A-12887, JUNE 22, 1926, 5 COMP. GEN. 1004

A-12887: Jun 22, 1926

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THERE BEING NO PROVISION IN THE APPROPRIATION ACT FOR CREDITING SUCH INTEREST TO THE APPROPRIATION OR USING THE SAME FOR PURPOSES FOR WHICH THE APPROPRIATION WAS MADE. WHERE ANY SUCH MONEYS ARE HELD IN BANKS AT INTEREST. OR INTEREST IS RECEIVED ON OUTSTANDING LOANS. THE INTEREST DERIVED THEREFROM IS PROPERLY FOR COVERING IN TO THE TREASURY AS MISCELLANEOUS RECEIPTS. 1926: THERE IS FOR CONSIDERATION BY THIS OFFICE THE QUESTION AS TO THE LEGALITY OF THE PRACTICE HERETOFORE FOLLOWED BY THE DISBURSING OFFICERS OF THE UNITED STATES SHIPPING BOARD EMERGENCY FLEET CORPORATION IN CREDITING TO THE OPERATING FUND AND CONSTRUCTION LOAN FUND INTEREST RECEIVED FROM VARIOUS BANKS UPON MONEYS BELONGING TO SUCH FUNDS DEPOSITED AND HELD IN BANKING INSTITUTIONS FOR INDEFINITE PERIODS OF TIME.

A-12887, JUNE 22, 1926, 5 COMP. GEN. 1004

INTEREST - DISPOSITION OF INTEREST DERIVED FROM FUNDS OF THE UNITED STATES SHIPPING BOARD EMERGENCY FLEET CORPORATION INTEREST DERIVED FROM FUNDS APPROPRIATED ANNUALLY UNDER THE EMERGENCY SHIPPING FUND OF THE UNITED STATES SHIPPING BOARD EMERGENCY FLEET CORPORATION AND DEPOSITED AND HELD IN VARIOUS BANKS, SHOULD BE COVERED INTO THE TREASURY AS MISCELLANEOUS RECEIPTS, THERE BEING NO PROVISION IN THE APPROPRIATION ACT FOR CREDITING SUCH INTEREST TO THE APPROPRIATION OR USING THE SAME FOR PURPOSES FOR WHICH THE APPROPRIATION WAS MADE. MONEYS CONSTITUTING THE CONSTRUCTION LOAN FUND OF THE UNITED STATES SHIPPING BOARD EMERGENCY FLEET CORPORATION, CREATED BY SECTION 11 OF THE MERCHANT MARINE ACT OF JUNE 5, 1920, AS AMENDED, SHOULD BE KEPT IN THE TREASURY IN THE ACCOUNT ESTABLISHED FOR THAT PURPOSE. WHERE ANY SUCH MONEYS ARE HELD IN BANKS AT INTEREST, OR INTEREST IS RECEIVED ON OUTSTANDING LOANS, THE INTEREST DERIVED THEREFROM IS PROPERLY FOR COVERING IN TO THE TREASURY AS MISCELLANEOUS RECEIPTS, THERE BEING NO PROVISION OF LAW AUTHORIZING THE CREDITING OF REVENUES SO DERIVED TO THE CREDIT OF THE ORIGINAL FUND.

DECISION BY COMPTROLLER GENERAL MCCARL, JUNE 22, 1926:

THERE IS FOR CONSIDERATION BY THIS OFFICE THE QUESTION AS TO THE LEGALITY OF THE PRACTICE HERETOFORE FOLLOWED BY THE DISBURSING OFFICERS OF THE UNITED STATES SHIPPING BOARD EMERGENCY FLEET CORPORATION IN CREDITING TO THE OPERATING FUND AND CONSTRUCTION LOAN FUND INTEREST RECEIVED FROM VARIOUS BANKS UPON MONEYS BELONGING TO SUCH FUNDS DEPOSITED AND HELD IN BANKING INSTITUTIONS FOR INDEFINITE PERIODS OF TIME, AND THE USING OF THE INTEREST THUS PROVIDED FOR THE SAME PURPOSES AS THE APPROPRIATED MONEYS IN SUCH FUNDS.

