A-44002, MAY 1, 1936, 15 COMP. GEN. 947

A-44002: May 1, 1936

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ARE AVAILABLE FOR RENTAL OR BENEFIT PAYMENTS. THE DATE SAID PROGRAM WAS HELD TO BE UNCONSTITUTIONAL. IF THERE WAS PARTIAL PERFORMANCE PRIOR TO SAID DATE. THE SECRETARY OF AGRICULTURE IS NOT AUTHORIZED TO ISSUE NEW ORDERS OR CHANGE OR RESCIND PREVIOUS ONES SO AS TO INCREASE THE OBLIGATIONS OR COMMITMENTS THERETOFORE INCURRED. PAYMENTS THEREUNDER ARE LIMITED TO AMOUNTS PAYABLE HAD THE CONTRACTS BEEN LEGAL AND FULLY PERFORMED BY THE CONTRACTOR. THE PERTINENT PART OF WHICH IS AS FOLLOWS: THERE IS SUBMITTED FOR YOUR CONSIDERATION AND APPROVAL "SECRETARY'S ORDER. IN CONNECTION WITH THE PROPOSED ISSUANCE OF THIS ORDER THERE HAVE ARISEN THE FOLLOWING THREE QUESTIONS. 1935 RENTAL PAYMENTS ARE TO BE MADE FOR PERFORMANCE RENDERED PRIOR TO JANUARY 6.

A-44002, MAY 1, 1936, 15 COMP. GEN. 947

RENTAL AND BENEFIT PAYMENTS - CROP ADJUSTMENT PROGRAM - ACT OF FEBRUARY 11, 1936 FUNDS APPROPRIATED BY THE SUPPLEMENTAL APPROPRIATION ACT OF FEBRUARY 11, 1936, 49 STAT. 1116, ARE AVAILABLE FOR RENTAL OR BENEFIT PAYMENTS, UNDER AGRICULTURAL ADJUSTMENT ACT CROP ADJUSTMENT CONTRACTS, FOR CONTRACT PERFORMANCE SUBSEQUENT TO JANUARY 6, 1936, THE DATE SAID PROGRAM WAS HELD TO BE UNCONSTITUTIONAL, IF THERE WAS PARTIAL PERFORMANCE PRIOR TO SAID DATE, BUT THE SECRETARY OF AGRICULTURE IS NOT AUTHORIZED TO ISSUE NEW ORDERS OR CHANGE OR RESCIND PREVIOUS ONES SO AS TO INCREASE THE OBLIGATIONS OR COMMITMENTS THERETOFORE INCURRED. THE "FAIR AND EQUITABLE" PAYMENTS AUTHORIZED BY THE SUPPLEMENTAL APPROPRIATION ACT OF FEBRUARY 11, 1936, 49 STAT. 1116, APPLY TO CROP ADJUSTMENT CONTRACTS SIGNED PRIOR TO JANUARY 6, 1936, AS WELL AS TO THOSE UNSIGNED PRIOR TO THAT DATE, BUT PAYMENTS THEREUNDER ARE LIMITED TO AMOUNTS PAYABLE HAD THE CONTRACTS BEEN LEGAL AND FULLY PERFORMED BY THE CONTRACTOR.

COMPTROLLER GENERAL MCCARL TO THE SECRETARY OF AGRICULTURE, MAY 1, 1936:

CONSIDERATION HAS BEEN GIVEN YOUR LETTER OF APRIL 11, 1936, THE PERTINENT PART OF WHICH IS AS FOLLOWS:

THERE IS SUBMITTED FOR YOUR CONSIDERATION AND APPROVAL "SECRETARY'S ORDER, TOBACCO NO. 1," WHICH SETS FORTH AND AUTHORIZES CERTAIN PAYMENTS TO BE MADE ON TOBACCO-PRODUCTION ADJUSTMENT CONTRACTS PURSUANT TO THE PROVISIONS OF THE ITEM ENTITLED "PAYMENTS FOR AGRICULTURAL ADJUSTMENT" CONTAINED IN THE SUPPLEMENTAL APPROPRIATION ACT, FISCAL YEAR 1936, APPROVED FEBRUARY 11, 1936 (PUBLIC, NO. 440, 74TH CONGRESS).

