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§ 34. Army control in time of war or imminence of war

In time of war in which the United States is engaged, or when, in the opinion of the President, war is imminent, such officer of the Army as the President may designate shall, upon order of the President, assume and have exclusive authority and jurisdiction over the operation of the Panama Canal and all its adjuncts, appendants and appurtenances, including the entire control and government of the Canal Zone. During a continuation of this condition, the Governor of the Canal Zone shall be subject to the order and direction of the officer so appointed, in all respects and particulars as to:

(1) the operation of the Canal; and

(2) all duties, matters and transactions affecting the Canal Zone.

§ 35. Assistance of Armed Forces

The Governor of the Canal Zone may call upon the Commander of the Armed Forces of the United States in the Canal Zone for military assistance, whenever the Governor deems the assistance of the Armed Forces necessary to:

Sec.

(1) protect the Canal Zone;

(2) preserve the peace;

(3) quell or disperse routs or riots; or

(4) disperse unlawful assemblies.

CHAPTER 5-PANAMA CANAL COMPANY

61. Continuation, purposes, offices and residence of the Company.

62. Investment of the United States.

63. Board of Directors; allowances; quorum; meetings.

64. President of the Company.

65. General powers of Company.

66. Specific powers of Company.

67. Subjection to treaties and laws applicable to Panama Railroad Company. 68. Rights in assets taken over upon dissolution of Panama Railroad Company; liabilities.

69. Reimbursement of other agencies.

70. Payment of excess funds into Treasury.

71. Borrowing from Treasury.

72. Appropriations to cover losses.

73. Transfer of Canal and facilities to Company.

74. Insurance coverage.

75. Amendment or repeal.

§ 61. Continuation, purposes, offices and residence of the Com

pany

(a) For the purposes of maintaining and operating the Panama Canal and of conducting business operations incident thereto and incident to the civil government of the Canal Zone, the Panama Canal Company is continued as a body corporate and as an agency and instrumentality of the United States.

(b) The Company shall have perpetual succession in its corporate name, unless dissolved by Act of Congress.

(c) The principal offices of the Company shall be in the Canal Zone, but the Company may establish agencies or branch offices in such other places as it deems necessary or appropriate in the conduct of its business. Within the meaning of the laws of the United States relating to venue in civil actions, the Company is an inhabitant and resident of the Canal Zone and of the District of Columbia.

§ 62. Investment of the United States

(a) The receipt issued as of July 1, 1948, to the United States and delivered to the Secretary of the Treasury, acknowledging the transfer to the Company, as then required by law, of the net assets of the

Panama Railroad Company, a corporation created by an Act of the Legislature of the State of New York passed on April 7, 1849, as amended by an Act of that legislature passed on April 12, 1855, and which was wholly owned by the United States, shall be, either in its original amount of $1 or in the amount to which it subsequently has been or is increased as required by law, evidence of the ownership of the Panama Canal Company by the United States.

(b) The President of the United States or such officer of the United States as he designates, shall be known as the "stockholder", and shall represent the United States in its capacity as owner of the Company.

(c) The amount of the receipt referred to by subsection (a) of this section shall be increased by subsequent additional direct investments of the United States, in excess of repayments to the Treasury and extraordinary expenditures and losses applicable as offsets to such investments under the provisions of subsection (f) of this section, due to:

(1) funds advanced to the Panama Canal Company from the Treasury within such appropriations as the Congress from time to time may make for the purpose of meeting increased capital needs; and

(2) transfers to the Panama Canal Company from other Government agencies (or, conversely, decreased by transfers from the Company to other Government agencies), pursuant to applicable provisions of law, of business enterprises, facilities, appurtenances, and other assets, less liabilities assumed in connection with the transfers.

(d) Transfers of properties and other assets from or to other Government agencies pursuant to paragraph (2) of subsection (c) of this section shall be at such appropriate amounts as are agreed upon between the Panama Canal Company and the agencies concerned and approved by the Director of the Bureau of the Budget. In the determination thereof, due consideration shall be given to the cost and probable earning power of the transferred assets, or usable value to the transferee if clearly less than cost, and adequate provisions made for depreciation of properties and equipment, obsolete or otherwise unusable inventories and other reasonably determinable shrinkages in values, and, insofar as practicable, there shall be excluded from the amount any portion of the value of the transferred property which is properly allocable to national defense. The board of directors shall certify to the Secretary of the Treasury the amount of each transfer, the amount of any accumulated repayments to the Treasury or extraordinary expenditures or losses applicable as offsets to the amount of the transfer under the provisions of subsection (f) of this section, and the effective date of the transfer.

