NATIONAL EMERGENCIES ACT

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP77M00144R001100040002-7
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 54
• Document Creation Date: December 16, 2016
• Document Release Date: March 29, 2005
• Sequence Number: 2
• Publication Date: September 30, 1974
• Content Type: REPORT

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a
93o CONGRESS I
Nd Session f
J REPORT
No. 937193
NATIONAL EMERGENCIES ACT
REPORT
OF THE
COMMITTEE ON GOVERNMENT OPERATIONS
UNITED STATES SENATE
TO ACCOMPANY
S. 3957
TO TERMINATE CERTAIN AUTHORITIES WITII RESPECT
TO NATIONAL EMERGENCIES STILL IN EFFECT, AND TO
PROVIDE FOR ORDERLY IMPLEMENTATION AND TERMI-
NATION OF FUTURE NATIONAL EMERGENCIES
U.S. GOVERNMENT PRINTING OFFICE
WASHINGTON : 1974
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GOVERNMENT ON GOVERNMENT OPERATIONS
SAM J. ERVIN, JR., North Carolina, Chairman
JOHN L. McCLELLAN, Arkansas CHARLES H. PERCY, Illinois
HENRY M. JACKSON, Washington JACOB K. JAVITS, New York
EDMUND S. MUSKIE, Maine EDWARD J. GURNEY, Florida
ABRAHAM RIBICOFF, Connecticut WILLIAM V. ROTH, JR., Delaware
LEE METCALF, Montana BILL BROCK, Tennessee
JAMES B. ALLEN, Alabama
LAWTON CHILES, Florida
SAM NUNN, Georgia
WALTER D. HUDDLESTON, Kentucky
ROBERT BLAND SMITE, Jr., Chief Counsel and Staff Director
ELI E. NOBLEMAN, Counsel
W. P. GOODwIN, Jr., Counsel
J. ROBERT VASTINE, Minority Counsel
BRIAN CONBOY, Special Counsel to the Minority
W. THOMAS FOIWELL, Staff Editor
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CONTENTS
Page
Purpose --------------------------------------------------------------
1
History of legislation-------------------------------------------------
2
Section-by-section analysis--------------------------------------------
7
Estimated cost of legislation------------------------------------------
Changes in existing law----------------------------------------------
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93D CONGRESS SENATE J REPORT
2d Session f No. 93-1193
Mr. ERVIN, from the Committee on Government Operations,
submitted the following
REPORT
The Committee on Government Operations, to which was referred
the bill (S. 3957) to terminate certain authorities with respect to na-
tional emergencies still in effect and to provide for orderly imple-
mentation and termination of future national emergencies, having
considered the same, reports favorably thereon without amendment
and recommends that the bill do pass.
The purpose of S. 3957 is to end the four states of national emer-
gency currently in force and to provide for a procedure for meeting
future emergencies which will assure the operation of constitutional
processes.
In order to carry out this purpose the National Emergencies Act
would:
(1) Terminate the four states of national emergency now in
force;
(2) Provide for automatic termination of future national emer-
gencies after six months unless extended by Congressional action;
(3) Provide for Congressional oversight of and accountability
for actions taken by the Executive in the exercise of delegated
emergency powers ; and
(4) Repeal specific obsolete emergency powers statutes.
Four states of national emergency are now in force. The national
emergency declared by President Roosevelt on March 6, 1933, to meet
the crisis of the depression has not been formally terminated.
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The national emergency declared on December 16, 1950, by Presi-
dent Truman to mobilize the country for the Korean War, is still in
effect.
The national emergency declared by President Nixon on March 23,
1970, to cope with the Post Office strike, has not been terminated.
The national emergency declared by President Nixon on August 15,
1971, to implement currency restrictions and to enforce controls on
foreign trade remains in effect.
The termination of the existing states of emergency would take
effect 9 months after the date of enactment of this bill. This 9-month
grace period is provided to enable the Executive branch to make legis-
lative proposals for the small body of "emergency" powers that have
become everyday functions of the government, with enough time to
obtain enactment through normal legislative processes.
The second section of the bill provides for regular and consistent
procedures by which emergencies can be met in the future. The defini-
tion of an emergency has been deliberately cast in broad terms that
makes it clear that a proclamation of a state of national emergency
requires a. grave national crisis. In the event of such a crisis, the Presi-
dent, by proclamation, would declare the existence of a national emer-
gency. The proclamation of the President would be immediately made
public and published in the Federal Register. In his proclamla:tion
the President would specify his reasons for declaring the emergency
and _ the statutory powers he intended to invoke. The delegation _ of
authority would take effect immediately upon public notification by
the President. Any time within the next 6 months, the Congress could
affirm or reject by Concurrent Resolution the President's use of these
powers. If the Congress did not, act the declared emergency would
lapse after 6 months. Proclaimed states of national emergency could
be extended for 6-month periods but each extension would require an
affirmative act by the Congress and be limited to 6 months.
The third section of the bill would require an accounting of all sig-
nificant actions taken by the President pursuant to emergency powers
invoked during a declared state of national emergency. This section
is intended to provide the means for effective Congressional oversight
of the executive branch's use of statutory delegated emergency powers.
The final section of the bill is a list of statutes to be repealed. The
Standing Committees and the executive branch departments and
agencies have agreed that these statutes are obsolete and should be
stricken from the books.
HISTORY OF LEGISLATION
The National Emergencies Act was introduced by the Senate Spe-
cial Committee on National Emergencies and delegated emergency
powers on August 22, 1974. The Act was sponsored by Senators
Church, Mathias, Hart, Pell, Stevenson, Case, Pearson, Hansen, Ervin,
Chiles, Williams, Muskie, Javits, Ribicoff, and Roth.
The National Emergencies Act is the result of almost 2 years of
hearings, investigations and studies conducted by the bipartisan spe-
cial committee under the co-chairmanship of Senator Church and
Senator Mathias and whose other members are Senators Hart, Case,
Pell, Pearson, Stevenson and Hansen. The special committee had its
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origins in the final months of the 92nd Congress, when considerable
interest was expressed within the Senate in determining with pre-
cision what emergency powers were available to the Executive. With
the opening of the 93rd Congress there was established, on January 6,
1973, a Special Committee on the Termination of the National Enier-
gency. The mandate of the special committee, as expressed in its au-
thorizing resolution (S. Res. 9), was "to conduct a study and in-
vestigation with respect to the matter of terminating the national
emergency proclaimed by the President of the United States on
December 16, 1950, as announced in Presidental Proclamation Num-
bered 2914, dated the same date."
It was soon discovered that more than one proclamation of national
emergency was in effect; in fact, there are four such instruments, issued
in 1933, 1950, 1970 and 1971, now in force. After examining the U.S.
Code and uncodified statutory emergency powers, the special commit-
tee identified over 470 provisions of Federal law in effect which dele-
gate extraordinary authority in time of national. emergency to the
Executive.*
The special committee discovered that there was no consistent
procedure for declaring, administering or terminating states of na-
tional emergencies. The special committee, therefore, worked on two
main tasks. First, to explore how existing states of national emergency
could be terminated with the least adverse effects. There were three pos-
sible approaches: (a) outright repeal of all emergency statutes, (b)
relegating all emergency provisions to a state of domancy to be used in
future emergencies, or (c) maintaining emergency provisions in the
United States Code but for use only in states of emergency declared in
accordance with regular and consistent procedures which would pro-
vide for termination and oversight.
The second task was to explore the possibility of establishing a pro-
cedure for declaring states of national emergency. The procedure
would require accountability for actions taken by the Executive pur-
suant to delegated emergency authorities in order to permit the Con-
gress to effectively exercise its oversight responsibilities.
Concurrent with the historical research undertaken by the staff of
the special committee, the Library of Congress and distinguished con-
sultants, hearings were held on the history of emergency rule in the
United States and constitutional problems created b such rule. The
dates of committee hearings were April 11 and 12, July 24 and No-
vember 28, 1973.
Professor Robert S. Rankin, Emeritus, of Duke University, Pro-
fessor Cornelius P. Cotter of the University of Wisconsin, and Pro-
fessor J. Malcolm Smith of California State University, all renowned
scholars of the subject of emergency powers, testified in hearings held
by the special committee on April 11, 1973. Since that time they have
continued to advise the committee on particular constitutional and
legal questions concerned with emergency powers. .
'See U.S. Congress, Senate-Special Committee on the Termination of the National
Emergency ; Emergency Powers Statutes : Provisions of Federal Law Now in Effect Dele-
gating to the Executive Extraordinary Authority in Time of National Emergency, Wash-
ington, U.S. Govt. Print. Off., 1973 (93(l Congress, 1st session, Senate Report No. :549)
607 pages; see also, Executive Orders in Times of War and National Emergency, Wash-
ington, U.S. Govt. Print. Off., 1974 (93d Congress, 2d session, 283 pages). ,
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The. Dean of the Georgetown University Law Center, Professor?
Adrian S. Fisher, testified on the circumstances surrounding the decla-
ration of the 1950 national emergency. His testimony was particu-
larly useful because Professor Fisher was an advisor to Harry Truman
at the time the emergency was declared. Dr. Gerhard Casper, Professor
of Law and Political Science at the University of Chicago, testified on
the constitutional questions involved in Executive use of emergency
powers, comparing the experiences of other democratic states, particu-
larly those of the Weimar Republic.
