the services of these institutions in redeeming bonds are available to the general public at some 30,000 locations, including branch offices.

The Department of the Treasury began the issuance of saving notes, popularly referred to as "Freedom Shares" on May 1, 1967. The notes are payable 1 year after the date of issue at the option of the owner so that the first notes will become redeemable on May 1, 1968. These savings notes may be purchased only by purchasers of savings bonds and then only under certain limited conditions directly related to the purchase of such bonds.

Your committee is advised that savings notes are generally sold through the same issuing agencies as savings bonds and believes it desirable, both from the standpoint of convenience to the public and economy to the Government, that the notes be redeemable through the same outlets as savings bonds. Hence, the first section of H.R. 15114 would authorize the Secretary of the Treasury to use the same financial institutions to make payments in connection with redemption of savings notes as are presently used to make payments on savings bonds under section 22(h) of the Second Liberty Bond Act, as amended, (31 U.S.C. 757c(h)).

Your committee also believes it only equitable to accord such paying agents the same relief from liability for losses in the handling of savings notes as is provided under existing law with respect to savings bonds. At the present time, section 22(i) of the Second Liberty Bond Act, as amended (31 U.S.C. 757c(i)), authorizes the relief of paying agents for savings bonds from liability to the United States in cases in which it can be established that such losses resulted from no fault or negligence on the part of the paying agent. Section 2 of the bill, H.R. 15114, therefore, would extend the same relief to these paying agents in their services with respect to savings notes.

In view of the above considerations, your committee unanimously recommends prompt enactment of H.R. 15114.

CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

In compliance with clause 3 of rule XIII of the Rules of the House of Representatives, changes in existing law made by the bill as reported, are shown as follows (new matter is printed in italic, existing law in which no change is proposed is shown in roman):

SECOND LIBERTY BOND ACT, AS AMENDED

(h) The Secretary of the Treasury, under such regulations as he may prescribe, may authorize or permit payments in connection with the redemption of savings bonds and savings notes to be made by commercial banks, trust companies, savings banks, savings and loan associations, building and loan associations (including cooperative banks), credit unions, cash depositories, industrial banks, and similar financial institutions. No bank or other financial institution shall act as a paying agent until duly qualified as such under the regulations prescribed by the Secretary, nor unless (1) it is incorporated under

H.R. 112S

Federal law or under the laws of a State, Territory, possession, the District of Columbia, or the Commonwealth of the Philippine Islands; (2) in the usual course of business it accepts, subject to withdrawal, funds for deposit or the purchase of shares; (3) it is under the supervision of the banking department or equivalent authority of the jurisdiction in which it is incorporated; and (4) it maintains a regular office for the transaction of its business.

(i) Any losses resulting from payments made in connection with the redemption of savings bonds and savings notes shall be replaced out of the fund established by the Government Losses in Shipment Act, as amended, under such regulations as may be prescribed by the Secretary of the Treasury. The Treasurer of the United States, any Federal Reserve bank, or any qualified paying agent authorized or permitted to make payments in connection with the redemption of such bonds and notes, shall be relieved from liability to the United States for such losses, upon a determination by the Secretary of the Treasury that such losses resulted from no fault or negligence on the part of the Treasurer, the Federal Reserve bank, or the qualified paying agent. The Post Office Department or the Postal Service shall be relieved from such liability upon a joint determination by the Postmaster General and the Secretary of the Treasury that such losses resulted from no fault or negligence on the part of the Post Office Department or the Postal Service. Relief from liability shall be granted in all cases where the Secretary of the Treasury shall determine, under regulations prescribed by him, that written notice of liability or potential liability has not been given by the United States, within ten years from the date of the erroneous payment, to any of the foregoing agents or agencies whose liability is to be determined: Provided, That no relief shall be granted in any case in which a qualified paying agent has assumed unconditional liability to the United States. The provisions of section 3 of the Government Losses in Shipment Act, as amended, with respect to the finality of decisions by the Secretary of the Treasury shall apply to the determinations made pursuant to this subsection. All recoveries and repayments on account of such losses, as to which replacement shall have been made out of the fund, shall be credited to it and shall be available for the purposes thereof. The Secretary of the Treasury shall include in his annual report to the Congress a statement of all payments made from the fund pursuant to this subsection.

