B-15985, SEPTEMBER 18, 1941, 21 COMP. GEN. 226

B-15985: Sep 18, 1941

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WHERE THE USE OF APPROPRIATED FUNDS IS INVOLVED. THIS OFFICE IS AUTHORIZED AND REQUIRED TO DECIDE WHETHER THE FUNDS ARE AVAILABLE FOR THE PAYMENT OF SUCH A TAX. 1941: REFERENCE IS MADE TO YOUR LETTER OF APRIL 4. YOUR LETTER IS AS FOLLOWS: THE ACT OF CONGRESS OF AUGUST 7. NO SPECIFIC EXCEPTION WITH RESPECT TO ACTIVITIES OF THE UNITED STATES GOVERNMENT IS CONTAINED IN THE LAW. THERE WERE SHIPPED FROM THE NAVY YARD. AN AGREEMENT WAS REACHED LOCALLY UNDER WHICH THE SHIPMENT IN SAN FRANCISCO. THE NAVY DEPARTMENT HAS BEEN INFORMED THAT THE UNITED STATES CUSTOMS SERVICE ARE REQUIRING AN EXPORT CERTIFICATE AS PROVIDED FOR IN SECTION 1 (H) OF THE ACT OF AUGUST 7. A QUESTION IS RAISED AS TO WHETHER APPROPRIATED FUNDS PROVIDED FOR THE NAVY DEPARTMENT ARE AVAILABLE FOR THE PAYMENT OF THE EXPORT TAX IMPOSED BY THE ACT OF AUGUST 7.

B-15985, SEPTEMBER 18, 1941, 21 COMP. GEN. 226

PHILIPPINE ISLANDS - APPLICABILITY OF EXPORT TAX TO PROPERTY OF THE UNITED STATES THE SOVEREIGNTY OF THE UNITED STATES WITH RESPECT TO THE PHILIPPINE ISLANDS HAS NOT AS YET BEEN WITHDRAWN UNDER THE PHILIPPINE INDEPENDENCE ACT OF MARCH 24, 1934, AS AMENDED, AND, THEREFORE, THE PHILIPPINE GOVERNMENT MAY NOT DECIDE, AS AGAINST THE UNITED STATES GOVERNMENT, WHETHER IT HAS BEEN AUTHORIZED TO LAY AN EXPORT TAX ON PROPERTY OF THE UNITED STATES, AND WHERE THE USE OF APPROPRIATED FUNDS IS INVOLVED, THIS OFFICE IS AUTHORIZED AND REQUIRED TO DECIDE WHETHER THE FUNDS ARE AVAILABLE FOR THE PAYMENT OF SUCH A TAX. AUTHORITY TO ADMINISTER THE PROVISIONS OF A STATUTE DOES NOT CARRY WITH IT THE POWER FINALLY TO DETERMINE DISPUTED QUESTIONS OF LAW AS TO THE CONSTRUCTION OF THE STATUTE BEING ADMINISTERED. APPROPRIATED FUNDS MAY NOT BE USED TO PAY AN EXPORT TAX ON PROPERTY OF THE UNITED STATES SHIPPED FROM THE PHILIPPINES SOUGHT TO BE IMPOSED PURSUANT TO THE AUTHORITY GRANTED IN THE PHILIPPINE INDEPENDENCE ACT OF MARCH 24, 1934, AS AMENDED BY THE ACT OF AUGUST 7, 1939, TO LAY AN EXPORT TAX ON "EVERY PHILIPPINE ARTICLE SHIPPED FROM THE PHILIPPINES TO THE UNITED STATES.'

COMPTROLLER GENERAL WARREN TO THE SECRETARY OF THE NAVY, SEPTEMBER 18, 1941:

REFERENCE IS MADE TO YOUR LETTER OF APRIL 4, 1941, CONCERNING THE EXPORT TAX SOUGHT TO BE IMPOSED BY THE GOVERNMENT OF THE COMMONWEALTH OF THE PHILIPPINES ON CERTAIN SHIP FENDERS BELONGING TO THE UNITED STATES GOVERNMENT SHIPPED FROM THE NAVY YARD, CAVITE, P.I., TO THE NAVY YARD, MARE ISLAND, CALIF. YOUR LETTER IS AS FOLLOWS:

THE ACT OF CONGRESS OF AUGUST 7, 1939 (48 U.S.C., SUPP., 1236), WHICH AMENDED THE " ACT TO PROVIDE FOR THE COMPLETE INDEPENDENCE OF THE PHILIPPINE ISLANDS, TO PROVIDE FOR THE ADOPTION OF A CONSTITUTION AND A FORM OF GOVERNMENT FOR THE PHILIPPINE ISLANDS, AND FOR OTHER PURPOSES," PROVIDES IN PART AS FOLLOWS:

"/A) ON AND AFTER JANUARY 1, 1941, THE PHILIPPINE GOVERNMENT SHALL IMPOSE AND COLLECT AN EXPORT TAX ON EVERY PHILIPPINE ARTICLE SHIPPED FROM THE PHILIPPINES TO THE UNITED STATES, EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED IN THIS SECTION. SAID TAX SHALL BE COMPUTED IN THE MANNER HEREINAFTER SET FORTH IN THIS SUBSECTION AND IN SUBSECTION (C) OF THIS SECTION. DURING THE PERIOD JANUARY 1, 1941, THROUGH DECEMBER 31, 1941, THE EXPORT TAX ON EVERY SUCH ARTICLE SHALL BE 5 PERCENTUM OF THE UNITED STATES DUTY; ON EACH SUCCEEDING JANUARY 1 THEREAFTER THE EXPORT TAX SHALL BE INCREASED PROGRESSIVELY BY AN ADDITIONAL 5 PERCENTUM OF THE UNITED STATES DUTY, EXCEPT THAT DURING THE PERIOD JANUARY 1, 1946, THROUGH JULY 3, 1946, THE EXPORT TAX SHALL REMAIN AT 25 PERCENTUM OF THE UNITED STATES DUTY.' NO SPECIFIC EXCEPTION WITH RESPECT TO ACTIVITIES OF THE UNITED STATES GOVERNMENT IS CONTAINED IN THE LAW.