IT APPEARS THAT MONEYS OF THE EMERGENCY SHIPPING FUND ARE CARRIED IN SOME 90 DIFFERENT BANKS IN THE UNITED STATES AND ABROAD AND THAT A CONSIDERABLE SUM ACCUMULATES EACH YEAR AS INTEREST UPON SUCH DEPOSITS. THE PRACTICE HERETOFORE FOLLOWED APPEARS TO HAVE BEEN, IN SOME CASES, TO CREDIT THE AMOUNT COLLECTED AS INTEREST AS PART OF THE DEPOSIT IN THE SAME BANKING INSTITUTIONS, IN OTHERS TO FORWARD THE COLLECTION TO THE HOME OFFICE, WHERE IT IS COVERED IN AS PART OF THE FUNDS FROM WHICH THE DEPOSITS WERE ORIGINALLY MADE.

THE APPROPRIATION MADE BY LAW FOR THE OPERATING FUND OF THE UNITED STATES SHIPPING BOARD EMERGENCY FLEET CORPORATION BY THE ACT OF MARCH 3, 1925, 43 STAT. 1209, PROVIDES AS FOLLOWS:

FOR EXPENSES OF THE UNITED STATES SHIPPING BOARD EMERGENCY FLEET CORPORATION DURING THE FISCAL YEAR ENDING JUNE 30, 1926, FOR ADMINISTRATIVE PURPOSES, MISCELLANEOUS ADJUSTMENTS, LOSSES DUE TO THE MAINTENANCE AND OPERATION OF SHIPS, FOR THE REPAIR OF SHIPS, AND FOR CARRYING OUT THE PROVISIONS OF THE MERCHANT MARINE ACT, 1920, (A) THE AMOUNT ON HAND JULY 1, 1925, BUT NOT IN EXCESS OF THE SUMS SUFFICIENT TO COVER ALL OBLIGATIONS INCURRED PRIOR TO JULY 1, 1925, AND THEN UNPAID; (B) $24,000,000; (C) THE AMOUNT RECEIVED DURING THE FISCAL YEAR ENDING JUNE 30, 1926, FROM THE OPERATION OF SHIPS: PROVIDED, THAT NO PART OF THESE SUMS SHALL BE USED FOR THE PAYMENT OF CLAIMS OTHER THAN THOSE RESULTING FROM CURRENT OPERATION AND MAINTENANCE; (D) SO MUCH OF THE TOTAL PROCEEDS OF ALL SALES PERTAINING TO LIQUIDATION RECEIVED DURING THE FISCAL YEAR 1926, BUT NOT EXCEEDING $4,000,000, AS IS NECESSARY TO MEET THE EXPENSES OF LIQUIDATION, INCLUDING ALSO THE COST OF THE TIE-UP AND THE SALARIES AND EXPENSES OF THE PERSONNEL DIRECTLY ENGAGED IN IQUIDATION: PROVIDED, THAT NO PART OF THIS SUM SHALL BE USED FOR THE PAYMENT OF CLAIMS.

THERE IS NOTHING IN THIS ACT PROVIDING SPECIFICALLY, OR BY NECESSARY IMPLICATION, THAT INTEREST UPON MONEYS THEREBY APPROPRIATED KEPT IN BANKS FOR PURPOSES OF CONVENIENCE AND EXPEDIENCY SHOULD BE CREDITED TO THE APPROPRIATION WHEN COLLECTED AND BECOME AVAILABLE FOR EXPENDITURE; AND IN THE ABSENCE OF SUCH EXPRESSED OR IMPLIED INTENT IN THE LAW IT MUST BE HELD THAT MONEYS THUS RECEIVED ARE TO BE DISPOSED OF AS OTHER MONEYS RECEIVED FOR THE USE OF THE UNITED STATES.

