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library
bureau of railway economics
washington, d. c.
[Public Law 841—81st Congress]
[Chapter 1049—2d Session]
[H. R. 8677]
AN ACT
To authorize and provide for the maintenance and operation of the Panama
Canal by the present corporate adjunct of the Panama Canal, as renamed;®to@ $
reconstitute the agency charged with the civil government of the Canal Zone,
and for other purposes. r . % r, / /* ,\
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Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled, That section 5 of
title 2 of the Canal Zone Code, approved June 19,1934 (48 Stat. 1122),
is amended to read as follows:
"5. Establishment, Administration, and Functions of Canal
Zone Government.—The independent agency of the United States
heretofore known as the Panama Canal shall hereafter—
" (1) be known as the Canal Zone Government;
"(2) be administered, under the supervision of the President
or such officer of the United States as may be designated by him,
by a Governor of the Canal Zone; and
"(3) be charged, except as otherwise provided by law, with
the performance of the various duties connected with the civil
government, including health, sanitation and protection, of the
Canal Zone.
"Appointment of other necessary persons, see section 81 of this title, as
amended."
Sec. 2. (a) Except as otherwise provided in, or where inconsistent
with, the provisions of this Act—
(1) the terms "the Panama Canal", "the Canal", and "the
Canal authorities", wherever appearing in the statutes of the
United States and having reference, prospectively, to the agency
heretofore known by those names, are amended to read "the Canal
Zone Government"; and
(2) the term "the Panama Railroad Company", wherever
appearing in the statutes of the United States and having ref¬
erence, prospectively, to the corporation heretofore known by
that name, is amended to read "the Panama Canal Company".
(b) Except as otherwise provided in this Act, the title "the Gover¬
nor of the Panama Canal", wherever appearing in the statutes of the
United States, is amended to read "the Governor of the Canal Zone".
(c) Sections 982, 987, and 1024 of title 4, and section 833 of title 5,
of the Canal Zone Code, are amended by deleting the term "the Panama
Canal", appearing in each of said sections, and inserting in lieu thereof
the term "the Panama Canal Company".
(d) Section 836 of title 5 of the Canal Zone Code is amended by
deleting the term "the Government of the Canal Zone", which appears
"Cross-Reference
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[ptm. law 841j
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in paragraph b of said section and inserting in lieu thereof the term
"the Panama Canal Company".
(e) The headline and introductory clause of section 7 of title 2 of
the Canal Zone Code are amended to read as follows:
"7. Control and Jurisdiction of Governor Over Canal Zone.—
The Governor of the Canal Zone shall: * *
Seo. 3. Section 10 of title 2 of the Canal Zone Code, as amended by
section 1 of the Act of June 13,1010 (cli. 358, 54 Stat. 387), is further
amended to read as follows:
"10. Injuries to Vessels, Cargo, Crew, or Passengers, Occa¬
sioned by Operation of Canal—(a) Injuries in Locks of Canal.—
The Panama Canal Company shall promptly adjust and pay dam¬
ages for injuries to vessels, or to the cargo, crew, or passengers of
vessels, which may arise by reason of the passage of such vessels
through the locks of the Panama Canal under the control of officers
or employees of the said corporation: Provided, however, That no
such damages shall be paid in any case where the injury was proxi¬
mately caused by the negligence or fault of the vessel, master, crew,
or passengers: Provided further, That in any case wherein the negli¬
gence or fault of the vessel, master, crew, or passengers proximately
contributed to the injury, the award of damages shall be diminished
in proportion to the negligence or fault attributable to the said vessel,
master, crew, or passengers: And provided further, That damages
shall not be allowed and paid for injuries to any protrusion beyond the
side of a vessel, whether such protrusion is permanent or temporary
in character. A vessel shall be considered to be passing through the
locks of the Canal, under the control of officers or employees of the
corporation, from the time the first towing line is made fast on board
before entrance into the locks and until the towing lines are cast off
upon, or immediately prior to, departure from the lock chamber.
"(b) Injuries Other Than in Locks.—The Panama Canal Com¬
pany shall promptly adjust and pay damages for injuries to vessels,
or to the cargo, crew, or passengers of vessels which may arise by
reason of the presence of such vessels in the waters of the Canal Zone,
other than the locks, when the injury was proximately caused by
negligence or fault on the part of any officer or employee of the corpo¬
ration acting within the scope of his employment and in the line of
his duties in connection wutli the operation of the canal: Provided,
however, That in any case wherein the negligence or fault of the vessel,
master, crew, or passengers proximately contributed to the injury,
the award of damages shall be diminished in proportion to the negli¬
gence or fault attributable to the said vessel, master, crew, or pas¬
sengers : And provided further, That in the case of any vessel which
is required by or pursuant to regulations prescribed under section 9
of this title, as amended, to have a Panama Canal pilot on duty
aboard, no damages shall be adjusted and paid for injuries to any
vessel, or to the cargo, crew, or passengers of any such vessel, incurred
while the vessel was under way and in motion, unless at the time such
injuries were incurred the navigation or movement of the vessel was
under the control of a Panama Canal pilot.
