B-60140, OCTOBER 7, 1946, 26 COMP. GEN. 235

B-60140: Oct 7, 1946

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ARE AVAILABLE FOR THE PAYMENT OF PROPERTY DAMAGE CLAIMS ASSERTED BY THE DEFENSE PLANT CORPORATION WHICH AROSE OUT OF THE PERFORMANCE BY THE FORMER CORPORATION OF ITS AUTHORIZED FUNCTIONS. 1946: I HAVE YOUR LETTER DATED AUGUST 20. AS FOLLOWS: YOUR OPINION IS RESPECTFULLY REQUESTED AS TO WHETHER THE INLAND WATERWAYS CORPORATION IS AUTHORIZED TO PAY CLAIMS ASSERTED AGAINST IT BY THE DEFENSE PLANT CORPORATION AS HEREINAFTER SET FORTH. WAS CREATED BY THE ACT OF JUNE 3. IT IS AUTHORIZED TO SUE AND BE SUED IN ITS CORPORATE NAME. IN THE EVENT ANYTHING OF CONSEQUENCE WAS NOT SPECIFICALLY SET FORTH IN THE ACT. SHALL HAVE SUCH POWERS AS MAY BE NECESSARY OR INCIDENTAL TO FULFILL THE POWERS OF ITS CREATION.'.

B-60140, OCTOBER 7, 1946, 26 COMP. GEN. 235

PROPERTY DAMAGE CLAIMS BETWEEN GOVERNMENT CORPORATIONS FUNDS OF THE INLAND WATERWAYS CORPORATION, BEING AVAILABLE FOR THE OPERATION OF THE BUSINESS OF A COMMON CARRIER BY WATER, ARE AVAILABLE FOR THE PAYMENT OF PROPERTY DAMAGE CLAIMS ASSERTED BY THE DEFENSE PLANT CORPORATION WHICH AROSE OUT OF THE PERFORMANCE BY THE FORMER CORPORATION OF ITS AUTHORIZED FUNCTIONS, EVEN THOUGH SUCH CLAIMS MAY NOT BE ENFORCEABLE BY SUIT IN VIEW OF THE PRINCIPLE LAID DOWN IN DEFENSE SUPPLIES CORPORATION V. UNITED STATES LINES COMPANY, 148 F.2D 311.

COMPTROLLER GENERAL WARREN TO THE SECRETARY OF COMMERCE, OCTOBER 7, 1946:

I HAVE YOUR LETTER DATED AUGUST 20, 1946, AS FOLLOWS:

YOUR OPINION IS RESPECTFULLY REQUESTED AS TO WHETHER THE INLAND WATERWAYS CORPORATION IS AUTHORIZED TO PAY CLAIMS ASSERTED AGAINST IT BY THE DEFENSE PLANT CORPORATION AS HEREINAFTER SET FORTH.

THE INLAND WATERWAYS CORPORATION, A WHOLLY-OWNED GOVERNMENT CORPORATION, WAS CREATED BY THE ACT OF JUNE 3, 1924 (43 STAT. 360; 49 U.S.C. 151), AS A CORPORATION IN THE DISTRICT OF COLUMBIA. IT HAS PLENARY POWERS. IT IS AUTHORIZED TO SUE AND BE SUED IN ITS CORPORATE NAME; TO ACQUIRE, HOLD, AND DISPOSE OF PROPERTY; TO INCUR OBLIGATIONS, BORROW MONEY FOR TEMPORARY PURPOSES, AND ISSUE NOTES OR OTHER INDEBTEDNESS THEREFOR; TO CONDUCT THE BUSINESS OF A COMMON CARRIER BY WATER, AND MAINTAIN, MANAGE, AND OPERATE PROPERTIES HELD FOR OR USED IN THE SERVICE OF TRANSPORTATION OR NECESSARY OR CONVENIENT TO SUCH USE; AND IN THE EVENT ANYTHING OF CONSEQUENCE WAS NOT SPECIFICALLY SET FORTH IN THE ACT, CONGRESS PROVIDED THAT "IN ADDITION TO THE POWERS SPECIFICALLY GRANTED" IT ,SHALL HAVE SUCH POWERS AS MAY BE NECESSARY OR INCIDENTAL TO FULFILL THE POWERS OF ITS CREATION.'

