The times. [volume] (Richmond, Va.) 1890-1903, 1898-12-25
CONTROLLERS DECISION.
The Paper Which Re-opcned Discus
sion ofthc Debt Question.

| office Of Comptroller Of the Treasury,
washington. ID. c.. Nov. /, 1898.
ITO the Honorable. the Secretary OF the
Treasury:
"slr-In your communication OF the
18th instant. you submit the following for
my decision:
The Auditor for the War Department
has certified 10 the Secretary OF the
| Treasury division Of Bookkeeping and
| Warranis). for repayment TO the Gov
| crnor Of Virginia from the apprOpria-
| ton FOR cl0thiHg and camp and garrison
| equlpage. January I, 1899. a claim.
| amounting 10 $2Gls0 for clothing and
shoes furnished for the use OF certain
regiments Of Virginia volunteers.
THE state Of Virginia being indebted to
! the United States FOR certain non-paying
and other Virginia State stocks and
bonds now belonging 10 the United
! States blouse Document No. 263. Fifty
| fourth Congress second session.. the
| question IS submitted for your consid-
| Grafton whether under the provisions Of
the act OF March 3. 1915 OS Stat. 4SD.
| tho Secretary Of the Treasury should
| withhold payment Of the claim and apply
The same as a partial payment on the
| indebtedness of the state of Virginia,
TRUST FUNDS.
| cit appears that prior to 1861 certain
| indian trust funds were Invested by the
| Secretary Of the Interior in certain state
| stocks Of the State of Virginia. amount
| ing IN $4,000: that by the act Of June
| l0 lS1G (G9 stat. 50. these stocks were
| directed 20 be transferred 70 the Treas
uror OF the United States whose duty 1t
was made 10 collect the interest falling
due thereon: that the principal Of the
! stocks became due and payable January
not rf,lnF
~ the principal and accrued interest
uouc Of which had been paid was de-
handed and refused.
"By the act Of August Is, 1891 (2S stat,
BID. the Secretary OF the Treasury was
authorized and directed to place
unon the books Of the Treasury TO the
credit Of the several Indian tribes inter-
cstcd therein. the face value OF certain
non-Daying state bonds or stocks, and
provided that
"Thoroupon said state bonds or stocks
shall become the property Of the United
States
Congress has also annually appro-
prlated moneys for the payment OF the
interest on these stocks.
1T thus appears that the state Of Vir-
ginia is indebted 20 the United States in
the amount OF these state stocks and the
interest accrued thereon.
MUST CREDIT THE DEBT.
Section 3lsl Of the Revised Statutes
provides
Whenever any state IS tn default in
the payment Of interest or principal on
investments I'm stocks or bonds issued or
guaranteed by such State and held by the
United States I'm trust. the Secretary Of
the Treasury shalt retain the whole, or
so much thereof as may be necessary, Of
arsr- rrDu.ve dine ON any account from the
United states 90 such State. and apply
the same 20 the payment Of such prin-
ciudi aud interest, or either or TO the
reimbursement with interest there, Of
mone-s advanced by the United States
on account OF interest due on such stocks
or bonds
"The act Of March 5, fs15 ds stat, 4sD
also provides:
That when any final judgment re-
covered against the United States or
other claim duly allowed by legal au-
thcrity. shall he presented 10 the Seore-
tary OF the Treasury for payment, and
the paintin OF claimant therein shall
Dee indebted 20 the United States in any
manner. whether as principal or surety
s. shall be the duty OF the Secretary 20
withhold payment Of an amount Of such
Judgment or claim equal to the debt thus
due TO the United States; and If such
plaintiff or claimant assents 10 such set
of. and discharges mis- judgment. or an
amount thereof equal TO said debt or
claim. the Secretary shall execute a dis
charge of the debt due from the plain
ton 20 the United States But II such
plaintiff. or claimant denies his indebt-
edness 20 the United States or refuses
20 consent 90 the set-oN. then the Secre-
tary shall withhold payment Of such fur.
Their amount of such judgment. or claim.
as In his opinion win be sufficient TO |
cover all legal charges and costs in |
prosecuting the debt Of the United States |
to final judgment. And II such debt IS |
not already iu suit. f. shall be the duty
Of the Secretary 10 cause legal proceed |
ings 10 bG Immediately prosecuted to |
final judgment with all reasonable dis |
patch. And If in such action judgment |
shall be rendered against the United |
States. or the amount recovered for |
debt and costs shall be less than the |
amount so withheld, as before provided |
the balance shall then be paid over TO |
such plaintiff by such Secretary with |
per cent. interest thereon for the time |
it has been withheld from the plaintin. |
AS A SET-OFF.
"These statutes are declaratOry; the |
right OF set-on being a common right. |
In Gratiot VS.. United States Q5 Pet.
315-310. Mr. Justice Story, In the opinion |
OF the court, in considering the right Of |
the United States to set off balance |
due from an officer on account against |
an amount due him for pay and e-olu-
ments. said:
" II IS but the exercise OF the common
right. which belongs TO every creditor.
10 apply the unapprOpriated moneys OF
his debtor. In his hands. in extinguish-
ment Of the debts due him.
These two statutes are in parl materia.
and are 20 be read together The pro !
visions OF section 2isl are specifically ap-
piicable 20 this class Of cases. while the
act OF March ?, 1875. is general IN its
provisions. The latter statute. how
ever contains provisions which are not !
IN tho former. 7 am. there
fore. OF the opinion that section 1881 +
exclusively applicable 10 this case. so far
as its provisions extend. but that the
provisions OF the act Of March 9. Is75. re.
1uirlng legal proceedings 10 be immedi-
ately commenced to enforce the claim.
In case the claimant refuses 20 consent
TO the set-off and the Withholding Of a
further amount 20 cover all legal charges
and costs in prosecuting the debt OF ;ire
United States 20 FINAL Judgment. apply
In addition 10 the provisions Of section
Isl.
HELD AS TRUSTEE.
1T IS 10 be observed that the provi-
,lons OF section s4s1 relate to stocks or
bonds OF a State iield by the United
States in trust" and that these stocks
ire now owned by the United States
But when the United States. IN pursu-