priated,16 the House Committee on Appropriations pointed out, among other things, that the past loss experience disclosed no need for the requested sum, that the Government has large contingent liabilities under other programs without reserve funds to assure payment, "because the Government's word is the assurance," and that, if it proved necessary, a future request for appropriations above the $30,000,000 "would receive appropriate consideration in view of the contractual relationship existing between the investor and the Federal Government." 17 (Italics added.) The Senate Appropriations Committee also proposed that the amount sought by AID be lowered, commenting as follows: 18 "Since the general credit of the United States may now be obligated by investment guaranties, the recommended reduction should not diminish the value of an investment guarantee to any investor." (Italics added.)

Section 222(f) and section 222 (d), as amended, do not, by their terms, place any limit on the Government's liability under AID guaranties. Other provisions of the act are free of any such limit, and the legislative history outlined above supports the view that the Government's liability is complete. Accordingly, I have come to the conclusion here, paralleling my conclusion with respect to Development Loan Fund guaranties issued under section 202 (b) of the Mutual Security Act of 1954, as amended,1o that unrestricted guaranties which have been or may hereafter be issued by AID under sections 221 (b) and 224 of the Foreign Assistance Act of 1961, as amended, are general obligations of the Government; that, in other words, the full faith and credit of the United States is pledged to their redemption.

The sources of funds which are listed in section 222 (d) of the act as being available for the satisfaction of AID guaranties are also available, by the terms of the section, for the satisfaction of outstanding guaranties issued by foreign aid agencies which preceded AID. These existing commitments consist of guaranties contracted under sections 202(b) and

16 P.L. 87-872, Title I, 76 Stat. 1163.

17 H. Rept. 2410, 87th Cong., 2d sess., pp. 11–12.

18 S. Rept. 2177, 87th Cong., 2d sess., p. 6. See also remarks of Secretary of State Dean Rusk, Senate Appropriations Committee Hearings, n. 9, supra, at p. 777, and of Representative Otto E. Passman, of Louisiana, 108 Cong. Rec. 19033-34 (daily ed. September 20, 1962).

19 See n. 5, supra.

413 (b) (4) of the Mutual Security Act of 1954, as amended,20 and section 111(b)(3) of the Economic Cooperation Act of 1948, as amended,21 exclusive of informational media guaranties. Inasmuch as the 1962 amendments to section 222 of the act apply to these outstanding guaranties, I find for that reason alone, in addition to any others which may exist,22 that they are backed by the full faith and credit of the United States.

Respectfully,

ROBERT F. KENNEDY.

20 See n. 4, supra; 68 Stat. 846-848, as amended.

21 62 Stat. 144, as amended.

22 In the case of the Development Loan Fund guaranties issued under section 202(b) of the Mutual Security Act of 1954, as amended, see Op. A.G., n. 5, supra.

NONAPPLICABILITY OF THE FOREIGN DREDGE ACT TO THE VIRGIN ISLANDS

Dredging performed by or from vessels on navigable waters is maritime trade, and is coasting or coastwise trade when performed in domestic navigable waters.

The foreign dredge act of May 28, 1906, c. 2566, 34 Stat. 204 (46 U.S.C. 292), which prohibits a foreign-built dredge from engaging in dredging in the United States unless documented as a vessel of the United States, is both a navigation and a coastwise law of the United States. As a coastwise law it is designed to protect American-built and American-documented ships from foreign competition in the domestic or coastwise trade.

In order to attract foreign shipping to the Virgin Islands rather than discourage it, the 1939 amendment to section 4 of the Organic Act (48 U.S.C. 1405c) freed the Virgin Islands from the application of the coastwise and other navigation laws of the United States, except as the President might find it necessary in the public interest to apply any such.

By Executive Order 9170 of May 21, 1942, 7 F.R. 3842, the President, in the interest of national defense, applied some of the navigation and vessel inspection laws of the United States to the Virgin Islands but specifically excepted the coastwise laws.

The foreign dredge act of May 28, 1906, supra, was not applied by Executive Order 9170, and does not now apply, to the Virgin Islands.

THE PRESIDENT.

AUGUST 7, 1963.

MY DEAR MR. PRESIDENT: I have the honor to respond to your request for an interpretation of Executive Order 9170 of May 21, 1942, "Making Certain Navigation Laws of the United States Applicable to the Virgin Islands." 7 F.R. 3842 (1942); 48 U.S.C. 1405c note. A copy of the order is attached as Appendix A.