THE REASONS FOR SUCH EXTRAORDINARY GRANT OF FULL AND COMPLETE POWERS ARE SET FORTH IN REPORT NUMBER 375 OF THE HOUSE COMMITTEE ON INTERSTATE AND FOREIGN COMMERCE WHICH WAS ISSUED TO ACCOMPANY H.R. 8209, THE BILL WHICH WAS THE BASIS FOR THE ACT OF JUNE 3, 1924. THE REPORT STATED IN PART AS FOLLOWS:

"THE PURPOSE OF THE PENDING BILL IS TO REORGANIZE THE INLAND AND COASTWISE WATER SERVICE THAT IS NOW BEING OPERATED BY THE SECRETARY OF WAR AND PUT IT ON A PRACTICAL BUSINESS BASIS. EXPERIENCE IN THE LAST TWO OR THREE YEARS HAS SHOWN THAT THE BARGE LINES ON THE MISSISSIPPI AND WARRIOR RIVERS CANNOT BE SUCCESSFULLY OPERATED AND CANNOT CARRY OUT THE PURPOSE DECLARED BY CONGRESS IN THE TRANSPORTATION ACT OF 1920 WITHOUT A REORGANIZATION WHICH WILL ENABLE THE SECRETARY OF WAR TO OPERATE IT AS ANY PRIVATE BUSINESS CONCERN WOULD OPERATE IT.

"AT PRESENT THE SECRETARY OF WAR IS LIMITED IN HIS EXPENDITURES BY THE APPROPRIATIONS THAT ARE MADE FOR THE BARGE-LINE SERVICE. HE IS NOT ALLOWED BY LAW TO INCUR A DEFICIT NOR CAN HE BORROW MONEY TO MEET CURRENT EXPENSES EVEN IN CASE OF AN EMERGENCY, AND EMERGENCIES MAY VERY OFTEN ARISE IN RIVER TRANSPORTATION. NOTHING CAN BE DONE WITHOUT APPROVAL FROM WASHINGTON AND EXCEPT IN ACCORDANCE WITH BUREAUCRATIC REGULATIONS WHICH ARE OFTEN NOT IN ACCORDANCE WITH PLAIN BUSINESS PRINCIPLES AND NECESSITY. THE ACTS OF THE SECRETARY OF WAR ARE HEDGED ABOUT BY SO MANY LIMITATIONS THAT IT HAS BEEN FOUND TO BE PRACTICALLY IMPOSSIBLE TO OPERATE THESE TRANSPORTATION SYSTEMS AS THEY SHOULD BE OPERATED IN ORDER TO CARRY OUT THE PURPOSE FOR WHICH THEY HAVE BEEN PLACED UNDER HIS CONTROL. IT IS FOR THE PURPOSE OF GETTING AWAY FROM THESE RESTRICTIONS AND BUREAUCRATIC REGULATIONS, AND FOR THE PURPOSE OF PUTTING THE BARGE-LINE SYSTEM UPON A BETTER BUSINESS BASIS THAT THIS BILL IS FAVORABLY REPORTED BY THE COMMITTEE WITH A RECOMMENDATION THAT IT PASS.'

AND AT PAGE 13 THE REPORT STATES:

"AFTER THE ENACTMENT OF THIS BILL THE SECRETARY OF WAR CAN OPERATE THE BARGE LINES IN ACCORDANCE WITH THE SAME BUSINESS PRINCIPLES THAT WOULD BE FOLLOWED BY A PRIVATE TRANSPORTATION COMPANY. AND IT IS THE OPINION OF THE COMMITTEE THAT IF THEY CANNOT THEN OPERATE IT SUCCESSFULLY AND AT A FAIR PROFIT PRIVATE CAPITAL COULD NOT DO SO; THAT FURTHER EXPENDITURE OF GOVERNMENT FUNDS FOR THE IMPROVEMENT OF OUR INLAND WATERWAYS WOULD BE USELESS AND SHOULD BE STOPPED.

"IF THE GOVERNMENT, AFTER MAKING THESE RIVERS NAVIGABLE, CANNOT PROFITABLY OPERATE A TRANSPORTATION SYSTEM ON THEM, THEN IT IS HOPELESS TO EXPECT PRIVATE CAPITAL TO DO SO, AND CONGRESS SHOULD NO LONGER APPROPRIATE MONEY FROM THE PUBLIC TREASURY FOR A USELESS PURPOSE. THEREFORE THE COMMITTEE WAS OF THE OPINION THAT THIS BILL SHOULD PASS IN ORDER THAT THIS PIONEERING DEMONSTRATION MIGHT BE CONDUCTED BY THE SECRETARY OF WAR UNTIL SUCH TIME AS ITS SUCCESS OR FAILURE MAY BE MADE APPARENT.'

