SECOND MORAN BILL

(H. R. 7981, 74th Cong., 1st sess.)

A BILL To further the development and maintenance of an adequate and well-balanced American merchant marine, to provide for the separation of the regulatory functions of the Government over shipping from the Government's business interests in ships and shipping, to repeal certain former legislation, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

TITLE I-UNITED STATES MERCHANT MARINE CORPORATION

SECTION 1. It is hereby declared that it is necessary for the national defense and for the proper development and maintenance of its foreign and domestic commerce that the United States shall have a merchant marine of the best equipped and most suitable types of vessels sufficient to carry the greater portion of its commerce and serve as a naval or military auxiliary in time of war or national emergency, to be privately operated by citizens of the United States whenever practicable.

SEC. 2. Within thirty days after the passage of this Act the President is hereby authorized and directed to create and organize a Federal corporation with an authorized capital stock of $500,000,000, to be subscribed for, paid in, and owned by the United States, as hereinafter provided, which corporation shall possess an entity separate from that of the United States, shall have a perpetual existence unless dissolved by Act of Congress, shall adopt a seal and make its own bylaws, shall sue and be sued in its own name as hereinafter provided, and said corporation and tis income and property shall be exempt from all taxation, direct or indirect, of whatsoever kind or nature. All the capital stock in said corporation shall be issued to and held in trust ex officio by the President of the United States. The name of said corporation, hereinafter in this Act referred to as "the Corporation", shall be "United States Merchant Marine Corporation."

SEC. 3. The Corporation is hereby authorized to build, reconstruct, recondition, and repair its own vessels, or to make contracts for the building, reconstruction, reconditioning, and repair of its own vessels; to acquire vessels by purchase or by transfer from Government departments and agencies, by charter or in any other lawful manner; to operate vessels in the commerce of the United States as a common carrier by water, either directly or through subsidiary corporations; to charter its vessels as hereinafter provided; to carry on the business of underwriting marine insurance, builders' risk insurance and protection and indemnity insurance, either directly or through a subsidiary corporation; to own real estate; to issue and sell its own bonds; and to make any and all contracts necessary for the exercise of the foregoing powers, within the limitations imposed by this Act.

SEC. 4. (a) The business of said corporation shall be controlled and directed by a board of directors composed of five members, to be appointed by the President, by and with the advice and consent of the Senate. Such directors shall be appointed as soon as practicable after the enactment of this Act, one for a term of one year, two for a term of three years, and two for a term of five years, the term of each to be designated by the President, but their successors shall be appointed for terms of five years, except that any person chosen to fill a vacancy shall be appointed only for the unexpired term of the director whom he succeeds. (b) The directors shall be appointed with due regard to their particular fitness for the intelligent and efficient discharge of their duties. Not more than three directors shall be affiliated with the same political party. No person shall be appointed a director, who, within three years prior to his appointment, shall have been employed by or have had any pecuniary interest in any carrier by water or other person subject to this Act, or other person who derives a substantial portion of his revenues from any business associated with ships or

pg ba1⁄4, director al ad devote his full time to t! e duties of his office It shall ima!ii for any director, officer or employee of the Corporation to be in teen of any other Is 15 firm of corps rati in, or to have aty peeliary interest in, or ), d'any cʻlsa' relationship with, al carrer by water ship? under, ཆོས་མའི་ཞི་ནའི་། an tra for or at er person firm association of corporation with in the United States Merc.cast Marine Corporation, or any carterer of the Corporation » Vessels or any person who may have a contract with the Corporato of any kind may have bat esa relatii*

Arv devetor may be removed by the President in his discretiot for ineff6. vegeet of duty, taitonsa: ce in c If ce, or other cause A vacat ey of Gewindeboard of directors s' aid not imj air the right of remattig tebers to ar i to exercise mu its powere

1 premlet of the Corporation slal' be one of the board of directors it cevrii at, then of at 10 ali b *es gra'c 1 by the Pros tent of the United 1. other pri opnuudliers of the Corporation, shai, be a vice presidert, ***V FATV, a treasurer, a compter, a 1 a general en 15,00 to be circted an 11by the board of directors The board of directors shall appoint all other ¦cao a detopovers of the Corporat..

