the United States to Canada or Mexico, require a 1-cent stamp and not a 10-cent stamp, as heretofore required by this office. All former rulings of this office on this subject are hereby modified to conform to

said opinion.

* * *

Respectfully, yours,

G. W. WILSON, Commissioner.

Mr. C. H. TREAT, Collector Internal Revenue, New York, N. Y.

DEPARTMENT OF JUSTICE, Washington, D. C., January 2, 1900. SIR: I have the honor to acknowledge the receipt of your communication of December 19, 1899, submitting for my opinion the following questions:

"(1) As to whether export bills of lading issued by carriers covering goods exported from the United States to Canada by railroad cars are taxable under Schedule A, act of June 13, 1898, at the rate of 10 cents for each shipment or at the rate of 1 cent.

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(2) Whether the same ruling applicable to Canadian exports by railroad would also apply to exports by railroad from the United States to Mexico, another contiguous foreign territory."

The answer to these interrogatories depends upon the determination as to which of two clauses of the war-revenue act of 1898 governs the taxation of bills of lading for goods exported by railroads from places within the United States to Canada or Mexico. The two clauses referred to are the following:

A. "Bills of lading or receipt (other than charter party) for any goods, merchandise, or effects, to be exported from a port or place in the United States to any foreign port or place, ten cents."

B. " 'Express and Freight: It shall be the duty of every railroad or steamboat company, carrier, express company, or corporation or person whose occupation is to act as such, to issue to the shipper or consignor or his agent, or person from whom any goods are accepted for transportation, a bill of lading, manifest, or other evidence of receipt and forwarding for each shipment received for carriage and transportation, whether in bulk or in boxes, bales, packages, bundles, or not so inclosed or included; and there shall be duly attached and cancelled, as is in this Act provided, to each of said bills of lading, manifests, or other memorandum, and to each duplicate thereof, a stamp of the value of one cent:" etc., etc.

Upon a broad and general interpretation of the language of these provisions, the ordinary freight receipts or bills of lading issued by railroad companies evidencing the receipt of goods to be transported from the United States to any place in Canada or Mexico would be taxable under either clause. Because such manifests or receipts as are referred to and as are usually issued by railroad companies upon the receipt of freight for transportation are within the broader meaning of the term bills of lading, and, therefore, would be taxable under Clause A, they are also undoubtedly within the class of instruments included within Clause B. There being, therefore, a necessity of determining by legal construction which clause of the war-revenue act is intended to cover this particular kind of instruments, we must resort to the ordinary rules of interpretation and seek to discover otherwise than by a resort to the broadest and most general meaning of the words the particular clause of the act which the will of Congress intended should apply.

Resorting, therefore, to other parts of the same act, we find the following provisions, which may be cited as tending to shed some light upon the question:

C. "Charter Party: Contract or agreement for the charter of any ship, or vessel, or steamer, or any letter, memorandum, or other writing between the captain, master, or owner, or person acting as agent of any ship, or vessel, or steamer, and any other person or persons, for or relating to the charter of such ship, or vessel, or steamer, or any renewal or transfer thereof, if the registered tonnage of such ship, or vessel, or steamer does not exceed three hundred tons, three dollars," etc.

D. "Manifest for custom-house entry or clearance of the cargo of any ship, vessel, or steamer for a foreign port-if the registered tonnage of such ship, vessel, or steamer does not exceed," etc.

E. "Passage ticket by any vessel from a port in the United States to a foreign port, if costing not exceeding thirty dollars, one dollar," etc.

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F. Provided, That the stamp duties imposed by the foregoing schedule on manifests, bills of lading, and passage tickets shall not apply to steamboats or other vessels plying between ports of the United States and ports in British North America."

The phrase "bills of lading" and the words "port," "export," etc., are derived from the maritime law, and originally related exclusively to matters connected with navigation and shipping. A bill of lading, in maritime jurisprudence, signifies a memorandum or acknowledgment in writing, signed by the captain or master of a ship or other vessel, that he has received in good order on board of his ship or vessel therein named at the place therein mentioned certain goods therein specified, which he promises to deliver in good order, the dangers of the sea excepted, at the place therein appointed, for the delivery of the same to the consignee named therein, or to his assigns, he or they paying freight for the same. This was the primary meaning of the term. A charter party was a contract for the letting of the whole or part of a ship for the conveyance of goods in consideration of the payment of freight. So, also, in its earliest use the word "export" meant the carrying out of goods from one country into a foreign country by means of a ship. Modern methods of business and transportation have made the use of receipts or manifests in the nature of bills of lading applicable to transportation by carriers by land, and such receipts or manifests are now frequently described as bills of lading. In the same way goods are now frequently exported by railroad cars as well as by vessels.

