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canal board of November 22, 1910, was accepted and acted upon by you as a sufficient compliance with the terms of the act of Congress authorizing the improvement in question; that this was a matter primarily for you to determine, and that the insufficiency of such action to extinguish the existing power rights and privileges affected by the improvement is not clearly apparent, I think that the action taken by you should be upheld, notwithstanding the attempt of the canal board to rescind that resolution, and that you are justified in making such further expenditures under said appropriation as the interests of the United States in the premises seem to require.
What has been said renders it unnecessary to reply categorically to the questions submitted. Respectfully,
GEORGE W. WICKERSHAM. THE SECRETARY OF WAR.
REGISTRY AND ENROLLMENT OF VESSELS.
A vessel belonging to a domestic corporation is entitled to registry or
enrollment, even though some stock of the company be owned by aliens.
DEPARTMENT OF JUSTICE,
July 11, 1911. SIR: I have the honor to acknowledge the receipt of your letters of the 21st and 29th of June, in which you
ask whether the vessel, New Island Wanderer is entitled to the “privileges of vessels employed in the coasting trade” of the United States.
You state that said vessel is American built and is owned by the Thousand Island Steamboat Co., a corporation duly organized and existing under the laws of the State of New York; that recently most, if not all, of the capital stock of the corporation has been acquired and is now owned by aliens, citizens, and residents of Canada, and that all the officers of the corporation are aliens, with the exception of three directors, who are citizens and residents of the United States.
The answer to your question depends upon an examination of the navigation laws.
Section 4311, title, “Regulation of Commerce and Navigation,” of the Revised Statutes of the United States, provides that vessels enrolled in pursuance of such title and no others “shall be deemed vessels of the United States entitled to the privileges of vessels employed in the coastingtrade or fisheries."
Section 4312, Revised Statutes, provides that "in order for the enrollment of any vessel, she shall possess the same qualifications, and the same requirements in all respects shall be complied with, as are required before registering a vessel.”
Section 4132, Revised Statutes, provides that certain vessels “belonging wholly to citizens,” or, “being wholly owned by citizens, and no others, may be registered as directed in this title.”
Section 4131 provides that vessels registered or enrolled pursuant to law, and no others, "shall be deemed vessels of the United States, and entitled to the benefits and privileges appertaining to such vessels; but no such vessel shall enjoy such benefits and privileges longer than it shall continue to be wholly owned by a citizen or citizens of the United States or a corporation created under the laws of any of the States thereof *
The underscored portion of this section was added by the act of May 28, 1896 (29 Stat. 188).
Clearly the policy of the law is that no vessel is a vessel of the United States for purposes of registry or enrollment unless it belongs to citizens of the United States.
Whether a corporation is such a citizen depends upon the intention of the legislature, to be found in the statutes themselves.
The original navigation act of September 1, 1789 (1 Stat. 55), provided for the registry of vessels in the foreign trade, and their enrollment in the coasting trade or fisheries. On December 31, 1792 (ib. 287), was passed a new statute relating solely to the registering of ships in the foreign trade; and the later act of February 18, 1793 (ib. 305), regulated the enrollment of vessels in the coasting trade.
* * "
The foregoing sections of the Revised Statutes are taken largely from these statutes. None of them refers to the registry of vessels owned by corporations.
The act of March 3, 1825 (4 Stat. 129), provided that enrollments and registers for steamboats or vessels, owned by any incorporated company, may be issued in the name of the president or secretary of such company; and that such enrollments and registers shall not be vacated or affected by a sale of any share or shares of any stockholder, or stockholders in such company (secs. 1 and 2); that upon the death, removal, or resignation of such president or secretary, a new register or enrollment shall be taken out (sec. 3); that previously to the obtaining of such enrollment or register, the president or secretary shall swear as to the ownership of the vessel by such company, without designating the names of the persons composing the company (sec. 4); and (sec. 5) that such oath shall contain a statement that "no part of such steamboat or vessel has been, or is then, owned by any foreigner or foreigners.”
The first four sections of this act have become sections 4314 and 4315 Revised Statutes, relating to enrollments and sections 4137, 4138, and 4139 Revised Statutes, relating to registers, while the fifth section was repealed by act of June 11, 1858 (11 Stat. 313).
