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Exceptions to the provisions of the 3 preceding paragraphs may be made whenever the contractor is fighting foreign competition. In such case, the contractor must furnish the Minister of Merchant Marine with a full justifica. tion or become liable to further penalties, described hereafter.

Special reduction in tariffs On the lines between France, Mexico, the Antilles, and Central America, special reductions in tariffs shall apply to French war invalids and war pensioners, and to large French families, according to the following schedules :

French war invalids and war pensioners, having a 50 to 75 percent disability, are entitled to 25 percent reduction from full commercial rates.

Such invalids and pensioners, having 75 to 100 percent disability are entitled to a 50 percent reduction from full commercial rates. The same discount applies to totally disabled invalids or pensioners.

Large French families traveling together, including father, mother, and children of between 3 and 18 years of age, are entitled to the following reductions on single full-price tickets : 20 percent for families of 5 persons: 30 percent for families of 6 persons; 35 percent for families of 7 persons, and 50 percent for families of larger than 7 persons.

These reductions apply only to price of transportation; subsistence being computed as a separate item and furnished by the company at cost price.

l'essel specifications Vessels in service under the contract shall be of French registry and fly the French postal ensign, shall be of sufficient number to insure regularity of service, and shall include sufficient reserves for the maintenance of service. In no case is the contractor allowed to plead an exception because of lack of reserve tonnage, and this provision shall especially hold in the case of loss of a vessel when the contractor cannot plead force majeure for interruption of service. Within a period of 6 months after the loss of a vessel, the conces. sionaire must either replace the lost vessel with another vessel complying with the conditions required for the first vessel, or else have ordered another vessel capable of meeting the conditions of the contract, unless otherwise authorized by the Minister of Merchant Marine.

Unless otherwise authorized by the Minister, each vessel when reaching the age of 25 years must be replaced by a new vessel. In case of necessity, temporary assignment of vessels which do not comply with all the conditions agreed upon, may be permitted, but only upon the approval of the Minister of Merchant Marine, and no vessel necessary to the service of subsidized lines can be definitely removed from the service without authorization of the Minister.

The contractor must advise the Government at least 30 days in advance as to the name of the vessels assigned to each voyage.

Construction and repair of vessels Vessels to be built to replace vessels in the service at the time this contract went into effect must be superior to the original vessels insofar as port equipment may permit, taking into account competitive conditions and improvements necessary to insure profitable operation. Replacement vessels must be of French construction, unless expressly authorized by the Minister of Merchant Marine.

Construction of replacement vessels shall be on the basis of competitive bids from a sufficient number of qualified French shipbuilders, specifying delivery time-limit, plans and costs estimates. If the most advantageous offer is deemed acceptable, the Minister shall give his approval to that bid, and the contractor must, the price and time-period being equal, have all major conversions or repairs done in shipyards in France or the French colonies, unless agreement is made with the Minister of Merchant Marine to the contrary. The Government reserves the right to exercise general and detailed inspection over new construction and repairs. It may delegate representatives for this purpose, to whom plans, orders, and purchases must be communicated, and to whom the shipyards and shops may be made accessible at all times. The con. tractor must furnish a list of these shipyards and submit plans for construction or remodelling work to be performed.

All vessels must be registered first class in a classification society agreed upon by the Minister of Merchant Marine. Vessels to be constructed must be registered in a French classification society.

Transactions in regard to the construction and repair of vessels must have a clause stipulating that the Decree of August 10, 1899, relative to transactions entered into by the State, shall be applied as if the transaction had been entered into by the State.

Finally, a clause shall be included covering the percentage of repair work that may be performed on a vessel abroad.

