AUTHORITY TO MAKE CONTRACTS

SEC. 404. The Postmaster General is authorized to enter into contracts with citizens of the United States whose bids are accepted, for the carrying of mails between ports (exclusive of ports in the Dominion of Canada other than ports in Nova Scotia) between which it is lawful under the navigation laws for a vessel not documented under the laws of the United States to carry merchandise. He shall include in such contracts such requirements and conditions as in his best judgment will insure the full and efficient performance thereof and the protection of the interests of the Government. Performance under any such contract shall begin not more than three years after the contract is let, and the term of the contract shall not exceed ten years.

VESSELS

SEO. 405. (a) The vessels employed in ocean mail service under a contract made under this title shall be steel vessels, shall be steam or motor vessels, and shall be either (1) American-built and registered under the laws of the United States during the entire time of such employment, or (2) registered under the laws of the United. States not later than February 1, 1928, and so registered during the entire time of such employment, or (3) actually ordered and under construction for the account of citizens of the United States prior to February 1, 1928, and registered under the laws of the United States during the entire time of such employment.

(b) A vessel for the services of which a contract is entered into under authority of this title, and the construction of which is hereafter begun, shall be either (1) a vessel constructed, according to plans and specifications approved by the Secretary of the Navy, with particular reference to economical conversion into an auxiliary naval vessel, or (2) a vessel which will be otherwise useful to the United States in time of national emergency.

(c) From and after the enactment of this Act, all licensed officers of vessels documented under the laws of the United States, as now required by law, shall be citizens of the United States; from and after the enactment of this Act and for a period of four years, upon each departure from the United States of a vessel employed in ocean mail service under this title, one-half of the crew (crew including all employees of the ship other than officers) shall be citizens of the United States and, thereafter, two-thirds of the crew as above defined shall be citizens of the United States.

ADVERTISING FOR BIDS

SEC. 406. Before making any contract for carrying ocean mails under this title the Postmaster General shall give public notice by advertisement once a week for three weeks in such daily newspapers as he shall select in each of the cities of Boston, New York, Philadelphia, Baltimore, New Orleans, Charleston, Norfolk, Savannah, Jacksonville, Galveston, Houston, and Mobile, calling for bids for carrying of such ocean mails; or when the proposed service is to be on the Pacific Ocean then in Los Angeles, San Francisco, Portland, Tacoma, and Seattle. Such notice shall describe the proposed route, the time when such contract will be made, the number of trips a year,

the schedule required, the time when the service shall commence, the character of the vessels required, and all other information deemed by the Postmaster General to be necessary to inform prospective bidders as to the character of the service to be required.

AWARDING CONTRACTS

SEC. 407. Each contract for the carrying of ocean mails under this title shall be awarded to the lowest bidder who, in the judgment of the Postmaster General, possesses such qualifications as to insure proper performance of the mail service under the contract.

CLASSIFICATION OF VESSELS

SEC. 408. (a) The vessels employed in ocean mail service under this title shall be divided into classes as follows:

Class 7. Vessels capable of maintaining a speed of 10 knots at sea in ordinary weather, and of a gross registered tonnage of not less than 2,500 tons.

Class 6. Vessels capable of maintaining a speed of 10 knots at sea in ordinary weather, and of a gross registered tonnage of not less than 4,000 tons.

Class 5. Vessels capable of maintaining a speed of 13 knots at sea in ordinary weather, and of a gross registered tonnage of not less than 8,000 tons.

Class 4. Vessels capable of maintaining a speed of 16 knots at sea in ordinary weather, and of a gross registered tonnage of not less than 10,000 tons.

Class 3. Vessels capable of maintaining a speed of 18 knots at sea in ordinary weather, and of a gross registered tonnage of not less than 12,000 tons.

Class 2. Vessels capable of maintaining a speed of 20 knots at sea in ordinary weather, and of a gross registered tonnage of not less than 16,000 tons.

