H.R. 5858

GAO testified on H.R. 5858, a private relief bill which provides compensation to certain silver dealers for losses found due them by the Court of Claims. The claims resulted from actions of the Treasury Department in terminating the silver marketing program. Under the program, Treasury openly bought and sold silver at a set price. By 1967, the need for the regulated price had lessened, because silver certificates were replaced by Federal Reserve Notes, and silver coins by clad coins. Treasury terminated the program on May 18, 1967. However, orders received on that date were not processed and honored because of an internal policy making the termination retroactive to the day before. The claimants had each ordered silver from the Treasury at the set price on May 18, 1967, and took orders from customers using that price. To cover their commitments, the dealers had to purchase silver at a considerably higher price. In 1969 testimony, GAO concluded that there was no legal liability to any of the claimants under contract theories, but there were strong equitable considerations in favor of the dealers. In addition, it had no objection to referring the matter to the Court of Claims. The Court of Claims has determined that the claimants are equitably entitled to recovery from the United States. GAO is in full agreement with the basic measure of recovery and concurred with the conclusion that interest can be awarded at the discretion of Congress, since it is the prerogative of Congress to award interest in this case. However, in making a determination on interest, GAO recommended that Congress should give attention to the longstanding practice of the courts not to award interest against the Government even in the case of equitable claims. Without the private relief bill, this case would not fall within the few exceptions to this rule.