B-75005, APRIL 16, 1948, 27 COMP. GEN. 641

B-75005: Apr 16, 1948

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1948: REFERENCE IS MADE TO AN UNDATED LETTER ( DF/O). THE FACTS AS STATED IN SAID LETTER ARE AS FOLLOWS: IN 1924. WAS BRUTALLY MURDERED BY A FANATIC MOB. THE CASE WAS SETTLED TO THE SATISFACTION OF BOTH GOVERNMENTS BY THE COMPLIANCE ON THE PART OF THE PERSIAN GOVERNMENT WITH FIVE DEMANDS MADE BY THIS GOVERNMENT. THE PUNISHMENT OF THE INDIVIDUAL PERSIANS WHO WERE GUILTY OF THE CRIME. AN INDEMNITY FOR ANOTHER AMERICAN WHO WAS INJURED AT THE SAME TIME. THE SAID LETTER SETS OUT CERTAIN EXCERPTS FROM THE SERIES OF NOTES WHICH WERE EXCHANGED BETWEEN THE TWO GOVERNMENTS IN CONNECTION WITH THE MATTER. THESE NOTES HAVE A MATERIAL BEARING ON THE LEGAL ISSUE PRESENTED BY THE SUBJECT REQUEST AND WILL BE DISCUSSED FULLY HEREINAFTER.

B-75005, APRIL 16, 1948, 27 COMP. GEN. 641

MISCELLANEOUS RECEIPTS - REFUNDS - TRUST FUND ESTABLISHMENT FOR EDUCATION OF PERSIAN STUDENTS FUNDS COVERED INTO THE MISCELLANEOUS RECEIPT ACCOUNT OF THE TREASURY IN 1925, REPRESENTING PAYMENT BY THE GOVERNMENT OF PERSIA, PURSUANT TO BINDING INTERNATIONAL AGREEMENT, FOR THE EXPENSES INCURRED IN DISPATCHING AN AMERICAN WARSHIP TO RETURN THE BODY OF A MURDERED VICE CONSUL TO THIS COUNTRY FOR BURIAL, MAY NOT BE REGARDED AS HAVING BEEN IMPRESSED WITH A TRUST FOR THE EDUCATION OF PERSIAN STUDENTS BY VIRTUE OF A GRATUITOUS OFFER BY THE STATE DEPARTMENT TENDERED SUBSEQUENT TO THE CONCLUSION OF THE AGREEMENT, BUT PRIOR TO THE COVERING THEREOF INTO SAID RECEIPT ACCOUNT, SO AS TO RENDER SUCH DEPOSIT ERRONEOUS, AND, THEREFORE, THE TRANSFER OF SUCH FUNDS TO A TRUST FUND ACCOUNT FOR SUCH PURPOSE WOULD NOT BE PROPER IN THE ABSENCE OF STATUTORY AUTHORITY.

COMPTROLLER GENERAL WARREN TO THE SECRETARY OF STATE, APRIL 16, 1948:

REFERENCE IS MADE TO AN UNDATED LETTER ( DF/O), RECEIVED IN THIS OFFICE MARCH 31, 1948, FROM THE DEPUTY ASSISTANT SECRETARY FOR ADMINISTRATION, DEPARTMENT OF STATE, REQUESTING THAT THE AMOUNTS OF $110,000 BE ESTABLISHED AS A TRUST FUND IN THE TREASURY OF THE UNITED STATES FOR THE PURPOSE OF DEFRAYING THE COST OF EDUCATING PERSIAN STUDENTS.

THE FACTS AS STATED IN SAID LETTER ARE AS FOLLOWS:

IN 1924, ROBERT W. IMBRIE, AN AMERICAN VICE CONSUL STATIONED IN TEHRAN, WAS BRUTALLY MURDERED BY A FANATIC MOB. THE CASE WAS SETTLED TO THE SATISFACTION OF BOTH GOVERNMENTS BY THE COMPLIANCE ON THE PART OF THE PERSIAN GOVERNMENT WITH FIVE DEMANDS MADE BY THIS GOVERNMENT. THESE CONSISTED OF AN INDEMNITY OF $60,000 REQUESTED BY THIS GOVERNMENT FOR THE BENEFIT OF THE WIDOW; THE RENDITION OF FULL MILITARY HONORS TO THE BODY OF THE DECEASED WHILE ON PERSIAN SOIL; THE PUNISHMENT OF THE INDIVIDUAL PERSIANS WHO WERE GUILTY OF THE CRIME; AN INDEMNITY FOR ANOTHER AMERICAN WHO WAS INJURED AT THE SAME TIME; AND THE PAYMENT OF $110,000 TO THE UNITED STATES AS THE ESTIMATED COST OF DISPATCHING THE U.S.S. TRENTON TO PERSIA TO RECEIVE IMBRIE'S BODY AND TO RETURN IT TO THE UNITED STATES FOR BURIAL.