Class 1. Vessels capable of maintaining a speed of 24 knots at sea in ordinary weather, and of a gross registered tonnage of not less than 20,000 tons.

(b) The classification of a vessel may be based upon its speed without regard to its tonnage if the Postmaster General is of opinion that speed is especially important on the particular route on which the vessel is to be employed, and that a suitable vessel documented under the laws of the United States of a higher classification is not available on reasonable terms and conditions, or, on account of the character of the ports served or for other reasons, can not be safely or economically employed on such route.

COMPENSATION UNDER CONTRACTS

SEC. 409. (a) The rate of compensation to be paid under this title for ocean-mail service shall be fixed in the contract. Such rate shall not exceed: For vessels of Class 7, $1.50 per nautical mile; for vessels of Class 6, $2.50 per nautical mile; for vessels of Class 5, $4 per nautical mile; for vessels of Class 4, $6 per nautical mile; for vessels of Class 3, $8 per nautical mile; for vessels of Class 2, $10 per nautical mile; and for vessels of Class 1, $12 per nautical mile. As used in this section the term "nautical mile means 6,080 feet.

(b) When the Postmaster General is of opinion that the interests of the postal service will be served thereby, he may, in the case of a vessel of class 1 capable of maintaining a speed in excess of 24 knots at sea in ordinary weather, contract for the payment of compensation in excess of the maximum compensation authorized in subsection (a), but the compensation per nautical mile authorized by this subsection shall not be greater than an amount which bears the same ratio to $12 as the speed which such vessel is capable of maintaining at sea in ordinary weather bears to 24 knots.

(c) If the Postmaster General is of opinion that to expedite and maintain satisfactory service under a contract made under this title, airplanes or airships are required to be used in conjunction with vessels, he may allow additional compensation, in amounts to be determined by him, on account of the use of such airplanes or airships. Such airplanes or airships shall be American-built and owned, officered, and manned by citizens of the United States.

(d) The Postmaster General shall determine the number of nautical miles by the shortest practicable route between the ports involved and payments under any contract made under this title shall be made for such number of miles on each outward voyage regardless of the actual mileage traveled.

VIOLATION OF CONTRACTS

SEC. 410. In the case of failure of a vessel from any cause to perform any regular voyage required by a contract made under this title, a pro rata deduction shall be made from the contract price on account of such omitted voyage; and suitable deductions, to be determined by the Postmaster General, may be made from the compensation payable under the contract for delays, failures to properly safeguard the mails, or other irregularities in the performance of the contract. Deductions so determined upon shall be deducted by the Postmaster General from the payments otherwise due and payable under the terms of the contract. The Postmaster General may, in case of emergency, permit the substitution for a particular voyage of a vessel not within the provisions of the contract, even though not conforming to the requirements of section 405.

PASSENGERS, FREIGHT, AND EXPRESS

SEC. 411. Any vessel operating under a contract made under this title may carry passengers and their baggage, and freight and express, and may do all ordinary business done by similar vessels.

NAVAL OFFICERS

SEC. 412. Naval officers of the United States on the active list may volunteer for service on any vessel employed in mail service under a contract made under the provisions of this title, and when accepted by the owner or master thereof may be assigned to such duty by the Secretary of the Navy. While in such employment such officers shall receive from the Government half pay, exclusive of allowances, and such other compensation from the owner or master as may be agreed upon by the parties; but such officers while in such employment shall be required to perform only such duties as apper. tain to the merchant marine.

MAIL MESSENGERS

SEC. 413. Upon each vessel employed in ocean mail service under a contract made under this title, the Postmaster General shall be entitled to have transported such mail messengers as he may require, for whom shall be provided subsistence, suitable staterooms, and working quarters, all free of charge.