UNDER DATE OF JANUARY 13, 1941, THERE WERE SHIPPED FROM THE NAVY YARD, CAVITE, P.I., VIA THE S.S. PRESIDENT TAFT OF THE AMERICAN PRESIDENT LINES, LTD., TO THE NAVY YARD, MARE ISLAND, CALIFORNIA, 270 SHIP CANE WOVEN FENDERS VALUED AT APPROXIMATELY $3,300, WHICH HAD BEEN MANUFACTURED AT THE NAVY YARD, CAVITE. BECAUSE OF DOUBT ON THE PART OF THE DISBURSING OFFICER AT THE NAVY YARD, CAVITE, AS TO THE AVAILABILITY OF APPROPRIATED FUNDS FOR THE PAYMENT OF AN EXPORT TAX, AN AGREEMENT WAS REACHED LOCALLY UNDER WHICH THE SHIPMENT IN SAN FRANCISCO, PAYMENT WOULD THEN BE MADE BY THE DISBURSING OFFICER AT THE NAVY YARD, CAVITE.

THE NAVY DEPARTMENT HAS BEEN INFORMED THAT THE UNITED STATES CUSTOMS SERVICE ARE REQUIRING AN EXPORT CERTIFICATE AS PROVIDED FOR IN SECTION 1 (H) OF THE ACT OF AUGUST 7, 1939, SUPRA, SHOWING THAT THE EXPORT TAX HAS BEEN PAID ON THE SHIPMENT OF CANE FENDERS.

IN VIEW OF THE GENERAL RULE APPLIED IN THE CONSTRUCTION OF STATUTES, IMPOSING TAXES THAT EXCEPT WHERE SPECIFICALLY SO PROVIDED THE GOVERNMENT DOES NOT CONTEMPLATE THE TAXATION OF ITS OWN ACTIVITIES ( DUGAN V. UNITED STATES, 34 CT.CLS. 458, 468), A QUESTION IS RAISED AS TO WHETHER APPROPRIATED FUNDS PROVIDED FOR THE NAVY DEPARTMENT ARE AVAILABLE FOR THE PAYMENT OF THE EXPORT TAX IMPOSED BY THE ACT OF AUGUST 7, 1939, ON ACCOUNT OF THE ABOVE-MENTIONED SHIP CANE FENDERS. A DECISION IN THE PREMISES IS RESPECTFULLY REQUESTED.

IN VIEW OF THE STATEMENT IN YOUR LETTER THAT THE UNITED STATES CUSTOMS SERVICE WAS REQUIRING AN EXPORT TAX CERTIFICATE UNDER SECTION 1 (6) (H) OF THE ACT, SHOWING THAT THE EXPORT TAX HAD BEEN PAID ON THE SHIPMENT OF CANE FENDERS, THE SECRETARY OF THE TREASURY WAS REQUESTED TO FURNISH A REPORT AS TO THIS PHASE OF THE MATTER. THE REPLY TO THIS REQUEST, UNDER DATE OF AUGUST 1, 1941, IS IN PART AS FOLLOWS:

SECTION 6 (A) OF THE ACT OF MARCH 24, 1934, AS AMENDED, SUPRA, PROVIDES THAT ON AND AFTER JANUARY 1, 1941, THE PHILIPPINE GOVERNMENT SHALL IMPOSE AND COLLECT AN EXPORT TAX ON EVERY PHILIPPINE ARTICLE SHIPPED FROM THE PHILIPPINES TO THE UNITED STATES, EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED. THE ACT DOES NOT SPECIFICALLY PROVIDE ANY EXEMPTION FOR PHILIPPINE ARTICLES SHIPPED TO THE UNITED STATES GOVERNMENT.

SECTION 18 (A) (6) OF THE ACT OF MARCH 24, 1934, AS ADDED BY SECTION 5 OF THE ACT OF AUGUST 7, 1939, 53 STAT. 1232 ( U.S.C., SUP. V. TITLE 48, SEC. 1247 (A) (6) (, PROVIDES THAT " THE TERM " PHILIPPINE ARTICLE" MEANS AN ARTICLE THE GROWTH, PRODUCE, OR MANUFACTURE OF THE PHILIPPINES, IN THE PRODUCTION OF WHICH NO MATERIALS OF OTHER THAN PHILIPPINE OR UNITED STATES ORIGIN VALUED IN EXCESS OF 20 PERCENTUM OF THE TOTAL VALUE OF SUCH ARTICLE WAS USED AND WHICH IS BROUGHT INTO THE UNITED STATES FROM THE PHILIPPINES.'