The special committee has had the benefit of the full cooperation
and assistance of three successive Attorneys General: Klemdienst,
Richardson and Saxbe, respectively, as well as three Secretaries of
Defense and the Office of Management and Budget.
In addition, the special committee called upon former Attorney
General of the United States and Associate Justice of the U.S. Su-
preme Court (retired) Tom C. Clark, former Attorney General
Nicholas DeB. Patzenbach, and former Attorney General Ramsey
Clark for their perspectives on emergency powers from the viewpoint
of the Justice Department and the Supreme Court. Just prior to his
death, the late Chief Justice of the Supreme Court Earl Warren in-
formally provided to the committee counsel based upon his long ex-
perience and life in the law. As reported by Senator Ia.thias in a
speech to the Senate on August 22, 1974:
Chief Justice Warren said that while the Constitution pro-
vides that only Congress can make the law, the legislature has
the obligation through enacting statutes to provide firm
policy guidelines for the executive branch. The former Chief
Justice agreed with Justice Jackson's view that where there
are statutory guidelines, a President is obliged to follow the
precepts contained in the laws passed by the Congress. In-
herent powers problems arise and the other branches act, he
said, largely when Congress fails to act definitely, when it
fails to make needed laws and when there is a necessity for
legislative action and Congress fails to meet the challenge.
We then discussed the outline and the constitutional con-
cept that lay behind the legislative proposal to meet future
national emergencies now before the Senate. Chief Justice
Warren thought it was, in principle, a sound solution to what
he recognized as a serious threat to constitutional government.
Following his resignation as Attorney General of the United States,
Elliot Richardson presented his views to the special committee as did
former Solicitor General Erwin N. Griswold.
On the basis of these hearings, contained in three volumes issued as
committee reports, consultations with every department and agency of
the Executive branch, the Federal Register and consultation with
many distinguished legal scholars in the Executive branch, in the
Library of Congress and in numerous universities and law schools, the
special committee drew up legislation making use of many of the sug-
gestions of these persons and the witnesses who had appeared before
committee hearings. The special committee took as a basic guideline
the opinion of the Supreme Court in the Youngstown Steel Case,
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particularly that portion of the concurring opinion given by Justice
Jackson:
The appeal, however, that we declare the existence of in-
herent powers ex necessitate to meet an emergency asks us to
do what many think would be wise, although it is something
the forefathers omitted. They knew what emergencies were,
knew the pressures they engendered for authoritative action,
knew, too, how they afford a ready pretext for usurpation.
We may also suspect that they suspected that emergency pow-
ers would tend to kindle emergencies. Aside from suspension
of the privilege of the writ of habeas corpus in time of rebel-
lion or invasion, when the public safety may -require it, they
made no express provision for exercise of extraordinary au-
thority because of a crisis. I do not think we rightfully may
so amend their work, and, if we could, I am not convinced it
would be wise to do so, although many modern nations have
forthrightly recognized that war and economic crises may
upset the normal balance between liberty and authority.
Their experience with emergency powers may not be irrele-
vant to the argument here that we should say that the
Executive, of his own volition, can invest himself with unde-
fined emergency powers.
Germany, after the First World War, framed the Weimar
Constitution, designed to secure her liberties in the Western
tradition. However, the President of the Republic, without
concurrence of the Reichstag, was empowered temporarily to
suspend any or all individual rights if public safety and
order were seriously disturbed or endangered. This proved a
temptation to every government, whatever its shade of
opinion, and in 13 years suspension of rights was invoked on
more than 250 occasions. Finally, Hitler persuaded President
von Hindenburg to suspend all such rights, and they were
never restored.
The French Republic provided for a very different kind of
emergency government known as the "state of seige." It dif-
fered from the German emergency dictatorship particularly
in that emergency powers could not be assumed at will by the
Executive but could only be granted as a parliamentary
measure. And it did not, as in Germany, result in a suspen-
sion or abrogation of law but was a legal institution governed
by special legal rules and terminable by parliamentary
authority.
Great Britain also has fought both World Wars under a
sort of temporary dictatorship created by legislation. As Par-
liament is not bound by written constitutional limitations, it
established a crisis government simply by delegation to its
Ministers of a larger measure than usual of its own unlimited
power, which is exercised under its supervision bt Ministers
whom it may dismiss. This has been called the ` high-water
mark in the voluntary surrender of liberty," but, as Churchill
put it, "Parliament stands custodian of these surrendered
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liberties, and its most sacred duty will be to restore them in
their fullness when victory has crowned our exertions and our
perseverance." Thus, parliamentary controls made emergency
powers compatible with freedom.
This contemporary foreign experience may be inconclusive
as to the wisdom of lodging emergency powers somewhere in
a modern government. But it suggests that emergency powers
are consistent with free government only when their control
is lodged elsewhere than in the Executive who exercises them.
That is the safeguard that would be nullified by our adoption
of the "inherent powers" formula. Nothing in my experience
convinces me that such risks are warranted by any real neces-
sity, although such powers would, of course, be an Executive
convenience.
In the practical working of our Government we already
have evolved a technique within the framework of the Con-
stitution by which normal Executive powers may be consider-
ably expanded to meet an emergency. Congress may and has
granted extraordinary authorities which lie dormant in nor-
mal times but may be called into play by the Executive in
war or upon proclamation of a national emergency. In 1939,
upon congressional request, the Attorney General listed
ninety-nine such separate statutory grants by Congress of
emergency or wartime Executive powers. They were. invoked
from time to time as need appeared. Under this procedure we
retain Government by law-speeial, temporary law, perhaps,
but law nonetheless. The public may know the extent and
limitations of the powers that can be asserted, and persons
affected may be informed from the statute of their rights and
duties.
In view of the ease, expedition and safety with which Con-
gress can grant and has granted large emergency powers, cer-
tainly ample to embrace this crisis, I am quite unimpressed
with the argument that we should affirm possession of them
without statute. Such power either has no beginning or it
has no end. If it exists, it need submit to no legal restraint.
I am not alarmed that it would plunge us straightway into
dictatorship, but it is at least a step in that wrong direction.
But I have no illusion that any decision by this Court can
keep power in the hands of Congress if it is not wise and
timely in meeting its problems. A crisis that challenges the
President equally, or perhaps primarily, challenges Congress.
If not good law, there was worldly wisdom in the maxim at-
tributed to Napoleon that "The tools belong to the man who
can use them." We may say that power to legislate for emer-
gencies belongs in the hands of Congress, but only Congress
itself can prevent power from slipping through -its fingers.
The essence of our free Government is "leave to live by no
man's leave, underneath the law''-to be governed by those
impersonal forces which we call law. Our Government is
fashioned to fulfill this concept so far as humanly possible.
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The Executive, except for recommendation and veto, has no
legislative power. The executive action we have here origi-
nates in the individual will of the President and represents
an exercise of authority without law. No one, perhaps not
even the President, knows the limits of the power he may
seek to exert in this instance and the parties affected cannot
learn the limit of their rights. We do not know today what
powers over labor or property would be claimed to flow from
Government possession if we should legalize it, what rights
to compensation would be claimed or recognized, or on what
contingency it would end. With all its defects, delays and
inconveniences, men have discovered no technique for long
preserving free government except that the Executive be
under the law, and that the law be made by parliamentary
deliberations.
Such institutions may be destined to pass away. But it is
the duty of the Court to be last, not first, to give them up.
The research required to bring together the statutes and Executive
orders concerned with war and national emergency could not have
been achieved without the help of all the executive departments and
agencies. The Air Force gave the special committee access to its LITE
computer system which included the U.S. Code among its tapes. This
made it possible to begin to identify the statutes triggered by a state
of national emergency. In addition to the computer search, the special
committee made a hand-search of all 87 volumes of the Statutes-at-
Large.
The result of the search of the U.S. Code and the Statutes-at-Large
and of the collection of proclamations and Executive orders found
at the Library of Congress and at the Federal Register, were two
compilations, the first entitled "Emergency Powers Statutes: Pro-
visions of Federal Law Now in Effect Delegating to the Executive
Extraordinary Authority in Time of National Emergency," and the
second, "Executive Orders in Times of War and National Emergency."
In addition, "A Brief History of Emergency Powers in the United
States," prepared by the Library of Congress was just issued as a
committee print. A handbook containing the evaluations of all emer-
gency statutes made by Standing Committees of the Senate and by
Executive branch departments and agencies is now in the process of
being printed.
SECTION-BY-SECTION ANALYSTS
S. 3957, the National Emergencies Act, contains six sections. They
provide for the termination of existing states of national emergencies
to take effect nine months after date of enactment. A procedure for
meeting future emergencies is set forth including provisions for ter-
mination, extension and accountability for actions taken. The final
section lists existing but obsolete statutes to be repealed upon enact-
ment.
SECTION 101
Subsection (a) states that all existing national emergencies are to
be terminated and all powers and authorities conferred by statutes
dependent upon a declared state of national emergency are terminated
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two hundred and seventy one days (nine months) after the enactment
of the National Eraser encies Act.
Subsection (b) defines the term "ally national emergency in effect"
as any general declaration of emergency made by the President pur-
suant to a statute authorizing him to declare a national emergency.
Subsection (a) provides that the President may declare a proclama-
tion of national emergency when it is "essential to the preservation,
protection, and defense of the Constitution, and is essential to the
common defense, safety, or well-being of the territory and people of
the United States." Any such proclamation must be made public and
published in the Federal Register.