AMENDMENTS AND REPEALS

SEC. 414. (a) Section 24 of the Merchant Marine Act, 1920 [U. S. C., Title 46, § 880], is amended to read as follows:

"SEC. 24. That all mails of the United States shipped or carried on vessels shall, if practicable, be shipped or carried on Americanbuilt vessels documented under the laws of the United States. No contract hereafter made with the Postmaster General for carrying mails on vessels so built and documented shall be assigned or sublet, and no mails covered by such contract shall be carried on any vessel not so built and documented. No money shall be paid out of the Treasury of the United States on or in relation to any such contract for carrying mails on vessels so built and documented when such contract has been assigned or sublet or when mails covered by such contract are in violation of the terms thereof carried on any vessel not so built and documented. This section shall not be applicable in the case of contracts made under Title IV of the Merchant Marine Act, 1928."

(b) Section 7 of the Merchant Marine Act, 1920 [U. S. C., Title 46, § 866], is amended by striking out so much thereof as reads as follows: The Postmaster General is authorized, notwithstanding the Act entitled 'An Act to provide for ocean mail service between the United States and foreign ports, and to promote commerce,' approved March 3, 1891, to contract for the carrying of the mails over such lines at such price as may be agreed upon by the board and the Postmaster General."

(c) The Act entitled "An Act to provide for ocean mail service between the United States and foreign ports, and to promote commerce," approved March 3, 1891 [U. S. C., Title 39, §§ 657-665], is repealed.

(d) So much of the Act entitled "An Act making appropriations for the service of the Post Office Department for the fiscal year ending June 30, 1918, and for other purposes," approved March 3, 1917, as provides for contracts for the carrying of mails between the United States and Great Britain [U. S. C., Title 39, § 666], is repealed.

(e) Subdivision (b) of section 4009 of the Revised Statutes, as amended [44 Statutes at Large, pt. 2, 900], is amended to read as follows:

"(b) The provisions of subdivision (a) of this section shall not limit the compensation for transportation of mail which the Postmaster General may pay under contracts entered into in accordance with the provisions of section 4007 of the Revised Statutes [U. S. C., Title 39, § 652], section 24 of the Merchant Marine Act, 1920 [U. S. C., Title 46, § 880], or Title IV of the Merchant Marine Act, 1928."

(f) Any contract made prior to the enactment of this Act shall remain in force and effect in the same manner and to the same extent as though this Act had not been enacted. Any such contract which expires on June 30, 1928, may be extended for a period of not more than one year from such date.

TITLE V-INSURANCE FUND

SEO. 501. Section 10 of the Merchant Marine Act, 1920 [U. S. C., Title 46, § 869], is amended to read as follows:

"SEO. 10. That the board may create out of insurance premiums, and revenue from operations and sales, and maintain and administer separate insurance funds which it may use to insure in whole or in part against all hazards commonly covered by insurance policies in such cases, any legal or equitable interest of the United States (1) in any vessel constructed or in process of construction; and (2) in any plants or property in the possession or under the authority of the board. The United States shall be held to have such an interest in any vessel toward the construction, reconditioning, remodeling, improving, or equipping of which a loan has been made under the authority of this Act, in any vessel upon which it holds a mortgage or lien of any character, or in any vessel which is obligated by contract with the owner to perform any service in behalf of the United States, to the extent of the Government's interest therein."

TITLE VI-TRANSPORTATION OF GOVERNMENT

OFFICIALS

SEC. 601. 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 when 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.

TITLE VII-MISCELLANEOUS

AUTHORIZATION OF APPROPRIATIONS

SEC. 701. The appropriations necessary to carry out the provisions and accomplish the purposes of this Act are hereby authorized.

REQUISITION OF VESSELS

SEC. 702. (a) The following vessels may be taken and purchased or used by the United States for national defense or during any national emergency declared by proclamation of the President:

(1) Any vessel in respect of which, under a contract hereafter entered into, a loan is made from the construction loan fund created by section 11 of the Merchant Marine Act, 1920, as amended-at any tíme until the principal and interest of the loan has been paid; and