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directora i nerive a salary of $10,000 per arm, except the d veteraŤ VI aan jate middest of the curțe ratior, si ali receive a sa ar. of 812 000 ine beard of it.recters still deterne t'e s'aries of the other executive officers berean rame fard of ad otter #wartekj vees, but no or en þá vec. all receive a salary in excess of $]E +90) jær ættum. freude of the Corps ration

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I e ti'e to a. 1 t. e possess, ity of a.. P... pites of any kind contracts and cor træet alves, pers, at i prozorty and it terests of evers kud. owned by Petuate d Mates and now coutro cite the Denartmaat of ( ཆོn『་ཙི།-ས༄ཟླས། ཏིན ཟེ་ སྐར་ས་དང། ས་ས་f་ ཾa ་༄། ༄ w and fatur tens of te formar linited States 2. at Bar 1. virtue of the Prew dent's Exo tive order of Je 10 De transferry 1, no. 1, and as, 'ed to t, e Urate.. States Mennant Marine Cor» ration as t'cow.er f. That such change of titie si.a". ecolar ("cefive ipan te late

a majority of the board of fires tors of the Corporation, at a Save been anpated

and, Lave tazet the oath of of ce As a pract alse, teres ter, an sors and aj prav ment of all t e meses at 1 property so trausterrei wail by a board of aj pra sets consisting of tree meth'ers one fimber to hệ designate i by the Secretary of the Treasury ose member ivt obretary of t. e Navy, and one mem: er by the Secretary of Commerce from t er resper five <va-miaett,ut ༈ ིན Surf inventory and ape raisether,ta stati place a fur VRÄtat, on a.. money a'i property, so transferred and spoù written approval of xx d an ei tory and appraisemet i by the saï 1 1. ree decretaries, t'e Corporation s'all emi ares of its capital stock of exava ent par vane of sai! morev ar 1 prope erts as so determined to be held by the President of the Urated States in trust for the United States

Sa 7 The President of the United States is a :thonzed and directed to allot to alto raise to be pai i to the Corporation from time to time as may be req ured #3043ar* Garam or sum of money as may be necessary to emplète the author. ize i capital stock of saif Corporation, ad sai ism or sims are hereby appropriated from pat lie finds it. the Treasury of the United States, or may be trans ferre 1 from finds previdas! appropriate 1 for pabic works as the President mav Le Corporation, stall pcie stiares of its capital stock of equivalent par vae to the anoint of money so received, to be held by the Prodent of the United States in trust for the United States

SEC 8. Upon completion of the sale and tran-fer to the United States Merchant Marine Corporation of an the vessels transferred from the former ated States

Shipping Board to the Department of Commerce by the President's Executive order of June 10, 1933, the United States Shipping Board Merchant Fleet Corporation shall cease to exist and shall stand dissolved. All of the records, books, papers, and corporate property of said dissolved corporation shall be taken over by the United States Merchant Marine Corporation.

SEC. 9. The Corporation is authorized to issue and sell from time to time its short-term or long-term bonds in such denominations, bearing such rates of interest, and such maturity dates as shall be jointly approved by the regulatory commission hereinafter created and by the Secretary of the Treasury, and payment of the principal and interest on said bonds shall be guaranteed by the United States: Provided, That the total principal amount of such bonds outstanding at any time shall not exceed $500,000,000.

SEC. 10. The Corporation is directed to perfect, adopt, and carry out a longrange shipbuilding program to provide an adequate and well-balanced An erican merchant marine to be privately operated, whenever feasible. During national emergencies as proclaimed by the President, the Corporation's vessels shall be operated by it or as the President of the United States shall direct. Such shipbuilding program shall provide for the construction of vessels of all types, including passenger liners, combination cargo-passenger vessels, cargo carriers, tankers, and colliers, so designed as to be readily and quickly converted into transports and supply vessels for employment by the armed forces of the United States in a national emergency, and to this end the Corporation shall closely cooperate with the Navy Department as to national-defense needs and as to design and plan of the Corporation's new vessels. The Corporation's long-range program shall make provision for replacement and modernization of its vessels as circumstances may require, so that its fleet shall at all times be well-balanced and adequate for the needs of the Nation's waterborne commerce and as a naval auxiliary.

