Mr. LANE. You were interrupted in your statement by some of the questions so you can follow along from there.

Mr. LIFTIN. I believe the questions have actually directed attention to most of the material that I wanted to cover.

One other thing might be of some possible interest, and that is that despite the fact there had been isolated explosions involving ammonium nitrate, it was the universal view that some special factor contributed in each case to that explosion and that in normal transportation, in anything that you could anticipate with respect to transportation by rail or water, there would be no hazard beyond the normal fire hazard of an oxidizing material.

This was the universal view of scientists at the time and of the overwhelming scientific reports-ammonium nitrate and ammonium nitrate fertilizer presented no special hazards for transportation.

There had been experience of many tremendous fires of the material where the fires just burned out. Ships loaded with them in harbors just burned out without any explosion.

I think even at Texas City there were fires in much of the ammonium nitrate on the shore which just burned out without anything happening.

This experience had led to the conclusion of scientists that under ordinary conditions of transportation no unusual hazard could be expected and in these circumstances I do not believe the Government had any information that the other people didn't have and had no greater duty than to make sure it knew everything that was known, which it did, and this didn't put it on any particular notice.

I think that view is corroborated by the statement I referred to before, and goes to the essence of the whole case. This is the majority opinion of the Supreme Court that the "Entirety of the evidence compels the view that FGAN was a material that former experience showed could be handled safely in the manner it was handled here."

If that is so, and without Government employees being charged with insight or foresight with which no one else would be charged, it seems impossible to find negligence in the Government's conduct in taking over, so to speak, industry practice and specifications in having this material manufactured and in shipping it in accordance with industry practice and experience of many years.

Mr. HYDE. If negligence were found here or if negligence had been established, would then the Department have objections to payment of subrogated claims as such?

Mr. LIFTIN. I believe the Department would because even then it would be paying insurance companies for losses which it had suffered while it permits many individuals suffering comparable losses to remain uncompensated.

Mr. HYDE. Doesn't the Department pay subrogated claims administratively under $1,000 under the Tort Claims Act?

Mr. LIFTIN. The Department is not opposed to the principle of subrogation. Where a party is entitled to subrogation as a matter of law, the Department, of course, recognizes and pays them and will not make any defense in a lawsuit.

But the legal rights of the parties have been determined by the Supreme Court. There is no legal right to recover at all from the United States as the result of this disaster.

Mr. HYDE. The point I made is assuming there was negligenceMr. LIFTIN. Even if there was negligence, there is no legal right. Mr. HYDE. Under the Tort Claims Act?

Mr. LIFTIN. That is right.

Mr. HYDE. Let us get that cleared up. Assuming there was negligence and a legal right under the Tort Claims Act, the Department would have no objection to subrogating claims as such?

Mr. LIFTIN. That is correct. But our position is that here the legal rights have been determined, so at the present time we are not considering those legal rights. We are considering something else. In connection with that something elseMr. HYDE. That is the point I make. As a claims committee we consider this case on a much broader scale than on the basis of the narrow legal rights involved.

Mr. LIFTIN. Yes. I want to indicate what I think the Department's views are with respect to that, and that is this:

If this claims committee makes an award to the insurance company because there was negligence here, even though there is no legal liability, then it is treating these insurance companies differently from the way thousands of citizens of the United States are treated when they are injured by negligent conduct of the United States which comes within the scope of the discretionary function exemption.

Mr. HYDE. Those are the cases which get into the claim bills.

Mr. LIFTIN. For the most part the Congress made this specific exemption in the Tort Claims Act. Perhaps some come here but I am fairly confident most of the cases are lost in the courts and that is the end of it.

Mr. HYDE. They don't come here just because there is something informal about this business.

Mr. LIFTIN. One of the purposes of the Tort Claims Act I understood was to reduce if not eliminate the number of people who would come here.

