shall provide (1) that the mortgagor or borrower shall pay to the mortgagee or lender the amount required for the payment of each premium charge at least sixty days before the payment of such charge of the Secretary is due (except for the first payment which shall be made not later than the time of execution and delivery of the contract of insurance and for any deficient premium charge which shall be paid not later than fifteen days before such payment is due by the mortgagee or lender to the Secretary), and (2) that the failure of the mortgagor or borrower to make such payment shall be a default under the mortgage or shall give the lender the right to mature the loan, as the case may be.

(f) Provisions for payment by mortgagee or lender. The contract of insurance shall require the mortgagee or lender to pay premium charges to the Secretary when due (subject to such period of grace as may be provided in the contract of insurance), but only to the extent received from the mortgagor or borrower.

(g) Manner and place of payment. Unless otherwise specified by the Secretary, all premium charges may be paid by check (which need not be certified) payable to "Maritime Adm.-Commerce", delivered in person or sent through the mails to the Maritime Administration, Washington, D.C., 20235, accompanied by a letter stating that the payment is of a premium charge under the contract of insurance and specifying the period covered by the payment.

(h) Premiums earned when paid. Each premium charge shall be deemed to be fully earned when paid and no refund will be made by the Secretary of any premium charge paid in the event the insurance shall terminate: Provided, however, That if the insurance shall terminate by reason of payment in full of the obligation or obligations secured by the mortgage or evidencing the loan, or if the insurance shall terminate prior to any advance under the mortgage or loan, any premium charge paid shall be subject to reduction as provided in paragraph (c) of this section and refund as provided in paragraph (d) of this section.

plicable to all applications for insurance, commitments to insure and contracts of insurance (except as to the latter where entered into pursuant to a prior commitment) made, issued or entered into after the effective date hereof, and all mortgages and loans covered thereby, except as may be otherwise required or approved by the Secretary and provided in said applications, commitments, contracts, mortgages and/or loans (including as to the latter, the loan agreements).

(b) Prior regulations superseded. The regulations in this part supersede Part 296 of this title and General Order No. 29 (as amended) dated April 13, 1939 (4 F. R. 1621) as of the effective date hereof, but shall not affect any commitment to insure or contract of insurance issued or entered into prior to said effective date, or any mortgage or loan covered thereby, including the provisions of any rules and regulations forming a part of or otherwise applicable to any such commitment, contract, mortgage or loan.

(c) Future amendments. The regulations in this part may be amended by the Secretary at any time. No such amendment shall affect any commitment to insure or contract of insurance theretofore issued or entered into or any mortgage or loan covered thereby, including the provisions of any rules and regulations forming a part of or otherwise applicable to any such commitment, contract, mortgage or loan, but all such amendments shall be effective as to any application for insurance, commitment to insure or contract of insurance (except as to the latter where entered into pursuant to a prior commitment) made, issued or entered into after the effective date thereof, and any mortgage or loan covered thereby, except as may be otherwise required or approved by the Secretary and provided in said application, commitment, contract, mortgage and/or loan (including as to the latter, the loan agreement).

(d) Applicability to United States. Nothing in the regulations in this part shall be deemed to impose any obligation on the United States, the Secretary or the Administration in addition to those contained in Title XI of the act or other provisions of law or the contracts or commitments entered into under the authority of said Title XI.

PART 299-RULES AND REGULATIONS, FORMS, AND CITIZENSHIP

REQUIREMENTS

Sec.

299.42

299.43 299.44

299.45

299.46

fits of act.

299.47

299.48

299.10 Termination date.

299.49

Subpart B-Sales of War-Built Vessels

CAPITAL NECESSARILY EMPLOYED

Fundamental bases.

Interim additions and deductions. Allocation among operations under bareboat charter agreements and "other operations".

Limitation of "capital necessarily employed".

Accounting periods extending beyond end of calendar year.

NET VOYAGE PROFIT

Fundamental bases.

Allocation among operations under bareboat charter agreements and "other operations".

Calculation of net voyage proît on cumulative basis.

Adjustments in absence of physical inventories.

Adjustment of priced differences between delivery and redelivery inventory lists; expendable equipment.

Post redelivery overhead expenses. Post redelivery overhead expenses under Form No. 303 SHIPSALESDEMISE agreements entered into subsequent to June 30, 1950; exception.

STATEMENTS AND CERTIFICATIONS

Statements required by the Administration.

Certifications and verifications.

