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283 BOARD OF GOVERNORS Of" THE FEDERAL RESERVE SYSTEM S-521 WASHINGTON ADDRESS OF"F"ICIAL CORRESPONDENCE TO THE BOARD Jm1e 30, 1942 Dear Sir: Referring t,o the Board's letter S-464 of April 23, 1942, experience in handling applications for guarantees m<.~de pur-suc:.nt to Executive Order 9112 has impressed the War Department, Navy Department, Maritime Commission, e..nd the Board's War Loans Committ0e with. the necessity of hav1ng the applications of fimmcing institutions for guarantees submitted on substantially tmiform forms by all Federal Re3erve Banks. It is important that in all eases the forms used contain the same nwnbered captions o.nd that any needed information not called for by captions numbered l to ll b<o obtained as supplemental information. It is assumed that supplemental information will be required only in unusual cases and that i t will be kept at a minimum. The form enclosed with the Board's :tetter S-464 has been rnodifi0d by the insertion of two new items as follows: 9.(a)(3)a. 12. Is contract a Fixed price contract? Cost plus a fixed fee contract? The applicant for the loan herein referred to has been advised that financing institution is appl~ring for this g·.1arantee in the a.JlDU11t ~:md subject to the terms herein indicated. A copy of the form as revised is enclosed. In the case of the War Department and Maritime Commission, three copies of the application should be furnished by the financing institution, one copy to be retained by the Federal Reserve Bank and two copies to be forwarded to Washington, As a general rule, the copies forwarded to Washington should be suppo2tEd b,y tcvo copies of the Federal Reserve Bank 1 s investig-ation and recoliunendations. In the case of Navy Deparhlent 2'J.ar;:mtces, the same procedure followed as indicated above, 0xcept that the Federal Reserve should forward to Washington a copy of the application immediately S-521 -2- 284 upon receipt thereof in order to allow the Department ample time for processing without delaying final action on the guarantee. One copy of the application should be submitted later supported by two co'pies of the Reserve Bank's investigation and recommendations. In urgent cases, applications for guarantees rna.y be handled by wire, followed by supporting information by mail. Section 1 of the copies of guarantee agreements forwarded to Washington should contain an adequate description of the loan, including the date, maturity, and amount of the loan, and the interest rate charged the borrower. All advices to financing institutions with respect to guarantee agreements should provide that the authorization to guarantee is effective for a period of 30 deys only and that unless extended it wi::Ll lapse i f the guarantee is not executed within such period~ In the case of NaV"J Department guarantees, the procedure outlined in paragraph J of the Board's letter of May 23, 1.942, S-L,86, is only applicable if the contracts of the borrower are subcontracts. In the case of prime contracts the Navy Department will secure the necessary information direct thereby eliminating the necessity for any action in this regard qy the Federal Reserve B,~1ks. Very truly yours, ~:::-'A '.·· "'.···#'-;:-tf::i-~# . , .-.: . ,. · ( -,;. / ' /J ·------· . L. P. Bethea, Assistant Secretary. Enclosure TO THE PRESIDENTS OF ALL FEDERAL RESERVE BANKS / U£-P.--/~---- (»85 S-521-a l'w (Superseding S-464-a) APPLICATION BY FINAl~CING INSTITUTION TO FEDERAL RESEr1VE BANK OF , FISCAL AGENT Of THE UNITED STATES, FOR GUARANTEE OF LOAN, PURSUANT 'l'O EXECUTIVE ORDER NO. 9112 DATED MARCH 26, 1242 l. Name and location of financing institution ') "-• Name and location of applicant for loan 3. Amount of loan applied for 4. P ere en tage of loan to be guaranteed 5. (a) Rate of interest to be charged Borrower (b) Maturity of proposed loan (c) Other terms and conditions of loan 6. Description of collateral, if any 7. War products to be supplied by applicant for loan 8. Purposes for which funds vdll be used 9. (a) If applicant for loan is a prime Government contractor, give the following information with resoe..Q_t to each prime contract: (l) Unit of Government with which thE: prime contrar.~t is held (2) Name, title and address of Government contracting officer (3) Contract number a. (b) Is contract a Fixed price contract? Cost plus .:1 fixed fee contract? (4) Amount of contract and approximate per cent completed ( 5) Date of first and last deli very If applicant for loan is a subcontractor,, give the following information with resoect to each subcontract: (l) Name and address of concern with which applicant for loan has a subcont,ract or orner for supplying war products 286 S-52.1-a -2(2) Name and address of prime Government contro.ctor for whom products are being produced (3) Unit of Government for which products are being provided (4) Amount of applicant's subcontract or purchase order and approximate per cent completed (5) Date of first and last delivery 10. General statement by financing institution with respect to the applicant's ability to perform the above contracts; the general character, reputation, and capability of the applicant; normal type and volume of production; and any other information ·which the .financing institution would ordinarily take into account in considering a loan to the applicant. ll. Copy of audited balance sheet and operating statement for the last fiscal period of Borrower and copy of latest available balance sheet and of latest ava:Llable interim opera.ting statement should accompany application. (If audited reports for the last fisc::,l period are not available, furnish balance sheet and statement of earnings and expenses for that period proper]_y certified.) 12. The applicant for the loan herein raferrecl to has bzen advised that financing institution is applying for this guarH.ntee in the amount and subject to the terms herein indicated. (Full name of financing institution) :a Y--~~------r---~----~----~-( Signature) (TitLe)
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