SEC. 11. The Corporation is authorized and directed to have constructed in American yards, on the Atlantic and Gulf and Pacific coasts, such new vessels as it shall determine may be required to carry out the objects of this Act, and to have old vessels reconditioned or remodeled in such yards: Provided, That if satisfactory contracts for such new construction or reconstruction, in accordance with the provisions of this Act, cannot be obtained from private shipbuilders, the Corporation is authorized and directed to build its vessels in its own yards. In the letting of contracts for construction of vessels in private yards and in the construction of vessels in its own yards, the Corporation shall keep in view that it is desirable to have shipbuilding yards available on the Atlantic, Gulf, and Pacific coasts and to encourage the development of the art of shipbuilding on each of said coasts, even though it may be necessary for the Corporation to allow a higher cost for vessels constructed on the Pacific coast.

SEC. 12. (a) No contract for the building of a new vessel, or for the reconditioning, reconstruction, or repair of any other vessel, shall be made by the Corporation with any private shipbuilder, except after due advertisement and upon sealed competitive bids except emergency repairs: Provided, That the advertisment for bids shall specify that the vessel is to be built or the work is to be done on the Atlantic, Gulf, or Pacific coasts of the United States, as the case may be.

(b) No bid shall be considered unless submitted on a printed form of proposal prepared by the Corporation and furnished upon request to all prospective bidders, and accompanied by a bid bond in such amount as the Corporation shall require.

(c) Except proposals for repairs, such proposal form shall provide for an offer by the bidder to construct, or reconstruct, or recondition the vessel, according to the plans and specifications therefor, on a basis of actual cost to the contractor plus such percentage of profit on the bidder's actual cost as shall be specified in the bid.

(d) Every such proposal form shall contain a precise definition of the term "actual cost to the contractor", which definition shall have been previously approved by the United States Maritime Commission, hereinafter created. In establishing such definition and providing for the proportion of the overhead expense that may be included in "actual cost to the contractor", no credit shall be allowed for any salary paid to any one of the contractors' officials in excess of $20,000 per annum to the contractor's principal officer and in excess of $15,000 per annum to two other officers and in excess of $10,000 per annum to any other officer or employee.

(e) Before accepting any bid or entering into any such contract, the Corporstion shall require the bidder to submit a statement, sworn to by the bidder or by

inal offer, if a corporation setting forth at length and in such wtie Corporat ■'a' repures, the iteras gag to make up the bifter s ༞ ༈ ༥སྟང་་wt a in iri trative, and fivesd over' cnd expense the volume of busimuted by the1 ferding the pro eleg two VEATR ach other ch information »? «1) he treated t, den fual by the Corporat not be da. dged to any person not o ed by the Corporatioo, or by the (or that jot རོ ན ག སྨཎ་『tན་ཟླ་ ས་ཝཱ་ཚུ,༣ན་པ་ཀྱི ,:』༞༞aའིས་གསོ་ al༄-f-ཚོས་ནནས་ན by 1 (

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Med Mates exci y in the for 25 trade of the United States, wich were parc. 1 from t སྐྱེ་ཟླར ན་ བྱས 1:|:|:ཀྱིན prag Band for restricted operation in trele or on, which a ect, tret

on that the voor was to be operated in Pronized, I sat the mver of such vessel ola'l acce;t at par vale tia botade for the amout of the purchase price of wich vessci ita :for The price to be pud Ev tre Corporation for at v vessel no parel and fatal, be echipated as fi wa Cat of the vessel to the first ver doe, Jens any relich. on in the part ase patire al wed by the vender either by a write down of the purchase money mortgage or otherwise if the vessel was p...re! ased from the former Nipt. g Board or cost of the ves ei to the first owner if the vessej was t with the aid of a cotruction, lean, p' in the will of a mis expended by the enter to recot latin sich vessel exording or ! arv roja rs and replacementa, 1 as an ant al depreciation, from t ́ ́e date of the von La xức ly Ve Shipping board or from the date of the vesse, « inureting, if b * with the aid of a construct. n loan, based upon the nositi ption the uff life of the vessel is twenty years less an allowared for j'acing the vessel in good rej ur in every partio lar, the Corporation to take creat for al, ca-l a ivanced on any lost, ma se by the Supping Board on such vessel, with interest at 3 ; per centium per annum duri g any period the vessel was operated in foreign trade after the loan was msie, i′′rospective of the rate charg 1, and interest at pererti per atm for 1. Fa vrce of the time the i atas ra, a: 1 the owner tola i en lit for all

