74TH C ONGRESS . SESS. II. CH. 858. JUNE 29, 1936.
2007 bearing securities, approved by the Commission, upon condition that t he in teres t on such secur ities shal l be depos ited in th e cap ital reserve fund . (e) If, during an accounting
the contractor's general funds ~i'ithdrawalsbyeon- y accounting year,
tra ctor fr om capi tal have be come seriously depleted due to operating losses on the sub- reserve fund . sidized vessels and the special reserve fund has been exhausted, the Commission may, in its discretion, permit the contractor temporarily to withdraw from his capital reserve fund such excess therein on deposit over and above the amount necessary to pay the principal amount currently due or about to become due on the contractor's mortgage obligation on the subsidized vessels : Provided, how eve r, ReJ ent . That the sum so withdrawn shall be repaid to the capital reserve fund as soon as the contractor's financial condition shall permit . (f) The earnings of any contractor receiving an operating-differ- Tax exem pti ons . ential subsidy under authority of this Act, which are deposited in the con tractor's reserve funds as provided in this section, except earnings withdrawn from the "special reserve funds" and paid into the contractor's general funds or distributed as dividends or bonuses as provided in paragraph 4 of subsection (c) of this section, shall be exempt from all Federal taxes . SEC . 608 . No contract executed under this title or an interest Restric tion on trans- fer, etc ., of operating therein shall be sold, assigned, or transferred, either directly or subsi d y con trac t wi th- indirectly, or through any reorganization, merger, or consolidation, out consent . nor shall any agreement or arrangement be made by the holder wh ereby the maint enanc e, ma nagem ent, or op erati on of the servi ce, rout e, line, v essel, or vessels is to be per formed by any other person, without the written consent of the Commission . If it consents to such New par ty to be bound by all contract agreement or arrangement, the agreement or arrangement shall make provisions, etc . provision whereby the person undertaking such maintenance, man- agement, or operation agrees to be bound by all of the provisions of the contract and of this Act applicable thereto, and the rules and regu- lations prescribed pursuant to this Act . If the holder of any such Iftransfermade with- out Commission's con- contract shall voluntarily sell such contract or any interest therein, sent . or make such assignment, transfer, agreement, or arrangement whereby the maintenance, management, or operation of the service, route, line, ves sel, or ve ssels is t o be perfo rmed by an y other pe rson, without the consent of the Commission or if the operation of the If operation passes f
out of direct control of service, route, line, or vessel, shall pass out of the direct control of contractor, etc . the holder of such contract by reason of any voluntary or involuntary rec eiver ship or ba nkrup tcy p rocee dings , the Comm issio n sha ll ha ve the ri ght to mod ify or res cind such contract, without fu rther liab ility s cii 9di c tnnrar . Te- thereon by the United States, and is hereby vested with exclusive jurisdiction to determine the purp oses for which any payments made by it under such contract shall be expended . SEC . 609. (a) The Commission shall withhold the payment of wi thhol ding of pa y- operating-differential subsidy whi le any contractor therefor is in ments. default in any payments due on acc ount of construction-loan, ship- sales mortgage notes, or any other obligation due the United States, and shall apply the amount so withheld to the s atisfaction of such debt . (b) If the holder of any contract under this title has filed a peti- Canc ellatio n or mo di- fi cation of cont ract if tion under any provision of the Bankruptcy Act or has applied for contractor bankrupt, the appointment of a receiver or is in default under any provisions in default, etc . of a ship mortgage given to the United States, the Commission may cancel or modify the contract as it finds advis able, and is hereby granted exclusive power to determine the purpose for which any paym ents made by it unde r suc h con tract shal l be expen ded . SEC. 610. An operating-differential subsidy shall not be paid under vessel requirements authority of this title on account of the operation of an vessel fo r opera ting-di fferen- y
tial subsidy.