IN CONNECTION WITH THE PROPOSED ISSUANCE OF THIS ORDER THERE HAVE ARISEN THE FOLLOWING THREE QUESTIONS, WHICH ARISE ALSO WITH RESPECT TO PRODUCTION ADJUSTMENT CONTRACTS RELATING TO COMMODITIES OTHER THAN TOBACCO:

1. CAN PAYMENTS BE MADE ON ACCOUNT OF PERFORMANCE UNDER THE CONTRACT EFFECTED, IN WHOLE OR IN PART, AFTER JANUARY 5, 1936? (UNDER THE ATTACHED ORDER, 1935 RENTAL PAYMENTS ARE TO BE MADE FOR PERFORMANCE RENDERED PRIOR TO JANUARY 6, 1936, AND 1935 ADJUSTMENT PAYMENTS ARE TO BE MADE FOR PERFORMANCE, THAT IS, FOR THE SALE OF TOBACCO AS SPECIFIED IN THE CONTRACT, RENDERED PRIOR AND SUBSEQUENT TO JANUARY 6, 1936.)

2. CAN THE SECRETARY OF AGRICULTURE, SUBSEQUENT TO JANUARY 6, 1936,ISSUE NEW ADMINISTRATIVE ORDERS OR RESCIND ADMINISTRATIVE ORDERS THERETOFORE ISSUED, SO AS TO CHANGE THE RATES AND AMOUNTS OF PAYMENTS AND REFUNDS DUE UNDER THE CONTRACTS? (IN THIS DOCKET, IT IS PROPOSED TO RESCIND IN PART ADMINISTRATIVE RULING 40.)

3. THE APPROPRIATION ACT READS IN PART: "PROVIDED, THAT SUCH FUNDS SHALL BE AVAILABLE FOR RENTAL AND BENEFIT PAYMENTS IN AN AMOUNT THAT THE SECRETARY DETERMINES TO BE FAIR AND EQUITABLE TO FARMERS WHO * * *.' THE WORDS "FAIR AND EQUITABLE," AS SET FORTH IN THIS PROVISO, APPLY TO CONTRACTS ENTERED INTO PRIOR TO JANUARY 6, 1936?

THIS OFFICE CANNOT UNDERTAKE TO APPROVE OR EVEN CONSIDER THE VARIOUS PROVISIONS OF "SECRETARY'S ORDER, TOBACCO NO. 1" WITH ITS REFERENCE TO NUMEROUS FORMS, RULINGS, ETC., NOT SUBMITTED THEREWITH. BUT WITH RESPECT TO THE THREE SPECIFIC QUESTIONS PRESENTED THE ACT OF FEBRUARY 11, 1936, REFERRED TO IN YOUR LETTER MADE AN APPROPRIATION FOR---

PAYMENTS FOR AGRICULTURAL ADJUSTMENT: TO ENABLE THE SECRETARY OF AGRICULTURE TO MEET ALL OBLIGATIONS AND COMMITMENTS (INCLUDING SALARIES AND ADMINISTRATIVE EXPENSES) HERETOFORE INCURRED UNDER THE PROVISIONS OF THE AGRICULTURAL ADJUSTMENT ACT, AS AMENDED, OR REGULATIONS HERETOFORE ISSUED THEREUNDER, * * *. AND PROVIDED THAT---

* * * NO PART OF THE SUMS APPROPRIATED HEREIN SHALL BE USED FOR RENTAL OR BENEFIT PAYMENTS IN CONNECTION WITH ADJUSTMENT CONTRACTS ENTERED INTO ON OR AFTER JANUARY 6, 1936, AND AS TO THOSE CONTRACTS ENTERED INTO PRIOR TO JANUARY 6, 1936, NO PART OF THE SUMS APPROPRIATED HEREIN SHALL BE USED FOR RENTAL OR BENEFIT PAYMENTS IN CONNECTION WITH ADJUSTMENT CONTRACTS UNLESS THERE HAS BEEN PARTIAL PERFORMANCE BY THE FARMER: PROVIDED, THAT SUCH FUNDS SHALL BE AVAILABLE FOR RENTAL AND BENEFIT PAYMENTS IN AN AMOUNT THAT THE SECRETARY DETERMINES TO BE FAIR AND EQUITABLE TO FARMERS WHO HAVE APPLIED FOR CONTRACTS, AND WHO PRIOR TO JANUARY 6, 1936, HAVE IN GOOD FAITH MADE ADJUSTMENTS IN ACREAGE AND OTHERWISE SUBSTANTIALLY COMPLIED WITH THE REQUIREMENTS OF THE SECRETARY OF AGRICULTURE IN CONNECTION WITH A CROP PROGRAM, REGARDLESS OF WHETHER CONTRACTS HAVE BEEN SIGNED. * * *

