Powers of the President during crises

by J. Malcolm Smith; Cornelius P. Cotter

The Federal Emergency Relief Act of 1933 opened with a declaration that the economic depression created a serious emergency, due to wide-spread unemployment and the inadequacy of State and local relief funds, resulting in the existing or threatened deprivation of a considerable number of families and individuals of the necessities of life, and making it imperative that the Federal Government cooperate more effectively with the several States and Territories and the District of Columbia in furnishing relief to their needy and distressed people.[69] Here then was an emergency created by the inadequacy of previous effort to cope with abnormal threats to the well-being of the population. The Municipal Bankruptcy Act of May 24, 1934 also described the emergency in terms which related it to the inability of local government units to function properly. Congress declared a national emergency existed, caused by the increasing financial difficulties of many local governmental units, which rendered imperative “the further exercise of the bankruptcy powers of the Congress.”[70]

On the same day that he signed the Emergency Relief Act, the President also signed an Act describing another facet of the emergency. The latter Act stated “the present acute economic emergency” was in part the result of very low prices for farm products. The effect of declining income for the American farmer had virtually destroyed his purchasing power, thus undermining the agricultural assets supporting the national credit structure.[71] The causal phenomena for declarations of emergency were, according to the statutes, heavy and unwarranted withdrawals of gold, severe drains on the Nation’s stocks of gold, widespread unemployment, and a severe and increasing disparity between the prices of agricultural and other commodities. Efforts to meet the emergency situation were directed immediately to ameliorate the existing emergency conditions and ultimately so alter the causal phenomena as to eliminate the causes of the existing threat to national well-being. The Gold Reserve Act of 1934 made passing reference to “the existing emergency.”[72] The President in January 1936 proclaimed that this emergency had not been terminated but, on the contrary, had been intensified in different ways by unsettled conditions in international commerce and finance and in foreign exchange.[73] As late as 1941 Congress continued certain of the powers delegated in the Gold Reserve Act until June 1943 “unless the President shall sooner declare the existing emergency ended.”[74]

In 1953 Congress authorized the President to declare the existence of economic disaster in any area. Thereafter the Secretary of Agriculture, on finding that an economic disaster had created a need for agricultural credit that could not be met for a temporary period from commercial banks or other responsible sources, might authorize emergency loans to farmers.[75]

Some statutes, on the other hand, identify emergency with the causal phenomena instead of their product. The National Industrial Recovery Act, for example, simply declared that a national emergency existed. This emergency, according to the statute was productive of widespread unemployment and disorganization of industry, which burdened interstate and foreign commerce, affected the public welfare, and undermined the standards of living of the American people.[76]

The Securities Exchange Act of 1934 found that national emergencies, which produced widespread unemployment and the dislocation of trade, transportation, and industry, burdened interstate commerce and adversely affected the general welfare, were “precipitated, intensified, and prolonged by manipulation and sudden and unreasonable fluctuations of security prices and by excessive speculation on such exchanges and markets.”[77] In these two statutes the term emergency is first used in a context associating it with causal agency, and secondly as something intermediate between the causal agents and the disagreeable ultimate effects.

While calling attention to the occasionally variable usage of the term emergency, we by no means intend to develop a metaphysics of emergency in order to settle the question whether it is rightfully applied to cause, effect, or something intermediate. We are satisfied to accept the overwhelming legislative tendency to apply the term to the undesired effects of events, attributing variant usages to imprecise draftmanship.

At this point it is appropriate to indicate that many statutes (some of which are described here; some of which, for sake of brevity or avoiding the redundant, are not) either declare the existence of, or describe action to be taken in the event of the occurrence of, a situation which by other statutes has been termed an emergency. Statutes in this category, describing the situation but refraining from applying the term emergency to them, are illustrated by the following: A Tariff Act amendment of June 1934 gives the President the power to curtail imports if he finds that existing duties or other import restrictions of the United States or any foreign country burden and restrict the foreign trade of the United States.[78] The Securities Exchange Act associates emergency, among other things, with the burdening of interstate and foreign commerce.

Did Congress intend the Tariff Act Amendment as an emergency statute? At that particular time, probably not. But later amendments to the Tariff Act specifically refer to emergency conditions affecting the American fisheries industry. We do not believe it is necessary to ferret out the precise Congressional intent in Acts which do not explicitly use the term emergency or describe the object of correcting legislation in terms which clearly reflect Congress’ finding that an emergency exists.

Inflation: We have included in the economic section some of the statutes designed to prevent or alleviate wartime inflation. Enacted within months after Japan’s attack on Pearl Harbor, the Emergency Price Control Act of 1942 was designed to prevent economic dislocations from endangering the national defense and security and the effective prosecution of the war.[79] The factors contributing to the national emergency included “speculative, unwarranted, and abnormal increases in prices and rents; ... profiteering, hoarding, manipulation, speculation, and other disruptive practices.” The war effort would be aided through insuring that defense appropriations were not dissipated by excessive prices; by protecting persons with relatively fixed and limited incomes, consumers, wage earners, investors, and persons dependent on life insurance, annuities, and pensions, from undue impairment of their standard of living through skyrocketing prices. Colleges, local government units, and other institutions with relatively fixed incomes were also to be protected against the inflationary spiral. The emergency price control measure was formulated in anticipation of a possible post emergency collapse of values and was aimed at the avoidance thereof.

The Proclamation of May 27, 1941, in which President Roosevelt declared the existence of an unlimited emergency caused by the supposed expanded war aims of the Axis powers, carefully translated the emergency into economic terms. The President advised businessmen that in maximizing war production they would be protecting a world in which free enterprise could exist; and workingmen, in so doing, would protect a society in which labor and management could bargain on free and equal terms. Benefits were also forecast for privately endowed institutions and local governmental units.[80] The extension of price controls in 1946 was attributed to the continued existence “of abnormally excessive spending power in relation to the presently available supply of commodities.”[81] And the Renegotiation Act was addressed to meeting the emergency within an emergency created by the wartime disruption of competitive conditions in regard to the placing of defense contracts.[82]