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BUREAU OF BUDGET: I HAVE YOUR LETTER OF FEBRUARY 5. THE SECRETARY OF WAR EXPLAINS THE NEED FOR THE DESIRED LEGISLATION AS FOLLOWS: "THERE IS INCLOSED HEREWITH DRAFT OF A BILL 'TO PROVIDE FOR THE DISPOSITION OF CERTAIN MONEYS RECEIVED BY UNITED STATES MILITARY OR NAVAL FORCES' WHICH THE WAR DEPARTMENT RECOMMENDS BE ENACTED INTO LAW. MILITARY CONTRIBUTIONS HAVE OCCASIONALLY BEEN LEVIED. FINES SO LEVIED WERE USED BY THE COMMANDING GENERALS OF OUR FORCES TO MEET THE EXPENSES OF MILITARY OR CIVIL GOVERNMENT OF THE REGIONS OCCUPIED OR FOR THE NEEDS OF THEIR FORCES. SUCH DISPOSITION WAS IN ACCORDANCE WITH ACCEPTED PRINCIPLES OF INTERNATIONAL LAW AND WITH THE EXPRESS PROVISIONS OF ARTICLES 48 AND 49 OF THE REGULATIONS ANNEXED TO THE CONVENTION RESPECTING THE LAWS AND CUSTOMS OF WAR ON LAND.

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B-23647, FEB 16, 1942

PRECIS-UNAVAILABLE

THE DIRECTOR, BUREAU OF BUDGET:

I HAVE YOUR LETTER OF FEBRUARY 5, 1942, REQUESTING AN EXPRESSION OF MY VIEWS REGARDING A DRAFT OF A PROPOSED BILL, SUBMITTED BY THE SECRETARY OF WAR, ENTITLED "A BILL TO PROVIDE FOR THE DISPOSITION OF MONEYS RECEIVED BY AMERICAN FORCES IN OCCUPIED TERRITORY OR UNDER MARTIAL LAW", WHICH BILL WOULD PROVIDE AS FOLLOWS:

"THAT, NOTWITHSTANDING ANY OTHER PROVISIONS OF LAW, THE PROCEEDS OF TAXES, CONTRIBUTIONS, FINES, OR OTHER MONEYS RECEIVED PURSUANT TO THE LAWS OR CUSTOMS OF WAR BY AN AMERICAN FORCE IN OCCUPIED TERRITORY, OR IN TERRITORY UNDER THE JURISDICTION OF THE UNITED STATES IN WHICH MARTIAL LAW SHALL BE IN FORCE, SHALL NOT BE COVERED INTO THE TREASURY OF THE UNITED STATES, BUT MAY BE EXPENDED BY COMMANDING OFFICER OF THE OCCUPYING FORCE OR OF THE FORCE IN THE AREA UNDER MARTIAL LAW FOR THE SUPPORT AND MAINTENANCE OF THAT FORCE OR FOR THE EXPENSES OF MILITARY OR CIVIL GOVERNMENT OF THE TERRITORIES OCCUPIED. ANY MONEYS NOT SO EXPENDED AT THE TERMINATION OF THE OCCUPATION OR OF MARTIAL LAW SHALL BE DISPOSED OF AS THE CONGRESS MAY DIRECT."

IN THE PROPOSED LETTER OF TRANSMITTAL TO THE CONGRESS, THE SECRETARY OF WAR EXPLAINS THE NEED FOR THE DESIRED LEGISLATION AS FOLLOWS:

"THERE IS INCLOSED HEREWITH DRAFT OF A BILL 'TO PROVIDE FOR THE DISPOSITION OF CERTAIN MONEYS RECEIVED BY UNITED STATES MILITARY OR NAVAL FORCES' WHICH THE WAR DEPARTMENT RECOMMENDS BE ENACTED INTO LAW.

"DURING THE OCCUPATION BY THE ARMY OF THE COBLENZ SECTOR OF THE RHINELAND FOLLOWING THE ARMISTICE OF NOVEMBER 11, 1918, THERE AROSE A SITUATION, OBJECTIONABLE BOTH ON LEGAL AND PRACTICAL GROUNDS, WITH RESPECT TO MONEYS RECEIVED BY THE AMERICAN FORCES.

