. Cotton Form E) secured by such mortgage a first lien on such cotton.

(3) Such cotton must not be compressed to high density.

(4) Such cotton must be free and clear of all liens and encumbrances.

(5) Such cotton must be tendered for a loan by a person who has the legal right to mortgage it as security for a loan.

(6) The beneficial interest in the cotton must be, and must always have been, in the person tendering such cotton for a loan, or in such person and any share tenant or sharecropper having an interest in the cotton or its proceeds in case such person is a landlord, cash tenant, or standing-rent tenant, and is placing under loan cotton in which both he and a share tenant or sharecropper have an interest.

(7) Such cotton must not have been received in payment of standing or fixed rent.

(8) All persons having an interest in the cotton must be entitled to loans on the cotton.

Loans may be obtained either directly from Commodity Credit Corporation or through a lending agency. The procedure to be followed in obtaining loans may be found in the Instructions and Procedure for State and County Committees pertaining to the Farm-Storage Cotton Loan Program (Cotton Loan (Farm Storage), Part I, Revised) issued by the Agricultural Adjustment Agency.

Members of county agricultural conservation committees, by approving cotton producer's notes by signing in the space provided on such notes for the appoval of the note by the county agricultural conservation committee, certify on behalf of such committees:

(a) That the producer is an "eligible producer" as defined in these instructions.

(b) That the mortgaged cotton is stored under seal in a storage facility located upon the premises described in section 2 of the chattel mortgage executed by the producer, and is in good condition and free from any damage.