# Spray Cotton Mills v. Secretary of War

> United States Tax Court · October 29, 1947 · 9 T.C. 824

URL: https://www.frixlaw.com/law-library/cases/4485990

## Case

- **Full name:** Spray Cotton Mills v. The Secretary of War
- **Court:** United States Tax Court
- **Decided:** October 29, 1947
- **Citations:** 9 T.C. 824; 1947 U.S. Tax Ct. LEXIS 49
- **Precedential status:** Published
- **Opinion:** Concurrence by Harron
- **Judges:** Arundell
- **Cited by:** 10 later opinions in the Frix Law Library

## Citator (automated)

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- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/4485990

## Opinion text

Harron, /., concurring: In the Sessions case, the letter which was sent to the contractor was an entirely different letter than the letter which was sent to the petitioner before us here. Cf. p. 1241 of the report of the Sessions case. The holdings in the Sessions case are not. controlling of the question here. However, reference is made in the Sessions case, at page 1243, to “a manual” and an interpretation contained therein of section 403 (c) (6) -of the Kenegotiation Act, which interpretation is quoted. The majority opinion in this case also refers to “a manual.” It would throw some light on the problem if the “manual” were identified, and if the duration of the amended interpretation was better understood.
The manual is the Joint Benegotiation Manual, effective January 27, 1944, which was followed by the “Departments” in the renegotiation of contracts and subcontracts with respect to renegotiation for fiscal years ended on or prior to June 30, 1943. Paragraph 101.3 of section 1 of the Joint Renegotiation Manual provides that: “(2) This manual supersedes the ‘Joint Statement by the War, Navy and Treasury Departments and the Maritime Commission, dated March 31, 1943 * * * ’ ”
Section 342.2 of the Joint Renegotiation Manual is as follows:
342.2 Commencement of Renegotiation. Subsection (c) (6) of the Act is interpreted to mean that renegotiation commences at the time the machinery of renegotiation is put in motion and an initial contact made with the contractor, either in person or through the mails, for the purpose of obtaining information which is to be used as a basis for the determination of excessive profits.
(See p. 1243, report of J. H. Sessions <& Son, supra, where the above provision is quoted.)
The interpretation of the word “commenced” in section 403(c) (6), set forth in Part III of the Joint Statement dated March 31, 1943, was amended and superseded by the amendment of May 27, 1943, supra. It appears that the amended interpretation of May 27, 1943, was not changed thereafter, in substance. Comparison with section 342.2 of the Joint Renegotiation Manual shows that both contain the clause “to obtain [of obtaining] information which is to be used as a basis for the determination of excessive profits.” Section 342.2 of the Joint Manual is a paraphrasing of the statement of May 27,1948; but if it is more than a paraphrasing, then it is only fair to note that the statement of May 27, 1943, was in effect until January 27, 1944.
The Joint Renegotiation Manual was not published in the Federal Register, as far as can be ascertained. (Renegotiation Regulations for fiscal years ending after June 30,1943, were published in the Federal Register of April 19,1944, p. 4135. See Code of Federal Regulations of the U. S. A., Title 32,1944 Supp., ch. XIV, p. 2835.) But it has been made available to the libraries of various governmental agencies, including the library of this Court, and, as the majority opinion states, it was quoted to contractors in negotiations with them, and it represented the compilation of the uniform rules of the Departments administering the Renegotiation Act.
I concur in the view that the Departments and the Secretaries interpreted section 403 (c) (6) in the manner set forth in the Joint Statement only during the brief period of March 31 to May 27, 1943, and that, thereafter, the amendment of May 27, 1943, represented the interpretation uniformly followed in all renegotiation relating to fiscal years ended prior to June 30, 1943. I would add that section 342.2 of the Joint Renegotiation Manual.is substantially the same as the statement of May 27,1943. Thus, I think it is demonstrated that the amendment of May 27,1943, of the first interpretation in the Joint Statement should control the question in this case because, of the two interpretations, it was the only interpretation which had long standing and uniform application. Alexander v. Cosden Co., supra. It can not be said to represent a mere “interim” interpretation.
If the fact that the interpretations in the published Joint Statement were “published” is to be a factor of great weight, then all interpretations in the Joint Renegotiation Manual itself, as well as interpretations followed before the compilation of the Joint Manual, must be given no weight, whatever. It appears that, .except for the Joint Statement (which was, in part, a public statement explaining the purposes and history of the Renegotiation Act), the administrative procedures of the Departments followed in the renegotiation of the years ended before June BO, 1943, were not published. I can not find any legal basis for a view that the Departments must be held to any or all of the interpretations set forth in the Joint Statement, regardless of subsequent amendments, solely because the Joint Statement was published and amendments were not. The interpretations in the Joint Statement were stated to be subject to revision from time to time.

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/4485990. Public record. Not legal advice.