SECTION 6 (H), SUPRA, PROVIDES THAT NO ARTICLE SHIPPED FROM THE PHILIPPINES TO THE UNITED STATES ON AND AFTER JANUARY 1, 1941, SUBJECT TO THE EXPORT TAX PROVIDED FOR IN THE SECTION, SHALL BE ADMITTED TO ENTRY IN THE UNITED STATES UNTIL THE IMPORTER OF SUCH ARTICLES SHALL PRESENT TO THE UNITED STATES COLLECTOR OF CUSTOMS A CERTIFICATE, SIGNED BY A COMPETENT AUTHORITY OF THE PHILIPPINE GOVERNMENT, SETTING FORTH THE VALUE AND QUANTITY OF THE ARTICLE AND THE RATE AND AMOUNT OF THE EXPORT TAX PAID, OR SHALL GIVE A BOND FOR THE PRODUCTION OF SUCH CERTIFICATE WITHIN SIX MONTHS FROM THE DATE OF ENTRY. THIS SECTION IS THE AUTHORITY OF LAW UNDER WHICH THE COLLECTORS OF CUSTOMS REQUIRE THE PRESENTATION OF EXPORT CERTIFICATES.

IT WILL BE NOTED THAT THE ADMINISTRATION OF THE EXPORT TAX PROVISIONS OF THE PHILIPPINE INDEPENDENCE ACT, AS AMENDED, IS UNDER THE JURISDICTION OF THE PHILIPPINE GOVERNMENT. THE DEPARTMENT IS OF THE OPINION THAT UNITED STATES CUSTOMS OFFICERS MUST COMPLY WITH SECTION 6 (H) UNLESS IT IS DECIDED BY THE PHILIPPINE CUSTOMS AUTHORITIES THAT THE TAX IS NOT APPLICABLE, AND IT IS BELIEVED THAT THE QUESTION IN THIS REGARD SHOULD BE REFERRED FOR DECISION BY THE PHILIPPINE GOVERNMENT.

CAREFUL CONSIDERATION HAS BEEN GIVEN THE SUGGESTION THAT THE QUESTION AS TO WHETHER THE EXPORT TAX IS APPLICABLE SHOULD BE REFERRED FOR DECISION BY THE PHILIPPINE GOVERNMENT, BUT I HAVE GRAVE DOUBTS WHETHER THAT IS A PROPER OR PERMISSIBLE COURSE. THAT IS, I DOUBT WHETHER POWER HAS BEEN CONFERRED ON THE PHILIPPINE GOVERNMENT TO DECIDE, AS AGAINST THE UNITED STATES GOVERNMENT, THAT IT, THE PHILIPPINE GOVERNMENT, HAS BEEN AUTHORIZED TO LAY AN EXPORT TAX ON PROPERTY OF THE UNITED STATES.

IN CINCINNATI SOAP CO. V. UNITED STATES, 301 U.S. 308, 314, 319, THE SUPREME COURT OF THE UNITED STATES AFFIRMED THE CONSTITUTIONALITY OF A STATUTE IMPOSING A TAX ON THE FIRST DOMESTIC PROCESSING OF COCOANUT OIL WITH A PROVISION THAT ALL SUCH TAXES COLLECTED WITH RESPECT TO COCOANUT OIL WHOLLY OF PHILIPPINE PRODUCTION SHOULD BE PAID TO THE TREASURY OF THE PHILIPPINE ISLANDS. STATING THE RELATIONSHIP OF THE PHILIPPINE ISLANDS TO THE UNITED STATES, THE COURT SAID, AT PAGE 314:

* * * THE ISLANDS CONSTITUTE A DEPENDENCY OVER WHICH THE UNITED STATES, FOR MORE THAN A GENERATION, HAS HAD AND EXERCISED SUPREME POWER OF LEGISLATION AND ADMINISTRATION, POSADAS V. NATIONAL CITY BANK, 296 U.S. 497, 502, A POWER LIMITED ONLY BY THE TERMS OF THE TREATY OF CESSION AND THOSE PRINCIPLES OF THE CONSTITUTION WHICH BY THEIR NATURE ARE INHERENTLY INVIOLABLE. * * *

AND, AT PAGE 319:

BUT IT IS CONTENDED THAT THE PASSAGE OF THE PHILIPPINE INDEPENDENCE ACT OF MARCH 24, 1934, C. 84, 48 STAT. 456, AND THE ADOPTION AND APPROVAL OF A CONSTITUTION FOR THE COMMONWEALTH OF THE PHILIPPINE ISLANDS HAVE CREATED A DIFFERENT SITUATION; AND THAT SINCE THEN, WHATEVER MAY HAVE BEEN THE CASE BEFORE, THE UNITED STATES HAS BEEN UNDER NO DUTY TO MAKE ANY FINANCIAL CONTRIBUTION TO THE ISLANDS. UNDOUBTEDLY, THESE ACTS HAVE BROUGHT ABOUT A PROFOUND CHANGE IN THE STATUS OF THE ISLANDS AND IN THEIR RELATIONS TO THE UNITED STATES; BUT THE SOVEREIGNTY OF THE UNITED STATES HAS NOT BEEN, AND, FOR A LONG TIME, MAY NOT BE, FINALLY WITHDRAWN. SO FAR AS THE UNITED STATES IS CONCERNED, THE PHILIPPINE ISLANDS ARE NOT YET FOREIGN TERRITORY. BY EXPRESS PROVISIONS OF THE INDEPENDENCE ACT, WE STILL RETAIN POWERS WITH RESPECT TO OUR TRADE RELATIONS WITH THE ISLANDS, WITH CERTAIN EXCEPTIONS SET FORTH PARTICULARLY IN THE ACT. WE RETAIN POWERS WITH RESPECT TO THEIR FINANCIAL OPERATIONS AND THEIR CURRENCY, AND WE CONTINUE TO CONTROL THEIR FOREIGN RELATIONS. THE POWER OF REVIEW BY THIS COURT OVER PHILIPPINE CASES, AS NOW PROVIDED BY LAW, IS NOT ONLY CONTINUED, BUT IS EXTENDED TO ALL CASES INVOLVING THE CONSTITUTION OF THE COMMONWEALTH OF THE PHILIPPINE ISLANDS.

