Full text of Circular No. 1 of the War Finance Corporation

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CIRCULAR No. 1
OF THE

WAR FINANCE CORPORATION

INFORMATION FOR PROSPECTIVE APPLICANTS
FOR ADVANCES UNDER SECTION 21
OF THE WAR FINANCE
CORPORATION ACT




Issued May 14,1921

WASHINGTON
GOVERNMENT PRINTING OFFICE
1921

SECTION 21 OF WAR FINANCE CORPORATION ACT.

Section 21 of the W a r Finance Corporation Act, as amended, the
provisions of which were the subject of the joint resolution of Congress reviving the activities of the Corporation, is as follows;
SEC. 21. (a) That the Corporation shall be empowered and authorized, in
order to promote commerce with foreign nations through the extension of
credits, to make advances upon such terms, not inconsistent with the provisions
of this section, as it may prescribe, for periods not exceeding five years from
the respective dates of such advances.
(1) To any person, firm, corporation, or association engaged in the business
in the United States of exporting therefrom domestic products to foreign countries, if such person, firm, corporation, or association is, in the opinion of the
board of directors of the Corporation, unable to obtain funds upon reasonable
terms through banking channels. Any such advance shall be made only for the
purpose of assisting in the exportation of such products, and shall be limited
in amount to not more than the contract price therefor, including insurance
and carrying or transportation charges to the foreign point of destination if
and to the extent that such insurance and carrying or transportation charges
are payable in the United States by such exporter to domestic insurers and carriers. The rate- of interest charged on any such advance shall not be less than
1 per centum per annum in excess of the rate of discount for ninety-day commercial paper prevailing at the time of such advance at the Federal Reserve
bank of the district in which the borrower is located; and
(2) To any bank, banker, or trust company in the United States which after
this section takes effect makes an advance to any such person, firm, corporation,
or association for the purpose of assisting in the exportation of such products.
Any such advance shall not exceed the amount remaining unpaid of the advances made by such bank, banker, or trust company to such person, firm,
corporation, or association for such purpose.
(b) The aggregate of the advances made by the Corporation under this section remaining unpaid shall never at any time exceed the sum of $1,000,000,000.
(c) Notwithstanding the limitation of section 1 the advances provided for
by this5 section may be made until the expiration of one year after the termination of the war between the United States and the German Government as
fixed by proclamation of the President. Any such advance made by the Corporation shall be made upon the promissory note or notes of the borrower, with
full and adequate security in each instance by indorsement, guaranty, or otherwise. The Corporation shall retain power to require additional security at any
time. The Corporation in its discretion may upon like security extend the time
of payment of any such advance through renewals, the substitution of new
obligations, or otherwise, but the time for the payment of any such advance
shall not be extended beyond five years from the date on which it was originally
made.
(2)




WAR FINANCE CORPORATION CIRCULAR No. 1—INFORMATION FOR PROSPECTIVE APPLICANTS FOR ADVANCES UNDER SECTION 21 OF THE WAR
FINANCE CORPORATION ACT.
This circular, with accompanying forms, is intended to outline in
a general way the requirements of the War Finance Corporation
with respect to applications for advances under section 21 of the
W a r Finance Corporation Act. As ench application must be considered on its merits, the nature of individual transactions may
necessitate appropriate modification of, or addition to, the requirements herein outlined.
TO WHOM ADVANCES MAY BE MADE.

Under the provisions of section 21 of the W a r Finance Corporation Act, as amended (which section is set forth in full on p. 2
hereof), the W a r Finance Corporation is authorized to make advances to two general classes of applicants, viz:
1. Exporters.—That
is, to any person, firm, corporation, or association engaged in the business in the United States of exporting therefrom domestic products to foreign countries; provided, such person,
firm, corporation, or association, in the opinion of the board of
directors of the W a r Finance Corporation, is unable to obtain funds
for such purposes upon reasonable terms through banking channels.
2. Banks, bankers, or trust companies.—That
is, to any bank,
banker, or trust company which makes an advance to exporters as
hereinbefore defined for the purpose of assisting in the exportation
of domestic products to foreign countries.
To qualify under these requirements of the statute, it is necessary—
{a) In the case of exporters, to show that the applicant is engaged
in the business in the United States of exporting domestic products
to foreign countries and has a contract or proposes to enter into a
contract to export from the United States some domestic product;
that the proceeds of the advance applied for are to be used to assist in
the exportation of such product; and that the applicant has been unable to obtain the funds, on reasonable terms, through banking
channels.
Advances can not be made direct to foreign purchasers. They must
be evidenced by the direct and unconditional obligation of a person,
firm, corporation, or association engaged in business in the United
States and subject to the jurisdiction of the courts thereof.
(b) In the case of banks, bankers, or trust companies, the applicant
must show that it is engaged in business in the United States and that
it has made or contemplates making an advance to an exporter, as
hereinbefore defined, to assist in the exportation of domestic products
to a foreign country.
The War Finance Corporation will not consider applications from
individual exporters or bankers who are not citizens of the United




(3)

4
States, or from firms, corporations, or associations which are organized under the laws of foreign countries, or which have their principal place of business outside of the United States.
HOW APPLICATION A9»*N&SiD.
PRELIMINARY APPLICATIONS.

Exporters, as defined in this memorandum, desiring to ascertain in
advance whether under stated conditions the board may be expected
to act favorably on an application, should file a preliminary application on Form A - l (see p. 9 ) .
Banks, bankers, or trust companies desiring to file preliminary applications should use Form A-2 (see p. 10).
These forms are designed to show whether the applicant is qualified under the statute, the nature of the transaction involved, and
the amount and character of the security offered.
In acting upon preliminary applications the board of directors of
the War Finance Corporation will indicate, if possible, whether or
not the application can be favorably considered, the amount and
terms of the advance that may be made, and the conditions it will be
necessary to impose in connection with such advance.
FORMAL APPLICATION.