(e) In order to reimburse the Treasury, as nearly as possible, for the interest cost of the funds or other assets directly invested in it, the Panama Canal Company shall pay interest to the Treasury on the net direct investment of the Government in it as defined by subsections (a), (c) and (d) 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 the interest charges shall be made annually to the extent earned, and if not earned shall be made from subsequent earnings. (f) The Panama Canal Company shall account for its surplus, as follows:

(1) the total net income from operations from and after 1904 (when the Government acquired control of the Panama Canal Railroad Company), plus the undistributed net income prior to 1904; less

(2) payments to the Treasury as dividends from and after 1904, not applied as offsets to direct capital contributions as described below; and less

(3) extraordinary expenditures or losses incurred through directives based on national policy and not related to the operations of the Panama Canal Company, not reimbursed through specific appropriations by the Congress, and not applied as offsets to direct capital contributions as described below.

The Panama Canal Company may not be required to pay interest to the Treasury on any part of its surplus, as above defined. Repayments to the Treasury as dividends shall be applicable as offsets against directly contributed capital, past or future, in determining the base for the interest payments required by subsection (e) of this section. Extraordinary expenditures and losses, as defined by paragraph (3) of this subsection, to the extent that they are not reimbursed through specific appropriations, shall be considered as repayments to the Treasury analogous to dividends and similarly applicable as offsets against directly contributed capital.

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 subsection, shall be made annually to the extent earned, and if not earned shall be made from subsequent earnings unless the Congress otherwise directs.

(g) The Panama Canal Company is further obligated to pay into the Treasury as miscellaneous receipts amounts sufficient to reimburse the Treasury, as nearly as possible, for the:

(1) 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 those Governments; and

(2) net costs of operation of the agency known as the Canal Zone Government.

§ 63. Board of Directors; allowances; quorum; meetings

(a) A board of directors shall manage the affairs of the Panama Canal Company. The board shall consist of not less than nine nor more than thirteen members, including:

(1) the Governor, who shall serve as a director, ex officio; and (2) the stockholder, if he elects to serve as a director.

The stockholder shall appoint all other members of the board, and neither this chapter nor any other law prevents the appointment and service, as a director, of an officer or employee of the United States. Each director so appointed shall hold office at the pleasure of the stockholder, and, before entering upon his duties, shall take an oath faithfully to discharge the duties of his office.

(b) The directors may not be paid a salary for their services, but, under regulations and in amounts prescribed by the board of directors, with the approval of the stockholder, may be paid by the Company a reasonable per diem allowance in lieu of subsistence expenses in connection with attendance at meetings of the board or in connection with the time spent on special service of the Company, and their travel expenses to and from meetings or when on special service, without regard to the Travel Expense Act of 1949, as amended (5 U.S.C., sec. 835 et seq.), or the regulations promulgated by the Director of the Bureau of the Budget pursuant to section 7 of that Act (5 U.S.C., sec. 840).

(c) The directors, of whom a majority constitute a quorum for the transaction of business, shall hold meetings as provided by the bylaws of the Panama Canal Company.

§ 64. President of the Company

The Governor shall serve, ex officio, as president of the Panama Canal Company.

65. General powers of Company

(a) The Panama Canal Company may:

(1) adopt, alter, and use a corporate seal, which shall be judicially noticed;

(2) adopt, amend, and repeal bylaws governing the conduct of its general business and the performance of the powers and duties granted to or imposed upon it by law;

(3) sue and be sued in its corporate name, but an attachment, garnishment, or similar process may not be issued against salaries or other moneys owed by the Company to its employees;

(4) enter into contracts, leases, agreements, or other transactions;

(5) determine the character of, and necessity for, its obligations and expenditures and the manner in which they shall be incurred, allowed, and paid, and incur, allow, and pay them, subject to pertinent provisions of law generally applicable to Government corporations; and

(6) purchase, lease, or otherwise acquire, and hold, own, maintain, work, develop, sell, lease, exchange, convey, mortgage, or otherwise dispose of, and deal in, lands, leaseholds, and any interest, estate, or rights in real, personal, or mixed property, and any franchises, concessions, rights, licenses, or privileges necessary or appropriate for any of the purposes expressed in this chapter. (b) The Panama Canal Company has the priority of the United States in the payment of debts out of bankrupt estates.

