A-55341, MAY 9, 1934, 13 COMP. GEN. 338

A-55341: May 9, 1934

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AGRICULTURAL ADJUSTMENT ADMINISTRATION - COTTON POOL - ADMINISTRATIVE PROMOTIONS THE COTTON POOL ESTABLISHED BY THE SECRETARY OF AGRICULTURE FOR THE PURPOSE OF HANDLING COTTON OPTIONED TO COTTON PRODUCERS IS A FEDERAL AGENCY ACTING FOR THE SECRETARY OF AGRICULTURE AND THE PERSONNEL THEREOF ARE FEDERAL EMPLOYEES. AS FOLLOWS: A RULING FROM YOUR DEPARTMENT IS DESIRED COVERING THE MATTERS HEREINAFTER SUBMITTED: PURSUANT TO THE 1933 COTTON ACREAGE REDUCTION PROGRAM. OPTIONS WERE ISSUED TO 573. THESE PRODUCERS WERE ENTITLED TO PURCHASE 2. TITLE TO WHICH WAS ACQUIRED BY THE SECRETARY OF AGRICULTURE UNDER THE PROVISIONS OF SECTION 3. YOUR FAMILIARITY WITH THIS PHASE OF THE MATTER IS SUCH THAT IT IS NOT NECESSARY FOR ME TO GIVE THE PARTICULARS OF THE TERMS AND CONDITIONS OF THE OPTION CONTRACTS.

A-55341, MAY 9, 1934, 13 COMP. GEN. 338

AGRICULTURAL ADJUSTMENT ADMINISTRATION - COTTON POOL - ADMINISTRATIVE PROMOTIONS THE COTTON POOL ESTABLISHED BY THE SECRETARY OF AGRICULTURE FOR THE PURPOSE OF HANDLING COTTON OPTIONED TO COTTON PRODUCERS IS A FEDERAL AGENCY ACTING FOR THE SECRETARY OF AGRICULTURE AND THE PERSONNEL THEREOF ARE FEDERAL EMPLOYEES. ANY COMPENSATION TO SUCH EMPLOYEES AT RATES EXCEEDING THOSE PREVIOUSLY RECEIVED BY THEM AS EMPLOYEES OF THE AGRICULTURAL ADJUSTMENT ADMINISTRATION CONSTITUTES ADMINISTRATIVE PROMOTIONS IN CONTRAVENTION OF SECTION 7 OF THE ACT OF MARCH 3, 1933, AND MAY NOT BE PAID IN THE ABSENCE OF PRESIDENTIAL APPROVAL.

COMPTROLLER GENERAL MCCARL TO THE SECRETARY OF AGRICULTURE, MAY 9, 1934:

THERE HAS BEEN RECEIVED YOUR LETTER OF MAY 2, 1934, AS FOLLOWS:

A RULING FROM YOUR DEPARTMENT IS DESIRED COVERING THE MATTERS HEREINAFTER SUBMITTED:

PURSUANT TO THE 1933 COTTON ACREAGE REDUCTION PROGRAM, OPTIONS WERE ISSUED TO 573,947 PRODUCERS OF COTTON, UNDER THE TERMS OF WHICH OPTIONS, THESE PRODUCERS WERE ENTITLED TO PURCHASE 2,446,075 BALES OF COTTON, TITLE TO WHICH WAS ACQUIRED BY THE SECRETARY OF AGRICULTURE UNDER THE PROVISIONS OF SECTION 3, AGRICULTURAL ADJUSTMENT ACT, APPROVED MAY 12, 1933. YOUR FAMILIARITY WITH THIS PHASE OF THE MATTER IS SUCH THAT IT IS NOT NECESSARY FOR ME TO GIVE THE PARTICULARS OF THE TERMS AND CONDITIONS OF THE OPTION CONTRACTS.