Subsection (b) provides that any statute that becomes effective in
time of a declared national emergency, shall only be lawful if the pro-
visions of this Act are complied with. No future act will supercede
this Act unless it does so in specific terms, and declares that the pur-
pose of the new law is to supercede either particular parts or the
whole of this Act.
When Congress declares war, any statutes that take effect in times
of a declared national emergency are also in effect. These emergency
powers remain in effect in conformity with procedures provided by
this Act.
Subsection (a) provides that only declared states of national emer-
gency that comply with this Act shall have legal authority and effect.
Subsection (b) provides that the President must specify the emer-
gency powers statutes he is making use of. The powers specified in
the declaration must be published in the Federal Register. and the
declaration. as well as the specified statutes must be transmitted im-
mediately to Congress.
Any future national emergency declared by the President shall
automatically terminate after six months, unless the emergency is
terminated earlier. or the. Congress by concurrent resolution specifies
a day beyond the six months when the emergency will end.
Subsection (a) provides that in the case of a war declared by Con-
gress statutory emergency powers specified by the President for use in
a proclamation terminate at the end of 180 days unless extended in
accordance with the procedures provided by this Act.
Subsection (b) provides that the procedures for exercising emer-
gency powers and authorities contained in Sections 401 and 402 of this
Act will apply to any subsequent declarations of national emergency
affecting the same war or national emergency.
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SECTION 501
Subsection (a) provides for a reporting by the Executive branch
whereby each emergency order or rule promulgated under the author-
ity of the national emergency and its use will be recorded and reported
to Congress.
Subsection (b) provides that where required, proper confidentiality
will be maintained for reports transmitted to the Congress.
SECTION 601
Repeals certain statutes that are obsolete.
ESTIMATED COST OF LEGISLATION
It is not expected that enactment of this legislation would require
any significant additional expenditures.
CHANGES IN EXISTING LAW
In compliance with subsection 4 of rule XXIX of the Standing
Rules of the Senate, changes made by the bill as reported are shown
as follows (existing law proposed to be omitted is enclosed in black
brackets, new matter is printed in italic, existing law in which no
changes is proposed is shown in roman) :
TITLE 7.-AGRICULTURE, UNITED STATES CODE
[Chapter 42.-AGRICULTURAL COMMODITY SET-ASIDE
[? 1741. Maximum and minimum quantities for set-aside;
definition.
[The Commodity Credit Corporation shall, as rapidly as the Secre-
tary of Agriculture shall determine to be practicable, set aside within
its inventories not more than the following maximum quantities and
not less than the following minimum quantities of agricultural com-
modities or products thereof heretofore or hereafter acquired by it
from 1054 and prior years' crops and production in connection with
its price support operations:
Maximum
quantity
Minimum
quantity
Wheat (bushels)------ --------------- ------------------------------
500,000,000
400,000,000
Upland cotton (bales) ------------------------------------------------
4000,000
3,000,000
Cottonseed oil(pounds) ----------------------------------------------
500, 000, 000
0
Butter (pounds)-----------------------------------------------------
200,000,000
0
Nonfat dry milk solids(pounds) ---------------------------------------
300,000,000
0
Cheese (pounds)------------------------------------------------- -
150,000,000
0
[Such quantities shall be known as the "commodity set-aside".
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j? 1742. Determination of commodity value for set-aside.
[Quantities of commodities shall not be included in the commodity
set-aside which have an aggregate value in excess of $2,500,000,000.
The value of the commodities placed in the commodity set-aside, for
the purpose of this section, shall be the Corporation's investment in
such commodities as of the date they are included in the commodity
set, aside, as determined by the Secretary.
[? 1743. Reduction of set-aside.
[(a) Such commodity set-aside shall be reduced by disposals made
in accordance with the directions of the President as follows :
[(I) Donation, sale, or other disposition for disaster or other
relief purposes outside the United States pursuant to and subject
to the limitations of subchapter III of chapter 41 of this title;
[(2) Sale or barter (including barter for strategic materials)
to develop new or expanded markets for American agricultural
commodities, including but not limited to disposition pursuant
to and subject to the limitations of subchapter IT of chapter 41 of
this title;
[(3) Donation to school-lunch programs;
[(4) Transfer to the national stockpile established pursuant to
sections 98 to 98h of Title 50, without reimbursement from funds
appropriated for the purposes of said sections ;
[(5) Donation, sale, or other disposition for research, experi-
mental, or educational purposes ;
E(6) Donation, sale, or other disposition for disaster relief
purposes in the United States or to meet any national emergency
declared by the President; and
[(7) Sale for unrestricted use to meet a need for increased sup-
plies at not less than 105 per centum of the parity price in the
case of agricultural commodities and a price reflecting 105 per
centum of the parity price of the agricultural. commodity in the
case of products of agricultural commodities.
[The President shall prescribe such terms and conditions for the
disposal of commodities in the commodity set-aside as he determines
will provide adequate safeguards against interference with normal
marketings of the supplies of such commodities outside the commodity
set-aside. Strategic materials acquired by the Commodity Credit Cor-
poration under paragraph (2) of this subsection shall be transferred
to the national stockpile established pursuant to sections 98 to 98h of
Title 50, and the Commodity Credit Corporation shall be reimbursed
for the value of the commodities bartered for such strategic materials
from funds appropriated pursuant to section 98g of Title 50. For the
purpose of such reimbursement, the value of any commodity so bar-
tered shall be the lower of the domestic market, price or the Commodity
Credit Corporation's investment therein as of the elate of such barter,
as determined by the Secretary of Agriculture.
[(b) The quantity of any commodity in the commodity set-aside
shall be reduced to the extent that the Commodity Credit Corporation
inventory of such commodity is reduced, by natural or other cause be-
yond the control of the Corporation, below the quantity then charged
to the commodity set-aside.
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[? 1744. Sale of commodities in set-aside; exemption from pricing
limitations.
[(a) The Corporation shall have authority to sell, without regard
to section 1743 (a) (7) of this title, any commodity covered by the
commodity set-aside for the purpose of rotating stocks or consolidat-
ing inventories, any such sale to be offset by purchase of the same
commodity in a substantially equivalent quantity or of a substantially
equivalent value.
[ (b) Dispositions 'pursuant to this chapter shall not be subject to the
pricing limitations of section 1427 of this title.
[? 1745. Computation of carry-over.
[The quantity of any commodity in the commodity set-aside or
transferred from the set-aside to the national stockpile established
pursuant to sections 98 to 98h of Title 50 shall be excluded from the
computation of "carryover" for the purpose of determining the price
support level for such commodity under the Agricultural Act of
1949, as amended, and related legislation, but shall be included in the
computation of total supplies for purposes of acreage allotments and
marketing quotas under the Agricultural Adjustment Act of 1938, as
amended, and related legislation. Until such time as the commodity
set-aside has been completed, such quantity of the commodity as the
Secretary shall determine between the maximum and minimum quan-
tities specified in section 1741 of this title shall be excluded from the
computations of "carryover" for the purpose of determining the price
support level, but shall be included in the computation of total sup-
plies for purposes of acreage allotments and marketing quotas, for the
1955 crop of the commodity, notwithstanding that the quantity so ex-
cluded may not have been acquired by the orporation and included
in the commodity set-aside.
[? 1746. Records and accounts.
[The Commodity Credit Corporation shall keep such records and
accounts as may be necessary to show, for each commodity set-aside,
the initial and current composition, value (in accordance with sec-
tion 1742 of this title), current investment, quantity disposed of,
method of disposition, and amounts received on disposition.
[? 1747. Appropriations; determination of value of transferred
commodity.
[In order to make payment to the Commodity Credit Corporation
for any commodities transferred to the national stockpile pursuant to
section 1743 (a) (4) of this title, there are authorized to be appropri-
ated amounts equal to the value of any commodities so transferred.
The value of any commodity so transferred, for the purpose of this
section, shall be the lower of the domestic market price or the
Commodity Credit Corporation's investment therein as of the date
.of transfer to the stockpile, as determined by the Secretary of
Agriculture.]
TITLE 8.-ALIENS AND NATIONALITY, UNITED STATES
CODE
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PART III.-LOSS OF NATIONALITY
? 1481. Loss of nationality by native-born or naturalized citi-
zen; voluntary action; burden of proof; presumptions.
(a) From and after the effective date of this chapter a person who
is a national of the United States whether by birth or naturalization,
shall lose his nationality by-
(1) ***
* * * * * * s
[(10) departing from or remaining outside of the jurisdiction of
the United States in time of war or during a period declared by the
President to be a period of national emergency for the purpose of
evading or avoiding training and sevice in the military, air, or naval
forces of the United States. For the purposes of this paragraph failure.
to comply with any provision of any compulsory service laws of the
United States shall raise the presumption that the departure from or
absence from the United States was for the purpose of evading or
avoiding training and service in the miiitary, air, or naval forces of the
United States.]
TITLE 10. ARMED FORCES, UNITED STATES CODE
* * * * * * *
Chapter 159.-REAL PROPERTY; RELATED PERSONAL
PROPERTY; AND LEASE OF N O\ -EXCESS PROPERTY
* * * * * *
? 2667. Leases: non-excess property.
(a')
* * * * * *
(b) A lease under subsection (a)-
(1) ***
* * * * * *
[(4) must be revocable by the Secretary during a national emer-
gency declared by the President ; and] _
* * * * * * *
Chapter 873.-CIVILIAN EMPLOYEES
* * * * * * *
[? 4025. Production of supplies and munitions: hours and pay of
laborers and mechanics.
