B-58199, JULY 2, 1946, 26 COMP. GEN. 1

B-58199, JULY 2, 1946, 26 COMP. GEN. 1

VESSELS - RECONDITIONING ALLOWANCE UPON RETURN TO PRIVATE OWNERSHIP WHERE VESSELS WERE REQUISITIONED FOR USE BY THE GOVERNMENT AND EXTENSIVELY ALTERED FROM AUTOMOBILE CARRIERS TO BULK CARGO CARRIERS PRIOR TO THE TAKING OF TITLE BY THE GOVERNMENT, THE ALLOWANCE FOR RECONDITIONING AUTHORIZED BY SECTION 2 OF THE ACT OF MAY 18, 1944, UPON RETURN OF THE VESSELS TO PRIVATE OWNERSHIP,"TO RESTORE THE VESSEL TO CONDITION AND UTILITY AT LEAST AS GOOD AS WHEN ACQUIRED BY THE UNITED STATES" MAY BE IN AN AMOUNT SUFFICIENT TO RESTORE THE VESSELS TO THE CONDITION AND UTILITY (ORDINARY WEAR AND TEAR CONSIDERED) EXISTING AT THE TIME THE GOVERNMENT ACQUIRED THE USE OF, RATHER THAN THE TITLE TO, THE VESSELS.

ACTING COMPTROLLER GENERAL YATES TO THE ADMINISTRATOR, WAR SHIPPING ADMINISTRATION, JULY 2, 946:

I HAVE YOUR LETTER OF MAY 28, 1946, AS FOLLOWS:

YOUR OPINION IS RESPECTFULLY REQUESTED CONCERNING THE CLAIM ASSERTED AGAINST THIS ADMINISTRATION BY THE OVERLAKES FREIGHT CORPORATION UNDER THE ACT OF MAY 18, 1944 ( PUBLIC LAW 305, 78TH CONGRESS). THIS CLAIM IS PARTICULARLY SET FORTH IN A LETTER DATED APRIL 6, 1946 ADDRESSED TO THE ADMINISTRATOR, A COPY OF WHICH IS ENCLOSED HEREWITH.

THE FACTS INVOLVED ARE AS FOLLOWS. IN APRIL OF 1942 THE WAR SHIPPING ADMINISTRATION REQUISITIONED THE USE ON A BAREBOAT BASIS OF THE VESSELS FRED L. HEWITT, CORALIA, SONOMA, CRESCENT CITY, AND PENOBSCOT. EXTENSIVE CONVERSIONS OF THE VESSELS WERE MADE WHILE THEY WERE UNDER BAREBOAT CHARTER TO THIS ADMINISTRATION. THEREAFTER, IN VIEW OF THE PROBABLE COST OF RECONVERSION UPON A REDELIVERY AND IN VIEW OF CONTEMPLATED LONG USE OF THE VESSELS, IT WAS DETERMINED THAT IT WAS MORE ADVANTAGEOUS TO THE UNITED STATES TO ACQUIRE THE TITLE THERETO THAN TO CONTINUE TO USE THE VESSELS ON A CHARTER BASIS.

PENDING THIS DETERMINATION, THE OWNERSHIP OF THE VESSELS HAD BEEN TRANSFERRED FROM THE ORIGINAL OWNER, THE NICHOLSON UNIVERSAL STEAMSHIP COMPANY, TO ITS RELATED PARENT COMPANY, THE OVERLAKES FREIGHT CORPORATION. THE LATTER COMPANY ACCEPTED THE OFFER OF THE ADMINISTRATOR TO PURCHASE THE VESSELS AND THE SALE WAS CONSUMMATED ON OCTOBER 5, 1942. AT THE SAME TIME, THE SUM OF $25,000 WAS PAID TO THE NICHOLSON UNIVERSAL STEAMSHIP COMPANY IN FULL SETTLEMENT OF ALL CLAIMS FOR THE USE OF THE VESSELS FROM THE TIME OF THEIR DELIVERY TO THE WAR SHIPPING ADMINISTRATION TO THE DATE OF TRANSFER OF TITLE TO OVERLAKES FREIGHT CORPORATION.

