A-13436, DECEMBER 12, 1927, 7 COMP. GEN. 374

A-13436, DECEMBER 12, 1927, 7 COMP. GEN. 374

DISBURSING OFFICERS - NAVY - RELIEF UNDER ACT OF JULY 11, 1919 PAYMENTS MADE BY A DISBURSING OFFICER OF THE NAVY TO TEA INSPECTORS FUNCTIONING AS A BOARD AND HIRED BY CONTRACT, HAVING BEEN DETERMINED BY THE COMPTROLLER GENERAL OF THE UNITED STATES TO HAVE BEEN ILLEGAL, THE DISALLOWANCE OF CREDIT THEREFOR IN THE DISBURSING OFFICER'S ACCOUNTS MAY NOT BE RELIEVED UPON A CERTIFICATE BY THE SECRETARY OF THE NAVY UNDER THE PROVISIONS OF THE ACT OF JULY 11, 1919, 41 STAT. 132.

COMPTROLLER GENERAL MCCARL TO THE SECRETARY OF THE NAVY, DECEMBER 12, 1927:

THERE HAS BEEN RECEIVED YOUR LETTER OF NOVEMBER 18, 1927, WITH REFERENCE TO THE DEFICIENCY OF $896.48 IN THE ACCOUNTS OF LIEUT. JOHN M. HOLMES, SUPPLY CORPS, UNITED STATES NAVY, AS PER CERTIFICATE OF SETTLEMENT M-23441 -N, DATED OCTOBER 1, 1927, REPORTED TO YOU BY LETTER OF OCTOBER 31, 1927, PURSUANT TO THE ACT OF AUGUST 8, 1888, 25 STAT. 387.

WITH REFERENCE TO THE MATTER YOU STATE:

THE ABOVE AMOUNT REPRESENTS PAYMENTS MADE TO TWO MEN EMPLOYED AT THE NAVY SUPPLY DEPOT AS INSPECTORS OF TEA PURCHASED BY THE NAVY DEPARTMENT UNDER CONTRACT. SUCH EMPLOYMENT WAS IN ACCORDANCE WITH AWARDS WHICH WERE BASED UPON APPROVED REQUISITION. THE APPROPRIATION "PROVISIONS, NAVY," PROVIDED FOR THE PAYMENT OF SERVICES IN CONNECTION WITH THE HANDLING OF PROVISIONS AND ONE OF THE ELEMENTS OF EXPENSE UNDER THIS HEADING IS NECESSARY INSPECTION. INASMUCH AS THE NAVY DEPARTMENT EMPLOYED PERMANENTLY NO TEA EXPERTS, AND IT WAS CONSIDERED AGAINST THE INTEREST OF THE GOVERNMENT TO RELY UPON INSPECTORS UNDER HIRE BY THE CONTRACTOR, THE TWO INSPECTORS ABOVE REFERRED TO WERE EMPLOYED. THE HIRE OF CIVILIAN INSPECTORS FOR VARIOUS PURPOSES HAD NOT BEFORE BEEN QUESTIONED BY THE GENERAL ACCOUNTING OFFICE.

INASMUCH AS THE TWO TEA INSPECTORS, TO WHOM THE PAYMENTS IN QUESTION WERE MADE, WERE HIRED AT THE INSTANCE OF THE BUREAU OF SUPPLIES AND ACCOUNTS, NAVY DEPARTMENT, AND AS SUCH EMPLOYMENT WAS IN ACCORDANCE WITH AWARDS WHICH WERE BASED ON APPROVED REQUISITION, IT IS CONSIDERED THAT LIEUT. JOHN M. HOLMES, SUPPLY CORPS, U.S. NAVY, WAS FREE FROM FAULT AND NEGLIGENCE, WITHIN THE MEANING OF THE ACT OF JULY 11, 1919, IN MAKING THE PAYMENTS DESCRIBED ABOVE. ACCORDINGLY YOU ARE INFORMED THAT THE SECRETARY OF THE NAVY HAS, IN ACCORDANCE WITH THE SAID ACT OF JULY 11, 1919 (41 STAT. 132; U.S. CODE, TITLE 31, SEC. 105), DETERMINED THAT THE LOSS OR DEFICIENCY MENTIONED BELOW OCCURRED WITHOUT FAULT OR NEGLIGENCE ON THE PART OF THE OFFICER CONCERNED AND WHILE SAID OFFICER WAS IN THE LINE OF HIS DUTY:

LIEUT. JOHN M. HOLMES, SUPPLY CORPS, U.S. NAVY, DISBURSING OFFICER, NAVY PURCHASING OFFICE, NEW YORK, N.Y. DISALLOWANCE MADE DECEMBER 15, 1925. AMOUNT $896.48. DISALLOWED IN SETTLEMENT M-23441-N.

