awkward. The President's lawyers, however, were not content with references to trade legislation in the Proclamation raising the duties, especially since imposition of duties was one area in which judicial challenge could be foreseen. Accordingly, they got the President to declare a national emergency, and then to state that he was acting under the authority of the constitution and statutes, "including but not limited to the Tariff Act of 1930 and the Trade Expansion Act." When the judicial challange came and only then-was the TWEA trotted out as the authority for the action, not by proclamation by the President but in the government's answering papers in court. The Customs Court in the Yoshida case did not mind that the authority of the TWEA had been brought in only by the back door after the fact. It held, however, that section 5(b) did not encompass the power to impose duties." The Court of Customs and Patent Appeals agreed with the lower court that none of the provisions of the trade acts covered the President's imposition of the duty surcharge. Nonetheless, it reversed, on the grounds that— We find it unreasonable to suppose that Congress passed the TWEA, delegating broad powers to the President for periodic use for national emergencies, while intending that the President, when faced with such an emergency, must follow limiting procedures prescribed in other acts designed for continuing use during normal times.1 With all respect, I find this opinion to be a thin one, which should not, and I think will not, go down in history as one of the great efforts to define the scope of Congressional delegation or of the powers of the presidency. It may be that the most important factor in that case-though not mentioned in any of the opinions-was that if the decision had gone the other way, the government stood to lose $540 million in duties collected just in the four months the surcharge was in effect. 4. The import duty surcharge had a curious relationship to the final case I want to mention the extension of export controls in fall of 1976. When President Nixon had removed the surcharge in connection with the Smithsonian Agreement on currency realignments in December 1971, he had terminated only Paragraphs B and C of the August 15th Proclamation, leaving in place the national emergency declaration in Paragraph A.1 That emergency, of course, had related to the international economic position of the dollar, and in particular to our loss of monetary reserves. When there was difficulty agreeing on extension of the Export Administration Act, that emergency, as well as the Truman Proclamation of 1950, were recited as the basis for keeping export controls in effect. This happened once in 1972 for about four weeks after which the Export Administration Act was extended (with amendments) as of the original date of expiration; it happened twice in 1974-first over the two-week period of changeover between President Nixon and President Ford, and later for another 4-week period in October. By the time of the real conflict over the Export Administration Act in the summer of 1976-in particular over the anti-Arab boycott provisions sought to be added by the Congress, resort to the TWEA as a back stop had become routine. With a few numbers and dates changed, President Ford's Executive Order of September 30, 197620 is a carbon copy of the three previous orders." When questions were raised about the legitimacy of this step, the Justice Department issued an opinion relying on the decision in Yoshida as well as on the precedents set in the earlier, and as it turned out, briefer uses of TWEA to extend export controls.22 Several persons have raised the question with me about whether the use of the TWEA to continue export controls is lawful. To a private person contemplating shipping out a strategic item without a license, I would say, "Don't do it." To a businessman wondering whether he must file the annoying boycott-request forms, I am not so clear, because the link between the stated emergencywhether having to do with the perils of communism or the declining dollar-seems to fit the anti-boycott provisions of our Export Administration Program 17 Yoshida International, Inc. v. United States, 378 F. Supp. 1155 (Cust. Ct. 1974). 19 Proclamation 4098 of Dec. 20, 1971, 36 Fed. Reg. 24201 (1971). 20 Exec. Order 11940. of Sept. 30, 1976, 41 Fed. Reg. 43407 (1976). 21 Exec. Order 11677 of Aug. 1, 1972, 37 Fed. Reg. 15483 (1972). Exec. Order 11796 of July 30, 1974, 39 Fed. Reg. 27891 (1974). Exec. Order 11810 of Sept. 30, 1974, 39 Fed. Reg. 35567 (1974). 22 Opinion of Asst. Atty. Gen'l Antonin Scalia of Sept. 29, 1976, reproduced in BNA, U.S. Export Weekly, Oct. 19, 1976. even less than it fits the other provisions. I guess I would say to a private person, "Don't be the one to challenge it." But I would say to the government, also, "Try to avoid a court test." And to the successive presidents who have used the TWEA and the lawyers who have gone along with and perhaps even suggested this strategy, I would say-and I hope this Committee would say-that the strategy is of doubtful legality and even more of doubtful propriety. To restate in somewhat different form the point I made at the outset, the reluctance of courts to strike down acts of the President taken in the name of national security is understandable. But this fact should put more, not less pressure on the executive branch and its lawyers to be careful about asserting expansive law-making powers not granted by the Congress. I think in this area we have had too many "can do" lawyers, and too many officials who demand "can do" lawyers. That attitude may be all right in the context where one can say "If we are wrong, a court will overrule us." Where that comfort is lacking-as it largely is in this area-I would hope counsels of restraint gain more respect than the instances I have cited suggest. IV-SOME LEGISLATIVE SUGGESTIONS 1. One could simply repeal section 5(b) of the TWEA, as H.R. 1560 would do. The difficulty with this approach is that it would bring down with it a number of programs, such as the embargo on trade with Cuba, that perhaps should not be terminated, or should not be terminated just now, or should not be terminated without a quid pro quo. I am not sure what our policy right now should be with respect to Cuba, and I am sure this Committee is not interested in my views on that subject. I say only that it would be a very awkward act (perhaps even an inappropriate interference in negotiations being carried out by the Executive Branch) if the embargo were suddenly to end without any deal or understanding, just because the Executive Branch in prior administrations had from time to time overstepped its bounds. 