The sun. [volume] (New York [N.Y.]) 1916-1920, 1918-07-09
shsil BE- charged at cost under sue
contracts.

shat be charged at cost under such
contracts.
Federal Guarantee to Company.
~ Tho Director-aene shall pay. or
save the company harmless from. all ex-
penses incident to or growing out Of the
possession, operation and use of the
property taken over during Federal con-
troll, and all rents called In the monthly
reports to the commission, equipment
rents or Joint facility rents and all judy
ments or DEGREES that may be recovered
or Issued against. and all fines and pen
alties that may be imposed upon. the
company by reason OF any cause OF ac-
ton arising out OF Federal control or of
anything done or omitted in the possess
sion. operation, use or control of the
oompanys property during Federal con-
troll
% The Director General shall save
the company harmless from any and all
liability. loss or expense resulting from
or incident to anything done or omitted
during Federal control in connection
with or incident TO operation or existing
contracts relating to operation; and shall
do and perform so far az Is requisite
of the company all and singular the
things. of which ne may have notice.
necessary and appropriate to prevent, by
reason Of anything done or omitted
under Federal control, the forfeiture or
loss by the company Of any Of It's prop
erty rights, ordinance rights. or fran
chises, or of its trackage. lease, terminal
or other contracts involving facility
OF operation. The Director General shall
also save the company harmless from
any and all claims for breach Of cove
nant heretofore entered into by the COM
pany in any mortgage or other instru-
ment in respect to insurance against
losses by fire.
Nothing in this or in the preceding
paragraph shall be construed to be an
assumption by the Director General of.
or to make him liable on, any obligation
OF the company to pay a debt secured by
a mortgage or any rent under lease
except rents called In the monthly re-
ports to the commission. equipment rents
and Joint facility rents.
(k) In carrying out the provisions of
paragraphs ta). (b), (o) and (d) Of
this section and the provisions Of Section
hereof the Director-General shall not
settle any claim by or against tho COM
pany. against the objection in writing of
the president Of or any other duly au-
thorized officer Of the company. The
conduct Of all litigation arising out of
such disputed claims shall be in charge
Of the Director-Generars legal force and
the expense thereof shall be paid by the
Director General: but the company may
at its own expense employ special coun-
sci in connection with any such litiga-
ton.
Cd Nothing in this agreement 81 all be
construed as inconsistent with the pro-
vision in section 10 OF the Federal con-
troll act that no process. mesne or final,
shall be levied against any property I'M
der Federal control nor az a waiver by
the United States OF any claim that
might otherwise be made by It that the
rights Of any State or subdivision thereof
or OF any individual or corporation have
been abrogated or suspended by the TAX
ing over OF the companys property or
by Federal control.
(m) The company shall have tho right
at all reasonable times to inspect the
books and accounts kept by the d.
rector General relating to the property
Of the company. or to the operation
section -Upkeep OF Properties.
Sec. s ta) During the period Of Fed
eral control tie Director General shall.
except as to the properties mentioned in
paragraph (h) OF section hereof. an
nually, as nearly as practicable expend
and charge to railway operating OK
penses, either payments for labor and
materials or by payments into funds,
such sums for the maintenance, repair,
retirement and depreciation OF
tho property described in paragraph (a)
of section hereof as may be requisite
In order that such property may be re-
turned to the company at the end OF
Federal control in substantially as good
repair and in substantially as complete
equipment as It was on January /, 1918 !.
Provided, however. that the annual ex-
penditure and charges for such purposes
during the period OF Federal control on
such property and tire fair distribution
thereof over the same. or the payment
into funds, or any amount equal IN the
aggregate (subject to the adjustments
provided in paragraph (c) and 10 pro-
visions Of paragraph (e) OF this section)
to the average annual expenditure and
charges for such purposes included I'M
der the accounting rules OF the commits
sion in railway operating expenses dur
ing the test period shall be taken as a
full compliance with the foregoing cove
nant
(b) The Director-9eneral may ex-
pend such sums In addition to those
expended and charged under paragraph
(a) Of this section (subject to the ad-
tustments provided in paragraph te)
of this section) as may be requisite
for the safe and proper operation Of
the property described In paragraph
(a) Of section 2 hereof. assuming a
use similar to the use during the test
period and not substantially enhancing
the cost Of maintenance over what II
should have been during said period !;
and the amount Of such excess expendi-
lures during Federal control shall be
made good by the company as provided
in paragraph (b) Of section hereof
Cost OF Labor to He Considered.
(c) In comparing the amounts ex-
pended and charged under the provi:
sions OF paragraphs (a) and (b) Of
this section. with the amounts expended
and charged during the test period. due
allowance shall be made for any differ
ence that may exist between the cost
of labor and materials and between the
amount Of property taken over and the
average for the test period. and as to
ta) for any difference in use
between that OF the test period and
during Federal control which in the
opinion Of the commission 10 substantial
enough to be considered. so that the re-
suit shall be, as nearly as practicable,
the same relative amount OF physical
reparation.
(d) There shall. at the request Of
either party, be an accounting OF the
amounts due by one party or the other
under paragraphs (a) and % Of this
section at the end OF each year OF Fed
erel control and at the end of Federal