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In your opinion, under existing laws, is there any provision by which the Government may meet a situation occasioned by a supression of production because of patent owners who refuse to cooperate?
Mr. EMERY. Why, I would not want to be sure of that offhand, but it is a matter very very readily rectified by legislation authorizing the Government of the United States to operate patents essential to national defense, on the offer of reasonable rental or use; but I should rather have the views of a well-informed specialist on that subject than offer any general suggestions of my own. But certainly the patent problem is one that readily lends itself to the necessities of the Government in national defense without destroying or making necessary the taking over of all property rights in patents for the purpose of defense.
Senator JOHNSON of Colorado. All patent rights are created by the Government through license and perhaps there is some limitation placed in the granting of patents when it comes to use of them by the Government.
Mr. EMERY. There are limitations, I know, with regard to protecting the secrecy of patents for the purpose of contributing to the national defense, but I should prefer to have one more intimately versed on the specialties of patent law than to pass on the question.
Senator JOHNSON of Colorado. That is one of the strong arguments used for the passage of this bill.
Mr. EMERY. Well, of course you can obviously see, Senator, that is not necessary to authorize the taking over of all property in the United States by the Government to reach patents. In other words, if the issue before us was a method of authorizing the Government to make use of any particular kind of property under any particular kind of circumstances that were essential to the defense, it would not be necessary to authorize the Government to take possession of all other property in order to accomplish that purpose.
Senator DOWNEY. Mr. Chairman, in connection with that, it seems to me that somebody who is entirely familiar with respect to monopolies and patents should be called before this committee.
Mr. EMERY. At this point I would like to call to your attention, if I may, Senators, a letter from the Attorney General transmitting to the Senate in October 1939, a list of emergency powers possessed by the President, which includes, as the Attorney General says here, "a list of statutes which by their terms grant to the executive branch of the Government powers which may be exercised in an emergency or state of war.”
There are over 100 statutes enumerated here—many of them which relate themselves to the subject matter before you here. And you will find also that there are over 20 statutes exclusive of those which you have recently enacted, and I refer to the Selective Service Act and amendments there to section 9, which was recently passed by the Senate, to the Priorities Act, the lease-lend bill, the amendment to section 9 of the Defense Act of 1940, every one of which grants various powers to either the Army or the Navy Departments, or generally to the Executive in connection with national defense.
I will illustrate them by reference to the following:
Section 120 of the National Defense Act, which you amended by section 9 of the Selective Service Act authorizing the requisitioning of plants which refused to perform contracts on reasonable terms for military supplies and equipment. That is in its broadest terms and of course it is merely necessary to offer a contract wherever there is a necessity for it, to obtain the power to operate under it if it should be refused.
There is the Naval Emergency Fund Act which act applies to the Army, which authorizes the purchase of supplies under emergency conditions without resorting to bidding and so forth. There is the Merchant Marine Act of 1936, which authorizes the requisitioning of ships on the one hand, which stops the disposal of ships registered under our conditions and which authorizes under another and separate legislation, the compulsory building of ships for the military or naval account.
There is the Federal Power Act which requires all the power companies throughout the United States to subject the distribution of power to requisition by the Federal Government or to the disposal of that power and to making such connections as may be necessary to produce the power for purposes of national defense.
There is the control of transportation which, first of all, provides or authorizes the taking over of transportation systems by the United States, and the terms of which are broad enough to include not merely the railroads of the United States but other forms of transportation that may be required for military purposes.
And there is also in the second act a provision for priorities with respect to transportation under the Transportation Act of 1920, which the President can bring into power at any time.
And I may say that it was the use of power of that kind in the last war that was the foundation of priorities and they were there employed.
There is the reorganization of the executive and administrative agencies; the conservation of tin, the authority to lease buildings in the District of Columbia, to requisition them, to acquire land in any place or at any time for the requirements of national defense under condemnation proceedings, or to take possession of that land and follow with the condemnation proceedings thereafter.
The acquisition of property for the production of lumber; the operation of nitrate plants, the authority to suspend trading on security exchanges, first by the Security Commission itself, and, secondly, by the authority of the President of the United States.