STATEMENT OF PURPOSES AND RESERVATIONS Statement of purposes and reservavations.

299.56

299.61

Subpart D-Transfer of War-Built Vessels Transfer of war-bullt vessel in settlement of a claim against the United States.

299.62

Transfer of another vessel for a vessel constructed in the United States since January 1, 1987, which has been taken for use by the United States.

Subpart E-Adjustment for Prior Sales to Citizens Adjustment for prior sales citizens.

299.66

to

Subpart F-Prewar Domestic Costs and Statutory Sales Prices of Vessels

TYPES, DESIGN CHARACTERISTICS AND PRICES

299.71

Prewar domestic costs; statutory sales prices.

36-104-70-16

Bec. 299.129

Supplemental application to bareboat charter government-owned, war-built, dry-cargo vessel (8) under section 5 (e) of the Merchant Ship Sales Act of 1946, as amended by Public Law 591, 81st Congress.

299.130 Uniform bareboat charter of a warbuilt dry-cargo vessel under the Merchant Ship Sales Act of 1946, "Shipsalesdemise 303".

299.131 Application for transfer of a warbuilt vessel in settlement of a claim against the United States. 299.182 Application for transfer of another vessel for a vessel constructed in the United States since January 1, 1937, which was taken for use by the United States.

299.133 Application for adjustment of purchase price of vessel purchased prior to March 8, 1946.

299.134 Application for the reconversion, alteration or modification of a vessel.

Subpart 1-Assumption of Mortgage by New Mortgagor

299.301 Application to transfer a vessel, subJect to mortgage.

AUTHORITY: The provisions of this Part 299 issued under sec. 204, 49 Stat. 1987, as amended; 46 U.S.C. 1114. Interpret or apply sec. 12, 60 Stat. 49, as amended; 50 U.S.C. App. 1745, except as otherwise noted.

SOURCE: The provisions of this Part 299 contained in General Order 60, Revised, 22 F.R. 11103, Dec. 31, 1957, unless otherwise noted.

Subpart A-General Provisions
Definitions.

§ 299.1

For the purpose of §§ 299.1 to 299.134, inclusive:

(a) Administration. "Administration" means the Maritime Administration.

(b) War-built vessel. "War-built vessel" means an ocean-going 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 September 2, 1945; or

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

(c) Dry-cargo vessel. "Dry-cargo vessel" means, except where the context indicates otherwise, any vessel other than a tanker, but the term "dry-cargo vessel" includes a Liberty type tanker except for § 299.31.

(d) Prewar domestic cost. "Prewar domestic cost," as applied to any type of vessel, means the amount determined by the Administration, and published by the Administration in the FEDERAL REGISTER (§ 299.71), to be the amount for which a standard vessel of such type could have been constructed (without its national defense features) in the United States under normal conditions relating to labor, materials, and other elements of cost, obtaining on or about January 1, 1941. In no case shall the prewar domestic cost of any type of vessel be considered to be greater than 80 percent of the domestic war cost of vessels of the same type.

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

(1) In the case of any vessel for which there is no domestic war cost as defined in this paragraph, such domestic war cost shall be in the same ratio to the prewar domestic cost (as defined in paragraph (d) of this section) as the domestic war cost of the most nearly comparable type of vessel for which a domestic war cost is available is to the prewar domestic cost of such similar vessel.

(f) Statutory sales price. "Statutory sales price," as applied to a particular vessel, means, in the case of a dry-cargo vessel (as defined in paragraph (c) of this section), an amount equal to 50 percent

of the prewar domestic cost of that type of vessel, and in the case of a tanker (excluding Liberty tankers), such term means an amount equal to 872 percent of the prewar domestic cost of a tanker of that type, such amount in each case being adjusted as follows:

(1) If the Administration is of the opinion that the vessel is not in class, there shall be subtracted the amount estimated by the Administration as the cost of putting the vessel in class;

(2) If the Administration is of the opinion that the vessel lacks desirable features which are incorporated in the standard vessel used for the purpose of determining prewar domestic cost, and that the statutory sales price (unadjusted) would be lower if the standard vessel had also lacked such features, there shall be subtracted the amount estimated by the Administration as the amount of such resulting difference in the statutory sales price;

(3) If the Administration is of the opinion that the vessel contains desirable features which are not incorporated in the standard vessel used for the purpose of determining the prewar domestic cost, and that the statutory sales price (unadjusted) would be higher if the standard vessel had also contained such features, there shall be added the amount estimated by the Administration as the amount of such resulting difference in statutory sales price;