Mr. HYDE. That is right. That is why I think that act has been too narrowly construed by the courts and perhaps need amendment. Mr. LIFTIN. If that is so our position would be this, and it was also expressed by the Department of the Army-there should be a general revision of the Tort Claims Act applicable to everybody rather than a revision which would give insurance companies over $40 million riding on the backs of widows and orphans, and which would leave most other people uncompensated.

Mr. HYDE. I don't think amount has anything to do with the moral obligation. Either a large amount or the smallness of it, one way or the other.

I think we have to decide the moral obligation or the obligation, whatever its form, of the Government. After we decide that then we go into the question of the amounts.

Mr. LANE. Mr. Liftin, in the report of the Attorney General last year to this committee, they used these words:

No legal or equitable basis can be found to support the position that the Government is responsible, or should assume responsibility for the explosion at Texas City.

Mr. LIFTIN. Yes.

Mr. LANE. In other words, you said that; and that the Department would not take a position one way or another, but that there was no legal or equitable basis.

Mr. LIFTIN. Yes.

Mr. LANE. In the statement that you have offered here today you say that the Department of Justice has no objection to the enactment of a relief bill.

Mr. LIFTIN. Yes.

Mr. LANE. For the benefit of the victims of the disaster, on the measures considered by the Congress, and getting the Department's views, that would provide for a relief bill, without assuming that the Government was negligent in the event of death.

Now, has not the Department's opinion differed a little bit this morning from what it was a year ago?

Mr. LIFTIN. I do not think it does. I think it means

Mr. LANE. The last time you told us there was no equitable basis for relief.

Mr. LIFTIN. We do not feel that there is any equitable basis, but at the same time, I think it should be said, as was said before the Senate committee, that we would not oppose a bill that provided for the maimed people and crippled people and individuals who suffered property damage, although we do not believe they have any equitable or legal right against the Government to this, but if the Congress

Mr. LANE. Wants to grant a gratuity

Mr. LIFTIN. Wants to make a gratuity, we would not object to giving a gratuity to the individuals who suffered such great losses down there.

Mr. BRICKFIELD. But on that point, suppose a man was damaged to the extent of $10,000 and the Government gave that man $10,000 and he had already collected $4,000 from the insurance company. Now, the insurance company is precluded from claiming or receiving back what it has paid claimant and we are giving the individual $10,000, so he would recover, counting the $4,000 from the insurance company, almost half again his actual damages.

Mr. LIFTIN. The Senate passed a bill last year which, while not being precisely what we have recommended here, is one we had no objection to, and they handled that problem by providing that they could not recover for any part of the loss that had been covered by insurance, for which there had already been a reimbursement. Mr. LANE. I remember that, too.

Mr. BRICKFIELD. If the Government feels that it is morally responsible in this instance, and it pays the full amount of the damage sustained by the individual, what difference does it make, if any, to the executive department whether that individual is compensated or repaid in the amount that the insurance company had given in the first instance?

Mr. LIFTIN. Well, we start off with a different premise; we start with the premise that the Government would not be satisfying any legal, moral, or equitable obligation; it would be merely giving to the person who has suffered a great disaster, a payment; and that should be a gift only to those who the Government thinks are appropriate beneficiaries, and that is, the individual who has sustained and suf

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fered a loss, but not from the standpoint that the individual might properly be entitled to it. But where the insurance companies have collected premiums, certainly they should not be the object of Government bounty.

Mr. LANE. Have you finished your statement?

Mr. LIFTIN. Yes, Mr. Chairman.

any

I would be happy to answer any further questions or to respond to other matters that may be brought up. I have attempted to reply to any charges of negligence that may have been made in the court, or that may have been made here. I do not recall any that have not been covered. If so, I will be glad to deal with them in a statement that will be submitted.

Mr. LANE. Attorney Liftin, do you mind returning later in the afternoon, say at 2 o'clock? Some of the committee members were called away and they may have a few questions to ask at that time. Mr. LIFTIN. I would be very happy to come back.

