She had to her credit a total of 14,962 hours of substitute service rendered prior to July 1, 1933, which, if allowable as service toward automatic promotion, would entitle her to the maximum rate of $2,100 per annum. During the fiscal year 1934, when the office was third class, claimant served as clerk, an "excepted" position under schedule A of the Civil Service Law and Regulations with salary rate of $650.80 per annum, and not within the terms of the statute authorizing automatic promotions of certain postal employees. On July 1, 1934, the post office was advanced from third to second class and the claimant was appointed effective on that date to the position of regular postal clerk, first grade, salary $1,700, without credit for her substitute service.

The question presented in the case involves the allowance after restoration to a classified position, for substitute service rendered prior to separation from a classified position, under the terms of the act of February 28, 1925 (43 Stat. 1059), as amended by the act of February 28, 1929 (45 Stat. 1405), in part as follows:

That clerks in first- and second-class post offices and letter car.iers in the City Delivery Service shall be divided into five grades as follows: First grade, salary $1,700; second grade, salary $1,800; third grade, salary $1,900; fourth grade, salary $2,000; fifth grade, salary $2,100 * *

*

That hereafter substitute clerks in first- and second-class post offices and substitute letter carriers in the City Delivery Service when appointed regular clerks or carriers shall have credit for actual time served, including time served as special-delivery messengers, on a basis of one year for each three hundred and six days of eight hours served as substitute or messenger, and shall be appointed to the grade to which such clerk or carrier would have progressed had his original appointment as substitute been to grade 1.

This statutory right to automatic promotion based on length of service contemplates only continuous service in a status subject to the terms of the statute. Upon restoration to a status, subject to the terms of the statute after complete separation from such a status, the employee no longer has a vested right, in determining his salary rate, to count any service rendered prior to such restoration, whether the service was as a substitute or a regular. In the decision of January 4, 1922 (1 Comp. Gen. 340), rendered under an earlier law, it was stated:

* * *It cannot be held that an employee who has been appointed from substitute to regular and who became completely separated from the service and was thereafter reinstated should have credit for substitute service rendered prior to his reinstatement. Under such a ruling substitute service would be credited when a like period of regular service could not be. There would be no reason or justification for such a holding and it cannot be presumed that the law was intended to create such an absurd situation. It must be assumed, therefore, that the law contemplated continuous service; that is to say, service either as substitute or regular not broken by resignation or other voluntary or involuntary separation. While the separation in that case was from all Postal Service, the principle stated is also applicable to any separation from a status subject to the automatic-promotion provision, such as the year's service in this case as a clerk in a third-class post office, during the fiscal year 1934.

Of course, it was within administrative authority to appoint Miss Hill a regular clerk at a rate above the minimum with the approval of the Civil Service Commission (7 Comp. Gen. 295), but having been appointed at the minimum salary rate of $1,700 per annum, she is not now entitled to count any prior service for promotion purposes. Decisions of October 30, 1925, A-10777, and March 15, 1927, A-16524. The claim must be and is denied.

(A-57825)

LOANS TO THE DISTRICT OF COLUMBIA FOR CONSTRUCTION OF MUNICIPAL PROJECTS

Under the act of June 25, 1934 (48 Stat. 1215), authorizing loans from the United States through the Federal Emergency Administration of Public Works to the District of Columbia for construction of certain municipal projects, it is contemplated that separate loans, each, in one lump sum, shall be made for each project authorized by the act, and placed to the credit of the District of Columbia at a reasonably early date and prior to June 16, 1935, date of termination fixed by existing law for the lending agency; that the unobligated part of each of such loans will remain available for the purpose for which loaned until expended or repaid to the United States; that interest on each of such loans will begin to run 3 years from date of loan and continue thereafter as to all unrepaid portions of the particular loan; and that the unused and unrequired balance, if any, upon completion of the work for which borrowed, shall be repaid to the United States as a credit on the particular loan. Comptroller General McCarl to the President, Board of Commissioners, District of Columbia, October 2, 1934:

There has been received your letter of September 21, 1934, as follows:

At the last session, Congress passed an act (Public, No. 465) authorizing the District of Columbia to borrow certain moneys from the Public Works Administration. Negotiations for a loan for the erection of a sewage-disposal plant, at an estimated cost of $8,000,000.00, are in process. It is expected that the periods of construction will be about four years. Question has arisen as to certain provisions of law controlling financial arrangements for such a loan. Inasmuch as these questions must eventually come before your office for decision, it is deemed best, in view of the amount of money involved, to present them for your decision before commitments are made by the District or by the Public Works Administration. These questions are:

(1) Will the power of the Public Works Administration to advance money upon this loan expire next June 16? Pertinent to the decision in this question is section 201 (d) of the National Recovery Act (Public, No. 67, 73d Cong.). If such power does not expire, it will be possible for the Public Works Administrator, under an agreement made before that time, to advance the amounts of the loan from time to time as they may be requested by the District. Under the other view it will be necessary for the Public Works Administrator to advance the entire amount of the contemplated loan to the credit of the District prior to June 16, 1935.

