B-30613, MAY 11, 1943, 22 COMP. GEN. 1025

B-30613, MAY 11, 1943, 22 COMP. GEN. 1025

COMPENSATION FOR FOREIGN VESSELS REQUISITIONED UNDER ACT OF JUNE 6, 1941 WITH THE EXCEPTION OF CERTAIN INSTANCES OF VESTED INTERESTS ACQUIRED SUBSEQUENT TO SEPTEMBER 8, 1939, THE "JUST COMPENSATION" TO BE PAID FOR FOREIGN VESSELS REQUISITIONED BY THE UNITED STATES PURSUANT TO THE ACT OF JUNE 6, 1941 (WHICH REQUIRES THAT JUST COMPENSATION FOR SUCH VESSELS BE DETERMINED AND MADE IN ACCORDANCE WITH THE APPLICABLE PROVISIONS OF SECTION 902 OF THE MERCHANT MARINE ACT OF 1936, AS AMENDED) IS SUBJECT TO THE SAME LIMITATIONS, AS CONSTRUED IN THE DECISION IN 22 COMP. GEN. 497, AS ARE IMPOSED BY SAID SECTION 902 ON THE COMPENSATION TO BE PAID FOR REQUISITIONED DOMESTIC VESSELS, EVEN THOUGH THE COMPENSATION THUS LIMITED FOR REQUISITIONED FOREIGN VESSELS MAY NOT BE IN ACCORDANCE WITH CERTAIN EXISTING PRINCIPLES OF INTERNATIONAL LAW. THE REQUIREMENT THAT THE COMPENSATION TO BE PAID FOR FOREIGN VESSELS REQUISITIONED BY THE UNITED STATES PURSUANT TO THE ACT OF JUNE 6, 1941, MUST BE BASED ON VALUES EXISTING ON SEPTEMBER 8, 1939, NEED NOT BE APPLIED IN A CASE WHERE, BY REASON OF BONA FIDE DEALINGS WITH RESPECT TO A PARTICULAR VESSEL ON THE BASIS OF A MARKET VALUE IN EXCESS OF THE VALUE OF THE VESSEL ON SEPTEMBER 8, 1939, VESTED INTERESTS HAVE BEEN ACQUIRED SUBSEQUENT TO THAT DATE; BUT, RATHER, PAYMENT MAY BE MADE OF AN AMOUNT SUFFICIENT TO COVER THE VALUE OF SUCH VESTED INTERESTS.

COMPTROLLER GENERAL WARREN TO THE ADMINISTRATOR, WAR SHIPPING ADMINISTRATION, MAY 11, 1943:

I HAVE YOUR LETTER OF APRIL 20, 1943, AS FOLLOWS:

WE ARE TRANSMITTING TO YOU HEREWITH A COPY OF A COMMUNICATION DATED APRIL 16, 1943, WHICH WE HAVE JUST RECEIVED FROM THE SECRETARY OF STATE IN WHICH HE ASKS THAT YOUR RULING OF NOVEMBER 28, 1942, BE RECONSIDERED FOR THE REASONS MORE FULLY SET FORTH IN THE MEMORANDUM ATTACHED TO HIS LETTER.

YOU WILL NOTE THAT HE HAS TAKEN THE POSITION THAT THE RULING IS IN VIOLATION OF INTERNATIONAL LAW AND CREATES A DANGEROUS PRECEDENT OF WHICH FOREIGN GOVERNMENTS MAY AVAIL THEMSELVES IN CONNECTION WITH THE CONFISCATION OF AMERICAN-OWNED PROPERTIES IN FOREIGN COUNTRIES.

WE WOULD APPRECIATE ADVICE FROM YOU AS TO WHETHER YOU WOULD OBJECT TO OUR TAKING A POSITION CONSISTENT WITH THAT URGED BY THE SECRETARY OF STATE.

THE ENCLOSED COPY OF THE LETTER OF APRIL 16, 1943, FROM THE SECRETARY OF STATE, TO YOU, IS AS FOLLOWS:

WITH REFERENCE TO PREVIOUS CORRESPONDENCE AND CONFERENCES BETWEEN OFFICERS OF THE WAR SHIPPING ADMINISTRATION AND THIS DEPARTMENT IN RELATION TO THE MATTER OF COMPENSATING DANISH NATIONALS FOR VESSELS REQUISITIONED BY THIS GOVERNMENT PURSUANT TO THE PROVISIONS OF PUBLIC LAW 101, 77TH CONGRESS, APPROVED JUNE 6, 1941 (55 STAT. 242), I ENCLOSE A MEMORANDUM SETTING FORTH IMPORTANT CONSIDERATIONS WHICH IT IS BELIEVED SHOULD BE TAKEN INTO ACCOUNT IN CONNECTION WITH THE SETTLEMENT OF THE CLAIMS OF THE DANISH OWNERS.

WHILE THE MATTER IS OF IMPORTANCE FROM THE STANDPOINT OF THE INTERNATIONAL RESPONSIBILITY OF THIS GOVERNMENT WITH RESPECT TO THE PROPERTIES OF NATIONALS OF FOREIGN COUNTRIES, IT IS ALSO OF IMPORTANCE FROM THE POINT OF VIEW OF THE EXPROPRIATION BY FOREIGN GOVERNMENTS OF EXTENSIVE PROPERTIES OF AMERICAN NATIONALS IN FOREIGN COUNTRIES, WHOSE INTERESTS WE MUST KEEP IN MIND.

HAVING IN MIND THE FOREGOING CONSIDERATIONS, PARTICULARLY OUR INTERNATIONAL RELATIONS, I CONSIDER IT IMPORTANT THAT JUST COMPENSATION IN THE REAL SENSE BE MADE TO THE DANISH OWNERS, AND THAT SECTION 902 OF THE MERCHANT MARINE ACT OF 1936, AS AMENDED, BE CONSTRUED, IF POSSIBLE, SO AS TO BRING ABOUT THIS RESULT. I AM CONFIDENT THAT YOU WILL TAKE SUCH STEPS AS MAY BE POSSIBLE IN THIS DIRECTION.

THE MEMORANDUM TO WHICH THE ABOVE-QUOTED LETTER FROM THE SECRETARY OF STATE REFERS, IS AS FOLLOWS:

PURSUANT TO THE ACT APPROVED JUNE 6, 1941 (55 STAT. 242) THIS GOVERNMENT REQUISITIONED CERTAIN IMMOBILIZED DANISH VESSELS IN JUNE 1941. THE ACT PROVIDED FOR THE PAYMENT OF "JUST COMPENSATION" AS FOLLOWS:

"JUST COMPENSATION SHOULD BE DETERMINED AND MADE TO THE OWNER OR OWNERS OF SUCH VESSELS IN ACCORDANCE WITH THE APPLICABLE PROVISIONS OF SECTION 902 OF THE MERCHANT MARINE ACT, 1936, AS AMENDED.'