TO PREVENT HOLDERS OF THE OPTIONS ON THIS COTTON FROM FORCING THIS CONSIDERABLE QUANTITY OF COTTON ON THE MARKET AND TO AVOID THE DISASTROUS CONSEQUENCES WHICH WOULD FOLLOW UPON THE MARKETING OF SUCH A QUANTITY OF COTTON, THE PRODUCERS WERE OFFERED AS AN ALTERNATIVE METHOD FOR THE EXERCISE OF THEIR RESPECTIVE OPTIONS, THE PRIVILEGE OF HAVING THE COTTON COVERED BY THESE OPTIONS DELIVERED TO A COTTON POOL. THIS ALTERNATIVE METHOD IS OUTLINED IN THE DOCUMENT, A COPY OF WHICH IS HERETO ATTACHED, KNOWN AS A.A.A. FORM C-5 C, EXERCISE OF COTTON OPTION AND POOL AGREEMENT. THESE BLANK FORMS WERE MAILED OUT TO THE PRODUCERS HOLDING OPTIONS. THIS DATE, 442,249 OF THESE PRODUCERS HOLDING OPTIONS ON 1,944,415 BALES OF COTTON, HAVE SEVERALLY EXECUTED THE FORM C-5 C.

PURSUANT TO THE AUTHORITY CONFERRED BY THE EXECUTED MULTIPLE IDENTICAL FOR C-5 C, THE SECRETARY OF AGRICULTURE DID, ON THE 8TH DAY OF JANUARY 1934 DECLARE THE ESTABLISHMENT OF THE COTTON POOL AND DESIGNATE OSCAR JOHNSTON AS MANAGER OF THAT POOL. A COPY OF THE DOCUMENT ESTABLISHING THE POOL AND APPOINTING THE MANAGER THEREOF, IS HEREWITH SUBMITTED.

ON THE 12TH DAY OF MARCH 1934 AN ARRANGEMENT OR AGREEMENT WAS REACHED BETWEEN THE SECRETARY OF AGRICULTURE AND THE MANAGER OF THE COTTON POOL, WHICH ARRANGEMENT IS SET FORTH IN A WRITTEN MEMORANDUM SIGNED BY THE SECRETARY OF AGRICULTURE, A COPY OF WHICH IS HEREWITH TRANSMITTED. ATTACHED TO THIS MEMORANDUM, IS THE ORIGINAL OF EXHIBIT A, BEING A SCHEDULE COVERING THE PERSONNEL AND SALARIES OF THE POOL.

TO DATE, THE SECRETARY OF AGRICULTURE HAS TRANSFERRED AND DELIVERED TO THE POOL, WAREHOUSE RECEIPTS CALLING FOR 1,944,415 BALES OF COTTON, THE SECRETARY RESERVING TO HIMSELF FOR THE BENEFIT OF THE UNITED STATES, A LIEN AGAINST SAID COTTON FOR THE OPTION PRICE OF 6 CENTS PER POUND OF $30 PER BALE, TOGETHER WITH A LIEN TO SECURE REIMBURSEMENT FOR ANY ADDITIONAL SUMS OF MONEY WHICH MAY, FROM TIME TO TIME, BE LOANED OR ADVANCED AGAINST THIS COTTON BY THE SECRETARY OF AGRICULTURE FOR ANY PURPOSE WHATSOEVER AND PARTICULARLY FOR THE PURPOSE OF DEFRAYING CARRYING AND HANDLING COSTS, INCLUDING STORAGE, INSURANCE, INTEREST, ETC.

