A-27386, JUNE 7, 1929, 8 COMP. GEN. 632

A-27386: Jun 7, 1929

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THERE IS NO REQUIREMENT THAT THE LEASES BE FOR A CASH CONSIDERATION AND THAT THE LEASES MAY BE MADE IN CONSIDERATION OF THE MAKING OF CERTAIN REPAIRS TO THE BUILDINGS. BEING "LARGELY AN EMPTY ONE" AND THAT IT WAS NECESSARY TO RETAIN THE INSURANCE POLICIES IN THE WAR DEPARTMENT SO AS TO ADJUST CLAIMS. IS HEREBY. WHEN IN HIS DISCRETION IT WILL BE FOR THE PUBLIC GOOD. SUCH PROPERTY OF THE UNITED STATES UNDER HIS CONTROL AS MAY NOT FOR THE TIME BE REQUIRED FOR PUBLIC USE AND FOR THE LEASING OF WHICH THERE IS NO AUTHORITY UNDER EXISTING LAW. REFERENCE IS MADE TO THE CASE OF UNITED STATES V. IS HEREBY AUTHORIZED TO LEASE ANY LEAD MINE WHICH HAS BEEN. - * * * THERE IS AN EXPRESS RESERVATION OF THE RENT OF SIX POUNDS OF EVERY HUNDRED POUNDS OF LEAD SMELTED.

A-27386, JUNE 7, 1929, 8 COMP. GEN. 632

LEASES - PUBLIC BUILDINGS - REPAIRS IN KIND IN LIEU OF CASH RENTALS THE ACT OF JULY 28, 1892, 27 STAT. 321, AS AMENDED BY THE ACT OF MAY 29, 1928, 45 STAT. 986, DOES NOT AUTHORIZE THE SECRETARY OF WAR TO RENT PUBLIC BUILDINGS UNDER THE CONTROL OF THE WAR DEPARTMENT FOR RENTAL IN THE FORM OF REPAIRS TO SAID BUILDINGS, SECTION 3733 OF THE REVISED STATUTES PROHIBITING ANY CONTRACT FOR THE REPAIRS OF PUBLIC BUILDINGS IN EXCESS OF APPROPRIATIONS MADE FOR THAT PURPOSE, AND SECTIONS 3617 AND 3618 OF THE REVISED STATUTES REQUIRING ALL MONEYS RECEIVED ON BEHALF OF THE UNITED STATES TO BE DEPOSITED IN THE TREASURY.

COMPTROLLER GENERAL MCCARL TO THE SECRETARY OF WAR, JUNE 7, 1929:

THERE HAS BEEN RECEIVED IN REFERENCE TO LETTER DATED JANUARY 19, 1929, OF THIS OFFICE, TO THE QUARTERMASTER GENERAL, INVITING HIS ATTENTION TO CONTRACTS MISC. 5291 AND 5721 ENTERED INTO NOVEMBER 14, 1925, AND DECEMBER 23, 1925, RESPECTIVELY, BY AND BETWEEN THE COMMANDING OFFICER OF WATERTOWN ARSENAL, WATERTOWN, MASS., AND THE HOOD RUBBER COMPANY FOR THE RENTAL OF SPACE IN CERTAIN GOVERNMENT BUILDINGS, YOUR LETTER OF APRIL 24, 1929, WHEREIN YOU EXPRESS THE VIEW THAT UNDER THE ACT OF JULY 28, 1892, 27 STAT. 321, AS AMENDED BY THE ACT OF MAY 29, 1928, 45 STAT. 986, THERE IS NO REQUIREMENT THAT THE LEASES BE FOR A CASH CONSIDERATION AND THAT THE LEASES MAY BE MADE IN CONSIDERATION OF THE MAKING OF CERTAIN REPAIRS TO THE BUILDINGS. YOU FURTHER EXPRESS THE VIEW THAT ANY MODIFICATION OF THIS PROCEDURE WOULD RESULT IN THE AUTHORITY TO MAKE LEASES OF PUBLIC BUILDINGS, ETC., BEING "LARGELY AN EMPTY ONE" AND THAT IT WAS NECESSARY TO RETAIN THE INSURANCE POLICIES IN THE WAR DEPARTMENT SO AS TO ADJUST CLAIMS, ETC., THAT MAY ARISE.

