DONALD REGAN, SECRETARY OF THE TREASURY, ET AL., PETITIONERS V.
RUTH WALD, ET AL.

   No. 83-436

   In the Supreme Court of the United States

   October Term, 1983

   On Writ of Certiorari to the United States Court of Appeals for the
First Circuit

   Brief for the Petitioners

                      PARTIES TO THE PROCEEDINGS

   In addition to Donald Regan, Secretary of the Treasury, the
following are also petitioners:  John M. Walker, Jr., Assistant
Secretary of the Treasury for Enforcement and Operations;  Dennis M.
O'Connell, Director, Office of Foreign Assets Control, Department of
the Treasury;  George P. Shultz, Secretary of State;  and Ronald
Wilson Reagan, President of the United States.  In addition to Ruth
Wald, the following are also respondents:  Marian Lowe, Rosario
Morales, Francis E. Bradley, Reverend Alice Hageman, Cuba Resources
Group, Robert C. Howard, Center for Cuban Studies, and Linda Turner.

   Intervening plaintiffs in the district court were Puerto Rico
Olympic Committee and Rafael Morales Cabranes, on his own behalf and
on behalf of the Asociacion de Turistas Olimpicos de Puerto Rico
(Atoprico), and other Puerto Rican sports fans.  The intervening
plaintiffs did not participate in the court of appeals.

            TABLE OF CONTENTS
   Opinions below
   Jurisdiction
   Statutes and regulations involved
   Statement:
      A. Background of the challenged regulation
      B. Proceedings in the courts below
   Introduction and summary of argument
   Argument:
      The grandfather clause preserved the President's TWEA
      authority to regulate travel-related economic transactions
      involving Cuba
      I. Authority to regulate travel-related economic
          transactions was encompassed by the TWEA "authorities"
          being "exercised" with respect to Cuba on July 1, 1977,
          and was therefore preserved by the grandfather clause
      II. In enacting the grandfather clause Congress acted
          against a long tradition of according the President
          regulatory flexibility to adjust foreign assets control
          programs to meet changing foreign policy and national
          security needs
      III. The legislative history of the grandfather clause
          shows that Congress intended to preserve the
          President's authority under TWEA to regulate
          travel-related economic transactions involving Cuba
      IV. The regulation at issue is not excluded from
          grandfathered TWEA authority on the ground that it has
          an incidental effect on travel
   Conclusion
   Appendix

                            OPINIONS BELOW

   The opinion of the court of appeals (Pet. App. 1a-14a) and the
memorandum of the court of appeals accompanying its order denying
rehearing (Pet. App. 15a-19a) are reported at 708 F.2d 794.  The order
of the district court denying a motion for preliminary injunction
(Pet. App. 22a-23a) and the magistrate's report recommending denial of
the motion for preliminary injunction (Pet. App. 24a-44a) are
unreported.

                             JURISDICTION

   The judgment of the court of appeals (Pet. App. 21a) was entered on
May 16, 1983.  A timely petition for rehearing was denied on June 16,
1983 (Pet. App. 20a).  The petition for a writ of certiorari was filed
on September 14, 1983, and was granted on November 28, 1983 (J.A.
197).  The jurisdiction of this Court is invoked under 28 U.S.C.
1254(1).

                   STATUTES AND REGULATIONS INVOLVED

   The relevant statutes and regulations are reproduced at App.
1a-12a, infra.

                          QUESTION PRESENTED

   Section 101(b) of Pub. L. No. 95-223, 91 Stat. 1625, provides that
the "authorities * * * being exercised" with respect to a country on
July 1, 1977, under Section 5(b) of the Trading With the Enemy Act may
continue to be exercised with respect to that country thereafter.  On
July 1, 1977, Treasury Department regulations prohibited all
unlicensed property transactions related to Cuba, and a general
license authorized many (but not all) travel-related transactions
involving Cuba.  The question presented is whether, under Section
101(b), the President may narrow the terms of this general license and
restrict travel-related economic transactions involving Cuba.

                               STATEMENT

              A. Background of the Challenged Regulation

   1. The United States does not enjoy -- and for a quarter century
has not been able to enjoy -- normal relations with the Government of
Cuba;  and the management of relations with Cuba has posed some of the
most difficult, sensitive and troublesome foreign policy problems
presented to our government.  /1/ Throughout this time it has been an
important objective of United States foreign policy to discourage the
Cuban Government from activities inimical to the interests of the
United States and its allies, particularly Cuban attempts to subvert
and destabilize governments in Central America and the Caribbean
region.  /2/ To this end, the United States has for more than two
decades maintained a delicate and extensive system of oversight over
the relations of our country with Cuba and the Cuban Government.  /3/

   A critical constituent of this system has, since 1963, been a
wide-ranging prohibition of all unlicensed property transactions
between persons subject to the jurisdiction of the United States and
Cuba or Cuban nationals.  /4/ This embargo program has given the
United States some leverage over Cuban conduct.  /5/ By restricting
Cuban access to hard currency, the program has made it more difficult
for Cuba to finance destabilizing activity in Central America and the
Caribbean region, and has served to dissociate the United States from
these Cuban ventures.  /6/ During these 20 years, Presidents have made
various adjustments in the embargo through amendment of the Cuban
Assets Control Regulations issued by the Department of the Treasury,
31 C.F.R. Pt. 515.  The embargo program has thus been a flexible
instrument of foreign policy, sensitive to the particular state of
relations between the United States and Cuba.  /7/

   2. Authority for the Cuban Assets Control Regulations derives from
the Trading With the Enemy Act of 1917 (TWEA), 50 U.S.C. App. 1 et
seq.  /8/ Prior to its amendment in 1977, Section 5(b) of the TWEA, 50
U.S.C. App. 5(b), gave the President, "(d)uring the time of war or
during any other period of national emergency declared by the
President," authority

      under such rules and regulations as he may prescribe, by means
      of instructions, licenses, or otherwise (to) --

         (A) investigate, regulate, or prohibit, any transactions in
      foreign exchange, transfers of credit or payments between, by,
      through, or to any banking institution, and the importing,
      exporting, 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, * * * .

   Section 5(b) thus gave the President extensive powers to impose
wide-ranging economic measures during peace-time national emergencies
as well as in times of war.  /9/

   In 1976 Congress enacted the National Emergencies Act, 50 U.S.C.
1601 et seq., which provided for termination in 1978 of previously
declared national emergencies and established new procedures for
declaring national emergencies in the future.  However, Congress
exempted certain statutes, including TWEA Section 5(b), from the
operation of the National Emergencies Act.  50 U.S.C. 1651(a)(1).
Congress concluded that, because Section 5(b) constituted the
authority for continuing foreign policy programs, further study was
necessary to determine how those programs would be affected by
terminating previously declared national emergencies.  See H.R. Rep.
95-459, 95th Cong., 1st Sess. 6-7 (1977).  It was after such study, in
1977, that Congress finally decided to create a new procedural
framework for the President's exercise of peacetime emergency economic
powers by enacting Pub. L. No. 95-223 (Public Law 95-223), 91 Stat.
1625 et seq.

   Title I of the new statute amended the TWEA to confine -- (with the
exception of certain grandfathered authorities) -- the President's use
of Section 5(b) powers to periods of war.  Title II of Public Law
95-223, known as "IEEPA" -- the International Emergency Economic
Powers Act, 50 U.S.C. (Supp. V) 1701 et seq.  /10 -- established new
predicates and procedures for the President's peacetime exercise of
international emergency economic powers.  Under IEEPA, the President
has authority to exercise such powers only if there exists "any
unusual and extraordinary threat, which has its source * * * outside
the United States, to the national security, foreign policy, or
economy of the United States, if the President declares a national
emergency with respect to such a threat." 50 U.S.C. 1701.  The
President has to report to Congress every six months on such an
emergency.  Once such an "unusual and extraordinary threat" is found
to exist, however, the President has -- with certain qualifications --
the same broad powers under IEEPA that he had under the TWEA.  /11/

   At the same time it altered the scheme governing the President's
exercise of powers during future peacetime national emergencies,
Congress carefully provided for continuation of presidential authority
undet TWEA Section 5(b) to exercise economic powers with respect to
those countries -- Cuba, North Korea, Vietnam, and Cambodia
(Kampuchea) -- for which financial and trade transactions were
currently subject to embargo.  Congress decided that the President
should not be required to declare a new national emergency in order to
continue these existing foreign embargo programs, so long as he
determined annually that continuation of such a program was in the
national interest.  Congress therefore included a "grandfather clause"
in Title I of Public Law 95-223, which preserves the Section 5(b)
authorities being exercised with respect to a country as of July 1,
1977.  The grandfather clause -- Section 101(b) of Public Law 95-223,
91 Stat. 1625 -- provides (emphasis added):

      (T)he authorities conferred upon the President by section 5(b)
      of the Trading With the Enemy Act, which were being exercised
      with respect to a country on July 1, 1977, as a result of a
      national emergency declared by the President before such date,
      may continue to be exercised with respect to such country,
      except that, unless extended, the exercise of such authorities
      shall terminate * * * at the end of the two-year period
      beginning on the date of enactment of the National Emergencies
      Act (September 14, 1976).  The President may extend the exercise
      of such authorities for one-year periods upon a determination
      for each such extension that the exercise of such authorities
      with respect to such country for another year is in the national
      interest of the United States.

   Pursuant to the grandfather clause, Presidents Carter and Reagan
have in every year since 1978 determined that it is in the national
interest to continue the exercise of TWEA authorities with respect to
Cuba, North Korea, Vietnam, and Cambodia.  /12/

   3.  Section 5(b) of the TWEA delegates to the President wide
authority to "regulate, direct and compel, nullify, void, prevent, or
prohibit" any "transfer" of any "property" or any "transactions
involving any property" in which "any foreign country or a national
thereof has any interest." Pursuant to this authority, ever since 1963
the Cuban Assets Control Regulations have prohibited, "except as
specifically authorized by the Secretary of the Treasury * * *
transactions involv(ing) property in which (Cuba) has * * * any
interest of any nature whatsoever, direct or indirect * * * ." 31
C.F.R. 515.201(b);  28 Fed. Reg. 6975 (1963).  The effect of this
sweeping groundrule regulation -- which we will hereafter refer to,
simply, as "Regulation 201(b)" -- is to subject all property
transactions involving Cuba, and engaged in by persons subject to
United States jurisdiction, to a comprehensive regulatory licensing
regime.  Regulation 201(b) prohibits persons subject to United States
jurisdiction from engaging directly or indirectly in unlicensed
economic transactions of any kind with Cuba or Cuban nationals,
including transactions incident to travel to and within Cuba.  /13/
Regulation 201(b) was in force on July 1, 1977, and continues in full
force and effect today.

   The Cuban Assets Control Regulations further provide (and have at
all relevant times provided) that any regulation or license "may be
amended, modified, or revoked at any time" (31 C.F.R. 515.805;  28
Fed. Reg. 6985 (1963)).  /14/

   In March 1977, President Carter decided to modify United States
policy with respect to economic transactions incident to travel to
Cuba.  Accordingly, the Department of the Treasury promulgated 31
C.F.R. 515.560 (1977), 42 Fed. Reg. 16621 (1977), which constituted a
general license ("the 1977 general license") authorizing transactions
"ordinarily incident to" travel to and within Cuba.  /15/ It gave
permission to persons visiting Cuba to pay for their transportation
and living expenses (e.g., meals, hotel bills, taxis) while in Cuba.
However, the 1977 general license prohibited (i) such persons from
buying and bringing back to the United more than $100 worth of Cuban
goods for personal use, 31 C.F.R. 515.560(a)(3) (1977), (ii)
transactions incident to regularly scheduled flights and voyages to
and from Cuba, 31 C.F.R. 515.560(a)(5) (1977), and (iii) domestic
credit card issuers from entering into contracts with Cuban
enterprises for issuing credit to travelers, 31 C.F.R. 515.560(a)(7)
(1977).  And the 1977 general license was, of course, continuously
subject to the general provisions of 31 C.F.R. 515.805, providing that
any regulation or license issued in connection with the Cuban Assets
Control Program may be "amended, modified, or revoked" at any time.

   In late 1981, it became apparent to the United States that the
Cuban Government was increasing its efforts to destabilize Central
American governments and at the same time was initiating a program to
increase its hard currency earnings by attracting tourists from the
United States.  /16/ In May 1982, in order to "reduce Cuba's hard
currency earnings from travel by United States persons to and within
Cuba," the Department of the Treasury amended 31 C.F.R. 515.560 to
modify the 1977 general license for travel-related economic
transactions involving Cuba.  47 Fed. Reg. 17030 (1982).  /17/ It is
this modification that is at issue here.  As amended, Section 515.560
provides that the general license to engage in travel-related
transactions is limited to persons engaged in official travel, visits
to close relatives, "fully sponsored or hosted" travel (i.e., travel
that does not involve transfer of economic benefit from Americans to
Cuba), and travel related to news-gathering, professional research, or
similar activities.  The amended regulation also provides that
specific licenses may be granted in the case of travel for
humanitarian reasons or for purposes of public performances in Cuba in
connection with cultural or sports events.  The general effect of the
amendments was to adjust the 1977 general license by withdrawing
authorization for transactions incident to ordinary private business
and tourist travel.

                  B. Proceedings in the Courts Below

   1. In June 1982, respondents, who are individuals interested in
travel to Cuba and two groups that organize tours to Cuba, filed a
complaint for declaratory and injunctive relief in the United States
District Court for the District of Massachusetts.  /18/ Respondents
claimed that the restrictions on travel-related economic transactions
imposed by the May 1982 amendment to the 1977 general license violated
22 U.S.C. 211a, which prohibits area restrictions on passports except
in certain circumstances;  exceeded the authority conferred by Section
5(b) of the TWEA and by IEEPA;  had not been promulgated pursuant to
IEEPA procedures;  and violated respondents' First Amendment and due
process rights, including their right to travel.