THIS COTTON WAS ACQUIRED FROM THE FARM CREDIT ADMINISTRATION AT A COST TO THE SECRETARY OF AGRICULTURE OF 5 CENTS PER POUND; IT WAS OPTIONED TO THE PRODUCERS AT 6 CENTS PER POUND; THE DIFFERENCE OF 1 CENT PER POUND OR APPROXIMATELY $10,000,000 WAS DEPOSITED WITH WM. R. FUCHS, DISBURSING CLERK, DEPARTMENT OF AGRICULTURE, IN A SPECIAL DISBURSING ACCOUNT NO. 78- 004, THIS FUND BEING DESIGNED FOR USE IN DEFRAYING COSTS OF CARRYING AND HANDLING THE COTTON AFORESAID. THE SECRETARY OF AGRICULTURE BORROWED FROM SUNDRY COMMERCIAL BANKS 6 CENTS PER POUND USING 5 CENTS PER POUND TO PAY FARM CREDIT ADMINISTRATION FOR THE COTTON AND COVERING THE 1 CENT PER POUND INTO THE DISBURSING FUND ABOVE REFERRED TO. ALL OF THE COTTON AFORESAID IS TRANSFERRED TO THE POOL AS OF FEBRUARY 1, 1934, FREE FROM ANY LIENS, CLAIMS, COSTS OR EXPENSES INCURRED PRIOR TO THAT DATE EXCEPT A LIEN FOR 6 CENTS PER POUND ABOVE REFERRED TO. FROM AND AFTER FEBRUARY 1, 1934, IT IS CONTEMPLATED THAT THE COTTON SHALL BEAR THE COSTS INCIDENT TO ITS CARRYING, HANDLING, AND ULTIMATE MARKETING, WHICH COSTS ARE ULTIMATELY TO BE PAID BY THE POOL FROM THE PROCEEDS DERIVED FROM THE MARKETING OF THE COTTON, THE REIMBURSEMENT FOR THESE COSTS TO CONSTITUTE A FIRST LIEN UPON THE COTTON.

THE POOL BEING WITHOUT FUNDS WITH WHICH TO DEFRAY THE CURRENT COSTS AND EXPENSES INCIDENT TO HANDLING THIS COTTON, AND THE SECRETARY BEING AT THE NECESSITY OF PROTECTING THE COTTON AND CARRYING AND HANDLING THE SAME BECAUSE OF THE GOVERNMENT'S INTEREST TO THE EXTENT OF 6 CENTS PER POUND OR $30 PER BALE THEREIN, IT IS THE PURPOSE OF THE SECRETARY, SUBJECT TO THE APPROVAL OF THE COMPTROLLER GENERAL, TO ADVANCE FROM TIME TO TIME, TO THE POOL OR FOR THE ACCOUNT OF THE POOL, THE NECESSARY CARRYING CHARGES WHICH WILL INCLUDE PARTICULARLY AND IN ADDITION TO STORAGE, INTEREST AND INSURANCE, CLERICAL AND ACCOUNTING COSTS, ADMINISTRATIVE EXPENSES, SALARIES, ETC. FOR PURPOSES OF ECONOMY AND FOR THE SAFETY AND PROTECTION OF THE GOVERNMENT, IT IS DESIRABLE THAT THE PAYMENT OF THESE COSTS AND EXPENSES BE UNDER THE IMMEDIATE DIRECTION OF THE AGRICULTURAL ADJUSTMENT ADMINISTRATION AND THE SECRETARY OF AGRICULTURE, AND THAT ALL FUNDS DEVOTED TO THIS PURPOSE SHOULD BE HANDLED THROUGH THE SPECIAL DISBURSING ACCOUNT OF THE DEPARTMENT OF AGRICULTURE AND HANDLED BY THE DISBURSING CLERK, OF THE DEPARTMENT OF AGRICULTURE. IT WAS FOR THESE CONSIDERATIONS, THAT THE ARRANGEMENT AS SET FORTH IN THE DOCUMENT OF MARCH 12, 1934, WAS MADE AND AGREED TO.

