A-65077, NOVEMBER 8, 1935, 15 COMP. GEN. 384

A-65077: Nov 8, 1935

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ARE AVAILABLE FOR PAYMENT OF THE CASH VALUE OF BONA FIDE CREDIT HOURS ACCUMULATED TO JUNE 15. TO THOSE WORKERS WHO HAVE NOT BECOME OBLIGATED TO THE GOVERNMENT BY THE PURCHASE OF PROJECT HOMES. IS NOT FOR APPLICATION TO SUCH PAYMENTS. AS FOLLOWS: THE SECRETARY OF THE INTERIOR WAS DESIGNATED BY THE PRESIDENT BY EXECUTIVE ORDER NO. 6209 OF JULY 21. IT WAS EXPECTED. WOULD EVENTUALLY PURCHASE THE COMPLETED HOMES FROM THE FEDERAL GOVERNMENT WERE EMPLOYED IN THE ACTUAL WORK OF CONSTRUCTION. IN ORDER THAT SUCH PERSONS MIGHT ACCUMULATE SUFFICIENT FUNDS TO ENABLE THEM TO AMORTIZE THE OBLIGATIONS THEY WOULD THUS INCUR A SYSTEM OF SO-CALLED "CREDIT HOURS" WAS PLACED IN OPERATION. UNDER THIS SYSTEM THE WAGE RATES OF SUCH EMPLOYEES WERE CALCULATED IN ACCORDANCE WITH THE STANDARDS ESTABLISHED BY SECTION 206 OF THE NATIONAL INDUSTRIAL RECOVERY ACT WHICH BY ITS TERMS WAS APPLICABLE TO ALL PROJECTS CONSTRUCTED UNDER TITLE II OF THE NATIONAL INDUSTRIAL RECOVERY ACT.

A-65077, NOVEMBER 8, 1935, 15 COMP. GEN. 384

SUBSISTENCE HOMESTEADS - PAYMENTS FOR CREDIT HOURS FUNDS TRANSFERRED TO THE RESETTLEMENT ADMINISTRATION PURSUANT TO EXECUTIVE ORDER NO. 7041 OF MAY 15, 1935, ARE AVAILABLE FOR PAYMENT OF THE CASH VALUE OF BONA FIDE CREDIT HOURS ACCUMULATED TO JUNE 15, 1935, UNDER AGREEMENTS BETWEEN REPRESENTATIVES OF THE SECRETARY OF THE INTERIOR AND WORKERS EMPLOYED DIRECTLY IN THE CONSTRUCTION OF SUBSISTENCE HOMESTEADS, TO THOSE WORKERS WHO HAVE NOT BECOME OBLIGATED TO THE GOVERNMENT BY THE PURCHASE OF PROJECT HOMES. SECTION 206 OF THE NATIONAL INDUSTRIAL RECOVERY ACT OF JUNE 16, 1933, 48 STAT. 205, RELATIVE TO HOURS OF LABOR AND RATES OF COMPENSATION FOR PERSONS EMPLOYED UNDER CONTRACTS FOR CONSTRUCTION PROJECTS, IS NOT FOR APPLICATION TO SUCH PAYMENTS. ALL CLAIMS FOR CASH PAYMENT FOR ACCUMULATED CREDIT HOURS SHOULD BE FORWARDED TO THE GENERAL ACCOUNTING OFFICE FOR DIRECT SETTLEMENT.

COMPTROLLER GENERAL MCCARL TO THE ADMINISTRATOR, RESETTLEMENT ADMINISTRATION, NOVEMBER 8, 1935:

THERE HAS BEEN CONSIDERED YOUR LETTER OF AUGUST 27, 1935, AS FOLLOWS:

THE SECRETARY OF THE INTERIOR WAS DESIGNATED BY THE PRESIDENT BY EXECUTIVE ORDER NO. 6209 OF JULY 21, 1935, AS THE AGENCY TO ADMINISTER SECTION 208 OF THE NATIONAL INDUSTRIAL RECOVERY ACT (48 STAT. 200, APPROVED JUNE 16, 1933). PURSUANT TO THE AUTHORITY THUS VESTED IN HIM, THE SECRETARY COMMENCED THE CONSTRUCTION OF VARIOUS SUBSISTENCE HOMESTEAD PROJECTS FOR "OTHERWISE AIDING IN THE PURCHASE OF SUBSISTENCE HOMESTEADS.'

