B-135527, MAY 29, 1958, 37 COMP. GEN. 803

B-135527: May 29, 1958

Additional Materials:

Contact:

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

 

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

WHICH WAS APPROVED AND CONFIRMED BY JAPAN. IT IS SAID. THE VIEW IS EXPRESSED THAT SINCE SUBSECTION 104 (F) CONTAINS NO WORDS OF LIMITATION THAT PRECLUDE THE EARMARKING OF GENERAL USE FOREIGN CURRENCIES FOR PAYMENT OF SPECIFIC UNITED STATES OBLIGATIONS THE AGREEMENT. WAS WITHIN AUTHORITY OF THE ENABLING ACT. THAT PURSUANT TO SUCH AGREEMENT YEN IS AVAILABLE FOR PAYMENT OF OBLIGATIONS OF YOUR AGENCY IN JAPAN INCLUDING OBLIGATIONS FOR PROVIDING FINANCIAL ASSISTANCE TO A COMMUNITY CENTER. WHICH EXPRESSLY IS AUTHORIZED IN SECTION 203 OF THE UNITED STATES INFORMATION AND EDUCATIONAL EXCHANGE ACT OF 1948. IT IS CONTENDED. THIS VIEW IS CONCURRED IN BY THE OFFICE OF THE LEGAL ADVISER. THAT ARE AVAILABLE UNDER THE TERMS OF ANY AGREEMENT.

B-135527, MAY 29, 1958, 37 COMP. GEN. 803

FOREIGN AID PROGRAM - FOREIGN CURRENCY FUNDS - AVAILABILITY WITHOUT DOLLAR REIMBURSEMENT THE PROHIBITION IN SECTION 104 (J) OF THE AGRICULTURAL TRADE DEVELOPMENT AND ASSISTANCE ACT OF 1954, 7 U.S.C. 1704 (J), AGAINST THE USE OF FOREIGN CURRENCIES ACQUIRED UNDER SURPLUS AGRICULTURAL COMMODITIES AGREEMENTS FOR GENERAL USE PURPOSES IN FOREIGN COUNTRIES WITHOUT DOLLAR REIMBURSEMENT, BARS THE USE OF JAPANESE YEN FOR GENERAL USE OF THE UNITED STATES IN PAYMENT OF ITS OBLIGATIONS IN JAPAN AND THE EARMARKING OF SUCH CURRENCY TO FINANCE U.S. INFORMATION AGENCY ACTIVITIES IN THE ABSENCE OF A SPECIFIC WAIVER OF THE APPLICATION OF SECTION 1415 OF THE SUPPLEMENT APPROPRIATION ACT, 1953, 31 U.S.C. 724.

TO THE DIRECTOR, UNITED STATES INFORMATION AGENCY, MAY 29, 1958:

ON MARCH 14, 1958, THE ACTING DIRECTOR, UNITED STATES INFORMATION AGENCY, REQUESTED OUR OPINION ON THE LEGALITY OF A PROPOSAL TO USE YEN, ACQUIRED BY THE SALE OF SURPLUS AGRICULTURAL COMMODITIES UNDER TITLE I OF THE AGRICULTURAL TRADE DEVELOPMENT AND ASSISTANCE ACT OF 1954, 68 STAT. 454, AS AMENDED, 7 U.S.C. SUPP. V, 1691, TO FINANCE A COMMUNITY CENTER IN JAPAN, WITHOUT DOLLAR REIMBURSEMENT THEREFOR, ON THE BASIS OF A WAIVER OF SECTION 1415 OF THE SUPPLEMENTAL APPROPRIATION ACT, 1953, 66 STAT. 662, 31 U.S.C. 724.

