"These figures include installation and erection costs. The forging machines are especially designed for this particular use and have no other commercial value. If the furnaces were removed from the contractor's plant they would have a value of not over $5,000 each. The conveyors and handling equipment, if removed, would be valueless. The cost of the acquisition, installation and erection of these facilities was taken into consideration by the contractor in its bid price. Accordingly, it will be reimbursed for such cost by the Government in the price paid for the shell forgings.

"The contractor wishes to apply for a Certificate of Government Protection under the provisions of subsection (i) of section 302 of the Second Revenue Act of 1940, and is willing to enter into a Supplemental Agreement substantially in the form of the inclosure marked 3. The Contracting Officer is prepared to recommend the execution of this proposed Supplemental Agreement and the Chief of Ordnance will approve this recommendation. It is the opinion of the Secretary of War that the provisions in the proposed Supplemental Agreement adequately protect the United States in the future use and disposition of the facility."

Much has been said in the Congress and elsewhere about the present national defense program and its prospective extension over a period of five years unless sooner ended by termination of the existing emergency. Various provisions of recently enacted statutes, including the Second Revenue Act of 1940, seem to show, impliedly at least, that the Congress has adopted this concept of the period during which the program will continue. Also in connection with the program and for the purpose of expediting it, the Congress has authorized the use of appropriated funds for the construction of emergency facilities necessary in connection therewith or for the reimbursement to contractors for the cost to them of the erection of such emergency facilities. It is recognized that if the Government finances the cost of such facilities, in whole or in part, it will have an interest

in them and 'should be protected with respect to their future use and disposition.

The pertinent provisions of subsection (i) of section 302 of the Second Revenue Act of 1940 read:

"Protection of the United States.-If the taxpayer has been or will be reimbursed by the United States for all or a part of the cost of any emergency facility pursuant to any contract with the United States, either—

"(1) directly, by a provision therein dealing expressly with such reimbursement, or

"(2) indirectly, because the price paid by the United States (insofar as return of cost of the facility is used as a factor in the fixing of such price) is recognized by the contract as including a return of cost greater than the normal exhaustion, wear and tear,

"no amortization deduction with respect to such emergency facility shall be allowed for any month after the end of the month in which such contract is made, unless, before the expiration of ninety days after the making of such contract or one hundred and twenty days after the date of the enactment of the Second Revenue Act of 1940, whichever of such periods expires the later, the Advisory Commission to the Council of National Defense, and either the Secretary of War or the Secretary of the Navy certify to the Commissioner that such contract adequately protects the United States with reference to the future use and disposition of such emergency facility. *

The Supplemental Agreement enclosed with your letter provides in paragraph 1:

"1. The contractor, at its own expense, shall care for and maintain such Emergency Facilities without cost to the Government for a period of five years after the completion or termination of this contract or until the end of the emergency period, whichever date shall be later, in order that said Facilities shall be available to the Government for such future use and disposition as may be required by the Government. During said period the contractor will give the Government priority in the use of said Facilities, keeping them available, at its own expense, for future orders which

may be placed by the Government. The contractor will accept future orders from the Government upon prices to be agreed upon, which shall not include any charge for the use or on account of the cost of said Facilities. Subject to the rights of the Government as herein provided, the contractor may use said Facilities for purposes, if any, normally incident to the production carried on by it, providing that before accepting an order which involves the use of such Facilities from any one other than the War Department, the contractor will first obtain the written consent of the Chief of Ordnance of the War Department."

