Mr. BYRNE. And they got money from you on their mortgages? Mr. PETERSON. Yes, sir. Mr. BYRNE. This is why you have the amendment? Mr. PETERSON. Yes, sir. The CHAIRMAN. Mr. Pelly? Mr. PELLY. Just to clarify the question asked by Mrs. Sullivan earlier, as I understand it, presently the fishermen are not included in the Revised Statute 4547. Mr. PETERSON. That is correct, sir. But Revised Statute 4547 merely provides that the master must appear, if called upon to answer why the fisherman was not paid. The fisherman does have a lien, the same as a seaman on any other vessel. Mr. PELLY. In other words, under existing statute the master of the fishing vessel is not covered, and under the bill as introduced by the chairman the master of the fishing vessel would be covered. Under your recommendation, if the master of a fishing vessel were a part owner, he would not be covered. Mr. PETERSON. That is correct, except for the statement that the way the bill is now drawn it does include fishermen and masters of fishing vessels. Mr. PELLEY. H.R. 162 does not include masters of fishing vessels? I think you will find that it could. Mr. BLATT. Excuse me, Mr. Congressman. May I clarify it. The bill, as now proposed, includes the master of any vessel documented, registered, enrolled, or licensed; and those fishing vessels above 5 net tons would be applicable in that case; yes, sir. Mr. PELLY. You are not proposing that any change be made in that part of H.R. 162. All you want is amendment to be sure that, if a master of such a vessel, as well as a part owner thereof they would not participate? Mr. PETERSON. That is correct. The CHAIRMAN. Mr. Grover? Mr. GROVER. I have no questions. The CHAIRMAN. Mr. Schadeberg? Mr. SCHADEBERG. I have no questions. The CHAIRMAN. Mr. Roth? Mr. ROTH. I have no questions. The CHAIRMAN. Mrs. Sullivan? Mrs. SULLIVAN. I have no questions. The CHAIRMAN. I wonder if we could send Mr. Fischer a copy of this report of yours. Do you want to comment on the proposed amendment that the Department of the Interior suggests? Mr. FISCHER. Basically, we have no objection if owners are excluded. It wouldn't affect the purpose that we are trying to achieve. We are mainly interested in protecting the merchant marine officer who is actually, in present-day practice, no different from the first mate or the second mate in the way he is hired or his position as respects the ship. Now, perhaps back 200 years ago, when the English courts made this rule, all ships were like the vessels these gentlemen are talking about. And that may have been the reason for the rule at that time, but we really have no objection. I do think that perhaps the amend ment is a little too all-inclusive when it says "any financial interest." Perhaps some extent of ownership might be spelled out, but I think when you say "any financial interest" you are speaking a little too broadly. Mr. BLATT. Mr. Chairman, if I may respond to that aspect of it. Mrs. SULLIVAN. Would you speak louder? Mr. BLATT. I am sorry. As the costs of the vessels are increasing, fishing vessels, that is, there is more and more the desire to limit liability on the part of the owner and so they incorporate and by incorporating they have thus achieved a limitation of liability. However, they take back a substantial stock interest, and that is the interest that we consider as ownership, and that is why we put "financial interest" rather than "ownership." Mr. PETERSON. I believe we would have no objection to putting a minimum on this, if the committee felt that this was desirable to eliminate someone who owned a half of 1 percent interest, as you might do in a large shipping corporation. Mr. FISCHER. I think that you could take 25 percent interest in the total value of the ship, or something of that nature, and solve the problem. Mr. PETERSON. We would recommend a slightly lower figure, something around 10 percent or 15 percent. Because generally for larger vessels on the west coast there are usually 15 to 18 owners, but all of them are equally liable for the operation of the vessel. The CHAIRMAN. Twenty-five percent on a large vessel would be quite an amount of money. It may not be so much on a fishing vessel. Mr. FISCHER. Twenty-five percent on a fishing vessel and 1 percent on the larger vessel might strike a happy medium. Mr. PELLY. Twenty-five percent on a modern trawler, which being subsidized by the Federal Government, would be 25 percent of half a million dollars. Or, in the case of recent trawlers, it would run 25 percent of $5 million. I think it is an important point which should be studied by the staff. Mr. GROVER. Mr. Chairman. The CHAIRMAN. Yes. Mr. GROVER. May I direct a question to the gentleman from Interior? Where is the area of possible collusion here that you are aiming