IN HIS LETTER THE ACTING DIRECTOR REFERS TO THE SURPLUS AGRICULTURAL COMMODITIES AGREEMENT SIGNED MAY 31, 1955, CONCLUDED BY THE DEPARTMENT OF STATE ON BEHALF OF THE UNITED STATES WITH A PAN; ALSO, TO THE EXCHANGE OF NOTES SIGNED ON THE SAME DATE BETWEEN THE TWO GOVERNMENTS SETTING FORTH THEIR UNDERSTANDINGS WITH REFERENCE TO THE AGREEMENT. SEE 6 UST 2119. ARTICLE V, PARAGRAPH 1 OF THE AGREEMENT ALLOCATED A PORTION OF THE YEN ACCRUED THEREUNDER AND DEPOSITED IN THE UNITED STATES ACCOUNT TO CERTAIN SPECIFIC USES INCLUDING IN SUBPARAGRAPH 1 (5) THEREOF THE GENERAL USE," TO PAY UNITED STATES OBLIGATIONS IN JAPAN.' THESE ALLOCATIONS CORRESPONDED WITH THE VARIOUS USE CATEGORIES PRESCRIBED FOR SUCH FUNDS IN SECTION 104 OF THE ENABLING ACT, 7 U.S.C. 1704. THE DEPARTMENT OF STATE IN PARAGRAPH 2 (5) OF ITS NOTE EXPRESSED THE INTENTION, WHICH WAS APPROVED AND CONFIRMED BY JAPAN, TO APPLY THE GENERAL USE ALLOCATION FOR, AMONG OTHER THINGS," TO FINANCE THE ACTIVITIES OF THE UNITED STATES INFORMATION AGENCY IN JAPAN.'

IN NEGOTIATING THE AGREEMENT AND EXCHANGE OF NOTES THE DEPARTMENT OF STATE, IT IS SAID, RELIED UPON SUBSECTION 104 (F) OF THE 1954 ACT, 68 STAT. 475, 7 U.S.C. 1704 (F), AS AUTHORITY FOR EARMARKING A PORTION OF THE YEN FOR PAYMENT OF OBLIGATIONS OF YOUR AGENCY IN JAPAN. THAT SECTION AUTHORIZES THE USE OF FOREIGN CURRENCIES ACCRUING UNDER SURPLUS AGRICULTURAL COMMODITY AGREEMENTS " TO PAY UNITED STATES OBLIGATIONS ABROAD.'

THE VIEW IS EXPRESSED THAT SINCE SUBSECTION 104 (F) CONTAINS NO WORDS OF LIMITATION THAT PRECLUDE THE EARMARKING OF GENERAL USE FOREIGN CURRENCIES FOR PAYMENT OF SPECIFIC UNITED STATES OBLIGATIONS THE AGREEMENT, AS CONCLUDED, WAS WITHIN AUTHORITY OF THE ENABLING ACT. ALSO, THAT PURSUANT TO SUCH AGREEMENT YEN IS AVAILABLE FOR PAYMENT OF OBLIGATIONS OF YOUR AGENCY IN JAPAN INCLUDING OBLIGATIONS FOR PROVIDING FINANCIAL ASSISTANCE TO A COMMUNITY CENTER, WHICH EXPRESSLY IS AUTHORIZED IN SECTION 203 OF THE UNITED STATES INFORMATION AND EDUCATIONAL EXCHANGE ACT OF 1948, AS AMENDED, 22 U.S.C. 1448, AND SECTION 2 OF REORGANIZATION PLAN NO. 8 OF 1953, 67 STAT. 642. IT IS CONTENDED, THEREFORE, THAT A WAIVER OF THE PROVISIONS OF SECTION 1415 OF THE SUPPLEMENTAL APPROPRIATION ACT, 1953, 66 STAT. 662, MAY LEGALLY BE GRANTED BY THE BUREAU OF THE BUDGET UNDER THE TERMS OF THE SECOND PROVISO OF SECTION 104. THIS VIEW IS CONCURRED IN BY THE OFFICE OF THE LEGAL ADVISER, DEPARTMENT OF STATE, IN A MEMORANDUM ACCOMPANYING THE LETTER OF MARCH 14.

THE DOUBT IN THE MATTER ARISES BECAUSE OF THE AMENDMENT OF THE 1954 ACT BY THE ADDITION OF A NEW SUBSECTION 104 (J), 7 U.S.C. 1704 (J). THAT SUBSECTION, AS ADDED BY SECTION 2 OF THE ACT OF AUGUST 3, 1956, 70 STAT. 988, 7 U.S.C. 1704, ESTABLISHED AN ADDITIONAL SPECIFIC USE CATEGORY FOR FOREIGN CURRENCIES, VIZ., ACTIVITIES AND PROJECTS AUTHORIZED BY SECTION 203 OF THE UNITED STATES INFORMATION AND EDUCATIONAL EXCHANGE ACT OF 1948, 22 U.S.C. 1448, AS AMENDED, TO BE AVAILABLE WITHOUT REGARD TO SECTION 1415; AND IN EFFECT PROHIBITED THE USE OF SUBSECTION 104 (F) ALLOCATIONS, THAT ARE AVAILABLE UNDER THE TERMS OF ANY AGREEMENT, FOR SUBSECTION 104 (J) PURPOSES WITHOUT DOLLAR REIMBURSEMENT THEREFOR.