THE DEFENSE PLANT CORPORATION WAS A CORPORATION CREATED BY THE RECONSTRUCTION FINANCE CORPORATION ON AUGUST 22, 1940, PURSUANT TO AUTHORITY OF SECTION 5 (D) OF THE RECONSTRUCTION FINANCE CORPORATION ACT AS AMENDED BY THE ACT OF JUNE 25, 1940 (54 STAT. 573, 15 U.S.C. 606B). ALL OF ITS STOCK WAS OWNED BY THE RECONSTRUCTION FINANCE CORPORATION. PURSUANT TO PUBLIC LAW 109 (79TH CONGRESS) APPROVED ON JUNE 30, 1945, THE DEFENSE PLANT CORPORATION WAS DISSOLVED EFFECTIVE JULY 1, 1945, AND ALL OF ITS FUNCTIONS, POWERS, DUTIES AND AUTHORITY, TOGETHER WITH ITS DOCUMENTS, BOOKS OF ACCOUNT, RECORDS, ASSETS, AND LIABILITIES OF EVERY KIND AND NATURE, WERE TRANSFERRED TO THE RECONSTRUCTION FINANCE CORPORATION TO BE PERFORMED, EXERCISED AND ADMINISTERED BY THE RECONSTRUCTION FINANCE CORPORATION IN THE SAME MANNER AND TO THE SAME EXTENT AND EFFECT AS IF ORIGINALLY VESTED IN THE RECONSTRUCTION FINANCE CORPORATION. THE RECONSTRUCTION FINANCE CORPORATION OBTAINS ITS FUNDS BY THE EXERCISE OF ITS BORROWING AUTHORITY AND PAYS INTEREST THEREFOR AT THE RATE OF ONE PERCENT PER ANNUM. DEFENSE PLANT CORPORATION OBTAINED ITS OPERATING FUNDS FROM THE RECONSTRUCTION FINANCE CORPORATION.

BOTH THE INLAND WATERWAYS CORPORATION AND THE DEFENSE PLANT CORPORATION ARE WHOLLY-OWNED GOVERNMENT CORPORATIONS CONDUCTED ALONG COMMERCIAL LINES; NEITHER OPERATES UNDER CONGRESSIONAL APPROPRIATIONS, NOR ARE THE AMOUNTS RECEIVED BY THEM FROM OPERATION OF THEIR VESSELS PAID INTO THE MISCELLANEOUS ACCOUNTS OF THE TREASURY DEPARTMENT, AND NEITHER ARE SUBJECT TO THE BUDGET AND ACCOUNTING ACT.

DURING THE WAR, THE DEFENSE PLANT CORPORATION ACQUIRED AND HAD BUILT SEVERAL HUNDRED VESSELS, INCLUDING UNMANNED BARGES, TOWBOATS, AND TUGS. SOME OF THESE UNMANNED BARGES AND TOWBOATS WERE CHARTERED ON A BAREBOAT BASIS TO INLAND WATERWAYS CORPORATION ON THE SAME BASIS THAT SIMILAR VESSELS WERE CHARTERED BY DEFENSE PLANT CORPORATION TO PRIVATE OPERATORS. A SPECIMEN COPY OF THE FORM OF CHARTER PARTIES SIGNED BY INLAND WATERWAYS CORPORATION IS ATTACHED FOR YOUR INFORMATION. IT IS ADMITTED THAT WHEN THE CHARTERED BARGES AND TOWBOATS WERE RETURNED BY INLAND WATERWAYS CORPORATION TO DEFENSE PLANT CORPORATION THEY WERE NOT IN THE CONDITION REQUIRED ON REDELIVERY AND THAT CERTAIN ITEMS OF EQUIPMENT BELONGING TO THE VESSELS WERE NOT RETURNED IN ACCORDANCE WITH THE TERMS OF THE CHARTER PARTIES. CLAIMS HAVE BEEN ASSERTED BY DEFENSE PLANT CORPORATION AGAINST INLAND WATERWAYS CORPORATION FOR THE COST OF REPAIRING THE VESSELS AND REPLACING THE MISSING EQUIPMENT IN ACCORDANCE WITH THE TERMS OF THE ATTACHED CHARTER PARTIES.

