A-93507, A-93379, APRIL 25, 1938, 17 COMP. GEN. 865

A-93379,A-93507: Apr 25, 1938

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

MAY NOT BE MADE UNTIL IT IS JUDICIALLY DETERMINED THE UNITED STATES IS LEGALLY LIABLE FOR SUCH DIFFERENCES. HAS REQUESTED THIS OFFICE TO "MAKE SUCH RULINGS AND TAKE SUCH ACTION AS WILL PERMIT AND AUTHORIZE THE POST OFFICE DEPARTMENT TO PAY US THE MINIMUM PRICES REQUIRED BY THE COAL COMMISSION FOR COAL DELIVERED TO IT DURING THE PERIOD THOSE PRICES WERE IN EFFECT.'. STATES ITS CASE AS FOLLOWS: WE HAVE SEVERAL CONTRACTS TO SUPPLY COAL TO THE POST OFFICE DEPARTMENT AT DIFFERENT LOCATIONS. IN SOME INSTANCES THESE CONTRACTS WERE AT PRICES LESS THAN THE MINIMUM PRICES APPLICABLE TO THE GRADE AND KIND OF COAL DELIVERED AT THE POINT REQUIRED. THE COMMISSION'S PRICES WERE EFFECTIVE FROM DECEMBER 16.

A-93507, A-93379, APRIL 25, 1938, 17 COMP. GEN. 865

CONTRACTS - COAL - BITUMINOUS COAL ACT OF 1937 - MINIMUM PRICE ORDERS - GOVERNMENT LIABILITY COAL CONTRACTS WHICH PROVIDED FOR INCREASING THE CONTRACT PRICES TO THE MINIMUM PRICE WHICH MIGHT BE ESTABLISHED BY THE NATIONAL BITUMINOUS COAL COMMISSION HAVING NECESSARILY CONTEMPLATED A LEGAL AND VALID ESTABLISHMENT OF MINIMUM PRICES BY THE COMMISSION IN ACCORDANCE WITH THE BITUMINOUS COAL ACT OF 1937, 50 STAT. 72, PAYMENTS THEREUNDER OF THE DIFFERENCE BETWEEN THE STATED CONTRACT PRICES AND THE MINIMUM PRICE CONTAINED IN CERTAIN ORDERS OF THE COMMISSION, MAY NOT BE MADE UNTIL IT IS JUDICIALLY DETERMINED THE UNITED STATES IS LEGALLY LIABLE FOR SUCH DIFFERENCES, THE ACTION OF THE UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA IN RESTRAINING, PENDENTE LITE, THE ENFORCEMENT OF CERTAIN MINIMUM PRICE ORDERS ISSUED BY THE COMMISSION, THE COMMISSION'S REVOCATION OF ITS ORDERS, AND OTHER CIRCUMSTANCES, RAISING SUCH DOUBT IN THE MATTER AS TO REQUIRE THE GENERAL ACCOUNTING OFFICE TO DISALLOW THE INVOLVED CLAIMS PENDING A DEFINITE SETTLEMENT OF THE MATTER BY THE COURTS.

DECISION BY ACTING COMPTROLLER GENERAL ELLIOTT, APRIL 25, 1938:

POCAHONTAS FUEL CO., INC., HAS REQUESTED THIS OFFICE TO "MAKE SUCH RULINGS AND TAKE SUCH ACTION AS WILL PERMIT AND AUTHORIZE THE POST OFFICE DEPARTMENT TO PAY US THE MINIMUM PRICES REQUIRED BY THE COAL COMMISSION FOR COAL DELIVERED TO IT DURING THE PERIOD THOSE PRICES WERE IN EFFECT.'

THE COMPANY'S LETTER OF MARCH 18, 1938, STATES ITS CASE AS FOLLOWS:

