the purview of the act of August 1, 1941, Public Law 200, providing a plan for making within-grade salary advancements to employees "occupying permanent positions." It would follow, therefore, that such employees are not entitled to a within-grade salary advancement under the provisions of said law. Compare 19 Comp. Gen. 125.

Executive Order No. 9063, dated February 16, 1942, contains provisions as follows:

1. The United States Civil Service Commission is authorized to adopt and prescribe such special procedures and regulations as it may determine to be necessary in connection with the recruitment, placement, and changes in status of personnel for all departments, independent establishments, and other Federal Agencies, except positions in the field service of the postal establishment. The procedures and regulations thus adopted and prescribed shall be binding with respect to all positions affected thereby which are subject to the provisions of the Civil Service Act and Rules.

2. Persons appointed solely by reason of any special procedures adopted under authority of this order to positions subject to the provisions of the Civil Service Act and Rules shall not thereby acquire a classified (competitive) civilservice status but, in the discretion of the Civil Service Commission, may be retained for the duration of the war and for six months thereafter.

United States Civil Service Commission Departmental Circular No. 323 has been promulgated to provide the regulations and procedures for effecting war service appointments under Executive Order No. 9063, supra. Regulation V, section 2, of the regulations appended to said circular, provides as follows:

Section 2. Status of appointees.-Persons appointed under these regulations will not thereby acquire a classified (competitive) civil-service status. Unless otherwise specifically limited such appointments may be for the duration of the present war and for six months thereafter.

Paragraph E of the circular, under the heading "Nature of Appointments Under the Regulations," provides in pertinent part as follows:

(1) On and after March 16, 1942, all appointments under these Regulations will be made under the authority of Executive Order No. 9063 and will be termed "War Service Appointments." Appointees will not thereby acquire a classified (competitive) civil-service status. (Regulation V, Appointments, Section 1.)

(2) Unless otherwise specifically limited such appointments may be for the duration of the present war and for six months thereafter. Those appointments which are for periods specifically limited to one year or less will be considered temporary. Appointments which are for a longer duration than one year will unless otherwise specifically limited be designated as indefinite. (Regulation V, Appointments, Section 2.)

Paragraph I of the same regulations, under the heading "Transition Procedures," reads as follows:

(1) Effective as of March 16, 1942, all persons serving under Section 2 Rule VIII will be regarded as serving under Executive Order 9063; change of records in individual cases to show authority under Executive Order No. 9063 instead of Section 2, Rule VIII, need not be made. On and after March 16, 1942, no persons now serving under Section 2, Rule VIII, will be given probational appointments, and conversions under Section 5, Rule VIII will not thereafter be effected.

It appears, therefore, that existing regulations of the Civil Service Commission, issued pursuant to Executive Order No. 9063, effective

March 16, 1942, have changed the status of positions the appointments to which previously were made under section 2, rule VIII of the Civil Service Rules and Regulations, considered in the decision of December 10, 1941, supra, from "temporary" to "permanent" within the meaning of the definition of the latter term as contained in section 1 (a) of Executive Order No. 8882, dated September 3, 1941, except such positions as are "specifically limited to one year or less," which are designated as "temporary." (See par. E (2) of Civil Service Departmental Circular No. 323, supra.)

On the basis of these changes in the Civil Service Regulations which have the force and effect of law, the question contained in the concluding paragraph of your letter is answered in the affirmative. The first of such automatic promotions will be payable to such employees effective on and after April 1, 1942, provided the employees are otherwise qualified to receive such promotions under the terms and conditions of the act of August 1, 1941, Public Law 200, 55 Stat. 613 and the President's Regulations thereunder.

(B-23919)

ATTENDANT FOR NAVY ENLISTED MAN AFTER DISCHARGE FOR PHYSICAL DISABILITY

In the absence of specific statutory provision therefor, payment of the expenses of an attendant to accompany a Navy enlisted man to his home after his discharge on account of physical disability is unauthorized.

Assistant Comptroller General Elliott to the Secretary of the Navy, April 15, 1942: There has been considered your letter of February 14, 1942, together with a letter from the Chief of the Bureau of Navigation, dated February 11, 1942, as follows:

Subject: Transportation of attendants for sick or disabled personnel discharged by Medical Survey.

Reference: Decision of the Comptroller General dated November 9, 1921, Appeal No. 37527, in case of Ellis F. DeWitt, F1c, USN.