[During a, national emergency declared by the President, the regular
working hours of laborers and mechanics of the Department of the
Army producing military supplies or munitions are 8 hours a day or
40 hours a week. However under regulations prescribed by the Secre-
tary of the Army these hours may be exceeded. Each laborer or me-
chanic who works more than 40 hours in a workweek shall be paid at a
rate not less than one and one-half times the regular hourly rate for
each hour in excess of 40.]
* * * * * * *
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Chapter 873.-CIVILIAN EMPLOYEES
[? 9025. Production of supplies and munitions: hours and pay of
laborers and mechanics.
[During a national emergency declared by the President, the regular
working hours of laborers and mechanics of the Department of the Air
Force producing military supplies or munitions are 8 hours a day or 40
hours a week. However, under regulations prescribed by the Secretary
of the Air Force these hours may be exceeded. Each laborer or me-
chanic who works more than 40 hours in a workweek shall be paid at a
rate not less than one and one-half times the regular hourly rate for
each hour in excess of 40.]
TITLE 12.-BANKS AND BANKING, UNITED STATES
CODE
Chapter 2.--NATIONAL BANKS
ORGANIZATION AND GENERAL PROVISIONS
[? 95. Emergency limitations and restrictions on business of mem-
bers of Federal reserve system.
[In order to provide for the safer and more effective operation of
the national banking system and the Federal reserve system, to pre-
serve for the people the full benefits of the currency provided for by
the Congress through the national banking system and the Federal
reserve system, and to relieve interstate commerce of the burdens and
obstructions resulting from the receipt on an unsound or unsafe basis
of deposits subject to withdrawal by check, during such emergency
period as the President of the United States by proclamation may
prescribe, no member bank of the Federal reserve system shall trans-
act any banking business except to such extent and subject to such
regulations, limitations, and restrictions as may be prescribed by the
Secretary of the Treasury, with the approval of the President.* Any
individual, partnership, corporation, or association, or any director,
officer, or employee thereof, violating any of the provisions of this
section shall be deemed guilty of a misdemeanor and, upon conviction
thereof, shall be fined not more than $10,000 or, if a natural person,
may, in addition to such fine, be imprisoned for a term not exceeding
ten years. Each day that any such violation continues shall be deemed
a separate offense.
[? 95a. Regulation of transactions in foreign exchange of gold
and silver; property transfers; vested interests, en-
forcement and penalties.
[ (1) During the time of war or during any other period of national
emergency declared by the President, the President may, through any
agency that he may designate, or otherwise, and under such rules and
regulations as he may prescribe, by means of instructions, licenses, or
otherwise-
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[(A) investigate, regulate, or prohibit any transactions in for-
eign exchange, transfers of credit or payments between, by,
through, or to any banking institution, and the importing, export-
ing, hoarding, melting, or earmarking of gold or silver coin or
bullion, currency or securities, and
[(B) investigate, regulate, direct and compel, nullify, void,
prevent or prohibit, any acquisition holding, withholding, use,
transfer, withdrawal, transportation, importation or exportation
of, or dealing in, or exercising any right, power, or privilege with
respect to, or transactions involving, any property in which any
foreign country or a national thereof has any interest,,
by any person, or with respect to any property, subject to the jurisdic-
tion of the United States; and any property or interest of any foreign
country or national thereof shall vest, when, as, and upon the terms,
directed by the President, in such agency or person as may be desig-
nated from time to time by the President, and upon such terms and
conditions as the President may prescribe such interest or property
shall be held, used, administered, liquidated, sold, or otherwise dealt
with in the interest of and for the benefit of the United States, and
such designated agency or person may perform any and all acts inci-
dent to the accomplishment or furtherance of these purposes; and the
President shall, in the manner hereinabove provided, require any per-
son to keep a full record of, and to furnish under oath, in the form of
reports or otherwise, complete information relative to any act or trans-
action referred to in this section either before, during, or after the
completion thereof, or relative to any interest in foreign property, or
relative to any property in which any foreign country or any national
thereof has or has had any interest, or as may be otherwise necessary
to enforce the provisions of this section, and in any case in which a
report could be required, the President may, in the mariner herein-
above provided, require the production. or if necessary to the national
security or defense, the seizure, of any books of account, records, con-
tracts, letters, memoranda, or other papers, in the custody or control of
such person; and the President may, in the manner hereinabove pro-
vided, take other and further measures not inconsistent herewith for
the enforcement of this section.
[(2) Any payment, conveyance, transfer, assignment, or delivery
of property or interest therein, made to or for the account of the
United States, or as otherwise directed, pursuant to this section or
any rule, regulation, instruction, or direction issued hereunder shall to
the extent thereof be, a full acquittance and discharge for all purposes
of the obligation of the person making the same; and no person shall be
held liable rn any court for or in respect to anything done or omitted in
good faith in connection with the administration o f, or in pursuance
of and in reliance on, this section, or any rule, regulation, instruction,
or direction issued hereunder.
E(3) As used in this section the term "United States" means the
United States and any place subject to the jurisdiction thereof: Pro-
rided, however, That the foregoing shall not be construed as a limita-
tion upon the power of the President, which is conferred, to prescribe
from time to time, definitions, not inconsistent with. the purposes of
this section, for any or all of the terms used in this section. Whoever
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willfully violates any of the provisions of this section or of any
license, order, rule or regulation issued thereunder, shall, upon con-
viction, be fined not more than $10,000, or, if a natural person, may be
imprisoned for not more than ten years, or both; and any officer, direc-
tor, or agent of any corporation who knowingly participates in such
violation may be punished by a like fine, imprisonment, or both. As
used in this section the term "person" means an individual, partner-
ship, association, or corporation.]
Chapter 3.-FEDERAL RESERVE SYSTEM
DEFINITIONS, ORGANIZATION, AND GENERAL PROVISIONS AFFECTING
SYSTEM
[? 249. Regulation of consumer credit.
[After November 1, 1947, the Board of Governors of the Federal
Reserve System shall not exercise consumer credit controls pursuant
to Executive Order Numbered 8843, and no such consumer credit con-
trols shall be exercised after such date except during the time of war
beginning after August 8, 1947, or any national emergency declared
by the President after August 8,1947.]
Chapter 13.-NATIONAL HOUSING
[? 1703. Insurance of financial institutions.
[(a) The Secretary is authorized and empowered upon such terms
and conditions as he may prescribe, to insure banks, trust companies,
personal finance companies, mortgage companies, building and loan
associations, installment lending companies and other such financial
institutions, which the Secretary finds to be qualified by experience or
facilities and approves as eligible for credit insurance, against losses
which they may sustain as a result of loans and advances of credit,
and purchases of obligations representing loans and advances of
credit, made by them on and after July 1, 1939, and prior to June 30,
1973, for the purpose of (i) financing alterations, repairs, and im-
provements upon or in connection with existing structures, and the
building of new structures, upon urban, suburban, or rural real prop-
erty (including the restoration, rehabilitation, rebuilding, and re-
placement of such improvements which have been damaged or de-
stroyed by earthquake, conflagration, tornado, hurricane, cyclone,
flood, or other catastrophe), by the owners thereof or by lessees of such
real property under a lease expiring not less than six months after the
maturity of the loan or advance of credit; and for the purpose of (ii)
financing the purchase of a mobile home to be used by the owner as
his principal residence. In no case shall the insurance granted by the
Secretary under this section to any such financial institution on loans,
advances of credit, and purchases made by such financial institution
for such purposes on and after July 1, 1939, exceed 10 per centum of
the total amount of such loans, advances of credit, and purchases :
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Provided, That with respect to any loan, advance of credit, or pur-
chase made after the effective date of the Housing Act, of 1954, the
amount of any claim for loss on any such individual loan, advance of
credit or purchase paid by the Secretary under the provisions of this
section to a lending institution shall not exceed 90 per centum of such
loss.]
[? 1705. Allocation of funds.
[For the purposes of carrying out the provisions of this subchap-
ter and subchapters II and III of this chapter the President, in his
discretion, is authorized to provide such funds or any portion
thereof by allotment to the Secretary from any funds that are avail-
able, or may hereafter be made available, to the President for emer-
gency purposes.]
1[? 1748b. Insurance of mortgages.
, (a) Aggregate amount of insurance ; termination date.
[In order to assist in relieving the acute shortage, and urgent need
for family housing which now exists at or in areas adjacent to military
installations because of uncertainty as to the permanency of such in-
stallations and to increase the supply of necessary family housing ac-
commodations for personnel at such installations, the Secretary is
authorized, a on application of the mortgagee, to insure mortgages
(including advances on such mortgages during construction) which
are eligible for insurance as hereinafter provided, and, upon such
terms as the Secretary may prescribe,, to make commitments for so
insuring such mortgages prior to the date of their execution or dis-
bursement thereon : Provided, That the aggregate amount of principal
obligations of all mortgages insured under this subchapter (except
mortgages insured pursuant to the provisions of this subchapter in
effect prior to August 11, 1955) shall not exceed $2,300,000,000: And
provided further, That the limitation in section 1715h of this title
shall not apply to this subchapter: And provided further, That no
more mortgages shall be insured under this section after October 1,
1962, except pursuant to a commitment to insure. be fore such date,
and not more than twenty-eight thousand family housing units shall
be contracted for after June 30, 1959, pursuant to any mortgage in-
sured under this section after such date.]