WE HAVE SEVERAL CONTRACTS TO SUPPLY COAL TO THE POST OFFICE DEPARTMENT AT DIFFERENT LOCATIONS. IN SOME INSTANCES THESE CONTRACTS WERE AT PRICES LESS THAN THE MINIMUM PRICES APPLICABLE TO THE GRADE AND KIND OF COAL DELIVERED AT THE POINT REQUIRED, AS PROVIDED BY THE NATIONAL BITUMINOUS COAL COMMISSION. THE COMMISSION'S PRICES WERE EFFECTIVE FROM DECEMBER 16, 1937, TO FEBRUARY 25, 1938, INCLUSIVE. DURING THAT PERIOD WE WERE REQUIRED TO COLLECT MINIMUM PRICES STIPULATED IN THE COMMISSION'S ORDERS AND WE HAVE BILLED THE POST OFFICE DEPT. ACCORDINGLY. SEVERAL OF OUR BILLS HAVE BEEN PAID AS RENDERED, BUT SINCE THE COALCOMMISSION'S PRICES WERE SUSPENDED, EFFECTIVE FEBRUARY 26TH, THE POST OFFICE DEPT. HAS IN SOME INSTANCES QUESTIONED THE CORRECTNESS OF OUR BILLS ON COAL SHIPPED PRIOR TO FEBRUARY 26TH, AND WHILE THE COAL COMMISSION'S PRICES WERE IN EFFECT. SPECIFIC INSTANCES OF THESE QUESTIONED BILLS WERE BROUGHT TO THE ATTENTION OF MR. YATES OF YOUR OFFICE ON MARCH 18TH, BY OUR MR. M. L. GARVEY. ARE MEMBERS OF THE BITUMINOUS COAL CODE. THE PRICE ORDERS OF THE COAL COMMISSION, WHEN IN EFFECT, WERE THE LAW. NO COURT HAS FOUND THE ORDERS OF THE COMMISSION ILLEGAL. THERE WERE COURT ORDERS ENTERED STAYING THE OPERATION OF THE COMMISSION'S ORDERS, PENDING A DETERMINATION OF THEIR LEGALITY. THE COMMISSION FINDING THAT BY REASON OF THE ACTION OF THE COURT IT WAS NOT PRACTICAL TO MAINTAIN ITS PRICE SCHEDULES IT SUSPENDED ITS PRICES. THE COMMISSION AT THE SAME TIME ISSUED ITS OPINION STATING THAT THE PRICES HAD BEEN LEGALLY ESTABLISHED IN CONFORMITY WITH THE NATIONAL BITUMINOUS COAL ACT. UNDER THE LAW, THIS COMPANY, AS A CODE MEMBER, MUST COLLECT THE MINIMUM PRICES ESTABLISHED BY THE COMMISSION DURING THE PERIOD THOSE PRICES WERE IN EFFECT. FOR THIS COMPANY TO ACCEPT LESS WOULD IMPERIL ITS POSITION AS A CODE MEMBER AND SUBJECT IT, POSSIBLY, TO THE 19 1/2 PERCENT TAX AND OTHER PENALTIES PROVIDED FOR IN THE ACT.

WE ARE REQUIRED UNDER THE LAW AND UNDER THE COMMISSION'S ORDERS TO COLLECT THE MINIMUM PRICES ESTABLISHED BY THE COMMISSION ON COAL DELIVERED UNDER CONTRACTS WITH INDIVIDUAL CUSTOMERS DURING SUCH PERIOD AS THE MINIMUM PRICES WERE IN EFFECT. IN VARIOUS INSTANCES IN CONTRACTS THAT WE HAVE, THESE MINIMUM PRICES WERE HIGHER THAN THE PRICES NAMED IN THE CONTRACTS. CERTAINLY THE POST OFFICE DEPT., AS ONE BRANCH OF THE GOVERNMENT, CANNOT, EITHER IN LAW OR IN FAIRNESS, DECLINE OR NEGLECT TO PAY TO A CITIZEN FOR COAL THE MINIMUM PRICES WHICH HE OR IT IS REQUIRED BY ANOTHER DEPARTMENT OF THE GOVERNMENT TO COLLECT. NOT ONLY WILL THIS PUT THE COAL SUPPLIER IN THE VERY DIFFICULT POSITION POINTED OUT ABOVE, BUT IT WILL CREATE AN INTOLERABLE SITUATION AS BETWEEN THE COAL SUPPLIER AND HIS INDIVIDUAL CUSTOMERS.

A NUMBER OF OTHER CONTRACTORS HAVE ADVANCED SIMILAR ARGUMENTS IN CLAIMS PENDING BEFORE THIS OFFICE UNDER POST OFFICE DEPARTMENT COAL CONTRACTS. UNDER DATE OF APRIL 2, 1938, THE POSTMASTER GENERAL REPORTED AS FOLLOWS CONCERNING THE MATTER:

RECEIPT IS ACKNOWLEDGED OF YOUR LETTER OF MARCH 23RD, A-93507, QUOTING ONE ADDRESSED TO YOU BY THE POCAHONTAS FUEL COMPANY, INC., 1 BROADWAY, NEW YORK, NEW YORK, REGARDING ITS CONTRACT WITH THIS DEPARTMENT FOR FURNISHING BITUMINOUS COAL.

