Page:United States Statutes at Large Volume 66.djvu/807

 66

STAT.]

PUBLIC LAW 5 8 6 - J U L Y 17, 1952

of the purchase price shall not restrict the lawful or proper use or operation of the vessel except to the extent expressly required by law." SEC. 2. The first sentence of section 501(c) of such Act is amended to read as follows: "Any citizen of the United States may make application to the Commission for a construction-differential subsidy to aid in reconstructing or reconditioning any vessel that is to be used in the foreign commerce of the United States." SEC. 3. Section 503 of such Act is amended by (1) amending the third sentence to read as follows: "At the time of delivery of the vessel the applicant shall execute and deliver a first-preferred mortgage to the United States to secure payment of any sums due from the applicant in respect to said vessel: Provided, That, notwithstanding any other provisions of law, the payment of any sums due in respect to a passenger vessel purchased under section 4(b) of the Merchant Ship Sales Act of 1946, reconverted or restored for normal operation in commercial services, or in respect to a passenger vessel purchased under title V of this Act, which is delivered subsequent to March 8, 1946, and which (i) is of not less than ten thousand gross tons, (ii) has a designed speed approved by the Commission but not less than eighteen knots, (iii) has accommodations for not less than two hundred passengers, and, (iv) is approved by the Secretary of Defense as being desirable for national defense purposes, may, with the approval of the Commission, be secured only by a first-preferred mortgage on said vessel.", and (2) by inserting the following sentences immediately after the third sentence: "With the approval of the Commission such preferred mortgage may provide that the sole recourse against the purchaser of such a passenger vessel under such mortgage, and any of the notes secured thereby, shall be limited to repossession of the vessel by the United States and the assignment of insurance claims, if the purchaser shall have complied with all provisions of the mortgage other than those relating to the payment of principal and interest when due, and the obligation of the purchaser shall be satisfied and discharged by the surrender of the vessel, and all right, title, and interest therein to the United States. Such vessel upon surrender shall be (i) free and clear of all liens and encumbrances whatsoever, except the lien of the preferred mortgage, (ii) in class, and (iii) in as good order and condition, ordinary wear and tear excepted, as when acquired by the purchaser, except that any deficiencies with respect to freedom from encumbrances, condition, and class, may, to the extent covered by valid policies of insurance, be satisfied by the assignment to the United States of claims of the purchaser under such policies of insurance." SEC. 4. The last sentence of section 504 of such Act is amended to read as follows: "Such vessel shall be documented under the laws of the United States as provided in section 503 of this title. The contract of sale, and the mortgage given to secure the payment of the unpaid balance of the purchase price, shall not restrict the lawful or proper use or operation of the vessel, except to the extent expressly required by law," SEC. 5. Section 507 of such Act is amended by inserting therein after the words "foreign trade" the words "or domestic trade". SEC. 6. Section 509 of such Act is amended by amending that part of the fourth sentence preceding the proviso to read as follows: "In case the vessel is designed to be of not less than three thousand five hundred gross tons and to be capable of sustained speed of not less than fourteen knots, the applicant shall be required to pay the Commission not less than 12^/^ per centum of the cost of such vessel, and in the case of any other vessel the applicant shall be required to pay

im Application.

46 USC 1153. F i r s t - preferred mortgage.

60 Stat. 43. 50 USC app. 1737.

Do cument ation. 46 USC 1154.

46 USC 1157. V e ssels in domestic trade. 46 USC 1159.

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