"(3) pilotage in the canal or the approaches thereto through the adjacent waters; and

"(4) the licensing of officers, or other operators, of vessels navigating the waters of the Canal Zone.

"Any person violating any of the provisions of the rules and regulations established under this section shall be punished by a fine of not more than $100, or by imprisonment in jail for not more than thirty days, or by both."

SEC. 7. Section 10 of title 2 of the Canal Zone Code, as amended by section 1 of the Act of June 13, 1940 (ch. 358, 54 Stat. 387), is further amended to read as follows:

"10. Injuries to vessels, cargo, crew or passengers, occasioned by operation of canal.-(a) Injuries in locks of canal.-The Panama Canal Company shall promptly adjust and pay damages for injuries to vessels, or to the cargo, crew or passengers of vessels, which may arise by reason of the passage of such vessels through the locks of the Panama Canal under the control of officers or employees of the said corporation: Provided, however, That no such damages shall be paid in any case where the injury was proximately caused by the negligence or fault of the vessel, master, crew or passengers: Provided further, That in any case wherein the negligence or fault of the vessel, master, crew or passengers proximately contributed to the injury, the award of damages shall be diminished in proportion to the negligence or fault_attributable to the said vessel, master, crew or passengers: And provided further, That damages shall not be allowed and paid for injuries to any protrusion beyond the side of a vessel, whether such protusion is permanent or temporary in character. A vessel shall be considered to be passing through the locks of the canal, under the control of officers or employees of the corporation, from the time the first towing line is made fast on board before entrance into the locks and until the towing lines are cast off upon, or immediately prior to, departure from the lock chamber.

"(b) Injuries other than in locks.-The Panama Canal Company shall promptly adjust and pay damages for injuries to vessels, or to the cargo, crew or passengers of vessels which may arise by reason of the presence of such vessels in the waters of the Canal Zone, other than the locks, when the injury was proximately caused by negligence or fault on the part of any officer or employee of the corporation acting within the scope of his employment and in the line of his duties in connection with the operation of the canal: Provided, however, That in any case wherein the negligence or fault of the vessel, master, crew or passengers proximately contributed to the injury, the award of damages shall be diminished in proportion to the negligence or fault arrtibutable to the said vessel, master, crew or passengers: And provided further, That in the case of any vessel which is required by or pursuant to regulations prescribed under section 9 of this title, as amended, to have a Panama Canal pilot on duty aboard no damages shall be adjusted and paid for injuries to any vessel, or to the cargo, crew, or passengers of any such vessel, incurred while the vessel was under way and in motion, unless at the time such injuries were incurred the navigation or movement of the vessel was under the control of a Panama Canal pilot.

"(c) Measure of damages generally.-In determining the amount of the award of damages for injuries to a vessel for which the Panama Canal Company is found or determined to be liable, there may be included-(1) actual or estimated cost of repairs: (2) charter hire actually lost by the owners, or charter hire actually paid, depending upon the terms of the charter party, for the time the vessel is undergoing repairs; (3) maintenance of the vessel and wages of the crew, if such are found to be actual additional expenses or losses incurred outside of the charter hire: (4) other expenses which are definitely and accurately shown to have been incurred necessarily and by reason of the accident or injuries: Provided, however, That there shall not be allowed agent's fees or commissions or other incidental expenses of similar character, or any items which are indefinite, indeterminable, speculative or conjectural. The corporation shall be furnished such vouchers, recipts, or other evidence as may be necessary in support of any item of a claim. If a vessel is not operated under charter but by the owner directly, evidence shall be secured if available as to the sum for which vessels of the same size and class can be chartered in the market. If such charter value cannot be determined, the value of the use of such vessel to its owners in the business in which it was engaged at the time of the injuries shall be used as a basis for estimating the damages for the vessel's detention; and the books of the owners showing the vessel's earnings about the time of the accident or injuries shall be considered as evidence of probable earnings

during the time of detention. If the books are unavailable, such other evidence shall be furnished as may be necessary.

