Page images

Page 4, lines 11 to 17: The principal change in language in those lines is the addition of the words "at the time of its taking" so there may be no uncertainty as to what value is to be considered in determining just compensation. It is also considered that the language of the amendment is more in harmony with the framework of the entire section as rewritten in the amendments.

Page 4, lines 17 to 25, and page 5, lines 1 and 2: It is proposed to delete this wording because the existing provisions for payment of just compensation do not seem fair to the private citizen whose property is taken for public use. It seems unfair and contrary to the precedents established during the World War, to require a citizen who is dissatisfied with an award of just compensation made by the Commission to either take what is offered or wait for all of his compensation until his claim has been passed upon in the courts.

In the emergency shipping fund provisions of the act of June 15, 1917 (ch. 29, 40 Stat. L. 182), provision was made that any person dissatisfied with an award of just compensation made by the President on account of cancelation, modification, suspension, or requisition of any contract or the taking of physical property, should be entitled to receive 75 percent of the just compensation so determined and be entitled to sue the United States to recover such further sum as would amount to just compensation. That arrangement worked well in practice and is fair to the citizen.

Accordingly, in subsections (c) and (d) of the amendments, a fair and constructive procedure is laid down for the determination and payment of just compensation.

Page 5, lines 2 to 5: The deduction of cost of national-defense features here proposed has been transposed from the section as it now stands—see page 3, lines 18 to 20.

Page 5, lines 6 to 25, and page 6, lines 1 to 8, subsection (c): This subsection is new, but in principle its provisions are adapted from section 11 of the act of July 18, 1918 (40 Stat. L. 913)-see page 162, July 1 edition, Maritime Commission Pamphlet of Laws.

In brief, the intent of this new subsection is to authorize the Commission to tender a requisition charter to an owner whose vessel has been requisitioned, in which the charter-hire rate is fixed for the period the vessel is to be used. If the owner accepts the charter tendered, all further argument or contention as to just compensation is at an end, because the charter is a contract binding on both the owner and the Government. On the other hand, if the owner rejects the proffered charter, the charter-hire rate contained therein becomes the Commission's determination of just compensation. Such dissatisfied owner may then be paid 75 percent of the charter-hire ratejust compensation-and may sue in the courts for such further sum as may be determined will amount to just compensation.

The fairness and the simplicity of such procedure is obvious. If the owner is satisfied with the charter hire offered, he receives the full amount of his just compensation in the form of charter hire, from month to month or quarter to quarter, as it accrues. In addition, he may continue to operate his own vessels for Government account of a time-charter basis or a bare-boat basis, if such arrangement is desired and is approved by the Commission.

Or the owner may receive a part of his compensation from month to month and sue for the balance.

[ocr errors]
[ocr errors]

It is believed that the procedure under this new subsection will cut down litigation, but, more important, would result in the least disruption of shipping lines and the least interference with private enterprise that is possible during an emergency,

Page 6, lines 9 to 19, subsection (d): This is a new subsection to provide for the determination and payment of just compensation in those cases where the title and not merely the use of property is taken. It closely follows in language and purpose the similar provision in the Emergency Shipping Act previously referred to. This new section takes the place of the provisions deleted from section 902 as it now stands, appearing on page 4, in lines 17 to 25, and page 5, lines 1 and 2, of this committee print.

Page 6, lines 20 to 25, and page 7, lines 1 to 8: This is a new subsection, intended to give the Commission authority to do the practical things that will be necessary when an emergency is declared and vessels are acquired under emergency powers.

The ordinary powers vested in the Commission by the 1936 act, as amended, are coupled with restrictions as to operation and charter of Government-owned vessels. In an emergency it may be necessary to turn over to the Navy or War Departments a certain number of the vessels acquired under authority of section 902. Provision should be made now for great latitude in the repair, reconstruction, and disposition of such vessels and also for proper reimbursement of the Commission's funds when the vessels are used by other agencies of the Government. This subsection will, in effect, implement the powers granted elsewhere in section 902.

In conclusion, it is suggested that the proposed amendments are designed to accomplish several important objectives:

First, to broaden the Commission's emergency powers and promote their execution.

Second, to simplify and clarify the procedure for determining and paying just compensation.

Third, to accord fair treatment to the private citizen whose property may be taken for public use.

The CHAIRMAN. Are there any questions?

