be assigned to duty in his specialty and the professional examination of such officer for promotion shall embrace only those subjects pertaining to such specialty." SEC. 2. Each vacancy existing in the grade of constructor and in the grade of district commander on the date of the approval of this Act, and each vacancy which shall hereafter occur in the extra number of officers commissioned pursuant to this Act, shall operate to increase by one the total number of line officers in the Coast Guard authorized by section 1 of the Act of March 2, 1929 (45 Stat. 1533), as amended. SEC. 3. No officer commissioned pursuant to this Act shall suffer any reduction in rank, pay, or allowances, by reason of the provisions of this Act, or lose any right to promotion which he would have had but for the enactment of this Act. SEC. 4. The grades of district commander and constructor on the active list in the Coast Guard are hereby abolished and all provisions of law in conflict with this Act are hereby repealed. The purpose of the amendment is to substitute for the original bill the bill recommended by the Treasury Department in the letter of Acting Secretary of the Treasury Stephen B. Gibbons to the chairman of your committee which is appended to this report and which recommended the amendment proposed as a substitute for H. R. 5611. It will be noted from the third paragraph from the end of Mr. Gibbons' letter that the cost of H. R. 5611, as introduced, would average $1,864 per annum for the next 18 years, or a total of $33,544 to 1957. The amendment, however, will save money as shown by the following quotation from that paragraph: * * * The bill, as amended in accordance with the recommendation contained herein, will gradually reduce the present cost, amounting to an annual saving of approximately $27,000 after 1957, and to an annual saving of approximately $37,000 after the retirement of the junior constructor. In the testimony of Admiral Waesche, Commandant of the Coast Guard, during the hearings before your committee there appears the following statement: There is one more point which I would like to make, Mr. Chairman, which I think is particularly important at this time, and that is that this bill is an actual economy measure. In other words, there will be a saving as a result of this bill and that saving will become greater as time goes on. And, in this day and age, I am pressed by the Bureau of the Budget and by the committees of Congress on any bill which I recommend which calls for increased expense. While the committees have been very generous, I would like to make it very strong that this bill is actually an economy measure. The Treasury Department reports that it has been advised by the Bureau of the Budget that there is no objection to the submission of its report to your committee. The bill as amended has the endorsement of the proponents of the bill (H. R. 5611) and although ample opportunity was given for full presentation of objections, if any should develop to the proposed bill, no objections were offered. In fact, the bill as amended has the approval of the Coast Guard, of the Treasury Department, and of the associations representing the enlisted personnel and the district commanders. In 1915 the former Revenue Cutter Service and the old Life Saving Service were amalgamated into one service known as the United States Coast Guard; however, the dual organization was perpetuated in that supervising the work of the Revenue Cutter Service were 9 division commanders and supervising the work of the Life Saving Service were 13 district commanders. Later, in 1926, the 13 district commanders and the administration of their districts were placed under the supervision of the 9 division commanders, but the dual organization was continued. Although the position of division commander was filled by line officers of the Coast Guard, a separate corps of district commanders, appointment to which grade was made from the grades of chief petty officer, chief warrant, and warrant officer, was instituted and has been maintained to this date. In addition, as the result of various laws since the amalgamation of the two former services, much confusion as to both rank and matters of pay and allowances has arisen and in some instances district commanders, junior by many years in precedence, based on original date of commission in the grade of district commander, outrank their seniors. Friction and a feeling of discrimination have naturally resulted. By a recent Executive order of the President, the Lighthouse Service, with its 17 lighthouse districts, has been merged with the Coast Guard and if the existing method of promotion and filling of positions of district commanders were followed there would be three administrative divisions of the Coast Guard with separate promotion systems for each division. The bill (H. R. 5611) as introduced sought to establish a faster promotion system in the grade of district commander and to restore precedence in that grade in accordance with the dates of appointment in the grade of district commander. Such a system would provide assurance of promotion faster than that of the Army, Navy, or Marine Corps, or of the system now in effect for line officers or other staff officers of the Coast Guard. Many of the irregularities now in existence would be continued and nothing would be done to consolidate the administration of the Coast Guard into one efficient organization. Accordingly, it is proposed by the amendment to the bill, which has the approval of the Secretary of the Treasury, the Commandant of the Coast Guard, the Bureau of the Budget, and the associations representing the enlisted personnel and the district commanders, to place the present district commanders in the line of the Coast Guard; to discontinue the further appointment of district commanders from the enlisted, warrant, or chief warrant rank; to adjust the matter of precedence in rank in the positions of district commanders; and to discontinue the appointment of constructors from civil life. In this way, all of the commissioned officers of the Coast Guard of the same grade would eventually receive the same pay and allowances and would constitute a single list of promotion. In addition, the bill will place the commissioned, chief warrant, warrant and enlisted personnel of both the seagoing and shore branches of the Coast Guard on exactly the same plane with respect to