B-148191, AUGUST 7, 1962, 42 COMP. GEN. 76

B-148191: Aug 7, 1962

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1962: REFERENCE IS MADE TO LETTER DATED FEBRUARY 13. IT IS REPORTED THAT ON AUGUST 1. FARRELL WAS NOTIFIED THAT ON DECEMBER 8. WHICH WAS ESSENTIALLY FOR THE REASON THAT IT LACKED AUTHORITY TO AWARD SUBSIDY RETROACTIVELY ON A VOYAGE BEGUN PRIOR TO THE DATE ON WHICH THE BOARD TOOK ITS OFFICIAL ACTION AUTHORIZING THE AMENDMENT OF THE OPERATING DIFFERENTIAL SUBSIDY CONTRACT TO INCLUDE ASSIGNMENT OF THE NEWLY ACQUIRED VESSEL TO SUBSIDIZED TRADE ROUTE NO. 14- 1. WE ARE INFORMED THAT AS A BASIS FOR THE POSITION OF THE BOARD REFERENCE WAS MADE TO OUR DECISION DATED OCTOBER 10. IT IS STATED THAT AUTHORITATIVE DISPOSITION OF THE QUESTION NOW PENDING REQUIRES CONSIDERATION OF OUR 1956 DECISION AND A DETERMINATION WHETHER THAT DECISION CAN BE ACCEPTED AS AUTHORITY FOR THE PAYMENT OF SUBSIDY FOR ANY PERIOD PRIOR TO THE DATE THE NECESSARY STATUTORY FINDINGS AND DETERMINATIONS ARE MADE.

B-148191, AUGUST 7, 1962, 42 COMP. GEN. 76

MARITIME MATTERS - SUBSIDIES - ELIGIBILITY - AFTER ACQUIRED VESSELS THE MAIDEN VOYAGE OF THE NEWLY ACQUIRED VESSEL ON A SUBSIDIZED TRADE ROUTE PRIOR TO THE ACTION OF THE MARITIME SUBSIDY BOARD AMENDING THE OPERATING-DIFFERENTIAL SUBSIDY CONTRACT TO ASSIGN THE VESSEL TO THE ROUTE DOES NOT MAKE THE OPERATOR ELIGIBLE FOR THE PAYMENT OF AN OPERATING- DIFFERENTIAL SUBSIDY, THE CONTRACT REQUIRING PRIOR APPROVAL OF THE VESSEL ASSIGNMENT TO THE SUBSIDIZED ROUTE FOR SUBSIDY ELIGIBILITY, AND THE SUBSEQUENT AMENDMENT OF THE AGREEMENT HAVING NO RETROACTIVE APPLICATION TO THE FIRST VOYAGE OF THE VESSEL, THE BOARD EXPRESSLY DISCLAIMING ANY INTENTION TO SUBSIDIZE THE VESSEL PRIOR TO VOYAGE NO. 2 BY APPROVING THE VESSEL FOR AN OPERATING-DIFFERENTIAL SUBSIDY COMMENCING ONLY WITH THE SECOND VOYAGE OF THE VESSEL.

TO THE SECRETARY OF COMMERCE, AUGUST 7, 1962:

REFERENCE IS MADE TO LETTER DATED FEBRUARY 13, 1962, FROM THE GENERAL COUNSEL, DEPARTMENT OF COMMERCE, REQUESTING OUR OPINION WHETHER THE DEPARTMENT OF COMMERCE HAS THE AUTHORITY TO APPROVE PAYMENT OF OPERATING- DIFFERENTIAL SUBSIDY FOR VOYAGE NO. 1 OF THE VESSEL AFRICAN GULF, OWNED AND OPERATED BY FARRELL LINES INCORPORATED, ON A SO-CALLED RETROACTIVE BASIS.