   Respondents' request for a preliminary injunction was referred to a
magistrate.  /19/ Following briefing and argument, the magistrate
recommended that a preliminary injunction be denied (Pet. App.
24a-44a).  He concluded that Congress did not, by the grandfather
clause, intend to freeze in place only the specific restrictions that
happened to be in effect on July 1, 1977 (id. at 36a).  Because
transactions related to Cuban travel were being regulated on that date
(albeit by a regulation authorizing most such transactions by general
license), the magistrate concluded that the grandfather clause gave
the President the authority in 1982 to change the scope of that
regulation (ibid.).  The magistrate also concluded that an injunction
against enforcement of the regulation would cause irreparable injury
to the government's conduct of its foreign affairs and that that
injury outweighed any inconvenience to respondents resulting from
postponement of their planned travel (id. at 40a-42a).

   After considering written and oral objections to the magistrate's
report, the district court denied the motion for a preliminary
injunction (Pet. App. 22a-23a).  The court concluded that respondents
were not likely to succeed on the merits of either their statutory or
constitutional claims.

   2.  The court of appeals vacated the district court's order and
remanded with instructions to issue a preliminary injunction against
enforcement of 31 C.F.R. 515.560 (Pet. App. 1a-14a).  It concluded
that the grandfather clause did not authorize the 1982 amendment to
the 1977 general license, that the government had failed to follow
IEEPA procedures in amending that regulation, and that the amended
regulation was therefore invalid.  The court declined to reach
respondents' other statutory and constitutional contentions.

   The court of appeals' holding that the grandfather clause did not
authorize the 1982 amendment to the 1977 general license was based on
its conclusion that on July 1, 1977, the Treasury Department was "not
restricting travel to Cuba" (Pet. App. 4a) (emphasis in original).
The court recognized that on that date the government was restricting
commodity transactions involving Cuba, but opined that restrictions on
travel-related transactions constituted a "very different 'exercise()'
of authority" (id. at 5a).  The court found support for its holding in
this Court's directives to lower courts to construe narrowly all
delegated powers that curtail the right to travel (id. at 11a-12a).
The court stated that its holding would not prevent the President from
regulating travel-related property transactions, since he could use
IEEPA procedures to do so (id. at 12a), and that a narrow construction
of the grandfather clause would be consistent with Congress's overall
intent to "impos(e) Congressional limits upon the President's
restrictive powers," reflected in, inter alia, the 1978 amendment to
the Passport Act (id. at 12a-13a).

   The court of appeals denied the government's petition for rehearing
and suggestion for rehearing en banc, as well as its request for stay
of the mandate (Pet. App. 15a-20a).  The court rejected the
government's submission that the combination of controls that the
President had in force on July 1, 1977 -- (i) a general prohibition on
all unlicensed property transactions with Cuba (Regulation 201(b)),
(ii) a revocable general license giving permission for many
travel-related property transactions (the 1977 general license), and
(iii) continuing restrictions on some travel-related transactions not
authorized by the 1977 general license -- did, together, constitute
"exercise" of the "authority" to regulate travel-related (as well as
all other property) transactions involving Cuba.  The court
acknowledged that "others could reasonably conclude that the
legislative history is ambiguous and should be read differently;" but
the court doubted that "a reasonable reader could conclude that the
relevant legislative history clearly supports the government" (id. at
19a).

   On July 6, 1983, this Court granted the government's application
for a stay of the mandate (Brennan, J., and Stevens, J., dissenting).

                 INTRODUCTION AND SUMMARY OF ARGUMENT

   In this case, the court of appeals invalidated an important
component of the Cuban Assets Control Program and thereby placed an
unwarranted restriction on the President's authority to carry out our
country's foreign policy toward Cuba.  Under this program succeeding
Presidents have, continuously since 1963, used TWEA authority
comprehensively to regulate economic transactions with Cuba, as one
element in the management of our delicate and difficult relations with
the Government of Cuba.  The court of appeals held that this TWEA
authority may not be used to adjust the regulations with respect to
those economic transactions that are related to travel to Cuba.
Instead, the court of appeals held, travel-related economic
transactions may only be regulated pursuant to a new, separate,
"national emergency" with respect to Cuba to be declared by the
President under IEEPA.  This must be done, said the court of appeals,
even though other property transactions involving Cuba may continue to
be regulated by the President pursuant to his grandfathered
authorities under the TWEA -- authorities that Presidents Carter and
Reagan have annually renewed as being in the national interest ever
since the passage of the grandfather clause.

   The court of appeals' holding is based on a narrow and artificial
reading of the governing statutes and regulations.  It means that
restrictions on the purchase of Cuban cigars may continue to be
imposed under the TWEA, whereas restrictions on the purchase of Cuban
hotel rooms and restaurant meals must be imposed pursuant to a new,
separate, national emergency, to be declared by the President with
respect to Cuba under IEEPA.  It apparently also means that the
restrictions imposed by the TWEA embargo with respect to Cuba -- and,
presumably, those with respect to North Korea, Vietnam, and Cambodia
-- are "frozen" as of July 1, 1977, and may not be adjusted in light
of changing foreign policy circumstances.  Such a reading makes no
sense;  is inconsistent with Congress's intent;  and creates
undesirable rigidities in the conduct of our foreign relations.

   Our central submission is straightforward:  on July 1, 1977, the
President was exercising comprehensive TWEA authority to regulate all
property transactions with Cuba;  encompassed within this authority
was the power to adjust the Cuban Assets Control Program in light of
changing foreign policy needs;  the authority to continue to regulate
-- and to adjust -- was expressly grandfathered;  and there exists no
reason to carve the power to regulate travel-related economic
transactions out of this comprehensive regulatory regime and to
constitute it as a "separate" authority to be regulated under a new
national emergency declaration under a separate statute.

   1. A natural and sensible reading of the grandfather clause
indicates that Congress intended to preserve the President's TWEA
authority to regulate travel-related economic transactions involving
Cuba.  The "authorities * * * being exercised" with respect to Cuba on
July 1, 1977, included Regulation 201(b), which constitutes a
comprehensive prohibition on all unlicensed property transactions
between persons subject to United States jurisdiction and Cuba or
Cuban nationals.  That broad prohibition reaches both trade in
commodities (sugar, or cigars) and economic transactions relating to
Cuban travel.

   In March 1977 President Carter exercised his licensing authority to
ease the broad restriction on travel-related transactions by
promulgating a revocable and qualified general license permitting most
such transactions.  But the temporary loosening of the restriction
itself constituted an exercise of the President's Section 5(b)
authority to regulate property transactions by "means" of "licenses."
Assets control programs have traditionally operated through a
combination of a broad general prohibition, which remains in place
during the life of a program, and a flexible licensing scheme, which
is used to adjust the program;  permitting transactions by license
cannot be characterized as an absence of regulation.

   The court of appeals concluded that Congress intended to
distinguish between the authority to regulate travel-related
transactions and the authority to regulate "more typical" commercial
transactions (Pet. App. 5a).  But there is no basis, either in the
statute or in common sense, for this disaggregation of Section 5(b)
authority.  Nor is there any basis for the court's conclusion that a
class of transactions can be restricted pursuant to grandfathered TWEA
authority only if such transactions were in fact prohibited on July 1,
1977.  The grandfather clause refers not to preservation of
"restrictions" or "prohibitions," but to preservation of
"authorities."

   2. Foreign assets control programs have traditionally operated in a
flexible manner to meet changing foreign policy needs.  It is against
that background that Congress enacted the grandfather clause;  it is
thus implausible that Congress intended through that clause to freeze
into place a static set of prohibitions.  It is doubly implausible in
light of the fact that TWEA programs are intimately connected to
national security and foreign policy interests of the United States.
Courts have recognized that the Executive needs considerable
flexibility in these areas;  accordingly, they have construed
generously statutes relating to these subjects.  The court of appeals'
suggestion that the President could simply use IEEPA procedures to
promulgate the same regulation ignores the fact that the effect of a
declaration of a new national emergency might itself have grave
foreign policy implications.  Finally, the Treasury Department has
consistently construed the grandfather clause as preserving the
President's flexibility to adjust assets control programs;  that
interpretation by the agency charged with administration of the
statute should be accorded deference.

   3. The legislative history makes it clear that Congress intended
the new IEEPA procedures to apply only to future emergencies, and that
it enacted the grandfather clause so that the President could continue
to administer existing assets control programs under TWEA authority
without taking the awkward and inappropriate step of declaring new
national emergencies with respect to countries such as Cuba and
Vietnam.  The legislative history lends no support to the conclusion
that Congress was grandfathering simply a frozen set of prohibitions.
Nor is there any evidence that Congress viewed the President's power
to regulate travel-related economic transactions as based on a
separate "authority" from that governing regulation of other property
transactions for purposes of the grandfather clause.  The legislative
history thus supports the conclusion that the President may use
grandfathered TWEA authority to make the adjustments in the Cuban
Assets Control Program at issue in this case.

   4. The court of appeals erred in concluding that constitutional
considerations support its narrow construction of the grandfather
clause because the regulation at issue has an incidental effect on
travel.  Neither Section 5(b) nor the grandfather clause regulates
travel as such;  nor does either single out travel-related economic
transactions for special treatment.  Rather, they regulate economic
transactions in the broad context of an overall embargo program
subjecting our financial and commercial relations with Cuba to
comprehensive regulatory monitoring.  The purpose of the regulation is
not to restrict Americans' freedom of movement but to deny economic
benefits to a country engaged in activities inimical to the United
States.  The court of appeals itself acknowledged that Congress
authorized the regulation of travel-related economic transactions with
Cuba under IEEPA.  The question of statutory construction in this case
is, therefore, whether such regulation may proceed under grandfathered
TWEA authority or must proceed under IEEPA;  constitutional
considerations are not relevant to such a choice and should not be
used artificially to narrow the President's TWEA authorities.

   In any event, the national security and foreign policy interests
underlying the Cuban Assets Control Program provide ample
constitutional space for the narrowly drawn incidental restrictions
the regulations place on travel to Cuba.

   The 1978 amendment to the Passport Act does not call for a narrow
construction of the grandfather clause.  That amendment on its face is
addressed only to passport restrictions imposed by the Secretary of
State;  there is no indication that Congress meant by that Act to
repeal a portion of the grandfathered TWEA authority exercised by the
Secretary of the Treasury to regulate economic transactions.

                               ARGUMENT

 THE GRANDFATHER CLAUSE PRESERVED THE PRESIDENT'S TWEA AUTHORITY TO
REGULATE TRAVEL-RELATED ECONOMIC TRANSACTIONS INVOLVING CUBA

 I. Authority To Regulate Travel-Related Economic Transactions Was
Encompassed By The TWEA "Authorities" Being "Exercised" With Respect
To Cuba On July 1, 1977, And Was Therefore Preserved By The
Grandfather Clause

   The key question in this case is whether the TWEA Section 5(b)
"authorities" being "exercised" with respect to Cuba on July 1, 1977,
encompassed authority to regulate travel-related economic
transactions.  Section 5(b) gave the President the power to
"regulate," "prevent" and "prohibit" "any" transaction involving "any"
property in which Cuba or Cubans had "any" interest.  Pursuant to
Section 5(b), ever since 1963 and up to this day, all our Presidents
have continuously prohibited -- by Regulation 201(b) -- all
transactions involving property in which Cuba has "any interest of any
nature whatsoever, direct or indirect" -- unless "specifically
authorized" by the Secretary of the Treasury.  The existence in 1977
of Regulation 201(b) alone establishes that the President was
affirmatively "exercis(ing)" TWEA Section 5(b) authority to "regulate"
all United States property transactions with respect to Cuba, and that
the authority to do so was, consequently, expressly grandfathered.

   A. Congress did not need to define the term "authorities" when it
provided in the grandfather clause that Section 5(b) "authorities"
being exercised with respect to a country on July 1, 1977, were to be
preserved.  Those authorities are specified in Section 5(b) itself.
They include the power comprehensively to exercise plenary regulatory
control over ("regulate, direct and compel, nullify, void, prevent or
prohibit") all property transactions.  This control may be exercised
through such "rules and regulations" as the President may prescribe
and "by means of instructions, licenses, or otherwise." There is no
good reason not to give these terms their plain and sensible meanings.

   We believe that one possible reading of the grandfather clause is
that if the President is exercising any Section 5(b) authority with
respect to a country on July 1, 1977, he may continue to exercise all
5(b) authorities with respect to that country.  This construes the
term "authorities * * * , which were being exercised with respect to a
country on July 1, 1977" as delimiting the countries that may continue
to be the objects of a TWEA embargo.  This reading gives generous
scope to Congress's clearly expressed purpose not to interfere with
the President's power to carry forward then-existing embargo programs
(see pages 38-52, infra).

   Alternatively, even if the language is read to suggest that
Congress meant to delimit "authorities" not only with respect to
target countries, but also with respect to the regulatory tools being
used on July 1, 1977, the most natural interpretation is to define the
relevant categories of authority in terms of the broad classifications
adopted in Section 5(b) itself:  (i) authority to control currency,
bullion, and securities transactions, as specified in Section
5(b)(1)(A);  (ii) authority to control transactions involving property
in which a foreign nation or its nationals have any interest, as
specified in Section 5(b)(1)(B);  and (iii) authority to vest
foreign-owned property, as specified in the text of Section 5(b)(1)
following subsection (B).  /20/ On this reading, since the Cuban
Assets Control Regulations concededly exercised the authority to
control property transactions pursuant to Section 5(b)(1)(B), all such
5(b)(1)(B) authority was being "exercised" on July 1, 1977, and was
therefore grandfathered, so that the regulation at issue here --
plainly encompassed by Section 5(b)(1)(B) -- is valid.