If the preliminary application is favorably acted upon by the
board, the applicant will be fully advised of the terms and conditions
imposed by the W a r Finance Corporation. A formal application
may then be filed, accompanied by all necessary papers and documents.
Exporters should use Form B - l (p. 11). Banks, bankers, and trust
companies should use Form B-2 (p. 13).
All papers, documents, and other instruments accompanying applications or filed in connection therewith are subject to the approval
of counsel designated by the W a r Finance Corporation.
SUPPORTING

DOCUMENTS.

Papers, documents, and other instruments to be filed in support of
formal applications will necessarily depend upon the nature and
character of each transaction as indicated by the preliminary application. I t is, therefore, impossible to prescribe in advance all supporting evidence that may be required in each case, but all formal
applications should be accompanied by the papers and documents
enumerated in the forms herein prescribed. Where the applicant is a
corporation, necessary resolutions of the board of directors or of the
executive committee of the corporation should be adopted in advance
of the filing of such application.
Where applications differ materially from the forms herein contained it is suggested that applicants submit to Counsel for the War
Finance Corporation, in advance, tentative drafts of such applications and of the documents which will accompany the same.
Where to be filed.—All applications, accompanied by supporting
documents, should be delivered or mailed to the W a r Finance Corporation, the Treasury Building, Washington, D. C.




5
The consummation of any proposed transaction will he materially
expedited if the applicants taill carefully consider the forms herein
prescribed, and before actually filing their formal application will
take all necessary action indicated therein.
LIMITATIONS ON AMOUNT OF ADVANCES.
The amount of each advance which the War Finance Corporation
may make to an applicant is limited—
1. In the case of advances to exporters, as above defined, to not
more than the contract price of the commodities exported or to be
exported, including insurance and carrying or transportation charges
to the foreign point of destination, provided such charges are payable in the United States by such exporter to domestic insurers and
carriers.
2. In the case of advances to banks, bankers, or trust companies, to
not more than the amount remaining unpaid of the advances made
by such banks, bankers, or trust companies, to an exporter, as hereinbefore defined, for the purpose of assisting in the exportation of
domestic products.
3. In no case may the aggregate amount of advances made by the
War Finance Corporation to any one person, firm, corporation, or
association exceed at any one time an amount equal to 10 per cent
of the authorized capital stock of the W a r Finance Corporation.
Within the limits set forth in the three foregoing paragraphs, the
amount of any advance made by the W a r Finance Corporation will
be determined in its discretion by the board of directors of the War
Finance Corporation.
MATURITY OF ADVANCES.
The duration of any advance is limited by statute to a maximum
period of five years from the making thereof, including all extensions which may be granted, whether through renewals, substitution
of new obligations, or otherwise.
INTEREST RATE.
1. In the case of an advance to an exporter, the rate of interest is
required to be not less than 1 per cent per annum in excess of the
rate of discount for 90-day commercial paper prevailing at the time
of such advance at the Federal Reserve Bank of the district in which
the exporter is located. The War Finance Corporation may, in its
discretion, however, prescribe such higher rate of interest as it may
deem advisable and warranted by the circumstances of the case.
2. In the case of an advance to a bank, banker, or trust company, the
rate of interest shall be such as may be prescribed by the War Finance
Corporation.
FORM OF OBLIGATION.
All advances made by the War Finance Corporation, whether to
exporters or to banks, bankers, or trust companies, must be evidenced
by an instrument imposing a direct and unconditional obligation on
the borrower, with full and adequate security. Where the borrower
is an exporter a negotiable promissory note executed by the borrower




6
as maker will in general be required. Where the borrower is a bank,
banker, or trust company the War Finance Corporation will accept
either a note executed by the borrower as maker, or a draft accepted
by the borrower, or a note or other negotiable instrument indorsed
by the borrower, waiving protest, notice of protest, notice of dishonor, extension of time, substitution of collateral, or other indulgence. Where the waiver is inserted in the body of the note it
should be in the form set forth in the " Form of Obligation" on
page 20 of this Circular. Where it is indorsed on the back of the
note over the signature of the indorser, it may be in the following
form: " waiving protest, notice of protest, notice of dishonor, extension of time, substitution of collateral, or other indulgence." Special
conditions imposed in any transaction may be incorporated in the
form of obligation prescribed or in a collateral agreement as the circumstances of each case requires. (See usual form of obligation,
p. 19.)
COLLATERAL SECURITY.

Where collateral security consists of stocks, bonds, or other securities listed on a recognized public exchange in good standing they
will ordinarily be accepted without special evidence of their legality
and validity. I n all other cases applicants will be required to furnish
opinion of counsel satisfactory to the W a r Finance Corporation and
such other evidence as the corporation may require to the effect that
such securities have been legally and validly issued. I n each case
applicant will be required to furnish evidence that those depositing
or hypothecating such securities are legally authorized to take such
action and that the War Finance Corporation will acquire a valid
title as pledgee.
SUMMARY OF PAPERS, DOCUMENTS. AND OTHER EVIDENCE
REQUIRED IN CONNECTION WITH ADVANCES.

The evidence required by the War Finance Corporation in cases of
advances may be briefly summarized as follows:
All papers and documents submitted must include an original and
three counterparts.
I n considering advances to exporters as defined in this memorandum the board must be satisfied, among other things—
1. That the applicant is engaged in the business in the United
States of exporting domestic products to foreign countries.
2. That the applicant has been unable to obtain funds upon reasonable terms through banking channels.
3. That the proceeds of the advance applied for are to be used only
for the purpose of assisting in the exportation of domestic products.
4. That the applicant has made or contemplates making a contract
for the exportation of domestic products. The contract must be
made and exhibited to the corporation before any advance is actually
made.
5. That the security offered is fully adequate to protect the advance applied for.
I n considering loans to banks, bankers, and trust companies, the
board must be satisfied—
1. That the applicant is a bank, banker, or trust company doing
business in the United States, and is authorized by law to borrow the
funds applied for.



