FEDERAL REGISTER \ 1934 VOLUME 4 ■ íflYiTEO ^ NUMBER 127

Washington, Saturday, July 1, 1939

The President its functions and personnel (including CONTENTS the Chairman and the members of the Page THE PRESIDENT Board) are hereby transferred to the [Public Resolution No. 20— 76th Congress] Bureau of the Budget in the Executive Reorganization Plan No. I______2727 [S. J. Res. 138] Office of the President. The Chairman Reorganization Plan No. I I ______2731 Joint R esolution Providing T hat R eorgan­ of the Board shall perform such admin­ RULES, REGULATIONS, ization P lans N umbered I and II Sh all istrative duties as the Director of the Take Effect o n Ju l y 1, 1939 ORDERS Bureau of the Budget shall direct. Resolved by the Senate and House of T itle 8—Aliens and Citizensh ip: Representatives of the United States of Section 3. Central Statistical Commit­ America in Congress assembled, That the tee Abolished and Functions Trans­ Immigration and Naturalization Service: provisions of reorganization plan numbered —The Central Statistical Commit­ I, submitted to the Congress on April 25, ferred. tee is hereby abolished, and its functions Ports of entry for aliens: 1939, and the provisions of reorganization Roseau, Minn______plan numbered n, submitted to the Con­ are transferred to the Director of the 2733 gress on May 9, 1939, shall take effect on July Bureau of the Budget to be administered Sandusky, Ohio, John G. 1, 1939, notwithstanding the provisions of Hinde Airport______2733 the Reorganization Act of 1939. by him under the direction and supervi­ T itle 26— Internal R evenue: Sec. 2. Nothing in such plans or this joint sion of the President. The Director of resolution shall be construed as having the the Bureau of the Budget shall promptly Bureau of Internal Revenue: effect of continuing any agency or function wind up any outstanding affairs of the Army contracts for aircraft, beyond the time when it would have ter­ Central Statistical Committee. excess profits on______2733 minated without regard to such plans or United States Processing Tax this joint resolution or of continuing any Section 4. National Resources Plan­ Board of Review: function beyond the time when the agency ning Board.— (a) The functions of the in which it was vested would have terminated Rules of Practice, corrections- 2740 without regard to such plans or this joint National Resources Committee, estab­ T itle 30—M ineral R esources: resolution. lished by Executive Order No. 7065 of National Bituminous Coal Com­ W m . B. B ankhead June 7, 1935, and its personnel (except Speaker of the House of Representatives. mission: the members of the Committee) and all Jno N G arner Distributors who physically of the functions of the Federal Employ­ Vice President of the United States and handle coal over docks, President of the Senate. ment Stabilization Office in the Depart­ report to be submitted___ 2740 Approved, June 7, 1939. ment of Commerce and its personnel are T itle 50—W ildlife: Fr a n k lin D R oosevelt hereby transferred to the Executive Bureau of Fisheries: Office of the President. The functions Alaska walruses and sea lions, transferred by this section are hereby R eorganization P lan N o. 1 taking of______consolidated, and they shall be admin­ 2741 Prepared by the President and trans­ istered under the direction and super­ NOTICES mitted to the Senate and the House of vision of the President by the National Representatives in Congress assembled, Resources Planning Board (hereafter Civil Aeronautics Authority: April 25, 1939, pursuant to the provi­ referred to as the Board), which shall Reapplication for pilot, ground sions of the Reorganization Act of 1939, be composed of five members to be ap­ instructor and air carrier approved April 3, 1939 pointed by the President. The Presi­ dispatcher certificates_____ 2744 Department of the Interior: PART 1.----EXECUTIVE OFFICE OF THE dent shall designate one of the mem­ National Bituminous Coal Com­ PRESIDENT bers of the Board as Chairman and another as Vice Chairman. The Vice mission: S e c t i o n 1. Bureau of the Budget.— Chairman shall act as Chairman in the District Board No. 18, desig­ The Bureau of the Budget and all of its absence of the Chairman or in the event nation of employee mem­ functions and personnel (including the of a vacancy in that office. The mem­ ber of______2741 Director and Assistant Director) are bers of the Board shall be compensated Southwest Coal Co., approval hereby transferred from the Treasury at the rate of $50 per day for time spent as marketing agency____ 2742 Department to the Executive Office of the in attending and traveling to and from Western Pennsylvania Coal President; and the functions of the meetings, or in otherwise exercising the Corp., modification of Bureau of the Budget shall be adminis­ functions and duties of the Board, plus marketing agency con­ tered by the Director thereof under the the actual cost of transportation: Pro­ tract ______2742 direction and supervision of the Presi­ vided, That in no case shall a member West Kentucky Coal Co., or­ dent. be entitled to receive compensation for der relative to complaint S e c t i o n 2. Central Statistical Board.— more than thirty days’ service in two alleging violation______2742 The Central Statistical Board and all of consecutive months. (Continued on next page) 2727 2728 FEDERAL REGISTER, Saturday, July 1, 1939

Sec. 6. Federal Employment Stabiliza­ Security Board and its functions, and the tion Office Abolished.—The Federal Em­ Civilian Conservation Corps and its func­ ployment Stabilization Office is hereby tions, are hereby consolidated under one FEDERALIpREGISTER abolished, and the Secretary of Com­ agency to be known as the Federal Secu­ merce shall promptly wind up its affairs. rity Agency, with a Federal Security Ad­ Sec. 7. Transfer of Records and Prop­ ministrator at the head thereof. The erty.—All records and property (includ­ Federal Security Administrator shall be ing office equipment) of the several appointed by the President, by and with Published by the Division of the Federal agencies transferred, or the functions of the advice and consent of the Senate, Register, The National Archives, pursuant to the authority contained in the Federal which are transferred, by this Part are and shall receive a salary at the rate of Register Act, approved July 26, 1935 (49 hereby transferred to the Executive $12,000 per annum. He shall have gen­ Stat. L. 500), under regulations prescribed Office of the President for use in the eral direction and supervision over the by the Administrative Committee, with the approval of the President. administration of the agencies and administration Of the several agencies The Administrative Committee consists of functions transferred by this Part. consolidated into the Federal Security the Archivist or Acting Archivist, an officer Sec. 8. Transfer of Funds.— So much Agency by this section and shall be re­ of the Department of Justice designated by the Attorney General, and the Public Printer of the unexpended balances of appro­ sponsible for the coordination of their or Acting Public Printer. priations, allocations, or other funds functions and activities. The daily issue of the Federal R egister available (including those available for (b) The Federal Security Administra­ will be furnished by mail to subscribers, free tor shall appoint an Assistant Federal of postage, for $1 per month or $10 per year; the fiscal year ending June 30, 1940) for single copies 10 cents each; payable in ad­ the use* of any agency in the exercise of Security Administrator, who shall re­ vance. Remit by money order payable to any functions transferred by this Part, ceive a salary at the rate of $9,000 per Superintendent of Documents, Government or for the use of the head of any depart­ annum, and he may also appoint such Printing Office, Washington, D. C. Correspondence concerning the publica­ ment or agency in the exercise of any other personnel and make such expendi­ tion of the Federal R egister should be ad­ functions so transferred, as the Director tures as may be necessary. dressed to the Director, Division of the of the Bureau of the Budget shall deter­ (c) The Assistant Administrator shall Federal Register, The National Archives, act as Administrator during the absence Washington, D. C. mine, shall be transferred to the Execu­ tive Office of the President for use in or disability of the Administrator or in connection with the exercise of functions the event of a vacancy in that office and transferred by this Part. In determin­ shall perform such other duties as the CONTENTS— Continued ing the amount to be transferred the Administrator shall direct. Director of the Bureau of the Budget (d) The several agencies and func­ Department of Labor: may include an amount to provide for tions consolidated by this section into Wage and Hour Division: Pa§e the liquidation of obligations incurred the Federal Security Agency shall carry Apparel industry, hearing on against such appropriations, allocations, with them their personnel. review of findings relative or other funds prior to the transfer: Section 202. Social Security Board.— to employment of learn­ Provided, That the use of the unex­ The Social Security Board and its func­ ers ______2743 pended balances of appropriations, allo­ tions shall be administered as a part of the Federal Security Agency under the Federal Trade Commission: cations, or other funds transferred by Gould, Benjamin, trading as this section shall be subject to the provi­ direction and supervision of the Federal Security Administrator. The Chairman Piccadilly Hosiery Mills, sions of section 4 (d) (3) and section 9 of the Social Security Board shall per­ etc., order apointing ex­ of the Reorganization Act of 1939. form such administrative duties as the aminer______2744 Section 9. Personnel.—Any personnel Federal Security Administrator shall Securities and Exchange Com­ transferred by this Part found to be in direct. mission: excess of the personnel necessary for the Section 203. United States Employ­ Notifce of and orders for hear­ efficient administration of the functions ment Service.— (a) The functions of the ings: transferred by this Part shall be re­ United States Employment Service shall Southern Union Service Co— 2744 transferred under existing law to other be consolidated with the unemployment Utilities Power & Light Corp., positions in the Government service, or compensation functions of the Social Se­ and Charles True Adams. 2744 separated from the service subject to the curity Board and shall be administered Withdrawal of applications: provisions of section 10 (a) of the Reor­ in the Social Security Board in connec­ Hillman Land Co., et al______2744 ganization Act of 1939. tion with such unemployment compen­ Kentucky Natural Gas Corp— 2744 PART 2.— FEDERAL SECURITY AGENCY sation functions under the direction and National Supply Co______2744 Section 201. Federal Security supervision of the Federal Security Ad­ War Department: ministrator. Regular Army, appointment of Agency.— (a) The United States Employ­ (b) The office of , the Director of the chaplains______. 2741 ment Service in the Department of Labor and its functions and personnel are United States Employment Service is transferred from the Department of hereby abolished, and all of the functions Labor; the Office of Education in the of such office are transferred to, and (b) The Board shall determine the Department of the Interior and its func­ shall be exercised by, the Social Security rules of its own proceedings, and a ma­ tions and personnel (including the Com­ Board. jority of its members in office shall con­ missioner of Education) are transferred (c) All functions of the Secretary of stitute a quorum for the transaction of from the Department of the Interior; the Labor relating to the administration of business, but the Board may function Public Health Service in the Department the United States Employment Service notwithstanding vacancies. of the Treasury and its functions and are hereby transferred to, and shall be (c) The Board may appoint neces­ personnel (including the Surgeon Gen­ exercised by, the Federal Security Ad­ sary officers and employees and may eral of the Public Health Service) are ministrator. delegate to such officers authority to transferred from the Department of the Section 204. Office of Education.— (a) perform such duties and make such ex­ Treasury; the National Youth Adminis­ The Office of Education and its func­ penditures as may be necessary. tration within the Works Progress Ad­ tions shall be administered by the Com­ missioner of Education under the direc­ S ec. 5. National Resources Committee ministration and its functions and per­ Abolished.—The National Resources sonnel (including its Administrator) are tion and supervision of the Federal Se­ Committee is hereby abolished, and its transferred from the Works Progress Ad­ curity Administrator. outstanding affairs shall be wound up by ministration; and these agencies and (b) All functions of the Secretary of the National Resources Planning Board. their functions, together with the Social the Interior relating to the administra- FEDERAL REGISTER, Saturday, July 1, 1939 2729

