§871. Repair and operation of vessels until sale

All vessels may be reconditioned and kept in suitable repair and until sold shall be managed and operated by the Secretary of Transportation or chartered or leased by him on such terms and conditions as the Secretary of Transportation shall deem wise for the promotion and maintenance of an efficient merchant marine, pursuant to the policy and purposes declared in section 861 of this Appendix and section 5 of this Act.¹

The term "reconditioned" as used in this section includes the substitution of the most modern, most efficient, and most economical types of internal-combustion engines as the main propulsive power of vessels. Should the Secretary of Transportation have any such engines built in the United States and installed, in private shipyards or navy yards of the United States, in one or more merchant vessels owned by the United States, and the cost to the Secretary of Transportation of such installation exceeds the amount of funds otherwise available to him for that use, the Secretary of Transportation may transfer to his funds from which expenditures under this section may be paid, from his construction fund authorized by section 11 ¹ of the Merchant Marine Act, 1920, so much as in his judgment may be necessary to meet obligations under contracts for such installation; and the Treasurer of the United States shall, at the request of the Secretary of Transportation, make the transfer accordingly: Provided, That the total amount expended by the Secretary of Transportation for this purpose shall not in the aggregate exceed $25,000,000. Any such vessel after June 5, 1920, so equipped by the Secretary of Transportation under the provisions of this section shall not be sold for a period of five years from the date the installation thereof is completed, unless it is sold for a price not less than the cost of the installation thereof and of any other work of reconditioning done at the same time plus an amount not less than $10 for each dead-weight ton of the vessel as computed before such reconditioning thereof is commenced. The date of the completion of such installation and the amount of the dead-weight tonnage of the vessel shall be fixed by the Secretary of Transportation: Provided further, That in fixing the minimum price at which the vessel may thus be sold the Secretary of Transportation may deduct from the aggregate amount above prescribed 5 per centum thereof per annum from the date of the installation to the date of sale as depreciation: And provided further, That no part of such fund shall be expended upon the reconditioning of any vessel unless the Secretary of Transportation shall have first made a binding contract for a satisfactory sale of such vessel in accordance with the provisions of this Act, or for the charter or lease of such vessels for a period of not less than five years by a capable, solvent operator; or unless the Secretary of Transportation is prepared and intends to directly put such vessel in operation immediately upon completion. Such vessel, in any of the enumerated instances, shall be documented under the laws of the United States and shall remain documented under such laws for a period of not less than five years from the date of the completion of the installation, and during such period it shall be operated only on voyages which are not exclusively coastwise.

(June 5, 1920, ch. 250, §12, 41 Stat. 993 ; June 6, 1924, ch. 273, §2, 43 Stat. 468 ; Feb. 11, 1927, ch. 104, §1, 44 Stat. 1083 ; Ex. Ord. No. 6166, §12, eff. June 10, 1933; June 29, 1936, ch. 858, title II, §204, title IX, §904, 49 Stat. 1987 , 2016; Pub. L. 97–31, §12(43), Aug. 6, 1981, 95 Stat. 157 .)

References in Text

Section 5 of this Act, referred to in text, is section 5 of act June 5, 1920, which was classified to section 864 of former Title 46, Shipping, and was repealed by Pub. L. 100–710, title II, §202(4), Nov. 23, 1988, 102 Stat. 4753 .

Section 11 of the Merchant Marine Act, 1920, referred to in text, was classified to section 870 of former Title 46, and was repealed by act June 29, 1936, ch. 858, §903(b), (c), 49 Stat. 2016 . See section 1116 of this Appendix.

This Act, referred to in text, means act June 5, 1920, ch. 250, 41 Stat. 988 , as amended, known as the Merchant Marine Act, 1920, which (except for sections repealed or reenacted in Title 46) is classified principally to this chapter. For complete classification of this Act to the Code, see section 889 of this Appendix and Tables.

Codification

The first paragraph of this section originally contained a further provision continuing the United States Shipping Board Merchant Fleet Corporation in existence with authority to operate vessels. The corporation was subsequently dissolved by section 203 of act June 29, 1936.

Amendments

1981-Pub. L. 97–31 substituted "Secretary of Transportation" for "Commission" in twelve places, "him" for "it" in two places, and "his" for "its" in three places. For prior transfers of functions, see Transfer of Functions note below.

1927-Act Feb. 11, 1927, substituted "U.S. Shipping Board Merchant Fleet Corporation" for "U.S. Shipping Board Emergency Fleet Corporation" in first par.

1924-Act June 6, 1924, added second par.

Transfer of Functions

"Commission", meaning United States Maritime Commission, substituted in text for "board", meaning United States Shipping Board. For dissolution of Board and transfer of functions to United States Maritime Commission, see Ex. Ord. No. 6166 and act June 29, 1936. Ex. Ord. No. 6166 is set out as a note under section 901 of Title 5, Government Organization and Employees. For subsequent transfers of functions, see Reorg. Plan No. 6 of 1949, Reorg. Plan No. 21 of 1950, and Reorg. Plan No. 7 of 1961, set out under section 1111 of this Appendix.

Section Referred to in Other Sections

This section is referred to in section 891b of this Appendix.

¹ See References in Text note below.