7
2. That it has made advances or contemplates making advances to
an exporter as defined in this circular.
3. That the security offered is fully adequate to protect the advance applied for.
Each applicant or his or its duly authorized representative will be
required to embody, in any formal application filed, statements cohering the foregoing points. The forms approved by the board were
prescribed with this end in view.
Attention is called to section 18 of the War Finance Corporation
Act, which appears on page 22 of this circular, and which prescribes
penalties for false statements or misrepresentations, overvaluations
of security, and other offenses in connection with any application.
I n addition to the foregoing statements the board will require a
certified statement of financial condition of the applicant.
SUMMARY OF ADDITIONAL DOCUMENTS REQUIRED WHERE
APPLICANT IS A CORPORATION.

Where the notes evidencing the advances are executed by a corporation in addition to the foregoing the board will require the following
documents:
1. Charter.—Certified copy of charter or articles of incorporation.
2. Resolutions.—Certified
copy of resolution of board of directors
or of the executive committee of the corporation authorizing the
officers of the corporation—
(a) To make and execute the application;
(b) To execute the promissory note or notes to be given to the
W a r Finance Corporation to evidence advances to be made;
(c) To hypothecate and pledge the securities tendered as collateral
for the note or notes of the borrower or deposited as additional
collateral therefor;
d) To receive and receipt for the proceeds of the advances made;
e) To execute such other documents, agreements, and papers as
may be required by the W a r Finance Corporation.
(For tentative forms of resolutions, see pp. 15, 17.)
3. By-laws.—A certified copy of its regulations or by-laws, or such
certified extracts or excerpts therefrom as shall establish the authority of the board of directors or executive committee to authorize the
execution of the promissory note of the applicant and the pledge and
hypothecation of the securities tendered or to be tendered; and the
execution of such other documents, agreements, and papers as may
be required by the W a r Finance Corporation.
4. Certificate of election to and present incumbency in office.—A
certificate which shall indicate the election or appointment to and
present incumbency in office of the officers of the borrower designated in the above-mentioned resolution, and who, in accordance
therewith, have authority to execute the application, promissory
notes, agreements, and papers submitted or to be submitted by the
borrower. Said certificate should embody therein or have appended
thereto specimen signatures of said officers duly verified before a
notary public. (See tentative form, p. 21.)
5. Opinion of counsel satisfactory to the corporation to the effect
(a) that applicant corporation is authorized by law to incur all
liabilities involved, (b) that the officers executing the note or notes




8
are duly authorized by legal and valid corporate action so to do and
are similarly authorized to pledge or hypothecate the collateral
security offered, (c) that each note when executed will constitute
a valid and binding obligation of the corporation according to its
terms; (d) where the note of applicant is secured by indorsement or
guaranty of a third party that the indorser or guarantor may legally
assume and has assumed this obligation; (e) where collateral security
consists of stocks, bonds, or other obligations of a corporation, which
securities are not listed on and dealt in on a recognized public exchange in good standing, that such securities have been legally and
validly issued.
ASSIGNMENT OF COLLATERAL.
Ordinarily the promissory note of the applicant will specifically
describe the security deposited as collateral and will contain necessary provisions relating to its disposition or sale in case of default.
Where the nature of the collateral or the special circumstances of
the case make it necessary, the board will require the applicant to
execute a separate collateral assignment.
PAYMENT OF PROCEEDS OF ADVANCES.
The proceeds of any advance authorized by the W a r Finance
Corporation will be paid to the applicant or its duly authorized representative, on three days' notice, by check on the Treasurer of the
United States. Where funds are desired in New York or at some
place .other than Washington, the Federal Reserve Bank in that city
will be authorized as fiscal agent for the War Finance Corporation to
deliver checks drawn on the corporation's account with the Treasurer
of the United States. Should funds be desired in some city other than
a Federal Reserve Bank city, telegraphic transfers may be arranged
through the Federal Reserve Banks. Applicant's representative
should therefore be furnished with necessary authority to receive
and receipt for the proceeds of any such advance. (See forms of
resolution, pp. 15,17.)
FORMS.
The forms of applications which follow indicate in a general way
the information which the War Finance Corporation requires. The
applicant should, however, state in addition any other information
which will in his judgment assist the Corporation in passing on his
application. The Corporation may at any time require such additional information as it may in its discretion deem appropriate.




FORM A - l .
W. F. C.
[To be used by exporters.]

Application No. —•

PRELIMINARY APPLICATION.
hereby applies to the War Finance Corporation for an advance,
to be made under authority of section 21 of the War Finance Corporation Act,
in an aggregate sum not to exceed $
Security.—If this application is finally approved, applicant will deliver to the
War Finance Corporation its direct and unconditional obligation, and as security
therefor the following:
[State here (a) The names, addresses, and approximate financial worth of all proposed
indorsers or guarantors. (6) A full description of any collateral security proposed to
be pledged, and a statement of the current market value of such security.]

Time and maturity of advance.
(a) Applicant desires the advance applied for to be made upon not less than
three days' notice, as follows:
[State here the approximate date upon which the advance will be called for. If it is
to be called for in installments, state the approximate dates and amounts of such installments.]

(6) Applicant will agree to call for the whole of the advance applied for on
or before
(c) Applicant desires that the advance applied for be made upon the following maturity or maturities:
Business of applicant
[State here (a) principal place of business within the United States. (6) A brief
general description of the foreign export business in which the applicant is engaged, (c)
If applicant is incorporated, under what laws? If a partnership, name the individuals
composing the same and give their places of residence.]

Purpose of advance.—The applicant proposes to use the proceeds of the advance applied for for the purpose of assisting in the exportation of a domestic
product to foreign countries, namely
[State here (a) the nature of the domestic product to be exported. (6) The foreign
countries to which the products are to be exported, (c) The name or names and a brief
description of the proposed foreign purchaser or purchasers.]

Terms of contract
[If a contract has already been made for the exportation and sale of the product in
question, state here briefly the terms of such contract. If no contract has been made,
give what information is available as to the contemplated terms of such contract.]

Efforts to obtain funds through banking channels[ State here in detail the efforts which have been made to obtain funds through banking
channels, and the results of such efforts.]

