New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1902-10-26
PANAMA TITLE CLEAR.
ATTORNEY GENERAL KNOX so
REPORTS TO PRESIDENT.
NO LEGAL OBSTACLES TO CoNsTRUC-
TION OF THE ISTHMIAN CANAL
BY THE UNITED STATES.

BY THE UNITED STATES.
Washington. Oct 25-Attorney General Knox
has decided that If the United States should
accept the offer of the new Panama Canal
Company submitted last spring for the sale Of
the canal for S400e0O00 il would receive
through the parties in interest a valid and un-
encumbered title 10 the property This decision
was reached after thorough and exhaustive
investigation Of the situation in Paris. first, by
Charles W. Russell. special attorney for the
Department OF Justice and later by the Attor-
ney General himself. The Attorney. General for
mally submitted his opinion to President Roose-
Welt to-day. II makes about three hundred
pages
The opinion begins with a history OF the con-
oessions made by Colombia in 1878 1890. etc.
the formation OF the De Lesseps Panama Canal
Company Of France. the failure OF this COM
pany in 1883. the transfer in 1894 Of all its
rights 10 the present Panama Canal Company
of France by the lquidator appointed by the
French court 10 wind W the affairs of the old
company. and Of he laws passed in France
concerning the liquidation Of the old company.
OBJECTIONS ANSWERED.
The opinion then takes up the principal OBJ
jections which have been made in this country
TO the title proposed 10 be given 10 the United
resolve n
selves into reasons in support of the following
propositions;
First-That the new Panama Canal Company
has no power 10 sell the canal and railway
property.
second-That the uquidator Of the old Pan
anna Canal Company has no power 10 consent
TO such sale.
Third-That the French courts have no power
TO authorize the liquidator or the new COM
panv or either Of them to enter into the sale
a. KrerfG he TTr.ffe Cd a feg
would take the property as a trust fund sub
ject to the total obligations TO the stockholders
the bondholders and the other creditors of both
companies.
The history and nature Of French companies
OF the kind in question are explained at length.
They are said TO be altogether different from
American corporations. but 10 be easily under
stood if regarded as private partnerships which
is their essential character, The opinion says
that they are in some respects regulated by
law but that these regulations do not change
the essential character OF the concerns as part
nerships. do not establish any tie between them
and the government or any obligations from
them 10 the government. and do not forbid the
exercise of liberty 10 dispose Of their property
as freely as an individual disposes OF his il no
special law forbds. and If he is solvent and
not under some particular contractual or other
like obligation to retain the property. The new
no law forbdding il to sell
COMPANY HAS POWER To SELL.
The powers of the general meeting Of stock
holders of that company are discussed. and il
is held to have derived from the partnership
agreement ample power to sell as it is pro
posing TO do
The Iiquidstor of the old company. when he
turned over the assets of the new company
stimulated for so per cent of the profits OF the
canal when finished, and his power 10 consent
to the sale and give up his right n the 60 ner
cent is discussed 4 the light Of the French
law concerning the winding up Of such asso-
Citations, and il is held that under the general
law of France and the special Law Of 1sa3
concerning the liquidation Of his compsnv he
has full power 10 dispose OF the assets of the
concern. and consequently TO consent 10 the sale
OF the 60 per cent. which is part OF those as
sets II is held that the old company is NOT IN
/ bankruptcy or in what is similar 10 banlr,,ntc,,
under French law, but IS governed by the aer
eral law or civil code. which the special Ian, .,
r 1893 already referred 10, partially rnodiAes
That law requires the approval of the C,i,,,
Tribunal OF the Seine for all sales alterations
of the assets. but does not prevent such aliena
tions. That tribunal has approved the consen,
Of the liquidator 10 the sale, and on apnsaI ~,
a bondholder Of the old company the Cour, =,
Appeals al Paris confirmed the decision which
held that under the special law OF ls93 a Ia-aI
representative OF the bondholdsrs had been a.
pointed by the court TO represent them all. and
that their representative. who had formally, a.
nounced his consent to the SALE was the 81.
one authorized by the special law to opnosa .h
Judgment OF approval on behalf OF the -
holders
The opinion next discusses the power Of ,ha
French court TO declare law OF that kins -
as unconstitutional. and holds that no Fraro,-
court or other authority has power to decI.ra
any French statute voi. The opinion s.,'s
however. that the French special act ought ~.
70 be declared void and u it is TO be eritic,.as
at all it is for being zoe tender of the priys,.