THE VESSELS ARE NO LONGER NEEDED BY THE UNITED STATES AND INFORMAL NEGOTIATIONS HAVE BEEN UNDER WAY BETWEEN THE FORMER OWNER ( OVERLAKES FREIGHT CORPORATION) AND THIS ADMINISTRATION FOR THEIR RETURN PURSUANT TO THE ACT OF MAY 18, 1944. THE FORMER OWNER INDICATES IN ITS ENCLOSED LETTER THAT IT BELIEVES ITSELF TO BE ENTITLED TO COST NECESSARY TO RESTORE THE VESSELS TO CONDITION AND UTILITY AS GOOD AS WHEN FIRST ACQUIRED BY THE UNITED STATES, THAT IS, IN THE SAME CONDITION AND UTILITY AS THEY WERE WHEN ACQUIRED FROM THE NICHOLSON UNIVERSAL STEAMSHIP COMPANY FOR USE BY THE UNITED STATES.

THIS ADMINISTRATION, ON THE OTHER HAND, HAS CONTENDED THAT ITS OBLIGATIONS UNDER THE STATUTE MERELY REQUIRE IT TO PLACE THE VESSELS IN THE SAME CONDITION AND UTILITY AS WHEN THE TITLE THERETO WAS ACQUIRED FROM THE OVERLAKES FREIGHT CORPORATION.

THE LEGISLATIVE HISTORY TO SOME EXTENT SUPPORTS THE CLAIM OF THE FORMER OWNER. THE REPORT OF THE HOUSE COMMITTEE ON MERCHANT MARINE AND FISHERIES (H. REP. NO. 802, 78TH CONGRESS) DATED OCTOBER 26, 1943 STATES:

"THE ADMINISTRATOR WOULD FIRST NOTIFY THE OWNER FROM WHOM THE VESSEL WAS PURCHASED OR REQUISITIONED THAT THE VESSEL WAS AVAILABLE FOR RETURN AND THAT IT WOULD BE RETURNED TO HIM IF HE WANTED IT, UNDER CONDITIONS WHEREIN THE OWNER WOULD HAVE TO RETURN THE PURCHASE PRICE OR COMPENSATION RECEIVED BY HIM FOR THE VESSEL, LESS ALLOWANCE FOR RECONDITIONING THE VESSEL AND FOR ITS USE BY THE UNITED STATES. THE ADMINISTRATOR AFTER CONSULTATION WITH THE OWNER WOULD DETERMINE THE AMOUNT NECESSARY TO RESTORE THE VESSEL "TO CONDITION AND UTILITY AT LEAST AS GOOD AS WHEN ACQUIRED BY THE UNITED STATES.'

"SOME OF THESE VESSELS HAVE HAD ALTERATIONS MADE ON THEM. SUCH ALTERATIONS MAY OR MAY NOT AFFECT THE USEFULNESS OF THE VESSEL IN ITS FORMER OCCUPATION. THE PROBLEM THEREFORE IS NOT TO RESTORE THE VESSEL TO A CONDITION AT LEAST AS GOOD AS WHEN ACQUIRED BY THE GOVERNMENT, NECESSARILY, BUT TO MAKE IT SUITABLE FOR THE USE TO WHICH IT IS TO BE RETURNED. THE ALLOWANCE FOR RECONDITIONING, IT IS CONTEMPLATED, WILL ENABLE THE OWNER TO PLACE THE VESSEL IN AS GOOD A CONDITION AS WHEN IT WAS TAKEN FOR PRACTICAL PURPOSES, WEAR AND TEAR EXCEPTED. IT IS RECOGNIZED THAT IN SOME INSTANCES, DUE TO EXTENSIVE CHANGES MADE, THE COST OF RECONDITIONING WILL BE HIGH, AND MAY POSSIBLY APPROXIMATE THE ACQUISITION COST OF THE VESSEL. HOWEVER, IN THE INTEREST OF THE NATIONAL ECONOMY, AND THE RESUMPTION OF PEACETIME COMMERCIAL OPERATIONS, PARTICULARLY IN THE CASE OF FISHING VESSELS, IT APPEARS HIGHLY DESIRABLE THAT THE OWNER OF THE VESSEL BE GRANTED ALLOWANCE FOR RECONDITIONING THE VESSEL SUFFICIENT TO INSURE THE VESSEL'S RETURN TO ITS FORMER OCCUPATION. THE TERM "ORDINARY WEAR AND TEAR" REFERS TO PEACETIME STANDARDS OF ORDINARY WEAR AND TEAR.'

