b. Unreasonable compensation paid to officers or employees, including any compensation in excess of wages or salaries approved under applicable wage and salary stabilization regulations; bonuses which constitute a distribution of profits; and royalties paid to officers and employees.

c. Profit on transactions with business enterprises, of any kind, directly or indirectly controlling, controlled by, or under common control with, the contractor or subcontractor.

d. Cost of unreasonable spoilage or defective work and excessive inventories of materials and supplies.

e. Entertainment expenses. f. Donations.

g. Taxes and expenses on issues and transfers of stock.

h. Income and excess profits taxes.

i. Losses on other contracts or subcontracts, not limited to contracts and subcontracts as herein defined; losses from sales or exchanges of capital assets; losses on investments; and bad debt losses and charges to reserves therefor, including expenses of collection and exchange.

j. Cost or losses arising from fraud or wilful misconduct of any officer, employee, or agent, or negligence of any officer, of the contractor or subcontractor. k. Fines and penalties.

1. Amortization of unrealized appreciation of values of assets; amortization or depreciation of facilities at rates in excess of rates having a reasonable relation to actual useful life; and expenses, maintenance, and depreciation of excess facilities, other than reasonable stand-by facilities.

m. Provisions in reserve accounts for contingencies, repairs, and compensation insurance except self-insurance reserves established consistently with state laws and at rates not in excess of lawful or approved insurance company rates less allowance for acquisition costs incurred by insurance companies.

n. Any item of cost which the contract or subcontract or negotiations therefor expressly contemplated would not be reimbursed or compensated or allowed for.

101.8 The term "contract price" means the aggregate of all amounts (before taxes and statutory renegotiation) paid or payable to a contractor or subcontractor for work, supplies, or services

furnished during the statutory period pursuant to a contract or subcontract, including any amounts paid or payable pursuant to any amendment, adjustment, or settlement of or on account of such contract or subcontract under the First War Powers Act, 1941, the Contract Settlement Act of 1944 (41 U. S. C., Supp. IV, secs. 101-125), or otherwise.

101.9 The term "loss" means the amount by which the cost of performance of a contract or subcontract exceeds the contract price thereof.

101.10 The term "profit" means the amount by which the contract price of a contract or subcontract exceeds the cost of performance thereof.

101.11 The term "net loss" means the amount by which the aggregate of the costs of performance under all contracts and subcontracts exceeds the aggregate of the contract prices under all contracts and subcontracts, after giving appropriate effect to action in renegotiation proceedings in respect of the statutory period.

101.12 The term "claim" means a claim for relief under the Act.

101.13 The term "claimant" means a contractor or subcontractor who files a claim under the Act.

PART II-FILING OF CLAIM

201. No claim shall be received or considered by any war agency unless properly filed in accordance with the Act and these Regulations on or before February 7, 1947.

202. Each claim shall be in writing and shall contain or shall be accompanied by: a. A statement of the total amount claimed.

b. A statement of the contract price, cost of performance, and loss claimed, for each contract with a war agency or subcontract under a contract of a war agency with respect to which claim is made.

c. A statement of the contract price, cost of performance, and profit or loss, on each contract and subcontract. The claimant shall identify each such contract by agency, number, and date, and shall identify each such subcontract by names of contracting parties, number (if any), and date. In addition, in the case of each such subcontract, the claimant shall similarly identify the related prime contract and each intervening

higher tier subcontract to the greatest extent possible.

d. A statement of the net loss on all the contracts and subcontracts listed under subparagraph c hereof.

e. A copy of each written request filed on or before August 14, 1945, with the war agency concerned, for relief with respect to the losses claimed.

f. A copy of any other written request filed prior or subsequent to August 14, 1945, with any agency for relief with respect to the losses claimed.

g. A statement of any other relief sought from the Government with respect to the losses claimed.

h. A statement of the amount (if any) refunded to the Government pursuant to section 403 of the Sixth Supplemental National Defense Appropriation Act, 1942, as amended (50 U. S. C., Supp. IV, App., sec. 1191), for each fiscal year of the claimant subject to statutory renegotiation; a copy of each renegotiation agreement or order entered into or received by the claimant; and a statement of the extent to which any loss for which claim for relief is filed hereunder reduced the amount of profits reported in a renegotiation proceeding.

i. A statement in detail of all claims and settlements made or entered into by the claimant under section 17 of the Contract Settlement Act of 1944.

j. A statement in detail, as to each loss claimed, of the facts and circumstances which caused the loss and the period or periods of time during which the loss occurred.

k. A statement, supported by reasonable detail, showing that the loss or losses claimed occurred through no fault or negligence on the claimant's part.