A 1939 amendment of section 4 of the Organic Act of the Virgin Islands (1936), 48 U.S.C. 1405c, conferred power on its Legislative Assembly to enact navigation, boat inspection, and safety laws, but reserved to the President authority to make applicable to the Virgin Islands such of the navigation, inspection, and coastwise laws of the United States as he may find necessary in the public interest. For reasons

discussed infra, this form of legislation had been recommended by the Legislative Assembly, and in response to its further request the President issued Executive Order 9170 making applicable to the Virgin Islands "all of the navigation and vessel inspection laws of the United States" except "the coastwise laws of the United States" and three other classes of exceptions which are not relevant to the question you have raised. That question is whether the act of May 28, 1906 (sometimes called section 292 herein),1 which prohibits a foreign-built dredge from engaging in dredging in the United States unless documented as a vessel of the United States, applies to the Virgin Islands as one of the unexcepted "navigation and vessel inspection laws of the United States" under the Executive order, or whether it is one of the "coastwise laws" excepted from the order and does not apply to the Virgin Islands.2

It is my view that the 1906 act, 46 U.S.C. 292, is both a navigation law and a coastwise law of the United States. Because it is a coastwise law, it is not made applicable to the Virgin Islands by Executive Order 9170 and is not part of the body of law continued in force for the Virgin Islands by the Revised Organic Act of 1954. This conclusion is based upon the meaning ordinarily attributed to the terms "navigation" and "coastwise" laws, the history of the 1906 act, and the purposes intended to be served by the 1939 amend

3

434 Stat. 204, 46 U.S.C. 292. The first section of the act, which has been codified, reads:

"A foreign-built dredge shall not, under penalty of forfeiture, engage in dredging in the United States unless documented as a vessel of the United States." The second section of the act, which was omitted from the code as special only, provided for documenting as vessels of the United States five named foreign-built dredges engaged in, or intended for, dredging in Galveston harbor under then existing public works contracts.

* Assuming that the 1906 act is a navigation law, the question can no longer be resolved by amendment of Executive Order 9170 because of section 8(c) of the Revised Organic Act of the Virgin Islands (1954), 68 Stat. 501, 48 U.S.C. 1574 (c). That provision continued in force, unless Congress should otherwise provide, the laws of the United States applicable to the Virgin Islands on July 22, 1954, including those which were applied under the 1936 Organic Act.

The pertinent provision is cited and described in note 2, supra. Because we find that section 292 is a navigation and coastwise law, and is, therefore, not applicable to the Virgin Islands under section 4 of the Organic Act (as amended in 1939, 48 U.S.C. 1405c) unless it were specifically made so by the President, there is no need to consider whether section 292 would have general applicability to the territories, including the Virgin Islands, under the rule of such cases as Puerto Rico v. The Shell Co., 302 U.S. 253 (1937), and Vermilya-Brown Co. v. Connell, 335 U.S. 377 (1948).

ment of section 4 of the Organic Act of the Virgin Islands and by Executive Order 9170.*

NAVIGATION AND COASTWISE LAWS

The term "navigation laws" (or "navigation and vessel inspection laws") is not expressly defined in the statutes here in question. It appears to be quite comprehensive in scope. Bouvier is cited as having defined navigation as "whatever relates to traversing the sea in ships." Brookhaven v. Smith, 90 N.Y.S. 646, 651, 98 App. Div. 212 (1904). "Navigation,' said the court in Hawn v. American S.S. Co., 107 F. 2d 999, 1000 (C.A. 2, 1939), "does not cease when the ship is in drydock for repairs, awaiting new business." "Navigation" includes shipping and the conduct of ships generally, Pollock v. Cleveland Shipping Co., 47 N.E. 582, 583 (Ohio, 1897); the management of ships, The Ada O., 27 F. 2d 906, 907 (S.D. Texas, 1928); and is not confined to the moving of a vessel from one port to another for purposes of transportation of goods or passengers, United States v. Monstad, 134 F. 2d 986 (C.A. 9, 1943).

Thus, as a general proposition, the navigation laws, or the navigation and vessel inspection laws, of the United States largely appear in the provisions of law codified under title 46 U.S.C. (Shipping) and title 33 U.S.C. (Navigation and Navigable Waters), which include the definition of "vessel" in 1 U.S.C. 3.

Specifically, 46 U.S.C. 292 would appear to be classified as a navigation law. Dredges are considered vessels in admiralty jurisdiction, even if they have no motive power of their own, Ellis v. United States, 206 U.S. 246, 259 (1907); The Alligator, 161 F. 37, 39 (C.A. 3, 1908). They are "vessels subject to the ordinary rules relating to navigation,” The Kennebec, 167 F. 847, 855 (S.D.N.Y., 1908); In re Eastern Dredging Co., 138 F. 942 (D. Mass., 1905); The City of

The conclusion reached will enable the Government of the Virgin Islands to obtain a favorable revision of its obligation to provide reimbursement to a contractor for the cost of dredging a deep water channel in the harbor of St. Croix. The Department of the Interior advises that the present obligation is not to exceed $3 million be, if it is permissible to use foreign dredges, the contractor has indicated willingness, based upon bids taken, to reduce the maximum obligation from $ million to $2.5 million.

5 To same effect, see Cc umbo v. Cape Cod 8.8. Co., 123 F. 2d 991, 995 (C.A. 1, 1941).