Statement of financial condition.—The certified statement marked " Exhibit
A," attached to and made a part of this preliminary application, correctly
shows the true financial condition of the applicant.
The statements herein contained are made for the purpose of obtaining an advance from the War Finance Corporation within the meaning of section 18 of
the War Finance Corporation Act as amended,
47838°—21




2

(9)

FORM A-2.
W. F . C.
[To be used by banks, bankers,
or trust companies.]

Application No. —.

PRELIMINARY APPLICATION.
hereby applies to the War Finance Corporation for an advance,
to be made under authority of section 21 of the War Finance Corporation Act,
in an aggregate sum not to exceed $
Security.—If this application is finally approved, applicant will deliver to the
War Finance Corporation its direct and unconditional obligation, and as security
therefor the following:
[State here (a) the names, addresses, and approximate financial worth of all proposed
indorsers or guarantors, (b) A full description of any collateral security proposed to be
pledged, and a statement of the current market value of such security.]

Time and maturity of advance.—
(a) Applicant desires the advance applied for to be made upon not less than
three days' notice, as follows:
[State here the approximate date upon which the advance will be called for. If it is to
be called for in installments, state the approximate dates and amounts of such installments.]

(&) Applicant will agree to call for the whole of the advance applied for on
or before
.
(c) Applicant desires that the advance applied for be made upon the following maturity or maturities:
Business of applicant
[State here (a) Whether a bank, banker, or trust company, (b) Principal place of business within the United States, (c) If applicant is incorporated, under what laws? If a
partnership, name the individuals composing the same and give their places of residence.]

Advance made or to be made by applicant
[State here (a) The name or names of any person, firm, corporation, or association to
which the applicant has made or proposes to make an advance for the purpose of assisting
in the exportation of domestic products to foreign countries, (&) If such advance has
already been made, state the amount which has been advanced and the date or dates,
and the terms, upon which such advance was made, (c) If such advance has not yet been
made, state the amount, terms, and the date or dates upon which it is expected such advance will be made.]

Purpose of advance.—The purpose of the advance made or to be made by
the applicant as hereinabove stated is to assist the exportation of a domestic
product to foreign countries, namely,
[State here (a) The nature of the domestic product to be exported. (6) The foreign
countries to which the products are to be exported, (c) The terms upon which the products are to be exported.]

Statement of financial condition.—The certified statement marked "Exhibit
A," attached to and made a part of this preliminary application, correctly shows
the true financial condition of the applicant.
The statements herein contained are made for the purpose of obtaining an
advance from the War Finance Corporation within the meaning of section 18
of the War Finance Corporation Act as amended.
(10)




FORM B - l .
W. F. C.
[To be used by exporters.]

Application No. —w

APPLICATION FOR ADVANCE UNDER SECTION 21.

, hereby applies to the War Finance Corporation for an*
advance to be made under authority of section 21 of the War Finance Corporation Act, in the sum of $
The applicant desires the funds applied for to be paid to
»
at
, on not less than three days' notice by the applicant to
the treasurer of the War Finance Corporation, at the following time or times:
[State here the approximate date upon which the advance will be called for. If it is
to be called for in installments, state the approximate dates and amounts of such installments.]

Applicant agrees that it will call for the whole of the advance applied for on
or before
Whenever any advance shall be made to the applicant by the War Finance
Corporation, at the request of the applicant, under the terms of this application,
the applicant will make and deliver to the War Finance Corporation, or its
duly authorized agent, the promissory note or notes of the applicant, equal in
the aggregate amount to the amount of such advance. Such note or notes shall
be in the form attached hereto as " Exhibit A" and made a part hereof.
Such note or notes shall contain the following indorsements and/or guaranties, to wit:

and shall be accompanied by the following collateral security:.

and shall be accompanied also by the following papers and documents:
1.
2. Opinion of counsel of the applicant to the following effect:
'
(a) That the applicant is authorized by law to incur all liabilities involved.
(b) That the persons executing the note or notes are duly authorized by legal
and valid corporate action so to do, and that they are similarly authorized to
pledge or hypothecate the collateral security tendered therewith.
(c) That each note tendered therewith will upon delivery constitute a valid
and binding obligation of the applicant according to its terms.
(d) That the collateral securities offered have been legally and validly issued,
and that1 the War Finance Corporation will acquire a valid title thereto as
pledgee.
(e) That the indorsements and/or guaranties offered constitute legal and x
binding obligations of such indorsers and/or guarantors.
On behalf of the applicant the following representations are made to the
board of directors of the War Finance Corporation:
1. That the applicant is engaged in the business in the United States of
exporting from the United States domestic products to foreign countries.
2. That the applicant's principal place of business in the United States
is at

.

1

When the securities offered are listed and dealt in on a recognized public exchange in
good standing, opinion of counsel as to their validity will not generally be required.




(ID

12
8. That the applicant Is a

[ State here whether applicant is an individual, partnership, corporation, or association.
If an individual, state citizenship and residence. If a partnership, give names, citizenship,
and residence of all partners. If a corporation, state under what laws applicant is organized. If an association, state where applicant maintains its principal place of business,
under what laws, if any, it is organized, and describe briefly the nature of the association.]

