MAY 18, 1949.-Committed to the Committee of the Whole House on the State of the Union and ordered to be printed

Mr. DENTON, from the Committee on the Judiciary, submitted the

following

REPORT

[To accompany S. 30]

The Committee on the Judiciary, to whom was referred the bill (S. 30) providing for the settlement of personal-property claims of persons employed in Federal penal and correction institutions, having considered the same, report favorably thereon without amendment and recommend that the bill do pass.

The facts will be found fully set forth in Senate Report No. 75, Eightieth Congress, which is appended hereto and made a part of this report. Your committee concur in the recommendation of the Senate.

[S. Rept. No. 75, 81st Cong., 1st sess..

STATEMENT

It frequently happens that persons employed in Federal penal and correctional institutions suffer damage to, or loss or destruction of, personal property occurring incident to such employment. The only way under existing law that a person can be compensated for such damage, loss, or destruction is by the allowance of a private claim bill through the Congress. Often the amount involved is very small and the trouble of getting such a claim bill allowed causes the individual to prefer to suffer the loss personally rather than spend the time and expend the necessary effort to get the bill passed. This is unfair to the individual. Claims that do reach the Congress place an unnecessary burden on the Congress and an unwarranted delay on the individual receiving what is justly due him. Such procedure is felt to be too slow and cumbersome for practical use. It has been deemed advisable to limit the amount that can be settled administratively under this bill to a sum not exceeding $1,000 and such has been accomplished by an amendment. It is also deemed advisable to require the acceptance of the award to serve as a release. Both of these ends are accomplished by amendments.

Further explanation and justification of the bill may be found in the letter of February 7, 1949, to the chairman of this committee from Mr. Peyton Ford, the Assistant to the Attorney General.

Hon. PAT MCCARRAN,

Chairman, Committee on the Judiciary,

United States Senate, Washington, D. C.

FEBRUARY 7, 1949.

MY DEAR MR. CHAIRMAN: This is in response to your request for the views of this Department relative to the bill (S. 30) to provide for the settlement of claims of persons employed in Federal penal and correctional institutions for damage to, or loss or destruction of personal property occurring incident to their service

The bill would authorize the Attorney General or an officer designated by him to consider and pay claims of employees of the Federal penal and correctional institutions for damage to, or loss or destruction of, personal property occurring incident to their employment and not caused, in whole or in part, by any negligence or wrongful act on the part of the claimant, provided that such claims shall have been presented in writing within 1 year after they arise.

There have been a number of instances of loss or destruction of property belonging to employees of Federal penal institutions caused by the actions of prisoners. The money value of such loss or damage is seldom large enough to justify the trouble and expense of securing the enactment of special legislation for the purpose of reimbursing employees suffering such losses yet there is now no other method of indemnification.

Although this legislation would provide an expeditious and inexpensive method of settling such claims, it is recommended that consideration be given to a similar bill which would be applicable to all agencies of the Government rather than to the instant proposal which is limited in scope. Such a bill was introduced by you during the Eightieth Congress as S. 2219.

If S. 30 should receive favorable consideration, however, it is deemed appropriate to make the following comments with respect to it. The bill contains no limitation as to the amount for which claims may be settled thereunder and it might be advisable to provide for a maximum amount which may be awarded. The measure also fails to include the usual provision that the acceptance of an award thereunder shall release the United States, its agents, or employees from any further claim arising out of the same incident.

The Director of the Bureau of the Budget has advised that there is no objection to the submission of this report.

Sincerely yours,

PEYTON FORD,

The Assistant to the Attorney General.

O

CONSIDERATION OF H. R. 1036 OVER VETO MESSAGE

MAY 18, 1949.-Committed to the Committee of the Whole House on the State of the Union and ordered to be printed

Mr. CELLER, from the Committee on the Judiciary, submitted the following

REPORT

[To accompany H. R. 1036]

The Committee on the Judiciary, to whom was referred the bill (H. R. 1036) for the relief of R. C. Owen, R. C. Owen, Jr., and Roy Owen, former partners doing business as R. C. Owen, of Gallatin, Tenn., together with the objections of the President thereto, having reconsidered said bill and the objections of the President thereto, report the same back to the House with the recommendation that said bill do pass, the objections of the President to the contrary notwithstanding.

