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Section 1 of the act of February 28, 1925, 43 Stat. 1053, entitled "An act reclassifying the salaries of postmasters and employees of the Postal Service, readjusting their salaries and compensation on an equitable basis, increasing postal rates to provide for such readjustment, and for other purposes" [italics supplied], provides in pertinent part as follows:

That on and after January 1, 1925, postmasters and employees of the Postal Service shall be reclassified and their salaries and compensation readjusted, except as otherwise provided as follows:

The act specifically classifies for salary purposes all of the various classes of postal employees to whom the law was intended to relate. There is not included in the act any general provision authorizing the Postmaster General to fix the salary rates of other employees in the Postal Service not mentioned in the act. Employees of the Custodial Service of the Post Office Department are not included within the purview of the statute. In fact, these employees were not then under the Post Office Department. They were transferred from the Treasury Department to the Post Office Department by Executive Order No. 6166, dated June 10, 1933.

In decision of December 11, 1934, 14 Comp. Gen. 448, 449, it was held as follows:

The positions transferred from the Treasury Department to the Post Office Department under the above-mentioned Executive order remained subject to the schedule of salary rates prescribed by the Classification Act of 1923, as amended by the Welch Act of May 28, 1928, 45 Stat. 776, and the Brookhart Salary Act of July 3, 1930, 46 Stat. 1004. Also, any new positions created in the same unit, the salaries of which are payable under the appropriation "Operating force" for public buildings under the Post Office Department-except positions in the "mechanical labor force" within the proviso to the appropriation item, which are subject to the 40-hour week provision, section 23 of the act of March 28, 1934, 48 Stat. 522-are subject to the terms and conditions of the Classification Act, as amended, applicable to the field service. See section 3 of the Welch Act and section 2 of the Brookhart Salary Act, supra. In other words, the status as to salary, classification, etc., of the employees in the Custodial Service in post-office buildings was in no way changed by the transfer of said service from the Treasury Department to the Post Office Department.

No provision of law has been enacted subsequent to the quoted decision which may be regarded as authorizing the Postmaster General to fix the salary rates of custodial employees of the Post Office Department either under the Postal Service Reclassification Act of February 28, 1925, supra, or otherwise without regard to the Classification Act of 1923 as amended. The act of August 14, 1935, 49 Stat. 650, regulating the hours of work of postal employees expressly included employees of the Custodial Service of the Post Office Department within its terms, but it has been held that this statute is one to regulate the hours of work of employees and is not a pay statute. 15 Comp. Gen. 175; id. 299. In decisions of April 23, 1936, 15 Comp. Gen. 937, October 5, 1936, 16 id. 331, and October 18, 1939, 19 id. 445, it

was recognized that the hours of work and leave of absence of custodial employees of the Post Office Department were controlled by the laws applicable to employees of the Postal Service, but in each of these decisions attention was directed to the decision of December 11, 1934, 14 Comp. Gen. 448, above quoted, holding that for salary purposes the employees were within the scope of the Classification Act of 1923, as amended. That is, it has been held consistently that the salary rates of the custodial employees of the Post Office Department are required to be fixed in accordance with the terms of the Classification Act of 1923, as amended.

The salaries of these employees are paid, not from any Postal Service appropriation, but from the appropriation item "Operating force" appearing under the general heading "Public Buildings, Maintenance, and Operation," in the act making appropriations for the Post Office Department. See the act of May 31, 1941, Public Law 88, 55 Stat. 212. It is noted that the estimates on the basis of which the appropriation was provided show that the salaries of the custodial force are fixed administratively in grades or salary ranges prescribed by the Classification Act of 1923. See page 898 of The Budget for

1942.

The records of this office disclose that the salaries of the custodial employees are fixed at rates prescribed by the Classification Act of 1923, as amended, with steps of $60 in the lower grades and $100 in the higher grades.

The act of August 1, 1941, Public Law 200, 55 Stat. 613, amends section 7 of the Classification Act of 1923, as amended, to provide a uniform within-grade salary-advancement plan for employees whose salary rates are required to be fixed administratively at one of the rates within the salary ranges prescribed by section 13 of the act based on the allocation of the positions.

Section 2 of the original Classification Act, 42 Stat. 1488, provides, in pertinent part, as follows:

The term "position" means a specific civilian office or employment, whether occupied or vacant, in a department other than the following: Offices or employments in the Postal Service;

However, the term "employments in the Postal Service" does not include all employments under the Post Office Department; and it has been held that the exception referred to relates to positions in the Postal Service the salary rates for which were fixed in the Postal Service Reclassification Act of 1925, supra, or in other statutes applicable to the Postal Service. See decision of August 30, 1941, B-19955, 21 Comp. Gen. 189, to you, relating to positions of fillers and packers in the Division of Equipment and Supplies.

Answering specifically the question presented in your letter, supra, I have to advise that the act of August 1, 1941, Public Law 200, does apply to all classes of custodial employees of the Post Office Department whose salary rates, as hereinbefore shown, are required to be fixed in accordance with the Classification Act of 1923, as amended.

