(a) Eligible producer. An eligible producer shall be any person (individual, partnership, firm, corporation, association, joint-stock company, trust, estate, or other legal entity, or a State or a political subdivision thereof, or an agency of such State or political subdivision) producing cotton in 1945 in the capacity of landowner, landlord, tenant, or sharecropper. Except as provided below, two or more producers may not sell their cotton jointly. If the eligible cotton produced on a farm has been divided among the producers entitled to share in such cotton, each landlord, tenant, and sharecropper may sell his separate share. If the cotton has not been divided, the landlord and one or more of the share tenants or sharecroppers may sell their shares of cotton jointly. In no case shall a share tenant or sharecropper sell individually cotton in which a landlord has an interest. In any case where a landlord sells cotton in which a share tenant or sharecropper has an interest he must have the legal right to do so, and the share tenant or sharecropper must be paid his pro rata share of the proceeds.

The executor or administrator of the estate of a deceased eligible producer, or the guardian of or trustee for an eligible producer, may sell eligible cotton produced by such producer to Commodity Credit Corporation, if he has the legal right to do so.

The heirs who under State law, in the absence of a will, succeed to the property of a deceased eligible producer and, if there is a will, the beneficiaries under the will who are to receive the cotton or any part of the proceeds therefrom, may sell eligible cotton produced by such producer to Commodity Credit Corporation, if no administrator or executor has qualified. All such persons and beneficiaries must

join in executing the sales documents. Each such person and beneficiary must also execute an agreement to indemnify Commodity Credit Corporation, and also the Purchasing Agency if it makes the purchase for Commodity Credit Corporation, against any loss resulting from the establishment by any other person of a superior right to the cotton. The indemnity agreement must be submitted with the sales documents. Copies of this agreement may be obtained from the Regional Office of Commodity Credit Corporation, New Orleans 12, Louisiana.

Sales documents tendered pursuant to the last two paragraphs above must bear a written certificate of approval executed by the appropriate county agricultural conservation committee. Such sales decuments may be submitted to the Regional Office of Commodity Credit Corporation, New Orleans 12, Louisiana, or to a Purchasing Agency, and Commodity Credit Corporation will accept such documents from Purchasing Agents under its 1945 Cotton Purchasing Agency Agreements.

(b) Eligible cotton. Eligible cotton shall be upland cotton produced in the United States in 1945 by an eligible producer, as defined above: Provided, Such cotton meets the following requirements:

(1) Such cotton must be of a grade and staple specified in the table appearing at the end of the 1945 Cotton Loan Instructions (1945 C. C. C. Cotton Form

1).

(2) Such cotton must be represented by warehouse receipts complying with the provisions of § 256.72.

(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 offered for sale by a person who has the legal right to sell it.

(6) If the person producing such cotton for sale is a landlord or landowner, the cotton must not have been acquired by him directly or indirectly from a share tenant or a sharecropper, and must not have been received in payment of fixed or standing rent; if it was produced by him in the capacity of landlord, share tenant, or sharecropper, it must be his separate share of the crop unless he is a landlord and is tendering cotton in which both he and the share tenant or sharecropper have an interest; and he

must not have sold and repurchased the cotton prior to the execution of the 1945 Cotton Producer's Sales Agreement (1945 C. C. C. Cotton Form UA).

(7) Such cotton must be in bales weighing not less than 300 pounds, gross weight.

(8) Such cotton must be undamaged at time of purchase.

(c) Purchasing agency. Any agency approved by Commodity Credit Corporation for the purpose of acting as its agent in purchasing cotton pursuant to the 1945 Cotton Purchase Program in accordance with these instructions and the Cotton Purchasing Agency Agreement (1945 C. C. C. Cotton Form UD) entered into between such agency and Commodity Credit Corporation.

§ 256.67 Forms. The following documents must be delivered in connection with every sale:

(a) (1) A 1945 Cotton Producer's Sales Agreement (1945 C. C. C. Cotton Form UA), duly executed prior to July 1, 1946.

(2) Warehouse receipts complying with the provisions of § 256.72 hereof.

(3) A Cotton Purchasing Agency's Letter of Transmittal (1945 C. C. C. Cotton Form UC), except in case of direct purchases.

(b) If the cotton being tendered is under a 1945 Cotton Producer's Note and Loan Agreement, the following forms may be delivered in lieu of the forms specified in (a) above:

(1) A 1945 Cotton Producer's Transfer Agreement (1945 C. C. C. Cotton Form UR) duly executed prior to July 1, 1946.

(2) The producer's duplicate copy of 1945 Cotton Producer's Note and Loan Agreement.