tion of the Office of Education are cations, or other funds available (includ­ may also appoint such other personnel hereby transferred to, and shall be exer­ ing those available for the fiscal year and make such expenditures as may be cised by, the Federal Security Adminis­ ending June 30, 1940) for the adminis­ necessary. trator. trative expenses of the agencies and (c) The Assistant Administrator shall Section 205. Public Health Service.— functions consolidated by this Part, such act as Administrator during the absence (a) The Public Health Service and its sums, and in such proportions, as he may or disability of the Administrator, or in functions shall be administered by the find necessary for the administrative ex­ the event of a vacancy in that office, Surgeon General of the Public Health penses of the Federal Security Agency. and shall perform such other duties as Service under the direction and super­ Section 211. Personnel.—Any person­ the Administrator shall direct. vision of the Federal Security Adminis­ nel transferred by this Part found to be (d) The several agencies and func­ trator. in excess of the personnel necessary for tions consolidated by this section in the (b) All the functions of the Secretarythe efficient administration of the func­ Federal Works Agency shall carry with of the Treasury relating to the adminis­ tions transferred by this Part shall be them their personnel. tration of the Public Health Service, ex­ re-transferred under existing law to Section 302. Public Roads Adminis­ cept those functions relating to the ac­ other positions in the Government serv­ tration.— (a) The Bureau of Public ceptance and investment of gifts as au­ ice, or separated from the service subject Roads and its functions shall be admin­ thorized by sections 23 (b) and 137 (e ), to the provisions of section 10 (a) of the istered as the Public Roads Administra­ title 42, U. S. Code, are hereby trans­ Reorganization Act of 1939. tion at the head of which shall be the ferred to, and shall be exercised by, the Chief of the Bureau of Public Roads Federal Security Administrator. PART 3.— FEDERAL WORKS AGENCY whose title shall be changed to Commis­ Section 206. National Youth Admin­ sioner of Public Roads. Hereafter the Section 301. Federal Wbrks Agency.— istration.—The National Youth Admin­ Commissioner of Public Roads shall be (a) The Bureau of Public Roads in the istration and its functions shall be appointed by the Federal Works Admin­ Department of Agriculture and its func­ administered by the National Youth istrator. tions and personnel (including the Chief Administrator under the direction and (b) All functions of the Secretary of thereof) are transferred from the De­ supervision of the Federal Security Ad­ Agriculture relating to the administra­ partment of Agriculture; the Public ministrator. tion of the Bureau of Public Roads are Buildings Branch of the Procurement Di­ hereby transferred to, and shall be exer­ Section 207. Civilian Conservation vision in the Treasury Department and Corps.—The Civilian Conservation Corps cised by, the Federal Works Administra­ its functions and personnel are trans­ tor. and its functions shall be administered ferred from the Treasury Department; Section 303. Public Buildings Admin­ by the Director of the Civilian Conserva­ the Branch of Buildings Management of tion Corps under the direction and istration.— (a) The Public Buildings the National Park Service in the Depart­ Branch of the Procurement Division and supervision of the Federal Security ment of the Interior and its functions Administrator. its functions, the Branch of Buildings and personnel (except those relating to Management of the National Park Serv­ Section 208. Transfer of Records and monuments and memorials), and the ice and its functions (except those relat­ Property.—All records and property (in­ functions of the National Park Service in ing to monuments and memorials) and cluding office equipment) of the several the District of Columbia in connection the functions of the National Park Serv­ agencies which, with their functions, are with the general assignment of space, the ice in the District of Columbia in con­ consolidated by section 201 into the Fed­ selection of sites for public buildings, and nection with the general assignment of eral Security Agency are hereby trans­ the determination of the priority in space, the selection of sites for public ferred to the jurisdiction and control of which the construction or enlargement buildings, and the determination of the the Federal Security Agency for use in of public buildings shall be undertaken, priority in which the construction or en­ the administration of the agencies and and the personnel engaged exclusively in largement of public buildings shall be functions consolidated by that section. the administration of such functions, and undertaken, are hereby consolidated and Section 209. Transfer of Funds.— So the United States Housing Authority in shall be administered as the Public much of the unexpended balances of the Department of the Interior and its Buildings Administration, with a Com­ appropriations, allocations, or other functions and personnel (including the missioner of Public Buildings at the head funds (including those available for the Administrator) are transferred from the thereof. The Commissioner of Public fiscal year ending June 30, 1940) avail­ Department of the Interior; and all of Buildings shall be appointed by the Fed­ able for the use of any agency in the these agencies and functions, together eral Works Administrator and shall re­ exercise of any functions transferred by with the Federal Emergency Administra­ ceive a salary at the rate of $9,000 per this Part, or for the use of the head of tion of Public Works and its functions, annum. The Commissioner of Public any department or agency in the exer­ and all of the Works Progress Adminis­ Buildings shall act under the direction cise of any functions so transferred, as tration and its functions (except the Na­ and supervision of the Federal Works the Director of the Bureau of the Budget tional Youth Administration and its Administrator. shall determine, shall be transferred for functions) are hereby consolidated into (b) All functions of the Secretary of use in connection with the exercise of one agency to be known as the Federal the Treasury and the Director of Pro­ the functions transferred by this Part. Works Agency, with a Federal Works Ad­ curement relating to the administration In determining the amount to be trans­ ministrator at the head thereof. The of the Public Buildings Branch of the ferred the Director of the Bureau of the Federal Works Administrator shall be ap­ Procurement Division and to the selec­ Budget may include an amount to pro­ pointed by the President, by and with tion of location and sites for public build­ vide for the liquidation of obligations the advice and consent of the Senate, ings, and all functions of the Secretary incurred against such appropriations, and shall receive a salary at the rate of of the Interior and the Director of the allocations, or other funds prior to the $12,000 per annum. He shall have gen­ National Park Service relating to the ad- transfer: Provided, That the use of the eral direction and supervision over the minstration of the functions of the unexpended balances of appropriations, administration of the several agencies Branch of Buildings Management and allocations, or other funds transferred consolidated into the Federal Works the functions of the National Park Serv­ by this section shall be subject to the Agency by this section and shall be re­ ice in the District of Columbia in con­ provisions of section 4 (d) (3) and sec­ sponsible for the coordination of their nection with the general assignment of tion 9 of the Reorganization Act of 1939. functions. space, the selection of sites for public Section 210. Administrative Funds.— (b) The Federal Works Administrator buildings, and the determination of the The Director of the Bureau of the shall appoint an Assistant Federal Works priority in which the construction or en­ Budget shall allocate to the Federal Se­ Administrator, who shall receive a salary largement of public buildings shall be curity Agency, from appropriations, alio- I at the rate of $9,000 per annum, and he undertaken, are hereby transferred to. 2730 FEDERAL REGISTER, Saturday, July 1, 1939 and shall be exercised by, the Federal obligations incurred against such appro­ connection with the agencies and func­ Works Administrator. priations, allocations, or other funds tions transferred by this section. In de­ Section 304. United States Housing prior to the transfer: Provided, That termining the amount to be transferred, Authority.— (a) The United States Hous­ the use of the unexpended balances of the Director of the Bureau of the Budget ing Authority and its functions shall be appropriations, allocations, or other may include an amount to provide for the administered by the United States Hous­ funds transferred by this section shall liquidation of obligations incurred against ing Administrator under the direction be subject to the provisions of section 4 such appropriations, allocations, or other I and supervision of the Federal Works (d) (3) and section 9 of the Reorgani­ funds prior to the transfer. The use of J Administrator. zation Act of 1939. the unexpended balances of appropria­ (b) All functions of the Secretary of (b) All unexpended balances of ap­tions, allocations, or other funds trans­ the Interior relating to the administra­ propriations, allocations, or other funds ferred by this subsection shall be subject tion of the United States Housing Au­ available (including those available for to the provision of section 4 (d) (3) and thority are hereby transferred to, and the fiscal year ending June 30, 1940) for section 9 of the Reorganization Act of shall be exercised by, the Federal Works the use of the United States Housing 1939. Administrator. Authority, other than those transferred (c) Transfer of other funds.—Ail un­ Section 305. Public Works Adminis­ by subsection (a) of this section, are expended balances of appropriations, al­ tration.—The Federal Emergency Ad­ hereby transferred with the United locations, or other funds, other than ministration of Public Works and its States Housing Authority and shall re­ those mentioned in subsection (b) of this functions shall be administered as the main available to it for the exercise of section, available (including those avail­ Public Works Administration with a its functions. able for the fiscal year ending June 30, Commissioner of Public Works at the Section 309. Administrative Funds.— 1940) for any agency transferred by sub­ head thereof. The Commissioner of The Director of the Bureau of the Budg­ section (a) of this section shall be trans­ Public Works shall be appointed by the et shall allocate to the Federal Works ferred with such agency and shall re­ Federal Works Administrator and shall Agency, from appropriations, allocations, main available to it for the exercise of receive a salary at the rate of $10,000 per or other funds available (including those its functions. annum. The Commissioner of Public available for the fiscal year ending June (d) Personnel.— Any of the personnel Works shall act under the direction and 30,1940) for the administrative expenses transferred by this section to the De­ supervision of the Federal Works Ad­ of the agencies and functions consoli­ partment of Agriculture which the Sec­ ministrator. dated by section 301, such sums, and in retary of Agriculture shall find to be in Section 306. Work Projects Adminis­ such proportions, as he may find neces­ excess of the personnel necessary for the tration.— The Works Progress Adminis­ sary for the administrative expenses of administration of the functions trans­ tration and its functions (except the the Federal Works Agency. ferred by this section shall be re-trans­ National Youth Administration and its Section 310. Personnel.—Any of the ferred under existing law to other posi­ functions) shall be administered as the personnel transferred by this Part found tions in the Government, or separated Work Projects Administration, with a to be in excess of the personnel neces­ from the service subject to the provisions Commissioner of Work Projects at the sary for the efficient administration of of section 10 (a) of the Reorganization head thereof. The Commissioner shall the functions transferred by this Part Act of 1939. be appointed by the Federal Works Ad­ shall be re-transferred under existing Section 402. (a) Federal Loan Agen­ ministrator and shall receive a salary at law to other positions in the Government cy.—There shall be at the seat of the

the rate of $10,000 per annum. The service, or separated from the service Government a Federal Loan Agency, w , Commissioner shall act under the direc­ subject to the provisions of section 10 with a Federal Loan Administrator at tion and supervision of the Federal (a) of the Reorganization Act of 1939. the head thereof. The Federal Loan Ad­ Works Administrator. ministrator shall be appointed by the PART 4.— LENDING AGENCIES S ection 307. Transfer of Records and President by and with the advice and Property.—All records and property (in­ Section 401. (a) Transfers to the De­ consent of the Senate, and shall receive cluding office equipment) of the several partment of Agriculture.—The Farm a salary at the rate of $12,000 per annum. agencies which, with their functions, are Credit Administration, the Federal Farm (b) Assistant Federal Loan Adminis­ consolidated by section 301 into the Fed­ Mortgage Corporation, and the Com­ trator.—The Federal Loan Administra­ eral Works Agency are hereby trans­ modity Credit Corporation, and their tor shall appoint an Asssistant Federal ferred to the jurisdiction and control of functions and activities, together with Loan Administrator, who shall receive a the Federal Works Agency for use in the their respective personnel, records, and salary at the rate of $9,000 per annum. administration of the agencies and func­ property (including office equipment), The Assistant Administrator shall act as tions consolidated by that section. are hereby transferred to the Depart­ Administrator during the absence or dis­ Section 308. Transfer of Funds.— (a) ment of Agriculture and shall be admin­ ability of the Administrator, or in the So much of the unexpended balances of istered in such Department under the event of a vacancy in that office, and appropriations, allocations, or other general direction and supervision of the shall perform such other duties as the funds available (including those avail­ Secretary of Agriculture, who shall be Administrator shall direct. able for the fiscal year ending June 30, responsible for the coordination of their (c) Powers and Duties of Administra­ 1940) for the use of any agency (except functions and activities. tor.—The Administrator shall supervise the United States Housing Authority) (b) Transfer of Administrativethe administration, and shall be respon­ in the exercise of any functions trans­ Funds.—So much of the unexpended bal­ sible for the coordination of the functions ferred by this Part, or for the use of the ances of appropriations, allocations, or and activities, of the following agencies: head of any department or agency in other funds available (including those Reconstruction Finance Corporation, the exercise of any functions so trans­ available for the fiscal year ending June Electric Home and Farm Authority, RFC ferred, and so much of such balances 30, 1940) for the administrative expenses Mortgage Company, Disaster Loan Cor­ available to the United States Housing of any agency transferred by this section, poration, Federal National Mortgage As­ Authority for administrative expenses, as the Director of the Bureau of the sociation, Federal Home Loan Bank as the Director of the Bureau of the Budget shall determine, shall be trans­ Board, Home Owners’ Loan Corporation, Budget shall determine, shall be trans­ ferred to the Secretary of Agriculture for Federal Savings and Loan Insurance ferred for use in connection with the ex­ such use; and the Director of the Bureau Corporation, Federal Housing Adminis­ ercise of the functions transferred by of the Budget shall allocate to the Secre­ tration, and Export-Import Bank of this Part. In determining the amount tary of Agriculture from such funds, such Washington. The Administrator may to be transferred the Director of the sums, and in such proportions, as he may appoint such officers and employees and Bureau of the Budget may include an find necessary for the administrative ex­ make such expenditures as may be nec­ amount to provide for the liquidation of penses of the Secretary of Agriculture in essary. FEDERAL REGISTER, Saturday, July 1, 1939 2731

(d) Administrative Funds.—The Di­ cultural industry in foreign countries, office in the Department of State as the rector of the Bureau of the Budget shall and shall conduct abroad such activities Secretary shall determine. allocate to the Federal Loan Agency, (including the demonstration of stand­ Sec. 2. Treasury Department.— Trans­ from appropriations, allocations, or other ards for cotton, wheat, and other Amer­ fers, consolidations, and abolitions relat­ funds available (including those avail­ ican agricultural products), as the Sec­ ing to the Department of the Treasury able for the fiscal year ending June 30, retary of Agriculture shall determine to are hereby effected as follows: 1940) for the administrative expenses of be in the public interest, and shall report the agencies named in this section, such to the Secretary of Agriculture the results (a) Bureau of Lighthouses.—The Bu­ sums, and in such proportion, as he may of, and the information secured through, reau of Lighthouses in the Department find necessary for the administrative ex­ such investigations and activities. of Commerce and its functions are hereby transferred to and shall be consolidated penses of the. Federal Loan Agency. (2) The Secretary of Commerce may with and administered as a part of the from time to time when he deems it in Coast Guard in the Department of the the public interest designate any officer Treasury. R eorganization P l a n N o. II in his Department to render temporary (b) Director General of Railroads: Of­ service under the provisions of, and sub­ Prepared by the President and transmit­ fice Abolished and Functions Trans­ ject to the conditions named in, section ted to the Senate and the House of ferred.—The office of Director General of 5 of the Act of March 3, 1927, (44 Stat. Representatives in Congress assembled, Railroads is hereby abolished. The 1396). May 9, 1939, pursuant to the provisions functions and duties of the Director Gen­ of the Reorganisation Act of 1939, ap­ (3) The Secretary of Agriculture may eral of Railroads are hereby transferred proved April 3,1939 from time to time when he deems it in to the Secretary of the Treasury to be the public interest designate any officer PART 1.— DEPARTMENTS exercised and performed by him per­ in his Department to render temporary sonally or through such officer or officers S e c t i o n 1. State Department.—Trans­ service under the provisions of, and sub­ of the Department of the Treasury as he fers and consolidations relating to the ject to the conditions named in, section 2 may authorize. The Secretary of the Department of State are hereby effected of the Act of June 5,1930, (46 Stat. 498). Treasury is hereby designated as the as follows: (4) The Secretary of Commerce and agent provided for in section 206 of the (a) Foreign Commerce Service and the Secretary of Agriculture may each Transportation Act, 1920 (41 Stat. 461). Foreign Agricultural Service.—The For­ designate an officer in his Department, (c) War Finance Corporation Abol­ eign Commerce Service of the United acceptable to the Secretary of State, to ished.—All of the functions, property, States and its functions in the Bureau of serve in the Department of State as and obligations of the War Finance Cor­ Foreign and Domestic Commerce of the liaison officer in connection with the ad­ poration not heretofore transferred by Department of Commerce and the For­ ministration of the foreign service of the statute to the Secretary of the Treasury eign Agricultural Service of the United United States. are hereby transferred to the Depart­ States and its functions as established by (5) One officer in the Department of ment of the Treasury. The War Finance the Act of June 5, 1930 (46 Stat. 497), in Commerce designated by the Secretary Corporation is hereby abolished and the the Department of Agriculture are here­ of Commerce and acceptable to the Sec­ Secretary of the Treasury shall complete by transferred to the Department of retary of State and one officer in the the winding up of its affairs and shall State and shall be consolidated with and Department of Agriculture designated dispose of its assets in accordance with administered as a part of the Foreign by the Secretary of Agriculture and ac­ the Act of March 1, 1929 (45 Stat. 1442), Service of the United States under the ceptable to the Secretary of State shall not later than December 31, 1939. direction and supervision of the Secretary be added to the membership of the Sec. 3. Department of Justice.— Trans­ of State. Board of Foreign Service Personnel for fers, consolidations, and abolitions re­ (b) Functions of the Secretary of Com­ the Foreign Service. lating to the Department of Justice are merce and the Secretary of Agriculture (c) Status of Foreign Service Offi- hereby effected as follows: Transferred to the Secretary of State; cers.—Foreign Commerce Service officers Exceptions.—The functions of the Sec­ (a) Federal Prison Industries, Inc.— and Foreign Agricultural Service officers The Federal Prison Industries, Inc. (to­ retary of Commerce with respect to the who by reason of transfer to the Foreign Foreign Commerce Service and the func­ gether with its Board of Directors) and Service of the United States and by ap­ its functions are hereby transferred to tions of the Secretary of Agriculture with pointment according to law acquire respect to the Foreign Agricultural Serv­ the Department of Justice and shall be status of Foreign Service officers therein administered under the general direction ice (other than functions with respect to shall not be included in the total num­ such services pertaining to activities in and supervision of the Attorney General. ber of officers in such Service for the (b) National Training School for the United States and to the compilation, purpose of determining the percentage publication, and dissemination of infor­ Boys.—The National Training School for limitation established by section 10 of Boys and its functions (including the mation) are hereby transferred to, and the Act of February 23, 1931 (46 Stat. shall be exercised by, the Secretary of functions of its Board of Trustees) are 1207), as amended. hereby transferred to the Department State, except and provided that under (d) China Trade Act Registrar.—Such regulations prescribed by the President— of Justice and shall be administered by officer of the Foreign Service as the Sec­ the Director of the Bureau of Prisons, (1) The Secretary of State shall cause retary of State shall make available for under the direction and supervision of to be made such investigations relating to that purpose may be authorized by the the Attorney General. commercial and industrial conditions and Secretary of Commerce to perform the (c) Board of Trustees of the National activities in foreign countries and such duties of China Trade Act Registrar pro­ Training School for Boys Abolished.— other specific investigations relating to vided for in the Act of September 19, The Board of Trustees of the National foreign commerce as the Secretary of 1922 (42 Stat. 849), under the direction Training School for Boys (including the Commerce shall determine to be in the of the Secretary of Commerce. consulting trustees) is hereby abolished. public interest, and shall report to the (e) Foreign Service Buildings Com­ Secretary of Commerce the results of, mission.—The Foreign Service Buildings Sec. 4. Department of the Interior.— and the information secured through, Commission and its functions are here­ Transfers, consolidations, and abolitions such investigations. He shall also cause by transferred to the Department of relating to the Department of the In­ to be made such investigations relating State. The Commission shall exercise terior are hereby effected as follows: to world competition and demand for advisory functions, but all other func­ (a) Functions of the National Bitu­ agricultural products, to production, tions (including administrative func­ minous Coal Commission Transferred.— marketing, and disposition of such prod­ tions) shall be exercised under the di­ The functions of the National Bitumi­ ucts in foreign countries, and to farm rection and supervision of the Secretary nous Coal Commission (including the management and other phases of agri- of State by such division, bureau, or functions of the members of the Com- 2732 FEDERAL REGISTER, Saturday, July 1, 1939 mission) are hereby transferred to the enforce any act of Congress for the pro­ relating to the Federal Security Agency Secretary of the Interior to be admin­ tection, preservation or restoration of are hereby effected as follows: istered under his direction and super­ game and other wild life and animals vision by such division, bureau, or office shall apply to officers and employees of (a) Radio Service and United States in the Department of the Interior as the the Department of the Interior desig­ Film Service Transferred.—The func­ Secretary shall determine. nated by the Secretary of the Interior to tions of the Radio Division and the (b) National Bituminous Coal Com­ exercise and discharge such duties. United States Film Service of the Na­ mission Abolished.—The National Bitu­ (g) Officers of Biological Survëy May tional Emergency Council are hereby minous Coal Commission and the offices Administer Oaths.—The provisions of the transferred to the Federal Security of the members thereof are hereby abol­ Act of January 31, 1925 (c. 124, 43 Stat. Agency and shall be administered in the ished and the outstanding affairs of the 803), shall be applicable to such officers, Office of Education under the direction Commission shall be wound up by the agents, or employees of the Department and supervision of the Federal Security Administrator. Secretary of the Interior. of the Interior performing functions of (c) Office of Consumers’ Counsel Abol­ the Bureau of Biological Survey as are (b) American Printing House for the ished and Functions Transferred.—The designated by the Secretary of the In ­ Blind.—The functions of the Secretary office of Consumers’ Counsel of the Na­ terior for the purposes named in the Act. of the Treasury with respect to the ad­ tional Bituminous Coal Commission is (h) Migratory Bird Conservation Com­ ministration of the appropriations for hereby abolished and its functions are mission.—The Secretary of the Interior the American Printing House for the transferred to, and shall be administered shall be chairman of the Migratory Bird Blind (except the function relating to in, the Office of the Solicitor of the De­ Conservation Commission, and the Sec­ the perpetual trust fund) are hereby partment of the Interior under the di­ retary of Agriculture shall be a member transferred to the Federal Security rection and supervision of the Secretary thereof. Agency and shall be administered under of the Interior. (i) Mount Rushmore National Memo­ the direction and supervision of the Fed­ (d) Bureau of Insular Affairs.—The rial Commission.— The Mount Rushmore eral Security Administrator. The an­ Bureau of Insular Affairs of the War De­ National Memorial Commission and its nual report and vouchers required to be partment and its functions are hereby functions are hereby transferred to the furnished to the Secretary of the Treas­ transferred to the Department of the In­ National Park Service in the Department ury by the trustees of the American terior and shall be consolidated with the of the Interior. The functions vested in Printing House for the Blind shall be Division of Territories and Island Pos­ the Commission by section 3 and 4 (a) furnished to the Federal Security sessions in the Department of the Inte­ of the Act of June 15, 1938, (c. 402, 52 Administrator. rior and administered in such Division Stat. 694) shall continue to be exercised S e c . 202. National Archives.—Trans­ under the direction and supervision of by the Commission. All other functions fers, consolidations, and abolitions re­ the Secretary of the Interior. The office of the Mount Rushmore National Memo­ lating to the National Archives are of the Chief of the Bureau and offices rial Commission shall be administered by hereby effected as follows: subordinate thereto provided for in sec­ the National Park Service under the di­ tion 14 of the Act of June 4, 1920 (41 rection and supervision of the Secretary (a) Functions of Codification Board Stat. 769), are hereby abolished and all of the Interior. Transferred.— The functions of the Codification Board, established by the of the functions of such offices are trans­ Sec. 5. Department of Agriculture: ferred to, and shall be exercised by, the Act of June 19, 1937 (50 Stat. 304), are Rural Electrification Administration hereby transferred to the National Ar­ Director of the Division of Territories Transferred.—The Rural Electrification and Island Possessions. chives and shall be consolidated in that Administration and its functions and ac­ agency with the functions of the Divi­ (e) Bureau of Fisheries.—The Bureau tivities are hereby transferred to the De­ of Fisheries in the Department of Com­ sion of the Federal Register and shall be partment of Agriculture and shall be ad­ administered by such Division under the merce and its functions are hereby trans­ ministered in that Department by the ferred to the Department of the Interior direction and supervision of the Administrator of the Rural Electrifica­ Archivist. and shall be administered in that De­ tion Administration under the general (b) Codification Board Abolished.— partment under the direction and super­ direction and supervision of the Secre­ The Codification Board is hereby abol­ vision of the Secretary of the Interior. tary of Agriculture. ished and its outstanding affairs shall be The functions of the Secretary of Com­ Sec. 6. Department of Commerce: wound up by the Archivist through the merce relating to the protection of fur Transfer of Inland Waterways Corpora­ Division of the Federal Register in the seals and other fur-bearing animals, to tion.—The Inland Waterways Corpora­ National Archives. the supervision of the Pribilof Islands tion and all of its functions and obliga­ and the care of the natives thereof, and tions are hereby transferred to the De­ PART 3.— EXECUTIVE OFFICE OF THE to the Whaling Treaty Act, are hereby partment of Commerce and shall be ad­ transferred to, and shall be exercised by, ministered in that Department under PRESIDENT the Secretary of the Interior. the supervision and direction of the Sec­ S e c t i o n 301. Transfers and abolitions (f) Bureau of Biological Survey.—The retary of Commerce. The capital stock relating to the Executive Office of the Bureau of Biological Survey in the De­ of the Corporation shall continue to be President are hereby effected as follows: partment of Agriculture and its functions held for the United States by the Secre­ are hereby transferred to the Depart­ tary of the Treasury, but all other func­ (a) Functions of National Emergency ment of the Interior and shall be ad­ tions, rights, privileges, and powers and Council Transferred.—All functions of ministered in that Department under the all duties and liabilities of the Secretary the National Emergency Council other direction and supervision of the Secre­ of War relating to the Inland Waterways than those relating to Radio Service and tary of the Interior. The functions of Corporation are hereby transferred to, Film Service (transferred by section the Secretary of Agriculture relating to and shall be exercised, performed, and 201 (a) of this plan to the Federal Se­ the conservation of wild life, game, and discharged by, the Secretary of Com­ curity Agency) are hereby transferred to migratory birds are hereby transferred merce. The Secretary of Commerce shall the Executive Office of the President and to, and shall be exercised by, the Secre­ be substituted for the Secretary of War shall be administered under the direction tary of the Interior. The provisions of as, and shall be deemed to be, the in­ and supervision of the President. the Act of May 18, 1934 (c. 299, 48 Stat. corporator of the Inland Waterways (b) National Emergency Council 780), as amended by the Act of February Corporation. Abolished.— The National Emergency 8, 1936 (c. 40, 49 Stat. 1105), insofar as Council is hereby abolished and its out­ they relate to officers or employees of PART 2.— INDEPENDENT AGENCIES standing affairs shall be wound up under the Department of Agriculture desig­ Section 201. Federal Security the direction and supervision of the nated by the Secretary of Agriculture to Agency.—Transfers and consolidations President. FEDERAL REGISTER, Saturday, July 1, 1939 2733

