Reconstruction Finance Corp. v. McCarthy Bros.

On November 23, 1945 the Stabilization Administrator of the Office of War Mobilization and Reconversion announced his finding that “in order to obtain adequate supplies of green coffee without increasing coffee prices to the consumer or resuming coffee rationing, it is necessary to provide a temporary program for subsidizing imports of green coffee as an emergency measure to avoid a critical shortage of coffee for domestic civilian consumption.” To implement his finding, the Administrator authorized the Reconstruction Finance Corporation, a corporation chartered and wholly owned by the United States, to establish such a program. Directive 87, 10 F.R. 14450 .

Pursuant to the program which it initiated, R.F.C. entered into a contract with defendant McCarthy Bros, for the importation of green coffee in return for a subsidy of three cents a pound. The contract provided that R.F.C. should be reimbursed for any subsidy paid to defendant to the extent that defendant’s coffee inventory might thereafter increase in value as a result of the removal or increase in the OPA ceiling prices on coffee.

OPA ceiling prices on coffee were removed from July 1,1946 to July 25, 1946, when they were…