SECTION 104 OF THE AGRICULTURAL TRADE DEVELOPMENT AND ASSISTANCE ACT OF 1954 AUTHORIZES THE PRESIDENT, NOTWITHSTANDING SECTION 1415 OF THE SUPPLEMENTAL APPROPRIATION ACT, 1953, OR ANY OTHER PROVISION OF LAW, TO USE OR ENTER INTO AGREEMENTS WITH FRIENDLY NATIONS OR ORGANIZATIONS OF NATIONS TO USE THE FOREIGN CURRENCIES WHICH ACCRUE UNDER TITLE I OF THE ACT FOR CERTAIN SPECIFIC USES AND, IN ADDITION, FOR THE SUBSECTION 104 (F) GENERAL USE," TO PAY UNITED STATES OBLIGATIONS ABROAD.' THE FIRST PROVISO OF SECTION 104 MAKES SECTION 1415 APPLICABLE, SO FAR AS HERE MATERIAL, TO ALL FOREIGN CURRENCIES USED FOR PAYMENT OF UNITED STATES OBLIGATIONS INVOLVING GRANTS UNDER SUBSECTION 104 (F) WHICH ACCRUE UNDER TITLE I OF THE ACT. THE NEXT PROVISO AUTHORIZES THE PRESIDENT TO WAIVE THE APPLICABILITY OF SECTION 1415 IN ANY CASE WHERE HE DETERMINES THAT ITS APPLICATION WOULD BE INAPPROPRIATE OR INCONSISTENT WITH THE PURPOSES OF SAID TITLE I.

THESE AUTHORIZATIONS TO THE PRESIDENT WERE DELEGATED BY HIM TO CERTAIN AGENCIES OF THE GOVERNMENT IN EXECUTIVE ORDER NO. 10560 DATED SEPTEMBER 9, 1954, AS AMENDED. RESPONSIBILITY FOR THE NEGOTIATION OF SALES AGREEMENTS WAS DELEGATED TO THE DEPARTMENT OF STATE, AND THAT OF FIXING THE AMOUNTS OF FOREIGN CURRENCIES FOR EACH USE CATEGORY SET OUT IN SAID SECTION 104, TO THE DIRECTOR OF THE BUREAU OF THE BUDGET. THE WAIVER AUTHORITY IN THAT SECTION WAS ALSO DELEGATED TO THE DIRECTOR OF THAT BUREAU. TO EFFECTIVELY COORDINATE ADMINISTRATION OF THE ACT, THE PRESIDENT DIRECTED THE ESTABLISHMENT OF AN INTERAGENCY COMMITTEE ON AGRICULTURAL SURPLUS DISPOSAL MADE UP OF REPRESENTATIVES OF THE DEPARTMENTS AND AGENCIES CONCERNED WITH THE OBJECTIVES THEREOF.

AS STATED BY THE ACTING DIRECTOR, THE PROVISIONS IN THE SUBJECT AGREEMENT AND EXCHANGE OF NOTES ALLOCATING A SPECIFIC SUM OF YEN FOR THE GENERAL USE OF THE UNITED STATES IN PAYMENT OF ITS OBLIGATIONS IN JAPAN, AND EARMARKING A PORTION OF THE FUNDS TO ASSURE THEIR AVAILABILITY TO FINANCE AUTHORIZED ACTIVITIES OF YOUR AGENCY IN THAT COUNTRY WERE WITHIN THE AUTHORITY OF SECTION 104 OF THE CITED AGRICULTURAL TRADE DEVELOPMENT AND ASSISTANCE ACT OF 1954 AND EXECUTIVE ORDERS ISSUED IN PURSUANCE THEREOF. THUS, THE YEN BECAME AVAILABLE FOR USE IN FURNISHING ASSISTANCE TO A JAPANESE COMMUNITY CENTER, SUBJECT TO THE AVAILABILITY OF APPROPRIATIONS MADE TO YOUR AGENCY FOR SUCH PURPOSES AND DOLLAR REIMBURSEMENT THEREFOR, PURSUANT TO THE TERMS OF THE FIRST PROVISO OF SECTION 104. SEE B-131822 DATED MAY 31, 1957, TO THE SECRETARY OF STATE.