THE PURCHASING AGENT REPORTS THAT PROMPTLY UPON RECEIPT OF NOTICE TO THE EFFECT THAT ESTABLISHED MINIMUM PRICES HAD BEEN REVOKED, IT WAS DETERMINED, PENDING DEFINITE SETTLEMENT OF THE MATTER IN THE COURTS, TO CERTIFY INVOICES FOR PAYMENT ONLY IN AN AMOUNT EQUAL TO THE BID PRICE PER TON. THE PURCHASING AGENT FURTHER STATES THAT HE CONSIDERED HIS ACTION TO BE TO THE BEST INTERESTS OF THE GOVERNMENT IN THAT IT RESULTED IN THE CONSERVATION OF THE APPROPRIATION FOR COAL AND PREVENTED POSSIBLE OVERPAYMENT.

IN THE EVENT YOU ARE OF THE OPINION THAT THE PROCEDURE OF CERTIFICATION OF INVOICES FOR COAL AT THE BID PRICES RATHER THAN THE MINIMUM PRICES ESTABLISHED BY THE NATIONAL BITUMINOUS COAL COMMISSION, AND SUBSEQUENTLY REVOKED, IS NOT PROPER, I WILL BE GLAD TO HAVE YOUR DECISION IN THE MATTER.

THE BITUMINOUS COAL ACT OF 1937, APPROVED APRIL 26, 1937, 50 STAT. 72, "TO REGULATE INTERSTATE COMMERCE IN BITUMINOUS COAL, AND FOR OTHER PURPOSES," ESTABLISHED IN THE DEPARTMENT OF THE INTERIOR A NATIONAL BITUMINOUS COAL COMMISSION AND PROVIDED, INTER ALIA, IN SECTION 4, 50 STAT. 76, THAT THE PROVISIONS OF SUCH SECTION SHOULD BE PROMULGATED BY THE COMMISSION AS THE "BITUMINOUS COAL CODE; " THAT THE PROVISIONS OF SUCH CODE SHALL APPLY ONLY TO PRODUCERS ACCEPTING MEMBERSHIP IN THE CODE; THAT 23 DISTRICT BOARDS OF CODE MEMBERS SHOULD BE ORGANIZED, THE TERRITORIAL BOUNDARIES OR LIMITS OF THE 23 DISTRICTS BEING SET FORTH IN A SCHEDULE ANNEXED TO THE ACT; THAT THE COMMISSION "SHALL HAVE POWER TO PRESCRIBE FOR CODE MEMBERS MINIMUM AND MAXIMUM PRICES, AND MARKETING RULES AND REGULATIONS" AS DIRECTED THEREIN; THAT FOLLOWING THE PROPOSAL BY DISTRICT BOARDS OF MINIMUM PRICES AND REASONABLE RULES AND REGULATIONS INCIDENTAL TO THE SALE AND DISTRIBUTION OF COAL BY CODE MEMBERS WITHIN THE RESPECTIVE DISTRICTS, AND THE COORDINATION OF MINIMUM PRICES AND RULES IN MARKETING AREAS, ALL AS DIRECTED IN DETAIL THEREIN, THE COMMISSION ,SHALL THEREUPON ESTABLISH AND FROM TIME TO TIME, UPON COMPLAINT OR UPON ITS OWN MOTION, REVIEW AND REVISE THE EFFECTIVE MINIMUM PRICES AND RULES AND REGULATIONS IN ACCORDANCE WITH THE STANDARDS SET FORTH IN SUBSECTIONS (A) AND (B) OF PART II OF THIS SECTION.' 50 STAT. 80.

