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UNLAWFUL USE OF THE AMERICAN FLAG

SEC. 14. (a) It shall be unlawful for any vessel belonging to or operating under the jurisdiction of any foreign state to use the flag of the United States thereon, or to make use of any distinctive signs or markings, indicating that the same is an American vessel.

(b) Any vessel violating the provisions of subsection (a) of this section shall be denied for a period of three months the right to enter the ports or territorial waters of the United States except in cases of force majeure.

GENERAL PENALTY PROVISION

SEC. 15. In every case of the violation of any of the provisions of this joint resolution or of any rule or regulation issued pursuant thereto where a specific penalty is not herein provided, such violator or violators, upon conviction, shall be fined not more than $10,000, or imprisoned not more than two years, or both.

DEFINITIONS

SEC. 16. For the purposes of this joint resolution

(a) The term "United States," when used in a geographical sense, includes the several States and Territories, the insular possessions of the United States (including the Philippine Islands), the Canal Zone, and the District of Columbia.

(b) The term "person" includes a partnership, company, association, or corporation, as well as a natural person.

(c) The term "vessel" means every description of watercraft and aircraft capable of being used as a means of transportation on, under,

or over water.

(d) The term "American vessel" means any vessel documented, and any aircraft registered or licensed, under the laws of the United States.

(e) The term "state" shall include nation, government, and country.

The term "citizen" shall include any individual owing allegiance to the United States, a partnership, company, or association composed in whole or in part of citizens of the United States, and any corporation organized and existing under the laws of the United States as defined in subsection (a) of this section.

SEPARABILITY OF PROVISIONS

SEC. 17. If any of the provisions of this joint resolution, or the application thereof to any person or circumstance, is held invalid, the remainder of the joint resolution, and the application of such provision to other persons or circumstances, shall not be affected thereby.

APPROPRIATIONS

SEC. 18. There is hereby authorized to be appropriated from time to time, out of any money in the Treasury not otherwise appropriated, such amounts as may be necessary to carry out the provisions and accomplish the purposes of this joint resolution.

REPEALS

SEC. 19. The joint resolution of August 31, 1935, as amended, and the joint resolution of January 8, 1937, are hereby repealed; but offenses committed and penalties, forfeitures, or liabilities incurred under either of such joint resolutions prior to the date of enactment of this joint resolution may be prosecuted and punished, and suits and proceedings for violations of either of such joint resolutions or of any rule or regulation issued pursuant thereto may be commenced and prosecuted, in the same manner and with the same effect as if such joint resolutions had not been repealed.

SHORT TITLE

SEC. 20. This joint resolution may be cited as the "Neutrality Act of 1939."

Approved, November 4, 1939, 12:04 P.M.

216. REPORT OF THE SENATE COMMITTEE ON FOREIGN RELATIONS ON MODIFICATION OF NEUTRALITY ACT OF 1939, OCTOBER 25, 19411

The Committee on Foreign Relations, to whom was referred the joint resolution (H. J. Res. 237) to repeal section 6 of the Neutrality Act of 1939, and for other purposes, having considered the same, report favorably thereon with amendments and recommend that the joint resolution, as amended, do pass.

STATEMENT

The joint resolution as reported by the committee provides for the repeal of sections 2, 3, and 6 of the Neutrality Act of 1939.

Following the President's message on October 9, 1941 (relating to the modification of such act), the House, on October 17, 1941, passed House Joint Resolution 237, providing for the repeal of section 6 of the Neutrality Act of 1939. Your committee is in accord with the views expressed in the House report (H. Rept. 1267) accompanying House Joint Resolution 237 as to the necessity for repealing that section which prohibited the arming of American merchant vessels.

The committee also believe that in the interest of the defense and protection of American rights the restrictions voluntarily imposed by the United States upon its nationals by sections 2 and 3 of the Neutrality Act of 1939 should be removed at the same time. These sections, which prevent American vessels from carrying cargoes and passengers to belligerent destinations and to areas defined by the President as "combat areas," were enacted to meet a situation arising from the outbreak of war in Europe when it seemed prudent to restrict the movement of American citizens, American vessels, and American cargoes in order to avoid dangerous controversies with belligerents.

Since then the situation has changed entirely. Continental Europe has been overrun by conquesting armies. Nation after nation has gone down under military aggression, and a large part of the popula

U. S. Congress. Senate. Report No. 764, 77th Congress, 1st session.

tion of Europe is enslaved. A movement of world conquest is under way, with resulting death, destruction, and terrorism. No nation is secure in the face of this threat. The aggressors are struggling to obtain control of the high seas as a part of their plan of conquest of continents. If they should gain control of the seas, the United States and the entire Western Hemisphere would be immediately and most seriously threatened.

In view of this situation, the United States, as a part of its own plan of self-defense, has adopted the policy of extending aid to those nations resisting aggression. That policy was expressed in the Lend-Lease Act of March 11, 1941, and has been endorsed by the overwhelming majority of the American people. Under the Lend-Lease Act, aid has been given, and is being given, in ever-increasing quantities to countries whose defense is considered vital to our defense. The purpose of this policy is to preserve the security of the United States; to keep war from the shores of the western world.

Sections 2 and 3 of the Neutrality Act of 1939 stand directly in the way of carrying out effectively this policy of aid to the nations resisting aggression and impede our defense efforts. American merchant. vessels are prohibited from carrying needed supplies to such nations and are prevented from bringing essential defense materials to the United States from abroad. It does not seem reasonable to exert the utmost national effort to produce and acquire defense articles and materials and not take steps necessary to insure their full utilization. Every cargo sent to the bottom of the Atlantic diminishes our preparations for the national defense.

