(a) Shall have perpetual succession in its corporate name, unless dissolved by Act of Congress. (b) May adopt, alter, and use a corporate seal, which shall be judicially noticed. (c) May adopt, amend, and repeal bylaws governing the conduct of its general business, and the performance of the powers and duties granted to or imposed upon it by law. (d) May sue and be sued in its corporate name. (e) May appoint such officers, agents, attorneys, and employees as may be necessary for the conduct of the business of the corporation, define their authority and duties, fix their compensation, delegate to them such of the powers of the corporation as may be necessary, require that such of them as it may designate be bonded, and fix the penalties and pay the premiums of such bonds. Persons employed by the corporation whose compensation is paid on any basis other than a per annum basis shall not be included in making computations pursuant to the provisions of section 607 of the Federal Employees Pay Act of 1945. The provisions of section 82 of this title, as amended, shall apply to the corporation and to its officers and employees. May enter into contracts, leases, agreements, or other transactions. (g) Shall have, in the payment of debts out of bankrupt estates, the priority of the United States. (h) May determine the character of and necessity for its obligations and expenditures and the manner in which they shall be incurred, allowed, and paid, and may incur, allow, and pay the same, subject to pertinent provisions of law generally applicable to Government corporations. (i) May purchase, lease, or otherwise acquire, and hold, own, maintain, work, develop, sell, lease, exchange, convey, mortgage, or otherwise dispose of, and deal in, lands, leaseholds, and any interest, estate, or rights in real property, and any personal or mixed property, and any franchises, concessions, rights, licenses, or privileges necessary or appropriate for any of the purposes expressed in thisarticle. SEC. 249. SPECIFIC POWERS OF CORPORATION.-Subject to the provisions of the Government Corporation Control Act, the corporation shall have and may exercise the following specific powers, in addition to those elsewhere conferred in this article: (a) May maintain and operate the Panama Canal. (b) May construct, maintain, and operate a railroad across the Isthmus of Panama. (c) May construct or acquire vessels, and operate the same for transportation of passengers or freight and for other purposes. (d) May construct or acquire, establish, maintain, and operate docks, wharves, piers, harbor terminal facilities, shops, yards, marine railways, salvage and towing facilities, fuel-handling facilities, motor-transportation facilities, power systems, water systems, a telephone system, construction facilities, living quarters and other buildings, warehouses, storehouses, hotels, a printing plant, commissaries and manufacturing, processing or service facilities in connection therewith, laundries, dairy facilities, restaurants, amusement and recreational facilities, and other business enterprises, facilities, and appurtenances necessary or appropriate for the accomplishment of the purposes of this article. (e) May make or furnish sales, services, equipment, supplies, and materials, as contemplated by this article, to vessels, to agencies of the Government of the United States, to employees of the Government of the United States, and to any other governments, agencies, persons, corporations, or associations eligible to make or receive such purchases, services, supplies or materials under the laws prevailing at the time and the policies heretofore or hereafter adopted consistently with such laws. (f) May use the United States mails in the same manner and under the same conditions as the executive departments of the Federal Government. (g) May take such actions as may be necessary or appropriate to carry out the powers in this article or hereafter specifically conferred upon it: Provided, That the corporation shall undertake no new types of activities not included in the annual budget program prescribed by section 102 of the Government Corporation Control Act (except those which may be transferred to it under the provisions of section 246 (b) of this title): And provided further, That in the event an emergency is declared to exist by the board of directors during a period when the Congress is: not in session (or by the Governor of the Panama Canal, acting in his capacity as president of the corporation, with the concurrence of as many of the directors as may be consulted without loss of time unreasonable in the circumstances), recommended appropriate action within the scope of this article may be undertaken. A report on such emergency activity shall be presented promptly to the Congress, when it reconvenes, for its approval and such action as it may deem necessary or desirable with respect to reimbursement through supplemental appropriation of funds to cover costs or losses arising from such emergency. SEC. 250. SUBJECTION OF CORPORATION TO LAWS APPLICABLE TO NEW YORK COMPANY.