2. Another possibility would be to retain the delegation of emergency power, but to limit national emergencies to, say, 60 or 120 or 180 days, subject to express renewals. I have some sympathy for this suggestion, which is similar to H.R. 2382. But coming again to the Cuban situation, I can imagine that the President might well not be anxious at a given point to proclaim anew a state of emergency, even as he was negotiating for a relaxation of tensions. Perhaps a modification of the proposal might be developed, whereby an emergency might be extended by the President on the basis of finding continued need, without requiring a new emergency declaration. I would not make such extension of authority unlimited in time, and I would hope it could be tied to some kind of control by the Congress. 23 3. A modification of the previous proposal, used since 1966 with respect to travel controls, would make the actual measures taken pursuant to the national emergency come up for review at regular intervals, without the need for a new declaration of emergency. The idea would be to compel the government, including the President himself, to think through at regular intervals (say six months) whether extension of measures such as those taken under the TWEA were still justified. I would not want to rule out small modifications, such as were made with respect to China in the period 1969-71, and have been made recently with respect to Cuba. But no new measure, and certainly no measure not linked to the stated emergency, would be permitted without a new declaration of emergency. 4. I believe an amended statute-and I hope it would receive a new nameshould make clear that a "state of emergency" in United States law is not an abstract concept such as the stage of siege in some Latin American countries. One should not be able to proclaim an emergency on one subject, then take measures on a wholly unrelated subject that may well not be of an emergency character at all, just because it is convenient to act first and tell the Congress and public later. And it should be clear that a declaration of emergency is not to be made lightly. 5. I believe that if an amended statute, by whatever name, comes out of these hearings, the powers it confers should be limited in their territorial scope to the United States, its citizens acting in their individual (as contrasted with managerial) capacity, and to operations plainly designed to avoid the controls applicable in the United States. I do not say, as is sometimes contended, that our expansive assertions of jurisdiction are contrary to existing international 23 See 22 C.F.R. § 51.72, issued in 31 Fed. Reg. 13549 (Oct. 20, 1966). law. But I believe we lose more in receptivity to United States-based investment and in respect for the United States generally than we can possibly gain by the kind of extraterritoriality that we have practiced on and off in the past in implementation of the TWEA. Mr. Chairman, my statement is already much longer than I had intended. But it is extraordinary how seldom the questions you have raised have been asked in the Congress, and I hope I have been able to contribute to your inquiry. Mr. BINGHAM. Thank you, Professor Lowenfeld. It is a fascinating statement. Professor Maier. STATEMENT OF PROF. HAROLD G. MAIER, VANDERBILT UNIVERSITY SCHOOL OF LAW, VISITING SCHOLAR, THE BROOKINGS INSTITUTION Harold G. Maier, Professor of Law and Director of Transnational Legal Studies Program, Vanderbilt University Law School, Nashville, Tennessee; born Cincinnati, Ohio, March 25, 1937; B.A., University of Cincinnati, 1959; J.D., University of Cincinnati, 1963; LL.M., University of Michigan, 1964; Luftbrücke Dankstipendiat, Freie Universität Berlin, 1959-60; William W. Cook Fellow, University of Michigan, 1963-64; Ford International Studies Fellow, Institut für Patent-, Urheber-, und Markenrecht der Universität München (now Max-Planck-Institut), 1964-65; full-time member of the law faculty at Vanderbilt since 1965; delegate to State Department-Association of American Law Schools Conference on United States-Yugoslavian Trade and Investment, Belgrade, 1968; participant, Scholar-Diplomat Program, Department of State, 1972; member American Society of International Law (National Chairman, Regional and Local Activities Committee, 1973-74) (member Executive Council since 1975); member, African Law Association; Order of the Coif, Omicron Delta Kappa; author of numerous articles in professional journals dealing with international trade and with the foreign affairs power; Currently a Visiting Scholar at the Brookings Institution, Washington, D.C., conducting research concerning the effect of prior governmental practice on the constitutional powers of the political branches in foreign affairs matters. Mr. MAIER. Thank you. I consider it a real privilege to be invited to testify before your subcommittee. As you have asked, I will deal with some of the constitutional issues raised by this continued exercise of emergency powers by the executive branch under section 5(b) of the Trading With the Enemy Act and also the constitutional issues which might be raised by proposed repeal. I have submitted a written statement to the staff of the subcommittee, and this afternoon I would like, in my oral testimony, to present in summary form an overview of some of the constitutional implications of both the historic and potential future impact of this legislation. Mr. BINGHAM. Your written statement will appear in full, as will Professor Lowenfeld's.1 Mr. MAIER. Your invitation to testify happily permits me to combine two areas of my research and teaching interests. Much of my teaching over the last 12 years has been in the field of international commercial transactions and in various aspects of public international law. As a visiting scholar at the Brookings Institution here in Washington, I have been engaged for the past 1 Professor Maier's prepared statement appears on p. 26; Professor Lowenfeld's prepared statement on p. 12. 