A-48262, APRIL 7, 1933, 12 COMP. GEN. 580

A-48262: Apr 7, 1933

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AMENDED - PERCENTAGE REDUCTIONS - OFFICERS AND EMPLOYEES PAID FROM PRIVATE OR STATE FUNDS IF THE DUTIES AND RESPONSIBILITIES OF AN OFFICER OR POSITION ARE PERFORMED FOR OR UNDER THE SUPERVISION OF THE FEDERAL GOVERNMENT. THE BASIC RATE OF COMPENSATION IS FIXED UNDER ANY EXISTING FEDERAL LAW. THE INCUMBENT THEREOF IS A FEDERAL OFFICER OR EMPLOYEE WITHIN THE MEANING OF SECTION 1 (A). WHOSE COMPENSATION IS SUBJECT TO THE 15 PERCENT REDUCTION UNDER SECTION 3 OF SAID TITLE. REGARDLESS OF THE SOURCE FROM WHICH THE COMPENSATION IS PAID. AS FOLLOWS: REFERENCE IS MADE TO YOUR DECISION OF JULY 16. IN WHICH IT WAS STATED THAT THE OBJECT OR PURPOSE OF TITLE I OF PART II OF THE ACT OF JUNE 30. WAS TO EFFECT SAVINGS IN GOVERNMENT EXPENDITURES COMING OUT OF THE TREASURY DURING THE FISCAL YEAR 1933 AND THAT THERE WAS NOTHING UNDER SAID TITLE TO INDICATE ANY INTENT TO REDUCE COMPENSATION OTHER THAN FOR THE PURPOSE OF EFFECTING SUCH SAVINGS.

A-48262, APRIL 7, 1933, 12 COMP. GEN. 580

ECONOMY ACT, AMENDED - PERCENTAGE REDUCTIONS - OFFICERS AND EMPLOYEES PAID FROM PRIVATE OR STATE FUNDS IF THE DUTIES AND RESPONSIBILITIES OF AN OFFICER OR POSITION ARE PERFORMED FOR OR UNDER THE SUPERVISION OF THE FEDERAL GOVERNMENT, AND THE BASIC RATE OF COMPENSATION IS FIXED UNDER ANY EXISTING FEDERAL LAW, SCHEDULE, REGULATION, EXECUTIVE ORDER, OR DEPARTMENTAL ORDER, THE INCUMBENT THEREOF IS A FEDERAL OFFICER OR EMPLOYEE WITHIN THE MEANING OF SECTION 1 (A), TITLE II OF THE ACT OF MARCH 20, 1933, 48 STAT. 12, WHOSE COMPENSATION IS SUBJECT TO THE 15 PERCENT REDUCTION UNDER SECTION 3 OF SAID TITLE, AND THE EXECUTIVE ORDER OF MARCH 28, 1933, REGARDLESS OF THE SOURCE FROM WHICH THE COMPENSATION IS PAID, IMPOUNDING IN THE FEDERAL TREASURY TO BE ONLY 15 PERCENT OF THE SHARE OF THE COMPENSATION CONTRIBUTED FROM FEDERAL FUNDS.

COMPTROLLER GENERAL MCCARL TO THE SECRETARY OF THE TREASURY, APRIL 7, 1933:

CONSIDERATION HAS BEEN GIVEN TO YOUR TWO LETTERS OF APRIL 1, 1933, AS FOLLOWS:

REFERENCE IS MADE TO YOUR DECISION OF JULY 16, 1932 (A-43357), IN WHICH IT WAS STATED THAT THE OBJECT OR PURPOSE OF TITLE I OF PART II OF THE ACT OF JUNE 30, 1932 (ECONOMY ACT), WAS TO EFFECT SAVINGS IN GOVERNMENT EXPENDITURES COMING OUT OF THE TREASURY DURING THE FISCAL YEAR 1933 AND THAT THERE WAS NOTHING UNDER SAID TITLE TO INDICATE ANY INTENT TO REDUCE COMPENSATION OTHER THAN FOR THE PURPOSE OF EFFECTING SUCH SAVINGS. THEREFORE, IT WAS HELD THAT, IN APPLYING THE PROVISIONS OF SAID TITLE, FURLOUGH DEDUCTIONS SHOULD NOT BE MADE FROM THE SALARIES OF CUSTOMS STOREKEEPERS, THE AMOUNTS OF WHOSE SALARIES ARE REIMBURSED TO THE GOVERNMENT BY THE PROPRIETORS OF THE WAREHOUSES AS PROVIDED IN SECTION 555 OF THE TARIFF ACT OF 1930, SO LONG AS THE ULTIMATE CHARGE FOR THEIR SALARIES WAS NOT AGAINST THE UNITED STATES TREASURY.

