payments theretofore made to the Commission (less any refunds theretofore made by the Administration on account of such payments) on account of additional charter hire for the period involved, the Charterer may apply to the Administration for refund of such overpayment and, if such application is found to be in order, the amount of the overpayment will be refunded by the Administration. The application should be made on a public voucher (Form 1034-Revised) in quintuplicate, bearing language substantially as follows:

Claim for refund of excess of preliminary payments made to the Maritime Administration, on account of additional charter hire, over the amount of such additional charter hire indicated to be due the Administration for the period from

(d) The accounting comprising the statements and accompanying remittance or voucher required under this section shall be submitted to the Administration through the District Comptroller in the district, area, or port in which the home office of the Charterer is located, or (if there be no such auditor of the Administration in the district in which the home office of the Charterer is located) to the Comptroller, Maritime Administration, Washington 25, D. C.

§ 299.41 Subsequent adjustments.

(a) In instances where operations under SHIPSALESDEMISE 303 continue beyond December 31, 1949, at the time of the submission of the accounting for each succeeding annual or over-all accounting period as required hereunder, the Charterer shall submit also a revised accounting for the period ended December 31, 1949 under SHIPSALESDEMISE 303 and addenda thereto, including all adjustments affecting that period that occurred subsequent to the rendition of the accounting therefor. Such revised accounting shall include also all such adjustments under SHIPSALESDEMISE 303 and addenda thereto applicable to the period prior to January 1, 1949: Provided, however, That if such adjustments are substantial, a separate revised accounting shall be submitted with respect to such prior period, the Administration reserving the right to determine in each

instance whether the amount of the adjustment involved shall be regarded to be substantial for this purpose.

(b) If, in any instance, at the time of the submission of an accounting for an annual or over-all accounting period, no adjustment affecting the preceding period has occurred subsequent to the submission of the accounting for such period, the Charterer shall submit to the Administration an appropriate certification to that effect, over the signature of a duly authorized officer.

CAPITAL NECESSARILY EMPLOYED

§ 299.42 Fundamental bases.

The fundamental bases for the determination of "capital necessarily employed" are provided in Clause 23(c) of Part II of WARSHIPDEMISEOUT 203 and SHIPSALESDEMISE 303.

§ 299.43 Interim additions and deductions.

The definition of "capital necessarily employed" in SHIPSALESDEMISE 303 provides, among other things, that additional capital in the form of cash or tangible property paid in during the charter period shall be included in the computation of "capital necessarily employed" from the date paid in and that any withdrawals of capital shall be deducted from the date withdrawn. Such interim adjustments are neither required nor permitted under WARSHIPDEMISEOUT 203. In the determination of "capital necessarily employed" under SHIPSALESDEMISE 303, additional capital, in the form of cash or tangible property paid in, and any withdrawals of capital during an annual or overall accounting period thereunder shall be included or deducted (as the case may be), pro rata, on the basis of the proportion of such additions or withdrawals represented by the relation that the number of days from the date thereof to the end of the calendar year or overall accounting period involved bears to the total number of days within such period, such proportion to be allocated to or between "capital necessarily employed" under SHIPSALESDEMISE 303 and "other operations" in the manner hereinafter prescribed. In any instance where such an adjustment affects the effective period of WARSHIPDEMISEOUT 203 the proportion of such adjustment otherwise allocable to operations under WARSHIPDEMISEOUT 203 shall be treated in the same manner as the

proportion allocable to "other operations".

§ 299.44 Allocation among operations under bareboat charter agreements and "other operations".