ON THREE OF THOSE PROJECTS (TYGART VALLEY, ELKINS, WEST VIRGINIA; CUMBERLAND, CROSSVILLE, TENNESSEE; AND WESTMORELAND, GREENSBURG, PENNSYLVANIA) MANY OF THOSE WHO, IT WAS EXPECTED, WOULD EVENTUALLY PURCHASE THE COMPLETED HOMES FROM THE FEDERAL GOVERNMENT WERE EMPLOYED IN THE ACTUAL WORK OF CONSTRUCTION. IN ORDER THAT SUCH PERSONS MIGHT ACCUMULATE SUFFICIENT FUNDS TO ENABLE THEM TO AMORTIZE THE OBLIGATIONS THEY WOULD THUS INCUR A SYSTEM OF SO-CALLED "CREDIT HOURS" WAS PLACED IN OPERATION. UNDER THIS SYSTEM THE WAGE RATES OF SUCH EMPLOYEES WERE CALCULATED IN ACCORDANCE WITH THE STANDARDS ESTABLISHED BY SECTION 206 OF THE NATIONAL INDUSTRIAL RECOVERY ACT WHICH BY ITS TERMS WAS APPLICABLE TO ALL PROJECTS CONSTRUCTED UNDER TITLE II OF THE NATIONAL INDUSTRIAL RECOVERY ACT. HOWEVER, ONLY PART OF THE WAGE EARNED IN EACH PAY PERIOD WAS ACTUALLY PAID IN CASH TO SUCH WORKERS. IT WAS AGREED BETWEEN THE WORKERS AND THE DULY AUTHORIZED REPRESENTATIVES OF THE SECRETARY THAT THE BALANCE SHOULD REMAIN TO THE CREDIT OF THE FORMER AS "CREDIT HOURS.' WAS CONTEMPLATED THAT THE "CREDIT HOURS" SHOULD BE LIQUIDATED IN THE FOLLOWING FASHION:

1. IF THE WORKER EVENTUALLY BECAME OBLIGATED TO THE FEDERAL GOVERNMENT FOR THE PURCHASE PRICE OF A HOME THE FULL CASH VALUE OF THE "CREDIT HOURS" ACCUMULATED WOULD BECOME AVAILABLE TO HIM BY WAY OF OFFSET AGAINST SUCH OBLIGATION.

2. IF THE WORKER LEFT OR WAS DISMISSED FROM THE PROJECT BEFORE HE BECAME OBLIGATED ON ACCOUNT OF THE PURCHASE OF A HOME HE WOULD RECEIVE IN CASH AN ADMINISTRATIVELY ESTABLISHED PERCENTAGE (THE EXACT PERCENTAGE DIFFERED FROM PROJECT TO PROJECT AND FROM TIME TO TIME) OF THE CASH VALUE OF THE "CREDIT HOURS.'

BY EXECUTIVE ORDER NO. 7041 OF MAY 15, 1935, THESE PROJECTS, TOGETHER WITH ALL THE PROPERTY AND FUNCTIONS OF THE SECRETARY OF THE INTERIOR WITH RELATION TO SECTION 208 OF THE NATIONAL INDUSTRIAL RECOVERY ACT WERE TRANSFERRED TO THE RESETTLEMENT ADMINISTRATION. ON JUNE 15, 1935, BY A LETTER ADDRESSED TO THE SECRETARY OF THE TREASURY, THE PRESIDENT ADOPTED THOSE PROJECTS, AMONG OTHERS,"AS PROJECTS FOR RURAL REHABILITATION.' SINCE JUNE 15, 1935, THESE PROJECTS HAVE BEEN FINANCED BY FUNDS APPROPRIATED BY THE EMERGENCY RELIEF APPROPRIATION ACT OF 1935. SINCE THAT DATE NO FURTHER "CREDIT HOURS" HAVE BEEN ACCUMULATED; ALL PAYMENTS TO WORKERS HAVE BEEN MADE IN CASH.

YOUR OPINION IS SOUGHT ON THE FOLLOWING QUESTIONS WHICH ARE MATERIAL TO THE ADMINISTRATION OF THESE PROJECTS:

1. DID THE AGREEMENTS BETWEEN THE WORKERS AND THE SECRETARY OF THE INTERIOR OBLIGATE FUNDS APPROPRIATED BY SECTION 208 OF THE NATIONAL INDUSTRIAL RECOVERY ACT SO THAT IN THE EVENT THAT THE ,CREDIT HOURS" OF THE WORKERS ARE LIQUIDATED IN CASH THE PAYMENT MAY BE CHARGED AGAINST THAT APPROPRIATION?

2. IN THE EVENT THAT A WORKER RESIGNS FROM OR IS DISMISSED FROM A PROJECT, MAY HE BE PAID THE ADMINISTRATIVELY DETERMINED PERCENTAGE OF THE CASH VALUE OF THE "CREDIT HOURS" ACCUMULATED, OR MUST THAT DETERMINATION BE DISREGARDED ON THE THEORY THAT IT RESULTS IN THE PAYMENT OF A LESSER WAGE THAN THAT GUARANTEED BY SECTION 206 OF THE NATIONAL INDUSTRIAL RECOVERY ACT?

3. IN THE EVENT THAT IT IS ADMINISTRATIVELY DETERMINED THAT "RURAL REHABILITATION" WILL NOT BE EFFECTED BY A SALE OF THE HOMES TO THESE WORKERS, MAY SUCH WORKERS AS REMAIN ON THE PROJECT BE PAID THE FULL CASH VALUE OF THE CREDIT HOURS ACCUMULATED OUT OF FUNDS APPROPRIATED BY SECTION 208 OF THE NATIONAL INDUSTRIAL RECOVERY ACT?