IN THE LIGHT OF THAT RULING, YOUR DECISION IS REQUESTED AS TO WHETHER THE REDUCTION OF 15 PERCENT ANNOUNCED BY THE PRESIDENT UNDER THE PROVISIONS OF SECTIONS 2 AND 3 OF TITLE II OF THE ACT ENTITLED "AN ACT TO MAINTAIN THE CREDIT OF THE UNITED STATES GOVERNMENT," APPROVED MARCH 20, 1933 (PUBLIC NO. 2, SEVENTY-THIRD CONGRESS), SHALL APPLY TO--

1. CUSTOMS STOREKEEPERS AND OTHER EMPLOYEES FALLING INTO THE CLASS OF THOSE WHOSE SALARIES ARE FULLY REIMBURSED TO THE GOVERNMENT.

2. EMPLOYEES WHOSE FULL COMPENSATION IS DERIVED FROM ASSESSMENTS ON BANKS, OR OTHER NONGOVERNMENTAL FUNDS.

REFERENCE IS MADE TO THE ACT OF CONGRESS APPROVED MARCH 20, 1933, ENTITLED "AN ACT TO MAINTAIN THE CREDIT OF THE UNITED STATES GOVERNMENT," WHEREIN IT IS PROVIDED IN TITLE II FOR REDUCTIONS IN THE COMPENSATION OF CERTAIN CLASSES OF CIVIL OFFICERS AND EMPLOYEES THEREIN MENTIONED. YOUR OPINION IS REQUESTED AS TO THE APPLICATION OF THOSE PROVISIONS TO THE FOLLOWING OFFICERS AND EMPLOYEES IN THE BUREAU OF THE COMPTROLLER OF THE CURRENCY:

(1) NATIONAL-BANK EXAMINERS, AND OTHER OFFICERS AND EMPLOYEES CONNECTED WITH THE WORK OF EXAMINATION AND SUPERVISION OF BANKS WHOSE COMPENSATION IS DERIVED ENTIRELY FROM ASSESSMENTS AGAINST BANKS PURSUANT TO THE PROVISIONS OF SECTION 5240, U.S.R.S., AS AMENDED BY SECTION 21 OF THE ACT OF DECEMBER 23, 1913, 38 STAT. L. 271; SECTION 209 (B) OF THE ACT OF MARCH 4, 1923, 42 STAT. L. 1467 (U.S. CODE, TITLE 12, SECTIONS 6, 7, 8, 9, 10, AND 482).

(2) OFFICERS AND EMPLOYEES OF THE NATIONAL BANK REDEMPTION AGENCY, UNDER THE COMPTROLLER OF THE CURRENCY, WHOSE COMPENSATION IS DERIVED ENTIRELY FROM ASSESSMENTS AGAINST NATIONAL BANKS PURSUANT TO THE PROVISIONS OF U.S. CODE, TITLE 12, SECTIONS 127, 121, 122, 124, 125, AND 126.

(3) RECEIVERS, ASSISTANT RECEIVERS, THEIR EMPLOYEES, SUPERVISING RECEIVERS AND ASSISTANTS, AND OTHER OFFICERS AND EMPLOYEES, ENGAGED IN THE LIQUIDATION OF INSOLVENT BANKS, WHOSE COMPENSATION IS DERIVED ENTIRELY FROM ASSESSMENTS AGAINST INSOLVENT BANKS PURSUANT TO THE PROVISIONS OF SECTION 1 OF THE ACT OF JUNE 30, 1876 (U.S. CODE, TITLE 12, SECTION 191), SECTION 5234, U.S.R.S. (U.S. CODE, TITLE 12, SECTION 192), AND SECTION 3, ACT OF JUNE 30, 1876 (U.S. CODE, TITLE 12, SECTION 197).

(4) CONSERVATORS AND THEIR EMPLOYEES, AND SUPERVISING CONSERVATORS AND ASSISTANTS, AND OTHER OFFICERS AND EMPLOYEES ENGAGED IN CONSERVATION WORK, WHOSE COMPENSATION IS DERIVED ENTIRELY FROM ASSESSMENTS AGAINST BANKS PURSUANT TO THE PROVISIONS OF TITLE II OF THE ACT OF CONGRESS OF MARCH 9, 1933 (PUBLIC, NO. 1, 73D CONGRESS).

