tems of the various nations of the world. The United States has supported the preliminary work that has been done by the IAEA on this convention. A revised draft, prepared in May 1961, by an intergovernmental committee which included the United States, is to be circulated to all member governments for consideration.

An international convention applicable to maritime reactors was drafted at a diplomatic conference in April 1961, in Brussels at which some 50 countries were represented by official delegations and a number of countries and international organizations were represented by observers. This draft convention is being sent to governments for consideration. The tentative plans are for a signing conference to be called for January 1962. The convention generally conforms to the views of the United States on such a convention except that a significant problem is raised by inclusion of nuclear warships in the coverage of the draft convention.

With regard to national measures in this field, legislation has been enacted in the United Kingdom, the Federal Republic of Germany, Switzerland, Sweden, and Japan. Furthermore, such legislation is before the Philippine Congress, and is in various stages of preparation in Italy, France, Austria, Spain, Norway, Denmark, the Netherlands, Israel, and Venezuela. A number of other governments have reported that the problem is under active consideration.

The Government of Belgium is considering legislation which would provide the supplier of the Belgian power reactor (BR-3) with indemnity against nuclear liability, thus clearing the way for startup of the reactor. We are hopeful that this legislation will be passed in the near future.

MARITIME INDEMNITY PROBLEMS

NS "SAVANNAH" FOREIGN ACCEPTANCE AGREEMENTS

Designated foreign nuclear, maritime, and public health officials of Belgium, Denmark, France, Germany, Greece, Italy, Norway, The Netherlands, Portugal, Spain, Sweden, and the United Kingdom have met with Maritime Administration and AEC staff to work out acceptance agreements for the NS Savannah. In general, negotiations are progressing satisfactorily on matters related to general operating conditions, safety evaluation, and inspection. Liability provisions for an agreement with Germany have been tentatively agreed upon at the staff levels. Negotiation of liability provisions for agreements with the Netherlands, Greece, and Norway are at an advanced stage. The United Kingdom liability position remains unchanged from that described in the Commission's fourth annual report on its indemnity operations, dated March 31, 1961. The conclusion of acceptable indemnity arrangements continues to present problems, which we hope can be resolved through mutual effort during the months ahead.

STATEMENT ON H.R. 5215 AND S. 1144

The Commission was requested to comment on H.R. 5215 and S. 1144. On June 29, 1961, the committee received testimony on these bills from witnesses representing the owners of potash industry properties located in New Mexico near the site selected for plowshare Project Gnome. This statement reflects the comments of the Com

mission on these bills which were furnished the committee by letter dated July 14, 1961.

S. 1144 and H.R. 5215 are identical bills the primary purpose of which is to make the United States liable without proof of negligence or a wrongful act for damage from a nuclear incident "which occurs in the course of the conduct of any activity of the Commission involving the deliberate underground detonation of a nuclear explosive device."

Incidentally, Mr. Chairman, might I ask: I understand there is a substitute. Maybe it is pointless to go over this.

Representative PRICE. I was about to ask you about the substitute, because of objections from the Department of Justice to S. 1144 and H.R. 5215. A substitute was drawn up. Has the Commission had an opportunity to look at the substitute?

Senator ANDERSON. Do I understand the Commission does not know about it?

Mr. OLSON. Does not know about

Senator ANDERSON. The substitute.

Mr. OLSON. I saw it last night. I have been out of town, Senator. The Commission has looked at it, and I am advised that the Commission is amenable to the substitute.

Senator ANDERSON. Was it not worked out with the counsel for the Commission?

Mr. OLSON. Yes.

Senator ANDERSON. That is what I thought.

Mr. OLSON. This statement was prepared before it was worked out, however. I think the statement was prepared 2 days ago, and I believe the bill was worked out yesterday. And in the interest of saving time, I would like to just skip over this portion and come to the substitute, which the Commission does support.

Representative PRICE. Are you prepared to testify on the basis of the substitute?

Mr. OLSON. One moment, please.

I am advised that this did not get Bureau of the Budget clearance yesterday afternoon.

Senator ANDERSON. Do you see any point in your testifying on S. 1144, then?

