ance carrier to insure the payment of compensation under the act in a limited territory. It may suspend or revoke such authorization or approval for good cause shown after a hearing at which the insurance carrier shall be entitled to be head in person or by counsel and to present evidence. No revocation or suspension shall affect the liability of an insurance carrier already incurred. SEC. 47. (a) When any injury for which compensation is payable under this act shall have been sustained under circumstances creating in some other person than the employer a legal liability to pay damages in respect thereto, the injured employee or his dependents may elect either to claim compensation under this act or proceed at law or in admiralty or under any statute other than this act against such third person to recover damages. Election shall be evidenced in any such manner as the commission may by regulation prescribe. (b) The awarding or payment of compensation shall operate as an assignment of cause of action against such third person to the employer or insurance carrier. If the employer or insurance carrier shall recover damages against such third person he shall be entitled to retain from the sum so recovered an amount equal to the cost of suit, including a reasonable attorney's fee and of the benefits other than cash benefits actually furnished the injured employee, and the cash benefits paid to him or his dependents, and the present value of future cash benefits to be fixed by the deputy commissioner under a schedule to be prepared by the commission and to be held by such employer or insurance carrier as a trust fund to pay future cash payments as they become due and if any balance remain when such cash payments cease, then to turn over such balance to the injured workman or in case of his death to his legal representatives. The balance of the sum recovered shall be paid to the injured employee and in the event of his death to his legal representatives. (c In case of the payment of an award to the United States Treasury in accordance with subdivisions (f) and (g) of section 9, such payment shall operate to assign to the employer or insurance carrier liable for the award, the cause of action of the legal representatives of the deceased, subject to the provisions of (b) of this section.

(d) If the employee, or in case of death, his dependents, elect to proceed against such third person, the employer or insurance carrier, as the case may be, shall contribute only the deficiency, if any, between the amount of the recovery against such third party actually collected, and the compensation provided or estimated by this act.

(e) A compromise of any such cause of action by the employee or his dependents at an amount less than the compensation provided for by this act shall be made only with the written approval of the employer, or insurance carrier liable to pay the same, and a compromise by the employer or insurance carrier shall be made only with the written consent of the employee or his legal representative.

(f) Wherever an employee is killed by the negligence or wrong of another not in the same employ and the dependents of such employee entitled to compensation under this act are minors, such election to take compensation and the assignment of the cause of action against such third person and such notice of election to pursue a remedy against such third person shall be inade by such minor, or shall be made on behalf of such minor by a parent of such minor, or by his or her duly appointed guardian, as the deputy commissioner may determine in each case.

SEC. 48. Every employer who has secured compensation under the provisions of this act shall post and maintain in a conspicuous place or places in and about his place or places of business typewritten or printed notices in form prescribed by the commission, stating that he has secured the payment of compensation to his employees and their dependents in accordance with the provisions of the act. Such notice shall contain the name and address of the insurance carrier in whom he has secured payment of compensation and the date of the expiry of the policy. Failure so to do shall constitute a misdemeanor and shall be punishable by a fine of not more than $1,000.

SEC. 49. Every policy of insurance covering the liability of the employer under this act shall cover the entire liability of the employer to his employees covered by the policy. Every such policy and contract shall contain a provision that, as between the employer and the insurance carrier, the notice to or knowledge of the occurrence of the injury on the part of the employer shall be deemed notice or knowledge, as the case may be, on the part of the insurance carrier; that jurisdiction of the employer shall, for the purpose of

the act, be jurisdiction of the insurance carrier, and that the insurance carrier shall in all things be bound by and subject to the orders, findings, decisions. or awards rendered against the employer for the payment of compensation under the provisions of this act.

SEC. 50. Every such policy and contract shall contain a provision to the effect that the insolvency or bankruptcy of the employer and his discharge therein shall not relieve the insurance carrier from the payment of compensation for injuries or death sustained by an employee during the life of such policy or contract.