-The corporation shall, so far as consistent with the terms of this article, be deemed subject to all provisions in treaties and in Acts of the Congress of the United States, now in force, which relate or apply to the New York company; and shall have all the rights, privileges, and exemptions, and be subject to all the obligations, liabilities, and responsibilities applicable to the New York company under or by virtue of such provisions. SEC. 251. TAKING OVER OF ASSETS AND LIABILITIES OF, AND DISSOLUTION OF NEW YORK COMPANY; RELEASE OF UNITED STATES TREATY RIGHTS IN ASSETS. The corporation is authorized and directed to take over the assets and assume the liabilities of the New York company as of July 1, 1948. To accomplish the transfer of such assets to, and the assumption of such liabilities by, the corporation, and to accomplish the dissolution of the New York company, the two corporations are authorized and directed to take, under the supervision of the stockholder, whatever action shall be determined to be appropriate and necessary, whether by agreement, transfer, merger, consolidation, dissolution, or otherwise. Effective upon the transfer of such assets and the assumption of such liabilities, there are hereby released and transferred to the corporation all the right, title, and interest, in and to such assets, which the United States now has or may hereafter acquire by virtue of the convention of November 18, 1903, between the United States and the Republic of Panama; and, specifically, there are hereby released to the corporation any and all reversionary rights of the United States in the lands of the corporation located in the cities of Panama and Colon, Republic of Panama. SEC. 252. REIMBURSEMENT OF OTHER AGENCIES.-The corporation shall reimburse the Civil Service and Canal Zone Retirement and Disability Funds for Government contributions to the retirement fund applicable to the corporation's employees, and the Employees' Compensation Fund, Bureau of Employees Compensation, Federal Security Agency, for the benefit payments made to the corporation's employees, and shall also reimburse other Government agencies for any payments of a similar nature made on its behalf. SEC. 253. PAYMENT OF EXCESS FUNDS INTO THE TREASURY.-The board of directors shall have the power and duty to appraise, at least annually, its necessary working capital requirements, together with reasonable foreseeable requirements for authorized plant replacement and expansion, and to pay into the Treasury as dividends the amount of funds in excess thereof. Such dividends shall be treated by the Treasury as miscellaneous receipts, but shall be treated on the books of the corporation as applicable to reduction of past or future direct Government capital contributions (as provided in section 246 (d) of this title) in determining the base for interest payments required under section 246 (c). SEC. 254. EMERGENCY FUND.-The corporation may borrow from a fund to be established and maintained in the Treasury, for any authorized purposes of the corporation, but for limited periods only, sums of money not to exceed a total of $10,000,000 outstanding at any one time. The fund shall be established by the deposit by the New York company with the Treasury on or before June 30, 1948, of the sum of $10,000,000 from the invested depreciation reserve funds presently maintained by the New York company, which amount, less any amounts borrowed therefrom by the corporation from time to time, shall be maintained by the Treasury as a separate fund. Amounts borrowed from said fund shall be paid over to the corporation by the Secretary of the Treasury, and repayments thereof shall be redeposited in said fund and will be available for subsequent loans. Loans to the corporation from this fund shall not bear interest. SEC. 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 section 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 require payment of interest under paragraph (c) of said section 246: Provided, however, That repayments by the corporation to the Treasury 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. SEC. 256. AUTHORIZATION FOR TRANSFER OF PANAMA CANAL TO CORPORATION.The President is hereby authorized to transfer to the corporation 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 by section 2 of the Act of August 12, 1949 (ch. 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. 257. Amendment or REPEAL.—The right to alter, amend, or repeal this article is expressly reserved. SEC. 258. SEPARABILITY CLAUSE.-If any provision of this article, or the application of such provision to any person or circumstances, is held invalid, the remainder of this article and the application of such provision to other persons and circumstances shall not be affected thereby. CHAPTER 23-TOLLS FOR USE OF THE CANAL SEC. 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. 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, substantial weight shall be given to the ratio of the estimated gross revenues from tolls to the estimated total gr. 88 revenues of the said corporation exclusive of the cost of commoditics re sold, 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 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 corporation 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. 