or appurtenant thereto, other than those acquired by the President by or under the Act entitled "An Act making appropriations to supply urgent deficiencies in appropriations for the fiscal year ending June 30, 1918, and prior fiscal years, on account of war expenses, and for other purposes", approved March 28, 1918, which are acquired by the War Department or the Navy Department for military or naval purposes during the World War I emergency may be transferred by the President to the Secretary whenever the President deems such transfer to be for the best interest of the United States. The President may at any time he deems it necessary, by order setting out the need therefor and fixing the period of such need, permit or transfer the possession and control of any part of the property taken over by or transferred to the Secretary under this subsection to the Department of the Army or the Department of the Navy for their needs, and when in the opinion of the President such need therefor ceases the possession and control of such property shall revert to the Secretary. None of such property shall be sold except as may be provided by law.

(c) Notwithstanding any other provision of law, the Secretary may, in accordance with good business methods and on such terms and conditions as he determines to effectuate the policy of this Act, operate or lease any lands, docks, wharves, piers, or real property under his control, and all money heretofore or hereafter received from such operation or lease shall be available for expenditure by the Secretary as provided in this Act.

(d) The Secretary may, upon such terms and conditions as he may prescribe in accordance with sound business practice, make such extensions and accept such renewals of the notes and other evidences of indebtedness transferred to the Department of Commerce as the successor to the powers and functions of the former United States Shipping Board, by virtue of the President's Executive order of June 10, 1933, and of the mortgages and other contracts securing the same, as he may deem necessary to carry out the objects of this Act.

CONSTRUCTION FUND

SEC. 4213. (a) The revolving fund created by section 206 of the Merchant Marine Act of 1936, as amended, therein designated as the construction fund, is continued, and all of the proceeds of sales of ships and surplus property heretofore or hereafter made, including proceeds of notes or other evidences of debt taken therefor and the interest thereon, and, notwithstanding any other provision of law, all money heretofore or hereafter received from the operation or leasing of lands, docks, wharves, piers, or real property shall be deposited in the Treasury of the United States and there maintained as such revolving fund, and shall be available for expenditure by the Secretary in carrying out his functions under titles II, III, IV, sections 5101-5105 of title V, and title VI of this Act. Except as provided in subsection (b), all moneys received by the Secretary under the provisions of this Act shall be deposited in the construction fund, and all disbursements made by the Secretary under authority of this Act shall be paid out of said fund, and notwithstanding any other provision of law, all disbursements applicable to the money referred to in this section may be made by the Secretary out of said fund. Further appropriations by Congress to replenish said fund are authorized.

(b) Nothing in subsection (a) shall affect the provisions of sections 4214, 4306, 4502, and 4608 of this Act.

VESSEL OPERATIONS REVOLVING FUND

SEC. 4214. (a) The vessel operations revolving fund created by the Third Supplemental Appropriation Act, 1951 for the purpose of carrying out vessel operating functions of the Secretary, including charter, operation, maintenance, repair, reconditioning, and betterment of merchant vessels under the jurisdiction of the Secretary, is continued.

(b) Notwithstanding any other provision of law, rates for shipping services rendered under the fund shall be prescribed by the Secretary and the fund shall be credited with all receipts from vessel operating activities conducted thereunder: Provided, That such sums as may be determined to be necessary by the Secretary, with the approval of the Bureau of the Budget, but not exceeding 2 per centum of vessel operating expenses, may be advanced from the fund to the appropriation "Salaries and expenses" for the purposes of that appropriation in connection with vessel operating functions, but without regard to the limitations on amounts as stated therein: Provided further, That notwithstanding any other provision of law, the unexpended balances of any working funds or of allocation accounts estab

lished, subsequent to January 1, 1951, for the activities provided for under the Act referred to in subsection (a), together with receipts heretofore and hereafter received from such activities, may be transferred to and consolidated with the fund, which shall be available for the purposes of such working funds or allocation accounts.

(c) The vessel operations revolving fund shall be available for necessary expenses incurred, in connection with protection, preservation, maintenance, acquisition, or use of vessels involved in mortgage-foreclosure or forfeiture proceedings instituted by the United States, including payment of prior claims and liens, expenses of sale, or other charges incident thereto; for necessary expenses incident to the redelivery and layup, in the United States, of ships chartered on or before June 30, 1955, under agreements which did not call for their return to the United States; and for payment of expenses of custody and husbanding of Government-owned ships other than those within reserve fleets.

