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Historic, Archive Document 

Do not assume content reflects current 
scientific knowledge, policies, or practices. 







, (O.sie'Y' 

WAR FOOD ADMINISTRATION 
OFFICE OF DISTRIBUTION 



1944 CROP 




Finance Le.'tter No. 43 
Classification 560 



IRISH POTATO LOAN PROGRAM - LCL3a 



I. INTRODUCTION ' ' ' 

War Food Administration has authorized^ the making of loans on 1944 late crop 
potatoes stored in approved warehouses or on farms in approved storage 
structures.^ The program will be administered through, the facilities 'of the 
Office of Distribution, .War .Food Administration, as agent for Commodity 

Corporation, hereinafter referred to as "Commodity Credit Corporation, 
/• ^ Farm and warehouse loans on potatoes located, within the producing 
area will be' administered locally by State and County Agricultural Conserva- 
,tion Committees. All correspondence, loan documents, remittances, etc., 
except service fees , .dn^ co nnection with loans shall be sent to the appropriate 
egional Finance Office of the Office of Distribution. The chief purpo se 
of the program is ^ to ^support potato prices at not less than 90 per cent of 
parity as of ^ly 1> 1944, for the late crop. In connection with the loan 
program, such diversion and procurement operations as might be practicable 
will be conducted. 



general DESCRIPTION OF THE PROGRAM ■ . • 

To Whom Loans May Be Made . Loans will be made on 1944 late crop potatoes 
to producers, cooperative associations of producers, certified potato 
dealers and potato processors." 

Loans May Be Obtained . All farm and warehouse loans within the 
producing area must be approved by the County Agricultural Conservation 
Committee of the county in which the potatoes are stored. The committee 
^ indi cate its approval by having one of its members sign the 
. promissory note. Loans, may be obtained directly through Regional Finance 
^Offices of the Office of Distribution or from any bank or other lending 
agency making loans pursuant to these instructions, provided such lending 
agency has executed a Contract to Purchase on CCC Form E (Potatoes). 

d^o^nt of Loan. The amount of the loan shall be computed in accordance 
with the 1944 Schedule of Loan Rates. In the case of ungraded lots the 
loan will be computed on the basis of the percentage of U.S.No.l quality 
and the percentage of U.S. No. 1, size B and U.S.No. 2 (l 7/8 inch minimum) 
quality potatoes in, the lot. 

D. Terms of Loan,. Loans will' mature on demand or on March 31, 1945, vhichever 

is. earlier. All loans wall bear- interest at the rate of 3 per cent per 
annum. ■ . 

F*' FTnal Da te of Obtaining Loans . Application for loans.may.be made by 



Program Accounting 
General 

Loan Programs 



10-19-44 

1 



Sheet 1 



Finance Letter No. 43 
Classification 560 



( 



eligible borrowers only between the dates of September 15, 1944, and 
December 15, 1944. 

F. Potatoes Eligible for Loans . In order for potatoes to be eligible for 
such loans, they must satisfy the following requirements? 

(a) They must be mature Irish potatoes of the 1944 crop and in proper 
condition for storing. 

(b) They must have been inspected by licensed Federal or Federal -State 
inspectors, or by a person designated for the purpose by the State 
AAA committee or the regional director of Office of Distribution, 
each for its respective field of operation. In the case of ungraded 
lots, the percentage of U.S. No. 2 quality and the percentage of 

U. S. No. 1, size B or U. S. No. 2 (l v/s inch minimum) quality 
potatoes in the lot must be estimated by the inspector. 

(c) Loans will be made on the quantity of U. S. No. 1 quality potatoes 
in the lot at. the applicable loan rate for U. S. No. 1 potatoes 
plus the quantity of U. S. No. 1, size B or U. S. No. 2 (l 7/s inch 
minimum) quality potatoes in the lot at the applicable loan rate 

or U. S. No. 2 po.tatoes. 

(d) The potatoes must be in lots, as shown by such inspection, containing 
no more than two percent soft rot nor more than three per cent dry 
rot, including late blight. 

(e) In the case of loans to producers, the beneficial interest in the 
potatoes must be and must have always been in the producer. 

(f) In the case of loans to cooperative associations of producers, the 
potatoes must have been acquired pursuant to a 1944 Potato Producer’s 
Sales Agreement (CCC Potato Form C) • (The purpose of requiring the 
executing of such sales agreement is to insure that the cooperative 
association has the power to give a valid mortgage on the potatoes.) 

