B-5836, SEPTEMBER 15, 1939, 19 COMP. GEN. 363

B-5836: Sep 15, 1939

Additional Materials:

Contact:

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

 

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

WAS EMPLOYED BY A FEDERAL RESERVE BANK AND WHO. 1939: I HAVE YOUR LETTER OF AUGUST 24. THE PROVISIONS OF SECTION 3 OF THAT ACT ARE IN PART. OR OF ANY AGENCY THE MAJORITY OF THE STOCK OF WHICH IS OWNED BY THE GOVERNMENT OF THE UNITED STATES. WHOSE POST OF DUTY IS IN CONTINENTAL UNITED STATES UNLESS SUCH OFFICER OR EMPLOYEE IS A CITIZEN OF THE UNITED STATES OR A PERSON IN THE SERVICE OF THE UNITED STATES ON THE DATE OF THE APPROVAL OF THIS ACT WHO BEING ELIGIBLE FOR CITIZENSHIP HAS FILED A DECLARATION OF INTENTION TO BECOME A CITIZEN OR WHO OWES ALLEGIANCE TO THE UNITED STATES * * *.'. IT IS NOT ENTIRELY CLEAR WHETHER SUCH PERSON. WAS EMPLOYED "IN THE SERVICE OF THE UNITED STATES.'. ALSO PROVIDES THAT IF THE RESERVE BANKS ARE DISSOLVED THE SURPLUS IS TO BE PAID TO THE UNITED STATES.

B-5836, SEPTEMBER 15, 1939, 19 COMP. GEN. 363

ALIENS - EMPLOYMENT - STATUTORY PROHIBITION - STATUS OF FEDERAL RESERVE BANK EMPLOYEE WITHIN REQUIREMENT AS TO BEING IN SERVICE OF THE UNITED STATES AN EMPLOYEE OF A FEDERAL RESERVE BANK NOT BEING "A PERSON IN THE SERVICE OF THE UNITED STATES" WITHIN THE MEANING OF THE PROHIBITION AGAINST PAYMENT OF COMPENSATION TO OTHER THAN A "CITIZEN OF THE UNITED STATES OR A PERSON IN THE SERVICE OF THE UNITED STATES ON THE DATE OF THE APPROVAL OF THIS ACT WHO BEING ELIGIBLE FOR CITIZENSHIP HAS FILED A DECLARATION OF INTENTION TO BECOME A CITIZEN," CONTAINED IN SECTION 3 OF THE DEPARTMENT OF LABOR APPROPRIATION ACT, 1940, APPROVED JUNE 29, 1939, 53 STAT. 926, AND MADE APPLICABLE TO COMMERCE DEPARTMENT APPROPRIATIONS BY SECTION 206 OF THE THIRD DEFICIENCY APPROPRIATION ACT OF AUGUST 9, 1939, THE APPROPRIATIONS MADE FOR THE COMMERCE DEPARTMENT UNDER THE ACTS OF JUNE 29, 1939, 53 STAT. 907, AND AUGUST 9, 1939, 53 STAT. 1337, MAY NOT BE USED TO PAY THE SALARY OF A GOVERNMENT EMPLOYEE WHO ON JUNE 29, 1939, WAS EMPLOYED BY A FEDERAL RESERVE BANK AND WHO, BEING ELIGIBLE FOR CITIZENSHIP, HAD FILED A DECLARATION OF INTENTION TO BECOME A CITIZEN.

COMPTROLLER GENERAL BROWN TO THE SECRETARY OF COMMERCE, SEPTEMBER 15, 1939:

I HAVE YOUR LETTER OF AUGUST 24, 1939, AS FOLLOWS:

THE THIRD DEFICIENCY APPROPRIATION ACT, APPROVED AUGUST 9, 1939, APPLIES IN SECTION 206, THE PROVISIONS OF SECTION 3 OF THE DEPARTMENT OF LABOR APPROPRIATION ACT, 1940, TO APPROPRIATIONS FOR THE DEPARTMENT OF COMMERCE. THE PROVISIONS OF SECTION 3 OF THAT ACT ARE IN PART, AS FOLLOWS:

"NO PART OF ANY APPROPRIATION CONTAINED IN THIS ACT OR AUTHORIZED HEREBY TO BE EXPENDED SHALL BE USED TO PAY THE COMPENSATION OF ANY OFFICER OR EMPLOYEE OF THE GOVERNMENT OF THE UNITED STATES, OR OF ANY AGENCY THE MAJORITY OF THE STOCK OF WHICH IS OWNED BY THE GOVERNMENT OF THE UNITED STATES, WHOSE POST OF DUTY IS IN CONTINENTAL UNITED STATES UNLESS SUCH OFFICER OR EMPLOYEE IS A CITIZEN OF THE UNITED STATES OR A PERSON IN THE SERVICE OF THE UNITED STATES ON THE DATE OF THE APPROVAL OF THIS ACT WHO BEING ELIGIBLE FOR CITIZENSHIP HAS FILED A DECLARATION OF INTENTION TO BECOME A CITIZEN OR WHO OWES ALLEGIANCE TO THE UNITED STATES * * *.'