IT IS REPORTED THAT ON AUGUST 1, 1961, FARRELL APPLIED TO THE FORMER FEDERAL MARITIME BOARD FOR PRIOR APPROVAL TO PURCHASE A C-2 PRIVATELY OWNED AMERICAN-FLAG VESSEL TO BE ASSIGNED TO ITS SUBSIDIZED SERVICE TO WEST AFRICA ON TRADE ROUTE NO. 14, SERVICE 1, AND FOR AN INCREASE IN THE MAXIMUM NUMBER OF SUBSIDIZED SAILINGS AUTHORIZED FOR THAT TRADE ROUTE IN ITS OPERATING-DIFFERENTIAL SUBSIDY CONTRACT NO. FMB-64. BY LETTER DATED SEPTEMBER 28, 1961, THE ACTING MARITIME ADMINISTRATOR AUTHORIZED FARRELL TO PURCHASE THE VESSEL AND TO PAY FOR IT FROM ITS CAPITAL RESERVE FUND, BUT WITHHELD APPROVAL ACTION CONCERNING THE INTRODUCTION OF SUCH VESSEL INTO ITS SUBSIDIZED SERVICE. SUBSEQUENTLY, BY LETTER DATED DECEMBER 12, 1961, FARRELL WAS NOTIFIED THAT ON DECEMBER 8, 1961, THE MARITIME SUBSIDY BOARD HAD APPROVED THE ASSIGNMENT OF THE S.S. AFRICAN GULF TO TRADE ROUTE NO. 14-1 AS A SUBSIDIZED VESSEL EFFECTIVE UPON THE COMMENCEMENT OF THE LOADING OF CARGO ON ITS VOYAGE NO. 2.

YOUR GENERAL COUNSEL ADVISED THAT PURSUANT TO THE PROVISIONS OF SECTION 7.02, DEPARTMENT OF COMMERCE ORDER NO. 117, FARRELL HAS REQUESTED YOU TO REVIEW THE BOARD'S ACTION AS IT RELATED TO THE DENIAL OF THE APPLICATION FOR PAYMENT OF OPERATING-DIFFERENTIAL SUBSIDY ON THE VESSEL'S VOYAGE NO. 1; AND, AS A CONSEQUENCE, THE BOARD THEREAFTER SET FORTH THE BASIS FOR ITS DENIAL OF SUBSIDY ON THIS VOYAGE, WHICH WAS ESSENTIALLY FOR THE REASON THAT IT LACKED AUTHORITY TO AWARD SUBSIDY RETROACTIVELY ON A VOYAGE BEGUN PRIOR TO THE DATE ON WHICH THE BOARD TOOK ITS OFFICIAL ACTION AUTHORIZING THE AMENDMENT OF THE OPERATING DIFFERENTIAL SUBSIDY CONTRACT TO INCLUDE ASSIGNMENT OF THE NEWLY ACQUIRED VESSEL TO SUBSIDIZED TRADE ROUTE NO. 14- 1. AMONG OTHER REASONS, WE ARE INFORMED THAT AS A BASIS FOR THE POSITION OF THE BOARD REFERENCE WAS MADE TO OUR DECISION DATED OCTOBER 10, 1956, REPORTED IN 36 COMP. GEN. 291, WHEREIN WE EXPRESSED THE VIEW THAT PAYMENT OF SUBSIDY IN THAT CASE COULD BE AUTHORIZED FOR PAST VOYAGES, SUBJECT TO CERTAIN CONDITIONS SET FORTH THEREIN. IN VIEW THEREOF, IT IS STATED THAT AUTHORITATIVE DISPOSITION OF THE QUESTION NOW PENDING REQUIRES CONSIDERATION OF OUR 1956 DECISION AND A DETERMINATION WHETHER THAT DECISION CAN BE ACCEPTED AS AUTHORITY FOR THE PAYMENT OF SUBSIDY FOR ANY PERIOD PRIOR TO THE DATE THE NECESSARY STATUTORY FINDINGS AND DETERMINATIONS ARE MADE.