"(d) Delays for which no responsibility assumed.-The Panama Canal Company shall not be responsible, nor consider any claim, for demurrage or delays occasioned by landslides or other natural causes, by necessary construction or maintenance work on canal locks, terminals or equipment, by obstructions arising from acidents, by time necessary for admeasurement, by congestion of traffic, or by any other cause except as specially set forth in this section.

"(e) Settlement of claims.-The amounts of the respective awards of damages under this section may be adjusted, fixed and determined by the corporation by mutual agreement, compromise or otherwise; and acceptance by any claimant of the amount awarded to him shall be deemed to be in full settlement of such claim.

"(f) Actions on claims.-Any claimant for damages under this section who considers himself aggrieved by the findings, determination or award of the Panama Canal Company in reference to his claim may bring an action on such claim against the said corporation in the United States District Court for the District of the Canal Zone; and in any such action the provisions of this section relative to the determination, adjustment and payment of such claims, and the provisions of the regulations established under section 9 of this title, as amended, relative to navigation of Canal Zone waters and to transiting of the Panama Canal, shall be applicable. No action for damages which is cognizable under this section shall lie against the said corporation otherwise, or in any other court, than as provided in this paragraph, or shall lie against any officer or employee of the corporation: Provided, however, That nothing in this paragraph shall be construed to prevent or prohibit actions against officers or employers of the said corporation for damages for injuries resulting from acts of such officers or employees outside the scope of their employment or not in the line of their duties, or from acts of such officers or employees committed or performed with intent to injure the person or property of another. Actions under this paragraph shall be tried by the court without a jury.

"(g) Investigation before vessel's departure.-Notwithstanding any other provision of law, no claim shall be considered under this section, nor shall any action for damages lie thereon, unless, prior to the departure from Canal Zone waters of the vessel involved, the investigation under section 10a of this title of the accident or injury giving rise to such claim shall have been completed and the basis for the claim shall have been laid before the corporation."

SEC. 8. Title 2 of the Canal Zone Code is amended by adding in chapter 1 thereof two new sections numbered 10a and 10b, and reading as follows:

"10a. Investigation of accidents or injuries to vessels, etc.-Whenever, within the waters of the Canal Zone, including the locks of the Panama Canal, a vessel, or its cargo, crew, or passengers, meets with an accident or sustains any injury which may be the basis of a claim against the Panama Canal Company, or inflicts any injury upon any structure, plant or equipment of the said corporation, the Board of Local Inspectors of the Canal Zone Government, or a member thereof, shall promptly conduct an investigation of such accident or injury, including all the facts and circumstances surrounding the same and bearing on its proximate causation, the nature and extent of the injury, and the amount of the damages, if any occasioned by such injury, and shall promptly, upon the conclusion of such investigation, transmit to the corporation, for its consideration in connection with any claim which may arise, a transcript of the record of such investigation, together with its findings and conclusions respecting the accident or injury. All matters pertaining to such investigation shall be completed before the vessel involved departs from Canal Zone waters.

"10b. Injuries by vessels to canal structures or equipment.-A vessel, or its owners or operators, shall be liable to the Panama Canal Company for damages for injuries to any structure, plant, or equipment of or appertaining to the Panama Canal when such injuries are proximately caused by the negligence or fault of the vessel or its master or crew or by the issuance from such vessel of sparks or excessive quantities of smoke. Such damages shall be adjusted by mutual agreement when practicable between the said corporation and the owners, agents, or underwriters of the vessel. In the event of disagreement the vessel or its owners or operators may be proceeded against by action in the United States District Court for the District of the Canal Zone."

