that payment of the subsidies authorized by it should be 'upon such terms and conditions' as, in the case of commodities defined by the President as strategic or critical materials, were determined by the Federal Loan Administrator, with the approval of the President, to be necessary to attain their purpose.'
And 169 F.2d at page 658 the court said, 'Indeed, to hold that the subsidy paying agents, Defense Supplies Corporation and its successor Reconstruction Finance Corporation, had inherent authority to invalidate the subsidy claim of such a claimant would render Section 7003.10(a) of the regulation wholly superfluous and meaningless. We conclude that the respondent had no such independent inherent power as it now claims otherwise within the scope of Revised Regulation No. 3 is limited to the cases expressly provided for by the regulation.'
Moreover, O P A, and not R F C, was charged with the duty of investigating and arriving at a determination with respect to manipulative practices of the type respondent complains of. See: Sec. 7(c) of Directive 41, Office of Economic Stabilization. The evidence submitted before the master with regard to grader certificates and reports of veterinarians, which tended to show that petitioner had manipulated its weights and grades, might perhaps have been relevant in a hearing before the O P A, but here it is not relevant in the view the court takes of the case. In view of these considerations the findings of the master that respondent acted arbitrarily and improperly are not erroneous. Respondent's order or ruling denying the subsidy was based on an erroneous interpretation of the regulations. Hence its action in denying these claims was unlawful and amounted to the imposition of unauthorized conditions as contemplated by section 2(m) of the Stabilization Extension Act, supra.
The master found, however 'That there was no proof, as required by the regulation, that the War Food Administrator or the Secretary of Agriculture had arrived at a determination that the petitioner had wilfully violated their regulations.' Exhibit R-29, a letter from C. W. Kitchen, Assistant Administrator of the Production and Marketing Administration, United States Department of Agriculture, dated November 21, 1945, and addressed to Mr. Stuart K. Barnes of the R F C, stated that it was found that petitioner willfully violated War Food Order No. 75 by failing to set aside beef for the Armed Forces for the period from January 20, 1944 to November 3, 1944. Because this same determination had previously been made in a proceeding dismissed as moot, the master treated the matter as if no such determination had been made. At that time the controlling regulation in effect was Revised Regulation No. 3 of the Reconstruction Finance Corporation, section 7003.10, as amended by amendment No. 3, dated April 24, 1945, and amendment No. 6, dated July 4, 1945. As amended the regulation provided: 'Section 7003.10 Invalid Claims (a) Compliance with other Regulations. Reconstruction Finance Corporation shall declare invalid, in whole or in part, any claim filed by an applicant who, in the judgment of the Secretary of Agriculture or the Price Administrator, has wilfully violated any regulation or order of their respective agencies applicable to the purchase or sale of livestock or to livestock slaughter or to the sale or distribution of meat, * * *.'
Kitchen's letter, by virtue of authority delegated to him by the Secretary of Agriculture (See: 8 F.R. 13696, 14251; 10 F.r. 13041), had the same effect as if it had been written by the Secretary of Agriculture. Thus there appears a sufficient basis for the action taken by R F C. In view of this letter and the above-quoted regulation, it cannot be said that the R F C acted arbitrarily and capriciously in the invalidation of Riverview's claims for the pertinent period. The master's rulings on this phase of the case clearly appear to be in error and will be set aside. Petitioner, Riverview Packing Co., cannot recover subsidies on claims for slaughter during the period from January 20, 1944 to November 3, 1944, and respondent is entitled to recover on its counter claim for sums actually paid on claims for this period. The remaining findings of the master are adequately supported by evidence in the record, and the conclusions based thereon are not erroneous. Accordingly, they will not be disturbed.
Confirmation of the master's report, with respect to petitioners Penn Abattoir Co. and K. & J. Markets, Inc., will be denied. The report concerning Riverview Packing Co., Inc., modified as outlined in this opinion, will be confirmed.
Settle terms of order and judgment on notice.