604) shall not apply in proceedings brought by masters for the enforcement of wage liens. Finally, section 2 provides that the term "master" will not include persons having a financial interest of 5 percent or more either of the corporation, partnership, or association which owns a vessel against which a lien is claimed, or of the market value of the vessel. The bill is substantially similar to some of the provisions which were contained in H.R. 162, a bill vetoed by the President on December 8, 1967. It does not, however, contain that provision of H.R. 162 which the President found objectionable. Whether H.R. 14401 should be enacted in its present text involves considerations as to which the Department of Justice makes no recommendation. The Bureau of the Budget has advised that there is no objection. to the submission of this report from the standpoint of the administration's program. Sincerely, WARREN CHRISTOPHER, Deputy Attorney General. U.S. DEPARTMENT OF THE INTERIOR, Hon. EDWARD A. GARMATZ, Chairman, Committee on Merchant Marine and Fisheries, DEAR MR. GARMATZ: Your committee has requested this Department's views on H.R. 14401, a bill to grant the masters of certain U.S. vessels a lien on those vessels for their wages. We do not object to the enactment of this bill. The bill gives the master of a documented vessel, including a vessel documented to engage in the fisheries of the United States, the same lien and priority for wages against the vessel that any other seaman serving on such vessel has under existing statutes (see 46 U.S.C. 600 and 601). The bill defines the master to include anyone having command of the vessel against which a lien is claimed, except those who have a financial interest valued at 5 percent or more either in the organization owning the vessel or of the market value of the vessel. The purpose of the bill is to enable the master to collect his wages even if the vessel is libeled for nonpayment of maritime liens or preferred mortgages. The definition is similar to the one recommended by this Department to your committee last year in connection with H.R. 162. It protects the Department, which is the mortgagee of many commercial fishing vessels under our loan program. In most cases, the owner or part owner of a commercial fishing vessel is also the master. With this definition, the master who is the owner or part owner of a commercial fishing vessel in which this Department holds a mortgage will not have a preferred position against the Department to collect his wages or disbursements or liabilities from the proceeds of a marshal's sale because his interest in the vessel will be greater than 5 percent. With this definition, we have no objection to the bill. H.R. 1092 The Bureau of the Budget has advised that there is no objection to the presentation of this report from the standpoint of the administration's program. Sincerely yours, STANLEY A. CAIN, CHANGES IN EXISTING LAW In compliance with clause 3 of rule XIII of the Rules of the House of Representatives, as amended, changes in existing law made by the bill, as reported, are shown as follows (existing law proposed to be omitted is enclosed in black brackets, new matter is printed in italic, existing law in which no change is proposed is shown in roman): Section 4535 of the Revised Statutes of the United States No [seaman] master or seaman shall, by any agreement other than is provided by title 53 of the Revised Statutes, forfeit his lien upon the ship, or be deprived of any remedy for the recovery of his wages to which he would otherwise have been entitled; and every stipulation in any agreement inconsistent with any provision of title 53 of the Revised Statutes, and every stipulation by which any [seaman] master or seaman consents to abandon his right to his wages in the case of the loss of the ship, or to abandon any right which he may have or obtain in the nature of salvage, shall be wholly inoperative. Section 12 of the Act of March 4, 1915, as amended (38 Stat. 1164; 46 U.S.C. 601) No wages due or accruing to any [seaman or apprentice] master. seaman, or apprentice shall be subject to attachment or arrestment from any court, and every payment of wages to a [seaman or apprentice] master, seaman, or apprentice shall be valid in law, notwithstanding any previous sale or assignment of wages or of any attachment, encumbrance, or arrestment thereon; and no assignment or sale of wages or of salvage made prior to the accruing thereof shall bind the party making the same, except such allotments as are authorized by this title. This section shall apply to fishermen employed on fishing vessels as well as to seamen: Provided, That nothing contained in this or any preceding section shall interfere with the order by any court regarding the payment by [any seaman] any master or seaman of any part of his wages for the support and maintenance of his wife and minor children: And provided further, That no part of the wages due or accruing to a master, officer, or any other seaman who is a member of the crew on a vessel engaged in the foreign, coastwise, intercoastal, interstate, or noncontiguous trade shall be withheld pursuant to the provisions of the tax laws of any State, Territory, possession, or Commonwealth, or a subdivision of any of them. H.R. 1092 FEBRUARY 9, 1968.