A-83429, MARCH 3, 1937, 16 COMP. GEN. 806

A-83429, MARCH 3, 1937, 16 COMP. GEN. 806

PAYMENTS TO FEDERAL LAND AND INTERMEDIATE CREDIT BANKS FOR SLAUGHTER OF DISEASED CATTLE THE APPROPRIATION MADE BY THE DEPARTMENT OF AGRICULTURE APPROPRIATION ACT OF JUNE 4, 1936, 49 STAT. 1456, FOR PAYMENT TO "OWNERS" OF CATTLE SLAUGHTERED BECAUSE SUFFERING FROM BANG'S DISEASE, IS AVAILABLE FOR SUCH PAYMENTS TO FEDERAL LAND AND INTERMEDIATE CREDIT BANKS IN CONNECTION WITH THE SLAUGHTER OF CATTLE ACQUIRED BY THEM IN THE CONDUCT OF THEIR AUTHORIZED ACTIVITIES.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE SECRETARY OF AGRICULTURE, MARCH 3, 1937:

YOUR LETTER OF JANUARY 28, 1937, IS AS FOLLOWS:

IT WILL BE GREATLY APPRECIATED IF YOU WILL ADVISE ME WHETHER THE DEPARTMENT, UNDER THE AUTHORITY OF SECTION 6 OF THE ACT OF APRIL 7, 1934, 48 STAT. 528, AND SECTION 37 OF THE ACT OF AUGUST 24, 1935, 49 STAT. 775, MAY PROPERLY MAKE SUCH PAYMENTS AS ARE THEREIN MENTIONED TO THE FEDERAL LAND BANK OF NEW ORLEANS, LOUISIANA, AND THE FEDERAL INTERMEDIATE CREDIT BANK OF WICHITA, KANSAS, AS THE "OWNERS" OF CATTLE WHICH MAY BE TESTED FOR BANG'S DISEASE, FOUND TO BE REACTORS, APPRAISED, AND SLAUGHTERED, PURSUANT TO THESE ACTS AND TO THE DEPARTMENT'S REGULATIONS ISSUED THEREUNDER.

SECTION 6 OF THE ACT OF APRIL 7, 1934, AUTHORIZES AN APPROPRIATION TO ENABLE THIS DEPARTMENT, UNDER REGULATIONS ISSUED BY THE SECRETARY, AMONG OTHER THINGS, TO ELIMINATE CATTLE SUFFERING FROM BANG'S DISEASE AND TO "MAKE PAYMENTS TO OWNERS WITH RESPECT THERETO.' THE NECESSARY FUNDS WERE APPROPRIATED BY THE ACT OF MAY 25, 1934, 48 STAT. 805.

SECTION 37 OF THE ACT OF AUGUST 24, 1935, APPROPRIATES FUNDS TO ENABLE THIS DEPARTMENT, UNDER REGULATIONS ISSUED BY THE SECRETARY, TO ELIMINATE CATTLE SUFFERING FROM BANG'S DISEASE AND TO ,MAKE PAYMENTS TO OWNERS WITH RESPECT THERETO.' THE AVAILABILITY OF SUCH FUNDS WAS EXTENDED THROUGH THE 1937 FISCAL YEAR BY THE AGRICULTURAL APPROPRIATION ACT OF JUNE 4,1936, 49 STAT. 1421, 1456.

UNDER THE AUTHORIZATION OF THE ACT OF APRIL 7, 1934, REGULATIONS, KNOWN AS B.A.I. ORDER 347, COPY OF WHICH IS ENCLOSED, WERE DULY ISSUED TO GOVERN THE ELIMINATION OF CATTLE, REACTING TO THE TEST OF BANG'S DISEASE, AND, BY SECTION 17 OF REGULATION 4 OF THIS ORDER, THE CHIEF OF THE BUREAU OF ANIMAL INDUSTRY IS AUTHORIZED TO AGREE ON THE PART OF THE DEPARTMENT "TO PAY THE OWNER" OF REACTING CATTLE WHICH ARE ELIMINATED PURSUANT TO THE REGULATIONS.

TO THE EXTENT THAT THESE BANKS ASSIST THE FEDERAL GOVERNMENT IN THE CONDUCT OF ITS FISCAL TRANSACTIONS, THEY ARE UNDOUBTEDLY FEDERAL AGENCIES, AND THE SUPREME COURT, IN SMITH V. KANSAS CITY TITLE COMPANY, 255 U.S. 180, 212, HAS SO HELD WITH RESPECT TO FEDERAL LAND BANKS. IT APPEARS, HOWEVER, THAT THE PRIMARY FUNCTION OF THESE BANKS IS TO ENABLE FARMERS TO BORROW MONEY AT LOW RATES OF INTEREST AND THE MONEY THUS LOANED IS OBTAINED FROM THE SALE OF BONDS ISSUED BY THE BANKS, WHICH BONDS ARE, IN TURN, SECURED BY THE BANKS' ASSETS CONSISTING, IN LARGE PART, OF THE PROPERTY WHICH THEY OWN IN THEIR PRIVATE CAPACITY. IN THE CASE OF BOTH THE BANKS MENTIONED ABOVE, THE DEPARTMENT UNDERSTANDS THAT SUCH OF THEIR PROPERTY AS CONSISTS OF CATTLE WAS ACQUIRED AS THE RESULT OF LOANS MADE IN THE ORDINARY COURSE OF BUSINESS.

SINCE THE VALUE OF THE PROPERTY THUS OWNED BY THE BANKS, EVEN THOUGH THEY ARE FEDERAL AGENCIES IN MANY RESPECTS, WILL NECESSARILY BE IMPAIRED, IF SOME OF THE ANIMALS WHICH THEY OWN ARE TESTED, FOUND TO BE REACTORS, AND SLAUGHTERED, IT WOULD SEEM BUT EQUITABLE THAT REIMBURSEMENT SHOULD BE ACCORDED THEM FOR SUCH LOSSES, IN THE MANNER PROVIDED BY CONGRESS FOR CASES WHERE THE "OWNERS" ARE PRIVATE PARTIES. THIS, HOWEVER, IS THE QUESTION WHICH I AM SUBMITTING TO YOU FOR CONSIDERATION.

THE FACT THAT FEDERAL LAND BANKS AND FEDERAL INTERMEDIATE CREDIT BANKS ACT IN MANY RESPECTS AS FEDERAL AGENCIES DOES NOT NECESSARILY DISQUALIFY THEM AS "OWNERS" WITHIN THE MEANING OF THE CITED ACTS, WHEN THEY HAVE ACQUIRED TITLE TO CATTLE IN THE CONDUCT OF THEIR AUTHORIZED ACTIVITIES. THE APPROPRIATION BEING SPECIFICALLY FOR PAYMENT TO OWNERS, THIS OFFICE WILL NOT BE REQUIRED TO OBJECT TO ITS USE FOR PAYMENTS TO FEDERAL LAND BANKS AND FEDERAL INTERMEDIATE CREDIT BANKS IN OTHERWISE PROPER CASES.