Authority to dispose of property constitutionally acquired by the United States is expressly granted to the Congress by U.S. Const. art. IV, § 3.
Plaintiffs, stockholders of defendant power company, challenged the constitutionality of the contract between the defendant power company and the defendant federal agency they entered a contract with. The contract provided for the purchase of transmission lines by defendant agency from defendant power company and for the disposition of surplus electrical power, generated from a government-owned dam, to defendant power company. Plaintiffs sought review of a judgment under the court of appeals, which held that a dam had been constructed in the exercise of the war and commerce powers of congress and that the electric energy available from the dam was the property of the United States and subject to disposal by the United States government.
Was the construction of a dam for war purposes and the disposition of the electric energy generated by the dam constitutional?
The National Defense Act authorized construction of the dam, which was for national defense purposes. Congress properly exercised its war and commerce powers in the construction of the dam. Electric energy produced by the dam belonged to the United States. The Constitution, article IV §3 granted Congress the authority to dispose of property constitutionally acquired by the United States.The order holding the contract constitutional was affirmed.