specified a scale of provisions required to be carried upon vessels.
With minor alterations included in the Seamen's Act, the present scale,
with permissible substitutions, was fixed by law on December 21, 1898.
Under this law seamen have the option of accepting the provisions
offered or of demanding the legal scale, which is required to be
inserted in all ship articles and to be posted in the galley and
forecastle. The laws contain provisos for complaints to be made to the
officer in command of the vessel or to the United States consular
officer or Shipping Commissioner or chief officer of the customs, who
has authority to take action to see that the deficiency is corrected,
subject to a penalty for default.
For allowing the supply of provisions to be reduced below the legal
scale during the voyage, except for unavoidable causes, compensation
must be paid to every seaman according to the time of its continuance
and in accordance with the scheduled allowances fixed by law.
=Hospital Accommodations.=--In addition to crew space already referred
to all merchant vessels which ordinarily make voyages of more than three
days' duration and carry a crew of twelve or more seamen, are required
to have a separate compartment for hospital purposes with at least one
bunk for every twelve seamen, provided that not more than six bunks in
all may be required.
=Warm Room and Woolen Clothing.=--Every vessel bound on a voyage over
fourteen days in length must, in addition to a slop chest, provide for
each seaman one suit of woolen clothing, as also a "safe and warm room"
for cold weather.
XIII. PERSONAL INJURIES TO SEAMEN AND RECOVERIES FOR DEATH
Prior to the passage of the recent Merchant Marine Act (1920) recovery
by a seaman for injuries received by him in the service of the ship was
subject to the maritime law under which (except in case of the
unseaworthiness of the vessel, where full recovery might be claimed) the
seaman was entitled to, but only to, his maintenance and cure, and to
wages so long at least as the voyage continued, regardless of his own
negligence (unless it amounted to willful misconduct) or of that of any
other person. Where his contract extended beyond the voyage or there was
fault on the part of the ship, recovery of wages was allowable even
beyond the termination of the voyage.
This liability could not be enlarged or diminished by any law of the
states on the subject of employer's liability or workmen's compensation.
The Seamen's Act of 1915 undertook to enlarge the protection of seamen
by providing that in suits to recover damages for injuries received on
board a vessel, or in its service, seamen "having command," _e.g._,
masters, etc., should not be held to be fellow servants with those under
their authority, but this was held not to affect those cases covered by
the general rule of the maritime law above stated, under which the
fellow servant question is immaterial.
A more successful effort at extending the seaman's right, however, was
made in the recent Merchant Marine Act, which permits any seaman who
suffers injury in the course of his employment, to maintain, at his
election, an action for damages at law, with the right of trial by jury,
and in such case to have the benefit of the United States statutes
modifying or extending the rights of railroad employees in analogous
cases.
The same act also covers the question of actions for the death of
seamen, giving to their personal representatives the right to sue for
damages at law and the benefit of a trial by jury, and the similar
benefit of the laws covering actions for death in the case of railroad
employees.
This provision, it is observed, is in sharp contrast, and perhaps in
some conflict with the provision of an act passed at the same session of
Congress, on March 30, 1920, giving a general right to maintain actions
for all deaths occurring on the high seas by some wrongful act or
neglect. This law, which in its broad terms covers also the case of
seamen, permits suits to be brought in the admiralty courts and fixes
the recovery at the amount of pecuniary loss sustained by the persons
for whose benefit suit is brought. It further provides that in such
action the fact that the decedent has been guilty of contributory
negligence is not to be considered a bar to recovery, but is to be taken
into consideration by the court in fixing the degree of negligence and
in reducing the recovery accordingly.
A discussion of the technical questions involved in the relations of
these two acts is beyond the scope of this summary.
XIV. OFFENSES BY SEAMEN
Offenses by seamen are punishable under the laws of the United States,
generally, when committed on the high seas, or on any waters within the
jurisdiction of the admiralty courts, or on lands under the exclusive
jurisdiction of the United States. The list of crimes covers those
familiar to the criminal law, such as murder, manslaughter, assault,
rape, robbery, arson, larceny, forgery, receiving stolen property, etc.
Other offenses peculiar to marine life may be noted as follows.
=Mutiny, Desertion and Disobedience.=--Inciting to or participation in a
mutiny on a United States vessel is punished by a fine of not over
$1,000 or imprisonment of not over five years or both. This offense
includes the stirring up of the crew to resist lawful orders or "to
refuse or neglect their proper duty, or to betray their proper trust,"
also "the assembly with others in a tumultuous and mutinous manner." The
actual revolt or mutiny--the usurping of the command of a vessel, is
punishable by a fine of not over $2,000 or imprisonment of not over ten
years, or both.
Willful disobedience is punishable under the Seamen's Act by being
placed in irons until the disobedience ceases, and, on arrival in port,
by forfeiture of wages, not exceeding four days' pay, or, at the
discretion of the court, by imprisonment not exceeding a month.
Continued willful disobedience subjects the offender to being placed in
irons on bread and water, with full rations every fifth day, until the
disobedience ceases, and the forfeiture, on arrival in port, of twelve
days' pay for every twenty-four hours' disobedience, or by imprisonment
not over three months, at the discretion of the court.
Desertion is punishable under the Seamen's Act by forfeiture of clothes
and effects left on the vessel, and of wages due, the former penalty of
imprisonment for desertion in a foreign port having been abolished, as
also the provision for the arrest of seamen deserting from foreign
vessels. This proviso is much more lenient than the laws of most foreign
countries. In the case of England, if the desertion takes place outside
the United Kingdom the deserter is liable to imprisonment for a period
not exceeding twelve weeks. Imprisonment for desertion in the coastwise
trade was abolished by the Maguire Act in 1895.
=Miscellaneous Offenses.=--Among these may be mentioned the following:
_Seduction_ of a female passenger, by master, officer, crew or employee
is punishable by a fine not exceeding $1,000 and imprisonment not
exceeding one year, or both. A subsequent marriage may be pleaded in bar
of conviction. _Misconduct_, neglect or inattention to duty, resulting
in loss of life, is punishable by fine not exceeding $10,000, or
imprisonment not more than ten years, or both. _Abandonment of seamen_
is punishable by a fine not over $500, or imprisonment not over six
months, or both. _Barratry_--the attempt to injure or destroy a vessel
for her insurance--is punishable by a fine not over $10,000 and
imprisonment not over ten years. _Wrecking_--plundering or stealing from
a wrecked vessel--calls for a fine not exceeding $5,000 and imprisonment
not exceeding ten years. _Willfully Obstructing Escape_ from a wrecked
vessel subjects the offender to a minimum imprisonment of ten years,
with a maximum punishment of imprisonment for life. _Plundering_ a
vessel,--fine $5,000 maximum, and imprisonment not exceeding ten years.
_Entering_ a vessel with intent to commit felony,--fine $10,000 maximum,
and imprisonment not exceeding five years. _Casting away_ or otherwise
destroying vessel by owner,--imprisonment for life or any lesser term;
by other person, imprisonment not exceeding ten years.
The carrying of sheath-knives by seamen in the merchant service is
forbidden, and penalties for allowing violation of this prohibition are
imposed upon the master.
Officers, seamen and employees are forbidden to visit passengers'
quarters except by permission of the master. Severe penalties are
imposed upon both the offending person and upon the master permitting
the violation.
Corporal punishment is prohibited by the Seamen's Act under penalties
not only of fine and imprisonment, but of liability to civil damages.
Ill treatment of a seaman, beating without justifiable cause, wounding
or beating, or the withholding of suitable food and nourishment, or the
infliction of any cruel and unusual punishment is punished by fine of
not over $1,000 or imprisonment of not over five years.
Shanghaiing was prohibited, under severe penalties, in 1909.
=Assistance in Case of Collision.=--The law requires every master, in
the case of a collision, so far as he can do so without serious danger
to his own vessel or its crew or passengers, to stand by the other
vessel until he has ascertained that she has no need of further
assistance, and to render such assistance as may be practical, also to
give the name of his own vessel, her port of registry, and other
material information. For failure to do so and in the absence of
reasonable cause shown for such failure, a collision, in the absence of
proof to the contrary, is deemed to have been caused by such master's
wrongful act or neglect.
For failing to render such assistance, or giving the information
required, masters are liable to a fine of $1,000 or a year's
imprisonment, and the vessel is expressly made liable for the amount
named, one-half of which is payable to the informer.
XV. RULES OF THE ROAD
There are three general bodies of rules covering the navigation of
vessels with respect to the rules of the road.
The first of these are the International Rules which were adopted at a
conference of maritime nations held in the United States in 1889, which
are now in force in practically all maritime countries. They apply only
to vessels on the high seas, the boundary line of which, so far as the
United States is concerned, has been defined by an act of Congress
passed in 1913, under which the Secretary of Commerce, having been
authorized to fix lines separating the high seas from inland waters for
the purposes of the rules of the road, has defined a water line from
Cutler Harbor, Maine, to Puget Sound.
The second body of rules is known as the Inland Rules, embodied in a
federal statute passed in 1897, and applicable only to the waters within
the line thus defined. These rules, generally speaking, are similar to
the International Rules but differ in a number of details.
The third body of rules is what is known as the Pilot Rules for certain
inland waters of the Atlantic and Pacific coasts and of the coast of the
Gulf of Mexico, adopted by the supervising inspectors of the Steamboat
Inspection Service, approved by the Secretary of Commerce under
authority of the Act of June, 1897, establishing the Inland Rules, and
of subsequent acts passed in 1903 and 1913, establishing the Department
of Commerce. These rules are also to a large extent similar to, and are
generally in harmony with the inland rules, to which they yield in case
of conflict. More extended reference to these rules, the knowledge of
which should be a matter of second nature to seafaring men, is beyond
the scope of this summary.
XVI. PILOTAGE
As the states had enacted pilotage laws before the adoption of the
Constitution, the right of the states to a certain measure of control
over pilotage, within their boundaries, has always been recognized, and
consequently a dual system has grown up. The state laws are effective
except where the subject is specifically covered by a federal law.
As to the federal requirements, all vessels engaged in the _coasting_
trade are required, when under way and within the jurisdiction of the
United States, that is, except on the high seas, to be piloted by
officers duly licensed under the federal law as pilots for the
particular waters covered. This is covered by the qualifications laid
down for the various classes of vessels by the Board of Supervising
Inspectors, and by the provision of our law that the qualifications
necessary for obtaining a license as master, mate or pilot of all steam
vessels shall be as prescribed by the Board.
Registered steam vessels, when engaged in _foreign_ trade, and all
sailing vessels of the United States in the foreign or coasting trade,
are exempt from this requirement, but are subject to the requirements of
the pilotage laws of the several states.
The master of a foreign vessel is not required to employ a pilot
licensed under the laws of the United States.
As to state laws, the pilotage of all vessels in state waters (except
enrolled steam vessels employed in the coasting trade, which are
exempted from state supervision by act of Congress), is regulated by the
laws of the respective states. There are, however, a number of special
prohibitions designed to prevent controversy between the states. Thus,
no regulation may be adopted by one state making the discrimination of a
lower pilotage as to vessels sailing between ports of one state and
vessels sailing between ports of different states, nor any
discrimination against steam vessels; nor may a state require pilots to
procure a state license in addition to that issued by the United States.
It is to be noted that the federal law, which forbids the states to
require enrolled coastwise steamers to take on state pilots, does not
apply to _sailing vessels_ even though they may be in a tow of a steam
tug carrying a licensed pilot, a discrimination difficult to justify.
