B-108239, NOVEMBER 18, 1957, 37 COMP. GEN. 338

B-108239, NOVEMBER 18, 1957, 37 COMP. GEN. 338

MARITIME MATTERS - TRADE-IN VESSEL USE DURING NEW CONSTRUCTION - OBSOLETE OPERATION PROHIBITION ALTHOUGH THE OBSOLETE VESSEL TRADE-IN PROVISIONS IN SECTION 510 OF THE MERCHANT MARINE ACT, 1936, 46 U.S.C. 1160, MUST, IN VIEW OF THE LEGISLATIVE HISTORY, BE CONSTRUED AS REQUIRING TRANSFER OF THE TITLE OF THE OBSOLETE VESSEL TO THE GOVERNMENT AT THE TIME THE TRADE-IN ALLOWANCE TOWARD THE NEW VESSEL IS FIXED AND THE CONTRACT EXECUTED FOR THE REPLACEMENT VESSEL; TO CONSTRUE THE PROHIBITION AGAINST COMMERCIAL OPERATION OF OBSOLETE VESSELS CONTAINED IN SECTION 510 (G) OF THE ACT, 46 U.S.C. 1160 (G), AS PRECLUDING CONTINUED OPERATION OF THE VESSEL DURING CONSTRUCTION OF THE NEW VESSEL WOULD NULLIFY SECTION 510 (D) OF THE ACT, 46 U.S.C. 1160 (D), WHICH REQUIRES A REDUCTION IN THE TRADE-IN ALLOWANCE CREDIT IF THE VESSEL OWNER USES IT DURING THE CONSTRUCTION PERIOD, AND, THEREFORE, TRADE-IN VESSELS MAY BE CHARTERED BACK DURING CONSTRUCTION OF THE NEW VESSEL.

TO THE ADMINISTRATOR, MARITIME ADMINISTRATION, NOVEMBER 18, 1957:

REFERENCE IS MADE TO LETTER DATED OCTOBER 8, 1957, FROM MR. WALTER C. FORD, ACTING MARITIME ADMINISTRATOR, WHICH IN EFFECT REQUESTS A CLARIFICATION OF OUR DECISION DATED SEPTEMBER 29, 1952--- B-108239, 32 COMP. GEN. 148--- WHEREIN WE DISCUSSED THE MATTER OF "OWNERSHIP" AND "BENEFICIAL OWNERSHIP" IN THE GOVERNMENT OF OBSOLETE VESSELS TRADED IN UNDER SECTION 510 (D) OF THE MERCHANT MARINE ACT OF 1936, AS AMENDED, 46 U.S.C. 1160 (D). IT IS STATED THAT SUCH OPINION HAS BEEN CONSTRUED BY YOUR ADMINISTRATION AS REQUIRING THAT TITLE TO THE OBSOLETE VESSEL VEST IN THE UNITED STATES AT THE TIME OF THE TRADE-IN. HOWEVER, YOU REFER TO A RECENT INFORMAL MEMORANDUM PREPARED BY COUNSEL FOR THE COMMITTEE OF AMERICAN STEAMSHIP LINES--- A COPY OF WHICH WAS TRANSMITTED WITH YOUR SUBMISSION--- WHICH SETS FORTH THEIR RESERVATIONS AS TO THE AUTHORITY OF YOUR ADMINISTRATION TO ,CHARTER BACK" THE OBSOLETE VESSELS DURING THE "USE" PERIOD IF SECTION 510 IS CONSTRUED AS REQUIRING THE PASSAGE OF TITLE AT THE TIME THE CONSTRUCTION CONTRACT IS ENTERED INTO. PARTICULARLY, IT IS CONTENDED IN THE MEMORANDUM THAT SUCH CHARTERING BACK WOULD BE IN VIOLATION OF SECTION 510 (G) OF THE ACT, 46 U.S.C. 1160 (G). IN VIEW THEREOF, YOU REQUEST OUR OPINION AS TO WHETHER, (1) UNDER SECTION 510, 46 U.S.C. 1160, TITLE TO THE OBSOLETE VESSEL IS REQUIRED TO VEST IN THE UNITED STATES AT THE TIME OF THE EXECUTION OF THE CONSTRUCTION CONTRACT IN CASES WHERE THE OWNER ELECTS TO CONTINUE USING SUCH VESSEL DURING THE PERIOD OF CONSTRUCTION OF THE REPLACEMENT VESSEL, AND, (2) IF THE ANSWER IS IN THE NEGATIVE, WHETHER, UNDER SUCH CIRCUMSTANCES, THE ADMINISTRATION WOULD BE PRECLUDED FROM MAKING ADVANCE PAYMENTS TO THE SHIPYARDS UNDER THE CONSTRUCTION CONTRACT DURING THE PERIOD OF USE.

