A-84457, APRIL 19, 1937, 16 COMP. GEN. 941

A-84457, APRIL 19, 1937, 16 COMP. GEN. 941

EMERGENCY FUND ALLOTMENTS - PAYMENTS FOR PRIOR PURCHASES INVOLVING DOUBTFUL ANNUAL APPROPRIATION ADMINISTRATIVE AUTHORITY PAYMENTS UNDER AN ALLOTMENT FROM EMERGENCY FUNDS MAY NOT BE MADE UPON AN AGREEMENT PREVIOUSLY MADE FOR PURCHASE OF AIRCRAFT TO REPLACE AIRCRAFT FOR REGULAR ADMINISTRATIVE DUTIES OF THE DEPARTMENT, WHERE THE DEBATES AND COMMITTEE REPORTS SHOW THAT THE CONGRESS REFUSED TO APPROPRIATE FOR SUCH REPLACEMENT EITHER UNDER THE APPROPRIATION DESIGNATED IN THE AGREEMENT, OR UNDER ANY OTHER APPROPRIATION FOR ADMINISTRATIVE EXPENSES, ETC., ORDINARILY FINANCED FROM ANNUAL APPROPRIATIONS. SEE ALSO 16 COMP. GEN. 870.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE SECRETARY OF COMMERCE, APRIL 19, 1937:

YOUR LETTER OF MARCH 24, 1937, IS AS FOLLOWS:

YOUR DECISION DATED MARCH 17, 1937, REFERENCE NO. A-84457, IS ONE OF GREAT CONCERN TO THE DEPARTMENT IN VIEW OF THE URGENT NEED OF THE STINSON AIRCRAFT CORPORATION FOR AT LEAST A PARTIAL PAYMENT TO MEET PAY ROLL OBLIGATIONS.

IF SPECIAL LEGISLATION IS REQUESTED IN A DEFICIENCY APPROPRIATION,PAYMENT TO STINSON AIRCRAFT CORPORATION WILL BE RATHER INDEFINITELY DELAYED.

PLEASE INFORM THE DEPARTMENT AT THE EARLIEST PRACTICABLE MOMENT WHETHER YOU WOULD RAISE OBJECTION TO THE PAYMENT, UNDER THE EXISTING CONTRACT, FOR THESE AIRPLANES IF THE PRESIDENT MADE AN ALLOTMENT SPECIALLY PROVIDING FOR THE PAYMENT OF THEM FROM FUNDS AVAILABLE TO THE WORKS PROGRESS ADMINISTRATION.

THE "URGENT NEED OF THE STINSON AIRCRAFT CORPORATION FOR * * * PAYMENT," OF COURSE, MAY NOT PROPERLY BE CONSIDERED BY THIS OFFICE A CONTROLLING OR EVEN A PERSUASIVE FACTOR IN DECIDING WHETHER APPROPRIATED PUBLIC MONEYS ARE AVAILABLE FOR THE PROPOSED PAYMENT.

THE AGREEMENT CC-2510 MADE WITH THE STINSON AIRCRAFT CORPORATION IS DATED OCTOBER 1, 1936, AND RECITES ON ITS FACE THAT THE BID OF THE STINSON AIRCRAFT CO. WAS THE ONLY BID RECEIVED ON THE INVITATION FOR THE FURNISHING AND DELIVERY OF NINE THREE-PLACE CABIN MONOPLANES COMPLYING WITH SPECIFICATIONS BA-212, DATED AUGUST 15, 1936, AND DEPARTMENTAL PROPOSAL ADVERTISEMENT NO. 28199. ALSO, THE AGREEMENT CONTAINS THE RECITATION THAT THE ENTIRE AMOUNT OF THE BID, OR AGREED PRICE, OF $78,768 WILL BE PAID FROM THE APPROPRIATION "MAINTENANCE OF AIR NAVIGATION FACILITIES, 1937," THE "BALANCE OF WHICH IS CERTIFIED * * * AS BEING SUFFICIENT FOR THE PAYMENT OF ALL OBLIGATIONS INCURRED AGAINST IT, INCLUDING THIS CONTRACT.'

