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(e) The Commission shall, on or before the 2d day of January in each year, make a report to Congress, which shall include its recommendations and the results of its investigations, a summary of its transactions, and a statement of all its expenditures.

Sec. 207. (a) The Commission is authorized to make such periodic or special audits of all books of account, and such examinations of all contracts, records, and correspondence, as it deems advisable in the public interest, of any common carrier by water or other person subject to the Shipping Act, 1916, as such common carrier or other person is defined in section 1 of said Act, who is a citizen of the United States. Such audits and examinations may be extended to include books of account and other records of any subsidiary, parent or affiliated association, partnership, or corporation having any interest, direct or indirect, in any such common carrier by water and other person, whether the interest of such holding subsidiary, and/or affiliated concern is by means of contractual relations, stock ownership, interlocking directorates, or otherwise. To aid in the making of such audits and investigations, the Commission may, by subpena, compel the attendance of witnesses and the production of books, documents, and other evidence, to the same extent and upon the same condition as are now provided in section 826, chapter 23, title 46, of the Code of Laws of the United States.

(b) The Commission is authorized to prescribe uniform systems of accounts to be kept by all common carriers by water and other persons subject to the Shipping Act, 1916, by appropriate rules and regulations to be promulgated by the Commission, and such rules and regulations may be enforced as provided in section 828, chapter 23, title 46, of the Code of Laws of the United States.

Sec. 208. The Commission is authorized and directed to investigate the employment and wage conditions in the shipping industry, and after making such investigation, to prescribe and enforce minimum manning scales and minimum wage scales for all officers and crews employed on all types of vessels operated by citizens of the United States, and including vessels operated by the United States Merchant Marine Corporation in the foreign and interstate commerce of the United States. After such minimum manning and wage scales shall have been prescribed by the Commission no change shall be made by the Commission in such scales except upon formal complaint, public notice of the hearing to be had on such complaint, and a hearing by the Commission of all interested parties, under such rules as the Commission shall prescribe. Every common carrier by water operated by a citizen of the United States shall post and keep posted in a conspicuous place on each vessel operated by such citizen a printed copy of the minimum manning and wage scales prescribed by the Commission and applicable to such vessel. The provisions of this section shall be enforced in the same manner herein prescribed for the enforcement of the orders of the Commission.

SEC. 209. (a) At the end of each month, each charterer and shipbuilder under a contract in force under this Act shall file with the United States Maritime Commission a detailed report of all moneys expended in an attempt or attempts to influence legislation, or to prevent legislation, by the National Congress, or to influence any Federal bureau, agency, or Government official, or Government employee, to make, modify, alter, or cancel any contract with the Uuited States Government, or any United States bureau, agency, or official, as such official, or to influence any such bureau, agency, or official in the administration of any governmental duty, so as to give any benefit or advantage to such contractor.

(b) Such attempts shall be construed to include the distribution of literature, lectures, and public speeches, appearances before committees of Congress, interviews with individual Members of either House of Congress, appearances before or interviews with Federal bureaus, agencies, or employees, the preparation and/or publication of books, pamphlets, or newspaper or magazine articles.

(c) Such detailed reports shall contain the names of all persons to whom such moneys were paid, the amount paid to each, and for what purpose, and the papers, periodicals, or magazines in which any articles or editorials were caused to be published for a consideration.

(d) All reports required under this section shall be made under oath before an officer authorized by law to administer oaths.

(e) Any person who shall make a false affidavit, where an affidavit is required by this section, shall be guilty of perjury and upon conviction shall be fined not less than $5,000 nor more than $25,000 or be imprisoned for not less than one year nor more than ten years, or shall be both fined and imprisoned, in the discretion of the Court.


SECTION 301. The following Acts and parts of Acts shall stand repealed, effective on the date the United States Maritime Corporation shall have been appointed and organized, which date shall be published by proclamation of the President:

(a) All of the provisions of sections 3 to 8, inclusive, sections 10 to 13, inclusive, section 35, and section 43, of the Shipping Act, 1916, as amended.

(b) All of the provisions of section 1, subsection 2(b) (4), subsection 2(c), section 3, sections 5 to 7, inclusive, sections 10 to 14, inclusive, section 16, section 17, and section 35 of the Merchant Marine Act, 1920, as amended.

