B-24565-O.M. April 2, 1942

B-24565-O.M. April 2, 1942

Chief, Accounting and Bookkeeping Division:

Attention is invited to the attached copy of my letter of today to the Chairman, Board of Economic Warfare, with respect to trust fund accounts to be established in connection with certain awards for property requisitioned under the provisions of the acts of October 10, 1940 (54 Stat. 1090) and October 16, 1941 (55 Stat. 742). The accounts referred to therein should be established in the usual manner.

Comptroller General of the United States

Enclosure

Chairman, Board of Economic Warfare

Dear Mr. Chairman:

There has been considered a letter of March 12, 1942, from the Executive Director of your Board as follows:

"By Executive Order No. 8900 of September 15, 1941, there were transferred to this Board (formerly Economic Defense Board) the powers and functions previously vested in the Administrator of Export Control under Executive Order No. 8567 of October 15, 1940, relating to the requisitioning of property as authorized by the Act of October 10, 1940, Public, No. 829 76th Congress. This included the matter of determining the compensation, subject to Presidential approval, to be paid to the owners of property requisitioned. Further, by Executive Order No. 8942 of November 19, 1941, the Executive Director of this Board was authorized to initiate action for requisitioning under the aforesaid Act of October 10, 1940, and the Act of October 16, 1941, Public, No. 274, 77th Congress, and also to determine ownership and the amount of compensation to be paid.

"There are now pending before the Board many cases, instituted under the administrator of Export Control, which involve owners who are foreign nationale, with whom direct negotiation and settlement have not been possible, because they are unknown or there is conflicting evidence of ownership, or they are known but their where-about are unknown (or communication with them is not practicable), and they have not designated proper representatives in this country. It is, of course, desirable that these cases be disposed of as soon as possible, and it is proposed, therefore, that the amount of compensation shall nevertheless be determined in these cases, and awards made accordingly.

"Various appropriations of the War and Navy Departments, and of certain other independent agencies, are chargeable with the amounts so awarded, and it is further proposed that appropriate trust fund receipt (or other special deposit) accounts, together with corresponding appropriation accounts, be established in the Treasury of the United States in the amounts awarded, charging the proper appropriation therefor, and deposits would be made to the above-indicated accounts, with appropriate identification, to be paid out at some future time when the person or persons entitled thereto have been determined.

"It will be appreciated if you would advise whether this procedure is satisfactory to your office."

The effect of paying the awards into a trust fund receipt account, under the circumstances related in the said letter, would be to continue those funds available indefinitely for the purpose of meeting the obligations of the United States arising as an incident to the requisitioning of property under the cited statutes. You are aware, of course, that generally the unexpended balances of appropriations remaining upon the books of the Treasury for two fiscal years are required to be carried to the surplus fund and covered into the Treasury, and may not thereafter be expended for obligations previously incurred except pursuant to an additional appropriation. See 31 U.S.C. 713; the act of July 7, 1884, 23 Stat. 254; and prior laws providing for the settlement and allowance of claims under appropriations which have lapsed and the balances of which have been carried to the surplus fund of the Treasury.

The obligations incurred by the United States, however, in the "taking" of property, with or without the owner's consent, pursuant to the acts of October 10, 1940 (54 Stat. 1090) and October 16, 1941 (55 Stat. 742) may be distinguished in a material way from ordinary obligations incurred by the Government as those acts make it a condition to the "taking" of property that just compensation be paid therefor, presumably coincident with the taking. Therefore, since it is impossible to make direct payments immediately to certain owners for property taken, and it evidently is considered desirable and in the interests of the United States to make the awards and pay the amount determined to be due into a trust fund receipt account, as proposed -- and thus possibly avoid the payment of interest later as a part of just compensation -- this office will not be required to object to such procedure, in view of the provisions of the cited acts and the peculiar circumstances involved. You will be advised in due course as to the symbol and title assigned to the accounts established for handling the funds.

Respectfully,

Comptroller General of the United States