TITLE 16.-CONSERVATION, UNITED STATES CODE
Chapter 12A.-TENNESSEE VALLEY AUTHORITY
? 831d. Directors; maintenance and operation of plant for pro-
duction, sale, and distribution of fertilizer and power.
The board is authorized-
la) * * *
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[(m) No products of the Corporation except ferrophosphorus shall
be sold, for use outside of the United States, its Territories and pos-
sessions, except to the United States Government for the use of its
Army and Navy, or to its allies in case of war or, until six months
after the termination of the national emergency proclaimed by the
President on December 16, 1950, or until such earlier date or dates as
the Congress by concurrent resolution or the President may provide
but in no event after April 1, 1953, to nations associated with the
United States in defense activities.]
TITLE 18.-CRIMES AND CRIMINAL PROCEDURE,
UNITED STATES CODES
Chapter 67.-MILITARY AND NAVY
[? 1383. Restrictions in military areas and zones.
[`Vhoevcr, contrary to the restrictions applicable thereto, enters,
remains in, leaves, or commits any act in any military area or military
zone prescribed ender the authority of an Executive order of the
President, by the Secretar , of the Army, or by any military com-
mander designated by the Secretary of the Army, shall., if it appears
that he knew or should have known of the existence and extent of the
restrictions or order and that his act was in violation thereof, be fined
not more than $5,000 or imprisoned not more than one year, or both.]`.
TITLE 26.-INTERNAL REVENUE CODE, UNITED STATES
CODE
Chapter 1.-NORMAL TAXES AND SURTAXES
PART VI.-ITEMIIIZED DEDUcTIONs FOR INDIVIDUALS AND CORPORATIONS
* * * * * * *
[? 168. Amortization of emergency facilities.
[(a) General rule.
[Every person, at his election, shall be entitled to a deduction with
respect to the amortization of the adjusted basis (for determining
gain) of any emergency facility (as defined in subsection (d) ), based
on a period of 60 months. Such amortization deduction shall be an
amount, with respect to each month of such period within the taxable
year, equal to the adjusted basis of the facility at the end of such
month divided by the number of months (including the month for
which the deduction is computed) remaining in the period. Such ad-
justed basis at the end of the month shall be computed without regard
to the amortization deduction for such month. The amortization de-
duction above provided with respect to any month shall, except to the
extent provided in subsection (1), be in lieu of the depreciation deduc-
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lion with respect to such facility for such month provided by section
167. The 60-month period shall begin as to any emergency facility, at
the election of the taxpayer, with the month following the month in
which the facility was completed or acquired, or with the succeeding
taxable year.
t(b) Election of amortization.
[The election of the taxpayer to take the. amortization deduction
and to begin the 60-month period with the month following the month
in which the facility was completed or acquired, or with the taxable
year succeeding the taxable, year in which such facility was completed
or acquired, shall be made by filing with the Secretary or his delegate,
in such manner, in such form. and within such tune, as the Secretary
or his delegate may by regulations prescribe, a statement of such
election.
[(c) Termination of amortization deduction.
[A taxpayer which has elected under subsection (b) to take the
amortization deduction provided in subsection (a) may, at any time
after making such election, discontinue the amortization deduction
with respect to the remainder of the amortization period, such discon-
tinuance to begin as of the beginning of any month specified by the
taxpayer in a notice in writing filed with the Secretary or his delegate
before the beginning of such month. The depreciation deduction pro-
vided under, section 167 shall be allowed, beginning with the first
month as to which the amortization deduction does not apply and the
taxpayer shall not be entitled to any further amortization deduction
with respect to such emergency facility.
[(d) Definitions.
[(1) Emergency facility.
For purposes of this section, the term "emergency facility" means
any facility, land, building, machinery, or equipment, or any part
thereof, the construction, reconstruction, erection, installation, or
acquisition of which was completed after December 31, 1949, and
with respect to which a certificate under subsection (e) has been made.
In no event shall. an amortization deduction be allowed in respect of
any emergency facility for any taxable year unless a certificate in
respect thereof under this paragraph shall have been made before the
filing of the taxpayer's return for such taxable year.
[(2) Emergency period.
[For purposes of this section, the term "emerggency period" means
the period beginning January 1, 1911i(), and ending on the date on which
the President proclaims that the utilization of a substantial portion of
the emergency facilities with respect to which certifications tinder sub-
section (e) have been made is no longer required in the interest of na-
tional defense.
[(e) Determination of adjusted basis of emergency facility.
[In determining, for purposes of subsection (a) or (g), the adjusted
basis of an emergency facility-
[(1) Certification on or before August 22, 1957.
[In the case of a certificate made on or before August 22, 1957, there
shall be included only so much of the amount of the adjusted basis of
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such facility (computed without regard to this section) as is properly
attributable to such construction, reconstruction, erection, installation,
or acquisition after December 31, 1949, as the certifying authority,
designated by the President by Executive Order, has certified as neces-
sary in the interest of national defense during the emergency period,
and only such portion of such amount as such authority has certified
as attributable to defense purposes. Such certification shall be under
such regulations as may be prescribed from time to time by such certi-
fying authority with the approval of the President. An application for
a certificate must be filed at such time and in such manner as may be
prescribed by such certifying authority under such regulations, but in
no event shall such certificate have any effect unless an application
theref or is filed before March 24, 1951, or before the expiration of 6
months after the beginning of such construction, reconstruction, erec-
tion, or installation or the date of such acquisition, whichever is later.
[(2) Certifications after August 22, 1957.
[Iii the case of a certificate made after August 22, 1957, there shall
be included only so much of the amount of the adjusted basis of such
facility (computed without regard to this section) as is properly
attributable to such construction, reconstruction, erection, installa-
tion, or acquisition after December 381, 1949, as the certifying author-
ity designated by the President by Executive order, has certified is to
be used-
[(A) to produce new or specialized defense items or compo-
nents of new or specialized defense items (as defined in para-
graph (4)) during the emergency period,
[(B) to provide research, developmental, or experimental serv-
ices during the emergency period for the Department of Defense
(or one of the component departments of such Department), or
for the Atomic Energy Commission, as a part of the national
defense program, or
[(C) to provide primary processing for uranium ore or uranium
concentrate raider a program of the Atomic Energy Commission
for the development of new sources of uranium ore or uranium
concentrate,
and only such portion of such amount as such authority has certified is
attributable to the national defense program. Such certification shall
be under such regulations as may be prescribed from time to time by
such certifying authority with the approval of the President. An ap-
plication for a certificate must be filed at such time and in such man-
ner as may be prescribed. by such certifying authority under such
regulations but in no event shall such certificate have any effect unless
an application therefor is filed before the expiration of 6 months after
the beginning of such construction, reconstruction, erection, or instal-
lation or the date of such, acquisition. For purposes -of the preceding
sentence, an application which was timely filed under this subsection
on or before August 22, 1957, and which was pending on such date,
shall be considered to be an application timely filed under this
paragraph.
[(3) Separate facilities; special rule.
[After the completion or acquisition of any emergency facility with
respect to which a certificate under paragraph (1) or (2) has been
made, any expenditure (attributable to such facility and to the period
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after such completion or acquisition) which does not represent con-
struction, reconstruction, erection, installation, or acquisition included
in such certificate, but with respect to which a separate certificate is
made under paragraph (1) or (2), shall not be applied in adjustment
of the basis of such facility, but a separate basis shall be computed
therefor pursuant to paragraph (1) or (2), as the case may be, as if
it were a new and separate emergency facility.
[(4) Definitions.
[For purposes of paragraph (2)-
[(A) New or specialized defense item.
[The term "new or specialized defense item" means only an item
(excluding services) -
[(i) which is produced, or will be produced, for sale to the
Department of Defense (or one of the component departments of
such Department), or to the Atomic Energy Commission, for use
in the national defense program, and
[(ii) for the production of which existing productive facilities
are unsuitable because of its newness or of its specialized defense
features.
[(B) Component of new or specialized defense item.
[The term component of a new or specialized defense item means
only an item-
[(i) which is, or will become a physical part of a new or spe-
cialized defense item, and
[(ii) for the production of which existing productive facilities
are unsuitable because of its newness or of its specialized defense
features.
[(5) Limitation with respect to uranium ore or uranium concen-
trate processing facilities.
[No certificate shall be made under paragraph (2) (C) with respect
to any facility unless existing facilities for processing the uranium ore
or uranium concentrate which will be processed by such facility are
unsuitable because of their location.
[(f) Depreciation deduction.
[If the adjusted basis of the emergency facility (computed without
regard to this section) is in excess of the adjusted basis computed under
subsection (e), the depreciation deduction provided by section 167
shall, despite the provisions of subsection (a) of this section, be al-
lowed with respect to such emergency facility as if its adjusted basis
for the purpose of such deduction were an amount equal to the amount
of such excess.
[(g) Payment by United States of unamortized cost of facility.
[If an amount is properly includible in the gross income of the
taxpayer on account of a payment with respect to an emergency facil-
ity and such payment is certified as provided in paragraph (1), then,
at the election of the taxpayer in its return for the taxable year in
which such amount is so includible--
[(1) The amortization deduction for the month in which such
amount is so includible shall (in lieu of the amount of the deduc-
tion for such month computed under subsection (a)) be equal to
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the amount so includible but not in excess of the adjusted basis
of the emergency facility as of the end of such month (computed
without regard to any amortization deduction for such month).