NEITHER THE LANGUAGE NOR THE LEGISLATIVE HISTORY OF THIS MAINTENANCE APPROPRIATION, HOWEVER, LENDS ANY SUPPORT TO THE VIEW IT IS AVAILABLE FOR SUCH A PURCHASE. IN RESPONSE TO A SUGGESTION AS TO THE NONAVAILABILITY OF SAID APPROPRIATION, YOUR LETTER OF MARCH 3, 1937, STATED:

AS TO THE FOUR AIRPLANES FOR ASSIGNMENT TO THE AIR NAVIGATION DISTRICTS, THE DEPARTMENT REALIZES THAT THE APPROPRIATION "MAINTENANCE OF AIR NAVIGATION FACILITIES" DOES NOT SPECIFICALLY PROVIDE FOR THE PURCHASE OF AIRPLANES BUT MERELY FOR THE MAINTENANCE AND OPERATION OF AIRPLANES. * *

THE APPROPRIATION "AIR NAVIGATION FACILITIES FOR THE FISCAL YEAR 1936" AND FORMER YEARS PROVIDED FOR THE ACQUISITION AS WELL AS FOR THE MAINTENANCE AND OPERATION OF AIRPLANES. WHEN THE APPROPRIATION "AIR NAVIGATION FACILITIES FOR 1937" WAS UNDER DISCUSSION BY THE APPROPRIATIONS COMMITTEE OF THE HOUSE, IT WAS DECIDED BY THE COMMITTEE (NO DOUBT BECAUSE OF THE CRITICISM OF THE BUREAU OF AIR COMMERCE BY THE SENATE INVESTIGATING COMMITTEE AND THE PRESS AND STATEMENTS THAT MONEY HAD BEEN DIVERTED FROM MAINTENANCE TO OTHER PURPOSES) TO SUBDIVIDE THE APPROPRIATION INTO TWO APPROPRIATIONS, PROVIDING ONE SPECIFICALLY FOR MAINTENANCE, FROM WHICH THERE COULD BE NO DIVERSION, AND THE OTHER UNDER ESTABLISHMENT WHICH EMBRACED NOT ONLY THE CONSTRUCTION OF NEW OR ADDITIONAL AIRWAYS BUT ALL OTHER ACTIVITIES WHICH WERE PROVIDED FOR BY THE FORMER APPROPRIATION ,AIR NAVIGATION FACILITIES.' * * *

ALTHOUGH NOT SPECIFICALLY PROVIDED IN THE LANGUAGE OF THE 1937 APPROPRIATION ACT, THE DEPARTMENT NEVERTHELESS STRONGLY FEELS THAT IT WAS NOT THE INTENT OF THE CONGRESS TO PROHIBIT THE BUREAU OF AIR COMMERCE FROM OBTAINING AIRCRAFT ACTUALLY NECESSARY IN CONNECTION WITH THE MAINTENANCE AND OPERATION OF THE AIR NAVIGATION FACILITIES COMPRISING THE FEDERAL AIRWAYS SYSTEM.

AS TO THE FOUR AIRPLANES (OF THE NINE COVERED BY THE AGREEMENT WITH STINSON AIRCRAFT CORPORATION OF OCTOBER 1, 1936) WHICH HAVE BEEN ASSIGNED TO THE AERONAUTICAL INSPECTORS, THE DEPARTMENT ADMITS THAT THESE FOUR AIRPLANES SHOULD PROPERLY BE PAID FROM THE APPROPRIATION ,AIRCRAFT IN COMMERCE" BUT WE DO NOT AT THE PRESENT TIME HAVE A SUFFICIENT BALANCE IN THAT APPROPRIATION. AT THE PRESENT MOMENT, THERE IS NOT A SUFFICIENT AVAILABLE BALANCE IN THAT APPROPRIATION TO PAY FOR EVEN ONE OF THESE AIRPLANES. * * * THE APPROPRIATION ACT "AIRCRAFT IN COMMERCE" PROVIDES A LIMITATION OF $16,500 WHICH MAY BE EXPENDED DURING 1937 FOR AIRPLANES.

* * * IT WILL BE GREATLY APPRECIATED IF THE GENERAL ACCOUNTING OFFICE WILL AUTHORIZE IN THIS INSTANCE THE PAYMENT OF FOUR OF THESE AIRPLANES FROM "MAINTENANCE OF AIR NAVIGATION FACILITIES--- 1937," FOUR FROM THE APPROPRIATION "ESTABLISHMENT OF AIR NAVIGATION FACILITIES- - 1937 * * *.'

THE MAINTENANCE APPROPRIATION, FROM WHICH THE AGREEMENT SPECIFIED PAYMENT, CLEARLY IS UNAVAILABLE. THE APPROPRIATION "AIRCRAFT IN COMMERCE" --- AT THE TIME OF THE AGREEMENT AND NOW--- IS EQUALLY UNAVAILABLE BY REASON OF THE SPECIFIC LIMITATION UPON THE USE THEREOF FOR AIRPLANE PURCHASES.