"DURING MANY PAST OCCUPATIONS BY MILITARY FORCES OF THE UNITED STATES, SUCH AS THAT OF MEXICO DURING THE WAR WITH THAT COUNTRY NEARLY A CENTURY AGO, THOSE OF CUBA, PUERTO RICO AND THE PHILIPPINE ISLANDS, FOLLOWING THE SPANISH WAR, THAT OF CUBA IN 1904, AND THAT OF VERA CRUZ IN 1914, THE OCCUPYING FORCES COLLECTED TAXES IN THE OCCUPIED TERRITORY. MILITARY CONTRIBUTIONS HAVE OCCASIONALLY BEEN LEVIED. DURING THE MEXICAN WAR AND THE CIVIL WAR, DURING THE MILITARY OCCUPATIONS FOLLOWING OUR WAR WITH SPAIN, AND DURING OUR OCCUPATION OF VERA CRUZ, THE GENERALS COMMANDING OUR FORCES ESTABLISHED MILITARY COMMISSIONS AND PROVOST COURTS WHICH FINED OFFENDERS. TAXES, CONTRIBUTIONS, AND FINES SO LEVIED WERE USED BY THE COMMANDING GENERALS OF OUR FORCES TO MEET THE EXPENSES OF MILITARY OR CIVIL GOVERNMENT OF THE REGIONS OCCUPIED OR FOR THE NEEDS OF THEIR FORCES. SUCH DISPOSITION WAS IN ACCORDANCE WITH ACCEPTED PRINCIPLES OF INTERNATIONAL LAW AND WITH THE EXPRESS PROVISIONS OF ARTICLES 48 AND 49 OF THE REGULATIONS ANNEXED TO THE CONVENTION RESPECTING THE LAWS AND CUSTOMS OF WAR ON LAND, SIGNED BY MANY POWERS (INCLUDING THE UNITED STATES) AT THE HAGUE, OCTOBER 18, 1907, RATIFIED BY THE SENATE, AND PUBLISHED IN 36 STATUTES 2277, 2307.

"NO OBJECTION WAS RAISED TO THIS COURSE UNTIL OUR OCCUPATION OF A PART OF GERMANY IN THE WINTER OF 1918-19, WHEN THE QUESTION AROSE OF THE PROPER DISPOSITION OF PAYMENTS MADE BY THE GERMAN GOVERNMENT TO THE COMMANDING GENERAL OF OUR OCCUPYING FORCES FOR THE UPKEEP OF THOSE FORCES, PURSUANT TO ARTICLE IX OF THE ARMISTICE AGREEMENT.

"THE JUDGE ADVOCATE, AMERICAN EXPEDITIONARY FORCES, FRANCE, ADVISED THE COMMANDER-IN-CHIEF THAT THE MONEY SO PAID WAS A MILITARY CONTRIBUTION, EXACTED BY FORCE OF ARMS, WHICH MIGHT AND SHOULD BE USED BY THE COMMANDING GENERAL, THIRD ARMY, THEN OCCUPYING GERMANY, FOR THE SUPPORT OF HIS ARMY, PURSUANT TO WELL SETTLED PRINCIPLES OF INTERNATIONAL LAW, THE ARTICLES CITED FROM THE HAGUE REGULATIONS AND THE SPECIFIC PROVISION JUST CITED FROM THE ARMISTICE AGREEMENT OF NOVEMBER 11, 1918. THE ASSISTANT COMPTROLLER OF THE TREASURY SERVING IN FRANCE DID NOT AGREE WITH THAT VIEW, BUT HELD THAT THE MONEY SO RECEIVED FROM GERMANY WAS REQUIRED TO BE DEPOSITED IN THE TREASURY PURSUANT TO SECTION 3617 OF THE REVISED STATUTES (NOW 31 U.S.C. 484) AND BE EXPENDED ONLY PURSUANT TO APPROPRIATIONS. DEC. ASST. COMPT., FRANCE 57). SUBSEQUENTLY THE ASSISTANT COMPTROLLER MADE A LIKE HOLDING AS TO FINES IMPOSED BY PROVOST COURTS OF THE UNITED STATES ARMY UPON GERMAN CITIZENS IN THE OCCUPIED TERRITORY. (3 DEC. ASST. COMPT., FRANCE, 138).