THE DEFICIENCY IN QUESTION RESULTED FROM THE ILLEGAL PAYMENTS MADE BY THE DISBURSING OFFICER TO E. M. GILLETT AND J. HARVEY SWENARTON, TEA INSPECTORS, CREDIT FOR WHICH WAS DISALLOWED IN THE SETTLEMENT OF THE DISBURSING OFFICER'S ACCOUNTS, THE DISALLOWANCE BEING SUSTAINED BY DECISION OF THIS OFFICE OF AUGUST 21, 1926, 6 COMP. GEN. 140, UPON REVIEW AT YOUR REQUEST, AND IN WHICH IT WAS HELD (QUOTING FROM SYLLABUS):

A BODY OF THREE INSPECTORS OF TEA WHO EACH AND ALL INSPECT AND PASS UPON THE SAME LOTS OF TEA DELIVERED TO THE NAVY, THE REJECTION OR ACCEPTANCE BEING BASED UPON A MAJORITY VOTE OF THE THREE, CONSTITUTES A "COMMISSION, BOARD, COUNCIL, OR OTHER SIMILAR BODY," WITHIN THE PURVIEW OF SECTION 9 OF THE ACT OF MARCH 4, 1909, 35 STAT. 1027, AND MAY NOT BE PAID FROM APPROPRIATED FUNDS.

THE INSPECTION OF TEA TO BE FURNISHED UNDER A GOVERNMENT CONTRACT IS A PERSONAL SERVICE TO BE PERFORMED BY REGULAR GOVERNMENT EMPLOYEES, AND THE HIRING OF SUCH INSPECTION BY COMMERCIAL INSPECTORS NOT OTHERWISE IN THE GOVERNMENT SERVICE AND AUTHORIZING THEM TO OVERRULE THE DECISION OF A QUALIFIED AND REGULARLY EMPLOYED GOVERNMENT TEA EXPERT IS NOT AUTHORIZED.

THE PROVISION IN THE ACT OF JULY 11, 1919, 41 STAT. 132, UPON WHICH YOUR CERTIFICATE IS BASED, PROVIDES AS FOLLOWS:

THE ACCOUNTING OFFICERS OF THE TREASURY SHALL RELIEVE ANY DISBURSING OFFICER OF THE NAVY CHARGED WITH RESPONSIBILITY ON ACCOUNT OF LOSS OR DEFICIENCY WHILE IN THE LINE OF HIS DUTY, OF GOVERNMENT FUNDS, VOUCHERS,RECORDS, OR PAPERS, IN HIS CHARGE, WHERE SUCH LOSS OR DEFICIENCY OCCURRED WITHOUT FAULT OR NEGLIGENCE ON THE PART OF SAID OFFICER: PROVIDED, THAT THE SECRETARY OF THE NAVY SHALL HAVE DETERMINED THAT THE OFFICER WAS IN THE LINE OF HIS DUTY, AND THE LOSS OR DEFICIENCY OCCURRED WITHOUT FAULT OR NEGLIGENCE ON HIS PART: PROVIDED FURTHER, THAT THE DETERMINATION BY THE SECRETARY OF THE NAVY OF THE AFORESAID QUESTIONS SHALL BE CONCLUSIVE UPON THE ACCOUNTING OFFICERS OF THE TREASURY: PROVIDED FURTHER, THAT ALL CASES OF RELIEF GRANTED UNDER THIS AUTHORITY DURING ANY FISCAL YEAR SHALL BE REPORTED IN DETAIL TO THE CONGRESS BY THE SECRETARY OF THE NAVY.

THIS OFFICE HAS CONSISTENTLY MAINTAINED THE POSITION THAT THE TERM "LOSS OR DEFICIENCY WHILE IN THE LINE OF HIS DUTY, OF GOVERNMENT FUNDS, VOUCHERS, RECORDS, OR PAPERS, IN HIS CHARGE, WHERE SUCH LOSS OR DEFICIENCY OCCURRED WITHOUT FAULT OR NEGLIGENCE ON THE PART OF SAID OFFICER," APPLIED ONLY TO A PHYSICAL LOSS OR DEFICIENCY AND NOT TO ILLEGAL OR UNAUTHORIZED PAYMENTS MADE BY A DISBURSING OFFICER.

IN DECISION OF OCTOBER 12, 1922, 2 COMP. GEN. 277, THERE WAS SUSTAINED THE FORMER ACTION OF THIS OFFICE DENYING CREDIT TO P. J. WILLETT, COMMANDER (S.C.), UNITED STATES NAVY, FOR DISBURSEMENTS IN 1914 AGGREGATING $250, ILLEGALLY PAID TO THIRD PERSONS BY REASON OF ENTRIES OF THE NAME OF A FICTITIOUS PERSON AS A LABORER ON THE PAY ROLLS OF PEARL HARBOR NAVAL STATION, THE SECRETARY OF THE NAVY ON MARCH 31, 1922, HAVING ISSUED HIS CERTIFICATE PURPORTING TO BE UNDER THE PROVISIONS OF THE ACT OF JULY 11, 1919, 41 STAT. 132, THAT THE AMOUNT ERRONEOUSLY PAID WAS A LOSS OR DEFICIENCY WHICH OCCURRED WITHOUT FAULT OR NEGLIGENCE ON THE PART OF COMMANDER WILLETT AND THAT HE WAS IN LINE OF DUTY WHEN THE LOSS OR DEFICIENCY OCCURRED. AS THE BASIS FOR DENYING CREDIT IT WAS SAID:

* * * IN THE DECISION OF WHICH RECONSIDERATION IS REQUESTED IT WAS HELD THAT THE QUOTED PROVISION OF LAW APPLIED ONLY TO CASES OF ACTUAL PHYSICAL LOSS AND AFFORDED NO RELIEF WHATEVER TO DISBURSING OFFICERS OF PHYSICAL LOSS AND AFFORDED NO RELIEF WHATEVER TO DISBURSING OFFICERS OF THE NAVY FROM RESPONSIBILITY FOR UNLAWFUL PAYMENTS.

THE CONTENTION HAS BEEN ADVANCED IN THE REQUEST FOR RECONSIDERATION THAT THE DETERMINATION OF FACTS RELATIVE TO LOSS OR DEFICIENCY OF PUBLIC FUNDS BY DISBURSING OFFICERS OF THE NAVY RESTS SOLELY WITH THE SECRETARY OF THE NAVY, AND THAT THE ACCOUNTING OFFICERS ARE WITHOUT AUTHORITY TO QUESTION SUCH DETERMINATION, BEING SPECIFICALLY DIRECTED TO RELIEVE NAVY DISBURSING OFFICERS OF AMOUNTS SO CERTIFIED.

THE ENACTMENT FURNISHES NO AUTHORITY TO THE SECRETARY OF THE NAVY TO DETERMINE WHEN DISBURSING OFFICERS OF THE NAVY SHALL BE ENTITLED TO CREDIT IN THEIR ACCOUNTS FOR PAYMENTS MADE.

THE PROPER FACTS MUST BE PRESENT AND IT IS THE DUTY OF THIS OFFICE TO EXAMINE EVERY CERTIFICATE OF RELIEF GIVEN UNDER THE ACT TO SEE THAT THE FACTS NECESSARY TO ITS OPERATION ARE PRESENT. IF THE PROPER FACTS APPEAR, NO QUESTION ARISES AS TO THE GIVING OF THE CERTIFICATE. IF THE FACTS SHOW THERE IS NO QUESTION OF "LOSS OR DEFICIENCY" OF FUNDS, VOUCHERS, RECORDS, OR PAPERS, BUT THE QUESTION IS THE LAWFULNESS OF A PAYMENT MADE, THE GIVING OF THE CERTIFICATE IS CONCLUSIVE ON NONE AND CAN NOT BE ACTED UPON BY THIS OFFICE. IN THE PRESENT MATTER THERE WAS NO LOSS OF FUNDS, NO DEFICIENCY IN THE VOUCHERS, RECORDS OR PAPERS. IT WAS SIMPLY AN UNLAWFUL PAYMENT--- SUCH A PAYMENT AS IT IS INHERENTLY THE DUTY OF THE ACCOUNTING OFFICERS TO ACT UPON. A CERTIFICATE OF RELIEF IN SUCH A CASE WOULD OPERATE TO DESTROY ACCOUNTING.

THEREUPON SECRETARY OF THE NAVY DENBY, DISREGARDING THE GENERAL PROVISION IN SECTION 304 OF THE ACT OF JUNE 10, 1921, 42 STAT. 24, 26, THAT "THE BALANCES CERTIFIED BY THE COMPTROLLER GENERAL SHALL BE FINAL AND CONCLUSIVE UPON THE EXECUTIVE BRANCH OF THE GOVERNMENT," SUBMITTED THE QUESTION TO THE ATTORNEY GENERAL. ON OCTOBER 9, 1923, 34 OP.ATTY.GEN. 13, ATTORNEY GENERAL DAUGHERTY RENDERED HIS OPINION THAT THE TERM "LOSS OR DEFICIENCY" INCLUDED ILLEGAL PAYMENTS, SAYING:

I CAN FIND NO JUSTIFICATION FOR CONFINING THE ACT OF 1919 TO CASES OF MERE "PHYSICAL LOSS" OF FUNDS. THE WORDS OF THE STATUTE ARE "LOSS OR DEFICIENCY," AND EFFECT MUST BE GIVEN TO BOTH TERMS. "DEFICIENCY" IS NOT SYNONYMOUS WITH "LOSS" AND IS CERTAINLY OF BROADER IMPORT THAN "PHYSICAL LOSS.' THERE IS NOTHING IN THE GENERAL SCOPE AND PURPOSE OF THE ACT TO LIMIT ITS ORDINARY AND NATURAL MEANING. DE GANAY V. LEDERER, 250 U.S. 376, 380, 381. BESIDES, THE STATUTE IS MANIFESTLY REMEDIAL ONE AND SHOULD RECEIVE A LIBERAL RATHER THAN A STRICT AND NARROW CONSTRUCTION. I AM THEREFORE CLEARLY OF THE OPINION THAT THE STATUTE APPLIED TO A "DEFICIENCY" DUE TO PAYMENTS ERRONEOUSLY MADE, AS IS THE CASE HERE.

