B-19688, SEPTEMBER 6, 1941, 21 COMP. GEN. 205

B-19688: Sep 6, 1941

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THE EFFECT IS TO SUSPENDED COMPLIANCE WITH THE PROVISIONS IN SAID SECTIONS WITH RESPECT TO PERMISSIVE ACTION WHICH MAY BE TAKEN BY THE ADMINISTRATIVE OFFICE AS WELL AS THE MANDATORY PROVISIONS. NOTWITHSTANDING THE ADMINISTRATIVE MOTIVES IN RECOMMENDING THE ISSUANCE OF THE EXECUTIVE ORDERS MAY HAVE BEEN OTHERWISE. THIS DIFFERENTIAL MAY BE EXTENDED BY ADMINISTRATIVE ACTION TO ALL EMPLOYEES OF THE GOVERNMENT IN THE CANAL ZONE WHOSE SALARY RATES ARE NOT OTHERWISE SPECIFICALLY FIXED BY LAW. THE COMPENSATION DIFFERENTIAL OF NOT TO EXCEED 25 PERCENT WHICH MAY BE PAID TO GOVERNMENT EMPLOYEES IN THE CANAL ZONE IS NOT REQUIRED TO BE BASED ON THE MINIMUM SALARY RATE OF THE GRADE IN WHICH AN EMPLOYEE'S POSITION IS ALLOCATED.

B-19688, SEPTEMBER 6, 1941, 21 COMP. GEN. 205

COMPENSATION - RATES - CANAL ZONE DIFFERENTIAL WHERE, BY EXECUTIVE ORDERS NO. 8719 AND NO. 8812, ISSUED PURSUANT TO STATUTORY AUTHORITY, THE PRESIDENT HAS SUSPENDED COMPLIANCE WITH "THE PROVISIONS OF THE SECTIONS" OF THE APPROPRIATION ACTS THEREIN MENTIONED, THE EFFECT IS TO SUSPENDED COMPLIANCE WITH THE PROVISIONS IN SAID SECTIONS WITH RESPECT TO PERMISSIVE ACTION WHICH MAY BE TAKEN BY THE ADMINISTRATIVE OFFICE AS WELL AS THE MANDATORY PROVISIONS, NOTWITHSTANDING THE ADMINISTRATIVE MOTIVES IN RECOMMENDING THE ISSUANCE OF THE EXECUTIVE ORDERS MAY HAVE BEEN OTHERWISE. WHILE EXECUTIVE ORDERS NO. 8719 AND NO. 8812 SUSPEND COMPLIANCE WITH THE PROVISIONS OF THE APPROPRIATION ACTS THEREIN MENTIONED WITH RESPECT TO PAYMENT OF A COMPENSATION DIFFERENTIAL TO EMPLOYEES IN THE CANAL ZONE, THE ACT OF AUGUST 24, 1912, AUTHORIZING PAYMENT OF SUCH A DIFFERENTIAL TO EMPLOYEES OF THE PANAMA CANAL NOT TO EXCEED 25 PERCENT OF THE SALARIES PAID FOR THE SAME OR SIMILAR SERVICES FOR THE GOVERNMENT IN THE CONTINENTAL UNITED STATES, REMAINS UNCHANGED, AND THIS DIFFERENTIAL MAY BE EXTENDED BY ADMINISTRATIVE ACTION TO ALL EMPLOYEES OF THE GOVERNMENT IN THE CANAL ZONE WHOSE SALARY RATES ARE NOT OTHERWISE SPECIFICALLY FIXED BY LAW. THE COMPENSATION DIFFERENTIAL OF NOT TO EXCEED 25 PERCENT WHICH MAY BE PAID TO GOVERNMENT EMPLOYEES IN THE CANAL ZONE IS NOT REQUIRED TO BE BASED ON THE MINIMUM SALARY RATE OF THE GRADE IN WHICH AN EMPLOYEE'S POSITION IS ALLOCATED, BUT MAY BE BASED ON ANY SALARY RATE OF SUCH GRADE PROPERLY FIXED FOR THE PARTICULAR EMPLOYEE. WHERE THE ADDITION OF THE MAXIMUM COMPENSATION DIFFERENTIAL OF 25 PERCENT AUTHORIZED FOR GOVERNMENT EMPLOYEES IN THE CANAL ZONE RESULTS IN A SALARY RATE WHICH FALLS BETWEEN TWO AUTHORIZED CLASSIFICATION ACT RATES, THE RESULTING SALARY RATE MAY NOT BE ADVANCED TO THE NEXT HIGHER CLASSIFICATION ACT RATE, BUT, IF IT BE CONSIDERED ADMINISTRATIVELY DESIRABLE TO FIX TOTAL SALARY RATES OF SUCH EMPLOYEES AT A CLASSIFICATION ACT RATE, RATHER THAN AT AN ODD RATE, THE AMOUNT OF THE DIFFERENTIAL MAY BE LIMITED TO AN AMOUNT NECESSARY TO ACCOMPLISH THAT RESULT.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE SECRETARY OF WAR, SEPTEMBER 6, 1941:

THE DIRECTOR OF PERSONNEL, CIVILIAN PERSONNEL DIVISION, WAR DEPARTMENT, HAS SUBMITTED FOR MY CONSIDERATION THE MATTER PRESENTED IN HIS LETTER OF AUGUST 2, 1941, AS FOLLOWS:

1. SECTION 6, TITLE I, OF THE NAVAL APPROPRIATION ACT, 1941, PUBLIC, NO. 588; SECTION 7 OF THE MILITARY APPROPRIATION ACT, 1941, PUBLIC, NO. 611; AND SECTION 2 OF THE WAR DEPARTMENT CIVIL APPROPRIATION ACT, 1941, PUBLIC, NO. 653, ALL OF THE 76TH CONGRESS, PROVIDE FOR CERTAIN RESTRICTIONS AND PERMISSIVE ACTIONS PERTAINING TO THE SERVICES OF CIVILIAN PERSONNEL ON THE CANAL ZONE. THE WORDING OF THESE THREE SECTIONS IS IDENTICAL. USING PUBLIC, NO. 611, AS AN EXAMPLE, THE WORDING OF SECTION 7 IS:

"SEC. 7. NO PART OF ANY APPROPRIATION CONTAINED IN THIS ACT SHALL BE USED DIRECTLY OR INDIRECTLY AFTER MAY 1, 1941, EXCEPT FOR TEMPORARY EMPLOYMENT IN CASE OF EMERGENCY, FOR THE PAYMENT OF ANY CIVILIAN FOR SERVICES RENDERED BY HIM ON THE CANAL ZONE WHILE OCCUPYING A SKILLED, TECHNICAL, CLERICAL, ADMINISTRATIVE, EXECUTIVE, OR SUPERVISORY POSITION UNLESS SUCH PERSON IS A CITIZEN OF THE UNITED STATES OF AMERICA OR OF THE REPUBLIC OF PANAMA: PROVIDED, HOWEVER, (1) THAT, NOTWITHSTANDING THE PROVISION IN THE ACT APPROVED AUGUST 11, 1939 (53 STAT. 1409), LIMITING EMPLOYMENT IN THE ABOVE-MENTIONED POSITIONS TO CITIZENS OF THE UNITED STATES FROM AND AFTER THE DATE OF THE APPROVAL OF SAID ACT, CITIZENS OF PANAMA MAY BE EMPLOYED IN SUCH POSITIONS; (2) THAT AT NO TIME SHALL THE NUMBER OF PANAMANIAN CITIZENS EMPLOYED IN THE ABOVE MENTIONED POSITIONS EXCEED THE NUMBER OF CITIZENS OF THE UNITED STATES SO EMPLOYED, IF UNITED STATES CITIZENS ARE AVAILABLE IN CONTINENTAL UNITED STATES OR ON THE CANAL ZONE; (3) THAT NOTHING IN THIS ACT SHALL PROHIBIT THE CONTINUED EMPLOYMENT OF ANY PERSON WHO SHALL HAVE RENDERED FIFTEEN OR MORE YEARS OF FAITHFUL AND HONORABLE SERVICE ON THE CANAL ZONE; (4) THAT IN THE SELECTION OF PERSONNEL FOR SKILLED, TECHNICAL, ADMINISTRATIVE, CLERICAL, SUPERVISORY, OR EXECUTIVE POSITIONS, THE CONTROLLING FACTORS IN FILLING THESE POSITIONS SHALL BE EFFICIENCY, EXPERIENCE, TRAINING, AND EDUCATION; (5) THAT ALL CITIZENS OF PANAMA AND THE UNITED STATES RENDERING SKILLED, TECHNICAL, CLERICAL, ADMINISTRATIVE, EXECUTIVE, OR SUPERVISORY SERVICE ON THE CANAL ZONE UNDER THE TERMS OF THIS ACT (A) SHALL NORMALLY BE EMPLOYED NOT MORE THAN FORTY HOURS PER WEEK; (B) MAY RECEIVE AS COMPENSATION EQUAL RATES OF PAY BASED UPON RATES PAID FOR SIMILAR EMPLOYMENT IN CONTINENTAL UNITED STATES PLUS 25 PERCENTUM; (6) THIS ENTIRE SECTION SHALL APPLY ONLY TO PERSONS EMPLOYED IN SKILLED, TECHNICAL, CLERICAL, ADMINISTRATIVE, EXECUTIVE, OR SUPERVISORY POSITIONS ON THE CANAL ZONE DIRECTLY OR INDIRECTLY BY ANY BRANCH OF THE UNITED STATES GOVERNMENT OR BY ANY CORPORATION OR COMPANY WHOSE STOCK IS OWNED WHOLLY OR IN PART BY THE UNITED STATES GOVERNMENT: PROVIDED FURTHER, THAT THE PRESIDENT MAY SUSPEND COMPLIANCE WITH THIS SECTION IN TIME OF WAR OR NATIONAL EMERGENCY IF HE SHOULD DEEM SUCH COURSE TO BE IN THE PUBLIC INTEREST.'