AT THE OUTSET, IT SEEMS APPROPRIATE TO POINT OUT THAT SINCE SECTION 510 (D) MAKES NO SPECIAL REFERENCE TO THE PRESENT QUESTION CONCERNING THE TRANSFER OF TITLE TO THE SHIPS OFFERED IN THE TRADE-IN PROGRAM, IT BECOMES NECESSARY TO FURTHER ANALYZE THE MATTER FOR THE PURPOSE OF ASCERTAINING AS NEARLY AS POSSIBLE THE EXACT INTENT OF THE CONGRESS DURING CONSIDERATION AND PASSAGE OF THE BILL. AS A BASIS FOR SUCH ACTION, ATTENTION IS INVITED TO THE CASE OF THE BOSTON SAND COMPANY V. UNITED STATES, 278 U.S. 41, WHEREIN THE SUPREME COURT OF THE UNITED STATES STATED, IN PERTINENT PART, AS FOLLOWS:

* * * IT IS SAID THAT WHEN THE MEANING OF LANGUAGE IS PLAIN WE ARE NOT TO RESORT TO EVIDENCE IN ORDER TO RAISE DOUBTS. THIS IS RATHER AN AXIOM OF EXPERIENCE THAN A RULE OF LAW, AND DOES NOT PRECLUDE CONSIDERATION OF PERSUASIVE EVIDENCE IF IT EXISTS.

ALSO, IN HELVERING V. NEW YORK TRUST COMPANY, 292 U.S. 455, THE COURT AGAIN POINTED OUT:

THE RULE THAT WHERE THE STATUTE CONTAINS NO AMBIGUITY, IT MUST BE TAKEN LITERALLY AND GIVEN EFFECT ACCORDING TO ITS LANGUAGE IS A SOUND ONE NOT TO BE PUT ASIDE TO AVOID HARDSHIPS THAT MAY SOMETIMES RESULT FROM GIVING EFFECT TO THE LEGISLATIVE PURPOSE. * * * BUT THE EXPOUNDING OF A STATUTORY PROVISION STRICTLY ACCORDING TO THE LETTER WITHOUT REGARD TO OTHER PARTS OF THE ACT AND LEGISLATIVE HISTORY WOULD OFTEN DEFEAT THE OBJECT INTENDED TO BE ACCOMPLISHED. * * * ( ITALICS SUPPLIED.)

SECTION 510 (A) (2) (B) OF THE MERCHANT MARINE ACT OF 1936, AS ADDED AUGUST 4, 1939, 53 STAT. 1183, 46 U.S.C. 1160 (A) (2) (B), PROVIDES, IN PERTINENT PART, AS FOLLOWS:

(2) (B) IN ORDER TO PROMOTE THE CONSTRUCTION OF NEW, SAFE, AND EFFICIENT VESSELS TO CARRY THE DOMESTIC AND FOREIGN WATER-BORNE COMMERCE OF THE UNITED STATES, THE COMMISSION IS AUTHORIZED, SUBJECT TO THE PROVISIONS OF THIS SECTION, TO ACQUIRE ANY OBSOLETE VESSEL IN EXCHANGE FOR AN ALLOWANCE OF CREDIT. THE AMOUNT OF SUCH ALLOWANCE SHALL BE DETERMINED AT THE TIME THE OWNER CONTRACTS FOR THE CONSTRUCTION OR PURCHASE OF A NEW VESSEL. THE ALLOWANCE SHALL NOT BE PAID TO THE OWNER OF THE OBSOLETE VESSEL BUT SHALL BE APPLIED UPON THE PURCHASE PRICE OF A NEW VESSEL. IN THE CASE OF A NEW VESSEL CONSTRUCTED UNDER THE PROVISIONS OF THIS CHAPTER, SUCH ALLOWANCE MAY, UNDER SUCH TERMS AND CONDITIONS AS THE COMMISSION MAY PRESCRIBE, BE APPLIED UPON THE CASH PAYMENTS REQUIRED UNDER THIS CHAPTER. * * * ( ITALICS SUPPLIED.)