SECTION 902 (A) OF THE MERCHANT MARINE ACT OF 1936, AS AMENDED (53 STAT. 1254), PROVIDES IN PART AS FOLLOWS:

"WHENEVER THE PRESIDENT SHALL PROCLAIM THAT THE SECURITY OF THE NATIONAL DEFENSE MAKES IT ADVISABLE OR DURING ANY NATIONAL EMERGENCY DECLARED BY PROCLAMATION OF THE PRESIDENT, IT SHALL BE LAWFUL FOR THE COMMISSION TO REQUISITION OR PURCHASE ANY VESSEL OR OTHER WATERCRAFT OWNED BY CITIZENS OF THE UNITED STATES, OR UNDER CONSTRUCTION WITHIN THE UNITED STATES, OR FOR ANY PERIOD DURING SUCH EMERGENCY, TO REQUISITION OR CHARTER THE USE OF ANY SUCH PROPERTY. THE TERMINATION OF ANY EMERGENCY SO DECLARED SHALL BE ANNOUNCED BY A FURTHER PROCLAMATION BY THE PRESIDENT. WHEN ANY SUCH PROPERTY OR THE USE THEREOF IS SO REQUISITIONED, THE OWNER THEREOF SHALL BE PAID JUST COMPENSATION FOR THE PROPERTY TAKEN OR FOR THE USE OF SUCH PROPERTY, BUT IN NO CASE SHALL THE VALUE OF THE PROPERTY TAKEN OR USED BE DEEMED ENHANCED BY THE CAUSES NECESSITATING THE TAKING OR USE. * * *" ( ITALICS SUPPLIED.)

"IT IS COMMON GROUND THAT IN THIS RESPECT THE PUBLIC LAW OF THE PARTIES IS IN OF THE VALUE OF THE DANISH SHIPS ON THE DATE THEY WERE REQUISITIONED ( JUNE, 1941) THE SO-CALLED ENHANCEMENT CLAUSE OF SECTION 902 (A) "PROHIBITS THE PAYMENT OF COMPENSATION FOR SUCH VESSELS TO THE EXTENT THAT IT MAY BE BASED UPON VALUES IN EXCESS OF THE VALUES EXISTING ON SEPTEMBER 8, 1939, PROVIDED SUCH EXCESS BE DETERMINED AS DUE TO ECONOMIC CONDITIONS DIRECTLY CAUSED BY THE NATIONAL EMERGENCY" ( COMMUNICATION OF NOVEMBER 28, 1942, TO THE ADMINISTRATOR, WAR SHIPPING ADMINISTRATION).

IN HIS LETTER OF MAY 1, 1941, TO THE CHAIRMAN OF THE COMMITTEE ON COMMERCE, UNITED STATES SENATE, IN RELATION TO SENATE JOINT RESOLUTION NO. 67, THE SECRETARY OF STATE STATED:

"WITH REGARD TO THE ACQUISITION OF IMMOBILIZED GERMAN, ITALIAN, AND DANISH VESSELS IN AMERICAN PORTS, NOW IN PROTECTIVE CUSTODY, IT IS THE VIEW OF THE DEPARTMENT OF STATE THAT THESE VESSELS SHOULD NOT BE CONDEMNED WITHOUT MAKING JUST COMPENSATION TO THEIR RESPECTIVE OWNERS. IT IS BELIEVED THAT THERE IS ADEQUATE AUTHORITY IN INTERNATIONAL LAW FOR THIS METHOD OF ACQUISITION.' ( ITALICS SUPPLIED.)

THERE ARE ALSO QUOTED THE FOLLOWING EXCERPTS FROM THE RECORD OF THE HEARINGS ON H.R. 4088 AND H.J. RES. 167, RELATING TO THIS SAME SUBJECT BEFORE THE HOUSE COMMITTEE ON MERCHANT MARINE AND FISHERIES, APRIL 17-23, 1941, CONTAINING THE TESTIMONY OF MR. BRECKINRIDGE LONG, ASSISTANT SECRETARY OF STATE:

" MR. OLIVER. BUT WE ARE CITING AS OUR REASON FOR SEIZING OR REQUISITIONING THESE SHIPS THE NECESSITY OF OUR SELF-DEFENSE, SO TO SPEAK, AND IT WOULD APPEAR TO ME THAT WHETHER WE HAVE BEEN AGGRESSORS OR WHETHER WE HAVE NOT BEEN AGGRESSORS, THAT WHEN WE PUT OURSELVES IN THE SAME CATEGORY AS A NATION THAT WE DO CONSIDER TO BE AN AGGRESSOR, THAT WE ARE LOSING SOMETHING, OUR OWN TRADITION, SO TO SPEAK.

" ASSISTANT SECRETARY LONG. WELL, MR. OLIVER, WE ARE NOT GOING TO CONFISCATE THESE VESSELS; WE ARE GOING TO PAY FOR THEM AND PAY WHAT THEY ARE REASONABLY WORTH.

" MR. OLIVER. I UNDERSTAND THAT IS THE SITUATION.

" ASSISTANT SECRETARY LONG. THE VESSELS ARE THERE LYING IDLE.

" MR. OLIVER. I AGREE WITH THAT.

" ASSISTANT SECRETARY LONG. WE ARE SIMPLY GOING TO TAKE OVER VESSELS AND MAKE JUST COMPENSATION FOR THEM.'

MR. LONG'S COMMENTS WERE SUPPLEMENTED ON PAGE 54 AS FOLLOWS:

" ASSISTANT SECRETARY LONG. WE HAVE VESSELS IN PROTECTIVE CUSTODY, AND THEY ARE STILL THE PROPERTY OF FOREIGN INTERESTS, AND WE ARE PROPOSING TO PAY FOR THEM FULL VALUE AND TO USE THE VESSELS WHICH HAVE BEEN LYING IDLE, MANY OF WHICH WERE USED FORMERLY IN TRANSPORTING GOODS TO THE UNITED STATES WHICH WE NOW NEED MORE THAN EVER.'

THE DEPARTMENT HAD IN MIND, OF COURSE, THE PAYMENT OF "JUST COMPENSATION" AS HERETOFORE DETERMINED BY BOTH MUNICIPAL AND INTERNATIONAL TRIBUNALS. AS STATED BY MR. JUSTICE BUTLER IN DELIVERING THE OPINION OF THE SUPREME COURT IN BROOKS-SCANLAN CORPORATION V. UNITED STATES (265 U.S. 106, 123), IT IS SETTLED BY THE DECISIONS OF THE COURT THAT THE TERM "JUST COMPENSATION" IN ARTICLE V OF THE AMENDMENTS TO THE CONSTITUTION "IS THE VALUE OF THE PROPERTY TAKEN AT THE TIME OF THE TAKING.'

IN ITS OPINION RENDERED ON OCTOBER 13, 1922 THE INTERNATIONAL TRIBUNAL ESTABLISHED BY THE UNITED STATES AND NORWAY TO PASS UPON THE CLAIMS OF NORWEGIAN NATIONALS ARISING OUT OF THE REQUISITIONING OF CERTAIN SHIPBUILDING CONTRACTS, MATERIALS AND SHIPS BEING BUILT IN THE UNITED STATES AT THE DATE OF THEIR REQUISITION BY THIS GOVERNMENT, THE FOLLOWING STATEMENT WAS MADE WITH REFERENCE TO ARTICLE V OF THE AMENDMENTS TO THE CONSTITUTION:

"IT IS COMMON GROUND THAT IN THIS RESPECT THE PUBLIC LAW OF THE PARTIES IS IN COMPLETE ACCORD WITH THE INTERNATIONAL PUBLIC LAW OF ALL CIVILIZED COUNTRIES.' ( AMERICAN JOURNAL OF INTERNATIONAL LAW, VOL. 17, PP. 362, 385.)

IT WAS ADDED THAT "JUST COMPENSATION IS DUE TO THE CLAIMANTS UNDER THE MUNICIPAL LAW OF THE UNITED STATES, AS WELL AS UNDER INTERNATIONAL LAW," AND THAT IT WAS "COMMON GROUND" THAT SUCH COMPENSATION IS TO BE DETERMINED IN THE LIGHT OF "THE FAIR ACTUAL VALUE OF THE PROPERTY TAKEN * * * AT THE TIME AND PLACE IT WAS TAKEN" AND "ALL THE SURROUNDING CIRCUMSTANCES" (IBID., P. 388).

