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New Amsterdam Casualty Co., Baltimore 3, Md.
Newark Insurance Co., New York 8, N. Y.
New England Casualty Insurance Co., Springfield 1, Mass.
New York Casualty Co., New York 5, N. Y.
Norwich Union Fire Insurance Society, Ltd., New York 7, N. Y.
Ocean Accident & Guarantee Corp., Ltd., New York 16, Ń. Y.
Ohio Farmers Indemnity Co., Le Roy, Ohio
Old Colony Insurance Co., Boston 2, Mass.
Pacific Insurance Co, Ltd., Honolulu, Hawaii, United States of America.
Phoenix Indemnity Co., New York 3, N. Y.
Preferred Accident Insurance Co. of N. Y., New York 7, N. Y.
Providence Washington Indemnity Co., Providence, R. Í.
Providence Washington Insurance Co., Providence, R. I.
Public National Insurance Co., Miami, Fla.
Royal Indemnity Co., New York 8, N. Y.
St. Paul-Mercury Indemnity Co., St. Paul 2, Minn.
Seaboard Surety Co., New York 7, N. Y.
Southern Fire & Casualty Co., Knoxville, Tenn.
Springfield Fire & Marine Insurance Co., Springfield 1, Mass.
Standard Accident Insurance Co., Detroit 32, Mich.
Sun Indemnity Co., New York 3, N. Y.
Travelers Indemnity Co., Hartford 15, Conn.
Travelers Insurance Co., Hartford 15, Conn.
Tri-State Insurance Co., Tulsa 1, Okla.
United National Indemnity Co., Hartford 15, Conn.
United States Casualty Co., New York 7, N. Y.
United States Fidelity & Guaranty Co., Baltimore 3, Md.
United States Guarantee Co., New York 7, N. Y.
Yorkshire Indemnity Co., New York 7, N. Y.
Zurich General Accident & Liability Insurance Co., Ltd., Chicago 3, Ill.



Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That this Act may be cited as the “War Damage Corporation Act of 1950.

SEC. 2. Notwithstanding the Government Corporation Control Act or the charter of the War Damage Corporation, the War Damage Corporation (hereinafter referred to as the “Corporation”) shall have succession for the objects and purposes set forth in section 3. The Corporation shall not have succession beyond June 30, 1955, except for purposes of liquidation, unless it is extended beyond such date pursuant to an Act of Congress.

SEC. 3. The Reconstruction Finance Corporation is directed to supply funds to the Corporation. Such funds shall be supplied only at the request of the President and the aggregate amount of the funds so supplied shall not exceed $1,000,000,000, exclusive of capital stock subscribed prior to the date of the enactment of this Act. The Corporation is authorized to use its funds to provide, through insurance, reinsurance, or otherwise, reasonable protection against loss of or damage to property, real and personal, and through reinsurance (including the insurance of self-insured employers) reasonable protection against liability imposed under any workmen's compensation act, occupational disease act, employer's liability act or similar law, for injury or disease suffered by employees and arising out of or in the course of employment, which may result from or arise out of hostile or warlike action, including action in hindering, combating or defending against an actual, impending or expected attack, (1) by any government or sovereign power (de jure or de facto), or by any authority maintaining or using military, naval or air forces; or (2) by military, naval or air forces; or (3) by an agent of any such government, power, authority or forces; with such general exceptions as the Corporation, with the approval of the President, may deem advisable. Such protection shall be made available upon the payment of such premium or other charge, and subject to such effective date and other terms and conditions, as the Corporation, with the approval of the President, may establish, but, in view of the national interest

involved, the Corporation shall from time to time establish uniform rates for each kind of property, type of risk and exposure with respect to which such protection is made available. Such protection shall be applicable only (1) to such property situated, or liability imposed, in the United States (including the several States and the District of Columbia), the Canal Zone, the Territories and possessions of the United States, and in such other places as may be determined by the President, for the purposes of this Act, to be under the dominion and control of the United States; (2) to such property in transit between any points located in any of the foregoing; and (3) to all bridges and tunnels.

