order to secure the desired uniformity, the present bill is advanced. The committee has considered the proposed legislation and the testimony of witnesses thereon and is of the opinion that enactment of the bill is desirable and therefore recommends its enactment.

The bill is the same as one passed by the Senate late in the Seventyeighth Congress. It is similar to a proposal submitted by the Navy Department during the last Congress as a departmental measure.

The Navy Department's letter on the proposal submitted during the Seventy-eighth Congress is herewith made a part of this report.

Hon. SAM RAYBURN,

Speaker of the House of Representatives,

NAVY DEPARTMENT, Washington, D. C., June 2, 1944.

Washington, D. C.

MY DEAR MR. SPEAKER: There is transmitted herewith a draft of a proposed bill to amend section 1442, Revised Statutes, relating to furlough of officers by the Secretary of the Navy.

The purpose of the proposed legislation is to extend the authority which the Secretary of the Navy now has under section 1442, Revised Statutes (34 U. S. C. 228), to place on furlough officers of the active list of the Navy, to officers on the active list of the Marine Corps and to officers of the Coast Guard while the Coast Guard is operating as part of the Navy. Such authority would not extend to Reserve officers of such organizations.

Under section 1557, Revised Statutes (34 U. S. C. 881), officers on furlough receive one-half of the pay to which they would be entitled if on leave of absence. The proposed legislation is necessary to bring the subject statutory provision up to date to accord with wartime requirements. An anomalous situation prevails where the authority of the Secretary of the Navy to furlough under the subject section extends to officers of the Navy, but not to officers of other organizations serving with the Navy. Under present conditions, such officers of the Marine Corps and the Coast Guard cannot be involuntarily retired. It is the desire of the Navy Department to treat such officers in the same manner as officers of the Navy. When not performing duties commensurate with their rank, it is not believed desirable that they should be retained in full active status with pay and allowances. In order to secure the desired uniformity, the present bill is

advanced.

The Navy Department recommends the enactment of the proposed legislation. The Navy Department has been advised by the Bureau of the Budget that there would be no objection to the submission of the proposed legislation to the Congress.

Sincerely yours,

FORRESTAL.

In compliance with cluase 2a of rule XIII of the Rules of the House of Representatives, there follow the provisions of existing law showing the changes which would be made by the proposed legislation (omit the part printed in black brackets and insert the matter printed in italic):

The Secretary of the Navy shall have authority to place on furlough any officer on the active list of the Navy [] and the Marine Corps, and any officer of the Coast Guard while the Coast Guard is operating as a part of the Navy. This section shall not apply to Res ve officers of such organizations.

О

CHARLES CLEMENT GOODMAN, AND HENRY CHARLES ROBINSON TO ACCEPT DECORATIONS AND ORDERS TENDERED THEM BY THE GOVERNMENT OF THE UNITED STATES OF BRAZIL

JANUARY 22, 1945.-Committed to the Committee of the Whole House and ordered to be printed

Mr. MADDEN, from the Committee on Naval Affairs, submitted the

following

REPORT

[To accompany H. R. 1076]

The Committee on Naval Affairs, to whom was referred the bill (H. R. 1076) to authorize Lewis Hobart Kenney, Charles Garner, Charles Clement Goodman, and Henry Charles Robinson to accept decorations and orders tendered them by the Government of the United States of of Brazil, having considered the same, report favorably thereon without amendment and recommend that the bill do pass.

The proposed, legislation would authorize Lewis Hobart Kenny, Charles Garner, Charles Clement Goodman, and Henry Charles Robinson to accept the decoration of the National Order of the Southern Cross, which has been tendered them by the Government of the United States of Brazil. This authority must be granted by the Congress in accordance with clause 8 of section 9, article I of the United States Constitution before they may accept such decorations. The persons who have been tendered the decorations are employees of the Philadelphia Navy Yard, and rendered special services in the preparation of the plans and specifications for a combatant vessel for the Brazilian Navy. The State Department was advised of the conferring of the decorations by the Ambassador of Brazil in a note dated January 8, 1944. The decorations and accompanying diplomas are being held by the State Department until the conferees are in a position legally to receive them.

The enactment of the proposed legislation will result in no cost to the Government.

The committee has considered the proposed legislation and the testimony of witnesses thereon, and is of the opinion that enactment of the bill is desirable, and, therefore, recommends its enactment.

The bill is the same as one passed by the Senate late in the Seventyeighth Congress. It is similar to a proposal submitted by the Navy Department during the last Congress as a departmental measure.

The Navy Department's letter on the proposal submitted during the Seventy-eighth Congress is herewith made a part of this report. NAVY DEPARTMENT, Washington, March 7, 1944.

Hon. SAM RAYBURN,

Speaker of the House of Representatives,

Washington, D. C.

MY DEAR MR. SPEAKER: There is transmitted herewith a draft of a proposed bill to authorize Lewis Hobart Kenney, Charles Garner, Charles Clement Goodman, and Henry Charles Robinson to accept decorations and orders tendered them by the Government of the United States of Brazil.