4. That the applicant desires and undertakes to use the proceeds of the
advance applied for for the purpose of assisting in the exportation of
,
a domestic product, to foreign countries.
5. That the proceeds of the advance applied for will be used only for the
purpose of assisting in the exportation of said domestic products.
6. That the applicant has been unable to obtain funds for such purpose upon
reasonable terms through banking channels.
7. That the applicant has made a contract for the exportation and sale of
such products, and that the contract price therefor, including insurance and
carrying or transportation charges to the foreign point of destination, if and
to the extent that such insurance and carrying or transportation charges are
payable in the United States by the applicant to domestic insurers and carriers
Is
8. That the security offered as collateral is fully adequate in the opinion of
applicant to protect the advances applied for.
9. That no agreement has been made or will be made to pay directly or indirectly to any person, firm, or corporation any commission or fee for obtaining this advance from the War Finance Corporation, and no such payments
have been made or will be made, apart from reasonable compensation for legal
services; and further that the amount applied for does not include any banker's
commission or similar charges.
It is understood and agreed by the applicant that the War Finance Corporation shall have the right at any time to call for additional security.
The applicant agrees that, while any advances made to it by the corporation
or any part of such advances shall remain unpaid, it will keep the corporation
informed of any substantial change in the financial condition or corporate
organization of the applicant, and of any substantial change which may come
to the applicant's notice in the financial condition or corporate organization of
any endorser or guarantor, and of any matter which may come to the applicant's notice affecting the validity or worth of any collateral deposited with
the corporation.
There is submitted herewith, in behalf of the applicant, the following papers
and documents
which are asked to be treated as part of this application:
( l ) 1 Certified copy of charter or articles of incorporation, and certified copy
of the1 by-laws of applicant.
(2) Copy of resolutions of the board of directors or of the executive committee of the corporation authorizing the officers of the corporation to make
and execute this application, to execute a promissory note or notes evidencing
advance herein applied for, to pledge or hypothecate the security herein offered
as collateral for the advance, to receive and receipt for the proceeds of the
advance, and to execute all other documents, agreements, or papers required by
the War
Finance Corporation.
(3) 1 Certificate of election to and present incumbency in office of such officers.
(4) Opinion of counsel as follows:
[Wbile the opinion of counsel, covering the validity of obligations, endorsements, collateral, etc., as hereinabove enumerated, need not be filed until the notes are tendered and
an advance is called for, it will serve to expedite matters if applicant will submit
herewith opinion of counsel covering as many of these points as it is possible to cover
in advance.]

The following conditions, imposed by the War Finance Corporation, are hereby agreed to:
The following additional papers and documents required by the War Finance
Corporation are herewith filed:
Upon the acceptance of this application by the War Finance Corporation,
such application and acceptance shall be and become a contract between the
War Finance Corporation and the applicant.
All statements and representations herein contained are made for the purpose
of obtaining an advance within the meaning of section 18 of the War Finance
Corporation act as amended.
1

Where the application is by an unincorporated exporter these papers need not be filed.




•r^™» « «
FORM B - 2 .
W. F . C.
[To be used by banks, bankers,
or trust companies.]

Application No.—\

APPLICATION FOR ADVANCES UNDER SECTION 21.
hereby applies to the War Finance Corporation for an
advance to be made under authority of Section 21 of the War Finance Corporation Act, in the sum of $
The applicant desires the funds applied for to be paid to
at
, on not less than three days' notice by the applicant to
the Treasurer of the War Finance Corporation, at the following time or times:
[State here the approximate date upon which the advance will be called for. If it is
to be called for in installments, state the approximate dates and amounts of such installments.]

Applicant agrees that it will call for the whole of the advance applied for on
or before
.
Whenever any advance shall be made to the applicant by the War Finance
Corporation, at the request of the applicant, under the terms of this application, the applicant will make and deliver to the War Finance Corporation or its
duly authorized agent the promissory note or notes of the applicant, equal in the
aggregate amount to the amount of such advance. Such note or notes shall be
in the form attached hereto as " Exhibit A" and made a part hereof. Such
note or notes shall contain the following indorsements and/or guaranties, to wit:
and shall be accompanied by the following collateral security:
and shall be accompanied also by the following papers and documents:
1.
2. Opinion of counsel of the applicant to the following effect:
(a) That the applicant is authorized by law to incur all liabilities involved.
(6) That the persons executing the note or notes are duly authorized by legal
and valid corporate action so to do, and that they are similarly authorized to
pledge or hypothecate the collateral securities tendered therewith.
(c) That each note tendered therewith will upon delivery constitute a valid
and binding obligation of the applicant according to its terms.
(d) That the collateral securities offered have been legally and validly issued,
and that1 the War Finance Corporation will acquire a valid title thereto as
pledgee.
(e) That the indorsements and/or guaranties offered constitute legal and
binding obligations of such indorsers and/or guarantors.
On behalf of the applicant the following representations are made to the
Board of Directors of the War Finance Corporation:
1. That the applicant is engaged in the business in the United States of
a
(Bank, banker, or trust company.)

at

2. That the applicant's principal place of business in the United States is
3. That the applicant is a

[State here whether applicant is an individual, partnership, corporation, or association.
If an individual, state citizenship and residence. If a partnership, give names, citizenship,
and residence of all partners. If a corporation, state under what laws applicant is organized. If an association, state where applicant maintains its principal place of business,
under what laws, if any, it is organized, and describe briefly the nature of the association.]
1
When the securities offered are listed and dealt in on a recognized public exchange in
good standing, opinion of counsel as to their validity will not generally be required.




(13)

14
4. That the applicant has made or contemplates making an advance to the
following persons, firms, or corporations engaged in the business in the United
States of exporting domestic products to foreign countries, for the purpose of
assisting in the exportation of such products:

5. That the amount from time to time called for under this application will
not exceed the amount at that time remaining unpaid of such advance.
6. That the security offered as collateral is fully adequate, in the opinion of
applicant, to protect the advance applied for.
7. That no agreement has been made or will be made to pay directly or indirectly to any person, firm, or corporation any commission or fee for obtaining
this advance from the War Finance Corporation, and no such payments have been
made or will be made, apart fiom reasonable compensation for legal service;
and further that the amount applied for does not include any banker's commission or similar charges.
It is understood and agreed by the applicant that the War Finance Corporation shall have the right at any time to call for additional security.
The applicant agrees that, while any advance made to it by the corporation
or any part of such advances shall remain unpaid, it will keep the corporation
informed of any substantial change in the financial condition or corporate
organization of the applicant, and of any substantial change which may come
to the applicant's notice in the financial condition or corporate organization of
any endorser or guarantor, and of any matter which may come to the applicant's notice affecting the validity or worth of any collateral deposited with
the corporation.
There is submitted herewith in behalf of the applicant the following papers
and documents,
which are asked to be treated as part of this application.
( I ) 1 Certified copy of charter or articles of incorporation, and certified copy
of the1 by-laws of applicant.
(2) Copy of resolutions of the board of directors or of the executive committee of the corporation authorizing the officers of the corporation to make
and execute this application, to execute a promissory note or notes evidencing
advance herein applied for, to pledge or hypothecate the securities herein offered
as collateral for the advance, to receive and receipt for the proceeds of the
advance, and to execute all other documents, agreements, or papers required
by the1 War Finance Corporation.
(3) Certificate of election to and present incumbency in office of such officers.
(4) Opinion of counsel as follows:
[While opinion of counsel, covering t h e validity of obligations, endorsements, collateral, etc., as hereinabove enumerated, need not be filed u n t i l the notes a r e tendered
and an advance is called for, it will serve to expedite m a t t e r s if applicant will submit
herewith opinion of counsel covering as many of these points a s it is possible to cover
In advance.]