THUS, WHILE THE POWER OF THE UNITED STATES HAS BEEN MODIFIED, IT HAS NOT BEEN ABOLISHED. * * *

THAT CASE WAS DECIDED IN 1937. WHILE THE PHILIPPINE INDEPENDENCE ACT OF MARCH 24, 1934, HAS SUBSEQUENTLY BEEN AMENDED IN VARIOUS PARTICULARS BY THE ACT OF AUGUST 7, 1939, 53 STAT. 1226, THERE HAS BEEN NO CHANGE IN THE BASIC RELATIONSHIP BETWEEN THE TWO GOVERNMENTS. THE SOVEREIGNTY OF THE UNITED STATES HAS NOT BEEN WITHDRAWN; AND, WHILE THE PHILIPPINE GOVERNMENT HAS BEEN GRANTED A LARGE MEASURE OF AUTONOMY IN LOCAL MATTERS, ITS TRADE AND FISCAL RELATIONS WITH THE UNITED STATES ARE PRESCRIBED BY STATUTES OF THE UNITED STATES, AND THE MEANING AND SCOPE OF THOSE STATUTES WOULD APPEAR TO BE FINALLY FOR DETERMINATION BY THE UNITED STATES GOVERNMENT AND NOT BY THE PHILIPPINE GOVERNMENT. SEE ASIATIC PETROLEUM CO. V. INSULAR COLLECTOR OF CUSTOMS, 297 U.S. 666. AT LEAST, SO FAR AS TAXATION OF THE PROPERTY OF THE UNITED STATES IS CONCERNED, THE PHILIPPINE ISLANDS ARE STILL TO BE REGARDED AS HAVING THE CHARACTER OF A DEPENDENCY OF THE UNITED STATES, AND IT WOULD BE DIAMETRICALLY OPPOSED TO ALL CONCEPTS OF THAT RELATIONSHIP TO HOLD THAT THE DEPENDENCY HAS THE POWER FINALLY TO DECIDE AS AGAINST THE SOVEREIGN THAT THE SOVEREIGN HAS AUTHORIZED THE DEPENDENCY TO TAX THE SOVEREIGN'S PROPERTY. IT WOULD SEEM AXIOMATIC THAT THE SOVEREIGN, WITH FULL POWER TO GRANT AND REVOKE BENEFITS, MUST RETAIN THE POWER FINALLY TO DETERMINE THE EXTENT OF THE BENEFITS GRANTED BY ITS OWN STATUTES; AND NOTHING IS FOUND IN THE PHILIPPINE INDEPENDENCE ACT RELATIVE TO ADMINISTRATION OF THE EXPORT TAX PROVISIONS, OR OTHERWISE, WHICH WOULD HAVE THE EFFECT OF TRANSFERRING THAT POWER TO THE PHILIPPINE GOVERNMENT. AUTHORITY TO ADMINISTER THE PROVISIONS OF A STATUTE DOES NOT CARRY WITH IT THE POWER FINALLY TO DETERMINE DISPUTED QUESTIONS OF LAW AS TO THE CONSTRUCTION OF THE STATUTE BEING ADMINISTERED. THE PRINCIPLE IS ILLUSTRATED BY THE CASE OF DUGAN V. UNITED STATES, 34 CT.CLS. 458, CITED IN YOUR LETTER. IN THAT CASE THE COMMISSIONER OF INTERNAL REVENUE HAD MADE ALLOWANCES OR AWARDS IN FAVOR OF AN ARMY POST EXCHANGE OFFICER FOR THE AMOUNT OF SPECIAL TAXES PAID AS A RETAIL LIQUOR DEALER. THE AUDITOR FOR THE TREASURY DEPARTMENT CERTIFIED THE ALLOWANCES FOR PAYMENT BUT THE COMPTROLLER OF THE TREASURY DECLINED TO APPROVE HIS ACTION. IN THE COURT OF CLAIMS IT WAS INSISTED THAT THE DECISION OF THE COMMISSIONER WAS CONCLUSIVE AND, THEREFORE, NOT OPEN TO REVIEW BY EITHER THE ACCOUNTING OFFICERS OR THE COURTS. THE COURT, REFUSING TO ADOPT THIS VIEW, STATED (P. 466):

HIS DECISION IN RESPECT OF DISPUTED QUESTIONS OF FACT, IN THE ABSENCE OF FRAUD OR MISTAKES IN MATHEMATICAL CALCULATION, WOULD CERTAINLY BE FINAL AND NOT OPEN TO REVIEW; BUT IN THE ABSENCE OF DISPUTED QUESTIONS OF FACT, WHERE HIS DECISION INVOLVES THE CONSTRUCTION OF THE LAW UNDER WHICH HE ACTS, WE THINK A DIFFERENT RULE APPLIES.