It is obvious that when the act in question refers to the subject of charter parties and fixes the tax thereon, as well as when it refers to manifests for custom-house entry or clearance of the cargo of any ship, vessel, or steamer for a foreign port, or to passage tickets by any vessel from a port in the United States to a foreign port, it is referring exclusively to matters within the realm of maritime law, and is dealing only with vessels engaged in the foreign trade. In my judgment, it was in the same sense that Clause A, referring to bills of lading for goods to be exported from a port or place in the United States to any foreign port or place, was intended to be considered. This conclusion is derived from several considerations:

1. Clause B, under the title of "Express and freight," has fully and specifically covered the taxation of manifests or receipts issued for goods received for transportation by railroad companies. There can be no question but what in every case of a shipment by rail from any

point in the United States either to another point in the United States or to a point out of the United States, the company is bound to issue a receipt under the express and freight clause, and to place thereon a 1-cent stamp. In all instances where goods are received for transportation by rail in the United States, some part of the carriage must be through our own territory, and certainly for that portion of the carriage a stamp receipt is necessary under Clause B. It would also seem to be necessary to hold, if Clause A is applicable to such cases, that an additional stamp of 10 cents must be placed upon the receipt or manifest in case the goods are to be transported to a place outside the United States; but unless the language of the act positively requires it, it will not be held that Congress intended to impose duplicate taxation upon this branch of business. A meaning will be sought for that will give reasonable and adequate effect to each clause, so that each can have full and complete operation within its own sphere of application. Such a result we obtain from a construction which restricts Clause A to a maritime sense as referring only to transportation by vessels in the foreign trade, exclusive of all ports of British North America.

2. The war-revenue acts of 1862 and 1864 contained a clause in precisely the same language as Clause A under consideration; nevertheless, the Treasury Department never attempted by virtue of that provision to impose a stamp tax upon railroad companies transporting goods to Canada by rail during the whole period those acts remained in force. This was not because the Department was not desirous of imposing, if possible, a revenue tax upon railroad freight receipts, for it appears that several attempts were made by the Internal-Revenue Office to subject such receipts to taxation under other clauses of the acts of 1862 and 1864, though unsuccessfully. The fact that during the whole time that this clause remained unrepealed as a part of the acts of 1862 and 1864, a construction was put upon it by the revenue bureau, which limited its application to goods exported by vessels engaged in the foreign trade, is very cogent and conclusive testimony as to the scope and effect the same clause was intended to have by the Congress which passed the war-revenue act of 1898.

What is known as Departmental construction of a statute is, in proper instances, a very important method of determining the true legal construction to be placed upon acts of Congress. As was said by Mr. Justice Brown in Schell's Executors v. Fauche (138 U. S., 562-572): "In all cases of ambiguity the contemporaneous construction, not only of the courts, but of the departments, and even of the officers whose duties it is to carry the laws into effect, is universally held to be controlling."

When there is added to this Departmental construction the subsequent readoption of the same language by Congress in another act, it is conclusive that Congress, in the absence of language to the contrary, intended the same construction and effect to be given to the words in the latter as in the former instance.

In this connection it is to be noted that the Proviso F, exempting from stamp duties manifests, bills of lading, and passage tickets issued by steamboats and other vessels plying between ports of the United States and ports in British North America, was also contained in the act of 1862. It thus appears that Congress, in both instances, had in view the policy of exempting from taxation bills of lading on vessels engaged in the foreign trade with ports of British North America, leaving the duties to be paid upon business of that nature transacted by vessels going to other foreign ports.

3. To hold that Clause A covered bills of lading or manifests issued by railroad companies for goods received by them for transportation by rail from points in the United States to Canada would be to hold in effect that Congress intended to make a manifestly unjust discrimination against that particular class of traffic. This will appear from a comparison of freight rates by railroad to Canada and by vessels to Liverpool. The minimum rate for merchandise weighing less than 100 pounds from Boston to Montreal is 45 cents. A stamp tax of 10 cents upon such shipment would equal 22 per cent of the gross freight, but inasmuch as the American railroads, which would have to pay this tax, receive only a portion of the total freight charge, the percentage of tax to the freight received by the American road would be much greater.