Mr. OLIVER. I would like to ask the Admiral what this language in the proposed amendment that runs through this bill means, where it is specified "whenever the President shall proclaim that the security of the national defense makes it advisable or during any national emergency declared by proclamation of the President," et cetra. What is contemplated by the words “or during any national emergency declared by proclamation of the President" ?

Admiral LAND. I believe the Navy representatives will give you a better answer than I can on that, but the idea, Mr. Oliver, is that we will not be caught napping and that some anticipation can be given and put in the hands of the President, so that proper preparations can be made before an emergency act is actually declared operative. In other words, it is a little advance information that will permit the Navy Department, the Maritime Commission, and those concerned to have something ready, without taking any action, how

Mr. OLIVER. Of course, I understand the general purposes of the legislation; but I just question the power that is contained in those particular words, without any reflection upon any particular individual or President. I am wondering if, in the event of a threatened


[ocr errors]

general strike, for instance, that could not be declared a “national emergency”?

Admiral LAND. Well I should think not and I very seriously doubt whether any such action is contemplated.

Mr. OLIVER. Of course, we all do; but I am wondering if the legal authority is not given here by this language to make it possible for the requisitioning of ships in the event of such a threatened occurrence as a general strike?

Admiral LAND. Well my idea would be entirely in the negative on that, although I realize that possibility. But I think the powers the President already has would enable him to take care of that without any

reference to this particular legislation. That is in the act now, sir.

Mr. OLIVER. Those words are in the act now?
Admiral LAND. Yes, sir.

Mr. OLIVER. Do you think they are necessary to be in the act any more? Admiral LAND. I think so; yes, sir.

. Mr. OLIVER. In other words, won't it be amply taken care of by the first section of this particular clause, “whenever the President shall proclaim that the security of the national defense makes it advisable"? Does not that take care of the emergencies of impending war, or threatened war?

Admiral LAND. Yes: I think it does.

Mr. OLIVER. Then why is it necessary to have that additional language

Admiral LAND. Merely so we will be in a position to be ready and not caught off guard.

Mr. OLIVER. But does not the first clause take care of that particular situation you have just mentioned?

Admiral LAND. This modification was made at the direct request of the Navy Department, to take care of

The CHAIRMAN (interposing). Let me say we will go into that a little more fully with the Navy. Department.

Mr. OLIVER. All right, Mr. Chairman.

The CHAIRMAN. I will tell you what I think is wise about this legislation, anyhow: We will have your comments printed on this and when we get into the consideration in executive session we will have some representative from the Maritime Commission and representatives from the Navy here, because many of these matters are questions we want to be satisfied about. We reported a bill last year and, as I understand, these amendments are more in the interest of owners and operators than the bill last year.

Admiral LAND. I think, generally, this is an earnest endeavor to make the bill workable, operatable, and understandable to everybody and also to take care of any contingency somewhat in advance of an actual emergency. It is merely preparatory and in the interest of national defense.

Mr. OLIVER. I can appreciate that, Admiral; I am just concerned about the scope of that language.

Admiral LAND. I know.
The CHAIRMAN. Is there anybody here in opposition to the bill?

Mr. BURNS. I have two suggestions, representing the American Merchant Marine Institute, which I can make, briefly. Generally

[ocr errors]

speaking, I would like to reecho the words of Admiral Land that this does represent a very sincere and capable effort to iron out all of the difficulties that are involved.

Admiral LAND. There is one suggestion, Judge, which Mr. Geaslin, our general counsel, has to make; to make section 802 coordinated with the others. You know the paragraph numbers, and suppose you state that?

Mr. GEASLIN. If this bill is reported by the committee, there will have to be made an amendment to section 802, to make it consistent with this legislation.

The CHAIRMAN. I wonder if you cannot submit that in writing? Mr. GEASLIN. Yes, sir.

The CHAIRMAN. And we will incorporate it right along with Admiral Land's remarks, so that each member of the committee will have before him the committee print and the bill that has been worked out, together with the suggestions of amendments. Then when we get into executive session, we will have the Commission and the Navy present.

Mr. GEASLIN. Yes, sir; we will be glad to submit that.
The CHAIRMAN. That will go into the printed hearing.


