972 PUBLIC LAWS-CH. 600-JUNE 23, 1938 [52 STAT. foreclosure proceedings were instituted, or the property was other- wise acquired by the mortgagee after default, and shall bear interest from such date at a rate determined by the Commission, with the approval of the Secretary of the Treasury, at the time the mortgage was offered for insurance, but not to exceed 3 per centum per annum, payable semiannually on the 1st day of January and the 1st day of July of each year, and shall mature three years after the 1st day of July following the maturity date of the mortgage on the property Tax exemption. in exchange for which the debentures were issued. They shall be exempt, both as to principal and interest, from all taxation (except surtaxes, estate, inheritance, and gift taxes) now or hereafter imposed by the United States, by any Territory, dependency, or possession thereof, or by any State, county, municipality, or local taxing author- Payment. ity. They shall be paid out of the fund, which shall be primarily liable therefor, and they shall be fully and unconditionally guar- anteed as to principal and interest by the United States, and such Procedure if fund guaranty shall be expressed on the face of the debentures. In the event that the fund fails to pay upon demand, when due, the prin- cipal of, or interest on, any debentures so guaranteed, the Secretary of the Treasury shall pay to the holders the amount thereof, which is hereby authorized to be appropriated out of any money in the Treasury not otherwise appropriated, and thereupon to the extent of the amount so paid the Secretary of the Treasury shall succeed to all the rights of the holders of such debentures. Authority ob s "(d) Notwithstanding any other provision of law relating to the mission in business transactions. acquisition, handling, or disposal of property by the United States, the Commission shall have the right to complete, recondition, recon- struct, renovate, repair, maintain, operate, or charter, or sell for cash or credit, in its discretion, any properties conveyed to it in exchange for debentures as provided in this section; and notwithstanding any other provision of law, the Commission shall also have power to pursue to final collection, by way of compromise or otherwise, all claims against mortgagors assigned by mortgagees to the Commission as provided in this section. Retroactive provi- "SEC. 1106. No provision of this title shall be construed to authorize the Commission to insure a mortgage securing any loan or advance made prior to the enactment of this title and no mortgage shall be insured for refinancing in whole or in part any existing mortgage indebtedness except- Where substanotl "(1) where a substantial portion of the total amount to be secured portion of new mort- gage is applied to new by the new mortgage shall be applied to new construction, recondi- construction, improve- ments, ete tioning, or reconstruction of one or more of the mortgaged vessels: Provisoa Limitation on ag- Provided, however, That the aggregate amount of all mortgages gregate amount. insured under this paragraph and outstanding at anv one time shall not exceed $20,000,000, and provided that all of the eligibility requirements of section 1104 not inconsistent with this paragraph are complied with; Additional recondi- "(2) where the Commission has insured a mortgage under the pro- tioning etc., lons. visions of this title, and the mortgagor thereafter makes application to the mortgagee or another lender for an additional loan or advance for reconditioning or reconstructing the mortgaged property, the Commission may insure a new mortgage in the amount of the prin- cipal outstanding balance of the original mortgage plus the amount of the new loan, provided the total amount is within the limits of section 1104 and the new mortgage conforms to all other eligibility requirements thereof; and Insurance of mort- (3) the Commission may insure mortgages given to finance the chasestetc. purchase of vessels theretofore acquired by the fund under the pro- visions of section 1105 and to secure loans or advances made for recon- ditioning and reconstruction of such vessels.
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