A-37247, JULY 10, 1931, 11 COMP. GEN. 14

A-37247: Jul 10, 1931

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COMPENSATION - FOREIGN SERVICE OFFICERS - PAYMENT IN FOREIGN CURRENCY THE FACT THAT A LAW IN MEXICO PROHIBITS THE CIRCULATION OF FOREIGN CURRENCY IN THAT COUNTRY IS NOT IN CONFLICT WITH THE LAWS OF THE UNITED STATES REQUIRING THE COLLECTION OF CONSULAR FEES IN UNITED STATES CURRENCY OR ITS EQUIVALENT. THERE IS NO AUTHORITY BY REASON OF SUCH MEXICAN LAW TO PAY THE SALARIES OF FOREIGN SERVICE OFFICERS. FIXED IN UNITED STATES CURRENCY IN CURRENCY OTHER THAN THAT OF THE UNITED STATES WHEN SUCH CURRENCY IS AVAILABLE. AS FOLLOWS: THERE IS ENCLOSED A COPY AND TRANSLATION OF THE DECREE OF ALVARO OBREGON. WHICH MAKES IT UNLAWFUL TO IMPORT OR CAUSE TO CIRCULATE IN THE REPUBLIC OF MEXICO BANK BILLS AND IN GENERAL ALL CLASSES OF FOREIGN MONEY THAT IS NOT OF GOLD (METAL).

A-37247, JULY 10, 1931, 11 COMP. GEN. 14

COMPENSATION - FOREIGN SERVICE OFFICERS - PAYMENT IN FOREIGN CURRENCY THE FACT THAT A LAW IN MEXICO PROHIBITS THE CIRCULATION OF FOREIGN CURRENCY IN THAT COUNTRY IS NOT IN CONFLICT WITH THE LAWS OF THE UNITED STATES REQUIRING THE COLLECTION OF CONSULAR FEES IN UNITED STATES CURRENCY OR ITS EQUIVALENT, AND THERE IS NO AUTHORITY BY REASON OF SUCH MEXICAN LAW TO PAY THE SALARIES OF FOREIGN SERVICE OFFICERS, FIXED IN UNITED STATES CURRENCY IN CURRENCY OTHER THAN THAT OF THE UNITED STATES WHEN SUCH CURRENCY IS AVAILABLE.

COMPTROLLER GENERAL MCCARL TO THE SECRETARY OF STATE, JULY 10, 1931:

THERE HAS BEEN RECEIVED YOUR LETTER OF JUNE 19, 1931, AS FOLLOWS:

THERE IS ENCLOSED A COPY AND TRANSLATION OF THE DECREE OF ALVARO OBREGON, PRESIDENT OF THE UNITED MEXICAN STATES, DATED JUNE 6, 1931, WHICH MAKES IT UNLAWFUL TO IMPORT OR CAUSE TO CIRCULATE IN THE REPUBLIC OF MEXICO BANK BILLS AND IN GENERAL ALL CLASSES OF FOREIGN MONEY THAT IS NOT OF GOLD (METAL).

THE TARIFF OF UNITED STATES CONSULAR FEES REQUIRES THAT ALL FEES BE COLLECTED "IN THE COIN OF THE UNITED STATES OR AT ITS REPRESENTATIVE VALUE IN EXCHANGE.' THEREFORE, FOREIGN SERVICE OFFICERS ARE REQUIRED TO ACCEPT AMERICAN CURRENCY IF PRESENTED IN PAYMENT OF FEES COLLECTED IN ACCORDANCE WITH THAT TARIFF.

THE EXCHANGE OF UNITED STATES CURRENCY FOR MEXICAN CURRENCY BY DISBURSING OFFICERS IS PROHIBITED BY SECTION 3651 OF THE REVISED STATUTES EXCEPT FOR USE IN THE PAYMENT OF ITEMS STATED IN MEXICAN CURRENCY WHEN SUCH MEXICAN CURRENCY IS NOT OTHERWISE AVAILABLE. THE PRACTICE OF THE DEPARTMENT AND THE GENERAL ACCOUNTING OFFICE HAS BEEN TO REQUIRE THE PAYMENT IN UNITED STATES CURRENCY OF SALARIES AND OTHER ITEMS STATED IN UNITED STATES CURRENCY IF SUCH FUNDS ARE AVAILABLE, AS WOULD BE THE CASE WHERE FEES ARE COLLECTED IN UNITED STATES CURRENCY AT VARIOUS POSTS IN MEXICO.

