amounts paid by the United States. The act of July 2, 1864, above cited, expressly subordinated the lieu of the United States to the lien of the "new first mortgage bonds" to be issued. 66 The present holders take their title under the foreclosure of the mortgage made to secure those very new first mortgage bonds." This was squarely decided in the case of Union Pacific Co. v. United States (99 U. S. 402–427). 2. The Government has no right to demand the annual payment of 5 per cent of the net earnings. This follows from proposition 1, because the right to the 5 per cent of the net earnings was intended as a security and sinking fund for the Government's loan, and, therefore, its existence depends upon the existence of the debt. Union Pacific Co. v. United States (99 supra). 3. The Government has no right to withhold the entire compensation earned by the company for transportation services. The authority adduced to support this claim is the act of March 3, 1873 (secs. 5260 and 5261, Revised Statutes), which, however, is obviously a provision for a set-off against a debt, and it was so squarely held in the first of the Union Pacific cases on this general subject. United States v. Union Pacific (91 U. S. 72). 4. The Government still has the right to retain one-half of this compensation. This proposition was decided by Attorney General Griggs (22 Op. 396) and has always been accepted without controversy. 5. Also, it appears that the United States still has the right of a junior mortgagee to redeem. Whether or not the United States could have been brought by process into the foreclosure proceedings (which occurred in 1898) may be doubtful. The consent to be sued might, perhaps, be found in the Tucker Act (24 Stat. 505), section 1, subsection 1, especially in connection with section 4 of the act of March 3, 1887 (24 Stat. 491), which directs the Attorney General to "defend the rights and interests of the United States in respect of the matters in this section mentioned (redemption of paramount liens, etc.), and to take steps to foreclose any mortgages or liens of the United States on any such railroad property." Act of March 3, 1887, section 4 (24 Stat. 491). It is doubtful whether, irrespective of these provisions, the United States could compulsorily have been made a defendant. (Jones on Railroad Securities, 3d Ed. par. 400; Hill v. U. S., 9 How. 385; United States v. McLemore, 4 How. 286; Elliot v. Van Voorst, 3 Wall. Jun. 299; Fifth National Bank v. Long, 7 Biss. 502; Meier v. Kans. Pac. Ry., 4 Dill, 378.) But this is really immaterial, because even if it could have been made a party, it was not in fact made a party, and, therefore, it has the usual right of a junior mortgagee who has not been a party to the foreclosure of a prior lien, which is a right to redeem under conditions. (Noyes v. Hall, 97 U. S. 34; Gordon v. Hobart, 10 Fed. Cas. No. 5609; Gage v. Brewster, 31 N. Y. 218; Jones on Railroad Securities, 3d. Ed. 441; Barrett v. Blackmar, 47 Iowa, 565, 571; Douglass v. Bishop, 27 Iowa, 214, 216; 27 Cyc. 1578, collecting a large number of cases.) Attorney General Griggs did consider the advisability of redeeming this very property, but felt that at that time its value was not sufficient to provide an adequate equity (22 Op. 398). The figures as given by the Report of the Solicitor of the Treasury (pp. 52, 54) would seem to indicate a fairly substantial equity in the property at its present valuation over and above the amounts which the Government would have to allow as preliminary to its right to redeem. While the data is not sufficient to compute just what the equity would be, it would seem probable that there is a substantial balance which might be recovered either by actual resale or through a settlement. But that is a question for the Secretary of the Treasury to determine upon investigation of the facts which I have not before me. is, therefore, sufficient for me to say that for the reasons which I have briefly expressed, I am unable to concur with the recommendations of the Solicitor of the Treasury. Respectfully, THE PRESIDENT. GEORGE W. WICKERSHAM. FOREIGN VESSELS CARRYING PASSENGERS FROM SAN JUAN TO NEW YORK. The transportation of passengers by foreign vessels from San Juan, Porto Rico, to the port of New York, notwithstanding the fact that the passengers go ashore for brief stays at intervening foreign ports, is a violation of section 8 of the act of June 19, 1886 (24 Stat. 81), as amended by section 2 of the act of February 17, 1898 (30 Stat. 248). DEPARTMENT OF JUSTICE, SIR: I have the honor to acknowledge the receipt of your letter of the 10th ultimo, requesting an opinion whether the transportation of passengers by foreign vessels from San Juan, Porto Rico, to New York is a violation of section 8 of the act of June 19, 1886, as amended by section 2 of the act of February 17, 1898, under the circumstances set forth in a letter from the collector of customs at San Juan, inclosed in your communication. It appears that the Hamburg-American Line, operating foreign vessels, has put in effect a series of cruises for tourists from New