IN OUR OPINION DATED OCTOBER 10, 1956, REFERRED TO ABOVE, THERE WAS PRESENTED THE QUESTION WHETHER THE MERCHANT MARINE ACT, 1936, AS AMENDED, 46 U.S.C. 1101, AUTHORIZED THE THEN FEDERAL MARITIME BOARD TO PAY OPERATING-DIFFERENTIAL SUBSIDIES ON THE OPERATION BY THE AMERICAN EXPORT LINES, INC., OF THE S.S. INDEPENDENCE AND THE S.S. CONSTITUTION ON CERTAIN CRUISES OR VOYAGES EXTENDED BEYOND THEIR REGULAR PORTS OF CALL IN THE WESTERN MEDITERRANEAN, AS THEN PROVIDED IN ITS OPERATING DIFFERENTIAL SUBSIDY CONTRACT NO. FMB-1, TO PORTS IN THE EASTERN MEDITERRANEAN ON TRADE ROUTE 10 AND TO SOUTHWEST ASIA ON TRADE ROUTE 18. THAT CASE INVOLVED A SITUATION WHEREIN AMERICAN EXPORT LINES, INC., BY LETTER DATED JANUARY 25, 1954, REQUESTED AN AMENDMENT OF ITS OPERATING-DIFFERENTIAL SUBSIDY AGREEMENT TO INCLUDE CRUISES OF THE S.S. INDEPENDENCE AND THE S.S. CONSTITUTION AND TO PROVIDE FOR THE PAYMENT OF SUBSIDY ON A 1954 CRUISE TO INDIA, AND ON SIMILAR CRUISES IN SUBSEQUENT YEARS. THE APPLICATION OF JANUARY 25, 1954, WAS AMENDED BY LETTER DATED MAY 28, 1954, IN WHICH AMERICAN EXPORT LINES, INC., MADE A NEW REQUEST THAT ITS SUBSIDY AGREEMENT BE AMENDED TO MAKE CLEAR THAT SUCH AGREEMENT INCLUDED AS SUBSIDIZED SERVICES ANY FUTURE EXTENDED VOYAGES OR CRUISES OPERATED BY THE S.S. INDEPENDENCE OR THE S.S. CONSTITUTION IN THE GENERAL AREA OF TRADE ROUTE NOS. 10 AND 18, AND SUCH OTHER AREAS AS MIGHT BE AGREED UPON, BUT WITHDREW ITS REQUEST FOR SUBSIDY ON THE PORTION OF THE 1954 CRUISE OF THE S.S. INDEPENDENCE ON TRADE ROUTE NO. 18 BETWEEN THE EASTERN MEDITERRANEAN AND INDIA.

BY LETTER DATED MAY 3, 1956, THE FEDERAL MARITIME BOARD ADVISED THIS OFFICE THAT PRIOR TO EACH OF THE EXTENDED VOYAGES AMERICAN EXPORT LINES, INC., RECEIVED A LETTER FROM THE MARITIME ADMINISTRATION IN WHICH PERMISSION WAS GRANTED TO PERFORM ONE ROUND VOYAGE TO THE EASTERN MEDITERRANEAN AREA WITH THE S.S. INDEPENDENCE IN SOME YEARS, AND WITH THE S.S. CONSTITUTION IN OTHER YEARS. PRIOR TO AUGUST 17, 1953, THE LETTERS GRANTING SUCH PERMISSION REFERRED TO THE ROUND VOYAGE AS A SUBSIDIZED ROUND VOYAGE, AND CONTAINED A PROVISION THAT "IF THE FEDERAL MARITIME BOARD SHALL SO DETERMINE, SUBSIDY PAYMENTS SHALL BE ADJUSTED IN SUCH MANNER AS MAY BE REQUIRED * * *.' IN 1953, THE LETTER GRANTING THE PERMISSION CONTAINED A PROVISION THAT "SUBSIDY SHALL BECOME PAYABLE FOR THIS OPERATION ONLY IN THE EVENT THE FEDERAL MARITIME BOARD LATER MAKES ALL THE FINDINGS AND DETERMINATIONS REQUIRED BY SECTION 601 OF THE MERCHANT MARINE ACT, 1936, AS AMENDED, 46 U.S.C. 1171, AND THEN ONLY IN SUCH AMOUNT AND UNDER SUCH CONDITIONS AS THE BOARD SHALL DETERMINE TO BE APPROPRIATE AND CONSISTENT WITH ALL OF THE PROVISIONS OF THE ACT; AND FURTHER PROVIDED THAT IF THE FEDERAL MARITIME BOARD SHALL SO DETERMINE, SUBSIDY PAYMENTS SHALL BE ADJUSTED IN SUCH MANNER AS MAY BE REQUIRED * * *.' THE LETTERS OF PERMISSION IN LATER YEARS FOLLOWED SUBSTANTIALLY THE LETTER OF 1953.