THAT THE OPINION OF THE ATTORNEY GENERAL IS NOT SOUND SEEMS OBVIOUS FROM A SURVEY OF THE FIELD INVOLVED. IT IS INCONCEIVABLE THAT CONGRESS COULD HAVE INTENDED BY A LEGISLATIVE PROVISION INSERTED IN A GENERAL APPROPRIATION ACT TO OUST THE ACCOUNTING OFFICERS FROM THEIR LONG- ESTABLISHED AND INDEPENDENT JURISDICTION OF DETERMINING THE VALIDITY OF EXPENDITURES AND THE RESPONSIBILITY FOR ILLEGAL PAYMENTS AND TO PLACE IN THE HANDS OF AN ADMINISTRATIVE OFFICER THE FINAL POWER OF RELIEVING OFFICERS DISBURSING A VAST SUM OF MONEY EACH YEAR UNDER HIS IMMEDIATE SUPERVISION FROM THEIR RESPONSIBILITY FOR ILLEGAL DISBURSEMENTS. THAT AN ADMINISTRATIVE OFFICER SHOULD HAVE SUCH UNLIMITED POWER TO RELIEVE OF RESPONSIBILITY FOR ILLEGAL DISBURSEMENTS IN HIS OWN DEPARTMENT IS A PROPOSITION SO REVOLUTIONARY AND FAR REACHING IN ITS POSSIBILITIES FOR HARM THAT IT CERTAINLY REQUIRES A FOUNDATION MORE SECURE THAN A FORCED CONSTRUCTION OF THE MEANING OF THE TERM "LOSS OR DEFICIENCY OF FUNDS" TO INCLUDE ADMITTEDLY ILLEGAL PAYMENTS.

IF THE CONGRESS HAD INTENDED TO INCLUDE SUCH EXTENSIVE RELIEF FROM ILLEGAL PAYMENTS IN THIS PROVISION OF THE ACT OF JULY 11, 1919, DOUBTLESS LANGUAGE WOULD HAVE BEEN USED MAKING THAT PURPOSE CLEAR, AS WAS DONE BOTH IN THE SAME ACT AND IN SUBSEQUENT LEGISLATION AUTHORIZING RESTRICTED RELIEF FOR ILLEGAL PAYMENTS UNDER DEFINED CIRCUMSTANCES. IN THE SAME ACT, AT 41 STAT. 153, THERE APPEARS THE FOLLOWING PROVISION:

THAT THE ACCOUNTING OFFICERS OF THE TREASURY DEPARTMENT ARE HEREBY AUTHORIZED AND DIRECTED TO ALLOW, IN THE SETTLEMENT OF THE ACCOUNTS OF DISBURSING OFFICERS OF THE NAVY AND MARINE CORPS COVERING THE PERIOD OF THE PRESENT EMERGENCY, SUCH CREDITS FOR PAYMENTS TO OFFICERS AND ENLISTED MEN NOT ORDINARILY ALLOWABLE UNDER THE STATUTES, AS ARE CERTIFIED TO THEM BY THE SECRETARY OF THE NAVY AS HAVING BEEN INCURRED UNDER MILITARY NECESSITY, OR AS HAVING BEEN OCCASIONED BY ACCIDENTAL CIRCUMSTANCES OR CONDITIONS OVER WHICH SUCH DISBURSING OFFICERS HAD NO CONTROL AND FOR WHICH THEY WERE NOT JUSTLY RESPONSIBLE: PROVIDED, THAT THE PERIOD OF THE PRESENT EMERGENCY AS CONTEMPLATED BY THIS PARAGRAPH SHALL BE REGARDED AS BEGINNING ON THE 6TH DAY OF APRIL, 1917, AND AS TERMINATING SIX MONTHS AFTER THE EXPIRATION OF THE QUARTER IN WHICH PEACE IS DECLARED. AND THAT NOTHING HEREIN SHALL BE CONSTRUED TO INCLUDE PAYMENTS UNDER CONTRACTS FOR SUPPLIES OR SERVICES.

HERE, AS ALWAYS, THE CONGRESS HAS CAREFULLY RESTRICTED THE GRANTING OF RELIEF FOR ILLEGAL PAYMENTS. THEY MUST HAVE BEEN MADE DURING THE PERIOD OF THE EMERGENCY, WHICH IS DEFINED, AND THE SECRETARY OF THE NAVY MUST CERTIFY THAT THEY WERE MADE UNDER MILITARY NECESSITY OR WERE OCCASIONED BY ACCIDENTAL CIRCUMSTANCES OR CONDITIONS OVER WHICH THE DISBURSING OFFICER HAD NO CONTROL AND FOR WHICH HE WAS NOT JUSTLY RESPONSIBLE. FURTHER, PAYMENTS UNDER CONTRACTS FOR SUPPLIES AND SERVICES WERE EXCLUDED. THE VERY EXISTENCE OF THIS RESTRICTIVE PROVISION FOR RELIEF ON ACCOUNT OF LOSS OR DEFICIENCY OF FUNDS IS PRACTICALLY CONCLUSIVE THAT THE PROVISION FOR LOSS OR DEFICIENCY OF FUNDS WAS NEVER INTENDED TO INCLUDE ILLEGAL PAYMENTS. EFFECT MUST BE GIVEN TO THE PROVISION FOR ILLEGAL PAYMENTS AND IT CAN NOT BE ASSUMED THAT THE CONGRESS WOULD HAVE INCLUDED SUCH PROVISION FOR RESTRICTED RELIEF IF IN THE SAME ACT THEY HAD INCLUDED A GENERAL PROVISION INTENDED TO GIVE THE SECRETARY UNRESTRICTED POWER OF RELIEF, REGARDLESS OF TIME OR CLASS OF PAYMENT, BY HIS CERTIFICATE THAT THEY WERE MADE WITHOUT FAULT OR NEGLIGENCE ON THE PART OF THE DISBURSING OFFICER.