AS ABOVE MENTIONED, SOME OF THE UNMANNED BARGES OWNED BY DEFENSE PLANT CORPORATION WERE ALSO CHARTERED, BAREBOAT, TO PRIVATE COMPANIES. INCLUDED AMONG THEM WERE FOUR BARGES THAT WERE CHARTERED ON A BAREBOAT BASIS TO CENTRAL BARGE COMPANY OF CHICAGO, ILLINOIS. ON JUNE 7, 1945, THE TOWBOAT HOOVER WHICH IS OWNED BY INLAND WATERWAYS CORPORATION, WAS ENGAGED IN MAKING UP A TOW AT THE COAL DOCKS AT ALTON, ILLINOIS. WHILE DOING SO, TWO BARGES OWNED BY INLAND WATERWAYS CORPORATION BROKE LOOSE FROM THE COAL DOCKS AND, IN TURN, THOSE BARGES CAUSED THE AFORESAID FOUR BARGES OWNED BY DEFENSE PLANT CORPORATION TO BREAK LOOSE FROM THEIR MOORINGS, THEREBY CAUSING DAMAGE TO THE BARGES. IN VIEW OF THE ASSUMPTION OF RISK BY DEFENSE PLANT CORPORATION IN LIEU OF CARRYING INSURANCE WITH RESPECT TO THE LOSS OF OR PHYSICAL DAMAGE TO THESE FOUR BARGES AND ITS OBLIGATIONS TO PAY THE COST OF REPAIRING THE SAME LESS THE USUAL $500 DEDUCTIBLE, IT HAS ASSERTED CLAIMS AGAINST INLAND WATERWAYS CORPORATION IN THE TOTAL APPROXIMATE AMOUNT OF $10,795 FOR THE COST OF REPAIRING THE DAMAGES CAUSED TO THE FOUR BARGES.

IN ADDITION TO THE FOREGOING CLAIMS WHICH HAVE BEEN ASSERTED BY DEFENSE PLANT CORPORATION AGAINST INLAND WATERWAYS CORPORATION, A CLAIM FOR $1,162.75 HAS BEEN ASSERTED FOR THE COST OF REPAIRING ANOTHER UNMANNED BARGE WHICH WAS BAREBOAT CHARTERED TO INLAND WATERWAYS CORPORATION IN THE USUAL MANNER. CONTRARY TO TERMS OF THE CHARTER PARTY ON THIS BARGE AND WITHOUT THE CONSENT OF DEFENSE PLANT CORPORATION, INLAND WATERWAYS CORPORATION DELIVERED THE BARGE TO THE MARINE TRANSPORTATION COMPANY, A PRIVATE BARGE OPERATING COMPANY, AND WHILE THE BARGE WAS IN POSSESSION OF SUCH COMPANY IT WAS DAMAGED. THE MARINE TRANSPORTATION COMPANY HAS, IN TURN, REFUSED TO PAY THE CLAIM TO THE INLAND WATERWAYS CORPORATION AND, ACCORDINGLY, A CAUSE OF ACTION WAS INSTITUTED AGAINST IT BY INLAND WATERWAYS CORPORATION AND DEFENSE PLANT CORPORATION AS JOINT PARTIES PLAINTIFF. ( INLAND WATERWAYS CORPORATION, ET AL., VS. MIV FROG, ETC., U.S.D.C., E.D. LA. NO. 881 IN ADMIRALTY.)

IN THE RECENT DECISION OF THE COMPTROLLER GENERAL, B-48380, DATED JULY 14, 1945, IT WAS HELD THAT NAVY DEPARTMENT APPROPRIATIONS ARE NOT AVAILABLE FOR PAYMENT OF CLAIMS FOR DAMAGES CAUSED BY NAVY DEPARTMENT VESSELS TO VESSELS OR OTHER PROPERTY OF THE INLAND WATERWAYS CORPORATION OR THE DEFENSE PLANT CORPORATION. HOWEVER, AS TO PAYMENTS BY THE DEFENSE PLANT CORPORATION AND THE INLAND WATERWAYS CORPORATION TO THE NAVY DEPARTMENT FOR DAMAGES EX DELICTO CAUSED BY THEIR VESSELS TO PROPERTY OF THE SAID DEPARTMENT, IT WAS HELD THAT IN VIEW OF THE CASE OF DEFENSE SUPPLIES CORPORATION V. UNITED STATES LINES COMPANY, 148 F.2D 311, THE NAVY DEPARTMENT WOULD NOT HAVE A ENFORCEABLE CLAIM AGAINST THE SAID CORPORATIONS.

