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not regarded, as adequate, the owner receives 75 percent of what the President determined to be a fair value and he sues in the Court of Claims for the rest.
So that while he is deprived of his property, if he brings an action in view of the fact that he believes the value has not been fairly stated, he gets 75 percent of what was estimated to be its value and he goes through litigation with the right of the Government to appeal even to the Supreme Court of the United States with respect to the final determination of its value. But in the meantime he is out of the possession of his property.
Senator LODGE. May I ask you some questions on that point?
Senator LODGE. In other words, under condemnation proceedings he has to go through judicial court procedure to determine the question of what he shall receive for his land?
Mr. EMERY. Yes.
Senator LODGE. And what other questions are determined by the court?
Senator KILGORE. Necessity must be shown.
Senator LODGE. What I am getting at is, what is the difference between the method under this bill and ordinary condemnation proceedings? What points are passed upon by the court other than value?
Mr. EMERY. The necessity of the condemnation and to distinguish whether it is for public or private use, and whether or not the compensation offered is fair.
That question is often determined by a board of appraisers. There are exceptions to that when property is condemned for military purposes.
Senator LODGE. If the Government wants to take a piece of land for an Army post or a Coast Artillery post, surely a court does not decide on whether the Government needs it.
Mr. EMERY. If the question were raised any citizen could have a determination made as to whether it was for a public as distinguished from a private use. That question has been raised.
Senator LODGE. That doesn't quite answer my point. If the War Department wants to take some land that is on a point, let us say out in the Atlantic Ocean, they want to take that point of land for Coast Artillery purposes, and the land belongs to a private individual, does the court pass on the military desirability of that land?
Mr. EMERY. No; not at all. You already have legislation that fully covers that subject, and that is the act of July 2, 1917, which authorizes the Secretary of War to institute condemnation proceedings to take land needed for military purposes; and it further states that in time of war when land is needed, that land may be taken and the condemnation proceedings to be completed following the occupation of the property. That is the present state of the law.
After calling your attention to how the bill operates, I want to call your attention to just such instances as this, to illustrate the fact that the various powers which the Government now possesses, and the manner in which they could be expanded without the necessity of giving it universal and unlimited authority proposed in this bill.
Senator KILGORE. May I ask a question on that point—in the condemnation of land it must be for military purposes?
Mr. EMERY. Yes.
Senator KILGORE. It could not be condemned and turned over to some private concern to use?
Mr. EMERY. Not at all.
Senator KILGORE. But under this proposed bill, this commandeering would not necessarily be for public purposes, but could be used for private purposes. In other words, it could be commandeered and turned over to some other private agency to use?
Mr. EMERY. That would be, of course, as far as the first section is concerned.
Senator KILGORE. I am talking about this bill. This bill would contemplate what you might call a commandeering for private use, isn't that right?
Mr. EMERY. That is the transfer of property from one person to another on the assumption that it was necessary for national defense to do that.
Senator KILGORE. But to be used by the second person in carrying out contracts on which he would make a profit?
Mr. EMERY. Well, that might be, but I don't question the authority of the Government to take property for a public purpose when war is imminent or to supply the defense necessities of the United States. But I point out to you that such powers have always been accompanied in the past by distinct limitations and, secondly, that in this particular bill in clause (b) on page 2, there is no such limitation expressed in the bill on the disposition of the property to a third person.
Senator KilGORE. That is the point I am getting at. All these previous actions have contemplated the acquisition by the United States Government for the use of the Government of the United States, isn't that right?
Mr. EMERY. Yes, sir.
Senator KılGORE. And not the acquisition by the Government of the United States to be sold or transferred to some private industry or put to private use.
Mr. EMERY. Well, I want to go further than that, sir. I want to say in all wars of the past, and in the last Great War, that the Government of the United States has never taken over private property, except real property or materials, consumable materials which, of course, should be subject to a different consideration, but it has never taken over property for production purposes and taken title to it. In fact under all the legislation of the past where the Government's purpose was to obtain production for military defense, and that is what I understand to be the Secretary's contention here today, the property has been commandeered and the property has been used or operated by the Government, but rent has been paid for it to the owner and at the conclusion of the conditions which justified the taking of it over, it was restored to its owner and damages paid in compensation for any injury that had been done.
The illustration to that is the taking over of the railroads in the United States in the last war.
Senator KILGORE. I was going to ask you if you are familiar with that.
Mr. EMERY. Yes, sir.
Senator KILGORE. When the Government took the railroads over during the last war it paid a rental for the use of the railroads and
then at the conclusion they placed the roads back in a comparable condition and paid damages where damages were due?
Mr. EMERY. Yes, sir; they paid damages for repairs but, of course, it is a matter of public record that those claims were not settled for many years. The same thing operates today with respect to the taking over of the nitrate plants, the taking over and the operation of systems of communication or transportation. In all these instances which have been provided for, and in every instance which the Government has sought to use facilities that were necessary for the operation or its action in relation to national defense, it has either rented the property or taken it over temporarily, as for instance where a contract was refused, although there is only one single instance as far as I know of—in fact there is no single instance of any such case in which the Government has ever entered upon a property necessary for national defense and found the owner unwilling to produce for the benefit of the United States under the prices determined by the Secretary of War.
Senator Downey. You say there is not a single instance of that kind? Mr. EMERY. No, sir, there is not and I challenge the production of
I heard the Secretary here, if I understood him rightly, saying that the property in southern California was taken over without authority.
Senator JOHNSON of Colorado. In the North American Airplane case?
Senator LODGE. How about these instances of people who have machine tools that were referred to earlier, people who have machine tools and won't sell them because they want the price to rise?
