delivered price in such a case by the amount of the transportation tax here involved.

In view of the foregoing, it appears that Supplemental Order No. 31 effected an increase in the maximum prices applicable to the steel covered by the subject contract; and, since the terms of said contract provide that the prices specified therein should be adjusted so as to accord with such different maximum prices as might be established by the Office of Price Administration, it must be held that the Republic Steel Corporation is entitled to be reimbursed for such amount representing the Federal property transportation tax as it was required to pay on the charges for the transportation of the steel here involved.

Accordingly, you are advised that, if it be found that $25.97 is the correct amount of the Federal property transportation tax required to be paid by the Republic Steel Corporation in the instant case, payment of said amount to the corporation is authorized.

(B-34940)

COMPENSATION — AUTOMATIC PROMOTIONS ELIGIBILITY AS AFFECTED BY ADMINISTRATIVE PROMOTIONS TO MEET HIGHER COST OF LIVING OUTSIDE CONTINENTAL U. S.

A two-step within-grade promotion, administratively granted an employee stationed in Hawaii, which was intended for and had the effect of a differential allowance to meet the higher cost of living at the place assigned and which was terminated upon the employee's subsequent transfer to the continental United States is not an "equivalent increase in compensation from any cause" within the meaning of the within-grade salary-advancement statute of August 1, 1941, such as would affect the employee's eligibility to a within-grade salary advancement under the act.

Acting Comptroller General Yates to the Secretary of the Treasury, July 16, 1943: There has been considered your letter of May 28, 1943, requesting decision as to the date upon which an automatic promotion under the act of August 1, 1941, may become effective in the case of an internal revenue agent who:

(1) on June 1, 1940, while stationed at Honolulu, Hawaii, was promoted from CAF-9, $3,200, to CAF-11, $3,800, per annum;

(2) on February 16, 1941, in recognition of the higher cost of living in Hawaii and "in harmony with" the statutory provision for a differential of 25 per cent in salary rates for classified positions outside the United States (5 U. S. C. 681 (c)), was administratively granted a two-step within-grade promotion, to $4,200, to "remain in effect only during the existence of the conditions upon which it is based"; and

(3) on November 1, 1941, was transferred to San Francisco, California, at the same grade and designation, but with salary rate restored to $3,800.

It is stated the promotion was withdrawn, after the transfer from Hawaii in 1941, because it had been given solely to meet the higher living costs there, and because otherwise there would have resulted a promotion at an earlier date and for a greater amount than what would have been authorized by the subsequent act of August 1, 1941. The pertinent decisions are discussed in your submission and the conclusion is suggested that the promotion of February 16, 1941, was a differential which, merely neutralizing the local higher costs of living, was not an actual increase in compensation, and which, in fact, "was but a fraction of that now given government-wide application for service in the territories, insular possessions and Atlantic bases of the United States. Vide Civil Service Departmental Circular No. 394, Supplement No. 2, of January 16, 1943." It is finally suggested that, in any event, the promotion was not an increase because it was subsequently taken back.

Section 7 of the Classification Act, as amended August 1, 1941, 55 Stat. 613, 5 U. S. C. 667, qualifies certain employees for a promotion to the next higher step within their grade, at the beginning of the calendar quarter following the completion of each eighteen or thirty months of service-depending upon the grade-provided that "no equivalent increase in compensation from any cause was received during such period, except increase made pursuant to subsection (f) of this section" (pertaining to recognition of especially meritorious services). The amount of such advancement in the present case would be $200, and the question is whether the two-step within-grade promotion of $400 on February 16, 1941, under the circumstances stated, was an "increase in compensation from any cause," requiring the qualifying period of thirty months to start from that date.

It is settled that an increase effective to start the qualifying period does not become the less so when, at some later date, it is lost and the employee's lower rate is restored. 21 Comp. Gen. 369; id. 478; id. 641; 22 id. 1051; B-25121, April 22, 1942. On the other hand, the automatic promotion act operates upon the employee's basic salary rate (22 Comp. Gen. 589, 596), which is not regarded as affected by temporary adjustments in the amount actually payable, made pursuant to general law or rule, on account of overtime credited (id.) or in recognition of brief assignments to special crafts (21 Comp. Gen. 773).