HAD THE BUREAU OF THE BUDGET DETERMINED THAT DOLLAR REIMBURSEMENT WOULD BE INAPPROPRIATE OR INCONSISTENT WITH THE PURPOSES OF TITLE I IT WAS AUTHORIZED, UNDER THE TERMS OF THE SECOND PROVISO OF SECTION 104, TO WAIVE APPLICATION OF SECTION 1415 SO AS TO MAKE THE YEN AVAILABLE TO YOUR AGENCY WITHOUT DOLLAR REIMBURSEMENT--- AT LEAST PRIOR TO THE ENACTMENT OF SUBSECTION 104 (J). HOWEVER, THE BUREAU DID NOT EXERCISE THE WAIVER AUTHORITY, AND IT THUS APPEARS THAT ANSWER ON THE QUESTION PRESENTED IN THE LETTER INVOLVES A DETERMINATION OF WHETHER THE PASSAGE OF SUBSECTION 104 (J) INHIBITS THE BUREAU FROM NOW TAKING SUCH ACTION.

AS HEREINBEFORE STATED SUBSECTION 104 (J) WAS ADDED TO THE BASIC ACT TO PERMIT FOREIGN CURRENCIES ACQUIRED UNDER SURPLUS AGRICULTURAL COMMODITIES AGREEMENTS TO BE USED FOR OVERSEAS UNITED STATES INFORMATION AGENCY AND FOREIGN SERVICE ACTIVITIES WITHOUT REGARD TO THE APPROPRIATION DOLLAR PROVISIONS OF SECTION 1415 OF THE SUPPLEMENTAL APPROPRIATION ACT, 1953. THIS AUTHORITY WAS QUALIFIED BY THE PROVISION "* * * BUT NO FOREIGN CURRENCIES WHICH ARE AVAILABLE UNDER THE TERMS OF ANY AGREEMENT FOR APPROPRIATION FOR THE GENERAL USE OF THE UNITED STATES SHALL BE USED FOR THE PURPOSES OF THIS SUBSECTION (J) WITHOUT DOLLAR APPROPRIATION THEREFOR.' ( ITALICS SUPPLIED.)

THE PLAIN EFFECT OF THIS QUOTED PROVISION IS TO WITHDRAW OR REPEAL THE WAIVER AUTHORITY DELEGATED TO THE PRESIDENT AND BY HIM REDELEGATED TO THE BUREAU OF THE BUDGET IN RESPECT OF UTILIZING SUBSECTION 104 (F) GENERAL USE ALLOCATIONS FOR PURPOSES FALLING WITHIN THE SCOPE OF SUBSECTION 104 (J) WITHOUT DOLLAR REIMBURSEMENT THEREFOR. WHILE THE SUBJECT AGREEMENT AND EXCHANGE OF NOTES EARMARKED A PORTION OF THE YEN MADE AVAILABLE UNDER SUBSECTION 104 (F) TO PAY UNITED STATES INFORMATION AGENCY OBLIGATIONS ABROAD, SUCH ACTION MAY NOT BE REGARDED AS OPERATING TO ALTER OR CHANGE ITS STATUTORY GENERAL USE CLASSIFICATION. THE CONGRESS PRESCRIBED THE VARIOUS USES TO BE MADE OF FOREIGN CURRENCIES AND IT FOLLOWS THAT, IN THE ABSENCE OF EXPRESS PROVISION TO THE CONTRARY, ONLY THE CONGRESS CAN RESTRICT OR EXPAND SUCH USE CLASSIFICATIONS.

MOREOVER, THE AUTHORITY OF YOUR AGENCY TO USE SUBSECTION 104 (F) YEN FOR ITS ACTIVITIES IN JAPAN WITHOUT THEIR PURCHASE WITH APPROPRIATED DOLLARS EXISTED SOLELY BY VIRTUE OF THE DISCRETIONARY AUTHORITY IN THE BUREAU OF THE BUDGET TO WAIVE APPLICATION OF THE PROVISIONS OF SECTION 1415. OTHER WORDS, THE ENACTMENT OF SUBSECTION 104 (J) DID NOT DISTURB OR PREJUDICE ANY RIGHT OF YOUR AGENCY TO THE FREE USE OF SUCH FUNDS.

