A-52017, NOVEMBER 15, 1933, 13 COMP. GEN. 138

A-52017: Nov 15, 1933

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DEPARTMENTS AND ESTABLISHMENTS - SERVICES BETWEEN - HOME OWNERS' LOAN CORPORATION BONDS IT APPEARING THAT THE PUBLIC DEBT SERVICE OF THE TREASURY DEPARTMENT IS FULLY ORGANIZED AND EQUIPPED TO HANDLE THE BONDS OF THE HOME OWNERS' LOAN CORPORATION AT CONSIDERABLY LESS EXPENSE THAN WOULD BE INCURRED IF THE CORPORATION WERE TO SET UP ITS OWN ORGANIZATION. THERE WILL BE NO OBJECTION TO THE HANDLING OF THE WORK BY THE PUBLIC DEBT SERVICE UNDER THE PROVISIONS OF SECTION 601 OF THE ACT OF JUNE 30. AS FOLLOWS: THE SECRETARY OF THE TREASURY IS IN RECEIPT OF A LETTER FROM THE CHAIRMAN. WE SHALL APPRECIATE YOUR PROMPT CONSIDERATION OF THIS QUESTION AS IT IS NECESSARY FOR THE MACHINERY OF THE HANDLING OF THE BONDS TO BE AGREED UPON AND ESTABLISHED AND IN OPERATION AT THE EARLIEST POSSIBLE DATE.'.

A-52017, NOVEMBER 15, 1933, 13 COMP. GEN. 138

DEPARTMENTS AND ESTABLISHMENTS - SERVICES BETWEEN - HOME OWNERS' LOAN CORPORATION BONDS IT APPEARING THAT THE PUBLIC DEBT SERVICE OF THE TREASURY DEPARTMENT IS FULLY ORGANIZED AND EQUIPPED TO HANDLE THE BONDS OF THE HOME OWNERS' LOAN CORPORATION AT CONSIDERABLY LESS EXPENSE THAN WOULD BE INCURRED IF THE CORPORATION WERE TO SET UP ITS OWN ORGANIZATION, THERE WILL BE NO OBJECTION TO THE HANDLING OF THE WORK BY THE PUBLIC DEBT SERVICE UNDER THE PROVISIONS OF SECTION 601 OF THE ACT OF JUNE 30, 1932, 47 STAT. 417, THE FUNDS INVOLVED TO BE HANDLED EITHER THROUGH A SPECIAL WORKING FUND OR BY REIMBURSEMENT TO THE APPROPRIATION OR APPROPRIATIONS ORIGINALLY CHARGED WITH THE COST OF THE WORK.

COMPTROLLER GENERAL MCCARL TO THE SECRETARY OF THE TREASURY, NOVEMBER 15, 1933:

THERE HAS BEEN RECEIVED YOUR LETTER OF NOVEMBER 13, 1933, AS FOLLOWS:

THE SECRETARY OF THE TREASURY IS IN RECEIPT OF A LETTER FROM THE CHAIRMAN, FEDERAL HOME LOAN BANK BOARD, DATED NOVEMBER 7, 1933, SUBMITTING A PROPOSED PLAN FOR HANDLING THE BONDS OF THE HOME OWNERS' LOAN CORPORATION BY THE PUBLIC DEBT SERVICE OF THE TREASURY DEPARTMENT. THE CHAIRMAN STATES:

"THIS PLAN CONTEMPLATES THE TREASURY DEPARTMENT'S RENDERING THE SERVICES INDICATED TO THE CORPORATION AND THAT THE CORPORATION COMPENSATE THE TREASURY DEPARTMENT ON A PRO RATA BASIS FOR THE SERVICES RENDERED.

"THIS BOARD REQUESTS THAT YOU AUTHORIZE THIS METHOD OF HANDLING THE BONDS ON THIS BASIS, AND WE SHALL APPRECIATE YOUR PROMPT CONSIDERATION OF THIS QUESTION AS IT IS NECESSARY FOR THE MACHINERY OF THE HANDLING OF THE BONDS TO BE AGREED UPON AND ESTABLISHED AND IN OPERATION AT THE EARLIEST POSSIBLE DATE.'

