B-138613, JUN 1, 1959

B-138613: Jun 1, 1959

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ARE FOR CREDIT TO THE REVOLVING FUND OF THE UNITED STATES INFORMATION AGENCY OR FOR DEPOSIT IN THE GENERAL FUND OF THE TREASURY AS MISCELLANEOUS RECEIPTS. THE FISCAL ASSISTANT SECRETARY SAYS THAT FOREIGN CURRENCIES RECEIVED BY THE UNITED STATES INFORMATION AGENCY IN CONNECTION WITH INFORMATIONAL MEDIA GUARANTIES ARE DEPOSITED IN FOREIGN CURRENCY ACCOUNTS OF THE TREASURER OF THE UNITED STATES. THAT WHERE PERMISSIBLE SUCH FOREIGN CURRENCY IS SOLD TO THE UNITED STATES DISBURSING OFFICERS FOR THE PURPOSE OF PAYING UNITED STATES ADMINISTRATIVE EXPENSES IN THE RESPECTIVE COUNTRIES. THE UNITED STATES DOLLARS RECEIVED FROM THE SALE OF CURRENCIES ARE DEPOSITED IN THE REVOLVING FUND ACCOUNT OF THE UNITED STATES INFORMATION AGENCY TO BE USED FOR SUBSEQUENT PAYMENTS UNDER NEW GUARANTIES.

B-138613, JUN 1, 1959

PRECIS-UNAVAILABLE

MR. SECRETARY:

ON FEBRUARY 3, 1959, THE FISCAL ASSISTANT SECRETARY REQUESTED OUR DECISION AS TO WHETHER INTEREST EARNINGS, WHEN CONVERTED TO DOLLARS, WHICH ACCRUE ON FOREIGN CURRENCIES RECEIVED BY THE UNITED STATES INFORMATION AGENCY IN CONNECTION WITH INFORMATIONAL MEDIA GUARANTIES WHEN PLACED ON TIME DEPOSIT IN FOREIGN CURRENCY ACCOUNTS OF THE TREASURER OF THE UNITED STATES, PENDING SALE OR OTHER DISPOSITION, ARE FOR CREDIT TO THE REVOLVING FUND OF THE UNITED STATES INFORMATION AGENCY OR FOR DEPOSIT IN THE GENERAL FUND OF THE TREASURY AS MISCELLANEOUS RECEIPTS.

THE FISCAL ASSISTANT SECRETARY SAYS THAT FOREIGN CURRENCIES RECEIVED BY THE UNITED STATES INFORMATION AGENCY IN CONNECTION WITH INFORMATIONAL MEDIA GUARANTIES ARE DEPOSITED IN FOREIGN CURRENCY ACCOUNTS OF THE TREASURER OF THE UNITED STATES; THAT WHERE PERMISSIBLE SUCH FOREIGN CURRENCY IS SOLD TO THE UNITED STATES DISBURSING OFFICERS FOR THE PURPOSE OF PAYING UNITED STATES ADMINISTRATIVE EXPENSES IN THE RESPECTIVE COUNTRIES; THAT IN ACCORDANCE WITH THE AFTER-QUOTED PROVISION OF LAW, THE UNITED STATES DOLLARS RECEIVED FROM THE SALE OF CURRENCIES ARE DEPOSITED IN THE REVOLVING FUND ACCOUNT OF THE UNITED STATES INFORMATION AGENCY TO BE USED FOR SUBSEQUENT PAYMENTS UNDER NEW GUARANTIES; AND THAT IN SOME COUNTRIES THESE FOREIGN CURRENCIES, PENDING SALE OR OTHER DISPOSITION, ARE PLACED ON TIME DEPOSIT AND EARN INTEREST.