The following conditions imposed by the War Finance Corporation are hereby
agreed to:
The following additional papers and documents required by the War Finance
Corporation are herewith filed:
Upon the acceptance of this application by the War Finance Corporation, such
application and acceptance shall be and become a contract between the War
Finance Corporation and the applicant.
All statements and representations herein contained are made for the purpose
of obtaining an advance within the meaning of section 18 of the War Finance
Corporation Act as amended.
1
Where the application is by a n unincorporated bank, banker, or t r u s t company, these
papers need not be filed.




[For use by exporters.]

RESOLUTION OF THE BOARD OF DIRECTORS OR OF THE EXECUTIVE
COMMITTEE OF AN APPLICANT FOR ADVANCES.
Whereas this corporation has entered into or proposes to enter into a contract
involving the exportation of
from the United States to
(Describe commodity.)

, and the officers of this company having been unable through ordinary banking channels to procure the necessary funds on reasonable terms to
cosummate this transaction, it is the sense of this meeting that an application
should be filed with the War Finance Corporation for an advance or advances
in the aggregate principal amount of
dollars under the provisions of section 21 of the War Finance Corporation Act as amended to assist
in said exportation; and
Whereas under the terms of said act and under the requirements of said War
Finance Corporation in order to secure such advance or advances, it is necessary for this corporation to file with the said War Finance Corporation an application or applications on forms prescribed or approved by it, and if such application is favorably acted upon, to execute and deliver to the said War
Finance Corporation the promissory note or notes or other direct obligations of
this corporation representing or evidencing the amount advanced to it and to
pledge and hypothecate with the said War Finance Corporation security or
securities for such advance or advances and as and when called upon by said
corporation to pledge and hypothecate additional securities, so that said
advance or advances may at all times be fully protected; and
Whereas it is necessary for the officers of this corporation to execute and
deliver such other documents, papers, and agreements as from time to time may
be required by said War Finance Corporation.
Now, therefore, be it
Resolved, That
, the
, and
, the
of
this corporation, or either of them, be, and they are hereby, authorized and empowered for and in the name and on behalf of this corporation to execute and
deliver to the said War Finance Corporation the following papers and documents, to wit:
1. Preliminary application for advances in the amount of
dollars
on form prescribed or approved by the War Finance Corporation.
2. If such preliminary application receives the favorable consideration of the
War Finance Corporation and said officers are notified of the terms and conditions upon which said advance or any part thereof may be made to execute
and deliver formal application for said advance or advances on form prescribed or approved by said War Finance Corporation or its counsel, said application to contain all necessary representations and conditions prescribed in
the act aforesaid or required by the said War Finance Corporation.
3. To execute and deliver to the said War Finance Corporation the promissory note or notes or other direct obligation of this corporation in form prescribed or approved by the said War Finance Corporation, said note or notes
or other direct obligation to be for such amount or amounts as may be advanced
by said War Finance Corporation; to mature at such time or times as may be
prescribed by said corporation; to bear such rate of interest as said corporation
may require, and to contain such other conditions as may be imposed by the said
War Finance Corporation.
Be it further resolved, That in order to secure the payment of such note or
notes or other obligation of this corporation evidencing advances made to it by
the said War Finance Corporation the said officers of this corporation be, and
each of them is hereby, authorized and empowered to pledge and hypothecate
with the said War Finance Corporation the following described securities, belonging to this corporation, together with such other securities available for
that purpose as the War Finance Corporation may from time to time require




(15)

16
and such officers and each of them are further authorized and empowered to
do any and all acts and to execute any and all instruments under the corporate
seal of this corporation or otherwise, as may be necessary or desirable in order
to meet such terms and conditions and requirements of the War Finance Corporation or its representatives.
Be it further resolved, That
the
of this corporation be
and he is hereby authorized and empowered to receive and receipt for any and
all advances made by said War Finance Corporation under the terms and provisions of said act and said application aforesaid and to indorse in the name
of this corporation any checks or drafts representing the proceeds of such advance or advances.
Be it further resolved, That delivery of said proceeds of said advances may
be made to the said
in person or by mail or telegraph to the following address
or in such other manner as the said
may
direct.
I hereby certify that the foregoing is a true and correct copy of a resolution
regularly presented and adopted by the board of directors (or by the executive
committee) of the
^_ corporation at a
meeting of said corporation duly called and held at
on the
day of
, 1921,
at which meeting a quorum was present and voted.
[SEAL.]

[Notarial certificate.]




,

Secretary.

| F o r use by banks and
trust companies.]