IN DECISION A-36441 OF MAY 19, 1931, IT WAS HELD THAT DAMAGE RESULTING FROM INJURY TO WAR DEPARTMENT CABLES CAUSED BY THE CITY OF ALTON AND THE NARCISSUS; VESSELS OWNED AND CONTROLLED BY THE UNITED STATES SHIPPING BOARD MERCHANT FLEET CORPORATION, SHOULD BE PAID FROM THE UNITED STATES SHIPPING BOARD FUNDS FOR THE FISCAL YEARS INVOLVED. THE DECISION IN 6 COMP. GEN. 171 AND OTHER SIMILAR DECISIONS APPEAR TO BE DISTINGUISHED BY THE FOLLOWING EXPLANATION:

"SUCH DECISION, HOWEVER, AND OTHER SIMILAR DECISIONS, ARE NOT APPLICABLE TO THE MATTER PRESENTED BY YOUR SUBMISSION, INASMUCH AS IN THOSE CASES THE SAID VESSELS WERE ENGAGED ONLY ON GOVERNMENT BUSINESS, AND THE APPROPRIATIONS OF THE RESPONSIBLE DEPARTMENTS WERE IN TERMS AVAILABLE ONLY FOR REPAIRS TO THEIR OWN VESSELS, UNDER WHICH CIRCUMSTANCES SECTION 3678, REVISED STATUTES, OPERATED TO PREVENT THE USE OF SUCH APPROPRIATIONS FOR DAMAGES TO VESSELS OF OTHER DEPARTMENTS WHEN THE DEPARTMENT OPERATING THE DAMAGED VESSEL HAS AN APPROPRIATION AVAILABLE FOR THE REPAIR OF SAME, ON THE THEORY THAT THERE CAN BE NO REIMBURSEMENT TO THE GOVERNMENT FOR THE DAMAGES TO OR LOSS OF ITS OWN PROPERTY; WHILE IN THE INSTANT MATTER SAID SECTION 3678, REVISED STATUTES, IS INAPPLICABLE, INASMUCH AS THE SHIPPING BOARD VESSELS ARE MERCHANT VESSELS ENGAGED IN THE COMMERCE OF THE UNITED STATES, AND AS SUCH ARE LIABLE FOR AN ACTIONABLE INJURY RESULTING FROM THE OPERATION OF SAID VESSELS.'

AGAIN, IN COMPTROLLER GENERAL DECISION A-56676 (A-56687) OF AUGUST 13, 1934, REAFFIRMED ON DECEMBER ( SEPTEMBER) 27, IT WAS HELD THAT LOSSES SUSTAINED BY THE WAR DEPARTMENT, DUE TO THE COLLISION OF THE SHIPPING BOARD VESSEL, LIBERATOR, WITH AN ARMY DREDGE, WERE PAYABLE FROM THE UNITED STATES SHIPPING BOARD FUND FOR THE FISCAL YEAR INVOLVED. IN THIS DECISION, UPON THE SAME REASONING AS THAT SET FORTH IN A-36441 DISCUSSED ABOVE, SECTION 3678 OF THE REVISED STATUTES WAS HELD INAPPLICABLE. IT WAS SPECIFICALLY POINTED OUT THAT THE APPROPRIATION FOR THE UNITED STATES SHIPPING BOARD SHIPPING FUND IS MADE AVAILABLE FOR THE OPERATION OF THE GOVERNMENT'S MERCHANT MARINE VESSELS, WHICH NECESSARILY INCLUDES, AMONG OTHER THINGS, THE PAYMENT OF DAMAGES FOR ACTIONABLE INJURY RESULTING FROM THE OPERATIONS THEREOF.

