It is hereby determined that the articles allowed by the board of officers were reasonable, useful, necessary, and proper for this officer while engaged in the public service, in line of duty in the field, in quarters, or in both, and that the loss occurred under the circumstances found by the board, and the attached claim is therefore determined and approved as recommended above.

So much of the act of March 4, 1921, 41 Stat., 1436, 1437, as applies to this case reads as follows:

which since the destroyed in the

SEC. 1. That private property belonging to officers, 5th day of April, 1917, has been or shall hereafter be * military service, shall be replaced, or the damage thereto, or its value, recouped to the owner as hereinafter provided, when such * destruction has occurred or shall hereafter occur without fault or negligence on the part of the owner in any of the following circumstances:

Third. When during travel under orders such private property, including the regulating allowance of baggage, transferred by a common carrier, or otherwise transported by the proper agent or agency of the United States Government is lost, damaged, or destroyed; but replacement, recoupment, or commutation in these circumstances, where the property was or shall be transported by a common carrier, shall be limited to the extent of such loss, damage, or destruction over and above the amount recoverable from said carrier.

Captain Harm performed travel under orders, and his right to reimbursement for value of private property destroyed must be in accordance with the third section of the act cited above, which provides that the loss or destruction must be either while being transferred by a common carrier or otherwise transported by the proper agent or agency of the United States Government.

The evidence shows that the property had not been delivered to a common carrier, but turned over to the quartermaster at Fort Sheridan to be marked, weighed, and held subject to future shipping instructions, to be issued by the owner when proper quarters were located at the new station. This condition necessarily required the articles to be placed in the storehouse for protection, and while in that building were destroyed by fire. To transport means to carry or convey from one place or station to another. It is apparent that the destruction of the property did not occur while being otherwise transported by the proper agent or agency of the United States Government within the meaning of the law, but while being held in the storehouse at the post awaiting future shipping directions. The destruction not having occurred under the circumstances for which the act makes provision, there was no authority under the law for reimbursement. If the loss does not fall within the provisions, the findings of the War Department can not be conclusive upon the General Accounting Office.

Upon a review of the matter no differences are found and the Bettlement is sustained.

REFUNDS OF ESTATE TAXES WITH INTEREST.

Overpayments of estate taxes made prior to November 23, 1921, consisting of certain deductions not authorized when the tax was paid but allowable under the act of November 23, 1921, 42 Stat., 279, are refundable under section 1324 (a) of that act, with interest thereon, from the appropriations available for the refund of internal revenue taxes illegally collected. Comptroller General McCarl to the Secretary of the Treasury, April 21, 1923: I have your letter of April 10, 1923, referring to my decision of March 17, 1923, 2 Comp. Gen., 572, relative to refund of estate taxes collected without making proper allowances for deductions as provided for under paragraph 2 of subdivision (a) of section 403 of the revenue act of 1921, act of November 23, 1921, 42 Stat., 279, and, in effect, asking whether the ruling announced in said decision would also apply to refunds made under another provision in said section, page 281, which reads:

In the case of any estate in respect to which the tax has been paid, if necessary to allow the benefit of the deduction under paragraphs (2) and (3) of subdivision (a) or (b) the tax shall be redetermined and any excess of tax paid shall be refunded to the executor.

Under this provision refunds are authorized in proper cases where the tax was paid prior to November 23, 1921, on estates of decedents who have died since September 8, 1916. In such cases the tax was legal and proper at the time it was assessed and collected, as the law in effect prior to November 23, 1921, made no provision for deductions such as are authorized under paragraph 2 of subdivision (a) of section 403, but I think the purpose and effect of the provision authorizing a refund in such cases was to authorize treating the excess tax the same as a tax illegally collected. Accordingly, you are advised that the ruling announced in the decision of March 17, 1923, is applicable to such cases and that the interest authorized to be paid under the provisions of section 1324 (a) of the act of November 23, 1921, 42 Stat., 316, will be allowable on such refunds from six months after the date of filing of any such claim filed on or after November 23, 1921.

VOCATIONAL EDUCATION-FEDERAL AID TO STATES.