THIS PRINCIPLE OR DISTINCTION WAS LAST ANNOUNCED BY THE SUPREME COURT IN THE CASE OF MEDBURY V. THE UNITED STATES (173 U.S.R., 492, 497), WHERE, IN SPEAKING OF THE AUTHORITY OF THE SECRETARY OF THE INTERIOR UNDER SECTION 2 OF THE ACT OF JUNE 16, 1880 (21 STAT. L., 287), CONCERNING THE REPAYMENT OF THE EXCESS OF $1.25 PER ACRE FOR LANDS SOLD WITHIN THE LIMITS OF A RAILROAD LAND GRANT FOR DOUBLE THE MINIMUM PRICE WHERE SUCH LANDS WERE AFTERWARDS FOUND NOT TO BE WITHIN SUCH GRANT, THE COURT, SPEAKING BY MR. JUSTICE PECKHAM, SAID:

"IF THERE WERE ANY DISPUTED QUESTIONS OF FACT BEFORE THE SECRETARY HIS DECISION IN REGARD TO THOSE MATTERS WOULD PROBABLY BE CONCLUSIVE, AND WOULD NOT BE REVIEWED IN ANY COURT. BUT WHERE, AS IN THIS CASE, THERE IS NO DISPUTED QUESTION OF FACT, AND THE DECISION TURNS EXCLUSIVELY UPON THE PROPER CONSTRUCTION OF THE ACT OF CONGRESS, THE DECISION OF THE SECRETARY REFUSING TO MAKE THE PAYMENT IS NOT FINAL, AND THE COURT OF CLAIMS HAS JURISDICTION OF SUCH A CASE.'

SEE, ALSO, IN RE FASSETT, 142 U.S. 479, WHERE THE SUPREME COURT OF THE UNITED STATES HELD THAT AUTHORITY UNDER THE CUSTOMS ADMINISTRATIVE ACT OF JUNE 10, 1890, 26 STAT. 131, TO DETERMINE THE RATE AND AMOUNT OF DUTIES CHARGED UPON IMPORTED MERCHANDISE, ETC., DID NOT GIVE JURISDICTION FINALLY TO DETERMINE THE PRIMARY QUESTION OF WHETHER ARTICLES WERE IMPORTED MERCHANDISE WITHIN THE MEANING OF THE ACT.

THE QUESTION PRESENTED TO THIS OFFICE IN THE PRESENT CASE IS WHETHER NAVY APPROPRIATIONS ARE AVAILABLE TO PAY EXPORT TAXES SOUGHT TO BE IMPOSED BY THE PHILIPPINE GOVERNMENT ON PROPERTY OF THE UNITED STATES SHIPPED FROM THE PHILIPPINE ISLANDS TO THE UNITED STATES BY AND FOR THE USE OF THE NAVY. THIS OFFICE NOT ONLY IS AUTHORIZED, BUT IS REQUIRED, TO DECIDE SUCH QUESTION AS TO THE USE OF APPROPRIATIONS. SECTION 8 OF THE DOCKERY ACT, 28 STAT. 207, 208, AS MODIFIED BY SECTION 304 OF THE BUDGET AND ACCOUNTING ACT, 42 STAT. 24; 19 COMP. GEN. 129; ID. 478. THE ANSWER DEPENDS ON WHETHER THE EXPORT TAX PROVISIONS OF THE PHILIPPINE INDEPENDENCE ACT WERE INTENDED TO EXTEND TO PROPERTY OF THE UNITED STATES GOVERNMENT. THAT RAISES A GENERAL QUESTION OF LAW WHICH MUST BE ANSWERED TO DECIDE THE QUESTION OF APPROPRIATION AVAILABILITY PRESENTED. WHILE SUCH DECISION WILL BE CONTROLLING SO FAR AS THE USE OF THE APPROPRIATION FOR THE PAYMENT OF THE EXPORT TAX IS INVOLVED, THERE IS ALSO INVOLVED THE ADMINISTRATIVE DUTY IMPOSED ON CUSTOMS OFFICIALS BY SECTION 6 (H) OF THE ACT AS AMENDED, CITED IN THE LETTER OF THE SECRETARY OF THE TREASURY, TO REFUSE ADMISSION TO ENTRY IN THE UNITED STATES OF ANY ARTICLE SHIPPED FROM THE PHILIPPINES "SUBJECT TO AN EXPORT TAX PROVIDED FOR IN THIS SECTION" UNTIL THE IMPORTER HAS PRESENTED A CERTIFICATE OF THE PHILIPPINE GOVERNMENT AS TO PAYMENT OF THE EXPORT TAX, OR HAS GIVEN BOND FOR THE PRODUCTION OF SUCH CERTIFICATE WITHIN 6 MONTHS. THIS OFFICE MAY DECIDE, ON THE BASIS THAT PROPERTY OF THE UNITED STATES IS NOT SUBJECT TO THE EXPORT TAX, THAT APPROPRIATIONS ARE NOT AVAILABLE TO PAY SUCH TAX. ON THE OTHER HAND, TREASURY CUSTOMS OFFICIALS MAY DECIDE WITH RESPECT TO THE PERFORMANCE OF THE ADMINISTRATIVE DUTIES IMPOSED ON THEM BY SECTION 6 (H) THAT PROPERTY OF THE UNITED STATES IS SUBJECT TO THE EXPORT TAX, AS INDICATED BY THE ACTION TAKEN ON THE SHIPMENT HERE INVOLVED AND, ALSO, BY THE REPORT OF THE SECRETARY OF THE TREASURY, QUOTED SUPRA, AND ON THAT BASIS MAY REFUSE TO ADMIT SUCH PROPERTY WITHOUT A CERTIFICATE THAT THE EXPORT TAX HAS BEEN PAID. THIS COULD RESULT IN STALEMATE RENDERING IT IMPOSSIBLE FOR AGENCIES OF THE UNITED STATES TO BRING INTO THE UNITED STATES FROM THE PHILIPPINE ISLANDS ANY PROPERTY OF THE UNITED STATES WHICH HAPPENED TO BE OF PHILIPPINE ORIGIN. HOWEVER, THIS POSSIBILITY, WHICH MIGHT PROVE EMBARRASSING TO THE CONDUCT OF DEFENSE AND OTHER GOVERNMENTAL ACTIVITIES, DOES NOT RELIEVE THIS OFFICE OF ITS DUTY TO DECIDE THE QUESTION PRESENTED AS TO THE AVAILABILITY OF APPROPRIATIONS TO PAY THE TAX, OR LESSEN THE OBLIGATION, IN RENDERING SUCH DECISION, TO APPLY THE PRINCIPLES OF LAW AND RULES OF STATUTORY INTERPRETATION DEEMED TO BE APPLICABLE. HAVING CONCLUDED, ON THE BASIS OF THE MATTER AS PRESENTLY SUBMITTED, THAT IT IS NOT ESTABLISHED THAT THE CONGRESS HAS AUTHORIZED THE PAYMENT OF EXPORT TAXES BY THE UNITED STATES GOVERNMENT TO THE PHILIPPINE GOVERNMENT ON UNITED STATES PROPERTY SHIPPED FROM THE PHILIPPINES TO THE UNITED STATES, AND, THEREFORE, HAVING DECIDED THAT NAVY APPROPRIATIONS ARE NOT AVAILABLE TO PAY SUCH EXPORT TAXES IN THE CASE SUBMITTED, 11 CAN ONLY STATE THE REASONS FOR SUCH CONCLUSIONS AND TRUST THAT THEY MAY BE SUFFICIENT TO JUSTIFY AGREEMENT BY THE CUSTOMS SERVICE WITH RESPECT TO THE ADMISSION OF SUCH PROPERTY ON THE GROUND THAT IT IS NOT SUBJECT TO THE TAX, AS STIPULATED IN SECTION 6 (H) OF THE ACT. IF NOT, THEN THIS OFFICE WILL BE GLAD TO CONSIDER THE MATTER FURTHER, AT YOUR REQUEST, ON THE BASIS OF SUCH ARGUMENTS IN SUPPORT OF A CONTRARY CONCLUSION WHICH MAY BE ADDUCED BY YOUR DEPARTMENT, THE TREASURY DEPARTMENT, OR THE PHILIPPINE GOVERNMENT, AND IF NO AGREEMENT OF VIEWS SHOULD BE REACHED, APPARENTLY THE MATTER WOULD HAVE TO BE LEFT TO LEGISLATIVE CORRECTION OR CLARIFICATION.