ACCORDING TO THE DECREE OF PRESIDENT OBREGON OF THE UNITED MEXICAN STATES, IT IS UNLAWFUL FOR THE OFFICERS OR OTHER RECIPIENTS OF SUCH AMERICAN CURRENCY IN PAYMENT OF SALARIES OR EXPENSES TO PLACE SAID CURRENCY IN CIRCULATION IN MEXICO, AND THE OFFICERS THEMSELVES CAN NOT LEGALLY EVEN SEND SUCH AMERICAN CURRENCY TO THE UNITED STATES IN THE MAIL AND THEN DRAW AGAINST IT, AS IT IS ILLEGAL TO TRANSMIT CURRENCY THROUGH THE MEXICAN MAILS. (UNIVERSAL POSTAL CONVENTION OF LONDON, 1929, ARTICLE 45, SECTION 1, PARAGRAPH G.)

IT IS EVIDENT THAT THE LAWS OF THE UNITED STATES AND THOSE OF MEXICO CONFLICT WITH RESPECT TO THE COLLECTION OF AMERICAN CONSULAR FEES IN UNITED STATES CURRENCY AND THE SUBSEQUENT CIRCULATION AND DISPOSITION OF SUCH CURRENCY IN ACCORDANCE WITH THE LAWS OF THE UNITED STATES. IN THIS CONNECTION GEORGE P. SHAW, AMERICAN CONSUL AT SAN LUIS POTOSI, MEXICO, STATED IN HIS DESPATCH TO THE DEPARTMENT, DATED NOVEMBER 15, 1930, AS FOLLOWS:

"THE PAYMENT OF SALARIES IN UNITED STATES CURRENCY CAUSES THE EMPLOYEE TO RECEIVE LESS PESOS THAN HE WOULD IF PAID AT THE BANK'S SELLING RATE OF THE DAY FOR DRAFTS. FURTHERMORE, HAVING NO TRANSACTIONS WITH THE UNITED STATES HE MUST CONVERT THE BILLS INTO PESOS. HE CAN NOT LEGALLY EVEN SEND THEM TO THE UNITED STATES IN THE MAIL AND THEN DRAW AGAINST THEM, AS IT IS ILLEGAL TO TRANSMIT CURRENCY THROUGH THE MEXICAN MAILS. SEE THE UNIVERSAL POSTAL CONVENTION OF LONDON, 1929, ARTICLE 45, SECTION 1, PARAGRAPH G. THERE IS CONSIDERABLE DOUBT IN THE OFFICER'S MIND AS TO THE PROPRIETY OF PAYING SALARIES IN MEXICO IN UNITED STATES CURRENCY (PAPER AND SILVER), AS THAT PROCEDURE IS EXPRESSLY PROHIBITED BY PRESIDENTIAL DECREE OF JUNE 6, 1921. A COPY AND TRANSLATION OF THIS DECREE ARE ATTACHED TO THIS DESPATCH. THE UNITED STATES LAW PROVIDING FOR THE PAYMENT OF SALARIES IN UNITED STATES CURRENCY WHEN THAT CURRENCY IS AVAILABLE, OF COURSE, CONFLICTS WITH THE MEXICAN LAW ON THE SUBJECT, WHICH MAKES THAT PROCEDURE ILLEGAL. THE MEXICAN LAW REFERS ONLY TO THE CIRCULATION OF CURRENCY AND DOES NOT PROHIBIT SALARIES BEING FIXED IN FOREIGN CURRENCY AND PAID IN PESOS THE EQUIVALENT THEREOF. AUTHORITY IS REQUESTED TO TRANSMIT ALL FEES COLLECTED IN UNITED STATES CURRENCY, EXCEPT GOLD COIN (WHICH ARE NOW VERY FEW) TO THE TREASURY OF THE UNITED STATES BY MEANS OF DRAFTS PURCHASED AT THE BANK IN DOLLARS (THERE IS LEGAL PROVISION FOR THIS, ALTHOUGH THE TRANSACTION IS MADE AT A LOSS TO THE PURCHASER OF THE DRAFT), THUS ELIMINATING UNITED STATES CURRENCY ON HAND IN THE CONSULATE, AND TO DRAW FOR THE SUMS NECESSARY TO PAY THE BALANCE DUE ON SALARIES AFTER THE FEES COLLECTED IN PESOS ARE APPLIED. SINCE THE DECLINE IN NUMBER OF IMMIGRATION VISAS THE AMOUNT OF FEES IN DOLLARS IS VERY SMALL.'

THE DEPARTMENT DESIRES TO AVOID THE BREAKING OF THE LAWS OF MEXICO BY FOREIGN SERVICE OFFICERS STATIONED THERE. IT IS THEREFORE REQUESTED THAT YOU ADVISE THE DEPARTMENT WHETHER IT WOULD BE PROPER TO INSTRUCT THESE OFFICERS TO PURCHASE REMITTANCES, PAYABLE TO THE TREASURER OF THE UNITED STATES, WITH ALL AMERICAN CURRENCY COLLECTED. LEGAL PROVISION FOR THIS HAS BEEN MADE BY THE GOVERNMENT OF MEXICO. IN THIS MANNER THE OFFICERS WILL BE ABLE TO PAY ALL SALARIES AND OTHER ITEMS STATED IN UNITED STATES CURRENCY, IN MEXICAN CURRENCY AT THE RATE PREVAILING ON THE DATE OF PAYMENT. THIS WILL NECESSITATE IN MANY INSTANCES THE DRAWING OF DRAFTS FOR A GREATER PORTION OF THE SALARIES AND EXPENSES THAN WOULD BE THE CASE IF THE MEXICAN LAW DID NOT PROHIBIT THE CIRCULATION OF AMERICAN CURRENCY. IF THE ABOVE SUGGESTION DOES NOT MEET WITH YOUR APPROVAL, IT IS REQUESTED THAT AN ACCEPTABLE METHOD BE OUTLINED IN YOUR REPLY IN ORDER THAT THE SITUATION MAY BE IMPROVED.

