A-11327, SEPTEMBER 11, 1934, 14 COMP. GEN. 203

A-11327, SEPTEMBER 11, 1934, 14 COMP. GEN. 203

MISCELLANEOUS RECEIPTS - RECEIPTS FROM PAY TELEPHONES - POST OFFICE BUILDINGS RECEIPTS DERIVED FROM THE INSTALLATION OF PAY TELEPHONES IN BUILDINGS UNDER THE CONTROL OF THE POST OFFICE DEPARTMENT ARE NOT POSTAL REVENUES OR CONNECTED WITH THE ACTIVITIES OF THE POSTAL SERVICE, OR THE SALE OF PUBLIC PROPERTY OF THE POST OFFICE DEPARTMENT FOR DISPOSITION UNDER SECTION 4050, REVISED STATUTES, BUT ARE FUNDS REQUIRED TO BE COVERED INTO THE GENERAL FUND OF THE TREASURY AS MISCELLANEOUS RECEIPTS UNDER THE PROVISIONS OF SECTION 3617, REVISED STATUTES.

COMPTROLLER GENERAL MCCARL TO THE POSTMASTER GENERAL, SEPTEMBER 11, 1934:

CONSIDERATION HAS BEEN GIVEN TO LETTER OF JUNE 25, 1934, FROM THE COMPTROLLER OF YOUR DEPARTMENT, AS FOLLOWS:

THIS LETTER REFERS TO YOUR DECISION OF NOVEMBER 18, 1925, CONCERNING THE COMMISSIONS ON COLLECTIONS FROM TELEPHONE PAY STATIONS AND YOUR FURTHER LETTERS ADDRESSED TO THE POSTMASTER GENERAL UNDER DATE OF JULY (JUNE) 26, 1928, AND DECEMBER 8, 1929 (1928), ON THE SAME SUBJECT.

MY READING OF THIS CORRESPONDENCE AND YOUR DECISION ON THE MATTER HAVE LED ME TO BELIEVE THAT YOUR INTEREST AT THAT TIME WAS PRIMARILY IN THE FURTHERANCE OF GOOD ACCOUNTING WHICH IS EXPRESSLY STATED IN THE SECOND PARAGRAPH OF YOUR LETTER OF JULY 26, 1928.

SINCE THAT TIME, HOWEVER, NEW FACTORS HAVE COME INTO THE PICTURE AND I AM NOW REVIVING THE SUBJECT FOR THOSE REASONS WITH THE REQUEST THAT YOU GO INTO THIS SUBJECT AGAIN AND SEE IF WE MAY NOT CONSIDER THIS INCOME AS POSTAL REVENUE.

UNDERLYING ANY DISCUSSION OF POSTAL REVENUE AT THIS TIME IS THE FACT THAT THE POSTAL SERVICES ARE SO ORGANIZED, VERY LARGELY BECAUSE OF LEGISLATION, THAT WE ARE FACED WITH A PERMANENT, RECURRING DEFICIT OF ABOUT 100 MILLIONS, AND I AM LED TO BELIEVE THAT THIS IS POSSIBLY A DETRIMENTAL ITEM IN OUR NATIONAL BUDGET MORE THAN EVER BEFORE.

AS YOU KNOW, WE HAVE NOW TAKEN OVER 1,700 PUBLIC BUILDINGS IN WHICH THE POSTAL ACTIVITY IN MORE THAN HALF IS COMPLETE AND IN THE BALANCE TAKES UP MORE THAN 65 PERCENT OF THE CUSTODIAL EXPENSE. CERTAINLY IN THESE BUILDINGS WHICH WE HAVE TAKEN OVER I HOPE YOU WILL HAVE NO DIFFICULTY IN STATING THE COMMISSIONS ON TELEPHONE CALLS TO BE POSTAL REVENUE. I KNOW OF NO REASON WHY SUCH INCOME SHOULD BE PAID INTO THE TREASURY AS "MISCELLANEOUS RECEIPTS.'

FRANKLY, THERE HAS BEEN LITTLE CHANGE IN THE SET-UP IN REGARD TO LEASED BUILDINGS, EXCEPT THE GROWING OBJECTION TO THE SIZE OF THE POSTAL DEFICIT, AND I THINK WE HAVE EVERY REASON TO ASK THAT ALL EARNINGS FROM TELEPHONE BOOTHS IN POST OFFICES, LEASED OR CUSTODIAL, SHOULD BE INCLUDED IN THE POSTAL REVENUE.

IT IS THE RECOMMENDATION OF THIS OFFICE THAT THIS REVENUE BE HANDLED EXACTLY AS THE PROCEEDS OF THE SALES OF WASTE PAPER IN POST OFFICES.

IT IS APPARENT THAT THE BASIC PRINCIPLE INVOLVED IN THE DECISIONS TO WHICH REFERENCE IS MADE IN THIS LETTER HAS BEEN OVERLOOKED OR MISUNDERSTOOD PROBABLY BECAUSE IN THE LETTERS OF JUNE 26, 1928, AND DECEMBER 8, 1928, THE MAIN PURPOSE WAS TO PROVIDE AN ADEQUATE ACCOUNTING PROCEDURE FOR THE FUNDS INVOLVED. THE BASIC PRINCIPLE WAS STATED IN DECISION OF THIS OFFICE DATED NOVEMBER 18, 1925, IN SUBSTANCE, THAT THE RECEIPTS DERIVED FROM THE INSTALLATION OF PAY TELEPHONES IN BUILDINGS UNDER THE CONTROL OF THE POST OFFICE DEPARTMENT ARE IN NO WAY CONNECTED WITH THE ACTIVITIES OF THE POSTAL SERVICE NOR WITH THE SALE OF PUBLIC PROPERTY OF THE POST OFFICE DEPARTMENT AND THAT, THEREFORE, THE FUNDS IN QUESTION SHOULD BE CONSIDERED AS PAYMENTS FOR A PRIVILEGE AND ALL COLLECTIONS RECEIVED ON SUCH PAY TELEPHONES SHOULD BE COVERED INTO THE GENERAL FUND OF THE TREASURY AS MISCELLANEOUS RECEIPTS. THE CHANGES WHICH HAVE OCCURRED IN RECENT YEARS IN THE OPERATION OF THE BUILDINGS BY THE POST OFFICE DEPARTMENT INSTEAD OF BY THE TREASURY DEPARTMENT CANNOT BE CONSIDERED AS HAVING CHANGED THE BASIC CHARACTER OF THE FUNDS. SAID FUNDS ARE STILL OF THE SAME CHARACTER, THAT IS TO SAY, NOT POSTAL REVENUES OR CONNECTED WITH THE ACTIVITIES OF THE POSTAL SERVICE OR THE SALE OF PUBLIC PROPERTY OF THE POST OFFICE DEPARTMENT FOR DISPOSITION UNDER SECTION 4050, REVISED STATUTES, BUT FUNDS RECEIVED IN RETURN FOR A PRIVILEGE INCIDENT TO THE OPERATION OF A PUBLIC BUILDING AND AS SUCH ARE FOR COVERING INTO THE GENERAL FUND OF THE TREASURY AS MISCELLANEOUS RECEIPTS, UNLESS OTHERWISE SPECIFICALLY PROVIDED BY LAW.