SECTION 4 FURTHER PROVIDES IN PART II (C), 50 STAT. 80, THAT THE SALE OR DELIVERY OR OFFER FOR SALE OF COAL AT A PRICE BELOW THE MINIMUM THEREFOR ESTABLISHED BY THE COMMISSION SHALL CONSTITUTE A VIOLATION OF THE CODE. SECTION 3 (B), 50 STAT. 75, IMPOSES AN EXCISE TAX EQUAL TO 19 1/2 PERCENTUM OF THE SALE PRICE AT THE MINE ON BITUMINOUS COAL PRODUCED IN THE UNITED STATES, BUT EXEMPTS FROM SUCH TAX THE SALE OR DISPOSAL OF COAL PRODUCED BY CODE MEMBERS. SECTION 5 (A), 50 STAT. 83, PROVIDES THAT THE COMMISSION SHALL SUPPLY TO ALL COAL PRODUCERS FORMS OF ACCEPTANCE FOR MEMBERSHIP IN THE CODE, AND SECTION 5, SUBSECTIONS (B) AND (C), 50 STAT. 84, PROVIDES THAT THE CODE MEMBERSHIP OF ANY COAL PRODUCER AND HIS RIGHT TO EXEMPTION FROM THE TAXES IMPOSED BY SECTION (B), SUPRA, MAY BE REVOKED BY THE COMMISSION UPON A WRITTEN COMPLAINT, NOTICE, HEARING, AND PROOF THAT SUCH MEMBER HAS "WILLFULLY VIOLATED" ANY PROVISION OF THE CODE, OR ANY REGULATION MADE THEREUNDER, AND PROVIDES FOR THE ASSESSMENT OF TAXES AND PENALTIES TO BE PAID AS A CONDITION TO RESTORATION TO CODE MEMBERSHIP.

THE PRESENT MATTER DOES NOT APPEAR EVEN REMOTELY TO INVOLVE ANY WILLFUL VIOLATION OF THE CODE SUBJECTING CONTRACTORS TO LOSS OF CODE MEMBERSHIP WITH CONSEQUENT TAXES AND PENALTIES UNDER THE CITED PROVISIONS OF SUBSECTIONS (B) AND (C) OF SECTION 5 OF THE ACT, AS APPARENTLY FEARED. THE QUESTION IS MERELY ONE OF THE LEGAL LIABILITY OF THE UNITED STATES UNDER THE COAL CONTRACTS TO PAY THE MINIMUM PRICES ANNOUNCED BY THE COMMISSION AS EFFECTIVE DECEMBER 16, 1937, UNDER ORDERS REVOKED BY THE COMMISSION AS OF FEBRUARY 25, 1938. THE CONTRACTS BEING VALID, IT IS NOT APPARENT HOW THE DENIAL BY THE GOVERNMENT OF LEGAL LIABILITY THEREUNDER TO PAY THE DIFFERENCE BETWEEN THE CONTRACT PRICES AND THE ANNOUNCED MINIMUM PRICES, ON THE GROUND THAT SUCH MINIMUM PRICES WERE NOT LEGALLY ESTABLISHED BY THE COMMISSION OR BECAUSE OF SUBSTANTIAL DOUBT THAT THEY WERE LEGALLY ESTABLISHED, COULD PLACE THE CONTRACTOR IN THE POSITION OF HAVING "WILLFULLY VIOLATED" THE CODE.

IT APPEARS THAT IN ANTICIPATION OF THE ESTABLISHMENT OF MINIMUM PRICES BY THE COMMISSION, AND IN COMPLIANCE WITH THE PROVISIONS OF SECTION 4 II (E) OF THE ACT, 50 STAT. 80, PROHIBITING CONTRACTS FOR SALE AND DELIVERY OF COAL FOR A PERIOD LONGER THAN 30 DAYS UNTIL MINIMUM PRICES WERE "ESTABLISHED PURSUANT TO SUBSECTIONS (A) AND (B) OF PART II OF THIS SECTION" BY THE COMMISSION, THE POST OFFICE DEPARTMENT INCLUDED THE FOLLOWING PROVISION IN ITS CONTRACTS:

THE CONTRACT WILL BE FOR A PERIOD OF 30 DAYS BEGINNING WITH THE DATE OF ACCEPTANCE, PROVIDED THAT IN THE EVENT THE NATIONAL BITUMINOUS COAL COMMISSION SHALL NOT HAVE ESTABLISHED DURING THE PERIOD OF THIS CONTRACT A MINIMUM PRICE FOR THE GRADE OR SIZE OF COAL PRODUCED AT THE MINE OR MINES NAMED IN THE CONTRACT, THE PERIOD OF TIME OF THE CONTRACT WILL BE EXTENDED FOR SUCCESSIVE 30 DAY PERIODS UNTIL A MINIMUM PRICE SHALL HAVE BEEN ESTABLISHED AND PROVIDED, FURTHER, THAT IN THE EVENT THE COMMISSION SHALL ESTABLISH DURING THE PERIOD OF THIS CONTRACT OR ANY SUCCESSIVE PERIODS A MINIMUM PRICE FOR THE GRADE OR SIZE OF COAL PRODUCED AT THE MINE OR MINES NAMED IN THE CONTRACT, WHICH IS MORE THAN THE CONTRACT PRICE FOR SUCH COAL, THE CONTRACT PRICE WILL BE INCREASED TO THE MINIMUM PRICE SO ESTABLISHED BY THE SAID COMMISSION FOR THE COAL SHIPPED FROM THE MINE OR MINES AND DELIVERED AFTER THE EFFECTIVE DATE OF THE ESTABLISHMENT OF SUCH MINIMUM PRICE. THE GOVERNMENT FURTHER RESERVES THE RIGHT TO TERMINATE THE CONTRACT IF THE CONTRACT PRICE IS GREATER THAN THE MINIMUM PRICE SO ESTABLISHED BY THE COMMISSION.

THIS AGREEMENT THAT "IN THE EVENT THE COMMISSION SHALL ESTABLISH" MINIMUM PRICES, THE CONTRACT PRICE WOULD BE INCREASED TO THE MINIMUM PRICE SO "ESTABLISHED," CONTEMPLATED, OF COURSE, A LEGAL AND VALID ESTABLISHMENT OF MINIMUM PRICES BY THE COMMISSION IN ACCORDANCE WITH THE PROVISIONS OF THE SAID BITUMINOUS COAL ACT OF 1937, CREATING THE COMMISSION AND AUTHORIZING IT TO "ESTABLISH" MINIMUM PRICES UNDER THE CONDITIONS AND PROCEDURE STIPULATED THEREIN. THE COMMISSION HAS NO POWER OR AUTHORITY TO "ESTABLISH" MINIMUM PRICES EXCEPT UNDER AND IN ACCORDANCE WITH THE PROVISIONS OF THIS STATUTE; AND IF THE ANNOUNCED MINIMUM PRICES WERE NOT SO ESTABLISHED, BUT WERE INVALID AND A NULLITY, SUCH PRICES WERE NOT "ESTABLISHED" WITHIN THE MEANING OF THE CONTRACTS AND, HENCE, COULD NOT LEGALLY OBLIGATE THE GOVERNMENT, UNDER THE EXPRESS TERMS OF THE CONTRACT, TO PAY AN INCREASE OVER THE CONTRACT PRICE. IT MAY BE REMARKED IN THIS CONNECTION THAT THE ANNOUNCEMENT OF MINIMUM PRICES DOES NOT APPEAR TO HAVE INCREASED THE COST OF PRODUCING OR FURNISHING THE COAL OR TO HAVE IMPOSED ANY ADDITIONAL BURDEN ON CONTRACTORS WHICH COULD BE VIEWED AS SUPPORTING CLAIMS FOR AN INCREASE IN PRICE OVER THE AGREED CONTRACT PRICE IRRESPECTIVE OF THE VALIDITY OF THE COMMISSION'S ACTION, THE MATTER BEING ONE MERELY OF PAYING INDIVIDUAL CONTRACTORS AN INCREASE OVER THE AGREED CONTRACT PRICE, IN THE NATURE OF A GRATUITY, TO CONFORM WITH MINIMUM PRICES DULY "ESTABLISHED" BY THE COMMISSION FOR THE BENEFIT OF THE COAL INDUSTRY AS A WHOLE.

ON MARCH 25, 1938, THE COMMISSION ISSUED THE FOLLOWING STATEMENT AND OPINION PERTAINING TO THE MATTER:

NUMEROUS REQUESTS HAVE BEEN RECEIVED BY THE GENERAL COUNSEL FOR HIS OPINION ON THE QUESTION OF WHAT EFFECT CERTAIN STAY ORDERS ENTERED BY THE UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA AND THE UNITED STATES CIRCUIT COURTS OF APPEALS FOR THE SECOND AND SEVENTH CIRCUITS AND COMMISSION ORDER NO. 230 HAD UPON THE VALIDITY OF MINIMUM PRICES ESTABLISHED BY THE NATIONAL BITUMINOUS COAL COMMISSION BETWEEN DECEMBER 16, 1937, AND FEBRUARY 25, 1938.