SECTION 1442 OF TITLE 22, U.S.C. A. PROVIDES, IN PERTINENT PART, AS FOLLOWS:

"(A) THE DIRECTOR OF THE UNITED STATES INFORMATION AGENCY MAY MAKE GUARANTIES, IN ACCORDANCE WITH THE PROVISIONS OF SUBSECTION (B) OF SECTION 1913 (1933) OF THIS TITLE OF INVESTMENTS IN ENTERPRISES PRODUCING OR DISTRIBUTING INFORMATIONAL MEDIA CONSISTENT WITH THE NATIONAL INTERESTS OF THE UNITED STATES.

"(D) FOREIGN CURRENCIES AVAILABLE AFTER JUNE 30, 1955, FROM CONVERSIONS MADE PURSUANT TO THE OBLIGATION OF INFORMATIONAL MEDIA GUARANTIES MAY BE SOLD, IN ACCORDANCE WITH TREASURY DEPARTMENT REGULATIONS, FOR DOLLARS WHICH SHALL BE DEPOSITED IN THE SPECIAL ACCOUNT AND SHALL BE AVAILABLE FOR PAYMENTS UNDER NEW GUARANTIES. ***

"(H)(1) THERE IS AUTHORIZED TO BE APPROPRIATED ANNUALLY AN AMOUNT TO RESTORE IN WHOLE OR IN PART ANY REALIZED IMPAIRMENT TO THE CAPITAL USED IN CARRYING ON THE AUTHORITY TO MAKE INFORMATIONAL MEDIA GUARANTIES, AS PROVIDED IN SUBSECTION (C) OF THIS SECTION, THROUGH THE END OF THE LAST COMPLETED FISCAL YEAR.

"(2) SUCH IMPAIRMENT SHALL CONSIST OF THE AMOUNT BY WHICH THE LOSSES INCURRED AND INTEREST ACCRUED ON NOTES EXCEED THE REVENUE EARNED AND ANY PREVIOUS APPROPRIATIONS MADE FOR THE RESTORATION OF IMPAIRMENT. ***"

WHILE AS A GENERAL RULE AND IN THE ABSENCE OF STATUTORY PROVISION TO THE CONTRARY, SECTION 3617, R. S., 31 U.S.C. 484, REQUIRES THE DEPOSIT INTO THE GENERAL FUND OF THE TREASURY AS MISCELLANEOUS RECEIPTS OF THE GROSS AMOUNT OF ALL MONIES RECEIVED FROM WHATEVER SOURCE FOR THE USE OF THE UNITED STATES, THE EXPRESS LANGUAGE OF 22 U.S.C. A. 1442(H)(2) SHOWS THE CONGRESSIONAL INTENT THAT "REVENUE EARNED" SHOULD BE DEPOSITED IN THE REVOLVING FUND.

"REVENUE" IS A TERM GENERALLY USED IN REFERRING TO INCOME OF A GOVERNMENT OR GOVERNMENTAL SUBDIVISION AND AS SO USED MEANS ALL THE PUBLIC MONEYS WHICH THE STATE COLLECTS AND RECEIVES FROM WHATEVER SOURCE AND IN WHATEVER MANNER. FULLERTON V. CENTRAL LINCOLN PEOPLE'S UTILITY DIST., 201 P. 2D 524. THE COURT IN DAVIS V. PHIPPS, 85 S. W. 2D 1020, 1022, EXPRESSED THE PRINCIPLE AS FOLLOWS:

"WHEN WE REFER TO THE REVENUES OF THE STATE, WE USUALLY MEAN THE ANNUAL OR PERIODIC YIELD OF TAXES, EXCISE, CUSTOMS, ETC., WHICH THE STATE COLLECTS AND RECEIVES INTO THE TREASURY FOR PUBLIC USE, BUT THE WORD 'REVENUES' MAY BE MUCH BROADER THAN THAT AS IT MAY INCLUDE RENT, YIELD, AS OF LAND, PROFIT. IT INCLUDES ANNUAL AND PERIODICAL RENT, PROFITS, INTEREST, OR ISSUES OF ANY SPECIES OF PROPERTY, REAL OR PERSONAL, INCOME.

