Veto of Bill Granting Masters of Vessels a Lien on Those Vessels for Their Wages and Certain Disbursements

[Released December 9, 1967. Dated December 8, 1967]

To the House of Representatives:

I am returning H.R. 162 without my approval.

This measure could seriously endanger private financing for ship construction.

It could lead to far greater government subsidies for the merchant fleet--and place an undue and unnecessary financial burden on the American taxpayer.

It could also result in extended litigation. In short, H.R. 162 is bad public policy. The preferred ship mortgage is a useful and time-tested private financing device for building our merchant fleet. The holders of these mortgages are now secured creditors. Under existing law, their liens are paid immediately after those for seamen's wages, tort judgments or other contract liens which attached prior to the preferred mortgage.

The mischief in H.R. 162 is this: it would--for the first time--give the highest priority lien to those who contract with the ship's master for ship supplies and other items. As a result, it places these suppliers and contractors in a superior position to the holders of preferred ship mortgages.

In substance, H.R. 162 could reduce the preferred mortgage holder virtually to the status of an unsecured creditor.

This could destroy the usefulness of the preferred ship mortgage as a means of privately financing merchant ship constriction--a method which Congress itself authorized and approved in the Ship Mortgage Act of 1920.

Some portions of H.R. 162 are desirable. I believe it is wise to give the master of a vessel a lien for his wages that would have the same high priority as a seaman has for his. This affords the master greater protection for the fruits of his labor.

If the Congress enacts a bill so safeguarding the ship master's wages--without the offending provision I have discussed above--I would be happy to approve it.

LYNDON B. JOHNSON

The White House

December 8, 1967