THE SAID ACT OF JULY 28, 1892, PROVIDED:

THAT AUTHORITY BE, AND IS HEREBY, GIVEN TO THE SECRETARY OF WAR, WHEN IN HIS DISCRETION IT WILL BE FOR THE PUBLIC GOOD, TO LEASE, FOR A PERIOD NOT EXCEEDING FIVE YEARS AND REVOCABLE AT ANY TIME, SUCH PROPERTY OF THE UNITED STATES UNDER HIS CONTROL AS MAY NOT FOR THE TIME BE REQUIRED FOR PUBLIC USE AND FOR THE LEASING OF WHICH THERE IS NO AUTHORITY UNDER EXISTING LAW, AND SUCH LEASES SHALL BE REPORTED ANNUALLY TO CONGRESS: PROVIDED, THAT NOTHING IN THIS ACT CONTAINED SHALL BE HELD TO APPLY TO MINERAL OR PHOSPHATE LANDS.

THE ACT OF MAY 29, 1928, 45 STAT. 986, REPEALED THE REQUIREMENT THAT THE LEASES BE REPORTED ANNUALLY TO CONGRESS. REFERENCE IS MADE TO THE CASE OF UNITED STATES V. GRATIOT, 14 PET. 526, WHERE THE COURT HAD UNDER CONSIDERATION AN ACT OF MARCH 3, 1807, WHICH PROVIDED THAT--

* * * THE PRESIDENT OF THE UNITED STATES SHALL BE, AND IS HEREBY AUTHORIZED TO LEASE ANY LEAD MINE WHICH HAS BEEN, OR MAY HEREAFTER BE DISCOVERED IN THE INDIAN TERRITORY FOR A TERM NOT EXCEEDING FIVE YEARS.

AND HELD IN REFERENCE TO THE PROVISION OF THE LEASE OF SUCH LANDS, WHICH REQUIRED THE LESSEE TO DELIVER FOR THE USE OF THE UNITED STATES 6 POUNDS OF EVERY 100 POUNDS OF LEAD SMELTED BY HIM UNDER THE LEASE, THAT---

* * * THERE IS AN EXPRESS RESERVATION OF THE RENT OF SIX POUNDS OF EVERY HUNDRED POUNDS OF LEAD SMELTED, WITH SPECIAL AND PARTICULAR STIPULATION FOR SECURING THE SAME. IT IS NOT NECESSARY THAT THE RENT SHOULD BE IN MONEY. IF RECEIVED IN KIND, IT IS RENT, IN CONTEMPLATION OF LAW.

IT SEEMS TO BE THE CONCLUSION OF YOUR LETTER OF APRIL 24, 1929, THAT THE RESERVATION IN THE LEASES UNDER CONSIDERATION THAT THE LESSEE SHOULD MAKE CERTAIN REPAIRS IN LIEU OF PAYING CASH RENT WAS ON A SIMILAR FOOTING. IS TO BE NOTED THAT THE CASE OF UNITED STATES V. GRATIOT WAS DECIDED DURING THE JANUARY TERM, 1840, AND THAT THE PROVISIONS OF SECTIONS 3617 AND 3618, REVISED STATUTES, WERE FIRST ENACTED IN THE ACTS OF MARCH 3, 1847, AND MARCH 3, 1849, 9 STAT. 172, 398. IN OTHER WORDS, THE LAW REQUIRING THAT ALL PROCEEDS DERIVED FROM PUBLIC PROPERTY BE DEPOSITED IN THE TREASURY AS MISCELLANEOUS RECEIPTS WAS ENACTED SUBSEQUENT TO THE DECISION IN THE GRATIOT CASE. IT IS NOTED THAT NO REFERENCE IS MADE IN THE LETTER OF APRIL 24, 1929, TO THE MORE RECENT DECISION OF THE SUPREME COURT OF THE UNITED STATES IN PAN-AMERICAN COMPANY V. UNITED STATES, 273 U.S. 456, 510, WHERE THE COURT HAD UNDER CONSIDERATION THE ACT OF JUNE 4, 1920, 41 STAT. 812, 813, WHICH PROVIDED:

* * * THAT THE SECRETARY OF THE NAVY IS DIRECTED TO TAKE POSSESSION OF ALL PROPERTIES WITHIN THE NAVAL PETROLEUM RESERVES * * * TO CONSERVE, DEVELOP USE, AND OPERATE THE SAME IN HIS DISCRETION, DIRECTLY OR BY CONTRACT, LEASE, ON OTHERWISE, AND TO USE, STORE, EXCHANGE, OR SELL THE OIL AND GAS PRODUCTS THEREOF, AND THOSE FROM ALL ROYALTY OIL FROM LANDS IN THE NAVAL RESERVES, FOR THE BENEFIT OF THE UNITED STATES. * * *

THE ACTS OF JULY 28, 1892, AND JUNE 4, 1920, ARE SIMILAR TO THE EXTENT THAT NEITHER DIRECTS THAT THE PROCEEDS BE IN CASH AND DEPOSITED IN THE TREASURY AS MISCELLANEOUS RECEIPTS. AS IS WELL KNOWN IT WAS THE VIEW OF THE ADMINISTRATIVE OFFICERS CONCERNED THAT A PART OF THE OIL OBTAINED UNDER LEASES ON THE PETROLEUM RESERVES COULD BE USED IN EXCHANGE FOR STORAGE EQUIPMENT OF OTHER OILS AND AS TO THIS THE SUPREME COURT OF THE UNITED STATES SAID:

THE SECRETARY WAS NOT AUTHORIZED TO USE MONEY RECEIVED FROM THE SALE OF GAS PRODUCTS. ALL SUCH SUMS ARE REQUIRED TO BE PAID INTO THE TREASURY. R.S., SECTIONS 3617, 3618, AS AMENDED, 19 STAT. 249.

THE WORDS GRANTING AUTHORITY TO THE SECRETARY ARE "USE, STORE, EXCHANGE, OR SELL" THE OIL AND GAS PRODUCTS. AS THE SECRETARY, AMONG OTHER THINGS, WAS AUTHORIZED UNTIL JULY 1, 1922, TO USE MONEY OUT OF THE APPROPRIATION TO "STORE" OIL AND GAS PRODUCTS FROM THESE LANDS, IT WILL NOT BE HELD, IN THE ABSENCE OF LANGUAGE CLEARLY REQUIRING IT, THAT HE WAS ALSO EMPOWERED WITHOUT LIMIT TO USE CRUDE OIL TO PAY FOR ADDITIONAL STORAGE FACILITIES.

IT IS FURTHER TO BE NOTED THAT SECTION 3733, REVISED STATUTES, PROVIDES THAT---

NO CONTRACT SHALL BE ENTERED INTO FOR THE ERECTION, REPAIR, OR FURNISHING OF ANY PUBLIC BUILDING, OR FOR ANY PUBLIC IMPROVEMENT WHICH SHALL BIND THE GOVERNMENT TO PAY A LARGER SUM OF MONEY THAN THE AMOUNT IN THE TREASURY APPROPRIATED FOR THE SPECIFIC PURPOSE.

THE CONCLUSIONS OF THE SUPREME COURT OF THE UNITED STATES IN THE PAN- AMERICAN COMPANY CASE, WHEN COUPLED WITH THE EXPRESS PROHIBITION IN SECTION 3733, REVISED STATUTES, AGAINST ANY CONTRACT FOR THE REPAIR, ETC., OF PUBLIC BUILDINGS IN EXCESS OF SUMS APPROPRIATED BY CONGRESS, SHOULD BE A CONCLUSIVE ANSWER TO ANY ARGUMENT THAT UNDER THE ACT OF JULY 28, 1892, THE SECRETARY OF WAR IS AUTHORIZED TO RENT PUBLIC BUILDINGS OF THE UNITED STATES UNDER HIS CONTROL IN RETURN FOR THE LESSEE MAKING CERTAIN REPAIRS OR ALTERATIONS TO SAID BUILDINGS.

