prices of contracts completed by the contractor within the income taxable year for the purposes of such section 505 (b) (2), under which shipbuilders with Commission contracts must repay to the Commission any profit in excess of 10 percent of the total contract prices of contracts completed within the income taxable year.

For the purpose of suspending the effect of the 8-hour law on such contracts covered by the bill (as has been done with respect to Army, Navy, and Coast Guard contracts by section 5 (v) of Public, No. 671), and at the same time protecting the interests of labor, subsection (b) specifically provides that the provisions of Public, No. 831 (76th Cong.), shall apply to the negotiated contracts. Public, No. 831 provides for compensation for mechanics and laborers at not less than one and one-half times the basic rate of pay for work in excess of 8 hours per day or 40 hours per week.

To facilitate coordinated progress of the ship construction program, and to conform to the policy of Public, No. 671, which contains a somewhat similar provision with respect to Navy and Coast Guard contracts, section 2 (a) (2) would authorize the Commission to modify its contracts in respect of vessel construction and other activities now or hereafter entered into in order to conform to the provisions of the bill relating to negotiated contracts. Such modifications of contracts are controlled by the limitation that the aggregate amount payable to the contractor under any modified contract may not exceed the amount which would have been payable if the contract had been originally negotiated under the proposed legislation.

Modifications could only be made in the interest of national commerce and defense and only because of changes in conditions occurring after the original execution of the contracts. Such authority to modify outstanding contracts is necessary in order to enable the Čommission to make the most effective use of the power to negotiate contracts, to secure the most effective rate of progress of performance under all its contracts, to promote the most efficient use of shipways required and available for its construction program, and to secure the desired priorities in performance under outstanding contracts in relation to priorities imposed in respect of contracts negotiated under this legislation.

In further conformity with the policy of Public, No. 671, provision is made for priorities, in the discretion of the President, for the furnishing of materials and performance of work under Commission contracts in respect of vessels over the furnishing of materials or performance of work for private account or for export.

This authority in respect of priorities is needed to place the Commission in a position to get a preference in favor of performance under Commission contracts when the contractors are engaged in work under both Commission contracts and contracts for strictly private account or for export. The War Department and the Navy Department have similar authority in respect of their contracts and comparable authority is being exercised by the priorities section of the Office of Production Management.

SECTION 3

Section 3 of the bill would authorize the Commission, until July 1, 1942, to charter any of its available vessels, with or without advertise

ment or competitive bidding, when it determines that the operation of such vessel is necessary for the maintenance of the foreign commerce of the United States and that the necessary service cannot be so provided as to meet such needs under the provisions of present law.

The section requires that the charter rate be fair and reasonable and that in case of vessels constructed under the 1936 act, the rate shall not be lower than the minimum rate prescribed in section 714 of the act.

Title VII of the Merchant Marine Act, 1936, covering the chartering of Commission vessels requires competitive bidding and relates to chartering on essential trade routes. This under existing conditions does not make the best possible use of the available tonnage under Commission control. Moreover, competitive chartering does not give the best results under numerous special, temporary, or emergency conditions.

This section would permit the Commission to allocate any of its available vessels to routes where the need is greatest without the delay of advertisement and without the possibility that the high bidder will not be the operator on the route where the vessel should be placed in the public interest. Particularly under present circumstances, it is necessary that the vessels available shall be employed as dictated by national considerations. Such routes are not always those upon which the rate structure would justify the highest bid. Some of the strategic and critical materials (such as manganese) are low-rate

cargoes.

Replacement vessels often are urgently needed for temporary periods. Vessels may be lost, delayed by break-downs, or delayed in delivery. Acquisitions by the Army and the Navy leave gaps in service which should be promptly filled under existing circumstances. Completed new vessels not needed at once by the operator contracting to buy them upon completion may well be used temporarily to fill these needs. Vessels are needed for emergency shipments and to provide for unexpected increases in trade on essential routes. They are needed to carry defense materials, some of which are low-rate cargoes. The section will permit the Commission to allocate available vessels to lines and uses where they will be operated to best meet public needs under existing conditions.

SECTION 4

Section 4 of the bill would authorize the Commission, during the national emergency declared on September 8, 1939, but not after June 30, 1942, to prescribe overtime hours and overtime compensation for certain technical employees of the Commission. The Commission is authorized to pay compensation for overtime employment at not less than one and one-half times the regular rate. The Commission under existing law has no authority to pay overtime compensation to any of its employees. This new authority would conform to the overtime provisions for the Army, the Navy, and the Coast Guard, in Public, No. 671 and Public, No. 873 (76th Cong.). The proposed legislation specifically covers naval architects, marine engineers, draftsmen, estimators, inspectors of new construction and materials, and marine surveyors. It would also extend to other

employees of the Commission performing duties comparable to those employees of the other departments authorized by law to receive overtime compensation.

The section would also authorize the President to provide for uniformity with respect to hours of work and compensation of Commission employees with the War Department, the Navy Department, and the Coast Guard. This authorization is comparable to a provision of section 5 (a) of Public, No. 671.

The payment of overtime is limited to employment in which there is a shortage of trained personnel and where it has been very difficult to hire well qualified people to carry the workload. The types of work involved in the Commission's construction program are similar to those of the Navy and War Departments for which overtime has been authorized and is in effect. Not only has it been difficult for the Commission to get the additional necessary help of this type which is offered overtime pay in both private employment and in other Government departments, but it has been difficult to retain its present employees who desire to accept private employment where overtime is paid.

CHANGES IN EXISTING LAW

In compliance with the spirit of paragraph 2a of rule XIII, of the Rules of the House of Representatives, Public Resolution No. 82 (76th Cong.), which is temporarily continued in effect by section 1 of the bill is set out for the information of the House.

[PUBLIC RESOLUTION-No. 82–76th ConGRESS)

[CHAPTER 327-3D SESSION]

[H. J. Res. 537)

JOINT RESOLUTION To make temporary emergency provision for the determination of foreign con struction costs under section 502 (b) of the Merchant Marine Act, 1936, as amended

Resolved by the Senate and House of Representatives of the United States of America in Congress assembled, That, for the period of one year from the date of the enactment of this joint resolution or until the revocation within such one-year period of the proclamations heretofore issued by the President under section 1 (a) of the Neutrality Act of 1939, the United States Maritime Commission is authorized to make, upon the basis of conditions existing during the period prior to September 3, 1939, the determinations under section 502 (b) of the Merchant Marine Act, 1936, as amended, of estimated foreign cost of vessels covered by construction contracts executed after that date.

Approved, June 11, 1940.

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CONSIDERATION OF H. R. 3368

MARCH 11, 1941.-Referred to the House Calendar and ordered to be printed

Mr. SABATH, from the Committee on Rules, submitted the following

REPORT

[To accompany H. Res. 127]

The Committee on Rules, having had under consideration House Resolution 127, report the same to the House with the recommendation that the resolution do pass, with the following amendment:

Page 1, line 8, strike out the words "one hour" and insert in lieu thereof the words "two hours".

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77TH CONGRESS HOUSE OF REPRESENTATIVES 1st Session

REPORT No. 225

CONSIDERATION OF H. R. 2082

MARCH 11, 1941.-Referred to the House Calendar and ordered to be printed

Mr. SABATH, from the Committee on Rules, submitted the following

REPORT

(To accompany H. Res. 135}

The Committee on Rules, having had under consideration House Resolution 135, report the same to the House with the recommendation that the resolution do pass.

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