He advises the committee that the cases of officers and employees at St. Elizabeths are not the only ones in which it has been asserted that injustices will result from enforcement of the law.

He appends correspondence in connection with the ruling and a tabulation showing what superintendents of other governmental hospitals receive in way of salary, quarters, etc.

Mr. McCARL. Mr. Chairman and gentlemen of the committee, at the time your chairman suggested to me that I might be of some assistance to the committee I did not know just what the committee had in mind. Naturally one thinks first of his own problems, and recalling that the General Accounting Office had deferred action on certain accounts because of a request made by the Secretary of the Interior that the matter under consideration be deferred until the Congress could be asked to take action for the relief of certain officers and employees of St. Elizabeths Hospital I immediately concluded that in all probability the matter intended to be taken up by the committee was that of determining whether or not the Congress would be justified in making an exception to the general law with reference to these particular employees. And it seemed to me that I might be able to help the committee get to the problem as it confronts us and as it confronts the Secretary of the Interior and necessarily confronts these gentlemen and ladies, by mapping out, as shortly as I could, just how the problem arose in the General Accounting Office, the laws that were considered applicable and controlling, and the problem that confronted us at the time we agreed with the Secretary of the Interior that it would be proper, in the circumstances, to defer further action until the Congress could study the particular situation in which these officers and employees find themselves and determine whether they wish the general law to proceed or to make some exception in their and possibly other cases where it is claimed injury will result. I have prepared a statement which it seemed to me would best aid the committee in seeing the problem from our angle and in getting them, perhaps, in a proper position to listen to the affected officers and employees-their situation and their difficulties-so as to determine whether or not there should be any exception made. This seemed to me particularly true in view of what occurred in the House of Representatives by striking out a provision in an appropriation bill which was intended, I believe, to give them relief. If the committee will permit me, I will read what I have prepared.

IN RE VALUE OF QUARTERS AND OTHER ALLOWANCES FURNISHED CERTAIN OFFICERS AND EMPLOYEES AT ST. ELIZABETHS HOSPITAL

The matter of the value of quarters and other allowances furnished in kind to civil officers and employees of the Government is of concern to the accounting officers of the United States because of their duty and responsibility to see that the amounts required by law to be deducted from compensation and deposited to the credit of the retirement fund are so deducted and deposited, and in addition, to see that the maximum salary rates authorized by law are not exceeded.

To ascertain the amount required by law to be deducted from compensation of an officer or employee for deposit to the credit of the retirement fund the facts supplied the accounting officers in support of disbursing accounts must show not only the amount paid in cash, but in addition, the determined value of quarters and other allowances furnished the officer or employee in kind and in lieu of cash. This information must also appear to enable the

accounting officers to ascertain that the maximum salary rates prescribed by law are not being exceeded.

Previous to the fiscal year 1927 many officers and employees of the Government were being furnished quarters, subsistence, and other allowances, without statutory authority therefor. Other officers and employees were being furnished such allowances in kind under general or special authority of law, and in this latter class were certain officers and employees at St. Elizabeths Hospital.

Mr. COLTON. Did they come under a special, or the general law? Mr. McCARL. I do not recall which; but under one or the other. I think there is no question but what prior to the enactments hereinafter mentioned by me, they were provided with quarters and subsistence.

The CHAIRMAN. At St. Elizabeths?

Mr. McCARL. Yes.

Mr. SCHAFER. Under those acts, were they also provided with servants, such as the four servants the superintendent has to-day according to your decision?

Mr. McCARL. I do not recall that, just what the provision was, and that did not seem to me to be important here as I understood what was to come up. I do not recall particularly on that; I do not recall what laws were applicable to them, but I recall very distinctly that, in the consideration of the matter, it became apparent they were entitled to certain allowances including quarters. And that being the major item, I had my mind principally on that. Mr. DALLINGER. Would "quarters" include "servants"? Mr. McCARL. I would not think so.

Mr. SCHAFER. The amount allowed for servants which has been used by the superintendent is far in excess of the amount allowed for quarters; it is almost equal to the amount allowed for subsistence and quarters. What I want to find out is whether there is any provision of law for making that allowance for servants.

Mr. McCARL. I would be glad to supplement this by making an examination of the prior laws with a view to letting you know what the laws were prior to the acts applicable here, the classification act, supplemented by the act of March 2, 1926, about which I am particularly concerned in this statement. But I would be glad to supplement that if you wish it and bring together, if you please, a compilation of the laws under which they were permitted allowances, if that would be of service to the committee.

Mr. SCHAFER. Yes.