Upon a consideration of the several statutes, I am of opinion that in the act of 1825 Congress declared a corporation of the United States a "citizen" thereof within the meaning of the navigation laws. Therefore, a vessel belonging to a domestic corporation is owned by a citizen of the United States, even though some of the stock in that corporation belongs to aliens; alien stockholders have neither the legal nor equitable ownership of any part of the vessel. As said by the Supreme Court of the United States in Humphreys v. Mc Kissock (140 U. S. 304, 312): “Both the commissioner and the court
seem to have confounded the ownership of stock in a corporation with ownership of its property. But nothing is more distinct than the two rights; the ownership of one confers no ownership of the other. * * The corporationthe artificial being created—holds the property, and alone can mortgage or transfer it.”
In its later enactments upon the subject Congress clearly indicates the same view.
Section 1 of the act to encourage American shipbuilding, of May 10, 1892 (27 Stat. 27), authorized the issue of registers to certain foreign-built vessels, of which not less than 90 per cent of the shares of the capital of the foreign corporation owning the same was owned by citizens of the United States, “including as such citizens corporations created under the laws of any of the States thereof,” upon the American owners of such majority interest obtaining full and complete title and transfer to such steamships from the foreign corporations owning the same.
And in the act of May 28, 1896, amending section 4131, supra, Congress uses the expression “a corporation created under the laws of any of the States” as synonymous with “citizen of the United States."
Section 4142, Revised Statutes, is not inconsistent with this view. That section requires the taking of an oath, in order to the registry of any vessel, “that there is no subject or citizen of any foreign prince or state, directly or indirectly, by way of trust, confidence, or otherwise, interested in such vessel, or in the profits or issues thereof.” As this provision first appears in section 4 of the act of December 31, 1792, it would seem to be required only in the oath of an American owner residing abroad. However, the courts early construed the law as requiring this statement in all oaths (Scudder v. Calais Steamboat Co., 21 Federal Cases No. 12566, per Curtis, circuit justice), and I believe that such is the present practice. Assuming, especially in view of a slight change in the language of this section as carried forward into section 4142 in the revision of the laws, that this construction is correct, the interest meant is clearly an interest by way of ownership, and as before stated the owner of stock in a corporation has no such interest in its property.
A similar question was raised in United States v. Delaware and Hudson Co., 213 U. S. 366, where the Supreme Court construed the so-called commodities clause of the Hepburn Act of June 29, 1906. That clause provided that it should be unlawful for any railroad company to transport in interstate or foreign commerce any commodity
owned by it in whole or in part “or in which it
“or in which it may have any interest, direct or indirect.” The United States filed a bill to restrain, among other things, some of the carriers from transporting coal belonging to a corporation some of the stock of which was owned by the carrier. The Supreme Court, applying the foregoing reasoning, held (413, 414) that the carrier had no interest, direct or indirect, in the property of the corporation whose stock it owned. This construction of substantially the same language seems controlling here.
In a letter to the Secretary of the Treasury of April 16, 1884, Attorney General Brewster expressed the same opinion. (See Treasury Decisions for 1884, p. 187, No. 6316.)
Mr. Brewster referred with approval to the English case of Queen v. Arnaud (9 Adolphus and Ellis, N. S. 806), decided in 1846, where the Court of Queen's Bench construed similar British statutes in the same way. There Lord Chief Justice Denman said:
“It is said that some of the members of the corporation are not British subjects, but foreigners, and, consequently, that the vessel does not wholly belong to Her Majesty's subjects, as required by the fifth section of the act, and is within the prohibition, contained in the twelfth section of the act, against foreigners being entitled to be owners, whole or in part, directly or indirectly, of any requiring to be registered.
“Now, it appears to us that the British corporation is, as such, the sole owner of the ship, and a British subject within the meaning of the fifth section, as far as such a term can be applicable to a corporation, notwithstanding some foreigners may individually have shares in the company, and that such individual members of the corporation are not entitled, in whole or in part, directly or indirectly, to be owners of the vessel.
“The individual members of the corporation, no doubt, are interested, in one sense, in the property of the corporation, as they may derive individual benefit from its increase, or loss from its destruction; but in no legal sense are the individual members the owners.
If all the individuals of the