SEC. 9. Section 16 of title 2 of the Canal Zone Code, as added by section 1 of the Act of August 12, 1949 (ch. 422, 63 Stat. 600), is amended to read as follows: "16. Acquisition or construction of structures, equipment, and improvements.The Governor of the Canal Zone is authorized, within the limits of available funds, to purchase or otherwise acquire equipment, and within the Canal Zone to purchase or otherwise acquire, construct, repair, replace, alter, or enlarge any building, structure, or other improvement, when in his judgment such action is necessary for the civil government of the Canal Zone."

SEC. 10. Section 17 of title 2 of the Canal Zone Code, as added by section 1 of the Act of August 12, 1949 (ch. 422, 63 Stat. 600), is amended to read as follows:

"17. Claims for losses of or damages to property.-Authority is hereby conferred upon the Governor of the Canal Zone, or his designee for the purpose, to consider, adjust, determine, and settle claims for losses of or damages to property arising from the civil government of the Canal Zone: Provided, however, That this section shall not apply to claims cognizable under the Federal Tort Claims Procedure.

"Any award made to any claimant pursuant to this section shall be payable out of any moneys appropriated or made available for the sanitation and civil government of the Canal Zone; and the acceptance by the claimant of any such award shall be final and conclusive on the claimant, and shall constitute a complete release by the claimant of such claim against the United States."

SEC. 11. Title 2 of the Canal Zone Code is amended by adding in chapter 1 thereof a new section numbered 19 and reading as follows:

"19. Sale of obsolete materials and equipment.-The Canal Zone Government is authorized to assemble, assort, store, repair, and sell materials, supplies, and equipment purchased or acquired for the civil government of the Canal Zone and which are obsolete, unserviceable, or no longer needed."

SEC. 12. Section 31 of title 2 of the Canal Zone Code is amended to read as follows:

"SEC. 31. Receiving, disbursing, and accounting for funds of Canal Zone Government.-The functions of receiving, disbursing, and accounting for the funds of the Canal Zone Government may, in the discretion of the Governor, be performed for said government, on a remibursable basis, by the receiving, disbursing, and accounting officers of the Panama Canal Company."

SEC. 13. Sections 41 of title 2 of the Canal Zone Code is amended to read as follows:

"SEC. 41. Authority of certain officers to administer oaths.-Customs officers, quarantine officers and members of the board of local inspectors, appointed by the Governor of the Canal Zone, and admeasurers appointed by the Panama Canal Company, may administer oaths for the purpose of certifying the correctness of official papers."

SEC. 14. Section 43 of title 2 of the Canal Zone Code is amended by deleting, from subparagraph "a" thereof, the word "Canal."

SEC. 15. The headline and introductory clause of section 81 of title 2 of the Canal Zone Code, as amended by section 3 of Act of July 9, 1937 (ch. 470, 50 Stat. 487), are amended to read as follows:

"SEC. 81. Conditions of employment in service of Canal Zone Government.All persons, other than the Governor of the Canal Zone, necessary for the civil government of the Canal Zone shall-*

* * "

SEC. 16. Section 82 of title 2 of the Canal Zone Code is amended to read as follows:

"82. Compensation of persons in military, naval, or public health service.— (a) If any of the persons appointed or employed as provided in section 6, or section 81 as amended, of this title are in the military, naval, or public health service of the United States, the amount of the official salary paid to any such person shall be deducted from the amount of salary or compensation provided by or which shall be fixed under the terms of those sections, but this section shall not be construed as requiring the deduction from the amount of such salary or compensation of—

"(1) the retired pay or allowance of any retired warrant officer or enlisted man of the Army, Navy, Air Force, Marine Corps, or Coast Guard; or

"(2) the training pay, retainer pay, or allowances of any warrant officer or enlisted man of the reserve forces of the Army, Navy, Air Force, Marine Corps, or Coast Guard.

69057-50-2

"(b) The Canal Zone Government shall annually pay to each of the aforesaid services an amount sufficient to reimmburse the said service for the official salary paid to any person in such service for the period of appointment or employment by the Canal Zone Government."

