SEC. 224. (a) Any department or agency of the United States is hereby authorized to procure insurance from the Commission as provided for in section 222 of this subtitle or in section 10 of the Merchant Marine Act, 1920, as amended, except as provided in the Government Losses in Shipment Act, approved July 8, 1937, as amended (50 Stat. 479; U. S. C., Supp. VI, title 5, secs. 134 to 134h).

(b) The Commission is authorized to provide such insurance at the request of the Secretary of War or the Secretary of the Navy on a nominal premium basis in consideration of the agreement of the department concerned to indemnify the Commission against all losses covered by such insurance, and the Secretary of War or the Secretary of the Navy is authorized to execute such idemnity agreement with the Commission.

SEC. 225. In the event of disagreement as to a claim for losses or the amount thereof, on account of insurance under this subtitle, an action on the claim may be brought and maintained against the United States in the district court of the United States sitting in admiralty in the district in which the claimant or his agent may reside, or in case the claimant has no residence in the United States, in a district court in which the Attorney General of the United States shall agree to accept service. Said suits shall proceed and shall be heard and determined according to the provisions of an Act entitled "An Act authorizing suits against the United States in admiralty, suits for salvage services, and providing for the release of merchant vessels belonging to the United States from arrest and attachment in foreign jurisdictions, and for other purposes", approved March 9, 1920, as amended (known as the Suits in Admiralty Act), insofar as such provisions are not inapplicable and are not contrary to or inconsistent with the provisions of this subtitle. All persons having or claiming to have an interest in such insurance, or who is believed might assert such an interest, may be made parties to such suit, either initially or upon the motion of either party. In any case where the Commission acknowledges the indebtedness of the United States on account of such insurance, and there may be a dispute as to the person or persons entitled to receive payment, the United States may bring an action in the nature of a bill of interplader against the persons having or claiming to have any interest in such insurance, or who it is believed might assert such an interest, in the District Court of the United States for the District of Columbia, or in the district court in and for the district in which any such person resides. In either of such actions any person claiming to have an interest in such insurance, or who it is believed might assert such an interest, if not an inhabitant of or found within the district within which either of such actions is brought, may be brought in by order of the court to be served personally or by publication or in such other reasonable manner as the court may direct, and if it be shown to the satisfaction of the court that persons unknown might assert a claim on account of such insurance, the court may direct service upon such persons unknown by publication in the Federal Register. Judgment in any such action shall discharge the United States from further liability to any parties to such action, and to all persons where service by publication upon persons unknown is directed by the court. The procedure herein provided shall apply to all actions now pending against the United States under the provisions of this subtitle, as amended.

SEC. 226 (a) The Commission in the administration of this subtitle is authorized to adjust and pay losses, compromise and settle claims whether in favor of or against the Government, and to pay the amount of any judgment rendered in respect of any suit or settlement agreed upon in respect of any claim. The determinations of the Commission with respect to adjustments, compromises, settlements, and payments hereunder shall not be subject to review by any other executive or accounting officer of the Government.

(b) The Commission is authorized to prescribe such forms and policies, to change or modify such forms and policies as may be necessary or appropriate under the circumstances, and to fix and adjust, as may be required by circumstances, the rates and changes of rates of insurance provided for in this subtitle.

(c) The Commission is authorized and directed to prescribe such rules and regulations as may be necessary or appropriate to carry out the provisions of this subtitle. The Commission is authorized, in administering the provisions of this subtitle, to exercise its powers, perform its duties and functions, and make its expenditures, in accordance with commercial practice in the marine insurance business.

(d) The Commission, without regard to the laws, rules, or regulations relating to the employment of employees of the United States, may appoint and prescribe the duties of such number of experts in marine insurance as the Commission may deem necessary in carrying out the provisions of this subtitle. The Commission, with the consent of any executive department, independent establishment, or other agency of the Government, including any field service thereof,.

may avail itself of the use of information, services, facilities, officers, and employees thereof in carrying out the provisions of this subtitle.

(e) The Commission shall include in the annual report to Congress a detailed statement of all activities and of all expenditures and receipts under this subtitle for the period covered by such report.

(f) When used in this subtitle

(1) The term "American vessels" includes any vessel registered, enrolled, or licensed under the laws of the United States and any undocumented vessel owned or chartered by or made available to the United States or any department or agency thereof and any American-owned tug or barge or other watercraft (documented or undocumented) used in essential water transportation or in the fishing trade or industry. This subsection shall not be construed as including any watercraft used exclusively in or for sport fishing.

(2) The term "transportation in the water-borne commerce of the United States" shall be deemed to include the operation of vessels in the fishing trade or industry.

(3) The term "risks of war" shall include those losses which, in accordance with commercial practice prevailing from time to time, are excluded from marine insurance coverage under "free of capture and seizure" clauses or clauses analogous thereto.