SEC. 51. No contract of insurance issued by an insurance carrier against liability arising under this Act shall be canceled within the time limited in such contract for its expiration until at least thirty days after the day on which notice of cancellation of such contract has been sent by registered mail to the commission and served on the employer. If the day of mailing and the day of service are different, then the latter shall be taken. Such notice shall be served on the employer by delivering it to him or by sending it by mail, addressed to the employer at his or its known place of residence: Provided, That, if the employer be a partnership, then such notice may be so given to any one of the partners, and if the employer be a corporation then the notice may be given to any agent or officer of the corporation upon whom legal process may be served.

SEC. 52. No vessel shall be allowed clearance by the collecter of any port unless the master or agent shall satisfy the collector that the provisions of this act requiring the securing of compensation for work done in respect to such vessel have been complied with.

SEC. 53. If any employer carries on any employment under this act without security for compensation he shall be liable to the United States in a civil penalty of $5 a day for each employee for each day of such employment, which shall be collected as other civil penalties by the commiss.on and paid into the Treasury of the United States. This section shall not affect any other liability of the employer under this act.

ARTICLE V

ADMINISTRATION

SEC. 54. This act shall be administered by the United States employees' compensation commission.

SEC. 55. The commission is authorized to make necessary rules and regulations for the proper administration. of this act.

SEC. 56. (a) The commission shall appoint such deputy commissioners as may be necessary for the administration of the act and shall set up compensation districts, including places where work covered by this act is done, and shall assign to such district one or more deputy commissioners as may be necessary.

(b) Such deputy commissioners may be transferred from one district to another and may be temporarily detailed from one district for service in another at the will of the commission. The salary of the deputy commissioners shall be fixed by the commission in a sum not to exceed $5.000.

(c) The commission may appoint as such deputy commissioners any or all members of any board, commission, or other agency of a State, Territory, or possession of the United States, Canal Zone, or the District of Columbia having jurisdiction over workmen's compensation, to act as deputy commissioners for such State, Territory, or possession of the United States, Canal Zone, or the District of Columbia, and may make arrangements with such board, commission, or other agency for the use of its personnel and facilities in the administration of this act. The commission may make such arrangements as may be suitable for a reasonable share in the expenses of such board, commission, or other agency, and may pay any amount so agreed upon to the proper officers of the State, Territory, or possession of the United States, Canal Zone, or the District of Columbia for such purpose upon vouchers approved by the commission.

(d) In any Territory or possession of the United States or the Canal Zone, a person holding an office under the United States may be appointed such deputy commissioner and be paid additional salary from the appropriations of the commission in an amount to be fixed by the commission.

SEC. 57. Each deputy commissioner shall maintain and keep open during reasonable business hours an office, at a place designated by the commission,

for the transaction of business under this act, at which office he shall keep his records and papers. Such office shall be furnished and equipped by the commission, who shall also furnish him with all necessary records, books, blanks, and supplies. Wherever possible such office shall be located in a building owned or leased by the United States; otherwise it shall be rented by the commission.

SEC. 58. If any deputy commissioner shall be removed, or for any reason shall cease to act, he shall transfer all his official records, files. papers, and office equipment to his successor in office, or, if none, then to the commission or to a deputy commissioner designated by the commission.

SEC. 59. Neither a deputy commissioner nor his partner shall appear as attorney for either party in any proceedings under this act.

SEC. 60. The commission may employ such clerical, technical, and other assistants including assistants for the deputy commissioners, as may be neces sary. The deputy commissioners and other employees shall be appointed from lists of eligibles to be supplied by the Civil Service Commission and in accordance with the civil service law.

SEC. 61. The commissioners, the deputy commissioners, and persons employed by the commission shall be entitled to receive their actual and necessary expenses while traveling on official business, in an amount as allowed by the commission not to exceed $8 per day.

SEC. 62. The commission shall make to Congress at the beginning of each regular session a report of its work for the preceding fiscal year, including a detailed statement of appropriations and expenditures.

SEC. 63. The commission shall study safety provisions, the causes of accidents and occupational diseases among the employees covered by this act, and shall from time to time make such recommendations as it may deem proper to Congress and to employers and carriers as to the best means of preventing such accidents and occupational diseases.

