Article 1.　The purpose of this Law is to diminish the surplus of coastwise shipping bottoms through the Government's purchase of low-efficiency vessels, in order to contribute to the recovery of the normalcy of coastwise shipping industry.

Article 2.　In this Law, "low-efficiency vessels" shall mean the steel vessels which are of not less than 800 gross tons (excluding those whose deadweight tonnage is less than 60% of the gross tonnage) and which fall under any of the following items:

Article 3.　The Government will purchase low-efficiency vessels having the equipments enumerated in the following items upon application of their owners (with regard to the vessels which are held jointly by the Sempaku Kodan, the owners other than the Sempaku Kodan, hereinafter the same);provided that this shall not apply to the vessel which is sunken or in need of a large scale repair at the time of enforcement of this Law, or the vessel which may sink or come to need a large scale repair after the enforcement of this Law, or the vessel which is owned by the Japanese Monopoly Corporation, Japanese National Railways or local public entity:

2　The purchase under the provision of the preceding paragraph shall not exceed \2,700,000,000 in total purchasing prices.

3　The provision of Article 2 of the Ministerial Ordinance concerning Restriction of Navigation, etc.(Ministry of Transportation Ordinance No.40 of 1945) shall not apply to the vessels which are to be purchased under the provision of paragraph 1.

Article 4.　Prices for the purchase under the provision of the preceding Article shall be as follows:

Article 5.　The period during which the applications for the Government purchase under the provision of Article 3 may be made shall be from September 1 to 30, 1950.

Article 6.　Each applicant shall specify the order of priority to be given to his vessels, where he offers two or more vessels for sale. In case the total tonnage of vessels, offered for sale by the applicants within the period prescribed in the preceding Article, exceeds the limits prescribed in Article 3 paragraph 2, the selection of vessels for purchase shall be effected, priority being given to vessels in the order specified by the applicants (if one vessel only is offered for sale by an applicant, the first priority is given to such vessel in the selection), and if, in the course of selection, all of some group of vessels which are to be given equal priority according to the order specified by the applicants cannot be given equal priority because of the said limits, the selection shall be made by lottery specifically among those vessels.

Article 7.　The contract for purchase shall be made in writing, and at least the following matters shall be specified therein:

Article 8.　In the case falling under any of the following items, the Minister of Transportation shall rescind the contract for purchase:

Article 9.　The Minister of Transportation shall not pay the purchase-money for the vessel for which the contract for purchase is made, before the delivery thereof has been effected.

Article 10.　The purchase-money mentioned in the preceding Article shall be paid into a special deposit account which the seller of the vessel will open with a bank or banks (except the Bank of Japan), in accordance with the contract for purchase.

Article 11.　The contract for purchase shall stipulate that the deposit money mentioned in the preceding Article shall not be drawn by the seller of the vessel for any purpose other than repayment of debts as specified in the following items, that it may be drawn by him after repayment of such debts has been completed and that it may be drawn by him when there is no such debt:

Article 12.　The title to the vessel for which the contract for purchase is made shall be transferred upon delivery thereof.

Article 13.　Where the title to a vessel for which the contract for purchase is made has been transferred to the State, the Minister of Transportation shall immediately entrust to the competent authorities the cancellation of registration of the vessel (hereinafter referred to as "Government-purchased skeleton vessel" ) and have its registry cancelled.

Article 14.　The Government-purchased skeleton vessels shall be administered by the Minister of Transportation.

Article 15.　Any person who has sold a vessel to the Government under the contract for purchase shall take custody of the Government-purchased skeleton vessel in accordance with the terms and conditions of the contract for purchase until the Minister of Transportation has turned it over to the Minister of Finance under the provision of the following Article. In this case, the period of the custody shall not extend after July 31, 1951.

Article 16.　The Minister of Transportation shall, when he intends to have the Government-purchased skeleton vessel sold, turn it over to the Minister of Finance.

2　The Minister of Finance shall immediately sell the Government-purchased skeleton vessel to a person who intends to scrap it.

3　If the Minister of Finance has not succeeded in selling a Government-purchased vessel by July 31, 1951, he shall either scrap or abandon it not later than September 30, 1951.

Article 17.　The person who has purchased the Government-purchased skeleton vessel from the Government, shall remove from the hull of the skeleton vessel some steel-made portions of the hull equivalent, in weight, to at least one-fourth of all steel-made portions of the hull, by September 30, 1951.

Article 18.　The person who has purchased a Government-purchased skeleton vessel from the Government, shall not transfer, lease, or put it to pledge.

Article 19.　No preferential treatment or special favor, in connection with construction of vessels, shall be afforded by the Minister of Transportation and other Government agencies to any person who has sold the low-efficiency vessel to the Government under this Law, on the ground that he has made the sale.

Article 20.　Any person who has contravened the provision of Article 18 shall be liable to penal servitude for not exceeding one year or a fine not exceeding \100,000.