AS TO SUCH MONEYS, SECTION 3617, REVISED STATUTES, PROVIDES THAT:

THE GROSS AMOUNT OF ALL MONEYS RECEIVED FROM WHATEVER SOURCE FOR THE USE OF THE UNITED STATES * * * SHALL BE PAID BY THE OFFICER OR AGENT RECEIVING THE SAME INTO THE TREASURY, AT AS EARLY A DAY AS PRACTICABLE, WITHOUT ANY ABATEMENT OR DEDUCTION ON ACCOUNT OF SALARY, FEES, COSTS, CHARGES, EXPENSES, OR CLAIM OF ANY DESCRIPTION WHATEVER * * *.

SEE ALSO SECTION 3618, REVISED STATUTES.

NO REASON APPEARS WHY THIS PROVISION OF LAW IS NOT APPLICABLE TO THE MONEYS DERIVED AS INTEREST UPON THE FUNDS HERE IN QUESTION, AND THE PRACTICE HERETOFORE FOLLOWED WITH RESPECT TO SUCH COLLECTIONS RELATING TO FUNDS APPROPRIATED UNDER THE EMERGENCY SHIPPING FUND SHOULD ACCORDINGLY BE DISCONTINUED, THE FUNDS THUS DERIVED HEREAFTER TO BE COVERED INTO THE TREASURY AS MISCELLANEOUS RECEIPTS.

WITH RESPECT TO THE CONSTRUCTION LOAN FUND PROVIDED FOR BY SECTION 11, MERCHANT MARINE ACT OF JUNE 5, 1920, 41 STAT. 993, AS AMENDED BY THE ACT OF JUNE/6, 1924, 43 STAT. 467, THERE APPEARS TO BE NEITHER AUTHORITY NOR NECESSITY FOR THE DEPOSITING AND HOLDING FUNDS THEREFROM IN A BANKING INSTITUTION. THE MONEYS COMPRISING THIS FUND SHOULD BE HELD IN THE TREASURY, WHERE A PROPER ACCOUNT THEREFOR IS MAINTAINED, AND NOT WITHDRAWN THEREFROM EXCEPT FOR THE PURPOSE OF LOANS AS PROVIDED FOR IN THE SECTION HEREIN MENTIONED. IF MONEYS FROM THIS FUND, HOWEVER, ARE DEPOSITED AND HELD IN BANKS AT INTEREST, THERE APPEARS NO REASON WHY SUCH INTEREST SHOULD BECOME A PART OF THE PRINCIPAL ANY MORE THAN THE INTEREST COLLECTED WHEN LOANS ARE MADE TO PRIVATE SHIPBUILDERS. AND AS TO SUCH INTEREST IT WAS HELD IN DECISION OF AUGUST 7, 1925, A-10455, THAT IT WAS NOT FOR CREDIT TO THE CONSTRUCTION LOAN FUND BUT SHOULD BE COVERED INTO THE TREASURY AS MISCELLANEOUS RECEIPTS.

WHILE THE CONSTRUCTION LOAN FUND MUST BE CONSIDERED FOR ALL INTENTS AND PURPOSES AS A REVOLVING FUND FOR MAKING LOANS, ETC., AUTHORIZED BY SECTION 11, MERCHANT MARINE ACT, AS AMENDED, AND THERE MAY BE CREDITED THERETO ANY REPAYMENTS OF LOANS MADE FOR THE PURPOSE OF MAKING FURTHER LOANS THEREFROM UNTIL OTHERWISE DIRECTED BY THE CONGRESS, ANY REVENUES DERIVED AS INTEREST UPON SUCH FUNDS, WHETHER THE MONEYS ARE HELD IN BANKS AT INTEREST OR ARE OUTSTANDING ON LOANS TO SHIPBUILDERS, ARE NOT FOR CREDIT TO THE CONSTRUCTION LOAN FUND BUT SHOULD BE COVERED INTO THE TREASURY AS MISCELLANEOUS RECEIPTS.

ANY PRACTICE IN CONNECTION WITH SUCH REVENUES CONTRARY TO THE HOLDING HEREIN SHOULD BE FORTHWITH DISCONTINUED UNLESS AND UNTIL OTHERWISE PROVIDED BY LAW.