NOR IS ANY SUPPORT FOUND FOR THE VIEW OF THE ATTORNEY GENERAL IN THE CIRCUMSTANCES UNDER WHICH THE PROVISION FOR RELIEF ON ACCOUNT OF LOSS OR DEFICIENCY OF FUNDS, VOUCHERS, ETC., WAS INCLUDED IN THE ACT OF JULY 11, 1919. THE NAVY HAD BEEN THROUGH A PERIOD OF HOSTILITIES, SHIPS HAD BEEN SUNK, FUNDS AND RECORDS HAD BEEN LOST OR DESTROYED. THIS MEASURE WAS URGED AS DESIRABLE IN VIEW OF SUCH CIRCUMSTANCES TO SAVE THE OFFICERS EITHER THE NECESSITY OF SECURING INDIVIDUAL RELIEF BY SPECIAL LEGISLATION OR THE TROUBLE AND EXPENSE OF SECURING RELIEF FROM ACCOUNTABILITY FOR SUCH FUNDS AND RECORDS THROUGH THE COURT OF CLAIMS UNDER EXISTING LEGISLATION. THIS IS MADE EVIDENT FROM THE REPORT OF THE HEARINGS ON JUNE 5, 1919, BEFORE THE COMMITTEE ON NAVAL AFFAIRS OF THE HOUSE OF REPRESENTATIVES ON ESTIMATES SUBMITTED BY THE SECRETARY OF THE NAVY FOR THE FISCAL YEAR 1920. SEE PAGES 411 AND 412 OF SUCH REPORT WHERE THE FOLLOWING DISCUSSION TOOK PLACE RELATIVE TO THE PURPOSE OF THE PROVISION FOR RELIEF HERE IN QUESTION: MR. KELLEY. HOW ABOUT THIS PROVISO WITH REFERENCE TO ACCOUNTING OFFICERS?

ADMIRAL MCGOWAN. THAT IS AT THE BOTTOM OF PAGE 5.

MR. KELLEY. IS THAT A DESIRABLE PROVISION?

ADMIRAL MCGOWAN. YES, SIR; IT IS VERY DESIRABLE. IT PUTS IT UP TO THE NAVY DEPARTMENT. THIS IS A GENERAL PROVISION.

MR. KELLEY. HOW MANY CASES ARE THERE OF THIS KIND INTENDED TO RELIEVE? ADMIRAL MCGOWAN. AT THE MOMENT, I THINK, FIVE.

MR. REED. FIVE CASES PENDING, AND THERE HAVE BEEN SEVERAL OTHER SHIPS THAT HAVE GONE DOWN WITH FUNDS ON BOARD, BUT THE AMOUNTS HAVE NOT BEEN CERTIFIED BY THE ACCOUNTING OFFICER, AND THOSE OFFICERS WILL BE ENTITLED TO RELIEF, ALTHOUGH UNDER PRESENT LEGISLATION THEY HAVE TO GET IT THROUGH A PRIVATE BILL OR A NAVY BILL, OR GO TO THE COURT OF CLAIMS AND HIRE AN ATTORNEY AND SPEND SEVERAL HUNDRED DOLLARS.

ADMIRAL MCGOWAN. THIS PROVISION WAS APPROVED AS COVERING A NUMBER OF MERITORIOUS CASES ON WHICH FAVORABLE ACTION WAS RECOMMENDED BY THE SECRETARY OF THE NAVY.

MR. KELLEY. IF THE SECRETARY OF THE NAVY SHOULD NOT APPROVE THIS SECTION, THERE WOULD BE A CERTAIN NUMBER OF SPECIAL CASES THAT OUGHT TO BE TAKEN CARE OF?

ADMIRAL MCGOWAN. THE SECRETARY HAS APPROVED IT.

MR. KELLEY. MY IMPRESSION WAS THAT HE DID NOT THINK THIS WAS GOOD LEGISLATION.

MR. REED. THE SECRETARY RECOMMENDED IT TO THE NAVAL COMMITTEE LAST JUNE.

