Evening star. [volume] (Washington, D.C.) 1854-1972, 1903-08-29
UNAUTHORIZED BY LAW
Controller Objects to theSign-
ing of Bonds Before Issue.
THE 365 SECURITIES
VIEWS UPON QUESTION RAISED
BY DISTRICT AUDITOR.
The Law Contemplates Concurrence of
Action Between Treasurer and
District Authorities.
THE 365 SECURITIES

Controller TracewelI has written a letter
to the District Commissioners on the ques-
ton Of signing and sealing District Of Co
lumbia 1865 bonds in advance of their ISSUE
He declines to render a decision on the
question, but presents his views The au-
ditor for the District presented to the Com
missioners the following question, which
: they transmitted to Mr.. Tracewell for de-
cision:
Il am advised that it is desired by the
treasurer of the United States, as commits
sioner of the sinking fund, that the blank
3.65 per cent District of Columbia regis
tered bonds, aggregating 100000, trans
mitted on the 10th instant, shall be coun-
tersigned by the auditor and sealed with
the seal Of the District in order that they
may be returned to the Treasury Depart
ment and held in the vaults of the register
of the treasury until demand for some por-
ton of said bonds shall arise, when regis
tered 1896 per cent District bonds hereto
fore issued shall be sent to the department
for transfer and issue of new bonds there
for, or when 1896 per cent coupon bonds of
the District shall be received for exchange
for registered bonds
| Suggestion Of Time Saving.
TT is suggested that undesirable delays
will be 0bviated should said bonds be so
countersigned and sealed in advance of
their actual issue, so that when needed
for the purpose of transfer or exchange the
requisite amount may be duly signed and
registered by the register of the treasury
and signed by the treasurer of the United
States as the commissioner of the sinking
fund. which will complete the execution
and issue.
THE question arises whether it would be
lawful and eXpedient to countersign and
seal these bonds in advance of their actual
issue, or should such action be deferred
until the Commissioners and the auditor
of the District shall be officially notified
of the retirement and cancellation of any
specific number of bonds for which a new
issue is desired for transfer or exchange,
limiting the number of new bonds to be
countersigned and sealed to the number
actually retired and cancelled.
Il should hesitate to countersign the
bonds in question in advance of the time
OF actual issue, in the absence Of a de-
cision by competent official authority that
such action would be lawful and proper.
AS the interest on the 36o per cent bonds
of the District of Columbia is made pay
able, by law, at the treasury of the United
States, where such bonds will also be re-
deemed at maturity, the question at issue
appears to be one which may be properly
decided by the controller of the treasury
and l respectfully recommend its submis-
sion to that officer for his decision
Declines to Render Formal Opinion.
The controller has this to say on the
question:
LAS the question presented by you ap-
pears to be one of Administered ton only and
does not involve payment to be made d.
rectly by you, there is a serious doubt
whether 1 am authorized to render any de-
cis.on thereupon. l am not unwilling to
render you any aid in my power but
In view of this doubt l feel constrained to
confne myself to an expression of my
views upon the question presented. which
are to be regarded as merely advisory.
LAS indicated by the auditor the act of
February 20, 1875, contained the following
provision: That registered bonds may be
issued in lieu of coupon bonds provided
in said act. or exchanged for coupon bonds
already issued, and the interest of all said
bonds shall be payable at the treasury of
the United States
There is no doubt of the authority to
issue the bonds for the purposes>specited
and when so issued the law requires that
they shall be signed by the treasurer of the
United States. exofacio commissioner of
the sinking fund.- and countersigned by the
auditor of the District and sealed as the
board may direct.
Specific Question.
'The specific question, therefore is
whether the above provision authorizes the
pIepdTdl lOu Oh DOnQS issue, lncluQlng
the counter signature of the auditor and
the sealing by you, before the facts actual
ly arise upon which their issue is au-
thorized.
las indicated, supra, think this is an
administrative question, the determination
of which is within the discretion of the Of
fcers who are authorized to issue the
| bonds.
IF the bonds were to be prepared in
nj G prnn fnr ,h1 .,,1 Il
there would be danger of their being stolen
| or otherwise passing into the hands of
persons not entitled thereto, and of con-
| sequent loss. 1t has been held that bonds
issued in blank. without the Insertion of
| the name of any payee, which had passed
| through several intervening holders would
| be filled up by subsequent holder and
made payable to himself or order. and that
| suit could be maintained upon them
1T is further understood that it is con-
| templated having them countersgned by
| the auditor of the District and sealed but
| not signed by the treasurer. eX-ofIicio com
| missioner of the sinking fund. In this form
they would not be perfect bonds, and if lost
or stolen no Iiability'would arise upon them
as bonds issued by the District.
| Function of Counter Signature
| The ordinary function of "a counters sna-
| ture is to verify the signature of the prnci-
| pal or to authenticate writing. But 1t is
| sometimes adopted for the purpose of pro-
| vidinS for concurrent action of the persons
who are to sign and countersign. Where it
is required for the first of these purposes it
would be manifestly unwarranted to have
the counter-signature made before the sigma
ture writing is made. But in the second
| of these cases 1t would seem to be imma-
| terial which signs first. But in the proposed
action there appears TO be further cues
| ton The statute authorizes the issue of
| registered bonds in exchange for coupon
| bonds. When coupon bonds are prese nted
| for exchange question may arise as to their
| validity or their ownership or their amount,
| etc. If blank registered bonds were coun-
| tersigned and sealed and left with the treas
| urer as ex-ofticio sinking fund commissions
! err to determine all questions that mig mt
! arise, there would be no concurrence of ac-
! ton between him and the auditor for the
| District. and the purpose of counter sigma
! ture would be nullifed. Similar questions
| would arise where new registered bonds
We're TO be issued for old registered bonds;
| which had been assigned.
1t would seem therefore that he courco