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Military equipment At the beginning of construction of new vessels, the company shall submit its plans to the Minister of Marine (Navy), so that study may be made by the French Navy with a view for appropriating said vessels in time of war, and if the Minister of Marine believes it necessary to do certain work in connection with the requisition of the vessel for war purposes, the expenses resulting from such work shall be for account of the French Navy. Any fittings prescribed by the Navy must not result in impeding normal speed of the service nor reduce normal commercial space more than by 75 cubic meters (2,648 cubic feet). If it is deemed essential to exceed this space, the Navy shall be liable for the payment of a special indemnity as reimbursement for loss on this account. if the space used is less than 75 cubic meters, the company shall benefit only from the various indemnities which are provided for the appropriation of merchant vessels from among the entire French merchant fleet.

Vessels must include one or more special bunkers of a total effective space of 30 cubic meters (1,059 cubic feet). In case of special requirements or in case they may be used for the transportation of war munitions, such bunkers must be placed as far as possible from all sources of heat, must be perfectly tight, and so located that they can be completely flooded however the vessel may be loaded, such flooding control to be made possible from the deck. Dimensions of hatches of munition bunkers shall be given by the interested administration for each passenger vessel at the time the study of the project is made. The contractor shall have the bunkers comply with all foreign laws and regulations, nonobservance of which might result in vessel movement delay or increased cost of operation, due to increased port dues, etc.

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Offioial trials, delivery of vessels No vessel may be placed in service until it has been examined by a special commission whose members shall be appointed by the Minister of Merchant Marine who alone has power to place the vessel in service. This commission shall have performed as extensive trials as it may deem necessary and shall satisfy itself that the vessels comply with the conditions of the contract, and that on the basis of trial runs of periods of 4 consecutive hours, show a speed in excess of that which the vessel must perform in actual service. This extra increment of speed is fixed at 142 knots. The power developed during 4-hour speed trials, and the speed attained on the basic run, must be obtained only with the use of permanent installations on board, which are to be used in actual service, and to the exclusion of all provisional installations designed to produce abnormal increase of power of the engine and boiler equipment.

Trial runs shall be performed under sea and weather conditions which will permit establishing, mean draft corresponding to half the total weight of passengers and baggage, freight, fuel, stores, and fresh water.

Speed calculations are made according to the rules and regulations of the Navy, and vessels must furthermore submit to an endurance run not to exceed 48 hours, at the speed actually used in service.

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Libor disputes In labor disputes between the company and its seagoing personnel, the company is obliged to submit the matter to arbitration without delay under maritime law. If the State places its personnel at the disposition of the company, following a disagreement of this nature, the pay of this personnel taust not be less than the compensation fixed by Navy regulations or than the pay covered by commercial labor agreements for their respective grades and character of work in force at the time of interruption of service,

Personnel other than that of the State, shipped on vessels requisitioned for maintaining the service, shall be paid according to the labor tariff in force at the time work is stopped. In case of increase in wages, the employees shall draw such increases from the date such increases go into effect.

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Nationality of executives French citizens only shall be members of the administrative board of the company, or serve as a manager or in an executive capacity in the company. Agents and correspondents of the company abroad and in the colonies must also, insofar as possible, be French citizens.

Working conditions Within 6 months from the date of the law authorizing the contract, addi. tional regulations for working conditions and working hours for seagoing personnel and working regulations for shore employees and laborers, as well as conditions of retirement for shore personnel, shall be completed. For conditions of retirement covering shore personnel, the first funds shall be made up by the present assets of the pension fund.

These regulations and new retirement plans shall be established by a commission in which the company and the organizations representing the personnel shall be equally represented.

CHAPTER VIII. OPERATIONS CONTROL Supervision over the services is exercised in the name of the Minister of Merchant Marine by the Government commissioner at the company's legal place of business. The commissioner exercises control over operations of every character performed by the company. He does not interfere in the operations, but must be kept posted on all developments and must receive all pertinent information. The commissioner's expenses are paid by the company. Besides the commissioner, the Minister of Merchant Marine may appoint, in ports of registry and ports of call not in the French colonies, an official to represent him with the agents of the company, at a compensation not to exceed 1,200 francs ($46.80) per year, payable by the company, and the Minister for Colonies appoints in the ports of call in the colonies representatives to represent him with the agents of the company.