THE SAID LETTER SETS OUT CERTAIN EXCERPTS FROM THE SERIES OF NOTES WHICH WERE EXCHANGED BETWEEN THE TWO GOVERNMENTS IN CONNECTION WITH THE MATTER. THESE NOTES HAVE A MATERIAL BEARING ON THE LEGAL ISSUE PRESENTED BY THE SUBJECT REQUEST AND WILL BE DISCUSSED FULLY HEREINAFTER. IT APPEARS THAT THE SAID SUM OF $110,000 WAS PAID TO THE UNITED STATES BY PERSIA IN FOUR INSTALLMENTS OF $27,500 EACH, BEGINNING ON DECEMBER 24, 1924, AND ENDING ON MARCH 29, 1925. SUCH SUM IS STATED TO HAVE BEEN CREDITED TO MISCELLANEOUS RECEIPTS OF THE STATE DEPARTMENT IN THE YEAR 1925 AND TO BE REPRESENTED BY THE ENTRY:

ASSESSMENTS AND REIMBURSEMENTS:

REIMBURSEMENT BY PERSIAN GOVERNMENT FOR EXPENSES OF U.S.S. TRENTON IN RETURNING TO THE UNITED STATES BODY OF ROBERT W. IMBRIE, UNITED STATES VICE CONSUL, $110,000.

THE CONTENTION ADVANCED IN SAID LETTER IS THAT THE ABOVE ENTRY WAS ERRONEOUS; THAT THE MONEY ACTUALLY WAS RECEIVED IN SETTLEMENT OF A CLAIM OF THE UNITED STATES AGAINST THE PERSIAN GOVERNMENT ,IN ACCORDANCE WITH WHICH THE SUM WAS RECEIVED BY THE UNITED STATES TO BE PAID OUT FOR THE EDUCATION OF PERSIAN STUDENTS; " AND THAT WHILE, FOR VARIOUS REASONS, LARGELY POLITICAL, IT WAS NOT CONSIDERED WISE TO UNDERTAKE THE EDUCATION OF SUCH STUDENTS IN THE UNITED STATES, THE SITUATION HAS CHANGED TO SUCH AN EXTENT THAT IT IS IN THE NATIONAL INTEREST THAT THE AGREEMENT BETWEEN THE TWO GOVERNMENTS NOW BE PERFORMED. IT IS STATED THAT SINCE THE FUNDS IN QUESTION WERE RECEIVED IN TRUST BY THE UNITED STATES, THE PROCEDURE OF THE ACT OF FEBRUARY 27, 1896, IS APPLICABLE, AND THAT TO RECTIFY THAT ERRONEOUS DEPOSIT IN 1925, A CHARGE AGAINST THE APPROPRIATION " REFUND OF MONEYS ERRONEOUSLY RECEIVED AND COVERED" IS BELIEVED PROPER.

AS A GENERAL PROPOSITION, WHEN FUNDS HAVE BEEN ERRONEOUSLY RECEIVED AND COVERED INTO THE TREASURY AS MISCELLANEOUS RECEIPTS AND A REFUND OR DISBURSEMENT THEREOF IS REQUIRED, SETTLEMENT MAY BE EFFECTED BY THE GENERAL ACCOUNTING OFFICE CHARGING THE APPROPRIATION REFERRED TO IN YOUR LETTER. 17 COMP. GEN. 859. AND, THE PROCEDURES AUTHORIZED BY THE ACT OF FEBRUARY 27, 1896, 29 STAT. 32, 31 U.S.C. 547, ARE SPECIFICALLY APPLICABLE TO MONEYS RECEIVED BY THE SECRETARY OF STATE FROM FOREIGN GOVERNMENTS OR OTHER SOURCES IN TRUST FOR CITIZENS OF THE UNITED STATES OR OTHERS. SAID ACT PROVIDES THAT PAYMENTS FROM SUCH FUNDS SHALL BE BY THE SECRETARY OF THE TREASURY, UPON CERTIFICATES ISSUED BY THE SECRETARY OF STATE. HENCE, THE QUESTION FOR DETERMINATION HERE IS WHETHER A PROPER AND LEGAL TRUST WAS IMPOSED UPON THE SUM OF $110,000 PRIOR TO THE COVERING THEREOF INTO THE GENERAL FUND OF THE TREASURY.