"(c) Measure of Damages Generally.—In determining the
amount of the award of damages for injuries to a vessel for which the
Panama Canal Company is found or determined to be liable, there may
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(Pub. Law 8414
be included (1) actual or estimated cost of repairs; (2) charter hire
actually lost by the owners, or charter hire actually paid, depending
upon the terms of the charter party, for the time the vessel is under¬
going repairs; (3) maintenance of the vessel and wages of the crew, if
such are found to be actual additional expenses or losses incurred out¬
side of the charter hire; (4) other expenses which are definitely and
accurately shown to have been incurred necessarily and by reason of
the accident or injuries: Provided, hoioever, That there shall not be
allowed agent's fees or commissions or other incidental expenses of
similar character, or any items which are indefinite, indeterminable,
speculative, or conjectural. The corporation shall be furnished such
vouchers, receipts, or other evidence as may be necessary in support of
any item of a claim. If a vessel is not operated under charter but by
the owner directly, evidence shall be secured if available as to the sum
for which vessels of the same size and class can be chartered in the
market. If such charter value cannot be determined, the value of the
use of such vessel to its owners in the business in which it was engaged
at the time of the injuries shall be used as a basis for estimating the
damages for the vessel's detention; and the books of the owners show¬
ing the vessel's earnings about the time of the accident or injuries shall
be considered as evidence of probable earnings during the time of
detention. If the books are unavailable, such other evidence shall
be furnished as may be necessary.
"(d) Delays for Which No Responsibility Assumed.—The Pan¬
ama Canal Company shall not be responsible, nor consider any claim,
for demurrage or delays occasioned by landslides or other natural
causes, by necessary construction or maintenance work on Canal locks,
terminals, or equipment, by obstructions arising from accidents, by
time necessary for admeasurement, by congestion of traffic, or by any
other cause except as specially set forth in this section.
"(e) Settlement of Claims.—The amounts of the respective
awards of damages under this section may be adjusted, fixed, and deter¬
mined by the corporation by mutual agreement, compromise, or other¬
wise ; and acceptance by any claimant of the amount awarded to him
shall be deemed to be in full settlement of such claims.
"(f) Actions on Claims.—Any claimant for damages under this
section wTho considers himself aggrieved by the findings, determina¬
tion, or award of the Panama Canal Company in reference to his
claim may bring an action on such claim against the said corporation
in the United States District Court for the District of the Canal Zone;
and in any such action the provisions of this section relative to the
determination, adjustment, and payment of such claims, and the pro¬
visions of the regulations established under section 9 of this title, as
amended, relative to navigation of Canal Zone waters and to transiting
of the Panama Canal, shall be applicable. No action for damages
which is cognizable under this section shall lie against the said cor¬
poration otherwise, or in any other court, than as provided in this
paragraph, or shall lie against any officer or employee of the corpora¬
tion: Provided, however, That nothing in this paragraph shall be
construed to prevent or prohibit actions against officers or employees
of the said corporation for damages for injuries resulting from acts
of such officers or employees outside the scope of their employment
or not in the line of their duties or from acts of such officers or em-
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ployees committed or performed with intent to injure the person or
property of another. Actions under this paragraph shall be tried by
the court without a jury.
"(g) Investigation Before Vessel's Departure.—Notwithstand¬
ing any other provision of law, no claim shall be considered under
this section, nor shall any action for damages lie thereon, unless, prior
to the departure from Canal Zone waters of the vessel involved, the
investigation by the competent authorities of the accident or injury
giving rise to such claim shall have been completed, and the basis for
the claim shall have been laid before the corporation."
Sec. 4. Section 82 of title 2 of the Canal Zone Code is amended to
read as follows:
"82. Compensation of Persons in Military, Naval, or Public
Health Service.— (a) If any of the persons appointed or employed
as provided in section 6, or section 81, as amended, of this title are in
the military, naval, or Public Health Service of the United States, the
amount of the official salary paid to any such person shall be deducted
from the amount of salary or compensation provided by or which shall
be fixed under the terms of those sections, but this section shall not be
construed as requiring the deduction from the amount of such salary
or compensation of—
"(1) the retired pay or allowance of any retired warrant officer
or enlisted man of the Army, Navy, Air Force, Marine Corps, or
Coast Guard; or
"(2) the training pay, retainer pay or allowances of any war¬
rant officer or enlisted man of the Reserve forces of the Army,
Navy, Air Force, Marine Corps, or Coast Guard.