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 provisions of said section 256, of the Panama Canal together with the facilities and appurtenances related thereto. (Sec. 14 of Public Law 841.) (Portions not italicized in the above reprint were added by Public Law 808. Portions deleted were repealed or changed by Public Law 841. Italicized portions were added by Public Law 841.) APPENDIX C PACIFIC AMERICAN STEAMSHIP ASSOCIATION San Francisco 11, Calif. JUNE 1, 1954. MEMORANDUM RE FOUR ARGUMENTS AGAINST LOWERING TOLLS (From 1928 Annual Report, the Panama Canal) After commenting on 1928 as the best year of the canal to date, the report states what appears to be perfectly natural from a business standpoint: "The increasing revenues have been made the occasion for proposals that tolls be reduced." The report then states that admittedly the toll rate is a matter for Congress, but that it is pertinent for the canal administration to advise Congress in the matter. The report then states, on page 2: "It is pertinent *** for the administration of the Canal to point out *** that the tolls are lower at Panama than *** at Suez *** that reductions will benefit foreign vessels in foreign trade as well as United States vessels in domestic trade; that the intercoastal lines are competing severely with the railroads; and a lowering of tolls may cripple the internal transportation system of the United States while reducing the Government's revenue with offsetting benefits accruing only to limited special interests." Not a single one of the reasons assigned for opposing a tolls reduction appears to be based on logic. Suez Canal rates are no valid comparison. The Panama Canal was built by the United States Government; its management has been headed at all times by the military; and its operation has been in the control of and to a substantial extent for the benefit of the military. The reasons for building the canal are amply set forth by authorities connected with the building. The Suez, on the other hand, was constructed by private interest; is so owned now; and yields a very fine rate of interest. The Suez Canal in 1948 earned $44 million. Annual dividends have been as high as 33 percent per year of the cost of the stock. Its shares are traded on the Paris Bourse. It is owned, controlled, and operated by the Compagne Universalle du Canal Maritime de Suez. A benefit to foreign vessels from possible lowered tolls is assigned a bad connotation in the report. This is in direct contradiction to the agreement that the United States made on a very important point affecting the commerce of the entire world. This argument can only indicate a failure on the part of the framers of that report so to subscribe to the policy of Congress in the treaty whereby all nations are given equal treatment at the Panama Canal. The Hay-Pauncefote Treaty (art. III, sec. 1) parallels the philosophy of friendship, commerce, and navigation clauses in some 31 treaties between the United States and other nations, and which have long been accepted as an absolute essential for the peaceful development of cultural and commercial intercourse among the nations of the world. It states that "The canal shall be free and open to the vessels * * * of all nations *** on terms of entire equality * * *” Severe competition with the railroads by the intercoastal steamship lines and a possible crippling of the internal transportation system are the last two cautions against lowered tolls. While fully admitting the tremendous value of our great rail system, it is at the least presuming for such a public agency to suggest that tolls charged to one industry as a Government utility be kept at a high rate so as to protect. another industry from competition. And the facts in that regard are so glaring as to make the statement embarrassing. The intercoastal lines never handled more than about 5 percent of total transcontinental freight. This is hardly "severe" competition, against which protection must be offered by keeping Government rates at an inordinately high level. The statement about "crippling the internal transportation system *** with offsetting benefits accruing only to limited special interests" seems an ominous reference to intercoastal shipping as some foreign element, whereas, as a matter of fact it is as much a part of the "internal transportation system" as the rails themselves, since it serves only the commerce between points within the United States. APPENDIX D Explanation of net expenditures as shown on page 21 Total depreciable assets_ Less accrued depreciation....... Net depreciable assets. Nondepreciable assets_ Total capital assets. Net revenues (representing tolls, civil revenues, and business profits; less appropriation expense, including depreciation) – Net expenditures _ _. Nondepreciable assets as above... Less: Interest during construction to 1914. Nondepreciable assets per 1952 annual report__ 1 Table 1, p. 81, 1951 Governor's annual report. Table 24, p. 102, 1951 Governor's annual report. X Million 1 $177. 8 1 89. 7 1 88. 0 1 399. O 1 487.0 2 272.9 214. 2 399. O 78. 0 3 16. 0 304. 9 |