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President to equalize the cost of production of articles in the United States and the like or similar articles of competing foreign countries. These proclamations were to be issued after investigation by the Tariff Commission to ascertain the facts necessary to enable the President to determine whether increases or decreases in the rates of duty should be made. The section provided that the total increase or decrease should not exceed 50 percent of the rates specified in title I of the act.
Section 316 gave the President power, whenever the existence of methods of unfair competition and unfair acts in the importation of articles into the United States or in their sale therein should tend to destroy or substantially injure an industry, or to prevent the establishment of such an industry, or to restrain and monopolize trade and commerce in the United States, had been established to his satisfaction, to cause additional import duties to be imposed, or in extreme cases, to cause such articles to be excluded from the United States,
Section 317 provided that when the President should find that the public interest would be served thereby, he should by proclamation specify and declare new or additional duties as provided in the act upon articles wholly or in part the growth or product of any foreign country whenever he should find as a fact that such country was imposing unreasonable charges upon the disposition in, transportation through, or reexportation from such country of American products, or was discriminating against American commerce in respect of customs duties, etc., as compared with that of other countries. He was also authorized, in certain cases, to exclude articles from such country from importation into the United States, i.e., if following the proclamations the foreign country had maintained or increased its said discriminations, to impose countervailing duties in certain classes of cases, the Tariff Commission being authorized to make investigations and reports to the President in all these cases (42 Stat. 944, 945).
CONSTITUTIONALITY OF SECTIONS 315 AND 316 OF THE 1922 TARIFF
The constitutionality of the first two of these sections was brought into question in the courts of the United States between 1928 and 1932 on the ground that the delegation of power to the President violated section 8, article I, of the Constitution, wherein Congress was given the power to lay and collect imposts and excises; the objection was also made that the act was adopted for the express purpose of protecting the industries of the United States, whereas the Constitution gave the Congress power to lay taxes for revenue purposes only. These two points were involved in the case of Hampton & Co. v. United States (1928), (276 U.S. 394), which had to do with the payment of increased duties assessed pursuant to a proclamation of the President of May 19, 1924. Mr. Chief Justice Taft in delivering the opinion of the Supreme Court upheld the constitutionality of section 315, relying in the main upon Field v. Clark, supra, and upon the precedent of the power conferred by Congress on the Interstate Commerce Commission.
With reference to the first constitutional objection above named, the Chief Justice said:
The same principle that permits Congress to exercise its rate-making power in interstate commerce, by declaring the rule which shall prevail in the legislative fixing of rates, and enables it to remit to a rate-making body created in accordance with its provisions, the fixing of such rates, justifies a similar provision for the fixing of customs duties on imported merchandise. If Congress shall lay down by legislative act an intelligible principle to which the person or body authorized to fix such rates is directed to conform, such legislative action is not a forbidden delegation of legislative power. (Ibid. 409).
With reference to the second constitutional objection above named, the Court said:
Whatever we may think of the wisdom of a protection policy, we cannot hold it unconstitutional.
So long as the motive of Congress and the effect of its legislative action are to secure revenue for the benefit of the general government, the existence of other motives in the selection of the subjects of taxes cannot invalidate Congressional action. (Ibid. 412.)
The question of the constitutionality of section 316 of the act was raised in the case of Frischer & Co., Inc., et al. v. Bakelite Corporation et al. (39 Fed. (2d) (1930) 247), and upheld, Judge Graham quoting the decision in the Hampton case, supra, at considerable length.
The Court stated: The provisions of section 316 do not constitute an attempted delegation of legislative power. Here the Congress has declared certain unfair methods and acts to be unlawful, and has further declared that when such unlawful acts are committed, certain remedies shall be applied. The statute does not provide that the President shall establish any policy, or fix any rates, or levy any embargoes. These are fixed by the statute itself and are the act of the legislative body. The President, in performing his duties, does so as a fact-finding body, and no different principle applies than that which was held to be applicable in the Hampton Case, supra. (Ibid. 253.)
The constitutionality of section 316 was also upheld by a decision rendered July 18, 1932, by the Circuit Court of Appeals, second circuit, in the case of Frischer & Co., Inc., et al. v. Elting (60 Fed. (2d) (1932) 711).
SMOOT-HAWLEY ACT OF JUNE 17, 1930, (46 STAT., PT. I, 590, 701)
The provisions of sections 315, 316, and 317 of the act of 1922 were reenacted in substance in sections 336, 337, and 338 of the Tariff Act of 1930.
