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CCC ANNOUNCEMENT CHF 1-55, OCTOBER 22, 1954 OFFERING COMMERCIAL BANKS THE OPPORTUNITY TO FINANCE PRICE SUPPORT LOANS WHICH WERE ORIGINALLY DISBURSED BY CCC OR PURCHASED BY CCC FROM LENDING AGENCIES SECTION I — OFFER OF PARTICIPATION Commodity Credit Corporation (hereinafter called “ CCC” ) has placed in a pool (hereinafter referred to as the “ Pool” ) outstanding price support commodity loans totaling $1,150,000,000. Additional price support loans which are made or purchased by CCC may be placed in the Pool. Commercial Banks, which for this purpose are defined as banks accepting demand deposits, (herein after called “ Banks” ) may participate in the financing of price support loans placed in the Pool by making funds available to CCC at the Federal Reserve Bank of Chicago, Fiscal Agent for CCC, (herein after called “ Custodian” ). Certificates of Interest (hereinafter called “ Certificates” ) in the amount of $1,150 million or thereabouts bearing interest at the rate of 1% percent per annum will be issued pursuant to this Announcement to evidence participation in the Pool. Certificates will mature on August 1, 1955, but will be purchased by CCC upon demand except during the 9-day period preceding the date of maturity. The terms and conditions upon which Banks may participate in the Pool are set forth in Section II of this Announcement. Banks which desire to participate in the financing of the Pool shall make application to the Federal Reserve Bank or Branch of the district in which they are located. Applications may be made on forms which will be available at any Federal Reserve Bank or Branch or by wire or mail. Applications should be made for Certificates in multiples of $1,000 and for not less than $5,000. Books for the receipt of applications will be opened for one day only, October 27, 1954. Applications addressed to any Federal Reserve Bank or Branch and postmarked prior to midnight October 27, 1954, will be considered in this offering of participation Certificates. CCC reserves the right to reject any application, in whole or in part, or to allot less than the amount of Certificates applied for, and action in these respects shall be final. Applicants will be informed of allotments as soon as possible after closing of the books. The purchase price of the Certificates will be 100 percent of the face amount thereof. Payment for the Certificates allotted shall be made through the Federal Reserve Bank or Branch where application was filed in funds available at the Federal Reserve Bank of Chicago on November 12, 1954, and the Custodian will credit such funds to the account of CCC and will issue the Certificates as of that date. Under arrangements made between CCC and the Treasury Department, the Treasury will deposit on November 12, 1954, with subscribing Banks which have qualified to maintain Treasury tax and loan accounts, amounts equal to the Certificates allotted to such Banks, but not in excess of any amounts for which they may be qualified in excess of existing deposits. Banks desiring to avail themselves of such deposits should remit payment for the full amount of Certificates allotted to them by charges to reserve accounts or by drafts payable in funds immediately available on or before November 12, 1954. They should also credit on November 12, 1954, to the Treasury tax and loan accounts on their books any amount for which they desire such credit up to the amounts of their payments for Certificates allotted. The Treasury has authorized Federal Reserve Banks, as Fiscal Agents of the United States, to pay from other funds in the account of the Treasurer of the United States amounts equivalent to such credits to the respective subscribing Banks for deposit in their Treasury tax and loan accounts. Such payments will be credited to accounts on the books of the Federal Reserve Banks or remitted to or for the accounts of the subscribing Banks, as the latter may direct. The Certificates of this issue may be pledged as Treasury tax and loan collateral. However, because they are in registered form and the original Certificates will all be held by the Custodian, it will be necessary for depositaries wishing to pledge the Certificates to execute an assignment form which will be furnished by the Federal Reserve Banks; these assignments to be made to the Federal Reserve Banks as Fiscal Agents of the United States. SECTION II — TERMS AND CONDITIONS Certificates issued pursuant to this Announcement and evidencing participation in the Pool will be issued upon the following terms and conditions: 1. The Federal Reserve Bank of Chicago, Fiscal Agent for CCC (hereinafter called “ Custodian” ), will issue Certificates. The Custodian will retain the Certificates and act as Custodian of the Certificates for the holders thereof. The Custodian will furnish each original Certificate holder with a copy of the Certificate. This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org) 2. The aggregate value of all outstanding Certificates will not exceed the amount of the Pool. 3. The Certificate will be issued as of the date on which funds therefor are credited by the Custodian to the account of CCC. The face amount of the Certificate, less principal payments thereon, will consti tute the value of the Certificate. Interest at the rate shown on the Certificate will be payable at the time and upon the amount of each principal payment made upon the Certificate and will be computed on a 365-day basis from and including the date of the Certificate to, but not including, the date of such payment. 