Mr. DEANE. Than, you, sir.
The CHAIRMAN. Thank you, Mr. Ely.
The committee will now adjourn subject to the call of the chairman,

(The following letters and statements were submitted for the record:)



Washington, D. C., December 7, 1950. Hon. BRENT SPENCE, M. C. Chairman House Banking and Currency Committee,

House of Representatives, Washington 25, D. C. DEAR COLLEAGUE: I am enclosing a statement by Mr. H. E. Foreman, managing director, The Associated General Contractors of America, Inc., in the interest of H. R. 6982, legislation to recreate the War Damage Corporation and to restore war damage insurance such as was available during World War II.

I shall be thankful if you will kindly see that the enclosed statement is made a part of your hearings in connection with this legislation. Sincerely yours,



Washington 4, D. C., December 7, 1950. Hon. BRENT SPENCE, M. C., Chairman House Banking and Currency Committee,

New House Office Building, Washington, D. C. DEAR MR. SPENCE: This statement is submitted on behalf of the more than 5,700 members of the Associated General Contractors of America to recommend the passage as soon as possible of legislation to re-create the War Damage Corporation and to restore war damage insurance such as was available during World War II.

The association represents the leading general contractors from all parts of the country who annually perform the majority of construction undertaken by contract.

The need for such legislation was discussed by representatives of the association's members at the midyear meeting of the governing and advisory boards which was held in Chattanooga, Tenn., September 11-13, 1950.

A motion was adopted unanimously recommending to Congress that action be taken as soon as possible to make war damage insurance available to property owners and to general contractors.

We are familiar with H. R. 6982, which was introduced September 15, 1950, by Representative Thomas J. Lane, of Massachusetts. In our opinion, this bill accomplishes the necessary objective.

War damage insurance, as it was available previously under terms of Public Law 506, of the Seventy-seventh Congress, second session, signed March 27, 1942, was satisfactory to general contractors.

Under this legislation, the War Damage Corporation underwrote the risk, but used insurance companies for the placement of the policies. This did not require an appropriation by Congress, and the Government earned a profit on this activity.

Such insurance is not now available to property owners or to general contractors. Contractors from many parts of the country have urged that it be made available as soon as possible.

The legislation which we recommend provides "reasonable protection” through insurance “against loss of or damage to property, real and personal, which may result from enemy attack (including any action taken by the military, naval, or air forces of the United States, or its allies in resisting attack), with such general exceptions as the Corporation, with the approval of the President, may deem advisable."

It is evident that a general contractor has a substantial investment involved in a construction project before it is completed, accepted by the owner, and paid for in full. There are now several billions of dollars worth of construction projects in varying stages of partial completion. A contractor, without war damage insurance, could suffer heavy losses and be bankrupt if a project were seriously damaged or demolished before completion. The owner also needs the insurance protection both before and after the project is completed.

At some future time, when planning for the civil defense has progressed further, the committee may wish to give consideration to additional legislation which would include in insurable damage such actions as may be taken by authorized civil defense authorities.

It is the hope of general contractors throughout the country that the Congress will act promptly on such legislation. Sincerely,


Managing Director.


New York 7, N. Y., December 6, 1950. Hon. ABRAHAM J. MULTER,

House Office Building, Washington, D. C. DEAR CONGRESSMAN MULTER: This will acknowledge your letter of December 5, 1950, enclosing a copy of your bill (H. R. 9805) to reactivate the War Damage Corporation.

You are to be congratulated on your interest in this vital matter. I trust that you will use your good offices in pressing for passage of a bill without delay.

The Commerce and Industry Association has been very much concerned for some time with enactment of such legislation. Before the adjournment of Congress it repeatedly urged the President of the United States and the chairman of the House Committee on Banking and Currency to have a bill passed.

The association wishes to be placed on record as supporting the proposition that war damage coverage be made available immediately, although we are not in a position at this time to recommend which bill should be adopted or the technical provisions which it should contain. We understand a committee of insurance experts is appearing at the public hearing to give you the benefit of its advice and suggestions.

Enclosed are copies of a letter sent today to President Truman citing the present tense international situation as an added reason for immediate passage of such a measure.