REVERTING AGAIN TO THE FACTS OF THE CASE, IT APPEARS THAT UNDER DATE OF JULY 26, 1924, ABOUT A WEEK AFTER THE DEATH OF MR. IMBRIE, THE UNITED STATES MINISTER, ACTING UPON INSTRUCTIONS FROM OUR STATE DEPARTMENT, DELIVERED TO THE PERSIAN PRIME MINISTER A NOTE EXPRESSING THE CONCERN OF THE UNITED STATES GOVERNMENT OVER THE INCIDENT AND SETTING FORTH THE FIVE SEPARATE DEMANDS UPON THE PERSIAN GOVERNMENT REFERRED TO ABOVE. A PORTION OF SAID NOTE, OF POSSIBLE RELEVANCE TO THE ISSUE HERE, READ AS FOLLOWS:

MY GOVERNMENT HAS FURTHER INSTRUCTED ME TO RESERVE, FOR A LATER COMMUNICATION, FURTHER SUGGESTIONS AS TO THE ACTION WHICH MAY BE CONSIDERED NECESSARY TO MEET THE EXIGENCIES OF THE SITUATION. I AM INSTRUCTED BY MY GOVERNMENT TO ADD THAT THE CHARACTER OF ANY ADDITIONAL STATEMENT WHICH MIGHT BE MADE TO THE PERSIAN GOVERNMENT WOULD BE MATERIALLY INFLUENCED BY THE ACTION WHICH THAT GOVERNMENT MAY IMMEDIATELY TAKE ON ITS OWN INITIATIVE TO MAKE SUCH FURTHER REDRESS AS MAY BE APPROPRIATE, PARTICULARLY IN PUNISHING THOSE RESPONSIBLE FOR THE CRIME AND IN GIVING FULL PUBLICITY TO THE ACTION TAKEN.

THE PERSIAN GOVERNMENT REPLIED IN A NOTE DATED JULY 29, 1924, EXPRESSING THE READINESS OF THAT GOVERNMENT TO COMPLY IN ALL PARTICULARS WITH THE TERMS IMPOSED BY THE UNITED STATES. THE SIGNIFICANT PART OF SAID REPLY FOR PRESENT PURPOSES READS:

CONSIDERING THE OFFICIAL STATUS OF MR. IMBRIE, THE DECEASED, THE PERSIAN GOVERNMENT AGREES WITH THE SUGGESTION OF THE UNITED STATES GOVERNMENT THAT THE BODY OF MR. IMBRIE BE ACCORDED HONORS DURING ITS TRANSPORTATION. THE PERSIAN GOVERNMENT IS CONCERNED OVER THIS MATTER TO SUCH AN EXTENT THAT IT WOULD SHIP THE REMAINS OF THE DECEASED CONSUL TO AMERICA ABOARD A PERSIAN MAN-OF-WAR IF PERSIA POSSESSED ONE. BUT INASMUCH AS IT IS UNABLE TO DO SO, IT AGREES TO PAY THE EXPENSES WHICH MAY BE INCURRED BY THE DISPATCH OF AN AMERICAN MAN-OF WAR TO RECEIVE THE REMAINS.

AFTER THE PERSIAN GOVERNMENT HAD CARRIED OUT ITS OTHER COMMITMENTS, THE MATTER OF REIMBURSEMENT FOR THE EXPENSES INVOLVED IN DISPATCHING THE U.S.S. TRENTON WAS DEALT WITH IN A NOTE DELIVERED ON NOVEMBER 9, 1924, BY THE AMERICAN CHARGE D-AFFAIRS AT TEHRAN TO THE PERSIAN GOVERNMENT, WHICH READ IN PART:

ONE QUESTION WHICH IS NOW OUTSTANDING BETWEEN THE TWO GOVERNMENTS WITH RESPECT TO THE LATE INCIDENT IS THAT OF THE REIMBURSEMENT FOR THE EXPENSES INCURRED IN DISPATCHING AN AMERICAN MAN-OF-WAR TO PERSIA FOR THE RETURN OF THE VICE CONSUL'S REMAINS, EXPENSES WHICH THE PERSIAN GOVERNMENT IN ITS NOTE OF JULY 29 HAS ALREADY EXPRESSED ITS WILLINGNESS TO MEET. IT IS ANTICIPATED THAT THIS SUM WILL APPROXIMATE $110,000.

