Page:United States Statutes at Large Volume 72 Part 1.djvu/634

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PUBLIC LAW 85-637-AUG. 14, 1958

[72 S T A T.

Public Law 85-637 August 14, 1958 '•^' ^^^^^

^^ ACT To amend section 607(d) of the Merchant Marine Act, 1936, as amended.

Be it enacted by the Senate and House of Representatives of the ^ Merchant _^ ^ _ United States of America in Congress assembled, That section 607 of ^^^ Marine ^ ^ Act of 1936,amendment".'"""""""""' the Merchant Marine Act, 1936, as amended (46 U.S.C. 1177), is 49 Stat. 2005. amended by inserting at the beginning of the first two paragraphs of subsection (d) thereof the designations " (1) " and " (2) ", respectively, and by inserting at the end of such subsection (d) the following new subdivisions: Investment of "(3)(A) Upon application of the contractor, the Secretary of contractor's funds. nK

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Commerce, in his discretion, may permit the contractor to transfer not exceeding 50 per centum of his capital reserve fund and 50 per centum of his special reserve fund to a trustee which is incorporated as a bank or trust company under the laws of the United States, or of any State, and which is approved by the Secretary of Commerce, in trust nevertheless for the benefit of the contractor and of the United States as their interests are stated in this section (1) to hold in separate trusts the principal of the capital and special reserve funds so transferred, one trust for the capital reserve fund and one trust for the special reserve fund; (2) to invest and reinvest the principal of such trusts in such common stocks of corporations organized and existing under the laws of the United States or of the District of Columbia or of any State of the United States which are currently fully listed and registered upon an exchange registered with the Securities and Exchange Commission as a national securities exchange, and which would be acquired by prudent men of discretion and intelligence in such matters who are seeking a reasonable income and the preservation of their capital; (3) to accumulate the income from the capital reserve fund trust in such trust, to pay the income from the special reserve fund trust into the capital reserve fund trust, and to invest and reinvest such income in common stocks in which the trustee is authorized to invest principal under this subdivision (3); and (4) to pay to the contractor and the Secretary of Commerce, as trustees of the special reserve fund and the capital reserve fund, after reasonable notice, from the principal and accumulated income of the trusts such amounts, in cash, as the contractor and the Secretary of Commerce direct. " (B) Consent by the contractor to an investment which is not authorized by this subdivision (3) shall not be a defense to the trustee. Such common stock trusts shall be revocable by the Secretary of Commerce at any time and upon notice of the revocation, the common stock trustee shall reduce the principal and accumulated income of such trusts to cash and shall pay such cash to the contractor and the Secretary of Commerce as trustees of the capital reserve fund and special reserve fund. In the administration of such common stock trusts, capital gains, stock dividends, and rights to purchase stock shall be considered principal; cash dividends, whenever earned, shall be considered income. At the end of the contractor's recapture period, however, after satisfaction of the contractor's recapture obligations, an amount of the special reserve fund trust equal to the value of the capital gains made (whether realized or not), the stock dividends declared, and the rights to purchase stock issued to the special reserve fund trust during such recapture period, to the extent the special reserve fund trust contains this amount, shall be transferred (in cash or in stock) to the capital reserve fund trust. For the purpose of deter-

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