1 Opinion of the Court number of hardrock miners employed in gold mines was much smaller than the estimate based on the 1940 and 1941 figures; that, after taking into consideration the number of hardrock miners who would be necessary to maintain the closed mines in safe condition, and the number who were elderly men and home owners and thus unlikely to leave their homes unless forced to do so, a relatively small number of experienced miners would be thrown on the labor market for any purpose. The conclusions of the Mining Division were reinforced by data supplied by representatives of the larger gold mines who came to Washington to confer with officials of WPB and the Army, and also by Congressional Representatives of the mining States. Everyone involved in the ensuing controversy was aware that there was no power in any arm of the Government to force gold miners to work in the nonferrous metal mines, and no way to deny to gold miners opportunities to work in the same war industries or on the same armed services' construction projects that had been luring the nonferrous metal miners away from their jobs in the mines. Selective Service could not bring itself to grant deferments to miners. The Army indicated that it might furlough some four thousand soldiers who had mining experience, and condition their furloughs on their staying on the jobs in the nonferrous metal mines. But the Army was reluctant to grant those furloughs while the gold mines were still operating. Army officials were furnished with facts and figures showing that few hardrock miners would be released by the closing of the gold mines and that there was no way of compelling those miners to work in the copper mines and little likelihood that they would do so. Despite this, officials of the Army continued to bring great pressure to bear on the War Production Board to close down the gold mines, indicating that otherwise WPB would not be doing its part to increase production in the nonferrous metal mines. The Army's objection to the continued operation of gold mines appears to have been largely political rather than practical. Its reluctance to furlough trained soldiers was understandable, but the fact remains that it was the only governmental agency which had sufficient control over manpower to compel persons under its jurisdiction Opinion of the Court 134 C. Cls. to work in the nonferrous metal mines and continue to do so. Over the vigorous objection of informed persons in and out of the War Production Board, the Board on October 8, 1942, issued L-208 which ordered the complete shutdown within 60 days of all the country's gold mines which did not produce sufficient strategic metals to warrant their holding serial numbers. Within a relatively short time it became apparent that the closing of the gold mines was doing little to relieve the shortage of hardrock miners in the strategic metal mines. In fact, the record indicates that no more than 100 gold miners went into other mines and remained there for a year or more. Despite numerous appeals and a desire on the part of WPB officials to modify the order to permit the gold mines to operate at least on a break-even basis, the order was continued in effect and unchanged until the summer of 1945. The record establishes that no one having anything to do with the issuance of L-208 believed that it was devised or intended to be devised for the purpose of conserving critical materials, equipment or supplies, inasmuch as existing preference orders had solved that problem in connection with the gold mines. Although WPB had full power to requisition any large inventories of supplies, materials, and equipment owned by the gold mines, or to authorize more essential users of such materials to place mandatory orders with the gold mines, no such power was ever exercised. In L-208 WPB did not even attempt to assure that those critical materials, equipment and facilities would be held for possible future requisition or order, but left the owners free to sell them to anyone they pleased, whether the prospective purchaser was engaged in essential defense work or not. The record establishes that the purpose and intent of WPB in issuing L-208 was to deprive the gold mine owners and operators of the right to use their properties in the only way they could be beneficially used, i. e., to mine and sell gold for a profit, and that this was done in the unfounded hope that the underground workers thus deprived of their employment in the gold mines might seek employment in the nonferrous metal mines. The record fails to establish that 1 Opinion of the Court the prohibition of gold mining was reasonably calculated to or in fact did increase the country's war efficiency. The following contentions were made in the Homestake brief and were adopted in general by all the other plaintiffs. After discussing those contentions and disposing of them, we shall take up separately the applicability of the conclusions reached to each of the plaintiffs. Plaintiffs contend that L-208, while in form a regulation restricting their acquisition and use of critical materials needed for defense, was in substance a requisition or taking, for the life of the order, of plaintiffs' right to make profitable use of their gold mining properties for which taking the Government is liable to pay just compensation under the Fifth Amendment to the Constitution. Plaintiffs also contend that if the court should decide that L-208 was actually such a regulation in substance as well as in form, it was arbitrary in that it went far beyond what was required by the exigencies of the war situation existing at the time of its issuance, bore no reasonable relation to its ostensible purpose