appointment, rank, pay, and allowances, thereby removing all cause for mutual suspicion, jealousy, and ill feeling based on assumed ideas of discrimination. Considerable benefit will accrue to the Coast Guard and to the Nation by a modernized system of promotion and administration and your committee highly recommends the enactment of the bill as amended. A full explanation going into the history of the entire situation is contained in the report of the Acting Secretary of the Treasury and follows: Hon. SCHYULER O. BLAND, TREASURY DEPARTMENT, Washington. Chairman, Committee on Merchant Marine and Fisheries, DEAR MR. CHAIRMAN: Reference is made to your letter of April 8, 1939, transmitting two copies of H. R. 5611, a bill to amend section 9 of the act of July 3, 1926 (44 Stat. 817), entitled "An act to readjust the commissioned personnel of the Coast Guard, and for other purposes," and asking to be furnished the views and recommendations o this Department relative to the measure. The bill will correct the present anomalous situation relative to precedence of district commanders among themselves, caused by the fact that appointments to the grade of district commander have been made from both warrant officers and chief warrant officers. It does not, however, correct present and future disparities in pay and allowances due to the same cause. The bill provides more rapid advancement of district commanders than is the case with other Coast Guard officers either of line or staff. It provides for more rapid promotion than Congress has yet provided in time of peace for officers in any of the military services. The Department, therefore, recommends against the enactment of H. R. 5611. Since, however, legislation to correct the present situation is believed necessary, a careful study has been made of the various laws affecting district commanders and this study leads to the conclusion that there is a definite need for legislation that will accomplish the following purposes: 1. Restore precedence in the grade of district commander in accordance with dates of appointment in that grade. 2. Equalize within the limits of the Joint Service Pay Act of June 10, 1922 (U. S. C., title 37, sec. 1, et seq.), the pay and allowances of district commanders in accordance with length of service in the grade of district commander. 3. Prevent a recurrence of the present situation in the grade of district commander. 4. Place all commissioned, chief warrant, warrant, and enlisted personnel of both the seagoing and shore branches of the Coast Guard on exactly the same basis in their respective grades, ranks, and ratings, with regard to appointment, promotion, rank, pay, and allowances. All of the above purposes can be effectuated by amending H. R. 5611 so as to amalgamate the grades of district commander and constructor with the line of the Coast Guard, and the bill, as amended, would have the approval of this Department. This is the method that was used to remedy most satisfactorily a somewhat similar situation in the case of the former engineer officers of the Coast Guard and is the procedure which will be proposed for the induction of officers of the Lighthouse Service into the Coast Guard. It is therefore recommended that H. R. 5611 be amended by striking out all after the enacting clause and inserting in lieu thereof the following: "That section 9 of the Act entitled 'An Act to readjust the commissioned personnel of the Coast Guard, and for other purposes', approved July 3, 1926, 44 Stat. 817, is hereby amended by striking out the second and third sentences and substituting in lieu thereof the following: "All officers in the grades of district commander and constructor on active duty are hereby transferred to the line of the Coast Guard and shall be commissioned in the grades of commander, lieutenant commander, and lieutenant, according to the ranks held by them on the date of such transfer, and shall when so transferred and commissioned take precedence (1) with each other in their respective grades, according to length of commissioned service as district commander or constructor, as the case may be, (2) with other line officers in such grades, according to length of service in the ranks held by them on the date of such transfer, and (3) in higher grades to which they may be promoted, according to the dates of commissions in such higher grades: Provided, That the President is hereby authorized to appoint Charles Walker to the grade of lieutenant commander with precedence next after Irwin B. Steele. Each officer commissioned pursuant to this section shall be an extra number in his grade and in the grades to which he may be promoted, and shall be eligible for promotion, if otherwise qualified, whenever the officer in a regular number in line of promotion next above him on the seniority list becomes eligible for promotion; or if there be no such officer in his grade, he shall be eligible for promotion, if otherwise qualified, when a vacancy occurs in the next higher grade. Any officer commissioned pursuant to this section shall be assigned to duty in his specialty and the professional examination of such officer for promotion shall embrace only those subjects pertaining to such specialty.' "SEC. 2. Each vacancy existing in the grade of constructor and in the grade of district commander on the date of the approval of this Act, and each vacancy which shall hereafter occur in the extra number of officers commissioned pursuant to this Act, shall operate to increase by one the total number of line officers in the Coast Guard authorized by section 1 of the Act of March 2, 1929 (45 Stat. 1533), as amended. "SEC. 3. No officer commissioned pursuant to this Act shall suffer any reduction in rank, pay, or allowances, by reason of the provisions of this Act, or lose any right to promotion which he would have had but for the enactment of this Act. "SEC. 4. The grades of district commander and constructor on the active list in the Coast Guard are hereby abolished and all provisions of law in conflict with this Act are hereby repealed.' The cost of H. R. 5611, as introduced, would average $1,864 per annum for the next 18 years, or a total of $33,544 to 1957. The bill, as amended in accordance with the recommendation contained herein, will gradually reduce the present cost, amounting to an annual saving of approximately $27,000 after 1957, and to an annual saving of approximately $37,000 after the retirement