H.R. 112S

90TH CONGRESS HOUSE OF REPRESENTATIVES 2d Session

REPORT

{ No. 1129

AMENDING THE IMMIGRATION AND NATIONALITY ACT TO PROVIDE FOR THE NATURALIZATION OF PERSONS WHO HAVE SERVED IN COMBATANT AREAS IN ACTIVE-DUTY SERVICE IN THE ARMED FORCES OF THE UNITED STATES, AND FOR OTHER PURPOSES

FEBRUARY 28, 1968.-Committed to the Committee of the Whole House on the State of the Union and ordered to be printed

Mr. FEIGHAN, from the Committee on the Judiciary, submitted the following

REPORT

[To accompany H. R. 15147]

The Committee on the Judiciary, to whom was referred the bill (H.R. 15147) to amend the Immigration and Nationality Act to provide for the naturalization of persons who have served in combatant areas in active-duty service in the Armed Forces of the United States, and for other purposes, having considered the same, report favorably thereon without amendment and recommend that the bill do pass.

PURPOSE OF THE BILL

The purpose of the bill is to provide for expeditious naturalization of aliens who have served in an active-duty status in the Armed Forces of the United States in an area designated by the President as an area involving armed conflict with foreign hostile forces.

LEGISLATIVE HISTORY

Legislation providing for the expeditious naturalization of noncitizens who have rendered honorable service in the Armed Forces of the United States covers a span of more than 100 years of American history. The rewards embodied in these enactments consistently have been in the form of relief from compliance with some of the general requirements for naturalization applicable to civilians. Exemptions granted wartime servicemen and veterans have been more liberal than those given for services rendered during peacetime.

With the passage of the Nationality Act of 1940, effective January 13, 1941, and continuing to the present, our naturalization laws

have conferred special benefits upon aliens in the Armed Forces of the United States. The Nationality Act of 1940, as originally enacted, made no distinction between peacetime and wartime service for naturalization purposes. Honorable military service at any time for an aggregate period of 3 years was substituted for the required. United States and State residence, and no admission for permanent residence, declaration of intention, certificate of arrival, residence within the jurisdiction of the court, or waiting period was necessary for naturalization. The involvement of the United States in World War II led to the passage of the Second War Powers Act of 1942 which added to the Nationality Act of 1940 provisions for the expeditious naturalization of military personnel engaged in that war. Practically all of the general naturalization requirements were waived and residence in the United States, its territories or possessions, after a lawful admission, not necessarily for permanent residence, qualified the serviceman for naturalization. This prerequisite was later eliminated in the cases of servicemen who served beyond the continental limits of the United States. More than 143,000 members of the U.S. Armed Forces were granted naturalization under this legislation which expired on December 31, 1946.

In 1942 temporary legislation relaxing some of the naturalization requirements was passed for veterans who had served during certain periods of the Spanish-American War, World War I, and on the Mexican border. In 1948 permanent legislation was included in the Nationality Act of 1940 in recognition of the service performed during World War I and World War II. This legislation permitted waiver of the requirement of an admission for permanent residence when induction or enlistment occurred in the United States. It also granted exemption from the United States and State residence, physical presence, residence within the jurisdiction of the naturalization court and any waiting period for naturalization. Relief from some of the general requirements has not, however, included exemption from the establishment of good moral character, attachment to the principles of the Constitution, and favorable disposition to the good order and happiness of the United States.

The policies reflected in these earlier enactments have been continued in the Immigration and Nationality Act. In that act a distinction has been drawn between naturalization benefits accorded wartime veterans and benefits available to those who served during times of peace. However, the provisions of the Immigration and Nationality Act, relating to service during wartime, were not broad enough to include the Korean hostilities. Temporary legislation to meet this need was passed in 1953 covering the period between June 25, 1950, to July 1, 1955, and granting exemptions similar to those available to World War I and World War II veterans. Eligibility in this enactment was conditioned upon service of no less than 90 days. Admission for permanent residence was also required; otherwise, physical presence in the United States for one year following a lawful admission had to be established. In 1961 Korean veterans were extended benefits identical with those of veterans of World War I and World War II under the Immigration and Nationality Act and the requirement of service for 90 days and the physical presence of 1 year were eliminated. A total of 31,000 alien members of the U.S. Armed Forces were granted naturalization under the special legislation.