MY GOVERNMENT DESIRES TO EFFECT A SETTLEMENT OF THIS QUESTION IN A MANNER THAT WILL TEND TO PROMOTE THE FRIENDLY RELATIONS BETWEEN THE TWO COUNTRIES. IT HAS, THEREFORE, AUTHORIZED ME TO PROPOSE THAT THE PERSIAN GOVERNMENT'S UNDERTAKING IN THIS MATTER BE CARRIED OUT BY THE ESTABLISHMENT OF A TRUST FUND TO BE UTILIZED FOR THE EDUCATION OF PERSIAN STUDENTS AT INSTITUTIONS OF HIGHER LEARNING IN THE UNITED STATES.

UPON RECEIPT OF INFORMATION THAT THE PERSIAN GOVERNMENT IS PREPARED TO CARRY OUT THIS SUGGESTION THE PRECISE ARRANGEMENTS WHICH COULD BEST BE MADE TO GIVE EFFECT THERETO, CAN BE EASILY DETERMINED. MY GOVERNMENT BELIEVES THAT THE PERSIAN GOVERNMENT WILL BE IN FULL AGREEMENT WITH ITS VIEW THAT THE PLAN SUGGESTED WILL RESULT IN PROMOTING A CLOSER RELATIONSHIP AND A BETTER UNDERSTANDING BETWEEN THE PEOPLES OF THE TWO COUNTRIES.

TO THIS THE PERSIAN GOVERNMENT REPLIED BY NOTE DATED NOVEMBER 15, 1924:

I BEG TO ADVISE THAT I HAVE RECEIVED YOUR NOTE, NO. 49, OF NOVEMBER 9, 1924, AND THAT I HAVE TAKEN NOTE OF ITS CONTENTS. WITH REGARD TO THE PAYMENT OF $110,000 AS THE EXPENSES INCURRED BY THE DISPATCH OF THE AMERICAN VESSEL THAT CARRIED THE REMAINS OF MR. IMBRIE, INSTRUCTIONS HAVE BEEN SENT TO THE MILITARY OF FINANCE TO THE EFFECT THAT THEY PAY THE MONEY IN ANY MANNER THAT IS FEASIBLE.

I ALSO BEG TO STATE THAT THE PROPOSAL OF THE AUTHORITIES OF THE GREAT GOVERNMENT OF THE UNITED STATES OF AMERICAN THAT THIS SUM BE SPEND ON THE SENDING OF PERSIAN STUDENTS TO THE UNITED STATES IS APPRECIATED BY THE AUTHORITIES OF THE IMPERIAL GOVERNMENT. * * *

THE PRESIDENT, THROUGH THE STATE DEPARTMENT, HAD UNQUESTIONED AUTHORITY TO NEGOTIATE AND EFFECT SATISFACTORY SETTLEMENT OF THIS AFFAIR BY MEANS OF AN EXECUTIVE AGREEMENT. THE FOLLOWING IS QUOTED FROM HACKWORTH'S DIGEST OF INTERNATIONAL LAW, VOL. V. CHAP. XVI, PAGE 394:

CERTAINLY THE RIGHT OF THE EXECUTIVE TO ENTER INTO BINDING EXECUTIVE AGREEMENTS WITHOUT THE NECESSITY OF SUBSEQUENT CONGRESSIONAL APPROVAL HAS BEEN CONFIRMED BY LONG USAGE. FROM THE EARLIEST DAYS OF OUR HISTORY WE HAVE ENTERED INTO EXECUTIVE AGREEMENTS COVERING SUCH SUBJECTS AS COMMERCIAL AND CONSULAR RELATIONS, MOST-FAVORED-NATION RIGHTS, PATENT RIGHTS, TRADEMARK AND COPYRIGHT PROTECTION, POSTAL AND NAVIGATION ARRANGEMENTS AND THE SETTLEMENT OF CLAIMS. * * * THE VALIDITY OF THESE HAS NEVER BEEN SERIOUSLY QUESTIONED BY OUR COURTS. AND JOHN BASSETT MOORE HAS STATED IN AN ARTICLE ENTITLED " TREATIES AND EXECUTIVE AGREEMENTS," 20 POLITICAL SCIENCE QUARTERLY 385, 389:

* * * THE CONCLUSION OF AGREEMENTS BETWEEN GOVERNMENTS, WITH MORE OR LESS FORMALITY, IS IN REALITY A MATTER OF CONSTANT PRACTICE, WITHOUT WHICH CURRENT DIPLOMATIC BUSINESS COULD NOT BE CARRIED ON. A QUESTION ARISES AS TO THE RIGHTS OF AN INDIVIDUAL, THE TREATMENT OF A VESSEL, A MATTER OF CEREMONIAL, OR ANY OF THE THOUSAND AND ONE THINGS THAT DAILY OCCUPY THE ATTENTION OF FOREIGN OFFICERS WITHOUT ATTRACTING FURTHER NOTICE; THE GOVERNMENTS DIRECTLY CONCERNED EXCHANGE VIEWS AND REACH A CONCLUSION BY WHICH THE DIFFERENCE IS DISPOSED OF. THEY HAVE ENTERED INTO AN INTERNATIONAL "AGREEMENT; " AND TO ASSERT THAT THE SECRETARY OF STATE OF THE UNITED STATES, WHEN HE HAS ENGAGED IN ROUTINE TRANSACTIONS OF THIS KIND, AS HE HAS CONSTANTLY DONE SINCE THE FOUNDATION OF THE GOVERNMENT, HAS VIOLATED THE CONSTITUTION BECAUSE HE DID NOT MAKE A TREATY, WOULD BE TO INVITE RIDICULE. WITHOUT THE EXERCISE OF SUCH POWER IT WOULD BE IMPOSSIBLE TO CONDUCT THE BUSINESS OF HIS OFFICE.

THE SPHERE OF MATTERS WHICH MAY THUS BE ADJUSTED IS, OF COURSE, NOT WITHOUT LIMITATION, BUT, AT LEAST IN THE SETTLEMENT OF PECUNIARY CLAIMS OF THE UNITED STATES OR ITS CITIZENS, THE LAW IS CLEAR THAT THE PRESIDENT HAS BROAD AUTHORITY. IN STATE OF RUSSIA V. NATIONAL CITY BANK OF NEW YORK, 69 F.2D 44, 48, THE COURT SAID:

THE PRESIDENT OF THE UNITED STATES IS INTRUSTED WITH THE RIGHT OF CONDUCTING ALL NEGOTIATIONS WITH FOREIGN GOVERNMENTS AND IS THE JUDGE OF THE EXPEDIENCY OF INSTITUTING, CONDUCTING, OR TERMINATING SUCH NEGOTIATIONS IN RESPECT TO CLAIMS AGAINST FOREIGN GOVERNMENTS. AGREEMENTS OF SUCH ADJUSTMENT OR SETTLEMENT OF SUCH CLAIMS ARE NOT SUBMITTED TO THE SENATE. ALSO, SEE UNITED STATES V. BELMONT, 301 U.S. 324; ALTMAN V. UNITED STATES, 224 U.S. 583.

HOWEVER, THE QUESTION IN THE PRESENT MATTER DOES NOT CONCERN THE VALIDITY OF THE AGREEMENT CONSUMMATED BY THE SERIES OF DIPLOMATIC NOTES EXCHANGED BETWEEN THE TWO GOVERNMENTS, BUT, RATHER, IT IS TO DECIDE PRECISELY WHAT THE TERMS OF THE AGREEMENT WERE. THAT DETERMINATION NECESSARILY INVOLVES THE FABRICATION OF A CONTRACT FROM THE TEXT OF THE CORRESPONDENCE. SUCH AN UNDERTAKING IT HAS BEEN STATED:

AGREEMENTS CONCLUDED BY THE PRESIDENT WHICH FALL SHORT OF TREATIES ARE COMMONLY REFERRED TO AS EXECUTIVE AGREEMENTS AND ARE NO LESS COMMON IN OUR SCHEME OF GOVERNMENT THAN ARE THE MORE FORMAL INSTRUMENTS -- TREATIES AND CONVENTIONS. THEY SOMETIMES TAKE THE FORM OF EXCHANGES OF NOTES AND AT OTHER TIMES THAT OF MORE FORMAL DOCUMENTS DENOMINATED "AGREEMENTS" OR "PROTOCOLS.' THE POINT WHERE ORDINARY CORRESPONDENCE BETWEEN THIS AND OTHER GOVERNMENTS ENDS AND AGREEMENTS- - WHETHER DENOMINATED EXECUTIVE AGREEMENTS OR EXCHANGES OF NOTES OR OTHERWISE--- BEGIN, MAY SOMETIMES BE DIFFICULT OF READY ASCERTAINMENT. * * * ( HACKWORTH'S DIGEST, VOL. V, CHAP. XVI, PAGE 397).