"IT THEREFORE BECAME NECESSARY FOR MONEYS RECEIVED BY THE UNITED STATES FROM THE GERMAN GOVERNMENT FOR THE SUPPORT OF THE ARMY OF OCCUPATION OR FROM GERMAN CITIZENS AS FINES IMPOSED BY MILITARY COMMISSIONS OR PROVOST COURTS TO BE DEPOSITED IN THE TREASURY, WHENCE THEY COULD BE DRAWN PURSUANT TO APPROPRIATIONS ONLY. THE INCONVENIENCE OF THE RESULTANT SITUATION WAS THE SUBJECT OF COMMENT BY THE COMMANDING GENERAL, AMERICAN FORCES IN GERMANY.

"ANOTHER PERSUASIVE REASON FOR THE ENACTMENT OF THE PROPOSED LEGISLATION LIES IN THE FACT THAT UNLESS CONTRIBUTIONS, FINES, TAXES, AND ALL FUNDS SO PAYABLE ARE, BY CONTRACT OR OTHERWISE, MADE PAYABLE IN UNITED STATES DOLLARS, THE ADMINISTRATION OF SUCH FUNDS MAY INVOLVE A CONTINUOUSLY INCREASING LOSS TO THE UNITED STATES WHICH RESULTS FROM INFLATIONARY PROCESSES IN OCCUPIED TERRITORY. THIS HAPPENED IN GERMANY. THE FALLING PRICE OF THE MARK MADE IT IMPOSSIBLE TO ESTABLISH A BASIS FOR EXCHANGE DURING THE PROCESS OF CONVERSION INTO DOLLARS, AND DISBURSEMENT OR RECONVERSION INTO MARKS THEREAFTER. THESE PROCESSES COULD NOT BE PERFORMED SIMULTANEOUSLY NOR 'HEDGED' IN ANY WAY. THE LOSS TO THE UNITED STATES THAT AROSE AS A CONSEQUENCE OF THE DECISIONS REFERRED TO, WAS SUBSTANTIAL.

"IT SEEMS PROBABLE THAT IF THE SAME PROBLEMS SHALL AGAIN ARISE, THE COMPTROLLER GENERAL WILL FOLLOW THE OPINIONS OF THE ASSISTANT COMPTROLLER OF THE TREASURY WHICH HAVE BEEN CITED. WHETHER HE WOULD APPLY THE SAME PRINCIPLE TO TAXES COLLECTED CAN NOT BE FORETOLD, BUT IT IS AT LEAST POSSIBLE THAT HE MIGHT DO SO.

"THE OBJECTIONS TO THE SITUATIONS CAUSED BY THE ABOVE DECISIONS OF THE ASSISTANT COMPTROLLER OF THE TREASURY AND POSSIBLE LIKE FUTURE DECISIONS OF THE COMPTROLLER GENERAL ARE BOTH LEGAL AND PRACTICAL.

"THE LEGAL OBJECTION, WHICH IS ONE OF FAIRNESS AND JUSTICE AS WELL, IS THAT THE DECISIONS MENTIONED REQUIRE THE DEPOSIT IN THE TREASURY AND THE MINGLING WITH OTHER FUNDS OF THE UNITED STATES OF MONEYS PAID BY PEOPLES OF OTHER LANDS, WHICH ACCORDING TO INTERNATIONAL LAW AND EVERY PRINCIPLE OF FAIR DEALING OUGHT NOT TO BE SO MINGLED, BUT OUGHT TO BE SPENT SOLELY FOR THE CIVIL AND MILITARY GOVERNMENT OF THOSE LANDS AND FOR THE SUPPORT OF THE TROOPS OCCUPYING THEM.

"THE PRACTICAL OBJECTION TO THE EXISTING SITUATION IS THAT MILITARY GOVERNMENT IS USUALLY SET UP TO DEAL WITH AN EMERGENT SITUATION, THAT IT WILL BE IMMEDIATELY NECESSARY TO SPEND MONEY FOR THE DAILY OPERATIONS OF SUCH GOVERNMENT, THAT CONGRESS MAY NOT BE IN SESSION, OR IF IN SESSION WILL BE HUNDREDS OF MILES AWAY, AND THAT CONGRESS WILL NOT HAVE AND CAN NOT FAIRLY BE EXPECTED TO HAVE DETAILED KNOWLEDGE OF THE COUNTRIES OCCUPIED SUFFICIENT TO ENABLE IT TO APPROPRIATE QUICKLY AND INTELLIGENTLY FOR THEIR GOVERNMENT.