THE FEDERAL MARITIME BOARD SUBSEQUENTLY MADE ALL THE REQUIRED FINDINGS AND DETERMINATIONS UNDER SECTION 601 OF THE ACT, AND APPROVED (1) THE PAYMENT OF SUBSIDY ON THE ROUND VOYAGES (ONE EACH YEAR) BY AMERICAN EXPORT LINES, INC., TO THE EASTERN MEDITERRANEAN AREA WITH THE S.S. INDEPENDENCE IN 1951, 1952, 1954 AND 1955, AND WITH THE S.S. CONSTITUTION IN 1953, AND (2) THE AMENDMENT OF CONTRACT NO. FMB-1 SO AS TO PROVIDE FOR PAYMENT OF SUBSIDY ON ONE SIMILAR VOYAGE PER YEAR IF MADE WITH EITHER OF SAID VESSELS BEGINNING WITH THE CALENDAR YEAR 1956. WE ALSO WERE INFORMED THAT AMERICAN EXPORT LINES, INC., IN MAKING EACH OF THESE VOYAGES DURING THE YEARS 1951 TO 1954, INCLUSIVE, ENCOUNTERED SUBSTANTIAL FOREIGN FLAG COMPETITION FROM THE NORWEGIAN FLAG VESSEL OSLOFJORD AND THE BRITISH-FLAG VESSEL BRITANNIC; AND IN 1955 SUBSTANTIAL FOREIGN FLAG COMPETITION WAS PROVIDED BY THE PANAMANIAN-FLAG VESSEL ATLANTIC OF THE HOME LINE. ADDITION TO THE FOREIGN FLAG COMPETITION DURING THESE YEARS WITH RESPECT TO THE VESSELS SPECIFICALLY NAMED, THERE WAS SUBSTANTIAL FOREIGN FLAG COMPETITION FROM OTHER FOREIGN FLAG PASSENGER AND COMBINATION VESSELS OPERATED DURING THE SAME YEARS IN LINER SERVICES PARALLELING THE REGULAR ROUTE OF THE S.S. INDEPENDENCE AND THE S.S. CONSTITUTION AND BEYOND TO THE EASTERN END OF THE MEDITERRANEAN. AT THAT TIME IT WAS DETERMINED THAT THE GOVERNMENT'S RECAPTURE POSITION WOULD BE ENHANCED IF THE FINANCIAL RESULTS FOR THE OPERATIONS OF THESE VOYAGES BEYOND THEIR REGULAR SERVICE REQUIREMENT AS SET FORTH IN CONTRACT NO. FMB-1 WERE INCLUDED IN SUBSIDY ACCOUNTING FOR RESERVE AND RECAPTURE PURPOSES. IN OTHER WORDS, THE OPERATION OF THESE VESSELS ON EXTENDED VOYAGES DURING THE SLACK SEASON PRODUCED BETTER FINANCIAL RESULTS THAN WOULD HAVE BEEN REALIZED HAD THE VESSELS BEEN CONFINED WITHIN THE LIMITS OF THEIR REGULAR SERVICE TO THE WEST COAST OF ITALY. IT WAS FURTHER FELT THAT, SINCE EVEN WITHOUT HAVING MADE THESE EXTENDED VOYAGES, THE S.S. INDEPENDENCE AND THE S.S. CONSTITUTION WOULD HAVE BEEN ENGAGED IN PERFORMING THEIR REGULAR CONTRACT REQUIREMENTS FOR 365 DAYS DURING EACH YEAR, THE GOVERNMENT'S SUBSIDY PAYMENTS WITH RESPECT TO THESE VOYAGES FOR THOSE YEARS WERE NOT INCREASED AND, ACCORDINGLY, THE INCREASED REVENUE TO AMERICAN EXPORT LINES, INC., ENHANCED THE GOVERNMENT'S CHANCES OF RECAPTURING A PORTION OF THE SUBSIDY IT MIGHT PAY TO THIS OPERATOR. IN THE LIGHT OF THESE CIRCUMSTANCES, OUR VIEWS WERE REQUESTED WHETHER THE FEDERAL MARITIME BOARD MIGHT (1) LEGALLY PAY SUBSIDY WITH RESPECT TO THE EXTENDED OPERATIONS OF THE ABOVE DESCRIBED VOYAGES DURING THE YEARS 1951 TO 1955, INCLUSIVE, AND (2) AMEND CONTRACT NO. FMB-1 SO AS TO PROVIDE FOR THE PAYMENT OF SUBSIDY ON THE EXTENDED PORTIONS OF SUCH VOYAGES MADE BY THE SAID VESSELS BEGINNING WITH THE CALENDAR YEAR 1956.

BASED UPON THESE AND OTHER FACTS INVOLVED IN THIS PARTICULAR CASE, WE CONCLUDED THAT IF, IN ADDITION TO THE REPORTED FINDINGS AND DETERMINATIONS BY THE BOARD UNDER SECTION 601 OF THE ACT, THE ADMINISTRATOR DETERMINED THAT THE OPERATION OF A MINIMUM OF ONE EXTENDED VOYAGE BY THE S.S. INDEPENDENCE OR THE S.S. CONSTITUTION PER ANNUM ON ESTABLISHED TRADE ROUTES 10 AND 18 PROVIDED A PASSENGER SERVICE OF SUFFICIENT "FREQUENCY AND REGULARITY" TO FURNISH "ADEQUATE, REGULAR, CERTAIN, AND PERMANENT SERVICE," WE PERCEIVED NO LEGAL BASIS UPON WHICH WE COULD OBJECT TO THE PAYMENT OF SUBSIDY WITH RESPECT TO THE SUBJECT PAST VOYAGES OR TO AN AMENDMENT OF THE CONTRACT TO PROVIDE SUBSIDY ON THE FUTURE VOYAGES.