YOUR PROMPT REPLY WILL BE APPRECIATED IN VIEW OF THE FACT THAT NUMEROUS SUSPENSIONS AND DISALLOWANCES ARE BEING MADE IN THE ACCOUNTS OF VARIOUS OFFICERS STATIONED IN MEXICO.

IT IS NOT CLEAR FROM THE MATTER AS STATED WHEREIN THE LAWS OF THE UNITED STATES AND THE LAWS OF MEXICO ARE IN CONFLICT. THE LAWS OF THE UNITED STATES REQUIRING CONSULAR FEES TO BE COLLECTED IN THE COIN OF THE UNITED STATES OR AT ITS REPRESENTATIVE VALUE IN EXCHANGE DO NOT CONFLICT WITH THE LAWS OF MEXICO RELATING TO THE NONCIRCULATION OF FOREIGN MONEY IN THAT COUNTRY; NEITHER IS THERE ANYTHING CONFLICTING WITH SUCH LAWS IN THE REQUIREMENT THAT IN SO FAR AS AVAILABLE UNITED STATES CURRENCY SHOULD BE USED FOR THE PAYMENT OF SALARIES FIXED IN UNITED STATES CURRENCY. THE DECREE OF THE PRESIDENT OF MEXICO REFERRED TO IN YOUR LETTER HAS PARTICULAR REFERENCE TO CIRCULATION OF FOREIGN CURRENCY IN MEXICO. IT CAN HAVE NO APPLICATION AS DIRECTING THE UNITED STATES GOVERNMENT TO PAY THE SALARIES OF ITS FOREIGN SERVICE OFFICERS IN MEXICAN OR OTHER CURRENCY RATHER THAN ITS OWN CURRENCY. THE LAW AS MADE BY SUCH DECREE IS FOR APPLICATION TO SUCH FOREIGN SERVICE OFFICERS IN PROVIDING THAT THEY CAN NOT PUT SUCH UNITED STATES CURRENCY IN MEXICO. UNDER SUCH CIRCUMSTANCES THEY SHOULD TAKE THE NECESSARY STEPS FOR EXCHANGE OF THE UNITED STATES CURRENCY RECEIVED BY THEM INTO LOCAL CURRENCY TO COMPLY WITH THE LAW.

IT IS STATED, HOWEVER, BY THE AMERICAN CONSUL AT SAN LUIS POTOSI IN THE DESPATCH QUOTED IN YOUR LETTER THAT THE PAYMENT OF SALARIES IN UNITED STATES CURRENCY CAUSES THE EMPLOYEE TO RECEIVE LESS PESOS THAN HE WOULD RECEIVE IF PAID AT THE BANK'S SELLING RATE OF THE DAY FOR DRAFTS. THIS WOULD APPEAR TO BE THE ONLY REASON FOR THE PROPOSED CHANGES IN THE PRESENT PROCEDURE AS SUGGESTED IN YOUR LETTER. IT SHOULD BE UNDERSTOOD THAT THE SALARIES OF FOREIGN SERVICE OFFICERS, BEING FIXED IN UNITED STATES CURRENCY, THE UNITED STATES GOVERNMENT HAS DISCHARGED ITS OBLIGATION WHEN PAYMENT IN UNITED STATES CURRENCY HAS BEEN MADE IN THE AMOUNT SO FIXED, AND THERE WOULD APPEAR TO BE NO BASIS FOR THE ADOPTION OF A PROCEDURE SUGGESTED IN YOUR LETTER, OR ANY OTHER PROCEDURE WHICH WOULD BURDEN THE UNITED STATES GOVERNMENT WITH ADDITIONAL EXCHANGE EXPENSES MERELY FOR THE PURPOSE OF RELIEVING THE FOREIGN SERVICE OFFICERS FROM SUCH EXPENSES.

ACCORDINGLY, I HAVE TO ADVISE THAT UPON THE FACTS AND CIRCUMSTANCES PRESENTED THERE WOULD APPEAR TO BE NO AUTHORITY OF LAW AT THIS TIME FOR A CHANGE OF THE PRESENT PROCEDURE EITHER IN THE MANNER SUGGESTED IN YOUR LETTER OR OTHERWISE.

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