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payments of principal and interest male or, such, leans If the Corporation Bois a purchase-money mortgage, transferred to it by the United States, on any auct, vessel, the amount of ur paid prisopa, and interest on wich mortg are stall be deducted from the prelve price to be på 1 by the Corp-rat; ni The purcase price so determined, if the vessels parehas 1 are operate 1 on a reglar steams up route, shail include the tra: sfer of te trade name and good will of wacha line, without adfiti nal cost to the Corpora'

SEC. 15. In determinang the time a vessel las boen en gvg 1 in foreign trade, the Corporation shall not make any allowance f any portiot, of a voyage from a port on the Atlantic or G if coasts to the Pacific coast of the United States, or from the Pacific coast to the Graf or Atlantic erasts of the United States, by

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way of the Panama Canal, even though the vessel may have touched at a West Indian, South American, or Mexican port on such voyage; nor shall the Corporation make any allowance for any portion of a round voyage between a United States port and a port in the West Indies; nor on the voyage of any vessel when more than 75 per centum of the cargo carried by such vessel consisted of commodities consigned by or to the owner of such vessel, or any subsidiary, or affiliate or holding company of such owner.

SEC. 16. The Corporation shall not purchase any vessel from a private owner, unless as one of the conditions of such purchase the owner shall execute a bond, with one or more approved sureties, conditioned upon indemnifying and saving the Corporation from loss against all existing liens against such vessel arising out of prior operation thereof or otherwise. Before acceptance of such bond by the Corporation it must be approved by the Secretary of the Treasury, who shall not approve such bond unless satisfied as to the financial responsibility of the sureties.

SEC. 17. The Corporation is authorized and directed to investigate and determine from time to time what existing steamship lines and what new steamship lines should be operated in the foreign commerce of the United States by American flag vessels and are necessary and essential for the development and maintenance of such commerce, and in reaching its determination the Corporation shall consider and give due weight to the cost of maintaining each of such steamship lines, the probability that any such line cannot be maintained except at a heavy loss disproportionate to the benefit accruing to our foreign trade, the number of sailings and types of vessels that should be employed in such lines, and any other facts and conditions that a prudent business man would consider when dealing with his own business, with the added consideration, however, of the intangible benefit the maintenance of any such line may afford to the foreign commerce of the United States and to the national defense.

SEC. 18. All vessels acquired by the Corporation in any manner may be operated by the Corporation. All vessels acquired and now being operated by private operators on regular lines in the foreign commerce of the United States may be temporarily operated by the Corporation for its account by private operators until such time and upon such operating agreements as the Corporation may deem advantageous, but the corporation shall arrange as soon as practicable to offer all its vessels for charter as hereinafter provided and all operation of the Corporation's vessels by private operators under such operating agreements shall be discontinued within one year after the passage of this Act.

SEC. 19. As soon as practicable after the passage of this Act, and continuing thereafter, the Corporation shall arrange for the employment of its vessels in steamship lines on such trade routes, exclusively serving the foreign trade of the United States, as the Corporation shall determine are necessary and essential for the development and maintenance of the foreign commerce of the United States and the national defense: Provided, That such needs are not being adequately served by existing steamship lines privately owned by citizens of the United States and operated by such citizens without direct governmental aid of any kind except the carriage of United States mails on a poundage basis. It shall be the policy of the Corporation to encourage private operation of each essential steamship line by demising the vessels on bareboat charter to citizens of the United States who shall agree to maintain the line. In determining the amount of charter hire the Corporation should receive on such bareboat charters, the Corporation is directed to observe the following objectives:

(a) During periods of economic depression which make it difficult to profitably operate any line, the Corporation is authorized to require only a nominal charter hire, and on any lines that cannot be operated except at a loss the Corporation is authorized to require no charter hire and to further assist the operator by paying a certain proportion or all of the wages of the crew of the vessels operated in such lines as the exigencies of the situation may require.

(b) During periods when, due to economic or other special conditions, any particular line should be operated profitably, the Corporation is directed to require such charter hire as may be reasonable in view of the voyage earnings of such line, so that the Corporation may recoup its losses and build up a fund for the amortization of its investment in the Corporation's entire fleet and provide for replacements thereto by new construction.

(c) The Corporation is directed to require that all operators shall limit the salaries and bonuses paid to its officials and employees and allocated to the overhead expenses of the line of vessels chartered to such operator, to $17,500 per annum for not to exceed one official and in excess of $12,500 per annum to two