There is no merit in your first contention. You could have been separated from the service in the field, that is, it was not required that the administrative office return you to Washington before separating you from the service. Hence, you are not entitled to any savings in salary by reason of your earlier arrival in Washington.

Your second contention has some merit, that is, as your baggage could not have been returned in the Government-owned automobile, the Government would have been obligated to bear the cost of returning same. However, the item of $17 claimed by you is purely speculative and cannot be allowed by this office.

Referring to your third contention, the item of $8.75, representing saving in per diem in lieu of subsistence is allowable.

Accordingly, on the basis of the present record there is certified to you the sum of $8.75 for which settlement will issue in due course.

(B-19487)

COMPENSATION-PROMOTIONS-"AVERAGE PROVISION" LIMITATION

REMOVAL

The provisions, commonly known as the average provisions, in the several existing appropriation acts to the effect that the average of the salaries of the total number of persons under any particular grade shall not at any time exceed the average of the compensation rates specified for the grade by the Classification Act of 1923 are inconsistent with and, therefore, rendered inoperative by the uniform within-grade salary-advancement act of August 1, 1941.

Comptroller General Warren to the Director, Bureau of the Budget, August 8, 1941:

I have your letter of August 7, 1941, as follows:

In the Independent Offices Appropriation Act for the fiscal year 1942 there is a provision commonly known as the average clause which reads in part as follows:

"SEC. 2. In expending appropriations or portions of appropriations contained in this act, for the payment of personal services in the District of Columbia in accordance with the Classification Act of 1923, as amended, the average of the salaries of the total number of persons under any grade in any bureau, office, or other appropriation unit shall not at any time exceed the average of the compensation rates specified for the grade by such act, as amended, and in grades in which only one position is allocated the salary of such position shall not exceed the average of the compensation rates for the grade except that in unusually meritorious cases of one position in a grade, advances may be made to rates higher than the average of the compensation rates of the grade but not more often than once in any fiscal year and then only to the next higher rate. . . ."

A similar provision is found in several other appropriation acts for the current fiscal year.

By the enactment of Public, No. 200, approved August 1, 1941, effective July 1, 1941, section 7 of the Classification Act of 1923 was amended by the addition of the following (and other) paragraphs:

"(b) All employees compensated on a per annum basis, and occupying permanent positions within the scope of the compensation schedules fixed by this act, who have not attained the maximum rate of compensation for the grade in which their positions are respectively allocated, shall be advanced in compensation successively to the next higher rate within the grade at the beginning

of the next quarter, following the completion of: (1) Each eighteen months of service if such employees are in grades in which the compensation increments are $60 or $100, or (2) each thirty months of service if such employees are in grades in which the compensation increments are $200 or $250, subject to the following conditions:

"(e) Employees eligible under subsection (b) for compensation advancement by reason of service immediately preceding the effective date of this amendment shall be advanced to the next higher rate of compensation within the grade to which their positions are respectively allocated at the beginning of the next quarter immediately following the effective date of this amendment. (f) Within the limit of available appropriations, and in recognition of especially meritorious services, the head of any department or agency is authorized to make additional within-grade compensation advancements, but any such additional advancements shall not exceed one step and no employee shall be eligible for more than one additional advancement hereunder within each of the time periods specified in subsection (b) . . .”

Section 8 of Public, No. 200, provides as follows:

"Insofar as they are inconsistent or in conflict with prior laws, the provisions of this act shall control."

In view of the latter provision it would appear that the average clause hereinabove quoted, as well as similar clauses in other enactments approved prior to August 1, 1941, the date on which Public, No. 200, was approved, does not constitute a bar to salary advances made in pursuance of sections (b), (e), and (f) of section 7 of the Classification Act of 1923 as now amended, even though such advances caused the average compensation of all persons in the grade to exceed the midpoint of the grade. Will you please advise me whether this conclusion is correct?

The average provision appearing in several of the annual appropriation acts for the fiscal year 1942, enacted prior to August 1, 1941, providing salaries for employees within the purview of the Classification Act, as amended, operates to preclude salary advances within grade to some employees regardless of how efficient their services may have been or of how long they may have served without any increase whatever, 4 Comp. Gen. 333; id. 459. The act of August 1, 1941, Public Law 200, amending the Classification Act, provides a uniform within-grade salary-advancement plan for all employees compensated on a per annum basis, and occupying permanent positions within the scope of the compensation schedules fixed by this act-regardless of whether their salary rates are below or above the middle or average salary rate of the grade and regardless of the total number of persons in the grade—on the basis of (1) length of service (2) the attainment of a certain degree of efficiency, and (3) one additional within-grade salary advancement for "especially meritorious service." Obviously, these provisions of the act of August 1, 1941, for within-grade salary advancements for all employees within its scope on the basis of length of service, efficiency, and meritorious service of the individual employee, is inconsistent and in conflict with the average provision under which an individual employee's right to an advance within grade is dependent upon the total number of persons in a grade and the salary of each rather than solely upon his individual length of service, efficiency, etc. In other words, the new plan operates on the individual without regard to other employees in

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the same grade and the old plan under the average provision operated collectively on all employees in a grade.