IN DOMENECH V. NATIONAL CITY BANK, 294 U.S. 199, THE SUPREME COURT OF THE UNITED STATES HELD INVALID A TAX SOUGHT TO BE IMPOSED BY PUERTO RICO ON A BRANCH OF A NATIONAL BANK ORGANIZED UNDER THE LAWS OF THE UNITED STATES. RESPECTING THE POWER OF A DEPENDENCY TO TAX ITS SOVEREIGN OR ITS INSTRUMENTALITIES, THE COURT SAID:

* * * PUERTO RICO, AN ISLAND POSSESSION, LIKE A TERRITORY, IS AN AGENCY OF THE FEDERAL GOVERNMENT, HAVING NO INDEPENDENT SOVEREIGNTY COMPARABLE TO THAT OF A STATE IN VIRTUE OF WHICH TAXES MAY BE LEVIED. AUTHORITY TO TAX MUST BE DERIVED FROM THE UNITED STATES. BUT LIKE A STATE, THOUGH FOR A DIFFERENT REASON. SUCH AN AGENCY MAY NOT TAX A FEDERAL INSTRUMENTALITY. A STATE, THOUGH A SOVEREIGN, IS PRECLUDED FROM SO DOING BECAUSE THE CONSTITUTION REQUIRES THAT THERE BE NO INTERFERENCE BY A STATE WITH THE POWERS GRANTED TO THE FEDERAL GOVERNMENT. A TERRITORY OR A POSSESSION MAY NOT DO SO BECAUSE THE DEPENDENCY MAY NOT TAX ITS SOVEREIGN. TRUE THE CONGRESS MAY CONSENT TO SUCH TAXATION; BUT THE GRANT TO THE ISLAND OF A GENERAL POWER TO TAX SHOULD NOT BE CONSTRUED AS A CONSENT. NOTHING LESS THAN AN ACT OF CONGRESS CLEARLY AND EXPLICITLY CONFERRING THE PRIVILEGE WILL SUFFICE. * * * ( ITALICS SUPPLIED.)

SO THE QUESTION HERE IS WHETHER THE CONGRESS HAS DIRECTED, AUTHORIZED, OR CONSENTED TO THE IMPOSITION OF AN EXPORT TAX BY THE PHILIPPINE GOVERNMENT ON PROPERTY OF THE UNITED STATES. THE SUPREME COURT HAS SAID THAT A GENERAL POWER TO TAX SHOULD NOT BE CONSTRUED AS A CONSENT AND THAT NOTHING LESS THAN AN ACT OF CONGRESS "CLEARLY AND EXPLICITLY" CONFERRING THE PRIVILEGE WILL SUFFICE.

