the rental as provided in the lease should be withheld until the premises shall have been placed in a satisfactory condition by the lessor for occupancy as a post office, or the lease may be cancelled as provided in paragraph 10 thereof.

(B-41449)

COMPENSATION-DOUBLE-RETIRED ARMY OFFICER EMPLOYED BY GOVERNMENT CORPORATION

A retired Army officer's employment by a Government corporation constitutes the holding of an "office" within the meaning of section 2 of the act of July 31, 1894, as amended, prohibiting persons whose annual compensation in one office amounts to $2500 or more from holding another office to which compensation is attached.

The provision in section 3 of the Reconstruction Finance Corporation Act of 1932, that nothing contained in any act shall be construed to prevent the appointment and compensation as an employee of the corporation of any Government employee, is applicable to Government corporations created by the Reconstruction Finance Corporation and operates to remove the restriction in the act of 1894, prohibiting officers whose annual compensation amounts to $2500 or more from holding another office to which compensation is attached, and, therefore, a retired Army officer receiving retirement pay in excess of $3000 per annum may be appointed to a paid position in such a corporation provided he relinquishes his retired pay during such employment, as required by section 212 of the Economy Act of 1932.

Acting Comptroller General Yates to the Administrator, Foreign Economic Administration, April 27, 1944:

I have your letter of April 17, 1944, as follows:

The U. S. Commercial Company is engaged in a program of purchasing nickel matte, metallurgical chrome ore and other strategic minerals in New Caledonia, and has had stationed there a metallurgical engineer who, for personal reasons, must now return to the United States. After extensive recruitment for a replacement, there has thus far been found only one man with the necessary qualifications and who is free to undertake this assignment. He is Colonel Roger Taylor, who was retired from the Army on January 1, 1944, as being past the statutory Army age limit. Colonel Taylor is now drawing retired pay at the rate of approximately $5,000 per annum, and he is willing to undertake this assignment only if he is fully compensated for all additional expenses which might be involved.

It has, therefore, been proposed that the U. S. Commercial Company employ him at an anuual rate of about $6,500, plus transportation to and from his home and New Caledonia, with the understanding that during the period of his incumbency in that position he would, of course, relinquish his retired pay, as permitted by Section 212 of the Economy Act of 1932 (5 U. S. C. 59a). The only question then is whether such an arrangement would be in contravention of the Act of July 31, 1894, (5 U. S. C. 62), prohibiting the holding of two Government offices.

In this connection, I call to your attention the fact that while the U. S. Commercial Company is a wholly-owned Government corporation, it has the power of action of any private corporation, including the power to employ without regard to the Federal laws applicable to the employment or compensation of officers or employees of the United States (See Section 4, Act of January 22, 1932, as amended, 47 Stat., Chap. 8; and Section 5d (3), 54 Stat. 961-962, 55 Stat. 249-250, pursuant to which the Company was organized. It was transferred to this Administration by Executive Order 9380, September 25, 1943). You will note, also, that this Company obtains its funds either from the sale of capital stock to, or loans from, the Reconstruction Finance Corporation, and. of course, from its earnings.

I am informed that a decision of the Court of Claims, Dalton vs. United States, 71 Ct. Cls. 421 (1931), involving the Emergency Fleet Corporation, and two manuscript decisions of your office, A-95379, dated June 7, and July 11, 1938, are to the effect that employment with such a Government corporation does not constitute holding an office within the meaning of the aforesaid law. However, in view of the importance of this question to Colonel Taylor in terms of possible jeopardy to his retired status, and because of its possible recurrence in the light of the growing manpower shortage, I would appreciate receiving your formal ruling.

Also, in the alternative, assuming employment by the U. S. Commercial Company to constitute holding an "office" within the 1894 law, I should like to be advised whether the Company could contract to employ Colonel Taylor without compensation, but to reimburse him for all actual expenses (both living and business, including necessary transportation) incurred incident to such employment, or in lieu of actual expenses, to pay him a fixed per diem allowance of approximately $15.00, as may be administratively determined to reflect such expenses.

The act of July 31, 1894, as amended, 5 U. S. C. 62, to which you refer, reads as follows:

No person who holds an office the salary or annual compensation attached to which amounts to the sum of two thousand five hundred dollars shall be appointed to or hold any other office to which compensation is attached unless specially authorized thereto by law; but this shall not apply to retired officers of the Army, Navy, Marine Corps, or Coast Guard whenever they may be elected to public office or whenever the President shall appoint them to office by and with the advice and consent of the Senate. Retired enlisted men of the Army, Navy, Marine Corps, or Coast Guard retired for any cause, and retired officers of the Army, Navy, Marine Corps, or Coast Guard who have been retired for injuries received in battle or for injuries or incapacity incurred in line of duty shall not, within the meaning of this section, be construed to hold or to have held an office during such retirement.