In the case of service outside the continental United States, various adjustments upon the basic pay scales have been invoked to equalize the excessive cost of living and other special conditions obtaining in certain localities. 22 Comp. Gen. 491. When the adjustment takes the form of a percentage allowance, up to 25 percent of the classification grade, its payment is not regarded as an equivalent increase

under the automatic promotion statute, whether it be granted administratively (22 Comp. Gen. 769), or under special statute (21 Comp. Gen. 478), or under the 1940 extension of the classification act, 54 Stat. 1213 (21 Comp. Gen. 947). The differential is paid, so it is understood, not to grant an increase, but to counteract an effective decrease which the assignment to the particular locality would entail. In that aspect, it is comparable to the cost of living allowance or the pay adjustment for currency exchange losses allowable for foreign service, and to the subsistence allowance regularly granted to meet extra living expenses upon travel assignments away from home. In all such cases, the allowance ceases when the condition it is designed to meet no longer exists, and no increase in actual compensation is intended. However, when, instead of granting any such special benefit, the basic rate itself is changed, by a promotion to a higher grade, an "equivalent increase" necessarily results, whatever its motivation. 21 Comp. Gen. 369.

Upon the understanding that the promotion granted in the present case was intended for and had the effect of, a differential allowance to meet the conditions local to the assignment to Hawaii, it may be so regarded for the purposes of automatic promotion, so that the 30-month period is to be computed, upon the facts stated, from the date of the last increase in the basic rate of compensation, namely June 1, 1940.

(B-35527)

TRANSPORTATION OF HOUSEHOLD EFFECTS OF CIVILIAN EMPLOYEES "PAPER TRANSFER" OF OFFICIAL STATION WHILE IN MILITARY SERVICE; EXTENSIONS OF TIME LIMIT FOR MAKING SHIPMENTS

The act of October 10, 1940, and the Executive regulations issued thereunder, governing the payment of expenses of transportation of household goods of civilian employees transferred from one official station to another for permanent duty, contemplate that the employee report to his new official station, and, therefore, transportation of household goods at Government expense, incident to a paper transfer of official stations made solely for the purpose of the administrative record of an employee who has left his civilian position and entered the active military or naval service, is not authorized while he is in the military service.

Where a paper transfer of an employee's official station was made while he was on furlough from his civilian position to perform active military service, the "effective date of transfer of the employee" within the meaning of section 12 of Executive Order No. 8588, as amended, issued pursuant to the act of October 10, 1940, authorizing shipment of household goods upon transfer of official stations to be made within six months of such effective date, is the date the transfer is consummated by entrance on duty at the new station upon reemployment after military duty in accordance with the applicable statute, and the employee would have six months from the date of his reemployment to effect shipment of his household goods at Government expense. Section 12 of Executive Order No. 8588, as amended, issued pursuant to the uniform transportation-of-household-effects statute of October 10, 1940, authorizing in the case of a civilian employee furloughed for the duration of military

or naval duty an extension of the six-month period within which shipments of household goods upon transfer of official stations are required to begin, relates only to cases where the transfer of official station already has taken effect and the employee has entered upon active military or naval duty within the six months immediately following the effective date of the transfer. Under the uniform transportation-of-household-effects statute of October 10, 1940, and Executive regulations issued pursuant thereto, a civilian employee whose official station was changed by a paper transfer while he was on active military duty may not, upon reemployment in his civilian position and entrance on duty at the new station, be reimbursed for expenses incurred in transporting his household goods to the new station prior to such reemployment and entrance on duty.

Acting Comptroller General Yates to the Federal Security Administrator, July 16, 1943:

I have your letter of July 3, 1943, as follows:

Reference is made to Executive Order No. 8588, "Prescribing Regulations Governing the Payment of Expenses of Transportation of Household Goods and Personal Effects of Certain Civilian Officers and Employees of the United States." This Executive Order was issued under the Act of October 10, 1940, Public No. 839, 76th Congress, entitled "An Act to Provide for uniformity of allowances for the transportation of household goods of civilian officers and employees when transferred from one official station to another for permanent duty."

Section 1 of this order reads as follows: "When any civilian officer or employee of any of the executive departments or establishments of the United States, hereinafter called employee, is transferred from one official station to another for permanent duty and the payment of expenses of transportation of his household goods and other personal effects is authorized by law, such expenses, when specifically authorized or approved by the head of the department or establishment concerned, shall be allowed and paid in accordance with the provisions of these regulations."

