A-80890, OCTOBER 9, 1936, 16 COMP. GEN. 364

A-80890: Oct 9, 1936

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EXCHANGE LOSSES PAYABLE ON SALARIES AND ALLOWANCES ACCRUING ON THAT DATE TO OFFICERS AND EMPLOYEES OF THE UNITED STATES ON DUTY IN FRANCE ARE NOT FOR COMPUTATION ON THE BASIS OF THE RATE OF EXCHANGE QUOTED AT NEW YORK ON THAT DATE. 1936: RECEIPT IS ACKNOWLEDGED OF YOUR LETTER OF OCTOBER 1. AS FOLLOWS: AN EARLY DECISION IS REQUESTED WITH REGARD TO THE RATE TO BE USED FOR THE COMPUTATION OF EXCHANGE LOSSES PAYABLE UNDER THE ACT OF MARCH 26. THE BASIC RATE FOR THE FRENCH FRANC FOR THE COMPUTATION OF EXCHANGE LOSSES IS FIXED BY EXECUTIVE ORDER NO. 6928 OF DECEMBER 24. WAS AT THE RATE OF 15.18 FRANCS TO THE DOLLAR. THAT DUE TO THE CLOSING OF THE EXCHANGE MARKET NO RATE FOR THE FRANC WAS OBTAINABLE ON SEPTEMBER 30.

A-80890, OCTOBER 9, 1936, 16 COMP. GEN. 364

EXCHANGE - LOSS BY - OFFICERS AND EMPLOYEES IN FOREIGN COUNTRIES - CLOSING OF FOREIGN EXCHANGE MARKETS THE EXCHANGE MARKET IN PARIS HAVING BEEN CLOSED PRIOR TO SEPTEMBER 30, 1936, EXCHANGE LOSSES PAYABLE ON SALARIES AND ALLOWANCES ACCRUING ON THAT DATE TO OFFICERS AND EMPLOYEES OF THE UNITED STATES ON DUTY IN FRANCE ARE NOT FOR COMPUTATION ON THE BASIS OF THE RATE OF EXCHANGE QUOTED AT NEW YORK ON THAT DATE, BUT ON THE RATE IN EFFECT ON THE LAST PRECEDING BUSINESS DAY IN PARIS FOR EXCHANGE TRANSACTION PURPOSES.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE SECRETARY OF STATE, OCTOBER 9, 1936:

RECEIPT IS ACKNOWLEDGED OF YOUR LETTER OF OCTOBER 1, 1936, AS FOLLOWS:

AN EARLY DECISION IS REQUESTED WITH REGARD TO THE RATE TO BE USED FOR THE COMPUTATION OF EXCHANGE LOSSES PAYABLE UNDER THE ACT OF MARCH 26, 1934 (48 STAT. 466), ON SALARIES AND ALLOWANCES ACCRUING ON SEPTEMBER 30, 1936, TO OFFICERS AND EMPLOYEES OF THIS GOVERNMENT ON DUTY IN FRANCE.

THE BASIC RATE FOR THE FRENCH FRANC FOR THE COMPUTATION OF EXCHANGE LOSSES IS FIXED BY EXECUTIVE ORDER NO. 6928 OF DECEMBER 24, 1934, AT 3.92 CENTS. THE DISTRICT ACCOUNTING AND DISBURSING OFFICER AT PARIS REPORTS THAT THE LAST BANK TRANSACTION AT PARIS ON SEPTEMBER 25, 1936, WAS AT THE RATE OF 15.18 FRANCS TO THE DOLLAR, OR ABOUT 6.58 CENTS, BUT THAT DUE TO THE CLOSING OF THE EXCHANGE MARKET NO RATE FOR THE FRANC WAS OBTAINABLE ON SEPTEMBER 30. HOWEVER, ACCORDING TO THE NEW YORK TIMES, OCTOBER 1, 1936, THE SIGHT EXCHANGE RATE FOR THE FRENCH FRANC IN NEW YORK ON SEPTEMBER 30 RANGED BETWEEN 5.3 CENTS AND 4.8 CENTS, CLOSING AT 4.97 CENTS.

THE DECISIONS OF THE COMPTROLLER GENERAL HOLD THAT EXCHANGE LOSSES ARE FOR COMPUTATION AS OF THE DATE THE SALARIES OR ALLOWANCES ACCRUE TO THE EMPLOYEE, IRRESPECTIVE OF WHERE THE CHECK THEREFOR IS CASHED. (SEE 15 COMP. GEN. 212 AND DECISIONS THEREIN CITED.)