at? Mr. PETERSON. It is not only collusion. It is merely bookkeeping in many cases. That is, many of the owner-captains don't bother to take a master's share out of the vessel's earnings during the year, because they draw money as they need it and take it out of profit and draw a smaller wage. But at any time they might say, "I have not collected my master's share," which is usually as well-recognized amount and might not have been collected for 4 years and take $20,000 out from a sale in which they actually may have taken this money out in another form, in the form of profits. Mr. GROVER. Then, in effect, you call it bookkeeping, but it is somewhat collusive? Mr. PETERSON. It was not done with the intent of being collusive. At the time they are taking it out, this is the way a lot of owners do. Mr. GROVER. It is collusion after the fact? Mr. PETERSON. After the fact they decide that "We didn't collect any salary." Mr. GROVER. It is convenient bookkeeping. Mr. PETERSON. Yes, sir. The CHAIRMAN. Are there any other questions? Thank you very much. We also have Capt. Clinton J. Maguire, Legal Division, and Capt. Andrew Grogard, Chief, Merchant Vessel Personnel, U.S. Coast Guard. Do you have any comments to make here? STATEMENT OF CAPT. CLINTON J. MAGUIRE, LEGAL DIVISION, AND CAPTAIN ANDREW GROGARD, CHIEF, MERCHANT VESSEL PERSONNEL, U.S. COAST GUARD Captain GROGARD. Captain Maguire, from the Legal Office of the Coast Guard, is here and prepared to answer any questions that you have. Captain MAGUIRE. Mr. Chairman, I am Captain Maguire, from the Office of the Chief Counsel of the Coast Guard. The CHAIRMAN. Do you have a statement or just a letter that you have reference to? Captain MAGUIRE. We have no prepared statement. We do understand that the Secretary of Transportation did deliver a report to you this morning. Mr. BYRNE. Who? Captain MAGUIRE. The Secretary of Transportation. The CHAIRMAN. You may proceed, Captain. Captain MAGUIRE. I am sorry for the confusion. We had been assured that it had been delivered to you. The Department's position is that the question of seamen's liens, and particularly of masters' wages, is not within the cognizance of the Coast Guard and therefore we merely say that the Department perceives no objection to the bill. The CHAIRMAN. The Department has no objection? Captain MAGUIRE. No, sir. However, it has been suggested that a change in format be made. The bill in its present form provides three sections which would enter the Statutes at Large. One section amends a section of the Seamen's Act of 1915, and there is a reference to the fact that two sections of the Revised Statutes would not apply in the case of a master's lien. What we propose very simply is to take the substantive portion of the bill and insert it into the Revised Statutes as Revised Statute 4547-A, inserting it in position just after the two sections of the Revised Statutes. The CHAIRMAN. May I interrupt you for a second? Mr. Fisher, do you have a copy of this? You may proceed. Captain MAGUIRE. This suggestion is made merely for convenience of editors, and so on. When the Code editors get hold of this it would indicate to them very precisely where to put it into the Code; that is, immediately after the present 4547. There is one other point which I would like to make. This is not speaking for the Department or for the Coast Guard, but since I have the opportunity to appear here before you I would like to mention it. For some time past I have been engaged in work which has involved a great deal of study of the seaman's statutes, and I notice that you have addressed yourselves to section 12 of the act of March 4, 1915, and by your amendment to that act you would extend to masters of ships the same freedom from attachment of wages that you have already given to seamen. And I surmise that you are approaching this question because of the Supreme Court decision of some years back which said that so far as the attachment of wages was concerned a master was not a seaman and his wages could be attached. I would like to submit for your consideration another question directly involved with that same Supreme Court decision and with this same section of the statute, and that is that the courts have for many years had a problem as to whether the protection of a seaman's wages applied only in the foreign and intercoastal trade, or did it apply as well to the coastwise seamen, and the courts have been divided on this. I believe, from my study of it, that the original intent of the Congress was to provide the same protection to all seamen. And I note that when you amended this same section a couple of years back to protect seamen from withholding taxes by the States that you very carefully spelled out foreign trade, intercoastal trade, coastwise