A-61873, MAY 22, 1935, 14 COMP. GEN. 846

A-61873: May 22, 1935

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RAILROAD RETIREMENT BOARD THE UNITED STATES SUPREME COURT HAVING HELD THAT THE ACT CREATING THE RAILROAD RETIREMENT BOARD AND FUND TO BE VOID AND OF NO EFFECT THE BOARD AND ITS EMPLOYEES HAVE NO LAWFUL EXISTENCE AND THE MEMBERS OF THE BOARD OR THE EMPLOYEES MAY NOT BE PAID SALARIES OR OTHER EXPENSES FROM THE RETIREMENT FUND. 1935: THERE HAVE BEEN RECEIVED YOUR TWO LETTERS OF MAY 6. AS FOLLOWS: THE SUPREME COURT OF THE UNITED STATES TODAY HANDED DOWN ITS DECISION AFFIRMING THE INJUNCTION ISSUED BY THE SUPREME COURT OF THE DISTRICT OF COLUMBIA WHICH ENJOINED THE RAILROAD RETIREMENT BOARD FROM ENFORCING THE RAILROAD RETIREMENT ACT AGAINST THE RAILROADS ON THE GROUND THAT THE ACT IS FOR SEVERAL REASONS UNCONSTITUTIONAL.

A-61873, MAY 22, 1935, 14 COMP. GEN. 846

RAILROAD RETIREMENT BOARD THE UNITED STATES SUPREME COURT HAVING HELD THAT THE ACT CREATING THE RAILROAD RETIREMENT BOARD AND FUND TO BE VOID AND OF NO EFFECT THE BOARD AND ITS EMPLOYEES HAVE NO LAWFUL EXISTENCE AND THE MEMBERS OF THE BOARD OR THE EMPLOYEES MAY NOT BE PAID SALARIES OR OTHER EXPENSES FROM THE RETIREMENT FUND, NOR MAY THEY AS SUCH PERFORM ANY OFFICIAL FUNCTION WHATEVER. THE PROPERTY AND RECORDS IN POSSESSION OF THE FORMER BOARD SHOULD BE TURNED OVER TO A GOVERNMENT AGENCY DESIGNATED BY THE PRESIDENT, TO BE HELD UNTIL THE CONGRESS DIRECTS THE DISPOSITION THEREOF.

COMPTROLLER GENERAL MCCARL TO THE CHAIRMAN, RAILROAD RETIREMENT BOARD, MAY 22, 1935:

THERE HAVE BEEN RECEIVED YOUR TWO LETTERS OF MAY 6, 1935, AS FOLLOWS:

THE SUPREME COURT OF THE UNITED STATES TODAY HANDED DOWN ITS DECISION AFFIRMING THE INJUNCTION ISSUED BY THE SUPREME COURT OF THE DISTRICT OF COLUMBIA WHICH ENJOINED THE RAILROAD RETIREMENT BOARD FROM ENFORCING THE RAILROAD RETIREMENT ACT AGAINST THE RAILROADS ON THE GROUND THAT THE ACT IS FOR SEVERAL REASONS UNCONSTITUTIONAL. THE BOARD IS CONSEQUENTLY UNDER THE OBLIGATION OF WINDING UP ITS AFFAIRS.

THE BOARD, THROUGH ITS MEMBERS AND EMPLOYEES, DULY APPOINTED OFFICERS AND EMPLOYEES OF THE UNITED STATES, HAS BEEN FUNCTIONING SINCE JULY 1934. HAS ACCUMULATED A LARGE VOLUME OF VALUABLE RECORDS. IT HAS IN ITS FILES MANY VALUABLE DOCUMENTS AND PIECES OF PROPERTY WHICH BELONG TO INDIVIDUALS WHO FILED APPLICATIONS FOR RETIREMENT UNDER THE ACT, SUCH AS INSURANCE POLICIES, FAMILY BIBLES, MARRIAGE CERTIFICATES, AND NATURALIZATION CERTIFICATES SENT TO THE BOARD AS PROOF OF THE APPLICANTS' AGE. THESE ITEMS OF PROPERTY MUST OF COURSE BE RETURNED TO THEIR OWNERS. THE OTHER RECORDS OF THE BOARD, WHICH WILL BE OF GREAT SERVICE TO THE GOVERNMENT IN VARIOUS CONNECTIONS, MUST ALSO BE DISPOSED OF AND THE AFFAIRS OF THE BOARD LIQUIDATED. THE PROCESS OF LIQUIDATION WILL REQUIRE A LITTLE TIME--- TWO OR THREE WEEKS--- AND THE SERVICES OF A SMALL STAFF OF EMPLOYEES.