"SINCE THE STUDY OF THIS SUBJECT WAS BEGUN, WAR HAS BROKEN OUT, HAWAII HAS BEEN ATTACKED, AND, PURSUANT TO SECTION 67 OF THE ORGANIC ACT OF HAWAII (ACT APR. 30, 1900, 31 STAT. 153, 48 U.S.C. 532), THE GOVERNOR OF HAWAII HAS DECLARED MARTIAL LAW IN THAT TERRITORY, HAS APPOINTED THE COMMANDING GENERAL, HAWAIIAN DEPARTMENT, AS MILITARY GOVERNOR, AND THE LATTER HAS SET UP PROVOST COURTS AND A MILITARY COMMISSION. IT IS ANTICIPATED THAT THE SAME QUESTIONS WHICH AROSE IN GERMANY MAY ARISE WITH RESPECT TO FINES COLLECTED BY PROVOST COURTS IN HAWAII. THE MILITARY GOVERNMENT IN HAWAII WILL UNDOUBTEDLY COLLECT THE TAXES AND FEES ORDINARILY COLLECTED BY THE TERRITORIAL GOVERNMENT, AND WILL BE ENTITLED TO DO SO. THE MONEY SO COLLECTED OUGHT, IN FAIRNESS TO THE PEOPLE OF HAWAII, TO BE SPENT FOR THE SAME PURPOSES AS THE MONEY ORDINARILY COLLECTED AS TERRITORIAL TAXES. IT IS URGENTLY NECESSARY THAT IT BE SO SPENT AS OTHERWISE MANY GOVERNMENTAL SERVICES WOULD ABRUPTLY CEASE. YET, IF THE COMPTROLLER GENERAL SHALL FOLLOW THE DECISIONS OF THE ASSISTANT COMPTROLLER OF THE TREASURY IN FRANCE, ALL FINES AND TAXES COLLECTED BY THE MILITARY GOVERNMENT IN HAWAII MUST BE DEPOSITED IN THE TREASURY.

"EVEN IF THE BILL SUBMITTED BE NOT PASSED AND ALL TAXES, CONTRIBUTIONS, AND FINES COLLECTED IN HAWAII AND IN OCCUPIED COUNTRIES BE COVERED INTO THE TREASURY, CONGRESS WOULD HAVE TO APPROPRIATE THE SAME OR OTHER LIKE SUMS FOR THE EXPENSES OF THE GOVERNMENT OF HAWAII AND OF OTHER TERRITORY WHERE IT MAY BE NECESSARY TO SET UP MILITARY GOVERNMENT. IT FOLLOWS THAT THE ENACTMENT OF THE BILL, WHICH RELATES MERELY TO METHOD OF DISBURSEMENT AND ACCOUNTING, WILL CAUSE NO ADDITIONAL EXPENSE TO THE UNITED STATES, AND INVOLVE NO CHARGE AGAINST THE REVENUES OF THE UNITED STATES.

"FOR THE REASONS ABOVE INDICATED, THE ENACTMENT AT AN EARLY DATE OF THE BILL INCLOSED IS URGENTLY RECOMMENDED."

THE DECISION OF JANUARY 4, 1919, 3 DEC. ASST. COMP., FRANCE, 57, TO WHICH REFERENCE IS MADE IN THE QUOTED LETTER, WAS IN RESPONSE TO AN INQUIRY WHETHER AMOUNTS COLLECTED FROM THE GERMAN GOVERNMENT FOR THE UPKEEP OF THE ARMY OF OCCUPATION MUST BE DEPOSITED IN THE TREASURY AS A MISCELLANEOUS RECEIPT AND DISBURSED IN ACCORDANCE WITH APPROPRIATIONS, OR WHETHER SUCH FUNDS MIGHT BE RECEIVED AND DISBURSED BY OFFICERS NAMED BY THE COMMANDING GENERAL WITHOUT REGARD TO APPROPRIATIONS AND WITH SUCH AUDIT ONLY AS THE COMMANDING GENERAL MIGHT REQUIRE. IN RESPONSE TO SUCH INQUIRY, THE COMMANDER-IN-CHIEF, A.E.F., WAS ADVISED IN PERTINENT PART AS FOLLOWS:

"I HAVE READ WITH INTEREST AND CARE THE BRIEF SUBMITTED BY THE JUDGE ADVOCATE, A.E.F., IN SUPPORT OF THE VIEW THAT THE MONEYS NOW BEING RECEIVED UNDER THE CIRCUMSTANCES STATED MAY BE USED BY DIRECTION OF THE COMMANDING GENERAL, THIRD ARMY, UNDER AUTHORITY OF THE ARMISTICE STIPULATIONS, WITHOUT DEPOSIT IN THE UNITED STATES TREASURY AND WITHOUT REGARD TO APPROPRIATIONS OR ACCOUNTABILITY AS PUBLIC MONEYS.