SEC. 64. The commission shall cooperate with any agency of the United States charged with the duty of enforcing any law of the United States securing safety against accident in any employment covered by this act, and for this purpose shall give access to its records and shall cooperate with the agency of any State, Territory, or possession of the United States or the District of Columbia engaged in enforcing any laws to assure safety for employees. The commission shall in its report to Congress embody such recommendations as it may deem advisable for improvement in safety conditions in any employment covered by this act. In carrying out this duty the commission shall have power to enter on any premises, track, wharf, dock, or other landing place or upon any vessel or in any building in which is being carried on an employment subject to this act, or to examine any tools, appliance, or machinery used for such employment.

SEC. 65. The special funds as created in subdivisions (f) and (g) of section 9 of this act shall be administered by the commission and shall be used only for the purposes for which they are created. The Treasurer of the United States shall be the custodian of all moneys and securities of the funds, which moneys and securities shall be deemed not to be money or property of the United States, but to be held in trust for the funds. He shall give a separate and additional bond in an amount to be fixed and with sureties to be approved by the Secretary of the Treasury and the Comptroller of the United States, conditioned upon the faithful performance of his duty as custodian of the funds. Advances to disbursing officers out of the funds shall be made on the order of the commission.

SEC. 66. The Treasurer shall deposit the money of the funds in United States depository banks designated by the commission, which banks shall give bonds to guarantee such deposits in an amount to be fixed and with sureties to be approved by the commission. Any portion of the funds which, in the opinion of the commission, is not needed for current requirements shall be invested by the Treasurer in bonds or notes of the United States or of the Federal land bank. All fines and penalties not otherwise disposed of shall, when collected, be paid into the special funds in equal parts, except as otherwise provided in this act.

SEC. 67. Neither the commission nor the United States shall be liable or responsible in respect to payments secured by the special funds beyond the extent of the moneys or property held in and belonging to such funds.

SEC. 68. The commission shall direct the vocational rehabilitation of injured employees and shall arrange with the appropriate public or private agencies in States or Territories, possessions, or the District of Columbia for such education. The Federal Board of Vocational Education shall cooperate with the commission in such educational work. If any surplus is left in any fiscal year in the fund created for the maintenance of employees undergoing vocational rehabilitation as provided in subdivision (g) of section 9 such surplus may be used in subsequent fiscal years for the purposes of this section except for the purposes of administration and investigation.

SEC. 69. The commission annually as soon as practicable after July 1 in each year shall ascertain the total amount of expenses incurred during the preceding fiscal year in connection with the administration of this act. The commission shall assess upon each insurance carrier the proportion of such expense that the total compensation or payments made in such year by such carrier bears to the total compensation or payments made by all insurance carriers. The commission shall notify each insurance carrier of the amount assessed against it. The amount shall be paid within thirty days of the time the notice is received and if not so paid shall be collected in the same manner as a civil penalty with an additional penalty of 10 per centum a month until paid. In the event that any insurance carrier fails to make payment of the amount assessed against it within sixty days of the time the notice is received the commission in its discretion may suspend or revoke the authorization extended to such insurance carrier to insure the payment of compensation under this act, subject to the provisions of subdivision (c) of section 46. Such sums shall be paid into a fund which is hereby created for the purpose of paying the expenses of administering this act. This fund shall be established in the Treasury of the United States and shall be kept separate from all other moneys in such Treasury and shall be paid out on vouchers approved by the commission. The bond of the Treasurer of the United States shall cover such fund.

SEC. 70. For the remainder of the fiscal year ending June 30, 1926, and for the fiscal year ending June 30, 1927, there is hereby authorized to be appropriated. from any money in the Treasury not otherwise appropriated, the sum of $250,000 for the purposes of the act, including salaries and traveling expenses, rent, and equipment of offices in the District of Columbia and elsewhere, purchase of books, law books, stationery, and other supplies, printing and binding, to be done at the Government Printing Office, expenses of medical examination, and other necessary expenses. Such sums to be reimbursed to the Treasury of the United States by the commission from the sums collected by the commission for such years under section 69.