In this connection, thrifty ship agents handling _registered_ vessels
which for the time being happen to be engaged in the _coasting_ trade,
will naturally see to it that registers are exchanged for enrollments,
wherever a substantial saving in the matter of exemption from state
pilotage fees can be figured out.
It is to be noted, however, that in order to permit this very saving, in
another direction, the government permits vessels engaged in trade
through the canal to be enrolled and licensed. By thus obviating the
necessity for registry, state pilotage is avoided.
XVII. LENGTH OF HAWSERS
The law provides a special procedure covering length of hawsers in the
case of tows. The Commissioner of Lighthouses, the Supervising Inspector
of the Steamboat Inspection Service, and the Commissioner of Navigation
are directed to convene as a board, under directions of the Secretary of
Commerce, and to prepare regulations limiting the length of hawsers
between towing vessels and seagoing barges in tow, and the length of
such tows within any of the inland waters of the United States. Willful
violation of these regulations subjects the license of the master of the
towing vessel to suspension or revocation.
XVIII. INSPECTION OF STEAM VESSELS
All steam vessels must be inspected yearly as to their hulls, and
generally as to whether they have complied with all the requirements of
the law in regard to fires, boats, pumps, hose, life preservers, floats,
anchors, etc., as laid down in the Rules and Regulations of the United
States Board of Supervising Inspectors, which should be familiar to all
masters. Inspectors, however, have the widest latitude. The law requires
that they shall satisfy themselves that the boat is in a condition to
warrant their belief that she may be used in navigation with safety for
life. In making this test they may have her put under way or may adopt
any other suitable means to test her sufficiency or that of her
equipment. This yearly inspection, however, may be suspended under
special regulations, when vessels are laid up and dismantled and out of
commission. In this connection it is perhaps worth remembering that the
laws of the United States make it a criminal offense for any person
knowingly to send to sea an American ship, whether in the coast, foreign
or coastwise trade, in such an unseaworthy state that the life of any
person is liable to be endangered. The punishment for this offense is
properly severe--imprisonment not exceeding five years or a fine not
exceeding $1,000 or both at the discretion of the court.
The law also provides for the yearly inspection of the boilers of all
steam vessels, including tug-boats, to insure compliance with the
requirements of the standards issued by the board.
=Barges.=--Seagoing barges of over 100 tons gross are also subject to
yearly inspection. The standard applied by the local inspectors is the
elastic one that they shall satisfy themselves that the barge is "of a
structure suitable for the service in which she is to be employed, has
suitable accommodations for the crew, and is in a condition to warrant
the belief that she may be used in navigation with safety to life." In
the case of such barges the law also specially provides that there shall
be at least one lifeboat, one anchor with suitable chain or cable, and
at least one life preserver for each person on board.
Without such certificate of inspection actually in force at the time, no
document can be issued for a barge, and for navigating a barge without a
certificate or without the equipment referred to the owner is liable to
a penalty of $500. Certificates of inspection for barges are issued in
the same manner as for seagoing vessels generally. Where the certificate
is not available at the time of securing a new document, evidence that
it is still in force must be produced to the Collector, which may be in
the form of a telegraphic confirmation of the fact, from the office of
the Steamboat Inspection Bureau, Department of Commerce, Washington.
=The Certificate of Inspection.=--Upon the making of every inspection,
if the inspectors refuse to grant a certificate, they are required to
sign a written statement of their reasons for their disapproval. If
approval is granted, however, it is their duty to immediately deliver to
the master or owner a temporary certificate, which is good until the
regular certificate has been delivered. Copies of these certificates are
kept on file in the inspector's office or in the office of the Collector
of Customs. The original is required to be posted in a conspicuous place
in the vessel, to be kept there at all times except where it is
otherwise permitted in special cases under the regulations.
=Manning of Inspected Vessels.=--The inspection of the local inspectors
covers not only the hull and boiler and equipment, but also the
questions of manning, character of merchandise to be carried, and the
mode of packing dangerous articles, etc.
The local inspectors, on making the general inspection of the vessel,
are required to make entry in the certificate of inspection of such
complement of licensed officers and crew, including certificated
lifeboat men, as they consider necessary for her safety, this entry
being subject to right of appeal to the Supervising Inspector General.
Where such a vessel is for any reason deprived of the services of any
number of the crew, without the consent or fault of the master or any
person interested in the vessel, she is permitted to proceed on her
voyage if, in the judgment of the master, she is still sufficiently
manned. It is required, however, that the master shall ship, if
obtainable, a number equal to those whose services he has been deprived
of, and of the same or higher grade, also that he shall explain in
writing the situation to the local inspectors within twelve hours of the
arrival of the vessel at its destination under penalty of $50. The
penalty for undermanning the vessel is $100, or in case of an
insufficient number of licensed officers $500.
XIX. REGISTER TONNAGE
Three methods of measuring the capacity of a ship are more or less in
general use in the maritime world.
The displacement tonnage, or weight of the volume of water displaced by
the ship when fully loaded with all her crew, coal, supplies, etc., is
in general use by the navies of the world for assuring accuracy and
uniformity, but of course is not adapted to merchant vessels on which
the cargo varies from voyage to voyage.
The deadweight tonnage, or actual weight of the cargo which a merchant
ship will transport, obviously is adaptable only for vessels carrying
bulk cargoes and not for general cargo ships. Each of these measurements
is recorded in long tons avoirdupois.
The American registered tonnage system follows the Moorsom rules adopted
in England in 1854, which are now in effect in practically every
maritime country. It aims to express the entire cubical content of a
merchant ship in unit tons of 100 cubic feet, this figure having been
arrived at in England, on the adoption of the present system, when it
was found that the ratio of the total registered tonnage of the British
merchant marine to cubic feet of contents was slightly over 98.
The measurement rules of the United States are carefully and elaborately
defined in the statutes themselves.
Under the statutes net tonnage is ascertained by deducting from gross
tonnage that proportion of the ship's space occupied by engine's
machinery, boilers, coal bunkers and certain other minor spaces, such as
those which inclose the steering gear below deck, the boatman's stores,
chart-houses, donkey engine and sail room.
To encourage the building of ample forecastles, crews' quarters, etc.,
as well as for other reasons, the rule is adopted by almost all maritime
nations that tonnage taxes and other tonnage dues shall be collected not
on gross but upon the net tonnage. This also includes the usual
commercial charges for towage, dockage and wharfage. Official U. S.
statistics of entrances and clearances are in terms of net-register
tonnage, as also time charter rates when not specifically based on
deadweight tonnage. The incentive to understate net register is thus
strong.
In the case of tugs engaged in foreign service and which are therefore
subject to tonnage duties, it becomes important to see that the net
tonnage, which should ordinarily be a very small figure, is held to the
lowest limit. For instance, seagoing and oceangoing tugs have been
reported with a tonnage as low as eight and ten tons. On the other hand,
many American tugs of no larger capacity are in the habit of carrying a
net tonnage far exceeding this amount.
XX. TONNAGE TAXES
Tonnage tax is levied on every vessel engaged in trade upon her arrival
by sea from a foreign port unless she is in distress. It is not levied
on more than five entries at the same rate during any one year nor on
vessels arriving otherwise than by sea from foreign ports at which
equivalent taxes or dues are not imposed on vessels of the United States.
This tax varies from two to six cents per net ton, the two cent rate
applying to ports in North and Central America, the West Indies,
including Cuba and the Bermuda Islands, the coast of South America
bordering on the Caribbean Sea, and New Foundland. By special treaty
arrangement it also applies to Norway and Sweden. The six cent rate
applies to all other trade.
Vessels entering otherwise than by sea from a foreign port at which
tonnage or lighthouse dues or other equivalent tax or taxes are not
imposed on vessels of the United States, are exempt from the tonnage
duty of two cents per ton, not to exceed in the aggregate ten cents per
ton in any one year.
These tonnage duties are substantially similar to the corresponding
English rates, but are materially lower than corresponding charges in
European continental ports. There are a number of special instances of
exceptional cases, but which are not of sufficient frequency or
importance to deserve special mention. It is well to remember, however,
that if any officer of an American vessel should happen not to be a
citizen a penalty of fifty cents a ton is imposed, except as provided by
presidential proclamation in the case of certain vessels of foreign
origin.
Foreign steam tugs employed in towing coastwise vessels are liable to a
tonnage of fifty cents a ton on the measurement of the vessel towed,
unless the towing is done in whole, or in part, within or upon foreign
waters, or when the tug-boat is owned by a foreign railway company whose
cars enter into the United States by means of such transportation.
XXI. NAVIGATION FEES
Vessels engaged in foreign trade with other than Canadian ports are
subject to navigation fees upon entry. Thus if she is less than 100 tons
burden the fee is $1.50. Over that amount the fee is $2.50. Her
clearance fee is at the same rate.
In the event that she might have any dutiable merchandise on board she
would also be liable under similar conditions to the usual fees for
surveyor's services in connection with her customs entries, to wit,
$1.50, if less than 100 tons, and $3 if more than 100 tons. Where she
carries no dutiable merchandise, however, the fee is a nominal one of
sixty-seven cents, which applies, of course, in the case of foreign
ballast which is not dutiable.
XXII. ANNUAL LIST OF MERCHANT VESSELS
The law provides that the Commissioner of Navigation shall publish
annually a list of vessels of the United States belonging to the
commercial marine, specifying their official number, signal letters,
name, rig, tonnage, home port, and place and date of build,
distinguishing sailing vessels from those propelled by steam or other
motive power. The list for the year 1919 was the fifty-first list so
published.
Under the provisions of an act passed in 1912 it is required that upon
affidavit by a reputable ship builder as to the rebuilding of _unrigged_
wooden vessels, giving date and place of their rebuilding, and
certifying that they are sound and free from rotten wood and in every
respect seaworthy, a notation to this effect shall be included in the
list. It is noted that the provision applies only to _unrigged_ wooden
vessels, and thus does not cover the case of rigged barges, whatever
their size.
XXIII. NUMBERING OF UNDOCUMENTED MOTOR BOATS
In 1918 a law was passed requiring the numbering of all theretofore
undocumented motor boats, except vessels under sixteen feet temporarily
equipped with detachable motors. These numbers are awarded by the
collectors of customs on application of the owner or master, and are
required to be painted, or otherwise attached, to the bow of the vessel,
and to be not less than three inches in size. Violation of the act is
subject to a penalty of $10.
From the date of the passage of the act on December 7, 1917, up to July
1, 1919, nearly 100,000 such vessels had been numbered, and the
experiment had proved highly successful in assisting the enforcement of
the navigation laws and the collection of taxes as well as the
enforcement of harbor police laws and regulations.
XXIV. ADMINISTRATION OF NAVIGATION LAWS
Practically every department of the government has to do with some
feature or other of the navigation laws as affecting ship building,
maritime commerce and ocean transportation. Primarily, however, the
administration of the laws is in the hands of the Department of
Commerce, under the immediate direction of the Bureau of Navigation, the
Steamboat Inspection Service and the United States Shipping
Commissioners. Other branches of government service whose functions
touch on some phase of navigation are the Public Health Service, with
its hospitals and quarantine stations, and the Coast Guard which, since
1915, has included the Revenue Cutter and Life Saving Service. The War
and Navy departments also have various functions related primarily to
the national defense. The activities of the Shipping Board will be
separately reviewed.