(d) The vessel operations revolving fund shall be available for expenses incurred in connection with the activation, repair, and deactivation of merchant ships chartered under the jurisdiction of the Secretary. There shall be credited to such fund all receipts on account of operations under charters of Government-owned ships under the jurisdiction of the Secretary.

(e) In connection with the functions of the Secretary described in subsection (a), and with seamen employed through general agents as employees of the United States, who may be employed in accordance with customary commercial practices in the maritime industry, notwithstanding the provisions of any law applicable in terms to the employment of persons by the United States, the following provisions shall be applicable:

(1) Officers and members of crews (hereinafter referred to as "seamen") employed on United States- or foreign-flag vessels as employees of the United States through the Secretary shall, with respect to (A) laws administered by the Public Health Service and the Social Security Act, as amended; (B) death, injuries, illness, maintenance and cure, loss of effects, detention, or repatriation, or claim arising therefrom not covered by the foregoing clause (A); and (C) collection of wages and bonuses and making of allotments, have all of the rights, benefits, exemptions, privileges, and liabilities, under law applicable to citizens of the United States employed as seamen on privately owned and operated American vessels. Such seamen shall not be considered as officers or employees of the United States for the purposes of the United States Employees Compensation Act, as amended; the Civil Service Retirement Act, as amended; the Act of Congress approved March 7, 1942 (Public Law 490, Seventy-seventh Congress); or the Act entitled "An Act to provide benefits for the injury, disability, death, or detention of employees of contractors with the United States and certain other persons or reimbursement therefor", approved December 2, 1942 (Public Law 784, Seventy-seventh Congress). Claims arising under clause (A) hereof shall be enforced in the same manner as such claims would be enforced if the seamen were employed on a privately owned and operated American vessel. Any claim referred to in clause (B) or (C) hereof shall, if administratively disallowed in whole or in part, be enforced pursuant to the provisions of the Suits in Admiralty Act, notwithstanding the vessel on which the seaman is employed is not a merchant vessel within the meaning of such Act. Rights of any seaman under the Social Security Act, as amended, and claims therefor shall be governed solely by the provisions of such Act. When used in this subsection the term "administratively disallowed" means a denial of a written claim in accordance with rules or regulations prescribed by the Secretary. "Seaman" shall be deemed to include any seaman employed as an employee of the United States through the Secretary on vessels made available to or subchartered to other agencies or departments of the United States.

(2) The Secretary and his agents or persons acting on his behalf or for his account may, for convenience of administration, make payments of any taxes, fees, charges, or exactions to the United States or its agencies.

(3) The United States shall, with respect to vessels owned by or chartered to the Secretary under bareboat charter or time charter or operated directly by the Secretary or for his account, be entitled to the benefits of all exemptions and of all limitations of liability accorded by law to the owners of vessels. With respect to any such vessel, the term "the United States" shall include agents or other persons acting for or on behalf of the Secretary in connection with the operation thereof.

NATIONAL DEFENSE RESERVE FLEET

SEC. 4215. The national defense reserve fleet, established under section 11(a) of the Merchant Ship Sales Act of 1946, is continued. Unless otherwise provided by law, all vessels now in the reserve fleet or hereafter placed in the reserve fleet pursuant to section 3111(i) of this Act shall be preserved and maintained by the Secretary for the purpose of national defense. A vessel placed in such reserve shall in no case be used for any purpose whatsoever except that (1) any such vessel may be used for account of any agency or department of the United States during any period in which vessels may be requisitioned under section 4203 of this Act, (2) any such vessel may be used under a bareboat charter entered into pursuant to authority vested in the Secretary under this Act or otherwise, and (3) any vessel may be furnished to a State maritime academy or college as provided in section 5202 of this Act.

PART C-WAR-BUILT VESSELS

DEFINITIONS

SEC. 4301. As used in this part

(a) "Citizen of the United States" includes a corporation, partnership, or association only if it is a citizen of the United States within the meaning of section 4101 of this Act, and, in the case of a corporation, partnership, or association operating a vessel on the Great Lakes, or on bays, sounds, rivers, harbors, or inland lakes of the United States the amount of interest required to be owned by a citizen of the United States shall be not less than 75 percentum.

(b) "Domestic war cost" as applied to any type of vessel means the average construction cost (without national-defense features) as determined by the Secretary, of vessels of such type delivered during the calendar year 1944, except in case of any type of vessel the principal deliveries of which were made after the calendar year 1944, there shall be used in lieu of such year 1944 such period of not less than six consecutive calendar months as the Secretary shall find to be most representative of war production costs of such type.

