A-39046, NOVEMBER 14, 1931, 11 COMP. GEN. 181

A-39046: Nov 14, 1931

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THE SETTLEMENT OF ACCOUNTS IS BY PAYING THE CREDITOR COUNTRY 30 CENTS FOR EACH SUCH PACKAGE AS STIPULATED IN THE CONVENTION IN THE CURRENCY OF SUCH CREDITOR COUNTRY. WAS INSTRUCTED TO PURCHASE A BILL OF EXCHANGE FOR THAT AMOUNT WHICH HE BOUGHT AT THE RATE OF 8 1/2 PERCENT DISCOUNT. THAT IS. CONVERSION MUST BE EFFECTED AT THE GOLD PAR RATE STOP PLEASE WIRE US THAT THIS IS CLEARLY UNDERSTOOD.'. YOUR ATTENTION IS INVITED TO THE FOLLOWING PROVISIONS OF THE POSTAL CONVENTION BETWEEN THE UNITED STATES AND THE DOMINION OF CANADA: "ARTICLE 2. (A) * * * IT IS AGREED THAT ON PACKAGES SENT AT PARCEL-POST RATES. WHICH ARE NOT HEREIN PROVIDED FOR. THESE ARE THE ONLY PROVISIONS OF THE CONVENTION WHICH CAN BE REGARDED AS RELATING TO THE SETTLEMENT OF PARCEL-POST ACCOUNTS.

A-39046, NOVEMBER 14, 1931, 11 COMP. GEN. 181

PARCEL-POST CONVENTION - UNITED STATES AND CANADA - SETTLEMENT OF ACCOUNTS UNDER THE PARCEL-POST CONVENTION BETWEEN THE UNITED STATES AND CANADA PROVIDING FOR THE PAYMENT BY THE COUNTRY OF ORIGIN TO THE COUNTRY OF DESTINATION OF 30 CENTS FOR EACH PARCEL ON THE TOTAL EXCESS NUMBER OF SUCH PARCEL-POST PACKAGES DESPATCHED OVER THE NUMBER OF SUCH PARCEL-POST PACKAGES RECEIVED, THE CONVENTION CONTAINING NO PROVISION AS TO THE BASIS OF CURRENCY, TO BE USED FOR SETTLEMENT PURPOSES, THE SETTLEMENT OF ACCOUNTS IS BY PAYING THE CREDITOR COUNTRY 30 CENTS FOR EACH SUCH PACKAGE AS STIPULATED IN THE CONVENTION IN THE CURRENCY OF SUCH CREDITOR COUNTRY.

COMPTROLLER GENERAL MCCARL TO THE POST MASTER GENERAL, NOVEMBER 14, 1931:

THERE HAS BEEN RECEIVED YOUR LETTER OF OCTOBER 9, 1931, AS FOLLOWS:

ON SEPTEMBER 22, 1931, THE POST OFFICE DEPARTMENT DIVISION OF THE GENERAL ACCOUNTING OFFICE REQUESTED THIS BUREAU TO PURCHASE A BILL OF EXCHANGE ON CANADA IN THE SUM OF $200,000 CANADIAN CURRENCY AND TRANSMIT IT TO CANADA AS A PROVISIONAL PAYMENT ON THE PARCEL-POST ACCOUNT FOR THE HALF YEAR ENDED JUNE 30, 1931. THE POSTMASTER AT NEW YORK, N.Y., WAS INSTRUCTED TO PURCHASE A BILL OF EXCHANGE FOR THAT AMOUNT WHICH HE BOUGHT AT THE RATE OF 8 1/2 PERCENT DISCOUNT, PAYING THEREFOR $183,000. THIS BUREAU HAS NOW RECEIVED A TELEGRAM FROM THE DEPUTY POSTMASTER GENERAL OF CANADA, READING AS FOLLOWS:

"YOUR LETTER FIRST INST. TRANSMITTING BILL OF EXCHANGE ON OTTAWA FOR TWO HUNDRED THOUSAND DOLLARS CANADIAN CURRENCY REPRESENTING PROVISIONAL PAYMENT ON PARCEL-POST ACCOUNT WOULD POINT OUT THAT UNDER ARTICLE ELEVEN POSTAL CONVENTION BETWEEN OUR TWO COUNTRIES AND UNDER ARTICLES TWENTY EIGHT OF LONDON CONVENTION, ARTICLE SEVENTY TWO REGULATIONS LONDON CONVENTION AND ARTICLE ONE FINAL PROTOCOL REGULATIONS LONDON CONVENTION PAYMENTS MUST BE MADE ON GOLD BASIS; THAT IS, CONVERSION MUST BE EFFECTED AT THE GOLD PAR RATE STOP PLEASE WIRE US THAT THIS IS CLEARLY UNDERSTOOD.'

YOUR ATTENTION IS INVITED TO THE FOLLOWING PROVISIONS OF THE POSTAL CONVENTION BETWEEN THE UNITED STATES AND THE DOMINION OF CANADA:

"ARTICLE 2. (A) * * * IT IS AGREED THAT ON PACKAGES SENT AT PARCEL-POST RATES, THE COUNTRY OF ORIGIN SHALL ALLOW TO THE COUNTRY OF DESTINATION THIRTY CENTS A PARCEL ON THE TOTAL EXCESS NUMBER OF SUCH PARCEL-POST PACKAGES DESPATCHED OVER THE NUMBER OF SUCH PARCEL-POST PACKAGES RECEIVED; SETTLEMENT TO BE MADE IN THE GENERAL POSTAL ACCOUNT BETWEEN THE TWO COUNTRIES ON THE BASIS OF STATISTICS TAKEN DURING THE FIRST SEVEN DAYS OF APRIL AND OCTOBER OF EACH YEAR.

"ARTICLE 11. ALL MATTERS CONNECTED WITH THE EXCHANGES OF MAILS BETWEEN THE TWO COUNTRIES, WHICH ARE NOT HEREIN PROVIDED FOR, SHALL BE GOVERNED BY THE PROVISIONS OF THE UNIVERSAL POSTAL CONVENTION AND REGULATIONS THEN IN FORCE, SO FAR AS THE PROVISIONS OF SUCH UNIVERSAL POSTAL CONVENTION AND REGULATIONS SHALL BE OBLIGATORY UPON BOTH OF THE CONTRACTING PARTIES, EXCEPT AS HEREAFTER MODIFIED OR CHANGED.'

THESE ARE THE ONLY PROVISIONS OF THE CONVENTION WHICH CAN BE REGARDED AS RELATING TO THE SETTLEMENT OF PARCEL-POST ACCOUNTS.

THE LONDON CONVENTION OF THE UNIVERSAL POSTAL UNION REFERRED TO IN THE TELEGRAM FROM THE CANADIAN ADMINISTRATION DOES NOT GOVERN PARCEL POST TRANSACTIONS BETWEEN THE COUNTRIES OF THE UNION, AND THIS COUNTRY AND CANADA ARE NOT PARTIES TO THE PARCEL POST CONVENTION OF THE UNIVERSAL POSTAL UNION. IT IS CLEARLY THE INTENT OF THE LONDON CONVENTION, HOWEVER, AND IT IS THE BELIEF OF THIS DEPARTMENT THAT SETTLEMENTS BETWEEN COUNTRIES OF THE UNION SHOULD BE MADE ON A GOLD BASIS. OWING TO THE PRESENT LOW RATE OF EXCHANGE ON CANADA THAT COUNTRY NOW RECEIVES A CONSIDERABLY SMALLER AMOUNT WHEN THE BALANCES OF THE ACCOUNTS ARE COMPUTED IN CANADIAN CURRENCY THAN IF PAYMENTS WERE MADE IN ACCORDANCE WITH THE PROVISIONS OF THE POSTAL UNION CONVENTION REFERRED TO IN THE TELEGRAM HERETOFORE QUOTED.

