One phrase here I would like to read, and perhaps have your comment. This is Mr. Moss speaking for the Maritime Commission: It is our considered opinion that the principal reasons which justify changes in pay at the present time for members of the uniformed services do not apply with equal merit in the case of the administrative enrollees, and that it is fundamentally sound and equitable that administrative enrollees be compensated in general on the same basis as comparable civilian employees. Mr. WALSH. That is the argument of the Civil Service Commission and the Department of Commerce. Mr. BLANDFORD. Are these administrative enrollees somebody different from the 76 members of the faculty? Mr. WALSH. No, sir. The Merchant Marine Act of 1936 stated that these men are enrolled, not employed or commissioned. Mr. BLANDFORD. This includes the faculty? Mr. WALSH. That is right. Enrollee is the legal designation of the members of the maritime service. Mr. BLANDFORD. In other words, the faculty proposal now, or the proposal for the faculty, is that they be placed on the same category as the civilian members of the Naval Academy? Mr. WALSH. Yes. Mr. BLANDFORD. When they pass that law I hope they get it right the first time because we have been amending it for the last 10 years. Mr. WALSH. That is right. Mr. BLANDFORD. That is what they propose to do. Mr. WALSH. Yes. Mr. BLANDFORD. You have not seen the proposal? Mr. WALSH. That is right. Mr. BLANDFORD. Your point is that we should continue to live now the way we have been living before we run into perils we know not of? Is that what it boils down to? Mr. WALSH. Yes. I would very willingly concede the Cordiner recommendations which are fine for the other services but have a few hitches in it for the Merchant Marine Academy. There haven't been promotions for so long at the Academy that most of the men under the Cordiner proposal would be frozen for years to come. We have lieutenants in their fifties and early sixties who were teaching in colleges before they came to the Academy, and have been there for 15 years. There would be no real increase other than the base pay provision. They do feel that the bill will be detailed and spell it out, and will probably be presented to the House Post Office and Civil Service Committee, or the House Merchant Marine and Fisheries Committee, when that is introduced, then it can be discussed on its own merits, and not section 13, which merely states that someone should have discretionary power. Frankly, these men, because of what they consider to be an arbitrary adjustment in ranks and ratings, are very fearful of this one provision, to adjust or to prescribe pay and allowances. Mr. KILDAY. Would it sum it up correctly to say that you are willing to take your chances with your lawsuit and the proposed legislation? Mr. WALSH. I don't think the lawsuit enters into it, as such, although I think a committee, having the result of a court decision for or against the men concerned, would particularly, with the declaratory judgment, have something to go by. The court could say these men should never have been under the Military Pay Act, or they should never have been given the civil-service pension, or maybe they have been civilian employees all along, but there has been no judicial determination of section 216 (b) of the Merchant Marine Act, and we feel section 13, added to the current confusion, would make things worse. The attitude of the men in that, when the bill is presented in full detail, that is, this draft legislation, that it stand on its merits and let it go at that. Mr. BLANDFORD. May I say for the record, to my knowledge the Department of Defense did not ask that it be included. It was included by the Bureau of the Budget at the request of the Department of Commerce. No one should feel that the Department of Defense, to my knowledge, had anything to do with this provision with regard to the Merchant Marine Academy. Mr. WALSH. That is generally understood. Mr. GAVIN. It is your recommendation that that section be eliminated? Mr. WALSH. Yes. Mr. GAVIN. Without adding to an already confusing situation? Mr. WALSH. Yes, when the other bill is introduced with everything spelled out that can be considered on its own merits. Mr. BLANDFORD. May I insert in the record at this point a letter from Mr. Kenneth Lowe, of the 35th Legislative Assembly of the State of North Dakota, in connection with section 13 of the proposed legislation, in which he strongly endorses the proposal that Mr. Walsh has made, and copies of other letters received or sent by the Association of Parents and Friends of Kings Point? Mr. KILDAY. Without objection, they will be in the record. Mr. WALSH. I wish to thank the committee for hearing me out of turn. I have been caught in blizzards and now I return to sunny California. (The letters are as follows:) HOUSE ARMED SERVICES COMMITTEE, LONG BEACH, CALIF., March 23, 1958. House Office Building, Washington, D. C. DEAR CONGRESSMAN KILDAY: You may recall my testimony against section 13, H. R. 9979, on February 27, 1958. I have no way of knowing how many college teachers your committee has heard in recent years. With some 19 years of college teaching behind me, the last 11 of them in teaching United States history and government at the United States Merchant Marine Academy, I find it difficult to express to you and your committee my feelings after your kind treatment of February 27. That a civilian with no political connections could be heard out of turn immediately after the highest ranking officials of the Department of Defense had given their testimony, was to me inspiring, hard bitten as I am parliamentary wise. I was permitted to appear before your committee as an equal with the representative of the Department of Commerce who was opposing my point of view; I know you have similar situations every day, but it gave me a renewed faith in our legislative procedures. On March 6, 1958, there was introduced into the Senate, S. 3407, by Senator Magnuson at the request of the Secretary of Commerce. A similar House bill by now has also been introduced. These bills are designed "to establish