(2) If it be held that the Administrator must advance the entire amount of any loan prior to June 16, 1935, and such amount is advanced and placed to the credit of the District of Columbia in the Treasury of the United States, will the unobligated portion of such credit be covered back into the Treasury, and thus taken from the District, on June 30, 1935? If such unobligated portion would thus be taken from the District, it will be necessary for the District to obligate the entire amount of the cost of any contemplated project before that date. In a project of the size and complexity of the sewage-disposal plant it is not believed that this is possible. Therefore, the whole undertaking is involved in the decision on this and the preceding question.

(3) If it be held that the amounts of the loan can be advanced to the District, either by the Public Works Administrator or by the Treasury, from time to time as the money may be needed, at what time does interest begin to run? The language of the act is that the loan shall be "without interest for the first three years after any such advances and with interest at not exceeding four per centum per annum thereafter on annual balances as of each June 30." This would seem to mean that there shall be no interest for the first three years upon the amount of each separate advance. It has been suggested that the statute means that interest on all advances begins to run at the date of the first advance, and that beginning three years from that date interest must be paid on the outstanding balances of all advances made up to that time. This latter suggestion would appear to ignore the language "any such advances." These words seem to indicate quite clearly that the obligation to pay interest begins separately on each advance.

(4) Are funds allotted in this case by transfer of funds on Treasury books to the credit of the District of Columbia, and is the date of such transfer the effective date three years after which interest begins to run?

(5) In the event the entire sum is allotted to the District of Columbia, and it afterwards develops that the sewage-treatment plant will cost less than $8,000,000.00, what happens to the remainder of the money, and does the District have to pay interest on such remainder never required, withdrawn, or used?

(6) Is the District of Columbia a Federal or a non-Federal agency in its relations to the Public Works Administration?

The National Industrial Recovery Act of June 16, 1933, 48 Stat., 200, et. seq., had provided for the establishment of a Federal Emergency Administration of Public Works for the purposes therein stated and appropriations had been made for carrying out such purposes, which apparently did not include any loans or advances to the District of Columbia, when Public, No. 465, approved June 25, 1934, 48 Stat. 1215, authorized the Commissioners of the District of Columbia to borrow for the District of Columbia from the Federal Emergency Administration of Public Works and authorized said Administration to lend to the said Commissioners a sum not to exceed $10,750,000 for the acquisition, purchase, construction, establishment, and development of a tuberculosis hospital, a sewage disposal plant, an extension of or addition to Gallinger Municipal Hospital, a jail or other enclosure for prisoners at Lorton, Va., or any one or more of said projects as the said Commissioners may determine, with a requirement that the Commissioners submit with their annual estimates to the Senate and House of Representatives a report of their activities and expenditures under said act.

The act of June 25, 1934, further provided, in sections 2 and 3 thereof as follows:

The sum authorized by section 1 hereof, or any part thereof shall, when borrowed, be available to the Commissioners of the District of Columbia for the acquisition by dedication, purchase, or condemnation of the fee simple title to land, or rights or easements in land, for the public uses authorized by this act, and for the preparation of plans, designs, estimates, models, and contracts, for architectural and other necessary professional services, without reference to the Classification Act of 1923, as amended, and section 3709 of the Revised Statutes, for the construction of buildings, including materials and labor, heating, lighting, elevators, plumbing, landscaping, and all other appurtenances, and the purchase and installation of machinery, apparatus, and any and all other expenditures necessary for or incident to the complete construction of the aforesaid buildings and plants. All contracts, agreements, and proceedings in court for condemnation or otherwise, pursuant to this act shall be had and made in accordance with existing provisions of law, except as otherwise herein provided.

