the minimum number of sailings that will be required, the length of time for which the charter will be given, and all other information the Corporation shall deem necessary for the information of prospective bidders.

(b) The Corporation shall have authority to, and shall announce in its advertisements for bids that the Corporation reserves the right to, reject any and all bids submitted.

(c) No bid shall be considered unless submitted upon a printed proposal form prepared by the Corporation and furnished to prospective bidders, which forms shall provide for a definite offer by the bidder to charter the particular vessels offered by the Corporation, and to operate such chartered vessels in a steamship line on the trade route in question on the terms prescribed in the charter and to pay to the Corporation as charter-hire for such vessels a percentage of the net voyage profit made by each of such vessels on each round voyage performed under such charter, which percentage shall be determined and inserted by the bidder in his proposal; or, if the bidder is unwilling to offer to pay any percentage of the voyage profits by way of charter-hire, but is willing to take the charter provided, the Corporation shall pay a portion or all of the wages of the crews of such vessels, the bidder's offer to charter shall definitely state what, if any, proportion of the wages of the crews is to be paid by the Corporation: Provided, That if the bid is to pay a percentage of net voyage profit as charter hire, and the charter is executed on that basis, such charter shall provide that if no net profit is realized on any particular voyage, the charterer shall be excused from paying any charter hire for such voyage but that the Corporation shall not be required to reimburse the charterer for any loss sustained on such voyage.

SEC. 21. (a) The Corporation shall award the charter to the bidder proposing to pay the highest percentage of voyage profits as charter-hire, or, if none of the bidders offers to pay any percentage of the voyage profits as charter-hire, then the charter shall be awarded to the bidder whose proposal is the most advantageous to the Corporation: Provided, That the Corporation, acting in its discretion, determines that the percentage of voyage profits offered is adequate, or, that the proportion of crew wages to be paid by the Corporation is not excessive, in respect to the operation of the line in question.

(b) The Corporation may reject the highest or most advantageous or any other bid, if, in the Corporation's discretion the percentage of voyage profits offered is deemed too low, or the proportion of the crew wages to be paid by the Corporation is deemed too high, or the Corporation determines that the bidder lacks sufficient capital, credit, or experience to successfully operate the line; but the reason or reasons for rejection of any bid shall be, upon request of the bidder, stated to such bidder in writing.

(c) If the highest or most advantageous bid is rejected, the Corporation may award the charter to the next highest bidder, or may reject all bids and readvertise the line, or the Corporation may operate the line until conditions appear to be more favorable for a reoffering of the line for private charter.

SEC. 22. (a) Every charter of its vessels made by the Corporation pursuant to the provisions of this Act shall contain suitable provision for the payment of additional charter-hire by the charterer in the event that after the making of the charter there shall be an increase in freight rates on commodities carried by the line or passenger rates, or both, above the rates prevailing at the time the charter was executed, in the trade territory served by the line.

(b) Such additional charter-hire provision shall be identical in every charter and shall provide for a progressively higher percentage share in voyage profits to be paid to the Corporation for every increase of 10 per centum in the freight or passenger rates in the trade territory served by the line when such increase results in increased revenue to the charterer, but the formula for determining the amount of such increased charter-hire shall be so devised that due credit shall be given to the charterer for any increase in voyage expense occasioned by the economic conditions which have brought about the increase in freight and/or passenger rates.

(c) Every charter shall contain an identical definition of the term "net voyage profit", setting forth the formula for determining of such profit, which definition shall have been previously approved by the United States Maritime Commission. SEC. 23. Each and every charterer of the Corporation's vessels shall be required to deposit with the Corporation the Corporation's bonds as security for the faithful performance of all of the conditions of the charter, including indemnity against liens on the chartered vessels, in such amount as the Corporation shall require, but in no event in an amount less than 15 per centum of the world market value of such vessels. Each and every charter shall provide that any claim by the

Corporation against the charterer, arising out of the charter, shall be determined by the Corporation and upon nonpayment within a reasonable time shall be liquidated from the proceeds of the sale of some or all of the bonds so deposited, as may be necessary, or from other security supplied to the Corporation by the charterer: Provided, That if the charterer shall be dissatisfied with the determination of any such claim by the Corporation, the charterer shall have the right to appeal from such determination to the regulatory commission hereinafter created, under such rules and regulations as the commission shall adopt, and the determination of the commission shall be final and binding upon both parties.

SEC. 24. The charters to be made by the Corporation pursuant to the provisions of this Act shall demise the vessels to the charterer subject to all the usual conditions contained in bare-boat charters, and until January 1, 1939, shall be for terms of three years, or less, as the Corporation may decide, with option to the charterer the charter to renew for not to exceed three years: Provided, That after January 1, 1939, charters may be executed by the Corporation for such terms as the experience gained by the Corporation shall indicate are to the best interests of the Corporation and the merchant marine.