The definition of "capital necessarily employed" in WARSHIPDEMISE 203 and in SHIPSALESDEMISE 303 provides, among other things, that if the Charterer engages in other activities in addition to the operation of the vessels thereunder, the Owner shall determine the proper allocation of capital as between such activities. To implement this provision of the bareboat charter agreements, the following bases of allocation are prescribed:

(a) Wherever practicable and the result will not be disproportionate, assets (and applicable liabilities) shall be allocated directly to the operation in which they are employed. For example, such assets (and applicable liabilities) as

(1) Non-shipping inventories,

(2) Replacement and similar special funds (including contractual and statutory reserve funds of subsidized operators),

(3) Amounts on deposit under purchase contracts,

(4) Investments

panies,

in related com

(5) Advances and loans to related companies,

(6) Non-current receivables from, and payables (not in excess of receivables) to, related companies,

(7) Net book value of vessels and of non-shipping property and equipment, less the portion of any long-term debt arising from the acquisition of such assets due more than one year after the date of the balance sheet involved,

(8) Vessels under construction, (9) Notes and accounts receivable from officers and employees,

(10) Good will and other intangible assets, and

(11) Liability for recapture under operating-differential subsidy agreements, are not necessarily employed in operations under WARSHIPDEMISEOUT 203 or SHIPSALESDEMISE 303 and, therefore, are not allocable to such operations.

(b) Except in instances involving (1) considerable non-shipping operations, (2) the operation of passenger vessels, (3) substantial dissimilarity between the operations of the vessels chartered from the Administration and those of vessels owned or chartered from others

by the Charterer, or (4) agency operations actually carried on as a separate and substantial business activity of the Charterer for its own account and not merely incidental to the operation of the chartered vessels, (with respect to which the Charterer shall submit for the consideration of the Administration, in advance of the accounting herein prescribed, its concept of a fair and reasonable formula, addressed in the manner prescribed in § 299.40 (d)),

(i) Net current assets (excluding non-shipping inventories),

(ii) Voyages in progress (unterminated voyage revenue, less unterminated voyage expenses, or vice versa).

(iii) Advance ticket sales and deposits, (iv) Special and guaranty deposits (such as those made with utilities corporations),

(v) The net book value of furniture and fixtures and other property and equipment not included in paragraphs (a) and (c) of this section, less the portion of any long-term debt arising from the acquisition of such property and equipment due more than one year from the date of the balance sheet involved.

(vi) Non-current receivables from, and payables to, others than related companies, officers, and employees,

(vii) Long-term debt incurred in borrowing funds to provide working capital, (viii) Deferred charges, prepaid expenses, and deferred credits, and

(ix) Other debits and credits,

if, and to the extent that, they are employed in the general conduct of the shipping business, shall be allocated between operations under the bareboat charter agreements with the Administration and "other operations" on the basis of the relation that the number of days (eliminating fractions by considering twelve hours or more a full day and omitting portions of days amounting to less than twelve hours) of operation or maintenance of vessels under each SHIPSALESDEMISE 303, under each addendum to SHIPSALESDEMISE 303 whereunder additional charter hire is required to be computed, accounted for, and paid separately, under each WARSHIPDEMISEOUT 203, and in "other operations" (including those under service agreements) during the annual or over-all accounting period involved individually bear to the total of such days: Provided, That, for the purposes of this calculation only, a vessel day

130

(h) Vessels under Berth Agency Agreements where Berth Agent does not act in capacity of General Agent-_-_Provided, That in instances where more than one Berth Agent act for the vessel on a single voyage, the number of days so calculated shall be divided between the Berth Agents involved on the basis of the relation that the number of days under the agency of each bears to the total number of days of the voyage.

In this calculation the expired days of voyages in progress at the commencement of the annual or over-all accounting period will be omitted and the expired days of voyages in progress at the termination of such period will be taken into account (in other words, only the vessel days within the annual or over-all accounting period involved will be taken into account).

(c) The net book value of tugs, barges, scows, launches, lighters, cranes, and similar floating equipment; terminal property and equipment; stevedoring and other cargo-handling gear and equipment; and other property and equipment used exclusively in shipping and its auxiliary operations, less the portion of any long-term debt arising from the acquisition of such property and equipment due more than one year from the date of the balance sheet involved, shall be allocated between operations under the bareboat charter agreements with the Administration and "other operations" on the same basis as is the income derived from, and the expense incurred in, the operation and maintenance of such services or facilities as prescribed in §§ 299.47 to 299.53.