MANIFESTLY, THIS SECTION OF THE STATUTE, STANDING ALONE NEEDS LITTLE OR NO CLARIFICATION, SINCE IT IS OBVIOUS FROM SUCH LANGUAGE AND ITS LEGISLATIVE HISTORY THAT THE CONGRESS INTENDED TO FORMULATE A STATUTORY SCHEME WHEREBY WHEN A SHIPOWNER CONTRACTED FOR THE CONSTRUCTION OR PURCHASE OF A NEW VESSEL HE COULD RECEIVE A TRADE-IN ALLOWANCE REDUCING THE PURCHASE PRICE IF AT THE TIME OF THE CONTRACTING HE TRADED IN AN OLD VESSEL. FURTHERMORE, IT IS APPARENT THAT THE ACT VIEWS THE TRADE IN AS OCCURRING AT THE DATE OF THE PURCHASE CONTRACT, AT WHICH TIME THERE WAS TO BE ESTABLISHED AN EQUATION BETWEEN AN OBSOLETE VESSEL AND AN ALLOWANCE OF CREDITS, THUS PLACING THE OWNERSHIP OF THE VESSEL IN THE MARITIME COMMISSION. TO THIS END THE COMMISSION IS AUTHORIZED "TO ACQUIRE ANY OBSOLETE VESSEL IN EXCHANGE FOR AN ALLOWANCE OF CREDIT.' SUCH A VIEW APPEARS TO BE SUBSTANTIATED BY THE FOLLOWING REMARKS OF REPRESENTATIVE BLAND AT THE TIME OF HIS EXPLANATION, ON THE FLOOR OF THE HOUSE, OF SECTION 7 OF THE BILL WHICH BECAME SECTION 510 (D):

WE PROVIDE AS TO VESSELS OVER 17 YEARS OF AGE THAT THE MARITIME COMMISSION MAY AGREE WITH THE OWNERS, IF THEY CAN AGREE, UPON A FAIR AND REASONABLE PRICE AT WHICH THOSE VESSELS MAY BE TAKEN OVER BY THE MARITIME COMMISSION, AND WHATEVER AMOUNT SHALL BE ALLOWED ON THOSE OLD VESSELS SHALL BE CREDITED AS PAYMENT ON THE NEW VESSELS TO BE CONSTRUCTED; THE OLD VESSELS WILL THEN BE IN THE POSSESSION OF THE MARITIME COMMISSION EITHER TO BE CONVERTED INTO SCRAP OR, IF IT IS DESIRED OR THOUGHT REASONABLY PROPER, THOSE VESSELS MAY BE PUT IN THE LAID UP FLEET IN ORDER TO BE RETAINED THERE FOR USE IN THE EVENT OF EMERGENCY. ( ITALICS SUPPLIED.)

ATTENTION ALSO IS INVITED TO THE STATEMENT OF ADMIRAL LAND AT PAGE 3 IN THE HEARINGS BEFORE THE COMMITTEE ON MERCHANT MARINE AND FISHERIES OF THE HOUSE OF REPRESENTATIVES IN CONNECTION WITH H.R. 5130 (SUPERCEDED BY H.R. 6746, WHICH BECAME PUBLIC LAW 259, 76TH CONGRESS), 46 U.S.C. 672B-1, WHICH IS AS FOLLOWS:

IT SHOULD BE REMEMBERED THAT UNDER THIS PROPOSAL THE GOVERNMENT WOULD OFFER, NOT CASH, BUT A CREDIT ON NEW SHIPS IN EXCHANGE FOR SUCH OLD VESSELS * * *. ( ITALICS SUPPLIED.)

IN VIEW OF THESE EXPLANATIONS, WE CANNOT REASONABLY CONSTRUE THE INTENT OF CONGRESS TO BE OTHER THAN AS STATED IN OUR DECISION OF SEPTEMBER 29, 1952, NAMELY, THAT UPON THE EXECUTION OF THE CONTRACTS THEREIN AUTHORIZED, OWNERSHIP OF THE OBSOLETE VESSEL WOULD PASS TO THE GOVERNMENT, THE TRADE- IN VALUE (CREDIT ALLOWANCE) OF SUCH VESSEL WOULD BE FIXED, AND PROVISION WOULD BE MADE FOR APPLICATION OF THE ALLOWANCE TO THE PURCHASE PRICE OF THE NEW VESSEL.