IN ADMINISTRATIVE DECISION NO. III RENDERED ON DECEMBER 11, 1923, THE MIXED CLAIMS COMMISSION, UNITED STATES AND GERMANY, ESTABLISHED PURSUANT TO THE AGREEMENT CONCLUDED BY THE TWO GOVERNMENTS ON AUGUST 10, 1922 TO ADJUDICATE CLAIMS OF AMERICAN NATIONALS AGAINST GERMANY, LAID DOWN CERTAIN RULES WITH RESPECT TO CLAIMS "BASED UPON PROPERTY TAKEN AND NOT RETURNED TO PRIVATE OWNERS.' IT WAS SAID THAT THE MEASURE OF DAMAGES WHICH WOULD ORDINARILY BE APPLIED WAS "THE REASONABLE MARKET VALUE OF THE PROPERTY AS OF THE TIME AND PLACE OF TAKING IN THE CONDITION IN WHICH IT THEN WAS, IF IT HAD SUCH MARKET VALUE; IF NOT, THEN THE INTRINSIC VALUE OF THE PROPERTY AS OF SUCH TIME AND PLACE.' ( CONSOLIDATED EDITION OF DECISIONS AND OPINIONS, 1925-1926, PP. 61, 63.)

ON MARCH 11, 1924, THE SAME COMMISSION ENTERED THE FOLLOWING ORDER:

" ORDERED, THAT IN ALL CLAIMS FALLING WITHIN THE TERMS OF THE TREATY OF BERLIN BASED ON THE DESTRUCTION OF HULLS THE MEASURE OF DAMAGES WHICH WILL ORDINARILY BE APPLIED IS THE REASONABLE MARKET VALUE OF THE PROPERTY DESTROYED IN THE CONDITION IN WHICH IT WAS AS OF THE TIME AND PLACE OF DESTRUCTION, IF IT HAD A MARKET VALUE; IF NOT, THEN THE INTRINSIC VALUE OF THE PROPERTY AS OF SUCH TIME AND PLACE. WHILE THE REASONABLE MARKET VALUE, IF THERE WERE A TRUE AND ASCERTAINABLE MARKET VALUE, WILL CONTROL, NOTWITHSTANDING THE MARKET MAY HAVE BEEN EITHER DEPRESSED OR INFLATED BY ABNORMAL CONDITIONS HOWSOEVER PRODUCED, STILL PURELY SPECULATIVE FACTORS WILL BE ELIMINATED AS FAR AS PRACTICABLE IN ARRIVING AT SUCH MARKET VALUE. ( ITALICS SUPPLIED.)

"THE AMERICAN AND GERMAN AGENTS AND THEIR RESPECTIVE COUNSEL IN THE PREPARATION AND PRESENTATION OF CASES, AND THE NAVAL EXPERTS IN THE PREPARATION OF THEIR REPORTS TO THE COMMISSION, WILL BE GOVERNED ACCORDINGLY.' ( IBID, P. 331.)

IN HIS REPORT ON THE WORK OF THE COMMISSION, THE AMERICAN AGENT MADE THE FOLLOWING STATEMENTS WITH RESPECT TO THE MATTER OF DETERMINING VALUES PURSUANT TO THE ABOVE-MENTIONED ORDER:

"THE AMERICAN AGENCY IN THE MEANTIME WAS ENGAGED IN GATHERING AND ASSEMBLING ALL AVAILABLE STATISTICS AS TO ACTUAL SALES OF SHIPS DURING THE WAR PERIOD, THE OPINIONS OF EXPERTS ON SUCH VALUES, AND INFORMATION REGARDING THE CHARACTER OF SHIPS SOLD, AS TO THEIR AGE, TONNAGE, PHYSICAL CONDITION, AVAILABILITY FOR USE, CARGO CAPACITY, AND ALL FACTS WHICH WOULD HAVE ANY BEARING OR MATERIALITY IN THE DETERMINATION OF THE QUESTION OF VALUE.

"DURING THE WAR IT IS WELL KNOWN THAT THE VALUES OF SHIPS AROSE ENORMOUSLY. THE AGE OF A SHIP WAS OF SLIGHT CONSEQUENCE. THERE WAS A TREMENDOUS DEMAND FOR SHIPS OF ANY KIND AND THE SUPPLY WAS LIMITED. THE VALUES FLUCTUATED WIDELY AND GENERALLY IN ACCORDANCE WITH THE ACTIVITIES OF THE GERMAN SUBMARINE WARFARE. IT WAS AN EXTREMELY DIFFICULT MATTER TO DETERMINE THE VALUE OF A PARTICULAR SHIP AT A GIVEN TIME, BUT WITH THE AID OF THE MASS OF STATISTICS, TABULATED STATEMENTS OF ACTUAL SALES MADE PRIOR TO, THROUGHOUT, AND SUBSEQUENT TO THE WORLD WAR, CHARTS PREPARED IN ACCORDANCE THEREWITH SHOWING THE FLUCTUATIONS IN THE MARKET VALUES OF BOTTOMS, AND ALL THE INFORMATION ASSEMBLED, IT WAS FOUND POSSIBLE IN MOST CASES TO ARRIVE AT A SATISFACTORY CONCLUSION.

"AS A RESULT OF THESE EFFORTS, CONSULTATIONS AND CONFERENCES, THE AGENTS OF THE RESPECTIVE GOVERNMENTS IN NEARLY ALL OF THE CLAIMS FOR THE LOSS OF HULLS WERE ABLE TO PRESENT THE CLAIMS TO THE COMMISSION UPON AGREED STATEMENTS OF FACTS INCLUDING AN AGREED VALUATION OF EACH SHIP FOR WHICH A STATEMENT WAS FILED, TOGETHER WITH A RECOMMENDATION FOR THE CONSIDERATION OF THE COMMISSION OF AN AMOUNT TO BE AWARDED IN EACH CASE. THESE RECOMMENDATIONS WERE IN EACH CASE APPROVED BY THE COMMISSION AND AWARDS ENTERED ACCORDINGLY.' ( REPORT OF ROBERT W. BONYNGE, 1934, P. 38.)

THE AGREED STATEMENTS FILED WITH THE COMMISSION WITH RESPECT TO THE VALUES AND RECOMMENDATIONS ARRIVED AT BY THE AGENTS, AND ON THE BASIS OF WHICH THE COMMISSION ACTED, CONTAINED THE FOLLOWING PARAGRAPH:

"IV. THE VALUES SHOWN IN THE ATTACHED SCHEDULES WERE ARRIVED AT BY THE COMPARISON WITH THE PRICES OBTAINED AT THE SALES OF AMERICAN VESSELS OF APPROXIMATELY THE SAME TYPE, AGE AND TONNAGE, EFFECTED AT ABOUT THE SAME TIME OF LOSS OF THE RESPECTIVE VESSELS UNDER CONSIDERATION, THEY KEEP GENERALLY WITHIN THE LIMITS OF THE AVERAGE RATES OF THE PRICES PAID UNDER SUCH SALES, AND THE PARTICULAR CIRCUMSTANCES INFLUENCING THE VALUE OF THE LOST VESSEL HAVE BEEN TAKEN INTO ACCOUNT IN EACH CASE" ( IBID., P. 40).

