Court Opinion

ID: 9419586
Source: CourtListenerOpinion
Date Created: 2023-08-02 22:50:20.213239+00
Date Added: 2024-06-11T17:22:19.196698
License: Public Domain

Mr. Justice Frankfurter,
dissenting.
As part of the effective financial conduct of the war, the United Kingdom brought sterling, under control by fixing its exchange value. A limited supply of sterling in foreign countries presented a special problem. But though that supply was out of its bounds, Great Britain by various mechanisms could bring it under control. Apparently it moved to do so as quickly as economic and political considerations permitted. See the statement of the Chancellor of the Exchequer on April 9, 1940, in reply to various questions in the House of (Commons, 359 H. C. Deb. (5th ser. 1940) 461-463. Thus, while “the vast bulk of transactions between sterling and other currencies” was conducted at the exchange rate fixed by the Government, the supply and demand of sterling abroad created a market. By virtue of various British restrictions this free sterling market became increasingly thin. See 26 Fed. Res. Bull. (July, 1940) 638; The Commercial and Financial Chronicle, April 20, 1940, Yol. 150, Pt. 2, pp. 2478-79. Nevertheless, until the British Government completely clamped down on the use of this free sterling in payment of exports, it was possible to pay for such exports in sterling purchased at a lower rate than that which the British Government believed to be a reflection of the true value of the pound and officially fixed as such.
Plainly enough, a single currency having multiple values has important bearings upon the flow of goods and *96upon international economic relations. In the case of Great Britain, the situation may have not been serious because, as we noted, free sterling played a relatively small share in the economic interchange between the two countries. The “free” rate was employed only in limited transactions and evidently represented on the part of Great Britain merely a transitory compromise with circumstances. In short, the official rate was not an unreality. But in the case of some countries, a dual system of rates of exchange may have decisive economic effects through highly organized manipulation of exchange, with all the evils that result from confusion and from depreciated currencies.
To dispose of the case on the assumption that it merely involves enforcement of a Congressional policy for assuring approximate accuracy in determining the true dollar value of a particular importation is to throw the significance of the case out of focus. The problem, as I see it, is whether Congress by § 522 (c) of the Tariff Act of 1930, 46 Stat. 590, 739, 31 U. S. C. § 372 (c), prohibited the Secretary of the Treasury from safeguarding the public interest as he did, in relation to dislocations in the money markets following the outbreak of the war and to their repercussions both upon our domestic economy and our international relations. That the Treasury’s instruction to the collectors of customs to assess tariff duties on the basis of the sterling rate fixed by the British Government was not an ordinary Treasury order affecting the collection of revenue is attested by the fact that the instruction was the result of a conference of the Secretary of State, the Secretary of the Treasury, the Attorney General and the Secretary of Agriculture. See New York Times, April 17, 1940, p. 4, col. 5; The Commercial and Financial Chronicle, April 20, 1940, Yol. 150, Pt. 2, pp. 2478-79.
It is not suggested that apart from § 522 (c) this Government could not protect its interests in relation to the *97abnormal currency situations precipitated by the war through such action as the Secretary of the Treasury here took. The wide duties of financial supervision possessed by the Secretary by virtue of his office and the broad powers implied in various provisions of law, see for instance: 5 U. S. C. § 242,19 U. S. C. § 3; § 624 of the Tariff Act of 1930, 46 Stat. 690, 759, 19 U. S. C. § 1624, and Boske v. Comingore, 177 U. S. 459, would give him ample warrant to fix a rate for dollar conversions of foreign currencies on a uniform basis reflecting the dominant value among multiple values of a foreign currency and one not subject to manipulations or influences adverse to our interests.
Withdrawal of this power of the Secretary of the Treasury implies a radical curtailment of his historic and appropriate authority to protect the nation’s fiscal interests. If it chose, of course Congress could so curtail the Secretary’s powers. But such an important change in the executive responsibility for our fiscal affairs ought to be disclosed through some unequivocal Congressional expression. To find such destructive force in § 522 (c) is to attribute to it a potency not designed by Congress. It is conceded that in the legislation which is now § 522 (c) Congress was concerned solely with fluctuations in a single exchange rate, a problem thrown up after the Eirst World War. And so Congress designated the Federal Reserve Bank as a fact-finding agency to ascertain the most durable among fluctuating quotations. But multiple rates for a single currency — with their effects upon the flow of goods and upon international economic relations and the opportunities they afford for highly organized manipulations of exchange — present a totally different problem. That problem, as is admitted by the Federal Reserve Bank appearing before us as amicus curiae, was not at all in the contemplation of Congress. That problem was not dealt with by Congress because it did not con*98front Congress. As a problem it did not emerge until, in 1940, the present war confronted the Federal Reserve Bank and the Secretary of the Treasury with it.