BY THE TERMS OF THE ACT FUNDS WERE MADE AVAILABLE TO MEET OBLIGATIONS AND COMMITMENTS THERETOFORE INCURRED UNDER THE LAW AND REGULATIONS THERETOFORE ISSUED. SUCH OBLIGATIONS AND COMMITMENTS ARE TO BE DETERMINED UPON THE BASIS OF THE CONTRACTS WHICH WERE RENDERED INVALID AND UNENFORCEABLE BY THE DECISION OF THE SUPREME COURT OF THE UNITED STATES IN THE CASE OF UNITED STATES V. BUTLER, DECIDED JANUARY 6, 1936. IF THE CONTRACTS HAD BEEN PERFORMED ON THE PART OF THE PRODUCER PRIOR TO JANUARY 6, 1936, BUT RENTAL OR BENEFIT PAYMENTS HAD NOT BEEN RECEIVED, THE APPROPRIATION IS AVAILABLE FOR MAKING THE PAYMENTS THAT WOULD HAVE BEEN DUE EXCEPT FOR THE TERMINATION OF THE CROP ADJUSTMENT PROGRAM. THE ACT SPECIFICALLY PROVIDES THAT NO PART OF THE FUNDS APPROPRIATED SHALL BE USED FOR RENTAL OR BENEFIT PAYMENTS IN CONNECTION WITH ADJUSTMENT CONTRACTS UNLESS THERE HAD BEEN PARTIAL PERFORMANCE PRIOR TO JANUARY 6, 1936; THUS INDICATING THAT COMPLETE PERFORMANCE BEFORE THAT DATE IS NOT REQUIRED. THEREFORE, WHERE THERE WAS PARTIAL PERFORMANCE PRIOR TO JANUARY 6, 1936, FURTHER PERFORMANCE THEREAFTER AS CONTEMPLATED UNDER THE CONTRACT MAY BE CONSIDERED BY THE SECRETARY IN DETERMINING WHAT AMOUNT WOULD CONSTITUTE THE FAIR AND EQUITABLE PAYMENT AUTHORIZED TO BE MADE. YOUR FIRST QUESTION IS ANSWERED ACCORDINGLY.

AS TO YOUR SECOND QUESTION THE STATUTE AUTHORIZES PAYMENTS ONLY WITH RESPECT TO OBLIGATIONS OR COMMITMENTS UNDER "REGULATIONS HERETOFORE ISSUED.' THEREFORE, WHILE THE SECRETARY MAY ISSUE NEW ADMINISTRATIVE ORDERS OR RESCIND ADMINISTRATIVE ORDERS THERETOFORE ISSUED SO AS TO EFFECTUATE THE FAIR AND EQUITABLE PAYMENTS AUTHORIZED UNDER THE APPROPRIATION, HE IS NOT AUTHORIZED TO ISSUE NEW ORDERS OR CHANGE OR RESCIND PREVIOUS ORDERS SO AS TO INCREASE IN ANY WAY THE OBLIGATIONS OR COMMITMENTS THERETOFORE INCURRED.

IN ANSWER TO YOUR THIRD QUESTION, I HAVE TO ADVISE THAT THE "FAIR AND EQUITABLE" PAYMENTS WHICH THE STATUTE AUTHORIZES TO BE MADE ARE NOT LIMITED TO CASES WITH RESPECT TO WHICH NO CONTRACT HAD BEEN SIGNED PRIOR TO JANUARY 6, 1936, BUT APPLY, ALSO, TO CASES WITH RESPECT TO WHICH THE CONTRACT HAD BEEN SIGNED PRIOR TO SAID DATE. THAT IS TO SAY, UNDER THE PLAIN TERMS OF THE STATUTE, SUCH "FAIR AND EQUITABLE" PAYMENTS ARE AUTHORIZED--- THE OTHER CONDITIONS OF THE STATUTE BEING MET--- "REGARDLESS OF WHETHER CONTRACTS HAVE BEEN SIGNED.' BUT, OF COURSE,THERE MAY NOT BE PAID IN ANY CASE UNDER THIS PROVISION AN AMOUNT IN EXCESS OF THE COMMITMENT--- THE AMOUNT THAT WOULD HAVE BEEN PAYABLE IF THE CONTRACT HAD BEEN LEGAL AND HAD BEEN FULLY PERFORMED BY THE CONTRACTOR.