PART 4.— GENERAL PROVISIONS are hereby transferred to the head of TITLE 26—INTERNAL REVENUE such department and shall be adminis­ S ec. 401. Transfer of Functions of tered under his direction and supervision BUREAU OF INTERNAL REVENUE Heads of Departments.—Except as other­ wise provided in this Plan, the functions by such division, bureau, office, or persons [T. D. 4909] as he shall determine. of the head of any Department relating S u b c h a p te r A—P art 16— E x cess P r o f its to the administration of any agency or o n A r m y C o ntr acts fo r A ircraft function transferred from his Depart­ ment by this Plan, are hereby transferred Rules, Regulations, Orders REGULATIONS UNDER SECTION 14 OF THE to, and shall be exercised by, the head ACT OF APRIL 3, 1939, AND OTHER PRO­ of the department or agency to which VISIONS *f such transferred agency or function is TITLE 8—ALIENS AND CITIZENSHIP To Officers and Employees of the Treas­ transferred by this Plan. IMMIGRATION AND NATURALIZA­ ury Department, the War Department, Sec. 402; Transfer of Records, Prop­ TION SERVICE and Others Concerned: erty, and Personnel.—All records and [Supp. 6 to General Order No. C -l x] Table of Contents property (including office equipment) of the several agencies, and all records and P ort of Entry for A liens at Roseau, Sec. M innesota 16.0 Introductory. property used primarily in the adminis­ 16.1 Definitions. tration of any functions, transferred by June 29, 1939. 16.2 Contracts and subcontracts under this Plan and, except as otherwise pro­ Pursuant to the authority contained which excess profit liability may be vided, all the personnel used in the ad­ incurred. in Section 23 of the Immigration Act of 16.3 Contracts or subcontracts for scientific ministration of such agencies and func­ 1917 (Act of February 5, 1917, 39 Stat. equipment. tions (including officers whose chief 892; 8 U.S.C. 102), Title 8 CFR, Chapter 16.4 Completion of contract defined. duties relate to such administration) are 16.5 Manner of determining liability. 1, Subchapter A—Immigration Rules and 16.6 Computation of excess profit liability. hereby transferred to the respective de­ Regulations—Part 3, Section 3.1 (Rule 16.7 Total contract price. partments or agencies concerned, for use 3, Subdivision (a ), paragraph 1 of the 16.8 Cost of performing a contract or sub­ in the administration of the agencies and Immigration Rules and Regulations of contract. functions transferred by this Plan: Pro­ 16.9 Credit for net loss or for deficiency in January 1, 1930, Edition of December 31, profit in computing excess profit. vided, That any personnel transferred to 1936), is amended by inserting Roseau, 16.10 Credit for Federal income taxes. any department or agency by this sec­ Minnesota in lieu of Richardson’s Bridge, 16.11 Failure of contractor to require agree­ tion found by the head of such depart­ Minnesota (Roseau P. O.), in the list of ment by subcontractor. ment or agency to be in excess of the 16.12 Evasion of excess profit. designated ports for the entry of aliens 16.13 Books of account and records. personnel necessary for the administra­ into the United States. 16.14 Report to Secretary of War. tion of the functions transferred to his 16.15 Annual reports for income-taxable [ seal] James L. H oughteling, department or agency shall be retrans­ years. Commissioner. ferred under existing law to other posi­ 16.16 Payment of excess profit liability. Approved: 16J.7 Liability of surety. tions in the Government service, or sepa­ 16.18 Determination of liability for excess rated from the service subject to the pro­ F rances P erkins, profit, interest and penalties; assess­ visions of section 10 (a) of the Reor­ Secretary. ment, collection, payment, refunds. ganization Act of 1939. [F. R. Doc. 39-2268; Filed, June 30, 1939; § 16.0 Introductory, (a) Section 14 S ec. 403. Transfer of Funds.— So much 9:51 a. m.] of the Act entitled “An Act to provide of the unexpended balances of appro­ more effectively for the national defense priations, allocations, or other funds by carrying out the recommendations of available for the use of any agency in the [Supp. 3 to General Order No. C-2*] the President in his message of January exercise of any function transferred by 12, 1939, to the Congress,” approved P ort of Entry for Aliens Arriving by this Plan, or for the use of the head of April 3,1939 (Public, No. 18, 76th Cong., A ircraft—John G. Hinde Airport, any department or agency in the exercise Sandusky, Ohio 1st sess.; I.R.B. 1939-20, 13), provides: of any function so transferred, as the June 29,1939. Sec. 14. All the provisions of section 3 of Director of the Bureau of the Budget the Act of March 27, 1934, as amended (48 with the approval of the President shall Pursuant to the authority contained Stat. 505; 49 Stat. 1926), and as amended determine, shall be transferred to the in Subdivision (d) of Section 7 of the by this section shaU be applicable with re­ Air Commerce Act of 1926 (Act of May spect to contracts for aircraft or any por­ department or agency concerned for use tion thereof for the Army to the same ex­ in connection with the exercise of the 20, 1926, 44 Stat. 572; 49 U. S. C. 177 tent and in the same manner that such function so transferred. In determining (d)), Title 8 CFR, Chapter I, Sub-chap­ provisions are applicable with respect to the amount to be transferred the Direc­ ter A—Immigration Rules and Regula­ contracts for aircraft, or any portion thereof tions—Part 3, Section 3.3 (b), (Rule 3, for the Navy: Provided, That the Secretary tor of the Bureau of the Budget may of W ar shall exercise all functions under include an amount to provide for the Subdivision (a), paragraph 3 (b) of the such section with respect to aircraft for the liquidation of obligations incurred Immigration Rules and Regulations of Army which are exercised by the Secretary January 1, 1930, Edition of December 31, of the Navy with respect to aircraft for against such appropriations, allocations, the Navy: Provided further, That section or other funds prior to the transfer: 1936), is amended by inserting San­ 3b of the Act of March 27, 1934 (48 Stat. Provided, That the use of the unexpended dusky, Ohio, John G. Hinde Airport, in 505), as amended (49 Stat. 1926; 34 U.S.C. balances of appropriations, allocations, lieu of Sandusky, Ohio, Sandusky Mu­ Supp. IV 496), is hereby further amended nicipal Airport, in the list of airports by inserting in the first sentence after the or other funds transferred by this section words “in excess of 10 per centum of the shall be subject to the provisions of sec­ designated as temporary ports for the total contract prices’’ the words “for the tion 4 (d) (3) and section 9iof the Reor­ entry into the United States of aliens ganization Act of 1939. arriving by aircraft. ‘ Sections 16.0 to 16.18 issued under the Sec. 404. Transfer of Functions Relat­ [ seal] F rances P erkins, authority contained in section 14 of the Act of April 3, 1939 (Public, No. 18, 76th Cong., ing to Personnel.—Except as prohibited Secretary. 1st sess.) and section 3 of the Act of March by section 3 (b) of the Reorganization Approval recommended: 27, 1934, 48 Stat. 505 (34 U.S.C. 496), as amended by the Act of June 25, 1936, 49 Act of 1939, all functions relating to the James L. H oughteling, appointment, fixing of compensation, Stat. 1926 (34 U.S.C., Sup. IV, 496) and as Commissioner. further amended by section 14 of such Act transfer, promotion, demotion, suspen­ of April 3, 1939. [F. R. Doc. 39-2267; Filed, June 30, 1939; sion, or dismissal of persons to or from 9:51 a. m.] tThe source of sections 16.0 to 16.18 is offices and positions in any department Treasury Decision 4909, approved by the vested by law in any officer of such de­ Acting Secretary of the Treasury June 16, 14 F.R. 1947 DI. 1939, and approved by the Acting Secretary partment other than the head thereof * 3 F.R. 1951 DI. of W ar June 28, 1939. 2734 FEDERAL REGISTER, Saturday, July 1, 1939 construction and/or manufacture of any tracts for the construction and or manu­ The contract or subcontracts referred to complete naval vessel or portion thereof, and facture of any complete naval vessel or herein are limited to those where the award in excess of 12 per centum of the total con­ portion thereof completed by the particular exceeds $10,000. tract prices for the construction and/or contractor or subcontractor within any in­ manufacture of any complete aircraft or come taxable year, such net loss shall be Pursuant to the authority prescribed portion thereof”; by inserting in the first allowed as a credit in determining the by section 14 of the Act of April 3, 1939 proviso after the words “That if there is a excess profit, if any, for the next succeeding (Public, No. 18, 76th Cong., 1st sess.) net loss on all such contracts or subcon­ income taxable year, and that if there is a tracts” the words “for the construction net loss, or a net profit less than 12 per and section 3 of the Act of March 27, and/or manufacture of any complete naval centum, as aforesaid on all such contracts 1934, as amended, the following regula­ vessel or portion thereof”; and by inserting or subcontracts for the construction and tions are hereby prescribed:*! at the end of the first proviso after the or manufacture of any complete aircraft or words “income taxable year” a comma and portion thereof completed by the particular § 16.1 Definitions. As used in these the words “and that if there is a net loss, contractor or subcontractor within any in­ regulations the term— or a net profit less than 12 per centum, as come taxable year, such net loss or deficiency aforesaid on all such contracts or subcon­ in profit shall be allowed as a credit in (a) Act means the Act of April 3,1939 tracts for the construction and/or manu­ determining the excess profit, if any, during (Public, No. 18, 76th Cong., 1st sess.; facture of any complete aircraft or portion the next succeeding four income taxable thereof completed by the particular con­ years, and that the method of ascertaining I.R.B. 1939-20,13), together with the ap­ tractor or subcontractor within any income the amount of excess profit, initially fixed plicable provisions of section 3 of the Act taxable year, such net loss or deficiency in upon shall be determined on or before June of March 27, 1934, 48 Stat. 505 (34 UJ3.C. profit shall be allowed as a credit in deter­ 30, 1939: Provided further, That if such 496) as amended by the Act of June 25, mining the excess profit, if any, during the amount is not voluntarily paid the Secre­ next succeeding four income taxable years, tary of the Treasury shall collect the same 1936, 49 Stat. 1926 (34 UJS.C., Sup. IV, and that the method of ascertaining the under the usual methods employed under 496) and as further amended by the Act amount of excess profit, initially fixed upon the internal-revenue laws to collect Federal of April 3,1939 (Public, No. 18,76th Cong., shall be determined on or before June 30, income taxes: Provided further, That all 1939” : Provided further, That when aircraft provisions of law (including penalties) ap­ 1st sess.; IJR.B. 1939-20, 13). are procured by the Secretary of W ar as a plicable with respect to the taxes imposed (b) Person includes an individual, a result of competitive bids requiring the sub­ by Title I of the Revenue Act of 1934, and corporation, a partnership, a trust or es­ mission of sample aircraft with bid, the not inconsistent with this section, shall tate, a joint-stock company, an associa­ Secretary is authorized, in his discretion, to be applicable with respect to the assessment, purchase sample aircraft of competitors to collection, or payment of excess profits to tion, or a syndicate, group, pool, joint whom an award is not made, not more than the Treasury as provided by this section, venture or other unincorporated organi­ one each from not more than three such and to refunds by the Treasury of overpay­ zation or group, through or by means of competitors, in order of merit, at prices not ments of excess profits into the Treasury: exceeding 75, 60, and 50 per centum, respec­ And provided further, That this section which any business, financial operation or tively, of the cost applicable in the opinion shall not apply to contracts or subcontracts venture is carried on. of the Secretary to the development and for scientific equipment used for communi­ (c) Contract means an agreement manufacture of such sample aircraft. cation, target detection, navigation, and fire control as may be so designated by the made by authority of the Secretary of (b) Section 3 of the Act entitled “ An Secretary of the Navy, and the Secretary War for the construction or manufacture Act to establish the composition of the of the Navy shall report annually to the of any complete aircraft or any portion United States Navy with respect to the Congress the names of such contractors and thereof for the Army. subcontractors affected by this provision, categories of vessels limited by the trea­ together with the applicable contracts and (d) Contractor means a person enter­ ties signed at Washington, February 6, the amounts thereof: And provided further, ing into a direct contract with the Sec­ 1922, and at London, April 22, 1930, at That the income-taxable years shall be such retary of War or his duly authorized the limits prescribed by those treaties; taxable years beginning after December 31, 1935, except that the above provisos relat­ representative. to authorize the construction of certain ing to the assessment, collection, payment, (e) Subcontract means an agreement naval vessels; and for other purposes,” or refunding of excess profit to or by the entered into by one person with another approved March 27, 1934, 48 Stat. 505 Treasury shall be retroactive to March 27, person for the construction or manufac­ (34 U.S.C. 496), as amended by the Act 1934. (c) To make no subdivisions of any con­ ture of any complete aircraft or any por­ of June 25, 1936, 49 Stat. 1926 (34 U.S.C., tract or subcontract for the same article tion thereof for the Army, the prime Sup. IV, 496) and as further amended or articles for the purpose of evading the contract for such aircraft or portion by the Act of April 3, 1939 (Public, No. provisions of this Act, but any subdivision thereof having been entered into between 18, 76th Cong., 1st sess.; I.R.B. 1939-20, of any contract or subcontract involving an amount in excess of $10,000 shall be sub­ a contractor and the Secretary of War or 13), reads as follows: ject to the conditions herein prescribed. (d ) That the manufacturing spaces and his duly authorized representative. Sec. 3. The Secretary of the Navy is hereby books of its own plant, affiliates, and sub­ (f) Subcontractor means any person directed to submit annually to the Bureau divisions shall at all times be subject other than a contractor entering into a of the Budget estimates for the construction to inspection and audit by any person of the foregoing vessels and aircraft; and designated by the Secretary of the Navy, subcontract. there is hereby authorized to be appropriated the Secretary of the Treasury, and/or by a (g) Contracting party means a con­ such sums as may be necessary to carry into duly authorized committee of Congress. tractor or subcontractor as the case may effect the provisions of this Act: Provided, (e) To make no subcontract unless the That no contract shall be made by the Sec­ subcontractor agrees to the foregoing con­ be. retary of the Navy for the construction ditions. (h) Contract price or total contract and/or manufacture of any complete naval vessel or aircraft, or any portion thereof, The report shall be in form prescribed price means the amount or total amount herein, heretofore, or hereafter authorized by the Secretary of the Navy and shall state to be received under a contract or sub­ unless the contractor agrees— the total contract price, the cost of per­ forming the contract, the net Income, and contract as the case may be. (a ) To make a report, as hereinafter de­ the per centum such net income bears to . (i) Income-taxable year means the scribed, under oath, to the Secretary of the the contract price. A copy of such report calendar year, the fiscal year ending Navy upon the completion of the contract. shall be transmitted to the Secretary of the (b ) To pay into the Treasury profit, as Treasury for consideration in connection during such calendar year, or the frac­ hereinafter provided shall be determined by with the Federal income tax returns of the tional part of such calendar or fiscal the Treasury Department, in excess of 10 contractor for the taxable year or years year, upon the basis of which the con­ per centum of the total contract prices for concerned. tracting party’s net income is computed the construction and or manufacture of any The method of ascertaining the amount and for which its income tax returns complete naval vessel or portion thereof, of excess profit to be paid into the Treasury and in excess of 12 per centum of the total shall be determined by the Secretary of the are made for Federal income tax pur­ contract prices for the construction and Treasury in agreement with the Secretary poses.*! or manufacture of any complete aircraft of the Navy and made available to the or portion thereof, of such contracts within public. The method initially fixed upon § 16.2 Contracts and subcontracts the scope of this section as are completed shall be so determined on or before June under which excess profit liability may by the particular contracting party within 30, 1934: Provided, That in any case where the income taxable year, such amount to an excess profit may be found to be owing be incurred. Except as otherwise pro­ become the property of the United States, to the United States in consequence hereof, vided with respect to contracts or sub­ but the surety under such contracts shall the Secretary of the Treasury shall allow contracts for certain scientific equip­ not be liable for the payment of such credit for any Federal income taxes paid or ment (see section 16.3 of these regula­ excess profit: Provided, That if there is a remaining to be paid upon the amount of net loss on all such contracts or subcon­ such excess profit. tions), every contract awarded for an FEDERAL REGISTER, Saturday, July 1, 1939 2735