Mr. OLSON. Pardon?

Senator ANDERSON. Do you see any point in incorporating testimony on S. 1144? It is dead as it can be.

Mr. OLSON. I think that is probably right. I think it might serve some useful purpose if my statement were put in the record to review what the situation was day before yesterday, because this may come up again, and it may be useful to preserve this for the record. If I could introduce that statement into the record, I think it would be useful.

Senator ANDERSON. You say the Bureau of the Budget has not passed on it yet?

Mr. OLSON. On the substitute? I am just advised that they have not given us authority to concur. However, in the absence of instructions to the contrary from them, the Commission views this very favorably. Senator ANDERSON. I was going to say if they have not taken a stand on it, you ought to feel free to express yourself. I of course am

one who has never liked the Bureau of the Budget saying what is the program of the President. This at least is the program of the President's brother; is it not?

Mr. OLSON. There was quite a flurry of dust in the tort claims section, I guess, with respect to 1144.

Senator ANDERSON. Somebody down in the Bureau of the Budget attempts to pass on what two Cabinet officers do plus people from the Atomic Energy Commission.

Mr. OLSON. It seems to me a little hard to justify a double standard, Senator, one for Uncle Sam and one for the private citizen. So I personally feel very strongly the single standard has its application here. Senator ANDERSON. Now you have got me confused. In this instance, which is Uncle Sam and which is the private citizen?

Mr. OLSON. Well, the proposed bill would put the potash miners in the position where they could sue Uncle Sam or his contractors and have the same potential of recovery as though they were suing the private citizen; because this would remove the various defenses that would be raised, such as sovereign immunity and special standards under the Federal Tort Claims Act, and so forth.

Senator ANDERSON. Do you feel the defenses ought to be retained, then?

Mr. OLSON. They ought to be removed. If by causation they show we damage their property, I think we should pay under the law of the State, just like a private citizen.

Senator ANDERSON. I have many times said that not being a lawyer I speak very freely on all these legal points; but in this particular instance the Atomic Energy Commission is forewarned that the mines might come in with a claim. The Atomic Energy Commission is going to make measurements. It is going to have the most delicate recording devices inside the mines, so that it can come into court with a very carefully prepared defense and say: "We did not disturb this formation. We did not cause this rock to fall. We know how much vibration there was as a result of it."

I think the Government is in good shape.

Mr. OLSON. I think we are, too.

Senator ANDERSON. I really do. I could not commend the Atomic Energy Commission more highly than I can for the preparations they have made for this particular shot. I think they have done everything to set up a very good defense. And I think that is proper. And having done that, however, I think then we ought to say to the mines: If there can be some damage proved, and you can tie it directly to the explosion, we are not going to require that negligence be proved as to the way the shot was fired.

I am very happy this revised bill is moving forward. I saw nothing wrong with the other bill. The Atomic Energy Commission says there is not a chance in the world of there being any damage. Therefore, there should not be a chance in the world of any recovery.

Representive PRICE. Mr. Olson, could you comment on the difference between the substitute bill and the previous bill? What is the difference between the substitute bill and S. 1144 and H.R. 5215?

Mr. OLSON. The difference in a legal sense is that S. 1144 creates an absolute liability on the part of the Government; whereas the substitute bill simply deprives our contractors of any defenses that might flow from their municipal, State, or Federal character.

Mr. RAMEY. That was because they were worried about the University of California.

Mr. OLSON. Yes. And also we were worried about some cases that showed a contractor who did as his Federal contractor directed him to do and was held not to be liable. He sort of received a sort of umbrella protection of the sovereign; to provide against both of these situations.

Representative PRICE. Do you believe that this bill would be satisfactory to the Commission contractors in Project Gnome? The substitute bill?

Mr. OLSON. We had a tentative indication that it was satisfactory yesterday, but we have a telegram from the University of California this morning that indicates that they will not be able to advise us until they meet with the board of regents on Friday.

But in my own view, this should be satisfactory to them. After all, they incur no liability under it.