And then you have added to that very recently by the amendment to the Selective Service Act an authority in relation to the requisition of plants with respect to where production is halted either by labor disputes or as you have said, “by other causes.”
The CHAIRMAN. You refer to the Connally amendment? Mr. EMERY. Yes; I refer to the Connally amendment now under consideration in the House. I have simply called your attention to the statute which gives the authority with respect to priorities to the President, exercised through his agencies, and I especially call your attention to paragraph 2 of section 2 of that act of May 31, 1940, as one which, the amendment of which with respect to machinery or other necessities of that character required by the Government, would give ample but not unlimited authority to requisition or give priority to machinery products that were necessary for national defense.
Senator Johnson of Colorado. Mr. Emery, in connection with other acts of Congress pertaining to this same subject, I call your attention to the so-called lend-lease bill.
Mr. EMERY. Yes, sir.
Senator Johnson of Colorado. I notice that that bill, section 3, reads as follows:
Notwithstanding the provisions of any other law, the President may, from time to time, when he deems it in the interest of national defense, authorize the Secretary of War, the Secretary of the Navy, or the head of any other department or agency of the Government, first, to manufacture in arsenals, factories, and shipyards under their jurisdiction, or otherwise procure, to the extent to which funds are made available therefor, or contracts are authorized from time to time by the Congress, or both, any defense article for the Government of any country whose defense the President deems vital to the defense of the United States.
Then it describes any defense article under section 2 as follows:
It is any weapon, munition, aircraft, vessel, or boat; any machinery, facility, tool, material, or supply necessary for the manufacture, production, processing, repair, servicing or operation of any article described in this subsection; any component material or part of or equipment or any article described in this subsection; any agricultural, industrial or other commodity or article for defense.
The point that I desire to make is this: Under the lend-lease bill the President is given all the power, as I understand this language, that he is given in the pending measure except that the procurement is to be for the benefit of some foreign nation deemed by him to be necessary in our national defense.
Now, if we can do these things for some foreign nation why shouldn't we do them here for our own defense in our own country?
Mr. EMERY. Well, Senator, I call your attention that under the terms of that bill the authorization given is to contract for or to purchase or to make contracts for the production of any goods for those purposes, and then under the applicable provision of section 9 of the Selective Service Act, if the producer refuses to manufacture for under the contract offered, the Government could take over and operate the plant for that purpose, but it would do so under rental. And I want to emphasize all the time the fact that in every one of these bills to which reference is made and to every one of these statutes under which we have operated in the past for the purpose of national defense, we have exercised the power to rent, to occupy, to operate, to manage, to requisition for that purpose and then to restore the property to the owner when the Government concludes the use which it had in mind.
But we have never taken over plants for purposes of production by changing title to the United States as the condition for that purpose. And while it has been said here this morning, very properly, that such suggestions have been made a number of times, and they were made by the committee on national defense which met in 1931 and reported in 1932, and their various proposals have been modified and changed up to the last four “M” day that was suggested a year ago but was never made public.
The Congress has considered but it never has enacted any provisions such as this, which authorizes the Government to take title to property universally for purposes of national defense in the discrimination of the Executive.
Senator Johnson of Colorado. I am not entirely able to follow your argument. I hope that your argument is correct. Although I did not vote for the lend-lease bill, because of its sweeping powers, I do not find anything in the lend-lease bill about paying rentals. I do read in this bill, it says: “or otherwise procure," and that is pretty sweeping. And then in paragraph 2 of subparagraph A of section 3, I notice that the President is given power to sell, transfer title, to exchange, lease, lend, or otherwise dispose of to any such government any defense article. We go back to the “defense article" again. And then you go up here to your definitions of “defense articles” and that means any tool, weapon, munition, aircraft, vessel, boat, machinery, facility, material or supply necessary for the manufacture, production, processing, repair, servicing or operation of any article described in this subsection; any component material or part of or equipment for any article described in this subsection; any agricultural, industrial, or other commodity or article for defense.
Mr. EMERY. Yes, sir.
Senator JOHNSON of Colorado. And it seems to me that the language in the lend-lease bill is just as sweeping as it is in this bill with the single exception that everything in the lend-lease bill is for some other government and everything in the present bill is for our own Government.