HOWEVER, A STUDY OF THE CORRESPONDENCE IN ITS PROPER SEQUENCE LEADS TO THE CONCLUSION THAT THE ORIGINAL NOTE FROM OUR GOVERNMENT SPECIFYING THE FIVE DEMANDS AND THE REPLY OF THE PERSIAN GOVERNMENT ACCEDING UNCONDITIONALLY TO THOSE DEMANDS CONSTITUTED A BINDING AGREEMENT, BY WHICH CERTAIN RIGHTS WERE VESTED IN THE UNITED STATES, AND CORRESPONDING OBLIGATIONS IMPOSED UPON PERSIA. THE FACT THAT THE COST OF DISPATCHING THE U.S.S. TRENTON WAS NOT KNOWN OR AGREED UPON IN SPECIFIC AMOUNT AT THAT TIME IS NOT MATERIAL. THE PERSIAN GOVERNMENT HAD CLEARLY COMMITTED ITSELF TO PAY WHATEVER THE EXPENSE TURNED OUT TO BE. CONSEQUENTLY, THE SUBSEQUENT OFFER ON THE PART OF THIS GOVERNMENT, THROUGH THE SECRETARY OF STATE, TO USE THE SUM OF $110,000 FOR THE EDUCATION OF PERSIAN STUDENTS MUST BE REGARDED AS A PURELY GRATUITOUS GESTURE, ENTIRELY DEVOID OF BINDING OR OBLIGATORY CHARACTERISTICS.

THE SIGNIFICANCE OF THIS CONCLUSION IS THAT THE SUM OF $110,000 WAS, BY THE TERMS OF A BINDING INTERNATIONAL AGREEMENT, DUE THE UNITED STATES AS REIMBURSEMENT FOR THE EXPENSES OF THE U.S.S. TRENTON. SECTION 3617, REVISED STATUTES, 31 U.S.C. 484, PROVIDES THAT THE GROSS AMOUNT OF ALL MONEYS RECEIVED FROM WHATEVER SOURCE FOR THE USE OF THE UNITED STATES SHALL BE COVERED INTO THE MISCELLANEOUS RECEIPTS OF THE TREASURY WITHOUT ABATEMENT OR DEDUCTION. CONSEQUENTLY, THE DEPOSIT OF $110,000 AS REPRESENTED BY THE ENTRY DESCRIBED ABOVE MUST BE REGARDED AS HAVING BEEN MADE PROPERLY AND AS REQUIRED BY LAW. THERE HAS NOT BEEN OVERLOOKED THE POSSIBLE CONTENTION THAT, UNDER THE BROAD AUTHORITY OF THE STATE DEPARTMENT IN THE FIELD OF INTERNATIONAL AFFAIRS, ESPECIALLY IN THE SETTLEMENT OF CLAIMS AGAINST FOREIGN NATIONS, THE EFFECT OF THE PROPOSAL TO USE THE MONEY FOR THE EDUCATION OF PERSIAN STUDENTS WAS TO MODIFY THE AGREEMENT TO THAT EXTENT. THIS VIEW WAS EXPRESSED IN THE MINORITY REPORT OF THE COMMITTEE ON FOREIGN AFFAIRS, HOUSE OF REPRESENTATIVES, ( REPORT NO. 985, 69TH CONGRESS, ST SESSION, TO ACCOMPANY H.J. RES. 154) ON A BILL WHICH, AS REPORTED TO THE HOUSE, WOULD HAVE APPROPRIATED THE SUM OF $110,000 FOR (1) THE PAYMENT OF $25,000 TO THE WIDOW OF THE DECEASED CONSUL AND (2) THE EXPENDITURE OF $85,000 FOR THE EDUCATION IN THE UNITED STATES OF PERSIAN STUDENTS. THE CONCLUDING SENTENCE OF SAID MINORITY REPORT READ:

TO CONCEDE THAT THE EXECUTIVE HAD FULL POWER AND AUTHORITY TO ARRANGE THE UNDERSTANDING EMBODIED IN THE JULY NOTES IS TO ADMIT THAT AUTHORITY EXISTED TO MODIFY THE ARRANGEMENT IN THE SUBSEQUENT EXCHANGE OF NOTES.

THE OPPOSITE VIEW WAS TAKEN BY THE MAJORITY OF SAID COMMITTEE IN WHOSE REPORT IT WAS STATED:

IT WILL BE OBSERVED FROM THE STATEMENT ISSUED BY THE DEPARTMENT OF STATE, ADDRESSED TO THE PRESIDENT AND HEREIN PRINTED, THAT OUR GOVERNMENT IN ITS NOTE OF JULY 26, 1924, ADDRESSED TO THE PERSIAN GOVERNMENT, MADE FIVE DEMANDS, AMONG WHICH WAS THE PAYMENT OF THE EXPENSES IN THE DISPATCH OF THE U.S.S. TRENTON TO PERSIA, WHICH AFTERWARDS WAS ASCERTAINED TO BE $110,000, AND THAT ON JULY 29, 1924, THE PERSIAN GOVERNMENT.