AS FOR THE SUGGESTION IN THE LETTER OF MARCH 3, 1937, THAT PAYMENT FOR FOUR OF THE AIRPLANES MIGHT BE AUTHORIZED FROM THE APPROPRIATION "ESTABLISHMENT OF AIR NAVIGATION FACILITIES--- 1937," IT APPEARS THAT WHEN THE APPROPRIATION BILL H.R. 12098 PASSED THE HOUSE (74TH CONG., 2D SESS.), AND AS REPORTED OUT BY THE SENATE COMMITTEE ON APPROPRIATIONS IT CONTAINED LANGUAGE UNDER THIS TITLE AUTHORIZING USE OF THE APPROPRIATION MADE THEREUNDER FOR THE "REPLACEMENT, INCLUDING EXCHANGE, OF NOT TO EXCEED TWO AIRPLANES FOR SERVICE USE AND TWO FOR EXPERIMENTAL PURPOSES.' CONG.REC. 4929, 5863.

SENATOR COPELAND OF NEW YORK--- A MEMBER OF THE SENATE COMMITTEE ON APPROPRIATIONS AND CHAIRMAN OF THE SENATE COMMITTEE ON COMMERCE, WHICH LATTER COMMITTEE HAD THE NEEDS OF THE BUREAU OF AIR COMMERCE PARTICULARLY UNDER INVESTIGATION AND CONSIDERATION AT THE TIME PURSUANT TO S.RES. 146, 74TH CONGRESS, 1ST SESSION (S.REPT. NO. 2455, 74TH CONG., 2D SESS., AND S.REPT. NO. 185, 75TH NG., 1ST SESS./--- OFFERED SENATE AMENDMENT NO. 27 TO STRIKE THIS LANGUAGE FROM THE BILL AND SAID AMENDMENT WAS ADOPTED (80 CONG.REC. 5867-5869). THE CONFERENCE REPORT RECOMMENDING THAT THE HOUSE RECEDE FROM ITS DISAGREEMENT TO THIS AMENDMENT WAS AGREED TO IN THE SENATE (80 CONG.REC. 6405-6406) AND IN THE HOUSE (80 CONG.REC. 6704-6706, 6708). SENATOR MCKELLAR WAS IN CHARGE OF THIS BILL ON THE FLOOR OF THE SENATE AT THE TIME THIS AMENDMENT WAS UNDER CONSIDERATION AND THE FOLLOWING INQUIRY AND EXPLANATION--- ON THE BASIS OF WHICH IT WAS AGREED TO--- INDICATE THE PURPOSE OF THE AMENDMENT:

MR. MCKELLAR. MR. PRESIDENT, WILL THE SENATOR STATE JUST WHAT WOULD BE THE EFFECT OF HIS AMENDMENT TO THIS PROVISION OF THE BILL?

MR. COPELAND. YES. FIRST, LET ME SAY AS TO THE TWO LINES WHICH I HAVE ASKED TO HAVE STRICKEN OUT THAT THE LANGUAGE IS:

"REPLACEMENT, INCLUDING EXCHANGE, OF NOT TO EXCEED TWO AIRPLANES FOR SERVICE USE AND TWO FOR EXPERIMENTAL PURPOSES.'

IF THE SENATOR WILL TURN OVER THE PAGE AT THE BOTTOM OF PAGE 62 HE WILL FIND THAT PROVISION IS MADE FOR THE EXCHANGE OF AIRPLANES, NOT TO EXCEED $16,500. WHAT I DESIRE TO ACCOMPLISH BY MY AMENDMENT, IF THE SENATOR SHALL SEE FIT TO TAKE IT TO CONFERENCE, IS TO MAKE SURE THAT THERE IS NOT A TRANSFER OF FUNDS WITHIN THE APPROPRIATION, SO THAT THE AMOUNT OF MONEY WHICH IS TO BE USED FOR INVESTIGATION SHALL BE LIMITED TO $50,000, AND ALL THE REST OF THE FUND SHALL BE USED LARGELY FOR CONSTRUCTION OF NECESSARY LIGHTING, RADIO, AND OTHER SIGNALLING AND COMMUNICATING STRUCTURES AND APPARATUS. 80 CONG.REC. 5867-5869.