(c) All of the provisions of the Merchant Marine Act, 1928, as amended. (d) The last sentence in section 4 of the Intercoastal Shipping Act, 1933.

Sec. 302. Section 2 of the Shipping Act, 1916, is hereby amended to read as follows:

“Sec. 2. (a) That within the meaning of this Act no corporation, partnership, or association shall be deemed a citizen of the United States unless nine-tenths interest therein is owned by citizens of the United States, and, in the case of a corporation, unless its president and managing directors are citizens of the United States and the corporation itself be organized under the laws of the United States or of a State, Territory, District, or possession thereof.

“(b) Nine-tenths of the interest in a corporation shall not be deemed to be owned by citizens of the United States (a) if the title to nine-tenths of the stock thereof is not vested in such citizens free from any trust or fiduciary obligation in favor of any person not a citizen of the United States, or (b) if nine-tenths of the voting power in such corporation is not vested in citizens of the United States, or (c) if through any contract or understanding it is so arranged that more than one-tenth of the voting power may be exercised, directly or indirectly, in behalf of any person who is not a citizen of the United States.

"(c) 'If by any other means whatsoever control of the corporation is conferred upon or permitted to be exercised by any person who is not a citizen of the United States.

"(d) The provisions of this Act shall apply to receivers and trustees of all persons to whom this Act applies, and to the successors and assignees of such persons."

Sec. 303. The last paragraph of section 18 of the Shipping Act, 1916, is hereby amended to read as follows:

“Whenever the Commission finds that any rate, fare, charge, classification, tariff regulation, or practice, demanded, charged, collected, or observed by any common carrier by water is unjust or unreasonable or is unfairly competitive, the Commission may determine, prescribe, and order enforced a just and reasonable and fair minimum or maximum rate, fare, or charge or a just and reasonable and fair classification, tariff, regulation, or practice."

Sec. 304. That the second paragraph of section 3 of the Intercoastal Shipping Act, 1933, be amended to read as follows:

Pending such hearing and the decision thereon the Commission, upon filing with such schedule and delivering to the carrier or carriers affected thereby a statement in writing of its reasons for such suspension, may from time to time suspend the operation of such schedule and defer the use of such rate, fare, charge, classification, regulation, or practice, but not for a longer period than four months beyond the time when it would otherwise go into effect; and after full hearing whether completed before or after the rate, fare, charge, classification, regulation, or practice goes into effect, the Commission may make such order with reference thereto as would be proper in a proceeding initiated after it had become effective, and may prescribe the maximum and minimum rates, fares, and charges which may be charged and enforced. If the proceeding has not been concluded and an order made within the period of suspension, the proposed change of rate, fare, charge, classification, regulation, and practice shall go into effect at the end of such period. The Commission shall give preference to the hearing and decision of such questions and decide the same as speedily as possible.'

Sec. 305. Whenever the words "United States Shipping Board” or the words "the Board” are used in any prior Act, such Acts are hereby amended so that such words shall be read and shall be construed to mean United States Maritime Commission" and "the Commission”, respectively.



SECTION 401. The United States Merchant Marine Corporation is authorized and directed, as soon as practicable after the passage of this Act, to establish and maintain a merchant-marine training school, upon such plan therefor and under such rules and regulations as may be approved by the President of the United States.

Sec. 402. (a) Candidates for admission to the training school shall be annually nominated as follows: One by each Senator and Representative in Congress, one by the Commissioners of the District of Columbia, five by the President of the United States, and five by the Corporation. The young men so nominated shall be given a mental and a physical examination for admission. No nominee under the age of sixteen years or over the age of twenty-five shall be eligible for admission. To qualify for admission each nominee shall be physically sound, well formed, of robust constitution, and shall be sons of native-born or naturalized citizens of the United States. Students at the school shall be known as “cadet merchant seamen."

(b) Upon failure of any candidate to qualify or pass his examination for admission, his nominator may name another candidate.