IN CONNECTION WITH THE ESTABLISHMENT OF THE POOL, THE HOLDERS OF THE OPTIONS WERE ASSURED THAT WHEN THE POOL WAS ESTABLISHED, THE POOL MANAGER WOULD UNDER AUTHORITY OF THE POWER CONTAINED IN THE FORMS C-5 C, BORROW AGAINST THE COTTON DELIVERED TO THE POOL, THE SUM OF 4 CENTS PER POUND OR $20 PER BALE AND SECURE THE REPAYMENT OF THE FUNDS SO BORROWED BY PLEDGING THE POOL'S EQUITY IN THE COTTON OVER AND ABOVE THE LIEN RETAINED BY THE SECRETARY FOR 6 CENTS PER POUND AS AFORESAID. THIS BORROWING INVOLVED NO LIABILITY ON THE PART OF THE GOVERNMENT OR OF ANY GOVERNMENTAL AGENT OR OFFICIAL AND TO BE SECURED SOLELY BY THE PLEDGE OF THE EQUITY IN THE COTTON, SUCH PLEDGE TO BE AS STATED SUBJECT TO THE LIEN RETAINED BY THE SECRETARY OF AGRICULTURE FOR THE 6 CENTS PER POUND INTEREST OF THE GOVERNMENT IN THE COTTON AND FOR SUCH FURTHER OR ADDITIONAL SUMS AS MIGHT BE ADVANCED TO DEFRAY COST AND EXPENSE INCIDENT TO CARRYING AND HANDLING THE COTTON. THE POOL MANAGER PURSUANT TO AUTHORITY HAS IN FACT BORROWED SAID SUM OF 4 CENTS PER POUND WHICH HAS BEEN COVERED TO THE SPECIAL DISBURSING ACCOUNT OF THE DEPARTMENT OF AGRICULTURE AND AUDITED BY THE COTTON AUDIT AND ACCOUNTING DIVISION OF THE DEPARTMENT OF AGRICULTURE.

THE POOL MANAGER WAS AUTHORIZED WITH THE APPROVAL AND CONSENT OF THE SECRETARY OF AGRICULTURE, TO EMPLOY THE NECESSARY PERSONNEL TO CONDUCT THE MANAGEMENT AND OPERATION OF THE POOL AND PURSUANT THERETO, EMPLOYED THOSE PERSONS AT THE SALARIES INDICATED ON EXHIBIT A TO THE DOCUMENT OF MARCH 12, 1934. THE PERSONS COMPRISING THE POOL PERSONNEL WERE SERVING IN SUNDRY CAPACITIES AS EMPLOYEES OF THE AGRICULTURAL ADJUSTMENT ADMINISTRATION OR THE BUREAU OF AGRICULTURAL ECONOMICS, DEPARTMENT OF AGRICULTURE, AND WERE SELECTED BY THE POOL MANAGER FROM THEIR SEVERAL PRIOR EMPLOYMENTS BECAUSE OF SPECIAL QUALIFICATIONS FOR THE DUTIES INCIDENT TO THE OPERATION OF THE POOL. THESE EMPLOYMENTS WERE DULY APPROVED BY THE SECRETARY OF AGRICULTURE AS INDICATED BY HIS SIGNATURE UPON THE SCHEDULE EXHIBIT A.

AS OF MARCH 1, 1934, THE PERSONS COMPRISING THE POOL PERSONNEL, SEVERALLY SEVERED THEIR CONNECTIONS WITH THE DEPARTMENT OF AGRICULTURE AND/OR THE AGRICULTURAL ADJUSTMENT ADMINISTRATION, CEASED TO BE FEDERAL EMPLOYEES AND UNDERTOOK THE DISCHARGE OF THE DUTIES INCIDENT TO THE HANDLING AND CONDUCT OF THE POOL WITH THE EXPECTATION THAT THEY WOULD BE PAID THEIR RESPECTIVE SALARIES EITHER BY THE POOL OR BY THE DISBURSING CLERK, DEPARTMENT OF AGRICULTURE FOR THE ACCOUNT OF THE POOL, AND WITH THE FURTHER UNDERSTANDING THAT ALL SALARIES TO BE PAID TO THEM OR ANY OF THEM, WOULD BE SUBJECT TO SUCH DEDUCTION AS IS APPLICABLE IN THE CASE OF FEDERAL EMPLOYEES.