SEC. 227. Nothing in this subtitle shall be deemed to affect the rights of seamen under any provision of existing law.

SEC. 228. In conformity with the President's Executive order of February 7, 1942 (Numbered 9054; 7 F. R. 837), the authority conferred upon the Commission by this subtitle shall be vested in and exercised by the Administrator of the War Shipping Administration.

SEC. 229. In addition to the insurance functions authorized by the other sections of this subtitle, the War Shipping Administration may insure directly, or may reinsure in whole or in part any company authorized to do business in any State in the United States and which shall insure directly, any person who shall perform services or provide facilities for or with respect to any public or private vessel against legal liabilities (except liability to employees in respect of employer's liability and workmen's compensation) that may be incurred by such person in connection with the performance of such services or the providing of such facilities, uhenever in the opinion of the Administrator, War Shipping Administration, such insurance or reinsurance is required in the prosecution of the war effort and cannot be obtained at reasonable rates or upon reasonable conditions from approved companies authorized to do an insurance business in any State of the United States.

Section 3 (b), Public Law 101, Seventy-Seventh Congress (sec. 3 (j) of the bill.)

(b) The Commission is authorized to provide such insurance and reinsurance with respect to vessels (including any interest or liability of the [owner or charterer] owner, charterer, or agent) chartered, purchased, requisitioned, or the title to which or the possession of which is taken over, under this Act, as it may deem necessary in connection with the operation, use, or disposition thereof under this Act, whenever it appears to the Commission that adequate and satisfactory insurance is not otherwise obtainable at reasonable rates and upon reasonable terms and conditions. The fund established pursuant to Public Resolution Numbered 94, Seventy-sixth Congress, approved July 18, 1940 (54 Stat. 766), shall be available for all purposes of this subsection; and all moneys received from premiums and from salvage or other recoveries and all receipts in connection with such insurance shall be deposited to the credit of such fund, and all disbursements made by the Commission in carrying out the provisions of this subsection, including the payment of return premiums and all liabilities incurred hereunder, shall be paid from such fund. The provisions of sections 225 and 226 (a) to (e), inclusive, of the Merchant Marine Act, 1936, as amended, shall be applicable in the administration of this subsection.

Section 4, Public Law 101, Seventy-seventh Congress (sec. 3 (k) of the bill):

Whenever the United States Maritime Commission is authorized to charter vessels under section 3 hereof, it is further authorized, notwithstanding any other provision of law, to purchase any vessel, whether undocumented or documented under the laws of the United States or of a foreign country, deemed by the Commission to be suitable for transportation of foreign commerce of the United States 80385-46- -6

or of commodities essential to the national defense, without regard to the provisions of section 3709 of the Revised Statutes, at such price and upon such terms and conditions as it may deem fair and reasonable and in the public interest. Such vessels and vessels otherwise acquired by or made available to the Commission may be chartered as provided in section 3 of this Act, or operated by the Commission upon such terms and conditions as it may deem desirable and in the public interest, giving primary consideration to the needs of national defense, and when so chartered or operated may be insured as provided in said section 3, but no vessel constructed under the provisions of the Merchant Marine Act, 1936, as amended, may be chartered to a private operator hereunder. All moneys received by the Commission under the provisions of this section shall be deposited in the construction fund of the Commission, and all disbursements made by the Commission in carrying out the provisions of this section or section 5 (f) (except as provided in section 2) shall be paid from such fund.

77TH CONGRESS HOUSE OF REPRESENTATIVES 2d Session

{

REPORT No. 2572

CLARIFYING CERTAIN PROVISIONS OF THE MERCHANT MARINE LAWS

October 15, 1942.-Committed to the Committee of the Whole House on the state of the Union and ordered to be printed

Mr. BLAND, from the Committee on the Merchant Marine and Fisheries, submitted the following

REPORT

[To accompany H. R. 7424]

The Committee on the Merchant Marine and Fisheries, to whom was referred the bill (H. R. 7424) to amend and clarify certain provisions of law relating to functions of the War Shipping Administration, and for other purposes, having considered the same, report favorably thereon with an amendment and recommend that the bill, as amended, do pass.