IN CONSIDERING FOR APPOINTMENT IN THIS DEPARTMENT A PERSON WHO HAS FILED A DECLARATION OF INTENTION TO BECOME A CITIZEN, IT IS NOT ENTIRELY CLEAR WHETHER SUCH PERSON, IF EMPLOYED BY A FEDERAL RESERVE BANK AT THE TIME OF THE APPROVAL OF THE ACT, WAS EMPLOYED "IN THE SERVICE OF THE UNITED STATES.' THE NEED FOR AN OPINION LIES PRIMARILY IN THE FACT THAT THE FEDERAL RESERVE BANKS (AS OUTLINED ON PAGES 35-38 OF " THE FEDERAL RESERVE SYSTEM: ITS PURPOSES AND FUNCTIONS," PUBLISHED RECENTLY BY THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM) PERFORM VARIOUS FISCAL DUTIES WHICH MIGHT BE CONSTRUED IN EFFECT AS GOVERNMENT SERVICES. THE FEDERAL RESERVE ACT, AS AMENDED, ALSO PROVIDES THAT IF THE RESERVE BANKS ARE DISSOLVED THE SURPLUS IS TO BE PAID TO THE UNITED STATES.

THE QUESTION THEREFORE, IN BRIEF, MAY BE STATED, AS FOLLOWS: IS THIS DEPARTMENT AUTHORIZED UNDER THE PROVISIONS OF THE ACTS OF JUNE 29, 1939, AND AUGUST 9, 1939, TO EXPEND ANY PORTION OF THE APPROPRIATIONS MADE UNDER THOSE ACTS IN PAYMENT OF SALARY TO AN EMPLOYEE OF THE GOVERNMENT WHO, ON JUNE 29, 1939, WAS EMPLOYED BY A FEDERAL RESERVE BANK AND WHO HAD AT THAT TIME FILED A DECLARATION OF INTENTION TO BECOME A CITIZEN AND WAS ELIGIBLE FOR CITIZENSHIP.

THE MAJORITY OF THE SHARES OF THE CAPITAL STOCK OF A FEDERAL RESERVE BANK IS OWNED OR CONTROLLED BY THE MEMBER BANKS WHICH ARE PRIVATE INSTITUTIONS, ALTHOUGH STOCK IN FEDERAL RESERVE BANKS MAY BE ALLOTTED TO THE UNITED STATES. SECTIONS 281-284, TITLE 12, UNITED STATES CODE. EVERY FEDERAL RESERVE BANK IS CONDUCTED UNDER THE SUPERVISION AND CONTROL OF A BOARD OF DIRECTORS, MOST OF THE MEMBERS OF WHICH ARE ELECTED BY THE STOCKHOLDING MEMBER BANKS. SECTIONS 304 AND 305, TITLE 12, UNITED STATES CODE. FEDERAL RESERVE BANKS WHEN DESIGNATED BY THE SECRETARY OF THE TREASURY ARE REQUIRED TO BE DEPOSITARIES OF PUBLIC MONEYS AND MAY BE EMPLOYED AS FINANCIAL AGENTS OF THE UNITED STATES. SECTION 332, TITLE 12, UNITED STATES CODE.

SECTION 341, TITLE 12, U.S.C. PROVIDES, IN PART, AS FOLLOWS:

UPON THE FILING OF THE ORGANIZATION CERTIFICATE WITH THE COMPTROLLER OF THE CURRENCY A FEDERAL RESERVE BANK SHALL BECOME A BODY CORPORATE AND AS SUCH, AND IN THE NAME DESIGNATED IN SUCH ORGANIZATION CERTIFICATE, SHALL HAVE POWER---

FIFTH. TO APPOINT BY ITS BOARD OF DIRECTORS A PRESIDENT, VICE PRESIDENTS, AND SUCH OFFICERS AND EMPLOYEES AS ARE NOT OTHERWISE PROVIDED FOR IN THIS CHAPTER, TO DEFINE THEIR DUTIES, REQUIRE BONDS FOR THEM AND FIX THE PENALTY THEREOF, AND TO DISMISS AT PLEASURE SUCH OFFICERS OR EMPLOYEES.

SEVENTH. TO EXERCISE BY ITS BOARDS OF DIRECTORS, OR DULY AUTHORIZED OFFICERS OR AGENTS, ALL POWERS SPECIFICALLY GRANTED BY THE PROVISIONS OF THIS CHAPTER AND SUCH INCIDENTAL POWERS AS SHALL BE NECESSARY TO CARRY ON THE BUSINESS OF BANKING WITHIN THE LIMITATIONS PRESCRIBED BY THIS CHAPTER.

WHILE THE ORGANIZATION AND OPERATION OF FEDERAL RESERVE BANKS ARE CONTROLLED BY FEDERAL STATUTE AND REGULATION AND SUCH BANKS ARE REQUIRED TO PERFORM CERTAIN FUNCTIONS FOR THE FEDERAL GOVERNMENT, THE APPOINTMENT OR EMPLOYMENT OF THE PERSONNEL OF THE BANKS IS NOT CONTROLLED BY FEDERAL STATUTE; THE SALARIES OF THE EMPLOYEES ARE NOT PAID FROM APPROPRIATED FUNDS BUT FROM THE EARNINGS OF THE BANKS; AND THEIR DUTIES ARE NOT PRESCRIBED OR SUPERVISED BY FEDERAL OFFICERS. IT HAS BEEN HELD BY THIS OFFICE THAT AN EMPLOYEE OF A FEDERAL RESERVE BANK IS NOT AN EMPLOYEE OF THE UNITED STATES WITHIN THE MEANING OF THE DUAL COMPENSATION STATUTES. DECISION OF JULY 21, 1936, A-76647, TO THE ADMINISTRATOR, FEDERAL HOUSING ADMINISTRATION. SEE ALSO 17 COMP. GEN. 1055.

THE QUESTION CONTAINED IN THE CONCLUDING PARAGRAPH OF YOUR LETTER IS ANSWERED IN THE NEGATIVE.