AT THAT TIME THERE WAS NO MENTION OF THE USE OF THIS $110,000 AS A TRUST FUND FOR THE EDUCATION OF PERSIAN STUDENTS, AND NO SUCH REQUEST WAS MADE BY THE PERSIAN GOVERNMENT, BUT WHEN TENDERED WAS ACCEPTED BY THEM ON DECEMBER 15, 1924, FOR WHICH THEY EXPRESSED APPRECIATION. THE PAYMENT OUT OF THIS $110,000 OF $25,000 TO MRS. IMBRIE CAN NOT WITH ANY FAIRNESS BE OBJECTED TO BY THE PERSIAN GOVERNMENT, BECAUSE IT WAS NOT A PART OF THE ORIGINAL CONTRACT AND THE PROPOSAL TO SET ASIDE $100,000 BY OUR GOVERNMENT WAS A GRATUITY IN THE INTEREST OF FRIENDLINESS AND COOPERATION BETWEEN NATIONS. IT IS PROPOSED THAT THE $85,000 BALANCE OF THE FUND BE CARRIED INTO THE TRUST FUND FOR THE EDUCATION IN THE UNITED STATES OF PERSIAN STUDENTS.

THIS OFFICE IS IN FULL ACCORD WITH THE LATTER OF THE ABOVE VIEWS. THE FACT THAT AN OFFICER OR AGENT OF THE UNITED STATES HAS WIDE DISCRETION AND LATITUDE IN NEGOTIATING A CONTRACT DOES NOT NECESSARILY MEAN THAT HE HAS AUTHORITY TO WAIVE OR GIVE AWAY THE VESTED RIGHTS CREATED IN THE UNITED STATES UNDER A VALID BINDING AGREEMENT EXECUTED AFTER SUCH NEGOTIATION. SEE BRAWLEY V. UNITED STATES, 96 U.S. 168; SIMPSON V. UNITED STATES, 172 U.S. 372; UNITED STATES V. AMERICAN SALES CORP., 27 F.2D 389; PACIFIC HARDWARE CO. V. UNITED STATES, 49 C.1CLS. 327; BAUSCH AND LOMB OPTICAL CO. V. UNITED STATES, 78 C.1CLS. 584. SINCE THE PERSIAN GOVERNMENT WAS ALREADY OBLIGATED TO PAY THE COST OF THE U.S.S. TRENTON'S EXPENSES, THERE WAS NO VALID CONSIDERATION FOR THE PROPOSAL OF THE STATE DEPARTMENT TO USE THE FUNDS FOR THE BENEFITS OF PERSIAN STUDENTS. J. J. PREIS AND CO. V. UNITED STATES, 58 C.1CLS. 81. THESE FUNDAMENTAL PRINCIPLES OF THE LAW OF CONTRACTS WOULD SEEM APPLICABLE WITH EQUAL FORCE TO INTERNATIONAL AGREEMENTS.

HOWEVER, THE REAL ISSUE BEFORE THIS OFFICE BY REASON OF THE SUBJECT REQUEST IS WHETHER THERE WAS AN ERRONEOUS DEPOSIT OF THE SUM OF $110,000 INTO THE GENERAL FUND OF THE TREASURY. IF THE STATE DEPARTMENT ITSELF VIEWED THE FUNDS AS IMPRESSED WITH A TRUST UPON THEIR RECEIPT, IT IS NOT APPARENT WHY SOME REQUEST FOR AN ACCOUNTING ADJUSTMENT HAS NOT BEEN MADE OVER THE PAST 23 YEARS. THE EXISTENCE OF POLITICAL OR OTHER FACTORS RENDERING PERFORMANCE OF THE TRUST INADVISABLE DOES NOT EXPLAIN THAT DELAY. RATHER, THE LAPSE OF TIME WOULD SEEM TO IMPLY ON THE PART OF THE STATE DEPARTMENT AS TO THE USE OF THE MONEY WAS PURELY GRATUITOUS AND THAT ANY ACTION TO CARRY OUT THE PROPOSAL WOULD REQUIRE THE ENACTMENT OF APPROPRIATE LEGISLATION. AS A MATTER OF FACT, NOT LONG AFTER RECEIPT OF THE SUM OF $110,000 THE THEN SECRETARY OF STATE REPORTED THAT IT HAS BEEN ,DEPOSITED IN THE TREASURY PENDING A DECISION OF THE CONGRESS AS TO ITS FINAL DISPOSITION.'