UNDER THE SETTLEMENT OF WAR CLAIMS ACT OF 1928 (45 STAT. 254) A WAR CLAIMS ARBITER WAS APPOINTED TO HEAR CERTAIN CLASSES OF CLAIMS OF GERMAN NATIONALS AGAINST THE UNITED STATES. AMONG SUCH CLAIMS WERE THOSE ARISING OUT OF THE TAKING OVER BY THE UNITED STATES OF CERTAIN GERMAN VESSELS. PARAGRAPHS 6 AND 7 OF SECTION 4 (C) AUTHORIZED THE SECRETARY OF THE TREASURY, FOLLOWING AWARDS BY THE ARBITER, TO PAY IMMEDIATELY AMOUNTS IN THE AGGREGATE OF 50 PERCENT OF THE AWARDS AUTHORIZED TO BE MADE "ON ACCOUNT OF SHIPS, PATENTS, AND RADIO STATIONS.' BY FINDINGS OF JUNE 5, 1930, JAMES W. REMICK AS ARBITER DETERMINED THE "FAIR VALUE" OF EACH OF 94 SHIPS,"TO THE OWNER, IMMEDIATELY PRIOR TO THE TIME EXCLUSIVE POSSESSION WAS TAKEN BY THE UNITED STATES UNDER THE AUTHORITY OF THE JOINT RESOLUTION OF MAY 12, 1917, IN ITS CONDITION AT THAT TIME, TAKING INTO CONSIDERATION THE FACT THAT SUCH OWNER COULD NOT USE OR PERMIT THE USE OF SUCH VESSEL, OR CHARTER, OR SELL OR OTHERWISE DISPOSE OF SUCH VESSEL FOR USE OR DELIVERY PRIOR TO THE TERMINATION OF THE WAR, AND THAT THE WAR WAS NOT TERMINATED UNTIL JULY 2, 1921, INCLUDING SIMPLE INTEREST THEREON AT THE RATE OF FIVE PERCENTUM PER ANNUM FROM JULY 2, 1921, TO DECEMBER 31, 1928, BOTH DATES INCLUSIVE.' THE FAIR VALUE OF THE 94 SHIPS, INCLUDING INTEREST, WAS FOUND TO BE $74,243,000 ( AMERICAN JOURNAL OF INTERNATIONAL LAW, VOL. 25, P. 139).

IN HIS OPINION RENDERED IN CONNECTION WITH THE CASE OF MACANDREWS AND FORBES COMPANY ( U.S.) V. THE REPUBLIC OF TURKEY, COMMISSIONER NIELSON STATED:

"IN UNITED STATES V. NEW RUBBER ( RIVER) COLLIERIES CO., 262 U.S. 341, 344, THE COURT ASSERTED AND APPLIED THE FOLLOWING GENERAL RULE WITH RESPECT TO COMPENSATION FOR THE TAKING OF PROPERTY:

" "WHERE PRIVATE PROPERTY IS TAKEN FOR PUBLIC USE, AND THERE IS A MARKET PRICE PREVAILING AT THE TIME AND PLACE OF THE TAKING, THAT PRICE IS JUST COMPENSATION.'

"INTERNATIONAL TRIBUNALS APPLY THE SAME GENERAL RULE, WHICH, IT IS BELIEVED, MAY BE TAKEN AS A RULE OF INTERNATIONAL LAW AS WELL AS OF DOMESTIC LAW. IT IS ALSO BELIEVED THAT, GENERALLY SPEAKING, THE RULE SHOULD BE AND HAS BEEN APPLIED TO ARBITRARY AND UNLAWFUL TAKING OR DESTRUCTION OF PROPERTY. SEE THE MELCZER MINING COMPANY CASE IN THE ARBITRATION BETWEEN THE UNITED STATES AND MEXICO UNDER THE CONVENTION OF SEPTEMBER 8, 1923, OPINIONS OF COMMISSIONERS, WASHINGTON, 1929, P. 228.' ( OPINIONS AND REPORT, PP. 89-90.)

WITH REFERENCE TO THE LIMITATION INHERENT IN THE SO-CALLED ENHANCEMENT CLAUSE IN SECTION 902 (A) IT MAY BE OBSERVED THAT THE TRIBUNAL ESTABLISHED TO PASS UPON THE ABOVE-MENTIONED CLAIMS OF NORWEGIAN NATIONALS AGAINST THE UNITED STATES HELD THAT, IN DETERMINING JUST COMPENSATION, IT WAS NOT BOUND BY CERTAIN DESIGNATED STATUTES OF THE UNITED STATES "NOR BY ANY OTHER MUNICIPAL LAW, IN SO FAR AS THESE PROVISIONS RESTRICTED THE RIGHT OF THE CLAIMANTS TO RECEIVE IMMEDIATE AND FULL COMPENSATION, WITH INTEREST FROM THE DAY ON WHICH THE COMPENSATION SHOULD HAVE BEEN FULLY PAID EX AEQUO ET BOND.' THERE ARE A NUMBER OF INTERNATIONAL PRECEDENTS IN SUPPORT OF THE PRINCIPLE UNDERLYING THE TRIBUNAL'S RULING. I MAY REFER TO THE FOLLOWING STATEMENT MADE BY SECRETARY OF STATE BAYARD IN AN INSTRUCTION OF NOVEMBER 1, 1887 TO MR. CONNERY, AMERICAN MINISTER TO MEXICO:

"* * * IF A GOVERNMENT COULD SET UP ITS OWN MUNICIPAL LAWS AS THE FINAL TEST OF ITS INTERNATIONAL RIGHTS AND OBLIGATIONS, THEN THE RULES OF INTERNATIONAL LAW WOULD BE BUT THE SHADOW OF A NAME AND WOULD AFFORD NO PROTECTION EITHER TO STATES OR TO INDIVIDUALS. IT HAS BEEN CONSTANTLY MAINTAINED AND ALSO ADMITTED BY THE GOVERNMENT OF THE UNITED STATES THAT A GOVERNMENT CANNOT APPEAL TO ITS MUNICIPAL REGULATIONS AS AN ANSWER TO DEMANDS FOR THE FULFILLMENT OF INTERNATIONAL DUTIES. SUCH REGULATIONS MAY EITHER EXCEED OR FALL SHORT OF THE REQUIREMENTS OF INTERNATIONAL LAW, AND IN EITHER CASE THAT LAW FURNISHES THE TEST OF THE NATION'S LIABILITY AND NOT ITS OWN MUNICIPAL RULES. THIS PROPOSITION SEEMS NOW TO BE SO WELL UNDERSTOOD AND SO GENERALLY ACCEPTED, THAT IT IS NOT DEEMED NECESSARY TO MAKE CITATIONS OR TO ADDUCE PRECEDENTS IN ITS PORT.' ( FOREIGN RELATIONS, 1887, P. 753.)

IN THE LIGHT OF THE FOREGOING PRECEDENTS IT SEEMS CLEAR THAT UNDER PRINCIPLES OF INTERNATIONAL LAW THE PECUNIARY LIABILITY OF THIS GOVERNMENT WITH RESPECT TO THE DANISH VESSELS IN QUESTION CAN BE FULLY DISCHARGED ONLY BY THE PAYMENT OF AN AMOUNT WHICH WILL REPRESENT "JUST COMPENSATION" IN CONFORMITY WITH THE DECISIONS OF THE SUPREME COURT AND INTERNATIONAL TRIBUNALS, THAT IS, AN AMOUNT DETERMINED ON THE BASIS OF THE ACTUAL VALUE AT THE TIME OF TAKING. IF SUCH COMPENSATION IS NOT PAID AND THE MATTER IS SUBMITTED TO AN INTERNATIONAL TRIBUNAL FOR ADJUDICATION, IT IS TO BE EXPECTED THAT THIS GOVERNMENT WILL BE FOUND LIABLE IN AN AMOUNT REPRESENTING SUCH ACTUAL VALUE, PLUS INTEREST.