THE GENERAL RULE REGARDING THE EFFECT OF A STATUTE REPEALING A LEGISLATIVE GRANT OF AUTHORITY IS THAT, IN THE ABSENCE OF A SAVINGS CLAUSE OR OTHER CLEAR EXPRESSION OF INTENTION, THE AUTHORITY REPEALED IS DESTROYED--- EXCEPT AS TO TRANSACTIONS PASSED AND CLOSED--- AS COMPLETELY AS IF IT HAD NEVER EXISTED AND ALL PROCEEDINGS UNDER IT ARE TERMINATED. SEE LYNCH V. UNITED STATES, 292 U.S. 571, 577; UNITED STATES V. KENDALL, 263 F. 126; DEPARTMENT OF SOCIAL WELFARE V. WINGO, 175 P.2D 262. SEE ALSO 29 COMP. GEN. 11; 30 ID. 65; 34 ID. 149; AND SUTHERLAND STATUTORY CONSTRUCTION, SECTION 1936, AND CASES THEREIN CITED. THERE APPEARS NOTHING IN THE QUOTED LANGUAGE OF SUBSECTION 104 (J) NOR IN ITS LEGISLATIVE HISTORY LIMITING OR RESTRICTING THE APPLICATION OF ITS REPEALER PROVISIONS.

THEREFORE, AND APPLYING THIS RULE, WE CONCLUDE THAT THE BUREAU OF THE BUDGET NOT HAVING EXERCISED ITS AUTHORITY TO WAIVE APPLICATION OF SECTION 1415, IN RESPECT OF UTILIZING SUBSECTION 104 (F) GENERAL USE YEN EARMARKED TO FINANCE UNITED STATES INFORMATION AGENCY ACTIVITIES IN JAPAN, WITHOUT DOLLAR REIMBURSEMENT THEREFOR, IT IS EFFECTIVELY BARRED BY ENACTMENT OF THE REFERRED-TO PROVISIONS OF SUBSECTION 104 (J) FROM TAKING SUCH ACTION AT THIS TIME.

IN VIEW OF THE CONCLUSION JUST STATED, THE ACTING DIRECTOR POSED AN ALTERNATIVE QUESTION AS TO WHETHER THERE IS ANY LEGAL OBJECTION TO REVISION OF THE SUBJECT AGREEMENT SO AS TO MAKE THE YEN SPECIFICALLY AVAILABLE FOR SUBSECTION 104 (J) ACTIVITIES OF YOUR AGENCY IN JAPAN WITHOUT DOLLAR REIMBURSEMENT THEREFOR.

A QUESTION SUBSTANTIALLY IDENTICAL WITH THAT HERE PRESENTED WAS CONSIDERED IN OUR DECISION OF SEPTEMBER 30, 1957, B-133517, TO THE SECRETARY OF STATE. WE HELD THEREIN TO THE EFFECT THAT IT WAS PERMISSIBLE TO TRANSFER FOREIGN CURRENCY ALLOCATIONS BETWEEN CERTAIN SPECIFIC USE CATEGORIES WITHOUT THEIR PURCHASE WITH APPROPRIATED DOLLARS, BUT THAT IT WAS NOT LEGALLY PROPER TO TRANSFER SUBSECTION 104 (F) GENERAL USE ALLOCATIONS INVOLVING GRANTS TO A SPECIFIC USE CATEGORY, SUCH AS SUBSECTION 104 (J), WITHOUT DOLLAR REIMBURSEMENT THEREFOR.

IN ANSWER TO THE ALTERNATIVE QUESTION YOU ARE ADVISED THAT THE AGREEMENT PROPERLY MAY BE REVISED TO MAKE THE YEN HERETOFORE ALLOCATED FOR SUBSECTION 104 (F) PURPOSES AVAILABLE FOR SUBSECTION 104 (J) ACTIVITIES AND PROJECTS. HOWEVER, SINCE SUCH YEN ACCRUED UNDER TITLE I OF PUBLIC LAW 480 AND ARE AVAILABLE FOR THE GENERAL USE OF THE UNITED STATES (NOTWITHSTANDING THAT THEY ARE EARMARKED FOR UNITED STATES INFORMATION AGENCY ACTIVITIES) UNDER THE TERMS OF THE AGREEMENT, WHEN THEY ARE MADE AVAILABLE FOR SUBSECTION 104 (J) PURPOSES UNDER THE REVISED AGREEMENT DOLLAR REIMBURSEMENT THEREFOR MUST BE MADE IN VIEW OF THE SPECIFIC REQUIREMENT UNDER THAT SUBSECTION.