=Commissioner of Navigation.=--The Bureau of Navigation, under the head
of the Commissioner of Navigation, has general superintendence of the
merchant marine and seamen so far as they are not directly subject to
other departments; it controls the documentation of vessels and has
supervision of the laws relating to measurement of vessels, signal
numbers and the questions relating to the tonnage tax. It is charged
further with the preparation of the annual list of vessels belonging to
the merchant marine, has authority to change the names of vessels, and
is charged with the preparation of annual reports to the Secretary, and
with numerous other miscellaneous but important duties.
=Steamboat Inspection Service.=--The Steamboat Inspection Service is
under the direction of a Supervising Inspector General appointed by the
President, in addition to which there are ten supervising inspectors who
meet as a Board in Washington at least once a year and establish
regulations necessary to carry out the inspection laws relating to
vessels, subject to the right of the Secretary of Commerce to convene a
special executive committee, composed of the Supervising Inspector
General and two supervising inspectors, who have power to alter and
amend these rules with the approval of the secretary.
The principal duty of the supervising inspectors is to supervise the
work of a large number of local inspectors of hulls and of boilers, and
who in their respective districts, upon designation of the Secretary of
Commerce, constitute the Board of Local Inspectors charged with the
duties of inspection and the issuance and supervision of licenses
already referred to.
=Shipping Commissioners.=--The Shipping Commissioners of the United
States form a highly responsible body of officers with semi-judicial
functions, who are directly responsible to the Secretary of Commerce, by
whom they are appointed. The law provides one such officer for each port
of entry which is a port of ocean navigation, and which in the judgment
of the Secretary shall require the services of a Commissioner, and for
whom Congress has made an appropriation. Generally speaking, the duties
of the Shipping Commissioner are to afford facilities for engaging
seamen; to superintend their engagement and discharge in the manner
prescribed by law; to provide means for securing their presence on the
board at the proper time; to facilitate the making of apprentices in the
sea service; and to perform other duties imposed upon them.
One of the most important and useful functions of a Shipping
Commissioner, particularly when the office is in capable hands, is that
of arbitrating claims between master, consignee, agent or owner or any
of the crew, when both parties agree in writing to submit to the award,
it being provided by law that an award made by a Commissioner in such
case is binding on both parties and in any legal proceedings is to be
deemed conclusive of the rights of the party.
The Commissioners are given authority to call upon owners, agents,
masters, for proof or production of books, papers, etc., or to give
evidence before the Commissioner subject to a penalty and punishment for
contempt for failure to so comply.
As it is the practice to insert arbitration clauses in all steamers'
shipping articles, excepting those operated by the Shipping Board, which
should be carefully read to the crews before they are signed, this duty
is generally viewed by captains and owners as an invaluable aid to
shipping and has been accepted also by the majority of seamen. The work
of the Commissioners in this direction has been so successful that an
effort was recently made to confer upon the Commissioners by law certain
magisterial powers subject to appeal to the United States District
Courts. So far the effort has been unsuccessful.
Having in mind their responsibilities and enormous possibilities of
service to navigation, Shipping Commissioners are among the most
pitifully underpaid of government officials. As an illustration of this
it may be noted that the Commissioners in the great ports of
Philadelphia and of Norfolk receive salaries of $2,400 and of $1,800,
respectively.
XXV. THE SHIPPING BOARD
The United States Shipping Board was created before the war, by the
Shipping Act of 1916, with the dual function and purpose, first of
acting as the administrative agent of the government in developing the
merchant marine and the naval auxiliary in peace time, and, second, that
of meeting the shipping problems incident to a possible war.
Its most important powers have heretofore been exercised through the
instrumentality of the United States Shipping Board Emergency Fleet
Corporation, organized by, and the stock of which has been held by, the
Shipping Board, for the Government. The primary function of the
Corporation was the construction of vessels, but its work was soon
extended to include their operation, in an effort to avoid the
embarrassments, prior to our entering the war, of having our vessels, if
operated by such purely public administrative agency as the Shipping
Board, treated as public vessels in foreign ports. In the beginning it
was intended that the Corporation should function in the character of a
private corporation, and 50,000,000 dollars was appropriated to it for
the construction of vessels, but during the war it acted primarily as
the agent of the President, claiming the immunities and privileges
incident to that somewhat anomalous relation, and has expended upwards
of 3,000,000,000 dollars, its capital remaining intact. The actual
operation of vessels by the Corporation has been carried out through the
instrumentality of a specially organized Division of Operations, which
was largely separate from the Corporation itself, and subject to the
direction and supervision of the Shipping Board.
The jurisdiction of the Shipping Board, however, has not been confined
to vessels in which the government is interested as owner or charterer.
From the first the Board has had authority to enforce a general
prohibition against unfair discrimination and preferences and against
the improper influencing of marine insurance companies by common
carriers by water, whether in foreign or interstate commerce, not
including tramps, and has also exercised the right of supervising and
regulating tariffs fixed by common carriers in _interstate_ commerce. In
this field, however, the jurisdiction of the Board does not overlap the
jurisdiction of the Interstate Commerce Commission, which has authority
to establish through routes and joint rates where they involve water
transportation. Like the Interstate Commerce Commission the orders of
the Shipping Board are subject to review by the federal courts.
A recent provision of the Merchant Marine Act (1920) reorganizes and
strengthens the Shipping Board, consolidating and centralizing its
control and giving it wide powers in the matter of developing the
American merchant marine and of encouraging the establishment of new
lines and the investigation generally of all matters relative to the
advancement of merchant marine.
Among other new powers of general scope given to the Board is that under
which it is authorized to make rules and regulations affecting shipping
in the _foreign_ trade, wherever necessary, in order to meet special
conditions in foreign trade arising out of foreign laws or competitive
methods practiced in foreign countries. The Board is also authorized to
request the heads of departments to suspend and modify regulations or to
make new regulations affecting shipping in the foreign trade, except
those relating to the Public Health Service, the Consular Service and
the Steamboat Inspection Service, and no rules or regulations excepting
those affecting the services named, may be established by any department
without being first submitted to the Board for its approval and final
action taken thereon by the Board or the President.
[33] Of the Philadelphia Bar.
APPENDIX II
THE MERCHANT MARINE ACT OF 1920[34]
_Be it enacted by the Senate and House of Representatives of the United
States of America in Congress assembled_, That it is necessary for the
national defense and for the proper growth of its foreign and domestic
commerce that the United States shall have a merchant marine of the best
equipped and most suitable types of vessels sufficient to carry the
greater portion of its commerce and serve as a naval or military
auxiliary in time of war or national emergency, ultimately to be owned
and operated privately by the citizens of the United States; and it is
hereby declared to be the policy of the United States to do whatever may
be necessary to develop and encourage the maintenance of such a merchant
marine, and, in so far as may not be inconsistent with the express
provisions of this Act, the United States Shipping Board shall, in the
disposition of vessels and shipping property as hereinafter provided, in
the making of rules and regulations, and in the administration of the
shipping laws keep always in view this purpose and object as the primary
end to be attained.
SEC. 2. (a) That the following Acts and parts of Acts are hereby
repealed, subject to the limitations and exceptions hereinafter, in this
Act, provided:
(1) The emergency shipping fund provisions of the Act entitled "An Act
making appropriations to supply urgent deficiencies in appropriations
for the Military and Naval Establishments on account of war expenses for
the fiscal year ending June 30, 1917, and for other purposes," approved
June 15, 1917, as amended by the Act entitled "An Act to amend the
emergency shipping fund provisions of the Urgent Deficiency
Appropriation Act, approved June 15, 1917, so as to empower the
President and his designated agents to take over certain transportation
systems for the transportation of shipyard and plant employees, and for
other purposes," approved April 22, 1918, and as further amended by the
Act entitled "An Act making appropriation to supply deficiencies in
appropriations for the fiscal year ending June 30, 1919, and prior
fiscal years, on account of war expenses, and for other purposes,"
approved November 4, 1918;
(2) Section 3 of such Act of April 22, 1918;
(3) The paragraphs numbered 2 and 3 under the heading "Emergency
shipping fund" in such Act of November 4, 1918; and
(4) The Act entitled "An Act to confer on the President power to
prescribe charter rates and freight rates and to requisition vessels,
and for other purposes," approved July 18, 1918.
(5) Sections 5, 7, and 8, Shipping Act, 1916.
(b) The repeal of such Acts or parts of Acts is subject to the following
limitations:
(1) All contracts or agreements lawfully entered into before the passage
of this Act under any such Act or part of Act shall be assumed and
carried out by the United States Shipping Board, hereinafter called "the
board."
(2) All rights, interests, or remedies accruing or to accrue as a result
of any such contract or agreement or of any action taken in pursuance of
any such Act or parts of Acts shall be in all respects as valid, and may
be exercised and enforced in like manner, subject to the provisions of
subdivision (c) of this section, as if this Act had not been passed.
(3) The repeal shall not have the effect of extinguishing any penalty
incurred under such Acts or parts of Acts, but such Acts or parts of
Acts shall remain in force for the purpose of sustaining a prosecution
for enforcement of the penalty therein provided for the violation
thereof.
(4) The board shall have full power and authority to complete or
conclude any construction work begun in accordance with the provisions
of such Acts or parts of Acts if, in the opinion of the board, the
completion or conclusion thereof is for the best interests of the United
States.
(c) As soon as practicable after the passage of this Act the board shall
adjust, settle, and liquidate all matters arising out of or incident to
the exercise by or through the President of any of the powers or duties
conferred or imposed upon the President by any such Act or parts of
Acts; and for this purpose the board, instead of the President, shall
have and exercise any of such powers and duties relating to the
determination and payment of just compensation: _Provided_, That any
person dissatisfied with any decision of the board shall have the same
right to sue the United States as he would have had if the decision had
been made by the President of the United States under the Acts hereby
repealed.
SEC. 3. (a) That section 3 of the "Shipping Act, 1916," is amended to
read as follows:
"SEC. 3. That a board is hereby created to be known as the United States
Shipping Board and hereinafter referred to as the board. The board shall
be composed of seven commissioners, to be appointed by the President, by
and with the advice and consent of the Senate; and the President shall
designate the member to act as chairman of the board, and the board may
elect one of its members as vice chairman. Such commissioners shall be
appointed as soon as practicable after the enactment of this Act and
shall continue in office two for a term of one year, and the remaining
five for terms of two, three, four, five, and six years, respectively,
from the date of their appointment, the term of each to be designated by
the President, but their successors shall be appointed for terms of six
years, except that any person chosen to fill a vacancy shall be
appointed only for the unexpired term of the commissioner whom he
succeeds.
"The commissioners shall be appointed with due regard to their fitness
for the efficient discharge of the duties imposed on them by this Act,
and two shall be appointed from the States touching the Pacific Ocean,
two from the States touching the Atlantic Ocean, one from the States
touching the Gulf of Mexico, one from the States touching the Great
Lakes and one from the interior, but not more than one shall be
appointed from the same State. Not more than four of the commissioners
shall be appointed from the same political party. A vacancy in the board
shall be filled in the same manner as the original appointments. No
commissioner shall take any part in the consideration or decision of any
claim or particular controversy in which he has a pecuniary interest.
"Each commissioner shall devote his time to the duties of his office,
and shall not be in the employ of or hold any official relation to any
common carrier or other person subject to this Act, nor while holding
such office acquire any stock or bonds thereof or become pecuniarily
interested in any such carrier.
"The duties of the board may be so divided that under its supervision
the directorship of various activities may be assigned to one or more
commissioners. Any commissioner may be removed by the President for
inefficiency, neglect of duty, or malfeasance in office. A vacancy in
the board shall not impair the right of the remaining members of the
board to exercise all its powers. The board shall have an official seal,
which shall be judicially noticed.