That 70 per centum of so much of said sum authorized by section 1 of this act as may be expended as therein provided shall be reimbursed to the Federal Emergency Administration of Public Works from any funds in the Treasury to the credit of the District of Columbia, as follows, to wit: Not less than $1,000,000 on the 30th day of June each year after such sum shall have been advanced to said District until the full amount expended hereunder is reimbursed, without interest for the first three years after any such advances and with interest at not exceeding 4 per centum per year thereafter on annual balances as of each June 30: Provided, That whenever the District of Columbia is under obligation by virtue of the provisions of section 4 of Public Act Numbered 284, Seventyfirst Congress, entitled "An act for the acquisition, establishment, and development of the George Washington Memorial Parkway, and so forth", approved May 29, 1930, to reimburse the United States for sums appropriated by the Congress under that act, the total reimbursement required under both that act and this act shall be not less nor more than $1,300,000 in any one fiscal year: Provided, That the Commissioners may, in their discretion, repay more than said amount: And provided further, That the Commissioners may, in their discretion, allocate any reimbursement as between the sums due by them to the United States under the aforesaid act and the sums due by them to the Federal Emergency Administration of Public Works under this act: Provided, That such sums as may be necessary for the reimbursement herein required of or permitted by the District of Columbia, and for the payment of interest, shall be included in the annual estimates of the Commissioners of the District of Columbia, the first reimbursement to be made on June 30, 1936. Until 70 per centum of so much of said sum authorized by section 1 of this act as may be expended as therein provided shall be reimbursed to the Federal Emergency Administration of Public Works, with interest as provided in this section, 10 cents of the tax levied and collected upon each $100 of the assessed valuation of all real and tangible personal property subject to taxation in the District of Columbia shall be deposited in the Treasury of the United States to the credit of a special account for such reimbursement to the Federal Emergency Administration of Public Works and shall not be available for any other purpose. The Commissioners may, in their discretion, anticipate from said special account the payments required by this act.

The borrowing transactions therein specified are authorized by the act of June 25, 1934, by the District of Columbia from the United States, the District acting through its Commissioners and the United States acting through the Administrator of the Federal Emergency Administration of Public Works. The resulting obligations of the District of Columbia are to the United States.

The act contemplates a specific borrowing for each of the enumerated projects as the Commissioners may determine upon, and that the full amount of each such loan when made shall be withdrawn from the appropriation involved and placed to the credit of the District of Columbia on the books of the United States Treasury for expenditure only for the purpose for which borrowed and in accordance with the laws applicable to expenditures by the District of Columbia.

Had it been the intention in the act of June 25, 1934, that the moneys loaned should be advanced in installments from time to time, apt language doubtless would have been used to indicate such intent, as in section 3 with respect to repayment of the loan or loans in installments of at least $1,000,000 on the 30th day of June of each year. Interest at not exceeding 4 per centum per annum as may be fixed in the loan agreement or agreements begins 3 years after the date of the particular loan and runs thereafter against the unre

7556-35-19

paid portion thereof. The amount loaned and placed to the credit of the District of Columbia will remain available until expended or repaid to the United States unless the Congress should otherwise provide in the meantime.

Answering specifically the questions stated in the submission of September 21, 1934, you are advised: (1) Since under existing law the agency authorized to act for the United States in making the loans here in question shall cease to exist June 16, 1935, it must be held that the act of June 25, 1934, contemplates that the loans therein authorized shall be made and the amounts thereof placed to the credit of the District of Columbia at a reasonably early date and prior to June 16, 1935. (2) The unobligated part of each such loan will remain. available for the purpose for which loaned until expended or repaid to the United States. (3) The full amount of any loan made under the act of June 25, 1934, is required to be placed to the credit of the District of Columbia as of the date of the loan and interest thereon will begin to run 3 years from said date, it being in contemplation, as above stated, that not exceeding $10,750,000 for the several purposes stated in the act of June 25, 1934, may be obtained under separate loans one for each project as may be administratively determined— hence the significance of the phrase "any such advances" as referred to in connection with this question. (4) This question is answered in the affirmative. (5) The unused and unrequired balance, if any, upon completion of the work for which borrowed should be repaid to the United States as a credit on the particular loan, which repayment will, of course, stop the accruing of interest on the amount so repaid. Interest begins 3 years from the date of a loan and continues thereafter as to all unrepaid portions of the particular loan. (6) The District of Columbia under the act of June 25, 1934, is neither a Federal nor a non-Federal agency in its relations to the Public Works Administration as to such loans and is required to function in the expenditure of said funds in accordance with the terms of the act of June 25, 1934, and other statutes applicable to the uses of public funds by said District.

(A-58039)

TRANSPORTATION-RATES-AMBIGUITY

Where a carrier publishes a lower rate under a commodity description which has a generally understood and commercially accepted meaning, but it is apparent that the application of the rate is not limited strictly to articles included within that description and is to be given a liberal interpretation it must be clear, to justify a charge against appropriated moneys at a higher rate, that an article shipped is without the scope of the lower rate.

Decision by Comptroller General McCarl, October 3, 1934:

The Dollar Steamship Lines, Inc., Ltd., has requested review of settlement T903022, dated December 1, 1933, which disallowed the carrier's claim for $111.60 in addition to the amount of $37.20