( g) In the case of loans to dealers, the dealer must have purchased 

the potatoes from producers at not less than the applicable support 
price, and must have applied for and received a certificate declaring 
such dealer eligible to participate. 

G. Preparation and Execution of Loan Documents. All borrowers, whether 
producers, cooperative associations, or dealers, will, for each loan 
advanced, execute a promissorj^ note on Producer’s Note (CCC Form A). 

Notes representing loans obtained through the Office of Distribution 
should name Commodity Credit Corporation as payee and should be forwarded 
to the Regional Finance Office of the Office of Distribution serving 

the area. Notes representing -loans obtained from lending agencies 
should name the lending agency as payee. 

All borrowers must also execute a Chattel Mortgage (CCC Form AA) 



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Finance Letter No •.',43 
Classification 560 



securing each note* The mortgage must cover all the potatoes dn the 
lot. The borrower must also be given a copy of the Mortgage Supple- 
ment (Loan Agreement) (1944 Potatoes)* . . 

The names of the holders of all existing liens on the potatoes, such as 
landlords, laborers, or mortgagees must be. , listed, in the space provided 
therefor on the chattel mortgage, and the lienhoider-, so listed must 
execute the lienholder ’ s* waiver on the mortgage, or on CCC Form AB. 

• All blanks mbst be filled in with ink, indelible, pencil, or ..typewriter,, 
and no documents containing additions, alterations, or erasures will be 
accepted. 

In applying, for a loan, there must be submitted to the County Agricultural 
Conservation Committee with the note and chattel mortgage, inspeptor’s 
certificates covering the potatoes, and in the case of loans to 
cooperative associations, copies of Potato Sales Agreements for all of 
the potatoes tendered. 

H* Storage . In the case of farm-stored potatoes, the potatoes must be ■ 

stored in'storage facilities of such substantial and permanent construction 
as determined by the County Agricultural Conservation Committee to insure 
safe keeping of the potatoes throughout the storage season. In the ease 

I" of warehouse-stored potatoes, the potatoes must be stored in warehouses 
approved by the County; Agricultural Conservation Committee which (a) have 
convenient shipping facilities, (b) will afford safe storage throughout 
the storage season, ( c) will afford protection against rodents, other 
animals, thieves, and weather, (d) are frostproof or contain a heating 
system sufficient to protect potatoes from frost damagej» (e) contain 
sufficient space and possess or have access to adequate facilities for 
grading, packaging, weighing and otherwise handling potatoes, (f) will 
permit the regular inspection of such potatoes by the warehouseman, the 
County Agricultural Conservation Committee, and the VJar Food. Administra- 
tion, and (g) will permit the segregation of each lot of potatoes in bins, 
which bins must be capable of being identified, and must afford adequate 
ventilation and drainage. 

I. ■ Release of Potatoes . At any time before the maturity of the loan the 
borrower may obtain a release of all or any part of the potatoes upon . 
payment, in the case of total redemption, or in the case of a partial 
redemption for processing by the borrower, of the principal amount of ■ 
the loan-, together with three per cent interest per annum with respect 
V to the potatoe s Teleased, and in the case of a partial redemption for 
sale, upon payment of the net proceeds received from the sale of the-. 

: potatoes, exclusive 6f charges for services actually rendered at rates 

recommended by State Potato Committees or by the State AAA Committees in 
States having no State Potato Committee, and approved by the , Regional . 
Director of Office of Distribution, except that, in np event shall such 

Progrtoi /ccounting 
General 

Loan Programs 




- .Sheet 2 



Finance Letter No. 43 
.Classification 560 



partial repayment be less than the amount loaned, plus interest with 
respect to the potatoes released. 

J. Settlement . If a borrower notifies the county committee of deterioration 
or threatened deterioration such as to require immediate disposal of the 
potatoes to avoid excessive loss, the county committee will, in all cases 
v/here the borrower can make delivery, notify the Regional Director in the 
Office of Distribution, by telegraph or telephone, regarding the borrower, 
name, location of potatoes and quantity to be shipped, and request 
shipping instructions. The Regional Direc,tor of the Office of Distribution 
will (l) transmit shipping instructions to the county committee or 
(2) notify the committee that immediate acceptance of delivery of the 
potatoes is not possible. The county committee will, on receipt of 
shipping instructions, request immediate delivery of the potatoes and 
settlement will be made on the basis of the grades and quantities 
delivered. 