§ 256.68 Amount. The purchase price per pound which will be paid for the gross weight of middling 15/16 inch eligible cotton stored in approved warehouses is shown in the Schedule of Purchase Prices for 1945 Crop Cotton in the Instructions to Warehousemen issued by Commodity Credit Corporation for each warehouse location. Grade and staple premiums and discounts for qualities other than middling 1516 inch cotton shall be those in effect under the 1945 Cotton Loan Program. These premiums and discounts are shown in the table appearing at the end of the 1945 Cotton Loan Instructions. Purchases will not be made of

grades and staple lengths of cotton not shown in the schedule.

An allowance of 20 cents per 100 pounds in Arizona and California and 15 cents per 100 pounds in all other States will be made for cotton outside the zoned area when compressed to standard density. No cotton will be purchased which has been compressed to high density. An allowance of 7 pounds will also be made on bales covered with cotton bagging. Bales weighing between 300 and 400 pounds will be purchased at the regular purchase price less $1.25 for each such bale.

All

§ 256.69 Classification of cotton. cotton must be classified by a Board of Cotton Examiners of the United States Department of Agriculture. Instructions will be issued to approved warehouses concerning sampling and forwarding of samples and recording the class of the cotton in the schedule of warehouse receipts in the 1945 Cotton Producer's Sales Agreement and in the 1945 Cotton Producer's Transfer Agreement. The classification of any cotton previously classed by a Board of Cotton Examiners for the loan program may be used by transcribing such classification from the loan to purchase forms. A charge of 15 cents per bale will be made for cotton classed under the program. The warehouseman should collect this charge from the producer. The Board of Cotton Examiners will make collections for classing charges from the warehouseman at the end of each month. Form 1 Classification Memorandum of the United States Department of Agriculture will also be accepted as evidence of the class of cotton provided the sample is a representative cut sample drawn by an approved warehouseman, United States Department of Agriculture employee, or a bonded sampler.

§ 256.70 Preparation of documents. A producer desiring to sell his cotton to Commodity Credit Corporation may obtain the necessary forms from an approved cotton warehouse, a purchasing agency, or the county office of the Agricultural Adjustment Agency. The warehouseman who has issued the warehouse receipts representing the cotton will fill in all except the last two columns of the Schedule of Warehouse Receipts in the 1945 Cotton Producer's Sales Agreement. He will also execute the Warehouseman's Certificate and Storage Agreement. In the case of purchases through a pur

chasing agency, the purchasing agency will then determine the amount due the producer on the basis of the Schedule of Purchase Prices for 1945 Crop Cotton and will complete the Schedule of Warehouse Receipts. It will also assist the producer in completing the remainder of the sales agreement. In the case of direct purchases under the 1945 Cotton Producer's Sales Agreement by Commodity Credit Corporation, after the warehouseman has executed the Warehouseman's Certificate and Storage Agreement the county agricultural conservation committee will complete the Schedule of Warehouse Receipts and assist the producer in completing the remainder of the sales agreement.

If the cotton being tendered for purchase is held under Form A loan (1945 Cotton Producer's Note and Loan Agreement), the producer may, in lieu of redeeming the cotton and tendering it under the forms prescribed in § 256.67 (a) hereof, execute a 1945 Cotton Producer's Transfer Agreement, attach his duplicate copy of the Form A or, if such duplicate copy of the Form A is not available, a Form AA (Cotton Producer's Equity Transfer Agreement) executed by the Federal Reserve bank covering such cotton, and present these documents to the warehouseman in whose warehouse the cotton is stored. The warehouseman will execute the Warehouseman's Certificate and Storage Agreement, in the 1945 Cotton Producer's Transfer Agreement, and the documents should be transmitted to the Federal Reserve bank serving the district in which the cotton is stored. Producers will not be permitted to tender under a transfer agreement cotton held under a Form A loan if any bale of such cotton is damaged and has to be reconditioned. After such cotton has been reconditioned by the warehouseman, it may be tendered on the reconditioned weights to the Corporation under a 1945 Cotton Producer's Sales Agreement. All farm-stored loan cotton must be redeemed from the loan and tendered under a 1945 Cotton Producer's Sales Agreement.

§ 256.71 Approved warehouses. Cotton to be eligible for purchase must be stored in warehouses approved by Commodity Credit Corporation. When warehouses are approved, notification will be given to the approved purchasing agencies. Complete instructions will be issued to warehousemen, at the time of

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approval, for their guidance in completing the Schedule of Warehouse Receipts in the 1945 Cotton Producers' Sales Agreement.

§ 256.72 Warehouse receipts. Only negotiable warehouse receipts issued by an approved warehouse, dated on or prior to the date of the 1945 Cotton Producer's Sales Agreement, 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 gross 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. Block warehouse receipts will not be accepted.

§ 256.73 Warehouse charges. All warehouse charges must be paid by the producer to the close of the month during which the Warehouseman's Certificate and Storage Agreement in the 1945 Cotton Producer's Sales Agreement or the 1945 Cotton Producer's Transfer Agreement is executed. Warehouse charges thereafter will be in accordance with the Warehouseman's Certificate and Storage Agreement.

