Commerce, 74th Cong., 1st Sess., p. 44 (1935).
If evidence dehors Section 902 is needed to show that the requisitioning authority it establishes in the Secretary of Commerce does not exclude a power in the military to charter vessels directly, that evidence exists in abundance.
The Armed Services Procurement Act, 10 U.S.C. § 2303, where it refers to "the purchase and contract to purchase * * of all property * * * including * * (4) vessels," has reference to the chartering of vessels. S. Rep. No. 571, 80th Cong., 1st Sess., p. 8 (1947). The Department of Defense,
the Department of the Army,
and MSTS all have published regulations dealing explicitly with the chartering of ships.
During World War II, Section 902 requisitions were the exclusive means by which the military acquired commercial ships; however the War Department informed Congress that in its view this practice was one of convenience rather than legal necessity.
During the Korean War, MSTS time chartered 37 vessels from operating subsidy carriers. Four of these vessels were built with C.D.S. and were subject to the restrictions of Section 506 of the Merchant Marine Act, 1936.
In 1964, ten commercial ships, including eight built with C.D.S.,
were chartered by MSTS for "Operation Steel Pike," an exercise designed to test the integration of commercial vessels into military requirements under simulated wartime conditions. This chartering was specifically made known to Congress.
In connection with the war in Viet Nam, MSTS has engaged very extensively in the chartering of merchant vessels -- again including C.D.S. vessels
and again made known to Congress.
In 1968 the Department of Defense and the subsidized operators entered into an agreement for allocation of military cargoes on ordinary berth terms to operators who agreed to charter their vessels to MSTS upon certain military contingencies. The validity of this program, known as "RESPOND", was upheld by the Comptroller General over the objection of the unsubsidized carriers that Section 902 provided the exclusive means by which the military could augment its sealift capacity in the time of emergency.
The Merchant Marine Act of 1936 was reenacted in 1952, 66 Stat. 760, and again in 1970, 84 Stat. 1018. A long-standing administrative interpretation applying to a substantially reenacted statute is deemed to have received congressional approval and has the effect of law. Commissioner of Internal Revenue v. Noel Estate, 380 U.S. 678, 682, 85 S. Ct. 1238, 14 L. Ed. 2d 159 (1965). Application of the rule of congressional acquiescence seems particularly appropriate where, as here, the long-standing administrative interpretation has been specifically made known to Congress at various times.
In sum, the interpretation of MARAD/MSB that Section 902 does not provide the exclusive means by which the military can obtain charter use of commercial vessels is neither unreasonable nor contrary to ascertainable legislative intent.
Section 506 of the Act
Plaintiff's principal contention before the Board and the court is that when a vessel built with C.D.S. is chartered to MSTS it is not being operated "exclusively in foreign trade," as is required by Section 506 of the Act.
That is, though MSTS uses the C.D.S. vessels exclusively in voyages between the United States and a foreign country, since the supplies are being transported from a U.S. military base here to a U.S. military base there, there is no "trade" at all. The Board's opinion gives the term "foreign trade" as used in Section 506 a purely geographical significance, rejecting the notion that foreign trade necessarily connotes an exchange of ownership of the goods transported between this country and a foreign country.
The term "foreign trade" is defined in Section 905(a) of the Act as follows:
"The words 'foreign commerce' or 'foreign trade' mean commerce or trade between the United States, its Territories or possessions, or the District of Columbia, and a foreign country." 46 U.S.C. § 1244(a).