2. THE PROVISION IN THE ABOVE SECTION FORBIDDING THE USE, AFTER MAY 1, 1941, OF ANY PART OF THE APPROPRIATIONS CONTAINED IN THE ACT "* * * FOR THE PAYMENT OF ANY CIVILIAN FOR SERVICES RENDERED BY HIM ON THE CANAL ZONE, WHILE OCCUPYING A SKILLED, TECHNICAL, CLERICAL, ADMINISTRATIVE, EXECUTIVE, OR SUPERVISORY POSITION UNLESS SUCH PERSON IS A CITIZEN OF THE UNITED STATES OF AMERICA OR THE REPUBLIC OF PANAMA: * * *.' WAS VIEWED WITH ALARM, INASMUCH AS THE RECRUITING PROBLEM ON THE CANAL ZONE WAS EVEN THEN BEING FELT. THE DEFENSE PROGRAM WAS UNDER WAY, INDUSTRY WAS MARSHALLING PERSONNEL TO MEET THE DEMANDS AND NEEDS OF NATIONAL DEFENSE, THE HOUSING SITUATION ON THE CANAL ZONE MADE EMPLOYMENT THERE UNDESIRABLE TO CITIZENS OF THE UNITED STATES, QUARTERS WERE NOT AVAILABLE FOR FAMILIES, NECESSITATING SEPARATION OF EMPLOYEES FROM THEIR FAMILIES--- IN SHORT, CITIZENS OF THE UNITED STATES WERE GOING TO WORK IN THE UNITED STATES. ALL THESE FACTORS CONTRIBUTED TO THE RECRUITMENT PROBLEM. ALLEVIATE THE PRESSING NEED FOR PERSONNEL, ALIENS HAD BEEN EMPLOYED IN MANY INSTANCES. THESE "ALIENS" WERE IN GENERAL JAMAICAN NEGROES AND THE LABOR THEY PERFORMED WAS NOT USUALLY ATTRACTIVE TO CITIZENS OF THE UNITED STATES. THEY PRESENTED NO HOUSING PROBLEM SINCE THEY WERE ACCUSTOMED TO THE USUAL LIFE OF A TROPICAL SETTLEMENT. TO HAVE REPLACED THEM AT THAT TIME BY CITIZENS OF THE UNITED STATES WOULD HAVE SUBJECTED SUCH REPLACEMENTS TO SUBSTANDARD LIVING CONDITIONS AND SEPARATION FROM THEIR FAMILIES, WHICH WOULD HAVE INEVITABLY RESULTED IN LOWERED MORALE, REDUCED EFFICIENCY AND HIGH LABOR TURNOVER, WITH THE ATTENDANT ADVERSE EFFECTS UPON THE NATIONAL DEFENSE PREPARATIONS IN ONE OF THE MOST IMPORTANT STRATEGIC AREAS.