amount exceeding $10,000 and entered The second step is to ascertain the cost taxable year 1939. For purposes of the into after the enactment of the Act of of performing such contracts and sub­ Federal income tax, the net income of April 3, 1939 for the construction: or contracts and to deduct such cost from the B Corporation for the year 1940 manufacture of any complete aircraft or the total contract prices of such contracts amounted to $96,000, which included the any portion thereof for the Army, is and subcontracts as computed in the first total net profit of $40,000 upon the two subject to the provisions of the Act re­ step. See section 16.8 of these regula­ contracts. For the year 1940 the B Cor­ lating to excess profit liability. Any sub­ tions. poration paid a Federal income tax of contract made with respect to such a The amount remaining after such sub­ $13,240 upon its entire net income. The contract and involving an amount in ex­ traction is the amount of net profit or excess profit liability is $6,700 computed cess of $10,000 is also within the scope net loss upon the contracts and subcon­ as follows: of the Act. I f a contracting party places tracts completed within the income-tax­ Total contract prices: orders with another party, aggregating able year. Contract No. 1_____ $200,000 an amount in excess of $10,000, for The third step, in case there is a net Contract No. 2_____ 40,000 articles or materials which constitute profit upon such contracts and subcon­ ------$240,000 Less: Cost of performing a part of the cost of performing the tracts, is to subtract from the amount of contracts : contract or subcontract, the placing of such net profit as computed in the second Contract No. 1_____ 155,000 such orders shall constitute a subcon­ step the sum of— Contract No. 2_____ 45,000 tract within the scope of the Act, unless ------200,000 (1) An amount equal to 12 percent of it is clearly shown that each of the Net profit on contracts______40,000 orders involving $10,000 or less is a the total contract prices of the contracts bona fide separate and distinct subcon­ and subcontracts completed within the Less: 12 percent of total tract and not a subdivision made for income-taxable year; contract prices (12 per­ (2) The amount of any net loss sus­ cent of $240,000)______$28, 800 the purpose of evading the provisions of Net loss from 1939— 2, 500 the Act.*! tained in a prior income-taxable year and Deficiency in proft allowable as a credit in determining the from 1939______1,000 § 16.3 Contracts or subcontracts for excess profit for the income-taxable year ------32,300 scientific equipment. No excess profit (see section 16.9 of these regulations); liability is incurred upon a contract or Excess profit for year 1940______7,700 and subcontract entered into after the en­ Less: Credit for Federal income (3) The amount of any deficiency in taxes (Federal income tax on actment of the Act of April 3, 1939, if $7,700 at the rates for 1940)___ 1,000 at the time or prior to the time such profit sustained in a prior income-tax­ contract or subcontract is made it is able year and allowable as a credit in de­ Amount of excess profit payable to designated by the Secretary of War as termining the excess profit for the in­ the United States______I ______6,700 being exempt under the provisions of the come-taxable year (see section 16.9 of •t Act pertaining to scientific equipment these regulations). used for communication, target detec­ The amount remaining after such sub­ § 16.7 Total contract price. * The total tion, navigation, and fire control.*! traction is the amount of excess profit for contract price of a particular contract § 16.4 Completion of contract defined. the income-taxable year. or subcontract (see section 16.1 of these The date of delivery of the aircraft or The fourth step is to ascertain the regulations) may be received in money portion thereof covered by the contract amount of credit allowed for Federal or its equivalent. I f something other or subcontract shall be considered the income taxes paid or remaining to be than money is received, only the fair date of completion of the contract or paid upon the amount of such excess market value of the thing received, at subcontract unless otherwise determined profit (see section 16.10 of these regula­ the date of receipt, is to be included in jointly by the Secretary of War and the tions) and then subtract from the determining the amount received. Bo­ Secretary of the Treasury or their duly amount of such excess profit the amount nuses earned for bettering performance authorized representatives. Except as of credit for Federal income taxes. and penalties incurred for failure to otherwise provided in the preceding sen­ The amount remaining after this sub­ meet the contract guarantees are to be tence, the replacement of defective parts traction is the amount of excess profit regarded as adjustments of the original of delivered articles or the performance to be paid to the United States by the contract price. Trade or other discounts of other guarantee work in respect of contracting party for the income-taxable granted by a contracting party in re­ such articles will not operate to extend year.*! spect of a contract or subcontract per­ formed by such party are also to be the date of completion. As to the treat­ § 16.6 Computation of excess profit ment of the cost of such work as a cost deducted in determining the true total liability. The application of the provi­ contract price of such contract or sub­ of performing a contract or subcontract, sions of section 16.5 of these regulations see section 16.8 (h) of these regulations. contract.*! may be illustrated by the following § 16.8 Cost of performing a contract As to a refund in case of adjustment example: due to any subsequently incurred addi­ or subcontract— (a) General rule. The Example: On September 1, 1939, the tional costs, see section 16.18 of these cost of performing a particular contract regulations. If a contract or subcontract B Corporation which keeps its books and or subcontract shall be the sum of (1) is at any time cancelled or terminated, makes its Federal income tax returns on the direct costs, including therein ex­ it is completed at the time of the can­ a calendar year basis entered into a penditures for materials, direct labor and cellation or termination.*! contract coming within the scope of the direct expenses, incurred by the con­ Act, the total contract price of which § 16.5 Manner of determining liability. tracting party in performing the con­ was $200,000. On March 10, 1940, the tract or subcontract; and (2) the proper The first step in the determination of the corporation entered into another such excess profit to be paid to the United proportion of any indirect costs (includ­ contract, the total contract price of ing therein a reasonable proportion of States by a contracting party with re­ which was $40,000. Both contracts were spect to contracts and subcontracts com­ management expenses) incident to and completed within the calendar year 1940, necessary for the performance of the pleted within an income-taxable year is the first at a cost of $155,000 and the contract or subcontract. to ascertain the total contract prices of second at a cost of $45,000. During the (b) Elements of cost. No definitions all contracts and subcontracts completed year 1939 the B Corporation sustained a of the elements of cost may be stated by the contracting party within the in­ net loss of $2,500 and a deficiency in which are of invariable application to all come-taxable year. As to total contract profit of $1,000 on contracts and subcon­ contractors and subcontractors. In gen­ prices, see section 16.7 of these regula­ tracts entered into after April 3, 1939 eral, the elements of cost may be defined tions. and completed within the income- for purposes of the Act as follows: No. 127---- 2 2736 FEDERAL REGISTER, Saturday, July 1, 1939

