B-82191, MARCH 2, 1949, 28 COMP. GEN. 493

B-82191: Mar 2, 1949

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PROVIDED THE FURNISHING OF INSURANCE IS A "WAGE PRACTICE" OF THE MARITIME INDUSTRY WITHIN THE MEANING OF 5 U.S.C. 946. 1949: REFERENCE IS MADE TO LETTER DATED DECEMBER 4. THERE ARE PENDING BEFORE YOUR DEPARTMENT APPROXIMATELY FIFTY CLAIMS OF THEIR BENEFICIARIES IN THE AMOUNT OF $5. THE CLAIMS ARE SAID TO BE BASED ON THE CONTRACTUAL PROVISIONS OF THE SHIPPING ARTICLES UNDER WHICH THE SEAMEN SAILED. IT IS REQUESTED IN THE SAID LETTER THAT THE LEGAL BASIS FOR THE PROPOSED PAYMENTS AS SET FORTH IN THE STATEMENT ACCOMPANYING THE LETTER BE REVIEWED AND THAT ADVICE BE FURNISHED AS TO WHETHER THIS OFFICE WOULD BE REQUIRED TO OBJECT TO THEIR PAYMENT BY A DISBURSING OFFICER OF THE ARMY OR WHETHER SUCH CLAIMS SHOULD BE FORWARDED TO THIS OFFICE FOR DIRECT SETTLEMENT.

B-82191, MARCH 2, 1949, 28 COMP. GEN. 493

INSURANCE - AS CONSTITUTING PART OF COMPENSATION - PAYMENTS TO BENEFICIARIES OF DECEASED MARINE SEAMEN BENEFICIARIES OF FORMER CIVILIAN MARINE SEAMEN EMPLOYED BY THE DEPARTMENT OF THE ARMY, WHO DIED IN THE STRANDING AND BREAK-UP OF AN ARMY TRANSPORT, MAY BE PAID THE PROCEEDS OF WAR RISK INSURANCE CARRIED ON THE LIVES OF SUCH SEAMEN WHERE THE PROVIDING OF SUCH INSURANCE CONSTITUTED A PART OF THEIR PAY OR COMPENSATION, PROVIDED THE FURNISHING OF INSURANCE IS A "WAGE PRACTICE" OF THE MARITIME INDUSTRY WITHIN THE MEANING OF 5 U.S.C. 946, AND ADMINISTRATIVE REGULATIONS IN FORCE AT THE TIME PROVIDED FOR SUCH INSURANCE TO THE CLASS OF EMPLOYEES CONCERNED.

COMPTROLLER GENERAL WARREN TO THE SECRETARY OF THE ARMY, MARCH 2, 1949:

REFERENCE IS MADE TO LETTER DATED DECEMBER 4, 1948, WITH ENCLOSURES, FROM THE ASSISTANT SECRETARY OF THE ARMY, ADVISING THAT, IN CONNECTION WITH THE DEATH OF CERTAIN FORMER CIVILIAN MARINE PERSONNEL WHO PERISHED IN THE STRANDING AND BREAK-UP OF THE USAT CLARKESDALE VICTORY ON NOVEMBER 17, 1948, THERE ARE PENDING BEFORE YOUR DEPARTMENT APPROXIMATELY FIFTY CLAIMS OF THEIR BENEFICIARIES IN THE AMOUNT OF $5,000 FOR THE LOSS OF THE LIFE OF EACH SEAMAN. THE CLAIMS ARE SAID TO BE BASED ON THE CONTRACTUAL PROVISIONS OF THE SHIPPING ARTICLES UNDER WHICH THE SEAMEN SAILED, WHICH PROVIDED FOR THE PAYMENTS IN ACCORDANCE WITH THE WAGE PRACTICE OF THE MARITIME INDUSTRY.

IT IS REQUESTED IN THE SAID LETTER THAT THE LEGAL BASIS FOR THE PROPOSED PAYMENTS AS SET FORTH IN THE STATEMENT ACCOMPANYING THE LETTER BE REVIEWED AND THAT ADVICE BE FURNISHED AS TO WHETHER THIS OFFICE WOULD BE REQUIRED TO OBJECT TO THEIR PAYMENT BY A DISBURSING OFFICER OF THE ARMY OR WHETHER SUCH CLAIMS SHOULD BE FORWARDED TO THIS OFFICE FOR DIRECT SETTLEMENT.