The proposed legislation, as its title indicates, would authorize the persons named to accept the decoration of the National Order of the Southern Cross, which has been tendered them by the Government of the United States of Brazil. This authority must be granted by the Congress before they may accept such decorations.

The persons who have been tendered the decorations are employees of the Philadelphia Navy Yard. The State Department was advised of the conferring of the decorations by the Ambassador of Brazil in a note dated January 8, 1944. The decorations and accompanying diplomas are being held by the State Department until the conferees are in a position legally to receive them.

The enactment of the proposed legislation will result in no cost to the Govern

ment.

The Navy Department recommends enactment of the proposed legislation. The Navy Department has been advised by the Bureau of the Budget that there would be no objection to the submission of the proposed legislation to the Congress.

Sincerely yours,

WAIVING THE LIMITATION IN SECTION 1426 (a) (1) OF THE INTERNAL REVENUE CODE FOR THE WAR SHIPPING ADMINISTRATION AS AN EMPLOYER OF SEAMEN

JANUARY 23, 1945.-Committed to the Committee of the Whole House on the state of the Union and ordered to be printed

Mr. DOUGHTON of North Carolina, from the Committee on Ways and Means, submitted the following

REPORT

[To accompany H. R. 1429]

The Committee on Ways and Means, to whom was referred the bill (H. R. 1429) to permit the Administrator, War Shipping Administration, and the United States Maritime Commission, during the national emergency, to pay the employer's tax imposed under section 1410 of the Internal Revenue Code without regard to the $3,000 limitation in section 1426 (a) (1) of the Internal Revenue Code, report favorably thereon without amendment and recommend that the bill do pass.

GENERAL STATEMENT

The purpose of the bill is to permit the War Shipping Administration as an employer of seamen serving on vessels owned, or bareboat chartered to the United States, through the War Shipping Administration, to pay the employers' pay-roll tax for old-age benefits without regard to the $3,000 limitation placed upon the amount of wages subject to the tax. The bill is designed to overcome an existing administrative hardship in the War Shipping Administration, arising out of the extent and character of the operations of that agency.

In 1943, the Congress enacted legislation placing the services of seamen, in the employ of the War Shipping Administration, within the definition of "covered employment" as used in the Social Security Act, as amended, for the purpose of old-age and survivors' insurance, and directed the War Shipping Administration, as an employer, to pay the employer's pay-roll excise tax in accordance with existing law. The War Shipping Administration, however, has encountered considerable difficulty in observing the limitation that only the first

$3,000 remuneration paid to any employee during a calendar year is subject to the employer's tax. The difficulty arises in cases in which a seaman, during the course of a year, serves as an employee of the United States on vessels operated by two or more general agents of the Administration. The first general agent for whom the seaman works is in a position to observe the $3,000 limitation on wages subject to the employer's tax. The second general agent, however, has no means of checking on the wages paid to the seaman earlier in the same year by another general agent of the Administration.

The War Shipping Administration cannot enforce the $3,000 limitation in cases where seamen work for two or more general agents in the same calendar year, without establishing a central wage record office in Washington to maintain the wage records of all the seamen in its employ, check the records for the $3,000 limitation in each individual case and prepare all the returns for seamen employed by it.

In all cases where a seaman is employed by one general agent throughout a particular calendar year the War Shipping Administration encounters no difficulty in observing the $3,000 limitation and advises it will not pay taxes on the amounts above $3,000 in such

cases.

In addition to relieving the administrative difficulties outlined above, a substantial saving will be effected not only in money, but also in manpower by the enactment of the bill. While it is difficult to determine accurately the amount of savings involved, the War Shipping Administration has attempted to approximate the amount. The cost of operating a central wage record unit in Washington to insure the enforcement of the $3,000 limitation would amount to at least $150,000 to $200,000 per year, while the estimate on the additional taxes which, under the bill, it may pay on wages in excess of $3,000 paid to seamen in its employ would amount to not more than $100,000, or a saving of $50,000 to $100,000 per annum. In addition to the money involved, a central unit in Washington would require the use of calculating and business machines, which would have to be specially manufactured since there are none available on the market, and the employment of additional personnel, both in the manufacture and operation of these machines at a time when manpower is sorely needed in jobs more directly connected with the prosecution of the war. The figures used are merely estimates and approximations of variable factors with respect to which it is impossible to secure accurate figures and are contingent on the acquisition of the necessary machines and manpower to operate the central wage record unit.

The bill also relieves the War Shipping Administration from filing claims for refund of taxes paid on wages in excess of $3,000. It is estimated that the cost of preparing and filing claims for refund would be as great as the cost of establishing the central wage unit to check and insure the observance of the $3,000 limitation.

The bill relates only to the War Shipping Administration as an employer and does not affect the employee's tax or his benefits under the social-security program.

The bill will be effective during the period prior to the termination of the First War Powers Act of 1941, and is retroactive to services performed since September 30, 1941. It is a war measure which the War Shipping Administration believes will facilitate a more effective