"The board may adopt rules and regulations in regard to its procedure
and the conduct of its business. The board may employ within the limits
of appropriations made therefor by Congress such attorneys as it finds
necessary for proper legal service to the board in the conduct of its
work, or for proper representation of the public interest in
investigations made by it or proceedings pending before it whether at
the board's own instance or upon complaint, or to appear for or
represent the board in any case in court or other tribunal. The board
shall have such other rights and perform such other duties not
inconsistent with the Merchant Marine Act, 1920, as are conferred by
existing law upon the board in existence at the time this section as
amended takes effect.
"The commissioners in office at the time this section as amended takes
effect shall hold office until all the commissioners provided for in
this section as amended are appointed and qualify."
(b) The first sentence of section 4 of the "Shipping Act, 1916," is
amended to read as follows:
"SEC. 4. That each member of the board shall receive a salary of $12,000
per annum."
SEC. 4. That all vessels and other property or interests of whatsoever
kind, including vessels or property in course of construction or
contracted for, acquired by the President through any agencies
whatsoever in pursuance of authority conferred by the Acts or parts of
Acts repealed by section 2 of this Act, or in pursuance of the joint
resolution entitled "Joint resolution authorizing the President to take
over for the United States the possession and title of any vessel within
its jurisdiction, which at the time of coming therein was owned in whole
or in part by any corporation, citizen, or subject of any nation with
which the United States may be at war, or was under register of any such
nation, and for other purposes," approved May 12, 1917, with the
exception of vessels and property the use of which is in the opinion of
the President required by any other branch of the Government service of
the United States, are hereby transferred to the board: _Provided_, That
all vessels in the military and naval service of the United States,
including the vessels assigned to river and harbor work, inland
waterways, or vessels for such needs in the course of construction or
under contract by the War Department, shall be exempt from the
provisions of this Act.
SEC. 5. That in order to accomplish the declared purposes of this Act,
and to carry out the policy declared in section 1 hereof, the board is
authorized and directed to sell, as soon as practicable, consistent with
good business methods and the objects and purposes to be attained by
this Act, at public or private competitive sale after appraisement and
due advertisement, to persons who are citizens of the United States
except as provided in section 6 of this Act, all of the vessels referred
to in section 4 of this Act or otherwise acquired by the board. Such
sale shall be made at such prices and on such terms and conditions as
the board may prescribe, but the completion of the payment of the
purchase price and interest shall not be deferred more than fifteen
years after the making of the contract of sale. The board in fixing or
accepting the sale price of such vessels shall take into consideration
the prevailing domestic and foreign market price of, the available
supply of, and the demand for vessels, existing freight rates and
prospects of their maintenance, the cost of constructing vessels of
similar types under prevailing conditions, as well as the cost of the
construction or purchase price of the vessels to be sold, and any other
facts or conditions that would influence a prudent, solvent business man
in the sale of similar vessels or property which he is not forced to
sell. All sales made under the authority of this Act shall be subject to
the limitations and restrictions of section 9 of the "Shipping Act,
1916," as amended.
SEC. 6. That the board is authorized and empowered to sell to aliens, at
such prices and on such terms and conditions as it may determine, not
inconsistent with the provisions of section 5 (except that completion of
the payment of the purchase price and interest shall not be deferred
more than ten years after the making of the contract of sale), such
vessels as it shall, after careful investigation, deem unnecessary to
the promotion and maintenance of an efficient American merchant marine;
but no such sale shall be made unless the board, after diligent effort,
has been unable to sell, in accordance with the terms and conditions of
section 5, such vessels to persons citizens of the United States, and
has, upon an affirmative vote of not less than five of its members,
spread upon the minutes of the board, determined to make such sale; and
it shall make as a part of its records a full statement of its reasons
for making such sale. Deferred payments of purchase price of vessels
under this section shall bear interest at the rate of not less than
5-1/2 per centum per annum, payable semiannually.
SEC. 7. That the board is authorized and directed to investigate and
determine as promptly as possible after the enactment of this Act and
from time to time thereafter what steamship lines should be established
and put in operation from ports in the United States or any Territory,
District, or possession thereof to such world and domestic markets as in
its judgment are desirable for the promotion, development, expansion,
and maintenance of the foreign and coastwise trade of the United States
and an adequate postal service, and to determine the type, size, speed,
and other requirements of the vessels to be employed upon such lines and
the frequency and regularity of their sailings, with a view to
furnishing adequate, regular, certain, and permanent service. The board
is authorized to sell, and if a satisfactory sale can not be made, to
charter such of the vessels referred to in section 4 of this Act or
otherwise acquired by the board, as will meet these requirements to
responsible persons who are citizens of the United States who agree to
establish and maintain such lines upon such terms of payment and other
conditions as the board may deem just and necessary to secure and
maintain the service desired; and if any such steamship line is deemed
desirable and necessary, and if no such citizen can be secured to supply
such service by the purchase or charter of vessels on terms satisfactory
to the board, the board shall operate vessels on such line until the
business is developed so that such vessels may be sold on satisfactory
terms and the service maintained, or unless it shall appear within a
reasonable time that such line can not be made self-sustaining. 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: _Provided_,
That preference in the sale or assignment of vessels for operation on
such steamship lines shall be given to persons who are citizens of the
United States who have the support, financial and otherwise, of the
domestic communities primarily interested in such lines if the board is
satisfied of the ability of such persons to maintain the service desired
and proposed to be maintained, or to persons who are citizens of the
United States who may then be maintaining a service from the port of the
United States to or in the general direction of the world market port to
which the board has determined that such service should be established:
_Provided further_, That where steamship lines and regular service have
been established and are being maintained by ships of the board at the
time of the enactment of this Act, such lines and service shall be
maintained by the board until, in the opinion of the board, the
maintenance thereof is unbusinesslike and against the public interests:
_And provided further_, That whenever the board shall determine, as
provided in this Act, that trade conditions warrant the establishment of
a service or additional service under Government administration where a
service is already being given by persons, citizens of the United
States, the rates and charges for such Government service shall not be
less than the cost thereof, including a proper interest and depreciation
charge on the value of Government vessels and equipment employed therein.
SEC. 8. That it shall be the duty of the board, in coöperation with the
Secretary of War, with the object of promoting, encouraging, and
developing ports and transportation facilities in connection with water
commerce over which it has jurisdiction, to investigate territorial
regions and zones tributary to such ports, taking into consideration the
economies of transportation by rail, water and highway and the natural
direction of the flow of commerce; to investigate the causes of the
congestion of commerce at ports and the remedies applicable thereto; to
investigate the subject of water terminals, including the necessary
docks, warehouses, apparatus, equipment, and appliances in connection
therewith, with a view to devising and suggesting the types most
appropriate for different locations and for the most expeditious and
economical transfer or interchange of passengers or property between
carriers by water and carriers by rail; to advise with communities
regarding the appropriate location and plan of construction of wharves,
piers, and water terminals; to investigate the practicability and
advantages of harbor, river, and port improvements in connection with
foreign and coastwise trade; and to investigate any other matter that
may tend to promote and encourage the use by vessels of ports adequate
to care for the freight which would naturally pass through such ports:
_Provided_, That if after such investigation the board shall be of the
opinion that rates, charges, rules, or regulations of common carriers by
rail subject to the jurisdiction of the Interstate Commerce Commission
are detrimental to the declared object of this section, or that new
rates, charges, rules, or regulations, new or additional port terminal
facilities, or affirmative action on the part of such common carriers by
rail is necessary to promote the objects of this section, the board may
submit its findings to the Interstate Commerce Commission for such
action as such commission may consider proper under existing law.
SEC. 9. That if the terms and conditions of any sale of a vessel made
under the provisions of this Act include deferred payments of the
purchase price, the board shall require, as part of such terms and
conditions, that the purchaser of the vessel shall keep the same insured
(a) against loss or damage by fire, and against marine risks and
disasters, and war and other risks if the board so specifies, with such
insurance companies, associations or underwriters, and under such forms
of policies, and to such an amount, as the board may prescribe or
approve; and (b) by protection and indemnity insurance with such
insurance companies, associations, or underwriters and under such forms
of policies, and to such an amount as the board may prescribe or
approve. The insurance required to be carried under this section shall
be made payable to the board and/or to the parties as interest may
appear. The board is authorized to enter into any agreement that it
deems wise in respect to the payment and/or the guarantee of premiums of
insurance.
SEC. 10. That the board may create out of net revenue from operations
and sales, and maintain and administer, a separate insurance fund, which
it may use to insure in whole or in part, against all hazards commonly
covered by insurance policies in such cases, any interest of the United
States (1) in any vessel, either constructed or in process of
construction, and (2) in any plants or materials heretofore or hereafter
acquired by the board or hereby transferred to the board.
SEC. 11. That during a period of five years from the enactment of this
Act the board may annually set aside out of the revenues from sales and
operations a sum not exceeding $25,000,000, to be known as its
construction loan fund, to be used in aid of the construction of vessels
of the best and most efficient type for the establishment and
maintenance of service on steamship lines deemed desirable and necessary
by the board, and such vessels shall be equipped with the most modern,
the most efficient and the most economical machinery and commercial
appliances. The board shall use such fund to the extent required upon
such terms as the board may prescribe to aid persons, citizens of the
United States, in the construction by them in private shipyards in the
United States of the foregoing class of vessels. No aid shall be for a
greater sum than two-thirds of the cost of the vessel or vessels to be
constructed, and the board shall require such security, including a
first lien upon the entire interest in the vessel or vessels so
constructed as it shall deem necessary to insure the repayment of such
sum with interest thereon and the maintenance of the service for which
such vessel or vessels are built.
SEC. 12. That all vessels may be reconditioned and kept in suitable
repair and until sold shall be managed and operated by the board or
chartered or leased by it on such terms and conditions as the board
shall deem wise for the promotion and maintenance of an efficient
merchant marine, pursuant to the policy and purposes declared in
sections 1 and 5 of this Act; and the United States Shipping Board
Emergency Fleet Corporation shall continue in existence and have
authority to operate vessels, unless otherwise directed by law, until
all vessels are sold in accordance with the provisions of this Act, the
provision in section 11 of the "Shipping Act, 1916," to the contrary
notwithstanding.
SEC. 13. That the board is further authorized to sell all property other
than vessels transferred to it under section 4 upon such terms and
conditions, as the board may determine and prescribe.
SEC. 14. That the net proceeds derived by the board prior to July 1,
1921, from any activities authorized by this Act, or by the "Shipping
Act, 1916," or by the Acts specified in section 2 of this Act, except
such an amount as the board shall deem necessary to withhold as
operating capital, for the purposes of section 12 hereof, and for the
insurance fund authorized in section 10 hereof, and for the construction
loan fund authorized in section 11 hereof, shall be covered into the
Treasury of the United States to the credit of the board and may be
expended by it, within the limits of the amounts heretofore or hereafter
authorized, for the construction, requisitioning, or purchasing of
vessels. After July 1, 1921, such net proceeds, less such an amount as
may be authorized annually by Congress to be withheld as operating
capital, and less such sums as may be needed for such insurance and
construction loan funds, shall be covered into the Treasury of the
United States as miscellaneous receipts. The board shall, as rapidly as
it deems advisable, withdraw investment of Government funds made during
the emergency under the authority conferred by the Acts or parts of Acts
repealed by section 2 of this Act and cover the net proceeds thereof
into the Treasury of the United States as miscellaneous receipts.