Accordingly, I am in agreement with the view expressed in the concluding paragraph of your letter.

(B-19319)

CLAIMS ASSIGNMENTS-CONTRACTS-INSURANCE AGENCY AS A

"FINANCING INSTITUTION"

An individually owned insurance agency not regularly engaged in the business of financing, apart from such credit as may be extended to those with whom it deals in connection with and as incidental to the carrying on of its primary business activities, is not a "financing institution" within the meaning of the Assignment of Claims Act of 1940.

Comptroller General Warren to the Federal Works Administrator, August 9, 1941:

I have your letter of July 30, 1941, as follows:

Fred M. Garrett, of Louisville, Kentucky, has filed Notice of Assignment with the Public Buildings Administration, of this Agency, of all moneys due or to become due under Contract No. WA2pb-1253, dated May 17, 1941, between the Lockwood Company, Inc., of Louisville, Kentucky, and the Public Buildings Adminis tration, for interior painting and miscellaneous repairs to the Versailles, Kentucky, Post Office.

Upon receipt of the Notice of Assignment, the Public Buildings Administration requested Mr. Garrett to furnish evidence to show that he is a "financing institution" within the meaning of the term as used in the Assignment of Claims Act of 1940.

By letter of July 19th, Mr. Garrett addressed the following communication to the Public Buildings Administration, signed (under oath) "Garrett Insurance Agency, by Fred M. Garrett, Owner":

"I have your letter of January 15th in reference to an assignment to a financing institution and you have requested me to clarify why Fred M. Garrett would qualify as a financial institution.

"Fred M. Garrett is the sole owner of an insurance agency in Louisville and any insurance agency in Louisville that expects to continue in business is forced to be a financing institution by the fact that practically all of the banks, building and loan and other financing institutions are actively engaged in the insurance business and coerce insurance from people borrowing money. This applies to National Banks, State Banks and building and loan associations; and, as a result, Fred M. Garrett, as an individual, extends the time of payment, accepts notes, makes advances to contractors and does other business of the normal financial institutions in order to protect his insurance business. I have already advanced $1,000.00 on this Versailles, Ky., contract."

Your decision is requested as to whether Mr. Garrett may be recognized as a "financing institution" within the purview of the Assignment of Claims Act and payments under the said contract made to him accordingly.

Insofar as here pertinent, the Assignment of Claims Act of 1940, 54 Stat. 1029, provides:

That sections 3477 and 3737 of the Revised Statutes be amended by adding at the end of each such section the following new paragraph:

"The provisions of the preceding paragraph shall not apply in any case in which the moneys due or to become due from the United States or from any agency or department thereof, under a contract providing for payments aggre gating $1,000 or more, are assigned to a bank, trust company, or other financing institution, including any Federal lending agency: *

Even though it be assumed that an individually owned business may, in a proper case, qualify as a "financing institution" within the meaning of the Assignment of Claims Act of 1940, it would appear that Mr. Garrett's financing activities are only such as are incidental to the carrying on of his business as the owner of an insurance agency; and that he is not regularly engaged in the business of financing, apart from such credit as may be extended by him in connection with his principal business. Compare 20 Comp. Gen. 415. Obviously, a business does not become a "financing institution" merely by reason of the extension of credit to those with whom it deals in the course of its primary business activities.

Accordingly, it does not appear upon the present record that Mr. Garrett may be recognized as a "financing institution" within the purview of the Assignment of Claims Act of 1940.

(B-17775)

PENSIONS, COMPENSATION, RETIREMENT PAY, HOSPITAL BENEFITS, AND DEATH GRATUITIES NAVAL RESERVISTS ON ACTIVE DUTY Officers and enlisted men on the honorary retired list of the Naval Reserve, established by section 309 of the Naval Reserve Act of 1938, who have been or may be ordered to active duty for extended service in excess of 30 days are entitled to the pensions, compensation, retirement pay, and hospital benefits provided in the act of August 27, 1940, to the extent that such benefits are matters within the jurisdiction of this office. Beneficiaries of officers and enlisted men on the honorary retired list of the Naval Reserve who die while on the extended active duty contemplated by section 4 of the act of August 27, 1940, are entitled to the six months' death gratuity as authorized by law for beneficiaries of personnel of the regular Navy and members of the Naval Reserve whose death occurs while on the active list.