PURSUANT TO THIS ARRANGEMENT AND UNDER DATE OF APRIL 16, 1934, STANDARD FORM NO. 1064, SCHEDULE OF DISBURSEMENT, WAS DRAWN UP BY MR. E. E. NAYLOR, GENERAL AUDITOR, A.A.A., FOR THE PAYMENT OF $844.50, BEING SALARIES FOR POOL EMPLOYEES FOR THE FIRST HALF OF APRIL 1933. THIS SCHEDULE WAS SUBMITTED TO THE GENERAL ACCOUNTING OFFICE FOR PREAUDIT AND HAS BEEN RETURNED WITH A PREAUDIT STATEMENT DATED APRIL 20, 1934, WITH THE FOLLOWING NOTATION:

"VOUCHER RETURNED WITHOUT CERTIFICATION. SINCE THE REGULAR PAY ROLL VOUCHERS NOS. 17437, 17585, 17586, AND 202769 SHOW EMPLOYEES PAID AT LOWER SALARY RATES THAN THOSE PROPOSED HEREON, ANY INCREASE IN COMPENSATION IS PROHIBITED BY SECTION 7, ACT OF MARCH 3, 1933, 47 STAT. 1515 IN THE ABSENCE OF A SHOWING THAT EMPLOYEES ARE NOW OCCUPYING MATERIALLY DIFFERENT POSITIONS WITH INCREASED DUTIES AND RESPONSIBILITIES. ALSO, THE SALARY RATES SHOULD BE FIXED IN ACCORDANCE WITH EITHER THE REGULAR CLASSIFICATION SCHEDULE OR THE SCHEDULE PRESCRIBED IN EXECUTIVE ORDER NO. 6440 OF NOVEMBER 18, 1933, AS AMENDED BY EXECUTIVE ORDER 6554 OF JANUARY 10, 1934. A-52844, DATED FEBRUARY 20, 1934; A-54282, DATED MARCH 19, 1934; A- 51743, DATED FEBRUARY 14, 1934.'

YOUR ATTENTION IS CALLED TO THE FACT THAT THE EMPLOYEES ENUMERATED ON THE SCHEDULE A ARE NOW NOT ONLY OCCUPYING MATERIALLY DIFFERENT POSITIONS WITH INCREASED DUTIES AND RESPONSIBILITIES FROM THOSE POSITIONS WHICH WERE OCCUPIED BY THESE EMPLOYEES WHILE IN DIRECT GOVERNMENTAL SERVICE, BUT THAT THESE PERSONS ARE NO LONGER IN THE EMPLOYMENT OF THE GOVERNMENT OR THE DEPARTMENT OF AGRICULTURE, BUT ARE EMPLOYED IN AN INDEPENDENT ORGANIZATION, THE COTTON POOL; THAT THE GOVERNMENT IS FINANCING THE OPERATION OF THE POOL UPON THE SECURITY OF THE LIEN ON THE COTTON AND BECAUSE OF THE DIRECT PECUNIARY INTEREST OF THE GOVERNMENT IN THE COTTON, AS WELL AS THE GOVERNMENT'S INTEREST IN THE MANAGEMENT AND HANDLING OF THE POOL BECAUSE OF ITS CONNECTION WITH THE GOVERNMENT'S AGRICULTURAL PRODUCTION PROGRAM AS RELATED TO COTTON. THE ADVANCE BY THE DEPARTMENT OF FUNDS WITH WHICH TO PAY THE SALARIES OF THE POOL PERSONNEL IS IN THE SAME CATEGORY AS THE ADVANCE BY THE GOVERNMENT OF FUNDS FOR PAYING WAREHOUSE CHARGES, TRANSPORTATION CHARGES, INTEREST CHARGES, SALES COMMISSIONS AND DIVERS AND SUNDRY OTHER COSTS AND EXPENSES INCIDENT TO THE CONDUCT AND OPERATION OF THE POOL. YOUR RULING IS PARTICULARLY DESIRED AS TO WHETHER OR NOT UNDER THE CONDITIONS ABOVE STATED, AND IN VIEW OF THE GOVERNMENT'S PECUNIARY INTEREST IN THE COTTON, IT IS NOT PERMISSIBLE FOR THE TRANSACTION TO BE HANDLED AS OUTLINED AND THE COSTS AND EXPENSES INCLUDING SALARIES OF THE POOL PERSONNEL TO BE PAID FROM A SPECIAL DISBURSING ACCOUNT AND BY THE DISBURSING CLERK, DEPARTMENT OF AGRICULTURE, AND UPON THE SECURITY OF THE LIEN RETAINED AGAINST THE COTTON, IT BEING AT ALL TIMES UNDERSTOOD THAT ALL COSTS AND EXPENSES, INCLUDING SALARIES, SHALL BE UNDER THE DIRECT CONTROL OF THE SECRETARY OF AGRICULTURE.