IN RESPONSE THERETO, THE GENERAL COUNSEL RENDERS THE FOLLOWING OPINION:

"COMMISSION ORDER NO. 230 DID NOT DECLARE THE PRICE SCHEDULES AND PRICE ORDERS INVALID. IT REVOKED CERTAIN PRIOR ORDERS OF THE COMMISSION FOR THE REASON THAT THEY HAD "BECOME INOPERATIVE DUE TO CAUSES BEYOND THE CONTROL OF THE COMMISSION AND THAT THE EXPRESS INTENTION OF CONGRESS, AS PROVIDED IN SECTION IV, PART II (A) AND (B) OF BITUMINOUS COAL ACT OF 1937, CANNOT BE EFFECTUATED BY THE MINIMUM PRICES REMAINING IN EFFECT AND THAT THE CONDITION THEREBY CREATED IS DETRIMENTAL TO THE INTEREST OF CODE MEMBERS.'

"IT WILL BE NOTED THAT NO COURT DECLARED THE PRICE ORDERS AND SCHEDULES INVALID. THE COURTS RESTRAINED THE COMMISSION PENDENTE LITE FROM ENFORCING CERTAIN OF ITS PRICE ORDERS AS THEY APPLIED TO THE PETITIONERS. FINAL DETERMINATION OF THE ISSUES WAS EXPRESSLY RESERVED UNTIL SUCH TIME AS THE COMMISSION COULD CERTIFY TO THE COURTS COMPLETE RECORDS FOR REVIEW. WHEN THE COMMISSION DEEMED IT ADVISABLE TO REVOKE ITS ORDERS BECAUSE OF THE RELIEF GRANTED BY THE COURTS ALL QUESTIONS OF LAW WHICH WERE PENDING IN THE COURTS BECAME MOOT.'

WHILE, AS STATED IN THIS OPINION, NO COURT HAS DECLARED THE QUESTIONED MINIMUM PRICE SCHEDULES AND ORDERS INVALID, AND THE QUESTIONS OF LAW PENDING BEFORE THE COURTS IN SUCH CONNECTION HAVE BECOME MOOT BY THE COMMISSION'S REVOCATION OF SUCH ORDERS, THEY MAY NOT BE DISREGARDED WHAT WAS SAID BY THE UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA IN ITS OPINION OF FEBRUARY 10, 1938, IN SAXTON COAL MINING COMPANY V. NATIONAL BITUMINOUS COAL COMMISSION, AND OTHER CASES, RESTRAINING THE COMMISSION, PENDENTE LITE, FROM ENFORCING CERTAIN OF SUCH PRICE ORDERS. THE COURT SAID, PER CURIAM: * * * FROM THE ALLEGATIONS OF THE PETITIONS AND FROM THE STATEMENTS AND CONCESSIONS MADE IN THE COURSE OF ARGUMENT, IT APPEARS THAT THE BITUMINOUS COAL COMMISSION'S MINIMUM PRICE ORDERS, SOUGHT ULTIMATELY TO BE REVIEWED BY THIS COURT UNDER THE PROVISIONS OF SECTION 6 (B) OF THE ACT OF APRIL 26, 1937, 50 STAT. 72, WERE ISSUED AND MADE EFFECTIVE WITHOUT NOTICE OF HEARING, WITHOUT AFFORDING A HEARING TO INTERESTED PARTIES, AND WITHOUT THE MAKING OF FINDINGS OF FACT BY THE COMMISSION; IT FURTHER APPEARS THAT THE PRODUCING COAL COMPANIES WERE PARTIES TO THESE ORDERS AND THAT THEY ARE INTERESTED PARTIES, AND THAT IF THE ORDERS WERE INVALID, THEY ARE SUFFERING IRREPARABLE AND CONTINUING DAMAGE. UNDER THESE CIRCUMSTANCES THE DENIAL OF RELIEF PENDENTE LITE, SOUGHT TO PREVENT CONTINUING IRREPARABLE DAMAGE AND TO PRESERVE INSOFAR AS POSSIBLE THE STATUS QUO UNTIL A RULING UPON FINAL REVIEW, WOULD BE EXTRAORDINARY UNLESS THE ULTIMATE RIGHT OF REVIEW SOUGHT IS CLEARLY WITHOUT FOUNDATION. WITHOUT PREJUDICE TO AN ULTIMATE RULING, WE ARE UNABLE AT THE PRESENT STAGE OF THE PROCEEDINGS TO CONCLUDE THAT THE RIGHT OF REVIEW SOUGHT IS CLEARLY WITHOUT FOUNDATION IN THE STATUTE. THE MINIMUM PRICE ORDERS SOUGHT TO BE REVIEWED ARE APPARENTLY ORDERS WITHIN THE TERMS OF SECTION 6 (B) OF THE ACT, WHICH PROVIDES THAT "ANY PERSON AGGRIEVED BY AN ORDER ISSUED BY THE COMMISSION IN A PROCEEDING TO WHICH SUCH PERSON IS A PARTY MAY OBTAIN A REVIEW * * * IN THE UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA.' AND UNDER SECTION 2 (A) OF THE ACT NO ORDER SUBJECT TO REVIEW UNDER SECTION 6 IS TO BE MADE OR PRESCRIBED WITHOUT NOTICE, HEARING AFFORDED TO INTERESTED PARTIES, AND FINDINGS OF FACT. THE CONTENTION OF THE COMMISSION THAT THE STATUTE CONTEMPLATES NOTICE, HEARING, AND FINDINGS OF FACT ONLY AFTER ISSUANCE OF A MINIMUM PRICE ORDER AND UPON THE FILING OF A PETITION UNDER SECTION 4 (D) OF THE ACT BEFORE THE EFFECTIVE DATE OF THE ORDER, IS NOT SUPPORTED BY THE EXPRESS LANGUAGE OF THE STATUTE AND SEEMS NOT TO BE SUPPORTED BY NECESSARY CONSTRUCTION THEREOF. AND NEITHER THE EXPRESS LANGUAGE OF THE STATUTE NOR NECESSARY CONSTRUCTION THEREOF SEEM CLEARLY TO REQUIRE COMPLETE EXHAUSTION OF THE ADMINISTRATIVE REMEDY PROVIDED FOR IN SECTION 4 (D) BEFORE ANY RIGHT OF REVIEW IN THE COURTS MAY BE HAD IN RESPECT OF A MINIMUM PRICE ORDER MADE EFFECTIVE WITHOUT NOTICE OF HEARING AND WITHOUT HEARING AND FINDINGS OF FACT.

