B-121558, DECEMBER 16, 1954, 34 COMP. GEN. 292

B-121558, DECEMBER 16, 1954, 34 COMP. GEN. 292

CANAL ZONE GOVERNMENT POSTAGE - PAYMENT BY GOVERNMENT AGENCIES AGENCIES OF THE FEDERAL GOVERNMENT ENTITLED TO FREE TRANSMISSION OF MAIL PURSUANT TO SECTION 5 OF THE ACT OF MARCH 3, 1877, ARE NOT REQUIRED TO PAY CANAL ZONE GOVERNMENT POSTAGE ON PENALTY MAIL DEPOSITED IN CANAL ZONE POST OFFICES.

ACTING COMPTROLLER GENERAL WEITZEL TO THE SECRETARY OF THE NAVY, DECEMBER 16, 1954:

REFERENCE IS MADE TO LETTER OF SEPTEMBER 21, 1954, FROM THE UNDER SECRETARY OF THE NAVY, REQUESTING A DECISION WHETHER APPROPRIATIONS OF YOUR DEPARTMENT ARE AVAILABLE FOR THE PAYMENT OF POSTAGE--- EITHER ON A PREPAYMENT OR A REIMBURSEMENT BASIS--- ON OFFICIAL MAIL MATTER PLACED IN THE CANAL ZONE POSTAL SERVICE BY AGENCIES OF YOUR DEPARTMENT. THE QUESTION PRESENTED FOR DECISION IS SAID TO STEM FROM A DIRECTIVE BY THE GOVERNOR OF THE CANAL ZONE DECLARING PENALTY INDICIA UNACCEPTABLE AND REQUIRING ALL EXECUTIVE DEPARTMENTS AND AGENCIES OF THE GOVERNMENT TO PREPAY POSTAGE ON ALL OFFICIAL MATTER MAILED IN CANAL ZONE POST OFFICES EFFECTIVE OCTOBER 1, 1954.

THE UNDER SECRETARY EXPRESSES DOUBT AS TO THE PROPRIETY OF THE USE OF NAVY DEPARTMENT APPROPRIATIONS FOR THE PAYMENT OF PENALTY MAIL IN THE CANAL ZONE. IN SUPPORT OF THAT VIEW HE STATES, IN SUBSTANCE, THAT THE ACT OF MARCH 3, 1877, 19 STAT. 335, AS AMENDED, 39 U.S.C. 321, PROVIDING FOR THE TRANSMISSION OF OFFICIAL GOVERNMENT-MAIL MATTER FREE OF POSTAGE APPLIES TO THE POSTAL SERVICE OF THE CANAL ZONE; THAT THE LAWS GOVERNING THE OPERATION OF SUCH POSTAL SERVICE DO NOT AUTHORIZE THE GOVERNMENT TO REQUIRE DEPARTMENTS AND AGENCIES OF THE GOVERNMENT TO PREPAY POSTAGE ON OFFICIAL MATTER MAILED IN CANAL ZONE POST OFFICES; AND THAT SECTION 1 OF THE ACT OF AUGUST 15, 1953, 67 STAT. 614, WHICH ADDED TO SECTION 301 OF THE PENALTY MAIL ACT OF 1948, 62 STAT. 1048, A PROVISION REQUIRING REIMBURSEMENT TO THE POST OFFICE DEPARTMENT BY ALL GOVERNMENT DEPARTMENTS, AGENCIES, AND ESTABLISHMENTS FOR THE TRANSMISSION OF THEIR PENALTY MAIL DOES NOT APPLY TO THE CANAL ZONE POSTAL SERVICE.

