The Montgomery advertiser., 1902-10-26
MR.. KNOX FILES OPINION
Considers Objections Urged
Against the Purchase.
Comes to the Conclusion That There
is Nothing to Prevent Acquisi-
ton of Canal Rights by
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 $40,
100000 1t would receive through the par
ties in interest a valid and unincumbered
title to the property.
This decision was arrived at after a
thorough and exhaustive investigation of
the situation in Paris first by Special At
torney Charles w. Russell and later by
the Attorney General himself. Tire At
torney General formally submitted the
opinion to President Roosevelt today. 1t
makes about 800 pages. The following Is
synopsi sof the opinion:
The Attorney Generals opinion to the
President on the title which the new Pan
anna Canal Company of France offers to
the United States of all its rights and
property on the isthmus of Panama,
opens with a history of the concessions
made by Colombia in 1873. 1890. etc. the
formation of the De Lesseps Panama Ca
nal Company OF France: the failure of
this company in 1885, the transfer in 1894
of all its rights to the present Panama
Canal Company of France by the liqui-
dator appointed by the French court to
wind up the affairs Of the old company
and of the laws passed by France con-
corning the liquidation of the old COM
pany.
The Principal Objections.
The opinion then takes up the princi-
pal objections which have been made in
this country to the title proposed to be
given to the United States. These objec-
TONS 1t says, resolve themselves into
reasons in support of the following prop
ositions: ~
First-That the new Panama Canal
Company has not power to sell the canal
and railway property
Second-That the iiquidator of the old
Panama Canal Company has not power
to consent to such sale. ~
Third-rhat the French courts have not
power to authorize the llquidator and the
new company or either Of them to enter
into the sale.
Fourth-At all events the United States
would take the property as a trust fund
subject to the total obligations to the
stockholders the bondholders and the
other creditors of both companies.
The history and nature OF French COM
panies of the kind in question are ex-
planned at length. They are said to be
altogether different from our corpora
lions, but to be easily understood IL look
ed upon 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 partnerships,
do not establish any tie between them and
the government or any obligations from
them to the government and do not for
bid the exercise of the liberty to dis
pose of their property as freely as an
individual dlsposes of his If no special law
forbids and If he Is solvent and not under
some particular contractual or like obi
CATION to retain the property.
New Company Solvent.
The New Panama Company Is quite
solvent and there is no law forbidding 1t
TO SELL
The liquidator of the old company, when
he turned over the assets to the new
company, stipulated for 30 per cent of the
profits of the canal when finished, and 1t
is held that he has full power to consent
to the sale of 60 per cent which is a part
of those assets.
The opinion next discusses the power
of the French court to declare a law of
that kind void as unconstitutional and
holds that no French court or other au-
thority has power to declare any French
statute void.
As to the proposition that the United
claims of the stockholders and bond
holders and other creditors of both of the
companies. the opinion says:
'As a general proposition it is not
perceived how there could be any law or
equity for subjecting a purchaser of an
article sold as assets of failing partner
ship (such as the old company to the
debt Of the partnership"
Nevertheless. the opinion considers all
,ln TOGO 9TH affa
ing the property itself, real or personal
under French or Colombian law. 1t says
there have been mortgages and pledges
of personal property and shows in detail
what became of them. AS to the PROPOSE
zion that the United States cannot take
title to the shares of stock of the Panama
Railroad Company 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 the shares as an In
dividual would hold them. AS for the
suggestion that the United States at all
events could not destroy the railroad, II
Is pointed out that 1t was evidently not
intention of the French, IL they built
the canal. to dispense with the railroad
As to the objection that Congress au,
thorizes a purchase from the new com
pany only and not from the liquidator
the opinion says:
Acts as a Waiver.
certainly in view of the condition OF
1--WE title as hereinbefore explained, the
nu,chase will be from the new company
and the consent of the liquidator viii
bn at most a waiver of the rights of the
n-operty transferred to the new company
Rut If this were otherwise it would be
unreasonable to treat the act of Con
cress as forbidding purchase from the
now, company, in which it would be-
necessary for the old company or the
llauidator to join as vendor. This woulC
~ IN defeat, not to ascertain, the viii
~ congress. What 1t wants is a goot
ti+,e from the owners of certain speci
ned property, the owner being supposed
20 he and being admittedly in part, thu
-, company; and it is entirely justi