U.S. Rev. Stat. § 161 provides that the head of each department is authorized to prescribe regulations, not inconsistent with law, for the government of his department, the conduct of its officers and clerks, and the distribution and performance of its business.
U.S. Comp. Stat. § 2619 provided that the salaries of postmasters were determined on the basis of the gross receipts of their offices. By regulation the Postmaster General provided that gross receipts would not include any large or unusual sales of stamps and stamped matter for use other than at the office of purchase. The indictment alleged that appellees, postmaster and customer, conspired to defraud appellant government by arranging a large sale of stamps, that were purchased for use elsewhere. The sale was reported in the office's gross receipts with the intent of increasing the postmaster's compensation. Appellees demurred on the ground that the Postmaster General had no authority to issue a regulation so defining gross receipts, which the trial court sustained. The Supreme Court of the United States reversed the judgment.
Did the Postmaster General have the authority to prescribe rules defining the gross receipts upon which the salaries of postmasters were based?
The promulgation by the Postmaster General of a regulation defining gross receipts was a proper exercise of the power conferred under U.S. Rev. Stat. § 161 to prescribe regulations for the government of the Post Office Department that supplemented the statute providing for postmasters' compensation. It would, indeed, be strange if unlawful and criminal sales were intended to constitute a part of the gross receipts upon which the postmaster's salary should be adjusted, and it would seem clear that to prevent such result the Postmaster General could legally exercise by the regulation under review the power given him by Rev. Stat., § 161. The regulation was purely administrative of the law.