WHERE A STATUTE IS OPEN TO MORE THAN ONE INTERPRETATION THE RULES OF STATUTORY CONSTRUCTION REQUIRE ADMINISTRATIVE BODIES, ENTRUSTED WITH THE DUTY OF ADMINISTERING A LAW, TO APPLY IT, IF POSSIBLE, IN SUCH MANNER AS TO AVOID RUNNING COUNTER TO THE CONSTITUTION. STATUTES SHOULD ALSO BE CONSTRUED, IF POSSIBLE, SO AS NOT TO RUN COUNTER TO OUR INTERNATIONAL OBLIGATIONS. THUS IN THE CASE OF MACLEOD V. UNITED STATES (229 U.S. 416, 434), THE SUPREME COURT STATED:

"THE STATUTE SHOULD BE CONSTRUED IN THE LIGHT OF THE PURPOSE OF THE GOVERNMENT TO ACT WITHIN THE LIMITATION OF THE PRINCIPLES OF INTERNATIONAL LAW, THE OBSERVANCE OF WHICH IS SO ESSENTIAL TO THE PEACE AND HARMONY OF NATIONS, AND IT SHOULD NOT BE ASSUMED THAT CONGRESS PROPOSED TO VIOLATE THE OBLIGATIONS OF THIS COUNTRY TO OTHER NATIONS, WHICH IT WAS THE MANIFEST PURPOSE OF THE PRESIDENT TO SCRUPULOUSLY OBSERVE AND WHICH WERE FOUNDED UPON THE PRINCIPLES OF INTERNATIONAL .'

IN THE CASE OF THE S.S. LOTUS BEFORE THE PERMANENT COURT OF INTERNATIONAL JUSTICE, MR. JOHN BASSETT MOORE STATED:

"2. IT IS AN EQUALLY ADMITTED PRINCIPLE THAT, AS MUNICIPAL COURTS, THE CREATURES OF MUNICIPAL LAW, DERIVE THEIR JURISDICTION FROM THAT LAW, OFFENSES COMMITTED IN THE TERRITORIAL JURISDICTION OF A NATION MAY BE TRIED AND PUNISHED THERE ACCORDING TO THE DEFINITIONS AND PENALTIES OF ITS MUNICIPAL LAW, WHICH, EXCEPT SO FAR AS IT MAY BE SHOWN TO BE CONTRARY TO INTERNATIONAL LAW, IS ACCEPTED BY INTERNATIONAL LAW AS THE LAW PROPERLY GOVERNING THE CASE. ( REPORT OF MR. BAYARD, SECRETARY OF STATE, TO THE PRESIDENT, CASE OF ANTONIO PELLETIER, JANUARY 20TH, 1887, FOREIGN RELATIONS OF THE UNITED STATES, 1887, P. 606, AND THE NUMEROUS AUTHORITIES THERE CITED; WILDENHUS' CASE, 120, U.S. 1.) THIS PRINCIPLE IS NOT CONTRARY, BUT IS CORRELATIVE, TO THE PRINCIPLE LAID DOWN IN NUMEROUS DECISIONS OF MUNICIPAL COURTS, THAT INTERNATIONAL LAW IS TO BE CONSIDERED AS FORMING PART OF THE LAW OF THE LAND, THAT IT IS AS SUCH TO BE JUDICIALLY ADMINISTERED IN ALL CASES TO WHICH IT IS APPLICABLE, AND THAT MUNICIPAL ENACTMENTS OUGHT NOT TO BE SO CONSTRUED AS TO VIOLATE INTERNATIONAL LAW, IF ANY OTHER CONSTRUCTION IS POSSIBLE ( CHIEF JUSTICE MARSHALL, MURRAY V. SCHOONER CHARMING BETSEY (1804), 2CRANCH, 64, 118; SIR WILLIAM SCOTT, LE LOUIS (1817), 2 DODSON, 210, 239).' (II HUDSON, WORLD COURT REPORTS 20, 68.)

ATTENTION IS ALSO INVITED TO THE FOLLOWING STATEMENTS OF SECRETARY OF STATE ROOT IN A COMMUNICATION OF MARCH 16, 1906 TO THE SECRETARY OF COMMERCE AND LABOR:

"IN SUPPORT OF THE CONTENTION THAT FOREIGN DIPLOMATIC OFFICERS ARE NOT EXEMPT FROM THE HEAD TAX, AN OPINION OF THE ATTORNEY GENERAL, DATED FEBRUARY 20, 1905, IS SUBMITTED.

"IT IS NOT THE INTENTION OF THIS DEPARTMENT TO IMPUGN OR TO CRITICIZE THIS OPINION; IT IS HOWEVER, SUGGESTED THAT THE OPINION CONSIDERS SOLELY THE LETTER OF THE STATUTE AND DOES NOT TAKE INTO CONSIDERATION THE FACT THAT INTERNATIONAL LAW IS AS MUCH THE LAW OF THE LAND AS IS A STATUTE. NOR IS THE STATUTE INTERPRETED IN RELATION TO INTERNATIONAL LAW, AS IS THE RULE OF CONSTRUCTION IN SUCH CASES.' ( HACKWORTH, DIGEST OF INTERNATIONAL LAW, VOL. IV, 460-461.)

IN SCHROEDER V. BISSELL, COLLECTOR ( THE OVER THE TOP), (5 F. (2D) 838, 842) IT WAS SAID:

"/2) IF, HOWEVER, THE COURT HAS NO OPTION TO REFUSE THE ENFORCEMENT OF LEGISLATION IN CONTRAVENTION OF PRINCIPLES OF INTERNATIONAL LAW, IT DOES NOT FOLLOW THAT IN CONSTRUING THE TERMS AND PROVISIONS OF A STATUTE IT MAY NOT ASSUME THAT SUCH PRINCIPLES WERE ON THE NATIONAL CONSCIENCE AND THAT THE CONGRESSIONAL ACT DID NOT DELIBERATELY INTEND TO INFRINGE THEM. OTHER WORDS, UNLESS IT UNMISTAKABLY APPEARS THAT A CONGRESSIONAL ACT WAS INTENDED TO BE IN DISREGARD OF A PRINCIPLE OF INTERNATIONAL COMITY, THE PRESUMPTION IS THAT IT WAS INTENDED TO BE IN CONFORMITY WITH IT.'

IT IS NOT BELIEVED THAT EITHER THE LANGUAGE OF THE STATUTE IN QUESTION OR ITS LEGISLATIVE HISTORY INDICATES THAT IT WAS INTENDED TO BE IN DISREGARD OF ESTABLISHED INTERNATIONAL LAW IN RELATION TO THE PAYMENT OF "JUST COMPENSATION" AS INTERPRETED AND APPLIED BY INTERNATIONAL TRIBUNALS.