I WILL THANK YOU TO ADVISE ME WHAT METHOD WILL BE USED IN MAKING THE PAYMENTS TO CANADA IN FUTURE IN ORDER THAT REPLY MAY BE MADE TO THE TELEGRAM.

IN ADDITION TO THE PROVISIONS QUOTED IN YOUR LETTER FROM THE POSTAL CONVENTION BETWEEN THE UNITED STATES AND THE DOMINION OF CANADA, THE SAID CONVENTION PROVIDES, IN ARTICLE 1---

(A) ARTICLES OF EVERY KIND OR NATURE WHICH ARE ADMITTED TO THE DOMESTIC MAILS OF EITHER COUNTRY EXCEPT AS HEREIN PROHIBITED SHALL BE ADMITTED TO THE MAILS EXCHANGES UNDER THIS ONVENTION; * * *

(B) THE FOLLOWING ARTICLES ARE PROHIBITED ADMISSION TO THE MAILS EXCHANGES UNDER THIS CONVENTION:

* * * PACKAGES SENT AT PARCEL POST RATES. * * *

SINCE PACKAGES SENT AT PARCEL-POST RATES ARE SPECIFICALLY EXCLUDED BY THE CONVENTION FROM THE EXCHANGE OF MAILS, THE PROVISIONS IN ARTICLES 11 OF SAID CONVENTION THAT ALL MATTERS CONNECTED WITH THE EXCHANGE OF MAILS BETWEEN THE TWO COUNTRIES NOT OTHERWISE PROVIDED FOR SHALL BE GOVERNED BY THE PROVISIONS OF THE UNIVERSAL POSTAL CONVENTIONS AND REGULATIONS THEN IN FORCE, HAVE NO APPLICATION TO THE SETTLEMENT OF THE PARCEL-POST ACCOUNTS BETWEEN THE UNITED STATES AND CANADA AND, THEREFORE, THE GOLD BASIS PROVIDED FOR IN THE LONDON CONVENTION OF THE UNIVERSAL POSTAL UNION IS NOT FOR APPLICATION IN A CASE SUCH AS HERE INVOLVED.

IT APPEARS THAT SINCE THE POSTAL CONVENTION WITH CANADA BECAME EFFECTIVE ON JANUARY 1, 1923, THE SETTLEMENTS HAVE BEEN MADE ON THE SAME BASIS AS WAS DONE IN THE INSTANCE PRESENTED BY YOUR LETTER AND THAT NO QUESTION HAS BEEN RAISED HERETOFORE BY CANADA. THE REASON NOW ADVANCED IN YOUR LETTER FOR PAYMENT ON THE GOLD BASIS THAT IN VIEW OF THE LOW RATE OF EXCHANGE ON CANADA THAT COUNTRY NOW RECEIVES A CONSIDERABLY SMALLER AMOUNT IS NOT CONTROLLING. CANADA, UNDER THE PRACTICE WHICH AS BEEN FOLLOWED HERETOFORE, RECEIVES THE SAME AMOUNT IN CANADIAN CURRENCY THAT IT RECEIVED WHEN ITS CURRENCY WAS PRACTICALLY ON A PART WITH THAT OF THIS COUNTRY, AND THE FACT THAT THERE WAS A GAIN BY EXCHANGE IN FAVOR OF THE UNITED STATES AT PRESENT, BY REASON OF THE LOW RATE OF EXCHANGE ON CANADIAN CURRENCY, IMPOSES NO OBLIGATION UPON THE UNITED STATES TO PAY SUCH GAIN OVER TO CANADA.

ACCORDINGLY, IN SPECIFIC ANSWER TO THE QUESTION PRESENTED I HAVE TO ADVISE THAT HEREAFTER PAYMENTS TO CANADA ON PARCEL POST ACCOUNTS WILL BE AS HAS BEEN THE PRACTICE HERETOFORE; THAT IS TO SAY, IN ACCORDANCE WITH THE PROCEDURE FOLLOWED IN THIS INSTANCE.