Powers of the President during crises

by J. Malcolm Smith; Cornelius P. Cotter

Upon amendment of the July 1940[332] Act in June 1942, the President was authorized to prohibit or curtail the exportation of any articles, technical data, materials, or supplies, except under such rules and regulations as he might prescribe.[333] Unless the President otherwise directed, the functions and duties of the President under this section of the Act were to be performed by the Board of Economic Warfare.[334] The Export Control Act of 1949 empowered the President to prohibit or curtail the exportation from the United States, its Territories and possessions, of any articles, materials, or supplies, including technical data but excluding agricultural commodities in excess of domestic requirements.[335] The purpose here was to protect the United States from the excessive drain of scarce materials.[336] The Atomic Energy Act also prohibited the export from or import into the United States or curtail the exportation from the United States, its Territories and as authorized by the Atomic Energy Commission upon a determination by the President that the common defense and security would not be adversely affected thereby.[337]

Obviously embraced within the power to embargo is the power conditionally to permit exports. Thus, in December 1941 following Pearl Harbor, Congress permitted the President, whenever he deemed it to be in the interest of national defense, to authorize the Secretary of War to sell, transfer title to, exchange, lease, lend, or otherwise dispose of, to the government of any country whose defense the President deemed vital to the defense of the United States, any defense article procured from funds appropriated for the military establishment prior to or since March 11, 1941.[338]

In formulating an export policy for the period following World War II era, Congress doubtless has been influenced by the post war inflation. The Export Control Act of 1949, in granting the President power to prohibit or curtail the exportation of certain materials, including technical data,[339] made explicit the Congressional intent to protect the domestic economy from the excessive drain of scarce materials and to reduce the inflationary impact of abnormal foreign demand.[340]

Domestic Conservation: With a view to stabilizing prices and encouraging the conservation of deposits of crude oil situated within the United States Congress in 1935 prohibited the interstate shipment of contraband oil (i.e., oil produced in excess of state imposed quotas).[341] Two different provisions of the Second War Powers Act of 1942 related to conservation of strategic materials. Section 801 empowered the President to direct the Administrator of the Federal Security Agency to assign the manpower of the Civilian Conservation Corps to the extent necessary to protect the munitions, aircraft, and other war industries, municipal water supply, power and other utilities, and to protect resources subject to the hazards of forest fires.[342] Section 1201 permitted the Director of the Mint to vary the metallic composition of five cent pieces to conserve strategic metals.[343]

Priorities and Allocation: In late May 1941, Congress provided that whenever the President was satisfied that the fulfillment of requirements for the defense of the United States would result in a shortage in the supply of any material for defense or for private account or for export, the President could allocate the material in whatever manner he deemed necessary or appropriate in the public interest and to promote the national defense.[344] This provision was retained in the Second War Powers Act of 1942.[345] In a joint resolution of March 1947 declaring the need for maintenance of a technologically advanced and rapidly expandable domestic rubber-producing industry and for a Congressional study of the problem, Congress provided that in the interim, pending the enactment of permanent legislation, the government should continue allocation, specification, and inventory controls of natural and synthetic rubber.[346] A year later this power was continued. The President was authorized to exercise allocation, specification, and inventory controls of natural rubber and synthetic rubber to insure the consumption of general-purpose synthetic rubber as a part of the estimated total annual consumption of natural rubber.[347]

The First Decontrol Act of 1947, providing for the termination of certain of the provisions of the Second War Powers Act, permitted the continued exercise of power to allocate materials which were certified by the Secretaries of State and Commerce as necessary to meet international commitments.[348] Section 101 of the Defense Production Act of 1950 empowered the President to allocate materials in such manner, upon such conditions, and to such extent as he deems necessary or appropriate to promote the national defense.[349] A related section provided that no person should accumulate (1) in excess of the reasonable demands of business, personal, or home consumption, or (2) for the purpose of resale at prices in excess of prevailing market prices, materials which had been designated by the President as scarce materials or materials the supply of which would be threatened by such accumulation.[350] The Atomic Energy Act of 1946, as amended in 1951, expands the allocation power to its logical extreme by allocating all fissionable material to the federal government, making it unlawful for any person to possess or transfer any fissionable material, except as authorized by the Atomic Energy Commission.[351]

Control of Productive Facilities

Priorities: Particularly in the conversion period preceding full-scale defense production it is necessary to compel producers to accord first priority to fulfillment of government contracts. During such interval prior to all-out defense mobilization, when his competitors may be satisfying the demands of consumers, the businessman has ample cause to fear that in giving priority to government orders disgruntled private customers will be permanently lost to competing firms. Accordingly, a June 1940 statute provided that, in the discretion of the President, fulfillment of Army or Navy contracts was to take priority over all deliveries for private account or for export.[352] In a year this was amended to extend the President’s power over priorities to include contracts or orders for the Government of any country whose defense the President deemed vital to the defense of the United States and contracts or orders, or subcontracts or sub-orders, which the President deemed necessary or appropriate to promote the defense of the United States.[353] In May 1941 the Maritime Commission was empowered to demand that work on its contracts take priority over the furnishing of materials or performance of work for private account or for export.[354] The Second War Powers Act continued in effect the provision of the June 1940 and May 1941 statutes[355] by providing that all orders for vessels, equipment, and weapons placed by the Army and Navy were, in the discretion of the President, to take priority over all deliveries for private account or for export.

To repair the Spring 1945 flood damages, Congress in June of that year granted the War Production Board, and every other governmental agency which had jurisdiction over allocations and priorities relating to farm machinery and equipment, authorization to take such steps as might be necessary to provide for the necessary allocations and priorities to enable farmers in the areas affected by floods in 1944 and 1945 to replace and repair their farm machinery and equipment which was destroyed or damaged by floods, or windstorms, or fire caused by lightning, and to continue farming operations.[356]

Again, the Defense Production Act of 1950 gave the President virtually plenary power to require that defense orders be given priority by private industry: “The President is hereby authorized ... to require that performance under contracts or orders (other than contracts of employment) which he deems necessary or appropriate to promote the national defense shall take priority over performance under any other contract or order.”[357] Perhaps not classifiable as examples of an assertion of governmental priority in the use of productive facilities are three enactments under which the Federal Government has exercised the right to withhold issuance of patents and to reserve certain inventions for its exclusive use whenever the public safety or defense so require.[358]