WE ALSO HAVE LITTLE DIFFICULTY IN DETERMINING WHAT WAS CONTEMPLATED BY THAT PORTION OF SECTION 510 (D) WHICH PROVIDES "IF THE OWNER OF THE OBSOLETE VESSEL USES SUCH VESSEL DURING THE PERIOD OF CONSTRUCTION OF THE NEW VESSEL, THE ALLOWANCE SHALL BE REDUCED BY AN AMOUNT REPRESENTING THE FAIR VALUE OF SUCH USE.' ( ITALICS SUPPLIED.) HERE, THE SHIPOWNER HAS TRADED IN HIS VESSEL; HE DID SO AT THE TIME HE SIGNED THE PURCHASE AGREEMENT AND HAD THE AMOUNT OF HIS TRADE-IN ALLOWANCE DETERMINED. BUT, OBVIOUSLY, HE STILL NEEDS THE USE OF HIS OLD SHIP TO PROVIDE UNINTERRUPTED SERVICE DURING THE CONSTRUCTION OF HIS NEW VESSEL UNLESS, OF COURSE, HE PREFERS TO OBTAIN A SUBSTITUTE VESSEL BY MEANS OF A BAREBOAT CHARTER FROM A PRIVATE OWNER. IN THIS LATTER REGARD, IT MAY BE NOTED THAT THE OWNER IS UNDER NO STATUTORY COMPULSION TO CONTINUE THE OBSOLETE VESSEL IN HIS OPERATIONS. THIS WAS SPECIFICALLY PROVIDED FOR IN THE STATUTE BY PERMITTING MARITIME THE BENEFIT OF A FAIR VALUE FOR THE SUBSEQUENT USE OF ITS ACQUIRED VESSEL. BUT, IN THE INTEREST OF CONVENIENCE, THE STATUTE FURTHER PROVIDED THAT IN LIEU OF DIRECT PAYMENT BY THE OPERATOR AS "FAIR VALUE" RENTAL ON THE OBSOLETE VESSEL THE PREVIOUSLY DETERMINED TRADE-IN ALLOWANCE MAY SIMPLY BE REDUCED BY THAT AMOUNT.

THAT THIS WAS THE KIND OF TRANSACTION WHICH THE CONGRESS ASSUMED WAS INTENDED BY THE 1939 AMENDMENTS APPEARS CLEARLY FROM THE LEGISLATIVE HISTORY. DURING THE HEARINGS ON THE BILL, THE ATLANTIC COASTWISE STEAMSHIP ASSOCIATION COMPLAINED OF THE "FAIR USE VALUE" PROVISION IN SECTION 510 (D) IN THE FOLLOWING LANGUAGE:

WE SEE NO REASON FOR INCLUSION OF THE ABOVE, SINCE IT WOULD ONLY HAVE THE EFFECT OF REDUCING THE ALLOWANCE OBTAINABLE. ANY NEW CONSTRUCTION IS TO REPLACE EXISTING TONNAGE. IT WILL MOST LIKELY BE NECESSARY FOR AN OPERATOR TO USE THE OLD VESSEL UNTIL SUCH TIME AS THE NEW VESSEL IS READY FOR OPERATION. TO CHARGE THE OPERATOR FOR THE USE OF THE OLD VESSEL DURING THE CONSTRUCTION PERIOD, WHICH WOULD PROBABLY EXTEND FROM 10 MONTHS TO OVER A YEAR, MIGHT WELL NULLIFY ANY POSSIBLE ADVANTAGE WHICH WOULD OTHERWISE ACCRUE. CERTAINLY IF HE WAS TO SELL THE VESSEL FOR SCRAP, OR FOR OPERATION, IN THE OPEN MARKET, THE PRICE HE WOULD RECEIVE WOULD NEVER BE REDUCED BY ANY SUCH FACTOR.

IN OBJECTING TO THAT RECOMMENDATION, THE COMMISSION STATED IN MEMO NO. 3 (SECTION 7, H.R. 5130, TURN-IN-AND-1BUILD), PAGE 183, PART II OF THE HEARINGS AS FOLLOWS:

THE PURPOSE OF THIS PROVISION IS TO APPROXIMATE THE CIRCUMSTANCES UNDER WHICH A VESSEL WOULD BE SOLD IN THE OPEN MARKET. THE COMMISSION HAS NOT HEARD OF ANY SALES CONTRACTS PROVIDING THAT A VESSEL (OR AN AUTOMOBILE) SOLD COULD BE USED BY THE VENDOR FREE OF CHARGE FOR PERIODS OF 10 MONTHS TO OVER A YEAR. IF SUCH SALES CONTRACTS WERE MADE, NO DOUBT THE ALLOWANCE FOR THE TURN-IN- WOULD REFLECT THE CONCESSION IN QUESTION. THE COMMISSION DOES NOT FAVOR THE PROPOSED AMENDMENT. ( ITALICS SUPPLIED.)