IT IS PLAIN, THEREFORE, BOTH FROM THE LANGUAGE AND FROM THE HISTORY OF THE APPROPRIATIONS MADE FOR THE BUREAU OF AIR COMMERCE FOR THE FISCAL YEAR 1937, ACT OF MAY 15, 1936, 49 STAT. 1309, 1332-1333, THAT NO PART OF THE MONEYS APPROPRIATED THEREIN WAS OR IS AUTHORIZED TO BE USED IN MAKING PAYMENT FOR THE NINE AIRPLANES WHICH ARE THE SUBJECT OF THE AGREEMENT OF OCTOBER 1, 1936, WITH THE STINSON AIRCRAFT CORPORATION. THE GENERAL STATUTORY LAWS, MOREOVER, APPEAR TO FORBID ANY GOVERNMENT CONTRACTING OFFICER MAKING AN AGREEMENT OR CONTRACT IN THESE CIRCUMSTANCES AND THIS OFFICE MAY NOT RECOGNIZE ANY RIGHT TO PAYMENT AS ARISING FROM ANY AGREEMENT SO MADE, OR EVEN UPON A QUANTUM VALEBAT BASIS. SECTIONS 3678 AND 3679, REVISED STATUTES, AS AMENDED, 31 U.S.C. 628, 665; SECTION 3732, REVISED STATUTES, AS AMENDED, 41 U.S.C. 11; SECTION 9, ACT OF JUNE 30, 1906, 34 STAT., 764; 31 U.S.C. 627; BRADLEY V. UNITED STATES, 98 U.S. 104, 112-114; SUTTON V. UNITED STATES, 256 U.S. 575, REPORTED WITH ANNOTATION, 19 A.L.R. 403, 408.

ASIDE FROM ANY QUESTION AS TO THE NON-AVAILABILITY OF AN APPROPRIATION, THE VALIDITY OF THE CONTRACT FOR THE PURCHASE OF THE NINE AIRPLANES WOULD APPEAR--- ON THE RECORD PRESENTED--- TO BE AT LEAST DOUBTFUL. ALTHOUGH THE AGREEMENT WITH THE STINSON AIRCRAFT CORPORATION BEARS A CERTIFICATE INDICATING THE NEEDS OF THE SERVICE WERE ADVERTISED BY CIRCULARIZATION OF NUMEROUS AIRPLANE DEALERS AND PRODUCERS, NEVERTHELESS IT IS CERTIFIED THAT THE BID OF THE SAID STINSON AIRCRAFT CORPORATION WAS THE ONLY BID RECEIVED. IN VIEW OF THE WELL KNOWN PRESSING NEED AND DESIRE OF AIRPLANE PRODUCERS TO OBTAIN BUSINESS AT THIS STAGE OF DEVELOPMENT IN THE INDUSTRY, INFERENCES ARE UNAVOIDABLE--- IN THE ABSENCE OF ACCEPTABLE EVIDENCE TO THE CONTRARY--- THAT EITHER THE CIRCULAR SPECIFICATIONS ADVERTISING THE SERVICE NEEDS WERE NOT TIMELY AND ACCURATELY ADDRESSED TO REACH THE DEALERS SAID TO HAVE BEEN CIRCULARIZED, OR ELSE THE SPECIFICATIONS WERE SO RESTRICTED AND EXCLUSIVELY DESCRIPTIVE OF THE STINSON AIRCRAFT CORPORATION PRODUCT THAT NO OTHER MANUFACTURER OR DEALER COULD BID UPON A BONA FIDE COMPETITIVE BASIS. THE ATTORNEY GENERAL IN CONSTRUING SECTION 3709, REVISED STATUTES, 41 U.S.C. 5, HAS SAID ON THIS POINT AS FOLLOWS:

* * * THE PURPOSE OF CONGRESS IN REQUIRING THAT CONTRACTS SHALL BE LET AFTER PUBLIC ADVERTISEMENT IS TO PROCURE OPEN COMPETITION. ANY COURSE OF ACTION WHICH HAS THE EFFECT OF DEFEATING THAT PURPOSE WOULD BE CONTRARY TO LAW. * * * 36 OP.ATT.GEN. 33, 37.