IT IS ESTIMATED BY OFFICIALS OF THE HOME OWNERS' LOAN CORPORATION THAT THERE WILL BE A THOUSAND OR MORE ISSUES OF BONDS PER DAY IN ADDITION TO THE OTHER WORK IN CONNECTION WITH THE BONDS, AND AS THE PUBLIC-DEBT SERVICE OF THE TREASURY DEPARTMENT IS FULLY ORGANIZED AND EQUIPPED FOR HANDLING THIS WORK IT IS BELIEVED THAT THE WORK CAN BE PERFORMED BY THAT ORGANIZATION FOR LESS THAN HALF WHAT IT WOULD COST THE CORPORATION TO SET UP ITS OWN ORGANIZATION.

THE VOLUME OF WORK IN CONNECTION WITH HANDLING THE BONDS OF THE HOME OWNERS' LOAN CORPORATION WILL BE SO GREAT THAT IT CANNOT BE PERFORMED BY THE PUBLIC DEBT SERVICE WITHOUT AN INCREASE IN FORCE AS WELL AS SOME ADDITIONAL MISCELLANEOUS EXPENSES, AND THE APPROPRIATION FOR SALARIES AND EXPENSES OF THE PUBLIC DEBT SERVICE IS NOT SUFFICIENT TO PERMIT ABSORBING THE ADDITIONAL EXPENSE. UNLESS THE AMOUNT RECEIVED FROM THE HOME OWNERS' LOAN CORPORATION FOR THE PERFORMANCE OF THIS WORK IS MADE AVAILABLE FOR PAYMENT OF THE ADDITIONAL SALARIES AND OTHER EXPENSES IN THE PUBLIC DEBT SERVICE, THE DEPARTMENT WILL BE UNABLE TO UNDERTAKE THE WORK AS REQUESTED BY THE CHAIRMAN OF THE FEDERAL HOME LOAN BANK BOARD, MAKING IT NECESSARY THAT THE CORPORATION SET UP ITS OWN ORGANIZATION AT A GREATLY INCREASED EXPENSE, WHICH INCREASED EXPENSE WILL EVENTUALLY COME OUT OF THE TREASURY OF THE UNITED STATES.

IN THIS CONNECTION ATTENTION IS INVITED TO THE HOME OWNERS' LOAN ACT OF 1933, APPROVED JUNE 13, 1933, (PUBLIC, NO. 43--- 73D CONGRESS), WHICH PROVIDES, IN SECTION 4 (A), THAT THE FEDERAL HOME LOAN BANK BOARD IS AUTHORIZED AND DIRECTED TO CREATE A CORPORATION TO BE KNOWN AS THE HOME OWNERS' LOAN CORPORATION, WHICH SHALL BE AN INSTRUMENTALITY OF THE UNITED STATES AND WHICH SHALL BE UNDER THE DIRECTION OF THE BOARD AND OPERATED BY IT UNDER SUCH BYLAWS, RULES, AND REGULATIONS AS IT MAY PRESCRIBE. THE MEMBERS OF THE BOARD SHALL CONSTITUTE THE BOARD OF DIRECTORS OF THE CORPORATION. SECTION 4 (B) PROVIDES THAT THE CAPITAL STOCK OF THE CORPORATION SHALL BE SUBSCRIBED FOR BY THE SECRETARY OF THE TREASURY ON BEHALF OF THE UNITED STATES. SECTION 4 (C) AUTHORIZES THE CORPORATION TO ISSUE BONDS IN AN AGGREGATE AMOUNT NOT TO EXCEED $2,000,000,000, WHICH BONDS ,SHALL MATURE WITHIN A PERIOD OF NOT MORE THAN EIGHTEEN YEARS FROM THE DATE OF THEIR ISSUE, SHALL BEAR INTEREST AT A RATE NOT TO EXCEED 4 PERCENTUM PER ANNUM, AND SHALL BE FULLY AND UNCONDITIONALLY GUARANTEED AS TO INTEREST ONLY BY THE UNITED STATES, AND SUCH GUARANTY SHALL BE EXPRESSED ON THE FACE THEREOF.'