Federal funds paid to a State under the vocational education act are held in custody by the State for the specific purposes provided for by the act, and the Federal Government has no further control over the custody, manner of handling, safe-keeping, or expenditure thereof other than the right to supervise the final disbursements thereof and to hold the State responsible for their lawful expenditure.

Should the Federal funds contributed to a State in aid of vocational education be disbursed for other purposes than contemplated by the vocational education act, the Federal Board for Vocational Education upon determining such erroneous disbursement to have been made would be authorized to withhold a similar amount from the next allotment to that State.

Comptroller General McCarl to the Chairman, Federal Board for Vocational Education, April 21, 1923:

I have a letter of the Director of the Federal Board for Vocational Education of April 17, 1923, presumably by your authority, as follows:

I attach copies of two letters one from the director of the State Board for Vocational Education of Kansas and one from the auditor of the State of Kansas. The occasion for writing these letters is a suit brought by the State of Kansas against its State treasurer and its auditor in re the handling of Federal money paid over to the State under the vocational education act of February 23, 1917. In this suit the State contends that Federal money paid over to the State under this act becomes State money as soon as it comes into the State, and further, that being State money, it should be deposited in the State's general revenue account and handled as other State funds are handled. For your convenience I may note that the vocational education act of 1917 in section 13 provides that the State "shall, through the legislative authority thereof, appoint as custodian for said appropriations its State treasurer, who shall receive and provide for the proper custody and disbursements of all money paid to the State from said appropriations." Section 14 of the act provides further that “moneys so received by the custodian for vocational education for any State shall be paid out on the requisition of the State board as reimbursement for expenditures already incurred to such schools as are approved by said State board and are entitled to receive such moneys under the provisions of this act."

In answer to the suit brought by the governor, the Kansas State auditor and the State treasurer, defendants in the suit, contend that Federal money paid over to the State under the vocational educational act is a custodial fund and that it remains Federal money so long as it is in the custody of the State treasurer.

As you know, unexpended balances of Federal money paid over to a State on each year's account are charged up to the State by the United States Treasurer, and figured as part of the succeeding year's allotment to the State. These balances are thus not actually paid back into the United States Treasury, but are counted as Federal money in the hands of the State treasurer, who is under the act custodian of the Federal money. Further, it may be noted that interest on the Federal money in the hands of the State treasurer, where such interest is earned on deposit in banks, is paid annually into the Federal Treasury.

The contentions of the Governor of the State of Kansas and of the State treasurer and auditor raise the following questions, which are hereby submitted for your determination :

1. Does Federal money paid over to a State under the vocational educational act become State money as soon as it comes into the State? Or does it remain Federal money?

2. May such money paid over to the State be deposited as general revenue of the State to be drawn upon by the State in the same manner as is provided for drawing upon any other State money?

3. Assuming that a State has designated its State treasurer to be custodian of the Federal money, has the treasurer, acting as custodian, authority to segregate the Federal money by setting up a custodial fund which is not open to appropriations by the State legislature?

4. Under the vocational education act accepted by a State, is the State treasurer, as custodian of the Federal money, bound to segregate the Federal money in a custodial fund?

5. As custodian, is the State treasurer bound to protect the Federal money in his custody against appropriations by the State legislature, and against all requisitions except such as are made upon him by the State board for vocational education?

6. Has the Federal Government any control over the handling of Federal money paid over to the State?

7. If the State treasurer, acting as custodian of the Federal money, pays out this money under appropriations of the State legislature and not on requisi tions by the State board, can the Federal Government recover this money?

8. If the State treasurer, acting as custodian, does not segregate the Federal money in a custodial fund, can the Federal Government withhold payments to the State under the vocational education act?

Sections 2, 3, and 4 of the act of February 23, 1917, 39 Stat., 930, 931, appropriate, respectively, certain specified sums for the purpose of cooperating with the States in paying salaries of teachers, supervisors, or directors of agricultural subjects and salaries of teachers of trade, home economics, and industrial subjects, and in preparing such teachers, supervisors, and directors. Each of these appropriations is made in the following terms:

That for the purpose of cooperating with the States in (paying salaries, etc.) there is hereby appropriated for the use of the States, subject to the provisions of this act (Naming the several amounts appropriated for each suc

ceeding fiscal year up to and including the fiscal year 1925.)