(B-19688)

COMPENSATION-RATES-CANAL ZONE DIFFERENTIAL

Where, by Executive Orders No. 8719 and No. 8812, issued pursuant to statutory authority, the President has suspended compliance with "the provisions of the sections" of the appropriation acts therein mentioned, the effect is to suspended compliance with the provisions in said sections with respect to permissive action which may be taken by the administrative office as well as the mandatory provisions, notwithstanding the administrative motives in recommending the issuance of the Executive orders may have been otherwise.

While Executive Orders No. 8719 and No. 8812 suspend compliance with the provisions of the appropriation acts therein mentioned with respect to payment of a compensation differential to employees in the Canal Zone, the act of August 24, 1912, authorizing payment of such a differential to employees of the Panama Canal not to exceed 25 percent of the salaries paid for the same or similar services for the Government in the continental United States, remains unchanged, and this differential may be extended by administrative action to all employees of the Government in the Canal Zone whose salary rates are not otherwise specifically fixed by law. The compensation differential of not to exceed 25 percent which may be paid to Government employees in the Canal Zone is not required to be based on the minimum salary rate of the grade in which an employee's position is allocated, but may be based on any salary rate of such grade properly fixed for the particular employee.

Where the addition of the maximum compensation differential of 25 percent authorized for Government employees in the Canal Zone results in a salary rate which falls between two authorized classification act rates, the resulting salary rate may not be advanced to the next higher classification act rate, but, if it be considered administratively desirable to fix total salary rates of such employees at a classification act rate, rather than at an odd rate, the amount of the differential may be limited to an amount necessary to accomplish that result.

Acting Comptroller General Elliott to the Secretary of War, September 6, 1941: The Director of Personnel, Civilian Personnel Division, War Department, has submitted for my consideration the matter presented in his letter of August 2, 1941, as follows:

1. Section 6, title I, of the Naval Appropriation Act, 1941, Public, No. 588; section 7 of the Military Appropriation Act, 1941, Public, No. 611; and section 2 of the War Department Civil Appropriation Act, 1941, Public, No. 653, all of the 76th Congress, provide for certain restrictions and permissive actions pertaining to the services of civilian personnel on the Canal Zone. The wording of these three sections is identical. Using Public, No. 611, as an example, the wording of section 7 is:

"SEC. 7. No part of any appropriation contained in this act shall be used directly or indirectly after May 1, 1941, except for temporary employment in case of emergency, for the payment of any civilian for services rendered by him on the Canal Zone while occupying a skilled, technical, clerical, administrative, executive, or supervisory position unless such person is a citizen of the United States of America or of the Republic of Panama: Provided, however. (1) That,

notwithstanding the provision in the act approved August 11, 1939 (53 Stat. 1409), limiting employment in the above-mentioned positions to citizens of the United States from and after the date of the approval of said act, citizens of Panama may be employed in such positions; (2) that at no time shall the number of Panamanian citizens employed in the above-mentioned positions exceed the number of citizens of the United States so employed, if United States citizens are available in continental United States or on the Canal Zone; (3) that nothing in this act shall prohibit the continued employment of any person who shall have rendered fifteen or more years of faithful and honorable service on the Canal Zone; (4) that in the selection of personnel for skilled, technical, administrative, clerical, supervisory, or executive positions, the controlling factors in filling these positions shall be efficiency, experience, training, and education; (5) that all citizens of Panama and the United States rendering skilled, technical, clerical, administrative, executive, or supervisory service on the Canal Zone under the terms of this act (a) shall normally be employed not more than forty hours per week; (b) may receive as compensation equal rates of pay based upon rates paid for similar employment in continental United States plus 25 per centum; (6) this entire section shall apply only to persons employed in skilled, technical, clerical, administrative, executive, or supervisory positions on the Canal Zone directly or indirectly by any branch of the United States Government or by any corporation or company whose stock is owned wholly or in part by the United States Government: Provided further, That the President may suspend compliance with this section in time of war or national emergency if he should deem such course to be in the public interest."

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2. The provision in the above section forbidding the use, after May 1, 1941, of any part of the appropriations contained in the act for the payment of any civilian for services rendered by him on the Canal Zone, while occupying a skilled, technical, clerical, administrative, executive, or supervisory position unless such person is a citizen of the United States of America or the Republic of Panama : *" was viewed with alarm, inasmuch as the recruiting problem on the Canal Zone was even then being felt. The defense program was under way, industry was marshalling personnel to meet the demands and needs of national defense, the housing situation on the Canal Zone made employment there undesirable to citizens of the United States, quarters were not available for families, necessitating separation of employees from their families-in short, citizens of the United States were going to work in the United States. All these factors contributed to the recruitment problem. To alleviate the pressing need for personnel, aliens had been employed in many instances. These "aliens" were in general Jamaican negroes and the labor they performed was not usually attractive to citizens of the United States. They presented no housing problem since they were accustomed to the usual life of a tropical settlement. To have replaced them at that time by citizens of the United States would have subjected such replacements to substandard living conditions and separation from their families, which would have inevitably resulted in lowered morale, reduced efficiency and high labor turnover, with the attendant adverse effects upon the national defense preparations in one of the most important strategic areas.