A COPY OF THE REFERRED-TO DIRECTIVE, NAMELY, POSTAL CIRCULAR NO. 165, DATED AUGUST 27, 1954, WAS FURNISHED THIS OFFICE BY THE SECRETARY, PANAMA CANAL COMPANY, WASHINGTON, D.C. THE POSTAL CIRCULAR PRESCRIBES REGULATIONS CONCERNING "1FREE MATTER IN THE CANAL ZONE MAILS," AND PROVIDES FOR, AMONG OTHER THINGS, THE PREPAYMENT OF POSTAGE BY DEPARTMENTS AND AGENCIES OF THE GOVERNMENT ON PENALTY MATTER MAILED IN THE CANAL ZONE POST OFFICES EFFECTIVE OCTOBER 1, 1954. THERE ALSO ACCOMPANIED THE POSTAL CIRCULAR A COPY OF A MEMORANDUM DATED NOVEMBER 4, 1954, FROM THE GOVERNOR OF THE CANAL ZONE TO THE SECRETARY OF THE PANAMA CANAL COMPANY RELATIVE TO THE MATTER. WITH PARTICULAR REFERENCE TO THE QUESTION PRESENTED, THE GOVERNMENT STATES TO THE EFFECT THAT HE DID NOT DETERMINE THE PENALTY MAIL ACT OF 1948, AS AMENDED, TO BE APPLICABLE TO MATTER MAILED AT CANAL ZONE POST OFFICES; THAT THE AMENDMENT OF CANAL ZONE POSTAL REGULATIONS EFFECTIVE OCTOBER 1, 1954, WAS PURSUANT TO AUTHORITY OF SECTION 271 OF THE CANAL ZONE CODE; AND THAT SAID AMENDMENT WAS SIMPLY A DISCONTINUANCE OF FREE POSTAL SERVICE TO OTHER GOVERNMENT AGENCIES BY REQUIRING PREPAYMENT OF POSTAGE ON MATTER MAILED IN CANAL ZONE POST OFFICES.

SECTION 271 AND 272, TITLE 2 OF THE CANAL ZONE CODE, AS AMENDED BY SECTION 2 OF THE ACT OF JUNE 13, 1940, 54 STAT. 389, PROVIDES:

271. MAINTENANCE AND OPERATION OF THE CANAL ZONE POSTAL SERVICE--- THE POSTAL SERVICE OF THE CANAL ZONE SHALL BE GOVERNED, EXCEPT AS OTHERWISE PROVIDED IN THE CANAL ZONE CODE, BUT SUCH OF THE LAWS, RULES, REGULATIONS, AND CONVENTIONS OF THE POSTAL SERVICE OF THE UNITED STATES AS BY THEIR TERMS APPLY IN THE CANAL ZONE AND BY SUCH ADDITIONAL LAWS, RULES, AND REGULATIONS OF THE POSTAL SERVICE OF THE UNITED STATES AS THE GOVERNOR OF THE PANAMA CANAL SHALL BY REGULATION DETERMINE TO BE APPLICABLE TO CONDITIONS EXISTING IN THE CANAL ZONE. THE GOVERNOR MAY PRESCRIBE SUCH ADDITIONAL RULES AND REGULATIONS AS ARE NECESSARY FOR THE MAINTENANCE AND OPERATION OF THE CANAL ZONE POSTAL SERVICE.

THE GOVERNOR OF THE PANAMA CANAL IS AUTHORIZED---

A. TO MAINTAIN AND OPERATE A POSTAL SERVICE IN THE CANAL ZONE, INCLUDING A MONEY-ORDER SYSTEM, A PARCEL/POST SYSTEM, A POSTAL-SAVINGS SYSTEM, AND SUCH OTHER SERVICES AS MAY BE NECESSARY OR CONVENIENT IN CONNECTION WITH THE POSTAL SERVICE;

B. TO ESTABLISH AND DISCONTINUE POST OFFICES;

C. TO PRESCRIBE THE POSTAGE RATES: PROVIDED, HOWEVER, THAT THE UNITED STATES DOMESTIC POSTAGE RATES SHALL BE APPLICABLE TO REGULAR MAIL EXCHANGE WITH THE UNITED STATES; AND

D. TO PRESCRIBE THE POSTAGE STAMPS AND OTHER STAMPED PAPER WHICH SHALL BE USED IN SUCH SERVICE.

272. DEFRAYING EXPENSES FROM REVENUE SO FAR AS POSSIBLE--- THE EXPENSES OF OPERATING THE CANAL ZONE POSTAL SERVICE SHALL BE DEFRAYED, SO FAR AS POSSIBLE, FROM THE REVENUE DERIVED THEREFROM, THE USE OF WHICH FOR THAT PURPOSE IS AUTHORIZED.