THE SAID ACT OF MARCH 20, 1933 (GENERALLY REFERRED TO AS THE "SECOND ECONOMY ACT"), IS IDENTICAL IN PURPOSE WITH THE PROVISIONS OF PART II OF TITLE I OF THE ACT OF CONGRESS OF JUNE 30, 1932 (PUBLIC NO. 212, 72ND CONGRESS 1ST SESS., GENERALLY REFERRED TO AS THE "FIRST ECONOMY ACT") IN THAT THE LEGISLATION IN EACH CASE WAS DESIGNED TO REDUCE THE COMPENSATION OF CERTAIN OFFICERS AND EMPLOYEES PAID FROM THE GENERAL FUNDS OF THE FEDERAL TREASURY, SO THAT THE SAVINGS THEREBY DERIVED MIGHT BE UTILIZED IN BALANCING THE FEDERAL BUDGET. IN YOUR DECISIONS CONSTRUING THE FIRST ECONOMY ACT YOU HELD IN SUBSTANCE THAT OFFICERS AND EMPLOYEES WHOSE COMPENSATION WAS NOT PAID FROM THE GENERAL FUNDS OF THE FEDERAL TREASURY DID NOT COME WITHIN THE PURVIEW OF THE ECONOMY ACT, FOR THE REASON THAT SAVINGS FROM THE SALARIES OF SUCH OFFICERS AND EMPLOYEES COULD NOT, UNDER THE ACT, BE IMPOUNDED OR RETURNED TO THE TREASURY TO REDUCE THE FEDERAL APPROPRIATIONS AND THAT THERE WAS NO INTENT OR PURPOSE TO EFFECT AT THE EXPENSE OF GOVERNMENT EMPLOYEES A SAVING TO PRIVATE INTERESTS. YOUR DECISION IN THIS RESPECT EMBRACED OFFICERS AND EMPLOYEES OF THE TYPE ENUMERATED IN NUMBERED PARAGRAPHS 1, 2, 3, AND 4 OF THIS LETTER.

FOR THE CONVENIENCE OF YOUR OFFICE IN GIVING CONSIDERATION TO THE QUESTIONS HEREIN SET FORTH, THERE IS ATTACHED HERETO A MEMORANDUM DISCUSSING MORE IN DETAIL THE PRINCIPLES INVOLVED, AND CITING AT SOME LENGTH BOTH THE FEDERAL COURT DECISIONS RELATING THERETO AND THE DECISIONS OF YOUR OFFICE CONSTRUING THE FIRST ECONOMY ACT.

THE MEMORANDUM ACCOMPANYING THE LETTER LAST ABOVE QUOTED HAS BEEN GIVEN CAREFUL CONSIDERATION.

IN THE DECISION OF JULY 16, 1932, 12 COMP. GEN. 69, TO WHICH YOU REFER, IT WAS HELD AS FOLLOWS (QUOTING FROM THE SYLLABUS):

IN VIEW OF SECTION 104 (A) (7) OF THE ACT OF JUNE 30, 1932, 47 STAT. 400, EXCEPTING "PUBLIC OFFICERS AND EMPLOYEES WHOSE COMPENSATION IS * * * NOT PAID FROM THE FEDERAL TREASURY" FROM THE DEFINITION OF THE TERMS "OFFICER" AND "EMPLOYEE," THE RESTRICTIONS IN TITLE I OF THE ACT RELATIVE TO THE 5- DAY WEEK, LEGISLATIVE FURLOUGH, AND PERCENTAGE REDUCTION IN COMPENSATION, ARE NOT APPLICABLE TO STOREKEEPERS IN THE CUSTOMS SERVICE, NOR TO CUSTOMS EMPLOYEES IN PUERTO RICO AND THE VIRGIN ISLANDS WHOSE SALARIES ARE NOT PAID FROM THE TREASURY, EVEN THOUGH FOR AN ACCOUNTING OR BOOKKEEPING PURPOSE THE FUNDS FOR PAYMENT OF SALARIES ARE PASSED THROUGH THE TREASURY, SO LONG AS THE ULTIMATE CHARGE IS NOT AGAINST THE TREASURY, BUT THE INHIBITION IN SECTION 203, TITLE II, OF THE ACT AGAINST ADMINISTRATIVE PROMOTIONS DURING THE FISCAL YEAR 1933 IS APPLICABLE TO SUCH EMPLOYEES.