   There is no basis for assuming that when Congress grandfathered
Section 5(b) "authorities" being "exercised" with respect to a
country, it was referring not to categories of authorities as these
are specified in Section 5(b) itself, but rather to classes of goods
and services ("sugar" vs. "hotel rooms") being regulated.  More
specifically, as we further detail below, there is no indication that
Congress viewed the President's power to regulate travel-related
transactions as based on a separate "authority" from that governing
regulation of other property transactions for purposes of the
grandfather clause.  Section 5(b) is simply not organized in terms of
such subject-matter categories;  and it is to Section 5(b)
"authorities" that the grandfather clause refers.

   But even if one assumes that Congress intended to preserve the
authority to regulate a given subject matter only if that subject
matter was subject to a regulatory authority being exercised through
the Cuban Assets Control Regulations as they stood on July 1, 1977,
the authority to regulate travel-related transactions was
grandfathered.  An examination of Regulation 201(b) shows that it
affirmatively asserts the regulatory authority to decide whether to
permit or prohibit all property transactions between persons subject
to the jurisdiction of the United States and Cuba or Cuban nationals.
If this is not an exercise of the "authority" to "regulate" (and to
"prevent" and "prohibit") all such transactions, what is?  The program
established by Regulation 201(b) includes the familiar features of a
trade embargo.  But it also plainly encompasses all other property
transactions, including travel-related economic transactions.  /21/
Since its promulgation in 1963, the Department of the Treasury has
consistently interpreted Regulation 201(b) as encompassing a
prohibition on travel-related transactions and has required licenses
for persons who wish to engage in such transactions.  /22/

   B. The court of appeals' conclusion that the authority to regulate
travel-related economic transactions was not "being exercised" on July
1, 1977, was based on a conceptual misunderstanding of the structure
of the regulatory system created by the Cuban Assets Control
Regulations.  The court of appeals focused narrowly on the fact that
in March 1977 President Carter took steps to ease restrictions on
travel-related property transactions by promulgating a (revocable)
general license permitting most such transactions.  But the temporary
loosening of those restrictions by general license was itself an
exercise of the President's TWEA authorities.  (Section 5(b) itself
characterizes a license as a means of exercising its authorities;  it
permits the President to regulate "by means of instructions, licenses,
or otherwise.") The 1977 general license did not revoke or alter the
comprehensive regime of regulatory oversight established by Regulation
201(b).  It was simply one exercise of the continuing powers of
supervision asserted through that regime.  It gave permission --
temporary, revocable permission -- to engage in certain transactions,
but did not in any way exempt them from underlying and continuing
regulatory control.  It is one thing to act where permission is
required and obtained, quite another to act where no permission is
needed at all.  The general prohibition of all unlicensed transactions
remained in force and has been continuously asserted from 1963 to the
present.

   The court of appeals' assumption that the promulgation of Section
515.560 amounted to removal of regulation ignores the regulatory
structure, which has always consisted of a combination of two
regulatory instruments:  a basic broad prohibition, coupled with an
ongoing licensing scheme used to make particular exceptions and
adjustments.  /23/ In fact, the 1977 general license itself maintained
some continuing restrictions on travel-related transactions;  for
instance, economic transactions incident to travel on scheduled
carriers were not allowed.  /24/ But even if one joins the court of
appeals in ignoring those restrictions, there is no reason why only a
flat prohibition specific to travel-related transactions should
"count" as an exercise of authority eligible for grandfathering.  /25/

   C. The court of appeals was also led to its conclusion (that
"authority" to regulate travel-related economic transactions was not
"being exercised" on July 1, 1977) by an imprecise and confusing
amalgam of two different substantive theories about the grandfather
clause.  The court believed that Congress wished to make a special
distinction between travel-related transactions and other sorts of
economic transactions in prescribing what authorities were to be
grandfathered.  The court of appeals also assumed that Congress
intended to grandfather only those specific prohibitions that happened
to be in place on July 1, 1977 -- that is, that Congress meant to
freeze the regulatory situation as it stood on that date.  Both of
those theories misapprehend the grandfather clause.

   1. The court of appeals, invoking "common sense and common English"
(Pet. App. 5a), opined that restricting commodity purchases and
restricting travel purchases "would seem to be very different
'exercises' of authority -- different enough at least not to count as
the exercise of the same authority" (ibid.).  But the court's
distinction is not supported by either the statutory language or
"common sense and common English." Nothing in Section 5(b) or the
grandfather clause indicates that Congress perceived a distinction
between the authority to regulate the purchase of, e.g., Cuban hotel
rooms and entertainment packages, and the authority to regulate the
purchase of, e.g., Cuban sugar and cigars.

   Section 5(b) is subdivided into various broad categories of
regulation (e.g., currency regulation;  regulation of property
transactions);  but it does not in any way isolate or specify as
distinct the category of travel-related transactions.  Rather, it
simply gives the President broad authority to regulate "transactions"
that involve "any property in which any foreign country or a national
thereof has any interest." Restriction of travel-related transactions
deprives Cuba of economic benefits just as effectively as other
economic restrictions;  in fact, allowing all comers freely to engage
in private tourist- and business-travel transactions with Cuba would
create a significant loophole in an otherwise comprehensive embargo
program.  The court of appeals' reading disaggregates Section 5(b)
authorities in an arbitrary way, one that finds no support in Section
5(b), in the grandfather clause, or in "common sense and common
English." /26/

   The court of appeals suggested (Pet. App. 7a) that Congress must
have viewed travel-related transactions as special because of the
special constitutional interest in travel.  As we show below, there is
no indication of any kind in the legislative history of the
grandfather clause that Congress perceived or adverted to any such
special concern.  And it is extremely significant that no such concern
was manifested in 1977 in IEEPA itself.  IEEPA provides that when new
peacetime national emergencies arise, the President, following IEEPA
procedures, may impose wide ranging economic measures with respect to
a particular country.  Congress made not the slightest attempt to
provide for special treatment for travel-related economic transactions
when these IEEPA powers are being exercised;  they are simply thrown
in with other embargo powers that may be exercised under a IEEPA
national emergency declaration.  (This was, of course, implicitly
acknowledged by the court of appeals when it specified that the
President may regulate the purchase of Cuban hotel space and airline
tickets under IEEPA.) /27/ Thus, the notion that Congress intended to
treat the authority to regulate economic transactions incident to
travel as a distinct category of authority is affirmatively rebutted
by the structure of the regulatory system that Congress adopted in
1977 to replace the TWEA.

   2. Mixed in with the court of appeals' notion that Congress
intended distinctive treatment for the regulation of travel-related
property transactions was another, separate, strand in its analysis.
The court of appeals concluded that the President was not "exercising"
TWEA authority with respect to travel-related economic transactions
because, on July 1, 1977, most such transactions were in fact not
prohibited but were, rather, licensed pursuant to the 1977 general
license.  The court in effect read the grandfather clause as
preserving the authority to prohibit a transaction only if that
transaction was in fact prohibited on July 1, 1977.

   The effect of this interpretation of the grandfather clause is, of
course, to freeze into place the specific list of prohibitions that
happened to be on the books on July 1, 1977.  Its reductio implication
is that if a particular regulation prohibited the importation, on July
1, 1977, of Cuban cigars but not of Cuban cigarettes, an adjustment of
the embargo to include cigarettes would be improper under TWEA Section
5(b), and would require the invocation of a new national emergency
under IEEPA.  /28/

   In parts II and III of our brief we show that the court of appeals'
static interpretation of the grandfather clause is inconsistent with
the traditional manner in which foreign assets control programs have
always operated and with Congress's intent in enacting it.  At this
point we therefore limit ourselves to basic propositions deriving from
the language and structure of the relevant provisions.

   a. The grandfather clause provides that TWEA "authorities" being
exercised with respect to a country on July 1, 1977, may continue to
be exercised.  It does not say that the "restrictions" or
"prohibitions" in effect on July 1, 1977, may be continued.  The grant
of the authority to impose a prohibition is not the equivalent,
linguistically or conceptually, of the prohibition itself.  There is
no reason why, therefore, Congress should be deemed to have used the
two sorts of words and concepts interchangeably.  If Congress had
wished to freeze existing prohibitions into place, nothing would have
been easier than to state, in the grandfather clause, that only the
"restrictions" in effect on July 1, 1977, could be continued under the
TWEA;  and that all other "restrictions" would have to be imposed
pursuant to IEEPA.

   How easy it is to use the terms "restrictions" or "prohibitions" is
symptomized by the fact that both the court of appeals and the
respondents consistently paraphrase the grandfather clause by
importing into it one of those words as a substitute for the word
"authorities." The court of appeals referred over and over again to
the question of what "restrictions" were in effect -- rather than what
"authorities" were being exercised -- on July 1, 1977, and to the
grandfathering of "on-going restrictions" (Pet. App. 11a;  see also
id. at 4a, 5a, 7a).  Respondents, too, seem unable to resist the urge
to substitute the terms "prohibitions" and "restrictions" for the
actual language of the grandfather clause (Br. in Opp. 22, 25).  But
Congress did pointedly resist the temptation to use these words and
adopted one that means something else and functions conceptually in a
different way.  The exercise of that choice should not be ignored.

   To equate "authorities" with "prohibitions" also distorts the
structure of TWEA Section 5(b) itself, which specifies that the
President has authority to "regulate" (by means of, inter alia,
"licenses") -- as well as to "prevent or prohibit" -- property
transactions.  In view of this listing in Section 5(b), the argument
that only actual prohibitions can qualify as an exercise of Section
5(b) authorities (for purposes of the grandfather clause) ignores the
language of the relevant statutes.

   b. The structure of IEEPA itself again casts a vivid light on
whether Congress envisaged foreign assets control programs as on-going
systems subject to flexible adjustment or, rather, as a laundry-list
of specific prohibitions.  For it is striking that, once a IEEPA
embargo has been invoked and is underway, IEEPA procedures afford the
President precisely the sort of flexibility that the court of appeals
thought the President was contemporaneously being stripped of in
connection with grandfathered TWEA programs.  Under IEEPA, once the
President has declared a national emergency with respect to a
particular threat, that declaration serves as the predicate for an
ongoing system of regulation, and the Executive may issue and amend
regulations with respect to that threat without declaring a new
national emergency.  Nothing in IEEPA would prevent the President from
imposing, first, an embargo on trade in machinery, and then -- without
a new emergency declaration -- prohibiting economic transactions
incident to travel.  Since Congress chose not to require a new
declaration of emergency in the midst of a program operating pursuant
to IEEPA, it is peculiar to ascribe to it the decision to impose such
a requirement in connection with grandfathered TWEA programs.

   In this connection it is significant that Congress in the
grandfather clause expressly created a new procedure that serves, in
effect, as a substitute for new declarations of national emergency.
In place of such new declarations, Congress required the President to
make an explicit annual determination that continued exercise of TWEA
authorities with respect to a particular country is in the national
interest.  In view of this required annual review, it is unlikely that
Congress would also have required the declaration of a new national
emergency whenever an existing program was significantly modified.

   The result of the court of appeals' conclusion (Pet. App. 12a) --
that Congress intended to force a President wishing to make post-July
1, 1977, changes in assets control programs to use the new IEEPA
procedures -- is to create an unwieldy two-track system.  Some
regulations involving Cuba (those addressed to purchase of Cuban
machinery, sugar, or cigars) would be administered under grandfathered
TWEA authority (and would be generally frozen into their July 1977
shape).  Others (those addressed to purchase of Cuban tourist travel
and entertainment packages) would be administered under new IEEPA
authority.  Under such a two-track system, the President would
determine annually that it is in the national interest to continue a
portion of the assets control program (that conducted pursuant to
grandfathered authority);  and he would declare a new national
emergency and thereafter adhere to the IEEPA reporting and
consultation requirements in connection with the other elements of the
same program.  There is no indication in either the language or
structure of Public Law 95-223 that Congress contemplated or would
have wished to create such a patchwork system.

 II. In Enacting The Grandfather Clause Congress Acted Against A Long
Tradition Of According The President Regulatory Flexibility To Adjust
Foreign Assets Control Programs To Meet Changing Foreign Policy And
National Security Needs

   A. A natural reading of the grandfather clause to mean that
Congress did preserve the President's TWEA authority to modify the
Cuban Assets Control Program would be harmonious with the longstanding
traditions that constituted the background against which Congress
acted.  Flexibility of administration has for more than four decades
been a central feature of such TWEA programs, allowing the President
to change the scope and form of regulations in response to shifting
foreign policy and national security needs.  See Dames & Moore v.
Regan, 453 U.S. 654, 673 (1981);  Nielsen v. Secretary of the
Treasury, 424 F.2d 833, 839-841 (D.C. Cir. 1970).  Ever since 1940 --
when Exec. Order No. 8389 (3 C.F.R. 645) "froze" the assets of
Nazi-occupied Norway and Denmark -- TWEA assets control programs have
assumed a consistent structure.  An initial Executive Order or basic
Treasury Department regulation -- Regulation 201 in the case of the
Cuban Assets Control Program -- imposes a general prohibition on all
unlicensed transactions.  That prohibition -- which normally tracks
the language of Section 5(b) and thereby subjects to centralized
regulatory supervision all transactions within the scope of the
statute -- remains in effect throughout the life of the program.  This
is then followed by a series of licenses, which are used to make
specific adjustments to the general prohibition and to ease or
retighten specific areas of prohibition on a short-term or long-term
basis, in response to changes in the foreign policy and national
security situation.  See Propper v. Clark, 337 U.S. 472, 475, 479
(1949);  Zittman v. McGrath, 341 U.S. 446, 448, 464 (1951);  Malloy,
Embargo Programs of the United States Treasury Department, 20 Colum.
J. Transnat'l L. 485, 496-510 (1981).  The Cuban Assets Control
Program has itself followed this pattern and has undergone
considerable change since its institution in 1963.  /29/

   Because the underlying comprehensive prohibition remains in place
throughout the existence of an assets control program, the President
may loosen and tighten various restrictions without in any way
abrogating the underlying regulatory authority to prohibit all
property transactions within the scope of Section 5(b).  Such a
reservation of authority is essential if foreign assets control
programs are to function as effective policy tools;  until full
normalization of relations with the subject country, the President
cannot be certain that a deterioration in relations or the need for a
new foreign policy initiative will not require a modification in or
revocation of previously issued licenses.  Broad reservation of
authority also preserves the Treasury's jurisdiction to enforce
license terms, act against license violations, and generally monitor
licensed activity.