SEC. 15. That the board shall not require payment from the War
Department for the charter hire of vessels owned by the United States
Government furnished by the board from July 1, 1918, to June 30, 1919,
inclusive, for the use of such department.
SEC. 16. That all authorization to purchase, build, requisition, lease,
exchange, or otherwise acquire houses, buildings or land under the Act
entitled "An Act to authorize and empower the United States Shipping
Board Emergency Fleet Corporation to purchase, lease, requisition, or
otherwise acquire, and to sell or otherwise dispose of improved or
unimproved lands, houses, buildings, and for other purposes," approved
March 1, 1918, is hereby terminated: _Provided, however_, That
expenditures may be made under said Act for the repair of houses and
buildings already constructed, and the completion of such houses or
buildings as have heretofore been contracted for or are under
construction, if considered advisable, and the board is authorized and
directed to dispose of all such properties or the interest of the United
States in all such properties at as early a date as practicable,
consistent with good business and the best interests of the United
States.
SEC. 17. That the board is authorized and directed to take over on
January 1, 1921, the possession and control of, and to maintain and
develop, all docks, piers, warehouses, wharves and terminal equipment
and facilities, including all leasehold easements, rights of way,
riparian rights and other rights, estates and interests therein or
appurtenant thereto, 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.
The possession and control of such other docks, piers, warehouses,
wharves and terminal equipment and facilities or parts thereof,
including all leasehold easements, rights of way, riparian rights and
other rights, estates or interests therein or appurtenant thereto which
were acquired by the War Department or the Navy Department for military
or naval purposes during the war emergency may be transferred by the
President to the board whenever the President deems such transfer to be
for the best interests 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 board under this section to the War
Department or the Navy Department 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 board. None of such
property shall be sold except as may be hereafter provided by law.
SEC. 18. That section 9 of the "Shipping Act, 1916," is amended to read
as follows:
"SEC. 9. That any vessel purchased, chartered, or leased from the board,
by persons who are citizens of the United States, may be registered or
enrolled and licensed, or both registered and enrolled and licensed, as
a vessel of the United States and entitled to the benefits and
privileges appertaining thereto: _Provided_, That foreign-built vessels
admitted to American registry or enrollment and license under this Act,
and vessels owned by any corporation in which the United States is a
stockholder, and vessels sold, leased, or chartered by the board to any
person a citizen of the United States, as provided in this Act, may
engage in the coastwise trade of the United States while owned, leased,
or chartered by such a person.
"Every vessel purchased, chartered, or leased from the board shall,
unless otherwise authorized by the board, be operated only under such
registry or enrollment and license. Such vessels while employed solely
as merchant vessels shall be subject to all laws, regulations, and
liabilities governing merchant vessels, whether the United States be
interested therein as owner, in whole or in part, or hold any mortgage,
lien, or other interest therein.
"It shall be unlawful to sell, transfer or mortgage, or, except under
regulations prescribed by the board, to charter, any vessel purchased
from the board or documented under the laws of the United States to any
person not a citizen of the United States, or to put the same under a
foreign registry or flag, without first obtaining the board's approval.
"Any vessel chartered, sold, transferred or mortgaged to a person not a
citizen of the United States or placed under a foreign registry or flag,
or operated, in violation of any provision of this section shall be
forfeited to the United States, and whoever violates any provision of
this section shall be guilty of a misdemeanor and subject to a fine of
not more than $5,000, or to imprisonment for not more than five years,
or both."
SEC. 19. (1) The board is authorized and directed in aid of the
accomplishment of the purposes of this Act
(a) To make all necessary rules and regulations to carry out the
provisions of this Act;
(b) To make rules and regulations affecting shipping in the foreign
trade not in conflict with law in order to adjust or meet general or
special conditions unfavorable to shipping in the foreign trade, whether
in any particular trade or upon any particular route or in commerce
generally and which arise out of or result from foreign laws, rules, or
regulations or from competitive methods or practices employed by owners,
operators, agents, or masters of vessels of a foreign country; and
(c) To request the head of any department, board, bureau, or agency of
the Government to suspend, modify, or annul rules or regulations which
have been established by such department, board, bureau, or agency, or
to make new rules or regulations affecting shipping in the foreign trade
other than such rules or regulations relating to the Public Health
Service, the Consular Service, and the Steamboat Inspection Service.
(2) No rule or regulation shall hereafter be established by any
department, board, bureau, or agency of the Government which affect
shipping in the foreign trade, except rules or regulations affecting the
Public Health Service, the Consular Service, and the Steamboat
Inspection Service, until such rule or regulation has been submitted to
the board for its approval and final action has been taken thereon by
the board or the President.
(3) Whenever the head of any department, board, bureau, or agency of the
Government refuses to suspend, modify, or annul any rule or regulation,
or make a new rule or regulation upon request of the board, as provided
in subdivision (c) of paragraph (1) of this section, or objects to the
decision of the board in respect to the approval of any rule or
regulation, as provided in paragraph (2) of this section, either the
board or the head of the department, board, bureau, or agency which has
established or is attempting to establish the rule or regulation in
question may submit the facts to the President, who is hereby authorized
to establish or suspend, modify, or annul such rule or regulation.
(4) No rule or regulation shall be established which in any manner gives
vessels owned by the United States any preference or favor over those
vessels documented under the laws of the United States and owned by
persons who are citizens of the United States.
SEC. 20. (1) That section 14 of the Shipping Act, 1916, as amended, is
amended to read as follows:
"SEC. 14. That no common carrier by water shall, directly or indirectly,
in respect to the transportation by water of passengers or property
between a port of a State, Territory, District, or possession of the
United States and any other such port or a port of a foreign country,--
"First. Pay, or allow, or enter into any combination, agreement, or
understanding, express or implied, to pay or allow, a deferred rebate to
any shipper. The term 'deferred rebate' in this Act means a return of
any portion of the freight money by a carrier to any shipper as a
consideration for the giving of all or any portion of his shipments to
the same or any other carrier, or for any other purpose, the payment of
which is deferred beyond the completion of the service for which it is
paid, and is made only if, during both the period for which computed and
the period of deferment, the shipper has complied with the terms of the
rebate agreement or arrangement.
"Second. Use a fighting ship either separately or in conjunction with
any other carrier, through agreement or otherwise. The term 'fighting
ship' in this Act means a vessel used in a particular trade by a carrier
or group of carriers for the purpose of excluding, preventing or
reducing competition by driving another carrier out of said trade.
"Third. Retaliate against any shipper by refusing, or threatening to
refuse, space accommodations when such are available, or resort to other
discriminating or unfair methods, because such shipper has patronized
any other carrier or has filed a complaint charging unfair treatment, or
for any other reason.
"Fourth. Make any unfair or unjustly discriminatory contract with any
shipper based on the volume of freight offered, or unfairly treat or
unjustly discriminate against any shipper in the matter of (a) cargo
space accommodations or other facilities, due regard being had for the
proper loading of the vessel and the available tonnage; (b) the loading
and landing of freight in proper condition; or (c) the adjustment and
settlement of claims.
"Any carrier who violates any provision of this section shall be guilty
of a misdemeanor punishable by a fine of not more than $25,000 for each
offense."
(2) The Shipping Act, 1916, as amended, is amended by inserting after
section 14 a new section to read as follows:
"SEC. 14A. The board upon its own initiative may, or upon complaint
shall, after due notice to all parties in interest and hearing,
determine whether any person, not a citizen of the United States and
engaged in transportation by water of passengers or property--
"(1) Has violated any provision of section 14, or
"(2) Is a party to any combination, agreement, or understanding, express
or implied, that involves in respect to transportation of passengers or
property between foreign ports, deferred rebates or any other unfair
practice designated in section 14, and that excludes from admission upon
equal terms with all other parties thereto, a common carrier by water
which is a citizen of the United States and which has applied for such
admission.
"If the board determines that any such person has violated any such
provision or is a party to any such combination, agreement, or
understanding, the board shall thereupon certify such fact to the
Secretary of Commerce. The Secretary shall thereafter refuse such person
the right of entry for any ship owned or operated by him or by any
carrier directly or indirectly controlled by him, into any port of the
United States, or any Territory, District, or possession thereof, until
the board certifies that the violation has ceased or such combination,
agreement, or understanding has been terminated."
SEC. 21. That from and after February 1, 1922, the coastwise laws of the
United States shall extend to the island Territories and possessions of
the United States not now covered thereby, and the board is directed
prior to the expiration of such year to have established adequate
steamship service at reasonable rates to accommodate the commerce and
the passenger travel of said islands and to maintain and operate such
service until it can be taken over and operated and maintained upon
satisfactory terms by private capital and enterprise: _Provided_, That
if adequate shipping service is not established by February 1, 1922, the
President shall extend the period herein allowed for the establishment
of such service in the case of any island Territory or possession for
such time as may be necessary for the establishment of adequate shipping
facilities therefor: _Provided further_, That until Congress shall have
authorized the registry as vessels of the United States of vessels owned
in the Philippine Islands, the Government of the Philippine Islands is
hereby authorized to adopt, from time to time, and enforce regulations
governing the transportation of merchandise and passengers between ports
or places in the Philippine Archipelago: _And provided further_, That
the foregoing provisions of this section shall not take effect with
reference to the Philippine Islands until the President of the United
States after a full investigation of the local needs and conditions
shall, by proclamation, declare that an adequate shipping service has
been established as herein provided and fix a date for the going into
effect of the same.
SEC. 22. That the Act entitled "An Act giving the United States Shipping
Board power to suspend present provisions of law and permit vessels of
foreign registry and foreign-built vessels admitted to American registry
under the Act of August 18, 1914, to engage in the coastwise trade
during the present war and for a period of one hundred and twenty days
thereafter, except the coastwise trade with Alaska," approved October 6,
1917, is hereby repealed: _Provided_, That all foreign-built vessels
admitted to American registry, owned on February 1, 1920, by persons
citizens of the United States, and all foreign-built vessels owned by
the United States at the time of the enactment of this Act, when sold
and owned by persons citizens of the United States, may engage in the
coastwise trade so long as they continue in such ownership, subject to
the rules and regulations of such trade: _Provided_, That the board is
authorized to issue permits for the carrying of passengers in foreign
ships if it deems it necessary so to do, operating between the Territory
of Hawaii and the Pacific Coast up to February 1, 1922.
SEC. 23. That the owner of a vessel documented under the laws of the
United States and operated in foreign trade shall, for each of the ten
taxable years while so operated, beginning with the first taxable year
ending after the enactment of this Act, be allowed as a deduction for
the purpose of ascertaining his net income subject to the war-profits
and excess-profits taxes imposed by Title III of the Revenue Act of 1918
an amount equivalent to the net earnings of such vessel during such
taxable year, determined in accordance with rules and regulations to be
made by the board: _Provided_, That such owner shall not be entitled to
such deduction unless during such taxable year he invested, or set aside
under rules and regulations to be made by the board in a trust fund for
investment, in the building in shipyards in the United States of new
vessels of a type and kind approved by the board, an amount, to be
determined by the Secretary of the Treasury and certified by him to the
board, equivalent to the war-profits and excess-profits taxes that would
have been payable by such owner on account of the net earnings of such
vessels but for the deduction allowed under the provisions of this
section: _Provided further_, That at least two-thirds of the cost of any
vessel constructed under this paragraph shall be paid for out of the
ordinary funds or capital of the person having such vessel constructed.
