Statement by the President Upon Signing Bill Regarding Marine War-Risk Insurance.

IN APPROVING S. 2484, a law which will authorize the Secretary of Commerce to provide marine war-risk insurance when such insurance is not available from private sources, I am gratified at the promptness with which this legislation has been enacted. It provides an important additional step to insure the readiness of the shipping industry to deal with any emergency conditions which may in the future arise.

An essential feature of any acceptable measure for such insurance is that the value of any vessel upon which indemnity is to be fixed must not be subject to the artificial enhancement which frequently characterizes the market value of ships during a wartime period when demand for shipping is abnormal. The possibility of excessive payments for ships requisitioned by the Government during wartime was wisely guarded against by the Congress when it provided, in section 902 of the Merchant Marine Act of 1936, that just compensation for vessels requisitioned thereunder should "in no case... be deemed enhanced by the causes necessitating the taking or use."

An identical safeguard was contained explicitly in this marine war-risk insurance bill, as it first passed the Senate. This language was replaced in the House-approved version with a provision that the amount of an allowable claim "shall not exceed the vessel's fair and reasonable value as determined by the Federal Maritime Board." It does not appear to me from a reading of the legislative history, however, that this change was intended to throw aside the no-enhancement concept embodied in the original Senate bill.

I therefore wish to make it clear that my approval of this measure is based upon the conviction that the legislative history is indicative of a desire by the Congress that any war-risk insurance claims be allowed only upon a standard of fair and reasonable value which will not be subject to the artificial inflation of a wartime shipping market.