The London Naval Treaty of 1930 sets forth "established rules of international law" for submarines in their relations with merchant vessels. In these rules, which have been formally accepted by all of the principal maritime powers, including Germany, there is no expressed distinction between armed and unarmed merchant vessels. The rules are:

(1) In their action with regard to merchant ships, submarines must conform to the rules of international law to which surface vessels are subject.

(2) In particular, except in the case of persistent refusal to stop on being duly summoned, or of active resistance to visit or search, a warship, whether surface vessel or submarine, may not sink or render incapable of navigation a merchant vessel without having first placed passengers, crew, and ship's papers in a place of safety. For this purpose the ship's boats are not regarded as a place of safety unless the safety of the passengers and crew is assured, in the existing sea and weather conditions, by the proximity of land, or the presence of another vessel which is in a position to take them on board.

It was testified in the committee hearings that, in actual practice, Hitler does not make any distinction between armed and unarmed merchant vessels. In defiance of the above-quoted rules, to which his Government has adhered, his naval forces are sinking indiscriminately armed and unarmed merchant vessels.

When Congress enacted the Neutrality Act of 1939, it was the hope that by prohibiting American ships from visiting belligerent ports and entering combat zones American merchant vessels would not be attacked or sunk. However, Hitler's submarines have attacked and sunk American merchant vessels in areas outside of combat zones prescribed by our Government and in some cases outside of the war zones prescribed by the German Government. By this course of conduct, it appears to be the fixed policy of the Nazi government to sink

American merchant ships wherever they may be found. If the United States should prohibit its ships from entering any area where the possibility of their being sunk exists, it would logically follow that we would prohibit our ships from going anywhere except by the permission of Nazi submarine commanders.

It is particularly important to stress the bearing of future developments, as well as past sinkings, in keeping our sea lanes open. If Japan can close up whole areas of the Pacific and if Germany can close up areas in Africa, and perhaps in the Middle East and off the coast of India, we would be almost entirely cut off from the main sources of our supply by the limitations which we have imposed on ourselves.

Any assumptions that by the provisions of this resolution our status of neutrality will be changed is entirely erroneously. The status of neutrality is determined solely by international law. The voluntary restrictions imposed by the Neutrality Act of 1939 were in derogation of American rights under international law, and by repealing sections 2, 3, and 6 of such act the United States is merely restored to the same status as a neutral which it had under international law prior to the enactment of such sections.

For these reasons, the committee recommend that sections 2 and 3 of the Neutrality Act of 1939, as well as section 6 of such act, be repealed and urge the speedy enactment of the joint resolution as reported by the committee.

217. EXPORT CONTROL ACT OF 1949, FEBRUARY 26, 1949; TOGETHER WITH AMENDMENT APPROVED JUNE 16, 19531

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That this Act may be cited as the "Export Control Act of 1949".

FINDINGS

(a) Certain materials continue in short supply at home and abroad so that the quantity of United States exports and their distribution among importing countries affect the welfare of the domestic economy and have an important bearing upon the fulfillment of the foreign policy of the United States.

(b) The unrestricted export of materials without regard to their potential military significance may affect the national security.

DECLARATION OF POLICY

SEC. 2. The Congress hereby declares that it is the policy of the United States to use export controls to the extent necessary (a) to protect the domestic economy from the excessive drain of scarce materials and to reduce the inflationary impact of abnormal foreign demand; (b) to further the foreign policy of the United States and to aid in fulfilling its international responsibilities; and (c) to exercise the necessary vigilance over exports from the standpoint of their significance to the national security.

1 Public Law 11, 81st Congress, 1st session.

AUTHORITY

SEC. 3. (a) To effectuate the policies set forth in section 2 hereof, the President may prohibit or curtail the exportation from the United States, its Territories, and possessions, of any articles, materials, or supplies, including technical data, except under such rules and regulations as he shall prescribe. To the extent necessary to achieve effective enforcement of this Act, such rules and regulations may apply to the financing, transporting, and other servicing of exports and the participation therein by any person.

(b) The President may delegate the power, authority, and discretion conferred upon him by this Act to such departments, agencies, or officials of the Government as he may deem appropriate.

(c) The authority conferred by this section shall not be exercised with respect to any agricultural commodity, including fats and oils, during any period for which the supply of such commodity is determined by the Secretary of Agriculture to be in excess of the requirements of the domestic economy, except to the extent required to effectuate the policies set forth in clause (b) or clause (c) of section 2 hereof.

CONSULTATION AND STANDARDS

SEC. 4. (a) In determining which articles, materials, or supplies shall be controlled hereunder, and in determining the extent to which exports thereof shall be limited, any department, agency, or official making these determinations shall seek information and advice from the several executive departments and independent agencies concerned with aspects of our domestic and foreign policies and operations having an important bearing on exports.

(b) In authorizing exports, full utilization of private competitive trade channels shall be encouraged insofar as practicable, giving consideration to the interests of small business, merchant exporters as well as producers, and established and new exporters, and provisions shall be made for representative trade consultation to that end. In addition, there may be applied such other standards or criteria as may be deemed necessary by the head of such department or agency, or official to carry out the policies of this Act.

VIOLATIONS

SEC. 5. In case of the violation of any provision of this Act or any regulation, order, or license issued hereunder, such violator or violators, upon conviction, shall be punished by a fine of not more than $10,000 or by imprisonment for not more than one year, or by both such fine and imprisonment.

ENFORCEMENT

SEC. 6. (a) To the extent necessary or appropriate to the enforcement of this Act, the head of any department or agency exercising any functions hereunder (and officers or employees of such department

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