6 months in intensive research concerning the separation and coordination of constitutional powers in foreign affairs matters, with special emphasis on the interrelationships between the legislative and executive branches in this field. NATIONAL EMERGENCIES ACT The importance of reexaming the continued exercise of so-called emergency powers by the executive branch in foreign and domestic affairs was emphasized by the passage of the National Emergencies Act in 1976. That act, as this subcommittee is aware, was designed to terminate those states of national emergency under which Government has been conducted in the United States for the last 40 years and to provide for certain congressional controls in the form of periodic review of executive branch activities under those states of national emergency which might be declared in the future. The National Emergencies Act, however, exempted section 5(b) of the Trading With the Enemy Act, as well as some other sections of law, from its coverage because so many current regulations, Executive orders and so forth, depend for their legal validity upon the continued existence of the powers which section 5 (b) confers. Professor Lowenfeld has mentioned several of those in the course of his testimony. By that exemption, however, not only were at least two and possibly three existing states of national emergency declared under the Trading With the Enemy Act continued, but all emergency powers which had been or might later be exercised under section 5 (b) were excluded from the reporting and override requirements which the National Emergencies Act established. Thus, if the National Emergencies Act is to accomplish the purposes for which it was intended, at least a substantial modification of section 5 (b) of the Trading With the Enemy Act is necessary. CONSTITUTIONAL SHIFT IN POWER In considering what steps to recommend for modification of section 5(b), I would urge the subcommittee to give primary emphasis to what I submit is a most important constitutional principle. That principle is that in order for an effective "separation" of governmental powers to be maintained together with the equally important system of checks and balances, activities of both the executive and legislative branches must emphasize decisions which will lead to the effective coordination of governmental powers in dealing with matters involving the Nation's foreign economic policy. Under the constitutional scheme, the framers clearly believed that the country as a whole is best served when the President and the Congress act together in the promulgation and implementation of policy. Abdication of power is not the same as coordination of power. When the authority to exercise powers necessary to the conduct of Government is abdicated by one branch, the constitutional vacuum created by that abdication will be filled by the other. There is no better illustration of this important truth than the legislative and functional history of section 5 (b) of the Trading With the Enemy Act. HISTORY OF SECTION 5(b) USE The historic interaction of the Congress and the President under section 5(b) provides an excellent illustration of the process by which acquiescence by one of the political branches-in this instance, the Congress has resulted in a loss of its real and important role in setting of policies and as a partner in executive activity. There has been a consequent shift of constitutional power in matters involving the regulation of foreign commerce from the legislative to the executive branch. When the Trading With the Enemy Act was originally enacted, it was intended as war powers legislation in connection with the First World War, as Professor Lowenfeld pointed out. It applied only to foreign transactions and conferred no purely domestic powers. In 1933, President Roosevelt, faced with a domestic economic emergency, cited section 5(b) as a source of power to deal with this domestic emergency and this legal basis for the 1933 Bank Holiday-not only the President's action but his interpretation of section 5(b)was quickly approved by the Congress. That is certainly understandable under the circumstances. The point is this is now part of the section's legislative history, and leads us down the path I am describing. Again and again during the Depression and throughout World War II, the executive branch relied upon the emergency powers of section 5(b) to deal with new and important needs, both domestically and internationally, and in each instance, ever-expanding interpretations of executive power were retroactively approved by the Congress; sometimes implicitly, most often by explicit legislative endorsement. President Truman's declaration of national emergency under section 5(b) during the Korean war has served as the basis for executive action to impose continuing trade embargoes, to prohibit or otherwise regulate certain forms of foreign investment, to impose a tariff surcharge, to freeze foreign-owned assets and to extend upon three different occasions the Export Administration Act after that legislation had expired on a date set by Congress. I am not suggesting that any or all of these actions by the executive branch have been unwise or that the power has been exercised in an arbitrary or capricious manner. What I am suggesting, however, is that the combination of legislative permissiveness and executive assertiveness over the past 40 years has created a significant shift in the functional allocations of constitutional power to regulate foreign commerce from the legislative to the executive branch. That the conduct of Government has come to rely upon this delegation of legislative power is made clear by the fact that it was found impossible to terminate executive authority under section 5(b) by means of the National Emergencies Act without considerable further study to determine what, if any, legislative power should or could be reclaimed without seriously injuring the governmental process. In addition, there is every indication that, absent a most serious abuse of the "emergency power" by the executive branch, this broad delegation of legislative authority will be upheld by the courts. |