A-66072, DECEMBER 18, 1935, 15 COMP. GEN. 536

A-66072, DECEMBER 18, 1935, 15 COMP. GEN. 536

DESTROYED TUBERCULOUS CATTLE - FEDERAL INDEMNITY PAYMENTS FEDERAL INDEMNITY PAYMENTS FOR DESTROYED TUBERCULOUS CATTLE UNDER SECTION 6 OF THE ACT OF APRIL 7, 1934, 48 STAT. 528, ADMINISTRATIVELY APPROVED UNDER B.A.I. 344 PRIOR TO OCTOBER 29, 1935, MAY NOT EXCEED TWO THIRDS OF THE DIFFERENCE BETWEEN THE APPRAISED VALUE AND THE SALVAGE VALUE AND MAY NOT EXCEED $20 PRIOR TO JUNE 10, 1935, OR $25 THEREAFTER FOR A GRADE ANIMAL OR $50 FOR A PUREBRED ANIMAL, AND THE AMOUNT RECEIVED FROM ALL SOURCES, INCLUDING SALVAGE, MAY NOT EXCEED THE APPRAISED VALUE. 15 COMP. GEN. 325 MODIFIED.

COMPTROLLER GENERAL MCCARL TO THE SECRETARY OF AGRICULTURE, DECEMBER 18, 1935:

THERE HAS BEEN CONSIDERED YOUR LETTER OF NOVEMBER 6, 1935, AS FOLLOWS:

ACKNOWLEDGMENT IS MADE OF THE RECEIPT OF YOUR DECISION OF OCTOBER 22 (A- 66072) IN CONNECTION WITH THE DISALLOWANCE IN THE INDEMNITY CLAIM OF NINA J. HAZELTON, CERTIFICATE NO. 0373318, DATED SEPTEMBER 16, 1935. IN THIS DECISION, IT IS NOTED THAT UPON REVIEW OF THIS CASE THE DISALLOWANCE IS SUSTAINED. REFERENCE THEREIN IS MADE BY YOU TO A SUGGESTION CONTAINED IN YOUR DECISION OF MARCH 18, 1935 (A-60347), REGARDING AN AMENDMENT TO B.A.I. ORDER 344, WHICH WOULD LIMIT THE AMOUNT WHICH ANY OWNER COULD RECEIVE FROM ALL SOURCES TO NOT MORE THAN TWO THIRDS OF THE DIFFERENCE BETWEEN THE APPRAISED VALUE AND THE SALVAGE. THIS WAS GIVEN CAREFUL CONSIDERATION, BUT IT WAS FOUND THAT IT WOULD NOT BE APPLICABLE IN ALL STATES, BECAUSE IN SOME OF THEM THE STATE PAYMENT IS MORE THAN ONE THIRD OF THE DIFFERENCE BETWEEN THE APPRAISED VALUE AND THE SALVAGE. IN NEW YORK, FOR EXAMPLE, THE STATE PAYMENT FOR TUBERCULOUS CATTLE MAY BE NINETY PERCENT OF THE APPRAISED VALUE.

IN ORDER TO OVERCOME FURTHER DIFFICULTY IN CONNECTION WITH THE ADMINISTRATION OF THIS TUBERCULOSIS ERADICATION WORK IN CATTLE, UNDER B.A.I. ORDER 344, IT WAS DECIDED TO AMEND IT BY REVOKING REGULATION 3 THEREOF AND AMENDMENT 1 THERETO AND PRESCRIBING THE FOLLOWING IN LIEU THEREOF. THIS ACTION WAS TAKEN ON OCTOBER 29, 1935.

"REGULATION 3. PAYMENT FOR TUBERCULOSIS CATTLE.--- SECTION 1. WHEN IT APPEARS NECESSARY TO SLAUGHTER CATTLE AFFECTED WITH TUBERCULOSIS, AND TO COMPENSATE THE OWNERS FOR LOSS THEREOF, THE CHIEF OF THE BUREAU OF ANIMAL INDUSTRY IS AUTHORIZED, WITHIN HIS DISCRETION, TO AGREE, ON THE PART OF THE DEPARTMENT, TO PAY THE OWNERS OF SUCH TUBERCULOUS CATTLE NOT MORE THAN $25 FOR A GRADE ANIMAL OR $50 FOR A PUREBRED ANIMAL. THE OWNER SHALL RECEIVE THE SALVAGE FOR ALL CATTLE SLAUGHTERED UNDER THESE REGULATIONS, BUT SHALL NOT RECEIVE FROM ALL SOURCES, INCLUDING THE SALVAGE, A SUM GREATER THAN THE APPRAISED VALUE OF THE CATTLE.'