§ 299.45 Limitation of “capital necessarily employed".

(a) If in any instance the amount allocated to "capital necessarily employed" under SHIPSALESDEMISE 303, in accordance with the provisions of §§ 299.43 and 299.44, is in excess of the greater of the working capital requirements, or the net worth requirements determined in the manner provided in paragraph (2) of Clause H-Special provisions, of Part I of SHIPSALESDEMISE 303, such allocation shall be disregarded and "capital necessarily employed" shall be determined in accordance with such Special Provisions. In the application of this limitation, for the purpose of determining:

(1) The number of vessels involved in instances where they do not remain constant throughout the accounting period. and

(2) The amount of the working capital requirements or the net worth requirements (whichever is the greater) in instances where more than one type of vessel is involved,

the following formula is prescribed:

(1) The number of vessels involved shall be deemed to be the result obtained by dividing into the total number of days covering which charter hire was paid for all vessels for the accounting period involved, the number of calendar days within such period, and

(ii) The average working capital requirements or net worth requirements per vessel shall be determined by multiplying the greater of such requirements (as modified in sub-paragraphs (a) and (b) of paragraph (2) of Clause H of Part I of "SHIPSALESDEMISE 303") for each type of vessel involved by the number of days covering which charter hire was paid for all vessels of that type for the accounting period involved, and dividing the sum of the results thus obtained for all types of vessels involved by the aggregate number of days covered by such payments for all types of vessels.

(b) The amount to be deducted in the determination of additional charter hire (as ten per centum per annum on "capital employed") shall be that proportion of ten percent represented by the relation that the number of days within the accounting period involved bears to three hundred and sixty-five, the number of

(1) Working capital requirements (as modified in subparagraph (a) of paragraph (2) of Clause H of Part I of "SHIPSALESDEMISE 303") should be used for this purpose, if they exceed net worth requirements.

(2) Fractions resulting from the calculation of the number of vessels involved shall be taken into account, the 25 percent reduction being applicable to such fractions occurring between the fifth and sixth vessels, and the 50 percent reduction to those occurring between the tenth and eleventh vessels.

§ 299.46 Accounting periods extending beyond end of calendar year.

(a) Clause 13 of Part II of WARSHIPDEMISEOUT 203, wherein is prescribed the fundamental basis for the calculation and payment to the Administration of additional charter hire, refers to the cumulative net voyage profits computed for the period of the agreement and makes no provision for an annual accounting. Accordingly, the calculation of "capital necessarily employed" for the entire period under WARSHIPDEMISEOUT 203 is required to be made on the basis of the adjusted net worth of the Charterer as at the end of the month preceding the date of the delivery of the first vessel thereunder. To accomplish this,

$148, 500, 000 81,000,000 24, 000, 000 18, 000, 000

25, 200, 000

296, 700, 000

296, 700,000

3,150

94,190 48

3,150 180

172

$470, 952 40 353, 214 30 235, 476.20 58,869.05

1, 118, 511. 95

55, 159.49

(1) The formula prescribed in § 299.44 (b) shall cover the entire period from the beginning of the month in which the first vessel was delivered to the Charterer to the end of the month in which the last vessel was redelivered to the Administration under WARSHIPDEMISEOUT 203, and

(2) After the amount of "capital necessarily employed" has been determined, pursuant to the provisions of §§ 299.42299.45, the "allowable return" thereon shall be calculated at the rate of 10 per centum per annum on the basis of the relation that the number of calendar days between the beginning of the month in which the first vessel was delivered to the Charterer and the end of the month in which the last vessel was redelivered to the Administration under WARSHIPDEMISEOUT 203 bears to 365, the number of days in a calendar year. (See Exhibit "A" for 1946 contained in the illustrative examples of statements to be supplied by the Comptroller, Maritime Administration.)