IT WOULD SEEM THAT IN VIEW OF THE NUMEROUS AUTHORITIES CONTAINED IN THE ABOVE-QUOTED MEMORANDUM, THERE MAY BE ACCEPTED FOR PRESENT PURPOSES THE THESIS THAT IT IS A WELL-ESTABLISHED PRINCIPLE OF CUSTOMARY INTERNATIONAL LAW THAT WHEN A SOVEREIGN POWER TAKES PRIVATE PROPERTY UNDER CIRCUMSTANCES SIMILAR TO THOSE HERE INVOLVED, JUST COMPENSATION SHOULD BE PAID THE OWNER OF SUCH PROPERTY, AND THAT JUST COMPENSATION CONSTITUTES THE FAIR MARKET VALUE OF THE PROPERTY AT THE TIME OF THE TAKING. AND IT WOULD SEEM EQUALLY WELL ESTABLISHED THAT A STATUTE SHOULD BE CONSTRUCTED, IF POSSIBLE, SO AS NOT TO CONFLICT WITH INTERNATIONAL LAW, WHETHER SUCH LAW BE IN THE FORM OF A TREATY, CONVENTION, OR MERELY CUSTOM. SEE, IN ADDITION TO THE AUTHORITIES CITED IN THE MEMORANDUM, CHEW HEONG V. UNITED STATES, 112 U.S. 536; JOHNSON V. BROWNE, 205 U.S. 309; ROYAL HOLLAND LLOYD V. UNITED STATES, 73 C.1CLS. 722.

HOWEVER, AT THE SAME TIME, THERE IS ANOTHER PROPOSITION OF WHICH MENTION HAS NOT BEEN MAKE IN THE MEMORANDUM BUT WHICH, NEVERTHELESS, SHOULD NOT BE OVERLOOKED. AND THAT IS, THAT SINCE INTERNATIONAL LAW IS NO MORE BINDING UPON THE CONGRESS THAN AN EXISTING STATUTE, THE CONGRESS HAS THE POWER TO ENACT A STATUTE, IF IT SO DESIRES, IN CONFLICT WITH INTERNATIONAL LAW. UNITED STATES V. SIEM, 299 F. 582. FURTHERMORE, WHERE SUCH A CONFLICT EXISTS, THE STATUTE TAKES PRECEDENCE OVER INTERNATIONAL LAW IN CONTROVERSIES BEFORE COURTS OF THE UNITED STATES. THUS, IN THE CASE OF THE KESTOR, 110 F. 432, 448, THE COURT SAID:

TREATY STIPULATIONS BETWEEN THE UNITED STATES AND FOREIGN NATIONS ARE NOT RESTRICTIVE OF THE CONSTITUTIONAL POWER OF CONGRESS. THEY HAVE THE FORCE OF LAW, BUT, LIKE STATUTES, ARE SUPERSEDED IN AMERICAN COURTS BY SUBSEQUENT ACTS OF CONGRESS CONFLICTING WITH THEM. * * * IT GOES WITHOUT SAYING THAT MERE INTERNATIONAL COMITY NOT INCORPORATED IN ANY CONVENTION BETWEEN THE UNITED STATES AND A FOREIGN POWER MUST YIELD TO A STATUTE WITH WHICH IT IS IN CONFLICT. SEE, ALSO, IN THIS CONNECTION, THE CHEROKEE TOBACCO, 73 U.S. 616; HEAD MONEY CASES, 112 U.S. 580; UNITED STATES V. LEE YEN TAI, 185 U.S. 213; TAYLOR V. MORTON, FED. CAS. NO. 13,799; UNITED STATES V. BELL, 248 F. 992; 10 OP. ATTY. GEN. 521.

APPARENTLY, THE ENGLISH COURTS TAKE THE SAME VIEW. IN MORTENSON V. PETERS, 14 SCOT. L.T.R. 227, 230 (1906), LORD DUNEDIN SAID:

IN THIS COURT WE HAVE NOTHING TO DO WITH THE QUESTION OF WHETHER THE LEGISLATURE HAS OR HAS NOT DONE WHAT FOREIGN POWERS MAY CONSIDER A USURPATION IN A QUESTION WITH THEM. NEITHER ARE WE A TRIBUNAL SITTING TO DECIDE WHETHER AN ACT OF THE LEGISLATURE IS ULTRA VIRES AS IN CONTRAVENTION OF GENERALLY ACKNOWLEDGED PRINCIPLES OF INTERNATIONAL LAW. FOR, AS AN ACT OF PARLIAMENT, DULY PASSED BY LORDS AND COMMONS AND ASSENTED TO BY THE KING, IT IS SUPREME, AND WE ARE BOUND TO GIVE EFFECT TO ITS TERMS.

IT IS IN THE LIGHT OF THESE FUNDAMENTAL PRINCIPLES THAT THE INSTANT QUESTION MUST BE EXAMINED. BUT WHILE THEY MAY PROVIDE SOME GUIDANCE AND ASSISTANCE IN CONSTRUING THE ACT OF JUNE 6, 1941, 55 STAT. 242, AND THE EXTENT TO WHICH ITS TERMS LIMIT--- IF AT ALL--- THE AMOUNT OF JUST COMPENSATION WHICH MAY BE PAID FOR A VESSEL REQUISITIONED THEREUNDER, IT IS UPON THAT ACT AND THAT ACT ALONE THAT SUCH DETERMINATION RESTS. IT IS TRUE THAT CERTAIN PROVISIONS OF SECTION 902 OF THE MERCHANT MARINE ACT, 1936, 49 STAT. 2015, AS AMENDED, WERE INCORPORATED INTO THE LATER ACT BY REFERENCE, BUT EVEN THAT DOES NOT ALTER THE FACT THAT IT IS THE LEGISLATIVE INTENT BEHIND THE LATER ACT THAT MUST HERE BE CONSTRUED. THEREFORE, IT IS CLEAR THAT THE PRINCIPLES OF THE DECISION OF NOVEMBER 28, 1942 (22 COMP. GEN. 497), WHICH DEALT SOLELY WITH VESSELS OWNED BY CITIZENS OF THE UNITED STATES AND REQUISITIONED UNDER SAID SECTION 902, ARE NOT NECESSARILY CONTROLLING IN THE MATTER.

IT WOULD SEEM THAT AN ARGUMENT COULD BE MADE TO THE EFFECT THAT THE ENHANCEMENT CLAUSE IS NOT ONE OF THE "APPLICABLE" PROVISIONS OF SAID SECTION 902 WITHIN THE CONTEMPLATION OF THE LATER ACT. IF CONSIDERATION BE CONFINED TO THE LANGUAGE OF SAID LATER ACT, SUPPORT FOR SUCH AN ARGUMENT IS FOUND IN THE MANNER IN WHICH THE PROVISO IN QUESTION IS PUNCTUATED. THAT IS TO SAY, IF A COMMA HAD BEEN INSERTED AFTER THE WORD "VESSELS" THE ENSUING PHRASE CLEARLY WOULD REFER TO BOTH THE VERB ,DETERMINED" AND THE VERB "MADE; " WITHOUT THE COMMA, THE PHRASE REFERS--- UNDER STRICT RULES OF SYNTAX--- ONLY TO THE VERB "MADE.' UNDER SUCH CONSTRUCTION OF THE PROVISO, THE ENHANCEMENT CLAUSE WHICH CONCERNS ONLY THE DETERMINATION OF JUST COMPENSATION WOULD NOT BE FOR APPLICATION TO VESSELS REQUISITIONED UNDER THE ACT OF JUNE 6, 1941, AND IT COULD BE PRESUMED THAT THE CONGRESS INTENDED BY THE TERM "JUST COMPENSATION" THE MEANING ATTRIBUTED TO IT BY PREVIOUS DECISIONS OF THE SUPREME COURT OF THE UNITED STATES. SEE MONONGAHELA NAVIGATION CO. V. UNITED STATES, 148 U.S. 312; SEABOARD AIR LINE RY. V. UNITED STATES, 261 U.S. 299; UNITED STATES V. NEW RIVER COLLIERIES, 262 U.S. 341; OLSON V. UNITED STATES, 292 U.S. 246; DANFORTH V. UNITED STATES, 308 U.S. 271. CF. UNITED STATES V. MILLER, 317 U.S. 369. HOWEVER, IT IS A WELL-SETTLED PRINCIPLE OF STATUTORY CONSTRUCTION THAT PUNCTUATION IS NO PART OF THE STATUTE ( HAMMOCK V. LOAN AND TRUST CO., 105 U.S. 77, 84), AND THAT COURTS WILL DISREGARD PUNCTUATION OR WILL RE-PUNCTUATE, IF NECESSARY, IN ORDER TO GIVE EFFECT TO WHAT OTHERWISE APPEARS TO BE THE TRUE PURPOSE AND INTENDMENT OF A PARTICULAR PROVISION. UNITED STATES V. SHREVEPORT GRAIN AND ELEVATOR CO., 287 U.S. 77, 82, 83. THUS, IT WOULD SEEM THAT LITTLE, IF ANY, WEIGHT SHOULD BE GIVEN TO THE MANNER IN WHICH THE PROVISO HERE IN QUESTION IS PUNCTUATED ( BARRETT V. VAN PELT, 268 U.S. 85, 91), AND THAT THE INTENT OF THE CONGRESS SHOULD BE OTHERWISE ASCERTAINED.

