Mr. ROGERS. The exchange value of a mark in New York may differ from the exchange value of a dollar in Berlin?

Mr. WARWICK. Oh, yes. The correct way, I should think, would be to take the rate that exists at the post where the officer is serving and where the transaction occurred rather than from this end. It is affected, of course, by the movement of commodities and trade between the countries. Sometimes a banker does not want to issue a draft on another country because he has no balance of trade there and the rate would be higher. The rate may be so high as to involve in the transaction the cost of the shipment of the money.

SALARIES OF OFFICERS WHOSE APPOINTMENT HAS NOT BEEN CONFIRMED.

Mr. ELSTON. I would like to ask a question that does not touch this discussion at all, that was put up to me, and which involves an officer of the State Department. I think it might be answered by the Comptroller of the Treasury. It is in regard to a recess appointment in the State Department by the President where the officer takes up the duties of his position and confirmation of his appointment is pending in the Senate, but meanwhile the officer is performing his duties, say, for a number of months and is not able to draw his pay by reason of the fact that his full appointment has not been made valid. Is there any way of taking care of the salary of that officer except by an act of Congress?

Mr. WARWICK. As I understand your question, it is that of an officer who is performing the duties prior to an appointment?

Mr. ELSTON. No. He is performing the duties under an appointment of the President during a recess of Congress.

Mr. WARWICK. Oh, yes.

Mr. ELSTON. But before the appointment has been ratified or approved by the Senate.

Mr. WARWICK. That arises in the case where, during a recess of the Senate, the President fills a vacancy which existed when the Senate was in session. Section 1761 of the Revised Statutes provides that no pay shall be drawn until the person is confirmed. That is the situation of a few officers at the present time. They are serving under valid appointments. They are not drawing any pay, and under the statute they will draw no pay unless they are confirmed. It has been the practice in the past for Congress to appropriate for the officer who fails of confirmation, who had a valid title to the office and performed the duties.

Mr. ELSTON. That is generally covered in a deficiency bill or in a clause in the subsequent bill covering that activity?

Mr. WARWICK. Í remember a case some years ago of a Federal judge in the South who was appointed during the recess and served until the end of the next session of the Senate and was not confirmed, but Congress authorized the payment of his salary.

Mr. ELSTON. About what phraseology is used to validate the payment of his salary out of the Treasury?

Mr. WARWICK. In those cases they mentioned the particular officer by name, but if there are a number of them it is sufficient to indicate them and authorize payment of their salaries for having performed services under a valid appointment, notwithstanding a failure to confirm. That would remove the bar of section 1761.

Mr. ROGERS. I want to ask one final question on this exchange matter to make sure that I have it clear. To go back to the case that I have mentioned several times, and which I have made as simple as possible, of the man who collects one dollar's worth of fees and has in his hands to show for it 16 francs, and who goes out to a shop and buys 16 francs of typewriter paper. As I understand it, you say that transaction is complete and closed?

Mr. WARWICK. Yes, sir.

Mr. ROGERS. What evidence have you that he did not pay three times the value of the typewriter paper?

Mr. WARWICK. Well, that is an ordinary commercial transaction in which the presumption is that he paid only the market price. We do not assume that a man is buying, even in small quantities, for the Government and paying more than the market price.

Mr. ROGERS. On the other hand, you do assume that he is paying himself more than his salary?

Mr. WARWICK. Well, we only say that because we say the law requires us to assume it. We do not assume it as a matter of fact. Mr. ROGERS. But why, if the law requires it in the case of his salary, does not the law require it in the case of purchasing 16 francs worth of typewriting paper?

Mr. WARWICK. Well, that is a measure of the money in itself. If you make a local purchase for 16 francs, it is immaterial what the franc is worth.

Mr. ELSTON. It is immaterial whether he pays $1 or $3?

Mr. WARWICK. Yes, sir. You do not attempt to determine in that case what he paid in United States money. He paid in the paper money that he had the market price of that article.

Mr. ELSTON. And it would not make any difference whether you regarded that price as $1 or $3, he pays it?

Mr. WARWICK. As I say, you do not consider what it might have been in United States money. It is a fair presumption that he paid only the market price, and whether he took 16 francs or 30 francs is immaterial. It is immaterial what that equivalent is in United States money.

Mr. ROGERS. But in the case of his salary you are absolutely confronted with the question and with the necessity of deciding what the ratio is between the two currencies?

Mr. WARWICK. Yes; because he is not paying himself in francs; that is, his salary is not fixed in francs. His salary is fixed in United States money, and you must get the equivalent in francs. If he was sent to Paris at a salary of 60,000 francs a year, we would not have any trouble, but he is sent there at a salary of $12,000, and you are attempting, then, to find its local equivalent and not its actual equivalent. Now, I can say this: That in what I have studied of this exchange question, off and on for 25 years, I have always approached the subject with considerable hesitation, because it presents new angles once in a while, and this war time threw off all calculations and produced an intolerable situation.

Mr. ROGERS. We are very much obliged to you for coming here. I think you have cleared it up.

(The committee thereupon proceeded to the consideration of other business.)