Payments referred to in this subsection shall be payments the.
amounts of which are certified, under such regulations as the
President may prescribe, by the certifying authority designated
by the President as compensation to the taxpayer for the un-
amortized cost of the emergency facility made because--
[(A) a contract with the United States involving the use
of the facility has been terminated by its terms or by can-
cellation, or
[(B) the taxpayer had reasonable ground (either from
provisions of a. contract with the United States involving the
use of the facility, or from written or oral representations
made -under authority of the United States) for anticipating
future contracts involving the use of the facility, which future
contracts have not been made.
[(2) In case the taxpayer is not entitled to any amortization
deduction with respect to the emergency facility, the depreciation
deduction allowable under section 167 on account of the month
in which such amount is so includible shall be increased by such
amount, but such deduction on account of such month shall not
be in excess of the adjusted basis of the emergency facility as
of the end of such month (computed without regard to any
amount allowable, on account of such month, under section 167
or this paragraph).
[(h) Life tenant and remainderman.
[In the, case of property held by one person for life with remainder
to another person, the deduction shall be computed as if the life tenant
were the absolute owner of the property and shall be allowable to the
life tenant.
[(i) Termination.
[No certificate under subsection (e) shall be made with respect to
any emergency facility after December 081, 1959.]
TITLE 41:-PUBLIC CONTRACTS, UNITED STATES CODE
[Chapter 2.-TERMINATION OF WAR CONTRACTS
[? 101. Declaration of policy.
(The Congress declares that the objectives of this chapter are--
[(a) to facilitate maximtirn war production during the war,
and to expedite reconversion from war production to civilian pro-
Auction as war conditions permit;
[(b) to assure to prime contractors and subcontractors, small
and large, speedy and. equitable final settlement of claims under
terminated war contracts, and adequate interim financing until
such final settlement;
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[(c) to assure uniformity among Government agencies in basic
policies and administration with respect to such termination set-
tlements and interim financing;
[(d) to facilitate the efficient use of materials, manpower, and
facilities for war and civilian purposes by providing prime con-
tractors and subcontractors with notice of termination of their
war contracts as far in advance of the cessation of work there-
under as is feasible and consistent with the national security;
[(e) to assure the expeditious removal from the plants of
prime contractors and subcontractors of termination inventory
not to be retained or sold by the contractor;
[(f) to use all practicable methods compatible with the fore-
going objectives to prevent improper payments and to detect and
prosecute fraud.
[? 102. Surveillance by Congress.
[(a) To assist the Congress in appraising the administration of
this chapter and in developing such amendments or related legisla-
tion as may further be necessary to accomplish the objectives of this
chapter, the appropriate committees of the Senate and the House of
Representatives shall study each report submitted to the Congress
under this chapter and shall otherwise maintain continuous surveil-
lance of the operations of the Government agencies under this chapter.
[(b) Repealed. Oct. 31, 1951, ch. 654, ? 1 (110), 65 Stat. 705.
[? 103. Definitions.
[As used in this chapter-
[(a) The term "prime contract" means any contract, agreement, or
purchase order heretofore or hereafter entered into by a contracting
agency and connected with or related to the prosecution of the war;
and the term "prune contractor" means any holder of one or more
prime contracts.
[(b) The term "subcontract" means any contract, agreement, or
purchase order heretofore or hereafter entered into to perform any
work, or to make or furnish any material to the extent that such work
or material is required for the performance of any one or more prime
contracts or of any one or more other subcontracts; and the term "sub-
contractor" means any holder of one or more subcontracts.
[(c) The term "war contract" means a prime contract or a subcon-
tract; and the term "war contractor" means any holder of one or more
war contracts.
[(d) The terms "termination", "terminate", and "terminated" refer
to the termination or cancelation, in whole or in part, of work under
a prime contract for the. convenience or it the option of the Govern-
ment (except for default of the p1?ime contractor) or of work under
a subcontract for any reason except the default of the subcontractor.
f(e) The term "material". includes any article, commodity, ma-
chinery, equipiment, accessory, part, component, assembly, work in
process, maintenance, repair, and operating supplies, and any product
of any kind.
[(f) The term "Government agency'' means any executive depart-
ment of the Government, or any administrative unit or subdivision
thereof, any independent agency or any corporation owned or con-
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trolled by the United States in the executive branch of the Govern-
ment, and includes any contracting agency.
[(g) The terra "contracting agency' means any Government
agency which has been or hereafter may be authorized to make con-
tracts pursuant to section 611 of Appendix to Title 50, and includes
the Reconstruction Finance Corporation and any corporation or-
ganized pursuant to the Reconstruction Finance Corporation Act,
and the Secretary of Commerce.
[(h) The term "termination claim" means any claim or demand by
a war contractor for fair compensation for the termination of any war
contract and any other claim under a terminated war contract, which
regulations proscribed under this chapter authorize to be asserted and
settled in connection with any termination settlement.
[(i) The term "interim financing" includes advance payments, par-
tial payments, loans, discounts, advances, and commitments in connec-
tion therewith, and guaranties of loans, discounts, advances and com-
mitments in connection therewith and any other type of financing
made in contemplation of or related to termination of war contracts.
[(j) The term "Administrator" means the Administrator of Gen-
eral Services.
[(k) The term "person" means any individual, corporation, part-
nership, firm; association, trust, estate, or other entity.
[(1) The term "termination inventory" means any materials (in-
cluding. a proper part of any common materials), properly allocable to
the terminated portion of a war contract, except any machinery or
equipment subject to a separate contract specifically governing the use
or disposition thereof.
[(m) The term "final and conclusive", as applied to any settle-
ment., finding, or decision, means that such settlement, finding, or do-
cision shall not be reopened, annulled, modified, set aside, or disre-
garded by any officer, employee, or agent of the United States or in any
suit, action, or proceeding except as provided in this chapter.
[? 104. Administration of chapter; rules and regulations;
personnel.
[(a) Repealed. Pub. L. 89-554, ~, 8(a), Sept. 6, 1066, 80 Shat. 652.
[(b) In order to insure uniform and efficient administration of the
provisions of this chapter, the Administrator. of General Services,
subject to such provisions, by general orders or general regulations-
[(1) shall prescribe policies, principles, methods, procedures,
and standards to govern the exercise of ' the authority and dis-
cretion and the performance of the duties and functions of all
Government agencies under this chapter; and
[(2) may require or restrict the exercise of any such authority
and discretion, or the performance of any such dirty or function,
to such extent as he deems necessary to carry out the provisions of
this chapter.
[(c) The exercise of any authority or discretion and the perform-
ance of any duty or function, conferred or imposed on any Govern-
riientagency by this chapter, shall be subject to such orders and regu-
lations prescribed by the A(hydnistrator of General Services pursuant
to subsection (b) of this section. Each Government agency shall carry
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out such orders and regulations of the Administrator of General. Serv-
ices expeditiously, and shall issue such regulations with respect to its
operations and procedures as may be necessary to carry out the poli-
cies, principles, methods, procedures, and standards prescribed by the
Administrator of General Services. Any Government agency may
issue such further regulations not inconsistent. with the general orders
or regulations of the Administrator of General Services as it deems
necessary or desirable to carry out the provisions of this chapter.
[(d) The Administrator of General. Services may, %vit.hirl the, limits
of funds which may be made available, employ and fix the compensa-
tion of necessary personnel in accordance with the. provisions of the
civil service laws and chapter ;1 and subchapter III of chapter 53 of
Title. 5, and make expenditures for supplies. facilrt,ies, and services
necessary for the performance of his functions under this chapter.
Without regard to the provisions of the civil-service laws, he may
employ certified public accountants, qualified cost accountants, indus-
trial engineers, appraisers, and other experts, and contract with cer-
tified public. accounting firms and qualified firms of engineers in the
discharge of the duties imposed upon him and in furtherance of the
objectives and policies of this chapter. The Administrator of General
Services shall perform the duties imposed upon him through the per-
sonnel and facilities of the contracting agencies and other established
Government agencies, to the extent that. this does not interfere with
the. function of the Administrator of General Services to insure uni-
form and efliciernt administration of the provisions of this chapter.
[(e) .111 orders and regulations prescribed by the Administrator of
General Services or any Government agency under this chapter shall
be published in the Federal Register.
[? 105. Contract Settlement Advisory Board; composition; duties.
[There is created a Contract Settlement Advisory Board, with
which the Administrator of General. Services shall advise and consult.
The Board shall be composed of the Administrator of General Serv-
ices who shall act as its Chairman, and of the Secretary of the Army,
the Secretary of the Navy, the Chairman of the Maritime Commis-
sion, the Secretary of State, the chairman of the board of directors of
the Reconstruction Finance Corporation, Secretary of Commerce, and
the Attorney General or any alternate or representative designated by
army of them. The Administrator of General Services shall request
other Government agencies to participate in the deliberations of the
Board whenever clatters specially affecting them are Linder
consideration.
[? 106. Basis for settlement of termination claims.
[(a) Priority to private contractors.
[It is the policy of the Government, and it shall be tine responsibility
of the contracting agencies and the Administrator of General Serv-
ices to provide war contractors with speedy and fair compensation
for the termination of any war contract., in accordance with and sub-
ject to the provisions of this chapter, giving priority to contractors
whose facilities are privately owned or privately operated. Such fair
compensation for the termination of subcontracts shall be based on
the same principles as compensation for the termination of prune
contracts.