HAD I ANY DOUBT AS TO THE SOUNDNESS OF THIS POSITION, IT WOULD BE DISPELLED BY THE FACT THAT THE NEED FOR STATUTORY AUTHORITY FOR EXPENDITURE OF THESE FUNDS WAS SPECIFICALLY RECOGNIZED BY BOTH THE EXECUTIVE AND LEGISLATIVE BRANCHES OF THE GOVERNMENT AT THE TIME OF THEIR RECEIPT. ON FEBRUARY 19, 1925, PRESIDENT COOLIDGE TRANSMITTED TO THE CONGRESS A LETTER FROM THE THEN SECRETARY OF STATE, CHARLES E. HUGHES, REQUESTING LEGISLATION AUTHORIZING THE USE OF THE FUNDS FOR THE PURPOSE OF EDUCATING PERSIAN STUDENTS. IN PURSUANCE OF THAT REQUEST, A JOINT RESOLUTION PASSED THE HOUSE ON MARCH 2, 1925, BUT NO ACTION THEREON WAS TAKEN BY THE SENATE PRIOR TO ITS ADJOURNMENT ON MARCH 4, 1925. THE NEXT YEAR, FRANK B. KELLOGG, THEN SECRETARY OF STATE, ADDRESSED A LETTER TO THE PRESIDENT, THE CONCLUDING PARAGRAPH OF WHICH READ:

IN VIEW OF THE RECEIPT IN FULL OF THESE FUNDS AND THE CIRCUMSTANCES ATTENDING THEIR PAYMENT TO THIS GOVERNMENT, AS OUTLINED ABOVE, I BELIEVE THAT YOU MAY DESIRE AGAIN TO PRESENT THE MATTER TO CONGRESS AND TO REQUEST APPROPRIATE AUTHORIZATION TO DEVOTE THE FUNDS RECEIVED ON THIS ACCOUNT FROM THE PERSIAN GOVERNMENT, IN A SUM NOT TO EXCEED $110,000, FOR THE GENERAL PURPOSE OF THE EDUCATION IN THIS COUNTRY OF PERSIAN STUDENTS UNDER CONDITIONS TO BE FORMULATED BY THE PRESIDENT OR BY THE SECRETARY OF STATE IN THE DISCRETION OF THE PRESIDENT. SAID LETTER WAS TRANSMITTED TO THE CONGRESS BY THE PRESIDENT UNDER DATE OF JANUARY 6, 1926, TOGETHER WITH A RENEWAL OF HIS REQUEST FOR APPROPRIATE LEGISLATION.

ON JANUARY 9, 1926, THERE WAS INTRODUCED IN THE HOUSE OF REPRESENTATIVES H.J. RES. 111, WHICH RECITED THE VARIOUS FACTS LEADING UP TO THE PAYMENT OF $110,000 BY THE PERSIAN GOVERNMENT AND ALSO THE FACT THAT SAID AMOUNT HAD "BEEN DULY PAID * * * AND COVERED INTO THE TREASURY AS A MISCELLANEOUS RECEIPT.' THE BILL PROVIDED:

THAT AS AN ACT OF FRIENDSHIP TOWARD THE PERSIAN PEOPLE AND GOVERNMENT, THERE IS HEREBY AUTHORIZED TO BE APPROPRIATED THE SUM OF $110,000, THIS BEING THE AMOUNT RECEIVED, AS AFORESAID, FROM THE PERSIAN GOVERNMENT AND THAT THE SECRETARY OF STATE IS HEREBY AUTHORIZED TO APPLY THE SUM THUS APPROPRIATED FOR THE ESTABLISHMENT OF A TRUST FUND, THE INTEREST OF WHICH OR THE PRINCIPAL, AT THE DISCRETION OF THE SECRETARY OF STATE, SHALL BE EMPLOYED OR EXPENDED IN SUCH A MANNER AS HE MAY CONSIDER BEST ADAPTED TO THE REALIZATION OF THE EDUCATION PURPOSES HERETOFORE DESCRIBED. SAID BILL NEVER BECAME A LAW.

ACCORDINGLY, AFTER THOROUGH CONSIDERATION OF ALL THE ATTENDANT CIRCUMSTANCES, THIS OFFICE MUST DENY THE REQUEST FOR ACTION TO ESTABLISH A TRUST FUND ON THE BOOKS OF THE TREASURY AND FOR THE DEPOSIT THERETO OF THE SUM OF $110,000, WITH A CORRESPONDING CHARGE TO THE APPROPRIATION "1REFUND OF MONEYS ERRONEOUSLY RECEIVED AND COVERED.'