It is understood the circumstances of Colonel Taylor's retirement and of his contemplated employment with the U. S. Commercial Company are not within the several exceptions which appear in the statute above quoted. Upon the question whether the proposed employment by such a Government corporation would constitute the holding of an "office" within the purpose and scope of the act of 1894, your attention is invited to a decision of this office dated November 5, 1943, B-37559 (holding that certain employees of Government corporations serving in foreign countries are eligible for an adjustment of pay due to loss in exchange provided for "employees of the United States" by a general act of 1934, 5 U. S. C. 118c), where it was said:

In the light of such court decisions as United States v. Strang, 254 U. S. 491; Pierce v. United States, 314 U. S. 306; Posey v. Tennessee Valley Authority (C. C. A. 5, 1937), 93 F. 2d 726; Commonwealth v. Rouse (Va. 1935), 178 S. E. 37 (and compare 1 Comp. Gen. 14; 34 Ops. Atty. Gen. 363, 369), there can not be stated any broad generality that persons employed by the Government's corporations are or are not employees of the United States for all purposes. In the more recent years it is the rule rather than the exception that congressional legislation on personnel matters expressly refers to Government corporation employees, and either includes them within their scope or authorizes administrative action to that end. See, for example, the recent statutes with respect to the civil service, classification, annual leave, sick leave, retirement, overtime pay, citizenship, and the administration of the oath of Federal office. (Acts of November 26, 1940, 54 Stat. 1211, 1212, sections 1 and 3 (a); March 14, 1936, 49 Stat. 1161 and 1162; January 24, 1942, 56 Stat. 13; March 7, 1942, 56 Stat. 143; June 26, 1943, Public Law 90, sections 205-6.) That unanimity of expression manifests a clear con

gressional intent that, for purposes of the same general character, Government corporation employees covered by those acts are to be treated and regarded as Government employees

It is evident that the statutory provisions relating to dual compensation may be fully applicable to the corporation employees because section 212 of the Economy Act of 1932, 47 Stat. 406, 5 U. S. C. 59a (which, as you state, is the basis for the relinquishment of retired pay in the case of a retired officer given civilian employment), in specific terms includes employment under any Government corporation. Accordingly, in the light of the consistent congressional policy in matters of personnel legislation, followed since the use of governmental corporations became common, it cannot be assumed that corresponding provisions of earlier acts as obviously broad in scope as the act of 1894 and enacted at a time when there was no occasion to specify their application to corporate personnel, are not fully applicable to employees of corporations of the Government. Also, the circumstance is noted that, according to the by-laws of the U. S. Commercial Company, its directors, officers, and certain employees subscribe to the oath of office prescribed by section 1757 of the Revised Statutes.

The case of General Dalton to which you refer (1931, 71 C. Cls. 421), might be distinguishable upon the basis of the changing concepts and policies which have developed since its date, as illustrated above; but, in any event, its authority as an indication of the intent of the Congress is made indecisive by the action of the Congress in disapproving that particular judgment and declining to appropriate therefor. Sec. 47 Stat. 28. The decisions of this office cited by you under reference A-95379 pertain to employment under a Production Credit Corporation, where an exception was found to the act of 1894, supra, it appearing that the appointing authorities were, in part, persons in private life, and it being noted, also, that the Congress specifically had excluded employees of the group there considered from certain other personnel legislation.

It is evident that the authority of the U. S. Commercial Company to employ officers, agent, et cetera, without regard to laws applicable to the employment of officers or employees of the United States, as cited in your letter, would not validate the payment of Army retired pay or preserve Colonel Taylor's status as a retired officer if other laws would jeopardize the retired status and pay upon his acceptance of civilian employment. However, section 3 of the Reconstruction Finance Corporation Act, approved January 22, 1932, 47 Stat. 5, 15 U. S. C. 603, provides:

* Nothing contained in this chapter or in any Act shall be construed to prevent the appointment and compensation as an employee of the corporation of any officer or employee of the United States in any board, commission, independent establishment, or executive department thereof

*

The charter of the U. S. Commercial Company, which was organized by the Reconstruction Finance Corporation under the specific authority of section 5d of the above act, as amended, 15 U. S. C. 606b, invests the new corporation with the privileges and immunities conferred upon the parent corporation by the Reconstruction Finance Corporation Act as amended, 7 Fed. Reg. 2426. Such a charter provision recently has been held to apply specifically to the powers of the Reconstruction Finance Corporation with respect to the employment of personnel. B-38773, December 24, 1943. The statutory provision just quoted plainly must have been in contemplation of the dual compensation statutes, and its sweeping generality excludes any inference of an exception with reference to the act of 1894, or with specific reference to retired officers (for whom, it is noted, the same Congress, in the act of June 30, 1932, supra, made provision for limiting their retired pay when called to undertake civilian employment under the United States). Accordingly, so far as concerns Colonel Taylor's right to salary and expenses otherwise accruing from an employment with your company, this office perceives no objection to the proposed arrangement, provided, of course, that no retired pay be drawn concurrently. You will understand, however, that the jurisdiction of this office extends only to the legal questions involved with respect to the payments made and to be made; and that, under the circumstances, there would be no direct jurisdiction in this office either to validate Colonel Taylor's retired status or to place it in jeopardy.