   This Court has long recognized that the success of foreign assets
control programs requires broad Executive authority and administrative
flexibility to adjust the program as the diplomatic and national
security situation changes.  Thus, in cases involving World War II
TWEA programs -- programs that regulated the right of persons subject
to United States jurisdiction to engage in a broad range of property
transactions (in part by freezing and vesting of assets) -- this
Court, in upholding the Executive's actions, interpreted the statute
as indicating a "congressional purpose to put control of foreign
assets in the hands of the President * * * , so that there might be a
unified national policy in the administration of the Act." Propper v.
Clark, 337 U.S. at 493.  See also Dames & Moore v. Regan, 453 U.S. at
673;  Zittman v. McGrath, 341 U.S. at 448, 463-464;  Lyon v. Singer,
339 U.S. 841 (1950).  It is in view of that broad purpose that the
Court has always construed TWEA authority as providing the Executive
with great flexibility.  See Orvis v. Brownell, 345 U.S. at 187-188;
Guessefeldt v. McGrath, 342 U.S. 308, 319 (1952);  Clark v. Uebersee
Finanz-Korporation, A.G., 332 U.S. 480, 488-489 (1947);  see also
Sardino v. Federal Reserve Bank, 361 F.2d 106, 110 (2d Cir.), cert.
denied, 385 U.S. 898 (1966).  As the Court noted in Dames & Moore v.
Regan, 453 U.S. at 672, the legislative history of the TWEA and the
cases interpreting it "fully sustain the broad authority of the
Executive when acting under this congressional grant of power." /30/

   As we show in Section III, the legislative history indicates that
Congress was well aware of the flexible manner in which foreign assets
control programs are administered.  But even if there were no such
direct evidence, it is implausible to assume that Congress acted in
ignorance of this consistent and long-maintained tradition of
flexibility and regulatory adjustment (see Lorillard v. Pons, 434 U.S.
575, 580-581 (1978)) and for the first time took steps to prevent the
Executive from meeting changing policy needs through adjustments to
such a program.  See Haig v. Agee, 453 U.S. 280, 297-298 (1981);
Lorillard v. Pons, 434 U.S. at 580-581;  NLRB v. Gullett Gin Co., 340
U.S. 361, 366 (1951).  /31/

   B. Construction of the grandfather clause to preserve the
Executive's traditional flexibility in the administration of ongoing
foreign assets control programs is particularly appropriate because of
the significance of those programs for the foreign policy and national
security interests of the United States.  As this Court has
recognized, the President needs maximum flexibility in the areas of
foreign policy and national security;  it is therefore traditional for
Congress to delegate broad authority in those areas.  See Weinberger
v. Rossi, 456 U.S. 25, 32 (1982);  Dames & Moore v. Regan, 453 U.S. at
678-679;  Zemel v. Rusk, 381 U.S. 1, 17 (1965);  United States v.
Curtiss-Wright Export Corp., 299 U.S. 304, 319-322, 324 (1936);
Mackenzie v. Hare, 239 U.S. 299, 311 (1915).  See also E.W. Bliss Co.
v. United States, 248 U.S. 37, 46 (1918);  Curran v. Laird, 420 F.2d
122, 128 (D.C. Cir. 1969).

   The regulation at issue here presents a perfect illustration of the
manner in which steps taken under an assets control program can serve
the changing needs of United States foreign policy.  Following the
1977 liberalization with respect to travel-related property
transactions, there was a deterioration in relations between the
United States and Cuba.  Beginning in 1978, Cuba increased its
military involvement in various countries in an effort to destabilize
governments friendly to the United States.  See J.A. 109, 113-114.  In
late 1981 the United States learned that Cuba was engaged in plans
significantly to expand its tourist industry.  /32/ The 1982
retightening of restrictions on travel-related transactions
constituted a response to these developments and served a dual foreign
policy purpose.  It operated as a means -- short of force -- of
expressing the United States' serious disapproval of Cuba's
adventuristic policies;  /33/ in addition, it "reduce(d) Cuba's hard
currency earnings from travel by U.S. persons to and within Cuba" (47
Fed. Reg. 17030 (1982)), thus decreasing the ability of the Cuban
Government to generate resources to finance policies detrimental to
United States interests.  /34/

   The court of appeals' opinion reflects little awareness of the
administrative flexibility that has been a consistent hallmark of TWEA
assets control programs.  And its reading of the grandfather clause as
not authorizing modification of grandfathered programs seriously
undermines the efficacy of those programs as instruments of foreign
policy.  /35/

   The court of appeals suggested that it was not interfering with the
ability of the Executive to take "whatever steps (are) necessary to
conduct our affairs with Cuba" (Pet. App. 12a) because the President
may use IEEPA procedures to institute such measures.  But the
suggestion is far too casual.  Action under IEEPA requires the
President to declare a new national emergency based on a finding that
Cuba presents an "unusual and extraordinary threat" to the "national
security, foreign policy, or economy" of the United States.  50 U.S.C.
1701.  That is a step with obvious and momentous foreign policy
implications.  See Michel Declaration Paragraph 9 (J.A. 181-182).  The
declaration of a national emergency and the finding of an "unusual and
extraordinary threat" may be warranted in order to institute a new
assets control program.  But it is a wholly different question whether
the President should take such a step -- one that could significantly
heighten tensions -- in order to make an adjustment to or a
modification in an existing program.  To require that such a step be
taken whenever the President wishes to tighten in any respect the
embargoes as they stood with respect to Cuba, North Korea, Vietnam and
Cambodia on July 1, 1977, is to introduce a dangerous and unnecessary
rigidity into the conduct of our foreign policy.

   C. The Treasury Department has consistently interpreted the
grandfather clause as authorizing modification of assets control
programs in existence on July 1, 1977, thereby preserving the
flexibility necessary to the continuing effectiveness of those
programs.  Accordingly, the Department has continued to modify
grandfathered programs.  /36/ That construction of the statute by the
agency charged with its administration is entitled to deference.  See,
e.g., Blum v. Bacon, 457 U.S. 132, 141 (1982);  FEC v. Democratic
Senatorial Campaign Committee, 454 U.S. 27, 31-32 (1981);  Zenith
Radio Corp. v. United States, 437 U.S. 443, 450-451 (1978);  Udall v.
Tallman, 380 U.S. 1, 16 (1965).  /37/

 III. The Legislative History Of The Grandfather Clause Shows That
Congress Intended To Preserve The President's Authority Under TWEA To
Regulate Travel-Related Economic Transactions Involving Cuba

   The legislative history of Public Law 95-223 shows that it was one
of the overarching purposes of the statute to preserve the President's
authority to conduct the Cuban Assets Control Program under TWEA
Section 5(b) without the invocation of a new national emergency.  That
history further indicates that Congress understood that what was
involved was an embargo program subject to adjustments, not a
subject-specific list of particular prohibitions to be frozen into
place as of July 1, 1977.  Finally, nothing in the legislative history
supports the conclusion that Congress contemplated that the authority
to regulate travel-related economic transactions falls outside the
scope of the Cuban embargo program and comprises a separate and
distinct category of authority.

   We note at the outset that the legislative history is complicated,
variegated, and, on occasion, obscure and contradictory.  Public Law
95-223 was the product of four years of legislative attention to the
controversial issue of presidential "emergency" powers.  Resolution of
counter-vailing interests and policies was achieved in large part
through negotiations among Congress, congressional staff, and the
Executive Branch.  Points of resolution between competing policy
thrusts emerged at various times, only to be reformulated later in the
process.  Much of the legislative history consists of subcommittee
sessions characterized by numerous informal exchanges among
subcommittee members, subcommittee staff and Executive Branch
witnesses.  Throughout, different people used different, sometimes
imprecise, words ("authorities", "powers", "actions", etc.) to refer
to subtle concepts.  In such a setting it is particularly dangerous to
take out of context individual exchanges or formulations that were
part of the ongoing process of negotiation and drafting.  Instead, the
legislative history must be understood in terms of its dominant
movement and fundamental purposes.

   A. Public Law 95-223 grew out of a congressional review of
presidential use of emergency powers commenced in 1973.  See S. Rep.
94-1168, 94th Cong., 2d Sess. 8-9 (1976);  H.R. Rep. 95-459, 95th
Cong., 1st Sess. 6-7 (1977).  In initiating that review Senator Church
pointed out that the United States had been in a state of emergency
continuously since President Roosevelt declared the banking emergency
of 1933.  National Emergency:  Hearings Before the Senate Special
Comm. on the Termination of the National Emergency, Part I, 93d Cong.,
1st Sess. 2 (1973).  The Special Committee established to conduct the
inquiry discovered that no fewer than four national emergency
proclamations were then extant.  The most significant of these was
President Truman's 1950 Korean war emergency proclamation, which
served as the basis for the embargoes against North Korea, Cuba,
Vietnam, and Cambodia.  S. Rep. 94-1168, supra, at 9.  The Committee
eventually identified over 450 statutes giving the President various
emergency powers.  S. Rep. 93-549, 93d Cong., 1st Sess. 7 (1973).

   Congress was understandably concerned that the currency had become
cheapened in the area of emergency powers and that the superannuated
states of emergency that remained in effect gave the President too
much discretion in the use of such powers.  As a partial solution to
this problem, Congress enacted the National Emergencies Act of 1976,
50 U.S.C. 1601 et seq. (see page 5, supra).  The Executive Branch
supported this legislation.  But it was also greatly concerned about
the effect of the legislation on then-existing uses of the President's
TWEA powers -- uses that were in no way superannuated.  There were
strong recommendations from representatives of the Treasury and State
Departments that the new legislation should not disturb the
then-existing freeze on Chinese assets and the embargoes against Cuba,
Vietnam, Cambodia and North Korea.  National Emergencies Act:
Hearings on H.R. 3884 Before the Subcomm. on Administrative Law and
Governmental Relations of the House Comm. on the Judiciary, 94th
Cong., 1st Sess. 38, 41, 45, 47, 81-82 (1975).  In response to this
concern, Congress exempted Section 5(b) of the TWEA from the 1976
National Emergencies Act, see 50 U.S.C. 1651(a)(1), providing instead
for further study of appropriate revisions to Section 5(b).  50 U.S.C.
1651(b);  see H.R. Rep. 95-459, 95th Cong., 1st Sess. 6-7 (1977);
page 5, supra.

   During the spring of 1977, the responsible subcommittee of the
House Committee on International Relations held hearings and mark-up
sessions to consider the legislation necessary to reform Section 5(b).
 Emergency Controls on International Economic Transactions:  Hearings
on H.R. 1560 and H.R. 2382 Before the Subcomm. on International
Economic Policy and Trade of the House Comm. on International
Relations, 95th Cong., 1st Sess. (1977) (hereinafter cited as
Hearings).  The objective was to resolve the problem left open by the
National Emergencies Act -- what (if any) changes should be made in
the President's authority under Section 5(b) to exercise emergency
economic powers?  The subcommittee's solution to this problem
reflected two dominant purposes.  Congress wanted to limit the
President's authority to exercise peacetime emergency economic powers
by giving Congress a greater voice in the exercise of these powers.
The proposed legislation therefore limited the use of TWEA Section
5(b) authorities to times of war, and (in IEEPA) spelled out new
predicates and procedures for the use of economic powers in connection
with future national emergencies in times of peace.

   At the same time -- and equally important -- the subcommittee
designed the legislation to make sure there would not be interruption
of or interference with the President's powers to continue existing
embargo programs that were then being conducted on the basis of past
declarations of emergency.  (Indeed, Chairman Bingham acknowledged
that the Administration's consent could never be obtained if Congress
attempted to end the existing programs:  "This is essentially an act
trying to clear up the mess that the (TWEA) has left us in.  We can
always move on the front of Vietnam or Cuba * * * However, to get this
through in reasonably good form, we would like not to raise that
particular controversy." Hearings 210.) Congress recognized that the
use of IEEPA procedures -- in particular, the need to declare a new
national emergency based on a new finding of an "unusual and
extraordinary threat" to the security or foreign policy or economy of
the United States -- might be inappropriate and awkward in the context
of ongoing embargo programs covering countries such as Cuba and
Vietnam, and might embarrass and complicate our difficult and
sensitive relations with these countries.

