and of the finest type and efficiency, and is deserving of the favorable consideration of the House. Accordingly, the enactment of the bill is strongly recommended.

There follows the letter of the Acting Secretary of the Treasury referred to elsewhere in this report:

TREASURY Department,
Washington, June 4, 1937.

The SPEAKER OF THE HOUSE OF REPRESENTATIVES.

SIR: There is transmitted herewith a proposed bill to increase the efficiency of the Coast Guard, by providing a stimulus to the officers thereof to carry on the work of the Coast Guard to the best of their ability, and a method of retiring voluntarily and involuntarily, a limited number of officers who show themselves to be unqualified to perform the myriad duties of the Service. The bill affects commissioned officers only. It does not, however, affect chief warrant officers. who technically are commissioned officers.

Section 1 of the bill permits an officer who, in accordance with the established rules of the Service, heretofore has been or hereafter may be placed out of the line of promotion, to have himself placed upon the retired list if he has 10 years or more of commissioned service. If his commissioned service is less than 10 years, it is provided that he may resign with 1 year's pay, computed at the rate of pay he was receiving on the date of his resignation.

Section 2 requires the Secretary of the Treasury, at the direction of the President, to assemble annually a Coast Guard Personnel Board to be composed of at least three commissioned officers on the active list of the Coast Guard, to select the officers, if any, whom the Board determines should be retired or placed out of the line of promotion and to make recommendations with respect thereto The proceedings and decisions of the Personnel Board are to be reviewed by the Commandant of the Coast Guard, and under certain circumstances, by the Seeretary of the Treasury. If the Commandant approves the recommendation of the Personnel Board, or, if the Secretary of the Treasury, after disapproval by the Commandant, shall concur in the decision of the Board, the officer concerned is entitled, as a matter of right, to have his case reconsidered by the Board, E. within 30 days after receipt by him of notice of the action taken in his case, be files with the Commandant a written protest or appears before the Persone Board. All recommendations for retiring officers or placing them out of the line of promotion, if approved by the Commandant or by the Secretary of the Treasury, as the case may be, are to be laid before the President by the latter with his recommendation.

Section 2 provides also that the President may, in any calendar year, pursusrt to any recommendation so laid before him (a) place out of the line of promotion such number of lieutenant commanders as will not exceed 2 percent of the officers in that grade as of January 1, of the particular year, with the qualification, bowever, that this percentage restriction is not intended to limit the number of her tenant commanders who may be placed out of the line of promotion for failing to qualify in their examinations for promotion; (b) retire such number of officers who have 30 or more years of service as will not exceed 5 percent of the number of officers falling within that classification on January 1 of the particular year; and (c) retire any officer who has been placed out of the line of promotion and who has 10 years or more of commissioned service.

Section 3 provides that the annual pay of any officer who is retired under the provisions of the bill is to be 22 percent of his active-duty pay, multiplied by the number of years of his service, with the proviso that such retired pay is not to exceed 75 percent of his active-duty pay. Years of service, for the purpose of determining retirement pay, are to be computed in the same manner as is now or may hereafter be provided by law for the computation of years of service for voluntary retirement.

Section 4 limits the number of officers who may be retired involuntarily in sy one year to 1 percent of the total number of commissioned officers. In addition this section limits to 2 percent of the total number of commissioned officers, the number of officers who under the bill are permitted to resign or retire voluntaras. Section 5 declares that the provisions of the bill are supplementary to, but are not to be construed to limit or supersede, existing laws relating to retirement, examination for promotion, and promotion of Coast Guard officers.

Section 6 specifically excepts chief warrant officers from the operation of the bill.

It would be appreciated if you would lay this bill before the House of Representatives.

A similar bill has been transmitted to the Senate.

This proposed legislation is in accord with the program of the President.
Very truly yours,

STEPHEN B. GIBBONS, Acting Secretary of the Treasury.

A BILL To increase the efficiency of the Coast Guard

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That any commissioned officer of the Coast Guard, who, in accordance with regulations prescribed by the Secretary of the Treasury, heretofore has been or hereafter may be placed out of the line of promotion, may, at his own request (a) if his commissioned service is 10 years or more, be placed upon the retired list with retired pay as prescribed by section 3 hereof, or (b) if his commissioned service is less than 10 years, resign from the Coast Guard with 1 year's pay computed at the rate of pay he was receiving on the date of his resignation.

If

SEC. 2. The Secretary of the Treasury, at the direction of the President, shal! assemble annually a Coast Guard Personnel Board, to be composed of not less than three commissioned officers on the active list of the Coast Guard, to select the officers, if any, whom the Board determines should be retired or placed out of the line of promotion, and to make recommendations with respect thereto. The proceedings and decisions of the Personnel Board shall be transmitted to the Commandant of the Coast Guard for review. If the Commandant shall approve the recommendation of the Personnel Board, the officer concerned shall be notified in writing of the action taken in his case, and he shall be entitled to have his case reconsidered by such Board, if, within thirty days after he receives notice as aforesaid, he files with the Commandant a written protest of the action taken, or appears, either in person or by counsel, before the Personnel Board: Provided, That no case shall be twice reconsidered by the Personnel Board. the Commandant shall disapprove the recommendation of the Personnel Board, he shall transmit the same with his recommendation to the Secretary of the Treasury for final action. If the Secretary of the Treasury shall concur in the decision of the Commandant, the case shall be terminated, and the officer concerned shall retain his status in the Coast Guard to the same extent as if his case had not been considered. If the Secretary of the Treasury shall disapprove the recommendation of the Commandant and approve that of the Board, the officer concerned shall be notified as aforesaid, and shall be entitled to have his case reconsidered by the Personnel Board, subject to the same conditions as hereinbefore provided. At the expiration of thirty days after receipt by any officer concerned of notice of the action taken in his case, in the event no protest is filed or appearance made as provided in this section, the recommendation of the Personnel Board, as approved by the Commandant or by the Secretary of the Treasury, as the case may be, shall be laid before the President by the latter with his recommendation. In the event of the reconsideration of the case of any officer, the Personnel Board shall, after carefully considering additional evidence, if any, submit its supplemental report and final recommendation in the case to the Commandant, who shall transmit the same with his recommendation to the Secretary of the Treasury. The Secretary of the Treasury shall lay the same before the President accompanied by his recommendation in the case. When Considering the record of any officer of the Coast Guard, the Personnel Board shall give major importance to reports upon the officer made, in accordance with regulations prescribed by the Secretary of the Treasury, by his seniors. The President may, in any calendar year, pursuant to any recommendations so laid before him:

(a) Place out of the line of promotion such number of lieutenant_commanders on the active list as will not exceed the whole number nearest to 2 per centum of the officers in that grade as of January 1 of such year; except that such limitation shall not be construed to limit the number of lieutenant commanders who may be placed out of the line of promotion, in accordance with regulations prescribed by the Secretary of the Treasury, for failing to establish their mental, moral, and professional fitness for promotion, as required by existing law.

(b) Place upon the retired list such number of commissioned officers who have had thirty or more years of service as will not exceed the whole number nearest

to 5 per centum of the number of officers falling within that classification on January 1 of such year.

(c) Place upon the retired list any officer who has been placed out of the line of promotion and who has had ten years or more of commissioned service.

SEC. 3. The annual pay of any officer who is retired under the provisions of this Act shall be 21⁄2 per centum of his active-duty pay at the time of his retirement, multiplied by the number of years of his service: Provided, That the retired pay of any officer retired pursuant to this Act shall not exceed 75 per centum of his active-duty pay at the time of his retirement. Years of service, for the purpose of computing retirement pay under the provisions of this Act, shall be computed in the same manner as is now or may hereafter be provided by law for the computation of years of service for voluntary retirement.

SEC. 4. The total number of officers retired involuntarily in any one calendar year, pursuant to this Act, shall not exceed the whole number nearest to 1 per centum of the total number of commissioned officers. The total number of officers who are permitted to resign from the Coast Guard with one year's pay or retire voluntarily, pursuant to this Act, shall not exceed in any one calendar year the whole number nearest to 2 per centum of the total number of commissioned officers.

SEC. 5. The provisions of this Act shall be supplementary to, but shall not be construed to limit or supersede, existing laws relating to retirement, examination for promotion, and promotion of Coast Guard officers.

SEC. 6. The provisions of this Act shall not apply to chief warrant officers.

O

CARRYING OUT UNEMPLOYMENT-COMPENSATION LAW

AUGUST 10, 1937.-Committed to the Committee of the Whole House on the state of the Union and ordered to be printed

Mr. DUNCAN, from the Committee on Ways and Means, submitted the following

REPORT

[To accompany H. R. 8174]

The Committee on Ways and Means, to whom was referred the bill (H. R. 8174) to make available to each State which enacted in 1937 an approved unemployment-compensation law a portion of the proceeds from the Federal employers' tax in such State for the year 1936, having had the same under consideration, unanimously report the bill back to the House without amendment and recommend that the bill do pass.

GENERAL STATEMENT

The object of the bill (H. R. 8174) is to place all the States and Territories complying with the unemployment-insurance provisions of the Social Security Act on the same basis with respect to their unemployment-insurance funds.

Title IX of the Social Security Act fixed the date December 31, 1936, as the last day for the State to comply with its provisions.

In those States which were able to comply the employers paid 90 percent of the Federal tax into a State unemployment fund and received credit therefor in their returns.

Thirty-five States passed unemployment-compensation laws prior to the 31st of December 1936. Most of the States called special sessions of the legislatures. The following 13 States and Territories, for valid reasons, were either unable to do so or failed during special sessions of their legislatures to enact such laws prior to December 31, 1936: Arkansas, Delaware, Georgia, Florida, Illinois, Kansas, Missouri Montana, Nebraska, Nevada, North Dakota, Washington, Wyoming, and the Territories of Hawaii and Alaska.

The effect of such noncompliance is that the employers in those States and Territories were required to pay the entire amount into the Federal Treasury instead of paying 90 percent of it to the unemployment fund of their respective States.

2

All of the acOTE TUS End T Los lame sore ammary 1, 1937, wicz wna and they cave been approved of the Social Security

se Sorta. Semen in ice passed and speed August 1925, and the State PoRATires teens that Tear had adjourned. On y four fore puta 4 sesi 1986. Therefore, Lee & pena semina of sun Bosutures were called and laws PATA ITU nos poemble to MEDIT WILL the me limit fixed by the Sortal Semny Ass, and where, bens se a may to have been are & special session, or failure of the legsisture during to wis before December 31. the employment ind of that Tate das coss the wax for 133 And those who will ulti& the benefits of templa ercipensation in those State * be penalized to that extent mak the money paid into the Treaty is made aralable to their employment insurance funds. H. R. 174&horizes the appropriation of & perment of the amount paid in 1956 by the employers of the 13 States and 2 Territories comp.ying in 1937 for the benefit of their unemployment fund.

Due to the fact that taxpayers are permitted to pay the Federal tax in the same manner as income taxes, the last installment will not be due unti. December 15, 1937. Therefore it is not possible to determine at this time the exact amount each State will be entitled to. Neither the Treasury Department nor the Social Security Board object to the bill, and the committee unanimously recommend its

enactment.