ON THE OTHER HAND, THE LANGUAGE OF THE STATUTE ITSELF SEEMS TO REQUIRE AN INTERPRETATION THAT THE OBLIGATION OF THIS ADMINISTRATION IS TO RETURN THE VESSELS TO THE FORMER OWNER IN CONDITION AND UTILITY AT LEAST AS GOOD AS WHEN THE TITLE WAS ACQUIRED BY THE UNITED STATES. SECTION 2 OF THE STATUTE STATES:

"* * * THE VESSEL MAY BE RETURNED TO SUCH OWNER UPON REPAYMENT TO THE UNITED STATES OF THE COMPENSATION PAID THEREFORE LESS SUCH ALLOWANCES AS THE ADMINISTRATOR MAY DEEM REASONABLE (1) TO COVER THE COST OF SUCH RECONDITIONING AS THE ADMINISTRATOR AFTER CONSULTATION WITH THE OWNER DEEMS NECESSARY TO RESTORE THE VESSEL TO CONDITION AND UTILITY AT LEAST AS GOOD AS WHEN ACQUIRED BY THE UNITED STATES (ORDINARY WEAR AND TEAR EXCEPTED).'

THE PHRASE THAT DETERMINES THE TIME AS OF WHICH THE CONDITION AND UTILITY OF THE VESSELS SHOULD BE DETERMINED IS "WHEN ACQUIRED BY THE UNITED STATES.' SECTION 1 OF THE ACT, IN REFERRING TO THE VESSELS INCLUDED THEREIN, INCLUDES THOSE "THE TITLE TO WHICH HAS BEEN OR MAY HEREAFTER BE ACQUIRED BY THE UNITED STATES THROUGH PURCHASE OF REQUISITION.' ACCORDINGLY, IT IS ASSUMED BY THIS ADMINISTRATION THAT THE CONDITION AND UTILITY REFERRED TO IN SECTION 2 "WHEN ACQUIRED BY THE UNITED STATES" MEANS THE CONDITION AND UTILITY WHEN THE TITLE WAS ACQUIRED BY THE UNITED STATES.

I WOULD VERY MUCH APPRECIATE YOUR OPINION ON THIS POINT.

FROM YOUR LETTER QUOTED ABOVE, THE ENCLOSURE FORWARDED THEREWITH, AND OTHER AVAILABLE INFORMATION, IT APPEARS THAT PHYSICAL POSSESSION OF THE FIVE VESSELS HERE INVOLVED WAS FIRST TAKEN BY THE UNITED STATES PURSUANT TO AN UNDERSTANDING SET FORTH IN A LETTER FROM THE ADMINISTRATOR, WAR SHIPPING ADMINISTRATION, TO THE NICHOLSON UNIVERSAL STEAMSHIP COMPANY DATED MARCH 5, 1942. BY THE TERMS OF THE UNDERSTANDING, BAREBOAT CHARTERS WERE TO BE EXECUTED AND THE VESSELS WERE TO BE OPERATED BY THE THEN OWNERS, NICHOLSON UNIVERSAL STEAMSHIP COMPANY, UNDER A PROFIT-SHARING AGREEMENT. APPARENTLY, NO CHARTERS EVER WERE IN FACT EXECUTED. SOME MONTHS LATER AFTER EXTENSIVE ALTERATIONS HAD BEEN MADE IN THREE OF THE FIVE VESSELS TO CONVERT THEM FROM AUTOMOBILE CARRIERS TO BULK CARGO CARRIERS, IT WAS DECIDED BY THE WAR SHIPPING ADMINISTRATION THAT TITLE TO THE VESSELS SHOULD BE TAKEN AND NEGOTIATIONS TO THAT END WERE COMMENCED. THESE NEGOTIATIONS RESULTED IN THE TAKING OF TITLE TO THE VESSELS BY THE UNITED STATES ON OCTOBER 5, 1942.

DURING THE PERIOD OF NEGOTIATIONS LEADING UP TO THE TAKING OF TITLE A CORPORATE READJUSTMENT TOOK PLACE AND OVERLAKES FREIGHT CORPORATION PURCHASED FROM NICHOLSON UNIVERSAL STEAMSHIP COMPANY, ITS WHOLLY OWNED SUBSIDIARY, ALL ITS ASSETS--- INCLUDING THE FIVE SHIPS HERE INVOLVED--- LEAVING NICHOLSON UNIVERSAL STEAMSHIP COMPANY WITH ONLY ITS GRANDFATHER OR OTHER OPERATING RIGHTS AND TARIFFS.