   The accommodation of these two dominant purposes provides the
overarching point-counterpoint of the legislative history.  IEEPA
procedures were to apply to future crises and future emergencies;
they were not to apply to ongoing programs already initiated under
previously declared emergencies.  The House Report states:  "The
purpose of the legislation is to redefine the power of the President
to regulate international economic transactions in future times of war
on national emergency." H.R. Rep. 95-459, supra, at 1 (emphasis
added).  See also id. at 13 ("Title II of the bill confers upon the
President authority to exercise controls on international economic
transactions during future national emergencies");  123 Cong. Rec.
22475 (1977) (IEEPA "confers upon the President a new set of
authorities for use in time of future national emergency") (statement
of Representative Bingham).  /38/ At the same time, the grandfather
clause was incorporated in the legislation to assure that ongoing
assets control programs could continue without the need to declare a
new national emergency.

   B. The concern that new and awkward constraints should not be
applied to existing assets control programs -- particularly the Cuban
program -- was raised at an early stage of the legislative process.
Professor Andreas Lowenfeld was the first witness at the hearings on
Public Law 95-223.  He pointed out that it would be an "awkward act *
* * perhaps even an inappropriate interference in negotiations being
carried out by the executive branch" if the Cuban embargo program were
suddenly ended by a repeal of Section 5(b).  Hearings 10.  Professor
Lowenfeld went on to point out the difficulties that would result from
requiring a new declaration of national emergency in the midst of a
program:  "Coming again to the Cuban situation, * * * I could 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
relaxation of tensions." Ibid.

   Administration witnesses also stressed that the President should
not be required to declare a new emergency with respect to Cuba.
Leonard Santos of the Department of the Treasury explained the
reluctance of the Executive to consider declaring a new national
emergency in connection with existing programs:  "But if a new
national emergency had to be declared (with respect to existing uses
of Section 5(b)) under all the constraints that have been placed in
this staff draft, I am not certain that a new national emergency would
be declared." Hearings 182.  Santos went on to note that "it is
difficult, considering our present state of negotiations with Cuba and
other countries that the President would want to declare a national
emergency with respect to those countries." Id. at 190.  See also id.
at 191, 193-194.

   Those who were drafting the new legislation were sympathetic to the
Executive's concerns.  Chairman Bingham said:  "I can see the problem.
 I personally would not argue that we should ask or expect the
President to declare, for the first time, an emergency with respect to
Cuba." Hearings 190.  The subcommittee thus proceeded to draft a new
version of the grandfather clause, one that Mr. Bingham characterized
as a "reasonably satisfactory" response to the Administration's
objections.  Id. at 209.  He noted (id. at 207) that the subcommittee
had decided that there should be grandfathering of "those situations
where (TWEA) authorities are currently being exercised under the old
Trading With the Enemy Act -- and I might mention that the principal
ones are Vietnam, Cuba, and North Korea, and the freezing of assets of
a number of Communist countries * * * ," and that "(w)e have
recognized that it might be embarrassing for the President to have to
declare new national emergencies with respect to Cuba and Vietnam."
The subcommittee staff director, R. Roger Majak, stated:  "The
prospect of the president having to declare a new emergency with
respect to some of these existing uses, such as Cuba, * * * does pose
a diplomatic, or potential diplomatic problem." Id. at 209.

   The one point that stands out clearly from these comments is that
Congress was persuaded not to require the President to declare a new
national emergency in order to continue the existing embargo program
with respect to Cuba.

   C. The further question that remains is whether the existing
embargo with respect to Cuba was perceived as a specific list of
specific prohibitions, or, rather, as a program or system of
restrictions subject to periodic adjustment.  The court of appeals
supported its conclusion that only restrictions actually on the books
on July 1, 1977, were grandfathered by pointing out that there were
references in the legislative history to grandfathering "existing
uses" of TWEA authorities (see Pet. App. 7a-9a).  /39/ But, for every
invocation of the word "uses," we can cite a countervailing example
where the reference was to grandfathering an existing "embargo" or
"program." For example, during the hearings Representative Bingham
stressed that it was not the intention of the subcommittee to
interfere with the continuation of "the current embargo against North
Korea, Vietnam, and Cuba" and that "it is the intention of this
subcommittee, the consensus so far, that we want to grandfather in and
not disturb the embargoes against Cuba, against North Vietnam, and
against North Korea." Hearings 188, 193.  The House report described
the uses of Section 5(b) authorities that were to be grandfathered as
including "the total U.S. trade embargoes of Cuba and Vietnam." H.R.
Rep. 95-459, supra, at 9-10.  During consideration by the full House,
Representative Bingham described the grandfather clause as allowing
the continuation in effect, at the President's discretion, of "trade
embargoes and asset control programs currently applied by the United
States under the authority of section 5(b)." 123 Cong. Rec. 22475
(1977).  Later he stated that "this legislation specifically
grandfathers the embargoes against Vietnam, Cambodia, Laos, Cuba, and
other existing embargoes, so that they are not affected in any way by
this legislation." 123 Cong. Rec. 38166 (1977) (emphasis added).  The
Senate report states:  "Section 101(b) would enable the President to
continue to control transactions with certain countries (Cuba and
Vietnam, for example) * * * ." S. Rep. 95-466, 95th Cong., 1st Sess. 4
(1977).  On signing the legislation, President Carter stated that it
would not affect "embargoes now being exercised against certain
countries." 13 Weekly Comp. Pres. Doc. 1940, 1941 (Dec. 28, 1977).
/40/

   There is no indication in the legislative history that Congress
believed that the "embargoes" and "programs" to which it was referring
amounted to static sets of regulations.  In fact, Congress was aware
that embargoes are adjusted over time to meet changing foreign policy
needs.  Julius Katz, Assistant Secretary of State, advised the House
subcommittee that the Section 5(b) controls "currently being exercised
are reviewed on a continuing basis in the context of our developing
relationships with the targeted countries" and that our relations with
Cuba were "still unsettled." Hearings 98, 117.  /41/

   It is also striking that there is virtually no reference in the
legislative history to the subject-matter content of the regulations
on the books as of July 1, 1977 -- as there presumably would have been
if Congress's intent was simply to grandfather specific prohibitions.
/42/ Rather, whenever categories of 5(b) authorities were being
discussed, the reference was to the broad classes of regulation
specified by Section 5(b) itself.  Thus, Mr. Majak stated:

         The current uses which the staff draft grandfathers on page
      4, paragraph (e), are the uses of 5(b) transaction controls to
      implement our current trade embargoes against Vietnam, Cuba,
      North Korea, and to control foreign assets in certain places
      like the People's Republic of China, Czechoslovakia, and others,
      with which we have not settled certain financial claims.

         The staff draft would make no change in the status of those
      claims, or any of the authorities currently exercised under
      5(b).  It would permit them to continue to be used as long as
      the President determines it is necessary to do so.

   Hearings 147-148 (emphasis added).  See also id. at 167 ("assets"
controls vs. "currency" controls);  and see id. at 100, 107-108,
144-145, 147, 152, 207, 215.

   Even more striking, there is not the slightest indication that
Congress had any intention of singling out travel-related economic
transactions as a special and distinct subject, to be regulated under
new IEEPA procedures as opposed to grandfathered TWEA procedures.
Indeed, the only mentions of travel-related economic transactions
indicate that Congress was apprised that such transactions were
subject to regulation under TWEA Section 5(b) authorities.  For
instance, when Mr. Majak, the subcommittee staff director, noted that
"there are other authorities being exercised with respect to Cuba and
Vietnam," Representative Findley asked Mr. Santos:  "Would you list
those?" Mr. Santos replied:

         They are essentially transaction control regulations to the
      extent that the transaction involves a transfer of assets, it
      would involve the travel to those countries and the exchange of
      goods.  Those are powers being exercised under 5(b), and this is
      considerably more extensive than the freezing of a bank account
      or a piece of property.

   Hearings 215.  /43/

   D. In support of its view that Congress intended to grandfather
only restrictions that were actually on the books as of July 1, 1977,
the court of appeals relied heavily on the fact that the subcommittee
deleted from an early version of the grandfather clause language
stating that "any other authority conferred upon the President by
(Section 5(b)) may be exercised to deal with the same set of
circumstances," and Representative Bingham's statements about that
deletion.  See Pet. App. 9a-10a.  We reprint in the margin the entire
exchange referred to by the court of appeals.  /44/ Representative
Bingham's remarks, even on their face, show at most that at this stage
of the hearings he was concerned that the exercise of one broad
category of Section 5(b) authority ("assets controls") not be usable
as a predicate for the ("currency controls").  Thus, the deletion
cannot be taken to indicate that Congress intended to freeze into
place specific subcategories of assets prohibitions on the books on
July 1, 1977.

   Even more important, at the hearings on the following day Mr.
Santos of the Treasury Department, responding to the invitation to
provide the "administration's reaction," testified that the issue was
in effect moot because the President was in fact exercising all of the
authorities provided by Section 5(b):

         Mr. Cavanaugh, I believe, asked whether or not there were
      powers -- you also asked if there were not powers now not
      exercised under 5(b), that we might wish to exercise pursuant to
      existing circumstances, existing embargoes.

         We have reviewed the powers conferred under this draft.
      Frankly we believe that all the powers conferred are exercised
      and that there are no additional powers that could be exercised
      that are not already exercised.

   Hearings 188.  Congressman Bingham understood this point,
commenting immediately thereafter:

         You have said, as I understand it, that there is no need for
      subparagraph 2, that you would not be disturbed by the
      elimination of paragraph 2.

   Ibid.  And Mr. Bingham emphasized that "we are aiming at the same
objectives" (id. at 189).  In other words, on reflection, all parties
agreed that the language at issue was surplusage and thus unnecessary.

   At the very next meeting of the subcommittee, Mr. Bingham
summarized the subcommittee's accommodation of the Administration's
views as follows:

         For the benefit of some of the members who have not been able
      to be present at the previous sessions of the subcommittee on
      this bill, let me attempt to summarize the working draft that we
      have been working on.

                        SUMMARY OF STAFF DRAFT

         First of all, title 1 limits the existing Trading with the
      Enemy Act to situations where there is a declared war, that is
      for the future.  With regard to those situations where these
      authorities are currently being exercised under the old Trading
      With the Enemy Act -- and I might mention that the principal
      ones are Vietnam, Cuba, and North Korea, and the freezing of
      assets of a number of Communist countries, including China as
      well as a number of Eastern European countries -- the tentative
      judgment of the subcommittee has been that these, in effect,
      should be grandfathered, subject only to a requirement that as
      of September of next year, which is the time at which the other
      emergencies that are covered by the National Emergencies Act
      expire, the President would simply have to indicate that certain
      powers which he has been exercising under the Trading with the
      Enemy Act are to be continued in the national interest.  This is
      the latest of several versions that we have discussed.

         We have recognized that it might be embarrassing for the
      President to have to declare new national emergencies with
      respect to Cuba and Vietnam.  At the same time, if we were to
      take action here, in effect, terminating those embargoes, we
      know that this bill, which we hope will not be particularly
      controversial, would become instantly controversial.

         So we have arrived at this proposed compromise, which I hope
      will be satisfactory to the administration.  We would not
      require the President to declare that the emergency of 1950,
      under which those powers are now being exercised, continues;  we
      would simply require him to state, beginning in September 1978
      and annually thereafter, that such powers are continued in the
      national interest.

   Hearings 207-208.

   The history of these exchanges thus illustrates, again, the dangers
of quoting out of context narrow passages from the legislative
history.  Nothing in the deletion of the subparagraph (2) language, we
submit, supports the proposition that Congress intended to freeze into
place the specific list of goods and services that happened to be the
subjects of a prohibition on July 1, 1977.  /45/

   As we noted at the outset of this section, the legislative history
reflects both Congress's wish to limit the President's use of
emergency economic powers and its desire to preserve authority in
connection with existing Section 5(b) programs.  In the course of many
days of hearings, some remarks were made that could be read to support
the court of appeals' reading of the grandfather clause.  /46/
Occasionally the discussions during the hearings reflect more
confusion than any affirmative indication of legislative intent;  /47/
and, as we have noted, the terms used were sometimes imprecise.  But
the dominant thrust of the legislative history demonstrates Congress's
desire to accommodate the Executive's concern that authority in
connection with ongoing assets control programs -- particularly the
Cuban program -- be preserved to avoid placing the President in the
position of having to declare a new national emergency with respect to
Cuba;  and to prescribe IEEPA procedures for use only in the case of
future emergencies.

 IV. The Regulation At Issue Is Not Excluded From Grandfathered TWEA
Authority On The Ground That It Has An Incidental Effect On Travel

   A. The court of appeals concluded (Pet. App. 11a-12a) that its
construction of the grandfather clause was supported by this Court's
opinion in Kent v. Dulles, 357 U.S. 116 (1958), in which the Court
said (id. at 129) that the courts should "construe narrowly all
delegated powers that curtail or dilute" the right to travel.

   Kent involved a total prohibition on Kent's right to leave the
country, based on his alleged pro-Communist activities.  The
prohibition was exercised by virtue of a highly general statutory
authority delegating to the Secretary of State the power to "grant and
issue passports." The Court concluded that the right to travel is a
Fifth Amendment liberty that must be regulated, if at all, pursuant to
the lawmaking power of Congress itself;  that if the power to regulate
is delegated, it must be under adequate standards;  and that Congress
had not spoken with a clarity adequate to justify the proscription
against Kent.

   In our view, the principle of statutory construction invoked in
Kent v. Dulles has no application to this case.