IN COMPTROLLER GENERAL DECISION B-34258 (B-34528) OF MAY 22, 1943, THE QUESTION SUBMITTED FOR DECISION WAS WHETHER RENTAL OF SPACE AT THE WASHINGTON NATIONAL AIRPORT BY THE CIVIL AERONAUTICS ADMINISTRATION TO THE WAR DEPARTMENT IS WITHIN THE GENERAL RULE THAT PAYMENT OF RENT BY ONE GOVERNMENT DEPARTMENT OR AGENCY FOR PREMISES UNDER CONTROL OF ANOTHER SUCH DEPARTMENT OR AGENCY CANNOT BE MADE. IT WAS HELD AS FOLLOWS:

"* * * THE ADMINISTRATOR OF CIVIL AERONAUTICS EXPRESSLY IS AUTHORIZED TO LEASE SPACE OR PROPERTY WITHIN THE AIRPORT, THUS INDICATING A CONGRESSIONAL INTENTION THAT IT PRODUCE REVENUE, AND SINCE ITS TRANSACTIONS IN THAT RESPECT ARE NOT DISSIMILAR TO THOSE OF PRIVATE ENTERPRISES, THE GENERAL RULE THAT PAYMENT BY ONE GOVERNMENT DEPARTMENT OR ESTABLISHMENT FOR THE USE OF PREMISES UNDER THE CONTROL OF ANOTHER DEPARTMENT OR AGENCY IS UNAUTHORIZED, NEED NOT BE HELD APPLICABLE TO THE PRESENT MATTER, PARTICULARLY IN VIEW OF THE CIRCUMSTANCES RELATED IN YOUR TER.'

IF CLAIMS OF THE NATURE ASSERTED BY THE RECONSTRUCTION FINANCE CORPORATION WERE ASSERTED BY PRIVATE ENTERPRISES IT IS INDISPUTABLE THAT THE INLAND WATERWAYS CORPORATION HAS THE AUTHORITY AND WOULD INDEED BE OBLIGATED, IN VIEW OF ITS SUABILITY, TO PAY SUCH CLAIMS. FAILURE ON THE PART OF INLAND WATERWAYS CORPORATION TO PAY THE CLAIMS ASSERTED BY THE RECONSTRUCTION FINANCE CORPORATION, INCLUDING THOSE CLAIMS INVOLVING CONTRACTUAL OBLIGATIONS ASSUMED BY THE INLAND WATERWAYS CORPORATION IN THE CHARTER PARTIES, WOULD DEPLETE THE ASSETS OF THE RECONSTRUCTION FINANCE CORPORATION AND DEFEAT THE PURPOSES FOR WHICH THESE CORPORATIONS WERE ORGANIZED IN THE FIRST INSTANCE. UNDER THE CIRCUMSTANCES, IT IS RESPECTFULLY REQUESTED THAT THE COMPTROLLER GENERAL GIVE CONSIDERATION TO THIS MATTER IN THE LIGHT OF THE DISCUSSION HEREIN ABOVE. THE SOLE QUESTION WHICH THE SAID LETTER PRESENTS FOR CONSIDERATION IS UNDERSTOOD TO BE WHETHER THE FUNDS OF THE INLAND WATERWAYS CORPORATION ARE AVAILABLE TO PAY CLAIMS OF THE DEFENSE PLANT CORPORATION ARISING IN CONNECTION WITH CERTAIN BARGES WHICH HAD BEEN CHARTERED ON A BAREBOAT BASIS, FROM THE LATTER CORPORATION AND OTHERWISE, IN CONNECTION WITH THE FUNCTIONS AND ACTIVITIES OF THE INLAND WATERWAYS CORPORATION.