TWO COPIES OF THIS AMENDMENT 4 TO B.A.I. ORDER 344 ARE BEING INCLOSED HEREWITH. THIS AMENDMENT, OF COURSE, MAY NOT BE APPLIED TO CASES WHERE THE CATTLE WERE SLAUGHTERED PRIOR TO OCTOBER 29, AND IT IS THEREFORE RESPECTFULLY REQUESTED THAT FURTHER CONSIDERATION BE GIVEN TO THE MATTER OF SETTLEMENT OF CLAIMS COVERING CATTLE THAT WERE DESTROYED HERETOFORE, UNDER THE PROVISIONS OF B.A.I. ORDER 344 AND ITS AMENDMENTS IN EFFECT PRIOR TO OCTOBER 29, 1935, AND FOR WHICH THE OWNERS HAVE NOT BEEN PAID.

PRIOR TO SEPTEMBER 16, 1935, A LARGE NUMBER OF TUBERCULOSIS INDEMNITY CLAIMS, AMOUNTING TO MORE THAN $5,000,000, WERE CERTIFIED AND PASSED FOR PAYMENT UNDER THE PROVISIONS OF B.A.I. ORDER 344 AND ITS AMENDMENTS, AND THIS DEPARTMENT HAD NO REASON TO BELIEVE THAT THE PAYMENTS WOULD NOT BE CONTINUED ON THAT BASIS, BECAUSE THE CLAIMS WERE COMPUTED IN ACCORDANCE WITH THE INTENT OF THE DEPARTMENT. THE OWNERS INVOLVED, ALSO, HAD EVERY REASON TO BELIEVE THAT THEIR CLAIMS WOULD BE PAID, AND OF COURSE THEY ARE VERY MUCH DISTURBED OVER THE FACT THAT PAYMENT HAS BEEN DENIED THEM.

THESE CLAIMS WERE COMPUTED UNDER THE GENERAL PLAN THAT IS FOLLOWED IN B.A.I. ORDER 329 AND ITS AMENDMENTS, BUT IT WAS NOT THE INTENTION THAT ANY PROVISION IN B.A.I. ORDER 344 SHOULD LIMIT THE AMOUNT THAT THE UNITED STATES WOULD PAY TO THE OWNER TO AN AMOUNT NOT EXCEEDING THE AMOUNT PAID BY THE COOPERATING STATE. IT WAS, HOWEVER, THE INTENT OF THE DEPARTMENT THAT THE TOTAL AMOUNT RECEIVED BY THE OWNER FROM ALL SOURCES, MEANING STATE, FEDERAL PAYMENT, AND SALVAGE, SHOULD NOT BE A SUM GREATER THAN WOULD HAVE BEEN RECEIVED IN CASE PAYMENTS TO THE OWNER SHOULD HAVE BEEN COMPUTED UNDER THE PROVISIONS OF B.A.I. ORDER 329 OR ANY AMENDMENT THERETO.

THERE ARE MANY OWNERS INVOLVED IN THIS MATTER AND, IN CALIFORNIA AT THIS TIME, THESE OWNERS ARE VERY MUCH CONCERNED OVER THE FACT THAT THEY ARE NOT BEING PAID THE FEDERAL INDEMNITY FOR TUBERCULOUS CATTLE, BECAUSE THEY MUST REPLACE THEIR HERDS WITH NEW COWS, IN THE DAIRY SECTIONS OF THE STATE. THE TUBERCULIN TESTING OF CATTLE IN MANY SECTIONS OF CALIFORNIA IS CONDUCTED BECAUSE IT IS NECESSARY FOR THE DAIRYMEN TO PRODUCE MILK FROM HERDS THAT ARE FREE FROM TUBERCULOSIS IN ORDER TO COMPLY WITH MUNICIPAL ORDINANCES.

