Granting for sake of argument that the Comptroller General was wrong in his interpretation of the law relating to these Philippine Scouts (and I may say parenthetically that I recommended to him that the case be not appealed), his decision was not clearly wrong, for the reason that the very able United States Circuit Court of Appeals thereafter agreed with him and reversed the case. Undoubtedly he had an uphill fight in this case with both the War Department and the Solicitor General of the United States arguing in support of the attorney for Miguel that the Circuit Court of Appeals was wrong in upholding the Comptroller General. Moreover, it must be remembered that in this case-as in so many others coming before the General Accounting Office-there are no prior decisions of the courts on the point and the Comptroller General must approach the questions without the benefit of prior adjudications; without briefs and arguments pro and con; and that he must in fact strike out over unbeaten paths. Considering the fact that he signs a great many decisions each year and that the Office settles literally thousands and thousands of cases each year, but a handful get into the courts and fewer yet are reversed on their merits. Some errors are, of course, made, but a Comptroller General would be more than human if he made no mistakes.

It is true that I was one of counsel in Wright v. Ynchausti (272 U. S. 640), as mentioned by Colonel Wren. I appeared in that case at the cabled request of the late Governor General Wood. Presumably a copy of that cable is on file in the Bureau of Insular Affairs, War Department. I likewise so appeared in Posados v. Manila (274 U. S. 410).

The referred-to McCabe case in the Court of Claims involves the question whether an officer ordered to his home to await retirement is ordered to make a permanent change of station within the requirements of section 12 of the act of May 18, 1920 (41 Stat. 604). Obviously the home of an officer is not a military station, and it was so held by the Supreme Court of the United States in United States v. Phisterer (94 U. S. 219). See the note to that case on page 225. The former Comptroller General elected to follow the Phisterer case, holding that a home was not a military station, and refused to approve payments for the transportation of dependents to the home of the officer when he is ordered there to await retirement-inviting the Secretary of the Navy in a decision in 14 Decisions of the Comptroller General 648, to submit the matter to the Congress for clarification of the act of 1920, if he wanted to pay an officer for transporting his dependents to his home to await retirement.

The attention of this committee has not been called to a number of decisions where the position of the Comptroller General was sustained in the courts with great savings to the United States. One such case is that of Leland v. McCarl (42 Fed. (2d) 346, 347). In that case a taxpayer had overpaid his taxes for one year and had underpaid them for another year. The Bureau of Internal Revenue certified a deficiency for the unpaid taxes and made an allowance for refund of the overpaid taxes. The taxpayer appealed to the Board of Tax Appeals and then insisted that pending the determination in the Board of Tax Appeals the Bureau of Internal Revenue should pay the refund with accrued interest. The Treasury Department sent a claim for refund to the General Accounting Office for preaudit approval with notice of the deficiency assessment in the Board of Tax Appeals. The General Accounting Office refused to preaudit approve the voucher for the

refund and mandamus was brought in the District of Columbia courts against the Comptroller General to compel him to make the payment. I made the argument in the Supreme Court of the District of Columbia and in the Court of Appeals of the District which resulted in a judgment in both courts sustaining the position taken by the Comptroller General that the United States was not required to make the refund until the deficiency had been finally determined. The issue involved was not only a possibility of collection of the principal of the deficiency assessment in event it was sustained but a large amount of interest which would have been payable if the refund was made. The Commissioner of Internal Revenue reported in letter of October 26, 1929, to the Comptroller General in this case that if we lost the case it would result in an additional cost of approximately $8,500,000 per year in additional interest, the Commissioner saying:

Relative to the possible additional interest cost, please be advised that an examination of a representative number of cases settled in the past several years indicates that the average interest cost paid upon refunds was 26 percent, and that the average interest cost upon amounts credited was 11 percent.

During the fiscal year ended June 30, 1928, overpayments of income and profits taxes to the extent of $55,950,574.88 were credited to other such taxes due from the taxpayers for other years. The interest allowed on such credits amounted to approximately $6,000,000, whereas, if these overpayments had been refunded, instead of credited, the interest paid by the Government would have amounted to approximately $14,500,000, an additional cost of approximately $8,500,000 to the Government. Incidentally, the annual saving of $8,500,000 is largely in excess of the entire cost of the General Accounting Office each year.