EVEN UNDER THE BROAD TERMS OF THE ACT OF JULY 2, 1926, 44 STAT., 780, 784, WHICH VESTS SO WIDE A DISCRETION IN THE SECRETARY OF WAR AND THE SECRETARY OF THE NAVY IN THE PROCUREMENT OF AIRCRAFT, ETC., FOR MILITARY PURPOSES, THERE MUST BE COMPLIANCE WITH THE CITED SECTION 3709, REVISED STATUTES, AND PURCHASES OF PROPRIETARY ARTICLES ON SPECIFICATIONS UNDULY RESTRICTING COMPETITION ARE UNAUTHORIZED SAVE ONLY IN INSTANCES OF COMPARATIVELY SMALL PURCHASES FOR EXPERIMENTAL PURPOSES, ETC., WHICH THE ACT OF 1926 ITSELF PERMITS TO BE PROCURED ON A DIFFERENT BASIS. OP.ATTY.GEN. OF JANUARY 12, 1935. THE ATTORNEY GENERAL REFERRED NEAR THE END OF THAT OPINION TO THE LIMITED TYPES OF PURCHASES EXCEPTED BY LAW FROM THE REQUIREMENTS OF THE CITED SECTION 3709, REVISED STATUTES, AND THEN SAID, IN CONCLUDING, AS FOLLOWS:

* * * THESE, HOWEVER, ARE BUT LIMITED EXCEPTIONS TO THE GENERAL RULE EVIDENCED BY ALL THE STATUTES THAT PROCUREMENTS ARE ORDINARILY TO BE MADE AFTER ADVERTISING IN THE MANNER PRESCRIBED BY LAW, AND CLOSE CIRCUMSPECTION, AS WELL AS THE UTMOST GOOD FAITH, IS REQUIRED WHEN RESORTING TO THEM IN ORDER THAT THE SPIRIT NO LESS THAN THE LETTER OF THE LAW SHALL PREVAIL.

ALSO, IN THE COURSE OF THIS OPINION OF JANUARY 12, 1935, THE ATTORNEY GENERAL SAID---

* * * IF AN ARTICLE IS REQUIRED WHICH MIGHT REASONABLY BE OBTAINED FROM SEVERAL SOURCES AND THE SPECIFICATIONS, THEREFORE, ARE SO NARROWED, WITHOUT REASONABLE RELATION TO ACTUAL NEEDS OF THE SERVICE, AS TO LIMIT POSSIBLE PROCUREMENT TO A SINGLE SOURCE, THIS ALSO IS AN ABUSE OF DISCRETION. IF WRONGFUL INTENT IS PRESENT, WE MAY, IN THE WORDS OF THE COMMITTEE, TERM SUCH THINGS "SUBTERFUGES" AND "VIOLATIONS.'

IT WOULD BE THE DUTY OF THIS OFFICE, THEREFORE, ASIDE FROM ANY QUESTION OF AVAILABLE APPROPRIATION, TO REQUIRE EVIDENCE THAT ADVERTISING OF THE SERVICE NEEDS ACTUALLY WAS HAD ON A BASIS WHICH WOULD HAVE PERMITTED REPRESENTATIVES OF THE INDUSTRY TO BID ON A BONA FIDE COMPETITIVE BASIS. 34 OP.ATTY.GEN. 446. LACKING THIS PRELIMINARY EVIDENCE ESSENTIAL TO ESTABLISH AN AGREEMENT PURSUANT TO LAW, EVEN WERE AN APPROPRIATION OTHERWISE AVAILABLE--- WHICH IS NOT THE CASE--- NO PAYMENT COULD BE AUTHORIZED ON THE BASIS OF SAID AGREEMENT AND THERE IS NO EVIDENCE IN THE RECORD BEFORE THIS OFFICE, OUTSIDE OF THE AMOUNT NAMED IN THE BID OF THE STINSON AIRCRAFT CORPORATION AS SOLE BIDDER, WHICH WOULD SUPPORT ANY CONCLUSION AS TO THE PROBABLE ACTUAL WORTH OR VALUE OF THE AIRPLANES AGREED TO BE DELIVERED.

THE CONCLUDING PARAGRAPH OF YOUR LETTER OF MARCH 24, 1937, APPARENTLY HAS REFERENCE TO THE PRESIDENT'S ALLOCATION LETTER NUMBERED 1988, OF MARCH 23, 1937, AS FOLLOWS:

BY VIRTUE OF THE AUTHORITY VESTED IN ME UNDER THE EMERGENCY RELIEF APPROPRIATION ACT OF 1935, APPROVED APRIL 8, 1935, IT IS REQUESTED THAT THE FOLLOWING FUNDS BE TRANSFERRED FROM THE APPROPRIATION MADE IN SAID ACT TO THE DEPARTMENT OF COMMERCE FOR THE PURPOSE INDICATED BELOW: AMOUNT: $83,000.