A LARGE AMOUNT OF WORK HAS RECENTLY BEEN CONDUCTED IN THE STATES OF NEBRASKA AND SOUTH DAKOTA, BECAUSE IT IS NECESSARY FOR THE CATTLE OWNERS IN THOSE STATES TO HAVE THEIR HERDS TESTED IN ORDER THAT THE COUNTIES MAY BE PLACED IN WHAT IS KNOWN AS THE MODIFIED ACCREDITED AREA. OTHERWISE, THE MOVEMENT OF CATTLE FROM THOSE AREAS TO OTHER STATES FOR FEEDING PURPOSES WOULD NOT BE PERMITTED.

IT IS ESTIMATED THAT THERE ARE ABOUT 8,000 OWNERS WHO HAVE NOT RECEIVED THEIR FEDERAL PAYMENT FOR TUBERCULOUS CATTLE, AND IT IS URGENTLY REQUESTED THAT FAVORABLE CONSIDERATION BE GIVEN TO THE APPROVAL OF PAYMENT OF THESE CLAIMS UNDER THE PROVISIONS OF B.A.I. ORDER 344 AND ITS AMENDMENTS WHICH WERE IN EFFECT PRIOR TO OCTOBER 29, 1935, IN ACCORDANCE WITH THE INTENT OF THE DEPARTMENT IN PRESCRIBING THAT ORDER, AS ABOVE EXPLAINED.

IF YOU THINK IT IS ADVISABLE, THE DEPARTMENT WOULD BE PLEASED TO HAVE ONE OF ITS REPRESENTATIVES WHO IS FAMILIAR WITH THE WORK CONFER WITH SOMEONE IN YOUR OFFICE AND DISCUSS THIS MATTER MORE IN DETAIL.

THE PAYMENTS FOR THE ELIMINATION OF DISEASED CATTLE AS PROVIDED FOR UNDER SECTION 6 OF THE ACT OF APRIL 7, 1934 (48 STAT. 528), ARE, BY THE TERMS OF THAT STATUTE, TO BE MADE "UNDER RULES AND REGULATIONS TO BE PROMULGATED BY" THE SECRETARY OF AGRICULTURE "AND UPON SUCH TERMS AS HE MAY PRESCRIBE.' PROPER REGULATIONS ISSUED PURSUANT TO THE STATUTE HAVE THE FORCE AND EFFECT OF LAW AND, WHILE THEY MAY BE AMENDED FROM TIME TO TIME, SUCH AMENDMENTS MAY OPERATE PROSPECTIVELY ONLY, EXCEPT WHERE THE PURPOSE OR EFFECT THEREOF IS MERELY TO CLARIFY SOME AMBIGUITY IN THE ORIGINAL REGULATION.

THE AMENDMENT NO. 4 TO B.A.I. ORDER 344, ISSUED OCTOBER 29, 1935, LIMITS PAYMENTS BY THE UNITED STATES TO $25 AND $50 FOR GRADE AND PUREBRED ANIMALS, RESPECTIVELY, AND PROVIDES FURTHER THAT THE OWNER SHALL NOT RECEIVE FROM ALL SOURCES, INCLUDING SALVAGE, MORE THAN THE APPRAISED VALUE OF THE ANIMAL. THIS AMENDMENT IS WITHIN THE AUTHORITY CONFERRED UPON THE SECRETARY OF AGRICULTURE BY THE STATUTE BUT CANNOT BE CONSIDERED AS HAVING ANY EFFECT PRIOR TO THE DATE OF ITS ISSUANCE, OCTOBER 29, 1935.

