should be that most convenient for administrative reasons to be determined after consultation with the officers of the Reconstruction Finance Corporation.

The funds allocated and made available to the Secretary of Agriculture from the capital of the Corporation may only be used in accordance with the provisions of the Act "for the purpose of making loans or advances to farmers in the several States of the United States in cases where he finds that an emergency exists as a result of which farmers are unable to obtain loans for crop production during the year 1932 *

subject to the other provisions of section 2.

Subject to the provisions and limitations of section 2, the Secretary may continue to use, for the purpose authorized by section 2, the funds originally received from the Reconstruction Finance Corporation, together with any funds collected from loans made under the provisions of this section, treating these funds as a revolving fund to be used for the purposes authorized by the Act. But since the authority of the Secretary is limited to making loans for crop production during the year 1932 it follows that after the time has passed when loans may be made for that purpose all collections and any unexpended balance of the funds allocated to him will cease to be available for his further disposition, in accordance with the provisions of the Act, and should thereupon be returned to the Reconstruction Finance Corporation or disposed of as the Corporation may direct.

From what has been said it is apparent that the Secretary of Agriculture, in handling the funds allocated and made available to him from the capital of the Reconstruction Finance Corporation, will be engaged in making loans of its funds in accordance with the provisions, and subject to the limitations, of the statute. Thus, the Secretary is constituted the statutory agent of the corporation through whom such loans of its funds are to be made. With reference to the conduct of this business, the Act provides (section 2):

"All such loans or advances shall be made through such agencies as the Secretary of Agriculture may designate, and in such amounts as such agencies, with the approval of the Secretary of Agriculture, may determine."

There is no express limitation upon this broad power to employ any agencies which the Secretary may choose. In terms, the discretion in the selection of agencies is unlimited. Nor is there any basis in the Act for implying limitations upon the exercise of this discretion which are not expressed in the Act.

This is an emergency measure, and should be liberally construed so that its purpose may be accomplished without delay and free from undue restrictions. The Secretary is by the Act constituted the statutory agent of the Corporation, to deal with that part of its capital allocated to him, and in the execution of this agency is authorized by the statute to employ such sub-agencies as he may designate.

Section 4 of the Act authorizes the Corporation

"to select, employ and fix the compensation of such officers, employees, attorneys and agents as shall be necessary for the transaction of the business of the corporation, without regard to the provisions of other laws applicable to the employment and compensation of officers or employees of the United States; * * * determine and prescribe the manner in which its obligations shall be incurred and its expenses allowed and paid.

This provision does not in terms refer to the designation of agencies under section 2, but since it defines the power of the Corporation to employ agents and authorizes it to determine and prescribe the manner in which its obligations shall be incurred and its expenses allowed and paid, and since the statute makes the Secretary the statutory agent of the Corporation in the conduct of a part of its business, with authority to create agencies for the accomplishment of this business, the fair conclusion is that the Secretary of Agriculture, in his capacity as the representative of the Corporation with respect to agricultural loans, is to be subject to no greater restrictions than the Corporation itself.

Specifically I am of the opinion and have to advise you as follows:

1. That loans made pursuant to section 2 of the Act creating the Reconstruction Finance Corporation should not be made in the name of the Secretary of Agriculture, but may be made either in the name of "the United States of America, acting through the Secretary of Agriculture or

in the name of "the Reconstruction Finance Corporation, acting through the Secretary of Agriculture " or in the name of " the Secretary of Agriculture, acting pursuant to section 2 of the Reconstruction Finance Corporation Act," as may be most convenient for administrative reasons to be determined after consultation with the officers of the Reconstruction Finance Corporation.

2. The funds referred to in the second question, when they have served the purpose of the Act, should be returned to the Reconstruction Finance Corporation or disposed of as the Corporation may direct.

3. The Secretary of Agriculture has authority to appoint and fix compensation of persons employed by him in carrying out the provisions of the Act, without regard to other laws applicable to the employment and compensation of officers and employees of the United States, provided such persons are not otherwise employed in the service of the United States. In using such part of the funds allocated to him under the provisions of section 2 as may be necessary for the payment of personnel and for defraying all other expenses incident to carrying out the provisions of section 2, the Secretary of Agriculture is not subject to the restrictions imposed by statute upon the expenditure and disbursement of funds belonging to the United States.

Respectfully,

WILLIAM D. MITCHELL.