4. The Certificate may be transferred to any commercial bank, Federal Reserve Bank or such other banking institution as may be determined by CCC to be eligible, by execution of an Assignment of Certificate of Interest (Commodity Credit Corporation Form 316, hereinafter called “ Assignment” ). Transfers will be recorded as of the date of receipt and acceptance of such Assignment by the Custodian or as of the date of receipt by the Custodian of telegraphic advice of such Assignment if such advice is promptly confirmed by the delivery to the Custodian of a duly executed Assignment. Assignments postmarked subsequent to midnight July 22, 1955 will not be accepted by CCC. In the event of announce ment by CCC, as provided in paragraph 6 hereof, that Certificates will be purchased during a designated month, Assignments and telegraphic advices received during the first ten calendar days of that month will not be recorded prior to the expiration of such period. 5. Except during the 9-day period preceding the date of maturity, CCC will, upon demand by the Certificate holder of record to the Custodian, purchase through any Federal Reserve Bank or Branch any outstanding Certificate at any time by paying to the Certificate holder of record the value thereof plus accrued interest. CCC will purchase at maturity all outstanding Certificates. 6. CCC reserves the right to purchase at its option any outstanding Certificate, in whole or in part, and will, in the event the value of the outstanding Certificates on the last day of any month prior to maturity exceeds the unpaid principal amount of the loans comprising the Pool as determined by CCC during that month, purchase outstanding Certificates, in whole or in part, in a total amount sufficient to reduce the outstanding Certificates to the unpaid principal amount of the loans comprising the Pool. CCC will pay for any Certificate purchased, in whole or in part, all or the respective part of the value of the Certificate plus accrued interest on such amount. Any purchase by CCC of outstanding Certificates, in whole or in part, except as provided in paragraph 5, will be made only during the first ten calendar days of a month and CCC will announce by press release on or before the first business day of such month that purchases of Certificates, in whole or in part, will be made. Payments for such purchases will be made during the first ten calendar days of such month to the Certificate holders of record as of the last day of the preceding month. 7. No Member of, or Delegate to Congress, or any Resident Commissioner, will be admitted to any share or part of this contract or to any benefit to arise therefrom except that this provision will not be construed to extend to their interest in any incorporated company, if the contract be for the general benefit of such company. 8. The applicant Bank warrants that it has not employed any person to solicit or secure this contract upon any agreement for a commission, percentage, brokerage, or contingent fee and that no such con sideration or payment has been or will be made. Breach of this warranty will give CCC the right to annul the contract, or at its discretion, to deduct from the contract consideration the amount of such commission, percentage, brokerage, or contingent fees. This warranty will not apply to commissions payable by the applicant Bank upon contracts secured or made through bona fide employees or bona fide established commercial or selling agencies utilized by the applicant Bank for the purpose of securing business. SECTION III — PURPOSE AND FINANCIAL ORGANIZATION OF CCC CCC engages in buying, selling, lending, and other activities with respect to agricultural com modities, their products, foods, feeds, and fibers for the purpose of stabilizing, supporting, and protecting farm income and prices, assisting in the maintenance of balanced and adequate supplies of such com modities, and facilitating their orderly distribution. CCC also makes available materials and facilities required in connection with the production and marketing of such commodities. CCC is managed by a board of directors, subject to the general supervision and direction of the Secretary of Agriculture, who is, ex officio, a director and the chairman of the board. In addition to the Secretary, the board consists of six members appointed by the President and confirmed by the Senate. There is also a bipartisan advisory board of five members appointed by the President to survey the general policies of the Corporation and advise the Secretary with respect thereto. CCC has an authorized capital stock of $100 million, all of which is held by the United States, and authority to borrow up to $10 billion. On August 31, 1954, outstanding commitments against this authority amounted to $6.7 billion. CCC will at all times hold in reserve an amount of its borrowing authority sufficient to cover outstanding Certificates. J. J. SOMERS Controller, Commodity Credit Corporation
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