IN SUMMARY, THEREFORE, AND IN THE LIGHT OF THE SPECIAL FACTS AND CIRCUMSTANCES IN THAT PARTICULAR CASE, OUR DECISION INTERPOSED NO OBJECTION TO THE EXTENDED VOYAGES, TAKING SPECIAL COGNIZANCE OF THE REPORTED FACTS THAT (1) SINCE THERE WAS NOT INVOLVED THE ADDITION TO THE SUBSIDY CONTRACT OF ANOTHER VESSEL SUCH EXTENSIONS DID NOT INCREASE THE SUBSIDY PAYABLE AND (2) THERE WAS INVOLVED THE MATTER OF VOYAGES MADE PURSUANT TO PRIOR PERMISSION TO EXTEND THE OPERATION OF SUBSIDIZED VESSELS WHICH ALREADY WERE COVERED BY A SUBSIDY CONTRACT. ASIDE FROM THIS, THE DECISION DID NOT AND DID NOT INTEND TO SUGGEST AN INTENTION TO APPROVE THE PAYMENT OF OPERATING-DIFFERENTIAL SUBSIDY GENERALLY TO AN APPLICANT FOR A PERIOD PRIOR TO THE NECESSARY AUTHORIZING ACTION BY THE BOARD.

IN THE INSTANT CASE, HOWEVER, IT IS NOTED THAT ARTICLE II-37 OF THE OPERATING-DIFFERENTIAL SUBSIDY CONTRACT NO. FMB-64, BETWEEN THE FEDERAL MARITIME BOARD AND FARRELL LINES INCORPORATED SPECIFICALLY PROVIDES AS FOLLOWS:

II-37. SUBSIDIZED VESSEL (S); SAILINGS. (A) THE TERM "SUBSIDIZED VESSEL (S)" SHALL INCLUDE ANY VESSEL LISTED IN THIS AGREEMENT UNTIL AND UNLESS IT IS PERMANENTLY WITHDRAWN FROM THE SUBSIDIZED SERVICE (S), ROUTE (S), OR LINE (S). IF TEMPORARILY WITHDRAWN, IT SHALL BE CONSIDERED A SUBSIDIZED VESSEL EXCEPT TO THE EXTENT OTHERWISE STIPULATED BY THE UNITED STATES IN ITS CONDITIONS OF WITHDRAWAL. UNSUBSIDIZED VOYAGES PERFORMED BY ANY OTHER VESSEL, WHICH WITH PRIOR APPROVAL OF THE UNITED STATES OPERATES IN THE SUBSIDIZED SERVICE, SHALL BE CONSIDERED "EXCESS VOYAGES" WITHIN THE MEANING OF ARTICLE II 21 (G) OF THIS AGREEMENT.

IN OUR OPINION, THIS SECTION OF THE CONTRACT IS CLEAR AND UNAMBIGUOUS AND, IN VIEW THEREOF, WE MUST CONCUR IN THE POSITION OF THE BOARD THAT IN ACCORDANCE WITH THESE PROVISIONS IT WAS NECESSARY FOR THE VESSEL TO BE ADDED TO THE AGREEMENT AS A SUBSIDIZED VESSEL IN ORDER TO BE ELIGIBLE FOR PAYMENT OF SUBSIDY; OTHERWISE, THE VOYAGE MUST BE REGARDED AS MERELY AN "EXCESS VOYAGE" BY "ANY OTHER VESSEL.'