(1) Manufacturing cost, which is the (such as time tickets and other forms), be allocated to the cost of performing sum of factory cost (see paragraph (c) and boxing and wrapping materials. the contract or subcontract. If a special of this section) and other manufacturing (C) Service expenses. Factory ex­ experimental or development project is cost (see paragraph (d) of this section); penses of a general nature, such as those carried on in pursuance of a contract, or (2) Miscellaneous direct expenses (see for power, heat and light (whether pur­ in anticipation of a contract which is paragraph (e) of this section); chased or produced), ventilation and air- later entered into, and the expense is (3) General expenses, which are the conditioning and operation and mainte­ not treated as a part of general experi­ sum of indirect engineering expenses, nance of general plant assets and facili­ mental and development expenses or is usually termed “ engineering overhead” ties. not otherwise allowed as a cost of per­ (see paragraph (f) of this section) and (D) Fixed charges and obsolescence. forming the contract, there clearly ap­ expenses of distribution, servicing and Recurring charges with respect to prop­ pearing no reasonable prospect of an administration (see paragraph (g) of erty used for manufacturing purposes of additional contract for the type of article this section); and the contract or subcontract, such as pre­ involved, the entire cost of such project (4) Guarantee expenses (see para­ miums for fire and elevator insurance, may be allowed as a part of the cost graph (h) of this section). property taxes, rentals and allowances for of performing the contract. (c) Factory cost. Factory cost is thedepreciation of such property, including (e) Miscellaneous direct expenses. sum of the following: maintenance and depreciation of reason­ Miscellaneous direct expenses as used able stand-by equipment; and deprecia­ in paragraph (b) of this section in­ (1) Direct materials. Materials, such tion and obsolescence of special equip­ clude— as those purchased for stock and sub­ ment and facilities necessarily acquired sequently issued for contract operations primarily for the performance of the (1) Cost of installation and construc­ and those acquired under subcontracts, contract or subcontract. In making al­ tion. Cost of installation and con­ which become a component part of the lowances for depreciation, consideration struction includes the cost of materials, finished product or which are used di­ shall be given to the number and length labor and expenses necessary for the rectly in fabricating, converting or proc­ of shifts. erection and installation prior to the essing such materials or parts. (E) Miscellaneous indirect factory ex­ completion of the contract and after the delivery of the product or material (2) Direct productive labor. Produc­ penses. Miscellaneous factory expenses tive labor, usually termed “shop labor,” not directly chargeable to the factory manufactured or constructed pursuant to the contract or subcontract. which is performed on and is properly cost of performing the contract or sub­ chargeable directly to the article manu­ contract, such as purchasing expenses; (2) Sundry direct expenses. Items factured or constructed pursuant to the ordinary and necessary expenses of re­ of expense which are properly charge­ contract or subcontract, but which ordi­ arranging facilities within a department able directly to the cost of performing narily does not include direct engineer­ or plant; employees’ welfare expenses; a contract or subcontract and which do ing labor (see subparagraph (3) of this premiums or dues on compensation in­ not constitute guarantee expenses (see paragraph). surance; employers’ payments to unem­ paragraph (h) of this section) or direct (3) Direct engineering labor. The ployment, old age and social security costs classified as factory cost or other compensation of professional engineers Federal and State funds not including manufacturing cost (see paragraphs (c) and other technicists (including reason­ payments deducted from or chargeable and (d) of this section), such as pre­ able advisory fees), and of draftsmen, to employees or officers; pensions and miums on performance or other bonds properly chargeable directly to the cost retirement payments to factory em­ required under the contract or subcon­ of the contract or subcontract. ployees; factory accident compensation tract; State sales taxes imposed on the (4) Miscellaneous direct factory (as to self-insurance, see paragraph (g) contracting party; freight on outgoing charges. Items which are properly of this section); but not including any shipments; fees paid for wind tunnel chargeable directly to the factory cost amounts which are not incident to serv­ and model basin tests; demonstration of performing the contract or subcon­ ices, operations, plant, equipment or and test expenses; crash insurance pre­ tract but which do not come within facilities involved in the performance miums; traveling expenses. In order for the classifications in subparagraphs ( 1), of the contract or subcontract. any such item to be allowed as a charge (2), and (3) of this paragraph, as for directly to the cost of performing a con­ example, royalties which the contracting (d) Other manufacturing cost. Othertract or subcontract, ( 1) a detailed rec­ party pays to another party and which manufacturing cost as used in para­ ord shall be kept by the contracting are properly chargeable to the cost of graph (b) of this section includes items party of all items of a similar character, performing the contract or subcontract of manufacturing costs which are not and (2) no item of a similar character (but see paragraph (d) of this section). properly or satisfactorily chargeable to which is properly a direct charge to (5) Indirect factory expenses. Items, factory costs (see paragraph (c) of this other work shall be allowed as a part of usually termed “factory overhead,” section) but which upon a complete any indirect expenses in determining the which are not directly chargeable to the showing of all pertinent facts are prop­ proper proportion thereof chargeable to factory cost of performing the contract erly to be included as 'a cost of perform­ the cost of performing the contract or or subcontract but which are properly ing the contract or subcontract, as for subcontract. As to allowable indirect incident to and necessary for the per­ instance, payments of royalties and expenses, see paragraphs (c) (5), (f), formance of the contract or subcontract amortization of the cost of designs pur­ (g) and (j) of this section. chased and patent rights over their and consist of the following: (f ) useful life; and “ deferred” or “ unliqui­ Indirect engineering expenses. Indirect engineering expenses, usually (A ) Labor. Amounts expended for dated” experimental and development termed “ engineering overhead,” which factory labor, such as supervision and in­ charges. For example, in case experi­ are treated in this section as a part of spection, clerical labor, timekeeping, mental and development costs have been general expenses in determining the cost packing and shipping, stores supply, serv­ properly deferred or capitalized and are of performing a contract or subcontract ices of tool crib attendants, and services amortized in accordance with a reason­ (see paragraph (b) of this section), com­ ably consistent plan, a proper portion in the factory employment bureau, which prise the general engineering expenses of the current charge, determined by a are not chargeable directly to productive which are incident to and necessary for ratable allocation which is reasonable in labor of the contract or subcontract. the performance of the contract or sub­ consideration of the pertinent facts, may (B) Materials and supplies. The cost contract, such as the following: of materials and supplies for general use be treated as a cost, of performing the in the factory in current operations, such contract or subcontract. In the case of (1) Labor. Reasonable fees of en­ as shop fuel, lubricants, heat-treating, general experimental and development gineers employed in a general consulting plating, cleaning and anodizing supplies, expenses which may be charged off cur­ capacity, and compensation of employees nondurable tools and gauges, stationery rently, a reasonable portion thereof may for personal services to the engineering FEDERAL REGISTER, Saturday, July 1, 1939 2737 department, such as supervision, which ness expenses; employees’ welfare ex­ purchase, except that all discounts on is properly chargeable to the contract or penses; premiums and dues on compensa­ subcontracts subject to the Act will be subcontract, but which is not chargeable tion insurance; employers’ payments to considered; interest incurred or earned; as direct engineering labor (see para­ unemployment, old age and social secur­ bond discount or finance charges; pre­ graph (c) (3) of this section). ity Federal and State funds not including miums for life insurance on the lives of officers; legal and accounting fees in con­ (2) Material. Supplies for the en­ payments deducted from or chargeable to nection with reorganizations, security gineering department, such as paper employees or officers; pensions and re­ issues, capital stock issues and the prose­ and ink for drafting and similar supplies. tirement payments to administrative office employees and accident compensa­ cution of claims against the United (3) Miscellaneous expenses. Expenses tion to office employees (as to self-insur­ States (including income tax m atters); of the engineering department, such as ance, see the following subparagraph). taxes and expenses on issues and trans­ (A) maintenance and repair of engineer­ Subject to the exception stated in this fers of capital stock; losses on invest­ ing equipment, and (B) services pur­ ments; bad debts; and expenses of col­ chased outside of the engineering depart­ subparagraph, in cases where a con­ tracting party assumes its own insurable lection and exchange. ment for blue printing, drawing, comput­ In order that the cost of performing a ing, and like purposes. risks (usually termed “ self-insurance” ), losses and payments will be allowed in contract or subcontract may be ac­ (g) Expenses of distribution, servicing the cost of performing a contract or sub­ counted for clearly, the amount of any and administration. Expenses of distri­ contract only to the extent of the actual excess profits repayable to the United bution, servicing and administration, losses suffered or payments incurred States pursuant to the Act should not be charged to or included in such cost. which are treated in this section as a during, and in the course of, the per­ part of general expenses in determining formance of the contract or subcontract (h) Guarantee expenses. Guarantee the cost of performing a contract or sub­ and properly chargeable to such con­ expenses include the various items of contract (see paragraph (b) of this sec­ tract or subcontract. If, however, a con­ factory cost, other manufacturing cost, tion) , comprehend the expenses incident tracting party assumes its own insur­ cost of installation and construction, in­ to and necessary for the performance of able risks (a) for compensation paid to direct engineering expenses and other the contract or subcontract, which are employees for injuries received in the general expenses (see paragraphs (c) to incurred in connection with the distri­ performance of their duties, or (b) for (g), inclusive, of this section) which are bution and general servicing of the con­ unemployment risks in States where in­ incurred after delivery or installation of tracting party’s products and the gen­ surance is required, there may be al­ the article manufactured or constructed eral administration of the business, such lowed as a part of the cost of perform­ pursuant to the particular contract or a,s— ing a contract or subcontract a reason­ subcontract and which are incident to the able portion of the charges set up for correction of defects or deficiencies (1) Compensation for personal serv­ which the contracting party is required ices of employees. The salaries of the purposes of self-insurance under a sys­ tem of accounting regularly employed to make under the guarantee provisions corporate and general executive officers of the particular contract or subcon­ and the salaries and wages of adminis­ by the contracting party, as determined by the Commissioner of Internal Reve­ tract. If the total amount of such guar­ trative clerical employees and of the antee expenses is not ascertainable at office services employees such as tele­ nue, at rates not exceeding the lawful or approved rates of insurance com­ the time of filing the report required to phone operators, janitors, cleaners, be filed with the collector of internal watchmen and office equipment repair­ panies for such insurance, reduced by amounts representing the acquisition revenue (see section 16.15 of these regu­ men. lations) and the contracting party in­ (2) Bidding and general selling ex­ cost in such companies, provided the contracting party adopts and consist­ cludes any estimated amount of such penses. Bidding and general selling ex­ ently follows this method with respect expenses as part of the claimed total penses which by reference to all the to self-insurance in connection with all cost of performing the contract or sub­ pertinent facts and circumstances rea­ contracts and subcontracts subsequently contract, such estimated amount shall sonably constitute a part of the cost of performed by him. be separately shown on the report and performing a contract or subcontract. Allowances for interest on invested the reasons for claiming such estimated The treatment of bidding and general capital are not allowable as costs of per­ amount shall accompany the report; selling expenses as a part of general ex­ forming a contract or subcontract. but only the amount of guarantee ex­ penses in accordance with this para­ Among the items which shall not be penses actually incurred will be allowed. graph is in lieu of any direct charges included as a part of the cost of per­ If the amount of guarantee expenses which otherwise might be made for such forming a contract or subcontract or actually incurred is greater than the expenses. The term “bidding expenses” considered in determining such cost, are amount (if any) claimed on the report as used in this section includes all ex­ the following: Entertainment expenses; and the contracting party has made an penses in connection with preparing and dues and memberships other than of overpayment of excess profit, a refund submitting bids. regular trade associations; donations ex­ of the overpayment shall be made in (3) General servicing expenses. Ex­ cept as otherwise provided above; losses accordance with the provisions of sec­ penses which by reference to all the per­ on other contracts; profits or losses from tion 16.18 of these regulations. If the tinent facts and circumstances reason­ sales or exchanges of capital assets; ex­ amount of guarantee expenses actually ably constitute a part of the cost of per­ traordinary expenses due to strikes or incurred is less than the amount claimed forming a contract or subcontract and lockouts; fines and penalties; amortiza­ on the report and an additional amount which are incident to delivered or in­ tion of unrealized appreciation of values of excess profit is determined to be due, stalled articles and are due to ordinary of assets; expenses, maintenance and de­ the additional amount of excess profit adjustments or minor defects; but in­ preciation of excess facilities (including shall be assessed and paid in accordance cluding no items which are treated as a idle land and building, idle parts of a with the provisions of section 16.18 of part of guarantee expenses (see para­ building, and excess machinery and these regulations. graph (h) of this section) or as a part equipment) vacated or abandoned, or (i) Unreasonable compensation. The of direct costs, such as direct materials, not adaptable for future use in perform­ salaries and compensation for services direct labor, and other direct expense. ing contracts or subcontracts; increases which are treated as a part of the cost (4) Other expenses. Miscellaneous in reserve accounts for contingencies, re­ of performing a contract or subcontract office and administrative expenses, such pairs, compensation insurance (except as include reasonable payments for salar­ as stationery and office supplies; postage; above provided with respect to self-in­ ies, bonuses, or other compensation for repair and depreciation of office equip­ surance) and guarantee work; Federal services. As a general rule, bonuses paid ment; contributions to local charitable or and State income and excess-profits to employees (and not to officers) in community organizations to the extent taxes and surtaxes; cash discount earned pursuance of a regularly established in­ constituting ordinary and necessary busi­ up to one percent of the amount of the centive bonus system may be allowed 2738 FEDERAL REGISTER, Saturday, July 1, 1939