That during the period of ten years from the enactment of this Act any
person a citizen of the United States who may sell a vessel documented
under the laws of the United States and built prior to January 1, 1914,
shall be exempt from all income taxes that would be payable upon any of
the proceeds of such sale under Title I, Title II, and Title III of the
Revenue Act of 1918 if the entire proceeds thereof shall be invested in
the building of new ships in American shipyards, such ships to be
documented under the laws of the United States and to be of a type
approved by the board.
SEC. 24. That all mails of the United States shipped or carried on
vessels shall, if practicable, be shipped or carried on American-built
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. The
board and the Postmaster General, in aid of the development of a
merchant marine adequate to provide for the maintenance and expansion of
the foreign or coastwise trade of the United States and of a
satisfactory postal service in connection therewith, shall from time to
time determine the just and reasonable rate of compensation to be paid
for such service, and the Postmaster General is hereby authorized to
enter into contracts within the limits of appropriations made therefor
by Congress to pay for the carrying of such mails in such vessels at
such rate. Nothing herein shall be affected by 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.
SEC. 25. That for the classification of vessels owned by the United
States, and for such other purposes in connection therewith as are the
proper functions of a classification bureau, all departments, boards,
bureaus, and commissions of the Government are hereby directed to
recognize the American Bureau of Shipping as their agency so long as the
American Bureau of Shipping continues to be maintained as an
organization which has no capital stock and pays no dividends:
_Provided_, That the Secretary of Commerce and the chairman of the board
shall each appoint one representative who shall represent the Government
upon the executive committee of the American Bureau of Shipping, and the
bureau shall agree that these representatives shall be accepted by them
as active members of such committee. Such representatives of the
Government shall serve without any compensation, except necessary
traveling expenses: _Provided further_, That the official list of
merchant vessels published by the Government shall hereafter contain a
notation clearly indicating all vessels classed by the American Bureau
of Shipping.
SEC. 26. That cargo vessels documented under the laws of the United
States may carry not to exceed sixteen persons in addition to the crew
between any ports or places in the United States or its Districts,
Territories, or possessions, or between any such port or place and any
foreign port, or from any foreign port to another foreign port, and such
vessels shall not be held to be "passenger vessels" or "vessels carrying
passengers" within the meaning of the inspection laws and the rules and
regulations thereunder: _Provided_, That nothing herein shall be taken
to exempt such vessels from the laws, rules, and regulations respecting
life-saving equipment: _Provided further_, That when any such vessel
carries persons other than the crew as herein provided for, the owner,
agent, or master of the vessel shall first notify such persons of the
presence on board of any dangerous articles, as defined by law, or of
any other condition or circumstances which would constitute a risk of
safety for passenger or crew.
The privilege bestowed by this section on vessels of the United States
shall be extended insofar as the foreign trade is concerned to the cargo
vessels of any nation which allows the like privilege to cargo vessels
of the United States in trades not restricted to vessels under its own
flag.
Failure on the part of the owner, agent, or master of the vessel to give
such notice shall subject the vessel to a penalty of $500, which may be
mitigated or remitted by the Secretary of Commerce upon a proper
representation of the facts.
SEC. 27. That no merchandise shall be transported by water, or by land
and water, on penalty of forfeiture thereof, between points in the
United States, including Districts, Territories, and possessions thereof
embraced within the coastwise laws, either directly or via a foreign
port, or for any part of the transportation, in any other vessel than a
vessel built in and documented under the laws of the United States and
owned by persons who are citizens of the United States, or vessels to
which the privilege of engaging in the coastwise trade is extended by
sections 18 or 22 of this Act: _Provided_, That this section shall not
apply to merchandise transported between points within the continental
United States, excluding Alaska, over through routes heretofore or
hereafter recognized by the Interstate Commerce Commission for which
routes rate tariffs have been or shall hereafter be filed with said
commission when such routes are in part over Canadian rail lines and
their own or other connecting water facilities: _Provided further_, That
this section shall not become effective upon the Yukon river until the
Alaska Railroad shall be completed and the Shipping Board shall find
that proper facilities will be furnished for transportation by persons
citizens of the United States for properly handling the traffic.
SEC. 28. That no common carrier shall charge, collect, or receive, for
transportation subject to the Interstate Commerce Act of persons or
property, under any joint rate, fare, or charge, or under any export,
import, or other proportional rate, fare, or charge, which is based in
whole, or in part on the fact that the persons or property affected
thereby is to be transported to, or has been transported from, any port
in a possession or dependency of the United States, or in a foreign
country, by a carrier by water in foreign commerce, any lower rate,
fare, or charge than that charged, collected, or received by it for the
transportation of persons, or of a like kind of property, for the same
distance, in the same direction, and over the same route, in connection
with commerce wholly within the United States, unless the vessel so
transporting such persons or property is, or unless it was at the time
of such transportation by water, documented under the laws of the United
States. Whenever the board is of the opinion, however, that adequate
shipping facilities to or from any port in a possession or dependency of
the United States or a foreign country are not afforded by vessels so
documented, it shall certify this fact to the Interstate Commerce
Commission, and the commission may, by order, suspend the operation of
the provisions of this section with respect to the rates, fares, and
charges for the transportation by rail of persons and property
transported from, or to be transported, to such ports, for such length
of time and under such terms and conditions as it may prescribe in such
order, or in any order supplemental thereto. Such suspension of
operation of the provisions of this section may be terminated by order
of the commission whenever the board is of the opinion that adequate
shipping facilities by such vessels to such ports are afforded and shall
so certify to the commission.
SEC. 29. (a) That whenever used in this section--
(1) The term "association" means any association, exchange, pool,
combination, or other arrangement for concerted action; and
(2) The term "marine insurance companies" means any persons, companies,
or associations, authorized to write marine insurance or reinsurance
under the laws of the United States or of a State, Territory, District,
or possession thereof.
(b) Nothing contained in the "antitrust laws" as designated in section 1
of the Act entitled "An Act to supplement existing laws against unlawful
restraints and monopolies, and for other purposes," approved October 15,
1914, shall be construed as declaring illegal an association entered
into by marine insurance companies for the following purposes: To
transact a marine insurance and reinsurance business in the United
States and in foreign countries and to reinsure or otherwise apportion
among its membership the risks undertaken by such association or any of
the component members.
SEC. 30. Subsection A. That this section may be cited as the "Ship
Mortgage Act, 1920."
DEFINITIONS.
Subsection B. When used in this section--
(1) The term "document" includes registry and enrollment and license;
(2) The term "documented" means registered or enrolled or licensed under
the laws of the United States, whether permanently or temporarily;
(3) The term "port of documentation" means the port at which the vessel
is documented, in accordance with law;
(4) The term "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 board; and
(5) The term "mortgagee," in the case of a mortgage involving a trust
deed and a bond issue thereunder, means the trustee designated in such
deed.
RECORDING OF SALES, CONVEYANCES, AND MORTGAGES OF VESSELS OF THE UNITED
STATES.
Subsection C. (a) No sale, conveyance, or mortgage which, at the time
such sale, conveyance, or mortgage is made, includes a vessel of the
United States, or any portion thereof, as the whole or any part of the
property sold, conveyed, or mortgaged shall be valid, in respect to such
vessel, against any person other than the grantor or mortgagor, his heir
or devisee, and a person having actual notice thereof, until such bill
of sale, conveyance, or mortgage is recorded in the office of the
collector of customs of the port of documentation of such vessel, as
provided in subdivision (b) of this subsection.
(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.
Subsection D. (a) A valid mortgage which, at the time it is made
includes the whole of any vessel of the United States of 200 gross tons
and upwards, shall in addition have, in respect to such vessel and as of
the date of the compliance with all the provisions of this subdivision,
the preferred status given by the provisions of subsection M, if--
(1) The mortgage is indorsed upon the vessel's documents in accordance
with the provisions of this section;
(2) The mortgage is recorded as provided in subsection C, together with
the time and date when the mortgage is so indorsed;
(3) 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;
(4) The mortgage does not stipulate that the mortgagee waives the
preferred status thereof; and
(5) The mortgagee is a citizen of the United States.
(b) Any mortgage which complies in respect to any vessel with the
conditions enumerated in this subsection is hereafter in this section
called a "preferred mortgage" as to such vessel.
(c) There shall be indorsed upon the documents of a vessel covered by a
preferred mortgage--
(1) The name of the mortgagor and mortgagee;
(2) The time and date the indorsement is made;
(3) The amount and date of maturity of the mortgage; and
(4) Any amount required to be indorsed by the provisions of subdivision
(e) or (f) of this subsection.
(d) Such indorsement 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 indorsement by the collector of
customs of the port of documentation; and no clearance shall be issued
to the vessel until such indorsement 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 indorsement shall be transferred to and indorsed upon
the new document by the collector of customs.
(e) A mortgage which includes property other than a vessel shall not be
held a preferred mortgage unless the mortgage provides for the separate
discharge of such property by the payment of a specified portion of the
mortgage indebtedness. If a preferred mortgage so provides for the
separate discharge, the amount of the portion of such payment shall be
indorsed upon the documents of the vessel.
(f) If a preferred mortgage includes more than one vessel and provides
for the separate discharge of each vessel by the payment of a portion of
the mortgage indebtedness, the amount of such portion of such payment
shall be indorsed upon the documents of the vessel. In case such
mortgage does not provide for the separate discharge of a vessel and the
vessel is to be sold upon the order of a district court of the United
States in a suit in rem in admiralty, the court shall determine the
portion of the mortgage indebtedness increased by 20 per centum (1)
which, in the opinion of the court, the approximate value of the vessel
bears to the approximate value of all the vessels covered by the
mortgage, and (2) upon the payment of which the vessel shall be
discharged from the mortgage.
Subsection E. The collector of customs upon the recording of a preferred
mortgage shall deliver two certified copies thereof to the mortgagor who
shall place, and use due diligence to retain, one copy on board the
mortgaged vessel and cause such copy and the documents of the vessel to
be exhibited by the master to any person having business with the
vessel, which may give rise to a maritime lien upon the vessel or to the
sale, conveyance, or mortgage thereof. The master of the vessel shall,
upon the request of any such person, exhibit to him the documents of the
vessel and the copy of any preferred mortgage of the vessel placed on
board thereof.
Subsection F. The mortgagor (1) shall, upon request of the mortgagee,
disclose in writing to him prior to the execution of any preferred
mortgage, the existence of any maritime lien, prior mortgage, or other
obligation or liability upon the vessel to be mortgaged, that is known
to the mortgagor, and (2), without the consent of the mortgagee, shall
not incur, after the execution of such mortgage and before the mortgagee
has had a reasonable time in which to record the mortgage and have
indorsements in respect thereto made upon the documents of the vessel,
any contractual obligation creating a lien upon the vessel other than a
lien for wages of stevedores when employed directly by the owner,
operator, master, ship's husband, or agent of the vessel, for wages of
the crew of the vessel, for general average, or for salvage, including
contract salvage, in respect to the vessel.
Subsection G. (a) The collector of customs of the port of documentation
shall, upon the request of any person, record notice of his claim of a
lien upon a vessel covered by a preferred mortgage, together with the
nature, date of creation, and amount of the lien, and the name and
address of the person. Any person who has caused notice of his claim of
lien to be so recorded shall, upon a discharge in whole or in part of
the indebtedness, forthwith file with the collector of customs a
certificate of such discharge. The collector of customs shall thereupon
record the certificate.
(b) The mortgagor, upon a discharge in whole or in part of the mortgage
indebtedness, shall forthwith file with the collector of customs for the
port of documentation of the vessel, a certificate of such discharge.