In view of the foregoing, no decision upon your second question appears necessary but, for a ruling on a comparable matter, there may be found of interest the decision of a former Comptroller General reported in 14 Comp. Gen. 355.

(B-40715)

CONTRACTS-COST-PLUS-PAY ROLL CHECK CASHING CHARGES Where a cost-plus-a-fixed-fee contract provides that "Disbursements incident to payment of payrolls" shall be reimbursable and that, if employees are paid by check, the contractor shall furnish free pay roll check cashing facilities for its employees for which it shall be reimbursed, the contractor may be reimbursed for charges imposed by a local bank on its pay roll checking account based upon the number of "pay roll checks" debited against the account after said checks have been honored by the bank upon being presented for payment by the employees in person or by others.

Acting Comptroller General Yates to the Secretary of War, April 29, 1944:

I have your letter of March 9, 1944, as follows:

It has come to the attention of this department that numerous informal (taken by local project General Accounting Office auditors) and formal (Standard Form

No. 1100-Revised) exceptions have been taken on vouchers covering reimbursement to cost-plus-a-fixed-fee contractors for amounts paid to local banks for handling the payroll accounts of the contractors.

Typical of such exceptions is an exception dated December 6, 1943, taken on D. O. Voucher No. 23864 (Bu. Vou. No. S-634) paid in the September 1943 accounts of Colonel George Dobert, Disbursing Officer, covering reimbursement to Sunbeam Electric Manufacturing Company (Contract No. W-ORD-635) of $174.45, paid the Old National Bank, Evansville, Indiana, for payroll checks debited against the contractor's account. The exception reads as follows:

"The activity charge incurred by clearing checks as distinguished from that of cashing checks directly for employees is not a part of the cost of the work to be performed under the contract. Reply dated October 25, 1943, to informal inquiry dated September 20, 1943, has been noted."

Reply to the exception (Form 1100) reads:

"Deduction made on Bureau Voucher No. S-765, D. O. 62171 December 1943 Accounts Colonel George Dobert.

Title III, Article III-A (1) of Contract W-ORD-635 provides:

(S) BYERS GAO"

"1. The contractor shall be reimbursed in the manner hereinafter described for such of its actual expenditures in the performance of the work under this contract, as may be approved or ratified by the Contracting Officer, and as are included in but not limited to the following items:

*

"o. Disbursements incident to payment of payrolls including but not limited to, the cost of disbursing cash, necessary guards, cashiers, and pay masters. If payments to employees are made by check, facilities for cashing checks must be provided without expense to employees, and the Contractor shall be reimbursed therefor." [Italics supplied.]

The charge upon which exception was taken was made by the Old National Bank and is their standard charge for handling checks for companies who do not maintain a sufficient bank balance to justify the bank in handling the employee's payroll checks.

Prior to the middle of July 1943 the contractor was paying its employees by cash. This method of payment involved quite a bit of risk which was partially covered by insurance (at Government expense). It was also necessary to engage the services of Brinks, Inc., (also at Government expense), who delivered the money under guard. It was also necessary to prepare cash payrolls, compute denominations, check, and "stuff" the pay envelopes. These duties were performed by clerical employees whose salaries were reimbursable expenditures under the contract.

On July 15, 1943 the contractor decided that payment by check would be advisable. The Commanding Officer at Evansville Ordnance Plant approved in writing the payment to the bank a fee of three cents (34) for each payroll check debited against the account of the contractor. The fee is in conformity with the charge made by the bank on similar accounts and is consistent with the charge used by other banks in Evansville, Indiana.

It appears to this department that payment by check rather than cash is the most practical and less expensive procedure to be followed. It has been estimated by the Chrysler Corporation (Contract W-ORD-618, also cost-plus-a-fixedfee operators at the Evansville Ordnance Plant whose contract contains identical provisions as the Sunbeam contract, and who is confronted with the same problem with respect to costs of payments by check), that in order to pay by cash from ten to twelve thousand dollars worth of equipment will be required and that the additional expense will be between $45,000 and $50,000 per year, which appears to this office to be unwarranted.

Decisions B-15851 dated June 30, 1941; B-16272 dated August 4, 1941; and B-22816 dated January 19, 1942 [21 Comp. Gen. 675], on the subject of reimbursement to cost-plus-a-fixed-fee contractors for expenditures made incident to activity and check cashing charges imposed by banks, have been reviewed by this department. While it is agreed that the decisions rendered are not directly in point with the instant question, it would appear that, if expenses incident to cashing checks are reimbursable, the expenses incident to issuing checks are