(c) "War-built vessel" means an oceangoing vessel of one thousand five hundred gross tons or more, owned by the United States and suitable for commercial use

(1) which was constructed or contracted for by or for the account of the United States during the period beginning January 1, 1941, and ending with September 2, 1945; or

(2) which, having been constructed during the period beginning September 3, 1939, and ending with September 2, 1945, was acquired by the United States during such period.

CHARTER OF WAR-BUILT VESSELS

SEC. 4302. Notwithstanding the provisions of section 4215 of this Act, war-built dry-cargo vessels owned by the United States may be chartered to any citizen of the United States for bareboat use in any service which, in the opinion of the Secretary, is required in the public interest and is not adequately served, and for which privately owned American-flag vessels are not available for charter by private operators on reasonable conditions and at reasonable rates for use in such service. No such charters shall be made by the Secretary until he shall have given due notice to all interested parties and shall have afforded such parties an opportunity for a public hearing thereon. The Secretary is authorized to include in such charters such restrictions and conditions as he determines to be necessary or appropriate to protect the public interest in respect to such charters and to protect privately-owned vessels against competition from vessels chartered under this section: Provided, however, That all such charters shall contain a provision that they will be reviewed annually by the Secretary, for the purpose of determining whether conditions exist justifying continuance of the charters under the provisions of this subsection.

CHARTER HIRE

SEC. 4303. (a) The charter hire for any vessel chartered under section 4302 shall be fixed by the Secretary at such rate as the Secretary determines to be consistent with the policies stated in section 2101 of this Act. Except in the case of vessels having passenger accommodations for not less than eighty passengers, rates of charter hire fixed by the Secretary on any war-built vessel which are less than 5.25 per centum per annum of its domestic war cost (4.725 per centum in the case of any Liberty-type vessel) shall not be less than the prevailing world

market charter rate for similar vessels for similar use as determined by the Secretary.

(b) The provisions of sections 3307(k), 3308, 3309, 3310, and 3312 of this Act shall be applicable to charters made under section 4302.

(c) Where an operator is engaged both in the foreign trade and in the domestic trade (coastwise or intercoastal), additional charter hire determined with reference to voyage profits of the chartered vessels, under regulations promulgated by the Secretary, shall be computed, accounted for, and paid separately on such foreign trade and shall be computed, accounted for, and paid separately on such domestic trade.

CHARTER OF PASSENGER VESSELS

SEC. 4304. Notwithstanding the provisions of section 4215 of this Act, the Secretary may charter any passenger vessel, whether or not war built, owned by the United States, pursuant to part C of title III of this Act and may charter any war-built passenger vessel owned by the United States for use in the domestic trade of the United States, under the conditions prescribed for the charter of warbuilt cargo vessels pursuant to section 4302 of this Act.

ORDER OF PREFERENCE

SEC. 4305. In exercising his powers under this part and under other provisions of law with respect to the sale and charter of war-built vessels, the Secretary shall give preference to citizen applicants over noncitizen applicants, and as between citizen applicants to purchase and citizen applicants to charter, shall, so far as practicable and consistent with the policies of this Act, give preference to citizen applicants to purchase.

GENERAL PROVISIONS

SEC. 4306. (a) The Secretary is authorized to reconvert or restore for normal operation in commercial services and to convert for operation on the Great Lakes, including the Saint Lawrence River and Gulf, and their connecting waterways, including removal of national defense or war-service features, any vessel authorized to be chartered under this part. The Secretary is authorized to make such replacements, alterations, or modifications with respect to any vessel authorized to be chartered under this part, and to install therein such special features, as may be necessary or advisable to make such vessel suitable for commercial operation on trade routes or services or comparable as to commercial utility to other such vessels of the same general type.

(b) Notwithstanding the provisions of section 6103(b) of this Act, no vessel chartered by the Secretary under this part to a citizen of the United States or sold under the provisions of the Merchant Ship Sales Act of 1946 (50 U.S.C. App. 1735 et seq.) shall be prohibited from engaging in the coastwise trade of the United States while owned by or chartered to such citizen or citizen successors in interest merely because it was under foreign registry on or after May 27, 1941, and prior to such sale or charter to such citizen, if it is otherwise entitled under the laws of the United States to engage in such trade.