1. A list of all business enterprises, of any kind, directly or indirectly controlling, controlled by, or under common control with, the claimant, and, with respect to each such business enterprise, a description of the means of such control.

m. A statement showing the amount by which any loss, in respect of which a claim is made, reduced income or excess profits taxes of the claimant for any taxable year or years.

n. An affidavit by two officers or other responsible officials of the claimant, one of whom shall be the chief accounting officer of the claimant, that the statements, information, and other data set

forth in the claim and supporting papers have been carefully verified, have been prepared from the accounting and other records of the claimant, have been prepared in accordance with the requirements of the Act and these Regulations, and in all respects are true and correct to the best of their knowledge and belief.

203. No more than one claim shall be filed under the Act by any one claimant. Each claim shall be filed in quadruplicate with the war agency with respect to whose contracts and subcontracts claim for loss is made. When claim for loss is made with respect to contracts and subcontracts of more than one war agency, the claim shall be filed with the war agency with respect to whose contracts and subcontracts the largest claim for loss is made.

204. No claim for loss under any contract or subcontract of a war agency shall be received or considered unless a written request for relief with respect thereto was filed with such war agency on or before August 14, 1945; and no claim shall be considered if final action with respect thereto was taken on or before that date.

205. Upon request by a war agency with which a claim has been filed, the claimant shall furnish promptly additional copies of its claim or any additional evidence which may be requested and which is within the possession of or available to the claimant, bearing upon the claim or any of the matters referred to in section 2 (a) of the Act. Such additional evidence shall be verified by the claimant in accordance with subparagraph n of paragraph 202 of these Regulations.

PART III-SETTLEMENT OF CLAIMS

301. Upon receipt of a claim, the war agency shall transmit a copy of the claim to the General Accounting Office for verification of the list of contracts and subcontracts shown in the claim. The General Accounting Office shall be requested to advise the war agency of any discrepancies between its records and the list of contracts and subcontracts set forth in the claim, and to furnish any facts in its files pertinent to the consideration and settlement of the claim. Before any claim is paid under the Act or these Regulations the war agency considering the claim shall notify the General Accounting Office as to the proposed settlement, and the General Accounting Office shall ascer

tain from the contracting and lending agencies of the Government whether they have any claims against the claimant and shall notify the agency concerned with respect thereto. As soon after February 7, 1947, as practicable, the General Accounting Office shall prepare a list of all claimants under the Act and shall furnish each contracting or lending agency of the Government, and the Department of Justice, a copy thereof. Each such agency shall thereupon notify the General Accounting Office as to any claim or claims it may have against any claimant named in such list.

302. When claim for loss is made with respect to contracts and subcontracts of more than one war agency, the war agency with which the claim is filed pursuant to paragraph 203 of these Regulations shall proceed to consider and settle the claim, subject to the approval of each other war agency concerned as to that portion of the proposed settlement which relates to the contracts or subcontracts of that agency, which approval of, or determination with respect to, such portion shall be final. Each war agency considering a claim involving losses under contracts and subcontracts of other war agencies shall advise and consult with such other war agencies, and may request information or comment from any other agency with respect to matters bearing upon the claim.

303. Each war agency, in considering a claim, shall take into consideration (a) action taken with respect to the claimant under section 403 of the Sixth Supplemental National Defense Appropriation Act, 1942, as amended, the Contract Settlement Act of 1944, or similar legislation; (b) relief granted the claimant under section 201 of the First War Powers Act, 1941, or otherwise; and (c) relief proposed to be granted the claimant by any other war agency under the Act. Whenever a war agency finds that a loss affected the computation of the amount of the claimant's excessive profits determined in a renegotiation agreement or order, and to the extent that the war agency finds such amount was thereby reduced, no claim for such loss shall be allowed under the Act or these Regulations. Each war agency, in considering a claim, shall give such regard as may be proper to any reduction in income or excess profits taxes of the claimant resulting from the loss in respect of which the claim is made.