Mr. LANE. Will you tell me, also, before we suspend the hearings for the morning, is there any of these bills that have been presented, whether from the other side, the Senate side, or this side, that the Department has favored?

Mr. LIFTIN. Well, the bill that passed the Senate last year, the last term, is one that we had no opposition to, and we have recommended

Mr. LANE. Briefly, what did it provide?

Mr. LIFTIN. It provided for

Mr. LANE. I wanted to get this into the record.

Mr. LIFTIN. That provided for payment of claims to individuals, and just to individuals, for personal injuries, death and property damage, with a limitation, an upper limit on the amount that could be awarded-I do not have the precise figures

Mr. LANE. Under which a Commission would be set up?

Mr. LIFTIN. No; that did not provide for a Commission; but it provided that the Department of the Army would determine the amount of the claims and then report them back to the Congress.

Mr. LANE. That is very true. The Secretary of the Army should investigate all claims.

Mr. LIFTIN. Yes.

Mr. LANE. Resulting from loss, death, and certain property injuries, resulting from the disaster. Am I to understand now that there was some opposition to that because, after all, the Army has never felt that they were responsible at any time for the Texas City disaster?

Mr. LIFTIN. The reference of the matter to the Army, and the provisions for reporting back to the Congress, would not affect our views of the bill. Of course, if reference were made to some other Commission, we would have no objection, and if that Commission were permitted to make awards on what it found, we would have no objection. We believe, however, that there are some undesirable features in the Commission which are contemplated by the bill now under consideration.

Mr. LANE. Is that the bill, H. R. 8572?

Mr. LIFTIN. Yes. For one thing, it appears to contemplate a parttime commission which we think would be both expensive and would

unduly extend the determination of this matter. And then it would relieve them from all of the usual safeguards with respect to the obligations and restriction upon Government employees; and we think that that is undesirable. But we think that a separate commission, whether within the executive branch or any agency at all, not necessarily the Army, with members and employees performing their duties on the same basis as other employees of the Government, on a full-time basis, would be the appropriate way of having claims reviewed and adjudicated.

Mr. BRICKFIELD. How about placing jurisdiction in the district court?

Mr. LIFTIN. Our feeling is that that would be

Mr. LANE. Do you think it would be fair to give jurisdiction to the district court down in Texas to litigate this Texas City disaster, with all of the claims, with all the lawyers, coming from down in that section?

Mr. LIFTIN. I am not sure that that would be in the best interests of the Government. To protect the Government's interest

Mr. LANE. It would not protect the interests of the taxpayers in every other section of the country?

Mr. LIFTIN. I do not think so; I agree with that. It is quite obvious that the judges would not hear these matters.

Mr. LANE. In other words, they would use another lawyer to act as a master, in the same association, in the same State and everything. Mr. LIFTIN. So that they would have to have these cases parceled out to any number of private attorneys, acting as special masters, perhaps, and I think it would be more expensive, because they would be entitled to substantial fees for the time they spent, in addition to the awards that were being made, and you would have this all being done by a group

Mr. LANE. And with all due respect to all the matters that might be involved in the situation, it would not look good, from the standpoint of the rest of the country.

Mr. LIFTIN. We believe that it would not be the desirable solution to the problem.

Mr. LANE. Well, if you will be good enough to return at 2 o'clock, we will appreciate it very much.

Mr. LIFTIN. Yes.

Mr. LANE. Thank you very much.

Mr. LIFTIN. I will be happy to return, and I want to thank you for your patience in listening to me.

AFTERNOON SESSION

(The hearing was resumed at 2 p. m. of the same day.)

Mr. LANE. The subcommittee will come to order.

Mr. Liftin, I am waiting Congressman Forrester's return, and 1 more of the members who might like to ask you questions. I have another attorney, Mr. Leachman. He would like to speak for a few minutes.

Mr. LIFTIN. Yes, sir.

Mr. LANE. It is a pleasure to have Mr. Leachman, one of the attorneys from Dallas, Tex., who represents some of the claimants in this Texas suit.