SEC. 17. The headline and first sentence of section 245 of title 2 of the Canal Zone Code, as added by the Act of June 29, 1948 (ch. 706, 62 Stat. 1075), are amended to read as follows:

“245. Creation, purposes, offices, and residence of Panama Canal Company.— For the purposes of maintaining and operating the Panama Canal and of conducting business operations incident to such maintenance and operation and incident to the civil government of the Canal Zone, there is hereby created, as an agency and instrumentality of the United States, a body corporate to be known as the Panama Canal Company, hereinafter referred to as the 'corporation.' * *

SEC. 18. Paragraph (c) of section 246 of title 2, Canal Zone Code, as added by the Act of June 29, 1948, is amended to read as follows:

"(c) In order to reimburse the Treasury, as nearly as possible, for the interest cost of the funds or other assets directly invested in the corporation, the corporation shall pay interest to the Treasury on the net direct investment of the Government in the corporation as defined in paragraphs (a) and (b) of this section, and shown by the receipt described therein, at a rate or rates determined by the Secretary of the Treasury as required to reimburse the Treasury for its cost. Payments of such interest charges shall be made annually to the extent earned, and if not earned shall be made from subsequent earnings unless the Congress shall otherwise direct."

SEC. 19. Section 246 of title 2, Canal Zone Code, as added by the Act of June 29, 1948, is amended by adding at the end thereof a new paragraph lettered (e) and reading as follows:

"(e) The corporation is further obligated to pay into the Treasury as miscellaneous receipts amounts sufficient to reimburse the Treasury, as nearly as possible, (1) for the annuity payments under Article XIV of the Convention of November 18, 1903, between the United States of America and the Republic of Panama, as modified by Article VII of the Treaty of March 2, 1936, between the said Governments, and (2) for the net costs of operation of the agency known as the Canal Zone Government. The net costs of operation of the Canal Zone Government, which are deemed to form an integral part of the costs of operation of the Panama Canal enterprise as a whole, shall not include interest but shall include depreciation and the reimbursement of other Government agencies for expenditures made on behalf of the Canal Zone Government. The payments into the Treasury, referred to in this paragraph, shall be made annually to the extent earned, and if not earned shall be made from subsequent earnings unless the Congress shall otherwise direct."

SEC. 20. Subparagraph (e) of section 248 of title 2, Canal Zone Code, as added by the Act of June 29, 1948, is amended by adding at the end thereof a sentence reading as follows: "The provisions of section 82 of this title, as amended, shall apply to the corporation and to its officers and employees."

SEC. 21. Section 249 of title 2 of the Canal Zone Code, as added by the Act of June 29, 1948, is amended by relettering subparagraphs (a) to (f) thereof as subparagraphs (b) to (g), respectively, and by inserting after the introductory clause of said section a new subparagraph reading as follows:

"(a) May maintain and operate the Panama Canal."

SEC. 22. Article 3 of chapter 12 of title 2, Canal Zone Code, as added by the Act of June 29, 1948, is amended by renumbering sections 255 and 256 of said title 2 as sections 257 and 258, respectively, and by adding, in said article 3, two new sections numbered 255 and 256 and reading as follows:

"255. Appropriations to cover losses.—Appropriations are hereby authorized for payment to the corporation of such amounts as may be shown in the annual budget program of the corporation as necessary to cover losses sustained in the conduct of its activities. Amounts appropriated to the corporation under authority of this section shall not be added to the amount of the receipt referred to in paragraphs (a) and (b) of section 246 of this title, and shall not require payment of interest under paragraph (c) of said section 246: Provided, however, That repayments by the corporation to the Treasury shall in no case be treated as dividends under sections 246 (d) and 253 of this title until all amounts appropriated to the corporation under authority of this section shall have been repaid to the Treasury.