304. No claim shall be allowed by any war agency except if and to the extent that the war agency finds that the claim is (a) equitable under all the circumstances and (b) for losses incurred without fault or negligence on the part of the claimant.

305. No claimant shall be granted relief under the Act and these Regulations in any amount in excess of the amount of the net loss (less the amount of any relief granted subsequent to the establishment of such loss) on all contracts and subcontracts held by the claimant pursuant to which work, supplies, or services were furnished for the Government during the statutory period.

306. A war agency considering a claim shall determine the extent to which information and data sworn to and filed by the claimant shall be verified.

307. Relief with respect to a particular loss claimed shall not be granted under the Act and these Regulations unless the war agency considering the claim finds, or, in case such loss was incurred under the contracts and subcontracts of another war agency, such other war agency finds, that relief would have been granted under the First War Powers Act, 1941, if final action with respect thereto had been taken by the war agency on or before August 14, 1945.

308. Where a claim is settled by agreement between the war agency and the claimant, the agreement shall be reduced to writing and signed by both parties and shall include an unconditional release by the claimant of all claims whatsoever of the claimant against the Government or any department or agency thereof as to all contracts and subcontracts involved in consideration of the claims. Payment, within the limits of appropriations available for such purposes, shall be made by the war agency upon the basis of the executed agreement.

309. Where a claim is not settled by agreement, the war agency shall deliver to the claimant a written statement as to the amount, if any, due on the claim, but shall make no payment of any amount so found to be due until the claimant shall have delivered to the war agency an unconditional release of all claims whatsoever of the claimant against the Government or any department or agency thereof as to all contracts and subcontracts involved in consideration of the claims.

AMENDMENT OF EXECUTIVE ORDER No. 7747 OF NOVEMBER 20, 1937, AS AMENDED, EsTABLISHING THE SAN CLEMENTE ISLAND NAVAL DEFENSIVE SEA AREA 1

Executive Order No. 7747 of November 20, 1937, as amended by Executive Order No. 8536 of September 6, 1940,2 is hereby amended to read as follows:

"By virtue of and pursuant to the authority vested in me by the provisions of section 44 of the Criminal Code, as amended (18 U. S. C. 96), the area of water surrounding San Clemente Island, California, extending from low-water mark out for a distance of three hundred yards beyond low-water mark, except in Wilson Cove, where it is to extend one hundred yards beyond low-water mark, and including that part of Pyramid Cove lying north of a line between a point one thousand yards south of China Point light and a point three hundred yards south of Whitewashed Rock, is hereby established as a defensive sea area for purposes of national defense, subject to the uses reserved for the Department of Commerce by Executive Order No. 6897 of November 7, 1934. The said area shall be known as the San Clemente Island Naval Defensive Sea Area.

"At no time shall vessels or other craft be navigated within the defensive sea area above defined except such as are authorized by the Secretary of the Navy.

'Tabulated in § 9.3 of Title 34. 23 CFR Cum. Supp.

"Any person violating the provisions of this order shall be subject to the penalties provided by law."

HARRY S. TRUMAN

THE WHITE HOUSE,

October 5, 1946.

EXECUTIVE ORDER 9788

TERMINATING THE OFFICE OF ALIEN PROPERTY CUSTODIAN AND TRANSFERRING ITS FUNCTIONS TO THE ATTORNEY GENERAL 3

By virtue of the authority vested in me by the Constitution and statutes, including the Trading with the Enemy Act of October 6, 1917, 40 Stat. 411, as amended, and the First War Powers Act, 1941, 55 Stat. 838, as amended, and as President of the United States, it is hereby ordered, in the interest of the internal management of the Government, as follows:

1. The Office of Alien Property Custodian in the Office for Emergency Management of the Executive Office of the President, established by Executive Order No. 9095 of March 11, 1942,2 is hereby terminated; and all authority, rights, privileges, powers, duties, and functions vested in such Office or in the Alien Property Custodian or transferred or delegated thereto are hereby vested in or transferred or delegated to the Attorney General, as the case may be, and shall be administered by him or under his direction and control by such officers and agencies of the Department of Justice as he may designate.