FROM TIME TO TIME, IT BECOMES NECESSARY FOR PERSONS OF THE POOL PERSONNEL TO TRAVEL AND INCUR TRAVELING EXPENSES INCIDENT TO THE HANDLING OF THE POOL. TO COVER SUCH ITEMS OF EXPENSE, IS IT PERMISSIBLE FOR POOL EMPLOYEES TO PROCURE STANDARD FORM 1030, GOVERNMENT REQUEST FOR TRANSPORTATION AND TO BE ACCORDED SUBSISTENCE ON EXPENSE ACCOUNTS IN LIKE MANNER AS MAY EMPLOYEES OF THE DEPARTMENT OF AGRICULTURE? IF THE FOREGOING IS NOT PERMISSIBLE, WHAT FORMS OF VOUCHERS, RECEIPTS, ETC., SHOULD BE USED BY SUCH POOL EMPLOYEES IN ORDER THAT THEY MAY BE REIMBURSED FOR SUCH EXPENDITURES BY THE POOL, SUCH REIMBURSEMENT TO BE MADE IN LIKE MANNER AS ARE OTHER PAYMENTS FOR POOL COSTS AND EXPENSES.

THE MEMBERS OF THE POOL HAVING SEVERED THEIR FEDERAL CONNECTION, HAVE RECEIVED NO COMPENSATION FOR THE SERVICES RENDERED BY THEM DURING THE MONTH OF APRIL AND CANNOT BE PAID FOR THEIR SERVICES UNTIL THE MATTERS COVERED BY THE FOREGOING STATEMENT ARE DETERMINED BY YOU. IT IS FOR THIS REASON VERY DESIRABLE THAT WE HAVE A RULING FROM YOUR DEPARTMENT AT THE EARLIEST MOMENT POSSIBLE.