suitable personnel policies" for the faculty and administrative staff of the United States Merchant Marine Academy. What, then, was the purpose of the Department of Commerce in causing section 13 in H. R. 9979? This is, I think, another reason for the rejection of section 13 by your committee. I am attaching for your information a copy of a decision, by Judge Madden of the United States Court of Claims, dated March 5, 1958, in the case of James P. Walsh, et al v. The United States (C. A. 145-56), which indicates that the court has serious doubts as to the legality of certain personnel actions of the Maritime Administration and the Department of Commerce. I am not impressed by the efforts of the Department of Commerce to seek legal sanction for their highly questionable personnel actions, by causing to be attached to the generally laudable Cordiner bill section 13, which would grant to the Maritime Administration carte blanche to regularize its past errors. This is, I feel, further reason why section 13 should be deleted. If it is not to late I would like this letter and enclosure made a supplement of my testimony of February 27, 1958. Thank you for your many kindnesses. Very truly yours; JAMES P. WALSH. IN THE UNITED STATES COURT OF CLAIMS No. 146-56 (DECIDED MARCH 5, 1958) JAMES P. WALSH ET AL V. THE UNITED STATES Mr. Carl L. Shipley for the plaintiffs. Mr. Samuel Resnicoff was on the brief. Mr. Kendall M. Barnes, with whom was Mr. Assistant Attorney General George Cochran Doub, for the defendant. Mrs. Sondra K. Slade was on the briefs. ON PLAINTIFFS AND DEFENDANT'S MOTIONS FOR SUMMARY JUDGEMENT Madden, JUDGE, delivered the opinion of the court: The plaintiffs sue to recover the pay of which they were deprived by a reevaluation of their positions as administrative enrollees in the United States Maritime Service, assigned for duty to the United States Merchant Marine Academy at Kings Point, Mew York. They allege that the reevaluation of their positions, reducing their pay, was made according to the provisions and standards of the Classification Act of 1949 (63 Stat. 954, 958, 5 U. S. C. 1071, 1101 (b)), which act is not applicable to their positions, and was made in violation of the provisions of section 216 (a) of the Merchant Marine Act of 1936, as amended (53 Stat. 1182-3, 46 U. S. C. 1126 (a)). Section 216 (a) of the Merchant Marine Act of 1936 authorizes the United States Maritime Commission "to establish and maintain (under such rules and regulations as the Maritime Commission may prescribe) the United States Maritime. Service as a voluntary organization for the training of citizens of the United States to serve as licensed and unlicensed personnel on American merchant vessels. The Commission is authorized to determine the number of persons to be enrolled in the said service, to fix the rates of pay of such persons, and to prescribe such courses and periods of training as, in its discretion, is necessary to maintain a trained and efficient merchant marine personel. The ranks, grades, and ratings for the personnel of the said Service shall be the same as are now or shall hereafter be prescribed for the personnel of the Coast Guard." The United States Merchant Marine was created by the Merchant Marine Act of 1936 (52 Stat. 965), which provided, among other things, for training crewmen for merchant vessels. At first the Maritime Commission made contracts with shipping companies which were operating Government ships as managing agents, or with companies subsidized by the Government, to accept trainees as cadet seamen. Later the Commission was authorized by section 216 (a) quoted above, to engage directly in training officers and crewmen for merchant ships. Pursuant to this authority, the Commission in 1942 established the United States Merchant Marine Academy at King's Point, New York. The ranks, grades, and ratings of the staff of the Academy were established and had their early development during World War II, and were not reexamined or reevaluated during the succeeding years. In 1953 preliminary investigations by the Maritime Administration, which had succeeded to the functions of the Maritime Commission, indicated that there were serious discrepancies between the work actually performed by the members of the staff of the Academy, and the ranks and ratings held by them. The Administration therefore ordered a survey and reevaluation of the positions in which the staff members were working. As a result of the survey, higher ranks and ratings were assigned to some 44 positions, and the holders of these positions thereby became entitled to higher ranks and higher pay. The positions of 101 persons were left unchanged and those of 128 persons were downgraded, the holders of those 128 positions thus receiving reductions in rank and pay. The 91 plaintiffs in this case were among those adversely effected by the reevaluation of their positions. It appears from the briefs, and from the papers and documents submitted, that the reevaluaiton of the positions of the plaintiffs was made according to the standards used for classifying civilian Government positions covered by the Classification Act. Those are, no doubt, excellent standards, developed scientifically and through long experience. They may indeed fit the positions to the attached rank and pay better than the standards in use by the Coast Guard. But the Government concedes, contrary to the position of the Civil Service Commission, and in accord with the position of the General Accounting Office and the Maritime Administrator, that the staff of the Merchant Marine Academy are not subject, to the Classification Act, but are governed in their employment by section 216 (a) of the Merchant Marine Act. Section 216 (a), as we have seen, says: "The ranks, grades, and ratings for the personnel of the said (United States Maritime) Service shall be the same as are now or shall hereafter be prescribed for the personnel of the Coast Guard." To be sure, section 216 (a) authorizes the Maritime Commission (now the Administration) to fix the rates of pay of the enrollees, and published regulations provide as follows: "16. C. F. R. 310.59b: Personnel for administrative or instructor duty with the United States Merchant Marine Cadet Corps may be enrolled in the United States Maritime Service at grades designated by the Supervisor with the approval of the assistant Deputy Administrator." 