of conserving critical materials needed in the defense effort, and in fact and law amounted to a taking of valuable property rights of plaintiffs for which just compensation should be paid. The Government contends that regardless of how much damage plaintiffs may have suffered by virtue of their compliance with the provisions of L-208, the order was a proper exercise of the statutory regulatory powers over critical materials by the War Production Board; that it was issued to prohibit plaintiffs' use of those materials in a manner detrimental to the public safety in wartime; that the Government made no use of plaintiffs' property nor did the order represent any positive invasion of any of plaintiffs' property rights, and that no direct benefits accrued ot the Government from the imposition of the order except the negative benefit arising from the prohibitions placed on plaintiffs' use of their property. Defendant urges that under these circumstances, plaintiffs' losses are no more compensable than were the losses suffered by the St. Regis Paper Company from the imposition on it of War Production Board General Preference Order M-251 (St. Regis Paper Co. v. United Opinion of the Court 134 C. Cls. States, 110 C. Cls. 271; cert. den. 335 U. S. 815), or the losses suffered by landlords who complied with wartime rent control regulations (Bowles v. Willingham, 321 U. S. 503, Block v. Hirsh, 256 U. S. 135, Marcus Brown Holding Co. v. Feldman, 256 U. S. 170). Defendant also contends that if WPB acted arbitrarily and without good cause in issuing L-208, then the order was unauthorized and illegal and the Government is not liable to pay just compensation for losses occasioned by the unauthorized act of its agents, citing Hooe v. United States, 218 U. S. 322 and United States v. North American Transportation & Trading Co., 253 U. S. 330. Defendant suggests that in this latter circumstance, plaintiffs should have refused to obey the order (Morrisdale Coal Co. v. United States, 259 U. S. 188), or they should have brought injunction proceedings against the officials of WPB to prevent enforcement of the order. Our first problem is to determine the precise nature of the action taken by the War Production Board in its issuance of L-208, i. e., whether that action amounted to a regulation or a taking of plaintiffs' property rights. Next it must be determined whether WPB had the power to do what it in fact did, and finally whether the Government is liable for the injuries caused plaintiffs by the exercise of that power, even though the power was exercised arbitrarily. The property which plaintiffs contend has been taken from them, and which defendant urges was merely limited in its usefulness to plaintiffs as a consequence of a valid regulation of scarce materials, was plaintiffs' right to make profitable use of their gold mining properties. As pointed out by Mr. Justice Roberts in United States v. General Motors Corporation, 323 U. S. 373, while "property" as that term is used in the Fifth Amendment certainly means the physical thing with respect to which the citizen exercises rights recognized by law, it also means the group of rights inhering in the citizen's relation to the physical thing, as the rights to exclusively possess, use and dispose of the physical thing. In this sense, the right of a gold mine owner to extract gold from his mine and to sell it for a profit, is a property right protected by the Constitution. Pennsylvania Coal Co. v. Mahon, 260 U. S. 393. 1 Opinion of the Court In order to determine whether that property right was "regulated" or "taken," or was merely injured as a consequence of a regulation or of a taking of some other property or property right of plaintiffs, we turn to the limitation order itself and to the facts and circumstances of record surrounding its issuance. The order was issued on October 8, 1942, by the War Production Board which had succeeded to all the powers and functions of the old Office of Production Management and the Supply Priorities and Allocations Board. The preamble to L-208 reads as follows: The fulfillment of requirements for the defense of the United States has created a shortage in the supply of critical materials for defense, for private account and for export which are used in the maintenance and operation of gold mines; and the following order is deemed necessary and appropriate in the public interest and to promote the national defense. The statutory authority cited at the conclusion of the order was section 2 (a) of the Act of June 28, 1940 (54 Stat. 676), as amended, which granted to the President the power to establish priorities and to allocate materials. The President's allocation powers were expressed in the following language (56 Stat. 178), which it will be noted, closely resembles the above quoted language in the preamble of L-208: *** Whenever the President is satisfied that the fulfillment of requirements for the defense of the United States will result in a shortage in the supply of any material or of any facilities for defense or for private account or for export, the President may allocate such material or facilities in such manner, upon such conditions and to such extent as he shall deem necessary or appropriate in the public interest and to promote the national defense. As further authority for its issuance, the order cited Executive Order 9024 (January 16, 1942) abolishing SPAB and establishing the War Production Board, Executive Order 9040 (January 24, 1942), abolishing the Office of Production Management and transferring to WPB all of its duties and Act of May 31, 1941 (Pub. Law 89), 55 Stat. 236; Act of March 27, 1942 (Pub. Law 507), 56 Stat. 177. 393549-56 |