CONSTITUTIONALITY OF SECTION 336 OF 1930 TARIFF ACT UPHELD
The constitutionality of section 336 of this act was questioned in the case of United States v. Sears, Roebuck & Co. which had to do with an increased duty imposed upon certain wire netting or fencing under a proclamation (no. 1934) issued by President Hoover on February 5, 1931. It was contended that the section delegated legislative power to the President and was void ab initio. The United States Customs Court overruled the classification and assessment by the collector of customs, holding that the President exceeded the powers delegated to him in section 336, “or, if said section by its terms authorized the President to take the action stated in said proclamation, then said section 336 is unconstitutional and void." (63 Treasury Decisions (1933), 47).
1. An appeal was taken to the United States Court of Customs and Patent Appeals. Two questions were presented, as follows:
(1) Whether the provisions of section 336 were in violation of Article I, Sections 1, 7, and 8 of the Constitution; and
(2) Whether the President, in the issuance of the Proclamation, exceeded the powers delegated to him by Congress.
The court stated, in a decision rendered December 5, 1932, that, so far as the question of the constitutionality of the section was concerned, section 315 of the Tariff Act of 1922, which was the predecessor of section 336 of the Act of 1930, had been found to be constitutional and valid, citing Hampton, Jr., & Co., v. United States, 276 U.S. 394, supra; United States v. Fox River Butter Co., (1932) 20'C.C.P.A., and other decisions. The court also stated that there was no difference in principle in authorizing the President, in ascertaining the differences in costs of production, to consider the differences in the wholesale selling prices of domestic and foreign articles, as provided in section 315, and authorizing the commission to accept as evidence of costs of production the weighted average of invoices or the average wholesale selling price for a representative period, as set forth in section 336. The court added:
We therefore conclude that the question of the constitutionality of said section 336 of the tariff act is controlled by the principles declared in the decisions of the Supreme Court and this court, heretofore cited, holding section 315 of the Tariff Act of 1922 to be constitutional, and that said section 336 of the Tariff Act of 1930 does not purport to delegate legislative power, and its provisions are within the power of Congress. (20 C.C.P... 301.)
The second question presented to the court had to do with the contention by the appellee that the particular wire in question had not been designated in paragraph 397 of title I of the tariff act (the paragraph specified in the proclamation), and that the Congress had not delegated to the President the power to describe an article falling within a “catch-all or basket paragraph and give it to an eo nomine designation as he has done in the case at bar, and that therefore, in the issuance of said proclamation, he exceeded the powers delegated to him by Congress. The court stated:
We cannot agree with this contention. It is well established that where a general class of articles is named in a tariff law without specifying each article coming within the class, each of said articles is regarded as enumerated as clearly as if the proper names of each and all of them had been given. Mason v. Robertson 139 U.S. 624; Arthur v. Butterfield, 125 U.S. 70.
Under this principle if the articles here involved are classifiable under said paragraph they must be regarded as enumerated therein, to use the language of the Supreme Court, “as clearly as if the proper names of each and all of them had been given.
This being the law, we think it was clearly the intention of Congress to empower the President to change the classification of an article falling within the provisions of said paragraph 397 of said tariff act and increase or decrease the rates of duty thereon to the same extent as if said article had been eo nomine designated in said paragraph.
(Ibid. 301, 302.) It will be seen from the foregoing that at various times, from the time of Washington to the present time, very broad powers have been conferred upon the Executive in connection with the regulation and promotion of trade and commerce, and in the application of provisions of the various tariff acts.
This authority has included the right of the President(1) To lay embargoes on ships and vessels (act of June 4, 1794).
(2) To remit and discontinue restraints and prohibitions prescribed by Congress with respect to commercial intercourse (acts of Feb. 9, 1799, and Dec. 19, 1806).
(3) To revive restrictions and prohibitions with respect to commercial intercourse previously removed (acts of Mar. 1, 1809, and May 1, 1810).
(4) To declare the repeal of acts imposing duties on the tonnage of ships and vessels and on goods, wares, and merchandise (acts of Mar. 3, 1815, and May 31, 1830).
(5) To suspend the free entry of specified articles and to enter into Executive agreements for the free introduction of such articles on a basis of reciprocity (act of Oct. 1, 1890).
(6) To enter into commercial agreements granting reciprocal and equivalent concessions, and to suspend by proclamation the imposition and collection of duties provided for by Congress (act of July 24, 1897).
(7) To grant minimum rates prescribed by Congress on imports (act of Aug. 5, 1909).