PURPOSE: FOR ADMINISTRATIVE EXPENSES AT THE SEAT OF GOVERNMENT AND ELSEWHERE TO TAKE CARE OF THE ADDITIONAL WORK IMPOSED UPON THE DEPARTMENT OF COMMERCE BY REASON OF THE ENACTMENT OF THE EMERGENCY RELIEF APPROPRIATION ACT OF 1935, INCLUDING * * * NOT TO EXCEED $82,300 FOR THE PURCHASE OF AIRPLANES; AND SUCH OTHER CLASSES OF EXPENSES AS ARE PAYABLE UNDER CURRENT APPROPRIATION FOR CONTINGENT EXPENSES OF THE DEPARTMENT OF COMMERCE. (O.P. NO. 2-1.)

TREASURY DEPARTMENT TRANSFER APPROPRIATION WARRANT NO. 1833, OF MARCH 25, 1937, GIVING EFFECT TO THIS TRANSFER, WAS COUNTERSIGNED BY ME MARCH 30, 1937, BUT I WOULD POINT OUT IN THAT CONNECTION THAT THERE IS NOTHING IN THE PRESIDENT'S LETTER TO INDICATE, AND IT IS NOT TO BE ASSUMED, THAT NOT TO EXCEED $82,300 SO TRANSFERRED FOR THE PURCHASE OF AIRPLANES TO TAKE CARE OF ADDITIONAL WORK IMPOSED UPON THE DEPARTMENT OF COMMERCE BY REASON OF THE ENACTMENT OF THE EMERGENCY RELIEF APPROPRIATION ACT OF 1935, WAS INTENDED TO BE AUTHORIZED FOR USE IN MAKING PAYMENT TO THE STINSON AIRCRAFT CORPORATION OF $78,768 FOR AIRPLANES, UNDER THE AGREEMENT OF OCTOBER 1, 1936, TO BE USED FOR CARRYING ON THE REGULARLY PRESCRIBED WORK OF THE BUREAU OF AIR COMMERCE, PARTICULARLY AS THE SAID AGREEMENT WAS MADE FOR PAYMENT UNDER AN APPROPRIATION WHICH THE CONGRESS APPEARS DELIBERATELY TO HAVE MADE UNAVAILABLE FOR SUCH PURCHASES AND ALSO AFTER DELIBERATE REFUSAL OF THE CONGRESS TO MAKE PROVISION FOR SUCH PURCHASES UNDER ANY OTHER APPROPRIATION. THERE IS TO BE NOTED ALSO IN THIS CONNECTION THE SPECIFIC INHIBITION IN SECTION 11 OF THE SAID EMERGENCY RELIEF APPROPRIATION ACT OF 1935, 49 STAT. 119, WHICH READS:

NO PART OF THE FUNDS HEREIN APPROPRIATED SHALL BE EXPENDED FOR THE ADMINISTRATIVE EXPENSES OF ANY DEPARTMENT, BUREAU, BOARD, COMMISSION, OR INDEPENDENT AGENCY OF THE GOVERNMENT IF SUCH ADMINISTRATIVE EXPENSES ARE ORDINARILY FINANCED FROM ANNUAL APPROPRIATIONS, UNLESS ADDITIONAL WORK IS IMPOSED THEREUPON BY REASON OF THIS JOINT RESOLUTION.

IN ADDITION TO THE CONSIDERATIONS ABOVE ENUMERATED WHICH COMPEL ME TO CONCLUDE THAT NO PART OF THE $83,000 DIRECTED BY THE PRESIDENT TO BE TRANSFERRED TO THE DEPARTMENT OF COMMERCE AND MADE AVAILABLE FOR THE ADMINISTRATIVE EXPENSES NECESSARY TO TAKE CARE OF THE ADDITIONAL WORK IMPOSED UPON THE DEPARTMENT BY THE ENACTMENT OF THE EMERGENCY RELIEF APPROPRIATION ACT OF 1935, WAS INTENDED TO BE OR MAY BE USED TO MAKE PAYMENTS UNDER THE CONTRACT OF OCTOBER 1, 1936, I WOULD INVITE ATTENTION PARTICULARLY TO THE CRITICISM DIRECTED AGAINST THE BUREAU OF AIR COMMERCE IN THE LEGISLATIVE BRANCH OF THE GOVERNMENT AT THE VERY TIME OF REFUSAL TO APPROPRIATE FOR THE PURCHASE OF AIRPLANES DURING THE FISCAL YEAR 1937, AND WHICH RESULTED IN THE ADOPTION OF A MORE DETAILED BREAKDOWN IN THE LANGUAGE OF THE APPROPRIATION ACT AS RECITED IN YOUR LETTER OF MARCH 3, 1937, TO PREVENT A RECURRENCE OF THE DIVERTING OF FUNDS FROM AUTHORIZED TO UNAUTHORIZED OBJECTS WHICH, IT HAD BEEN CHARGED FROM NUMEROUS RESPONSIBLE SOURCES, THERETOFORE HAD OCCURRED.