ON OCTOBER 5, 1942, WHEN TITLE TO THE VESSELS WAS TAKEN, TWO AGREEMENTS, WSA-2779 AND WSA-2780, WERE EXECUTED. BY THE FIRST OF THESE AGREEMENTS THE WAR SHIPPING ADMINISTRATION OFFERED, AND THE NICHOLSON UNIVERSAL STEAMSHIP COMPANY ACCEPTED, THE SUM OF $25,000 AS FULL COMPENSATION FOR ANY AND ALL USE BY THE WAR SHIPPING ADMINISTRATION OF EACH OF THE FIVE VESSELS, CRESCENT CITY, FRED L. HEWITT, SONOMA, PENOBSCOT, AND CORALIA, DURING THE PERIOD OF OWNERSHIP OF THE VESSELS BY NICHOLSON UNIVERSAL STEAMSHIP COMPANY. BY THE SECOND AGREEMENT WAR SHIPPING ADMINISTRATION OFFERED, AND THE OVERLAKES FREIGHT CORPORATION ACCEPTED, THE SUM OF $975,000 AS THE PURCHASE PRICE FOR THE SAME FIVE VESSELS, INCLUDING ALL APPURTENANCES THEREUNTO BELONGING, SPARE PARTS ABOARD AND ASHORE--- EXCLUDING LEASED EQUIPMENT, IF ANY--- THE AMOUNT TO INCLUDE CONSIDERATION FOR ANY AND ALL USE THAT MAY HAVE BEEN MADE BY THE WAR SHIPPING ADMINISTRATION OF ANY AND ALL THE VESSELS DURING THE PERIOD OF OWNERSHIP BY OVERLAKES FREIGHT CORPORATION. IT THUS APPEARS THAT THE SUM OF $1,000,000 PAID BY THE WAR SHIPPING ADMINISTRATION TO NICHOLSON UNIVERSAL STEAMSHIP COMPANY AND OVERLAKES FREIGHT CORPORATION WAS FOR THE PURCHASE OF THE FIVE VESSELS AND, IN ADDITION, PAYMENT FOR THE USE THEREOF BY THE WAR SHIPPING ADMINISTRATION FROM THE TIME OF TAKING OF POSSESSION TO THE TIME OF TAKING OF TITLE.

THE QUESTION FOR CONSIDERATION IS WHETHER THE OVERLAKES FREIGHT CORPORATION IN REFUNDING THE PURCHASE PRICE OF THE VESSELS MAY WITHHOLD A SUFFICIENT SUM, IN ADDITION TO THE SUM WITHHELD AS COMPENSATION FOR THE USE OF THE VESSELS, TO RESTORE THE VESSELS TO A CONDITION AND UTILITY AS GOOD AS WHEN TAKEN FOR USE, OR WHETHER IT IS LIMITED TO A SUFFICIENT SUM TO RESTORE THE VESSELS TO A CONDITION AND UTILITY ONLY AS GOOD AS WHEN TITLE TO THE VESSELS WAS TAKEN BY THE UNITED STATES.

SECTIONS 1 AND 2 OF PUBLIC LAW 305, 78TH CONGRESS, 58 STAT. 223 (50 U.S.C.A. 1301-1304), ARE AS FOLLOWS:

THAT THE ACT ENTITLED "AN ACT TO AUTHORIZE THE RETURN TO PRIVATE OWNERSHIP OF CERTAIN VESSELS FORMERLY USED OR SUITABLE FOR USE IN THE FISHERIES OR INDUSTRIES RELATED THERETO," APPROVED APRIL 29, 1943 ( PUBLIC LAW 44, SEVENTY-EIGHTH CONGRESS; 57 STAT. 69), IS AMENDED TO READ AS FOLLOWS: ,THAT ANY VESSEL FORMERLY USED OR SUITABLE FOR USE IN THE FISHERIES OR INDUSTRIES RELATED THERETO, ANY VESSEL OF ONE THOUSAND GROSS TONS (DETERMINED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 77 OF TITLE 46 OF THE UNITED STATES CODE) OR LESS, AND ANY VESSEL EMPLOYED ON THE GREAT LAKES DURING THE YEAR PRECEDING ITS ACQUISITION BY THE UNITED STATES, THE TITLE TO WHICH HAS BEEN OR MAY HEREAFTER BE ACQUIRED BY THE UNITED STATES THROUGH PURCHASE OR REQUISITION EXCEPT ANY VESSEL SEVENTEEN YEARS OF AGE OR OLDER TRADED IN UNDER THE PROVISIONS OF SECTION 510, MERCHANT MARINE ACT, 1936, AS AMENDED, OR ANY OTHER PROVISION OF LAW MAY BE RETURNED TO PRIVATE OWNERSHIP IN ACCORDANCE WITH THE PROVISIONS OF THIS ACT.'