As I read paragraph 1 of the proposed Supplemental Agreement as now drafted, it provides (1) that the facilities involved shall be maintained without cost to the Government during the remainder of the present emergency upon which the national defense program is based or for five years after November 1941, whichever is the longer period; (2) that during such period the facilities are to be available for use for the benefit or in the interest of the Government, if and when required; and (3) that at the end of such period the facilities are to be subject to such future use and disposition as may be required by the Government under applicable laws. It is believed, however, that the paragraph should be modified or changed to make this more definite, and the following redraft of the paragraph is suggested:

"1. The contractor, at its own expense, shall care for and maintain such facilities without cost to the Government for a period of five years after the completion or termination of this contract or until the end of the emergency period, whichever date shall be later, in order that said facilities shall be available to the Government during such period and thereafter be subject to such future use and disposition as may be required by the Government. During said period the contractor will give the Government priority in the use of said facilities, keeping them available, at its own expense, for future orders which may be placed by the Government. The contractor will accept future orders from the Government upon prices to be agreed upon, which shall not include any charge for the use or on account of the cost of said

facilities. Subject to the rights of the Government as herein provided, the contractor may use said facilities for purposes, if any, normally incident to the production carried on by it, providing that before accepting an order which involves the use of such facilities from any one other than the War Department, the contractor will first obtain the written consent of the Chief of Ordnance of the War Department."

It is also believed that paragraph 2 of the proposed Supplemental Agreement should be modified or changed so as to prevent the facilities from being mortgaged or disposed of at any time without the consent of the Secretary of War The following redraft of the paragraph is suggested:

"2. The title to all the emergency facilities shall be in the contractor. The contractor shall allow no mortgage or other lien hereafter to become an encumbrance upon the emergency facilities and shall make no conveyance or transfer of said emergency facilities or of any item thereof, unless written consent of the Secretary of War thereto is first obtained."

It is my opinion that if in connection with and under the circumstances surrounding the case outlined in your letter of November 28, 1940, you find that the proposed Supplemental Agreement, modified or changed in accordance with the suggestions herein for the redrafting of paragraphs 1 and 2 thereof, will adequately protect "the United States with reference to the future use and disposition" of the facilities involved, and that finding is concurred in by the Advisory Commission to the Council of National Defense, the proposed Supplemental Agreement so modified and properly executed by the parties to the original contract will constitute sufficient basis for the issuance of a certificate under the above-quoted provisions of subsection (i) of section 302 of the Second Revenue Act of 1940. Concurrence in this finding by the Advisory Commission to the Council of National Defense is necessary, since the statute requires that Commission to join with you in the issuance of the certificate.

Respectfully,

ROBERT H. JACKSON.

FOREIGN PROPAGANDA, EXCLUSION FROM MAILS

A person outside the United States who uses the mails to commit here an act forbidden by statute is liable to the penalties of the statute.

Propaganda dispatched by an agent of a foreign principal who has not registered under the act of June 8, 1938, as amended, may be excluded from the mails.

The POSTMASTER GENERAL.

DECEMBER 10, 1940.

MY DEAR MR. POSTMASTER GENERAL: In your letter of November 20, 1940, you request my opinion whether you have authority to exclude from the mails under section 343, title 18, U. S. C., matter of the character described in your letter if it be first ascertained from the State Department that the foreign mailers of such matter have not complied with the provisions of section 233, title 22, U. S. C., and the Foreign Agent Registration Act of 1938, sections 223a-233g, title 22, U. S. C.

You state in part:

"The matter in question is coming into this country in large quantities principally 'Via Siberia.' Recently one Japanese ship bore some 3,000 pounds of 'prints' mailed by individuals and concerns in Germany to persons in the United States. The matter is open to postal inspection. In general, it purports to give 'news and views' to influence American readers in behalf of Germany and the Axis powers against the British and the democracies. In the pursuit of this aim it perverts and distorts the facts. It is of such a character as would subject the mailers, who have not registered as foreign agents with the State Department, to the penalties imposed by the provisions of 22 U. S. Code 233 and 233e and 18 U. S. Code 98."

Section 343, title 18, U. S. C., is taken from section 1 of title XII of the act of June 15, 1917, 40 Stat. 230, which reads in pertinent part:

"Every letter, writing, circular, postal card, picture, print, engraving, photograph, newspaper, pamphlet, book, or other publication, matter, or thing, of any kind, in violation of any of the provisions of this act is hereby declared to be non