SECTION 1 OF THE ACT OF AUGUST 7, 1939, 53 STAT. 1226, AMENDED SECTION 6 OF THE PHILIPPINE INDEPENDENCE ACT OF MARCH 24, 1934, 48 STAT. 459, TO READ, IN PART, AS FOLLOWS:

SEC. 6. DURING THE PERIOD BEGINNING JANUARY 1, 1940, AND ENDING JULY 3, 1946, TRADE RELATIONS BETWEEN THE UNITED STATES AND THE PHILIPPINES SHALL BE AS NOW PROVIDED BY LAW, SUBJECT TO THE FOLLOWING EXCEPTIONS:

(A) ON AND AFTER JANUARY 1, 1941, THE PHILIPPINE GOVERNMENT SHALL IMPOSE AND COLLECT AN EXPORT TAX ON EVERY PHILIPPINE ARTICLE SHIPPED FROM THE PHILIPPINES TO THE UNITED STATES, EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED IN THIS SECTION. SAID TAX SHALL BE COMPUTED IN THE MANNER HEREINAFTER SET FORTH IN THIS SUBSECTION AND IN SUBSECTION (C) OF THIS SECTION. DURING THE PERIOD JANUARY 1, 1941, THROUGH DECEMBER 31, 1941, THE EXPORT TAX ON EVERY SUCH ARTICLE SHALL BE 5 PERCENTUM OF THE UNITED STATES DUTY; ON EACH SUCCEEDING JANUARY 1 THEREAFTER THE EXPORT TAX SHALL BE INCREASED PROGRESSIVELY BY AN ADDITIONAL 5 PERCENTUM OF THE UNITED STATES DUTY, EXCEPT THAT DURING THE PERIOD JANUARY 1, 1946, THROUGH JULY 3, 1946, THE EXPORT TAX SHALL REMAIN AT 25 PERCENTUM OF THE UNITED STATES DUTY.

(G) (1) THE PHILIPPINE GOVERNMENT SHALL PAY TO THE SECRETARY OF THE TREASURY OF THE UNITED STATES, AT THE END OF EACH CALENDAR QUARTER, ALL OF THE MONEYS RECEIVED DURING SUCH QUARTER FROM EXPORT TAXES (LESS REFUNDS), IMPOSED AND COLLECTED IN ACCORDANCE WITH THE PROVISIONS OF THIS SECTION, AND SAID MONEYS SHALL BE DEPOSITED IN AN ACCOUNT WITH THE TREASURER OF THE UNITED STATES AND SHALL CONSTITUTE A SUPPLEMENTARY SINKING FUND FOR THE PAYMENT OF BONDS OF THE PHILIPPINES, ITS PROVINCES, CITIES, AND MUNICIPALITIES, ISSUED PRIOR TO MAY 1, 1934, UNDER AUTHORITY OF ACTS OF CONGRESS: * * *

(4) * * * ANY PORTION OF SUCH SPECIAL TRUST ACCOUNT FOUND BY THE SECRETARY OF THE TREASURY OF THE UNITED STATES ON JULY 4, 1946, TOBE IN EXCESS OF AN AMOUNT ADEQUATE TO MEET FUTURE INTEREST AND PRINCIPAL PAYMENTS ON ALL SUCH OUTSTANDING BONDS SHALL BE TURNED OVER TO THE TREASURY OF THE INDEPENDENT GOVERNMENT OF THE PHILIPPINES TO BE SET UP AS AN ADDITIONAL SINKING FUND TO BE USED FOR THE PURPOSE OF LIQUIDATING AND PAYING ALL OTHER OBLIGATIONS OF THE PHILIPPINES, ITS PROVINCES, CITIES, MUNICIPALITIES, AND INSTRUMENTALITIES. TO THE EXTENT THAT SUCH SPECIAL TRUST ACCOUNT IS DETERMINED BY THE SECRETARY OF THE TREASURY OF THE UNITED STATES TO BE INSUFFICIENT TO PAY INTEREST AND PRINCIPAL ON THE OUTSTANDING BONDS OF THE PHILIPPINES, ITS PROVINCES,CITIES, AND MUNICIPALITIES, ISSUED PRIOR TO MAY 1, 1934, UNDER AUTHORITY OF ACTS OF CONGRESS, THE PHILIPPINE GOVERNMENT SHALL, ON OR BEFORE JULY 3, 1946, PAY TO THE SECRETARY OF THE TREASURY OF THE UNITED STATES FOR DEPOSIT IN SUCH SPECIAL TRUST ACCOUNT AN AMOUNT WHICH SAID SECRETARY OF THE TREASURY DETERMINES IS REQUIRED TO ASSURE PAYMENT OF PRINCIPAL AND INTEREST ON SUCH BONDS: * * *

(H) NO ARTICLE SHIPPED FROM THE PHILIPPINES TO THE UNITED STATES ON OR AFTER JANUARY 1, 1941, SUBJECT TO AN EXPORT TAX PROVIDED FOR IN THIS SECTION, SHALL BE ADMITTED TO ENTRY IN THE UNITED STATES UNTIL THE IMPORTER OF SUCH ARTICLE SHALL PRESENT TO THE UNITED STATES COLLECTOR OF CUSTOMS A CERTIFICATE, SIGNED BY A COMPETENT AUTHORITY OF THE PHILIPPINE GOVERNMENT, SETTING FORTH THE VALUE AND QUANTITY OF THE ARTICLE AND THE RATE AND AMOUNT OF THE EXPORT TAX PAID, OR SHALL GIVE A BOND FOR THE PRODUCTION OF SUCH CERTIFICATE WITHIN SIX MONTHS FROM THE DATE OF THE ENTRY.