3. IN VIEW OF THESE FACTS, THE WAR DEPARTMENT, UNDER DATE OF JANUARY 3, 1941, REQUESTED THE OPINION OF MR. SIDNEY HILLMAN, ADVISORY COMMISSION, COUNCIL OF NATIONAL DEFENSE, WITH REGARD TO THE POSSIBILITY OF SECURING A SUSPENSION OF THOSE PROVISIONS REQUIRING THE EMPLOYMENT OF UNITED STATES AND PANAMANIAN CITIZENS. ON FEBRUARY 26, 1941, THE WAR DEPARTMENT WAS ADVISED THAT MR. HILLMAN HAD AGREED TO THE SUSPENSION.

4. THE JUDGE ADVOCATE GENERAL OF THE ARMY AND THE JUDGE ADVOCATE GENERAL OF THE NAVY COLLABORATED IN DRAFTING AN EXECUTIVE ORDER WHICH WAS SUBMITTED TO THE PRESIDENT ON MARCH 5, 1941, ITS OBJECT BEING TO SUSPEND COMPLIANCE WITH THE CITIZENSHIP PROVISIONS IN THE SECTIONS OF THE ACTS IN QUESTION. EXECUTIVE ORDER NO. 8719 WAS ISSUED MARCH 22, 1941 AS FOLLOWS:

EXECUTIVE ORDER

SUSPENDING CERTAIN STATUTORY PROVISIONS RELATING TO EMPLOYMENT

IN THE CANAL ZONE

BY VIRTUE OF THE AUTHORITY VESTED IN ME BY SECTION 6, TITLE I OF THE ACT OF JUNE 11, 1940, PUBLIC, NO. 588, 76TH CONGRESS, SECTION 7 OF THE ACT OF JUNE 13, 1940, PUBLIC, NO. 611, 76TH CONGRESS, AND SECTION 2 OF THE ACT OF JUNE 24, 1940, PUBLIC, NO. 653, 76TH CONGRESS, RELATING TO CERTAIN KINDS OF EMPLOYMENT IN THE CANAL ZONE, AND DEEMING SUCH COURSE TO BE IN THE PUBLIC INTEREST, I HEREBY SUSPEND COMPLIANCE WITH THE PROVISIONS OF THE SAID SECTIONS DURING THE CONTINUANCE OF THE NATIONAL EMERGENCY PROCLAIMED TO EXIST BY PROCLAMATION NO. 2352 DATED SEPTEMBER 8, 1939.

FRANKLIN D. ROOSEVELT.

THE WHITE HOUSE,

MARCH 22, 1941.

( NO. 8719)

5. FROM THE WORDING OF EXECUTIVE ORDER NO. 8719, IT WOULD APPEAR THAT THE PRESIDENT HAD SUSPENDED COMPLIANCE WITH ALL THE PROVISIONS CONTAINED IN THE SECTIONS IN QUESTION, WHEREAS THE WAR DEPARTMENT WAS ONLY DESIROUS OF SUSPENDING THE PROVISION FORBIDDING PAYMENT TO ANY CIVILIAN FOR SERVICES RENDERED BY HIM ON THE CANAL ZONE, UNLESS SUCH PERSON WAS A CITIZEN OF THE UNITED STATES OF AMERICA OR THE REPUBLIC OF PANAMA. THIS DESIRE WAS CLEARLY EXPRESSED IN ALL CORRESPONDENCE PERTAINING TO THE MATTER, AS REFERENCE TO THE ENCLOSED COPIES WILL SHOW. THE PROVISION IN THE SECTIONS IN QUESTION REGARDING EXTRA COMPENSATION IN THE AMOUNT OF 25 PERCENTUM WAS VITALLY ESSENTIAL TO THE RECRUITMENT OF CITIZENS OF THE UNITED STATES FOR EMPLOYMENT ON THE CANAL ZONE. ACCORDINGLY, AN OPINION OF THE JUDGE ADVOCATE GENERAL OF THE ARMY WAS REQUESTED ON APRIL 2, 1941, AS TO WHETHER EXECUTIVE ORDER 8719 OF MARCH 22, 1941, OPERATED TO MAKE INEFFECTIVE SUBSECTION (5) (B) OF SECTION 7, PUBLIC NO. 611, AS WELL AS SIMILAR SECTIONS OF PUBLIC, NO. 588 AND PUBLIC, NO. 653, 76TH CONGRESS. IN AN OPINION DATED APRIL 5, 1941, THE JUDGE ADVOCATE GENERAL HELD:

"* * * WITH A VIEW TO ACCOMPLISHING THIS OBJECTIVE, (TO PERMIT THE EMPLOYMENT OF PERSONS WITHOUT REGARD TO CITIZENSHIP IN THE PROSECUTION OF ALL THE PROJECTS TO BE UNDERTAKEN IN THE CANAL ZONE FOR WHICH THE APPROPRIATIONS WERE MADE) THE EXECUTIVE ORDER SUSPENDS COMPLIANCE WITH THE PROVISIONS OF CERTAIN SECTIONS OF THE STATUTES MENTIONED ABOVE AND CITED THEREIN. IT SHOULD BE NOTED, HOWEVER, THAT EACH OF THESE SECTIONS CONTAINS SEVERAL PROVISIONS WHICH CONSTITUTE MANDATORY REQUIREMENTS OF LAW (SUBJECT TO THE POWER OF SUSPENSION) AND CERTAIN OTHERS WHICH ARE MERELY PERMISSIVE, OR IN THE NATURE OF AUTHORIZATIONS. THOSE PROVISIONS WHICH PRESCRIBE THAT EMPLOYEES ,MAY RECEIVE AS COMPENSATION EQUAL RATES OF PAY BASED UPON RATES PAID FOR SIMILAR EMPLOYMENT IN THE CONTINENTAL UNITED STATES PLUS 25 PERCENTUM" ARE OBVIOUSLY OF THE CATEGORY LAST DESCRIBED. THE LANGUAGE OF THE PORTION OF EACH STATUTORY PROVISION WHICH RELATES TO THE MATTER OF SUSPENDING ITS OPERATION APPEARS TO BE CLEARLY DESIGNED TO EMPOWER THE PRESIDENT TO SUSPEND COMPLIANCE WITH THE RESTRICTIONS IMPOSED BY IT AND IT IS MANIFEST THAT NO AUTHORITY WOULD BE REQUISITE IN ORDER TO EFFECT THE SUSPENSION OF MORE AUTHORIZATIONS. MOREOVER, THE TERMS OF THE EXECUTIVE ORDER CLOSELY PARALLEL THE STATUTORY LANGUAGE AUTHORIZING SUCH SUSPENSION. IN VIEW OF THESE FACTORS, CONSIDERED IN CONJUNCTION WITH THE GENERAL PURPOSE OF THE ORDER, AND IN THE ABSENCE OF ANY INDICATION OF AN EXECUTIVE INTENT TO DO MORE THAN SUSPEND THE LIMITATIONS IMPOSED BY LAW, IT SEEMS REASONABLE TO CONCLUDE THAT THE PERMISSIVE STATUTORY PROVISIONS RELATING TO COMPENSATION SHOULD BE REGARDED AS HAVING BEEN UNAFFECTED BY THE TERMS OF THE EXECUTIVE ORDER.

"4. ACCORDINGLY, IT IS THE OPINION OF THIS OFFICE THAT EXECUTIVE ORDER NO. 8719 DOES NOT SUSPEND THOSE PORTIONS OF THE APPROPRIATION ACTS, CITED IN PARAGRAPH 3 ABOVE, WHICH PROVIDE THAT CERTAIN CIVILIAN EMPLOYEES IN THE CANAL ZONE MAY RECEIVE AS COMPENSATION EQUAL RATES OF PAY BASED UPON RATES PAID FOR SIMILAR EMPLOYMENT IN THE UNITED STATES PLUS 25 PERCENTUM.'