There is for consideration the case of Charles T. McCoy whose official station was changed from Wilkes-Barre, Pennsylvania, to Chester, Pennsylvania, on February 17, 1943. This change of station was made in absentia, as Mr. McCoy was inducted into the Army on December 28, 1942, and had accumulated leave to February 11, 1943. Expense of travel, per diem at the rate of $6.00, and transportation of household goods and other personal effects as prescribed by Executive Order No. 8588, as amended, was authorized.

Mr. McCoy was originally transferred from Chester to Wilkes-Barre to fill a military duration position, with reemployment rights to his permanent position in Chester. Upon induction into military service, his station was changed from Wilkes-Barre to Chester, the position which will be held for him. His wife now wishes to move her household furniture to Chester at the expense of the Government where the family home will be maintained during the employee's military service.

In view of the fact that the above-mentioned Executive Order prescribes that the expense of shipment of the household goods incident to the change of official station be paid by the Government, it is requested that we be advised whether the fact that the individual does not report to the new official station before entering military service precludes payment of shipment of household goods to his new official station by his wife while the employee is in military service, provided that requirements of the order have been complied with otherwise.

We would also appreciate your advice on the following two additional questions: 1. May the time limit established by Section 12 of Executive Order 8588 as amended by Executive Order 9122 be extended not to exceed 60 days following the date of termination of the furlough in such cases at the time the change of official station, travel and transportation of household goods is first authorized? 2. If the right of an employee to transportation of household effects at Government expense may be exercised only if the employee actually reports to the new duty station, may the household goods be shipped at the employee's expense and reimbursement claimed by the employee within 60 days after reporting to the new duty station upon expiration of the furlough?

The act of October 10, 1940, 54 Stat. 1105, authorizing the issuance by the President of uniform regulations in connection with expenses

of shipping household effects, etc., upon transfer of an employee's official station, when such expenses are authorized to be paid from Government funds, relates specifically to "transportation of household goods and personal effects of civilian officers and employees of any of the executive departments or establishments of the United States when transferred from one official station to another for permanent duty." [Italics supplied.]

Obviously the statute and the President's regulations issued pursuant thereto, E. O. 8588, November 7, 1940, section 1 of which is quoted in your letter, are applicable only when an employee actually is transferred from one station to another for permanent duty, which situation, of course, contemplates that the employee report to his new official station. Compare 18 Comp. Gen. 408. There is no reasonable basis for applying the law and regulation to authorize the transportation of household goods, incident to a paper transfer of official stations made solely for the purpose of the administrative record of an employee who has left his civilian position and has entered the active military service. Accordingly, on the basis of the facts presented, it must be held that there is no authority to reimburse Mr. McCoy, or his wife, for the cost of transporting his household goods from WilkesBarre to Chester, Pennsylvania.

Section 12 of the regulations, as amended by Executive Order No. 9122, April 6, 1942, made effective as of October 1, 1942, by Executive Order No. 9223, August 15, 1942, provides:

Time limit.-All shipments allowable under these regulations shall begin within six months of the effective date of the transfer of the employee unless an extension is specifically granted by the head of the department or establishment. Such an extension shall be approved by the head of the department or establishment within the six months' period during which shipment would otherwise begin and shall in no case be for a period exceeding two years from the effective date of the transfer, except that, for employees who enter upon active military, naval, or Coast Guard duty at any time prior to the expiration of the period within which transportation of their effects is authorized and who are furloughed for the duration of such duty, the extension may be made effective until a date not more than sixty days following the date of termination of the furlough.

That regulation relates only to periods after the effective date of transfer of official stations, and not to cases where the transportation of household goods takes place prior to the effective date of a transfer of official station. The last part of the regulation relates only to cases where the transfer of an official station already has taken effect and where the employee has entered active military or naval service during the first six months thereafter.

In the case presented the "effective date of the transfer of the employee" within the meaning of the regulation, would be the date that the transfer of Mr. McCoy is consummated by his entrance upon duty at Chester, Pennsylvania, upon his reemployment in a civilian position within 40 days after honorable discharge from the military service