(8) (a) To lower or raise duties to equalize cost of production, (b) to exclude articles from importation on grounds of unfair competition, (c) to specify and declare new and additional duties when discrimination against American products was found to exist (acts of Sept. 21, 1922, and June 17, 1930).
The powers granted to the President by these various acts have been consistently upheld by the courts. It is worthy of remark that, of the very large number of agreements that have been entered into by the President, without the consent of the Senate, relatively few have been questioned in the courts. This delegation of power must, however, be confined within certain limitations. The courts when called upon have indicated in a general way what these limitations should be. While the wording of these limitations has varied in the different decisions, the tests which the courts have indicated that such legislation must meet are substantially as follows:
(1) That Congress must prescribe the policy and plan to be followed, leaving to the President merely the execution of such policy and plan; (2) that while the President may not exercise discretion as to what the policy or the law shall be, authority may be conferred on him to exercise discretion in the execution of such policy or law; (3) that Congress may provide that the enforcement of the law shall depend upon future events or upon the ascertainment of facts, leaving to the President the determination of the happening of the events, or the existence of the facts; (4) that---
If Congress shall lay down by legislative act an intelligible principle to which the person or body authorized to fix such rates is directed to conform, such legislative action is not a forbidden delegation of legislative power. (Hampton & Co. v. United States, 1927, 276 U.S. 409.)
With reference to the matter of judicial review, the court in the case of United States v. Sears, Roebuck & Co., supra, said:
the acts of the President in performing the duties imposed upon him by said section 336 are administrative,
* judicial review of such acts may be had for the purpose of determining whether he has exceeded the powers delegated to him (304).
Two classes of agreements have been concluded by the Executive under the acts above mentioned: (1) Executive agreements, brought into force by proclamations, without reference to the Congress, and (2) treaties, particularly the Kasson Treaties, providing for reciprocal tariff concessions which, by the act of Congress, were to be submitted to the Senate and later to the Congress for approval. The history of this latter class of agreements, as indicated above, would suggest that this latter method of negotiating tariff agreements is not a very satisfactory one for the reason that, when the agreements are referred to the Senate for approval, conflicting interests develop, making it difficult, if not impossible, to bring about their consummation. There is ample authority under the Constitution for the delegation by the Congress to the Executive of power to conclude such Executive agreements as to tariff matters as in the judgment of the Congress may be in the interest of American trade and commerce, and a reasonable delegation of such power, with proper limitations,
, and the exercise of the authority by the Executive, with proper regard for the wishes of Congress, will give rise to no difficulties from the point of view of the Constitution of the United States.
AN ACT To authorize the President of the United States to lay, regulate, and revoke embargoes
SECTION 1. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That the President of the United States be, and he is hereby authorized and empowered, whenever, in his opinion, the public safety shall so require, to lay an embargo on all ships and vessels in the ports of the United States, or upon the ships and vessels of the United States, or the ships and vessels of any foreign nation, under such regulations as the circumstances of the case may require, and to continue or revoke the same, whenever he shall think proper. And the President is hereby fully authorized to give all such orders to the officers of the United States, as may be necessary to carry the same into full effect: Provided, The authority aforesaid shall not be exercised, while the Congress of the United States shall be in session: And any embargo, which may be laid by the President, as aforesaid, shall cease and determine in fifteen days from the actual meeting of Congress, next after laying the same.
SEC. 2. And be it further enacted, That this act shall continue and be in force until fifteen days after the commencement of the next session of Congress, and no longer.
Approved, June 4, 1794.
The CHAIRMAN. The committee will recess until 10 o'clock tomorrow.
(Thereupon the committee recessed until 10 a.m., Tuesday, Mar. 13, 1934.)
BRIEF SUBMITTED BY THE AMERICAN TARIFF LEAGUE, 25 WEST
FORTY-THIRD STREET, NEW YORK CITY
MARCH 12, 1934. WAYS AND MEANS COMMITTEE,
House of Representatives, Washington, D.C. GENTLEMEN: Without wishing to elaborate extensively certain pinions that have already been advanced before the committee, we desire to set forth as briefly as possible some of the considerations that seem to us to justify our opposition to the approval of this bill. First, although this legislation is offered as a part of the recovery program, an analysis of the inevitable consequences of its application indicates that it is contrary to the expressed purpose of much of our other legislation. The Agricultural Adjustment Act stipulates that it is the policy of Congress to “reestablish prices to farmers at a level that will give agricultural commodities a purchasing power with respect to articles that farmers buy, equivalent to the purchasing power of agricultural commodities in the base period.”