A-80056, SEPTEMBER 1, 1936, 16 COMP. GEN. 211

A-80056: Sep 1, 1936

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PAYMENT WAS MADE IN CASH WHEN THE CREDIT DUE WAS SUFFICIENT FOR THE PURCHASE OF AN ADJUSTED SERVICE CERTIFICATE. AS A LOAN ON SAID CERTIFICATE FROM THE DATE SAID PAYMENT WAS MADE. AS FOLLOWS: THERE ARE NOW PENDING FOR SETTLEMENT UNDER THE ADJUSTED COMPENSATION PAYMENT ACT. SEVERAL APPLICATIONS WHERE THE VETERAN HAS PREVIOUSLY RECEIVED PAYMENT OF AN ADJUSTED SERVICE CREDIT OF LESS THAN $50 AND IT NOW DEVELOPS THAT HE WAS ENTITLED TO A CREDIT SUFFICIENT FOR THE PURCHASE OF AN ADJUSTED SERVICE CERTIFICATE. 348 CORRECTLY PRESENT THE PROBLEM AND ARE STATED AS FOLLOWS: IN DECEMBER 1924 THE WAR DEPARTMENT CERTIFIED THAT THE ABOVE NAMED VETERAN WAS ENTITLED TO ADJUSTED SERVICE CREDIT OF $32 ON HIS APPLICATION FOR BENEFITS UNDER THE WORLD WAR ADJUSTED COMPENSATION ACT.

A-80056, SEPTEMBER 1, 1936, 16 COMP. GEN. 211

VETERANS' ADMINISTRATION - ADJUSTED COMPENSATION - CASH PAYMENTS ON ERRONEOUS CERTIFICATIONS WHERE, BECAUSE OF THE ERRONEOUS CERTIFICATION OF AN ADJUSTED SERVICE CREDIT DUE A VETERAN, PAYMENT WAS MADE IN CASH WHEN THE CREDIT DUE WAS SUFFICIENT FOR THE PURCHASE OF AN ADJUSTED SERVICE CERTIFICATE, THE AMOUNT ERRONEOUSLY PAID MAY BE REGARDED AS A LIEN AGAINST THE CERTIFICATE OTHERWISE DUE THE VETERAN WITHIN THE PURVIEW OF SECTION 7 OF THE ADJUSTED COMPENSATION PAYMENT ACT OF JANUARY 27, 1936, 49 STAT. 1099, AND AS A LOAN ON SAID CERTIFICATE FROM THE DATE SAID PAYMENT WAS MADE, INTEREST TO BE COMPUTED AT THE RATES AND FOR THE PERIODS STATED IN APPLICABLE ADJUSTED COMPENSATION STATUTES.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE ADMINISTRATOR OF VETERANS' AFFAIRS, SEPTEMBER 1, 1936:

CONSIDERATION HAS BEEN GIVEN TO YOUR LETTER OF AUGUST 6, 1936, AS FOLLOWS:

THERE ARE NOW PENDING FOR SETTLEMENT UNDER THE ADJUSTED COMPENSATION PAYMENT ACT, 1936 (PUBLIC, NO. 425, 74TH CONGRESS), SEVERAL APPLICATIONS WHERE THE VETERAN HAS PREVIOUSLY RECEIVED PAYMENT OF AN ADJUSTED SERVICE CREDIT OF LESS THAN $50 AND IT NOW DEVELOPS THAT HE WAS ENTITLED TO A CREDIT SUFFICIENT FOR THE PURCHASE OF AN ADJUSTED SERVICE CERTIFICATE. THE FACTS IN THE CASE OF ARTHUR G. BIRD A 1,272,348 CORRECTLY PRESENT THE PROBLEM AND ARE STATED AS FOLLOWS:

IN DECEMBER 1924 THE WAR DEPARTMENT CERTIFIED THAT THE ABOVE NAMED VETERAN WAS ENTITLED TO ADJUSTED SERVICE CREDIT OF $32 ON HIS APPLICATION FOR BENEFITS UNDER THE WORLD WAR ADJUSTED COMPENSATION ACT, AND A CHECK FOR THAT AMOUNT WAS SENT TO HIM ON OR ABOUT MARCH 1, 1925. IN DECEMBER 1935 THE WAR DEPARTMENT ADVISED THAT THE ORIGINAL CERTIFICATION WAS IN ERROR AND THAT THE VETERAN IS ENTITLED TO ADJUSTED SERVICE CREDIT OF $78. THE LATTER AMOUNT WOULD AUTHORIZE THE ISSUANCE OF AN ADJUSTED SERVICE CERTIFICATE IN THE AMOUNT OF $196. THE VETERAN ADVISES THAT IT IS IMPOSSIBLE FOR HIM TO RETURN THE $32 AND HAS AUTHORIZED BY LETTER ITS COLLECTION FROM THE AMOUNT DUE HIM BY REASON OF HIS APPLICATION FOR PAYMENT UNDER THE ADJUSTED COMPENSATION PAYMENT ACT, 1936, HE HAVING FILED AN APPLICATION ON FORM 1701.