-Committed to the Committee of the Whole House on the State of the Union and ordered to be printed Mr. PATMAN, from the Committee on Banking and Currency, submitted the following REPORT together with MINORITY, SUPPLEMENTAL, AND SEPARATE VIEWS [To accompany H.R. 14743] The Committee on Banking and Currency, to whom was referred the bill (H.R. 14743) to eliminate the reserve requirements for Federal Reserve notes and for U.S. notes and Treasury notes of 1890, having considered the same, report favorably thereon with an amendment and recommend that the bill as amended do pass. The amendment is as follows (page and line numbers refer to the bill as introduced): Page 3, strike line 20 and insert: Stat. 289; 31 U.S.C. 408), and section 2 of the Act of Background of the Legislation H.R. 14743 would eliminate the present requirement that each Federal Reserve bank maintain reserves in gold certificates of not less than 25 percent against its Federal Reserve notes in actual circulation. In addition, the bill would also eliminate the $156 million gold reserve for U.S. notes and Treasury notes of 1890. Removal of this gold cover is recommended in order to make it clear that the United States intends to continue its international financial commitments. The purpose of this policy is to provide liquidity for the maintenance and growth of international trade and to maintain this Nation's proper role therein. While our total gold reserves at yearend 1967 stood at slightly more than $12.1 billion, $10.7 billion of this is, under 85-081 O present law, frozen as reserves against outstanding Federal Reserve notes, U.S. notes and Treasury notes of 1890 in the total amount of $42.7 billion at yearend 1967. Enactment of this legislation would merely make these reserves available to support our position in international trade and finance, and would have absolutely no effect upon our domestic monetary system or the soundness of the dollar. The United States abandoned the domestic gold standard by official actions taken in 1933 and 1934. With the act of May 12, 1933, the Congress, in expressly exercising its power and responsibility conferred by section 8 of article I of the Constitution "to coin money and regulate the value thereof," authorized the President by proclamation to fix the weight of the gold dollar (48 Stat. 51). (This Presidential authority expired in 1943, and today only the Congress may change the weight of the gold dollar, i.e., the par value of the dollar.) By joint resolution approved June 5, 1933, the Congress invalidated all contractual obligations providing for payment in gold as contrary to public policy and provided that all coin and currency be legal tender for public and private debts (48 Stat. 112). The Gold Reserve Act of 1934 vested title in the Government to all privately held gold and provided that no currency of the United States would be redeemed in gold (48 Stat. 340). While these actions effectively removed the domestic monetary system's direct link with gold, the Gold Reserve Act nevertheless left undisturbed the provisions in the Federal Reserve Act of 1913 for a 35-percent gold certificate reserve against Federal Reserve bank reserves and deposits, and a 40-percent reserve against Federal Reserve notes in actual circulation. On January 31, 1934, the President exercised the authority granted by Congress and changed by proclamation the gold parity of the dollar from $20.67 per ounce to $35 per ounce of gold (1934 Proclamation No. 2072, 48 Stat. 1730). In 1944, the Bretton Woods Agreements Act was enacted which provided for U.S. membership in the International Monetary Fund and in the International Bank for Reconstruction and Development (59 Stat. 512). This country thereupon communicated to the Fund a par value of $35 per ounce of gold with respect to the provision that the par value of each member's currency be expressed in terms of gold as a common denominator or in terms of the U.S. gold dollar. The act further provides that the par value of the dollar thus communicated to the IMF cannot be changed without congressional authorization. Thereafter, the dollar has functioned as the world's primary reserve currency and, along with gold, has furnished the necessary liquidity to finance a flourishing trade among the United States and her trading partners. By the act of June 12, 1945, the reserve requirements against both Federal Reserve deposits and notes were reduced to 25 percent (59 Stat. 237). On March 3, 1965, the gold certificate reserve against Federal Reserve deposits was eliminated entirely (79 Stat. 5); and as a result of continuing, substantial payments deficits, enactment of H.R. 14743 is recommended to eliminate the remaining gold reserve against our currency so that additional gold may be made available if and when needed to meet our international commitments. Need for the Legislation As President Johnson recently stated in his state of the Union message: "We have assured the world that America's full gold stock stands behind our commitment to maintain the price of gold at $35 per ounce. We must back this commitment by legislating now to free our gold reserves." In the Economic Report of the President, submitted to the Congress on February 1, President Johnson further stated: The interests of major nations are also linked together in he international monetary system. For us, there is a special esponsibility, since the dollar is a world currency— widely used by businesses abroad, held along with gold as a reserve asset by foreign central Our deficits in the past decade have sent more dollars Speculation generated by the strains on the international monetary system has caused further drains of gold from international reserves much of it from our own. As a result, U.S. gold reserves have declined to about $12 billion. This is still ample to cope with foreseeable demands on our gold stock. But persistent large U.S. deficits would threaten the entire international monetary system. Our commitment to maintain dollar convertibility into gold at $35 an ounce is firm and clear. We will not be a party to raising its price. The dollar will continue to be kept as good as or better than gold. I am therefore asking the Congress to take prompt action The gold reserve requirement against Federal Reserve • The reserve requirement does make some foreigners I ask speedy action from the Congress because it will In their testimony before your committee, the Secretary of the Treasury and the Chairman of the Federal Reserve Board pointed out that we can expect increases in Federal Reserve notes in circulation of about $2 billion a year. This means that an additional $500 million must be added annually to the gold certificate reserves. In addition, industrial consumption of gold is expected to equal or exceed last year's consumption of the equivalent of $160 million. Therefore, more |