THE LANGUAGE OF THE ACT ITSELF LEAVES BUT LITTLE DOUBT THAT THE CONGRESS INTENDED JUST COMPENSATION TO BE DETERMINED IN THE MANNER PROVIDED IN SECTION 902 OF THE MERCHANT MARINE ACT, 1936, AS AMENDED. BUT WHATEVER DOUBT IS LEFT IS DISPELLED BY CERTAIN STATEMENTS IN THE LEGISLATIVE HISTORY OF THE ACT. THE NEED FOR THE LEGISLATION WAS EXPLAINED IN A LETTER FROM THE PRESIDENT TO THE CONGRESS UNDER DATE OF APRIL 14, 1941. REFERENCE WAS MADE TO SAID SECTION 902 AS THE EXISTING AUTHORITY UNDER WHICH DOMESTIC VESSELS COULD BE ACQUIRED DURING A NATIONAL EMERGENCY. THE PRESIDENT THEN STATED,"THE SAME SECTION PROVIDES A METHOD BY WHICH COMPENSATION SHALL BE DETERMINED.' THERE WAS ENCLOSED WITH THAT LETTER A DRAFT OF A PROPOSED RESOLUTION; AND WHILE THE CONGRESS MADE SUBSTANTIAL CHANGES IN BOTH THE FORM AND SUBSTANCE OF SAID RESOLUTION BEFORE PASSING THE ACT OF JUNE 6, 1941, IT RETAINED WITHOUT CHANGE THE PROVISION THAT "JUST COMPENSATION SHALL BE DETERMINED AND MADE TO THE OWNER OR OWNERS OF ANY SUCH VESSEL IN ACCORDANCE WITH THE APPLICABLE PROVISIONS OF SECTION 902 OF THE MERCHANT MARINE ACT OF 1936, AS AMENDED.'

MOREOVER, IN ITS REPORT ON H.R. 4466 WHICH SUBSEQUENTLY BECAME THE ACT OF JUNE 6, 1941, THE HOUSE COMMITTEE ON MERCHANT MARINE AND FISHERIES STATED (PAGE 7):

* * * IT IS PROVIDED THAT JUST COMPENSATION SHALL BE DETERMINED AND MADE TO THE OWNER OR OWNERS OF ANY SUCH VESSEL IN ACCORDANCE WITH SECTION 902 OF THE MERCHANT MARINE ACT, 1936, AS AMENDED. THAT SECTION PRESCRIBES THE COMPENSATION TO BE PAID IN THE CASE OF REQUISITION OF AMERICAN-OWNED TONNAGE, AND AUTHORIZES, IN THE CASE OF A DISPUTE AS TO THE AMOUNT THEREOF, PAYMENT OF 75 PERCENT OF THE DETERMINED AMOUNT WITH RECOURSE TO THE COURTS BY THE CLAIMANT FOR THE BALANCE OF THE AMOUNT NECESSARY TO CONSTITUTE JUST COMPENSATION JUDICIALLY DETERMINED. ( ITALICS SUPPLIED.)

SUCH STATEMENTS SEEM CLEARLY TO REBUT THE CONTENTION THAT IT WAS NOT THE INTENT OF THE CONGRESS THAT THE LIMITATION OF THE ENHANCEMENT CLAUSE IN SECTION 902 BE APPLIED TO FOREIGN VESSELS REQUISITIONED UNDER THE ACT OF JUNE 6, 1941. THE FACT THAT DURING THE HEARINGS ON THE LEGISLATION THE ASSISTANT SECRETARY OF STATE REFERRED TO THE AMOUNT OF COMPENSATION TO BE PAID FOR THE INVOLVED VESSELS IN SUCH TERMS AS "FULL VALUE," "JUST COMPENSATION" AND "WHAT THEY ARE REASONABLY WORTH," IS OF QUESTIONABLE SIGNIFICANCE. IT IS STATED THAT,"THE DEPARTMENT HAD IN MIND, OF COURSE, THE PAYMENT OF "JUST COMPENSATION" AS HERETOFORE DETERMINED BY BOTH MUNICIPAL AND INTERNATIONAL TRIBUNALS.' HOWEVER, THE PRESENT DETERMINATION INVOLVES ONLY WHAT THE CONGRESS HAD IN MIND. AND IT WOULD SEEM THAT SUCH BROAD GENERAL EXPRESSIONS AS WERE USED, MUST BE READ IN THE LIGHT OF THE LANGUAGE OF H.J. RES. 167, THEN PENDING BEFORE THE COMMITTEE, WHICH CONTAINED THE SAME PROVISO WITH RESPECT TO JUST COMPENSATION AS IS CONTAINED IN THE ACT OF JUNE 6, 1941.

FURTHERMORE, IT WOULD SEEM THAT UNDER THE CIRCUMSTANCES ATTENDING THE ENACTMENT OF THIS LEGISLATION, LITTLE IF ANY WEIGHT SHOULD BE ATTACHED TO THE PRINCIPLE THAT A STATUTE SHOULD BE CONSTRUED, IF POSSIBLE, SO AS NOT TO VIOLATE ACCEPTED RULES OF INTERNATIONAL LAW. "JUST COMPENSATION" FOR REQUISITIONED PROPERTY HAS BEEN HELD TO CONSTITUTE THE FAIR MARKET VALUE OF THE PROPERTY AS OF THE DATE OF THE TAKING, UNDER THE FIFTH AMENDMENT OF THE CONSTITUTION OF THE UNITED STATES AS WELL AS UNDER INTERNATIONAL LAW. SEE CASES CITED ABOVE. BUT NOTWITHSTANDING SUCH DECISIONS, THE CONGRESS PLACED A SPECIFIC AND UNMISTAKABLE LIMITATION ON THE AMOUNT OF JUST COMPENSATION WHICH COULD BE PAID FOR VESSELS REQUISITIONED UNDER SECTION 902. WHILE IT IS NOT THE PROVINCE NOR THE INTENTION OF THIS OFFICE TO EXPRESS ANY OPINION AT THIS TIME ON THE CONSTITUTIONALITY OF THE ENHANCEMENT CLAUSE, CERTAINLY THE ACTION OF THE CONGRESS IN SO LIMITING THE VALUES TO BE PLACED ON VESSELS TAKEN UNDER SAID SECTION 902, MAKES IT UNREASONABLE TO ATTRIBUTE TO THE CONGRESS AN INTENTION NOT JUSTIFIED BY THE ORDINARY AND USUAL MEANING OF THE LANGUAGE EMPLOYED IN THE ACT OF JUNE 6, 1941, SOLELY TO KEEP THE STATUTE IN LINE WITH CERTAIN EXISTING PRINCIPLES OF INTERNATIONAL LAW.