of the junior constructor. In order to arrive at an understanding of H. R. 5611 and the necessity for amending it as recommended, it is necessary to review legislation affecting the appointment, rank, pay and allowances of district commanders from the date of the amalgamation of the Revenue-Cutter Service and the Life-Saving Service, January 28, 1915, to the present time. Accordingly there is inclosed herewith a memorandum analyzing and explaining the legislation proposed in this report. The Department has been advised by the Bureau of the Budget that there is no objection to the submission of this report to your committee. Very truly yours, STEPHEN B. GIBBONS, Acting Secretary of the Treasury. MEMORANDUM ANALYZING AND EXPLAINING H. R. 5611 AND THE NECESSITY FOR AMENDING IT AS RECOMMENDED IN THE REPORT ON H. R. 5611 BY THE SECRETARY OF THE TREASURY The authorization of the grade of chief warrant officer in the Coast Guard, the commissioning of boatswains (L) as chief boatswains (L), and the appointment of chief boatswains (L) as district commanders has made necessary new legislation concerning the appointment of district commanders and establishing their rank, pay, allowances, and precedence. In order to arrive at the character and extent of the required legislation it is necessary to review the matter of appointment of district commanders from the date of the amalgamation of the Revenue-Cutter Service and the Life-Saving Service, January 28, 1915, to the present time. In 1914 these officers were in the civil establishment. With the title of "district superintendent" they had charge of groups of lifesaving stations. As at the present time there were 13 groups of stations, with a district superintendent in charge of each, who received pay ranging from $1,900 to $2,200 a year, plus longevity allowances. This pay roughly corresponded to that of ensign and lieutenant (jr. gr.). Under the act of January 28, 1915, the 13 district superintendents were commissioned as such but there was no provision for giving them corresponding rank, pay, and allowances of any grade of line officers. They continued to receive their former civil-service pay (12 at $2,200 per year and 1 at $1,900 per year) plus longevity. The act of May 18, 1920, provided rank, pay, and allowances for district superintendents as follows, making permanent the temporary provisions of the act of July 1, 1918: The act of July 3, 1926, changed the title of "district superintendent" to "district commander," and provided that a district commander with less than 10 years commissioned service shall have the rank, pay, and allowances of a lieutenant, and after 10 years commissioned service the rank, pay, and allowances of a lieutenant commander. The intent and effect of this provision was that during the first 10 years of service as district commander (which was the only commissioned service possible for a district commander appointed from a warrant officer or chief petty officer to have) a district commander would receive the rank, pay and allowances of a lieutenant, and after 10 years service as district commander, the rank, pay, and allowances of a lieutenant commander. This act provided that an original appointment as district commander shall be made from warrant officers and chief petty officers. The act of July 3, 1926, made permanent the temporary chief warrant officers appointed under the act of April 21, 1924, and authorized the President to appoint chief warrant officers from the permanent list of warrant officers of the Coast Guard, such chief warrant officers to receive the same pay, allowances, and benefits as commissioned warrant officers of the Navy. Here it is important to recognize that the principal reason given for this legislation was because the Pay Act of 1922 reduced the pay of ensign and further provided that no officer commissioned after its enactment should receive increase in pay as a credit for prior enlisted or warrant service. As district commanders have considerable enlisted and warrant service this legislation was of a corrective nature. The reason advanced for reducing the grades to two is found in the address of the late Rear Admiral Billard, former Commandant of the Coast Guard, before the subcommittee on Interstate and Foreign Commerce, April 8, 1926 (H. R. 10973), as follows: "Another defect is this, that these districts are of about the same importance, so that there is no reason in the world why the officer in charge of the New Hampshire coast should be a lieutenant commander while the officer in charge of another coast should be a poor ensign. * Under the act of April 8, 1926, which remains unchanged, district commanders receive pay in accordance with the following table. For purpose of comparison the rank and pay of officers of the line of corresponding commissioned service are also shown. NOTE. Under the Pay Act of 1922 the maximum pay and allowances of officers of the Army, Navy, Marine Corps, or Coast Guard, of less rank than brigadier general or rear admiral, is $7,200 a year. It is essential to differentiate between a division commander and a district commander. A district commander is an officer attached to the staff of a division commander and subordinate to him. As with all units under the command of a division commander, which consists of vessels, aviation stations, bases, etc., he is responsible for the administration and efficient performance of the duties of district commanders and the stations under them. Matters of inspection, communication systems, repairs to buildings and boats, including their engines, expenditure of material sums of money, discipline in important cases, and questions of general policy, are of particular concern to the division commander, the details of which are generally assigned to various members of his staff. To this extent the duties and responsibilities of a district commander are limited. The division commander has in his command officers of the rank of commander and below; the district commander commands no officer of higher rank than a chief warrant officer. The act of March 2, 1929, provided for 14 district commanders in the complement of commissioned officers of the Coast Guard. The Joint Pay Act of June 10, 1922, provides that a lieutenant with less than 7 years' commissioned service shall receive the pay and allowances of the second pay period, except when first commissioned with rank above ensign in which |