R E S O L U T I O N OF T H E BOARD OF D I R E C T O R S OR O F T H E E X E C U T I V E
COMMITTEE OF AN A P P L I C A N T F O R ADVANCES.
W h e r e a s t h i s corporation has made (or contemplates m a k i n g ) an advance of
to certain persons, firms, or corporations (describe)
engaged in business in the United States in exporting therefrom to foreign
countries certain domestic products, said advance having been used (or to be
used) to assist in the exportation of such p r o d u c t s ; a n d
W h e r e a s it is the sense of this meeting t h a t application shall be filed with t h e
W a r Finance Corporation for an advance or advances in the aggregate principal
amount of $
, or for the a m o u n t remaining unpaid of the
advances made or to be made to the exporter as aforesaid on t h e d a t e of said
application, said application to be made to the W a r F i n a n c e Corporation u n d e r
t h e provision of section 21 of the act of Congress known as the W a r F i n a n c e Corporation Act as amended; and
W T hereas under the t e r m s of said act and u n d e r the r e q u i r e m e n t s of said
WTar Finance Corporation, in order to secure such advance or advances, it is
necessary for this corporation to file with the said W a r F i n a n c e Corporation
an application or applications on forms prescribed or approved by it, and if such
application is favorably acted upon, to execute and deliver to t h e said W a r
F i n a n c e Corporation the promissory note or notes or other direct obligations
of this corporation representing or evidencing the a m o u n t advanced to it and
to pledge and hypothecate with the said W a r F i n a n c e Corporation security or
securities for such advance or advances and as and when called upon by said
corporation to pledge and hypothecate additional securities, so t h a t said advance
o r advances may be a t all times fully protected; and
Whereas it is necessary for the officers of this corporation to execute a n a
deliver such other documents, papers, and agreements as may from time to time
be required by said W a r Finance Corporation.
Notv, therefore, be it
Resolved, T h a t
the
and
the
of
t h i s corporation or either of them be and they a r e hereby authorized and empowered for and in the name and in behalf of this corporation to execute and
deliver to the said W a r Finance Corporation the following papers and documents, to w i t :
1. Preliminary application for advances in the amount of $
on form prescribed or approved by the W a r F i n a n c e Corporation.
2. If such preliminary application receives the favorable consideration of
the W a r Finance Corporation and said officers a r e notified of t h e t e r m s and
conditions upon which said advance or any p a r t thereof m a y be made, to execute and deliver formal application for said advance or advances on form
prescribed or approved by said W a r Finance Corporation or its counsel, said
application to contain all necessary representations and conditions prescribed
in the act aforesaid or required by the said W a r Finance Corporation.
3. To execute and deliver to the said W a r F i n a n c e Corporation the promissory note or notes or other obligation of this corporation in form prescribed or
approved by t h e said W a r Finance Corporation; said note or notes or other
obligation to be for such amount or amounts a s may be advanced by said W a r
F i n a n c e Corporation; to m a t u r e at such time or times as may be prescribed by
said corporation; to bear such r a t e of interest a s said corporation may require,
and to contain such other conditions a s may be imposed by t h e said W a r
F i n a n c e Corporation.
Be it further resolved, T h a t in order to secure the p a y m e n t of such note
or notes or other obligations of this corporation, evidencing advances made
to it by the said W a r Finance Corporation, the said officers of this corporation
be and each of them is hereby authorized and empowered to pledge and hypothe(17)




18
cate with the said War Finance Corporation the following-described securities
belonging to this corporation:
together with such other securities available for that purpose as the War
Finance Corporation may from time to time require, and such officers and each
of them are further authorized and empowered to do any and all acts and to
execute any and all instruments under the corporate seal of this corporation or
otherwise, as may be necessary or desirable in order to meet such terms and
conditions and requirements of the War Finance Corporation or its representatives.
Be it further resolved, That
the
of this corporation
be. and he is hereby, authorized and empowered to receive and receipt for any
and all advances made by said War Finance Corporation under the terms and
provisions of said act and said application aforesaid and to indorse in the name
of this corporation any checks or drafts representing the proceeds of such
advance or advances.
Be it further resolved, That delivery of said proceeds of said advances may
be made to the said
in person or by mail or telegraph to the following address
or in such other manner as the said
may direct.
I hereby certify that the foregoing is a true and correct copy of a resolution
regularly presented and adopted by the board of directors (or by the executive
committee) of the
corporation at a
meeting of said corporation duly called and held at
on the
day of
, 1921, at which meeting a quorum was present and voted.
[SEAL.]

Secretary,
[Notarial certificate.]




FORM OF OBLIGATION.
(Place)
,
(Date)
, 192-.
after date, for value received, the undersigned, being a corporation
organized and existing under the laws of
, promises to pay to the W a r
Finance Corporation (herein referred to a s Payee) or order, a t the F e d e r a l Heserve B a n k of New York, in the city of New York,
dollars
($
), with interest at the r a t e of
per cent per a n n u m from the date
hereof, payable
, on the
day of
, and h a s pledged to
the Payee, as collateral security for the payment of this and all other liabilities
of t h e undersigned to t h e Payee, whether direct or contingent, due or to become
due, or which may hereafter be contracted or existing, the following:
$