"THE JUDGE ADVOCATE STATES:

"'8. I AM NOT IGNORANT OF THE CONSTITUTIONAL PROVISION (ART. IV, SEC. 3, PARA. 2), R.S. SEC. 3617, AND OTHER STATUTES AND NUMEROUS DECISIONS DENYING OR LIMITING THE POWER OF EXECUTIVE OFFICERS TO DISPOSE OF FUNDS AND OTHER PUBLIC PROPERTY OF THE UNITED STATES; BUT SUCH A SITUATION AS THE PRESENT IS NOT WITHIN THEIR SCOPE. THE CONSTITUTION ALSO AUTHORIZES CONGRESS TO DECLARE WAR, AND TO RAISE AND SUPPORT ARMIES (ART. 1, SEC. 8). IT FURTHER APPOINTS THE PRESIDENT THE COMMANDER-IN-CHIEF OF THE ARMY (ART. II, SEC. 2). AN OFFICER COMMANDING IN HOSTILE TERRITORY, APPOINTED TO SUCH COMMAND BY THE CONSTITUTIONAL COMMANDER-IN-CHIEF, COMMANDING ARMIES RAISED BY CONGRESS AND WAGING WAR DECLARED BY IT, HAS ALL THE POWERS GRANTED BY INTERNATIONAL LAW OR THE LAWS OF WAR TO SUCH AN OFFICER, AMONG WHICH ARE THOSE TO LEVY CONTRIBUTIONS AND APPLY THEM ACCORDING TO HIS OWN JUDGMENT AND THE REQUIREMENTS OF THE MILITARY SITUATION. THIS IS ALL THAT IS ASKED IN THE PRESENT CASE.'

"IT APPEARS, HOWEVER, THAT THE SUBJECT-MATTER OF YOUR INQUIRY IS GOVERNED BY CONSTITUTIONAL AND STATUTORY PROVISIONS SO EXPLICIT AND MANDATORY IN THEMSELVES THAT ARGUMENT IS PRECLUDED, AND THAT A DISCUSSION COULD SERVE BUT AN ACADEMIC PURPOSE AT BEST.

"TO CONGRESS, UNDER THE TERMS OF THE CONSTITUTION, IS GIVEN THE POWER TO 'RAISE AND SUPPORT ARMIES' (ART. I, SEC. 8, CL. 12) TO 'MAKE RULES FOR THE GOVERNMENT AND REGULATION OF THE LAND AND NAVAL FORCES' (ART. I, SEC. 8, CL. 14), TO 'DISPOSE OF AND MAKE ALL NEEDFUL RULES AND REGULATIONS RESPECTING THE TERRITORY OR OTHER PROPERTY BELONGING TO THE UNITED STATES' (ART. IV, SEC. 3, CL. 2); AND BY ARTICLE I, SEC. 9, CL. 7, IT IS PROVIDED:

"'NO MONEY SHALL BE DRAWN FROM THE TREASURY BUT IN CONSEQUENCE OF APPROPRIATIONS MADE BY LAW; AND A REGULAR STATEMENT AND ACCOUNT OF THE RECEIPTS AND EXPENDITURES OF ALL PUBLIC MONEY SHALL BE PUBLISHED FROM TIME TO TIME.'

"SECTION 3617, REVISED STATUTES READS:

"'THE GROSS AMOUNT OF ALL MONEYS RECEIVED FROM WHATEVER SOURCE FOR THE USE OF THE UNITED STATES, EXCEPT AS OTHERWISE PROVIDED IN THE NEXT SECTION, SHALL BE PAID BY THE OFFICER OR AGENT RECEIVING THE SAME INTO THE TREASURY, AT AS EARLY A DAY AS PRACTICABLE, WITHOUT ANY ABATEMENT OR DEDUCTION ON ACCOUNT OF SALARY, FEES, COSTS, CHARGES, EXPENSES, OR CLAIM OF ANY DESCRIPTION WHATEVER. ***'

"SECTION 3618, REVISED STATUTES, READS:

"'ALL PROCEEDS OF SALES OF OLD MATERIAL, CONDEMNED STORES, SUPPLIES, OR OTHER PUBLIC PROPERTY OF ANY KIND, EXCEPT *** SHALL BE DEPOSITED AND COVERED INTO THE TREASURY AS MISCELLANEOUS RECEIPTS, ON ACCOUNT OF "PROCEEDS OF GOVERNMENT PROPERTY", AND SHALL NOT BE WITHDRAWN OR APPLIED, EXCEPT IN CONSEQUENCE OF A SUBSEQUENT APPROPRIATION MADE BY LAW.'