B.A.I. ORDER 344 AS ORIGINALLY PROMULGATED PROVIDED--- INSOFAR AS THE QUESTION HERE INVOLVED IS CONCERNED--- THAT THE OWNER SHOULD NOT RECEIVE FROM ALL SOURCES "A SUM GREATER THAN WOULD BE RECEIVED IN CASE PAYMENT WAS MADE UNDER THE PROVISIONS OF B.A.I. ORDER 329" AND REGULATION 3 OF B.A.I. 329 PROVIDES AS FOLLOWS:

SECTION 1. IF IT APPEARS TO BE NECESSARY, FOR THE CONTROL OR ERADICATION OF TUBERCULOSIS OR PARATUBERCULOSIS OF ANIMALS, TO DESTROY CATTLE AFFECTED WITH EITHER DISEASES, AND TO COMPENSATE OWNERS FOR LOSS THEREOF, THE CHIEF OF BUREAU IS AUTHORIZED WITHIN HIS DISCRETION TO AGREE, ON THE PART OF THE DEPARTMENT, WITH THE STATE, TERRITORY, COUNTY, OR MUNICIPALITY, TO PAY NOT TO EXCEED ONE-THIRD OF THE DIFFERENCE BETWEEN THE APPRAISED VALUE OF EACH ANIMAL SO DESTROYED AND THE VALUE OF THE SALVAGE THEREOF: PROVIDED, HOWEVER, THAT IN NO CASE SHALL ANY PAYMENT BY THE DEPARTMENT BE MORE THAN $25 FOR ANY GRADE ANIMAL, NOR MORE THAN $50 FOR ANY PUREBRED ANIMAL.

SEC. 2. NO PAYMENT BY THE DEPARTMENT SHALL EXCEED THE AMOUNT PAID OR TO BE PAID BY THE STATE, TERRITORY, COUNTY, OR MUNICIPALITY WHERE THE ANIMAL SHALL BE CONDEMNED.

AS SAID REGULATION OF B.A.I. 329 PROHIBITS ANY PAYMENT BY THE UNITED STATES IN EXCESS OF THE PAYMENT BY THE STATE, ETC., AND THE PROVISION IN B.A.I. 344, SUPRA, LIMITS THE AMOUNT TO BE RECEIVED BY THE OWNER FROM ALL SOURCES TO THE AMOUNT HE WOULD RECEIVE IF PAYMENT WERE MADE UNDER B.A.I. 329, IT WAS HELD IN DECISION OF OCTOBER 22, 1935, THAT THE MAXIMUM AMOUNT PAYABLE UNDER B.A.I. 344 WAS THE AMOUNT OF THE STATE PAYMENT, PLUS AN EQUAL AMOUNT AS PAYABLE BY THE UNITED STATES (IF NOT IN EXCESS OF ONE- THIRD OF THE DIFFERENCE BETWEEN THE APPRAISED AND SALVAGE VALUES), PLUS THE SALVAGE VALUE.

NOTWITHSTANDING THE PLAIN TERMS OF THE LIMITATION IN B.A.I. 344 AND THE PROVISIONS OF B.A.I. 329, SUPRA, YOU NOW CONTEND IT WAS NOT THE INTENTION OF THE LIMITATION IN B.A.I. 344 TO SO LIMIT PAYMENTS THEREUNDER. IT IS TRUE THE LAW DID NOT REQUIRE THAT THESE PAYMENTS BE SO LIMITED, AND IT IS NOTED THAT THE REGULATION RELATIVE TO THE PAYMENT FOR ELIMINATION OF CATTLE SUFFERING FROM BANGS' DISEASE, PROVIDED FOR UNDER THE SAME ACT, CONTAINED NO SUCH LIMITATION. THAT THE LIMITATION WAS NOT INTENDED OR UNDERSTOOD BY YOUR DEPARTMENT TO MEAN WHAT IT SAYS IS FURTHER INDICATED BY THE FACT THAT THE AGREEMENTS MADE WITH THE OWNERS ON THE BASIS OF WHICH THE CATTLE WERE SLAUGHTERED DURING THE PERIOD FROM JUNE 12, 1934, TO OCTOBER 29, 1935, DID NOT SO APPLY THE LIMITATION.

THE ENTIRE SENTENCE IN WHICH THE LIMITATION HERE IN QUESTION APPEARS IS AS FOLLOWS:

THE OWNER SHALL NOT RECEIVE FROM ALL SOURCES (1) A SUM GREATER THAN THE APPRAISED VALUE OF THE ANIMAL, OR (2) A SUM GREATER THAN WOULD BE RECEIVED IN CASE PAYMENT WAS MADE UNDER THE PROVISIONS OF B.A.I. ORDER 329 OR ANY AMENDMENT THERETO.