ALTHOUGH THE COURT DID NOT SPECIFICALLY DECLARE THE MINIMUM PRICE ORDERS INVALID, THE STATEMENT OF ITS REASONS FOR RESTRAINING THEIR ENFORCEMENT, PENDENTE LITE, INDICATES THEIR INVALIDITY, OR CREATES GRAVE DOUBT, AT LEAST, OF THEIR VALIDITY, AND THIS DOUBT HAS BEEN INCREASED BY THE ACTION OF THE OTHER COURTS AND BY THE SUBSEQUENT ACTION OF THE COMMISSION IN REVOKING THE ORDERS AND THUS RENDERING MOOT, AND, IN EFFECT, PRECLUDING A JUDICIAL DETERMINATION OF THE QUESTION IN SUCH PENDING CASES. IT MAY BE NOTED AS TO SUCH REVOCATION OF THE ORDERS THAT WHILE SECTION 4 II (B) OF THE ACT, 50 STAT. 80, AUTHORIZES THE COMMISSION FROM TIME TO TIME TO "REVIEW AND REVISE" THE ,EFFECTIVE" MINIMUM PRICES WHICH IT HAS ESTABLISHED, NO EXPRESS AUTHORITY APPEARS TO BE CONFERRED TO REVOKE SUCH PRICES ONCE THEY ARE LEGALLY ESTABLISHED. THIS FURTHER ADDS TO THE DOUBT OF THE VALIDITY OF THE REVOKED ORDERS.