Senator ANDERSON. I think you people have done a very fine job in going further, almost, than they might have been required to go. They have cooperated with the people down there in every way, and have tried to reassure them on every count that they are going to make an absolute check so that they will know exactly what took place. I think it is commendable and will help very much in the future program we may have for the peaceful uses of atomic energy. I think it will also help in the seismic improvement program.

Mr. OLSON. Thank you very much for those kind words. I think when you work for the Government, you have an obligation to see that justice is done, and not just to be an advocate.

Representative PRICE. I understand Mr. Graham Claytor, representing the potash mining companies, is here in the room. I wonder if he would care to comment on the substitute proposal.

STATEMENT OF W. GRAHAM CLAYTOR, JR., ATTORNEY, COVINGTON & BURLING

Mr. CLAYTOR. Thank you, Mr. Price.

My name is Graham Claytor, Jr., 701 Union Trust Building, Washington. We are Washington counsel for the International Minerals & Chemical Corp., the potash company whose mining properties are closest to Project Gnome.

Now, we are in agreement that the substitute bill is satisfactory to accomplish the purposes of the original S. 1144 and should be substituted. We found that the Department of Justice had serious reservations about the original bill, particularly about some of the specific provisions it contained, because they might establish a precedent in other areas.

We worked closely with lawyers in the Department of Justice and with counsel for the Commission over the last 2 weeks to see if we could not come up with a substitute that would accomplish the same purpose and yet would meet the objections.

I understand and I am quite sure that I am correct-that the Department of Justice now has no objection whatever to the substitute bill. As a private citizen, of course, I know nothing about the posi

tion of the Bureau of the Budget, but it was my understanding that the Bureau of the Budget's original objection was based on the Department of Justice's objection. So I feel fairly confident that any difficulty that the executive department has with this bill has now been removed.

Now, I am authorized also to say that the other six potash companies who were listed in the testimony of Mr. Nelson White, given before the Subcommittee on Legislation on June 29, are also in agreement that the substitute bill is satisfactory, and should be substituted for S. 1144.

Representative PRICE. Mr. Ramey of the staff has some questions. Mr. RAMEY. Under this revised bill, the substantive requirement of absolute liability is removed. However, under common law in the State of New Mexico, it is pretty well established that a contractor is absolutely liable?

Mr. CLAYTOR. The substantive law of New Mexico has been settledthe State law in New Mexico-that one who is responsible for an intentional underground explosion is absolutely liable, without negligence, for the consequences which result from it. This is correct.

Mr. RAMEY. And then this bill would take away any procedural means of avoiding liability so that it pretty well accomplishes almost the same thing as the original bill?

Mr. CLAYTOR. We think it accomplishes essentially the same purpose as the original bill. It does eliminate the special defenses which a contractor might have because he is a Government contractor and because he is a state agency. And with the elimination of these special defenses, we feel that we are in as good a position to recover as we would be if a private corporation, like Union Carbide or the Du Pont Co. were, as a project of their own, putting off this explosion. And that is all we ask.

Senator ANDERSON. Now, you speak for the Potash Co. of America? United States Potash? Duval?

Mr. CLAYTOR. Yes, sir. All of the six additional potash companies that were listed in Mr. White's testimony on June 29.

Representatives PRICE. Will you also list them with your statement here this morning?

Mr. CLAYTOR. Yes, sir. Just one moment. I have the list of the companies.

These companies are the United States Borax & Chemical Co., the Potash Co. of America, Duval Sulphur & Potash Co., Southwest Potash Co., National Potash Co., and Farm Chemical Resources Development Corp., as well as the company for which I am counsel directly, International Minerals & Chemical Corp. We have been authorized to say that these other companies join International Minerals & Chemical Corp. in this position.

Senator ANDERSON. That covers every producer of potash in the area at the present time?

Mr. CLAYTOR. It is my understanding that it does. Yes, Senator. Representative PRICE. Senator Anderson and Mr. Morris as sponsors of this legislation, do you think that covers this subject?

Senator ANDERSON. Yes, I think as soon as the Bureau of the Budget reports, what we could do is just substitute this for the bill already introduced and report it favorably to the Senate.