THE CHAIRMAN. I WAS SURE THE HOUSE ACCEPTED THE PROVISION IN THE BILL AS REPORTED FROM THIS COMMITTEE PROVIDING FOR THE SETTLEMENT OF DAMAGES, BUT IT SEEMS TO BE A SENATE AMENDMENT.

ADMIRAL MCGOWAN. YES, SIR. MY RECOLLECTION WAS THAT THE SECRETARY SENT A LETTER RECOMMENDING IT.

MR. REED. I THINK I CAN STRAIGHTEN THAT OUT. THE ACT OF JULY 1, 1918, CONTAINED A PROVISION AUTHORIZING THE SECRETARY OF THE NAVY TO SETTLE CLAIMS ABROAD IN AMOUNTS NOT EXCEEDING $1,000. THIS IS INTENDED TO COVER CASES IN THE UNITED STATES OF LOSSES OF PROPERTY.

THE CHAIRMAN. WE REPORTED THIS PROVISION AND ENDEAVORED TO GET IT THROUGH THE HOUSE, AND I THOUGHT IT REMAINED IN THE BILL, BUT I AM SURPRISED TO FIND THAT IT COMES AS A SENATE AMENDMENT.

MR. REED. THIS AMENDMENT WAS PROPOSED IN THE SENATE BY MR. CALDER.

ADMIRAL MCGOWAN. YES, I WAS THERE WHEN THE SENATOR BROUGHT THIS IN.

THE CHAIRMAN. DO YOU KNOW WHETHER THE SECRETARY OF THE NAVY APPROVED THIS PROVISION?

ADMIRAL MCGOWAN. I DO NOT, SIR.

THE CHAIRMAN. HAVE YOU ANYTHING FURTHER TO SAY ABOUT THIS AMENDMENT?

ADMIRAL MCGOWAN. YOU MEAN THE CALDER AMENDMENT?

THE CHAIRMAN. YES, SIR; THAT THE ACCOUNTING OFFICE SHALL RELIEVE ANY OFFICER, ETC.

ADMIRAL MCGOWAN. YES, SIR; I AM STRONGLY IN FAVOR OF IT BECAUSE NOTHING SUGGESTED TO THE CONGRESS WOULD ORDINARILY BE IN A BILL WITHOUT THE BACKING OF THE NAVY DEPARTMENT. IT SAVES CONGRESS THE TROUBLE OF HAVING TO LEGISLATE ON EACH INDIVIDUAL CLAIM. THEY ARE COMING UP CONSTANTLY.

THE CHAIRMAN. THEY GO TO THE CLAIMS COMMITTEE?

ADMIRAL MCGOWAN. USUALLY TO THE NAVAL COMMITTEE. THEY GO IN THE APPROPRIATION BILL, AS A RULE. IF THEY DO NOT GET THROUGH HERE, THEY FIND THEIR WAY INTO THE SENATE.

MR. KELLEY. I WOULD LIKE TO CALL YOUR ATTENTION TO THESE TWO CASES OF JOHN R. MARTIN AND ARTHUR HUNTINGTON IN CASE THEY SHOULD BE DROPPED OUT OF THE BILL. ARE THOSE TWO MERITORIOUS ASES?

ADMIRAL MCGOWAN. ABSOLUTELY MERITORIOUS. BOTH OF THOSE MEN WERE SIMPLY ROBBED.

MR. KELLEY. BY A SUBORDINATE OFFICER?

ADMIRAL MCGOWAN. YES, SIR.

MR. KELLEY. WITHOUT THEIR FAULT?

ADMIRAL MCGOWAN. WITHOUT ANY CONTRIBUTARY FAULT WHATEVER.

NOTHING IS APPARENT HERE OF AN INTENT TO RELIEVE OFFICERS FROM RESPONSIBILITY FOR ILLEGAL PAYMENTS. THE REPRESENTATIVES OF THE NAVY DEPARTMENT CITE CASES OF "SHIPS THAT HAVE GONE DOWN WITH FUNDS ON BOARD" AND OF MEN WHO "WERE SIMPLY ROBBED" BY SUBORDINATE OFFICERS, MERITORIOUS CASES FOR WHICH THERE WOULD BE RELIEF IF THE OFFICER WOULD "GO TO THE COURT OF CLAIMS AND HIRE AN ATTORNEY AND SPEND SEVERAL HUNDRED DOLLARS.' THUS IT APPEARS THAT THE CLASS OF CASES INTENDED FOR RELIEF WERE THOSE GENERALLY COMING WITHIN THE PROVISIONS OF EXISTING LAW ALLOWING RELIEF BY THE COURT OF CLAIMS. SUCH RELIEF WAS PROVIDED FOR IN THE ACT OF MAY 9, 1866, 14 STAT. 44, NOW SECTIONS 145 AND 147 OF THE JUDICIAL CODE, 36 STAT. 1137, AS FOLLOWS:

SEC. 145. THE COURT OF CLAIMS SHALL HAVE JURISDICTION TO HEAR AND DETERMINE THE FOLLOWING MATTERS:

THIRD. THE CLAIM OF ANY PAYMASTER, QUARTERMASTER, COMMISSARY OF SUBSISTENCE, OR OTHER DISBURSING OFFICER OF THE UNITED STATES, OR OF HIS ADMINISTRATORS OR EXECUTORS, FOR RELIEF FROM RESPONSIBILITY ON ACCOUNT OF LOSS BY CAPTURE OR OTHERWISE, WHILE IN THE LINE OF HIS DUTY, OF GOVERNMENT FUNDS, VOUCHERS, RECORDS, OR PAPERS IN HIS CHARGE, AND FOR WHICH SUCH OFFICER WAS AND IS HELD RESPONSIBLE.