IT THUS APPEARS THAT THE AMOUNT OF THE INTEREST EARNINGS WHEN CONVERTED INTO DOLLARS IS "REVENUE EARNED" WITHIN THE MEANING OF SUBSECTION (H)(2) AND AS SUCH WAS INTENDED BY THE CONGRESS TO BE RETURNED TO THE CAPITAL FUND. CF. 5 COMP. GEN. 1004.

A FURTHER INDICATION OF SUCH CONGRESSIONAL INTENT IS FOUND IN THE LEGISLATIVE HISTORY OF SECTION 502(I) OF THE MUTUAL SECURITY ACT OF 1958, PUBLIC LAW 85-477, 72 STAT. 274, WHICH ADDED SUBSECTION (H) TO SECTION 1011 OF THE UNITED STATES INFORMATION AND EDUCATIONAL EXCHANGE ACT OF 1948. THAT NEW SUBSECTION (H) IS 22 U.S.C. A. 1442(H) HERE UNDER CONSIDERATION.

ROBERT M. BEARS, CHIEF, INFORMATIONAL MEDIA GUARANTY DIVISION, UNITED STATES INFORMATION AGENCY, MADE THE FOLLOWING STATEMENT IN THE HEARINGS BEFORE THE COMMITTEE ON FOREIGN AFFAIRS, HOUSE OF REPRESENTATIVES, 85TH CONGRESS, 2D SESSION, ON H. K. 12181 WHICH WAS ENACTED AS PUBLIC LAW 85- 477, AS REPORTED ON PAGE 1618:

"THE PROPOSED LEGISLATION THEREFORE AUTHORIZES ANNUAL CONGRESSIONAL APPROPRIATIONS TO REPLENISH, IN WHOLE OR IN PART, THE IMPAIRMENT TO THE IMG CAPITAL FUND THROUGH THE END OF THE LAST COMPLETED FISCAL YEAR. THE TOTAL IMPAIRMENT TO THE IMG CAPITAL FUND AS OF JUNE 30, 1957, WAS AS FOLLOWS:

"1. LOSSES ON FOREIGN CURRENCIES SOLD - - - - $2,252,015

2. COST OF FOREIGN CURRENCIES DETERMINED TO BE UNAVAILABLE OR IN EXCESS OF U. S. GOVERNMENT NEEDS - - - - - - - 9,780,418

3.FOREIGN CURRENCIES TRANSFERRED TO OTHER ACCOUNTS WITHOUT REIMBURSEMENT - - - - 0

4. INTEREST PAYABLE ON NOTES - - - - - - - - 767,783

5. LESS:

(A) FEES COLLECTED - - - - $665,009

(B) PROCEEDS FROM SALE OF FOREIGN CURRENCY RECEIVED AS INTEREST ON BANK DEPOSITS - - - 0

665,009

6. IMPAIRMENT TO JUNE 30, 1957 - - - - - - 12,135,207"

7. LESS PRIOR RESTORATION BY APPROPRIATION- 0

8. SUBJECT TO APPROPRIATION - - - - - - - 12,135,207"

FROM THE HEARINGS REFERRED TO ABOVE, IT IS EVIDENT THAT THE MATTER OF CONSIDERING INTEREST RECEIVED ON BANK DEPOSITS IN ARRIVING AT THE NET AMOUNT OF IMPAIRMENT OF THE FUND WAS BROUGHT TO THE ATTENTION OF THE COMMITTEE AND THERE IS NOTHING IN THE HEARINGS INDICATING ANY OBJECTION TO THE METHOD PRESENTED FOR COMPUTING THE NET IMPAIRMENT.

ACCORDINGLY, WE CONCLUDE THAT THE INTEREST EARNINGS IN QUESTION, WHEN CONVERTED TO DOLLARS, ARE FOR CREDIT TO THE REVOLVING FUND OF THE UNITED STATES INFORMATION AGENCY AND ARE NOT REQUIRED TO BE DEPOSITED IN THE GENERAL FUND OF THE TREASURY AS MISCELLANEOUS RECEIPTS.