2. All property or interests vested in or transferred to the Alien Property Custodian or seized by him, and all proceeds thereof, which are held or administered by him on the effective date of this order are hereby transferred to the Attorney General.

3. All personnel, property, records, and funds of the Office of Alien Property Custodian are hereby transferred to the Department of Justice.

4. This order supersedes all prior Executive orders to the extent that they are in conflict with this order.

5. This order shall become effective on October 15, 1946.

THE WHITE HOUSE,

HARRY S. TRUMAN

October 14, 1916.

3 Noted in Chapter II of Title 8.

EXECUTIVE ORDER 9789 ESTABLISHING THE PHILIPPINE ALIEN PROPERTY ADMINISTRATION AND DEFINING ITS FUNCTIONS

By virtue of the authority vested in me by the Constitution and statutes, including the Trading with the Enemy Act of October 6, 1917, 40 Stat. 411, as amended, the Philippine Property Act of 1946 (Public Law 485, 79th Congress, approved July 3, 1946), and the First War Powers Act, 1941, 55 Stat. 838, as amended, and as President of the United States, it is hereby ordered, in the interest of the internal management of the Government, as follows:

1. There is established in the Office for Emergency Management of the Executive Office of the President the Philippine Alien Property Administration, at the head of which shall be a Philippine Alien Property Administrator appointed by the President, without regard to the civil service laws. The Philippine Alien Property Administrator shall receive compensation at such rate as the President shall approve and in addition shall be entitled to actual and necessary transportation, housing, subsistence, and other expenses incidental to the performance of his duties. Within the limitation of such funds as may be made available for that purpose, and without regard to the civil service laws, the Philippine Alien Property Administrator may appoint assistants and other personnel and delegate to them such functions as he may deem necessary to carry out the provisions of this order. Such personnel of the Office of Alien Property Custodian as are engaged in the exercise of the functions transferred hereunder, may be transferred to the Philippine Alien Property Administration without loss of such civil service status or eligibility therefor as they may possess.

2. All authority, rights, privileges, powers, duties and functions vested in the Office of Alien Property Custodian or in the Alien Property Custodian or transferred or delegated thereto with respect to property located in the Philippines and property transferred by section 3 hereof are hereby vested in or transferred or delegated to the Philippine Alien Property Administrator.

3. The Alien Property Custodian is authorized and directed to transfer to the Philippine Alien Property Administrator all property or interests vested in or transferred to him which were located in the Philippines at the time of such vest

ing or transfer, or the proceeds thereof, less, however, such expenses as the Alien Property Custodian is authorized to charge against such property or proceeds. Such property or proceeds shall be administered and disposed of under the direction and control of the Philippine Alien Property Administrator in accordance with law.

4. The Philippine Alien Property Administrator shall, except as otherwise agreed to by the Secretary of State, consult with the Secretary of State before vesting any property or interest pursuant to this Executive order.

5. The Alien Property Custodian is authorized and directed to transfer to the Philippine Alien Property Administrator such personnel, records, files, furniture, funds, authorizations, equipment and supplies as the Director of the Bureau of the Budget may determine to be necessary for the performance of the functions hereby transferred, but the Administrator shall reimburse the Custodian for the funds and the present value of the furniture, equipment and supplies so transferred.

6. The Philippine Alien Property Administrator, to the extent permitted by law, is authorized to pay out of any funds or other property or interests vested in him or transferred to him all necessary expenses of the Philippine Alien Property Administration in the performance of the functions hereby transferred.

7. Paragraph 5 of Executive Order No. 91421 (7 Fed. Reg. 2985) is amended to the extent that it requires that litigation under the Trading with the Enemy Act of October 6, 1917, as amended, and the Philippine Property Act of 1946, instituted in the courts of the Philippine Islands prior to July 4, 1946, be conducted under the supervision of the Attorney General. In any such litigation the Philippine Alien Property Administrator may appear personally or through attorneys appointed by him.

8. No action taken by the Alien Property Custodian under Executive Order No. 9747 of July 3, 1946,2 shall be challenged on the ground that it was within the jurisdiction of the Philippine Alien Property Administrator.

9. This order shall become effective on October 14, 1946.

THE WHITE HOUSE,

HARRY S. TRUMAN

October 14, 1946.

13 CFR Cum. Supp. 2 Supra.