I will appreciate it if you would have inserted in the record of the hearing this letter to you as well as a copy of the letter sent to President Truman in favor of reactivating the War Damage Corporation. Sincerely yours,


Erecutive l'ice President,


New York 7, V. Y., December 6, 1950. Hon. HARRY S. TRUMAN,

The White House, Washington 25, D. C. DEAR PRESIDENT TRUMAN: With the turn of events in Korea increasing international tension, the home owners and representatives of business and industry in New York and throughout the Nation are more concerned than ever over the failure of the Federal Government to provide for war damage insurance.

For 2 months prior to the adjournment of Congress in September, the Commerce and Industry Association has sought enactment by (ongress of legislation to reactivate the War Damage Corporation of World War II. Many Members of Congress, not only from New York but from practically all of the coastal States, which would be particularly vulnerable in the event of enemy air attack, expressed their support of these recommendations.

You, too, were quoted at the time as favoring revival of war damage insurance "when the time comes.” On that note, ('ongress adjourned in September without taking any action on war damage insurance for the homes and other structures of the Nation even though, in recognition of the potentialities of the situation, it already had approved—and you had signed into enactment-a law providing for marine war damage insurance.

In a letter to you before the September adjournment of Congress, the association expressed the opinion that the time to which you had referred had come and urged that you press for war damage insurance legislation before the session ended. It is our opinion that today, the time is overdue.

Congress did not wait for an American vessel to be torpedoed before legislating insurance protection. Certainly, it should not wait for a bomb to fall on American soil to provide the same measure of protection for the Nation's homes against damage resulting from a sneak attack. Such coverage is unquestionably required to safeguard the home front.

Aside from the moral obligation involved, you are aware that the War Damage Corporation, which is now in liquidation, paid a profit to the Federal Government of $210,000,000. That being so, there could be no possible opposition to the appropriation of sufficient funds to reactivate the Corporation now, under a plan similar to that operated during World War II, and cover its costs until premiums are collected.

Because of its position as the country's first port and its commercial and financial center, New York necessarily is placed high on the target list of a potential enemy. On that list, too, is practically every large city and industrial center on both the east and west coasts. Sneak attacks on such concentrated areas inevitably would leave in their wake considerable devastation of human life and property.

The Commerce and Industry Association therefore most strongly urges that the Nation's civilian defense program be implemented promptly with enactment of war damage insurance legislation and that the plan operated during World War II be adopted as the most desirable.

Your concurrence with our view that the time has come would insure quick congressional action. The association urges that you take immediate steps to that end. Sincerely yours,


Executive Vice President. (Whereupon, at 12:09 p. m., the committee was adjourned, to reconvene at the call of the Chair.)





Washington, D. C. The committee met at 10 a. m., pursuant to the call of the chairman, Hon. Brent Spence (chairman), presiding.

Present: Messrs. Spence, Brown, Buchanan, Deane, McKinnon, Wolcott, Kilburn, Cole, Hull, and Nicholson.

The CHAIRMAN. The committee will come to order.

Mr. Brown, who was here, but left a few minutes ago to attend a meeting of the Joint Committee on Defense Production, has requested the following letter, which he received from the National Cotton Council of America, be read into the record.

The CLERK (reading): Hon. Paul BROWN, M. C.,

House Office Building, Washington 25, D. C. DEAR MR. BROWN: The board of directors of the National Cotton Council of America, representing all six branches of the raw cotton industry, at its recent meeting in Memphis passed a resolution urging that risks of property damage resulting from war which are not insurable privately should be insured by the Government.

The council recommends that the War Damage Corporation created during World War II be reactivated now and authorized to use its funds to provide insurance, reinsurance or other reasonable protection against loss or damage to real or personal property which may result from hostile or warlike action. The organization believes that reasonable rates should be charged for this insurance as was done during World War II.

We would like you to bring these views of the council to the attention of the House Banking and Currency Committee which is now considering legislation to this end. Your cooperation will certainly be appreciated by the industry. Sincerely yours,

Wm. Rhea BLAKE,

Executive l'ice President. The CHAIRMAN. Call the first witness.

The CLERK. The first witness is Mr. Leslie Henry, representing the American Mutual Alliance.

The CHAIRMAN. Identify yourself.



Mr. Henry. Leslie Henry, vice president and counsel of the American Mutual Alliance of Boston.

I am appearing here this morning in behalf of the American Mutual Alliance, which is the national trade association for mutual insurance, both casualty and fire. Our organization includes practically all of


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