While such large savings are not effected in some cases, I may invite the attention of the Committee to the case of United States v. Northern Pacific Railroad Co. (30 Fed. (2d) 655), rehearing denied (32 Fed. (2d) 698), which I defended in the district court of Minnesota and in the Circuit Court of Appeals for the Eighth Circuit. The suit there was for $1.60, but if the case had been lost there would have been a continuing charge against the United States which would have aggregated millions of dollars additional over the years for the transportation of troops and property of the United States and the transportation of the mail. That case was one of first impression in the courts and was exceedingly technical, but the circuit court of appeals affirmed the position taken by the General Accounting Office.

In Clay v. United States (8 Ct. Cls. 209, 213), decided in 1872, a diplomatic representative of the United States stationed in Peru from August 1847 to April 1861 was paid in bills of exchange which he sold in the Peruvian market for Peruvian money of less value than the American money. Clay brought suit in the Court of Claims and recovered judgment of $3,273.57 as the difference between the mint or gold value which he alleges he should have received as his salary and the commercial value which he did receive.

The General Accounting Office took the position that any officer stationed abroad who is paid in dollars to the extent of his salary in dollars has been paid all that the United States is legally obligated to pay him and that the United States is not concerned if such payment purchases a lesser number of bags of potatoes, and so forth, in the foreign country. Such a ruling applied, of course, to the thousands of officers and employees stationed in various sections of the world, including the American Expeditionary Forces abroad during the World War. One of these men-Captain Hill, of the Navy-had been stationed in Brazil during the period from May 1917 to August 1,

1920, and he had been paid in checks drawn in dollars for his salary. These checks likewise did not bring as much in Brazilian currency as he would have received had he been paid in gold. That is to say, the American money was depreciated in terms of Brazilian money, there being the same situation as developed in the Clay case. Hill brought suit in the Court of Claims, and the attorney handling the case came to see me, saying that under the Clay case the Court of Claims would decide the case against the United States and that the Government would not only have to pay that case but a vast number of other

cases

I advised him that in my judgment we could win the case, for the reason that money in foreign exchange was a commodity and not money; that we could prove it to the courts; and that the Clay case was wrongly decided. At my suggestion, the said attorney made a study of standard works on foreign exchange and I arranged with the Governor of the Federal Reserve System, who was then Mr. Crissinger, to borrow two employees of the Federal Reserve Board working on the Federal Reserve Bulletin in the field of foreign exchange, to testify for the record. These two men were splendidly educated; they knew foreign exchange thoroughly; and they were placed on the stand with the understanding that after they had been qualified as experts, they would detail for the record the theories of exchange in foreign transactions in simple and nontechnical language. This was done, and in the case reported as Hill v. United States (62 Ct. Cls. 412, 415), the court sustained our position, dismissing the petition. Courts may not always properly decide cases unless they are fully advised and if they are not fully advised they are not to be blamed if they occasionally make a mistake.

It should be said here that in nearly all cases the Department of Justice has shown the very best degree of cooperation in the defense of the United States in the courts in cases coming through the General Accounting Office.

In Noce v. United States (58 Ct. Cls. 688) the Court of Claims disagreed with the General Accounting Office as to the right of an Army officer to count certain service for longevity pay purposes. The case was taken to the Supreme Court of the United States and reversed in 268 United States Reports, 613.

In Rider v. United States (57 Ct. Cls. 323) the Court of Claims disagreed with the General Accounting Office, holding that candidates for commission at third officers' training camps were entitled to $100 a month. We had held that these men were entitled to the pay of their respective grades. The case was taken to the Supreme Court of the United States, and the judgment of the Court of Claims was reversed in United States v. Rider (261 U. S. 363), which resulted in dismissal of a considerable number of similar suits.