York and return to various ports in the West Indies and in South America. The vessels in the course of the voyage stop at Habana, San Juan, Kingston, and other places to enable the passengers to go ashore for brief stays. It frequently happens that persons in Porto Rico desire to take advantage of the coming of these tourist steamers by joining the vessel at San Juan for the remainder of the voyage, disembarking at the port of New York, it being their intention to make that port the final termination of their voyage. Section 8 of the act of June 19, 1866 (24 Stat. 79, 81), as amended by section 2 of the act of February 17, 1898 (30 Stat. 248), provides: "SEC. 8. No foreign vessel shall transport passengers between ports or places in the United States, either directly or by way of a foreign port, under a penalty of two hundred dollars for each passenger so transported and landed." That San Juan, Porto Rico, is a port or place in the United States within the meaning of the above enactment s determined by Huus v. New York and Porto Rico Steam ship Company, 182 U. S. 392, where it was held that a steam vessel engaged in trade between Porto Rico and New York was not engaged in foreign trade but was "a coastwise seagoing steam vessel" within the meaning of section 4401, Revised Statutes. Referring to section 9 of the Porto Rico organic act (31 Stat. 79) which provides that "the coasting trade between Porto Rico and the United States shall be regulated in accordance with the provisions of law applicable to such trade between any two great coasting districts of the United States," the court said (182 U. S. 396): 66 By this act it was evidently intended, not only to nationalize all Porto Rican vessels as vessels of the United States, and to admit them to the benefits of their coasting trade, but to place Porto Rico substantially upon the coast of the United States, and vessels engaged in trade between that island and the continent, as engaged in the coasting trade. This was the view taken by the executive officers of the Government in issuing an enrollment and license to the Ponce, to be employed in carrying on the coasting trade, instead of treating her as a vessel engaged in foreign trade." The question, therefore, resolves itself to this: Is it a violation of section 8 of the act of June 19, 1886, as amended, supra, for a foreign vessel to transport passengers from one port of the United States to another port thereof, via foreign ports, where part of the object of the voyage is to see these foreign ports, though the main object of the voyage is the transportation to the domestic port of destination? Such transportation is clearly a violation both of the letter and spirit of the statute. It falls directly within its terms, and is in every respect coastwise transportation. In 18 Op. 445 it appeared that a foreign vessel carried passengers from Cleveland, Ohio, to Windsor, Canada, from whence they purchased tickets to Chicago and resumed their voyage on the same vessel, landing finally at Chicago. This was held to be a continuous voyage from Cleveland to Chicago, and a violation of section 8 of the act of June 19, 1886. That opinion is clearly controlling here. The fact that the passengers stop at the intervening foreign ports, desiring in good faith to see these interesting places, can not affect the case. Their motives are not the proper subjects of inquiry. They are, in fact, transported from San Juan to their ultimate destination, New York. and landed there. The case of The Cleveland (28 Op. 204) is distinguishable. There the whole object of the voyage was to visit foreign places, and it was in no just sense a transportation from New York to San Francisco. In the case now submitted, however, it is evident from your statement that the voyage would not be undertaken at all if it were not desired to reach New York. Respectfully, GEORGE W. WICKERSHAM. The SECRETARY OF COMMERCE AND LABOR. CUSTOMHOUSE AT SAN FRANCISCO-PAYMENT FOR EARTHQUAKE LOSSES BY CONTRACTOR. The provision of the act of May 27, 1908 (35 Stat. 318), which authorizes the Secretary of the Treasury to reimburse the contractor for the loss sustained by him in consequence of the earthquake and fire of 1906 in constructing the customhouse at San Francisco, does not warrant any payment to his subcontractors for their individual losses due to these causes. If, however, the contractor should, in pursuance of his verbal understanding with the subcontractors, pay them an amount properly attributable to said earthquake and fire, he would be entitled to be reimbursed for that amount out of the appropriation in question. DEPARTMENT OF JUSTICE, SIR: I have the honor to respond to your letter of the 10th ultimo, wherein you request my opinion upon certain questions arising under the act of May 27, 1908 (35 Stat. 318). The questions and the supporting facts are thus stated by you: "This act authorized the Secretary of the Treasury to pay Thomas Butler, the contractor for construction of the customhouse at San Francisco, such sum as may be equitable and just and without profit to him to reimburse him |