Mr. McCARL. But I was trying in this statement to present my particular and present difficulty. In neither class, however, where the officers and employees so furnished with quarters or other allow ances in kind charged for such allowances in kind, nor was any accounting whatever made for this use of Government property. Practically all of these officers and employees who received allowances of substantial value, whether or not specifically authorized by law, apparently were also being paid in cash at the same, or approximately the same, rate of compensation as other officers and employees in positions of similar grade who received no free allowance in kind. Because of the obvious inequality and injustice of this situation, both to the officers and employees who received no allowances and to the Government, the situation was called to attention by the accounting officers and was promptly given consideration by

the Congress with the result that there was enacted as section 3 of the act of March 2, 1926 (44 Stat. 161), governing the uses of appropriations for the fiscal year 1927, the following:

SEC. 3. The head of an executive department or independent establishment, where, in his judgment, conditions of employment require it, may continue to furnish civilians employed in the field service with quarters, heat, light, household equipment, subsistence, and laundry service; and appropriations for the fiscal year 1927 of the character heretofore used for such purposes are hereby made available therefor: Provided, That the reasonable value of such allowances shall be determined and considered as part of the compensation in fixing the salary rate of such civilians.

Similar provisions have appeared in the appropriation acts for subsequent fiscal years. (See acts of January 26, 1927, 44 Stat. 1052, and March 3, 1928, 45 Stat. 193.) The clear purposes of this legislation were to equalize the compensation of officers and employees furnished quarters and other allowances in kind with officers and employees not so supplied, and to gain a reasonable return to the United States for the quarters and allowances so furnished. While it will be observed that this statute is directed more particularly to the field service, the situation as to the departmental service in the District of Columbia had been covered by a provision in the classification act of 1923 (42 Stat. 1489), as follows: * The board [Personnel Classification Board] shall make necessary adjustments in compensation for positions carrying maintenance and for positions requiring only part-time service.

In many cases the value of quarters and allowances furnished to officers and employees in kind appears to have been determined and from the facts supplied in such cases the accounting officers have little difficulty in ascertaining the correct amounts deductible from compensation for deposit to the credit of the retirement fund, or in checking to ascertain that the maximum salary rates are not being exceeded. Difficulty is experienced, however, in cases where the value of quarters and allowances furnished in kind has not been determined as the law clearly requires. In such cases the facts essential to proper and lawful action by the accounting officers on the disbursing accounts are lacking. It was the absence of such essential facts in the accounts of the disbursing officer at St. Elizabeths Hospital that brought forward the cases of certain officers and employees at that institution and caused the General Accounting Office on August 15, 1928, to address the Secretary of the Interior, the administrative head of that institution, as follows:

The SECRETARY OF THE INTERIOR.

WASHINGTON, August 15, 1928.

SIR: There has been brought to the attention of this office through investigation and audit of accounts that the salary rates for positions of employees working and resid ng at St. Elizabeths Hospital have been fixed under the classification act of 1923 on the basis of the cash paid only, without including the value of quarters, subsistence, and other allowances furnished in kind.

It is reported that the Personnel Classification Board has been requested to fix the value of the allowances in kind, but has refused or failed to act for the stated reason that the hazardous nature of the employment and the necessity to be subject to call 24 hours of the day justifies the granting of allowances in kind without deduction from salary.

It is not a question of deduction from salary, but a question of determining the value of allowances furnished in kind in order that the total salary rate and the "basic salary, pay, or compensation" may be determined, the value of the allowances furnished in kind being as much a part of the total salary rate and the basic compensation as is the cash pay. The former must now be considered compensation the same as the latter in determining the “basic salary, pay, or compensation" on which the percentage retirement deductions are to be computed.

The last sentence of section 3 of the classification act of 1923, dated March 4, 1923 (42 Stat. 1489), is as follows:

66 * * * The board shall make necessary adjustments in compensation for positions carrying maintenance and for positions requiring only part-time service."

In decision of June 19, 1925 (4 Comp. Gen. 1051, 1059), this sentence was construed in a case similar to the present one, and it was held as follows:

66* * * Section 3 of the classification act of March 4, 1923 (42 Stat. 1489), provides in part: The board shall make necessary adjustments in compensation for positions carrying maintenance.' It has been ascertained that the board has taken such action with regard to employees under the District of Columbia and that the commutation or monetary value of subsistence, house, and quarters above stated, was determined by the Personnel Classification Board after agreement with the District authorities.