THE RAILROAD RETIREMENT FUND WHICH WAS APPROPRIATED FOR USE BY THE BOARD FOR THE PAYMENT, AMONG OTHER THINGS, OF THE COMPENSATION OF THE BOARD MEMBERS AND ITS EMPLOYEES AND THE EXPENSES OF ADMINISTRATION, SHOWS A BALANCE WHICH WILL BE SUFFICIENT TO PROVIDE FOR THE LIQUIDATION. THE BOARD RESPECTFULLY INQUIRES WHETHER ITS STAFF MAY BE RETAINED TEMPORARILY FOR THE PURPOSE OF LIQUIDATING ITS AFFAIRS AND WHETHER YOU WILL APPROVE VOUCHERS FOR PAYMENTS REQUIRED IN THIS PROCESS.

I WISH TO ADD THAT THE MANDATE AFFIRMING THE INJUNCTION AGAINST THE BOARD WILL NOT GO DOWN FROM THE SUPREME COURT FOR TWENTY-FIVE DAYS AND THAT NEITHER THE INJUNCTION NOR THE COURT'S OPINION ATTEMPTED IN ANY WAY TO IMPEDE THE BOARD IN THE USE OF THE MONEY ALREADY IN THE RAILROAD RETIREMENT FUND.

PURSUANT TO THE RAILROAD RETIREMENT ACT THE MEMBERS OF THE RAILROAD RETIREMENT BOARD AND ITS EMPLOYEES ARE EMPLOYEES UNDER THE ACT AND HAVE MADE CONTRIBUTIONS TO THE RAILROAD RETIREMENT FUND. THESE CONTRIBUTIONS WERE DEDUCTED FROM THEIR SALARIES AND RETAINED IN THE FUND. THE SALARIES OF THE MEMBERS OF THE BOARD WERE FIXED BY THE RAILROAD RETIREMENT ACT AND THE SALARIES OF THE EMPLOYEES WERE FIXED IN ACCORDANCE WITH THE CLASSIFICATION ACT OF 1923, AS AMENDED, AND THE ECONOMY ACT OF 1932.

THE RAILROAD RETIREMENT ACT HAS NOW BEEN DECLARED UNCONSTITUTIONAL. THE BOARD RESPECTFULLY INQUIRES WHETHER YOU WILL APPROVE VOUCHERS RETURNING FROM THE RAILROAD RETIREMENT FUND TO THE MEMBERS OF THE BOARD AND ITS PRESENT AND FORMER EMPLOYEES THEIR SEVERAL CONTRIBUTIONS TO THE FUND.

THE RAILROAD RETIREMENT ACT OF JUNE 27, 1934 (48 STAT. 1283), PROVIDED FOR (SEC. 5, P. 1285) ,AN EMPLOYEE CONTRIBUTION IN A PERCENTAGE UPON HIS COMPENSATION; " THAT "EACH CARRIER SHALL PAY A CARRIER CONTRIBUTION EQUAL TO TWICE THE CONTRIBUTIONS OF EACH EMPLOYEE OF SUCH CARRIER; " THAT ,THE CONTRIBUTION PERCENTAGE SHALL BE DETERMINED BY THE BOARD FROM TIME TO TIME, AND SHALL BE SUCH AS TO PRODUCE FROM THE COMBINED EMPLOYEE AND CARRIER CONTRIBUTIONS, WITH A REASONABLE MARGIN FOR CONTINGENCIES, THE AMOUNT NECESSARY TO PAY THE ANNUITIES, OTHER DISBURSEMENTS AND THE EXPENSES BECOMING PAYABLE FROM TIME TO TIME; " AND THAT THE CONTRIBUTIONS OF THE EMPLOYEES AND THE CARRIER ,SHALL BE PAID BY THE CARRIER * * * INTO THE TREASURY OF THE UNITED STATES QUARTERLY OR AT SUCH OTHER TIMES AS ORDERED BY THE BOARD.'

SECTION 8, PAGE 1286, PROVIDED THAT ALL THE MONEYS PAID INTO THE TREASURY UNDER THE PROVISIONS OF THE ACT AND ALL REFUNDS OF MONEY PAID OUT THEREUNDER "SHALL CONSTITUTE AND BE KEPT IN A SEPARATE FUND IN THE TREASURY TO BE KNOWN AS THE "RAILROAD RETIREMENT FUND" * * *," AND AT,"THERE IS HEREBY APPROPRIATED SUCH SUMS NOT IN EXCESS OF THE AMOUNTS IN SAID FUND AS MAY BE NECESSARY TO PAY ALL ANNUITIES, OTHER DISBURSEMENTS, AND THE EXPENSES OF ADMINISTRATION OF THIS ACT.'