trade noncontiguous, and simply as a personal suggestion I am thinking that while you are attacking this section that you might consider spelling out whether it does or does not also apply to seamen in the coastwise trade. One other minor point. When this section 12 was enacted in 1915, it actually was a substitute for a repealed section of the Revised Statutes and the words "this title" were placed in the reenactment. The words "this title" came from the original and had originally referred to title 53 of the Revised Statutes. In the act, as reenacted in the act of 1915, the words "this title" have no meaning. The Code editors have noted that in their notes in the text of the Code, and I would suggest that since you are working on it at this time that the words "this title" could be changed to something like "any laws of the United States." That is all I have to say on the matter. Captain Grogard might be able to give you some information on instances of ship bankruptcy. Mrs. SULLIVAN. Mr. Chairman, May I ask the captain a question? Captain, have you suggested any wording in order to make these corrections that you just talked about? Captain MAGUIRE. No, I have not, because the Department didn't see fit to get into that. The Department has submitted a proposed format for the bill, and that is as far as they have gone. However, I would be very happy, if you wish, to spell out what I would like to see in there and submit a copy personally. Mrs. SULLIVAN. I think that would be very helpful for him to do that, Mr. Chairman, if it would meet with your approval. I think it would be helpful for him to submit the suggested wording for the suggested changes, so that as we are considering the rest of this bill, we can make these proper amendments. Mr. PELLY. Mr. Chairman, I want to associate myself with that suggestion of Mrs. Sullivan. I urge that we accept the offer of the witness to give us some language. Then, we can have the staff look it over. I also think that the other witnesses that are here today might well review it. It is for the benefit of the American seamen and we certainly should give it every consideration. Adopting these suggestions in this particular bill would not in any way, so far as I can tell, do violence to any of its objectives. The CHAIRMAN. Could you do that for us, Captain? Captain MAGUIRE. Yes, sir; I would be very happy to do it, Mr. Chairman. The CHAIRMAN. How soon? Captain MAGUIRE. Would 48 hours be too much? The CHAIRMAN. Mr. Schadeberg? Mr. SCHADEBERG. I have no questions. The CHAIRMAN. Mr. Roth? Mr. ROTH. I have no questions. The CHAIRMAN. Mr. Rogers? Mrs. SULLIVAN. I have no questions. The CHAIRMAN. Counsel? Mr. DREWRY. Captain Maguire's assistance would just be drafting assistance to us, and not a matter requiring any clearance or change in the official Department position? Captain MAGUIRE. No; it would not. The CHAIRMAN. Captain, do you have a statement to make? Captain GROGARD. I might add, sir, that the Coast Guard does become involved in a limited extent in cases where a vessel does go bankrupt inasmuch as the shipping commissioners and in foreign ports the American consul is responsible for determining that the crew had received their wages upon discharge. And while I do not have a complete list of the vessels that have gone bankrupt, I would estimate that we have had approximately 25 cases within the past 8 or 10 years. And with respect to the shipping articles, the crewmembers are covered by a wage contract which is included in the articles, and the master is not, and in general, he does not have a contract. While he signs the contract with the crew on behalf of the owner, he is not himself covered. That is all I have to say, unless you have some questions. Mr. PELLY. Mr. Chairman, could the captain submit for the record the list of those 25 cases he referred to? Captain, do you have them in your files? Captain GROGARD. Yes; I can prepare a list. Mr. PELLY. I think it would be well to have them available. The CHAIRMAN. Very well. (The list requested to be furnished follows:) Hon. EDWARD A. GARMATZ, U.S. COAST GUARD, DEPARTMENT OF TRANSPORTATION, Washington, D.C., April 19, 1967. Chairman, Committee on Merchant Marine and Fisheries, House of Representatives, Washington, D.C. DEAR MR. CHAIRMAN: Pursuant to your request at the hearing on H.R. 162 on Thursday, 13 April 1967, the attached listing of ships involved in non-payment or delayed payment of wages is forwarded. It should be noted that the Merchant Vessel Personnel Division of the U.S. Coast Guard does not maintain statistical records concerning vessels which are involved in bankruptcy proceedings; however, reports made incident to payment of seamen's wages indicate about 50 large seagoing vessels were involved in bank |