Members of the Naval Reserve whose orders to active duty are for periods of indefinite duration during the existing national emergency, and do not otherwise indicate that the ordered duty is for less than 31 days, are within the provisions of section 4 of the act of August 27, 1940, as amended, granting pensions, compensation, retirement pay, and hospital and death gratuity benefits to members of the Naval Reserve ordered to extended active duty in excess of 30 days, even though they are disabled or die prior to completion of 31 days' active service.

Naval Reserve Aviation cadets, Merchant Marine Reserve cadets, and Naval Reserve midshipmen, are entitled to the pensions, compensation, retirement pay, hospital benefits, and death gratuities provided by section 4 of the act of August 27, 1940, as amended, to the extent that such benefits are matters within the jurisdiction of this office.

Assistant Comptroller General Elliott to the Secretary of the Navy, August 12, 1941:

There has been received your letter of June 12, 1941, in part, as follows:

Section 4 of the Naval Aviation Personnel Act of 1940, approved August 27, 1940 (Pub. No. 775, 76th Cong.), provides:

"All officers, nurses, warrant officers, and enlisted men of the United States Naval Reserve or United States Marine Corps Reserve, who, if called or ordered

into active naval or military service by the Federal Government for extended naval or military service in excess of thirty days, suffer disability or death in line of duty from disease or injury while so employed shall be deemed to have been in the active naval service during such period, and they or their beneficiaries shall be in all respects entitled to receive the same pensions, compensation, retirement pay, and hospital benefits as are now or may hereafter be provided by law or regulation for officers, warrant officers, nurses, and enlisted men of corresponding grades and length of service of the Regular Navy or Marine Corps: Provided, That if a person who is eligible for the benefits prescribed by this Act be also eligible for pension under the provisions of the Act of June 23, 1937 (50 Stat. 305), compensation from the United States Employees' Compensation Commission under the provisions of section 304 of the Naval Reserve Act of 1938 (52 Stat. 1181) or retired pay under the provision of section 310 of the Naval Reserve Act of 1938 (52 Stat. 1183), he shall elect which benefit he shall receive."

Section 4 was modified by the Act of March 17, 1941 (Public Law 16, 77th Cong.), as follows:

"That the benefits provided by section 4 of the act approved August 27, 1940 (Public, Numbered 775, Seventy-sixth Congress), shall include payment of the gratuity authorized by the act of June 4, 1920 (41 Stat. 824), as amended by the act of May 22, 1928 (45 Stat. 710; U. S. C., title 34, sec. 943).

"SEC. 2. The provisions of this Act shall be effective as of August 27, 1940." In connection with the above quoted statutory provisions, your decision is requested on the following questions:

(a) Are officers and enlisted men on the Honorary Retired List of the Naval Reserve, established by section 309 of the Naval Reserve Act of 1938 (52 Stat. 1183; 34 U. S. C. 855h), who have been or may be ordered to active duty for extended service in excess of 30 days, entitled to receive the pensions, compensation, retirement pay and hospital benefits as provided in the Act of August 27, 1940, as amended, supra?

(b) In case of the death of an officer or enlisted man on the Honorary Retired List of the Naval Reserve while performing active duty, will the beneficiaries of such officer or enlisted man be entitled to payment of the six months' death gratuity as authorized by law for the beneficiaries of the personnel of the regular Navy and members of the Naval Reserve whose death occurs while on the active list?

(c) Are members of the U. S. Naval Reserve ordered to active duty for indefinite periods during the existing national emergency, which under ordinary circumstances would continue for more than 30 days, entitled to any of the benefits specified in section 4 of the Act of August 27, 1940, as amended, supra, if they are disabled or die prior to completion of 31 days active service?

(d) Are Aviation Cadets, Merchant Marine Reserve Cadets, and Naval Reserve Midshipmen entitled to the pensions, compensation, retirement pay, hospital benefits and death gratuities as provided by law for other Naval Reserve personnel?

Section 5 of the Naval Reserve Act of 1938, 52 Stat. 1176, 34 U. S. C. 853c, provides that any member of the Naval Reserve, including those on the honorary retired list created by section 309 of the act, or who may have been retired, may be ordered to active duty by the Secretary of the Navy in time of war or when in the opinion of the President a national emergency exists and may be required to perform active duty throughout the war or until the national emergency ceases to exist, but in time of peace, except as otherwise provided in the act, he shall be ordered to or continued on active duty with his own consent only. Section 7 of the act, 52 Stat. 1176, as amended, 34 U. S. C. 853e, provides that commissioned officers of the Naval Reserve, including those on the honorary retired list or who may have been retired, when employed on active duty or on training duty with pay shall be entitled to the pay and allowances, including