Senator KILGORE. But there is a difference in procuring those articles under the two bills.
Mr. EMERY. I am familiar with the bill and I am sure that all the transfers that are authorized there are transfers of property into the possession of the United States, or property for which the United States may contract and, of course, this bill goes so far—the lendlease bill goes so far it would authorize the United States to go into a foreign country which the President had determined necessary for national defense, and to offer contracts there.
Senator JohNSON of Colorado. That is right.
Mr. EMERY. For the account of the country which they believe necessary to national defense; but there isn't a line in this bill that authorizes the President of the United States to take property of citizens of the United States and transfer it to a foreign country, except such property as either title is now in the United States or which is contracted for by the United States for the foreign account.
Senator KILGORE. Under the lend-lease bill in conjunction with S. 1579, would it be possible for the United States Government to take over a plant in the United States and give it or sell it or otherwise dispose of it to some other nation if that was considered necessary for our national defense?
Mr. EMERY. I don't see where you could escape any other conclusion, because this bill specifically states it is to be construed “as an addition to existing law.” It is considered as an additional grant of authority and as the authority already exists under the lend-lease bill to transfer to any other country which the President deems necessary for national defense any property which the United States has in its possession or may contract for, certainly any property which the United States took over it could transfer to another nation for that purpose or clause B on page 2 would be meaningless.
Senator JOHNSON of Colorado. I hope, Mr. Emery, the distinction you make between the lend-lease bill and the present bill is actually as you interpret it. I might say that I am terribly disturbed about the language on page 2 in lines 7 and 8 of the present bill:
To sell or otherwise dispose of, either temporarily or permanently.
Senator Johnson of Colorado. I think that that is pretty drastic language and goes far beyond any possible necessity of national defense.
Mr. EMERY. And you observe that it is not limited by the termination of national defense?
Senator Johnson of Colorado. It isn't limited by anything Mr. EMERY. That power of disposition to third parties—in fact the President could transfer it to private parties within the United States.
Senator JOHNSON of Colorado. And as you pointed out a moment ago, it might go far beyond any emergency; it isn't ended with the emergency
Mr. EMERY. Yes, sir; because the termination of the emergency is within the Executive discretion.
Senator JOHNSON of Colorado. In other words, it gives to the President absolute power over all property in the United States?
Mr. EMERY. If the emergency is measured by the necessity of national defense. I want to emphasize again that the term "national defense” is so much broader than the existence of war," because when war is terminated powers which are granted during a war terminate with the end of the war itself, but that "national defense" is a continuing condition just as long as there is a nation to defend.
Senator DOWNEY. As a matter of fact when this war ends Germany will just begin, isn't that true? Mr. EMERY. We will have a new one then. That is all I have to say, Mr. Chairman. Senator DOWNEY. May I intervene again. I gained from something you said that perhaps I was using the word "commandeer" improperly. Does the word "commandeer” connote a legal significance in your mind?
Mr. EMERY. “Commandeer” is to take over by command literally, It might mean either the taking over permanently or temporarily Usually it has been applied to the immediate seizure of property for some military purpose as distinguished from taking over under power of eminent domain.
Senator DOWNEY. That was the way I used it but you seemed to use the meaning merely for temporary purposes rather than permanent purposes.
Mr. Emery. It might mean either one, but, generally speaking, it means temporarily.
Senator KilgORE. “Commandeer" is usually used in a sudden emergency or actually in time of war. Mr. EMERY. Yes, sir; for summary seizure. Senator JOHNSON of Colorado. By a military power and authority. Senator KILGORE. And for the use of power and authority only.
The CHAIRMAN. Mr. Emery, I want to enlarge a little bit by way of inquiry, if I may, upon the questions directed to you by Senator Johnson in reference to the lend-lease bill. On page 1 of the four-page folder that you have there, you will notice that under section 3, already having defined what national-defense instruments are there, it reads:
Notwithstanding the provisions of any other law, the President may, from time to time, when he deems it in the interest of national defense, authorize the Secretary of War, the Secretary of the Navy, or the head of any other department or agency of the Governmentto do what?