To the SECRETARY OF AGRICULTURE.

FILLING OF EXCEPTED-BY-LAW POSITIONS-RECONSTRUCTION FINANCE CORPORATION

The Secretary of Agriculture may make appointments under the provisions of section 2 of the Reconstruction Finance Corporation Act (47 Stat. 5), without regard to the provisions of the Civil Service Act and Rules, provided such appointees are not otherwise employed in the service of the United States.

The words excepted position" appearing in the final clause of paragraph 3 of Civil Service Rule II should be construed by the Civil Service Commission as including positions excepted by law from the operation of the Civil Service Act and Rules.

The filling of an excepted-by-law position by original appointment from a civil service register of eligibles confers upon the person so

NOTE. The publication of this opinion was delayed.

appointed eligibility for subsequent transfer, promotion, or reinstatement to a position in the classified civil service, but such employee does not thereby acquire a status protecting him from removal from such excepted position and, while holding such excepted position, the employee is not entitled to the benefits of the Civil Service Retirement Act.

When formal action looking to appointment could have been taken but was not taken by the appointing officer, either from a register of eligibles or by transfer or reinstatement, the Civil Service Commission should, at a later date, take action whereby an employee is accorded a competitive classified status.

No distinction should be made between a position in the Executive civil service of the United States which is excepted from the operation of the Civil Service Act and Rules by specific statute of Congress, and a position in a corporate body such as the Reconstruction Finance Corporation and the Merchant Fleet Corporation.

DEPARTMENT OF JUSTICE,

June 10, 1932.

Sir: I have the honor to refer to your letter of April 1, 1932, enclosing a letter of March 31, 1932, from the Civil Service Commission, and requesting me to give consideration to the following questions propounded therein:

"1. Whether appointments by the Secretary of Agriculture under the provisions of the Reconstruction Finance Corporation Act may be made without regard to the pro visions of the Civil Service Act and Rules;

"2. Whether the words "excepted position" appearing in the final clause of paragraph 3 of Civil Service Rule II may be construed by the Commission as including positions excepted by law from the operation of the Civil Service Act and Rules;

"3. Whether, in the event that an affirmative answer is given to Question 2 above, the Commission may hold that the filling of such an excepted position in any manner in which competitive positions may be filled accords to the employee (a) A status for promotion, transfer, or future reinstate

ment to a competitive classified position, but no status protecting him against arbitrary removal; and/or

(b) A status under the retirement act;

"4. Whether, in any class of cases herein considered, when formal action looking to appointment could have been taken but was not by an appointing officer, either from a register

of eligibles or by transfer or reinstatement, the Commission may, at a later date, take action whereby an employee is accorded a competitive classified status for future action;

"5. Whether in the consideration of these questions there should be any distinction made between a position in the Executive civil service of the United States which is excepted from the operation of the Civil Service Act and Rules by specific statute of Congress, and a position in a corporate body such as the Reconstruction Finance Corporation and the Merchant Fleet Corporation.'

It appears from the Commission's letter that the Secretary of Agriculture has expressed a desire to make some appointments under the provisions of section 2 of the Reconstruction Finance Corporation Act of January 22, 1932 (47 Stat. 5), in accordance with the Civil Service Act and Rules; and the question has arisen whether the Secretary is required to observe the provisions of the Civil Service Act and Rules in making all appointments under the provisions of the Reconstruction Finance Corporation Act. This question was considered by the Attorney General in an opinion to the Secretary of Agriculture dated February 27, 1932. (37 Op. 1.) In that opinion the Secretary was advised that as under section 4 of the Reconstruction Finance Corporation Act of January 22, 1932, the Corporation is authorized to select and fix the compensation of its personnel without regard to the provisions of law applicable to the employment and compensation of officers and employees of the United States, and as the funds allocated to the Secretary under the provisions of section 2 of the Act, for agricultural loans, continue to be capital of the Reconstruction Finance Corporation, "the Secretary of Agriculture in his capacity as the representative of the Corporation with respect to agricultural loans is to be subject to no greater restrictions than the Corporation itself." Therefore, "The Secretary of Agriculture has authority to appoint and fix compensation of persons employed by him in carrying out the provisions of the Act, without regard to other laws applicable to the employment and compensation of officers and employees of the United States, provided such persons are not otherwise employed in the service of the United States." Hence, with this limitation, the answer to the first question is that the Secretary of Agriculture