T h e P a y e e is also given a lien for the payment of this note and of all such other
liabilities upon all of the property or securities now or hereafter left by t h e undersigned in possession of the Payee, or of any person or corporation as represent! ve of the Payee. The undersigned agrees t h a t it will promptly deposit with
the Payee such additional security acceptable to the P a y e e as the latter, from
time to time, in the exercise of its uncontrolled discretion, may require for t h e
full and adequate security of this note. Upon the nonpayment of the principal
of or interest upon this note according to its terms, or any adjudication of the
insolvency or bankruptcy of or any general assignment by the undersigned, or
the appointment of a receiver for the undersigned, or any of its property, or the
nonpayment when due of any other liability of the undersigned held by the
Payee, or failure by the undersigned to satisfy any such requirement for t h e
deposit of additional collateral hereunder, t h e P a y e e or anjr holder hereof is
hereby authorized to declare the principal hereof, and of any such other liabilities due and payable, a n d thereupon the same shall be due and payable, and
to collect or to sell, assign, and deliver the whole or any p a r t of t h e above-named
collateral securities, or any substitute therefor, or addition thereto, a t any public or p r i v a t e sale or on any broker's board or stock exchange, a t any time or
times hereafter, without demand, advertisement, or notice; and upon such sale,
if as much as five days' written notice thereof shall have been mailed to t h e
undersigned, the Payee or holder hereof may become the purchaser of the whole
or any p a r t of such collateral securities, free from any right of redemption, nnd
no notice of any adjournment of any such sale shall be required. I n case of
such sale, after deducting all legal or other costs and expenses for collection,
sale, and delivery, the Payee or holder hereof may apply the residue of t h e
proceeds of such collections, sale, or sales to the payment hereof and of any or
all of the said liabilities, as the said Payee or its assigns shall deem proper,
r e t u r n i n g the overplus, if any, to the undersigned.
T h e Payee may collect and at the expense (and in the name of the undersigned or otherwise) enforce the payment when due of any of the collateral
deposited hereunder, and a t its election apply the proceeds thereof to payment
hereof or hereon, or of any of such other liabilities.
T h e undersigned will bear all reasonable expense and all loss occasioned by
or connected with the collection, enforcement, or transmission of securities
pledged hereunder or instruments or documents delivered herewith or t h e remittance of proceeds of any of the foregoing, including, among other things,
loss arising from negligence, insolvency, or default of any agent or instrumentality utilized by the Payee or sustained in any exchange t r a n s a c t i o n ; all
collections, enforcement proceedings, transmission of property and papers, and
remittance of funds being solely at the cost and risk of the undersigned.
T h e undersigned further agrees t h a t upon any t r a n s f e r of this note the Payee
may deliver the collateral securities held hereunder, or any p a r t thereof or
interest therein, to the transferee, who shall thereupon become vested with all
the powers and rights above given in respect to such collateral securities requisite for enforc'ng the payment of the whole or any p a r t of the indebtedness
evidenced by this note, and the Payee shall thereafter be forever discharged and
relieved from any liability or responsibility in t h e m a t t e r to the undersigned
or to its successors or assigns.
(39)




20
The undersigned and all indorsers hereby waive protest and notice of dishonor and agree to remain bound for the payment of this obligation and all
interest and charges thereon, and that the lien hereof and the pledge hereunder
shall remain undisturbed notwithstanding any extension of time, substitution
of collateral, or other indulgence granted by any holder of this note, hereby
waiving all notice of such extension, substitution, or other indulgence.
The undersigned shall have the right, upon three days' notice in writing delivered to the Payee, at its principal office, to anticipate the payment of this
note or of any part thereof, and any payment so made shall be indorsed thereon.
In witness whereof the undersigned has caused this note to be executed by its
president or vice president and its corporate seal to be hereunto affixed by its
secretary or assistant secretary, this
day of
, 102-.
By
Attest:




,
Secretary.

,
President.

CERTIFICATE OF ELECTION TO AND PRESENT INCUMBENCY IN
OFFICE.
I,
, secretary of the
, do hereby
certify that at a meeting of the board of directors of said corporation held on the
day of
, 192__, the following persons were elected to the respective offices set under their respective names, and that said persons are the duly
authorized and present incumbents of said offices, and that the signatures set
opposite their respective names are true and genuine specimens of their respective signatures:
President.

(Specimen signature.)

Vice president.

(Specimen signature.)

Treasurer.

(Specimen signature.)

Secretary.
(Specimen signature.)
In witness whereof I have hereunto set my hand and affixed the seal of the
corporation this
day of
192__.
,
Secretary.
[CORPORATE SEAL.]
STATE OF
,

County of
, ss:
Before me, the undersigned notary public, personally appeared the abovenamed
,
,
, and
, known to me to be
respectively the
of said corporation,
and acknowledged to me that they are the said respective officers of said corporation, and that the signatures set opposite their respective names are their true
and genuine signatures.
In witness whereof I have hereunto set my hand and affixed my notarial seal
this
day of
, 192__.
Notary Public.
NOTE.—The above certificate should indicate the election or appointment to
and present incumbency in office and contain the specimen signatures of each
and every officer of the corporation, who may execute any documents or papers in
connection with applications to or advances by the War Finance Corporation.
(21)




SECTION 18 OF WAR FINANCE CORPORATION ACT.
SEC. 18. That whoever (1) makes any statement, knowing it to be false, for the
purpose of obtaining for himself or for any other person, firm, corporation, or
association any advance under this title, shall be punished by a fine of not more
than $10,000, or by imprisonment for not more than five years, or both.
Whoever willfully overvalues any security by which any such advance is
secured, shall be punished by a fine of not more than $5,000, or by imprisonment for not more than two years, or both.
Whoever (1) falsely makes, forges, or counterfeits any bond, coupon, or
paper in imitation of or purporting to be in imitation of a bond or coupon issued
by the corporation; or (2) passes, utters, or publishes, or attempts to pass,
utter, or publish, any false, forged, or counterfeited bond, coupon, or paper purporting to be issued by the corporation, knowing the same to be falsely made,
forged, or counterfeited; or (3) falsely alters any such bond, coupon, or paper;
or (4) passes, utters, or publishes as true any falsely altered or spurious bond,
coupon, or paper issued or purporting to have been issued by the corporation,
knowing the same to be falsely altered or spurious, shall be punished by a fine of
not more than $10,000, or by imprisonment for not more than five years, or both.
Whoever, being connected in any capacity with the corporation, (1) embezzles,
abstracts, or willfully misapplies any moneys, funds, or credits, thereof or (2)
with intent to defraud the corporation or any other company, body politic, or
corporate, or any individual, or to deceive any officer of the corporation, (a)
makes any false entry in any book, report, or statement of the corporation, or
(b) without authority from the directors draws any order or assigns any note,
bond, draft, mortgage, judgment, or decree thereof, shall be punished by a fine
of not more than $10,000, or by Imprisonment for not more than five years,
or both.
The Secretary of the Treasury is hereby authorized to direct and use the
Secret Service Division of the Treasury Department to detect, arrest, and deliver into custody of the United States marshal having jurisdiction any person
committing any of the offenses punishnblp under this section.




(22)

WASHINGTON : GOVERNMENT PRINTING OFFICE : 1921