result in stoppage of production with attendant unemployment and suspension of production contracts. It is therefore essential, both to our defense plans and to our domestic economy, that we shall not permit the continuance of the immobilization in our harbors of shipping facilities.

I attach as of possible assistance to the Congress a draft resolution designed to accomplish the purposes above outlined. It will be noted that the draft contemplates the use of funds appropriated by the Defense Aid Supplemental Appropriation Act, 1941, approved March 27, 1941.

THE WHITE HOUSE, April 10, 1941.

FRANKLIN D. ROOSEVELT.

"Resolved by the Senate and House of Representatives of the United States of America in Congress assembled, That during the existence of the present emergency the President is authorized and empowered, through such agency or officer as he shall designate, to purchase, requisition, or take over the title to, or the possession of, for such use or disposition as he shall direct, any foreign merchant vessel which is lying idle in waters within the jurisdiction of the United States and which is necessary to the national defense: Provided, That just compensation shall be determined and made to the owner or owners of any such vessel in accordance with the applicable provisions of section 902 of the Merchant Marine Act of 1936, as amended.

"SEC. 2. Funds appropriated by the Act af March 27, 1941 (Public Law 23, 77th Cong.), are hereby made available to carry out the provisions of this joint resolution.'

(S. J. Res. 67 is as follows:)

[S. J. Res. 67, 77th Cong., 1st sess.]

JOINT RESOLUTION Authorizing the purchase of foreign merchant vessels for national defense, and for other purposes

Resolved by the Senate and House of Representatives of the United States of America in Congress assembled, That during the existence of the present emergency the President is authorized and empowered, through such agency or officer as he shall designate, to purchase, requisition, or take over the title to, or the possession of, for such use or disposition as he shall direct, any foreign merchant vessel which is lying idle in waters within the jurisdiction of the United States and which is necessary to the national defense: Provided, That just compensation shall be determined and made to the owner or owners of any such vessel in accordance with the applicable provisions of section 902 of the Merchant Marine Act of 1936, as amended.

SEC. 2. Funds appropriated by the Act of March 27, 1941 (Public Law 23, Seventy-seventh Congress), are hereby made available to carry out the provisions of this joint resolution.

(NOTE: Before the completion of the hearings on S. J. Res. 67, similar bill, H. R. 4466, was passed by the House of Representatives and referred to the Committee on Commerce, and is as follows:)

[H. R. 4466, 77th Cong., 1st sess.]

AN ACT To authorize the acquisition by the United States of title to or the use of domestic or foreign merchant vessels for urgent needs of commerce and national defense, and for other purposes

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That, for the purposes of national defense, during the existence of the national emergency declared by the President on September 8, 1939, to exist, but not after June 30, 1942, the President is authorized and empowered, through such agency or officer as he shall designate, to purchase, requisition, for any period during such emergency charter or requisition the use of, or take over the title to, or the possession of, for such use or disposition as he shall direct, any foreign merchant vessel which is lying idle in waters within the jurisdiction of the United States and which is necessary to the national defense: Provided, That just compensation shall be determined and made to the owner or owners of any such vessel in accordance with the applicable provisions of section 902 of the Merchant Marine Act, 1936, as

amended: Provided further, That in the event any vessel taken over under the provisions of this Act belongs to any government now indebted to the United States the compensation to be paid for such vessel or vessels shall be paid by crediting same upon such existing debt and not by payment of cash.

SEC. 2. Funds appropriated by the Act of March 27, 1941 (Public Law 23, Seventy-seventh Congress), are hereby made available to carry out the provisions of section 1 hereof, including payment of the costs of repair, reconstruction, or reconditioning necessary or incidental to the use or disposition under this Act of vessels acquired, or the use or possession of which is acquired, under such section.

SEC. 3. (a) During the national emergency declared by the President on September 8, 1939, to exist, but not after June 30, 1942, the United States Maritime Commission, whenever it finds that vessels in addition to those otherwise available are necessary for transportation of foreign commerce of the United States or of commodities essential to the national defense, is authorized, notwithstanding any other provision of law, (1) to charter 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 such transportation, without regard to the provisions of section 3709 of the Revised Statutes, on a timecharter or bare-boat basis, upon such terms and conditions, and for such period or periods, as the Commission may deem necessary or desirable in the public interest, and at such rate of hire as it may deem to be fair and reasonable in view of the attendant circumstances, and (2) to charter any vessel chartered by the Commission under clause (1) hereof to a private operator, a citizen of the United States (including a corporation, partnership, or association, only if it is a citizen of the United States within the meaning of section 2 of the Shipping Act, 1916, as amended), or to any department or agency of the United States Government, without regard to the provisions of title VII of the Merchant Marine Act, 1936, on time-charter or bare-boat basis, for use in any foreign trade or service or as otherwise hereinafter provided, upon such terms and conditions, for such period or periods, and subject to such restrictions as the Commission may deem necessary or desirable for the protection of the public interest,and at such rate of hire as it may deem to be fair and reasonable. Any department or agency of the United States Government is authorized to enter into such charters. All moneys received by the Commission under the provisions of this subsection shall be deposited in the construction fund of the Commission, and all disbursements made by the Commission in carrying out the provisions of this subsection shall be paid from such fund.