Such collector of customs shall thereupon record the certificate. In
case of a vessel covered by a preferred mortgage, the collector of
customs at the port of documentation shall (1) indorse upon the
documents of the vessel, or direct the collector of customs at any port
in which the vessel is found, to so indorse, the fact of such discharge,
and (2) shall deny clearance to the vessel until such indorsement is
made.
Subsection H. (a) No bill of sale, conveyance, or mortgage shall be
recorded unless it states the interest of the grantor or mortgagor in
the vessel, and the interest so sold, conveyed, or mortgaged.
(b) No bill of sale, conveyance, mortgage, notice of claim of lien, or
certificate of discharge thereof, shall be recorded unless previously
acknowledged before a notary public or other officer authorized by a law
of the United States, or of a State, Territory, District, or possession
thereof, to take acknowledgment of deeds.
(c) In case of a change in the port of documentation of a vessel of the
United States, no bill of sale, conveyance, or mortgage shall be
recorded at the new port of documentation unless there is furnished to
the collector of customs of such port, together with the copy of the
bill of sale, conveyance, or mortgage to be recorded, a certified copy
of the record of the vessel at the former port of documentation
furnished by the collector of such port. The collector of customs at the
new port of documentation is authorized and directed to record such
certified copy.
(d) A preferred mortgage may bear such rate of interest as is agreed by
the parties thereto.
Subsection I. Each collector of customs shall permit records made under
the provisions of this section to be inspected during office hours,
under such reasonable regulations as the collector may establish. Upon
the request of any person the collector of customs shall furnish him
from the records of the collector's office (1) a certificate setting
forth the names of the owners of any vessel, the interest held by each
owner, and the material facts as to any bill of sale or conveyance of,
any mortgage covering, or any lien or other incumbrance upon, a
specified vessel, (2) a certified copy of any bill of sale, conveyance,
mortgage, notice of claim of lien, or certificate of discharge in
respect to such vessel, or (3) a certified copy as required by
subdivision (c) of subsection H. The collector of customs shall collect
a fee for any bill of sale, conveyance, or mortgage recorded, or any
certificate or certified copy furnished, by him, in the amount of 20
cents a folio with a minimum charge of $1.00. All such fees shall be
covered into the Treasury of the United States as miscellaneous receipts.
PENALTIES.
Subsection J. (a) If the master of the vessel willfully fails to exhibit
the documents of the vessel or the copy of any preferred mortgage
thereof, as required by subsection E, the board of local inspectors of
vessels having jurisdiction of the license of the master, may suspend or
cancel such license, subject to the provisions of "An Act to provide for
appeals from decision of boards of local inspectors of vessels and for
other purposes," approved June 10, 1918.
(b) A mortgagor who, with intent to defraud, violates any provision of
subsection F, and if the mortgagor is a corporation or association, the
president or other principal executive officer of the corporation or
association, shall upon conviction thereof be held guilty of a
misdemeanor and shall be fined not more than $1,000 or imprisonment not
more than 2 years, or both. The mortgaged indebtedness shall thereupon
become immediately due and payable at the election of the mortgagee.
(c) If any person enters into any contract secured by, or upon the
credit of, a vessel of the United States covered by a preferred
mortgage, and suffers pecuniary loss by reason of the failure of the
collector of customs, or any officer, employee, or agent thereof,
properly to perform any duty required of the collector under the
provisions of this section, the collector of customs shall be liable to
such person for damages in the amount of such loss. If any such person
is caused any such loss by reason of the failure of the mortgagor, or
master of the mortgaged vessel, or any officer, employee, or agent
thereof, to comply with any provision of subsection E or F or to file an
affidavit as required by subdivision (a) of subsection D, correct in
each particular thereof, the mortgagor shall be liable to such person
for damages in the amount of such loss. The district courts of the
United States are given jurisdiction (but not to the exclusion of the
courts of the several States, Territories, Districts, or possessions) of
suits for the recovery of such damages, irrespective of the amount
involved in the suit or the citizenship of the parties thereto. Such
suit shall be begun by personal service upon the defendant within the
limits of the district. Upon judgment for the plaintiff in any such
suit, the court shall include in the judgment an additional amount for
costs of the action and a reasonable counsel's fee, to be fixed by the
court.
FORECLOSURE OF PREFERRED MORTGAGES.
Subsection K. A preferred mortgage shall constitute a lien upon the
mortgaged vessel in the amount of the outstanding mortgage indebtedness
secured by such vessel. Upon the default of any term or condition of the
mortgage, such lien may be enforced by the mortgagee by suit in rem in
admiralty. Original jurisdiction of all such suits is granted to the
district courts of the United States exclusively. In addition to any
notice by publication, actual notice of the commencement of any such
suit shall be given by the libellant, in such manner as the court shall
direct, to (1) the master, other ranking officer, or caretaker of the
vessel, and (2) any person who has recorded a notice of claim of an
undischarged lien upon the vessel, as provided in subsection G, unless
after search by the libellant satisfactory to the court, such mortgagor,
master, other ranking officer, caretaker, or claimant is not found
within the United States. Failure to give notice to any such person, as
required by this subsection, shall not constitute a jurisdictional
defect; but the libellant shall be liable to such person for damages in
the amount of his interest in the vessel terminated by the suit. Suit in
personam for the recovery of such damages may be brought in accordance
with the provisions of subdivision (c) of subsection J.
Subsection L. In any suit in rem in admiralty for the enforcement of the
preferred mortgage lien, the court may appoint a receiver and, in its
discretion, authorize the receiver to operate the mortgaged vessel. The
marshal may be authorized and directed by the court to take possession
of the mortgaged vessel notwithstanding the fact that the vessel is in
the possession or under the control of any person claiming a possessory
common-law lien.
Subsection M. (a) When used hereinafter in this section, the term
"preferred maritime lien" means (1) a lien arising prior in time to the
recording and indorsement of a preferred mortgage in accordance with the
provisions of this section; or (2) a lien for damages arising out of
tort, for wages of a stevedore when employed directly by the owner,
operator, master, ship's husband, or agent of the vessel, for wages of
the crew of the vessel, for general average, and for salvage, including
contract salvage.
(b) Upon the sale of any mortgaged vessel by order of a district court
of the United States in any suit in rem in admiralty for the enforcement
of a preferred mortgage lien thereon, all preëxisting claims in the
vessel, including any possessory common-law lien of which a lienor is
deprived under the provisions of subsection L shall be held terminated
and shall thereafter attach, in like amount and in accordance with their
respective priorities, to the proceeds of the sale; except that the
preferred mortgage lien shall have priority over all claims against the
vessel, except (1) preferred maritime liens, and (2) expenses and fees
allowed and costs taxed, by the court.
Subsection N. (a) Upon the default of any term or condition of a
preferred mortgage upon a vessel, the mortgagee may, in addition to all
other remedies granted by this section, bring suit in personam in
admiralty in a district court of the United States, against the
mortgagor for the amount of the outstanding mortgage indebtedness
secured by such vessel or any deficiency in the full payment thereof.
(b) This section shall not be construed, in the case of a mortgage
covering, in addition to vessels, realty or personalty other than
vessels, or both, to authorize the enforcement by suit in rem in
admiralty of the rights of the mortgagee in respect to such realty or
personalty other than vessels.
TRANSFERS OF MORTGAGED VESSELS AND ASSIGNMENT OF VESSEL MORTGAGES.
Subsection O. (a) The documents of a vessel of the United States covered
by a preferred mortgage may not be surrendered (except in the case of
the forfeiture of the vessel or its sale by the order of any court of
the United States or any foreign country) without the approval of the
board. The board shall refuse such approval unless the mortgagee
consents to such surrender.
(b) The interest of the mortgagee in a vessel of the United States
covered by a mortgage, shall not be terminated by the forfeiture of the
vessel for a violation of any law of the United States, unless the
mortgagee authorized, consented, or conspired to effect the illegal act,
failure, or omission which constituted such violation.
(c) Upon the sale of any vessel of the United States covered by a
preferred mortgage, by order of a district court of the United States in
any suit in rem in admiralty for the enforcement of a maritime lien
other than a preferred maritime lien, the vessel shall be sold free from
all preëxisting claims thereon; but the court shall, upon the request of
the mortgagee, the libellant, or an intervenor, require the purchaser at
such sale to give and the mortgagor to accept a new mortgage of the
vessel for the balance of the term of the original mortgage. The
conditions of such new mortgage shall be the same, so far as
practicable, as those of the original mortgage and shall be subject to
the approval of the court. If such new mortgage is given, the mortgagee
shall not be paid from the proceeds of the sale and the amount payable
as the purchase price shall be held diminished in the amount of the new
mortgage indebtedness.
(d) No rights under a mortgage of a vessel of the United States shall be
assigned to any person not a citizen of the United States without the
approval of the board. Any assignment in violation of any provision of
this section shall be void.
(e) No vessel of the United States shall be sold by order of a district
court of the United States in any suit in rem in admiralty to any person
not a citizen of the United States.
MARITIME LIENS FOR NECESSARIES.
Subsection P. Any person furnishing repairs, supplies, towage, use of
dry dock or marine railway, or other necessaries, to any vessel, whether
foreign or domestic, upon the order of the owner of such vessel, or of a
person authorized by the owner, shall have a maritime lien on the
vessel, which may be enforced by suit in rem, and it shall not be
necessary to allege or prove that credit was given to the vessel.
Subsection Q. The following persons shall be presumed to have authority
from the owner to procure repairs, supplies, towage, use of dry dock or
marine railway, and other necessaries for the vessel: The managing
owner, ship's husband, master, or any person to whom the management of
the vessel at the port of supply is intrusted. No person tortiously or
unlawfully in possession or charge of a vessel shall have authority to
bind the vessel.
Subsection R. The officers and agents of a vessel specified in
subsection Q shall be taken to include such officers and agents when
appointed by a charterer, by an owner pro hac vice, or by an agreed
purchaser in possession of the vessel; but nothing in this section shall
be construed to confer a lien when the furnisher knew, or by exercise of
reasonable diligence could have ascertained, that because of the terms
of a charter party, agreement for sale of the vessel, or for any other
reason, the person ordering the repairs, supplies, or other necessaries
was without authority to bind the vessel therefor.
Subsection S. Nothing in this section shall be construed to prevent the
furnisher of repairs, supplies, towage, use of dry dock or marine
railway, or other necessaries, or the mortgagee, from waiving his right
to a lien, or in the case of a preferred mortgage lien, to the preferred
status of such lien, at any time, by agreement or otherwise; and this
section shall not be construed to affect the rules of law now existing
in regard to (1) the right to proceed against the vessel for advances,
(2) laches in the enforcement of liens upon vessels, (3) the right to
proceed in personam, (4) the rank of preferred maritime liens among
themselves, or (5) priorities between maritime liens and mortgages,
other than preferred mortgages, upon vessels of the United States.
Subsection T. This section shall supersede the provisions of all State
statutes conferring liens on vessels, in so far as such statutes purport
to create rights of action to be enforced by suits in rem in admiralty
against vessels for repairs, supplies, towage, use of dry dock or marine
railway, and other necessaries.
MISCELLANEOUS PROVISIONS.
Subsection U. This section shall not apply (1) to any existing mortgage,
or (2) to any mortgage hereafter placed on any vessel now under an
existing mortgage, so long as such existing mortgage remains
undischarged.
Subsection V. The Secretary of Commerce is authorized and directed to
furnish collectors of customs with all necessary books and records, and
with certificates of registry and of enrollment and license in such form
as provides for the making of all indorsements thereon required by this
section.