SEC. 2. EVERY SUCH VESSEL SHALL, UPON DETERMINATION BY THE DEPARTMENT OR AGENCY HAVING POSSESSION THEREOF THAT THE VESSEL IS NO LONGER NEEDED OR CAN BE SPARED BY SUCH DEPARTMENT OR AGENCY WITHOUT DETRIMENT TO ITS SERVICE, BE MADE AVAILABLE TO THE ADMINISTRATOR OF THE WAR SHIPPING ADMINISTRATION (HEREINAFTER REFERRED TO AS THE ADMINISTRATOR), WHO SHALL NOTIFY THE OWNER FROM WHOM SUCH VESSEL WAS PURCHASED OR REQUISITIONED THAT THE VESSEL MAY BE RETURNED TO SUCH OWNER UPON REPAYMENT TO THE UNITED STATES OF THE COMPENSATION PAID THEREFOR LESS SUCH ALLOWANCES AS THE ADMINISTRATOR MAY DEEM REASONABLE (1) TO COVER THE COST OF SUCH RECONDITIONING AS THE ADMINISTRATOR AFTER CONSULTATION WITH THE OWNER DEEMS NECESSARY TO RESTORE THE VESSEL TO CONDITION AND UTILITY AT LEAST AS GOOD AS WHEN ACQUIRED BY THE UNITED STATES (ORDINARY WEAR AND TEAR EXCEPTED), AND (2) TO COMPENSATE SUCH OWNER FOR THE USE OF THE VESSEL BY THE UNITED STATES, AND UPON COMPLIANCE WITH SUCH OTHER TERMS AND CONDITIONS AS THE ADMINISTRATOR MAY PRESCRIBE. THE DETERMINATION OF SUCH ALLOWANCES BY THE ADMINISTRATOR SHALL BE FINAL NOTWITHSTANDING ANY OTHER PROVISION OF LAW.

THE REFERENCE TO THE TAKING OF TITLE IN THE FIRST SECTION OF THE ACT APPEARS TO BE FOR THE PURPOSE OF DEFINING THE SCOPE OF THE ACT, MAKING IT APPLICABLE TO CERTAIN SPECIFIED CLASSES OF VESSELS "THE TITLE TO WHICH HAS BEEN OR MAY HEREAFTER BE ACQUIRED BY THE UNITED STATES THROUGH PURCHASE OR REQUISITION.' THE REFERENCE TO ACQUISITION IN SECTION 2 OF THE ACT WHERE PROVISION IS MADE FOR AN ALLOWANCE "TO RESTORE THE VESSEL TO CONDITION AND UTILITY AT LEAST AS GOOD AS WHEN ACQUIRED BY THE UNITED STATES" DOES NOT CLEARLY INDICATE WHETHER ACQUISITION OF TITLE OR MERE PHYSICAL ACQUISITION OF THE VESSEL IS INTENDED. THIS CREATES SUCH AN AMBIGUITY AS TO PERMIT, IN THE CONSTRUCTION OF THE ACT, REFERENCE TO THE INTENT OF THE CONGRESS AS REFLECTED IN ITS LEGISLATIVE HISTORY.

ON PAGE 2 OF HOUSE REPORT NO. 802, DATED OCTOBER 26, 1943, IT IS STATED:

THE BILL RELATES ONLY TO VESSELS OWNED BY THE UNITED STATES, THAT IS, VESSELS, THE TITLE OF WHICH HAS BEEN AND MAY HEREAFTER BE, ACQUIRED BY THE UNITED STATES THROUGH PURCHASE OR REQUISITION. VESSELS CHARTERED TO THE GOVERNMENT EITHER VOLUNTARILY OR BY MEANS OF REQUISITION FOR USE WILL BE BACK TO THE OWNERS UNDER THE TERMS OF THE CHARTERS.