46 C. F. R. 310.16: AUTHORITY OF COMMANDANT. In compliance with applicable Federal statutes and subject to the regulations prescribed by the Administration, the commandant is authorized * (d) To establish and regulate the ranks, grades, and ratings of enrollees in the service; * * *”. The Commandant acted under the last quoted regulation in reevaluating the positions. But he caused it to be done according to the standards of the Classification Act, and not so far as appears, according to the standards of the Coast Guard. If the regulations are interpreted as giving the Commandant the power to disregard the Coast Guard standards, they contradict section 216 (a) and are to that extent invalid. And we think that the authority, given to the Commission by section 216 (a) itself, to fix the rates of pay of the enrollees, are not intended as an authorization to disregard the immediately following language about the Coast Guard standards. Unless the status assigned to the positions in the reevaluation happened to coincide with that of comparable positions in the Coast Guard, we think the reevaluation was illegal and that persons who were prejudiced by it may recover. We deny the motions of both parties so that the facts may be put in evidence. We do not now consider the Government's contention that some of the plaintiffs failed to exhaust their administrative remedies. The facts in that regard will also be developed at the trial. The plaintiff's and the defendant's motions for summary judgment are denied. It is so ordered. Laramore, JUDGE; Littleton, JUDGE; and Jones, CHIEF JUDGE, concur. Hon. CARL VINSON, GRAND FORKS, N. DAK., February 24, 1958. Chairman, Committee on Armed Services, House Office Building, Washington, D. C. DEAR REPRESENTATIVE VINSON: Thank you for your letter of February 5, 1958, regarding Senate bill 3081. I understand hearings on this bill are in progress at the present time, and I should like to ask that this and enclosed letters be made a part of the House committee record. We in this section of the country feel that with the opening, in the future, of the St. Lawrence Waterway to oceangoing ships we will become involved in considerable increased activity in ocean commerce, and this naturally will in turn require more highly trained and competent officers of the merchant marine. Therefore, I am again requesting the deletion of section 14 of S. 3081, and also of section 13 of H. R. 9979, which, as I understand it, is similar to the Senate bill. My interest is, as stated previously, in Kings Point Merchant Marine Academy and the officers and enlisted men and staff being eligible to qualify under existing legislation for the pay increase given other Federal employees. I trust the enclosed letters which I requested asking information regarding the benefits we may anticipate by the St. Lawrence seaway may be of interest to your committee, and they may see fit to make these letters a part of your record. Very truly yours, KENNETH C. LOWE. FEBRUARY 21, 1958. Representative KENNETH C. LOWE, Grand Forks, N. Dak. DEAR MR. Lowe: You inquired as to how the opening of the St. Lawrence seaway will benefit the flour industry and particularly the North Dakota Mill and Elevator. Ever since we lost the package freight service on the Great Lakes our mill has been discriminated against in the shipment of flour to the eastern market. This amounts to considerable, since we are now forced to use all-rail service while the mills at Buffalo can ship their wheat by boat. This difference would be about 40 cents a hundred; consequently the Buffalo mills have that much advantage over the North Dakota Mill and Elevator in the selling of flour in that market. We believe that if and when the St. Lawrence seaway is opened there should be enough interest for the return of the package freight service and consequently that would be the big thing for our mill. While this is true of flour, there is no question that it does affect other industries in this area also. It may mean a tremendous growth in the dairy industry of our area. We hope that this service can come back as soon as possible, as it does have a tremendous effect on our welfare. Anything that can be done by our representatives in Washington to hasten this process and get the St. Lawrence seaway should be done. We hope that they are working diligently on it at all times. Sincerely yours, P. R. FOSSEN, Mr. KENNETH C. Lowe, Grand Forks, N. Dak. GRAND FORKS CHAMBER OF COMMERCE, DEAR MR. LOWE: This letter has reference to your inquiry relative the potential effects of the St. Lawrence seaway on the economy of Grand Forks and its trade area. As you know, for many years Grand Forks and the State of North Dakota has supported the seaway. We were most happy when the seaway became an actuality. Generally speaking, the proximate availability of water transportation has always enhanced the economy of any area. The seaway will place eastern North Dakota within 290 miles of world commerce. This area is a heavy producer of agricultural commodities. For many years our problem has been one of transportation. As you know, surface transportation is expensive. It costs us about $1.15 to ship a sack of flour to New York City. With the advent of the seaway, we expect this cost will be substantially reduced. Similarly, eastern North Dakota and western Minnesota are the third largest late producing area of potatoes in the Nation. We feel the water transportation which will become available at Duluth, Minn., will assist in finding outlets for this crop at lower transportation costs. Before the war (World War II) we had package freight service on the lakes. Since that time this service has not been available. However, at that time we saved 9 cents a sack on freight on flour, 15 cents per hundredweight on wool, 22 cents per hundredweight on dairy products. The first-class rate, westbound, 20066-58-No. 76- -18 |