Mr. Akerman to Mr. Fish
Sir: Your letter of the 1st instant presents a question arising under the act of February 21, 1871, making appropriations for the consular and diplomatic expenses of the Government for the year ending June 30, 1872, and for other purposes. The last of the appropriations in that act is as follows:
The pay to the government of Great Britain and Ireland, the second and last installment of the amount awarded by the commissioners under the treaty of July one, eighteen hundred and sixty-three, in satisfaction of the claims of the Hudson’s Bay and of the Puget Sound Agricultural Company, three hundred and twenty-five thousand dollars in gold coin: Provided, That before payment shall be made of that portion of the above sum awarded to the Puget Sound Agricultural Company, all taxes legally assessed upon any of the property of said company covered by said award, before the same was made, and still unpaid, shall be extinguished by said Puget Sound Agricultural Company; or the amount of such taxes shall be withheld by the Government of the United States from the sum hereby appropriated. (16 U. S. Stat., 419.)
Attorneys for Pierce County, Washington Territory, have transmitted to you a certificate of John Latham, auditor of Pierce County, Washington Territory, under the seal of the commissioner’s court of that county, that a certain annexed paper is a true and correct transcript of the delinquent tax-rolls so far as relates to the taxes of the Puget Sound Agricultural Company of Pierce County, Washington Territory, with the percentage added thereto according to law, as fully and as amply as the same appears of record in my office. The paper annexed purports to be a statement of delinquent taxes due to Pierce County, Washington Territory, by the Puget Sound Agricultural Company, on one hundred and sixty-one thousand acres of land, from the year 1859 to 1869, inclusive. These taxes are distributed under the heads of county tax, school tax, territorial tax, and road tax, the whole amounting to $27,062 64; and there are additions of various percentages, running from twenty-five per cent. on the tax of 1869 to two hundred and seventy-five per cent. upon the tax of 1859, raising the total to the sum of $61,305 22. No explanation is given in the certificate or annexed paper of the reason for these additions. But it is probable that they are claimed as due for the delinquency of the tax payer.
You request my opinion as to whether the law requires the retention in the Treasury of the amount of the said original taxes and of the additions thereto.
The appropriation above quoted is in fulfillment of a stipulation in the treaty of July 1, 1863, which, after providing for a decision of the claims of the company by commissioners, engages in the fourth article that the sums awarded shall be paid in two installments, within specified times, “without any deduction whatever.” (13 U. S. Stat., 652.) If this proviso is to cause the payment of a less sum than the amount awarded, it will produce a breach of the treaty, and make the country responsible to the foreign power for such a breach. A statute which may have such consequences should receive the strictest construction allowable under established rules. Not denying the right of Congress to repeal a treaty or any provision of it, so far at least as to control the action of the Executive in relation to it, yet I think that a statute which may have that effect should be held to mean no more than its language necessarily imports.
Under this rule, when the term taxes is used in such an act of Congress, [Page 539] without explanation from the context or other noticeable circumstances, it must be understood to mean taxes under the laws of the United States—that is, taxes known as national taxes, in distinction from State or Territorial taxes.
When the Government is both a debtor and creditor of the same party, Congress might think it no substantial, though a literal, violation of an international covenant to deduct what is due to this Government from what this Government owes to the other party. But that Congress meant that the Government of the United States should become a tax collector for a Territorial county, and should execute this office by breaking a treaty with a foreign power, is not to be inferred from language which will bear any other interpretation.
If it were intended that this money should be withheld for the benefit of Pierce County, Congress would probably have directed that it should be paid the treasury of that county. But no such direction appears in the statute. The provision is that the amount of such taxes shall be withheld from the appropriation—that is, shall be kept in the Treasury of the United States—a very fit place for taxes assessed by the United States, but not for taxes assessed by Pierce County.
I am not informed whether any United States taxes were in fact assessed upon the property of the company. But it is hardly possible that the company could have had interests of great magnitude within the United States for the last ten years without liability to national taxes; and Congress might have inserted the proviso out of abundant caution, without knowing whether a claim for such taxes existed in fact.
I do not overlook the fact that Territory is a creation of Congress, and sustains to the General Government a relation different in many respects from that sustained by a State. Nevertheless, its taxes are so different from the taxes of the United States, in the authority which immediately imposes them, in the agencies which collect them, and in the purposes to which they are applied, that Congress cannot reasonably be supposed to have intended to embrace them under the general name “taxes” in such a statute as that under consideration.
I have not examined the questions of the regularity and sufficiency of the certificate from the auditor of Pierce County; of the validity of the county’s claim for taxes, or of the validity of the assessed penalty; or whether the taxes, if valid at all, constitute a general debt of the company, or binds alone the property once occupied by it, and now recognized as belonging to the United States; because the construction which I have felt obliged to put upon the proviso in question makes such examination unnecessary.
I am, therefore, of the opinion that neither the tax nor the penalty which Pierce County is said to claim from the company should be withheld, and that no taxes should be withheld under the proviso except such as may be found to have been legally assessed upon the property of the company by the Government of the United States.
Very respectfully, &c.,