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[(b) Establishment of methods and standards.
[Each contracting agency shall establish methods and standards,
suitable to the conditions of various war contractors, for determining
fair compensation for the termination of war contracts on the basis of
actual, standard, average, or estimated costs, or of a percentage of the
contract price based on the estimated percentage of completion of
work under the terminated contract, or on any other equitable basis, as
it deems appropriate. To the extent that such methods and standards
require accounting, they shall be adapted, so far as practicable, to the
accounting systems used by war contractors, if consistent with recog-
nized commercial accounting practice.
[(c) Conclusiveness of settlement.
[Any contracting agency may settle all or any part of any termina-
tion claim under any war contract by agreement with the war con-
tractor, or by determination of the amount due on the claim or part
thereof without such agreement,, or by any combination of these
methods. Where any such settlement is made by agreement, the set-
tlement shall. be final. and conclusive, except (1) to the extent other-
wise agreed in the settlement; (2) for fraud; (3) upon renegotiation
to eliminate excessive profits under section 1191 of Appendix to Title
50, unless exempt or exempted under such section; or (4) by mutual
agreement before or after payment. Where any such settlement is
made by determination without agreement, it shall likewise be final
and conclusive, subject to the same exceptions as if made by agree-
ment, unless the war contractor appeals or brings suit in accordance
with section 113 of this tithe : Provided, That no settlement agreement
hereunder involving payment to a war contractor of an amount in
excess of $50,000 (or such lesser amount as the Administrator of Gen-
eral Services may from time to time determine) shall become binding
upon the Government until the agreement has been reviewed and
approved by a settlement review board of three or more members
established ty the contracting agency in the bureau, division, regional.
or district office, or other unit of the contracting agency authorized
to make such settlement, or in the event of disapproval by the settle-
ment review board, unless approved by the head. of such bureau, di-
vision, regional or district office, or other unit. Failure of the settle-
ment review board to act upon any settlement within thirty days after
its submission to the board shall operate as approval by the board.
The sole function of settlement review boards shall be to determine the
over-all reasonableness of proposed settlement agreements from the
point of view of protecting the interests of the Government. In deter-
mining, for purposes of this subsection, whether review of any settle-
ment agreement is required because of the amounts involved, no de-
duction shall. be made on account, of credits for property chargeable
to the Government or for advance or partial payments, but amounts
payable under such settlement agreement for completed articles or
work at the contract price and for the discharge of the termination
claims of subcontractors shall be deducted.
[(d) Allowable costs.
[Except as hereinafter provided, the methods and standards estab-
lished under subsection (h) of this section for determining fair com-
pensation for termination claims which are not settled by agreement
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shall be designed to compensate the war contractor fairly for the
termination of the war contract. taking into account----
[(1) the direct and indirect manufacturing, selling and dis-
tribution, administrative and other costs and expenses incurred
by the war contractor which are reasonably necessary for the
performance of the war contract and properly allocable to the
terminated portion thereof under recognized commercial account-
ing practices; and
[(2) reasonable costs and expenses of settling termination
claims of subcontractors related to the terminated portion of the
war contract ; and
[(3) reasonable accounting, legal, clerical, and other costs and
expenses incident to termination and settlement of the terminated
war contract; and
[(4) reasonable costs and expenses of removing, preserving,
storing and disposing of termination inventories; and
[(5) such allowance for profit on the preparations made and
work done for the terminated portion of the war contract as is
reasonable under the circumstances ; and.
[(6) interest on the termination claims in accordance with sub-
section (f) of this section ; and
[(7) the contract price and all amounts otherwise paid or pay-
able under the contract.
[The followi shall not be included as elements of cost :
[(i) Lossnges on other contracts, or from sales or exchanges of
capital assets, fees and other expenses in connection with reorgani-
zation or recapitalization, antitrust or Federal income-tax liti-
gation, or prosecution of Federal income-tax claims or other
claims against the Government (except as provided in paragraph
(3) of this subsection); losses on investments; l provisions for con-
tingencies; and premiums on life insurance where the contractor
is the beneficiary.
[(ii) The expense of conversion of the contractor's facilities to
uses other than the performance of the contract.
[(iii) Expenses due to the negligence or willful failure of the
contractor to discontinue with reasonable promptness the incur-
ring of expenses after the effective date of the termination notice.
[(iv) Costs incurred in respect to facilities, materials, or serv-
ices purchased or work done in excess of the reasonable quantita-
tive requirements of the entire contract.
[The failure specifically to mention in this subsection any item of
cost is not intended to imply that it should be allowed or disallowed.
The Administrator of General Services may interpret the provisions
of this subsection and may provide for the inclusion or exclusion of
other costs in accordance with recognized commercial accounting
practices.
[Where the small size of claims or the nature of production or per-
formance or other factors make it impracticable to apply the principles
stated in this subsection to any class of settlements which are subject
to this subsection, the contracting agencies may establish alternative
methods and standards for determining fair compensation for that
class of termination claims. The aggregate amount of compensation
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allowed in accordance with this subsection (excluding amounts al-
lowed under paragraphs (3) and (4). of this subsection) shall not ex-
ceed the total contract price reduced by the amount of payments other-
wise made or to be made under the contract.
[(e) Settlement by agreement.
[In order to carry out the objectives of this chapter, termination
claims shall be settled by agreement to the maximum extent feasible
and the methods and standards established under subsection (b) of
this section shall be designed to facilitate such settlements. To the
extent that he deems it practicable to do so without impeding expe-
ditious settlements, the Administrator of General Services shall re-
quire the contracting agencies to take into account the factors enu-
merated in subsection (d) of this section in establishing methods and
standards for determining fair compenaation in the settlement of ter-
mination claims by agreement.
[(f) Interest.
[Each contracting agency shall allow and pay interest on the
amount due and unpaid-from time to time on any termination claim
under a prime contract at the rate of 21/2 per centum per annum for
the period beginning thirty days after the date fixed for termination
and ending with the date' of final payment, except that (1) if the
prime contractor unreasonably delays the settlement of his claim, in-
terest shall not accrue for the period of such delay, (2) if interest for
the period after termination on any advance payment or loan, made or
guaranteed by the Government, has been waived for the benefit of the
contractor, the amount of the interest so waived allocable to the termi-
nated contract or the terminated part, of the contract shall be deducted
from the interest otherwise payable hereunder, and (3) if after de-
livery of findings by a contracting agency, the contractor appeals or
sues' as provided in section 113 of this title, interest shall not accrue
after the thirtieth day following the delivery of the findings on any
amount allowed by such findings, unless such amount is increased
upon such appeal or suit. In approving, ratifying, authorizing, or
making. termination settlements with subcontractors, each contract-
ing agency shall allow interest on the termination claim of the sub-
contractor on the same basis and subject to the same conditions as are
applicable to a prime contractor.
_`[(g) Amendment of contracts.
[Where any war contract does not provide for or provides against
such fair compensation for its termination, the contracting agency,
either before or after its termination, shall amend such wax contract
by agreement with the war contractor, or shall authorize, approve, or
ratify an amendment of such war contract by the parties thereto, to
provide for such fair compensation.
[? 107. Settlement of subcontractors' claims.
[(a) Conclusiveness of settlement.
[Where, in connection with the settlement of any termination claim
by a contracting agency, any war contractor makes settlements of the
termination claims of his subcontractors, the contracting agency shall.
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limit or omit its review of such settlements with subcontractors to
the maximum extent compatible with the public interest. Any contrac-
ting agency (1) may approve, ratify, or authorize such settlements
with subcontractors upon such evidence, terms, and conditions as it
deems proper; (2) shall vary the scope and intensity of As review of
such settlements according to the reliability of the war contractor, the
size, number, and complexity of such claims, and other relevant fac-
tors; and (3) shall authorize war contractors to make such settlements
with subcontractors without review by the contracting agency, when-
ever the reliability of the war contractor, the amount or nature of the
claims, or other reasons appear to the contracting agency to justify
such action. Any such settlement of a subcontract approved, ratified,
or authorized by a contracting agency shall be final and conclusive
as to the amount due to the same extent as a settlement under subsec-
tion (c) of section 106 of this title, and no war contractor shall be liable
to the United States on account of any amounts paid thereon except
for his own fraud.
[(b) Supervision of payments to war contractors.
[Whenever any contracting agency is satisfied of the inability of a
war contractor to meet his obligations it shall exercise supervision or
control over payments to the war contractor on account of termination
claims of subcontractors of such war contractor to such extent and
in such manner as it deems necessary or desirable for the purpose
of assuring the receipt of the benefit of such payments by the
subcontractors.
[(c) Group settlements.
[The Administrator of General Services shall prescribe policies
and methods for the settlement as a group, or otherwise, by any con-
tracting agency of some or all of the termination claims of a war con-
tractor under war contracts with one or more (1) bureaus or divisions
within a contracting agency, (2) contracting agencies, or (3) prime
contractors and subcontractors, to the extent he deems such action
necessary or desirable for expeditious and equitable settlement of such
claims. After consulting with the contracting agencies concerned, the
Administrator of General Services may provide for assigning any war
contractor to a contracting agency for such settlement, and such agency
shall have authority to settle, on. behalf of any other contracting
agency, some or all of the termination claims of such war contractor.
[(d) Direct settlement by contracting agency.
[Any contracting agency may settle directly termination claims of
subcontractors to the. extent that it deems such action necessary or
desirable for the expeditious and equitable settlement of such claims.