   1. Kent -- like Aptheker v. Secretary of State, 378 U.S. 500
(1964), also cited by the court of appeals -- involved a direct and
purposeful prohibition on the right to travel.  Neither the TWEA, nor
the grandfather clause, nor the regulation at issue in this case,
regulates travel as such.  They are addressed entirely to economic
transactions involving the transfer of money or other economic
benefits to Cuba.  Their purpose is not to restrict the freedom of
American citizens but to deny hard currency to a country that for two
decades has specialized in the enterprise of opposing and subverting
the foreign policy and security interests of the United States and its
allies.  This Court has never held -- and, we submit, should not today
hold -- that the "narrow construction" rule of Kent should apply
indiscriminately to all economic regulation that has the incidental
effect of making it harder for a person to go to a particular country.
 Indeed, we believe that this Court's opinion in Haig v. Agee, 453
U.S. 280, 304-306, 309 (1981), forecloses application of the Kent
analysis to the type of regulation at issue here.  And see Califano v.
Aznavorian, 439 U.S. 170, 177 (1978).

   Applying the Kent rule of strict construction would be particularly
inapposite when the regulation at issue constitutes one component of
an elaborate regulatory mosaic.  Neither Section 5(b), nor the
grandfather clause, nor Regulation 201(b) mentions or distinguishes
travel-related transactions.  Each deals with a system of economic
controls to be invoked against those countries -- and only those
countries -- with which our relations are such as to warrant the
imposition of a peacetime program of extensive economic sanctions.  To
superimpose a special rule of statutory construction onto one small
part of such a regulatory system just because that part has an impact
on some people's travel plans would unduly constrain Congress's power
to deal systematically and comprehensively with our economic relations
with those countries for which commercial and financial relations are
embargoed.

   2. Kent v. Dulles is irrelevant to this case for another reason.
The issue in Kent was whether Congress did or did not intend to
prohibit Kent's travel.  The Court held that, in the absence of a
clear statement, it would assume that Congress did not.  Here, the
court of appeals conceded that Congress did delegate to the President
the power to prohibit travel-related economic transactions.  All it
held was that, as of 1977, any such restriction must be imposed under
IEEPA rather than under the TWEA.  But we think that Kent's
constitutionally based clear-statement rule of construction is not an
appropriate tool for determining whether the President should regulate
by using one statutory procedure or another -- particularly where the
two statutes are equally silent about the authority so to regulate.
On the court of appeals' own reasoning, all that Congress was deciding
in 1977 was whether the pre-existing power to regulate economic
transactions incident to travel should be shifted from one statutory
"track" to another.  The solution to that question is not aided or
affected by the fact that such regulation has an incidental impact on
the constitutional liberty to travel.  /48/

   3. Seven years after Kent this Court decided Zemel v. Rusk, 381
U.S. 1 (1965).  In Zemel the Executive used the same general passport
authority involved in Kent;  but the prohibition encompassed only
travel to Cuba.  The Court held that the very same delegation of
authority that was insufficient to justify a general ban on travel to
a particular country.  In effect the holding was that Kent's rule of
"clear statement" did not apply -- at least in full force -- to area
restrictions, which had a lesser impact on the liberty to travel, a
stronger basis in administrative practice, and a more specific
justification in foreign policy needs.  See also Haig v. Agee, 453
U.S. at 305-306, 307-309.

   Zemel v. Rusk shows that it was error for the court of appeals to
subject the Cuban Assets Control Regulations to the scrutiny suggested
by Kent v. Dulles.  The rule that the courts should "construe
narrowly" delegated powers that curtail the right to travel was
created in the context of regulations that in effect told an American
citizen that he must stay home.  This Court has rejected the
application of that very rule to delegated powers that merely told
American citizens that they may not visit one particular country.  A
fortiori, the rule should not be applied to delegated powers that have
only an incidental impact on the ability of our citizens to engage in
ordinary private tourist and business travel to a country whose
relations with the United States are subject to a comprehensive and
longstanding trade and financial embargo.

   4. Finally -- and significantly -- Kent raised questions about
Congress's substantive constitutional power to regulate at all.  /49/
The passport denial in Kent, based solely on Kent's speech and
associational activities, raised obvious First Amendment concerns.
See Haig v. Agee, 453 U.S. at 304 ("Kent involved denials of passports
solely on the basis of political beliefs entitled to First Amendment
protection.").  It is in that context that the Court held that, if
Congress is to regulate, it must clearly assert its will to do so.

   Here there exists, in our view, no significant substantive
constitutional concern.  This Court has held that even direct passport
controls may be imposed "on the basis of substantial reasons of
national security and foreign policy." Haig v. Agee, 453 U.S. at 293.
See also Zemel v. Rusk, 381 U.S. at 13.  /50/ As previously indicated,
the Cuban Assets Control Program -- which only incidentally affects
travel -- is a central constituent of our foreign and national
security policies vis-a-vis Cuba.  The United States clearly has a
strong interest in limiting the flow of hard currency to Cuba, both
directly and for the purpose of deterring development of a strong
Cuban tourism industry.  In addition, the ability to express serious
disapproval of another country's behavior without the use of force,
through economic sanctions, is a vital component of our foreign
policy.  See pages 34-35, supra.

   "It is 'obvious and unarguable' that no governmental interest is
more compelling than the security of the Nation." Haig v. Agee, 453
U.S. at 307 (quoting Aptheker v. Secretary of State, 378 U.S. at 509).
 "The freedom to travel abroad * * * is subordinate to national
security and foreign policy considerations;  as such, it is subject to
reasonable governmental regulation." Haig v. Agee, 453 U.S. at 306.
On several occasions, courts have concluded that the strong interests
that underlie the operation of foreign assets control programs under
the TWEA are sufficient to justify even actions allegedly infringing
on First Amendment rights.  See Veterans & Reservists for Peace in
Vietnam v. Regional Commissioner of Customs, 459 F.2d 676 (3d Cir.),
cert. denied, 409 U.S. 933 (1972);  Teague v. Regional Commissioner of
Customs, 404 F.2d 441 (2d Cir. 1968), cert. denied, 394 U.S. 977
(1969);  American Documentary Films, Inc. v. Secretary of the
Treasury, 344 F. Supp. 703, 710 (S.D.N.Y. 1972).  And see Haig v.
Agee, 453 U.S. at 308-309;  Snepp v. United States, 444 U.S. 507, 509
n.3 (1980);  Brown v. Glines, 444 U.S. 348, 354-358 (1980);
Kleindienst v. Mandel, 408 U.S. 753, 770 (1972);  United States v.
O'Brien, 391 U.S. 367, 376-377 (1968).

   The impact of the disputed regulation on the freedom to travel is
narrow.  It applies only to a single country -- Cuba.  Respondents are
free to travel elsewhere and to spend as much as they want.  In
addition, the regulation does not prohibit all travel to Cuba.  Its
primary impact is on economic transactions incident to ordinary
private business and tourist travel.  Journalists, professional
researchers, close family members, those whose travel expenses are
paid for entirely by Cuba, those traveling for humanitarian reasons,
and artists and athletes performing in Cuba are not covered by the
proscription.  The national security and foreign policy interests
underlying the Cuban Assets Control Program provide ample
constitutional space for such narrowly drawn restrictions.

   B. The court of appeals also cited a 1978 amendment to the Passport
Act, 22 U.S.C. 211a, in support of its narrow reading of the
grandfather clause.  That amendment limits the Secretary of State's
authority to impose area restrictions on the use of United States
passports.  Although the amendment does not purport to limit the
President's authority to regulate property transactions under the
TWEA, the court of appeals nevertheless concluded (pet. App. 13a) that
it was necessary to read the grandfather clause narrowly in order to
harmonize it with the amendment to the Passport Act.

   As we have noted, the court of appeals acknowledged (Pet. App. 12a)
that the regulation at issue here could be promulgated using the
procedures mandated by IEEPA.  Thus, the amendment to the Passport Act
clearly cannot be viewed as a bar to restriction of travel-related
transactions under an emergency economic powers statute.  Since
nothing in the Passport Act amendment suggests that Congress favored
IEEPA procedures over grandfathered TWEA procedures -- or in any way
adverted to the difference -- whenever a regulation may have an
incidental effect on international travel, it does have an incidental
effect on international travel, it does not support the court of
appeals' construction of the grandfather clause.

   Moreover, nothing in the legislative history of the Passport Act
amendment -- which is addressed only to the Secretary of State, not to
the President or the Secretary of the Treasury -- indicates that
Congress intended to cut back on the powers granted to the Executive
under Section 5(b) of the TWEA.  The regulation at issue here does not
limit the use of passports;  rather, it restricts only economic
transactions incident to travel.  Nor does the regulation have the
same effect as an area restriction on passport use, because, as we
explained above, it permits property transactions in connection with a
number of classes of travel.

   This Court has held that repeals by implication are not favored.
See TVA v. Hill, 437 U.S. 153, 189-190 (1978);  Morton v. Mancari, 417
U.S. 535, 549 (1974).  Thus, in the absence of any direct
inconsistency with the amendment to the Passport Act and in the
absence of any reference to exercise of emergency economic powers when
Congress considered and enacted the amendment, it should not be
assumed that Congress intended an implied partial repeal of the
grandfather clause.

                              CONCLUSION

   The judgment of the court of appeals should be reversed.

   Respectfully submitted.

   REX E. LEE

      Solicitor General

   RICHARD K. WILLARD

      Acting Assistant Attorney General

   PAUL M. BATOR

      Deputy Solicitor General

   CAROLYN F. CORWIN

      Assistant to the Solicitor General

   MICHAEL F. HERTZ

   HAROLD J. KRENT

      Attorneys

   PETER J. WALLISON

      General Counsel Department of the Treasury

   DAVIS R. Robinson

      Legal Adviser Department of State

   JANUARY 1984

   /1/ Declaration of Myles R.R. Frechette, Director, Office of Cuban
Affairs, Department of State Paragraph 4 (J.A. 107).  A principal
objective of the Cuban Government has been the overthrow of
non-Communist governments in the western hemisphere.  Declaration of
Thomas O. Enders, Assistant Secretary of State for Inter-American
Affairs Paragraph 5 (J.A. 172).  In particular, since 1978 Cuba, with
the political, economic, and military support of the Soviet Union, has
provided widespread support for armed violence and terrorism in the
western hemisphere;  in addition, Cuba maintains close to 40,000
troops in various countries in Africa and the Middle East in support
of objectives inimical to United States foreign policy interests.
Frechette Declaration Paragraph 4 (J.A. 107).

   The declaration of Mr. Frechette was submitted to the district
court in connection with the government's response to respondents'
motion for preliminary injunction.  The declarations of Assistant
Secretary Enders and other government officials, which update and
expand declarations submitted to the district court, were filed in the
court of appeals and in this Court in connection with the government's
applications for stay of the mandate.  We draw on these declarations
in explaining the history and purpose of the Cuban Assets Control
Program and the regulations at issue here.

   /2/ Declaration of James H. Michel, Acting Assistant Secretary of
State for Inter-American Affairs Paragraph 3 (J.A. 178);  Enders
Declaration Paragraph 5 (J.A. 172);  Frechette Declaration Paragraph 4
(J.A. 107).

   /3/ In adopting this system, the United States acted in
coordination with other countries of the western hemisphere.  See
Resolution VIII of the Eighth Meeting of Consultation of Ministers of
Foreign Affairs Acting Under the Inter-American Treaty of Reciprocal
Assistance (Jan. 31, 1962) and Resolution I of the Ninth Meeting of
Consultation of Ministers of Foreign Affairs (July 22, 1964),
reprinted in II Inter-American Treaty of Reciprocal Assistance
Applications, 1948-72, at 77-78, 215-216 (General Secretariat,
Organization of American States 1973).  See Zemel v. Rusk, 381 U.S. 1,
14-15 & n.15 (1965).

   /4/ Enders Declaration Paragraph 6 (J.A. 172-173);  June 23, 1983,
Declaration of John M. Walker, Jr., Assistant Secretary of the
Treasury for Enforcement and Operations Paragraph 3 (J.A. 184).

   /5/ Michel Declaration Paragraph 3 (J.A. 178-179).

   /6/ Ibid.; June 23, 1983, Walker Declaration Paragraph 3

   (J.A. 184).

   /7/ See page 31, infra;  Pet. 20-21 nn. 32-33.  Parallel regulatory
provisions governing embargoes against North Korea, Vietnam, and
Cambodia (Kampuchea) appear in the Foreign Assets Control Regulations,
31 C.F.R. Pt. 500.

   /8/ The Cuban Assets Control Regulations also are issued under the
authority of the Foreign Assistance Act of 1961, 22 U.S.C. 2370(a),
which authorizes the President to establish and maintain a total
embargo on all trade between the United States and Cuba.  However,
TWEA authority is of primary importance because it provides for
various enforcement tools, such as subpoena power, mandatory
recordkeeping, and criminal penalties, and permits the blocking or
"freezing" of assets and control of certain financial transactions
unrelated to trade that might not be reached under the Foreign
Assistance Act of 1961.

   Violation of regulations promulgated under the TWEA constitutes a
felony punishable by imprisonment of not more than 10 years and/or a
fine of not more than $50,000.  50 U.S.C. App. (Supp. V) 16.  There
are no civil penalties for violations of the regulations.

   /9/ The TWEA was passed during World War I.  Act of Oct. 6, 1917,
ch. 106, 40 Stat. 411.  Originally it authorized use of the specified
economic powers only during times of war.  In 1933, Section 5(b) was
amended to extend those powers to times of peacetime national
emergency.  Act of Mar. 9, 1933, ch. 1, 48 Stat. 1.  See Tagle v.
Regan, 643 F.2d 1058 (5th Cir. 1981) (historical discussion).

   The President has delegated his authority under the TWEA to the
Secretary of the Treasury, who in turn has delegated that authority to
the Office of Foreign Assets Control.  See Exec. Order No. 9193, 3
C.F.R. 1174, 1175 (1942);  Treasury Dep't Order No. 128 (Rev. 1, Oct.
15, 1962).

