The news & observer. [volume] (Raleigh, N.C.) 1894-current, 1902-10-28
A CLEAR TITLE TO
PANAMA PROPERTY
The Company is Able to Give
Us One.
THUS bEClOES Mr.. KNOX
This Decision is Arrived at After a thorough
and Exhaustive investigation of the
Situation in Par S bv Russell
and Knox.
(By the Associated Press.)

Washington, D. c., Oct. 25.-Attorney-
General Knox has decided that if the
United States should accept the offer of
the New Panama Company, submitted
last spring for the sale of the canal for
$40, 900 900, it would receive, through the
parties in interest, a valid and unincum-
bered title to the property. The decision
was arrived at after a thorough and ex-
haustive investigation of the situation in
Paris, first by Special Attorney Charles
w. Russell and later by the Attorney
General himself. The Attorney General
formally submitted the opinion to Presi-
dent Roosevelt today. 1t makes about
three hundred pages.
The history and nature of French COM
panies of the kind in question are ex-
planned at length in the opinion. They
are said to be altogether different from
our corporations, but to be easily UNI
derstood if looked upon as private part
nerships which is their essential charac-
ter. The opinion says they are in some
respects regulated by law, but that these
regulations do not change the essential
DO not establish any tie between them
and the government, or any obligations
from them to the government, and do rot
forbid the exercise of the liberty to dis
pose of their property as freely as an
individual disposes of his, if no special
law forbids. and if he is solvent and
not under some particular contractual or
other like obligations to retain the prop
erty. The New Panama Company is
quite solvent. and there is no law for
bidding it to sell.
The powers of the general meeting of
stockholders Of that company are dis
cussed and it is held to have derived
from the partnership agreement ample
power TO sell as it is proposing to do
The liquidator of the old company
when he turned over the assets to the
new company, stipulated for so per cent
of the profits of the canal when finished
and his power to consent to the sale
and give up his right TO the 60 per cent
is discussed in the light of the French
law concerning the winding up of such
associations, and it is held that under
the general law of France and the special
act of 1898 concerning the liquidation Of
his company he has full power to dis
consequently to consent to the sale of
the 60 per cent which is part of those
assets 1t is held that the old com
pany is not in bankruptcy, or in what is
similar 70 bankruptcy under French law
but is governed by the general law or
civil code which the special law of 1898
already referred to partially modified.
That law requires the approval of the
{,.;I, 81 4l,o rn, al sol,
or alterations of the assets, but does
not prevent such alterations. The tri
bunal has approved the consent of the
liquidator to the sale, and on appeal by
a bondholder of the old company the
Court of Appeals of Paris confirmed the
decision which held that under the spc-
cial law of 1898 legal representative
of the bondholders had been appointed
by the court to represent them all, and
that that representative who has for
mally announced his consent to the sale,
was the ONLY one authorized by the spe-
cal law to oppose the judgment of ap
prevail on behalf of the bondholders.
AS to the proposition that the United
States would be subject to the debts and
claims of the stockholders and bondhold-
ers and other creditors of both of the
companies, the opinion says:
CAS- a general proposition, it is not
perceived how there could be any law
or equity for subiecting a purchaser of
an article sold as assets OF failing
partnership (such as the old company,
to the debts of the partnership. If such
were the law, there would be no pur-
cbasers of such assets, and the creditors
would receive no payment OF their debts
cut of the proceeds nor stockholders any
dividend of a residue
Nevertheless the opinion eXhaustively
considers all possible mortgages and 9TH
or liens affecting the property itself,
real or personal under French or Colon
bian law 1t says there have been mort
cages and pledges OF personal property.
and shows in detail what became of them.
As to the proposition that the United
States cannot take title to the shares OF
stock Of the Panama Railroad Company,
a New York corporation, which the
Panama company proposes to sell with
the canal property, the opinion holds that
the government can take and hold any
kind of property it may have need of, in
the same manner as an individual can:
that it would hold it's shares as an IN
dividual would hold them.
AS to the objection that Congress has
authorized a purchase from the company
only and not from the liquidator, the
opinion SAYS:
'fCcrtanly in view of tho title as here
inbefore explained, the purchase will be
from the new company, and the consent
of the IiGuidator viii be at most