ment of a percentage of gross earnings shall preclude the Government of the United States from imposing a tax upon any corporation of the United States, or of any State, which may construct and operate such utility. The concession granted by the Philippine Government to the company in 1906 provides in subdivision 12 for the payment by the company annually of a fixed percentage of its gross earnings to the Philippine Government, and that such payments, "when promptly and fully made by the grantee shall be in lieu of all taxes of every name and naturemunicipal, provincial, or central-upon its capital stock, franchises, right of way, earnings, and all other property owned or operated by the grantee under this concession or franchise." But the taxes here referred to as municipal, provincial, or central are taxes which might be imposed by authority of the Philippine Government, and have no reference to a tax imposed directly by authority of the United States for the purposes of its own revenues. And if the grant by the Philippine Government to the company assumed to exempt it in any wise from its obligations to the United States it would be to that extent inoperative.

Neither does the fact that the Philippine Government has guaranteed the payment of the interest upon the bonds issued by the company exempt the company from taxation.

Among the corporation tax cases recently decided by the Supreme Court was that of the Interborough Rapid Transit Co. The street railway, in that case, operated by the defendant company, was owned by the city of New York, but this was held not to exempt the business of the company from the tax. The court cited with approval South Carolina v. United States (199 U. S. 437), in which it was held that "when a State, acting within its lawful authority, undertook to carry on the liquor business it did not withdraw the agencies of the State carrying on the traffic from the operation of the internal revenue laws of the United States."

The company, as Mr. Milburn agrees, is within the terms of the corporation tax law. The business in which it is engaged is within the terms of the law, as was expressly held in the corporation tax cases. That the company is

aided in its business by the Philippine Government can not of itself exempt it from the burdens imposed by the Government of the United States.

The question you ask must be answered in the affirmative.

Respectfully, yours,

The SECRETARY OF WAR.

F. W. LEHMANN,

Solicitor General.

REMISSION OF PENALTY IMPOSED UPON VESSEL CLEARING FOREIGN PORT AND ENTERING PORT OF UNITED STATES WITHOUT BILL OF HEALTH.

The Secretary of Commerce and Labor has no authority to remit or mitigate a penalty or forfeiture imposed upon a vessel for a violation of section 2 of the act of February 15, 1893 (27 Stat. 450), which requires a vessel to obtain a bill of health before clearing any foreign port for a port in the United States, as that matter still remains within administrative jurisdiction and control of the Secretary of the Treasury.

DEPARTMENT OF JUSTICE,

June 27, 1911.

SIR: I beg to respond to your request of the 12th instant for my opinion as to whether, under section 5292 or section 5294 of the Revised Statutes, or any other provisions of law, you are authorized to remit or mitigate a penalty or forfeiture of $250 imposed by the District Court of the United States for the Southern District of California upon the British steamship Beckenham for a violation of section 2 of the act approved February 15, 1893 (27 Stat. 449, 450), which provides—

"SEC. 2. That any vessel at any foreign port clearing for any port or place in the United States shall be required to obtain from the consul, vice-consul, or other consular officer of the United States at the port of departure, or from the medical officer where such officer has been detailed by the President for that purpose, a bill of health, in duplicate, in the form prescribed by the Secretary of the Treasury, setting forth the sanitary history and condition of said vessel, and that it has in all respects complied with the rules and regulations in such cases prescribed for

securing the best sanitary condition of the said vessel, its cargo, passengers, and crew; * * *

"The President, in his discretion, is authorized to detail any medical officer of the Government to serve in the office of the consul at any foreign port for the purpose of furnishing information and making the inspection and giving the bills of health hereinbefore mentioned. Any vessel clearing and sailing from any such port without such bill of health, and entering any port of the United States, shall forfeit to the United States not more than five thousand dollars, the amount to be determined by the court, which shall be a lien on the same, to be recovered by proceedings in the proper district court of the United States. * * *99

Section 5292 of the Revised Statutes, as amended by the act of February 27, 1877 (19 Stat. 240, 252), reads as follows:

"SEC. 5292. Whenever any person who shall have incurred any fine, penalty, or forfeiture, or disability, or may be interested in any vessel or merchandise which has become subject to any seizure, forfeiture, or disability by authority of any provisions of law for imposing or collecting any duties or taxes, or relating to registering, recording, enrolling, or licensing vessels, and for regulating the same, or providing for the suppression of insurrections or unlawful combinations against the United States, shall prefer his petition to the judge of the district in which such fine, penalty, or forfeiture, or disability has accrued, truly and particularly setting forth the circumstances of his case, and shall pray that the same may be mitigated or remitted, the judge shall inquire, in a summary manner, into the circumstances of the case; first causing reasonable notice to be given to the person claiming such fine, penalty, or forfeiture, and to the attorney of the United States for such district, that each may have an opportunity of showing cause against the mitigation or remission thereof; and shall cause the facts appearing upon such inquiry to be stated and annexed to the petition, and direct their transmission to the Secretary of the Treasury. The Secretary shall thereupon have power to mitigate

or remit such fine, forfeiture, or penalty, or remove such disability, or any part thereof, if, in his opinion, the same was incurred without willful negligence, or any intention of fraud in the person incurring the same; and to direct the prosecution, if has been instituted for the recovery thereof, to cease and be discontinued, upon such terms or conditions as he may deem reasonable and just."

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Section 5294, as amended by the act of December 15, 1894 (28 Stat. 595) and the act of March 2, 1896 (29 Stat. 39), is as follows:

"SEC. 5294. The Secretary of the Treasury may, upon application therefor, remit or mitigate any fine, penalty, or forfeiture provided for in laws relating to vessels, or discontinue any prosecution to recover penalties or relating to forfeitures denounced in such laws, excepting the penalty of imprisonment or of removal from office, upon such terms as he, in his discretion, shall think proper; and all rights granted to informers by such laws shall be held subject to the Secretary's powers of remission, except in cases where the claims of any informer to the share of any penalty shall have been determined by a court of competent jurisdiction prior to the application for the remission of the penalty or forfeiture; and the Secretary shall have authority to ascertain the facts upon all such applications in such manner and under such regulations as he may deem proper."

The act of February 14, 1903 (32 Stat. 825, 829), to establish the Department of Commerce and Labor, provides, section 10, that

'All duties, power, authority and jurisdiction, whether supervisory, appellate or otherwise, now imposed or conferred upon the Secretary of the Treasury by acts of Congress relating to merchant vessels or yachts, their measurement, numbers, names, registers, enrollments, licenses, commissions, records, mortgages, bills of sale, transfers, entry, clearance, movements and transportation of their cargoes and passengers, owners, officers, seamen, passengers, fees, inspection, equipment for the better security of life, and by acts of Congress relating to tonnage tax, boilers on steam vessels, the carrying of inflam

mable, explosive, or dangerous cargo on vessels, the use of petroleum or other similar substances to produce motive power and relating to the remission or refund of fines, penalties, forfeitures, exactions or charges incurred for violating any provision of law relating to vessels or seamen or to informer's shares of such fines, and by acts of Congress relating to the Commissioner and Bureau of Navigation, Shipping Commissioners, their officers and employees, Steamboat-Inspection Service, and any of the officials thereof, shall be and hereby are transferred to and imposed and conferred upon the Secretary of Commerce and Labor from and after the time of the transfer of the Bureau of Navigation, the Shipping Commissioners, and the Steamboat-Inspection Service to the Department of Commerce and Labor, and shall not thereafter be imposed upon or exercised by the Secretary of the Treasury. And all acts or parts of acts inconsistent with this act are, so far as inconsistent, hereby repealed."

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The act of February 15, 1893 (27 Stat. 449), under which the penalty or forfeiture was imposed upon the steamship Beckenham, is entitled "An act granting additional tine powers and imposing additional duties upon the Marine-Hospital Service," now known as the Public Health and Marine-Hospital Service (act of July 1, 1902, 32 Stat. 712), which, it will be observed, has not been transferred to the Department of Commerce and Labor, but still remains, as formerly, under the jurisdiction of the Secretary of the Treasury (sec. 4862, Revised Statutes). The rules for the sanitary condition of the vessel, a compliance with which is to be set forth in the bill of health, are prescribed by the Secretary of the Treasury under the provisions of the act of February 15, 1893 (secs. 2, 3, and 5).

In my judgment Congress did not, by the provisions of the act creating your department, intend to transfer to you the authority to remit or mitigate a penalty or forfeiture, such as that in question, incurred for a violation of a statute concerning a matter which remains within the administrative jurisdiction and control of the Secretary of the Treasury. It is true that by the terms of that act the duties of the Secretary of the Treasury "relating to the