The Federal Reserve Bank and the Secretary of the Treasury, having different functions, naturally dealt with it differently. Although, to be sure, § 522 (c) charged the Federal Reserve Bank with the ascertainment of a single exchange rate, the Bank naturally enough solved the dilemma which confronted it when there were two rates for sterling by reporting both, although the significance of the two rates and the range of their functions varied greatly. It was not for the Bank to pick only one rate, for the Bank is merely a reporting agency and not a policy-making agency. But the determination whether one of the two rates is the rate, and if so which should have that fiscal function, is a policy problem, and the Secretary of the Treasury is the agency vested with responsibility for fiscal policies.
For the selection by the Secretary of the Treasury of an exchange rate in a situation like the one before us has implications far beyond translating into dollars the value at which a particular importer actually settled for the foreign price of his goods. The selection of the governing rate of exchange in the case of multiple rates affects at least three very important phases of our international economic relations. By § 402 of the Tariff Act of 1930, 46 Stat. 590, 708, 19 U. S. C. § 1402, in the assessment of ad valorem duties it is necessary to ascertain the foreign market value, which normally means the foreign home value. Commodities subject to the “official” rate and commodities available through “free” sterling may well have an identical home value and yet, according to the contention of the importer, one valuation would have to be reached according to § 522 (c) and another according to § 402. Again, the Secretary of the Treasury may impose countervailing duties whenever he finds that imported *99goods enjoy a bounty, direct or indirect. Section 303 of the Tariff Act of 1930, 46 Stat. 590, 687, 19 U. S. C. § 1303. Such bounties may readily take the form of favorable exchange rates. An unwarrantably rigid denial to the Secretary of the determination of an exchange rate which in substance corresponds to the realities of international exchange may force him to exercise the penalizing power of imposing countervailing duties. Finally, foreign exchange rates affect the fruitful use of foreign trade agreements. Section 350 of the Tariff Act of 1930 as amended by 48 Stat. 943,19 U. S. C. § 1351 et seg.
All these dangerous potentialities would of course be irrelevant if Congress had dealt with the problem of multiple rates in a rigid way and put the responsibility upon the Federal Reserve Bank to select one of such multiple rates. But the hand of the Government ought not to be tied too closely where, to put it mildly, the Congressional purpose has been ambiguously expressed. We cannot find such purpose from a reading of what Congress has written. We are hardly justified in assuming that if Congress had addressed itself to this problem it would have tied the hands of the Secretary of the Treasury and brought into play all the difficulties that have been indicated in the ascertainment of foreign home value, in the imposition of countervailing duties, and in embarrassing the policy of trade agreements. The power of Congress to pass new legislation is hardly a reason for giving old legislation a construction that disregards its history and its context and the unhappy consequences of such disregard.
Of course, general condemnation of a practice covers any specific manifestation of it, even though the latter was “unforeseen” by Congress, Puerto Rico v. Shell Co., 302 U. S. 253, just as a general outlawry of the use of a false document hits also a use to which the document was not “ordinarily” put when the legislation was passed. Brow-*100der v. United States, 312 U. S. 335. But these are instances of proper statutory construction quite irrelevant to the present case. It is one thing for judges not to excise a particular situation from language appropriately describing a general problem. Judicial interpolation into a statute of a wholly unrelated problem not envisaged by Congress is quite another matter. In this case we have not an unforeseen situation fitting into a general context. Here we have an unforeseen problem with which Congress did not deal and yet, by not dealing with it, is said to have taken away authority theretofore belonging to the Secretary of the Treasury. If the problem itself was not in the contemplation of Congress, as this problem was not, how can it be said that Congress legislated concerning that problem?
The judgment should be affirmed.
Mr. Justice Black joins in this dissent.