3. In view of these facts, the War Department, under date of January 3. 1941, requested the opinion of Mr. Sidney Hillman, Advisory Commission, Council of National Defense, with regard to the possibility of securing a suspension of those provisions requiring the employment of United States and Panamanian citizens. On February 26, 1941, the War Department was advised that Mr. Hillman had agreed to the suspension.

4. The Judge Advocate General of the Army and the Judge Advocate General of the Navy collaborated in drafting an Executive order which was submitted to the President on March 5, 1941, its object being to suspend compliance with the citizenship provisions in the sections of the acts in question. Executive Order No. 8719 was issued March 22, 1941 as follows:

EXECUTIVE ORDER

SUSPENDING CERTAIN STATUTORY PROVISIONS RELATING TO EMPLOYMENT IN THE

CANAL ZONE

By virtue of the authority vested in me by section 6, title I of the act of June 11, 1940, Public, No. 588, 76th Congress, section 7 of the act of

June 13, 1940, Public, No. 611, 76th Congress, and section 2 of the act of June 24, 1940, Public, No. 653, 76th Congress, relating to certain kinds of employment in the Canal Zone, and deeming such course to be in the public interest, I hereby suspend compliance with the provisions of the said sections during the continuance of the national emergency proclaimed to exist by Proclamation No. 2352 dated September 8, 1939.

THE WHITE HOUSE,
March 22, 1941.

[No. 8719]

FRANKLIN D. ROOSEVELT.

5. From the wording of Executive Order No. 8719, it would appear that the President had suspended compliance with all the provisions contained in the sections in question, whereas the War Department was only desirous of suspending the provision forbidding payment to any civilian for services rendered by him on the Canal Zone, unless such person was a citizen of the United States of America or the Republic of Panama. This desire was clearly expressed in all correspondence pertaining to the matter, as reference to the inclosed copies will show. The provision in the sections in question regarding extra compensation in the amount of 25 per centum was vitally essential to the recruitment of citizens of the United States for employment on the Canal Zone. Accordingly, an opinion of the Judge Advocate General of the Army was requested on April 2, 1941, as to whether Executive Order 8719 of March 22, 1941, operated to make ineffective subsection (5) (b) of section 7, Public No. 611, as well as similar sections of Public, No. 588 and Public, No. 653, 76th Congress. In an opinion dated April 5, 1941, the Judge Advocate General held: * * With a view to accomplishing this objective, (to permit the employment of persons without regard to citizenship in the prosecution of all the projects to be undertaken in the Canal Zone for which the appropriations were made) the Executive Order suspends compliance with the provisions of certain sections of the statutes mentioned above and cited therein. It should be noted, however, that each of these sections contains several provisions which constitute mandatory requirements of law (subject to the power of suspension) and certain others which are merely permissive, or in the nature of authorizations. Those provisions which prescribe that employees "may receive as compensation equal rates of pay based upon rates paid for similar employment in the continental United States plus 25 per centum" are obviously of the category last described. The language of the portion of each statutory provision which relates to the matter of suspending its operation appears to be clearly designed to empower the President to suspend compliance with the restrictions imposed by it and it is manifest that no authority would be requisite in order to effect the suspension of more authorizations. Moreover, the terms of the Executive order closely parallel the statutory language authorizing such suspension. In view of these factors, considered in conjunction with the general purpose of the order, and in the absence of any indication of an Executive intent to do more than suspend the limitations imposed by law, it seems reasonable to conclude that the permissive statutory provisions relating to compensation should be regarded as having been unaffected by the terms of the Executive order.

"4. Accordingly, it is the opinion of this office that Executive Order No. 8719 does not suspend those portions of the appropriation acts, cited in paragraph 3 above, which provide that certain civilian employees in the Canal Zone may receive as compensation equal rates of pay based upon rates paid for similar employment in the United States plus 25 per centum."

6. Section 3 of the Naval Appropriation Act, 1942, Public, No. 48; section 2 of the War Department Civil Appropriation Act, 1942, Public, No. 71; and section 7 of the Military Appropriation Act, 1942, Public, No. 139, all of the 77th Congress, contain the same restrictions and permissive actions pertaining to the services of civilian personnel on the Canal Zone, and Executive Order No. 8812 suspends compliance with the appropriate sections of these acts in the same manner as Executive Order No. 8719 does for the 1941 Acts.

7. In view of the apparent intent of the Executive orders in question, it is desired that a decision be given at this time as to whether those Executive orders operate to suspend compliance with the provisions in the sections of the acts stated as pertain to the employment of United States and Panamanian citizens, permitting payment of the 25 per centum differential, or whether you

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