FROM THIS IT WOULD SEEM CLEAR THAT THE THEN UNITED STATES MARITIME COMMISSION VIEWED THE TRANSFER OF THE OLD VESSEL AS OCCURRING AT THE TIME OF THE PURCHASE AGREEMENT, AND, IN OUR OPINION, ITS REFERENCE TO THE PURCHASE AGREEMENT AS A "SALES CONTRACT" OBVIOUSLY HAD REFERENCE TO A "SALE," OF THE OLD VESSEL TO THE GOVERNMENT. CONGRESS ADOPTED THE STATUTORY LANGUAGE RECOMMENDED BY THE COMMISSION, INCLUDING THE "FAIR USE VALUE" PROVISION AND, CONSEQUENTLY, IT WOULD SEEM ESTABLISHED BEYOND DOUBT THAT THE ACT CONTEMPLATED THAT THE AUTHORIZED ACQUISITION OF OBSOLETE VESSELS WOULD BE ACCOMPLISHED BY MEANS OF A "SALE" OF THE OBSOLETE VESSEL TO THE GOVERNMENT.

IN THE MEMORANDUM PREPARED BY COUNSEL FOR THE COMMITTEE OF AMERICAN STEAMSHIP LINES, IT IS CONTENDED THAT THE CONTINUED USE BY THE SHIP OPERATOR ON A SO-CALLED CHARTER-BACK BASIS WOULD BE CONTRARY TO SECTION 510 (G), WHICH PROVIDES AS FOLLOWS:

(G) AN ABSOLUTE VESSEL ACQUIRED BY THE COMMISSION UNDER THIS SECTION WHICH IS OR BECOMES TWENTY YEARS OLD OR MORE, AND VESSELS PRES*NTLY IN THE COMMISSION'S LAID-UP FLEET WHICH ARE OR BECOME TWENTY YEARS OLD OR MORE, SHALL IN NO CASE BE USED FOR COMMERCIAL OPERATION, EXCEPT THAT ANY SUCH OBSOLETE VESSEL, OR ANY SUCH VESSEL IN THE LAID-UP FLEET MAY BE USED DURING ANY PERIOD IN WHICH VESSELS MAY BE REQUISITIONED UNDER SECTION 902 OF THIS ACT, AS AMENDED, AND EXCEPT AS OTHERWISE PROVIDED IN THIS ACT FOR THE EMPLOYMENT OF THE COMMISSION'S VESSELS IN STEAMSHIP LINES ON TRADE ROUTES EXCLUSIVELY SERVING THE FOREIGN TRADE OF THE UNITED STATES.

WHILE A LITERAL INTERPRETATION OF THE ABOVE-QUOTED SECTION WOULD PRECLUDE THE USE OF SUCH VESSELS FOR COMMERCIAL OPERATION, IT LIKEWISE WOULD NEGATIVE THE VERY INTENT OF THE PROVISIONS OF SECTION 510 (D) IN PERMITTING THEM TO DO SO. BUT, HERE AGAIN, THE COURTS HAVE HELD THAT IN CONSTRUING OR CONSIDERING THE APPLICATION OF A STATUTE, IT IS PERMISSIBLE TO LOOK TO ITS EVIDENT SPIRIT AND PURPOSE AS WELL AS TO THE STRICT LETTER OF THE LAW; THAT THE STRICT LETTER MUST YIELD TO ITS EVIDENT SPIRIT AND PURPOSE WHEN THIS IS NECESSARY TO GIVE EFFECT TO THE INTENT OF CONGRESS; THAT UNJUST OR ABSURD CONSEQUENCES ARE, IF POSSIBLE, TO BE AVOIDED; THAT GENERAL TERMS SHOULD BE SO LIMITED IN THEIR APPLICATION AS NOT TO LEAD TO OPPRESSION, INJUSTICE, OR AN ABSURD CONSEQUENCE; THAT IT WILL ALWAYS BE PRESUMED THAT THE LEGISLATURE INTENDED EXCEPTIONS TO ITS LANGUAGE WHICH WOULD AVOID RESULTS OF THIS CHARACTER; THAT THE REASON OF THE LAW IN SUCH CASES SHOULD PREVAIL OVER ITS LETTER; AND THAT CONSTRUCTIONS OF STATUTES ARE TO BE MADE ACCORDING TO THE INTENTION OF THE MAKERS, AND SOMETIMES ARE TO BE EXPOUNDED AGAINST THE LETTER TO PRESERVE THE INTENT. SEE FLEISCHMANN CONSTRUCTION COMPANY V. UNITED STATES, 270 U.S. 349, 360; MCKEE V. UNITED STATES, 164 U.S. 287, 293; UNITED STATES V. KIRBY, 7 WALL. 482, 486, AND MANKEL V. UNITED STATES, 19 CT.1CLS. 295, 300.