IN THE REFERRED-TO DECISION DATED JULY 14, 1945, TO THE SECRETARY OF THE NAVY, B-48380 (25 COMP. GEN. 49), IT WAS HELD THAT, IN VIEW OF THE WELL ESTABLISHED RULE THAT THE APPROPRIATED FUNDS OF GOVERNMENT DEPARTMENTS AND AGENCIES ARE NOT AVAILABLE FOR THE PAYMENT OF CLAIMS FOR DAMAGES TO THE PROPERTY OF OTHER GOVERNMENT DEPARTMENTS OR AGENCIES, THE APPROPRIATIONS OF THE NAVY DEPARTMENT COULD NOT BE USED FOR THE PAYMENT OF CLAIMS FOR DAMAGES CAUSED BY SAID DEPARTMENT'S VESSELS TO VESSELS OR OTHER PROPERTY OF THE INLAND WATERWAYS CORPORATION OR THE DEFENSE PLANT CORPORATION. ALSO, IT WAS STATED THAT SINCE, IN VIEW OF THE DECISION IN THE CASE OF DEFENSE SUPPLIES CORPORATION V. UNITED STATES LINES COMPANY ( C.C. A.2D), 148 F.2D 311, CERTIORARI DENIED, 66 S.1CT. 43--- TO THE EFFECT THAT ONE GOVERNMENT INSTRUMENTALITY MAY NOT BRING SUIT AGAINST ANOTHER UNDER THE SUITS IN ADMIRALTY ACT (41 STAT. 525/--- THE NAVY DEPARTMENT WOULD NOT HAVE AN ENFORCEABLE CLAIM AGAINST THE DEFENSE PLANT CORPORATION AND INLAND WATERWAYS CORPORATION FOR DAMAGES BY THE CORPORATIONS' VESSELS TO NAVY DEPARTMENT'S PROPERTY, NO OBJECTION WAS PERCEIVED TO A MUTUAL WAIVER OF CLAIMS BETWEEN THE NAVY DEPARTMENT AND THE CORPORATIONS. THE QUESTION OF THE AVAILABILITY OF THE FUNDS OF THE CORPORATIONS TO PAY CLAIMS ASSERTED AGAINST THEM ARISING OUT OF THE CARRYING ON OF THE FUNCTIONS AND ACTIVITIES VESTED IN THEM BY LAW, WAS NOT DECIDED.

AS INDICATED BY THE PORTION OF THE DECISION PUBLISHED IN 6 COMP. GEN. 171, QUOTED IN YOUR LETTER, THE RULE THAT THE APPROPRIATED FUNDS OF GOVERNMENT DEPARTMENTS AND AGENCIES ARE NOT AVAILABLE FOR THE PAYMENT OF CLAIMS FOR DAMAGES TO THE PROPERTY OF OTHER GOVERNMENT DEPARTMENTS OR AGENCIES IS BASED ON THE LIMITATION ON THE USE OF APPROPRIATED MONEY CONTAINED IN SECTION 3678, REVISED STATUTES, WHICH PROVIDES:

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.

HOWEVER, WHERE THE FUNDS OF THE DEPARTMENT OR AGENCY AT FAULT ARE AVAILABLE FOR THE PAYMENT OF DAMAGES INCURRED IN THE COURSE OF THE COMMERCIAL OPERATION OF VESSELS, SUCH FUNDS PROPERLY MAY BE CHARGED WITH THE DAMAGES TO PROPERTY OF ANOTHER GOVERNMENT AGENCY. 14 COMP. GEN. 256.

SINCE THE FUNDS OF INLAND WATERWAYS CORPORATION ARE AVAILABLE FOR THE OPERATION OF THE BUSINESS OF A COMMON CARRIER BY WATER, SUCH FUNDS MAY BE USED FOE THE PAYMENT OF ANY CLAIMS ARISING OUT OF SAID OPERATION IF THE CORPORATION LEGALLY IS OBLIGATED THEREFOR. AND, WHILE THE CLAIMS OF THE DEFENSE PLANT CORPORATION AGAINST THE INLAND WATERWAYS CORPORATION, ARISING FROM THE ACTIVITIES OF THE LATTER, MAY NOT BE ENFORCEABLE BY SUIT IN VIEW OF THE REFERRED-TO DECISION IN THE DEFENSE SUPPLIES CORPORATION CASE, IT DOES NOT FOLLOW THAT THE FUNDS OF THE INLAND WATERWAYS CORPORATION MAY NOT BE USED FOR THE PAYMENT OF SAID CLAIMS.

ACCORDINGLY, YOU ARE ADVISED THAT FUNDS OF THE INLAND WATERWAYS CORPORATION ARE AVAILABLE FOR THE PAYMENT OF OTHERWISE PROPER CLAIMS ASSERTED BY THE DEFENSE PLANT CORPORATION ARISING OUT OF THE PERFORMANCE BY THE FORMER OF ITS AUTHORIZED FUNCTIONS. HOWEVER, NOTHING HEREIN IS TO BE CONSTRUED AS PASSING ON THE VALIDITY OF THE SPECIFIC CLAIMS DESCRIBED IN YOUR LETTER.