(b) In any instance where operations under WARSHIPDEMISEOUT 203 extended beyond December 31, 1946, in the calculation of the "allowable return" under SHIPSALESDEMISE 303 (and, tu the extent involved, any addendum thereto with respect to which additional charter hire is required to be computed,

accounted for, and paid separately) for such succeeding period, the number of vessel days applicable to WARSHIPDEMISEOUT 203 in such period shall be taken into account in the formula prescribed in § 299.44 (b) and shall be treated in the same manner as those applicable to "other operations". (See Exhibit "A" for 1947 contained in the illustrative examples of statements to be supplied by the said Comptroller.)

NET VOYAGE PROFIT

§ 299.47 Fundamental bases.

(a) The fundamental bases for the determination of "net voyage profit" are provided in Clause 23(a) of Part II of WARSHIPDEMISEOUT 203 and SHIP

SALESDEMISE 303.

(b) The fundamental bases for the determination of "fair and reasonable overhead expenses" (which are deductible from gross income in the determination of "net voyage profit") are prescribed in Clause 23(b) of Part II of WARSHIPDEMISEOUT 203 and SHIP

SALESDEMISE 303.

§ 299.48 Allocation among operations under bareboat charter agreements and "other operations”.

The definitions of "net voyage profit" in WARSHIPDEMISEOUT 203 and in SHIPSALESDEMISE 303 provide, in effect, among other things, that, in instances where the Charterer engages in other activities in addition to the operation of the vessels thereunder, income and expenses other than those directly and exclusively allocable to the operation of such vessels shall be prorated between these activities on such basis as the Owner may determine to be fair and reasonable. To implement this provision of the bareboat charter agreements, the following bases of allocations are prescribed:

(a) Wherever practicable and the result will not be disproportionate, income and expenses (including, but not necessarily limited to, operating revenues and expenses on terminated voyages, inactive vessels expense, operating-differential subsidy, collections from and contributions to pools for the purpose of equalizing revenue in accordance with pooling agreements) shall be allocated directly to the operation from which they are derived or in which they are incurred.

(b) The Uniform System of Accounts provides, among other things, that Accounts Nos. 645-Income from Terminal

Operations, 650 Income from Cargo Handling Operations, 655-Income from Tug and Lighter Operations, and 660— Income from Other Shipping Operations (in instances where such services or facilities are maintained by the Operator) shall be credited with "agreed amounts" for the use of such services or facilities by vessels owned by the "Operator", with corresponding charges to Vessel Operating Expense. In instances where the Charterer maintains such services or facilities and they are used by the chartered vessels and if it is impracticable to determine the actual cost of such use, the Charterer may charge in the Vessel Operating Expense Accounts of the chartered vessels fair and reasonable amounts for the use of such services or facilities (but at not in excess of the "going rates" for the services or facilities at the ports involved, or the rates at which such services or facilities could be obtained from independent suppliers, or the rates charged all other vessels using them), provided similar charges are made in the accounts of all other vessels operated by the Charterer. If the sum of the gross income derived from the use of such services or facilities by vessels under WARSHIPDEMISEOUT 203, under SHIPSALESDEMISE 303, owned by the Charterer, and chartered from others by the Charterer, exceeds the gross income derived from the use of such services or facilities by other vessels,

(1) The expense of maintaining such services or facilities shall be allocated among the operation of the vessels under WARSHIPDEMISEOUT 203 and SHIPSALESDEMISE 303 and "other operations" on the basis of the relation that the gross income so derived from the vessels engaged in each such operation bears to the total gross income derived from the furnishing of such services or facilities, except that income derived from the furnishing of such services or facilities to vessels neither owned, nor chartered from the Administration or others, by the Charterer shall not be included in the above calculation but shall be prorated between the operation of the vessels under WARSHIPDEMISEOUT 203 and SHIPSALESDEMISE 303 and "other operations" in the same manner as is the expense of maintaining such services or facilities as thus determined, and

(2) The amounts credited to the in-come accounts shall be allocated directly