FROM A COPY OF THE EXERCISE OF COTTON OPTION AND POOL AGREEMENT, THE SECRETARY OF AGRICULTURE IS AUTHORIZED BY THE OPTIONEES TO ESTABLISH A COTTON POOL, THE MANAGEMENT OF THE POOL TO BE VESTED IN A PERSON APPOINTED BY THE SECRETARY AND SUBJECT TO REMOVAL BY THE SECRETARY IN HIS DISCRETION. ALL EMPLOYEES OF THE POOL ARE LIKEWISE TO BE APPOINTED SUBJECT TO APPROVAL BY THE SECRETARY OF AGRICULTURE. ALL FUNDS RECEIVED BY THE MANAGER ARE TO BE KEPT ON DEPOSIT WITH THE UNITED STATES TREASURY AND DISBURSED BY THE DISBURSING CLERK OF THE DEPARTMENT OF AGRICULTURE UPON VOUCHERS OR WRITTEN AUTHORIZATION OF PERSONS TO BE DESIGNATED BY THE SECRETARY OF AGRICULTURE. NO MONEY HAS PASSED FROM THE POOL OR THE OPTIONEES TO THE SECRETARY AND IT IS ACKNOWLEDGED THAT THE POOL HAS NO CASH AVAILABLE AND IT IS PROPOSED TO PAY THE SALARIES OF THE MANAGER AND OTHER PERSONNEL AND THE EXPENSES OF THE POOL FROM THE FUNDS BORROWED BY SECRETARY OF AGRICULTURE UNDER AUTHORITY CONFERRED UPON HIM BY SECTION 4 OF THE ACT OF MAY 12, 1933, 48 STAT. 33, FOR WHICH FUNDS IT IS PRESUMED THAT THE WAREHOUSE RECEIPTS FOR THE COTTON ARE PLEDGED TO THE BANKS. SUCH DISBURSEMENTS ARE TO BE REIMBURSED FROM ANY CASH REALIZED FROM THE SALES OF THE COTTON OVER AND ABOVE THE OPTION PRICE AT 6 CENTS PER POUND WHICH IS THE AMOUNT OF THE LIEN AGAINST THE COTTON TO COVER FUNDS BORROWED BY THE SECRETARY OF AGRICULTURE. FROM A CAREFUL CONSIDERATION OF THE AGREEMENT, ETC., IT APPEARS THAT THE POOL IS NOTHING MORE OR LESS THAN AN AGENCY CREATED BY AND SUBJECT TO THE CONTROL OF THE SECRETARY OF AGRICULTURE. THE AGREEMENT TO REIMBURSE THE SECRETARY FOR EXPENSES OF THE POOL CONSTITUTES NOTHING MORE OR LESS THAN AN AGREEMENT ON THE PART OF THE OPTIONEES TO PAY THE CARRYING CHARGES OF THE COTTON WHICH THEY ARE REQUIRED TO PAY BY SECTION 6 (C) OF THE ACT OF MAY 12, 1933. THAT IS TO SAY, THE POOL IS STRICTLY A FEDERAL AGENCY ACTING FOR THE SECRETARY OF AGRICULTURE IN CARRYING OUT THE PROVISIONS OF THE STATUTE. THE LAWFUL EXPENSES OF THE POOL ARE PROPERLY PAYABLE FROM THE FUNDS BORROWED BY THE SECRETARY OF AGRICULTURE PURSUANT TO THE AUTHORITY VESTED IN HIM BY THE STATUTE AND ARE REIMBURSABLE FROM ANY SUMS REALIZED FROM THE SALE OF THE COTTON, THIS BEING AUTHORIZED BY THE STATUTE. THE PERSONNEL OF THE POOL, HOWEVER, ARE FEDERAL EMPLOYEES AND SUBJECT TO THE STATUTORY RESTRICTIONS AS SUCH. IT IS NOTED THAT THE PAY ROLLS SUBMITTED FOR PREAUDIT PROPOSE TO DEDUCT THE 10 PERCENT REQUIRED BY THE ECONOMY ACT FROM THE COMPENSATION OF GOVERNMENT EMPLOYEES. WHILE THIS OFFICE DOES NOT QUESTION THE CLAIM THAT THE MANAGER AND OTHER PERSONNEL ENGAGED IN THE MANAGEMENT OF THE POOL OCCUPY NEW AND DIFFERENT POSITIONS FROM THOSE PREVIOUSLY HELD BY THEM, NO EVIDENCE HAS BEEN SUBMITTED THAT THE FILLING OF SUCH NEW POSITIONS, WHICH CARRY SUBSTANTIAL INCREASES OVER THE COMPENSATION PREVIOUSLY RECEIVED, HAS BEEN AUTHORIZED BY THE PRESIDENT AS REQUIRED BY SECTION 7 OF THE ACT OF MARCH 3, 1933, 47 STAT. 1515. IN THE ABSENCE OF SUCH PRESIDENTIAL APPROVAL THE PAY ROLLS MAY NOT BE CERTIFIED FOR PAYMENT BY THIS OFFICE.