SEC. 147. WHENEVER THE COURT OF CLAIMS ASCERTAINS THE FACTS OF ANY LOSS BY ANY PAYMASTER, QUARTERMASTER, COMMISSARY OF SUBSISTENCE, OR OTHER DISBURSING OFFICER, IN THE CASES HEREINBEFORE PROVIDED, TO HAVE BEEN WITHOUT FAULT OR NEGLIGENCE ON THE PART OF SUCH OFFICER, IT SHALL MAKE A DECREE SETTING FORTH THE AMOUNT THEREOF, AND UPON SUCH DECREE THE PROPER ACCOUNTING OFFICERS OF THE TREASURY SHALL ALLOW TO SUCH OFFICER THE AMOUNT SO DECREED AS A CREDIT IN THE SETTLEMENT OF HIS ACCOUNTS.

WHILE THE COURT OF CLAIMS HAS GRANTED RELIEF UNDER THIS AUTHORITY IN A LARGE NUMBER OF CASES, NO RECORD IS FOUND OF RELIEF FOR AN ILLEGAL PAYMENT. THAT SUCH RELIEF COULD NOT BE GRANTED SEEMS CLEAR FROM THE STATEMENT BY THE COURT IN MALONE V. UNITED STATES, 5 CT.CLS. 486, THAT A DISBURSING OFFICER'S ERROR OR MISTAKE, OR OMISSION, OR FORBEARANCE TO DISCHARGE ALL LAWFUL DUTIES IMPOSED BY VIRTUE OF HIS OFFICE WILL NOT EXCUSE HIM. IN HALL V. UNITED STATES, 9 CT.CLS. 270, THE COURT SAID:

* * * THE CONCLUSION, THEN, IS THAT THOSE FUNDS WERE NOT IN HIS POSSESSION OR CHARGE; AND IF NOT, THEN HE DID NOT LOSE THEM BY CAPTURE OR OTHERWISE; IT WAS SIMPLY A CASE OF MORE BEING DRAWN FROM THE DEPOSITARY, THROUGH FORGED CHECKS AND VOUCHERS, THAN SHOULD HAVE BEEN, RESULTING IN THE CLAIMANT'S BEING CHARGED WITH THE EXCESS OVER THE AMOUNT JUSTLY PAYABLE. THIS WAS AN EVENTUAL LOSS TO HIM IN THE SETTLEMENT OF HIS ACCOUNTS, BUT NOT SUCH A LOSS AS THE GOVERNMENT, BY THE ACT IN QUESTION, AUTHORIZES THIS COURT TO RELIEVE HIM FROM.

THIS CONCLUSION IS AIDED BY THE WORDS OF THE ACT, COUPLING "FUNDS" WITH "VOUCHERS, RECORDS, AND PAPERS," WHICH LATTER WOULD NECESSARILY BE IN HIS POSSESSION. THE KIND OF LOSS CONTEMPLATED BY THE ACT WAS DOUBTLESS THE SAME AS TO ALL THOSE ENUMERATED ARTICLES. EACH MIGHT BE LOST BY CAPTURE, BY ROBBERY OR THEFT, BY FIRE OR FLOOD, OR BY UNAVOIDABLE ACCIDENT, AND IT SEEMS TO US THAT IT WAS AGAINST SUCH KINDS OF LOSS OF SPECIFIC THINGS, FOR WHICH HE COULD HAVE NO OTHER REMEDY, THAT THE ACT WAS INTENDED TO AFFORD RELIEF, NOT AGAINST LOSSES SUFFERED BY THE OFFICER THROUGH FORGERIES COMMITTED BY HIS EMPLOYEES OR OTHERS, FOR WHICH HE WOULD IN LAW BE ENTITLED TO RECOURSE AGAINST BOTH THE FORGER AND THE DEPOSITARY WHO PAID THE FORGED CHECKS.

IT MUST BE TAKEN THAT THE COURT'S INTERPRETATION OF THE THEN EXISTING LAW WAS IN THE MINDS OF THE CONGRESS WHEN ENACTING SIMILAR LEGISLATION URGED BY THE NAVY DEPARTMENT, IN VIEW OF WAR-TIME LOSSES, TO SAVE THEIR DISBURSING OFFICERS THE TROUBLE AND EXPENSE INCIDENT TO TAKING ADVANTAGE OF RELIEF AVAILABLE IN THE COURT OF CLAIMS.