   /10/ References to 50 U.S.C. in connection with Public Law 95-223
will hereafter omit "Supp. V."

   /11/ Under the TWEA, the existence of one declared emergency was a
sufficient predicate for exercise of any of the authorities provided
under the Act with respect to any country.  Under IEEPA, the President
must declare a new national emergency with respect to each specific
threat (using the procedures established by the National Emergencies
Act) before initiating the exercise of emergency economic powers with
respect to that threat.  50 U.S.C. 1703.  Under the National
Emergencies Act, Congress purported to retain the power to terminate a
declared national emergency by concurrent resolution.  50 U.S.C. 1622.
 Such termination apparently would cut off the use of emergency
authorities.  50 U.S.C. 1706(b).  But see INS v. Chadha, No. 80-1832
(June 23, 1983).

   Under IEEPA, the President does not have the power to vest foreign
assets (i.e., to place ownership in the United States), to regulate
purely domestic transactions, or to seize records, as he did under
Section 5(b) of the TWEA.  See H.R. Rep. 95-459, 95th Cong., 1st Sess.
14-15 (1977).  (Legislative materials relating to Public Law 95-223
were reproduced in a Legislative History Appendix filed by the parties
in the court of appeals.)

   /12/ See 48 Fed. Reg. 40695 (1983);  47 Fed. Reg. 39797 (1982);  46
Fed. Reg. 45321 (1981);  45 Fed. Reg. 59549 (1980);  44 Fed. Reg.
53153 (1979);  43 Fed. Reg. 40449 (1978).

   /13/ See 31 C.F.R. 515.310, 515.311;  see further pages 20-21 note
21, infra.

   /14/ The regulations also specify that "(a)ny transfer * * * which
is in violation of any provision of this part or of any regulation * *
* license or other direction or authorization * * * and involves any
property in which a designated national has or has had an interest * *
* is null and void * * * " (31 C.F.R. 515.203(a);  28 Fed. Reg. 6975
(1963)).

   /15/ The general license, 31 C.F.R. 515.560(a) (1977), provided in
part:

         The following transactions are authorized:

         (1) All transactions ordinarily incident to travel to and
      from Cuba.

         (2) All transactions ordinarily incident to travel in Cuba,
      including payment of living expenses and the acquisition in Cuba
      of goods for personal consumption there.

         (3) The purchase in Cuba, and importation as accompanied
      baggage, of merchandise with a foreign market value not to
      exceed $100 per person, for personal use only.  Such merchandise
      may not be resold.  The authorization in this subparagraph may
      only be used once in every six consecutive months.

   /16/ See pages 34-35, infra.

   /17/ In July 1982, 31 C.F.R. 515.560 was further amended to clarify
the scope of the general and specific licenses and the meaning of
certain terms.  47 Fed. Reg. 32060 (1982).

   /18/ One respondent, the Center for Cuban Studies, applied to the
Office of Foreign Assets Control of the Department of the Treasury for
a license to permit 98 named individuals to engage in transactions
relating to an interdisciplinary study tour.  That blanket application
was denied, but the Office of Foreign Assets Control invited the
individual applicants to provide more specific information that would
allow the Office to determine whether their proposed travel might be
covered by a general or specific license under the 1982 regulation.
See J.A. 69-70.  (Subsequently, 45 persons filed individual
applications;  of these, 38 were informed that they qualified for a
license, primarily as professional researchers.  The Office rejected
three of the applications and did not act on four others because they
were withdrawn or because there was no response to the Office's
request for additional information.) Respondent Bradley sought a
license that would allow him to travel to Cuba with a group of high
school students.  See J.A. 82-83.  The Office of Foreign Assets
Control denied the application on the ground that the proposed trip
did not fall within either the general or specific licenses authorized
by the regulations (J.A. 128-129).  The other respondents did not
apply for licenses.

   Respondents named Ronald Wilson Reagan, President of the United
States, as a defendant in the district court.  We believe President
Reagan is not a proper party to this suit.  See, e.g., Meyers v.
Nixon, 339 F. Supp. 1388, 1391 (S.D. N.Y. 1972);  Atlee v. Nixon, 336
F. Supp. 790 (E.D. Pa. 1972).  However, the decisions below were
issued on respondents' motion for preliminary injunction, prior to the
filing of an answer or any motion for dismissal of parties.  Because
President Reagan was named as a party below, we have included him as a
petitioner in this Court.  See Sup. Ct. R. 19.6.

   /19/ In the meantime, respondent Bradley obtained a temporary
restraining order permitting him to travel to Cuba pending a hearing
on the motion for preliminary injunction.  See Pet. App. 45a.

   /20/ As detailed below, see pages 46, 48, infra, the legislative
history includes some references to these broad classes of controls.

   /21/ Payment of funds directly to Cuba or Cuban nationals for
meals, lodging or transportation represents the discharge of an
indebtedness for goods or services provided and thus is a transaction
with respect to property in which Cuba has an interest, as is payment
of funds to non-Cuban entities (e.g., an airline) that in turn remit
proceeds to Cuba or pay fees to Cuba.

   The terms "property," "interest in property," and "transfer" are
defined broadly under the regulations.  For example, "property" is
defined to include, inter alia, "money, checks, drafts, * * * debts,
indebtedness obligations, * * * contracts of any nature whatsoever,
and any other property, real, personal, or mixed, tangible or
intangible, or interest or interests therein, present, future or
contingent" (31 C.F.R. 515.311;  28 Fed. Reg. 6977 (1963)).
"Transfer" is defined to include "any * * * transaction * * * whether
or not done or performed within the United States, the purpose,
intent, or effect of which is to * * * surrender, release, (or)
transfer * * * any * * * interest with respect to any property * * *
includ(ing) the making, execution, or delivery of any * * * check * *
* " (31 C.F.R. 515.310;  28 Fed. Reg. 6976-6977 (1963)).

   /22/ Beginning in 1963, it was routine practice for the Office of
Foreign Assets Control to issue specific licenses to named individuals
to engage in economic transactions in connection with authorized
travel to Cuba.  For an example of such a license, see Exhibit B to
our supplemental brief filed in the court of appeals.

   Since Regulation 201(b) was promulgated, the Treasury Department
has sought to secure compliance with the prohibition on travel-related
property transactions by, inter alia, investigating persons known to
have traveled to Cuba, sending questionnaires to United States
businesses with foreign subsidiaries conducting licensed trade with
Cuba, and sending letters to various travel magazines, travel
agencies, airlines and individuals warning them of the controls and
license requirements.  See United States-Cuba Trade Promotion:
Hearing Before the Subcomm. on International Trade and Commerce of the
House Comm. on International Relations, 94th Cong., 2d Sess. 44-46
(1976) (statement of Stanley Sommerfield, Acting Director, Office of
Foreign Assets Control, Dep't of the Treasury).  See also June 3,
1983, Walker Declaration Paragraph 3 (J.A. 159);  Frechette
Declaration Paragraph 6 (J.A. 107).

   In addition, 31 C.F.R. 515.559(a)(2) (1976) expressly provided for
issuance of licenses to foreign nationals who were employed by foreign
subsidiaries of United States corporations and who wished to travel to
Cuba in order to arrange licensed trade by the foreign subsidiaries.
The State Department handout to persons authorized to travel in Cuba
warned of the need to obtain a Treasury Department license in
connection with payments for travel expenses, for accommodations, or
for services in connection with such travel.  See 8 Foreign Affairs
Manual Section 249.92(c) (1966).

   /23/ Every assets freeze and trade embargo imposed by the Treasury
Department since 1940 has possessed the same structure:  a general
prohibition subject to an ongoing licensing scheme.  See pages 30-32,
infra.  The reason for combining prohibition and licensing is obvious.
 The sweeping prohibition subjects all transactions to oversight
through a unified decision-making process.  This is the key concept,
necessary in the case of those countries with which our relations are,
by hypothesis, extremely delicate and difficult.  Licensing decisions
then function as the expressions of on-going foreign policy
determinations.  Licensing discretion -- in both directions -- enables
the President to fine tune the embargo to meet current foreign policy
needs.  Sharply different from any of this is the ending of the
oversight regime by the removal of the general prohibition --
something that occurs when relations with the target country have
become normal.  Of course, no such stage has been reached in our
relations with Cuba -- the very fact recognized by the grandfather
clause.

   /24/ 31 C.F.R. 515.560(a)(5) (1977).  In addition, under 31 C.F.R.
515.560(a)(3) (1977), travelers were authorized to bring back no more
than $100 from Cuba (for personal use only).  31 C.F.R. 515.560(a)(7)
(1977) expressly excluded domestic credit card issuers from contracts
with Cuban enterprises for extension of credit to travelers.  31
C.F.R. 515.601 (1977) required every person engaging in any
transactions subject to the Cuban Assets Control Regulations, whether
licensed or not, to keep a full and accurate record of each such
transaction.  31 C.F.R. 515.602 (1977) required the production of such
records "at any time as may be required by the Secretary of the
Treasury."

   /25/ We note again that, in 1977, the Cuban Assets Control
Regulations provided (as they do now) that any license granted
thereunder remained at all times subject to amendment, modification,
or revocation (see 31 C.F.R. 515.805).  This Court has held that
significant conditions can be imposed in connection with expressly
revocable licenses.  In Dames & Moore v. Regan, 453 U.S. 654 (1981),
the Court concluded that the President had authority to withdraw
general licenses permitting legal actions against Iran, even to the
extent of nullifying court orders of attachment issued while such
licenses were in effect.  (See also Orvis v. Brownell, 345 U.S. 183
(1953).) The Court characterized the attachments obtained pursuant to
the general licenses as "revocable," "contingent," "specifically made
subordinate to further actions which the President might take" under
the applicable statute (IEEPA), and "in every sense subordinate to the
President's power" under the statute.  453 U.S. at 673, 674 n.6.
Those descriptions apply fully to licenses issued pursuant to the
TWEA, including the 1977 general license issued in Section 515.560.

   /26/ The court of appeals cited the practice of Executive Branch
agencies to support its view that historically travel restrictions
have been regarded as different from "more typical TWEA rules and
regulations" (Pet. App. 5a-7a).  But the "practice" the court cited
amounts to statements by Executive Branch representatives that the
President lacked power directly to control travel.  These statements
simply do not address the problem of travel-related economic
transactions, particularly in the context of a comprehensive embargo
program.  They certainly do not establish that, for purposes of TWEA
Section 5(b) and the grandfather clause, purchase of Cuban hotel space
is an entirely different category of transaction than the purchase of
a Cuban cigar.

   /27/ It is further illuminating in this respect that Congress did,
in IEEPA, manifest its sensitivity to First Amendment considerations
by restricting the President's authority to control "any postal,
telegraphic, telephonic or other personal communication, which does
not involve a transfer of anything of value." 50 U.S.C. 1702(b)(1).

   /28/ Under the court of appeals' reasoning, anomalous gaps would be
created in the President's grandfathered TWEA authorities quite apart
from the 1977 general license.  Long before that general license was
adopted, specific licenses were issued under Regulation 201(b) to
specific people to engage in specific property transactions with
respect to Cuba.  On the court of appeals' approach to the grandfather
clause, the President would be deemed not to be "exercising" TWEA
authority to restrict the travel-related transactions of such a person
and thus could not have restricted or revoked that particular license
without a new IEEPA national emergency declaration.  This example,
seemingly farfetched, illustrates that there is a fundamental
analytical confusion in the approach of the court of appeals, an
approach that assumes that the "authorities" being exercised on July
1, 1977, consisted only of the specific prohibitions that were in
place on that date.

   /29/ The history of the Cuban Assets Control Regulations is set out
at Pet. 20-21 nn.32 & 33.

   The traditional manner in which foreign assets control programs
operated is also illustrated by the former TWEA program for the
People's Republic of China.  The basic prohibition on unlicensed
property transactions was instituted in 1950.  See 15 Fed. Reg. 9040.
The scope of the program was changed from time to time over the next
20 years by use of the licensing mechanism.  See United States v.
Broverman, 180 F. Supp. 631, 637 (S.D.N.Y. 1959);  Sommerfield,
Treasury Regulations Affecting Trade With the Sino-Soviet Bloc and
Cuba, 19 Bus. Law. 861, 863 (1964).  In 1971, as part of the general
effort to improve relations between the United States and the People's
Republic, the program was relaxed to permit under a general license a
wide variety of previously prohibited transactions, opening the way
for renewal of trade and other business relationships.  See 36 Fed.
Reg. 8584.  Nevertheless, the People's Republic remained a "designated
country" subject to the broad prohibition on unlicensed transactions
found in 31 C.F.R. 500.201.  Finally, in connection with the general
normalizing of relations with the People's Republic, and following a
claims settlement agreement entered into in May 1979, Chinese assets
were unfrozen and the assets control program was ended.  45 Fed. Reg.
7224 (1980).  Only then did the Executive remove the basic prohibition
on unlicensed transactions involving the People's Republic.

   /30/ The Iranian assets control program, which operates under the
authority of IEEPA, illustrates the sorts of adjustments that may be
necessary under such a program.  In the early stages of the program,
soon after seizure of the hostages at the United States embassy, the
President used his emergency economic powers to block Iranian assets.
Thereafter, the program was modified so that parties with claims
against Iranian entities were permitted under a general license to
apply for court-ordered attachments of Iranian property.  Then, in
connection with the signing of the agreements that led to the freeing
of the hostages, the President revoked the general license, with the
result that the court-ordered attachments that had been obtained
pursuant to that license were rendered invalid.  See Dames & Moore v.
Regan, supra.