THE DEPARTMENT IS DESIROUS OF ACCEDING TO THE REQUEST OF THE CHAIRMAN, FEDERAL HOME LOAN BANK BOARD, THAT THE WORK OF HANDLING THE BONDS OF THE HOME OWNERS' LOAN CORPORATION BE PERFORMED BY THE PUBLIC DEBT SERVICE, BUT, AS ALREADY STATED, THIS WORK CANNOT BE UNDERTAKEN WITHOUT EXPANDING THE EXISTING ORGANIZATION WITH ADDITIONAL EXPENSE FOR PERSONNEL AND MISCELLANEOUS EXPENSES. BEFORE REPLYING TO THE REQUEST, YOUR DECISION IS REQUESTED AS TO (1) WHETHER THE TREASURY DEPARTMENT MAY BE REIMBURSED BY THE HOME OWNERS' LOAN CORPORATION FOR THE ADDITIONAL EXPENSE INCURRED IN DOING THE WORK, AND (2) WHETHER THE AMOUNTS WHICH MAY BE RECEIVED FROM THE CORPORATION AS REIMBURSEMENT OF EXPENSES WILL BE AVAILABLE FOR EXPENDITURE IN THE TREASURY DEPARTMENT EITHER THROUGH THE MEDIUM OF THE PROVISION FOR INTERDEPARTMENTAL WORK CONTAINED IN TITLE VI OF THE LEGISLATIVE APPROPRIATION ACT APPROVED JUNE 30, 1932, OR BY REIMBURSING THE APPROPRIATION OR APPROPRIATIONS OUT OF WHICH THE COST OF PERFORMING THE WORK WAS ORIGINALLY PAID.

UNDER THE CIRCUMSTANCES AS PRESENTED, THE MATTER MAY BE CONSIDERED AS WORK PERFORMED BY ONE AGENCY OF THE GOVERNMENT FOR ANOTHER AS CONTEMPLATED BY SECTION 601 OF THE ACT OF JUNE 30, 1932, 47 STAT. 417. IT IS PROVIDED BY SAID SECTION THAT ANY EXECUTIVE DEPARTMENT OR INDEPENDENT ESTABLISHMENT OF THE GOVERNMENT HAVING FUNDS AVAILABLE FOR THE PURPOSE "MAY PLACE ORDERS WITH ANY OTHER SUCH DEPARTMENT, ESTABLISHMENT, BUREAU, OR OFFICE FOR MATERIALS, SUPPLIES, EQUIPMENT, WORK, OR SERVICES OF ANY KIND THAT SUCH REQUISITIONED FEDERAL AGENCY MAY BE IN A POSITION TO SUPPLY OR EQUIPPED TO RENDER," AND SHALL PAY THEREFOR EITHER IN ADVANCE UPON AN ESTIMATED BASIS OR AS REIMBURSEMENT OF THE ACTUAL COSTS OF THE PROCUREMENT, WITH THE PROVISO THAT WHEN PAYMENT IS MADE BY ADVANCES, PROPER ADJUSTMENT SHALL BE MADE BASED UPON THE ACTUAL COST OF THE PROCUREMENT. THE LAW FURTHER PROVIDES THAT THE AMOUNTS PAID FOR SUCH PROCUREMENT SHALL BE CREDITED, IN CASES OF ADVANCE PAYMENTS, TO SPECIAL WORKING FUNDS AND IN CASES OF REIMBURSEMENTS TO THE APPROPRIATIONS OR FUNDS AGAINST WHICH CHARGES HAVE BEEN MADE.

IN THE MATTER PRESENTED BY YOU, THERE WILL BE NO OBJECTION TO THE HANDLING OF THE FUNDS EITHER THROUGH A SPECIAL WORKING FUND OR BY REIMBURSEMENT TO THE APPROPRIATION OR APPROPRIATIONS ORIGINALLY CHARGED WITH THE COST OF THE WORK, IT BEING UNDERSTOOD THAT THE CORPORATION IS TO BE CHARGED ON THE BASIS OF THE ACTUAL COST OF THE WORK TO BE PERFORMED FOR IT BY THE PUBLIC DEBT SERVICE.