6. SECTION 3 OF THE NAVAL APPROPRIATION ACT, 1942, PUBLIC, NO. 48; SECTION 2 OF THE WAR DEPARTMENT CIVIL APPROPRIATION ACT, 1942, PUBLIC, NO. 139, ALL OF THE 77TH CONGRESS, CONTAIN THE SAME RESTRICTIONS AND PERMISSIVE ACTIONS PERTAINING TO THE SERVICES OF CIVILIAN PERSONNEL ON THE CANAL ZONE, AND EXECUTIVE ORDER NO. 8812 SUSPENDS COMPLIANCE WITH THE APPROPRIATE SECTIONS OF THESE ACTS IN THE SAME MANNER AS EXECUTIVE ORDER NO. 8719 DOES FOR THE 1941 ACTS.

7. IN VIEW OF THE APPARENT INTENT OF THE EXECUTIVE ORDERS IN QUESTION, IT IS DESIRED THAT A DECISION BE GIVEN AT THIS TIME AS TO WHETHER THOSE EXECUTIVE ORDERS OPERATE TO SUSPEND COMPLIANCE WITH THE PROVISIONS IN THE SECTIONS OF THE ACTS STATED AS PERTAIN TO THE EMPLOYMENT OF UNITED STATES AND PANAMANIAN CITIZENS, PERMITTING PAYMENT OF THE 25 PERCENTUM DIFFERENTIAL, OR WHETHER YOU MUST HOLD THAT COMPLIANCE WITH ALL OF THE PROVISIONS OF THOSE SECTIONS ARE SUSPENDED AND THEY ARE RENDERED INEFFECTIVE.

8. SHOULD YOU HOLD THAT THE EXECUTIVE ORDERS DO NOT SUSPEND COMPLIANCE WITH THE 25 PERCENTUM DIFFERENTIAL PROVISION, DECISION IS REQUESTED ON THE FOLLOWING QUESTIONS CONCERNING THE APPLICATION OF THE 25 PERCENTUM DIFFERENTIAL:

"A. THERE ARE CLASSIFIED EMPLOYEES WITHIN THE DEPARTMENT WHO HAVE RECEIVED ADMINISTRATIVE WITHIN-GRADE PROMOTIONS AND WHO WISH TO TRANSFER TO PANAMA. MUST THE 25 PERCENTUM DIFFERENTIAL BE ADDED TO THE ENTRANCE SALARY FOR THE GRADE OR IS IT PERMISSIBLE TO ADD THE AMOUNT OF THE ADMINISTRATIVE INCREASE TO THE ENTRANCE RATE AND 25 PERCENTUM OF THAT TOTAL THEN BE ADDED.

"B. IF THE TOTAL COMPENSATION FOR A POSITION UNDER THE CLASSIFICATION ACT OF 1923, AS AMENDED, FALLS BETWEEN TWO APPROVED SALARY STEPS, IS IT LEGALLY PERMISSIBLE TO ADVANCE THE EMPLOYEE'S COMPENSATION TO THE NEXT SALARY LEVEL APPROVED BY THE CLASSIFICATION ACT OF 1923, AS AMENDED.'

REFERRING TO PARAGRAPH NUMBERED 6 OF YOUR LETTER, EXECUTIVE ORDER NO. 8812, DATED JUNE 30, 1941 (PUBLISHED IN THE FEDERAL REGISTER FOR JULY 3, 1941), PROVIDES AS FOLLOWS:

SUSPENDING CERTAIN STATUTORY PROVISIONS RELATING TO EMPLOYMENT

IN THE CANAL ZONE

BY VIRTUE OF THE AUTHORITY VESTED IN ME BY SECTION 3 OF THE NAVAL APPROPRIATION ACT, 1942, SECTION 2 OF THE WAR DEPARTMENT CIVIL APPROPRIATION ACT, 1942, AND SECTION 7 OF THE MILITARY APPROPRIATION ACT, 1942, RELATING TO CERTAIN KINDS OF EMPLOYMENT IN THE CANAL ZONE, AND DEEMING SUCH COURSE TO BE IN THE PUBLIC INTEREST, I HEREBY SUSPEND, EFFECTIVE JULY 1, 1941, COMPLIANCE WITH THE PROVISIONS OF THE SAID SECTIONS DURING THE CONTINUANCE OF THE UNLIMITED NATIONAL EMERGENCY PROCLAIMED BY PROCLAMATION NO. 2487 OF MAY 27, 1941.