"(b) The Canal Zone Government shall annually pay to each of
the aforesaid services an amount sufficient to reimburse the said service
for the official salary paid to any person in such service for the period
of appointment or employment by the Canal Zone Government."
Sec. 5. The headline and first sentence of section 245 of title 2 of
the Canal Zone Code, as added by the Act of June 29, 1948 (ch. 706,
62 Stat. 1075), are amended to read as follows:
"245. Creation, Purposes, Offices, and Residence of Panama
Canal Company.—For the purposes of maintaining and operating the
Panama Canal and of conducting business operations incident to such
maintenance and operation and incident to the civil government of the
Canal Zone, there is hereby created, as an agency and instrumentality
of the United States, a body corporate to be known as the Panama
Canal Company, hereinafter referred to as the 'corporation'. * *
Sec. 6. Paragraph (c) of section 246 of title 2, Canal Zone Code, as
added by the Act of June 29,1948, is amended to read as follows:
"(c) In order to reimburse the Treasury, as nearly as possible, for
the interest cost of the funds or other assets directly invested in the
corporation, the corporation shall pay interest to the Treasury on the
net direct investment of the Government in the corporation as defined
in paragraphs (a) and (b) of this section, and shown by the receipt
described therein, at a rate or rates determined by the Secretary of
the Treasury as required to reimburse the Treasury for its cost. Pay¬
ments of such interest charges shall be made annually to the extent
earned, and if not earned shall be made from subsequent earnings."
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[Pub. Law 841]
Sec. 7. Section 246 of title 2, Canal Zone Code, as added by tbe Act
of June 29, 1948, is amended by adding at tlie end thereof a new para¬
graph lettered (e) and reading as follows:
"(e) The corporation is further obligated to pay into the Treasury
as miscellaneous receipts amounts sufficient to reimburse the Treasury,
as nearly as possible, (1) for the annuity payments under article XIV
of the convention of November 18, 1903, between the United States of
America and the Republic of Panama, as modified by article VII of the
treaty of March 2,1936, between the said Governments, and (2) for the
net costs of operation of the agency known as the Canal Zone Govern¬
ment. The net costs of operation of the Canal Zone Government,
which are deemed to form an integral part of the costs of operation of
the Panama Canal enterprise as a whole, shall not include interest but
shall include depreciation and the reimbursement of other Government
agencies for expenditures made on behalf of the Canal Zone Govern¬
ment. The payments into the Treasury, referred to in this paragraph,
shall be made annually to the extent earned, and if not earned shall
be made from subsequent earnings unless the Congress shall otherwise
direct."
Sec. 8. Subparagraph (e) of section 248 of title 2, Canal Zone
Code, as added by the Act of June 29, 1948. is amended by adding at
the end thereof a sentence reading as follows: "The provisions of
section 82 of this title, as amended, shall apply to the corporation
and to its officers and employees."1
Sec. 9. Section 249 of title 2 of the Canal Zone Code, as added by the
Act of June 29, 1948, is amended by relettering subparagraphs (a) to
(f) thereof as subparagraphs (b) to (g), respectively, and by insert¬
ing after the introductory clause of said section a new subparagraph
reading as follows:
" (a) May maintain and operate the Panama Canal."
Sec. 10. Article 3 of chapter 12 of title 2, Canal Zone Code, as
added by the Act of June 29,1948, is amended by renumbering sections
255 and 256 of said title 2 as sections 257 and 258, respectively, and by
adding, in said article 3, two new sections numbered 255 and 256 and
reading as follows:
"255. Appropriations To Cover Losses.—Appropriations are
hereby authorized for payment to the corporation of such amounts as
may be shown in the annual budget program of the corporation as
necessary to cover losses sustained in the conduct of its activities.
Amounts appropriated to the corporation under authority of this sec¬
tion shall not be added to the amount of the receipt referred to in
paragraphs (a) and (b) of section 246 of this title, and shall not re¬
quire payment of interest under paragraph (c) of said section 246:
Provided, however, That repayments by the corporation to the Treas¬
ury shall in no case be treated as dividends under sections 246 (d) and
253 of this title until all amounts appropriated to the corporation
under authority of this section shall have been repaid to the Treasury."
"256. Authorization for Transfer of Panama Canal to Corpora¬
tion.—The President is hereby authorized to transfer to the corpora¬
tion the Panama Canal, together with the facilities and appurtenances
related thereto, and any or all of the facilities and appurtenances
heretofore maintained and operated by the Panama Canal under
authority of section 51 of title 2 of the Canal Zone Code, as amended
Law 841.1
6
by section 2 of the Act of August 12, 1949 (cli. 422, 63 Stat. 601), and
all or so much as he may determine to be necessary of the personnel,
property, records, related assets, contracts, obligations, and liabilities
of or appertaining to the said Canal and the aforesaid facilities or
appurtenances, and such transfer shall be deemed to have been accepted
and assumed by the corporation without the necessity of any act or acts
on the part of the corporation except as otherwise stipulated in the
provisions of section 246 of this title."
