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scribed by CCC, or a loan servicing agreement.
648.128 Eligible borrowers. An eli gible borrower shall be a any person, partnership, association or corporation that has executed a Producers Applica tion for 1949 Certificate of Eligibility Form 49Potatoes5, whose eligibility to participate in 1949 potato price support operations has been certified by the ap propriate county committee, and whose certificate of eligibility is in full force and effect hereinafter referred to as eligible producer, or b any dealer or coopera tive marketing association of producers that has become eligible to participate in the 1949 potato price support program by means of executing Dealer Application for Eligibility Form 49Potatoes3
which has been approved by the appro priate State PMA committee, and whose certificate of eligibility is in full force and effect. Since disapproval of a loan does not affect the applicants eligibility to participate in other potato price support programs, county committees may deny approval of a loan in instances where difficulty has been experienced in set tling loans with the applicant or the county committee has reason to believe that the applicant is unreliable. All eli gible borrowers must have access to grading facilities. In the event the bor rower is a cooperative association of pro ducers, the borrower must have authority to obtain a loan on the security of the potatoes and to give a lien thereon.
648.129 Eligible potatoes. Eligible potatoes shall be 1949 crop Irish potatoes produced by eligible producers which are of a quality suitable for storage, are properly stored in permanent storage which meets specifications established by the State committee, and are of a quality which will justify grading. Potatoes containing more than 2 percent soft rot or more than 3 percent dry rot including late blight shall not be eligible for loan.
In order to make certain that the pota toes are of a quality suitable for storage, county committees may require that the potatoes remain in storage for a specified period prior to inspection and approval for loan.
648.130 Approved forms. The ap proved forms consist of the loan docu ments which together with the provisions of this bulletin govern the rights and responsibilities of the borrower and of CCC. Each loan shall be evidenced by a promissory note, executed by the bor rower on CCC Commodity Form A, and shall be secured by a chattel mortgage executed by the borrower on CCC Com modity Form AA.
648.131 A m o u n t of loan. The amount of the loan shall be computed in accordance with the 1949 schedule of loan rates set out in 648.142 on the quantity of U. S. No. 21% inches mini mum diameter or better quality pota toes in the lot.
648.132 Storage charges. All stor age costs shall be assumed and paid by the borrower, and CCC will not make any storage payments.
648.133 Liens. The potatoes must be free and clear of all liens and encum-

RULES AND REGULATIONS

brances, or if liens or encumbrances exist on the potatoes, proper waivers must be obtained.
648.134 Service fees. A service fee shall be charged for each loan in the amount of one cent per hundredweight for each hundredweight of potatoes placed under loan but not less than $5.00
for each loan and shall be collected from the proceeds of the loan.
648.135 Set-offs. If the applicant is indebted to CCC the debt being other than a current loan which has not ma tured, whether or not such indebted ness is listed on the county debt register, he must designate CCC as the payee of the proceeds of the loan to the extent of such indebtedness but not to exceed that portion of the proceeds remaining after deduction of the service fees and amounts due prior lienholders. If the applicant is indebted to any other agency of the United States and such indebted ness is listed on the county debt reg ister, he must designate such agency as payee of the proceeds as provided above.
Indebtedness owing to CCC shall be given first consideration after claims of prior lienholders.
648.136 Interest rate. Loans shall bear interest at the rate of 3 percent per annum, and interest shall accrue from the date of disbursement of the loan, notwithstanding any printed pro visions of the note. When notes are held by CCC: a Interest on cash repay ments shall be calculated to the date the repayment is received by CCC, or by the county committee for the account of CCC; and b interest on repayments made through the application of the pro ceeds of potatoes sold to CCC shall be calculated to the date of delivery of the potatoes to CCC or to the date the note is purchased from a lending agency, whichever is later. When notes are held by lending agencies interest shall be cal culated to the date the repayments are received by the lending agencies either from the borrower, or in the case of sales of potatoes to CCC, from the CCC.
648.137 Insurance. CCC will not re quire the borrower to insure the potatoes placed under loan; however, if the bor rower does insure such potatoes, such in surance shall inure to the benefit of CCC
to the extent of its interest, after first satisfying the borrowers equity in the potatoes involved in the loss market value or support value, whichever is higher, of the potatoes, less the value of such potatoes at loan rates plus interest to date of loss.
648.138 Maturity and satisfaction of loans, a Loans shall mature on de mand but not latter than April 30, 1950.
b The loan shall be satisfied, on or before the maturify of the note, by pay ment by the borrower in cash of the prin cipal amount plus interest. Repayment may be made to the lending agency, or, if the note is held by CCC, to the county committee. Upon full repayment of a loan, the county committee should be re quested to release the mortgage by filing an instrument of release or by a mar ginal release on the records of the county recording office.

c The borrower may, prior to the maturity of the loan, make partial re demptions of the potatoes in order to sell them to others than CCC by pay ment of such portion of the loan plus interest as is equal to the amount of the net proceeds to be received from the sale of the potatoes gross proceeds less ap proved charges for marketing services performed or the loan value of the pota toes to be redeemed plus interest, which ever is greater.
d CCC will not accept delivery of the mortgaged potatoes in satisfaction of the loan; however the borrower shall ap ply on the loan in repayment thereof all of the net proceeds gross proceeds less approved charges for marketing services performed accruing to him from the sale to CCC under other programs of any potatoes owned by him, whether or not such potatoes are collateral security for the loan, and any proceeds from salvage of damaged potatoes covered by the mortgage.
648.139 Deficiencies due to flood, fire, lightning or windstorm. CCC will not making any allowance for loss in the quality and quantity of the potatoes which results in a deficiency on the loan, except as follows: In case physical loss or damage results frorfi flood, fire, light ning, or windstorm and occurs without fault, negligence, or conversion on the part of the borrower, and the total of a the market value of the undamaged po tatoes covered by the mortgage or the loan value thereof plus interest, which ever is greater, plus b the proceeds from the salvage of the damaged pota toes covered by the mortgage, plus c any insurance proceeds inuring to the benefit of CCC is less than the loan plus interest, CCC will assume the difference.
In the event the potatoes placed under loan are stored in more than one struc ture and loss or damage has occurred, settlement will be made as if a separate loan had been approved covering the col lateral stored in each structure.
648.140 Loans in default. Not withstanding any other provision of this bulletin, if the borrower has made any fraudulent representation in the loan documents or in obtaining the loan, or abandons or fails to safeguard the po tatoes or fails to comply with the terms and conditions of the 1949 potato price support program thereby causing a de mand for immediate payment of his note, or otherwise causes CCC to re move the potatoes or to foreclose the mortgage, he shall be given credit for such potatoes as are removed or fore closed at the best price obtainable by CCC, less necessary costs and expenses incurred, and shall be liable for any de ficiency which results. This shall not deprive CCC of any other relief, at law or in equity, to which CCC may be en titled.
648.141 Purchase of notes. CCC
will purchase from approved lending agencies notes evidencing approved loans which are secured by chattel mortgages.
The purchase price to be paid by CCC
will be the principal sums remaining due on such notes, plus accrued interest from the date of disbursement to the date of