SEC. 25. Each and every charter shall provide:

(a) That the charterer shall carry on the chartered vessels, at his own expense, policies of insurance covering all marine and port risks, protection and indemnity risks, and all other hazards and liabilities, in such amounts, in such form, and in such insurance companies as the Corporation shall require and approve, adequate to cover all damages claimed against and losses sustained by the chartered vessels arising during the life of the charter: Provided, That some or all of such insurance risks may be underwritten by the Corporation itself as, in its discretion, it may determine.

(b) That the charterer shall at its own expense keep the chartered vessel in a good state of repair and in efficient operating condition and shall at its own expense make any and all repairs as may be required by the Corporation.

(c) That the Corporation shall have the right to inspect the vessel at any and all times to ascertain its condition.

(d) That the charterer shall keep such books of account, keep such accounting records, and render such accounting reports as the Corporation may prescribe, and that the Corporation's authorized agents shall at all reaonable times be permitted to examine any and all of the charterer's books of account, accounting records, corporate records, and correspondence files.

(e) That the charterer shall not employ any subsidiary, affiliated, or other corporation, in which the charterer, or the charterer's officers, directors, or employees possess any pecuniary interest of any kind, direct or indirect, to perform stevedoring, towing, lighterage, repairing, brokerage, or any other service in connection with the operation of the chartered vessel, except when such service is to be rendered in a foreign port or ports, and the employment shall have had the express approval of the Corporation.

SEC. 26. Ninety days after the passage of this Act all contracts made by the Postmaster General pursuant to the provisions of the Merchant Marine Act, 1928, for the carriage of mail shall stand rescinded, and it shall be unlawful for any officer of the Government to pay from any public funds any compensation to the holder of any such contract for the carriage of ocean mail, except for voyages completed by the mail contractor's vessel or vessels prior to ninety days after the passage of this Act and for the round voyage completed by any vessel which was at sea on the date of passage of this Act and shall not have completed its round voyage prior to the date of rescission of the mail contract as declared in this Act: Provided, That the jurisdiction of the Court of Claims and of the District Courts of the United States to entertain and adjudicate suits claiming damages from the United States arising out of the rescission of such contracts is hereby limited to an award of just compensation, which compensation shall not include any allowance for loss of prospective profits that might have been earned by the contractor if permitted to further perform his contract: Provided further, That if, upon the trial of any such suit, the court shall find as facts, that the mail contract sued upon was obtained by the contractor without competitive bidding and that no competitive bid could reasonably have been made by any other person by reason of the advertisement for bids, such findings of fact shall be conclusive evidence of fraud in the letting of the contract and shall entitle the United States to recover a judgment against the plaintiff in such action for all sums of money paid to such plaintiff on account of the mail contract sued upon, together with interest on such sums at the rate of 6 per centum per annum from the date of payment of such

sum or sums.

SEC. 27. It shall be unlawful for the United States Merchant Marine Corporation to charter any of its vessels to any person now holding an ocean-mail contract made pursuant to the provisions of the Merchant Marine Act, 1928, or to any corporation in which any officer or director of a holder of a mail contract shall be interested directly or indirectly either as a stockholder, bond holder, director, or officer or otherwise, unless such mail contractor, within ninety days after the passage of this Act, shall have surrendered such contract and released the United States from any liability for its rescission, without cost to the United States.

SEC. 28. In the selection of persons to whom the Corporation's vessels are to be chartered, the Corporation shall take into consideration such person's financial resources and credit standing, practical experience in the operation of vessels, and any other factors that would be considered by a prudent business man in entering into a transaction involving a large investment of his capital; and the Corporation is directed to refrain from chartering its vessels to any person appearing to lack sufficient capital, credit, and experience to successfully operate the vessels over the period covered by the charter.

SEC. 29. (a) No charterer of the Corporation's vessels, or no holding company of any such charterer, or no officer, director, or executive, or no member of the immediate family of any of such officers, directors, or executives of such charterer or such holding company shall (1) own any pecuniary interest in any person performing or supplying stevedoring terminal, ship-repair, ship chandler, towboat, wharfage, or kindred services serving any of the Corporation's vessels, except as hereinbefore provided; (2) own, operate, or charter any vessel or vessels engaged in the domestic intercoastal or coastwise service, or own any pecuniary interest in any person that owns, charters, or operates any vessl or vessels in the domestic intercoastal or coastwise service; (3) own, charter, or operate any foreign flag vessel or vessels, or own any pecuniary interest in any person that owns, charters, or operates any foreign vessel or vessels; (4) perform or supply any domestic port or ports, stevedoring, towboat, ship repair, ship chandler, terminal, or wharfage services for any vessel: Provided, That such charterer may itself, with the express approval of the Corporation, perform stevedoring to and/or utilize its own terminal and/or wharfage facilities for its own vessels; (5) own any pecuniary interest in any person employed as agent or broker for any charterer of the Corporation's vessels.