"This provision in the classification act does not mean that the allocation of the position shall be affected, necessitating placing same in a lower grade when maintenance is provided in kind, but it means that the commutation or monetary value of maintenance must be determined by the Personnel Classification Board and that amount of cash deducted from the rate fixed by the administrative office in the grade to which compensation has been allocated. Substi tution of maintenance in kind for cash salary does not change the basic salary, pay, or compensation' within the meaning of the retirement act, which remains the rate fixed by the administrative office in the grade to which the position has been allocated. (See, generally, 3 Comp. Gen. 654.")

The following provision appears in annual appropriation acts for the Treas ury and Post Office Departments, effective as to all departments, for fiscal year 1929 (see act of March 5, 1928, Public, No. 93, p. 35, viz):

"SEC. 3. The head of an executive department or independent establishment, where, in his judgment, conditions of employment require it, may continue to furnish civilians employed in the field service with quarters, heat, light, household equipment, subsistence, and laundry service; and appropriations for the fiscal year 1929 and thereafter of the character heretofore used for such purposes are hereby made available therefor: Provided, That the reasonable value of such allowances shall be determined and considered as part of the compensation in fixing the salary rate of such civilians."

While this statute applies more particularly to the field service, it is an expression of the general intent of the Congress that the determined value of allowances in kind in any branch of the civilian service is to be considered as part of compensation. This statutory provision, together with the sentence quoted from the classification act, compels the conclusion that as to all positions in the District of Columbia the value of any allowances furnished in kind is to be determined and considered as compensation. The hazardous nature of the positions at St. Elizabeths Hospital and the necessity of employees to be subject to call 24 hours of the day may be elements proper for consideration by the Personnel Classification Board in determining the grade in which the position shall be allocated, but there is nothing in the nature or requirements of the positions at St. Elizabeths Hospital to justify an exception of the positions under that establishment from the general requirements that the value of all allowances furnished in kind are to be determined and considered as part of compensation.

It appears that the Personnel Classification Board has acted with respect to other positions in the District of Columbia and there would appear no sound reason for not taking similar action with respect to the positions under St. Elizabeths Hospital. Furthermore, it would appear that the total salary rate of the superintendent and possibly other officers or employees will exceed the maximum salary rate of $9,000 authorized by the classification act, as amended by the act of May 28, 1928, when the determined value of all allowances furnished in kind is properly added to the cash paid, as required by the statute. (See 6 Comp. Gen. 359, 361; id. 588, 595.) For instance, the following is a statement of the different items going to make up the estimated total salary of the superintendent

And I will state here that these figures are figures that were submitted by investigators who looked into the matter, but are not necessarily the figures that will have application under the statutes. There are other elements to be taken into consideration. It has been the constant holding of the accounting office, for instance, that for the purpose of determining the reasonable value there should be considered the element of the value to the employee. It would, perhaps, be unfair to force an employee into a governmental establishment,

the value of which would be vastly more than his value to the United States; yet that might be a convenient place for the Government to place him.

Mr. LANHAM. Or vastly more than he could get the same accommodations for elsewhere.

Mr. McCARL. Yes. So that an important element in the determination of the value of property under these circumstances is the value of the property to the employee; in other words, by furnishing it, what does it render unnecessary for him to obtain for himself. These are the items [again reading from letter of August 15, 1928]:

Allowances:

Approximate value Apartment completely furnished, 19 rooms, as follows: 2 parlors, 1 library, 1 studio, 1 dining room, 6 bedrooms, 1 boardmeeting room, 1 trunk room, 1 sewing room, 2 bathrooms, 3 kitchen rooms; estimated value of furniture is shown to be approximately $7,500_.

Laundry service__

1

$2,400

1300 148

2 4, 440 2, 676

2 195

10, 059

7,500

17, 559

Mr. LANHAM (interrupting). Now, General, do you go on to show whether or not some of these items or all of them, are predicated upon law-in this report?

Mr. McCARL. No, Congressman.

Mr. LANHAM. If not, I would like to interpose that inquiry.

Mr. McCARL. No, I have not and, and as I stated to Congressman Schafer

Mr. O'BRIEN. I did not catch that question.

Mr. LANHAM. My question was whether or not, in this statement he is reading, he goes on to show whether or not any or all of these items which he has just enumerated are or are not predicated upon laws providing for them.

Mr. McCARL. No, Congressman. I had rather the bigger problem first to solve, that was, had any administrative official attempted to determine the value of these allowances so that we could ascertain whether the maximum salary rate provided by law was being exceeded and, second, whether proper deductions were being made for the retirement fund-and any other questions that might be proper for the accounting office to consider.

Mr. LANHAM. But you are going to supply us with the information as to each of these items that was provided for by law?

Mr. McCARL. I will be glad to. Perhaps the gentlemen from the hospital will supply you with the statutes.