The amendment is as follows:

Strike out all after the enacting clause and insert in lieu thereof the following:

That (a) officers and members of crews (hereinafter referred to as "seamen") employed on United States or foreign flag vessels as employees of the United States through the War Shipping Administration shall, with respect to (1) laws administered by the Public Health Service and the Social Security Act, as amended by subsection (b) (2) and (3) of this section; (2) death, injuries, illness, maintenance and cure, loss of effects, detention, or repatriation, or claims arising therefrom not covered by the foregoing clause (1); and (3) collection of wages and bonuses and making of allotments, have all of the rights, benefits, exemptions, privileges, and liabilities, under law applicable to citizens of the United States employed as seamen on privately owned and operated American vessels. Such seamen, because of the temporary wartime character of their employment by the War Shipping Administration, shall not be considered as officers or employees of the United States for the purposes of the United States Employees' Compensation Act, as amended; the Civil Service Retirement Act, as amended; or the Act of Congress approved March 7, 1942 (Public Law 490, Seventy-seventh Congress). Claims arising under clause (1) hereof shall be enforced in the same manner as such claims would be enforced if the seaman were employed on a privately owned and operated American vessel. Any claim referred to in clause (2) or (3) hereof shall, if administratively disallowed in whole or in part, be enforced pursuant to the provisions of the Suits in Admiralty Act, notwithstanding the vessel on which the seaman is employed is not a merchant vessel within the meaning of such Act. Any claim, right, or cause of action of or in respect of any such sea

79

man accruing on or after October 1, 1941, and prior to the date of enactment of this section may be enforced, and upon the election of the seaman or his surviving dependent or beneficiary, or his legal representative to do so shall be governed, as if this section had been in effect when such claim, right, or cause of action accrued, such election to be made in accordance with rules and regulations prescribed by the Administrator, War Shipping Administration. Rights of any seaman under the Social Security Act, as amended by subsection (b) (2) and (3) and claims therefor shall be governed solely by the provisions of such Act, so amended. When used in this subsection the term "administratively disallowed" means a denial of a written claim in accordance with rules or regulations prescribed by the Administrator, War Shipping Administration. When used in this subsection the terms "War Shipping Administration" and "Administrator, War Shipping Administration" shall be deemed to include the United States Maritime Commission with respect to the period beginning October 1, 1941, and ending February 11, 1942, and the term "seaman" shall be deemed to include any seaman employed as an employee of the United States through the War Shipping Administration on vessels made available to or subchartered to other agencies or departments of the United States. The President shall, whenever he finds that convenience of administration and the efficient prosecution of the war require, extend to seamen upon such terms and conditions as he finds fair and appropriate any and all the benefits of employees of the United States under the United States Employees' Compensation Act, as amended, and upon such event, the rights, benefits, and privileges of such seamen herein provided for with respect to death, injury, illness, and maintenance and cure, shall cease to such extent as the President finds that the termination of such rights, benefits, and privileges is necessary to avoid duplication of payments on account of death, injury, illness, or maintenance and cure.

(b) (1) Section 1426 of the Internal Revenue Code (53 Stat. 177, 1383; 26 U. S. C. 1426) is amended by adding at the end thereof the following new subsection:

"(i) OFFICERS AND MEMBERS OF CREWS EMPLOYED BY WAR SHIPPING ADMINISTRATION. The term 'employment' shall include such service as is determined by the Administrator, War Shipping Administration, to be performed after September 30, 1941, and prior to the termination of title I of the First War Powers Act, 1941, on or in connection with any vessel by an officer or member of the crew as an employee of the United States employed through the War Shipping Administration, or, in respect of such service performed before February 11, 1942, the United States Maritime Commission. The term 'wages' means, with respect to service which constitutes employment by reason of this subsection, such amount of remuneration as is determined (subject to the provisions of this section) by the Administrator, War Shipping Administration, to be paid for such service. The Administrator and such agents as he may designate for the purpose are authorized and directed to comply with the provisions of the internal revenue laws on behalf of the United States as the employer of individuals whose service constitutes employment by reason of this subsection, but the Administrator and his agents shall not be liable for the tax on any employee imposed by section 1400 (unless the Administrator or his agent collects such tax from the employee) with respect to service performed before the date of enactment of this subsection which constitutes employment by reason of the enactment of this subsection."

(2) Section 209 of the Social Security Act, as amended (U. S. C., title 42, sec. 409), is amended by adding at the end thereof the following new subsection: "(o) (1) OFFICERS AND MEMBERS OF CREWS EMPLOYED BY WAR SHIPPING ADMINISTRATION.-The term 'employment' shall include such service as is determined by the Administrator, War Shipping Administration, to be performed after September 30, 1941, and prior to the termination of title I of the First War Powers Act, 1941, on or in connection with any vessel by an officer or member of the crew as an employee of the United States employed through the War Shipping Administration or, in respect of such service performed before February 11, 1942, the United States Maritime Commission.

"(2) The Social Security Board shall not make determinations as to whether an individual has performed services which are employment by reason of this subsection, or the periods of such services, or the amounts of remuneration for such services, or the periods in which or for which such remuneration was paid, but shall accept the determinations with respect thereto of the Administrator, War Shipping Administration, and such agents as he may designate, as evidenced by returns filed by such Administrator as an employer pursuant to section 1426 (i) of the Internal Revenue Code and certifications made pursuant to this subsection.