SECTION 104 (A) OF THE ECONOMY ACT OF JUNE 30, 1932, AND SECTION 1, TITLE II, OF THE ACT OF MARCH 20, 1933, BOTH DEFINE THE TERMS "OFFICER" AND "EMPLOYEE" AS FOLLOWS:

THE TERMS "OFFICER" AND "EMPLOYEE" MEAN ANY PERSON RENDERING SERVICES IN OR UNDER ANY BRANCH OR SERVICE OF THE UNITED STATES GOVERNMENT OR THE GOVERNMENT OF THE DISTRICT OF COLUMBIA, BUT DO NOT INCLUDE * * *

IN EACH STATUTE THERE ARE MADE A NUMBER OF EXPRESS EXCEPTIONS, A TOTAL OF ELEVEN IN THE ECONOMY ACT AND OF FIVE IN THE ACT OF MARCH 20, 1933. AMONG THE EXCEPTIONS APPEARING IN THE ECONOMY ACT BUT OMITTED IN THE LATER STATUTE IS "/7) PUBLIC OFFICIALS AND EMPLOYEES WHOSE COMPENSATION IS DERIVED FROM ASSESSMENTS ON BANKS AND/OR IS NOT PAID FROM THE FEDERAL TREASURY.' YOU ARE ADVISED, THEREFORE, THAT NEITHER THE SAID DECISION OF JULY 16, 1932, SUPRA, NOR ANY OTHER DECISION OF THIS OFFICE BASED ON EXCEPTION (7) TO SECTION 104 (A) OF THE ECONOMY ACT OF JUNE 30, 1932, SUPRA, IS CONTROLLING ON AND AFTER APRIL 1, 1933. THAT IS TO SAY, THE SAID EXCEPTION HAVING BEEN REPEALED EFFECTIVE APRIL 1, 1933, THE DECISIONS BASED THEREON ARE NOT APPLICABLE TO THE LAW AS IT NOW EXISTS.

SECTION 2, TITLE II, OF THE ACT OF MARCH 20, 1933, PROVIDES AS FOLLOWS:

SEC. 2. FOR THAT PORTION OF THE FISCAL YEAR 1933 BEGINNING WITH THE FIRST DAY OF THE CALENDAR MONTH FOLLOWING THE MONTH DURING WHICH THIS ACT IS ENACTED, AND FOR THE FISCAL YEAR ENDING JUNE 30, 1934, THE COMPENSATION OF EVERY OFFICER OR EMPLOYEE SHALL BE DETERMINED AS FOLLOWS:

(A) THE COMPENSATION WHICH SUCH OFFICER OR EMPLOYEE WOULD RECEIVE UNDER THE PROVISIONS OF ANY EXISTING LAW, SCHEDULE, REGULATION, EXECUTIVE ORDER, OR DEPARTMENTAL ORDER SHALL FIRST BE DETERMINED AS THOUGH THIS TITLE (EXCEPT SECTION 4) HAD NOT BEEN ENACTED.

(B) THE COMPENSATION AS DETERMINED UNDER SUBPARAGRAPH (A) OF THIS SECTION SHALL BE REDUCED BY THE PERCENTAGE, IF ANY, DETERMINED IN ACCORDANCE WITH SECTION 3 OF THIS TITLE.

UNDER THE DEFINITION IN SECTION 1 OF THE SAME ACT "ANY PERSON RENDERING SERVICES IN OR UNDER ANY BRANCH OR SERVICE OF THE UNITED STATES GOVERNMENT OR THE GOVERNMENT OF THE DISTRICT OF COLUMBIA," WITH THE FIVE EXCEPTIONS THEREIN MADE, ARE OFFICERS OR EMPLOYEES WHOSE TOTAL COMPENSATION, REGARDLESS OF THE SOURCE FROM WHICH PAID, IS SUBJECT TO THE 15 PERCENT REDUCTION IN ACCORDANCE WITH THE TERMS OF THE EXECUTIVE ORDER OF MARCH 28, 1933, ISSUED PURSUANT TO SECTION 3 OF THE ACT. THAT IS TO SAY, IF THE DUTIES AND RESPONSIBILITIES OF AN OFFICE OR POSITION ARE PERFORMED FOR OR UNDER THE SUPERVISION OF THE FEDERAL GOVERNMENT, AND THE BASIC RATE OF COMPENSATION IS FIXED UNDER "ANY EXISTING (FEDERAL) LAW, SCHEDULE, REGULATION, EXECUTIVE ORDER, OR DEPARTMENTAL ORDER," THE INCUMBENT THEREOF IS A FEDERAL OFFICER OR EMPLOYEE WITHIN THE MEANING OF SECTION 1 (A) OF TITLE II OF THE ACT OF MARCH 20, 1933, AND THE COMPENSATION IS SUBJECT TO THE 15 PERCENT REDUCTION UNDER SECTION 3 OF SAID TITLE.