FURTHERMORE, IT MAY WELL BE ARGUED THAT THE AUTHORITY GIVEN THE SECRETARY OF THE NAVY IN THE ACT OF JULY 11, 1919, BOTH AS TO RELIEF FROM LOSSES, 41 STAT. 132, AND RELIEF FROM CERTAIN ILLEGAL PAYMENTS, 41 STAT. 153, WAS REPEALED BY IMPLICATION BY THE PROVISION OF THE ACT OF JUNE 10, 1921, 42 STAT. 24, 26, VESTING AND IMPOSING "ALL POWERS AND DUTIES NOW CONFERRED OR IMPOSED UPON THE COMPTROLLER OF THE TREASURY OR THE SIX AUDITORS OF THE TREASURY DEPARTMENT" UPON THE GENERAL ACCOUNTING OFFICE TO "BE EXERCISED WITHOUT DIRECTION FROM ANY OTHER OFFICER," AND PROVIDING THAT ,THE BALANCES CERTIFIED BY THE COMPTROLLER GENERAL SHALL BE FINAL AND CONCLUSIVE UPON THE EXECUTIVE BRANCH OF THE GOVERNMENT.' ANY FORMER POWER IN THE SECRETARY OF THE NAVY TO DIRECT RELIEF OF A DISBURSING OFFICER SEEMS INCONSISTENT WITH THE POWERS CONFERRED ON THIS OFFICE BY THE ACT OF JUNE 10, 1921, AND TO THE EXTENT THAT THEY ARE INCONSISTENT THEY WERE REPEALED BY SUCH ENACTMENT. THE VIEW THAT SUCH FORMER POWERS WERE CONSIDERED BY THE CONGRESS AS REPEALED IS STRENGTHENED BY THE PASSAGE OF THE ACT OF APRIL 21, 1922, 42 STAT. 497, AUTHORIZING THE COMPTROLLER GENERAL TO ALLOW CREDIT TO AND RELIEVE DISBURSING OFFICERS OF THE WAR AND NAVY DEPARTMENTS, UNDER CONDITIONS SIMILAR TO THOSE PRESCRIBED IN THE TWO PROVISIONS OF THE ACT OF JULY 11, 1919, FOR LOSS OF FUNDS, RECORDS, ETC., AND FOR ILLEGAL PAYMENTS. IT IS DIFFICULT TO PERCEIVE WHY THE CONGRESS WOULD HAVE INCLUDED THE NAVY DISBURSING OFFICERS IN THE ACT OF APRIL 21, 1922, IF THE SECRETARY OF THE NAVY STILL HAD THE POWERS CONFERRED BY THE ACT OF JULY 11, 1919. IT MAY BE NOTED HERE THAT IN THE ACT OF APRIL 21, 1922, THE CONGRESS AGAIN SET FORTH CAREFULLY THE CONDITIONS AND THE TIME LIMITS IN AUTHORIZING RELIEF FROM RESPONSIBILITY FOR ILLEGAL PAYMENTS, NOT LEAVING THE MATTER TO A CONSTRUCTION OF "LOSS OR DEFICIENCY.' AND AGAIN IN THE ACT OF MAY 26, 1926, 44 STAT. 654, THE CONGRESS SPECIFICALLY SET FORTH THE TERMS FOR RELIEF TO BE GRANTED BY THE COMPTROLLER GENERAL FROM RESPONSIBILITY FOR ILLEGAL PAYMENTS MADE BY DISBURSING OFFICERS OF THE NAVY AS WELL AS THE ARMY ON ACCOUNT OF COMMUTATION OF QUARTERS, HEAT, AND LIGHT UNDER THE ACT OF APRIL 16, 1918, 40 STAT. 530, AND FOR RENTAL AND SUBSISTENCE ALLOWANCES UNDER THE ACT OF JUNE 19, 1922, 42 STAT. 625, APPARENTLY CONSIDERING THAT THE SECRETARY OF THE NAVY HAD NO AUTHORITY TO DIRECT RELIEF UNDER THE ACT OF JULY 11, 1919.

IN VIEW OF THE FOREGOING, THIS OFFICE MUST ADHERE TO ITS PREVIOUS INTERPRETATION OF THE ACT OF JULY 11, 1919, SUPRA, I.E., THAT SAID ACT HAS NO APPLICATION TO ILLEGAL PAYMENTS MADE BY DISBURSING OFFICERS, AND HAVING DETERMINED BY DECISION OF AUGUST 21, 1926, THAT THE PAYMENTS TO E. M. GILLETT AND J. HARVEY SWENARTON WERE ILLEGAL, I CAN NOT ACCEPT THE CERTIFICATE IN YOUR LETTER OF NOVEMBER 18, 1927, AS REQUIRING OR AUTHORIZING THIS OFFICE TO CREDIT THE DISBURSING OFFICER'S ACCOUNTS WITH THE DISALLOWED PAYMENTS WHICH WERE MADE IN DIRECT CONTRAVENTION OF THE PROVISIONS OF SECTION 9 OF THE ACT OF MARCH 4, 1909, 35 STAT. 1027.