IF THE SECOND PART OF THIS LIMITATION HAD BEEN OMITTED ENTIRELY, THE AUTHORIZED PAYMENTS THEREUNDER WOULD BE THE SAME AS NOW PROVIDED UNDER THE AMENDMENT OF OCTOBER 29, 1935. BUT, MANIFESTLY, THE SAID SECOND PART, (2), OF THE LIMITATION WAS INTENDED TO HAVE AND MUST BE GIVEN SOME EFFECT. THEREFORE, SINCE B.A.I. 329 LIMITED PAYMENTS BY THE UNITED STATES TO NOT TO EXCEED ONE-THIRD OF THE DIFFERENCE BETWEEN THE APPRAISED VALUE AND THE SALVAGE VALUE AND NOT TO EXCEED THE AMOUNT PAID BY THE STATE, THE REFERENCE TO B.A.I. 329 IN THE LIMITATION IN B.A.I. 344 MAY, IN VIEW OF ALL THE FACTS AND CIRCUMSTANCES, BE REGARDED AS INTENDED TO LIMIT PAYMENTS BY THE UNITED STATES TO NOT TO EXCEED IN ANY CASE TWO-THIRDS OF THE DIFFERENCE BETWEEN THE APPRAISED VALUE AND THE SALVAGE VALUE. THAT SUCH WAS THE INTENT WOULD APPEAR TO BE INDICATED BY THE AMENDMENT OF MARCH 19, 1935, WHICH ADDED TO THE LIMITATION A PROVISO AS FOLLOWS:

* * * PROVIDED, THAT RESTRICTION (2) IMMEDIATELY PRECEDING SHALL NOT APPLY IN STATES AND TERRITORIES WHICH DID NOT HAVE, ON APRIL 7, 1934, OR DO NOT HAVE, LAWS OR REGULATIONS FOR PAYMENT BY STATE, TERRITORY, COUNTY, OR MUNICIPALITY FOR TUBERCULOUS CATTLE PURSUANT TO THE PROVISIONS OF B.A.I. ORDER NO. 329; IN SUCH STATES OR TERRITORIES THE FEDERAL PAYMENT MADE UNDER THIS REGULATION SHALL NOT EXCEED TWO-THIRDS OF THE DIFFERENCE BETWEEN THE APPRAISED VALUE AND THE NET SALVAGE.

IT IS NOT TO BE ASSUMED THAT THIS AMENDMENT, WHICH WAS FOR THE PURPOSE OF PERMITTING PAYMENTS TO THE OWNERS OF CATTLE IN THOSE STATES WHICH HAD NO LAW AUTHORIZING STATE PAYMENT FOR ELIMINATED CATTLE, WAS INTENDED TO PLACE OWNERS OF CATTLE IN THOSE STATES IN A BETTER POSITION THAN OWNERS IN STATES WHICH DO HAVE LAWS OR REGULATIONS FOR PAYMENTS FOR CATTLE SLAUGHTERED PURSUANT TO THE PROVISIONS OF B.A.I. 329. BUT SUCH WOULD BE THE EFFECT THEREOF IF THE ORIGINAL LIMITATION IN B.A.I. 344 BE APPLIED LITERALLY.

ACCORDINGLY, IN VIEW OF YOUR REPRESENTATIONS AND THE NUMEROUS PAYMENTS WHICH HAVE ALREADY BEEN MADE, THIS OFFICE WILL NOT FURTHER OBJECT TO OTHERWISE PROPER PAYMENTS ADMINISTRATIVELY APPROVED UNDER B.A.I. 344 PRIOR TO OCTOBER 29, 1935, PROVIDED THE AMOUNT PAID OR TO BE PAID BY THE UNITED STATES DOES NOT EXCEED TWO-THIRDS OF THE DIFFERENCE BETWEEN THE APPRAISED VALUE AND THE SALVAGE VALUE AND DOES NOT EXCEED $20 PRIOR TO JUNE 10, 1935, OR $25 THEREAFTER FOR A GRADE ANIMAL, OR $50 FOR A PUREBRED ANIMAL, AND PROVIDED FURTHER THAT THE AMOUNT RECEIVED FROM ALL SOURCES, INCLUDING SALVAGE, DOES NOT EXCEED THE APPRAISED VALUE.