During a voyage, representative control is vested in the Controller of Maritime Postal Service or by special agents. These officials have the right to make inspection trips on board passenger vessels, or to inspect such vessels and their equipment at any time. All such inspections and all departure hours shall be recorded in the ship's log.

Financial control Financial control over operations are to be exercised by the Department of Finance. The accounting of the contractor is subject to audit by inspectors of finance, in respect to both approved services and to others, and the contractor must produce annually the operations accounts as prescribed by the Minister of Merchant Marine and the Minister of Finance.

The accounts are examined by a commission, to be fixed by decree, upon the suggestions of the Minister of Merchant Marine and the Minister of Finance, and the commission shall report to the Minister of Merchant Marine,

The company reports its regulations and all modifications of its regulations to the Government, which retains the right to disapprove all modifications, 'The Minister of Merchant Marine shall report to the Parliament the results of the previous fiscal year.


War clause “ In case of war, whether France be a belligerent or a neutral, the State shall, with the knowledge of the company, arrange the modifications to be made in the execution of the services, according to the circumstances. The suspension of the services whether entirely or in part shall not invalidate the agreement, but the financial stipulations shall be modified in taking account of the services eventually maintained.”

Subsidy payments In consideration of the subsidy, the contractor executes specified services at his own cost, risk, and peril, and all expenses of whatever nature are for his account.

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Subsidies are paid by twelfths, upon vouchers prepared by the Government commissioner certifying the completion of the service. At the time of payment of the subsidy, the State pays only the net difference between the subsidy and any amount retained due the State. Subsequently, the amount retained may be charged to the amount of the performance bond and interest due, or to become due, without prejudice to recourse of law.

In order to permit payment of the subsidy within the conditions described above, the subsidy shall be fixed provisionally for each year at a figure determined by the last ministerial decree issued.

Repayment to the State of sums paid in excess shall be effected through deduction from the first twelfth to be paid for the year following.

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Except in case of force majeure, regarding which protest must be entered by the master of the vessel, or by extract from the ship's log, the following penalties apply in connection with performance failure under the contracts:

Total or partial nonperformance of a voyage, a fine of 50,000 francs ($1,950). For using passenger vessels not qualified for the postal service, a fine of 50,000 francs ($1,950).

Reduction of fines, authorization of special vessels for special voyages, and remittance of fines is vested in the Minister of Merchant Marine.

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Failure to make required speed New York-Havre Line: 20,000 francs ($780) per knot below average annual speed for each voyage that a vessel shows insufficient average.

The Antilles-Central America Line: 50,000 francs ($1,950) per knot below average annual speed calculated on the average speed of the line.

Delay in departure from terminals, a fine of 100 francs ($3.90) per hour or fractional hour; for 12 consecutive hours delay, a fine of 250 francs ($9.76) per hour. The same penalties apply in case of delay in arrival at terminals.

Irrespective of penalties, whenever the delay exceeds 24 hours, the Minister of Merchant Marine may, with the knowledge of the contractor, take joint action with local authorities for assuring the shipment of mails, and he may charter or requisition vessels for account of the contractor.

Failure to make port of call, a fine of 2,500 francs ($97.50); for a second failure during the same year, 5,000 francs ($195); and for a third or subsequent failure during the year, a fine of 10,000 francs ($390) each.

Failure to replace a vessel, within the period provided in the foregoing
regulations, except in uncontrollable circumstances, of which the Minister of
Merchant Marine shall be the sole judge, a fine of 1,000 francs ($39) per day
shall be imposed for each day of delay.

For refusal to arbitrate, as provided in regulations, a fine of 20,000 francs
($780) to 50,000 francs ($1,950).
Delay or negligence in the postal or parcel-post service, a fine of 1,000 francs
($39) to 5,000 francs ($195).