IN ACCORDANCE WITH THE QUOTED PROVISIONS AND PRIOR ACTS PERTAINING TO THE OPERATION OF THE CANAL ZONE POSTAL SERVICE, SAID POSTAL SERVICE HAS BEEN RECOGNIZED BY THE CONGRESS AND BY THE ADMINISTRATIVE AND ACCOUNTING OFFICERS OF THE GOVERNMENT AS INDEPENDENT FROM THE POSTAL SERVICE OF THE UNITED STATES, BUT SUBJECT TO CERTAIN LAWS, RULES, RATES AND REGULATIONS PERTAINING THERETO. SEE DECISIONS OF MAY 21, 1941, B 14812, TO THE GOVERNOR, CANAL ZONE AND B-29388 OF DECEMBER 7, 1942, TO THE POSTMASTER GENERAL. IN THE ACT OF SEPTEMBER 26, 1950, 64 STAT. 1038, WHICH REORGANIZED THE PANAMA CANAL AND THE PANAMA CANAL COMPANY, THE CONGRESS EXPRESSED THE PRINCIPLE THAT THE CANAL ENTERPRISE SHOULD BE SELF- SUSTAINING AND THAT CANAL ZONE COSTS--- WHICH ENCOMPASS THE COSTS OF CIVIL GOVERNMENT AND INCLUDE, AMONG OTHER GOVERNMENTAL SERVICES, OPERATION OF A POSTAL SERVICE--- SHOULD BE RECOVERED BY THE CANAL ORGANIZATION THROUGH APPROPRIATE CHARGES TO THE USERS OF SUCH SERVICES. THUS, THE QUOTED SECTIONS OF THE ACT OF JUNE 13, 1940, WHEN CONSIDERED IN CONJUNCTION WITH THE DECLARED POLICY OF THE CONGRESS IN THE ACT OF SEPTEMBER 26, 1950, 64 STAT. 1038, MANIFEST REASONABLE SUPPORT FOR THE VIEW THAT THE AMENDMENT OF THE CANAL ZONE POSTAL REGULATIONS BY THE GOVERNOR TO EFFECT PAYMENT BY OTHER GOVERNMENT AGENCIES IN THE CANAL ZONE FOR POSTAL SERVICES RENDERED IS WITHIN THE SCOPE OF THE BROAD AUTHORITY VESTED IN HIM AND IS IN FURTHERANCE OF THE CONGRESSIONAL POLICY IN THIS RESPECT.

HOWEVER, WITH REGARD TO THE INTENTION EXPRESSED BY THE CONGRESS THAT THE CANAL ENTERPRISE SHOULD BE SELF-SUSTAINING, THE GENERAL ACCOUNTING OFFICE AUDIT REPORTS FOR 1952 AND 1953 OF THE PANAMA CANAL COMPANY AND THE CANAL ZONE GOVERNMENT, HOUSE DOCUMENTS NOS. 207 AND 473, 83D CONGRESS, ST AND 2D SESSIONS, RESPECTIVELY, POINTED OUT THAT THE CANAL ORGANIZATION PERFORMS MANY SERVICES, INCLUDING POSTAL SERVICES, FOR THE BENEFIT OF OTHER GOVERNMENT AGENCIES WITHOUT REIMBURSEMENT THEREFOR, AND RECOMMENDED THAT ENABLING LEGISLATION AND APPROPRIATIONS OF SUCH AGENCIES PROVIDE FOR REIMBURSEMENTS TO THE CANAL ORGANIZATION FOR ALL SUCH SERVICES RENDERED. SEE, IN THAT CONNECTION, SECTION 107 OF THE CIVIL FUNCTIONS APPROPRIATION ACT, 1955, PUBLIC LAW 453, APPROVED JUNE 30, 1954, 68 STAT. 335. SUCH RECOMMENDATION FOR SPECIFIC LEGISLATIVE AUTHORITY TO ENABLE GOVERNMENT AGENCIES TO REIMBURSE THE CANAL ORGANIZATION FOR CERTAIN SERVICES RECEIVED BY THEM WAS MADE ADVISEDLY IN VIEW OF THE PROVISIONS OF SECTION 3678, REVISED STATUTES, 31 U.S.C. 628, THAT " EXCEPT AS OTHERWISE PROVIDED BY LAW, SUMS APPROPRIATED FOR THE VARIOUS BRANCHES OF EXPENDITURE IN THE PUBLIC SERVICE SHALL BE APPLIED SOLELY TO THE OBJECTS FOR WHICH THEY ARE RESPECTIVELY MADE, AND FOR NO OTHERS.' I THINK THERE CAN BE NO QUESTION THAT THE CANAL ZONE GOVERNMENT IS AN INSTRUMENTALITY AND AGENCY OF THE UNITED STATES; THAT ITS FUNCTIONS OF CIVIL GOVERNMENT PERFORMED ON BEHALF OF THE PUBLIC AND THE UNITED STATES ARE STATUTORY AND MAY BE PERFORMED BY NO OTHER AGENCY OF THE UNITED STATES; AND THAT SUCH FUNCTIONS ARE CARRIED OUT WITH FUNDS EXPRESSLY DESIGNATED AND/OR ANNUALLY APPROPRIATED BY THE CONGRESS. HENCE, THERE MUST BE APPLIED HERE THE GENERAL RULE THAT PAYMENT FOR SERVICES RENDERED BY ONE AGENCY OF THE GOVERNMENT FOR ANOTHER IS NOT AUTHORIZED WHERE THE SERVICE PERTAINING TO IT ARE REQUIRED BY LAW IN CARRYING OUT THE NORMAL FUNCTIONS OF THE PERFORMING AGENCY AND FOR WHICH APPROPRIATIONS ARE SPECIFICALLY PROVIDED. SEE 33 COMP. GEN. 27 AND DECISIONS THEREIN CITED.