AS STATED ABOVE, THE RECORD INDICATES THAT, IN RESPONSE TO FARRELLLINE'S LETTERS OF AUGUST 1 AND SEPTEMBER 18, 1961, THE THEN ACTING MARITIME ADMINISTRATOR ON SEPTEMBER 28, 1961, ADVISED THE APPLICANT, IN PERTINENT PART, AS FOLLOWS:

THIS LETTER WILL SERVE AS APPROVAL UNDER ARTICLE II-27 (B) OF YOUR OPERATING-DIFFERENTIAL SUBSIDY AGREEMENT, CONTRACT NO. FMB-64 TO PURCHASE THE VESSEL AND TO PAY FOR IT FROM YOUR CAPITAL RESERVE FUND, BUT IS NOT TO BE CONSTRUED AS AN APPROVAL BY THE MARITIME SUBSIDY BOARD OF YOUR PENDING REQUEST FOR ADDITIONAL SAILINGS ON TRADE ROUTE NO. 14, SERVICE 1 OR THE INTRODUCTION OF THIS SHIP INTO YOUR SUBSIDIZED SERVICE. WHEN THE MARITIME SUBSIDY BOARD TAKES ACTION ON YOUR PENDING REQUEST FOR ADDITIONAL SAILINGS, YOU WILL BE ADVISED.

WE ARE NOT UNMINDFUL OF THE FACT THAT ON SEPTEMBER 18, 1961, FARRELL LINES INCORPORATED ADVISED THE ADMINISTRATION OF ITS DESIRE TO OPERATE THE NEW VESSEL IN EARLY OCTOBER, AND WE HAVE NOTED ITS TELEGRAM DATED OCTOBER 4, 1961, REQUESTING THAT THE VESSEL BE INTRODUCED IN THE OPERATING- DIFFERENTIAL SUBSIDY CONTRACT EFFECTIVE AS THE TIME OF DELIVERY. HOWEVER, NOTWITHSTANDING THESE REQUESTS, WE CANNOT OVERLOOK THE OFFICIAL ACTION BY THE BOARD OF DECEMBER 8, 1961, WHICH WAS TRANSMITTED TO FARRELL LINES ON DECEMBER 12, AND WHICH ADVISED, IN PERTINENT PART, AS FOLLOWS:

B. AUTHORIZED THE ASSIGNMENT OF THE SS AFRICAN GULF TO TRADE ROUTE NO. 14 -1 AS A SUBSIDIZED VESSEL EFFECTIVE UPON THE COMMENCEMENT OF THE LOADING OF CARGO ON VOYAGE NO. 2, WHICH VOYAGE IS SCHEDULED TO SAIL OUTBOUND ON OR ABOUT LATE DECEMBER 1961, OR EARLY JANUARY 1962; PROVIDED THE VESSEL MEETS THE REQUIREMENTS OF ARTICLE II-5 OF THE COMPANY'S OPERATING-DIFFERENTIAL SUBSIDY AGREEMENT, CONTRACT NO. FMB 64 (WHEN IT SAILS ON VOYAGE NO. 2), AND PROVIDED FURTHER THAT NO SUBSIDY SHALL BE PAID ON THE SAID VOYAGE NO. 2 OF THE SS AFRICAN GULF (IF SUCH VOYAGE COMMENCE PRIOR TO JANUARY 1, 1962) UNLESS THERE ARE SUFFICIENT MAXIMUM VOYAGES FOR SUCH PURPOSE, APPLICABLE TO THE CALENDAR YEAR 1961, AFTER GIVING EFFECT TO THE PROPOSED INCREASE OF SEVEN VOYAGES PER ANNUM ON A PRORATA BASIS FOR THE YEAR 1961 (EFFECTIVE AS OF THE DATE OF THIS ACTION) FOR THE OPERATOR'S SUBSIDIZED SERVICE ON TRADE ROUTE NO. 14-1. IT IS THUS APPARENT THAT UPON CONSIDERATION OF ALL THE FACTS BEFORE IT THE BOARD, BY THE FOREGOING ACTION, MADE AN EXPRESS DISCLAIMER OF ANY INTENTION TO SUBSIDIZE THE VESSEL PRIOR TO ITS VOYAGE NO. 2 OR JANUARY 1, 1962, WHICHEVER WAS LATER.

IN VIEW OF ALL THE FACTS AND CIRCUMSTANCES, THEREFORE, IT IS OUR OPINION THAT THE BOARD ACTED WITHIN THE CONFINES OF THE OPERATING DIFFERENTIAL SUBSIDY AGREEMENT BETWEEN THE GOVERNMENT AND FARRELL LINES INCORPORATED AND, IN SO DOING, WE ARE AWARE OF NO AUTHORITY FOR THE PAYMENT OF OPERATING-DIFFERENTIAL SUBSIDY ON THE VESSEL FOR ANY PERIOD PRIOR TO THE DATE OF AUTHORIZING ACTION WHICH PERMITTED THE INTRODUCTION OF SUCH VESSEL IN THE SUBSIDIZED SERVICE.