(c) All moneys received by the Secretary under this part shall be deposited in the Treasury to the credit of miscellaneous receipts. The provisions of sections 2205(b) and 2207 shall apply to all activities and functions which the Secretary is authorized to perform under this part.

PART D-SHIP MORTGAGES

DEFINITIONS

SEC. 4401. In addition to the definitions in subsections (a), (b), (c), (d), and (f) of section 4101 of this Act, for the purposes of this part

(a) "Collector of customs" includes any officer or employee designated by the Secretary of the Treasury to carry out the functions referred to in this part. (b) "Document" includes registry and enrollment and license.

(c) "Documented" means registered or enrolled or licensed under the laws of the United States, whether permanently or temporarily.

(d) "Mortgagee", in the case of a mortgagee involving a trust deed and a bond issue thereunder, means the trustee designated in such deed.

(e) "Port of documentation" means the "home port" of the vessel, as defined in section 1 of the Act of February 16, 1925 (43 Stat. 947, as amended; 46 U.S.C. 18), except that "port of documentation" shall not include a port in which a temporary document is issued.

(f) "Vessel of the United States" means any vessel documented under the laws of the United States and such vessel shall be held to continue to be so documented until its documents are surrendered with the approval of the Secretary.

RECORDING OF SALES, CONVEYANCES, AND MORTGAGES OF VESSELS OF THE UNITED

STATES

SEC. 4402. (a) No bill of sale, conveyance, mortgage, assignment of mortgage, or hypothecation (except botomry), which includes a vessel of the United States or any portion thereof, shall be valid in respect to such vessel against any person other than the grantor or mortgagor, his heirs or devisees, and any person having actual notice thereof, until such bill of sale, conveyance, mortgage, assignment of mortgage, or hypothecation is recorded in the office of the collector of customs at the home port of such vessel. Any bill of sale or conveyance of the whole or any part of a vessel shall be recorded at the home port of such vessel as shown in her new document.

(b) Such collector of customs shall record bills of sale, conveyances, and mortgages, delivered to him, in the order of their reception, in books to be kept for that purpose and indexed to show

(1) The name of the vessel;

(2) The names of the parties to the sale, conveyance, or mortgage;

(3) The time and date of reception of the instrument;

(4) The interest in the vessel so sold, conveyed, or mortgaged; and
(5) The amount and date of maturity of the mortgage.

PREFERRED MORTGAGES

SEC. 4403. (a) (1) A valid mortgage which, at the time it is made, includes the whole of any vessel of the United States (other than a towboat, barge, scow, lighter, car float, canal boat, or tank vessel, of less than twenty-five gross tons), shall, in addition, have in respect to such vessel and as of the date of the compliance with all the provisions of this subsection (a), the preferred status given by the provisions of section 4412, if—

(A) The mortgage is endorsed upon the vessel's documents in accordance with the provisions of this section;

(B) The mortgage is recorded as provided in section 4402, together with the time and date when the mortgage is so endorsed;

(C) An affidavit is filed with the record of such mortgage to the effect that the mortgage is made in good faith and without any design to hinder, delay, or defraud any existing or future creditor of the mortgagor or any lienor of the mortgaged vessel;

(D) The mortgage does not stipulate that the mortgagee waives the preferred status thereof; and

(E) The mortgagee is a citizen of the United States, as defined in section 4101 of this Act.

(2) With respect to any mortgage in existence on September 26, 1961, or any mortgage placed on a vessel after September 26, 1961, under a mortgage on such vessel in existence on such date, as long as such existing mortgage remains undischarged, "twenty-five gross tons" in subsection (a) (1) shall read "two hundred gross tons".

(b) Any mortgage which complies in respect to any vessel with the conditions enumerated in this section is hereafter in this part called a "preferred mortgage" as to such vessel.

(c) There shall be endorsed upon the documents of a vessel covered by a preferred mortgage

(1) The names of the mortgagor and mortgagee;

(2) The time and date the endorsement is made;

(3) The amount and date of maturity of the mortgage; and

(4) Any amount required to be endorsed by the provisions of subsection (e) or (f) of this section.

(d) Such endorsement shall be made (1) by the collector of customs of the port of documentation of the mortgaged vessel, or (2) by the collector of customs of any port in which the vessel is found, if such collector is directed to make the endorse ment by the collector of customs of the port of documentation; and no clearance shall be issued to the vessel until such endorsement is made. The collector of customs of the port of documentation shall give such direction by wire or letter at the request of the mortgagee and upon the tender of the cost of communication of such direction. Whenever any new document is issued for the vessel, such