§ 66. Specific powers of Company

(a) Subject to the Government Corporation Control Act (31 U.S.C., sec. 841 et seq.), the Panama Canal Company may: (1) maintain and operate the Panama Canal;

(2) construct, maintain, and operate a railroad across the Isthmus of Panama;

(3) construct or acquire, and operate, vessels for the transportation of passengers or freight, and for other purposes;

(4) construct or acquire, establish, maintain, and operate docks, wharves, piers, harbor terminal facilities, shops, yards, marine railways, salvage and towing facilities, fuel-handling facilities, motor-transportation facilities, power systems, water systems, a telephone system, construction facilities, living quarters and other buildings, guest houses, warehouses, storehouses, a printing plant, commissaries, and manufacturing, processing or service facilities in connection therewith, laundries, dairy facilities, restaurants, amusement and recreational facilities, and other business enterprises, facilities, and appurtenances necessary and appropriate for the accomplishment of the purposes of this chapter;

(5) make or furnish sales, services, equipment, supplies, and materials, as contemplated by this chapter, to:

(A) vessels;

(B) agencies of the Government of the United States;

(C) employees of the Government of the United States; and

(D) any other governments, agencies, persons, corporations, or associations eligible to make or receive such purchases, services, supplies, or materials under the laws prevailing at the time and the policies heretofore or hereafter adopted consistently with those laws;

(6) use the United States mails in the same manner and under the same conditions as the executive departments of the Federal Government; and

(7) take such actions as are necessary or appropriate to carry out the powers specifically conferred upon it.

(b) Subject to subsection (c) of this section, the Company may not undertake any new types of activities not included in the annual budget program prescribed by section 102 of the Government Corporation Control Act (31 U.S.Č., sec. 847), except those which may be transferred to it pursuant to section 62(c) (2) of this title.

(c) If, during a period when the Congress is not in session, the board of directors, or the president of the Company, with the concurrence of as many of the directors as may be consulted without loss of time unreasonable in the circumstances, declares an emergency to exist, the Company may undertake recommended appropriate action within the scope of this chapter, without regard to the restriction imposed by subsection (b) of this section. A report on the emergency activity shall be presented promptly to the Congress, when it reconvenes, for its approval and such action as it may deem necessary or desirable with respect to reimbursement through supplemental appropriation of funds to cover costs or losses arising from the emergency.

§ 67. Subjection to treaties and laws applicable to Panama Railroad Company

As far as consistent with this chapter, the Panama Canal Company is subject to all treaties and Acts of the Congress relating or applying to the Panama Railroad Company, as long as they remain in force; and has all the rights, privileges, and exemptions, and is subject to all the obligations, liabilities, and responsibilities, applicable to the Panama Railroad Company under or by virtue of those treaties or Acts. 68. Rights in assets taken over upon dissolution of Panama Railroad Company; liabilities

(a) The Panama Canal Company shall possess all the right, title, and interest in and to the assets taken over, as of July 1, 1948, from the Panama Railroad Company, since dissolved, which the United States then possessed or, by virtue of the convention of November 18, 1903, between the United States and the Republic of Panama, thereafter acquired or may hereafter acquire, and which, pursuant to law, were released and transferred, as of July 1, 1948, to the Company.

(b) Subsection (a) of this section does not apply to any right, title, or interest transferred or conveyed to the Republic of Panama after July 1, 1948, under applicable provisions of law or of any convention or treaty.

(c) The Company is responsible for the payment and discharge of all remaining liabilities of the Panama Railroad Company, which, as authorized by law, the Company assumed as of July 1, 1948.

§ 69. Reimbursement of other agencies

The Panama Canal Company shall reimburse the Employees' Compensation Fund, Bureau of Employees' Compensation, Department of Labor, for the benefit payments made to the Company's employees, and shall also reimburse other Government agencies for payments of a similar nature made on its behalf.

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