THERE IS ONE FURTHER GROUND FOR CONCLUDING THAT THERE IS NO LEGAL OBLIGATION UPON AGENCIES OF THE GOVERNMENT TO MAKE PAYMENT FOR PENALTY MAIL DEPOSITED IN CANAL ZONES POST OFFICES. SECTION 5 OF THE ACT OF MARCH 3, 1877, 19 STAT. 335, AS AMENDED, QUOTED BY THE UNDER SECRETARY, PROVIDES THAT IT SHALL BE LAWFUL TO TRANSMIT THROUGH THE MAIL, FREE OF POSTAGE, ANY LETTERS, PACKAGES, OR OTHER MATTERS RELATING EXCLUSIVELY TO THE BUSINESS OF THE GOVERNMENT OF THE UNITED STATES. THIS STATUTE EXTENDED THE PENALTY PRIVILEGE TO THE DEPARTMENTS AND AGENCIES OF THE GOVERNMENT AND WHILE IT, OF COURSE, WAS ENACTED LONG PRIOR, AND WITHOUT REFERENCE, TO THE OCCUPATION OF THE CANAL ZONE BY THE UNITED STATES, IT IS A REGULATORY STATUTE OF GENERAL APPLICATION AND ANY DOUBT AS TO THE PROPRIETY OF APPLYING THE PROVISIONS OF THIS STATUTE TO THE CANAL ZONE POSTAL SERVICE, WHICH IS IN INTEGRAL PART OF THE UNITED STATES POSTAL SERVICE, WAS REMOVED BY SECTION 2 OF THE QUOTED ACT OF JUNE 13, 1940. IT MAY BE SAID FURTHER THAT SUCH APPEARS TO HAVE BEEN THE INTERPRETATION ACCORDED THE 1877 STATUTE BY THE CANAL ORGANIZATION AUTHORITIES OVER THE MANY YEARS SINCE THERE IS NO RECORD HERE OF COMPLAINT.

THERE ALSO HAS BEEN CONSIDERED THE PROVISIONS OF SECTION 1 OF THE ACT OF AUGUST 15, 1953, AMENDING THE PENALTY MAIL ACT OF 1948 SO AS TO REQUIRE FEDERAL DEPARTMENTS AND AGENCIES--- WHICH PREVIOUSLY WERE ENTITLED TO FREE TRANSMISSION OF OFFICIAL MAIL UNDER THE 1877 ACT, AS AMENDED--- NOW TO PAY TO THE POST OFFICE DEPARTMENT THE POSTAL CHARGES FOR HANDLING SUCH MAIL. SEE 33 COMP. GEN. 216. HOWEVER, THE ACCOUNTING AND PAYMENT PROVISIONS OF SUCH STATUTES DO NOT SPECIFICALLY INCLUDE THE CANAL ZONE POSTAL SERVICE AND, THEREFORE, ARE INAPPLICABLE THERETO. SEE 16 COMP. GEN. 515.

ACCORDINGLY, AND FOR THE REASONS STATED HEREIN, IT IS CONCLUDED THAT THERE IS NOT STATUTORY AUTHORITY TO DISTURB THE POSTAL ARRANGEMENTS EFFECTIVE IN THE CANAL ZONE BY VIRTUE OF THE REFERRED-TO AUTHORITY CONFERRED BY THE 1877 ACT, AS AMENDED, AND OTHER LAW, AND IN ANSWER TO THE SPECIFIC QUESTION PRESENTED, YOU ARE ADVISED THAT, IN THE ABSENCE OF SPECIFIC AUTHORIZING LEGISLATION, THE APPROPRIATIONS OF YOUR DEPARTMENT ARE NOT AVAILABLE FOR THE PAYMENT OF CANAL ZONE GOVERNMENT POSTAGE ON PENALTY MAIL DEPOSITED IN CANAL ZONE POST OFFICES BY AGENCIES OF YOUR DEPARTMENT.

A COPY OF THIS DECISION IS BEING FORWARDED TODAY TO THE GOVERNOR OF THE CANAL ZONE FOR HIS INFORMATION.