(b) The Commission is authorized to provide such insurance and reinsurance with respect to vessels (including any interest of the owner or charterer) 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.

(c) Nothing in this Act shall be construed to modify or affect any provision of the Neutrality Act of 1939, as amended.

SEC. 4. Whenever the United States Maritime Commission is authorized to charter vessels under setcion 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 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 rea

sonable 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; 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.

SEC. 5 (a) Notwithstanding any other provision of law, during the effective period of section 3 of this Act, any vessel (except a vessel constructed under the provisions of the Merchant Marine Act, 1936, as amended), not documented under the laws of the United States, acquired by or made available to the Commission under this Act or otherwise, may (1) in the discretion of the Secretary of Commerce be documented as a vessel of the United States under such rules and regulations or orders, and with such limitations, as the Secretary of Commerce may prescribe or issue as necessary or appropriate to carry out the purposes and provisions of this Act; and (2) in accordance with the provisions of subsection (c) hereof engage in the coastwise trade when so documented. Any document issued to a vessel under the provisions of this Act shall be surrendered at any time that such surrender may be ordered by the Secretary of Commerce. No vessel, the surrender of the documents of which has been so ordered, shall, after the effective date of such order, have the status of a vessel of the United States unless documented anew.

(b) Notwithstanding any other provisions of law, the President may, by rules and regulations or orders, waive compliance with any provision of law relating to masters, officers, members of the crew, or crew accommodations on any vessel documented under authority of this Act to such extent and upon such terms as he finds necessary because of the lack of physical facilities on said ships, and because of the need to employ aliens for their operation. No vessel shall cease to enjoy the benefits and privileges of a vessel of the United States by reason of the employment of any person in accordance with the provisions of this subsection.

(c) Any vessel while documented under the provisions of this Act, when chartered hereunder by the Commission to other Government agencies or to private operators, may engage in the coastwise trade under permits issued by the Commission, which is hereby authorized to issue permits for such purpose pursuant to such rules and regulations as it may prescribe. The Commission is hereby authorized to prescribe such rules and regulations as it may deem necessary or appropriate to carry out the purposes and provisions of this Act.

(d) The second paragraph of section 9 of the Shipping Act, 1916, as amended, shall not apply with respect to vessels chartered to other Government agencies or to private operators under section 3 or section 4 of this Act.

(e) Existing laws covering the inspection of steam vessels are hereby made applicable to vessels documented under this Act only to such extent and upon such conditions as may be required by the regulations of the Board of Supervising Inspectors with the approval of the Secretary of Commerce: Provided, That in determining to what extent those laws should be made applicable, due consideration shall be given to the primary purpose of transporting commodities essential to the national defense.

(f) The Commission without regard to the provisions of section 3709 of the Revised Statutes may repair, reconstruct or recondition any vessels to be utilized under this Act.

(g) In case a voyage of a vessel documented under the provisions of this Act is begun before the date of termination of the effective period of section 3, but is completed after such date, the provisions of this section shall continue in effect with respect to such vessel until such voyage is completed.

(h) When used in this Act, the term "documented" means "registered" and "enrolled and licensed".

Passed the House of Representatives May 7, 1941.

Attest:

SOUTH TRIMBLE, Clerk.

Report of Department of State:

The Honorable JOSIAH W. BAILEY,

DEPARTMENT OF STATE,
Washington, May 1, 1941.

Chairman, Committee on Commerce, United States Senate.

MY DEAR SENATOR BAILEY: Further reference is made to your letter of April 16, 1941, enclosing a bill, Senate Joint Resolution 67, entitled "Joint resolution authorizing the purchase of foreign merchant vessels for national defense, and for other purposes," and requesting that the Committee on Commerce be furnished with such suggestions as this Department might deem proper, touching the merits of the bill and the propriety of its passage.

On April 29, 1941, Assistant Secretary Long appeared before your committee in executive session and discussed questions of policy concerning the methods of acquiring immobilized foreign vessels in our ports, and their subsequent operation and use.

With regard to the acquisition of immobilized German, Italian, and Danish vessels in American ports, now in protective custody, it is the view of the Department of State that these vessels should not be condemned without making just compensation to their respective owners. It is believed that there

is adequate authority in international law for this method of acquisition. With reference to a suggestion made at the same executive session that the bill should contain a provision authorizing payment in gold for these vessels, the Department, after careful consideration, is of the opinion that such a provision is unnecessary, as the compensation to be allowed will no doubt be just and reasonable, and the equivalent of gold.