SEC. 403. Courses of study shall be planned to fit the cadets to qualify as watch or engineer officers of ocean or coastwise steam vessels, as radio operator, or as marine architect. No training in any class shall exceed a period of three years and the Corporation shall determine the period of training required in the various classes. The cadets enrolled for training in the classes for watch or engineer officers shall spend at least half the time allotted for training at sea on ocean-going or coast vise steam vessels owned by the Corporation.

SEC. 404. (a) Upon completion of training, all graduates in the watch-officer, engineer-officer, and radio classes shall, after passing examination for licenses required by law, be given preference for employment as vacancies occur on vessels owned by the Corporation. Grad.ates in the marine-architect class shall be given preference for employment as vacancies occur in shipyards in which the Corporation's vessels are being built and in navy yards.

(b) Every graduate cadet, upon receiving a license as a watch or engineer officer, shall be eligible for appointment in the Naval Reserve without further examination, and, subject to rules and regulations prescribed by the Secretary of the Navy, shall be entitled to a rating corresponding to his license.

SEC. 405. During training, cadet merchant seamen shall receive the same pay and allowances as are allowed to cadets at the United States Naval Academy under existing law. While serving aboard the Corporation's vessels during the training period, and under such rules as may be prescribed by the Corporation, the operator of the vessel shall provide suitable quarters and subsistence for the cadets and shall employ them at suitable duties as cadet officers for not more than six hours per day, but the operator shall not be required to pay for the services so rendered by the cadets. Not more than six cadets shall be assigned on the same vessel.

TITLE V- MISCELLANEOUS PROVISIONS SECTION 501. Any officer or employee of the United States traveling on official business overseas to foreign countries, or to any of the possessions of the United States, shall travel and transport his personal effects on ships registered under the laws of the United States where such ships are available unless the necessity of his mission requires the use of a ship under a foreign flag: Provided, That the Comptroller General of the United States shall not credit any allowance for travel or shipping expenses incurred on a foreign ship in the absence of satisfactory proof of the necessity therefor.

Sec. 502. (a) For many vessel documented under the laws of the United States or used by the United States during any national emergency declared by proclamation of the President, when so taken or used, the owner shall be paid the fair actual value of the vessel at the time of taking, or paid the just compensation for her use based upon such fair actual value, but in neither case shall such fair actual value be enhanced by the causes necessitating the taking. In the case of a vessel taken and used, but not purchased, the vessel shall be restored to the owner in a condition at least as good as when taken, less reasonable wear and tear, or the owner shall be paid an amount for reconditioning sufficient to place the vessel in such condition. The owner shall not be paid for any consequential damages arising from such taking or use.

(c) The United States Maritime Commission shall ascertain the fair compensation for such taking or use and shall certify to Congress the amount so found by it to be due for appropriation and payment to the person entitled thereto. If the amount found by the Commission to be due is unsatisfactory to the person entitled thereto, such person shall be entitled to sue the United States for the amount of such just compensation and such suit shall be brought in the manner prescribed by paragraph 20 of section 24, or by section 145 of the Judicial Code, as amended (U. S. C., title 28, secs. 41, 250).

Sec. 503. The unexpended balance of the fund appropriated to enable the United States Shipping Board Merchant Fleet Corporation to operate ships or lines of ships which have been or may be taken back from purchasers by reason of competition or other methods employed by foreign ship owners or operators asappropriated under the Independent Offices Appropriation Act for the fiscal year 1927 and reappropriated under the Appropriations Act of February 20, 1929, shall be available for transfer to the corporation as a part of the allotment to be made by the President for the capital stock of the corporation.

SEC. 504. All appropriations and unexpended balances of appropriations available for expenditure by the Post Office Department for “Foreign Mail Service, Merchant Marine Act”, under the Merchant Marine Act of 1928, shall be available for expenditure by the Post Office Department solely for compensation for carriage of the mails on American-flag vessels on a poundage basis.

Sec. 505. If any provision of this Act, or the application thereof to any person or circumstance, is held invalid, the remainder of the Act, and the application of such provisions to other persons or circumstances shall not be affected thereby. This Act may be cited as the “Merchant Marine Act, 1935."



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

A BILL To further the development and maintenance of an adequate and well-balanced American mer.

chant marine, to provide for the separation of the regulatory functions of the Government over shipping froin 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 suocessors 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

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