In cases where immediate acceptance of delivery is impossible or delivery 
is impracticable the county committee will arrange for a reinspection in 
storage of the potatoes, and final settlement at the time the potatoes 
are actually delivered will be on the basis of such ' reinspe ction. 

The borrower may, prior to the maturity of his loan, request the county 
committee to provide such borrovirer instructions to enable him to deliver 
on or after January 1, 1945, the potatoes in satisfaction of his mortgage 
indebtedness. The county committee will, on receipt of such requests, 
request the Regional Director of the Office of Distribution to provide 
shipping instructions. 

As soon as detailed operations procedure for handling the potatoes 
acquired in satisfaction of loans has been concluded, detailed Finance 
procedure will be issued. 

Upon ' del ivery of -potatoes, borrowers will be credited with the full 
support price applicable to the location and condition at the time of 
delivery or time of settlement, with adjustments for marketing services 
not actually performed. Office of Distribution may buy the potatoes 
either under Section 32 Fund Programs or under the GCP Program. 

Adjustments will be made between the program of purchase and the loan 
program for the amount of the loan plus interest involved. 

In order to assure- full price support to the borrower who. has repaid his 
loan and has remaining potatoes formerly covered by the loan, and to 
■protect the interests of the Commodity Credit Corporation with respect 
to such potatoes, the folio-wing procedure will be used; 

1. The borrower shall declare at the time he repays his loan, the 
quantity of potatoes formerly covered by the loan which remain 
in his possession. 

2. The borrower will be permitted to deliver such remaining potatoes 



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Finance* Letter ^ No. 43 
Classification 560 



to Comniodity^ Credit Corporation passing iitle thereto, free and clear 
of liens -and ’ encumbrances> and will receive in settlement therefor the 
same prices as though such potatoes had been delivered in satisfaction 
■ ■ of the loan. ' ' ' 

3i. Commodity Credit Corporation may request delivery of such potatoes 
at a specified date and- in' the same manner as if being delivered in 
satisfaction of a loan and, if the borrower fails to make such 
delivery, the Commodity Credit Corporation shall be relieved of any 
further 'pr ice 'support obligations with ' respect to such potatoes. 

County Agricultural Conservation Com mittee. Loan forms will be furnished 
County 'Agricultural Conservation Commltiiees , and copies for the purposes of 
•ihformation may be obtained from such committee, or from the Regional 
Finance Offices of the Office of Distribution serving the area. Pursuant 
to regulations issued by the War Food Administration, ’ State and County . ? 
Committees shall be ■ responsible with respect to all farm and warehouse loans 
on potatoes located 'within theproducing area for the supervision of the work 
;of- inspection of storage structures and potatoes, the determination of the 
borrower ’ s. eligibility, the preparation, filing, and certification of all 
loan documents, maintenance of records,- ' submission of reports, arrangements 
for delivery, and other supervision necessary for proper care of the pledged 
collateral; provided, however, that the coun-ty committee may formally 
designate certain employees of the Coup-ty Association to execute loan 
forms on behalf of the committee. 

In order to- meet the cost of local expenses. County Agricultural Conserve- . 
tion Committees will 'collect from the borrovrer a service fee of 2 cents 
per 100 pounds, but in no case less than C|5»00 per application. Fees 
shall be handled according to previous instructions and forwarded to 
Treasurer, Ooramodity Cre-dit' Corporation, Washington 25, D’. C.' a 

1. Routing of Loan Documents . 

Loans made through approved lending agency . The coun'ty committee 
will attach securely to the original note a copy of ’’Special 
Instructions to Lending Agency.” The original ’’Producer’s Note,” 
■when signed by the producer and approved by the county committee, 
■will be transmitted to the designated payee together with the 
county office copy. The payee -vvill stamp or write the date of 
disbursement of funds on both the original and' coun'ty office 
copies and will return county office copy to appropriate county 
corranittee- at regular intervals. The producer’s copy vrill be 
retained in the coun'ty office until the county office copy is 
returned. 