IT IS NOT NECESSARY FOR THIS OFFICE TO DETERMINE AFFIRMATIVELY THAT THE MINIMUM PRICE ORDERS IN QUESTION WERE INVALID IN ORDER TO DENY CLAIMS FOR INCREASED PAYMENTS BASED THEREON. SUCH ACTION IS REQUIRED IF THERE BE SUBSTANTIAL DOUBT. IN LONGWILL V. UNITED STATES, 17 CT.CLS. 288, 291, THE COURT SAID:

THE ACCOUNTING OFFICERS OF THE TREASURY (NOW THE GENERAL ACCOUNTING OFFICE) ARE IN DUTY BOUND TO SCRUTINIZE CLAIMS AND ACCOUNTS WITH GREAT CARE, AS IS THEIR CUSTOM; AND IT IS THE UNDOUBTED RIGHT AND DUTY OF THE COMPTROLLERS (INCLUDING THE SIXTH AUDITOR AND THE COMMISSIONER OF CUSTOMS, WHO ARE COMPTROLLERS IN FACT THOUGH NOT IN NAME), WHO ALONE OF THE ACCOUNTING OFFICERS HAVE AUTHORITY TO DECIDE THEREON, TO REJECT, IN WHOLE OR IN PART, AS THEIR JUDGMENT DICTATES, ALL THOSE CLAIMS * * * TO WHICH THEY BELIEVE THERE MAY BE SUBSTANTIAL DEFENSES IN LAW, OR AS TO THE VALIDITY OF WHICH THEY ARE IN DOUBT.

UPON SUCH REJECTION BY THE COMPTROLLERS, THE CLAIMANTS ARE LEFT TO THEIR REMEDY BY ACTION OF LAW AGAINST THE UNITED STATES IN THIS COURT, IF WITHIN ITS JURISDICTION, WHERE THE GOVERNMENT IS DEFENDED BY THE ATTORNEY GENERAL AND HIS ABLE, PAINSTAKING, AND INDUSTRIOUS ASSISTANTS, AND WHATEVER DEFENSES CAN BE FOUND WILL NOT ESCAPE THE VIGILANCE OF THOSE OFFICERS.

IN CHARLES V. UNITED STATES, 19 CT.CLS. 316, 319, THE COURT SAID:

WHEN, IN THE COURSE OF THE EXAMINATION OF ACCOUNTS IN THE DEPARTMENTS, SUSPICIONS ARE AROUSED OR DOUBTS ARE ENTERTAINED AS TO THE VALIDITY OF THE DEMANDS OF CLAIMANTS, THE PARTIES MAY BE SENT TO THIS COURT TO PROVE THEIR CASES UNDER THE RULES AND FORMS OF LAW, UPON LEGAL AND COMPETENT EVIDENCE, OR THEIR DEMANDS MAY BE REJECTED ALTOGETHER, LEAVING THE CLAIMANTS TO PROSECUTE THEM HERE UPON THEIR OWN VOLUNTARY PETITIONS, IF THEY SO DESIRE. THAT IS THE MAIN PROTECTION WHICH THE ACCOUNTING OFFICERS CAN SECURE FOR THEMSELVES AND FOR THE GOVERNMENT IN THE CASE OF CLAIMS OF DOUBTFUL VALIDITY IN FACT OR IN LAW * * *.

THERE IS AT LEAST SUFFICIENT DOUBT IN THE PRESENT MATTER AND A SUFFICIENT POSSIBILITY THAT THE GOVERNMENT HAS SUBSTANTIAL DEFENSES IN LAW AGAINST THE CLAIMS FOR THESE INCREASED PAYMENTS TO REQUIRE THIS OFFICE TO FOLLOW THOSE BASIC PRINCIPLES LAID DOWN BY THE COURT OF CLAIMS. THEREFORE, I AM IN AGREEMENT WITH THE VIEWS STATED IN THE LETTER OF APRIL 2, 1938, FROM THE POSTMASTER GENERAL, SUPRA, THAT THE INCREASED PRICES SHOULD NOT BE PAID UNLESS AND UNTIL THE MATTER IS DEFINITELY SETTLED BY THE COURTS FAVORABLY TO THE CONTENTIONS OF SUCH CONTRACTORS.

ACCORDINGLY, ALL CLAIMS FOR PAYMENT OF THE DIFFERENCE BETWEEN THE CONTRACT PRICES AND THE ANNOUNCED MINIMUM PRICES IN CASES SUCH AS ARE HEREIN CONSIDERED WILL BE DISALLOWED, BUT WITHOUT PREJUDICE TO THE RIGHTS OF THE CONTRACTORS TO RESUBMIT SUCH CLAIMS TO THIS OFFICE FOR FURTHER CONSIDERATION IN THE EVENT IT SHOULD BE JUDICIALLY DETERMINED THE UNITED STATES IS LEGALLY LIABLE FOR SUCH DIFFERENCES.