IT APPEARS FROM THE STATEMENT ACCOMPANYING THE LETTER THAT, IN ORDER TO OVERCOME DIFFICULTIES ENCOUNTERED IN PROCURING SEAMEN TO MAN ITS TRANSPORTS, THE DEPARTMENT OF THE ARMY WAS AUTHORIZED BY THE ACT OF APRIL 11, 1942, 56 STAT. 214, 215, TO GRANT WAR RISK INSURANCE TO ITS VESSEL EMPLOYEES TO BE CARRIED WITH THE WAR SHIPPING ADMINISTRATION UNDER AN AGREEMENT WHEREBY THE DEPARTMENT REIMBURSED THE ADMINISTRATION FOR LOSSES SUSTAINED AND THAT, PURSUANT THERETO, THE TRANSPORTATION CORPS ADOPTED THE PRACTICE OF ADDING A RIDER TO THE SHIPPING ARTICLES SIGNED BY THE SEAMEN PROVIDING THAT WAR RISK BENEFITS WOULD BE PAID FOR THE DEATH OF THE OFFICERS AND CREW. IT IS STATED FURTHER THAT, UNDER THE MASTER WAR RISK POLICY WHICH THE DEPARTMENT OF THE ARMY HAD WITH THE WAR SHIPPING ADMINISTRATION, THE BENEFICIARY WAS PAID BY THAT ADMINISTRATION AND THE AMOUNT ALLOWED WAS REIMBURSED TO IT BY THE DEPARTMENT; AND ALSO THAT, PURSUANT TO SECTION 2 (A) OF THE ACT OF MARCH 24, 1943, 57 STAT. 47, AND AMENDMENT NO. 1, TO DECISION A, EFFECTIVE APRIL 24, 1943, OF THE MARITIME EMERGENCY BOARD, THE COVERAGE OF THE INSURANCE INVOLVED WAS BROADENED FROM STRICTLY WAR RISKS TO INCLUDE AS WELL CERTAIN OTHER MARINE PERILS NOT DIRECTLY RESULTING FROM THE WAR, SUCH AS STRANDING, SINKING OR BREAKING-UP OF VESSELS. IT IS POINTED OUT FURTHER THAT, BY THE ACT OF JULY 25, 1947, 60 STAT. 449, THE WAR RISK INSURANCE ACT, AS AMENDED, WAS REPEALED, THUS TERMINATING THE SPECIFIC AUTHORITY UNDER WHICH, PRIOR TO THAT DATE, INSURANCE AS TO THE MARINE PERSONNEL OF THE DEPARTMENT OF THE ARMY HAD BEEN PROCURED. IT IS REPORTED THAT, SINCE THAT DATE, THE MARITIME INDUSTRY HAS BEEN PROVIDING THE SAID WAR RISK INSURANCE TO SEAMEN ON THE SAME BASIS AS PRIOR TO REPEAL OF THE WAR RISK INSURANCE ACT, THE ONLY DIFFERENCE BEING THAT INSURANCE IS NOW PROCURED FROM COMMERCIAL INSURANCE COMPANIES INSTEAD OF THE MARITIME COMMISSION ( WAR SHIPPING ADMINISTRATION). IT IS REPORTED THAT DECISION A, AND AMENDMENT 1 THERETO, OF THE MARITIME WAR EMERGENCY BOARD, ARE STILL IN EFFECT AND THAT THE REGULATIONS OF THE DEPARTMENT OF THE ARMY--- BASED ON SECTION 606 OF THE FEDERAL EMPLOYEES PAY ACT OF 1945, AS AMENDED BY SECTION 8 (B) OF THE FEDERAL EMPLOYEES PAY ACT OF 1946 (5 U.S.C. 946/--- STILL PROVIDE FOR SUCH INSURANCE PAYMENTS.

IT APPEARS CLEAR FROM THE STATEMENT ENCLOSED WITH THE LETTER OF THE ASSISTANT SECRETARY THAT THE PROVIDING OF THE INSURANCE INVOLVED, AFTER REPEAL OF THE WAR RISK INSURANCE ACT, CONTINUED TO BE A PRACTICE OF THE MARITIME INDUSTRY. TITLE 5, SECTION 946, U.S.C. SUPRA, WHICH WAS IN FORCE AT THE TIME OF THE STRANDING OF THE VESSEL, INSOFAR AS HERE MATERIAL, PROVIDES AS FOLLOWS: ,EMPLOYEES OF THE TRANSPORTATION CORPS OF THE ARMY OF THE UNITED STATES ON VESSELS OPERATED BY THE UNITED STATES * * * MAY BE COMPENSATED IN ACCORDANCE WITH THE WAGE PRACTICES OF THE MARITIME INDUSTRY.' THE ANNUAL APPROPRIATION FOR TRANSPORTATION SERVICE IS AVAILABLE FOR THE COMPENSATION OR PAY OF THE SEAMEN INVOLVED. ACCORDINGLY, IF THE PROVIDING OF THE INSURANCE IS PART OF THE PAY OR COMPENSATION OF THE EMPLOYEES INVOLVED, IF THE PRACTICE OF THE MARITIME INDUSTRY IN PROVIDING SUCH INSURANCE IS A "WAGE PRACTICE" OF THAT INDUSTRY WITHIN THE MEANING OF 5 U.S.C. 946, AND IF THE REGULATIONS OF THE WAR DEPARTMENT IN FORCE AT THE TIME PROVIDED FOR SUCH INSURANCE TO EMPLOYEES OF THE CLASS CONCERNED, THERE APPEARS NO LEGAL OBJECTION TO PAYMENT OF THE AMOUNTS TO THE BENEFICIARIES OF THE FORMER CIVILIAN MARINE SEAMEN WHO DIED IN THE STRANDING AND BREAK-UP OF THE USAT CLARKESDALE VICTORY.