as a part of thé cost of performing a provided the proportion so allocated or and subcontracts. As to the meaning contract or subcontract. distributed is proper under the facts and of income-taxable year, see section 16.1 The test of allowability is whether circumstances relating to the perform­ of these regulations. the aggregate compensation paid to each ance of the particular contract or sub­ The term “deficiency in profit” as used individual is for services actually ren­ contract. in the Act and as applied to contracts dered incident to, and necessary for, (3) Administrative expenses (or ‘‘over­ and subcontracts coming within these the performance of the contract or sub­ head") . The allowable expenses of ad­ regulations means the amount by which contract, and is reasonable. Excessive ministration (see paragraph (g) of this 12 percent of the total contract prices of or unreasonable payments whether in section) or other general expenses ex­ all such contracts and subcontracts en­ cash, stock or other property ostensibly cept indirect engineering expenses, bid­ tered into after April 3, 1939 and com­ as compensation for services shall not be ding and general selling expenses, and pleted by a particular contracting party included in the cost of performing a general servicing expenses shall ordi­ within the income-taxable year exceeds contract or subcontract. narily be allocated or distributed to the the net profit upon all such contracts and (j) Allocation of indirect costs. Nocost of performing a contract or sub­ subcontracts. general rule applicable to all cases may contract on the basis of the proportion A net lo$s or a deficiency in profit sus­ be stated for ascertaining the proper which the sum of the manufacturing tained by a contracting party for an in­ proportion of the indirect costs to be cost (see paragraph (b) of this section) come-taxable year is allowable as a credit allocated to the cost of performing a and the cost of installation and con­ in computing the contracting party’s ex­ particular contract or subcontract. Such struction (see paragraph (e) of this cess profit on contracts and subcontracts proper proportion depends upon all the section) attributable to the particular coming within these regulations and facts and circumstances relating to the contract or subcontract bears to the sum completed during the four next succeed­ performance of the particular contract of the total manufacturing cost and the ing income-taxable years. Credit for or subcontract. Subject to a require­ total cost of installation and construc­ such a net loss or deficiency in profit ment that all items which have no rela­ tion during the period within which the may be claimed in the contracting party’s tion to the performance of the contract contract or subcontract is performed. annual report of profit filed with the col­ or subcontract shall be eliminated from (4) Bidding, general selling, and gen­ lector of internal revenue (see section the amount to be allocated, the follow­ eral servicing expenses. The allowable 16.15 of these regulations), but it shall ing methods of allocation are outlined as bidding and general selling expenses and be supported by separate schedules for acceptable in a majority of cases: general servicing expenses (see para­ each contract or subcontract involved (1) Factory indirect expenses. The graph (g) (2) and (3) of this section) showing total contract prices, costs of allowable indirect factory expenses (see shall ordinarily be allocated or dis­ performance and pertinent facts relative paragraph (c) (5) of this section) shall tributed to the cost of performing a con­ thereto, together with a summarized ordinarily be allocated or “ distributed” tract or subcontract on the basis of— computation of the net loss or deficiency to the cost of the contract or subcon­ (i) The proportion which the contract in profit. The net loss or deficiency in tract on the basis of the proportion price of the particular contract or sub­ profit claimed is subject to verification which the direct productive labor (see contract bears to the total sales made and adjustment. As to preservation of paragraph (c) (2) of this section) at­ (including contracts or subcontracts books and records, see section 16.13 of tributable to the contract or subcontract completed) during the period within these regulations. bears to the total direct productive labor which the particular contract or sub­ Net loss or deficiency in profit sus­ of the production department or par­ contracts is performed, or tained on contracts and subcontracts ticular Section thereof dining the period (ii) The proportion which the §um of completed within one income-taxable within which the contract or subcontract the manufacturing cost (see paragraph year may not be considered in comput­ is performed, except that if the indirect (b) of this section) and the cost of ing net loss or deficiency in profit sus­ factory expenses are incurred in differ­ installation and construction (see para­ tained on contracts and subcontracts ent amounts and in different propor­ graph (e) of this section) attributable completed within another income-tax­ tions by the various producing depart­ to the particular contract or subcon­ able year. ments consideration shall be given to tract bears to the sum of the total man­ The provisions of this section may be such circumstances to the extent neces­ ufacturing cost and the total cost of in­ illustrated by the following example: sary to make a fair and reasonable de­ stallation and construction during the Example: The A Corporation, which termination of the true profit and excess period within which the contract or keeps its books and makes its Federal profit. subcontract is performed, income tax returns on a calendar year (2) Engineering indirect expenses. basis, entered into and completed con­ except that special consideration shall The allowable indirect engineering ex­ tracts for aircraft for the Army coming be given to the relation which certain penses (see paragraph (f) of this sec­ within the scope of the Act as follows: classes of such expenses bear to the tion) shall ordinarily be allocated or Contracts were completed within the cal­ various classes of articles produced by “ distributed” to the cost of the con­ endar year 1939 on which the A Corpo­ the contracting party in each case in tract or subcontract on the basis of the ration sustained a net loss of $30,000 and which such consideration is necessary proportion which the direct engineering a deficiency in profit of $10,000; con­ in order to make a fair and reasonable labor attributable to the contract or sub­ tracts totaling $175,000 were completed determination of the true profit and ex­ contract (see paragraph (c) (3) of this in 1940 at a cost of $155,000, the A Cor­ cess profit. See section 16.13 of these section) bears to the total direct engi­ poration thereby realizing a net profit of neering labor of the engineering depart­ regulations.*! $20,000 but sustaining a deficiency in. ment or particular section thereof dur­ § 16.9 Credit for net loss or for de­ profit of $1,000 (i. e., 12 percent of $175,- ing the period within which the con­ ficiency in profit in computing excess 000, or $21,000, less $20,000); contracts tract or subcontract is performed. I f profit. The term “ net loss” as used in totaling $400,000 were completed in 1941 the expenses of the engineering depart­ the Act and as applied to contracts and at a cost of $300,000, or at a net profit of ment are not sufficient in amount to re­ subcontracts coming within these regu­ $100,000. After deducting from the net quire the maintenance of separate ac­ lations means the amount by which the profit of $100,000 for the year 1941 the counts, the engineering indirect costs total costs of performing all such con­ amount of $48,000 (i. e., 12 percent of may be included in the indirect factory tracts and subcontracts entered into the total contract prices of $400,000), expenses (see paragraph (c) (5) of this after April 3, 1939 and completed by there remains $52,000 in excess profit on section) and allocated or distributed to a particular contracting party within the contracts completed in the year 1941. the cost of performing the contract or the income-taxable year exceeds the The net loss of $30,000 and the deficiency subcontract as a part of such expenses, total contract prices of such contracts in profit of $10,000 sustained in 1939 and FEDERAL REGISTER, Saturday, July /, 1939 2739 the deficiency in profit of $1,000 sus­ tered into with such subcontractor shall things, production orders, bills or sched­ tained in 1940 may be deducted from be determined separately from any con­ ules of materials, purchase requisitions, such $52,000 in determining the amount tracts or subcontracts performed by the purchase orders, vouchers, requisitions of excess profit payable by the A Corpo­ contracting party entering into the sub­ for materials, standing expense orders, ration for the year 1941 with respect to contract with such subcontractor.*! inventories, labor time cards, payrolls, the contracts completed in such year.*! § 16.12 Evasion of excess profit. Sec­ cost distribution sheets) pertinent to the § 16.10 Credit for Federal income tion 3 of the Act of March 27, 1934, as determination of the true profit, excess taxes. For the purpose of computing the amended, provides that the contracting profit, deficiency in profit or net loss amount of excess profit to be paid to the party shall agree to make no subdivi­ from the performance of a contract or United States, a credit is allowable sions of any contract or subcontract for subcontract shall be kept at all times against the excess profit for the amount the same article or articles for the pur­ available for inspection by internal- of Federal income taxes paid or remain­ pose of evading the provisions of the revenue officers, and shall be carefully ing to be paid on the amount of such ex­ Act. If any such subdivision or sub­ preserved and retained so long as the cess profit. The “Federal income taxes” contract is made it shall constitute a contents thereof may become material in respect of which this credit is allow­ violation of the agreement provided for in the administration of the Act. This able include the income taxes imposed by in the Act, and the cost of completing provision is not confined to books, rec­ Titles I and IA of the Revenue Act of a contract or subcontract by a contract­ ords, and original evidences pertaining 1938, and chapter 1 and subchapter A of ing party which violates such agreement to items which may be considered to be chapter 2 of the Internal Revenue Code, shall be determined in a manner neces­ a part of the cost of performing a con­ and the excess-profits taxes imposed by sary clearly to reflect the true excess tract or subcontract. It is applicable to section 602 of the Revenue Act of 1938 profit of such contracting party.*! all books, records, and original evidences and subchapter B of chapter 2 of the In ­ § 16.13 Books of account and records. of costs of each plant, branch or de­ ternal Revenue Code. This credit is al­ It is recognized that no uniform method partment involved in the performance lowable for these taxes only to the ex­ of accounting can be prescribed for all of a contract or subcontract or in the tent that it is affirmatively shown that contracting parties subject to the pro­ allocation or distribution of costs to the they have been finally determined and visions of the Act. Each contracting contract or subcontract.*! paid or remain to be paid and that they party is required by law to make a re­ § 16.14 Report to Secretary of War. were imposed upon the excess profit port of its true profits and excess profit. Upon the completion of a contract or against which the credit is to be made. Such party must, therefore, maintain subcontract coming within the scope of In case such a credit has been allowed such accounting records as will enable the Act and these regulations, the con­ and the amount of Federal income taxes it to do so. See section 16.8 of these tracting party is required to make a re­ imposed upon the excess profit is redeter­ regulations. Among the essentials are port, under oath, to the Secretary of mined, the credit previously allowed shall the following: War. As to the date of completion of a contract or subcontract, see section 16.4 be adjusted accordingly.*! (1) The profit or loss upon a par­ § 16.11 Failure of contractor to re­ of these regulations. Such report shall ticular contract or subcontract shall be be in the form prescribed by the Secre­ quire agreement by subcontractor. Ev­ accounted for and fully explained in the ery contract or subcontract coming with­ tary of War and shall state the total books of account separately on each con­ contract price, the cost of performing the in the scope of the Act and these regu­ tract or subcontract. lations is required by the Act to contain, contract, the net income from such con­ (2) Any cost accounting methods, among other things, an agreement by the tract, and the per centum such income however standard they may be and re­ contracting party to make no subcon­ bears to the contract price. The con­ gardless of long continued practice, shall tract unless the subcontractor agrees— tracting party shall also include as a part be controlled by, and be in accord with, of such report a statement showing— (a) To make a report, as described the objectives and purposes of the Act in the Act, under oath to the Secretary and of any regulations prescribed there­ ( 1) the manner in which the indirect of War upon the completion of the sub­ under. costs were determined and allocated to contract; (3) The accounts shall clearly dis­ the cost of performing the contract or (b) To pay into the Treasury excess close the nature and amount of the dif­ subcontract (see section 16.8 of these profit, as determined by the Treasury ferent items of cost of performing a con­ regulations); Department, in the manner and amounts tract or subcontract. (2) the name and address of every specified in the Act; subcontractor with whom a subcontract In cases where it has been the cus­ was made, the object of such subcon­ (c) To make no subdivision of the tom priorly to use so-called “ normal” subcontract for the same article or ar­ tract, the date when completed and the rates of overhead expense or adminis­ amount thereof; and ticles for the purpose of evading the trative expenses, or “standard” or “nor­ (3) the name and address of each a f­ provisions of the Act; mal” prices of material or labor charges, filiate or other organization, trade or (d) That the manufacturing spaces no objection will be made to the use business owned or controlled directly or and books of its own plant, affiliates, temporarily during the period of per­ indirectly by the same interests as those and subdivisions shall at all times be forming the contract or subcontract of who so own or control the contracting subject to inspection and audit as pro­ such methods in charging the contract party, together with a statement showing vided in the Act. or subcontract, if the method of ac­ counting employed is such as clearly in detail all transactions which were If a contracting party enters into a made with such affiliate or other organi­ to reflect, in the final determination subcontract with a subcontractor who zation, trade or business and are perti­ fails to make such agreement, such con­ upon the books of account, the actual profit derived from the performance of nent to the determination of the excess tracting party shall, in addition to its profit. liability for excess profit determined on the Contract or subcontract and if the contracts or subcontracts performed by necessary adjusting entries are entered A copy of the report required to be it, be liable for any excess profit deter­ upon the books and they explain in full made to the Secretary of War is required mined to be due the United States on detail the revisions necessary to accord to be transmitted by the contracting the subcontract entered into with such with the facts. As to the elements of party to the Secretary of the Treasury. subcontractor. In such event, however, cost, see section 16.8 of these regulations. Such copy shall not be transmitted di­ the excess profit to be paid to the United All books, records, and original evi­ rectly to the Secretary of the Treasury States in respect of the subcontract en­ dences of costs (including, among other but shall be filed as a part of the annual 2740 FEDERAL REGISTER, Saturday, July 1, 1939 report. See section 16.15 of these regu­ come tax returns and must contain a full by the Commissioner of Internal Reve­ lations.*! recital of the causes for the delay.*! nue.*! § 16.15 Annual reports for income- § 16.16 Payment of excess profit lia­ [ s e a l ] H aro ld N . G raves, taxable years— (a) General requirements. bility. The amount of the excess profit Acting Commissioner of Every contracting party completing a liability to be paid to the United States Internal Revenue. contract or subcontract within the con­ shall be paid on or before the due date Approved, June 16, 1939. tracting party's income-taxable year for filing the report with the collector of J o h n W . H a n e s , ending after April 3, 1939 shall file with internal revenue. See section 16.15 of the collector of internal revenue for the these regulations. At the option of the Acting Secretary of the Treasury. collection district in Which the contract­ contracting party, the amount of the ex­ Approved, June 28, 1939. ing party’s Federal income tax returns cess profit liability may be paid in four Louis J o h n s o n , are required to be filed an annual report equal installments instead of in a single Acting Secretary of War. on the prescribed form of the profit and payment, in which case the first install­ ment is to be paid on or before the date [F. R. Doc. 39—2262; Filed, June 29, 1939* excess profit on all contracts and subcon­ 12:03 p. m.J tracts coming within the scope of the Act prescribed for the payment of the excess and these regulations and completed profit as a single payment, the second in­ within the particular income-taxable stallment on or before the 15th day of the year. There shall be included as a part third month, the third installment on or UNITED STATES PROCESSING TAX of such report a statement, preferably in before the 15th day of the sixth month, BOARD OF REVIEW columnar form, showing separately for and the fourth installment on or before R u l e s o f P ractice each such contract or subcontract com­ the 15th day of the ninth month, after pleted by the contracting party within such date.*! Correction § 16.17 Liability of surety. The the income-taxable year the total con­ F. R. Doc. 39-2233, filed, June 27, 1939, tract price, the cost of performing the surety under contracts entered into with at 4:01 p. m., appearing in the issue for the Secretary of W ar for the construc­ contract or subcontract and the result­ Thursday, June 29, 1939, should be cor­ ing profit or loss on each contract or sub­ tion or manufacture of any complete rected as indicated below: contract together with a summary state­ aircraft or any portion thereof for the ment showing in detail the computation Army shall not be liable for payment § 601.5 (a) appearing in the first col­ of the net profit or net loss upon all con­ of excess profit due the United States umn on Page 2515 should read as follows: tracts and subcontracts completed within in respect of such contracts.*! (a) A caption in the following form: the income-taxable year and the amount § 16.18 Determination of liability for excess profit, interest and penalties; as­ U nited States P rocessing Tax B oard of of the excess profit, if any, for the in­ R eview come-taxable year covered by the report. sessment, collection, payment, refunds. A copy of the report made to the Secre­ The duty of determining the correct petitioner, tary of War (see section 16.14 of these amount of excess profit liability on con­ v. >Docket No. — regulations) with respect to each con­ tracts and subcontracts coming within Commissioner of I nternal I tract or subcontract covered in the an­ the scope of the Act and these regula­ R evenue, respondent J nual report, shall be filed as a part of tions is upon the Commissioner of In ­ such annual report. In case the income- ternal Revenue. Under section 3 (b) of (The respondent shall be the Commis­ taxable year of the contracting party is the Act of March 27, 1934, as last sioner of Internal Revenue, and the name a period of less than twelve months (see amended, all provisions of law (includ­ of the incumbent of that office shall not section 16.1 of these regulations), the re­ ing the provisions of law relating to in­ appear in the caption of the petition.) port required by this section shall be terest, penalties and refunds) applicable The second paragraph in the first col­ made for such period and not for a full with respect to the taxes imposed by umn of Page 2516 should read as follows: year. Title I of the Revenue Act of 1934 and “I f a motion, other than one relating (b) Time for filing annual reports. not inconsistent with section 3 of the to the receipt of evidence during a hear­ Annual reports of contracts and subcon­ Act of March 27, 1934, as last amended, ing, is made orally at the hearing, the tracts coming within the scope of the are applicable with respect to the assess­ presiding officer may direct that it be re­ Act and these regulations completed by ment, collection, or payment of excess duced to writing and, unless he directs a contracting party within an income- profits on contracts and subcontracts otherwise, it shall be filed with the Board taxable year must be filed on or before coming within the scope of the Act and at Washington, D. C.” the 15th day of the ninth month follow­ these regulations and to refunds of over­ ing the close of the contracting party’s payments of profits into the Treasury income-taxable year. It is important under the Act. Claims by a contract­ that the contracting party render on or ing party for the refund of an amount TITLE 30—MINERAL RESOURCES before the due date an annual report as of excess profit, interest, penalties, and nearly complete and final as it is possible additions to such excess profit shall con­ NATIONAL BITUMINOUS COAL for the contracting party to prepare. An form to the general requirements pre­ COMMISSION scribed with respect to claims for re­ extension of time granted the contracting [Order No. 278] party for filing its Federal income tax fund of overpayments of taxes imposed return does not serve to extend the time by Title I of the Revenue Act of 1934 A n O rder R e q u ir in g D istributors W h o for filing the annual report required by and, if filed on account of any addi­ P h y s ic a l l y H an d le C oal O ver D ocks this section. Authority consistent with tional costs incurred pursuant to guar­ t o R epo r t C e r t a in I n f o r m a t io n to the authorizations for granting extensions of antee provisions in a contract, shall be C o m m is s io n time for filing Federal income tax returns supplemented by a statement under oath The Commission having, by Order in is hereby delegated to the various collec­ showing the amount and nature of such General Docket No. 12 on the 20th day tors of internal revenue for granting ex­ costs and all facts pertinent thereto. of June, 1939, amended the definition of a tensions of time for filing the reports re­ Administrative procedure for the de­ “distributor” as previously defined in quired by this section. Application for termination, assessment and collection of “Rules and Regulations for Registration extensions of time for filing such reports excess profit liability under the Act and of Distributors” dated March 24, 1939, as should be addressed to the collector of in­ these regulations and the examination of amended June 6, 1939,1 so as to include: a ternal revenue for the district in which reports and claims in connection there­ the contracting party files its Federal in­ with will be prescribed from time to time 14 F R . 2486 DI. FEDERAL REGISTER, Saturday, July 1, 1939 2741