(4) There shall be subtracted, as representing normal depreciation, an amount computed by applying to the statutory sales price (determined without regard to this paragraph) the rate of 5 percent per year for the period beginning with the date of the original delivery of the vessel by its builder and ending with the date of sale or charter to the applicant in question, and there shall also be subtracted an amount computed by applying to the statutory sales price (determined without regard to this paragraph) such rate not in excess of 3 per cent per year in the case of a vessel other than a tanker, and not in excess of 4 percent per year in the case of a tanker, for the period of war service as the Administration determines will make reasonable allowance for excessive wear and tear by reason of war service which cannot be or has not been otherwise compensated for under this paragraph. The period of war service in ordinary cases shall be from the date of delivery of the vessel to the Govern

ment for operation or December 7, 1941, whichever was later, until September 2, 1945.

(5) In the case of any vessel covered by subparagraph (3) of this paragraph, the amount of difference in statutory sales price resulting from the presence of desirable features not contained in the standard vessel of the same type shall be depreciated from the date of delivery of the vessel or the date of installation of such features if such features were installed after delivery.

No adjustment, except in respect of passenger vessels constructed before January 1, 1941, shall be made under the act which will result in a statutory sales price which (1) in the case of any Liberty type vessel will be less than 311⁄2 percent of the domestic war cost of vessels of such type, (2) in the case of drycargo vessels (except Liberty type vessels) will be less than 35 percent of the domestic war cost of vessels of the same type, or (3) in the case of a tanker (except a Liberty tanker) will be less than 50 percent of the domestic war cost of tankers of the same type.

"Cessa

(g) Cessation of hostilities. tion of hostilities" means the date proclaimed by the President as the date of the cessation of hostilities in the present war,' or the date so specified in a concurrent resolution of the two houses of the Congress, whichever is the earlier.

(h) Citizen of the United States. "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 2 of the Shipping Act, 1916, as amended, and section 905 (c) of the Merchant Marine Act, 1936, as amended. The Secretary of the Administration will furnish, on request, copies of memoranda dealing with citizenship.

(1) Affiliated interest. The term "affiliated interest" shall include any person or concern that directly or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, the applicant. The term "control" (including the terms "controlled by" and "under common control with") as used in this paragraph means the possession, directly or indirectly, of the power to direct or cause

1 Twelve o'clock noon, Dec. 31, 1946; see Proclamation 2714, Dec. 31, 1946, 3 CFR, 1946 Supp.

the direction of the management and policies of the applicant, whether through ownership of voting securities, by contract, or otherwise.

(j) Constructed or date constructed. "Constructed" or "date constructed" means the date upon which a vessel was originally delivered by the shipbuilder.

(k) Act. "Act" means, except where the context clearly indicates otherwise, the Merchant Ship Sales Act of 1946 (Public Law 321, 79th Cong., 2d Sess., approved March 8, 1946).

(1) Regulations. "Regulations" mean the rules and regulations prescribed by the Administration, under the Merchant Ship Sales Act of 1946 (Public Law 321, 79th Cong., 2d Sess), §§ 299.1 to 299.134, inclusive, published in the FEDERAL REGISTER and all succeeding amendments and supplements thereto similarly published in the FEDERAL REGISTER.

(m) Secretary.

"Secretary" means the Secretary of the Administration or any Assistant Secretary thereof or any other official or employee of the Administration designated by the Administration to perform the duties required of the Secretary under this part. (Communications sent to the Secretary should be addressed "Secretary, Maritime Administration, Washington, D.C., 20235.")

(n) Working capital. "Working capital" means the excess of "total current working assets" over "total current working liabilities" determined in accordance with the instructions and balance sheet embodied in the form of "General Financial Statement" prescribed by the United States Maritime Commission (Budget Bureau approval No. 62-R010-42): Provided, That (1) in determining the amount of working capital, unpaid tenders of "just compensation" made by the Maritime Administration (or made by the United States Maritime Commission or the War Shipping Administration to the extent approved by the Administration) for title to, or use (to the extent accrued) of, vessels (irrespective of whether or not such tenders have been accepted by the owners) may be included, (2) an amount equivalent to the excess (if any) of 50 percent of the amount of "Unterminated Voyage Revenue" over the amount of "Unterminated Voyage Expense" reflected in the balance sheet shall be deducted from the amount of working

Copies of the "General Financial Statement" will be furnished by the Maritime Administration on request.