(b) No charterer shall employ any person as its managing or operating agent. (c) No charterer or no holding company of such charterer or no officer, director, or executive, or no member of the immediate family of such officer, director, or executive of such charterer, or of such holding company, shall own any pecuniary interest in, or shall be owned to any extent by any person engaged in the building of ships, or any holding or subsidiary company of such person, or any officer, director, or other executive of such person or of such holding company.

(d) Any violation of any provision of this section shall constitute a breach of the charter in force under this Act, and upon determining that such a violation has occurred the Corporation shall forthwith declare such charter rescinded. SEC. 30. (a) No more than two lines of vessels shall be chartered to any person. Within the meaning of this limitation "a line of vessels" shall consist of the number of vessels required to maintain an adequate service from a port or ports in the United States to foreign ports upon a recognized steamship trade route.

(b) No charter shall be valid if the charterer, or any officer or director or employee of the character is financially interested in any way, directly or indirectly, in any other charterer of the corporation's vessels.

SEC. 31. (a) All vessels operated by the Corporation or under any charter made under and pursuant to this Act shall be manned in their deck and engine-room departments exclusively by citizens of the United States, native born or completely naturalized, unless satisfactory proof is made to the Bureau of Navigation and Steamboat Inspection that qualified and competent citizens are not procurable therefor: Provided, That this section shall not apply to the stewards' department, but preference in the employment of citizens in such stewards' department shall be observed so far as efficient and competent employees are available.

(b) All of the deck and engineer officers employed on the Corporation's vessels, after one year after the passage of this Act, shall be members of the United States Naval Reserve, provided that all native born or fully naturalized citizens of the United States who now hold licenses as deck or engineer officers under existing law shall be eligible for enrollment in the Naval Reserve under such regulations as the Secretary of the Navy shall prescribe.

(c) During a national emergency as proclaimed by the President he may, in his discretion, suspend any or all of the provisions in this section.

SEC. 32. The Corporation shall be suable in any District Court of the United States at law, in equity or in admiralty, but only if such suit is commenced within two years from the time the cause of action accrued, in the same manner that any private corporation may be sued: Provided, That all of the Corporation's vessels shall be exempt from distraint, attachment, or execution in all cases whatsoever under process of any court in the United States or its possessions.

SEC. 33. (a) The Corporation is authorized and directed to set up and maintain an insurance department with adequate capital and reserves to cover all risks undertaken, and through such insurance department the Corporation is authorized to carry on an insurance business by the issuance of its policies insuring or reinsuring in whole or in part marine risks, port risks, protection and indemnity risks, on vessels documented under the laws of the United States, and insuring the builder's risk on public vessels and vessels being constructed for the Corporation: Provided, That it shall be unlawful for any private ship builder to insure any portion of the builder's risk on any vessels being constructed for the United States or for the Corporation, with any foreign underwriter.

(b) The Corporation shall assume and take over all liabilities, adjustments, and claims against and in favor of the United States accruing prior to the passage of this Act in the exercise of the authority conferred by section 10, Merchant Marine Act, 1920, and after the passage of this Act no action shall be brought against the United States in any court on any policy of insurance issued pursuant to said authority, but the Corporation may sue and be sued on any such policy. SEC. 34. The Corporation shall send an annual report to Congress, not later than January 2 of each year, setting forth in detail all the operations, finances, and contracts made by the Corporation and its subsidiaries during the year covered by the report and the names of and the salaries paid to all officers and employees, together with the Corporation's recommendations for any additional legislation deemed desirable in the interest of the merchant marine and to carry out the policy stated in section 1 of this Act.

SEC. 35. All the Corporation's financial transactions shall be audited in the General Accounting Office according to approved commercial practice and the Comptroller General shall report annually or oftener to Congress any departure by the Corporation from approved commercial practice or any violations by the Corporation of the provisions of this Act.

SEC. 36. It shall be unlawful for any bidder, or for the officers, directors, executives, or employees of any bidder for a shipbuilding contract or for a charter of vessels under the provisions of this Act (1) to consult with, or agree with, or inform, any other such bidder, or officer, director, executive, or employee of any such other bidder, as to the amount of, or the terms and conditions of, any bid submitted to the Corporation, prior to the public opening of the bids as herein provided, or (2) to enter into any collusive agreement or understanding, either verbal or written, as to such bids, whereby free and secret competition for such contract or charter shall be prevented or hindered or evaded in any manner whatsoever.