In making such termination settlement s any contracting agency may
discharge the claim of the subcontractor by payment or may purchase
such claim. and may agree to assume, or inde.inni.fy the subcontractor
against, any claims by any person in connection with such claim or the
termination settlement. A.ny contracting agency undertaking to settle
the termination claim of any subcontractor shall deliver to the subcon-
tractor and the war contractor liable to him written notice stating its
acceptance of responsibility for settling his claim and the conditions
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applicable thereto, which may include the release, or assignment to the
contracting agency, of his claim against the war contractor liable to
him; upon consent thereto by the subcontractor, the Government shall
become liable for the settlement of his claims upon the conditions
specified in the notice.
[(e) Amount of settlement.
[Any contracting agency may make settlements with subcontractors
in accordance with any of the provisions of this chapter without re-
gard to any limitation on the amount payable by the Government to
the prime contractor.
[(f) Equitable payments.
[If any contracting agency determines that in the circumstances of
a particular case equity and good conscience require fair compensa-
tion for the termination of a war contract to be paid to a subcontractor
who has been deprived of and cannot otherwise reasonably secure such
fair compensation, the contracting agency concerned may pay such
compensation to him although such compensation already has been
included and paid as part of a settlement with another war contractor.
[? 108. Interim financing.
[(a) Prime contractors.
[It is the policy of the Government, and it shall be the responsibility
of the contracting agencies and the Administrator of General Services,
in accordance with and subject to the provisions of this chapter, to pro-
vide war contractors having any termination claim or claims, pending
their settlement, with adequate interim financing, within thirty days
after proper application therefor.
[(b) Method of financing; amounts payable.
[Each contracting agency shall, to the greatest extent it deems prac-
ticable, make available interim financing through loans and discounts,
and commitments and guaranties in connection therewith, in contem-
plation of or related to termination of war contracts. Where interim
financing is made by advance payments or partial payments, it shall,
insofar as practicable, consist of the following :
[(1) An amount equal to 100 per centum of the amount pay-
able, at the contract price, on account of acceptable items com-
pleted prior to the termination date under the terms of the
contract, or completed thereafter with the approval of the con-
tracting agency ; plus
[(2) An amount equal to 90 per centum of the cost of raw
materials purchased parts, supplies, direct labor, and manu-
facturing overhead allocable to the terminated portion of the war
contract; plus
[(3) A reasonable percentage of other allowable costs, includ-
ing administrative overhead, allocable to the terminated portion
of the war contract not included in the foregoing; plus
[(4) Such additional amounts, if any, as the contracting
agency deems necessary to provide the war contractor with ade-
quate interim financing.
[(5) In lieu of the costs referred to in clauses (2) and (3) of
this subsection, where a detailed ascertainment of such costs is
not suitable to the conditions of any war contractor and is apt to
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cause delay in the obtaining of interim financing by him, that
portion of such interim financing shall be equal to an amount not
greater than 90 per centum of the estimated costs which are allo-
cable to the terminated part or parts of the war contract or group
of. war contracts, and are ascertained in accordance with such
methods and standards as the Administrator of General Services
shall prescribe.
[((;) There shall be deducted from the amount of such interim
financing any unliquidated balances of advance and partial pay-
ments theretofore made to such war contractor, which are allo-
cable to the terminated war contract or the terminated part of the
war contract.
[(c) Evidence to support financing.
[The Administrator of General Services shall prescribe (1) the
types of estimates, certificates, or other evidence to he required to sup-
port such interim financing; (2) the terms and conditions upon which
such interim financing shall be made including the use of standard
forms for agreements with respect, to such interim financing to the
extent practicable; (3) the classes of oases in which such interim fi-
nancing shall be refused; and (4) such methods of supervision and
control over such interim financing as he. deems necessary or desirable
to assure adequate and speedy interim financing to subcontractors of
the war contractor.
[(d) Penalty for overstatement of claims.
[In case of an overstatement by any war contractor of the amount
chore on his termination claim or claims in connection with any interim
financing under this chapter, such contractor shall pay to the United
States, as a penalty, an amount equal to 6 per centumn of the amount of
the overstatement, but the Administrator of General Services may
suspend or modify any such penalty if in his opinion the imposition
thereof would be inequitable. Any penalty may be deducted from any
amounts due the war contractor upon such termination claim or
claims, or otherwise, or may be collected from the war contractor by
suit. The obligation to pay any penalty imposed and to repay any
interim financing made or assumed by the United States under this
chapter shall constitute. a debt due to the United States within the
meaning of section 191 of Title 31.
[(e) Advance payments as part of termination settlement.
[Any contracting agency may allow any advance payments, previ-
ously made or authorized by it in connection with the performance of
it war contract, to be used for pa-, merits and expenses related to the
termination settlement of such contract, upon such terms and condi-
tions as it deems necessary or appropriate to protect the interest of
the Government.
[(f) Liquidation of loans, etc., prior to final settlement.
[No interim financing shall be made by any contracting agency
under this chapter unless the terms of such financing provide for the
liquidation by the war contractor of all loans, discounts, advance pay-
ments, or partial payments thereunder not later than the time of final
payment of the amount due on the settlement of the- termination claim.
or claims of the war contractor involved or such time thereafter as the
contracting agency deems necessary for the liquidation of such interim
financing in an orderly manner.
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[(g) Settlement of claims; validation of prior financing.
[Any contracting agency may settle, upon such terms and condi-
tions as it deems proper, any claim or obligation due by or to the
Government arising from or related to any interim financing made,
acquired, or authorized by it. Any interim financing made, acquired,
or authorized by any contracting agency before the effective date of
this chapter shall be valid to the extent it would be authorized under
the provisions of this chapter if made after its effective date.
[? 109. Advance or partial payments to subcontractors; excessive
payments, interest, liability of war contractor.
[(a) Any contracting agency may make advance or partial pay-
ments to any war contractor on account of any termination claim or
claims, and may authorize, approve, or ratify any such advance or
partial payments by any war contractor to his subcontractors, upon
such conditions as it deems necessary to insure compliance with the
provisions of subsection (b) of this section. Each. contracting agency
shall make final payments from time to time on partial settlements or
on settlements fixing a minimum amount due before complete settle-
ment, or as tentative payments before any settlement of the claim or
claims.
[(b) Where any such advance or partial payment.is made to any
war contractor by any contracting agency or by another war contrac-
tor under this section, except a final payment on a partial settlement,
any amount in excess of the amount finally determined to be due
on the termination claim shall be treated as a loan from the Govern-
ment to the war contractor receiving it, and shall" be payable upon
demand together with a penalty computed at the rate of 6 per centum
per annum, for the period from the date such excess advance or partial
payment is received to the date on which such excess is repaid or
extinguished. Where the, advance or partial payment was made by a
war contractor and authorized, approved. or ratified by any contract-
ing agency, the war contractor making it shall not be liable for any such
excess payment in the absence of fraud on his part and shall receive
payment or credit from the Government for the amount of such excess
payment.
E? 110. Guarantee of loans, advances, etc., for financing termina-
tion of contracts.
[(a) Any contracting agency is authorized-
[ (1) to enter into contracts with any Federal Reserve bank, or
other public or private financing institution, guaranteeing such
financing institution against loss of principal or interest on loans,
discounts, or advances or on commitments in connection there-
with, which such financing institution may make to any war con-
tractor or to any person who is or has been engaged in perform-
ing any operation deemed by such contracting agency to be
connected with or related to war production, for the purpose of
financing such war contractor or other person in connection with
or in contemplation of the termination of one or more such war
contracts or operations : and
[(2) to make, enter' into contracts to make, or to participate
with any Government agency, any Federal Reserve bank or pub-
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lie or private financing institution in making loans, discounts, or
advances, or commitments in connection therewith, for the pur-
pose of financing any such war contractor or other person in con-
nection with or in contemplation of the termination of such war
contracts or operations.
[(b) Any such loan, discount, advance, guaranty, or commitment
in connection therewith may be secured by assignment of, or cove-
nants to assign, some or all of the rights of such war contractor or
other person in connection with the termination of such war contracts
or operations, or in such other manner as the contracting agency may
prescribe.
[(c) Subject to such regulations as the Board of Governors of the
Federal Reserve System may prescribe with the approval of the Ad-
ministrator of General Services, any Federal Reserve bank is au-
thorized to act, on behalf of the contracting agencies, as fiscal agent of
the United States in carrying out the purposes of this chapter.
[(d) This section shall not limit or affect any authority of any con-
tracting agency, under any other statute, to make loans, discounts, or
advances, or commitments in connection therewith or guaranties
thereof.
[? 111. Advance notice of termination.
[(a) In order to facilitate the efficient use of materials, manpower,
and facilities for war and civilian purposes, each contracting agencv-
[(1) shall provide its prime contractors with notice of termina-
tion of their prime contracts as far in advance of the cessation of
work thereunder as is feasible and consistent with the national
security without permitting unneeded production or performance;
[(2) shall establish procedures whereby prime contractors
shall provide affected subcontractors with immediate notice of
termination ; and
[(3) shall permit the continuation of some or all of the work
under a terminated prime contract whenever the agency deems
that such continuation will benefit the Government or is necessary
to avoid substantial injury to the plant or property.
[(h) Whenever a contracting agency hereafter directs ,_i prime con-
tractor to cease or suspend all or a, substantial part of the work under
a prime contract, without terminatin