"(THIS SECTION HAS BEEN AMENDED IN SEVERAL PARTICULARS BUT NONE OF THEM IMPORTANT TO THE QUESTION HERE UNDER CONSIDERATION).

"SECTION 3619, REVISED STATUTES, READS:

"'EVERY OFFICER OR AGENT WHO NEGLECTS OR REFUSED TO COMPLY WITH THE PROVISIONS OF SECTION THIRTY-SIX HUNDRED AND SEVENTEEN SHALL BE SUBJECT TO REMOVAL FROM OFFICE. ***' "AS STATED BY THE JUDGE ADVOCATE, A.E.F., THERE ARE NUMEROUS DECISIONS, UNDER THE STATUTES, 'DENYING OR LIMITING THE POWER OF THE EXECUTIVE OFFICERS TO DISPOSE OF FUNDS AND OTHER PUBLIC PROPERTY OF THE UNITED STATES'. THE PRESENT SITUATION WOULD SEEM TO BE WELL WITHIN THE SCOPE OF SUCH DECISIONS, AND THE STATUTORY OBLIGATIONS AND PROCEDURE WOULD SEEM TO HAVE BEEN DEVISED AND FORMULATED FOR JUST SUCH AN INSTANCE OF THE RECEIPT OF MONEYS 'FOR THE USE OF THE UNITED STATES' AS THE ONE UNDER CONSIDERATION.

"I AM OF THE OPINION THAT THE MONEYS IN QUESTION ARE PUBLIC MONEYS, REQUIRED BY LAW TO BE DEPOSITED IN THE TREASURY OF THE UNITED STATES, AND ARE NOT AVAILABLE FOR USE BY EXECUTIVE OFFICERS UNTIL APPROPRIATED FOR THAT PURPOSE BY CONGRESS."

SIMILAR CONCLUSIONS WERE REACHED IN DECISIONS OF FEBRUARY 21, 1931, 10 COMP.GEN. 382, TO THE SECRETARY OF THE NAVY AND OF JANUARY 25, 1932, 11 COMP.GEN. 281, TO THE SECRETARY OF WAR, BOTH OF WHICH REQUIRED THAT MONEYS COLLECTED BY DISBURSING OFFICERS BE DEPOSITED AND COVERED INTO THE TREASURY OF THE UNITED STATES, PURSUANT TO SECTIONS 3617 THROUGH 3621, REVISED STATUTES.

SUBSEQUENT TO THE DATE OF THE CITED DECISION TO THE SECRETARY OF WAR, THE FOLLOWING PROVISION, AS SET FORTH IN 31 U.S.C. 493A, WAS ENACTED IN THE MILITARY APPROPRIATION ACT, 1938, 50 STAT. 446, AND HAS APPEARED IN EACH ANNUAL APPROPRIATION ACT SINCE THAT TIME, INCLUDING THE MILITARY APPROPRIATION ACT, 1942, 55 STAT. 369.

"*** WITHOUT DEPOSIT TO THE CREDIT OF THE TREASURY OF THE UNITED STATES AND WITHDRAWAL ON MONEY REQUISITIONS, RECEIPTS OF PUBLIC MONEYS FROM SALES OR OTHER SOURCES BY OFFICERS OF THE ARMY ON DISBURSING DUTY AND CHARGED IN THEIR OFFICIAL ACCOUNTS, EXCEPT RECEIPTS TO BE CREDITED TO RIVER AND HARBOR AND FLOOD-CONTROL APPROPRIATIONS AND RETIREMENT DEDUCTIONS, MAY USED BY THEM AS REQUIRED FOR CURRENT EXPENDITURES, ALL NECESSARY BOOKKEEPING ADJUSTMENTS OF APPROPRIATIONS, FUNDS, AND ACCOUNTS TO BE MADE IN THE SETTLEMENT OF THEIR DISBURSING ACCOUNTS."

