So as long as 30 years ago in connection with the use of ammonium nitrate comparable coatings had been made and were never thought in industry to impart any particularly dangerous quality to the fertilizer.

There are letters in the record where inquiries were made about the coating by TVA at the time it started making this as fertilizer which indicate that that presents no problems other than the problems inherent in connection with the ammonium nitrate.

Mr. LANE. Were they using this as coating prior to this explosion in 1947, referring to the United States Government?

Mr. LIFTIN. Yes. The United States Government started attempting to develop a fertilizer in 1943, that is TVA was working on developing a fertilizer, and it was then that they used this coating.

The precise coating involved here had been used by the Hercules Powder Co. for fertilizer at least 9 months before the Government used it, that is TVA used it, and TVA in effect borrowed the experience of Hercules, made its own checks and independent studies of the literature, and then adopted this coating.

In 1946, when Ordnance was told to reactivate Ordnance plants so they could start producing ammonium nitrate fertilizer, what they did was to just call upon the experience of industry and TVA and manufacture the same product.

The fact is that the specifications for the material, packaging and coating, are identical with that used generally in private industry. This was no special product of the Government.

The only novelty with respect to the coating was its use for fertilizer in 1943, but coated ammonium nitrate had been in use for 30 years. Mr. LANE. You started in 1943?

Mr. LIFTIN. As fertilizer, but pretty much the same commodity had been used for 30 years.

Mr. LANE. I follow you.

Mr. LIFTIN. As far as transportation is concerned the other commodity had been shipped the same as ammonium nitrate. So this didn't present any different problems for transportation if you were shipping it as fertilizer rather than as ammonium nitrate because it was known to be ammonium nitrate and had the same characteristics. One other thing talked about is the so-called Cairns explosive patent, and this is thrown in to show everyone should have known this is an explosive because they used an explosive patent.

The patent is in the record. All that does is to provide a method for applying the coating to make the fertilizer waterproof. It has nothing to do with any explosive quality except insofar as it keeps the material dry and therefore makes it more useful for whatever purpose it will be used, and this so-called Cairns explosive patent pertains to the method of application of the coating to keep the ammonium. nitrate dry.

How that can have any relation to explosiveness is beyond me. All the talk is a matter of creating a false impression that because it was used in connection with ammonium nitrate's use in explosives, and somehow that patent made it more dangerous.

Similarly, much is made of the use of paper bags as further con-tributing to the hazard. The paper bags used here were in strict accord with ICC regulations and in strict accord with industry practice, with the TVA practice. The specifications were borrowed from

industry and TVA and hundreds of carloads and thousands and thousands of tons of the material had been shipped in comparable paper bags without incident, so there is no basis for any charge there was any novelty which required any new research in connection with the use of paper bags.

There, as in everything else, the Government did what had been accepted industry practice, developed as the result of experience over the years, and developed in accordance with appropriate research and study.

Mr. LANE. Do you know whether or not the Grandcamp had also transported these similar bags prior to this 1947 explosion in this special preparation formula bag which we mentioned here?

I ask that because I noticed in your FBI report from the Department of Justice you say that the owners of Grandcamp not only knew about this commodity but prior to 1947 they had already transported 200 cargoes of it without any trouble. Had we just started in on this program of transporting them in these bags to permit this moisture?

Mr. LIFTIN. No. The start was back in 1943. bags.

Mr. LANE. I wondered about the Grandcamp. already transported 200 cargoes.

It was in the paper

They said they had

Mr. LIFTIN. I remember the 200-cargo figure. I don't remember whether it was the Grandcamp or not.

Mr. LANE. It was the Highflyer.

Mr. LIFTIN. Yes.

Mr. LANE. You state on page 25 "There can be no doubt that the owners of the Highflyer and the Southern Stevedoring Co. were fully informed of the nature, composition, and contents of the shipping regulations of FGAN."

They had transported over 200 cargoes in this bagging.

I wondered whether we were just starting on this program of transporting them in these special bags which were water-repellent and moistureproof?

Mr. LIFTIN. No. The bags had been in use. TVA first used a burlap bag with some other lining and then they switched to these paper bags.

The paper bags are specifically countenanced by the ICC regulations under certain specifications they are to meet and did meet.

Mr. LANE. A lot had been said in the testimony about the fact this added to the danger.

Mr. LIFTIN. I know that. It is ironic that the ICC regulations provide that when ammonium nitrate is packaged in paper bags you have to take fewer precautions than otherwise. I suppose the theory is because you do not have as much of a mass.

The limit there is 200-pound bags and these were 100-pound bags. The amount of ammonium nitrate in any one bulk is reduced by the spaces between the bags and the way the bags were loaded. They require even less notice with respect to material in paper bags than otherwise.

They did that on the basis of information by the Bureau of Explosives and other scientific agencies on which they rely, whereas the contention is made here that they contributed to the explosive character of the matter.

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 negligence Mr. 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 else

Mr. 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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