Chapter XIV: Section 1: Be it enacted that from and after the passage of this Act,

the Secretary of the Navy is authorized and directed to execute contracts with the owners or agents of steam vessels, built and owned in the United States of America, and sailing under the American flag, upon the terms and conditions hereinafter set forth; and the faith of the United States is hereby pledged to carry said contracts into effect, and to make all payments arising thereunder, in strict and prompt accordance with the terms thereof.