This bill (H. R. 1036) provides for payment of the sum of $8,437.98, to R. C. Owen, R. C. Owen, Jr., and Roy Owen, former partners doing business as R. C. Owen, of Gallatin, Tenn.; such sum represents the amount which they paid to the United States for internal revenue tobacco stamps; such stamps were completely destroyed on December 24, 1945, when a fire destroyed claimants' factory, together with the equipment, tobacco, and tobacco stamps therein.

These stamps which were in various denominations were valued at $8,437.98, which was the price paid for them by the said manufacturer. The Treasury Department requires the manufacturer, through his collector of internal revenue, to always keep a record reflecting the amount of stamps on hand and that a report of this balance be returned to the collector once each month. The collector did not require that the records show the various denominations of the stamps but only their total value. The report to the collector reflected only the total value. These records were properly kept by the Owens and at the time of the fire showed stamps on hand of the value set forth in this bill, which were completely destroyed by fire. Not only did the records of the Owens show this but the records of the collector's office at Nashville, Tenn., showed the same thing.

Immediately after the fire, R. C. Owen filed claim on Form 843 with the collector of internal revenue, Nashville, Tenn., seeking a refund

of the value of the stamps or the stamps themselves replaced, as provided for in sections 156 and 3304, title 26, United States Code Annotated This claim was filed January 10, 1946. At the time of the fire, the records of R. C. Owen indicated the exact amount of the stamps on hand as well as the amount with which R. C. Owen was charged by the collector of internal revenue. Soon after the fire, Mr. S. C. Willis, a deputy collector for the Nashville, Tenn. office, investigated the fire, acknowledged the loss of these stamps by the fire and R. C. Owen was given credit against his inventory for these stamps and was no longer charged with them by the collector of internal revenue. This claim has been rejected by the collector of internal revenue and, in turn, rejected by the Commissioner in Washington. The reason given was that heretofore the Secretary of the Treasury ruled that no refund or redemption might be allowed unless the stamps themselves were submitted. However, in this instance, the fire was of an unknown origin and there was no way to submit the stamps, or the destruction of same being supervised by the Commissioner. The Treasury Department in its report states:

As is commonly known, a person having the misfortune of losing an amount of currency through destruction by fire may recover his loss by claim upon the Government only to the extent that the currency can be submitted in recognizable form for replacement. Obviously, that rule is necessary to protect the Government against fraudulent claims.

The veto message states:

It appears that claimants' firm was a dealer in leaf tobacco and also a manufacturer of certain tobacco products in Gallatin, Tenn. On the night of December 24, 1945, one of the buildings belonging to the firm, part of which was used as a factory and part as a warehouse, was destroyed by fire. According to affidavits submitted by R. C. Owen, Jr., as a member of the firm, the chief of police, and the assistant chief of the fire department, the building, including its contents, was a complete loss. The firm filed a claim with the Bureau of Internal Revenue for the value of the tobacco stamps allegedly on hand in the factory at the time of the fire and therefore destroyed by it, but this claim was disapproved by that Bureau on the ground that under existing law refund could be made only where the stamps were submitted to the Bureau in a recognizable condition or were destroyed under the supervision of a deputy collector.

A person who loses currency through destruction by fire may recover such loss only to the extent that such currency can be submitted in a recognizable form for replacement. Such rule is necessary to protect the Government against fraudulent claims. A similar situation prevails with regard to postage stamps. The Government does not assume the obligation of an insurer at the time of selling internalrevenue stamps to a taxpayer for subsequent use in payment of a particular excise tax. Enactment of the bill would grant relief to this firm which is not granted to other persons similarly situated, and such special treatment would be discriminatory against taxpayers generally.

The regulations which prohibit refunds in cases of this type were promulgated with the view to preventing frauds upon the Government. The situation of claimant firm is not different from that of a number of other persons who have been refused refunds because of their inability to comply with the regulations pertaining to such refunds. The Government cannot make refund in the absence of satisfactory proof that the stamps in question were actually destroyed. Accordingly, I am unable to approve the bill.

The attention of the House is called to a report submitted to the Committee on the Judiciary, dated August 26, 1948, which states as follows:

FOR THE RELIEF OF JAMES G. SMYTH, (INTERNAL REVENUE COLLECTOR) The facts in the case are as follows: On April 6, 1948, Mrs. Idyl Acuff, stamp deputy of the Santa Rosa, Calif., branch office of the first California internal revenue collection district, received a shipment of wine stamps from the main