Page:United States Statutes at Large Volume 49 Part 1.djvu/2051

 2006	7 4TH C ONGRESS. SESS. II. CH. 858. JUNE 29, 1936. "special reserve (c) To attain the public objects for which the financial aid pro- fund", maintenance of. vi ded for in such contract is exte nded and to insu re the c ontinued maintenance and successful operation of the subsidized vessels, the con tractor shall create and ma intain, durin g the life of such contract , a "specia l reserv e fund" in such deposit ory or d epositor ies as t he Commission shall approve. Deposits. In this reserve fund, the contractor shall deposit annually the profits earned by the business of the subsidized vessels and services incident thereto in excess of 10 per centum per annum and in excess of the percentage of profits deposited in the capital reserve fund, as Disbursements speci- provided in subsection (b) of this section. From the special reserve sea. fund the contractor may ma ke the following disbursements and no others : Reimbursement to (1) Reimb ursem ent to the c ontrac tor's general funds for any g ener a' fun ds for eper- sting losses. losses on the operation of the subsidized vessels and services incident thereto sustained subsequent to the execution of the operating- diff eren tial -sub sidy con trac t ; Reim burs emen t to general funds for cur- (2) Reimbursement to the contractor's general funds for current rent operatin g losses. operating losses on completed voyages of subsidized vessels whenever the Commission shall determine it is improbable that such current losses will not be made up by profits on other voyages during the current year ; Reimbursement to Commission. (3) Payment of amounts due from the contractor to the Commis- . Ante, p. 2001. sion fo r reimbu rsement as provi ded in c lause 5 of secti on 606, but such reimbursement shall be deferred until the amount on deposit in the special reserve fund shall be sufficiently in excess of 5 per centu m of the capital necessa rily emp loyed in the bus iness so that payment of such reimbursement to the (commission will not reduce the special reserve fund below a sum equal to such 5 per centum of Pro viso . capital necessarily employed in the business : Provided, however, If deferred ; p aymen t. That such reimbursement to the Commission, if so deferred, shall be payable from the special reserve fund or other funds upon termi- nation of the contract and the United States shall then have a preferred lien on the special reserve fund for such deferred reim burse ment ; Dispo sition of exce ss (4) After reimbursement to the contractor's general funds of all re serv e after reim- bursements made. ope rating l osses ha s been m ade, as provided in clau se 1, an d after reimbursement to the Commission of all amounts due from the con- tractor, as determined under clause 5 of section 606, if the amount accumulated in the special reserve fund shall then be in excess of 5 per centum of the capital necessarily employed in the business, the contractor may, if the Commission approves, withdraw some or all of such excess reserve and pay the sum so withdrawn into the con- tractor's general funds or distribute the sum so withdrawn asa special dividend to the contractor's shareholders or stockholders or as a bonus to officers or employees, as the contractor may determine . Administrative rules. (d) The Commission shall adopt and prescribe rules and re la- Net earnings" and gu "capital "tearni arilyem- Lions for the administration of the reserve funds contemplated by ployed in the busine ss" to be defined. this section and shall include therein a definition of the term "net earnings" and the term "capital necessarily employed in the busi- Proviso. ness", as such terms are employed in this section : Provided howev er, Accounting charges . That the term "net earnings" shall take into account as p a proper accounting charge to operation of vessels expense, an annual depreci- ation charge on the vessels, computed on the economic life of the vessel being twenty years and the term "capital necessarily employed in the business" shall not include borrowed capital. Investments of capi- U pon appl ication of the c ontracto r, the C ommissio n, fund and special re se rve tion, may permit the investment by the in its discre- e operator of some or all of the contract or's capital a nd special re serve fund in approved inte rest-