IN VIEW OF YOUR REPRESENTATIONS THAT A NUMBER OF SUCH LEASES HAVE BEEN ENTERED INTO; THAT SOME OF THE LEASES HAD BEEN REPORTED TO THE CONGRESS PRIOR TO THE ACT OF MAY 29, 1928; AND THAT "IN ALL PROBABILITY IT WOULD BE IMPOSSIBLE TO LEASE A GREATER PART OF THE PUBLIC PROPERTY UNDER THE CONTROL OF THE WAR DEPARTMENT," IN EVENT OF ANY MODIFICATION OF THE PROCEDURE, YOU ARE ADVISED THAT EXISTING LEASES PROVIDING FOR THE USE OF ALL OR PART OF THE ACCRUING RENTALS BY THE LESSEES TO REPAIR THE PROPERTY OF THE UNITED STATES, MAY BE PERMITTED TO CONTINUE IN EFFECT NOT LONGER THAN THE END OF THE NEXT REGULAR SESSION OF CONGRESS, UNLESS IN THE MEANTIME THE CONGRESS SHOULD AUTHORIZE, BY SPECIFIC STATUTE, THE CONTINUANCE OF SUCH PROCEDURE. NO ADDITIONAL LEASES OF PUBLIC PROPERTY UNDER THE CONTROL OF THE WAR DEPARTMENT SHOULD BE ENTERED INTO PROVIDING FOR USE BY THE LESSEE OF A PART OR ALL OF THE RENTAL FOR THE PURPOSE OF MAKING REPAIRS, ETC., TO THE PUBLIC BUILDINGS, UNLESS AND UNTIL SUCH SPECIFIC AUTHORITY IS SECURED.

WITH RESPECT TO THE INSURANCE POLICIES, IT WOULD SEEM TO BE CLEAR THAT THE LEASES HAVING REQUIRED THE SECURING BY THE LESSEES OF SUCH INSURANCE POLICIES, THEY FORM A PART OF THE LEASES AND UNDER THE LAW ARE REQUIRED TO BE FILED IN THIS OFFICE. A LEASE REQUIRING THE GIVING OF AN INSURANCE POLICY IS NOT COMPLETE WITHOUT SUCH POLICY ANY MORE THAN A CONTRACT REQUIRING THE GIVING OF A PERFORMANCE BOND IS COMPLETE WITHOUT SUCH BOND, AND THE REQUEST CONTAINED IN THE LETTER DATED JANUARY 19, 1929, FOR THE BONDS HAS BEEN COMPLIED WITH BY FORWARDING SAME FOR FILING WITH THE LEASES. THE INSURANCE POLICIES LIKEWISE SHOULD BE SO FORWARDED.

IT IS STATED IN THE LETTER OF APRIL 24, 1929, THAT--- * * * IT IS ESSENTIAL THAT THESE POLICIES BE RETAINED IN WAR DEPARTMENT FILES. CASE OF LOSS BY FIRE OR OTHER CAUSE COVERED THEREIN, SUCH POLICIES WOULD BE REQUIRED IN ADJUSTING SUCH LOSS, AND FURTHER, IT IS SOMETIMES DESIRABLE FROM AN ADMINISTRATIVE POINT OF VIEW TO SUBSTITUTE OTHER AND DIFFERENT POLICIES FOR THE ONES ORIGINALLY FURNISHED. ALSO, WHERE A LEASE IS TERMINATED FOR ANY REASON, BY REVOCATION OR OTHERWISE, SUCH POLICIES MUST BE RETURNED TO THE LESSEE FOR CANCELLATION AFTER IT HAS BEEN FIRST ASCERTAINED THAT NO LOSS OR DAMAGE, COLLECTIBLE UNDER SUCH POLICIES, OCCURRED DURING THE PERIOD OF TENANCY. * * *

THE FILES OF BOTH THE WAR DEPARTMENT AND OF THIS OFFICE BELONG TO THE UNITED STATES AND UNDER THE LAW IT IS THE DUTY AND RESPONSIBILITY OF THIS OFFICE TO SUPERINTEND THE COLLECTION OF ANY DEBTS DUE THE UNITED STATES, AS WELL AS TO SETTLE ANY CLAIMS AGAINST THE UNITED STATES. THE INSURANCE POLICY IS NECESSARY IN EITHER EVENT, AND IT IS AS READILY ACCESSIBLE WHEN FILED HERE AS WHEN FILED IN THE WAR DEPARTMENT. THE REQUEST IS RENEWED THAT THE INSURANCE POLICIES UNDER THESE OR OTHER SIMILAR LEASES BE FORWARDED TO THIS OFFICE FOR FILING WITH THE LEASES TO WHICH THEY PERTAIN.