Evening star. [volume] (Washington, D.C.) 1854-1972, 1875-10-27

Important Opinion Of Charles O.Cou.
or, that the United States IL Bouud
Tor Their Payment, Principal and
Int Fest.

The following opinion by the distinguished
lawyer, Charles O'Conor, upon the status o:
the 3-65 bonds will be read with interest
CASE.
| ACT OF congress approved June Goth, 1874.
| Section ], ~. s. Stat at Large, Vol. rs, part
5, p 1901 IL is provided: That the sinking
Iund commissioners of said district ii. q.
| District OF Columbial are hereby continued
| and IL shall be the duty OF said sin King fund
| commissioners 10 cause bonds of the Dis
| ulct OF Columbia To be prepared in sums of
| nifty and hve hundred dollars, bearing date
| August LIST, 1874, payable fifty wears after
| date, bearing interest at the rate of 3-65 per
| centrum per annum, payable semi annually,
| 10 be signed by the Secretary and Treasure
/ OF the sinking fund commissioners and
| countersigned by the Comptroller OF the sal I
| district, and sealed as the board may direct
| by Federal, State, or Municipal Authority
| engraved and printed at the ex pense of the
District OF Columbia, and IN form not in-
| consistent herewith. land the faith of the
| United States Is hereby pledged that the
United states will by proper proportional
appropriations as contemplated in this act
and by causing To be levied upon the proper
| ty within said District such taxes as will
| (dO SOY provide the revenues necessary To pa Y
| the interest on the said bonds as the same
may become due and payable and create a
SINKING lund for the payment thereof at
maturity.I These words edo so" were i'm
serted by an act of February 20, 1875, L. s.
Stat at Large, Vol. Il, page 49,
An Act of the Legislature of the State of
New York passed May Il. 1875, (ch. 81, o.
404.) provides Up. 409) as follows
]. section %. IL shall be lawful for the
trustees OF any savings bank 10 invest the
moneys deposited therein, only as follows,
To wit.
l. In the stocks or bonds or interest bear
Ing notes or obligations OF the United States
or those for which the faith of the United
states is pledged TO provide for the payment
OF the interest and principal. &c.
. Section 50 The powers, privileges du-
ties and restrictions, conferred and imposed
upon any savings corporation, by whatever
name known, by It's charter or act of incor-
poratiOn, are hereby abridged, enlarged or
moc1hed as each particular case may re-
qulTe, IN such manner that each and every
such savings corporation shall possess the
powers, rights and privileges, and be subject
10 the duties and restrictions and Liabilities
conferred and impose Il by this act, ANYTHING
I'D thelr respective charters or acts of incor-
LofauOn To the contrary notwithstanding.
But nothing in this act shall be construed TO
aDect the Legality of investments heretofore
mao pursuant to any provisions of law in
force When such investments were made, or
trans actions had, nor To require the change
OF investments for those named in this act
except as the same can be done gradually by
The sale or REDEEM ptiOn of the securities SO in
vested In, in such manner as TO prevent loss
or embarrassment in the business of such
corporation. or unnecessary loss or injury 10
Ine borrOwerS on sucn securities. And the
lnVeStme mt hereafter ip any securities moi
named in this act, or the amendments that
may be made thereto. shall be deemed mis-
denleHBOr on part of the trustees authorIZ-
ing, or officers making the same and such
trustees or officers shall be subject to the
prosecutions and punishments prescribed by
law for that offence.
Your opinion is requested as to the follow
ing questions:
1st What is the obligation of the United
States in regard to the bOuds issued under
the acts of Congress OF June goth. 1874 and
February 10Th, 1876?
I'd Are these bonds such as are mentioned
III the 10th section Of the act of the I.egisIa-
ture OF tue stale of New York OF the 18th of
May, 1875?
ID. Are savings banks incorporated under
the laws of the state of New York prior 20
the passage of the act (ch. 81, Laws of lS,a
authorized 10 invest in these bonds?
In connection with this matter we euclpSr
you
/. The report OF the Select Committee -
inquire into the affairs of the District OF CDi
nmbia, being report No. "a of the House of
representatives, i3d Congress, first session.
2. Message of the President OF the Uu't.d
States of the Doth OF June 1874, being Exaca
tive document No. 2ss OF the same boiy.
3. Report of the Committee OF the JUL
No. 651 of tie same body.
1. The opinion OF Mr., Attorney General
Williams, dated the 18th of March. 1875
s. Letter Of the Commissioner OF Internal
Revenue of the 18th of May, 1875 TO NJ. b
Blake, collector of internal revenue.
d. Letter Ofthe First and Second Comptroller
OF the Treasury of the United States of May
Il Co.
ISigned.l ALEXANDER GREEN.
Netr lOrK, October !, 1915.
OPINION.
!. The obligation OF the United States is
most explicitly that the principal aud Inter
est OF the bonds shall be punctually paid
The words employed admit of no other inter
probation. SO far as the District of Columbia
as corporate legal entity can be said to
have separate status among the parties to
the contract, it is a mere instrument or sub
ordinate agent of the United States, having
no powers, functions, authority, or, il may
be said, any existence save as established or
recognized, and from time to time suffered
to exist or modified by the supreme over
ruling power Of its creator and governor the
United States. By naming the method in
which the United States designs TO perform
It's obligation, i:e., through taxation on the
District no Limitation was imposed upon the
absolute and unqualified character of the OBJ
legation itself.
AS there is no system OF bankruptcy appli-
reputation, If the world will permit, being
their only escape from debt, so subordinate
municipalities or organized local districts
charge from debt except by full payment.
All The property within their limits is liable
10 taxation for payment, and, IL sold on exc
cution or otherwise for that purpose, it will
remain liable IN the hands OF the purchaser
for any unsatisfied balance of the debt; ans,
IL may be charged foI that balance through
renewed taxation, unless susceptible of re-
mOval and actually removed beyond the
municipality or district, which cannot be as
TO the realty.
Thus any local district in state of the
Union. duly charged with debt To be paid
through taxation, can by no possible subter-
fuge escape from the power OF the federal
court to compel payment whilst any prop
erty exists within Its geographical limits on
which a tax can be levied. 1t may safely be
asserted that payment OF any debt due 10 an
individual from such district is absolutely
certain to the creditor, and unavoidable by
the debtor. BoOdgOOd vs. Mohawk & Hud.
son river railroad company, Is Wendell, Is.
az.
This particular Illustration may not apply
TO the District OF Columbia; but 1t Is quite
Impossible to maintain that there would be
any possible method in which that district
could avoid the payment OF these debts. Its
supreme government has pledged itself to
levy on the property within 1t sufficient
sums TO pay the principal and interest. That
governments own legislative and executive
buildings are within the district. III they
are exempt from taxation, that is by the
mere SIC UOl0 Of the sovereign power. That
power has pledged itself that IL will not exer-
else, to impede payment any authority IL
may possess, and on the contrary that IL will
exert all its authority 10 secure and enforce
payment. Indeed its engagement is express
that payment shall be made, and In the man
ner specified; and this implies an engage
meDt that the method shall be efYectual. The
manner is rule laid down by the govern
ment for Its own convenience, and for the
Guidance nj = 0fY3rtal 0rupns In, the