SEC. 71. The appropriations for the salaries and contingent expenses for the administration of the act of September 7, 1916, as amended, and of this act may be used in connection with the administration of either of said acts, as the commission may determine to be practicable and in the interest of efficient and economical administration, subject to the approval of the Director of the Bureau of the Budget. The amounts to be charged against the appropriations of the two acts shall be just and reasonable and shall not be so made as to result in any increase in total expenditures either for salaries or for contingent expenses on account of the administration of the act of September 7, 1916, except as authorized by Congress. Payment of salary to the same person may be made from the appropriations for the administration of the two acts: Provided, however, That in such case the total salary paid shall be in accordance with the provisions of the classification act.

SEC. 72. Nothing in sections 4283, 4284, 4285, 4286, or 4289 of the Revised Statutes, as amended, or in section 18 of the act entitled "An act to remove certain burdens on the American merchant marine and encourage the American foreign carrying trade, and for other purposes," approved June 26, 1884, as amended, shall be held to limit the amount for which recovery may be had in any suit at common law or admiralty or under a statute brought against an employer who has failed to insure his liability under that act or to any proceeding to recover compensation or any civil penalty or assessment of expense under this act.

SEC. 73. If this act in whole or in part is repealed or adjudged unconstitutional by the courts, the period intervening between the time the injury is sustained and the time of such repeal or final adjudication of unconstitutionality shall not be computed as a part of the time limited by law for the commencement of any action against the employer relating to such injury; but

the amount of any compensation paid or furnished under this act on account of such injury shall be deducted from any judgment for damages on account thereof.

SEC. 74. If any provision of this act or the application thereof to any person or circumstances be held invalid, the validity of the remainder of the act and of the application of such provision to other persons and circumstances shall not be affected thereby.

SEC. 75. This act, except as prescribed in sections 54 to 70, inclusive, shall become effective July 1, 1926, and sections 54 to 70, inclusive, shall become effective on the passage of this act.

I will say that I have received a communication from an employer's association in Seattle, Wash., saying, among other things:

The water-front employers of this port are willing to join in advocating a reasonable proposal for establishing the principles of workmen's compensation and employees' limited liability. But we believe the bill introduced is unreasonable in its compensation rates and will lead to extensive fraud and malingering.

Without reading the entire letter, I want the proponents of the bill to know that this communication has been received; and I have notified them to appear at an adjourned meeting of the committee and present their reasons for what they say. So the proponents can be present at that meeting.

Mr. HERSEY. Did he say the compensation was too high or too low in that letter?

The CHAIRMAN. Too high; he said it would produce malingering and fraud. Now, the letter does not state in what way; it is a general letter approving the main features of the bill, but saying that the rates are not equitable.

Now, who desires to speak first?

STATEMENT OF ANTHONY J. CHLOPEK, PRESIDENT INTERNATIONAL LONGSHOREMEN'S ASSOCIATION, GENERAL HEADQUARTERS, BUFFALO, N. Y.

Mr. CHLOPEK. Mr. Chairman and gentlemen of the committee, the International Longshoremen's Association, whose membership covers the Atlantic seaports, the South Atlantic and Gulf coast districts, the Great Lakes district, and the west coast, are appealing to Congress asking that it provide a law whereby longshoremen and shipworkers or ship repair workers may be compensated for injuries or deaths resulting from injuries received in their employment.

There is not a group of workers in the United States of America that are so completely left without protection as the longshoremen and the ship repairmen. We absolutely have no redress whatsoever; no redress in court; nor do we come under the workman's compensation act. And when I say that I mean those of our membership who are employed aboard the ship doing the work.

" means a man who is

Mr. BOWLING. Would you mind telling us what the word "longshoremen " includes? I live 500 miles from the ocean. Mr. CHLOPEK. The word "longshoreman engaged in loading and discharging the ship. Mr. TUCKER. Is he a Federal employee?

Mr. CHLOPEK. Absolutely not. He is an employee of the contracting stevedore, or the vessel owner who does his own stevedoring work, unloading or discharging his vessel in port.