§ 256.74 Insurance. Under the terms of the Warehouseman's Certificate and Storage Agreement, the warehouseman is not required to insure the cotton against loss from fire after the date of execution of the certificate and storage agreement. Consequently, if the producer does not sell the cotton to Commodity Credit Corporation within 10 days after the certificate and storage agreement has been executed, the producer, if he desires to have the cotton insured against fire, will have to arrange for such insurance.

§ 256.75 Liens. Eligible cotton must be free and clear of all liens. The names of the holders of all existing liens on cotton tendered for sale, such as landlords, laborers, and mortgagees, must be listed in the List of Lienholders in the 1945 Cotton Producer's Sales Agreement, and the lienholders so listed must execute the Lienholder's Waiver in such form. If the producer is a tenant or sharecropper, the landlord must be listed and must sign the lien waiver whether or not he claims a lien, unless the 1945 Cotton Producer's Sales Agreement is signed jointly by the

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landlord and the tenant or sharecropper. A misrepresentation as to prior liens, or otherwise, will render the producer personally liable for any damage suffered by Commodity Credit Corporation 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 [1940]). The Lienholders' Waiver in the 1945 Cotton Producer's Sales Agreement must be signed personally by all lienholders listed, by their agents (in which case duly executed powers of attorney must be attached), or, if corporations, by the designated officers thereof customarily authorized to execute such instruments (in which case no authority need be attached).

§ 256.76 Manner of payment to producer. Purchases of cotton under the 1945 Cotton Producer's Sales Agreement will ordinarily be made by purchasing agencies, acting as agents for Commodity Credit Corporation. In such a case, the producer must tender a sales agreement and warehouse receipts representing the cotton offered for sale to the purchasing agency within 10 days after the date of the Warehouseman's Certificate and Storage Agreement in section II of the sales agreement, but in no event later than June 30, 1946. After completion of the sales agreement, the purchasing agency will pay the purchase price on behalf of the Corporation in the manner directed in section III of such sales agreement.

A producer may also obtain payments direct from Commodity Credit Corporation by tendering a properly executed 1945 Cotton Producer's Sales Agreement and warehouse receipts representing the cotton offered for sale to the Regional Office of Commodity Credit Corporation, New Orleans 12, Louisiana, within 10 days after the date of the Warehouseman's Certificate and Storage Agreement, but in no event later than June 30, 1946. If the tender is made by mail, the envelope must be postmarked within 10 days after the date of the Warehouseman's Certificate and Storage Agreement, but in no event later than June 30, 1946.

If the cotton is being tendered under a 1945 Cotton Producer's Transfer Agreement, the producer's duplicate copy of the 1945 Cotton Producer's Note and Loan Agreement or a Cotton Producer's Equity Transfer Agreement executed by

the Federal Reserve bank, and the transfer agreement, must be mailed to the Federal Reserve bank serving the district in which the warehouse is located within 10 days after the date of the warehouseman's Certificate and Storage Agreement in the 1945 Cotton Producer's Transfer Agreement, but in no event later than June 30, 1946. The Federal Reserve bank, as agent of Commodity Credit Corporation, will calculate the amount due the producer and mail him a check for such amount, together with a copy of the transfer agreement on which the payment calculations are shown.

As between Commodity Credit Corporation and the producer, the Corporation will bear all risks of loss or damage to the cotton on and after the date of Warehouseman's Certificate and Storage Agreement in the sales or transfer agreement if it is tendered to the Corporation, with the required documents attached, within 10 days of the date of the certificate and storage agreement, but in no event later than June 30, 1946.

§ 256.77 Purchasing agencies. Agencies desiring to cooperate in the purchase program should apply to the Regional Office of Commodity Credit Corporation, New Orleans 12, Louisiana, for approval. A Cotton Purchasing Agency's Agreement (1945 C. C. C. Cotton Form UD) will be entered into with each approved agency. Under this agreement, a purchasing agency is required to tender, on a Cotton Purchasing Agency's Letter of Transmittal (1945 C. C. C. Cotton Form UC), all warehouse receipts representing cotton purchased by the purchasing agency under such agreement, together with the 1945 Cotton Producer's Sales Agreements covering such cotton, to the Regional Office of Commodity Credit Corporation, New Orleans 12, Louisiana, within 15 days after the dates of execution of the Warehousemen's Certificate and Storage Agreement in such sales agreements. Upon receipt by Commodity Credit Corporation, the instruments will be examined, and, if the documents are in order, disbursements will be made or notes guaranteed by the United States will be issued to the purchasing agency, all in accordance with the terms of the Cotton Purchasing Agency's Agreement. Care should be exercised by the purchasing agency to determine that the warehouse receipts are genuine.