Mr. EMERY. Well, that would be a very simple matter and could be very easily obtained, it seems to me, by an amendment of an act which you passed a very short time ago.' I refer to the act of May 31, 1941, which is commonly known as Priority Act; and by that act the President, whenever he is satisfied that the fulfillment of the requirements for the defense of the United States would result in a shortage in the supply of any material for defense or for a private account or for export, the President may allocate such material in such manner and to such extent as he deems necessary or appropriate in the public interest. In other words, while he doesn't take title to the property he can determine who can have it and who can use it. That is the very function that is essential to the conduct of defense.
Senator LODGE. I don't think that will quite meet the point that I understood Judge Patterson to make. He wasn't talking about future production of machine tools, he was talking about existing machine tools.
Mr. EMERY. Exactly; and what I want to suggest is that whenever the President says that the fulfillment of the requirements of the defense of the United States requires the taking over of any machines the Government is authorized to do that or to use them for that purpose without the necessity of enacting legislation so general in its character as this.
In other words, when you compare the powers which the Government now possesses in that regard with the powers which it claims to find necessary to conduct national defense, I think you will find that many of them are satisfied by the requirements of the existing statutes or could be met by amendment subject to reasonable limitations in the exercise of such power, without the enactment of legislation so universal as this, which doesn't distinguish, for example, between the right to take a machine tool and the right to seize a wedding ring from the finger of a bride.
It may be said, of course, that these are frivolous suggestions as to how power may be used, but nobody can determine how power may be used, but only Congress can determine how power shall be granted and with what restrictions and limitations in its exercise.
I want to point out furthermore that this is not a power merely given to the War Department, the exercise of this power is not restricted to the War Department.
Under section 4 of this bill the President may promulgate rules and regulations, is empowered to require such information as may be necessary for the execution of the act and, finally, he may exercise any power or authority conferred on him "by this act through such department, agency, board, or officer as he shall direct or appoint."
So that the powers to be exercised here may be employed with respect to any kind of property, by any one of the agencies of the United States that the President chooses to use for that purpose. Of course there are major requirements for the Army and Navy. That, obviously, would be of first consideration in provisioning and supplying the armed forces, but these powers are much broader than that, and I want you to note, gentlemen, in this connection, that the term national defense” used as a standard to justify the taking of property, is a much broader standard than either“when war is imminent” or a state of war,” because “a state of war" is a determinable fact and it is ended by a treaty or otherwise.
The "imminence of war” is a determinable fact for either the war takes place or doesn't. But national defense and provisions for it exist as long as there is a nation to defend.
Senator DowNEY. May I intervene there? I must admit that that expression "imminence of war” is to me a very uncertain and unhappy term. Who determines whether it is "imminent"?
Mr. EMERY. Well, it has always been determined by the Congress or by the Executive. The term has been used in many statutes of the United States and, of course, has been employed in order to authorize the necessary preparation where war was thought to be eminent.
Senator Downey. There is nothing upon which you could base a statement at the present time that war is imminent now?
Mr. EMERY. No; because it has to be predicated upon somebody's judgment who has responsibility for the determination of the circumstances.
Senator Downey. And that ordinarily would be the Chief Executive or the Congress?
Mr. EMERY. Generally; yes, sir.
Senator Lodge. Wouldn't it improve this bill to have a definite limit on it?
Mr. EMERY. Yes; you put a definite limit on the lend-lease bill to June 30, 1943, and there would seem to be no reason why there should not be a limitation as to time on this bill and then extend it if it became necessary.
I want to call your attention finally, if I may, gentlemen, with respect to the granting of power of this kind. Of course all the criticism that is aimed at totalitarian powers in our day is aimed at this very extraordinary and unlimited power that is exercised by governments in other countries.
We are not yet in war. On the contrary we are sure that every effort is being made to keep us out of war and, of course, it is our desire to do so if it can possibly be done subject to the requirements of defense. But the fundamental principle of this Government at all times has been the protection of rights by the limitation of power. But here rights are subjected to Executive discretion with respect to the most fundamental of all, property rights, all that comes to men as the fruit of their labor and there is no limitation to be found in this bill except the judgment of the Executive with regard to the requirements of national defense.
Now, I don't think it is an argument against a reasonable criticism and reasonable request for restriction or limitation in the exercise of power, to suggest that the various things that might be done are purely imaginative. Well, if there is no need for the power, then why give it. And certainly the power which is here given would justify the seizure of realty, of stocks, bonds, bank deposits-every form of personal property that can be subjected to discretion; tangible or intangible, and every right that can be gained by contract, by license, by patent, by agreement. And certainly if we are going to enter a war we are going to prepare ourselves for the purpose of protecting the way of life of the American people, then we are going to protect them in what they possess of rights and property, for certainly that is what we are defending and that is what we are fighting for and if we grant to our own Government a universal and unlimited right to take property for the purpose of national defense, without limiting it to the necessities which are reasonably displayed, with broad discretion, if you please, in the right to take it over, we should be doing, it seems to me, the reasonable thing that is suggested.
I want to point out here that the experience of our Government in the past justifies us in the suggestion that if we cannot have at all times that which Woodrow Wilson described as the most effective of all things, "the spontaneous cooperation and voluntary cooperation of a free people," then if it becomes necessary to penalize cooperation we get it not by taking over property but we get it by using property for those purposes which are most practically related to the national defense.
And that has been the experience in the past, that whether we took over railroads or systems of communication or real property or patents, that we have never taken possession by shift of title, except with respect to real property and consumable property, of course, but as distinguished from that, productive property or duable goods as distinguished from consumable goods, Government has taken over and used when necessary and paid rental for it, which was just compensation due.
Senator Downey. May I intervene to ask a question? There has been rather widely stated in the newspapers that one of the bottlenecks of defense production has been the patents held either by European citizens or by nationals of other countries.