1. It was held in the reference that an enlisted man ordered on sick leave for a period of recuperation is in a duty status, entitled to the per diem allowance for such period, is granted the leave for the convenience of the Government, is entitled to transportation in kind to and from his home, and also for an attendant to accompany him if he is physically unable to travel alone.

2. Frequently occasions arise where men discharged on account of physical disability are unable to travel alone and require an attendant. As to the men themselves the current appropriation Act provides for transportation and subsistence to their homes if residents of the United States, or in lieu thereof to a travel allowance of five cents per mile to the place of acceptance for enlistment, if discharged under honorable conditions, under provisions of the Act of September 22, 1922 (42 Stat. 1021). There is, however, no provision for an attendant in connection with the payment of either allowance.

3. Since it is a Government obligation to get a man home, whether by reason of medical survey discharge, or on leave for the purpose of recuperation, it appears that the convenience of the Government would be similar in both cases. It is, therefore, requested that the Comptroller General be requested

to decide whether a man discharged by medical survey may be furnished an attendant to accompany him to his home in the event he is physically unable to travel alone.

As to the man himself, there is no question as to the authority for payment to him either of travel allowance at 5 cents per mile under the provisions of section 126 of the National Defense Act, as amended by the act of September 22, 1922, 42 Stat. 1021, or the furnishing of transportation to his home, if a resident of the United States, with subsistence and transfers en route, or cash in lieu thereof, under the provisions appearing in the annual appropriation acts for the naval service-for the fiscal year ending June 30, 1943, Public No. 441, approved February 7, 1942, 56 Stat. 63.

An enlisted man upon discharge is effectively separated from the naval service and normally the custody and control by naval authorities then and there ceases. His discharge absolutely terminates any contractual relationship with the Government. United States v. Smith 67 F. (2d) 412, affirmed 292 U. S. 337, 78 L. Ed. 1295. In the absence of a specific provision therefor, the obligation of the Government to furnish transportation or pay travel allowance is limited to that fixed in the statutes referred to, and payment of the expenses of an attendant to accompany a discharged person is not authorized.

Whether the decision of November 9, 1921, of the former Comptroller General, 3 MS. Comp. Gen. 412, would be followed in a case arising under similar circumstances need not now be decided.

(B-25040)

INSURANCE-VIRGIN ISLANDS CO. PROPERTY

While funds derived from the operation of The Virgin Islands Co. are subject, generally, to specific statutory restrictions and limitations applicable to the expenditure of appropriated moneys by the regularly established Federal agencies, the Government's practice of self-insurance, being one of policy rather than of positive law, is not applicable thereto, and, therefore, the company's operating funds are available for payment of premiums on contracts insuring its property against loss from fire, hurricane, marine perils, etc. the insurance to run to the company rather than to the United States Comptroller General Warren to the Chairman of the Board of Directors, The Virgin Islands Co., April 15, 1942:

I have your letter of April 3, 1942, as follows:

Your decision is requested as to the propriety of payments out of the revenues of The Virgin Islands Company for premiums for insurance covering raw sugar, rum, and other commodities and personal property of the company against loss from fire, theft, hurricane, marine, and other risks.

The Virgin Islands Company is a corporation created by a special ordinance of the Colonial Council for St. Thomas and St. John, approved April 16, 1934. Under an Operating Agreement, dated November 26, 1934, as amended, entered into with the Department of the Interior, sugar lands, sugar mills and a rum distillery owned by the Federal Government are operated by the company for its own ac

count and the products thereof are the property of the company and are sold by the company primarily in the continental market. Under the provisions of said Operating Agreement the revenues of The Virgin Islands Company are deposited currently into the Treasury of the United States as a special fund. These funds are requisitioned and transferred to the account of the disbursing officer of the company and then disbursed for necessary operating expenses of the company. The premiums for the insurance proposed to be procured would be paid from these funds in the usual manner as an operating expense.

The company has in its warehouses approximately 500,000 gallons of rum in the process of manufacture and ageing, which would probably be completely destroyed in case of fire. Sugar is also stored in warehouses from the time of its manufacture until the time of sale and may be damaged by fire or hurricane during that period. The same applies to other commodities produced by the company.