"256. Authorization for transfer of Panama Canal to corporation.-The President is hereby authorized to transfer to the corporation the Panama Canal together with the facilities and appurtenances related thereto, and any or all of the facilities and appurtenances heretofore maintained and operated by the Panama Canal under authority of section 51 of title 2 of the Canal Zone Code, as amended, by section 2 of the Act of August 12, 1949 (ch. 422, 63 Stat. 601), and all or so much as he may determine to be necessary of the personnel, property, records, related assets, contracts, obligations and liabilities of or appertaining to the said Canal and the aforesaid facilities or appurtenances, and such transfer shall be deemed to have been accepted and assumed by the corporation without the necessity of any act or acts on the part of the corporation except as otherwise stipulated in the provisions of section 246 of this title."

SEC. 23. Section 341 of title 2 of the Canal Zone Code is amended to read as follows:

"341. Maintenance of ferry near Pacific entrance.—The Panama Canal Company is authorized to maintain and operate, near the Pacific entrance of the Panama Canal, from a point at or near Balboa on the eastern side of the canal to a suitable point on the opposite shore of the canal, a ferry for the accommodation of the public, and for such purpose is authorized to acquire such ferryboats and other equipment, and to construct and maintain such slips and approaches from the highways, as may be necessary. Such ferry shall be operated and

maintained free of toll."

SEC. 24. Section 411 of title 2 of the Canal Zone Code is amended to read as follows:

"SEC. 411. Authority to prescribe measurement rules and tolls.-The Panama Canal Company is authorized to prescribe and from time to time change (1) the rules for the measurement of vessels for the Panama Canal, and (2), subject to the provisions of the section next following, the tolls that shall be levied for the use of the Panama Canal: Provided, however, That the rules of measurement, and the rates of tolls, prevailing on the effective date of this amended section shall continue in effect until changed as provided in this section: Provided, further, That the said corporation shall give six months' notice, by publication in the Federal Register, of any and all proposed changes in basic rules of measurement and of any and all proposed changes in rates of tolls, during which period a public hearing shall be conducted: And provided further, That changes in basic rules of measurement and changes in rates of tolls shall be subject to, and shall take effect upon, the approval of the President of the United States, whose action in such matter shall be final and conclusive."

SEC. 25. Section 412 of title 2 of the Canal Zone Code, as amended by the Act of August 24, 1937 (ch. 752, 50 Stat. 750), is amended to read as follows: "412. Bases of tolls.—(a) Tolls on merchant vessels, army and navy transports, colliers, tankers, hospital ships, supply ships, and yachts shall be based on net vessel-tons of one hundred cubic feet each of actual earning capacity determined in accordance with the rules for the measurement of vessels for the Panama Canal and tolls on other floating craft shall be based on displacement tonnage. The rate of tolls on vessels in ballast without passengers or cargo may be less than the rate of tolls for vessels with passengers or cargo.

"(b) Tolls shall be prescribed at a rate or rates calculated to cover, as nearly as practicable, all costs of maintaining and operating the Panama Canal, together with the facilities and appurtenances related thereto, including interest and depreciation, and an appropriate share of the net costs of operation of the agency known as the Canal Zone Government. In the determination of such appropriate share, substantial weight shall be given to the ratio of the estimated gross revenues from tolls to the estimated total gross revenues of the said corporation exclusive of the cost of commodities resold, and exclusive of revenues arising from transactions within the said corporation or from transactions with the Canal Zone Government.

"(c) Vessels operated by the United States, including warships, naval tenders, colliers, tankers, transports, hospital ships, and other vessels owned or chartered by the United States for transporting troops or supplies, may in the discretion of the President of the United States be required to pay tolls. In the event, however, that such vessels are not required to pay tolls, the tolls thereon shall nevertheless be computed and the amounts thereof shall be treated as revenues of the Panama Canal Company for the purpose of prescribing the rates of tolls, and shall be offset against the obligations of the said corporation under paragraphs (e) and (e) of section 246 of this title, as amended.