SINCE ADMINISTRATIVE DECISIONS OF SOME IMPORTANCE WAIT UPON THE DETERMINATION OF THESE ISSUES, YOUR EARLY OPINION IS RESPECTFULLY REQUESTED.

SECTIONS 206 AND 208 OF THE NATIONAL INDUSTRIAL RECOVERY ACT OF JUNE 16, 1933, 48 STAT. 204, 205, PROVIDED:

SEC. 206. ALL CONTRACTS LET FOR CONSTRUCTION PROJECTS AND ALL LOANS AND GRANTS PURSUANT TO THIS TITLE SHALL CONTAIN SUCH PROVISIONS AS ARE NECESSARY TO INSURE (1) THAT NO CONVICT LABOR SHALL BE EMPLOYED ON ANY SUCH PROJECT; (2) THAT (EXCEPT IN EXECUTIVE, ADMINISTRATIVE, AND SUPERVISORY POSITIONS), SO FAR AS PRACTICABLE AND FEASIBLE, NO INDIVIDUAL DIRECTLY EMPLOYED ON ANY SUCH PROJECT SHALL BE PERMITTED TO WORK MORE THAN THIRTY HOURS IN ANY ONE WEEK; (3) THAT ALL EMPLOYEES SHALL BE PAID JUST AND REASONABLE WAGES WHICH SHALL BE COMPENSATION SUFFICIENT TO PROVIDE, FOR THE HOURS OF LABOR AS LIMITED, A STANDARD OF LIVING IN DECENCY AND COMFORT; * * *

SEC. 208. TO PROVIDE FOR AIDING THE REDISTRIBUTION OF THE OVERBALANCE OF POPULATION IN INDUSTRIAL CENTERS $25,000,000 IS HEREBY MADE AVAILABLE TO THE PRESIDENT, TO BE USED BY HIM THROUGH SUCH AGENCIES AS HE MAY ESTABLISH AND UNDER SUCH REGULATIONS AS HE MAY MAKE, FOR MAKING LOANS FOR AND OTHERWISE AIDING IN THE PURCHASE OF SUBSISTENCE HOMESTEADS. THE MONEYS COLLECTED AS REPAYMENT OF SAID LOANS SHALL CONSTITUTE A REVOLVING FUND TO BE ADMINISTERED AS DIRECTED BY THE PRESIDENT FOR THE PURPOSES OF THIS SECTION.

THE AUTHORITY TO PROCEED UNDER SECTION 208 OF THE NATIONAL INDUSTRIAL RECOVERY ACT OF JUNE 16, 1933, 48 STAT. 205, CEASED JUNE 16, 1935, AND NO OBLIGATION COULD HAVE BEEN LAWFULLY INCURRED AFTER THAT DATE BY REASON OF THAT SECTION, BUT ANY BONA FIDE OBLIGATIONS LAWFULLY INCURRED PRIOR TO JUNE 16, 1935, MAY BE PAID FROM FUNDS TRANSFERRED TO YOUR ADMINISTRATION PURSUANT TO EXECUTIVE ORDER NO. 7041 OF MAY 15, 1935. (SEE A-61714, JUNE 3, 1935.)

SECTION 206 OF THE NATIONAL INDUSTRIAL RECOVERY ACT, RELATIVE TO THE HOURS OF LABOR AND RATES OF COMPENSATION FOR PERSONS EMPLOYED UNDER CONTRACTS LET FOR CONSTRUCTION PROJECTS AND IN CONNECTION WITH LOANS OR GRANTS PURSUANT TO THAT TITLE, WERE NOT NECESSARILY CONTROLLING AS TO THE RATES OF COMPENSATION WHICH MIGHT BE PAID TO PERSONS EMPLOYED DIRECTLY IN CONNECTION WITH SUBSISTENCE HOMESTEAD ACTIVITIES UNDER THE FORMER SUBSISTENCE HOMESTEAD DIVISION OF THE DEPARTMENT OF THE INTERIOR. ACCORDINGLY, TO THE EXTENT THAT YOUR THREE QUESTIONS RELATE TO WAGES EARNED PRIOR TO JUNE 16, 1935, THEY ARE ANSWERED IN THE AFFIRMATIVE.

AS SUCH PAYMENTS WOULD NOT CONSTITUTE CURRENT PAYMENTS SUCH AS DISBURSING OFFICERS ARE AUTHORIZED TO MAKE, AND MAY POSSIBLY INVOLVE THE COLLECTION OF INDEBTEDNESS FROM SOME OF THE PAYEES, ALL CLAIMS FOR CASH PAYMENT FOR CREDIT HOURS SHOULD BE FORWARDED TO THIS OFFICE FOR DIRECT SETTLEMENT ACCOMPANIED BY A COPY OF THE AGREEMENT BETWEEN THE SECRETARY OF THE INTERIOR AND THE WORKERS OR A REFERENCE TO THE ORIGINAL AGREEMENT, IF ON FILE IN THIS OFFICE, TOGETHER WITH A REPORT WHETHER THE CLAIMANTS ARE INDEBTED TO THE UNITED STATES FOR MONEY OR PROPERTY.