UNDER THE CONTROLLING STATUTES CITED, SINCE ALL OF THE CLASSES OF PERSONNEL MENTIONED IN YOUR TWO LETTERS RENDER "SERVICES IN OR UNDER" A "BRANCH OR SERVICE OF THE UNITED STATES GOVERNMENT," IT MUST BE HELD THAT THEIR COMPENSATION FIXED AS OF MARCH 31, 1933,"UNDER THE PROVISIONS OF ANY EXISTING LAW, SCHEDULE, REGULATION, EXECUTIVE ORDER, OR DEPARTMENTAL ORDER" PURSUANT TO SECTION 2 (A) OF THE ACT OF MARCH 20, 1933, IS SUBJECT TO 15 PERCENT REDUCTION BEGINNING APRIL 1, 1933.

HOWEVER, AS THE IMPOUNDING PROVISIONS OF THE ACT OF MARCH 20, 1933, RELATE ONLY TO ,APPROPRIATIONS OR PORTIONS OF APPROPRIATIONS UNEXPENDED BY REASON OF THE OPERATION OF THIS ACT" (QUOTING FROM SECTION 8), NO PART OF THE SALARY OF A FEDERAL OFFICER OR EMPLOYEE WHICH IS PAID FROM PRIVATE OR STATE FUNDS WILL BE IMPOUNDED IN THE FEDERAL TREASURY. ACCORDINGLY, ALL PRIVATE OR STATE INTERESTS WHICH CONTRIBUTE THE WHOLE OR ANY PART OF THE COMPENSATION OF FEDERAL OFFICERS OR EMPLOYEES SHOULD BE REQUIRED ON AND AFTER APRIL 1, 1933, TO CONTRIBUTE 15 PERCENT LESS OF THE TOTAL COMPENSATION OF EACH OFFICER AND EMPLOYEE AS OF MARCH 31, 1933; THAT IS TO SAY, THE SAVING WITH RESPECT TO THE 15 PERCENT REDUCTION ON THEIR SHARE OF THE COMPENSATION WILL INURE TO THEIR BENEFIT.

THE CONTENTION IS MADE IN THE LAST-QUOTED LETTER, AND AT GREATER LENGTH IN THE ATTACHED MEMORANDUM, THAT AS THE PRIOR DECISIONS OF THIS OFFICE STATED THE GENERAL PURPOSE OF THE ECONOMY ACT TO BE THE SAVING OF FEDERAL APPROPRIATIONS, ONLY, AND NOT OF PRIVATE OR STATE FUNDS, THE ACT OF MARCH 20, 1933, THE GENERAL PURPOSE OF WHICH LIKEWISE WAS TO EFFECT ECONOMY IN GOVERNMENT EXPENDITURES, SHOULD, ALSO, BE SO CONSTRUED AS TO EXEMPT FROM THE SALARY REDUCTION THE COMPENSATION OF OFFICERS AND EMPLOYEES PAID FROM PRIVATE OR STATE FUNDS. WHILE IT IS TRUE THAT THE PURPOSE OF THE ACT OF MARCH 20, 1933, IS GENERALLY THE SAME AS THE ECONOMY ACT; THAT IS, THE SAVING OF FEDERAL APPROPRIATIONS, ITS TERMS ARE BROADER IN SCOPE, AND PRACTICALLY ALL OF THE EXEMPTIONS OR SAVING CLAUSES AGAINST LOSS OF SALARY APPEARING IN THE ECONOMY ACT HAVE BEEN ELIMINATED. EFFECT MUST BE GIVEN TO THE SPECIFIC CHANGES MADE IN THE REENACTMENT. SECTIONS 1, 2, AND 3 OF THE ACT OF MARCH 20, 1933, PRESCRIBE A DEFINITE BASIS FOR FIXING THE COMPENSATION OF EVERY FEDERAL OFFICER AND EMPLOYEE, AS OF APRIL 1, 1933, AND NO EXCEPTIONS BY IMPLICATION MAY BE RECOGNIZED.