WHATEVER MAY HAVE BEEN THE MOTIVATING FACTOR IN RECOMMENDING TO THE PRESIDENT THE ISSUANCE OF THE EXECUTIVE ORDERS MENTIONED ( NOS. 8719 AND 8812), THE TERMS OF THE SAID ORDERS ARE CLEAR AND UNAMBIGUOUS AND, AS SUCH, DO NOT ADMIT OF CONSTRUCTION OR INTERPRETATION. BOTH ORDERS SUSPEND COMPLIANCE WITH THE "PROVISIONS OF THE * * * SECTIONS" OF THE APPROPRIATION ACTS THEREIN MENTIONED AND SAID "PROVISIONS," OF COURSE, INCLUDE OR EMBODY THE SO-CALLED PERMISSIVE PROVISIONS, AS WELL AS THE LIMITING PROVISIONS. THUS THE EFFECT OF THE ORDERS IS THAT ADMINISTRATIVE ACTION REGARDING EMPLOYMENTS IN THE CANAL ZONE IS AUTHORIZED TO BE TAKEN DURING THE PERIOD OF SUSPENSION AS THOUGH SUCH PROVISIONS HAD NOT BEEN ENACTED. THE QUESTION IN PARAGRAPH NUMBERED 7 OF YOUR LETTER IS ANSWERED ACCORDINGLY. PAYMENT OF A DIFFERENTIAL TO EMPLOYEES OF THE PANAMA CANAL NOT TO EXCEED 25 PERCENT OF THE SALARIES PAID FOR THE SAME OR SIMILAR SERVICES TO PERSONNEL EMPLOYED BY THE GOVERNMENT IN THE CONTINENTAL UNITED STATES IS EXPRESSLY AUTHORIZED BY SECTION 4 OF THE ACT OF AUGUST 24, 1912, 37 STAT. 561, WHICH STATUTE, IN THAT CONNECTION, REMAINS UNCHANGED. LONG PRACTICE IT HAS BEEN RECOGNIZED THAT THIS AUTHORITY FOR A DIFFERENTIAL NOT TO EXCEED 25 PERCENT MAY BE EXTENDED BY ADMINISTRATIVE ACTION TO ALL EMPLOYEES OF THE GOVERNMENT IN THE CANAL ZONE, REGARDLESS OF THE DEPARTMENT OR ESTABLISHMENT IN WHICH EMPLOYED, UNLESS THEIR SALARY RATES ARE OTHERWISE SPECIFICALLY FIXED BY LAW.

IN DECISION OF MAY 12, 1931, 10 COMP. GEN. 519, 520, AFTER QUOTING FROM THE ACT OF AUGUST 24, 1912, SUPRA, IT WAS STATED IN PART AS FOLLOWS:

THE EFFECT OF THE STATUTES EXTENDING THE PRINCIPLES OF CLASSIFICATION TO THE FIELD SERVICE IS A REGULATING BY THE CONGRESS OF COMPENSATION RATES OF PANAMA CANAL EMPLOYEES IN THE CANAL ZONE WITHIN THE MEANING OF THE ACT OF AUGUST 24, 1912, SUPRA, AND, AS PROVIDED BY THAT STATUTE, THE COMPENSATION OF SUCH EMPLOYEES IS NO LONGER AUTHORIZED TO BE FIXED BY THE PRESIDENT. THERE IS, HOWEVER, NOTHING IN ANY OF THE STATUTES EXTENDING THE PRINCIPLES OF CLASSIFICATION TO THE FIELD SERVICE, WHICH WOULD PRECLUDE THE CONTINUED RECOGNITION OF THE LONG-EXISTING DIFFERENTIAL IN SALARY RATES IN FAVOR OF POSITIONS IN THE CANAL ZONE, NOT TO EXCEED THE MAXIMUM DIFFERENTIAL FIXED BY THE ACT OF 1912, SUPRA, AT 25 PERCENT HIGHER THAN THE RATES PAID FOR THE SAME OR SIMILAR SERVICES TO PERSONS EMPLOYED BY THE GOVERNMENT IN THE CONTINENTAL UNITED STATES. SEE DECISION OF AUGUST 7, 1925, A-9682, TO THE POSTMASTER GENERAL, AUTHORIZING POSTAL EMPLOYEES FOR THE PANAMA CANAL TO BE PAID 25 PERCENT MORE THAN THE RATES FIXED BY THE POSTAL RECLASSIFICATION ACT OF FEBRUARY 28, 1925, 43 STAT. 1053, FOR THE SAME OR SIMILAR POSITIONS IN THE CONTINENTAL UNITED STATES.