A further important and outstanding case is that of United States v. American Sales Corporation (27 Fed. (2d) 389; affirmed in 32 Fed. (2d) 141, 142; certiorari denied, 280 U. S. 574). In that case the War Department had sold a large number of surplus escort wagons at a price of $55.25 each. After the contractor had removed and paid for 1,000 of these wagons, the War Department purported to enter into a supplementary contract whereby the price for the wagons was reduced from $55.25 each to $30.25, not only on the wagons undelivered but on the wagons which had been delivered. The contract price for the wagons was thus attempted to be reduced from $407,192.50 to

$249,538.30, or by the sum of $157,654.20, upon the plea, apparently, that the market which the contractor had anticipated had not materialized. The General Accounting Office discovered this matter in the examination of the contracts and held that the reduction in price was without consideration to the United States, with the result that the contractor was called upon to pay the balance of $157,654.20 notwithstanding the action of the War Department.

Upon refusal of the company to pay the said balance, a transcript was prepared and forwarded by the General Accounting Office with letter of September 9, 1925, to the Solicitor of the Treasury for collection, but no suit had been filed in early 1927, when the contractor brought suit to recover $10,000 because of the failure to deliver the number of wagons originally stipulated in the contract. It is no secret that the attorneys representing the Government expressed lack of confidence in the Government's claim for $157,654.20, but a counterclaim was finally filed in the suit. An attorney of the General Accounting Office was sent to assist in the trial of the case in the district court, which entered judgment for the unpaid balance of the contract price less a credit of $12,100 for wagons not delivered. That judgment was affirmed by the Circuit Court of Appeals for the Fifth Circuit, and certiorari was denied by the Supreme Court of the United States.

There appears no need to unduly burden this committee with a detail of other cases in the courts. It is quite true that the office has not always been sustained in the courts, but neither do the courts sustain in all instances the lower courts. However, and without desiring to make an invidious comparison, the record of the General Accounting Office cases in the courts is as good, if not better than, the record of the Bureau of Internal Revenue or the Bureau of Customs in the volume of litigation and in a proportionate number of instances of being sustained.

There have been not more than 1,500 to 2,000 cases in the courts from the General Accounting Office since 1921. The records maintained are such that the exact number is difficult to determine, but an examination of the volumes of the Court of Claims' decisions since the General Accounting Office was established will show that in a great many instances the General Accounting Office was sustained.

It will be remembered that the Bureau of Internal Revenue and the Bureau of Customs are both Bureaus of the Treasury Department and that both Bureaus are engaged in collecting taxes and customs, respectively, and in settling claims arising in connection therewith. The General Accounting Office has very little jurisdiction over such settlements.

The volume of litigation concerning the settlements made by the Bureau of Customs and by the Bureau of Internal Revenue has been great. During the past fiscal year there was appropriated for the support of the Customs Court, the Court of Customs and Patent Appeals, and the Division of the Department of Justice, located in New York, for defending such suits the sum fo approximately $487,000, and this does not include quarters for these two courts and the Department of Justice engaged in defending such cases. The Attorney General in his annual report for the fiscal year ended June 30, 1936, page 151, had a table of the volume of litigation in the Customs Courts arising from the operation of the Customs Bureau. That table is as follows:

Table showing the progress made in the past year, including the amount of pending litigation, as compared with the previous year

The record in the courts of these decisions and settlements by the Customs Bureau and its subordinates, collectors, and so forth, is given on page 116 of the Annual Report of the Attorney General for the fiscal year 1936 as follows:

It will be remembered that the Treasury Department has a considerable number of comptrollers of customs located at the several larger ports in the country who are supposed to perform such work for the Customs Service as the General Accounting Office performs for the remainder of the Government, and the success of these comptrollers, under the control of and owing their appointment to the Secretary of the Treasury, may be measured by the referred to volume of litigation in connection with customs cases.

The Bureau of Internal Revenue had 88,261 cases appealed to the Board of Tax Appeals during the period from July 16, 1924, to February 28, 1937; that Board had decided or closed 79,759 cases during the said period and there were pending on February 28, 1937, a total of 8,492 cases.

There were many of the cases on appeal from the Board of Tax Appeals to the various United States circuit courts of appeal. I do not have the figures showing what happened to these appeals during the period from July 15, 1924, to February 28, 1937, but I do have the figures for the fiscal year July 1, 1935, to June 30, 1936. There were pending on July 1, 1935, 409 cases and there were appealed during the fiscal year 1936, 301 cases to the United States Circuit Court of Appeals, a total of 710 cases. A total of 352 cases were closed during