Sec. 11. Section 411 of title 2 of the Canal Zone Code is amended
to read as follows:
"411. Authority To Prescribe Measurement Rules and Tolls.—
The Panama Canal Company is authorized to prescribe and from time
to time change (1) the rules for the measurement of vessels for the
Panama Canal, and (2), subject to the provisions of the section next
following, the tolls that shall be levied for the use of the Panama
Canal: Provided, however, That the rules of measurement, and the
rates of tolls, prevailing on the effective date of this amended section
shall continue in effect until changed as provided in this section:
Provided further, That the said corporation shall give six months'
notice, by publication in the Federal Register, of any and all proposed
changes in basic rules of measurement and of any and all proposed
changes in rates of tolls, during which period a public hearing shall
be conducted: And provided further, That changes in basic rules of
measurement and changes in rates of tolls shall be subject to, and shall
take effect upon, the approval of the President of the United States,
whose action in such matter shall be final and conclusive."
Sec. 12. Section 412 of title 2 of the Canal Zone Code, as amended
by the Act of August 24, 1937 (ch. 752, 50 Stat. 750), is amended to
read as follows:
"412. Bases of Tolls.— (a) Tolls on merchant vessels, army and
navy transports, colliers, tankers, hospital ships, supply ships, and
yachts shall be based on net vessel-tons of one hundred cubic feet each
of actual earning capacity determined in accordance with the rules
for the measurement of vessels for the Panama Canal, and tolls on
other floating craft shall be based on displacement tonnage. The rate
of tolls on vessels in ballast without passengers or cargo may be less
than the rate of tolls for vessels with passengers or cargo.
"(b) Tolls shall be prescribed at a rate or rates calculated to cover,
as nearly as practicable, all costs of maintaining and operating the
Panama Canal, together with the facilities and appurtenances related
thereto, including interest and depreciation, and an appropriate share
of the net costs of operation of the agency known as the Canal Zone
Government. In the determination of such appropriate share, sub¬
stantial weight shall be given to the ratio of the estimated gross reve¬
nues from tolls to the estimated total gross revenues of the said cor¬
poration exclusive of the cost of commodities resold, and exclusive
of revenues arising from transactions within the said corporation or
from transactions with the Canal Zone Government.
"(c) Vessels operated by the United States, including warships,
naval tenders, colliers, tankers, transports, hospital ships, and other
vessels owned or chartered by the United States for transporting
troops or supplies, may in the discretion of the President of the United
States be required to pay tolls. In the event, however, that such
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[Pxtb. Law 841 .J
vessels are not required to pay tolls, the tolls thereon shall nevertheless
be computed and the amounts thereof shall be treated as revenues of
the Panama Canal Company for the purpose of prescribing the rates
of tolls, and shall be offset against the obligations of the said corpora¬
tion under paragraphs (c) and (e) of section 246 of this title, as
amended.
"(d) The levy of tolls is subject to the provisions of section 1 of
article III of the treaty between the United States of America and
Great Britain concluded on November 18, 1901, of articles XVIII and
XIX of the convention between the United States of America and the
Republic of Panama concluded on November 18, 1903, and of article I
of the treaty between the United States of America and the Republic
of Colombia proclaimed on March 30,1922,
"(e) Capital investment for interest purposes shall not include any
interest during construction."
Sec. 13. The following statutes and parts of statutes are repealed:
(1) Canal Zone Code, title 2, sections 32 and 33;
(2) Canal Zone Code, title 2, sections 51 to 54, as amended by sec¬
tion 2 of the Act of August 12, 1949 (ch. 422, 63 Stat. 601);
(3) Canal Zone Code, title 2, section 414;
(4) The paragraph entitled "Housing of officers serving in the
Canal Zone" of the Act of July 9, 1918 (ch. 143, 40 Stat. 855; 10
U. S. C., sec. 721) ;
(5) Subparagraph (g) of section 2680 of title 28, United States
Code;
(6) Section 6 of the Act of August 1, 1914 (ch. 223, 38 Stat. 679;
31 U. S. C., sec. 621);
(7) Section 1 of the Act of June 29, 1948 (ch. 706, 62 Stat. 1075;
48 U. S. C., sec. 1361); and
(8) All statutes and parts of statutes inconsistent with this Act,
to the extent of such inconsistency.
Sec. 14. Except for section 256 of title 2 of the Canal Zone Code,
as added by section 10 of this Act, this Act shall take effect upon the
effective date of the transfer to the corporation, pursuant to the pro¬
visions of said section 256, of the Panama Canal together with the
facilities and appurtenances related thereto.
Approved September 26, 1950.
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