   /31/ It will not do to suggest that the grandfather clause permits
relaxation of restrictions on transactions, but does not allow
tightening of an embargo without the declaration of a new national
emergency.  The broad TWEA authorities that are preserved under the
grandfather clause should not operate on a one-way ratchet.  If
Congress intended to give the President the flexibility to relax the
embargo when United States foreign policy calls for such relaxation,
it must also have intended that he be able to impose restrictions if
he determines that such a step would further foreign policy interests.

   Even if Congress had anticipated only relaxation of the Cuban
embargo, it presumably would not have excluded the ability to tighten
the embargo from the scope of grandfathered authority.  In generally
relaxing an embargo, the President might wish to tighten some
regulations while he relaxed others, in order to maintain what he
viewed as the proper mix of foreign policy measures.  It would be
anomalous to require declaration of a national emergency in connection
with such an adjustment.

   /32/ See Enders Declaration Paragraphs 8-9 (J.A. 173-175);  Michel
Declaration Paragraph 6 (J.A. 180).  See Pet. 8-9 n.15 for a
description of actions Cuba was taking to build its tourist industry
in this period.

   /33/ Michael Declaration Paragraphs 3-8 (J.A. 178-181);  Frechette
Declaration Paragraph 5 (J.A. 107).

   /34/ Reestablishment of a vigorous tourism industry could provide
Cuba with a significant source of hard currency to further its foreign
policy goals.  In 1958, Cuba earned $37 million from United States
travelers alone -- two percent of its gross national product and
almost four prercent of foreign exchange earnings (Enders Declaration
Paragraph 10, J.A. 175).  United States government estimates indicated
that if Cuba could return tourism to its 1958 prominence as a source
of foreign exchange, within a few years it would earn a net hard
currency income of approximately $190 to $225 million per year, which
would amount to 20% of Cuba's annual hard currency income under
present conditions (June 3, 1983, Walker Declaration Paragraph 4, J.A.
159).

   /35/ The 1982 regulation continues to permit economic transactions
in connection with certain types of travel the United States wishes to
encourage on First Amendment and humanitarian grounds.  For example,
the regulation retains a general license authorizing travel-related
property transactions by members of the press and by individuals with
close family members in Cuba.  By permitting these transactions, the
United States provides incentives to the Cuban Government to conduct
its affairs in an internationally acceptable manner.  See Michel
Declaration Paragraph 6 (J.A. 180).

   In their brief in opposition (at 36) respondents attribute
significance to the fact that the Cuban Assets Control Regulations
permit trade between Cuba and foreign-based subsidiaries of United
States corporations (see 31 C.F.R. 515.559) and that such trade
results in economic benefit to Cuba.  But different sorts of foreign
policy considerations underlie that aspect of the regulations.  In a
number of cases, host countries insist that subsidiaries of United
States companies are nationals of the host country and must be
permitted to trade with Cuba if the host country permits such trade.
Therefore, the Treasury Department regulations authorize such trade
(under strict conditions) in order to avoid foreign relations
difficulties with those countries.  Affidavit of Dennis M. O'Connell,
Director, Office of Foreign Assets Control Paragraphs 13-14 (J.A.
125-126).  In any event, since the result of trade between Cuba and
foreign-based subsidiaries of United States companies is a net outflow
of hard currency from Cuba, respondents' point is a hollow one.  See
O'Connell Affidavit Paragraph 15 (J.A. 126).

   /36/ Post-1977 modifications to the Cuban Assets Control
Regulations are described at Pet. 20-21 n.33.  In United States v.
Frade, 709 F.2d 1387, 1397-1403 (1983), the Eleventh Circuit concluded
that one of these post-1977 modifications -- 31 C.F.R. 515.415, the
Mariel boatlift regulation -- was not authorized by the grandfather
clause, citing the decision of the court of appeals in this case.  The
court in Frade did not have the benefit of full briefing or argument
on the grandfather clause issue, since the decision of the court of
appeals in this case was issued after oral argument in Frade.

   The United States did not seek certiorari in Frade, because the
court of appeals rested its reversal of the convictions in that case
on two independent grounds:  (i) insufficient evidence to show what
the court viewed as the requisite level of specific intent, as well as
(ii) the invalidity of the boatlift regulation.  The Solicitor General
determined that the holding with respect to evidence of specific
intent was not sufficiently important to warrant seeking review by
this Court.

   /37/ Deference to agency interpretation is particularly appropriate
in a case like this one, in which representatives of the Executive
Branch were intimately involved in the drafting of the statute.  As we
explain in Section III, representatives of several federal agencies
attended the mark-up sessions and worked closely with the subcommittee
staff in the drafting of the legislation, including the development
and revision of the grandfather clause.  In these circumstances, the
Treasury Department, which took the lead in representing the
Administration viewpoint before the subcommittee, is in a particularly
good position to know what Congress intended when it enacted the
grandfather clause.

   /38/ See also 13 Weekly Comp. Pres. Doc. 1940, 1941 (Dec. 28, 1977)
(statement of President Carter that the new legislation "places
additional constraints on use of the President's emergency economic
powers in future national emergencies").

   There are in the legislative history some references to use of
IEEPA procedures for any "future action." But it seems clear when the
context is considered that such references were not meant to apply to
adjustments to the controls imposed with respect to countries like
Cuba and Vietnam.  For example, when the House subcommittee staff
director asked for the Administration's understanding of the extent to
which IEEPA procedures would be used in connection with a new
emergency problem, Leonard Santos of the Treasury Department responded
by distinguishing between such "future actions" and any new measures
concerning Cuba or Vietnam:

         My understanding is that if section 5(b), or the
      International Economic Emergencies Act is used as a basis for
      future action, it would have to conform to the procedural
      restraints of that act.

         If the President claims that he must do something new with
      respect to Cuba, or new with respect to Vietnam, that of course,
      is automatic.

   Hearings 211.

   /39/ As previously pointed out (see pages 18-30, supra), it is our
position that the authority to regulate travel-related economic
transactions was being "used" (exercised) on July 1, 1977, through the
comprehensive prohibition asserted by Regulation 201(b) combined with
the revocable 1977 general license.  The word "uses" seems simply a
shorthand for the term "authorities * * * being exercised." What
authorities were being exercised is not in any way indicated or
specified by the word "uses."

   /40/ References in the legislative history to "embargoes" or "trade
embargoes" appear to be shorthand for programs of assets controls.
Contrary to respondents' suggestion (Br. in Opp. 22-23), there is no
indication in the legislative history that references to an "embargo"
were intended to encompass only restrictions on trade in commodities
such as Cuban sugar, as opposed to the full range of existing controls
on all types of property transactions specified in Section 5(b)(1)(B).
 In fact, some of the references were to "trade and financial
embargoes." See Hearings 103 (statement of Assistant Secretary
Bergsten).

   /41/ See also Hearings 147 (remarks of subcommittee staff director
Majak) (referring to the need for grandfathering to avoid interference
with "ongoing uses of (Section 5(b))");  id. at 197-198 (remarks of
Leonard Santos).

   /42/ To the extent Members of Congress focused on the content of
the regulations, they were referred to a 1976 version of the Cuban
Assets Control Regulations.  See Hearings 168;  Staff of the Subcomm.
on International Trade and Commerce of the House Comm. on
International Relations, 94th Cong., 2d Sess., Trading With the Enemy:
 Legislative and Executive Documents Concerning Regulation of
International Transactions in Time of Declared National Emergency 640
(Comm. Print 1976).

   /43/ In addition, Mr. Majak mentioned that the news media "in the
case of Cuba objected to the fact that they are subjected to a
licensing process in order to travel to certain embargoed countries"
and that "(t)hat was certainly a part of the exercise of the
authorities" (Hearings 197).

   /44/ MR. BINGHAM.  I have a question, and perhaps we

      could spend a few minutes on this before we go on.  I do have a
      question as to whether subparagraph (2) on page 2 is desirable.
      Would you explain that, and indicate the reason for that?

         MR. MAJAK.  Our reading of that would be that with respect to
      any uses of 5(b) authorities for any presently existing
      situation, not only could the President use those particular
      authorities that he is now using, but any others which are
      conferred by section 5(b).

         So, if the President is presently using asset controls toward
      a particular country, but is not using, let us say, currency
      controls, he nonetheless could use, at some later date if he so
      desired, currency controls with respect to that situation.

         MR. BINGHAM.  I have a serious question about that.  It seems
      to me that if the President has not up to now used some
      authority that he has under section 5(b) in connection with
      those cases where 5(b) has been applied, I don't know why it
      should be necessary to give him authority to expand what has
      already been done.  It is really going beyond grandfathering.

         It seems to me that grandfathering applies to what has been
      done to date, and that should be ample authority.  I think on
      this point we would be particularly anxious to have the
      administration's reaction.

         MR. MAJAK.  If I may perhaps state it another way, I think it
      boils down to a question of whether we are grandfathering a
      particular situation, and all the powers that may be necessary
      to deal with the situation, or whether we are grandfathering the
      particular authorities themselves and their usage.

         MR. BINGHAM.  In those situations?

         MR. MAJAK.  Yes.

   Hearings 167.

   /45/ There are, of course, some indications in the legislative
history that Congress did not wish the grandfather clause to be read
in an overly expansive manner.  In particular, Representative
Cavanaugh -- an opponent of grandfathering -- sought, and obtained,
confirmation of the Administration's understanding that the
grandfather clause would "preclude the expansion by the President of
the authorities that might be included in 5(b) but are not being
employed as of June 1, 1977." Staff of House Comm. on International
Relations, 95th Cong., 1st Sess., Markup on Revision of Trading With
the Enemy Act 21 (Comm. Print 1977).  But the quoted language is quite
consistent with the concern, simply, that the President might use the
grandfather clause to extend the exercise of Section 5(b) powers to
new countries.  During the House subcommittee hearings several
subcommittee members had suggested that the grandfather clause might
be read to permit such an extension to different countries.  See,
e.g., Hearings 211 (remarks of Rep. Ireland) ("Let us say Cuba is
grandfathered in under that * * * could that grandfathered authority
be broadened out from -- Cubans have troops in Angola"):  id. at
211-212 (remarks of Rep. Findley) ("would those grandfathered ones
then be spread out to cover just a tremendous wide spectrum?  The
Vietnam one could end up covering all of Southeast Asia").  In light
of these suggestions, Representative Cavanaugh may have only been
seeking a commitment from the Administration not to extend the
grandfathered authority to countries not previously covered by Section
5(b) controls.

   Even if Representative Cavanaugh was speaking more narrowly, there
is no indication that he wished to make distinctions within
subcategories of property transactions, rather than between broad
categories of Section 5(b) authorities as these are specified in
Section 5(b) itself.  As already shown, to the extent there is any
discussion in the legislative history of distinction among
authorities, the categories mentioned were broad.

   /46/ For example, at one point during the House subcommittee
hearings, Representative Bingham stated that the subcommittee had "no
intention of grandfathering additional acts that may be taken in the
next few weeks." Hearings 211.  It is unclear whether Representative
Bingham was referring to acts with respect to a country not then
covered by an assets control program or to any new acts.  In any
event, his statement must be evaluated in the context of his other
comments, in which he indicated that the Cuban embargo program would
be preserved and that the President would not be required to declare a
new national emergency with respect to Cuba.

   /47/ See, e.g., the inconclusive colloquy between Representative
Bingham and Leonard Santos of the Treasury Department at Hearings
211-212.

   /48/ The court of appeals (Pet. App. 12a) followed its reliance on
Kent with a citation to Justice Jackson's opinion in Youngstown Sheet
& Tube Co. v. Sawyer, 343 U.S. 579, 635-638 (1952).  And in their
brief in opposition (at 20, 34), respondents chide us for failing to
cite the portion of Youngstown in which Justice Jackson explained that
the highest level of scrutiny is appropriate in cases in which the
President takes measures incompatible with the express or implied will
of Congress.  In our view, Youngstown is simply irrelevant to this
case.  In Youngstown the government argued that the Executive has the
"inherent" power to act, and to do so in disregard of concededly
applicable statutory alternatives.  In this case the government is
making no claim that the Executive has "inherent" power to disregard
IEEPA procedures and impose non-statutory restrictions on
travel-related property transactions with Cuba.  It claims only that
its regulations were issued in compliance with the procedures required
by the relevant and applicable statute:  the TWEA as grandfathered by
Public Law 95-223.

   /49/ And, of course, Aptheker v. Secretary of State, supra, held
that Congress in fact violated the Constitution in denying passports
to all members of "Communist organizations."

   /50/ We note, too, that the Cuban Assets Control Regulations'
effect on travel is on international, not interstate, travel.  This
Court has held that the interest in international travel, unlike the
interest in interstate travel, is not a fundamental right.  See, e.g.,
Califano v. Aznavorian, 439 U.S. at 176-177;  Califano v. Torres, 435
U.S. 1, 4 n.6 (1978).  Although the right of international travel "is
a part of the 'liberty' of which the citizen cannot be deprived
without due process of law" (Kent v. Dulles, 357 U.S. at 125), it is
not a First Amendment right.  See Zemel v. Rusk, 381 U.S. at 16-17.
Thus, courts have not applied the most exacting level of scrutiny to
otherwise valid provisions that have the effect of restricting
international travel.  See Haig v. Agee, 453 U.S. at 306-307;
Califano v. Aznavorian, 439 U.S. at 177;  Califano v. Torres, 435 U.S.
at 4 n.6;  Zemel v. Rusk, 381 U.S. at 16-17.

                               APPENDIX

   APPENDIX MATERIAL IS NOT AVAILABLE ON JURIS.