Washington, May 1, 1939. Hon. S. O. BLAND, Chairman, Committee on Merchant Marine and Fisheries,

House of Representatives. DEAR JUDGE BLAND: H. R. 4983, now before your committee for consideration, embodies amendments to section 902, Merchant Marine Act, 1936, which amount to a rewriting and elaboration of the section as it now appears in the law. One of the changes proposed is the deletion of the words "fair actual” from the phrase "the fair actual value of the vessel at the time of taking."

The reason for this change in phraseology is that the omitted words are unnecessary and serve only to suggest that in determining just compensation some particular kind of value might be used rather than that meant where "value" is to be determined without qualification.

The words "fair and actual value” are also used in section 802 in connection with the purchase or requisition of vessels on which a construction differential subsidy has been paid and since the objectives of the two sections are interrelated, it would seem that if the words “fair actual” are deleted from section 902, they should be deleted from section 802 so that the two sections may be in harmony.

At the hearing on H. R. 4983 on April 27, 1939, the general counsel of the Commission suggested the desirability of amending section 802 in this respect and you advised that the suggestion should be presented in written form so that it might be incorporated in the printed transcript of the hearing. Accordingly, the following amendment to section 802 is suggested :

Amend section 802, by striking out the words "fair actual” in line 4 of the second paragraph of that section, so that the first provision in said paragraph shall read :

“In the event the United States shall, through purchase or requisition, acquire ownership of the vessel or vessels on which a construction-differential subsidy was paid, the owner shall be paid therefor the value thereof

The foregoing amendment will remove any conflict between sections 802 and 902. Sincerely yours,

E. S. LAND, Chairman, The CHAIRMAN. Now you said you wanted to be heard, Mr. Burns? Mr. Burns. Yes; just briefly. I have two points. The CHAIRMAN. And you can supplement that with a brief.



[ocr errors]
[ocr errors]
[ocr errors]


Mr. BURNS. The representatives of the members of the American Merchant Marine Institute object to the limitation on "fair compensation" which, however, is in the present law. And I would just like to call attention to the fact Admiral Land stated, in his prepared statement, there may be some question whether that limitation, to wit—that in awarding just compensation, the court shall not take into account the cause of the taking-raises some constitutional question as to whether the limitation is binding on the court. We recommend, if in any event it is determined the present law is to stand, it shall be amended by inserting in section 902, at the end of line 25, on page 3, the word "immediate”, so that it will read:

but in no case shall the value of the property taken or used be deemed enhanced by the immediate causes necessitating the taking or use.

In other words, if you are going to have a limitation which is applicable solely to shipping, apparently, and not to any other property, then it ought to be clarified that the limitation applies only to the immediate causes of the taking, which is the war.

The CHAIRMAN. Can those suggestions be amplified and put in a brief?

Mr. BURNS. Yes, sir. I have just one other suggestion; that is, that the institute feels it is unnecessary to extend the causes of the taking to include “national emergency” and that everything which national

defense requires is taken care of by the first provision which grants i to the President not only power in case of war, but power in case of any

threat to the national security. Briefly, those are the two matters, but I will amplify them in a brief. The CHAIRMAN. Yes; amplify them in a brief. AMERICAN MERCHANT MARINE INSTITUTE, INC.,

New York, May 9, 1939 Hon. S. OTIS BLAND, Chairman, Merchant Marine and Fisheries Committee,

House of Representatives, Washington, D. C. MY DEAR MR. BLAND: You will recall that on Thursday, April 27, I appeared before your Committee on Merchant Marine and Fisheries on behaif

of the American Merchant Marine Institute, Inc. Your committee was then À considering H. R. 4983 relative to the requisitioning of vessels. At the time

you indicated that you would hear representatives of the Navy Department and of the United States Maritime Commission, and you very kindly agreed to consider a written memorandum regarding the institute's views on the bill.

Generally speaking, the institute regards the proposed legislation as satisfactory. It wishes to express its thanks for the splendid spirit of cooperation showed by representatives of the Navy Department and of the Maritime

Commission in their careful efforts to work out a program which would be 2 practical and fair.

We object, however, to the language of section 902 wherein there is proposed a limitation on just compensation to be paid to a shipowner whose vessel

has been requisitioned. You will recall that Admiral Land, Chairman of the ! Maritime Commission, in his statement to your committee suggested that the

constitutional validity of this limitation was not free from doubt. We can see no basis for discriminating in this fashion against the shipowner. The public

[ocr errors]


[ocr errors]
[ocr errors]
« PreviousContinue »