Unfulfillment of obligations to passengers or shippers, as provided in the regu-
lations, including negligence in service for transportation of the State and for
every infraction of the clauses in the list of duties, a fine of 1,000 francs
($39) to 5,000 francs ($195).
Strikes shall not be considered in themselves as a case of force majeure.

International agreements The list of duties shall be modified, if necessary, in order to bring it into conformity with any international agreements which may be made by the Government, or with agreements which the company may conclude with foreign companies, with the approval of the Minister of Merchant Marine.

Cancelation Cancelation of the contract may be made for nonperformance for more than 2 months; for interruption or abandonment of the service in case of war, except as provided in the contract for such contingencies; for bankruptcy or judiciary legislation; for frequent irregularities, persistent negligence, or bad faith; for insufficient or poor condition of vessel equipment; for agreements concluded with a foreign government or postal administration without

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authorization of the Government of France; or for inclusion in the service, without authorization of the Government, of vessels which are not the property of the contractor.

In lieu of placing the service under Government control or canceling the agreement for cause, the Minister of Merchant Marine may apply a penalty in the shape of a fine, the amount of which he shall determine.


FINANCIAL RESULTS OF FIRST PERIOD The financial results of the first period of operation of the maritime credit law were stated by the Minister of Merchant Marine in January 1934.1 The figures presented are subject to change due to possible reduction, but they show relatively the credits extended by the Credit Foncier, those advanced through private channels, and the State interest contribution to both, for each year of the 5-year period. These figures show that 45.7 percent of the total authorization of the Credit Foncier was loaned during the 5-year period, that private loans amounted to 18.5 percent of the Credit Foncier loans, and that the State contribution of interest was 54.5 percent of the total authorization of 30,000,000 francs ($1,176,000) for the 5-year period, despite the various liberalizing acts stated. They show also that 87 percent of the Credit Foncier loans were for vessel construction in France.

Financial results of maritime credit laro ?


Loans by



Interest allowance

First year, Aug. 1, 1928, to Aug. 1, 1929:

Construction in France.
Construction abroad.
Purchased abroad..

189, 349, 000

7, 363, 000
3, 288,000

40, 700,000

5,911, 423

46,048 36, 152


40, 700,000

5,993, 623

44, 150,000

131, 345, 000
18, 330, 000
11, 800,000

4, 423, 855

92, 225 122, 695

161, 475,000

44, 150,000

4,638, 775

1,076,500 10. 977,000

6,055, 500 18, 109,000

22, 578 21, 981 49, 826

94, 385

Second year, Aug. 1, 1929, to Aug. 1, 1930:

Construction in France.
Construction abroad.
Purchased abroad..

Third year, Aug. 1, 1930, to Aug. 1, 1931:

Construction in France.
Construction abroad..
Purchased abroad..

Fourth year, Aug. 1, 1931, to Aug. 1, 1932:

Construction in France.
Construction abroad.
Purchased abroad..

Fifth year, Aug. 1, 1932, to Aug. 1, 1933:

Construction in France..
Construction abroad.
Purchased abroad..

Total, Aug. 1, 1928, to Aug. 1, 1933:

Construction in France..
Construction abroad.
Purchased abroad...

Equivalent in dollars..

32, 252, 000
1, 285,000

1, 541, 069

2, 534 5, 251

34, 187,000

1, 548, 854

43, 349, 500



? 4,013, 701


5,718 4,024, 389

43, 849, 500



397, 372, 000
37, 955, 000
22, 293, 500

15, 912, 626

167, 758 219, 642

457, 620, 500


16,300, 026

$638, 961

$17, 938, 723

$3, 328, 080

1 Chambre Syndicale des Constructeurs de Navires et de Machines Marines No. 31 B. * In 1934: 3,383,691 francs (franc at $0.0392).

· Chambre Syndicale des Constructeurs de Navires et de Machines Marines. No. 31 B. (Franc at $0.0392.)

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