UNDER THE LAW (SECTION 500 OF THE WORLD WAR ADJUSTED COMPENSATION ACT) THE VETERAN WAS ENTITLED TO AN ADJUSTED SERVICE CERTIFICATE IN THE AMOUNT OF $196, EFFECTIVE AS OF JANUARY 1, 1925, WHICH WOULD HAVE HAD A LOAN VALUE OF $17.24 ON JANUARY 1, 1927; $23.53 ON JANUARY 1, 1928; $30.08 ON JANUARY 1, 1929; $36.97 ON JANUARY 1, 1930; $98.00 AFTER FEBRUARY 26, 1931. THE RATE OF INTEREST ON A LOAN GRANTED UNDER THAT AUTHORITY WAS FIXED BY SAID SECTION AND THE SUBSEQUENT AMENDMENTS THERETO.

THE ACT WAS FURTHER AMENDED ON FEBRUARY 26, 1931 (PUBLIC, NO. 743, 71ST CONGRESS) TO PROVIDE THAT THE LOAN BASIS OF AN ADJUSTED SERVICE CERTIFICATE SHALL AT NO TIME BE LESS THAN FIFTY PERCENTUM OF THE FACE VALUE OF THE CERTIFICATE AND THAT THE RATE OF INTEREST ON ANY LOAN MADE UNDER AUTHORITY OF SAID AMENDMENT SHALL NOT EXCEED FOUR AND ONE-HALF PERCENTUM PER ANNUM COMPOUNDED ANNUALLY. THE RATE OF INTEREST WAS CHANGED BY AN AMENDMENT APPROVED JULY 21, 1932 (PUBLIC, NO. 303, 72ND CONGRESS) TO THREE AND ONE-HALF PERCENTUM PER ANNUM COMPOUNDED ANNUALLY FROM DATE OF SAID AMENDMENT.

IT IS REQUESTED THAT YOU ADVISE IF A CERTIFICATE MAY BE ISSUED BEFORE THE VETERAN PAYS THE INDEBTEDNESS, OR IF ISSUED, MAY THE AMOUNT BE DEDUCTED IN MAKING SETTLEMENT UNDER THE ADJUSTED COMPENSATION PAYMENT ACT, 1936, IN VIEW OF THE PROVISIONS OF SECTION 7 OF SAID ACT WHICH IS QUOTED AS FOLLOWS:

"NOTWITHSTANDING THE PROVISIONS OF PUBLIC LAW NUMBERED 262, SEVENTY FOURTH CONGRESS, APPROVED AUGUST 12, 1935, NO DEDUCTIONS ON ACCOUNT OF ANY INDEBTEDNESS OF THE VETERAN TO THE UNITED STATES, EXCEPT ON ACCOUNT OF ANY LIEN AGAINST THE ADJUSTED-SERVICE CERTIFICATE AUTHORIZED BY LAW, SHALL BE MADE FROM THE ADJUSTED-SERVICE CREDIT OR FROM ANY AMOUNTS DUE UNDER THE WORLD WAR ADJUSTED COMPENSATION ACT, AS AMENDED, OR THIS ACT.'

WILL YOU ADVISE IF THIS INDEBTEDNESS IS A LIEN UNDER SAID SECTION 7, AND IF SO, PLEASE ADVISE THE RATE OR RATES OF INTEREST, IF ANY, TO BE CHARGED AND FOR WHAT PERIODS OF TIME.

THE INDEBTEDNESS IN THIS CASE, ARISING FROM THE ERRONEOUS PAYMENT OF $32 IN 1925, MAY BE REGARDED AS A LIEN AGAINST THE ADJUSTED SERVICE CERTIFICATE WITHIN THE PURVIEW OF SECTION 7 OF THE ADJUSTED COMPENSATION PAYMENT ACT OF JANUARY 27, 1936, AND THE CASE MAY BE DISPOSED OF UNDER THE TERMS OF SAID ACT ON THE BASIS THAT AN ADJUSTED SERVICE CERTIFICATE WITH A FACE VALUE OF $196 HAD BEEN ISSUED COINCIDENT WITH THE ISSUANCE OF THE CHECK "ON OR ABOUT MARCH 1, 1925" FOR THE ADJUSTED SERVICE CREDIT, AND THAT PAYMENT OF THE $32 AS ADJUSTED SERVICE CREDIT CONSTITUTES A LOAN AS OF THE DATE OF THE ISSUANCE OF THE CHECK BEARING INTEREST THEREAFTER AT THE LEGAL RATES AND FOR THE PERIOD STIPULATED IN THE VARIOUS PROVISIONS OF THE WORLD WAR ADJUSTED COMPENSATION ACT, AS AMENDED, AND THE ADJUSTED COMPENSATION PAYMENT ACT OF 1936. SEE 15 COMP. GEN. 841.