HOWEVER, IT WOULD SEEM THAT ANOTHER ARGUMENT IS POSSIBLE. EVEN IF THE ENHANCEMENT CLAUSE BE READ INTO THE LATER ACT, COULD IT NOT BE ARGUED THAT "THE CAUSES NECESSITATING THE TAKING OR USE" OF FOREIGN VESSELS WERE THE SAME CAUSES WHICH NECESSITATED THE TAKING OF DOMESTIC VESSELS? IT MIGHT BE CONTENDED THAT WHILE THE THREAT TO OUR NATIONAL SECURITY EXISTING AS OF THE DATE OF A PROCLAMATION OF A LIMITED NATIONAL EMERGENCY ON SEPTEMBER 8, 1939, WAS IN NATURE SUFFICIENTLY SERIOUS TO NECESSITATE THE TAKING OF VESSELS OWNED BY CITIZENS OF THE UNITED STATES, THE CAUSES WHICH NECESSITATED THE MORE EXTREME ACTION OF TAKING VESSELS IN PORTS OF THE UNITED STATES BUT OWNED BY NATIONALS OF OTHER COUNTRIES, DID NOT ARISE UNTIL 1941--- POSSIBLY AS OF THE DATE OF THE PROCLAMATION BY THE PRESIDENT OF AN UNLIMITED NATIONAL EMERGENCY ON MAY 27, 1941.

BUT WHATEVER FORCE AN ARGUMENT ALONG SUCH LINES MIGHT OTHERWISE HAVE SEEMS COMPLETELY TO FADE BEFORE A NONTECHNICAL, COMMON SENSE VIEW OF THE( MATTER. IS IT NOT MORE REASONABLE TO CONCLUDE THAT WHAT THE CONGRESS ACTUALLY INTENDED WAS THAT IN DETERMINING JUST COMPENSATION FOR FOREIGN VESSELS TAKEN UNDER THE ACT OF JUNE 6, 1941, THE SAME STANDARDS SHOULD BE USED AS THOSE PRESCRIBED FOR DOMESTIC VESSELS IN SECTION 902? IF SO, IT WOULD SEEM TO FOLLOW THAT IT WAS LIKEWISE INTENDED THAT THERE SHOULD NOT BE PAID FOR SUCH VESSELS AMOUNTS IN EXCESS OF THOSE LAWFULLY PAYABLE FOR A VESSEL OF THE SAME TYPE, AGE, SPEED, ETC., OWNED BY A CITIZEN OF THE UNITED STATES AND TAKEN OVER BY THE GOVERNMENT PURSUANT TO AUTHORITY CONFERRED BY SAID SECTION 902. THAT IS TO SAY, THIS OFFICE IS CONSTRAINED BY THE EXPRESS TERMS OF THE ACT OF JUNE 6, 1941, TO EXTEND TO THE PAYMENT OF JUST COMPENSATION FOR SUCH FOREIGN VESSELS AS MAY BE REQUISITIONED THEREUNDER THE SAME LIMITATIONS AS ARE CONTAINED IN SECTION 902 OF THE MERCHANT MARINE ACT, 1936, AS AMENDED, AS CONSTRUED BY THE DECISION OF NOVEMBER 28, SUPRA.

HOWEVER, IT IS CLEAR THAT GRAVE INJUSTICE REASONABLY COULD BE EXPECTED TO RESULT FROM THE APPLICATION OF SEPTEMBER 8, 1939, VALUES WHERE IT IS FOUND, FOR EXAMPLE, THAT THE OWNERS FROM WHOM THE VESSELS WERE TAKEN HAD ACQUIRED SUCH VESSELS SINCE SEPTEMBER 8, 1939, AT PRICES IN EXCESS OF VALUES EXISTING ON THAT DATE. MOREOVER, IT IS NOT REASONABLE TO ASSUME THAT THE CONGRESS INTENDED SUCH OWNERS TO SUFFER AN OUT-OF-POCKET LOSS BY REASON OF THE TAKING, ESPECIALLY IN VIEW OF THE FACT THAT THE LEGISLATION UNDER WHICH THE TAKING WAS MADE LEGALLY POSSIBLE WAS NOT ENACTED UNTIL ALMOST TWO YEARS AFTER THE CAUSES NECESSITATING THE TAKING OR USE OF SUCH VESSELS BEGAN TO EXERT INFLUENCE ON SHIP VALUES. THEREFORE, WHERE IT APPEARS THAT VESTED RIGHTS HAVE BEEN ACQUIRED SUBSEQUENT TO SEPTEMBER 8, 1939, BY REASON OF BONA FIDE DEALINGS WITH RESPECT TO A PARTICULAR VESSEL ON THE BASIS OF A MARKET VALUE IN EXCESS OF THE VALUE OF THE VESSEL ON SEPTEMBER 8, 1939, THIS OFFICE WILL NOT OBJECT TO THE PAYMENT OF AN AMOUNT SUFFICIENT TO COVER THE VALUE OF SUCH VESTED INTERESTS.

IN CONCLUSION, IT SHOULD BE CLEARLY UNDERSTOOD THAT THIS OFFICE IS NOT OBLIVIOUS OF THE ARGUMENT PUT FORTH BY THE SECRETARY OF STATE THAT TO PLACE ANY LIMITATION ON THE VALUES OF VESSELS OF FOREIGN OWNERS TAKEN BY THE UNITED STATES UNDER THE ACT OF JUNE 6, 1941, MAY GIVE RISE TO REPERCUSSIONS IN THE INTERNATIONAL RELATIONS OF THIS COUNTRY. THE SHORT ANSWER TO SUCH ARGUMENT IS THAT IT IS DIRECTED TO THE WRONG FORUM. IT IS THE FUNCTION OF THIS OFFICE IN MATTERS WITHIN ITS JURISDICTION TO CONSTRUE AND GIVE FULL FORCE AND EFFECT TO SUCH LAWS AS THE CONGRESS SEES FIT TO ENACT, REGARDLESS OF THE CONSEQUENCES OF SUCH CONSTRUCTION AND ENFORCEMENT. IN BROWN V. UNITED STATES, 12 U.S. 110, 128, MR. CHIEF JUSTICE MARSHALL DESCRIBED A SIMILAR SITUATION IN THE FOLLOWING WORDS:

COMMERCIAL NATIONS, IN THE SITUATION OF THE UNITED STATES, HAVE ALWAYS A CONSIDERABLE QUANTITY OF PROPERTY IN THE POSSESSION OF THEIR NEIGHBORS. WHEN WAR BREAKS OUT, THE QUESTION, WHAT SHALL BE DONE WITH ENEMY PROPERTY IN OUR COUNTRY, IS A QUESTION RATHER OF POLICY THAN OF LAW. THE RULE WHICH WE APPLY TO THE PROPERTY OF OUR ENEMY, WILL BE APPLIED BY HIM TO THE PROPERTY OF OUR CITIZENS. LIKE ALL OTHER QUESTIONS OF POLICY, IT IS PROPER FOR THE CONSIDERATION OF A DEPARTMENT WHICH CAN MODIFY IT AT WILL; NOT FOR THE CONSIDERATION OF A DEPARTMENT WHICH CAN PURSUE ONLY THE LAW AS IT IS WRITTEN. IT IS PROPER FOR THE CONSIDERATION OF THE LEGISLATURE, NOT OF THE EXECUTIVE OR JUDICIARY.