IT THUS APPEARS SUCH FUNDS AS MAY NOW BE IN THE "RAILROAD RETIREMENT FUND" ARE CONTRIBUTIONS, APPARENTLY ON BEHALF OF EMPLOYEES AND CARRIERS; ALSO, THAT THE CARRIERS PROTESTED MAKING CONTRIBUTIONS, ON THE THEORY THE LAW WAS UNCONSTITUTIONAL, BUT THAT FINALLY AN ARRANGEMENT WAS MADE UNDER WHICH THE CONTRIBUTIONS WERE MADE TO SOME EXTENT. WHAT SPECIFIC ARRANGEMENT WAS MADE, IF ANY, DOES NOT APPEAR FROM THE RECORD BEFORE ME, BUT YOUR PRESENT QUESTIONS HAVE RELATION TO THOSE FUNDS AND ARE UNDERSTOOD TO BE SPECIFICALLY WHETHER FROM AND AFTER THE DECISION OF THE SUPREME COURT OF THE UNITED STATES DECLARING UNCONSTITUTIONAL THE RAILROAD RETIREMENT ACT, THE SALARIES OF THE MEMBERS OF THE BOARD AND THE EMPLOYEES, IN WINDING UP THE AFFAIRS OF THE BOARD, ARE ENTITLED TO BE PAID FROM SAID FUNDS, AND WHETHER CERTAIN CONTRIBUTIONS TO THE FUND MADE BY EMPLOYEES OF THE BOARD MAY BE REFUNDED.

THE DECREE OF THE SUPREME COURT OF THE DISTRICT OF COLUMBIA ENTERED OCTOBER 30, 1934, IN THE CASE OF THE ALTON RAILROAD CO. ET AL. V. RAILROAD RETIREMENT BOARD, ET AL., NOT ONLY ENJOINED THE RAILROAD RETIREMENT BOARD FROM TAKING ANY FURTHER STEPS TO ENFORCE THE PROVISIONS OF THE RAILROAD RETIREMENT ACT BUT FOUND THAT THE LAW WAS UNCONSTITUTIONAL IN ITS ENTIRETY AND SPECIFICALLY HELD ,IT IS FURTHER CONSIDERED, ADJUDGED, AND DECREED THAT THE RAILROAD RETIREMENT ACT AND EACH AND EVERY PROVISION THEREOF IS VOID AND OF NO EFFECT.' THE DECISION OF THE UNITED STATES SUPREME COURT OF MAY 6, 1935, AFFIRMED THE JUDGMENT OF THE SUPREME COURT OF THE DISTRICT OF COLUMBIA. AS TO THE EFFECT OF SUCH A DECISION, ATTENTION IS INVITED TO THE CASE OF NORTON V. SHELBY COUNTY, 118 U.S. 425, IN WHICH IT WAS HELD, PAGE 442:

* * * AN UNCONSTITUTIONAL ACT IS NOT A LAW; IT CONFERS NO RIGHTS; IT IMPOSES NO DUTIES; IT AFFORDS NO PROTECTION; IT CREATES NO OFFICE; IT IS, IN LEGAL CONTEMPLATION, AS INOPERATIVE AS THOUGH IT HAD NEVER BEEN PASSED.

IT MUST FOLLOW FROM THE DECISION OF THE SUPREME COURT OF THE UNITED STATES IN THIS MATTER, THAT THE BOARD AND ITS EMPLOYEES HAVE NO LAWFUL EXISTENCE AS SUCH AND HENCE THERE IS NO AUTHORITY FOR THE MEMBERS OF THE BOARD OR ITS EMPLOYEES TO BE PAID FROM THE FUND IN QUESTION ANY SALARIES, ETC. ; AND, ALSO, THAT THERE IS NO AUTHORITY FOR THE BOARD OR ITS EMPLOYEES, AS SUCH, TO PERFORM ANY FUNCTION WHATSOEVER. THE FUNDS INVOLVED MUST REMAIN IN THE "RAILROAD RETIREMENT FUND" UNTIL OTHERWISE DIRECTED BY THE CONGRESS--- THE AGENCY, TO WIT, THE RAILROAD RETIREMENT BOARD, WHICH OTHERWISE WOULD HAVE FUNCTIONED ON PAYMENTS OUT OF SAID FUND, BEING BY FORCE OF THE DECISION OF THE SUPREME COURT OF THE UNITED STATES, NONEXISTENT.

YOUR SUBMISSION STATES THERE ARE CERTAIN ITEMS OF PROPERTY IN YOUR POSSESSION AND A LARGE VOLUME OF VALUABLE RECORDS, ETC., AND THAT THESE MUST BE PRESERVED AND EITHER BE RETURNED TO THE OWNERS OR OTHERWISE PROPERLY DISPOSED OF. THESE ARE MATTERS FOR YOU TO HAVE IMMEDIATELY BROUGHT TO THE ATTENTION OF THE PRESIDENT OF THE UNITED STATES, SO THAT BY HIS ORDER THERE MAY BE DESIGNATED AN EXISTING AGENCY OF THE GOVERNMENT TO TAKE POSSESSION OF SUCH PAPERS, RECORDS, ETC., AND TO HOLD THEM UNTIL THE CONGRESS DIRECTS WHAT DISPOSITION SHALL BE MADE THEREOF.