Moreover, prior to the outbreak of war purchases made by the company of materials and supplies used in the manufacturing processes could be purchased on a c. i. f. Christiansted, St. Croix, contract basis, which would include insurance during transit of the materials to the point of use. However, since the beginning of the war it has been impossible to obtain quotations on various materials and supplies on that basis. Practically all of the continental materials purchased are now quoted f. o. b. New York. Since neither the Federal Government nor any agency thereof has an interest in such materials and supplies, the Government Losses in Shipment Act is not applicable and the company would suffer serious loss in the event such cargoes are destroyed in shipment.

In the circumstances, it is deemed desirable from a practical business viewpoint that the company cover its manufactured products and other property by insurance in order to protect itself against loss. Your early consideration of the matter would be appreciated.

As you apparently are aware, it is the general policy of the Government to assume its own risks of loss, upon the theory that the magnitude of the Government's resources makes it more advantageous for the Government to carry its own risks than to have them assumed by private insurers at rates sufficient to cover all losses, to pay their operating expenses (including agency or brokers' commissions) and to leave such insurers a profit. 19 Comp. Gen. 211, 214; 16 id. 453, 454. Thus, it has been held consistently that appropriated moneys are not available for the payment of insurance premiums on Governmentowned property in the absence of specific statutory authority for the payment of such premiums. 17 Comp. Gen. 419, 421.

With respect to the payment of insurance premiums by Government corporations, it was said by a former Comptroller of the Treasury (23 Comp. Dec. 297) that it required an act of Congress to apply the Government's policy with respect to property insurance to a corporation wholly owned by the United States, citing instances where the Congress specifically had denied to governmental corporations the right to use their funds for payment of insurance premiums. Cf. 11 Comp. Gen. 59. In certain instances, the Congress has expressly granted the right to use appropriated moneys for premiums on policies of insurance against loss to Government property. See, for example, 19 Comp. Gen. 211, referring to section 3 of the act of June 29, 1936, 49 Stat. 2036, providing for insurance of certain projects of the Farm Security Administration. Compare my decision of January 12, 1942, A-51647, B-15611, to the Chairman, United States Maritime Commission, al

lowing credit for payments of certain insurance premiums under the general authority granted the Commission by section 207 of the Merchant Marine Act, 1936, as amended, 49 Stat. 1988, 46 U. S. C. 1117, to make such disbursements as may, in the Commission's discretion, be necessary to carry on the activities authorized by the act, or to protect, preserve, or improve the collateral held by the Commission to secure indebtedness.

Although The Virgin Islands Co. is, as you state, a corporation created by ordinance of the Colonial Council for St. Thomas and St. John, the property and resources to which The Virgin Islands Co. holds title were derived practically entirely from moneys appropriated by the Federal Government, and from the operation of property and facilities purchased by the Federal Government from appropriated moneys for the purpose of leasing such property and facilities to the company. It has been held, therefore, that the funds derived from the operation of The Virgin Islands Co. are subject, generally, to the same restrictions and limitations applicable to the expenditures of appropriated funds by the regularly established departments and agencies of the Government. 15 Comp. Gen. 485; 14 id. 798; ibid. 617. The conclusions reached in the cited decisions appear to have been based upon the fact that The Virgin Islands Co. was created without specific Congressional authorization and that, therefore, the corporate character of the company did not serve to free its funds from the provisions of law to which they would have been subject if administered by an unincorporated Government agency.

The Virgin Islands Co. was created to aid in effecting the economic rehabilitation of the municipality of St. Thomas and St. John and to promote the general welfare of the people of St. Thomas and St. John and of the Virgin Islands. By section 5 of the act of May 26, 1936, 49 Stat. 1372, which was enacted subsequent to the decisions cited in the preceding paragraph, The Virgin Islands Co. was authorized to pay annually into the municipal treasuries of the Virgin Islands in lieu of taxes "an amount equal to the amount of taxes which would be payable on the real property in the Virgin Islands owned by the United States and in the possession of The Virgin Islands Co., if such real property were in private ownership and taxable," and "amounts equal to the amounts of any taxes of general application which a private corporation similarly situated would be required to pay into the said treasuries." Thus, the Congress has recognized not only the corporate existence and status of The Virgin Islands Co. but, also, the corporate purposes of the company, since the payment by the company of taxes levied by the municipal governments of the islands obviously would be calculated to further such purposes, viz, to aid in effecting the economic rehabilitation of the municipalities and to promote the general welfare of the people of the islands. In the light of this Congressional action,