The minimum rate of freight for merchandise from Boston to Liverpool on similar quantities is 21 shillings; the tax of 10 cents on such a shipment would amount to only 2 per cent of the total freight, but by the proviso of the act all shipments by vessel to Canadian ports are required to pay no stamp tax whatever. It is not probable that it was the intention of Congress to make so serious a discrimination against the railroad carriers. No reason for such a discrimination is suggested or in any way appears, and in the absence of explicit language requiring such a construction it will not be presumed that Congress intended so to discriminate.

I therefore advise you that upon bills of lading, receipts, manifests, and other similar documents issued by railroad companies for the receipt of goods to be transported by rail from any place in the United States to Canada, a stamp tax of 1 cent is payable under the clause headed "Express and freight," and that no tax is payable thereon under the clause relating to goods exported from a port or place in the United States to any foreign port or place. The same rule should be applied to shipments by rail to Mexico.

Very respectfully,

JOHN W. GRIGGS, Attorney-General.

The SECRETARY OF THE TREASURY.

BOARDS OF TRADE, EXCHANGES, ETC., SALES AT.

(See EXCHANGES, BOARDS OF TRADE, ETC.)

BONDS.

(See also DECISIONS 20781, p. 138; 20795, p. 200; 20917, p. 203; 20981, p. 204; 21400. p. 205; 21420, p. 226; 21471, p. 209; 21539, p. 318; 21667, p. 211; 21815, p. 86.)

(20510.)

Stamp tax--Bonds of State officers.

Tax on bonds required before a person can enter on the duties of a State office not a tax on the functions of a State government.

TREASURY DEPARTMENT,

OFFICE OF COMMISSIONER OF INTERNAL REVENUE,

Washington, D. C., January 10, 1899.

SIR: I have the honor to acknowledge the receipt of your letter of December 19, 1898, to the Hon. John W. Griggs, United States Attorney-General, which has been referred to this office for answer.

13442- -3

Your letter is devoted to an argument intending to show that the taxation by the United States of the bonds of State officers is unconstitutional.

In reply, you are advised that the ruling of this office, made on the advice of the honorable Attorney-General, is that "bonds given by public officers, such as sheriffs, clerks, registers, or recorders of deeds, treasurers of counties, cities, or towns, or other public officers of like character, are required to be stamped." This ruling was made under the authority of that paragraph of Schedule A of the act of June 13, 1898, which is headed:

Bond: For indemnifying any person or persons, firm, or corporation who shall have become bound or engaged as surety for the payment of any sum of money, or for the due execution or performance of the duties of any office or position, and to account for money received by virtue thereof, and all other bonds of any description, except such as may be required in legal proceedings, not otherwise provided for in this schedule, fifty cents.

It is not claimed that the bonds of State officers come under the indemnifying clause of the above paragraph, but are included in the phrase "all bonds of any description, except such as may be required in legal proceedings not otherwise provided for in this schedule."

The only portion of the law which would exclude or exempt these bonds from taxation is contained in the first proviso of section 17 of the stamp act, which states:

That it is the intent hereby to exempt from the stamp taxes imposed by this Act such State, county, town, or other municipal corporation, in the exercise only of functions strictly belonging to them in their ordinary governmental, taxing, or municipal capacity.

Of course, it could not be maintained that bonds required from persons before they can be qualified as State officers come within this exception.

In your argument you cite the only decision of a court which has ever ruled that the official bonds of State officers are not taxable by the United States Government. This was given by the supreme court of Indiana in the case of the State v. Gordon (32 Ind., 1).

This opinion of a single State court can have no controlling influence over the Executive Department of the United States Government. This office is aware that the United States Supreme Court has decided that the United States can not tax the salaries of State officers, but it has never decided that it can not tax their bonds.

The same tax was in force from July 1, 1862, to June 6, 1872, and so far as known to this office this question was never tested in any Federal tribunal. In the face of a plain, unequivocal legislative mandate, the Executive Department of the Government would not be justified in changing the ruling above stated in regard to these bonds