COMPREHENSIVE HEARINGS WERE HELD BEFORE THE SUBCOMMITTEE OF THE HOUSE APPROPRIATIONS COMMITTEE ON THE NEEDS OF THE BUREAU OF AIR COMMERCE COMMENCING TUESDAY, FEBRUARY 25, 1936 (HEARINGS, P. 150). PARTICULAR CRITICISM WAS DIRECTED AT THE BUREAU FOR DIVERTING FUNDS FROM AUTHORIZED TO UNAUTHORIZED OBJECTS (HEARINGS, P. 171, ET SEQ). THE SUBCOMMITTEE WAS INFORMED OF THE NUMBER AND CONDITION OF DEPARTMENT AIRPLANES, THAT SIX OR EIGHT PLANES WERE LOANED, WHAT THE NEEDS FOR REPLACEMENTS AND NEW PLANES WERE ADMINISTRATIVELY CONSIDERED TO BE, AND THERE WAS SUGGESTED THE REMOVAL OF THE $16,500 RESTRICTION UNDER THE TITLE "AIRCRAFT IN COMMERCE," UPON REPLACEMENT, INCLUDING EXCHANGE OF AIRPLANES (HEARINGS, PP. 224- 226). AT THE SUPPLEMENTAL HEARING OF TUESDAY, MARCH 24, 1936, ON THE DEPARTMENT'S SUPPLEMENTAL ESTIMATE FOR AIR NAVIGATION FACILITIES, 1937, THE NEED ADMINISTRATIVELY THOUGHT TO EXIST FOR REPLACEMENT OF AIRPLANES AGAIN WAS BROUGHT TO THE ATTENTION OF THE SUBCOMMITTEE (SUPPLEMENTAL HEARINGS, PP. 3-4). IT ALREADY HAS BEEN A SUBJECT OF COMMENT IN YOUR LETTER OF MARCH 3, 1937, AND OTHERWISE HEREIN, HOW ADDITIONAL APPROPRIATION SOUGHT FOR AIRPLANES INCLUDING REPLACEMENTS WAS DELIBERATELY REJECTED BY THE LEGISLATIVE BRANCH.

MR. MCMILLAN, FROM THE COMMITTEE ON APPROPRIATIONS, SUBMITTED HOUSE REPORT NO. 2286, MARCH 31, 1936, ON THE BILL H.R. 12098, WHICH (AT P. 25) CONTAINS THE FOLLOWING COMMENT:

BUREAU OF AIR COMMERCE

AT THE PRESENT TIME THE ENTIRE SUBJECT OF THE OPERATIONS OF THIS BUREAU IS UNDER INVESTIGATION BY THE COMMERCE COMMITTEE OF THE SENATE * * *. IN THE LIMITED TIME AVAILABLE TO THE COMMITTEE TO CONDUCT HEARINGS * * *. IT WOULD BE IMPOSSIBLE FROM THE TIME ELEMENT ALONE TO RESOLVE OURSELVES INTO AN INQUISITORIAL BODY AND INVESTIGATE QUESTIONS OF ADMINISTRATIVE CONDUCT AND RESPONSIBILITY.

SUFFICIENT EVIDENCE HAS BEEN PRESENTED, HOWEVER, TO JUSTIFY THE ACTION THE COMMITTEE HAS TAKEN IN EFFECTING A REARRANGEMENT OF THE APPROPRIATIONS FOR THIS BUREAU IN SUCH WAY AS TO INSURE THAT FUNDS APPROPRIATED WITH THE UNDERSTANDING THAT THEY WILL BE DEVOTED TO A GIVEN PURPOSE ARE, IN FACT, USED FOR THAT PURPOSE AND NOT DIVERTED TO OTHER OBJECTS.

DURING THE PAST YEAR, FUNDS MADE AVAILABLE WITH THE UNDERSTANDING THEY WERE FOR MAINTENANCE WERE USED FOR THE PURCHASE OF ADDITIONAL EQUIPMENT. THE NEW GROUPING OF THE APPROPRIATIONS WILL PREVENT SUCH HAPPENINGS IN THE FUTURE.