•' • 'The' county recorder’ s copy' and coun'ty office copy of the chattel 

: ■ C ' 

Program Accounting 
General 

Loan Programs 




Sheet 3 - 



Finance Letter No. 43 
Classification 560 



mortgage, properly signed and acknov/ledged, will be submitted to 
the county recording official by the county committee in order 
that the receipt of the recording official may be executed on the 
county office copy. The county recorder’s copy will be retained 
in the office of the recording official and the county office 
copy will be filed in the county office with the producer’s 
worksheet and copy of the note. 

The yellow copies of all chattel mortgages -vd 11 be forv/arded 
daily to the appropriate Regional Finance Office of the Office 
of Distribution. 

Loans made direct through CCC(OP ). The county committee will 
transmit the original and the county office copy of the "Producer’s 
Note" and the yellow copy of the "Chattel Mortgage" direct to the 
appropriate Regional Finance Office of the Office of Distribution. 
Vifhen payment is made, the date of disbursement of funds will be 
stamped on both the original 'and county office copies of the 
"Producer’s Note," and the county office copies will be returned 
to the appropriate county committee at regular intervals. The 
producer’s copy mil be retained in the county office until the 
county office copy has been returned. 

2. Records to be Maintained by County Committee . The county committee 
will maintain a daily record. of loans certified. On Saturday of each 
week the committee shall report to the State AAA. office (l) the number 
of loans, the total quantity and grade of collateral, the amount of the 
principal advanced on loans, (2) the number of loans vrhich have been 
partially or wholly repaid, the total quantity and grade of collateral 
released, and the amount of principal repaid, and (3) the number of loans 
still in effect, the total quantity and grade of remaining collateral, 
and the amount of unpaid principal. 

Regional Finance Office of the Office of Distribution will keep county 
committees currently informed regarding any repayments reported through 
the Regional Finance Offices. In addition, county committees will make 
such arrangements with local lending agencies, dealers, etc., as v/ill be 
necessary for the preparation of currently accurate reports. 

The State office will prepare a weekly summary of these reports by 
counties. The original of such reports will be forwarded direct to the 
War Food Administration, Office of Distribution, Procurement and Price 
Support Branch, South Building, Washington 25, D. C. The first copy of 
the report will be forwarded to the Regional ‘Office of AAA. 

3. Signature Cards of Designated County Committeemen . If not already 
furnished, each county committee will furnish the appropriate Regional 
Finance Office of the Office of Distribution, in duplicate, on 3x5 cards 
the typed names followed by tho manually signed signature of the 
committeeman or employee designated to approve loan documents for the 




6 




4. 



Finance Letter No.. 43 
Classification 560 



county committee. The State and county code number 'should be shown 
in the upper right-hand corner, and immediately beneath the code 
numbers, the name of the State and 'county should be shovm. 

Terminal Market or In-Transit Loans . Under certain conditions such as a 
pressing need for additional storage outside of producing areas, upon 
determination of the Administrator or his authorized representative, loans 
will be made on potatoes stored in terminal market or in-transit warehouses 
in locations acceptable to the War Food Administration with respect to 
ultimate distribution, to grovfers in connection with their own potatoes, 
and to cooperative associations of growers, certified dealers, and processors 
in connection with potatoes which have been purchased. The conditions and 
requirements in connection with such loans would be the same as those set 
forth in Paragraph F above, except that there may be added to the loan rate 
calculated as previously set forth, an amount equal to 50 per cent of the 
cost of transportation and charges incidental thereto from shipping point to 
point of storage, provided, that in no case shall such additional amount 
exceed 50 cents per hundredweight. 

Such terminal warehouse or in-transit loans, if authorized by the Adminis- 
trator or his authorized representative, will be administered and approved 
by Regional Offices of the Office of Distribution. Promissory notes 
covering such loans would be secured by either chattel mortgages or 
ivarehouse receipts. 

Accounting and Reporting . Accounting under the potato loan program will 
be performed by the Regional Finance Offices of the Office of Distribution 
and covered by a master general ledger maintr.ined by the Program Accounting 
Section in accordance with Finance Instruction 560.6, 561.6, 562.6, 563.6 
and 564.6. Reporting under the potato loan program will be in accordance 
with Finance Instruction 569.6. 

Examination of Loan Documents . Producer notes and pertinent documents 
submitted to Regional Finance Offices either for direct loans to producers 
or for purchase from lending agencies shall be processed by the Regional 
Program Contract Accounting Section in accordance with Finance Instruction 
551.3, Section IV, Part A. 



Program Accounting 
General 

Loan Pro grams 



Sheet 4