dock operator who physically handles coal No. 326-W, application for Registration first lieutenant in the Regular Army with respect to transactions which have as a “ distributor”, and to cause copies under provisions of AR 605-30 and the been recognized by custom to be definitely of this Order to be made available for following special conditions will be held wholesale in character, and it appearing inspection by interested parties at the on September 12, 13, 14, and 15, 1939, to the Commission that the “Rules and Office of the Secretary of the Commis­ in Washington, D. C. Regulations for Registration of Distribu­ sion, Washington, D. C., and at the office 2. In order to provide for existing or tors” dated March 24, 1939, as amended of each Statistical Bureau of the Com­ prospective denominational vacancies, June 6, 1939 and June 20, 1939, as such mission. applications will be restricted to clergy­ rules and regulations relate to dock oper­ By order of the Commission. men duly accredited to the following de­ ators, would be more effectively adminis­ Dated this 29th day of June 1939. nominations: tered by requiring that certain informa­ [ seal] F. W itcher M cCullough, tion be filed with the Commission by such Colored (any Protestant denomina­ Secretary. tion) . distributors, [F. R. Doc. 39-2281; Piled, June 30, 1939; Baptist, South. Now, therefore, Pursuant to the provi­ 12:13 p. m.] Churches of Christ. sions of subsection (f) of Section in , Disciples of Christ. entitled “Terms of ‘Agreement by Regis­ Lutheran (except Missouri Synod). tered Distributor’ ” , of the “Rules and TITLE 50—WILDLIFE Methodist. Regulations for Registration of Distribu­ Roman Catholic. tors” dated March 24, 1939, as amended BUREAU OF FISHERIES June 6,1939 and June 20,1939, and to the 3. Eligibility to compete in the ex­ Subchapter B—Alaska Aquatic M am­ provisions of the Bituminous Coal Act of amination will be confined to candidates mals O ther than W hales 1937, the National Bituminous Coal Com­ who are at the time of the examina­ mission hereby orders and directs: PART 242— ALASKA WALRUSES AND SEA LIONS tion— 1. That a “ distributor”, as such dis­ Sec. a. Male citizens of the United States 242.1 Purposes for which walruses may be between the ages of 23 and 34 years. tributor is defined in the aforesaid rules taken. and regulations, who has been registered 242.2 Purposes for which sea lions may be b. Regularly ordained, duly accredited by the Commission, shall file with the taken. by, and in good standing with one of the religious denominations listed above. Statistical Division of the Commission § 242.1 Purposes for which walruses c. Graduates of both a 4-year college at Washington, D. C., on or before the may he taken. The killing of walruses in 15th day of each month from and after course and a 3-year theological seminary the Territory of Alaska or in any of the course. the effective date of Minimum Prices waters of Alaska over which the United d. Actively engaged in the ministry as and Marketing Rules and Regulations, States has jurisdiction is prohibited a report as to each dock operated dur­ the principal occupation in life and from July 1, 1939, to June 30, 1941, both credited with 3 years’ experience therein. ing the preceding month by such dis­ dates inclusive. This prohibition shall tributor, giving the following informa­ not apply to the killing of walruses by 4. Formal applications on WD, AGO tion: natives for food or clothing, by miners Form No. 62, accompanied by at least three letters of recommendation, small (a) Total net tons of coal received or explorers when in need of food, or to on each dock during the preceding the collection of specimens for scientific photographs of applicants, and proper month, by sizes and grades, the f. o. b. purposes under permits issued by the ecclesiastical indorsements must reach mine price thereof, the name of mine Secretary of Commerce. (§2, 35 Stat. The Adjutant General not later than and producer from whom such coal was 102) (41 Stat. 716; 48 U.S.C. 191) August 30, 1939. Application received after that date will not be considered. purchased, and the amount of discount § 242.2 Purposes for which sea lions to be received as to each transaction. may be taken. The killing of sea lions [ seal] E. S. A dams, in the Territory of Alaska, or in any of (b) Number of net tons sold during Major General, the waters of Alaska over which the the preceding month as to transactions The Adjutant General. United States has jurisdiction, is per­ which, by custom, are recognized to be [F. R. Doc. 39-2266; Filed, June 30, 1939; mitted as follows: definitely wholesale in character. 9: 23 a. m.] (c) Number of net tons sold during (a) By natives for food or clothing, the preceding month as to transactions and by miners or explorers when in need which are not wholesale in character. of food. (b) By anyone in the necessary pro­ DEPARTMENT OF THE INTERIOR. 2. That the initial report required tection of property, or while such ani­ National Bituminous Coal Commis­ herein shall contain an inventory show­ mals are destroying salmon or other sion. ing the amount of coal, and the sizes food fish. and grades of such coal, on each dock [Order No. 279] (c) Under permits issued by the Sec­ on the effective date of M in im um Prices An O rder Amending O rder No. 277 W ith and Marketing Rules and Regulations. retary of Commerce authorizing the tak­ ing of specimens for scientific purposes. R espect to the D esignation op the 3. That the reports required to be (48 Stat. 976; 16 U.S.C. 659) Employee M ember of D istrict B oard filed under this Order shall be signed by No. 18 the distributor if an individual, by a [ seal] E dward J. N oble, member of the firm if a partnership, or, i Acting Secretary of Commerce. Pursuant to Act of Congress entitled “An Act to regulate interstate commerce if a corporation, by a responsible officer June 29, 1939. thereof who is familiar with the facts. in bituminous coal and for other pur­ [F. R. Doc. 39-2275; Filed, June 30, 1939; poses” (Public No. 48, 75th Cong., 1st The Secretary of the Commission is 11:32 a. m.J sess.), known as the Bituminous Coal Act hereby directed to cause a copy of this of 1937, the National Bituminous Coal Order to be published forthwith in the Notices Commission hereby orders and directs: Federal R egister, and to cause a copy 1. That paragraph 2 of Order No. 2771 hereof to be mailed to the Consumers’ of the Commission be and the same is Counsel, to the Secretary of each Dis­ WAR DEPARTMENT. hereby amended by striking opposite the trict Board, and to all parties who have words " District 18—New M e x ic o the filed their appearances in Docket No. 12, A ppointment op Chaplains in the name of Eben Jones, 736 South 5th and to mail a copy of this Order to all R egular A rmy Street, Raton, New Mexico, and inserting Code Members and to all applicants who 1. Examination of applicants for ap­ have filed with the Commission, on Form pointment as chaplains in the grade of 14 F E . 2451 DI. 2742 FEDERAL REGISTER, Saturday, July 1, 1939

in lieu thereof the name of Earle Stucker, support thereof, together with a Motion notice having been given, the same came 110 East Mesa Avenue, Gallup, New Mex­ for Rehearing and Request for Oral on for hearing before the said Examiner ico. Argument; and on the 1st day of May 1939,4 and at said 2. Except as herein modified, Order No. The Commission having granted the hearing the applicant having duly ap­ 277 shall remain in full force and effect. respondent’s Request for Oral Argu­ peared and representatives of the Legal By order of the Commission. . ment and having heard the same on the Division of the Commission and of the Dated this 29th day of June 1939. 15th day of June 1939, and the Com­ Consumers’ Counsel having entered their mission being fully advised of the testi­ respective appearances therein, the evi­ [ s e a l ] F. W it c h e r M cC u l l o u g h , mony, evidence, exhibits and depositions dence was adduced; and Secretary. as contained in the official transcript of It further appearing, That the Trial [P. R. Doc. 39-2282; Piled, June 30, 1939; the proceedings as filed herein, and Examiner having received said evidence 12:13 p. m.j after thorough consideration of the did, on the 10th day of June 1939, file,’ Pleadings, Record, Briefs, Objections with the Commission, his report’ and [Docket No. 602—FD] and Arguments in the premises, the proposed findings of fact, together with Commission made its Findings and Con­ his recommendations that said applica­ O rder i n t h e M atter o f t h e W est K e n ­ clusions thereon, a copy of which is tion be granted, and it appearing that t u c k y C oal C o m p a n y ; C o m p l a in t of attached hereto and made a part hereof true copies of said report and proposed t h e U n it e d M in e W orkers o f A m e r ic a , by reference; findings of fact of the Examiner were D ist r ic t N o . 23, A l l e g in g V io l a t io n of Now, therefore, It is hereby ordered; duly served upon all parties appearing S e c t io n 9 o f t h e B it u m in o u s C oal A ct at said hearing, on the 12th day of June o f 1937 1. That the respondent’s Motion for a Rehearing in this matter is denied. 1939, and more than fifteen days having At a regular session of the National 2. That the objections of the respond­ elapsed since the service of said report, Bituminous Coal Commission held at its ent to the aforesaid Report and Proposed no exceptions having been filed thereto; offices in Washington, D. C., on the 28th Findings of Fact of the Examiner are and day of June 1939. overruled insofar as said Report and The Commission having considered It appearing that on the 19th day of Proposed Findings conform with the the application, the Report, the Proposed January, 1939, the United Mine Workers Findings and Conclusions of the Com­ Findings of Fact, and Recommendation of America, District No. 23, a party of mission. of the Examiner, and being fully ad­ interest within the meaning of Section 3. That the Secretary of the Commis­ vised of the evidence as the same is 9 (c) of the Bituminous Coal Act of 1937, sion is directed forthwith to certify the contained in the official transcript there­ hereinafter referred to as the Act, filed Findings and Conclusions of the Com­ of, finds that the “Findings of Fact” with the Commission a complaint al­ mission and this Order to all United as proposed by the Examiner are in leging violation of Section 9 of the Act States departments or agencies con­ all respects true and correct, and are on the part of the West Kentucky Coal cerned; to cause to be published in the hereby adopted as the findings of the Commission. Company, a corporation actively engaged F ederal R egister this Order together in the production of bituminous coal in with the Findings and Conclusions of the Now, therefore, pursuant to the pro­ the State of Kentucky, said Company be­ Commission; 2 and to cause copies of the visions of the Bituminous Coal Act of ing hereinafter referred to as the re­ same to be mailed to the Secretary of 1937, the National Bituminous Coal spondent; and each District Board, to the Consumers’ Commission hereby orders: It appearing that after copy of said Counsel, and to all interested parties. That the application of the South­ complaint had been duly served on the By Order of the Commission. west Coal Company for provisional ap­ respondent, notice of a hearing1 on said Dated this 28th day of June 1939. proval as a marketing agency be and complaint before an authorized Exam­ the same is hereby granted and the said [ s e a l ] F. W it c h e r M cC u l l o u g h , iner of the Commission was promptly Southwest Coal Company be and the served on all parties of interest, said Secretary. same is hereby considered to be a mar­ hearing to be held at the Hearing Room [F. R. Doc. 39-2278; Filed, June 30, 1939; keting agency and provisionally ap­ of the Commission, Washington, D. C. on 12:12 p. m.] proved as such within the purview of the 25th day of January, 1939, but pur­ Section 12 of the Bituminous Coal Act suant to the request of the respondent of 1937 until further order of the Com­ continued until the 6th day of February, [Docket No. 619-FD] mission. 1939, on which date said hearing was By order of the Commission. begun; and O rder i n t h e M atter o f t h e A p p l ic a ­ Dated this 28th day of June 1939. t io n o f S o u t h w e s t C o al C o m p a n y It further appearing, That at said [ s e a l ] F. W itc h e r M cC u l l o u g h , hearing all parties of interest were for P r o v isio n a l A ppro val as a M ar­ Secretary. represented by counsel and evidence k e t in g A g e n c y adduced and testimony heard, said hear­ [F. R. Doc. 39-2279; Filed, June 30, 1939; At a session of the National Bitumi­ 12:12 p. m.] ing was continued for the purpose of nous Coal Commission, held at its offices permitting the respondent to take de­ in Washington, D. C., on the 28th day positions of 50 witnesses which respond­ of June 1939. [Docket No. 498-FD] ent claimed were necessary in the proper It appearing, That the above-named presentation of its defense, and such de­ applicant, Southwest Coal Company, a O rder i n t h e M atter o f t h e A pplicatio n positions having been taken and made Missouri corporation authorized to en­ o f W e ste r n P ennsylvania C oal C orpo­ a part of the record in this case, the gage in business in the State of Missouri, r a t io n for P r o v isio n a l A pproval as a Examiner submitted a Report together filed its application for provisional ap­ M a r k e t in g A g e n c y with the Proposed Findings of Fact to proval as a marketing agency on the IN RE : PETITION OF WESTERN PENNSYLVANIA the Commission, and copies of such Re­ 6th day of April 1939, pursuant to COAL CORPORATION FOR PROVISIONAL AU­ port and Proposed Findings were duly Order No. 6 s of the Commission, and THORIZATION OF MODIFICATION OF MAR­ served upon all interested parties; and the matter being assigned to Trial Ex­ KETING AGENCY CONTRACT It appearing, That on the 4th day of aminer Edward J. Hayes, and proper April 1939, the respondent duly filed At a regular session of the National Bi­ with the Commission its Exceptions to 2 Filed as a part of the original document tuminous Coal Commission held at its the Report and Proposed Findings of with the Division of the Federal Register, offices in Washington, D. C., on the 28th Fact of the Examiner and a Brief in The National Archives. Requests for copies day of June 1939. should be addressed to the National Bitu­ minous Coal Commission. 14 F.R. 464 DI. 8 2 F.R. 1078. 4 4 F R . 1642 DI. FEDERAL REGISTER, Saturday, July 1, 1939 2743

It appearing that the above named pe­ Except as herein modified, the Order ings of fact and determination, and filed titioner, Western Pennsylvania Coal Cor­ of the Commission dated December 21, same with the Administrator on May 20, poration, a Pennsylvania corporation au­ 1938 in the above entitled matter shall 1939, and thorized to engage in business in the State remain in full force and effect. Whereas, on May 23, 1939, the Admin­ of Pennsylvania, on June 26,1939 filed its The Secretary of the Commission is istrator caused to be published in the petition for provisional authorization of directed forthwith to mail a copy of this F ederal R egister a notice2 which set modification of form of marketing agency Order to the petitioner, to the Con­ forth in full the findings of fact and de­ contract, which was heretofore approved sumers’ Counsel, to the Secretary of termination of the presiding officer and by Order of the Commission dated the each District Board, and to the Code stated that, pursuant to the provisions 21st day of December, 1938, requesting Members within District No. 2; and shall of Section 522.13 of the aforesaid Regula­ that there be deleted from Section 2, par­ cause a copy hereof to be filed and made tions, as amended, within fifteen days agraph 1 of said form of marketing available for inspection at each of the after May 23, 1939, persons aggrieved by agency contract the following clause: Statistical Bureaus of the Commission; the said findings and determination “such coal as Producer may sell from its and shall cause a copy hereof to be pub­ might file, with the Administrator, peti­ mines or from truck loading facilities ad­ lished in the F ederal R egister. tions for review of the findings and de­ jacent to any of Producer’s mines for By order of the Commission. termination of the said representative, delivery by truck,” Dated this 28th day of June 1939. and so that said paragraph of said section as [ s e a l ] F . W it c h e r M cC u l l o u g h , Whereas, petitions for review, copies of revised will read as follows: Secretary. which are on file in the office of the Ad­ ministrator, Room 5144, Department of “2. The Producer hereby appointe the [F. R. Doc. 39-2280; Filed, June 30, 1939; Labor Building, Washington, D. C., and Selling Agent as its exclusive agent for 12:13 p. m.] available for examination by all inter­ the sale of the coal produced by it in its ested parties, have been duly filed with mines, in above-mentioned area, and the the Administrator by the National Asso­ Selling Agent hereby accepts the ap­ DEPARTMENT OF LABOR. ciation of Shirt and Pajama Manufac­ pointment of such Selling Agent, all on turers and sundry other parties. the terms and conditions hereinafter Wage and Hour Division. Now, therefore, notice is hereby given contained; provided, however, that the of a public hearing to be held pursuant Producer hereby expressly reserves from N o t ic e o f H ea r in g o n P e t it io n s for R e ­ to Section 522.13 of the aforesaid Regu­ the terms of this Agreement such coal v ie w o f F in d in g s and D etermination lations, as amended, at 10 o’clock A. M. as may be produced and used by it in b y t h e P r e sid in g O ffic e r o n A p p l ic a ­ on July 18, 1939, at the Raleigh Hotel, the operations of its mines; such coal t io n for P e r m is s io n to E m p l o y 12th and Pennsylvania Avenue, N. W., as it may furnish or sell to its employees L earners i n t h e A ppa r e l I n d u s t r y Washington, D. C. before Paul Sifton, for their use; such coal as is used by Deputy Administrator of the Wage and Producer in the production of coke; such Whereas, The National Association of Shirt and Pajama Manufacturers, Inc., Hour Division, hereby duly authorized to coal as is transported by the Producer to conduct said hearing and to review the itself for consumption by it or is sold or and sundry, other parties pursuant to Part 5221 (Regulations applicable to the aforementioned findings of fact and de­ delivered to a subsidiary of the Producer termination of the presiding officer and for consumption by such subsidiary, or Employment of Learners pursuant to to make a final determination of the is sold or delivered by the Producer to a Section 14 of the Fair Labor Standards Act) made application for permission to questions set forth in the second para­ corporation of which the Producer is a graph of this notice. subsidiary for consumption by such cor­ employ learners in the apparel industry at wages lower than the applicable mini­ Any person interested in appearing, poration of which Producer is a subsidi­ either in support of or in opposition to ary; and such coal as remains to be de­ mum wage specified in Section 6 of the Act; and the matters prayed for in the petition livered on legally enforceable bona fide for review, may appear on his own be­ Whereas, a hearing on said applica­ written contracts entered into prior to half or on the behalf of any other per­ June 16, 1933 and not yet completed at tion was held before Merle D. Vincent, son, provided that he shall file with the the date of the taking effect of this the representative of the Administrator Administrator, at his office in Washing­ agreement.” ; of the Wage and Hour Division, duly au­ ton, prior to noon on July 15, 1939, A thorized to conduct the said hearing and and Notice of Intention To Appear, which to determine— It appearing to the Commission upon shall contain the following information: due consideration of said petition that (a) what if any occupation or occu­ such modification and revision in the (1) The name and address of the per­ pations in the apparel industry require son appearing. form of marketing agency contract be­ a learning period, and tween petitioner and its agency members (2) If he is appearing in a representa­ (b) whether it is necessary in order tive capacity, the name and address of will not unreasonably restrict the supply to prevent curtailment of opportunities of coal in interstate commerce, will not the person or persons whom he is repre­ for employment to provide for the em­ senting. prevent the public from receiving coal ployment of persons in occupations re­ at fair and reasonable prices, and will quiring a learning period at wage rates (3) Whether he is appearing in sup­ not operate against the public interest, lower than the minimum wage applica­ port of or in opposition to any petition for review. Now, therefore, Pursuant to the pro­ ble under Section 6 of the Fair Labor visions of the Bituminous Coal Act of Standards Act of 1938, and (4) The approximate length of time 1937, the National Bituminous Coal Com­ which his presentation will consume. mission hereby orders: (c) if such necessity is found to exist, (5) Scope of appearance, i. e., for at what wages lower than the minimum That the Western Pennsylvania Coal which branch of the apparel industry wage applicable under Section 6, such appearance will be made. Corporation be and hereby is granted employment of learners shall be permit­ provisional authorization to modify its ted, and with what limitations as to time, Signed at Washington, D. C., this 30th form of marketing agency contract as number, proportion and length of service. day of June, 1939. hereinabove set forth, effective thirty and E l m e r F . A n d r e w s , (30) days from the date of this Order, Administrator. unless within such time any interested Whereas, following such hearing the party files a protest to this Order and said Merle D. Vincent duly made his find- [F. R. Doc. 39-2283; Filed, June 30, 1939; requests that a hearing be held upon the 12:59 p. m.] aforesaid petition. 14 F.R. 2088 DI. * 4 F R . 2093 DI. No. 127----- 3 2744 F E D E R A L R E G IS T E R , Saturday, July 1, 1939