AT PAGES 23 AND 24 OF THE SENATE COMMERCE COMMITTEE PRELIMINARY REPORT NO. 2455, SUBMITTED BY SENATOR COPELAND JUNE 15, 1936, UPON THE INVESTIGATION PURSUANT TO S.RES. 146, COMMENT IN THIS CONNECTION WAS AS FOLLOWS:

* * * NEW CONSTRUCTION AND PROMOTION OF INTERESTING DEVELOPMENTS IS MUCH MORE ALLURING TO PERSONNEL THAN ROUTINE PROCEDURE.

(B) ADMINISTRATIVE EFFICIENCY.

(3) THAT THE BUREAU DOES NOT PREPARE ITS ANNUAL ESTIMATE EFFICIENTLY FOR PRESENTATION BEFORE CONGRESSIONAL COMMITTEES. THIS CONTENTION WAS SUSTAINED DURING THE LIFE OF THIS COMMITTEE IN FEBRUARY 1936, WHEN THE APPROPRIATIONS FOR THE FISCAL YEAR 1937 WERE BEING DISCUSSED BEFORE THE HOUSE APPROPRIATIONS COMMITTEE. READING THE EVIDENCE SEEMS TO INDICATE THAT THE COMMITTEE GAINED THE IMPRESSION THAT THE BUREAU DID NOT KNOW ITSELF WHAT IT WANTED, WHAT THE FUNDS WERE PROVIDED FOR, OR WHAT DIFFERENT ITEMS OF CONSTRUCTION AND MAINTENANCE WOULD COST.

THIS COMMENT IS FOR CONSIDERATION IN CONNECTION WITH THE HEREINBEFORE DESCRIBED SENATE AMENDMENT NO. 27 OFFERED BY SENATOR COPELAND ON THE FLOOR OF THE SENATE APRIL 22, 1936, AND AGREED TO (80 CONG.REC. 5863, 5867- 5869), STRIKING THE LANGUAGE WHICH, HAD IT BEEN ADOPTED, WOULD HAVE PERMITTED THE PROCUREMENT OF TWO ADDITIONAL PLANES FOR SERVICES AND TWO FOR EXPERIMENTAL PURPOSES, UNDER THE APPROPRIATION "ESTABLISHMENT OF AIR- NAVIGATION FACILITIES.'

SAID COMMENT ALSO IS FOR CONSIDERATION IN CONNECTION WITH THE STATEMENT OF APRIL 1, 1936, BY MR. BACON, MEMBER OF THE SUBCOMMITTEE OF THE COMMITTEE ON APPROPRIATIONS WHICH HELD THE HEARINGS AND ONE OF THE MANAGERS ON THE PART OF THE HOUSE OF THE COMMITTEE OF CONFERENCE ON THE DISAGREEING VOTES OF THE TWO HOUSES IN THE AMENDMENTS OF THE SENATE TO THE BILL (HOUSE CONFERENCE REPORT NO. 2574 OF MAY 1, 1936) AS FOLLOWS:

CONGRESS HAS ALWAYS GIVEN THEM THE NECESSARY MONEY. BUDGET ESTIMATES HAVE RARELY BEEN CUT. THERE HAS BEEN NO LACK OF FUNDS. APPROPRIATIONS HAVE BEEN MORE THAN SUFFICIENT.

THE MONEYS GIVEN, HOWEVER, HAVE BEEN RECKLESSLY WASTED AND INEFFICIENTLY SPENT. THE MAINTENANCE OF EXISTING AIR-NAVIGATION FACILITIES HAS BEEN NOTORIOUSLY INEFFICIENT. THIS HAS NOT BEEN DUE TO LACK OF FUNDS BUT TO INCOMPETENCE. LAST YEAR THE TESTIMONY WILL SHOW THAT FUNDS GIVEN BY CONGRESS FOR MAINTENANCE HAVE BEEN USED FOR OTHER PURPOSES (80 CONG.REC. 4743).

WITHOUT BURDENING THE PRESENT COMMUNICATION WITH FURTHER CITATIONS OF LIKE CHARACTER, I AM SURE YOU MUST AGREE THAT UPON THE RECORD BEFORE ME I AM WITHOUT AUTHORITY TO APPROVE ANY PAYMENT TO THE STINSON AIRCRAFT CORPORATION FOR AIRPLANES UNDER THE AGREEMENT OF OCTOBER 1, 1936, IN THE ABSENCE OF FURTHER LEGISLATION, AND SUCH MUST BE AND IS MY DECISION.