SUBSTANTIALLY SIMILAR LEGISLATION WITH REFERENCE TO NAVY AND MARINE CORPS DISBURSING OFFICERS APPEARS IN 31 U.S.C. 495A, HAVING BEEN ENACTED IN THE NAVAL APPROPRIATION ACT, 1933, AND REENACTED THEREAFTER IN THE SUBSEQUENT ANNUAL APPROPRIATION ACTS FOR THAT DEPARTMENT.

INSOFAR AS THE PROPOSED BILL IS AIMED AT MAKING FUNDS COLLECTED BY AMERICAN ARMED FORCES IN OCCUPIED TERRITORY OR TERRITORY UNDER MARTIAL LAW IMMEDIATELY AVAILABLE FOR DISBURSEMENT BY THE COMMANDING OFFICER OF THE FORCE, IT WOULD APPEAR THAT THIS COULD BE ACCOMPLISHED WITHOUT LEGISLATION UNDER THE CITED PROVISIONS OF LAW, 31 U.S.C. 493A, 495A, SUBJECT TO ANY LATER NECESSARY ADJUSTMENT IN APPROPRIATIONS, FUNDS, OR ACCOUNTS. AS TO THE DISPOSITION OF THOSE FUNDS WHICH MAY BE COLLECTED AS TAXES, FINES, ASSESSMENTS, ETC., THE PROCEEDS OF WHICH NORMALLY WOULD BE APPLIED TO CONTINUE THE ORDINARY FUNCTIONS OF CIVIL GOVERNMENT OF THE TERRITORY OCCUPIED OR UNDER MARTIAL LAW, IT MAY BE POINTED OUT THAT THERE NEED NOT BE COMMINGLING OF SUCH FUNDS WITH THOSE OF THE UNITED STATES, NOR THE DELAY IN APPROPRIATING FUNDS WHICH THE SECRETARY OF WAR APPEARS TO ANTICIPATE, IF SUCH MONEYS BE REGARDED AS TRUST FUNDS - WHICH WOULD APPEAR PROPER UNDER THE CIRCUMSTANCES-- AND BE SO HANDLED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 20 OF THE PERMANENT APPROPRIATION REPEAL ACT, 48 STAT. 1233, 31 U.S.C. 725A.

ACCORDINGLY, UNLESS IT BE THE PURPOSE OF THE PROPOSED LEGISLATION TO COLLECT AND DISBURSE THE MONEYS COVERED THEREBY, WITHOUT SUCH ACCOUNTING THEREFOR AND WITHOUT THE EXAMINATION AND AUDIT WHICH WOULD OTHERWISE BE MADE BY THIS OFFICE-- A PURPOSE WHICH IS EVIDENT IN THE QUOTED DECISION OF THE ASSISTANT COMPTROLLER IN FRANCE, TO WHICH THE SECRETARY OF WAR REFERS- - I SEE NO NECESSITY FOR THE PROPOSED LEGISLATION IN ORDER TO ACCOMPLISH THE OBJECTS SOUGHT; AND I DO NOT RECOMMEND ITS FAVORABLE CONSIDERATION.

I BELIEVE THAT A PROPER ACCOUNTING FOR AND AUDIT OF FUNDS SO COLLECTED AND DISBURSED ARE NO LESS DESIRABLE IN THIS THAN IN OTHER CASES INVOLVING FUNDS COMING INTO POSSESSION OF OFFICERS OF THE GOVERNMENT BY REASON OF THEIR OFFICIAL POSITIONS. THE PROPOSED BILL DOES NOT PURPORT TO WAIVE THE USUAL REQUIREMENTS OF ACCOUNTING FOR SUCH FUNDS AND OF EXAMINATION AND AUDIT BY THIS OFFICE; BUT IF IT IS TO BE RECOMMENDED FOR ENACTMENT, THE FOLLOWING AMENDMENT IS SUGGESTED, TO BE INSERTED BEFORE THE PERIOD CONCLUDING THE FIRST SENTENCE OF THE DRAFT, IN ORDER THAT THERE MAY BE NO MISUNDERSTANDING IN THAT RESPECT:

"PROVIDED, THAT ACCOUNTS FOR THE FUNDS SO COLLECTED AND DISBURSED SHALL BE RENDERED TO AND SETTLED AND ADJUSTED BY THE GENERAL ACCOUNTING OFFICE IN ACCORDANCE WITH EXISTING LAW."

THE ENCLOSURES TRANSMITTED WITH YOUR LETTER ARE RETURNED HEREWITH.

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