APPLYING THESE RECOGNIZED CANONS OF STATUTORY CONSTRUCTION, AND AFTER HAVING CONSIDERED THE OVER-ALL PURPOSE OF SECTION 510 OF THE ACT, WE MUST CONCLUDE THAT, IN OUR OPINION, THE PROHIBITION CONTAINED IN SECTION 510 (G) COULD NOT HAVE BEEN INTENDED TO APPLY TO THOSE VESSELS TRADED IN PURSUANT TO SECTION 510 (D), PARTICULARLY IN VIEW OF THE EXPRESS AUTHORITY PROVIDED IN THE LATTER WHICH CONTEMPLATED THAT VESSELS ACQUIRED THEREUNDER WOULD HAVE ARRIVED AT OR BE NEARING THE TWENTY-YEAR AGE LIMIT. SUCH A POSITION WOULD APPEAR TO BE SUPPORTED BY THE FOLLOWING COMMENTS OF REPRESENTATIVE BLAND IN HOUSE REPORT 824, 76TH CONGRESS, ST SESSION, CONCERNING THE STERILIZATION OF SHIPS TURNED IN UNDER THIS PLAN:

THE RETURN TO COMMERCIAL OPERATION OF VESSELS ACQUIRED UNDER THE PROPOSAL OR OF VESSELS NOW IN THE COMMISSION'S LAID-UP FLEET IS PROHIBITED BY THIS SECTION AFTER ANY SUCH VESSELS BECOME 20 YEARS OLD, EXCEPT DURING A PERIOD IN WHICH VESSELS MAY BE REQUISITIONED FOR NATIONAL DEFENSE, OR EXCEPT AS OTHERWISE PROVIDED IN THE ACT FOR THE EMPLOYMENT OF THE COMMISSION'S VESSELS IN STEAMSHIP LINES ON TRADE ROUTES EXCLUSIVELY SERVING THE FOREIGN TRADE OF THE UNITED STATES.

THE MENACE OF CONTINUED OPERATION OF THE OLDER VESSELS IN COMPETITION WITH VASTLY MORE EXPENSIVE NEW SHIPS SHOULD, TO SOME EXTENT, BE REMOVED. PRESENT COMMISSION POLICY PROVIDES A MEASURE OF STERILIZATION OF OLDER VESSELS OWNED BY THE GOVERNMENT AND PRESERVED FOR THE NATIONAL DEFENSE, BUT THE STATUTORY PROVISION OF THIS SECTION IS DEEMED DESIRABLE BECAUSE THE SHIP OWNER, WHEN CONTEMPLATING NEW CONSTRUCTION, MUST LOOK AHEAD NOT ONLY INTO THE IMMEDIATE FUTURE, BUT IF PRUDENT, MUST WEIGH POSSIBLE EVENTUALITIES WHICH MAY OCCUR DURING THE ENTIRE ECONOMIC LIFE OF A NEW VESSEL. TO THE EXTENT THAT COMPETITION IS PROBABLE OR POSSIBLE FROM WRITTEN-DOWN VESSLES WHICH MAY BE RELEASED BY THE GOVERNMENT, NEW CONSTRUCTION IS RETARDED. ( ITALICS SUPPLIED.)

THUS, IT IS APPARENT THAT THE CONTINUED USE OF A VESSEL AS AUTHORIZED UNDER SECTION 510 (D) WOULD NOT BE A RETURN TO COMMERCIAL OPERATION OF AN OBSOLETE VESSEL IN COMPETITION WITH MORE EXPENSIVE NEW SHIPS NOT YET IN BEING.

IN VIEW OF THE AFFIRMATIVE ANSWER TO YOUR FIRST QUESTION, NO CONSIDERATION IS REQUIRED OF THE SECOND QUESTION CONTAINED IN YOUR SUBMISSION.