Any person violating the provisions of this section shall be guilty of a misdemeanor and upon conviction thereof, shall be fined not less than $5,000 nor more than $25,000, or shall be both fined and imprisoned, in the discretion of the court.

TITLE II-UNITED STATES MARITIME COMMISSION

SECTION 201. (a) A regulatory commission is hereby created to be known as "United States Maritime Commission", and hereinafter referred to as the "Commission". The Commission shall be composed of three members to be appointed by the President by and with the advice and consent of the Senate. The members shall be appointed as soon as practicable after the approval of this Act and shall continue in office, one for a term of two years, one for a term of four years, one for a term of six years, the term of each to be designated by the Presi dent, who shall also designate the member to act as chairman, but their successors shall be appointed for terms of six years, except that any person chosen to fill a vacancy shall be appointed only for the unexpired term of the member whom he succeeds.

(b) The members of the Commission shall be appointed with due regard to their fitness for the efficient discharge of the duties imposed on them by this Act, but no more than two members shall be appointed from the same political party.

A vacancy in the Commission, shall be filled in the same manner as an original appointment. No person shall be appointed a member of the Commission, or be employed by the Commission, who within five years prior to his appointment shall have been employed by or have had any pecuniary interest, either direct or indirect, in any common carrier by water or other person subject to this Act. It shall be unlawful for any member of the Commission, and for any employee of the Commission, to be in the employ of or to have any pecuniary interest in any common carrier or other person subject to this Act.

(c) The compensation of the members of the Commission shall be $12,000 per annum, and no employee of the Commission shall receive a salary in excess of the sum of $10,000 per annum.

(d) Any member of the Commission may be removed by the President for inefficiency, neglect of duty, or malfesance in office.

SEC. 202. The Commission shall appoint a Secretary at a salary of $6,000 per annum. All other employees of the Commission shall be appointed from the roster of the present employees of the United States Shipping Board Bureau or United States Shipping Board Merchant Fleet Corporation, who thereupon shall require the same status as though certified after examination by the Civil Service Commission, or, when no such employee is available, the Commission shall appoint the necessary employee from lists of eligibles to be supplied by the Civil Service Commission and in accordance with the civil-service laws.

SEC. 203. The expenses of the Commission in the conduct of its business, including necessary expenses for transportation, incurred by the members of the Commission or designated employees under its orders, in making any investigation, or upon official business in any other place than in the city of Washington, shall be allowed and paid on the presentation of itemized vouchers therefor approved by the chairman of the Commission, or a designated employee of the Com

mission.

SEC. 204. The Commission may adopt rules and regulations in regard to its procedure and the conduct of its business. It may employ, within the limits of appropriations made therefor by Congress, such attorneys as it finds necessary in the conduct of its work, or for proper representation of the public interest in investigations made by it or in proceedings pending before it, whether at the Commission's own instance or upon complaint, or to appear for or represent the Commission in any case in court or other tribunal.

SEC. 205. The Commission is hereby authorized and directed to exercise all of the regulatory powers and duties heretofore conferred upon and delegated to the former United States Shipping Board by the Shipping Act, 1916, the Merchant Marine Act, 1920, the Intercoastal Shipping Act, 1933, and amendments to such Acts, together with such further powers and duties as are conferred upon the Commission by this Act. The Commission shall adopt all necessary rules and regulations in regard to its procedure and to carry out the powers and duties delegated to it. The orders issued by the Commission shall be enforced in the same manner as heretofore provided for enforcement of the orders of the United States Shipping Board. Violations of the orders issued by the Commission shall subject the person guilty of such violation to the same penalties or punishment as heretofore provided for violation of the orders of the United States Shipping Board.

SEC. 206. (a) Until an appropriation shall be made by Congress, there is hereby made available for the expenses of the Commission any sum heretofore appropriated for the expenses of the Shipping Board Bureau of the Department of Commerce for the fiscal year ending June 30, 1936, which sum is hereby transferred to the Commission.

(b) Suitable office quarters in buildings owned or controlled by the United States shall be assigned to the Commission, and if any such suitable office quarters are not available the Commission may rent suitable offices for its use.

(c) The Commission may employ, within the limits of appropriations made therefor by Congress, such attorneys, examiners, and clerical employees as it deems necessary for the conduct of its work, upon certification of eligibles from the Civil Service Commission: Provided, That all persons who were employed by the Shipping Board Bureau of the Department of Commerce or by the United States Shipping Board Merchant Fleet Corporation the date this Act is approved shall be eligible for appointment by the Commission, without certification from the Civil Service Commission, during a period of one year after approval of this Act, and such persons, if so appointed, shall have the same status as though certified by the Civil Service Commission.

(d) The General Accounting Office shall receive and examine all accounts of expenditures by the Commission.