CIVIL AERONAUTICS AUTHORITY. standard time), in Room 110, Customs United States of America— Before the [Amendment 16 of Civil Air Regulations] House, Philadelphia, Pennsylvania. Securities and Exchange Commission Upon completion of testimony for the R eapplication for P il o t , G r o u n d I n ­ Federal Trade Commission, the examiner A t a regular session of the Securities str uctor an d A ir C arrier D ispatc h er is directed to proceed immediately to take and Exchange Commission, held at its office in the City of Washington, D. C., C ertificates testimony and evidence on behalf of the on the 29th day of June, A. D. 1939, At a session of the Civil Aeronautics respondent. The examiner will then [File No. 31-406] Authority held at its office in Washing­ close the case and make his report. By the Commission. ton, D. C., on the 27th day of June 1939. I n t h e M atter o f t h e N a t io n a l Supply Acting pursuant to the Authority [ s e a l ] O t is B. J o h n s o n , C o m p a n y Secretary. vested in it by the Civil Aeronautics Act ORDER CONSENTING TO WITHDRAWAL OF of 1938, particularly section 205 and sub­ [F. R. Doc. 39-2269; Filed, June 30, 1939; APPLICATION UNDER PUBLIC UTILITY sections (a) and (b) of section 602 of 9:53 a. m.] HOLDING COMPANY ACT OF 1935 PURSU­ said Act, and finding that its action is ANT TO REQUEST OF APPLICANT desirable in the public interest and is necessary to carry out the provisions of, Upon the request of the applicant, the and to exercise and perform its powers SECURITIES AND EXCHANGE COM­ Commission consents to the withdrawal and duties under, said Act, the Civil MISSION. of the application of the above-named Aeronautics Authority hereby amends the applicant, and to that effect United States of America—Before the It is so ordered. Civil Air Regulations as follows: Securities and Exchange Commission Subsections (a) and (b) of section By the Commission. 20.39, section 20.47, section 21.29, sec­ At a regular session of the Securities [ s e a l ] F r a n c is P . B rassor, tion 23.29, and section 27.29 are amended and Exchange Commission, held at its Secretary. by striking the phrase “ 30 days” appear­ office in the City of Washington, D. C., [F. R. Doc. 39-2272; Filed, June 30, 1939; ing in each of such subsections and in­ on the 29th day of June, A. D. 1939. 10:54 a. m.j serting the phrase “ 90 days” in lieu [File No. 31-125] thereof. This amendment shall become effec­ n t h e atter o f il l m a n and o I M H L C ., J. H . United States of America—Before the tive on and after 12:01 A. M., E. S. T., il l m a n o n s o ecla oal H & S C ., H C & Securities and Exchange Commission July 27, 1939. C o k e C o ., P ennsylvania I n d u s t r ie s , By the Authority. I n c ., M otors M ortgage C o r p. At a regular session of the Securities and Exchange Commission held at its [ s e a l ] P a u l J. F rizzell, ORDER CONSENTING TO WITHDRAWAL OF office in the City of Washington, D. C., Secretary. APPLICATION UNDER PUBLIC UTILITY on the 30th day of June, A. D. 1939. [F. R. Doc. 39-2277; Filed, June 30, 1939; HOLDING COMPANY ACT OF 1935 PURSUANT 12 m.] TO REQUEST OF APPLICANT [File Nos. 34r-8, 52-3, 52-5, 52-9, 52-10, and 59-1] Upon the request of the applicants, the Commission consents to the withdrawal I n t h e M atter o f U t il it ie s P ow er & L ig h t C o r po r a t io n and U tilities FEDERAL TRADE COMMISSION. of the application of the above-named applicants, and to that effect P o w e r & L ig h t C o rpo ratio n and United States of America—Before It is so ordered. C h ar les T r u e A dam s Federal Trade Commission By the Commission. NOTICE OF AND ORDER FOR HEARING AND [ s e a l ] F r a n c is P . B rassor, ARGUMENT At a regular session of the Federal Secretary. Trade Commission, held at its office in The Commission having on August 29, the City of Washington, D. C., on the [F. R. Doc. 39-2270; Filed, June 30, 1939; 1938 entered, an order entitled “Order for 29th day of June, A. D. 1939. 10:54 a. m.] Consolidation of Hearings for Stated Pur­ Commissioners: Robert E. Freer, poses and Governing Certain Procedural Chairman; Garland S. Ferguson, Charles Matters” consolidating the above entitled H. March, Ewin L. Davis, William A. United States of America— Before the matters for purposes of hearing; Ayres. Securities and Exchange Commission Hearing pursuant to said order with respect to valuation and plans of reor­ [Docket No. 3774] At a regular session of the Securities and Exchange Commission, held at its ganization having been held before the I n t h e M atter o f B e n j a m in G o u l d , T rad­ office in the City of Washington, D. C., Commission’s Trial Examiner jointly on in g as P ic c a d il l y H o s ie r y M il l s and on the 29th day of June, A. D. 1939. the same subject matter with a hearing P ic c a d il l y H o s ie r y C o m p a n y before the Special Master appointed by [File No. 31-186] the District Court of the United States ORDER APPOINTING EXAMINER AND FIXING for the 'Northern District of Illinois, TIME AND PLACE FOR TAKING TESTIMONY I n t h e M atter o f K e n t u c k y N atural G as C o r po r a t io n Eastern Division, Cause No. 64605; This matter being at issue and ready Oral arguments having been made be­ for the taking of testimony, and pursuant ORDER CONSENTING TO WITHDRAWAL OF fore the Securities and Exchange Com­ to authority vested in the Federal Trade APPLICATION UNDER PUBLIC UTILITY mission and the Special Master jointly; Commission, under an Act of Congress HOLDING COMPANY ACT OF 1935 PURSU­ and the hearing with respect to valua­ (38 Stat. 717; 15 U.S.C.A., Section 41). ANT TO REQUEST OF APPLICANT tion and plans of reorganization having It is ordered, That John W. Addison, Upon the request of the applicant, the been closed; an examiner of this Commission, be and Commission consents to the withdrawal The Commission having on April 14, he hereby is designated and appointed to of the application of the above-named 1939 entered an order1 reopening said take testimony and receive evidence in applicant, and to that effect hearing with respect to valuation and this proceeding and to perform all other It is so ordered. plans of reorganization, and further duties authorized by law; By the Commission. hearing having been had and further I t is further ordered, That the taking [ s e a l ] F r a n c is P . B rassor, argument made before said Trial Ex­ of testimony in this proceeding begin on Secretary. aminer and Special Master jointly; the Monday, July 10, 1939, at nine o’clock in [F. R. Doc. 39-2271; Filed, June 30, 1939; the forenoon of that day (eastern 10:54 a. m.] 14 F.R. 1638 DI. FEDERAL REGISTER, Saturday, July 1, 1939 2745 transcript of said argument having been Changes in said plan, effected by said maining members shall be chosen by submitted to the Commission pursuant amendment include the following: the holders of outstanding debentures of to stipulation, and said hearing with the Debtor, with the right to vote cumu­ (1) Amendment of Article 1 of said respect to valuation and plans of reor­ latively; (d) that in subsequent elections plan so as to provide, in substance, that ganization having again been closed; of directors, the preferred stock of the a plan of integration under Section 11 Subsequently Atlas Corporation, the New Company shall be entitled to elect (e) of the Public Utility Holding Com­ proponent of a Plan of Reorganization J two members, voting as a class, the re­ pany Act of 1935 shall be filed by the dated February 1, 1939, comprising the maining members to be elected by the New Company contemplated by said subject matter of the application having holders of the common stock of the New plan of reorganization; that Interstate file number 52-9, having tendered for Company, voting as a class, with the Power Company, Central States Utilities filing an amendment of said application right of cumulative voting within each Corporation and Central States Power & for the purpose of amending said plan; class; except that whenever there shall Light Corporation (subsidiaries of Utili­ The Commission having considered be dividends of $1.871/2 accumulated and ties Power & Light Corporation, Debtor) the amendment so tendered and the unpaid on any shares of the preferred shall join in such plan of integration; record, briefs and arguments herein; stock of the New Company, the holders that such plan of integration shall It appearing to the Commission that of such stock as a class shall be en­ contain certain provisions more fully set such amendment should be permitted to titled to elect two-thirds of the directors forth in such amendment for the en­ be filed; until all arrears are paid (such right, forcement of such plan of integration It is ordered, That said amendment however, not to accrue until after the (including provisions with respect to be permitted to be filed and that such first dividend payment date next suc­ the appointment of a trustee) in the hearing be reopened for the purpose of ceeding one year from the date from event such plan of integration shall not receiving evidence with respect thereto; which dividends on such preferred stock be consummated within two years from It is further ordered, That such hear­ shall be cumulative); (e) that the com­ the date of filing thereof plus such mon stock to be issued by the New Com­ ing be held on July 10, 1939, at 10:00 extension of time as the Commission pany shall have a par value of $4 per o’clock in the forenoon of that day, at may grant. the Securities and Exchange Building, share; (f) that no dividend shall be 1778 Pennsylvania Avenue NW., Wash­ (2) Provisions added to Article II of declared or paid on the common stock ington, D. C. On such day the hearing- the plan whereby all holders of outstand­ of the New Company unless after the room clerk in Room 1102 will advise as ing debentures and allowed claims payment of such dividend the capital to the room where such hearing will be against the Debtor other than Atlas and surplus of the New Company shall held. Corporation and its subsidiaries may be at least equal to $100 per share of elect to take (a) in lieu of any or all the outstanding preferred stock of the It is further ordered, That Edward C. shares of new common stock which they Johnson or any other officer or officers New Company, and the surplus of the are entitled to receive under the plan, New Company shall be at least equal to of the Commission designated by it for 1 share of new preferred stock instead that purpose shall preside at the hearing $7.50 per share of such preferred stock; of each 8 V3 shares of new common stock (g) that the affirmative vote of the in such matter. The officer so desig­ or (b) in lieu of any or all shares of new nated to preside at such hearing is holders of at least two-thirds in interest preferred stock which they are entitled of the outstanding preferred stock is­ hereby authorized to exercise all powers to receive under the plan, 8y3 shares of granted to the Commission under sec­ sued by the New Company pursuant to new common stock instead of each 1 tion 18 (c) of the Public Utility Holding the plan be required, not only for the share of new preferred stock; and where­ authorization of any preferred stock Company Act of 1935 and to continue by at the expiration of the time fixed or postpone such hearing from time to senior thereto, but also for the authoriza­ for the exercise of such rights of elec­ tion of any preferred stock on a parity time or to a date thereafter to be fixed tion, Atlas Corporation and its subsidiar­ by such presiding officer. therewith; and ies shall have like rights of election ex­ (4) Certain other changes set out in I t is further ordered, That in the cept that they shall exercise such rights the amendment on file with the Com­ event a hearing shall be ordered to be in such a manner and to such extent mission. held before said Special Master at said that the initial capital structure of the By the Commission. time and place such hearing before an New Company will include no greater officer of the Commission may be held amount of preferred stock than would [ s e a l ] F r a n c is P . B rassor, jointly with such hearing before said be issuable if the rights of election men­ Secretary. Special Master; tioned in this paragraph (2) were not [F . R. Doc. 39-2273; Filed, June 30, 1939; It is further ordered, That at the con­ included in the plan. 10:54 a. m.J clusion of such hearing the Commission (3) Amendments providing in sub­ hear oral argument with respect to such stance (a) that the New Company shall amendment and with respect to whether United States of America— Before the pay over to the trustee for the sinking Securities and Exchange Commission or not the Commission’s approval of said fund for its debentures 100% of the net plan as amended, if granted, should be proceeds received by the New Company At a regular session of the Securities conditioned upon the filing of a further from any sale of assets acquired by it in and Exchange Commission held at its amendment eliminating those provi­ reorganization, until all such debentures office in the City of Washington, D. C., on sions of said plan which provide for the shall have been retired; (b) thereafter the 30th day of June, A. D. 1939. granting of rights to subscribe to shares the New Company shall set aside 30% of [File No. 37-39] of the new common stock therein men­ the net proceeds received by it from any tioned; I n t h e M atter o f S o u t h e r n U n i o n such sales, in a sinking fund to be ap­ Notice of such hearing and of such plied to the retirement of its preferred S ervice C o m p a n y oral argument is hereby given to the stock; (c) that the initial board of di­ n o t ic e o f a n d order fo r h e a r in g parties and to any other person whose rectors of the New Company shall con­ An application pursuant to section participation may be in the public in­ sist of nine or seven members (such 13 (b) of the Public Utility Holding Com­ terest or for the protection of investors number to be determined by Atlas Cor­ pany Act of 1935, having been duly filed or consumers. It is requested that any poration prior to the final confirmation with this Commission by the above- person not already a party who shall of the plan by the Court) of whom two named party; desire to be heard or admitted as a members shall be chosen by the holders It is ordered, That a hearing on such party, file a notice to that effect with of the outstanding shares of preferred matter be held on July 7, 1939, at 10 the Commission on or before July 7 stock of the Debtor, with the right to 1939. o’clock in the forenoon of that day, at vote cumulatively, and of whom the re­ the Securities and Exchange Building, 2746 FEDERAL REGISTER, Saturday, July 1, 1939

1778 Pennsylvania Avenue NW., Wash­ the Commission’s Rules of Practice to subsidiary service company of Southern ington, D. C. On such day the hearing- continue or postpone said hearing from Union Gas Company from the prohibi­ room clerk in room 1102 will advise as to time to time. tions of Section 13 of the Act and the the room where such hearing will be Notice of such hearing is hereby given rules promulgated thereunder, and per­ held. At such hearing, if in respect of to such declarant or applicant and to mitting such company to enter into and any declaration, cause shall be shown any other person whose participation in perform service, sales and construction why such declaration shall become ef­ such proceeding may be in the public contracts for associate companies there­ fective. interest or for the protection of investors of, pending Commission action on an It is further ordered, That James G. or consumers. It is requested that any application (Pile No. 37-39) for approval Ewell or any other officer or officers of person desiring to be heard or to be of such company as a mutual service the Commission designated by it for that admitted as a party to such proceeding company. purpose shall preside at the hearings in shall file a notice to that effect with the By the Commission. such matter. The officer so designated Commission on or before July 6, 1939. to preside at any such hearing is hereby The matter concerned herewith is in [ s e a l ] F r a n c is P . B rassor, Secretary. authorized to exercise all powers granted regard to an application for an order of to the Commission under section 18 (c) the Commission temporarily exempting [P. R. Doc. 39-2276; Piled, June 30, 1939; of said Act and to a trial examiner under Southern Union Service Company as a 11:54 a. m.]