Concerning the operation and use of the vessels the Department of State feels that it would be unwise to place a restrictive or prohibitory provision in the proposed legislation which would tend to place these vessels in a different category from other vessels now under the American flag.

Since Assistant Secretary Long gave similar testimony before the Committee on Merchant Marine and Fisheries of the House of Representatives on April 22, 1941, when bills H. R. 4088 and House Joint Resolution 167 were under consideration to accomplish the same purposes, I am pleased to transmit herewith a copy of his remarks made at that time.

In conjunction with the proposed legislation, I quote from the resolution unanimously adopted on April 26, 1941, by the Inter-American Financial and Economic Advisory Committee:

RESOLUTION XIX

"Whereas subparagraph (D) of article 2, resolution IV, on economic cooperation, of the meeting of foreign ministers of the American republics at Panama in 1939 charged the Inter-American Financial and Economic Advisory Committee with studying and proposing to the governments the most effective measures for mutual cooperation to lessen or offset dislocations in the trade of the American republics resulting from the present war;

"The commerce of the American republics has normally been carried on in large measure in merchant vessels of non-American powers, many of which are not available for such trade because of the increasing rate of destruction of the means of maritime transportation by the belligerent nations, the consequent increased diversion of such vessels to other trades, and the prolonged stationing by their owners of a large number of such vessels in American ports interrupting their normal commercial activities;

"The resulting shipping shortage has prejudiced and is prejudicing the commerce of and among the American republics, creating a very grave problem for the fundamental right of the nations of the Americas to preserve the trade which is essential to their normal existence;

"Some of the American Republics have already been forced to take steps with a view to remedying this situation;

"Bearing in mind the recommendations of the Inter-American Neutrality Committee, which were adopted by resolution I of the second meeting of the ministers of foreign affairs of the American republics at Habana in July 1940; "The Inter-American Financial and Economic Advisory Committee resolves to recommend to the governments of the American republics:

"(a) That they declare that the foreign-flag vessels in American ports, the normal commercial activities of which have been interrupted as a consequence

of the war, may now be utilized by the American republics in accordance with the rules of international law and the provisions of their respective national legislations, in such a manner as to promote the defense of their economies as well as the peace and security of the continent. The utilization of said vessels may be effected by the American republics either through agreements with the owners of the vessels or by virtue of the right of each of the American republics to assume complete jurisdiction and control over such vessels, and as they may deem it convenient to satisfy their own requirements.

"(b) That just and adequate compensation for the utilization of the said vessels be made in accordance with the commonly accepted rules of international law and the national legislations of each of the American republics. In the determination of this compensation, the damages which might have been caused and the other obligations resulting by the presence of these ships in the ports in which they may be shall be taken into consideration.

"(c) That they reaffirm their full right to the free navigation of those vessels, both in their national and international trade, once they are under the flag of any one of the American republics, and that they agree upon measures tending to facilitate the effective exercise of said right."

This is indicative of the prevailing sentiment of the 20 other American republics.

A suggested provision for the return of these vessels to their respective owners at the conclusion of this period of emergency is considered inadvisable, since title would no doubt have passed and just compensation would have been made.

Some precedents of the seizure by neutrals of vessels belonging to belligerents were referred to as follows by Assistant Secretary Long at the executive session of your committee:

"(1) In November 1915 the Italian Government requisitioned 34 German merchant vessels in Italian ports. The German Government made no protest, hoping, no doubt, that Italy would join the Central Powers or would at least remain neutral.

"(2) In February 1916 the Portuguese Government requisitioned 72 German vessels in Portuguese ports. The alleged cause of the seizure was stated to be the economic situation created by the illegal destruction of Portuguese shipping by German submarines. The two nations were formally at peace although hostilities between their colonies in east Africa had taken place.

"(3) In May 1917, the Brazilian Government having revoked its proclamation of neutrality, requisitioned 42 German vessels. After Brazil's declaration of war in November, they were leased to the French Government.

"(4) In August 1918 Spain requisitioned about 90 German vessels in Spanish ports. The Spanish Government declared that the seizure was indispensable for its existence, and apparently regarded the vessels requisitioned as substitutes for its own vessels sunk by German submarines, and consequently no compensation was payable.

"(5) Within the past few days, France has requisitioned 15 Belgian ships." In view of the committee's desire to have this report reach it as soon as possible, it is being forwarded direct, and has not been first submitted to the Bureau of the Budget for its consideration.

Sincerely yours,

CORDELL HULL.

(Enclosure: Statement of Assistant Secretary Long before the House Committee on the Merchant Marine and Fisheries.)

(Assistant Secretary of State Breckenridge Long appeared before the committee April 29, 1941, in executive session, and made an informal statement regarding the legislation. He stated that he had previously appeared before the House Committee on the Merchant Marine and Fisheries, and his testimony may be found in the hearings before that committee on H. R. 4466.)