Each of the sections provides for allotment to the States of the amounts appropriated on the basis of population shown by the last preceding census.

Section 5 of the said act provides that in order to secure the benefits of the appropriations aforesaid any State shall, through the legislative authority thereof, accept the provisions of the act and designate or create a State board having all necessary powers to cooperate as provided in the act with the Federal Board for Vocational Education in the administration of the provisions of the act.

Section 6 of the act created the Federal Board for Vocational Education with power in the said board to cooperate with the State boards in carrying out the provisions of the act.

Section 8 of the act provides that the State boards shall prepare plans showing the proposed use of the appropriations, and submit the same to the Federal Board for Vocational Education for approval, and shall make annual reports to the Federal board on the work done in the State, and the receipt and expenditure of money under the provisions of the act.

Sections 13, 14, 15, 16, and 17 of the act provide:

SEC. 13. That in order to secure the benefits of the appropriations for the salaries of teachers, supervisors, or directors of agricultural subjects, or for the salaries of teachers of trade, home economics, and industrial subjects, or for the training of teachers as herein provided, any State shall, through the legislative authority thereof, appoint as custodian for said appropriations its State treasurer, who shall receive and provide for the proper custody and disbursements of all money paid to the State from said appropriations.

SEQ. 14. That the Federal Board for Vocational Education shall annually ascertain whether the several States are using, or are prepared to use. the money received by them in accordance with the provisions of this Act. On or before the first day of January of each year the Federal Board for Vocational Education shall certify to the Secretary of the Treasury each State which has accepted the provisions of this Act and complied therewith, certifying the mounts which each State is entitled to receive under the provisions of this Act. Upon such certification the Secretary of the Treasury shall pay quarterly to the custodian for vocational education of each State the moneys to which

it is entitled under the provisions of this Act. The moneys so received by the custodian for vocational education for any State shall be paid out on the requisition of the State board as reimbursement for expenditures already incurred to such schools as are approved by said State board and are entitled to receive such moneys under the provisions of this Act.

SEC. 15. That whenever any portion of the fund annually allotted to any State has not been expended for the purpose provided for in this Act, a sum equal to such portion shall be deducted by the Federal board from the next succeeding annual allotment from such fund to such State.

SEC. 16. That the Federal Board for Vocational Education may withhold the allotment of moneys to any State whenever it shall be determined that such moneys are not being expended for the purposes and under the conditions of this Act.

If any allotment is withheld from any State, the State board of such State may appeal to the Congress of the United States, and if the Congress shall not direct such sum to be paid it shall be covered into the Treasury.

SEC. 17. That if any portion of the moneys received by the custodian for vocational education of any State under this Act, for any given purpose named in this Act, shall, by any action or contingency be diminished or lost, it shall be replaced by such State, and until so replaced no subsequent appropriation for such education shall be paid to such State. No portion of any moneys appropriated under this Act for the benefit of the State shall be applied, directly or indirectly, to the purchase, erection, preservation, or repair of any building or buildings or equipment, or for the purchase or rental of lands, or for the support of any religious or privately owned or conducted school or college.

Other sections of the act prescribe certain conditions and limitations under which the money appropriated shall be paid to and expended by the States.

While these moneys were appropriated for the use of the States, to be paid over to custodians appointed by the State and disbursed on requisitions of State boards, subject only to the annual reporting of receipts and expenditures required by section 8 of the act, they are not given outright to the States. The purposes for which they may be expended by the States and the terms and conditions governing such expenditures are prescribed by the Federal statute. The States hold the money in custody for such expenditure only as is provided for by the statute. Under section 15 all unexpended balances of yearly allotments are, in effect, returned to the United States through the procedure of deducting such balances from the next yearly allotment. The provision of section 16 authorizing the withholding of the yearly allotment of any State when the Federal board shall determine that moneys previously allotted and paid are not being expended for the purposes and under the conditions of the act is equivalent to recovery from the State of money not lawfully expended in accordance with the Federal statute. Thus, while the Federal Government does not directly control the custody and expenditure of these funds, it retains supervision over the expenditure and the right to enforce the statutory provisions by the statutory procedure.

The specific questions submitted are answered as follows:

1. Money paid over to the States is held in custody by the States for the specific purposes provided for by the Federal statute. The

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