THE PAY ROLLS FOR PERIODS BEGINNING JULY 1, 1931, SHOULD SHOW FOR EACH POSITION AFFECTED EREBY: (1) THE GRADE OR SALARY RANGE, SUCH AS CAF-1, PS- 2, ETC.; (2) THE SALARY RATE WITHIN SUCH GRADE FIXED FOR THE PARTICULAR EMPLOYEE; (3) THE AMOUNT OF THE DIFFERENTIAL NOT TO EXCEED 25 PERCENT OF THE PARTICULAR SALARY RATE THUS FIXED; (4) THE DETERMINED VALUE OF ALLOWANCES FURNISHED IN KIND TO BE CONSIDERED A PART OF THE TOTAL RATE OF COMPENSATION; (5) DEDUCTIONS FOR RETIREMENT BASED ON THE TOTAL SALARY RATE THUS DETERMINED, INCLUDING THE CASH PORTION (CLASSIFICATION RATE PLUS DIFFERENTIAL), AS WELL AS THE DETERMINED VALUE OF THE ALLOWANCES FURNISHED IN KIND, ALL OF WHICH MUST BE CONSIDERED AS THE "BASIC SALARY, PAY, OR COMPENSATION" WITHIN THE MEANING OF SECTION OF THE NEW PANAMA CANAL RETIREMENT ACT OF MARCH 2, 1931, 46 STAT. 1471, EFFECTIVE JULY 1, 1931; AND (6) THE NET CASH PAYMENT. SEE, ALSO, 14 COMP. GEN. 156.

REFERRING TO QUESTION A IN PARAGRAPH NUMBERED 8 OF YOUR LETTER, THE DIFFERENTIAL NOT TO EXCEED 25 PERCENT IS NOT REQUIRED TO BE BASED ON THE MINIMUM SALARY RATE OF THE GRADE IN WHICH AN EMPLOYEE'S POSITION IS ALLOCATED, BUT MAY BE BASED ON ANY SALARY RATE OF SUCH GRADE PROPERLY FIXED FOR THE PARTICULAR EMPLOYEE CONCERNED.

REFERRING TO QUESTION B, THE DIFFERENTIAL MAY NOT EXCEED 25 PERCENT OF THE BASIC SALARY RATE THE EMPLOYEE WAS RECEIVING IN THE CONTINENTAL UNITED STATES, UNLESS THE EMPLOYEE MAY BE PROPERLY PROMOTED TO A HIGHER SALARY RATE UNDER EXISTING LAW. PAYMENT OF AN AMOUNT IN ADDITION TO THE MAXIMUM DIFFERENTIAL OF 25 PERCENT, IN ORDER TO FIX THE TOTAL SALARY RATE OF THE EMPLOYEE AT ONE OF THE RATES PRESCRIBED BY THE CLASSIFICATION ACT, IS NOT AUTHORIZED. OF COURSE, PAYMENT OF THE MAXIMUM DIFFERENTIAL OF 25 PERCENT MAY RESULT IN AN ODD SALARY RATE. IT IS NOT REQUIRED THAT THE TOTAL SALARY RATE OF AN EMPLOYEE IN THE CANAL ZONE PAID A DIFFERENTIAL SHALL COINCIDE WITH THE SALARY RATE FIXED BY THE CLASSIFICATION ACT, BUT IT IS REQUIRED ONLY THAT THE BASIC SALARY RATE COINCIDE WITH THE CLASSIFICATION ACT RATE. IF IT BE ADMINISTRATIVELY DESIRABLE TO FIX TOTAL SALARY RATES OF EMPLOYEES IN THE CANAL ZONE AT ONE OF THE RATES FIXED BY THE CLASSIFICATION ACT, THE AMOUNT OF THE DIFFERENTIAL MAY BE LIMITED TO AN AMOUNT NECESSARY TO ACCOMPLISH THAT RESULT. ACCORDINGLY, QUESTION B IS ANSWERED IN THE NEGATIVE.