Subsection W. The Secretary of Commerce is authorized to make such
regulations in respect to the recording and indorsing of mortgages
covering vessels of the United States, as he deems necessary to the
efficient execution of the provisions of this section.
Subsection X. Sections 4192 to 4196, inclusive, of the Revised Statutes
of the United States, as amended, and the Act entitled "An Act relating
to liens on vessels for repairs, supplies, or other necessaries,"
approved June 23, 1910, are repealed. This section, however, so far as
not inconsistent with any of the provisions of law so repealed, shall be
held a reënactment of such repealed law, and any right or obligation
based upon any provision of such law and accruing prior to such repeal,
may be prosecuted in the same manner and to the same effect as if this
Act had not been passed.
SEC. 31. That section 4530 of the Revised Statutes of the United States
is amended to read as follows:
"SEC. 4530. Every seaman on a vessel of the United States shall be
entitled to receive on demand from the master of the vessel to which he
belongs one-half part of the balance of his wages earned and remaining
unpaid at the time when such demand is made at every port where such
vessel, after the voyage has been commenced, shall load or deliver cargo
before the voyage is ended, and all stipulations in the contract to the
contrary shall be void: _Provided_, Such a demand shall not be made
before the expiration of, nor oftener than once in, five days nor more
than once in the same harbor on the same entry. Any failure on the part
of the master to comply with this demand shall release the seaman from
his contract and he shall be entitled to full payment of wages earned.
And when the voyage is ended every such seaman shall be entitled to the
remainder of the wages which shall be then due him, as provided in
section 4529 of the Revised Statutes: _Provided further_, That
notwithstanding any release signed by any seaman under section 4552 of
the Revised Statutes any court having jurisdiction may upon good cause
shown set aside such release and take such action as justice shall
require: _And provided further_, That this section shall apply to seamen
on foreign vessels while in harbors of the United States, and the courts
of the United States shall be open to such seamen for its enforcement."
SEC. 32. That paragraph (a) of section 10 of the Act entitled "An Act to
remove certain burdens on the American merchant marine and encourage the
American foreign carrying trade, and for other purposes," approved June
26, 1884, as amended, is hereby amended to read as follows:
"SEC. 10. (a) That it shall be, and is hereby, made unlawful in any case
to pay any seaman wages in advance of the time when he has actually
earned the same, or to pay such advance wages, or to make any order, or
note, or other evidence of indebtedness therefor to any other person, or
to pay any person, for the shipment of seamen when payment is deducted
or to be deducted from a seaman's wages. Any person violating any of the
foregoing provisions of this section shall be deemed guilty of a
misdemeanor, and upon conviction shall be punished by a fine of not less
than $25 nor more than $100, and may also be imprisoned for a period of
not exceeding six months, at the discretion of the court. The payment of
such advance wages or allotment, whether made within or without the
United States or territory subject to the jurisdiction thereof, shall in
no case except as herein provided absolve the vessel or the master or
the owner thereof from the full payment of wages after the same shall
have been actually earned, and shall be no defense to a libel suit or
action for the recovery of such wages. If any person shall demand or
receive, either directly or indirectly, from any seaman or other person
seeking employment, as seaman, or from any person on his behalf, any
remuneration whatever for providing him with employment, he shall for
every such offense be deemed guilty of a misdemeanor and shall be
imprisoned not more than six months or fined not more than $500."
SEC. 33. That section 20 of such Act of March 4, 1915, be, and is,
amended to read as follows:
"SEC. 20. That any seaman who shall suffer personal injury in the course
of his employment may, at his election, maintain an action for damages
at law, with the right of trial by jury, and in such action all statutes
of the United States modifying or extending the common-law right or
remedy in cases of personal injury to railway employees shall apply; and
in case of the death of any seaman as a result of any such personal
injury the personal representative of such seaman may maintain an action
for damages at law with the right of trial by jury, and in such action
all statutes of the United States conferring or regulating the right of
action for death in the case of railway employees shall be applicable.
Jurisdiction in such actions shall be under the court of the district in
which the defendant employer resides or in which his principal office is
located."
SEC. 34. That in the judgment of Congress, articles or provisions in
treaties or conventions to which the United States is a party, which
restrict the right of the United States to impose discriminating customs
duties on imports entering the United States in foreign vessels and in
vessels of the United States, and which also restrict the right of the
United States to impose discriminatory tonnage dues on foreign vessels
and on vessels of the United States entering the United States should be
terminated, and the President is hereby authorized and directed within
ninety days after this Act becomes law to give notice to the several
Governments, respectively, parties to such treaties or conventions, that
so much thereof as imposes any such restriction on the United States
will terminate on the expiration of such periods as may be required for
the giving of such notice by the provisions of such treaties or
conventions.
SEC. 35. That the power and authority vested in the board by this Act,
except as herein otherwise specifically provided, may be exercised
directly by the board, or by it through the United States Shipping Board
Emergency Fleet Corporation.
SEC. 36. That if any provision of this Act is declared unconstitutional
or the application of any provision to certain circumstances be held
invalid, the remainder of the Act and the application of such provisions
to circumstances other than those as to which it is held invalid shall
not be affected thereby.
SEC. 37. That when used in this Act, unless the context otherwise
requires, the terms "person," "vessel," "documented under the laws of
the United States," and "citizen of the United States" shall have the
meaning assigned to them by sections 1 and 2 of the "Shipping Act,
1916," as amended by this Act; the term "board" means the United States
Shipping Board; and the term "alien" means any person not a citizen of
the United States.
SEC. 38. That section 2 of the Shipping Act, 1916, is amended to read as
follows:
"SEC. 2. (a) That within the meaning of this Act no corporation,
partnership, or association shall be deemed a citizen of the United
States unless the controlling interest therein is owned by citizens of
the United States, and, in the case of a corporation, unless its
president and managing directors are citizens of the United States and
the corporation itself is organized under the laws of the United States
or of a State, Territory, District, or possession thereof, but in the
case of a corporation, association, or partnership operating any vessel
in the coastwise trade the amount of interest required to be owned by
citizens of the United States shall be 75 per centum.
"(b) The controlling interest in a corporation shall not be deemed to be
owned by citizens of the United States (a) if the title to a majority of
the stock thereof is not vested in such citizens free from any trust or
fiduciary obligation in favor of any person not a citizen of the United
States; or (b) if the majority of the voting power in such corporations
is not vested in citizens of the United States; or (c) if through any
contract or understanding it is so arranged that the majority of the
voting power may be exercised, directly or indirectly, in behalf of any
person who is not a citizen of the United States; or (d) if by any other
means whatsoever control of the corporation is conferred upon or
permitted to be exercised by any person who is not a citizen of the
United States.
"(c) Seventy-five per centum of the interest in a corporation shall not
be deemed to be owned by citizens of the United States (a) if the title
to 75 per centum of its stock is not vested in such citizens free from
any trust or fiduciary obligation in favor of any person not a citizen
of the United States; or (b) if 75 per centum of the voting power in
such corporations is not vested in citizens of the United States; or (c)
if, through any contract or understanding it is so arranged that more
than 25 per centum of the voting power in such corporation may be
exercised, directly or indirectly, in behalf of any person who is not a
citizen of the United States; or (d) if by any other means whatsoever
control of any interest in the corporation in excess of 25 per centum is
conferred upon or permitted to be exercised by any person who is not a
citizen of the United States.
"(d) The provisions of this Act shall apply to receivers and trustees of
all persons to whom the Act applies, and to the successors or assignees
of such persons."
SEC. 39. That this Act may be cited as the Merchant Marine Act, 1920.
Approved June 5, 1920.
[34] Public, No. 261, 66th Congress.
An Act to provide for the promotion and maintenance of the American
merchant marine, to repeal certain emergency legislation, and provide
for the disposition, regulation, and use of property acquired
thereunder, and for other purposes.
APPENDIX III
PROTEST
The following is a specimen of a marine protest. It is taken from
Lawrence _v._ Minturn, 17 How. 100. It was signed by all the officers
and by such of the crew as could write:
August 29, 1851, Latitude 31° 0´ N., Longitude 61° 5´ W.
At sea, on board ship _Hornet_ of New York, William W. Lawrence,
master, bound from New York to San Francisco, California.
We, the undersigned, master, officers and mariners of the ship _Hornet_,
of New York, do, after mature and serious deliberation, enter this
solemn protest: That on August 26th, 1851, the ship _Hornet_ being then
in or about the longitude of 49° W., latitude 37° N., experiencing a
gale of wind from the south, veering to N. W.: and that during said
gale, which lasted until the night of the 27th of August, the weight of
the deck load, consisting of two boilers, with furnaces attached, and
two steam chimneys (the whole supposed to be of the weight of forty tons
or thereabouts), did cause the ship to labor very hard, rolling gunwale
deep, shipping large bodies of water, straining the ship in her upper
works and decks, causing the ship to leak badly, and her pumps
constantly worked, placing our lives, ship and cargo in imminent peril
for their safety. We now, therefore, do most seriously and solemnly
assert, that for the future preservation of the ship, and thereby our
lives and cargo, the said boilers, furnaces and chimneys are unsafe on
the decks, and for the safety of the whole should be thrown overboard as
soon as possible, the weather and sea permitting.
In testimony whereof to the above, we hereby subscribe our respective
names.
TABLE OF CASES
PAGE
Aguan, 48 Fed. 320 53
Albany, The, 44 Fed. 431 46, 188, 206
Albert Dumois, 177 U. S. 240 151
Albina Ferry Co. _v._ Imperial and S. G. Reed, 38 Fed. 614 167
Allanwilde Transport Corp. _v._ Vacuum Co., 248 U. S. 377 90
Ambrose Light, 25 Fed. 408 199
Amelie, 6 Wall. (U. S.) 18 20, 50
America. _See_ Eads _v._ Brazelton, 22 Ark. 499 208
America. _See_ Gracie _v._ Palmer, 8 Wheat. (U. S.) 605 95
American Sugar Refining Co. _v._ Maddock, 93 Fed. 980 42
Ancaios, 170 Fed. 106 53
Anderson _v._ Munson, 104 Fed. 913 102
Arcturus, 17 Fed. 95 44
Atlantic, 53 Fed. 607 41, 129
Atlas, 3 Otto (U. S.) 302 152
Atlee _v._ Union Packet Co., 21 Wall. (U. S.) 389 148, 215
Attorney General's Opinion, 29 Op. 188 27
Aurora, 1 Wheat. (U. S.) 96 50, 140
Australasian Steam Navigation Co. _v._ Morse, L. R. 4 P. S. 222,
1 Aspin. 407, 27 LT. Rep. N. S. 357, 8 Moore P. C. N. S. 482,
20 Weekly Rep. 728, 17 Eng. Reprint 393 47
Barker _v._ The Swallow, 44 Fed. 771 73
Barnard _v._ Adams, 10 How. (U. S.) 270 189
Barnstable, 181 U. S. 464 33, 104
Behrens _v._ Furnessia, 35 Fed. 798 82
Belden _v._ Chase, 150 U. S. 674 150
Belfast, 7 Wall. (U. S.) 624 4
Belgenland, 114 U. S. 355 158
Benefactor, 103 U. S. 247 124
Blake, 107 U. S. 418 147
Bold Buccleugh, The, 7 Moore P. C. 267 130
Boskenna Bay, 36 Fed. 697 110
Boston, The, Blatch & H. 309 40
Bowring _v._ Thebaud, 56 Fed. 520 87