THUS, IT MAY BE SEEN THAT THE REFERENCE TO THE TAKING OF TITLE IS INTENDED TO LIMIT THE SCOPE OF THE ACT AS TO THE VESSELS AFFECTED--- NO INTENTION BEING EVIDENCED HERE OR ELSEWHERE IN THE REPORT TO LIMIT THE AMOUNT OF THE RECONDITIONING ALLOWANCE TO THE CONDITION OF THE VESSEL AT THE TIME TITLE WAS TAKEN BY THE GOVERNMENT. ON PAGE 2 OF HOUSE REPORT NO. 802, IN EXPLAINING AN AMENDMENT INSERTED IN THE BILL, IT IS TATED:

* * * HE (THE FORMER OWNER) WILL BE ALLOWED TO PRESENT HIS VIEWS TO THE ADMINISTRATOR AS TO THE COST OF RECONDITIONING OF HIS VESSEL AND, (B) IN DETERMINING THE COST OF RECONDITIONING THE VESSEL CONSIDERATION WILL BE GIVEN TO THE COST OF RESTORING IT TO A CONDITION ENABLING IT TO BE USED IN THE TRADE IN WHICH IT WAS ENGAGED PRIOR TO ITS ACQUISITION BY THE UNITED STATES.

IN THE CASE OF THE THREE VESSELS HERE UNDER CONSIDERATION UPON WHICH THE EXTENSIVE ALTERATIONS HAD BEEN MADE, THE TRADE IN WHICH THE VESSELS WERE ENGAGED WAS THE CARRYING OF AUTOMOBILES.

AGAIN, ON PAGE 3 OF HOUSE REPORT NO. 802, IT IS STATED:

SOME OF THESE VESSELS HAVE HAD ALTERATIONS MADE ON THEM. SUCH ALTERATIONS MAY OR MAY NOT AFFECT THE USEFULNESS OF THE VESSEL IN ITS FORMER OCCUPATION. THE PROBLEM THEREFORE IS NOT TO RESTORE THE VESSEL TO A CONDITION AT LEAST AS GOOD AS WHEN ACQUIRED BY THE GOVERNMENT, NECESSARILY, BUT TO MAKE IT SUITABLE FOR THE USE TO WHICH IT IS TO BE RETURNED. * * *

HERE, THREE OF THE VESSELS WERE EXTENSIVELY ALTERED FROM AUTOMOBILE CARRIERS TO BULK CARGO CARRIERS AND TO RESTORE THEM TO AUTOMOBILE CARRIERS --- "THE USE TO WHICH THEY ARE TO BE ETURNED"--- UNDOUBTEDLY WILL REQUIRE EXTENSIVE RECONDITIONING.

TO LIMIT THE ALLOWANCES FOR RECONDITIONING TO A SUM SUFFICIENT TO RESTORE THE VESSELS TO THE CONDITION EXISTING AT THE TIME OF TAKING OF TITLE--- AFTER THE CHARACTER OF THE VESSELS HAD BEEN CHANGED BY THE GOVERNMENT--- WOULD RESULT IN THE GOVERNMENT NEVER HAVING PAID, AND THE OWNER NEVER HAVING RECEIVED, THE COST OF RECONVERSION REQUIRED BY THESE ALTERATIONS. SUCH A HOLDING WOULD TEND TO DEFEAT THE INTENT AND PURPOSE OF THE CONGRESS IN THE ENACTMENT OF SAID PUBLIC LAW 305 IN THAT THE ALLOWANCE WOULD NOT BE FIXED WITH A VIEW TO THE USE AND TRADE TO WHICH THE VESSEL IS TO BE RETURNED. AND, OF COURSE, THE STATUTE SHOULD BE GIVEN A CONSTRUCTION CONSISTENT WITH ITS LEGISLATIVE PURPOSE IF REASONABLY POSSIBLE. UNITED STATES V. KATZ, 271 U.S. 354.

ACCORDINGLY, I HAVE TO ADVISE THAT OVERLAKES FREIGHT CORPORATION MAY, IN REFUNDING THE AMOUNT PAID FOR THE FIVE VESSELS, FRED L. HEWITT, CORALIA, SONOMA, CRESCENT CITY AND PENOBSCOT, WITHHOLD A SUM FOUND BY YOU TO BE SUFFICIENT TO RESTORE THE VESSELS TO A CONDITION AND UTILITY AS GOOD AS WHEN TAKEN FOR USE (ORDINARY WEAR AND TEAR CONSIDERED), PLUS SUCH OTHER ALLOWANCES AS MAY BE AUTHORIZED UNDER THE PROVISIONS OF THE CITED STATUTE.