THE WORD "COMPENSATED" IN THE PROVISION THAT THE EMPLOYEES "MAY BE COMPENSATED IN ACCORDANCE WITH THE WAGE PRACTICES OF THE MARITIME INDUSTRY" APPEARS TO HAVE BEEN USED SIMPLY TO MEAN PAID. IT IS RECOGNIZED THAT SUCH PAYMENT MAY ENCOMPASS NOT ONLY ACTUAL WAGES OR SALARY, BUT ANY OTHER THING OF VALUE SUCH AS BOARD, LODGING OR SPECIAL VACATION LEAVE IN RECOMPENSE FOR THE SERVICES RENDERED. THE ASSURANCE THAT THE SUM OF $5,000 WOULD BE PAID TO A SEAMAN'S DESIGNATED BENEFICIARY IF HE DIED UNDER CERTAIN CONDITIONS UNQUESTIONABLY IS A THING OF VALUE TO THE SEAMAN WHICH COULD BE PROCURED ELSEWHERE ONLY UPON PAYMENT OF PREMIUMS. IT UNDOUBTEDLY INDUCED THE RENDITION OF HIS SERVICES AND THE PROMISE THAT THE AMOUNT WOULD BE PAID WAS PART OF THE REMUNERATION OF THE POSITION WHICH BUT FOR SUCH EMPLOYMENT WOULD NOT OTHERWISE BE PAYABLE. THEREFORE, IT APPEARS SUCH INSURANCE MAY BE CONSIDERED AS CONSTITUTING A PART OF THE COMPENSATION OF THE JOB.

ACCORDINGLY, UPON REVIEW OF THE LEGAL BASIS ADVANCED FOR THE PAYMENTS AS SET FORTH IN THE STATEMENT ACCOMPANYING THE LETTER OF THE ASSISTANT SECRETARY, I FIND NO OBJECTION THERETO.

WITH RESPECT TO WHETHER THE PAYMENTS INVOLVED MAY BE MADE DIRECTLY BY THE APPROPRIATE ARMY DISBURSING OFFICER, THE REGULATIONS OF THIS OFFICE SPECIFICALLY REQUIRE THAT CLAIMS FOR AMOUNTS DUE DECEASED CREDITORS OF THE UNITED STATES OR ITS DECEASED EMPLOYEES BE FORWARDED TO THE CLAIMS DIVISION, GENERAL ACCOUNTING OFFICE, FOR SETTLEMENT. HOWEVER, THE AMOUNTS HERE INVOLVED, WHILE ACCRUING BECAUSE OF THE SERVICE OF ITS DECEASED EMPLOYEES, DO NOT REPRESENT AMOUNTS DUE THE DECEDENTS BUT AMOUNTS DUE THE BENEFICIARIES WHO ARE THE CREDITORS OF THE UNITED STATES AND WHO IT IS UNDERSTOOD ARE ALIVE AND CLAIMING. THE INFORMATION NECESSARY TO SETTLEMENT IS MORE READILY AVAILABLE TO YOUR DEPARTMENT THAN IT WOULD BE TO THIS OFFICE AND IT IS UNDERSTOOD THAT, FOR THE MOST PART, CLAIMS FOR THE FINAL PAY DUE THE SEAMAN HAVE BEEN SETTLED. UNDER SUCH CONDITIONS, THIS OFFICE WOULD NOT BE REQUIRED TO OBJECT TO PAYMENT OF THE CLAIMS OF THE CREDITORS OF THE UNITED STATES DIRECTLY--- IF SUCH PAYMENTS ARE OTHERWISE PROPER--- BY THE APPROPRIATE DISBURSING OFFICER OF THE DEPARTMENT OF THE ARMY.