THE INSTRUCTIONS TO DIPLOMATIC OFFICERS, CHAPTER XX, SECTION 9, NOTE 16, PROVIDE AS FOLLOWS:

"SALARIES OR COMPENSATION OF DIPLOMATIC OFFICERS AND EMPLOYEES, WHEN PAID IN FOREIGN CURRENCY, MUST BE PAID AT THE RATE OF EXCHANGE (THE BANK SELLING RATE FOR SIGHT DRAFTS ON NEW YORK) PREVAILING ON THE DATE ON WHICH THE ACTUAL PAYMENTS ARE MADE, I.E., THE LAST DAY OF THE MONTH, OR THE FIFTEENTH DAY OF THE MONTH WHEN PAYMENTS ARE MADE SEMIMONTHLY. IF THE LAST DAY OF THE MONTH OR THE FIFTEENTH DAY OF THE MONTH SHOULD FALL ON A SUNDAY OR A LEGAL HOLIDAY, PAYMENTS WILL BE MADE AT THE RATE OF EXCHANGE (THE BANK SELLING RATE FOR SIGHT DRAFTS ON NEW YORK) WHICH PREVAILED ON THE LAST PRECEDING BUSINESS DAY.'

WHILE THE QUESTION HERE FOR DECISION RELATES TO OFFICERS AND EMPLOYEES WHO ARE NOT PAID, NOT IN FOREIGN CURRENCY, BUT BY DOLLAR CHECKS, THE PARAGRAPH QUOTED SEEMS DEFINITELY TO INDICATE THAT, WHERE AN EXCHANGE COMPUTATION IS NECESSARY TO DETERMINE THE AMOUNT DUE, THE RATE OF THE LAST PRECEDING BUSINESS DAY IS PROPERLY TO BE USED WHEN THE DATE ON WHICH SALARIES AND ALLOWANCES ACCRUE IS A SUNDAY OR LEGAL HOLIDAY.

FOR THE PURPOSE OF DETERMINING EXCHANGE LOSSES PAYABLE IN FRANCE ON SEPTEMBER 30, 1936, SHOULD THE DISTRICT ACCOUNTING AND DISBURSING OFFICER USE THE RATE OF THE LAST PRECEDING BUSINESS DAY FOR EXCHANGE TRANSACTIONS, THAT IS, THE RATE OF ABOUT 6.58 CENTS TO THE FRANC (THE EXACT RATE, OF COURSE, BEING FOR ESTABLISHMENT BY BANKING EVIDENCE) QUOTED ON SEPTEMBER 25, 1936, OR SHOULD HE USE THE RATE AT WHICH UNITED STATES CURRENCY COULD HAVE BEEN SOLD FOR FRANCS IN NEW YORK ON SEPTEMBER 30, EVEN IN THE ABSENCE OF BANKING FACILITIES FOR THE IMMEDIATE REMISSION TO PARIS OF FRANCS ACQUIRED ON THAT DATE IN NEW YORK?

YOUR DECISION WITH REGARD TO FRANCE MAY ALSO HAVE APPLICATION IN THE CASE OF OFFICERS AND EMPLOYEES IN ITALY, WHERE IT IS UNDERSTOOD THAT THE FOREIGN EXCHANGE MARKET WAS ALSO CLOSED ON SEPTEMBER 30.

I HAVE INFORMED THE DISTRICT ACCOUNTING AND DISBURSING OFFICER AT PARIS THAT THE PURPORT OF YOUR DECISION WILL BE TELEGRAPHED TO HIM.

WHERE PAYMENTS OF EXCHANGE LOSSES ARE TO BE MADE BY THE DISBURSING OFFICER IN A FOREIGN COUNTRY THE RATES OF EXCHANGE QUOTED AT NEW YORK CITY ARE NOT THE PROPER BASIS FOR COMPUTING SUCH LOSSES, BUT COMPUTATION SHOULD BE MADE UPON THE RATE OF EXCHANGE IN EFFECT ON THE LAST BUSINESS DAY PRIOR THERETO, WHICH IN THE CASE SUBMITTED BY YOU WOULD BE SEPTEMBER 25, 1936.