SECTION 18 (A) (6) OF THE PHILIPPINE INDEPENDENCE ACT AS ADDED BY SECTION 5 OF THE SAID ACT OF AUGUST 7, 1939, 53 STAT. 1231, 1232, PROVIDES THAT AS USED IN SECTION 6:

THE TERM " PHILIPPINE ARTICLE" MEANS AN ARTICLE THE GROWTH, PRODUCE, OR MANUFACTURE OF THE PHILIPPINES, IN THE PRODUCTION OF WHICH NO MATERIALS OF OTHER THAN PHILIPPINE OR UNITED STATES ORIGIN VALUED IN EXCESS OF 20 PERCENTUM OF THE TOTAL VALUE OF SUCH ARTICLE WAS USED AND WHICH IS BROUGHT INTO THE UNITED STATES FROM THE PHILIPPINES.

SECTION 7 (A) OF THE SAID ACT OF AUGUST 7, 1939, 53 STAT. 1233, 1234, PROVIDED THAT SECTIONS 1 TO 5 OF SUCH ACT (WHICH INCLUDE THE AMENDATORY PROVISIONS JUST QUOTED) SHOULD BECOME EFFECTIVE ON JANUARY 1, 1940, IF BEFORE THAT DATE THE ORDINANCE APPENDED TO THE CONSTITUTION OF THE PHILIPPINES SHOULD BE AMENDED IN CERTAIN PARTICULARS AND---

(2) THE PRESIDENT OF THE UNITED STATES SHALL HAVE FOUND AND PROCLAIMED THAT THE PHILIPPINE GOVERNMENT HAS ENACTED, SUBSEQUENT TO THE ADOPTION OF THE AMENDMENTS TO THE CONSTITUTION OF THE PHILIPPINES (AS PROVIDED IN SUBDIVISION (1) OF THIS SUBSECTION), A LAW RELATING TO EXPORT TAXES (AS PROVIDED IN SECTION 1), AND HAS RETAINED THOSE PHILIPPINE LAWS RELATING TO SINKING-FUND AND CURRENCY MATTERS WHICH WERE IN EFFECT ON MAY 20, 1938.

PURSUANT TO THIS SECTION THE PRESIDENT BY PROCLAMATION NO. 2377, DECEMBER 12, 1939, 4 F.R. 4861, PROCLAIMED THE FULFILLMENT OF THE STIPULATED CONDITIONS, INCLUDING THE ENACTMENT BY THE PHILIPPINE GOVERNMENT OF "A LAW RELATING TO EXPORT TAXES AS PROVIDED IN THE SAID ACT OF AUGUST 7, 1939.'

THUS IT APPEARS THAT THE SAID AMENDATORY PROVISIONS OF THE ACT OF AUGUST 7, 1939, HAVE GONE INTO EFFECT AND THAT THE PHILIPPINE GOVERNMENT HAS ENACTED A LAW RELATING TO EXPORT TAXES AS PROVIDED IN THAT ACT. BUT AS THE PHILIPPINE LAW IN THAT RESPECT WAS REQUIRED TO BE "AS PROVIDED IN SECTION 1" OF THE ACT OF AUGUST 7, 1939, SUPRA, IT COULD NOT TRANSCEND THE LIMITS OF THAT SECTION OR LEGALLY IMPOSE TAXES ON THE UNITED STATES NOT AUTHORIZED OR CONSENTED TO BY THE EXPRESS PROVISIONS OF THAT SECTION. FOLLOWS THAT THE QUESTION IS TO BE DETERMINED BY THE PROVISIONS OF SAID SECTION 1, AS IT AMENDS SECTION 6 OF THE ACT OF MARCH 24, 1934, SUPRA, AND NOT BY THE TERMS OF THE EXPORT TAX LAW ENACTED BY THE PHILIPPINE GOVERNMENT TO CARRY SUCH PROVISIONS INTO EFFECT.

THE LANGUAGE OF THE AMENDATORY ACT IS THAT ON AND AFTER JANUARY 1, 1941, THE PHILIPPINE GOVERNMENT SHALL IMPOSE AND COLLECT AN EXPORT TAX ON "EVERY" PHILIPPINE ARTICLE SHIPPED FROM THE PHILIPPINES TO THE UNITED STATES,"EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED IN THIS SECTION.' YOU POINT OUT IN YOUR LETTER, AND THE SECRETARY OF THE TREASURY POINTS OUT IN HIS LETTER, NO SPECIFIC EXCEPTION IS MADE WITH RESPECT TO THE ACTIVITIES--- OR PROPERTY--- OF THE UNITED STATES GOVERNMENT. DID THE CONGRESS THEN, BY THE USE OF THE WORD "EVERY," INTEND TO INCLUDE PROPERTY OF THE UNITED STATES AND TO AUTHORIZE AN EXPORT TAX THEREON? THE SUPREME COURT SAID IN THE DOMENECH CASE, SUPRA, THAT THE GRANT OF A GENERAL POWER SHOULD NOT BE CONSTRUED AS A CONSENT TO TAX THE SOVEREIGN AND THAT NOTHING LESS THAN AN ACT OF CONGRESS "CLEARLY AND EXPLICITLY" CONFERRING THE PRIVILEGE WILL SUFFICE. FAILURE OF CONGRESS EXPRESSLY TO EXCEPT PROPERTY OF THE UNITED STATES FROM THE TAX DOES NOT CONSTITUTE AN ACT CLEARLY AND EXPLICITLY CONFERRING THE PRIVILEGE TO TAX. THE WORD "EVERY" IN FORM IS ALL INCLUSIVE, BUT IT IS GENERAL AND NOT EXPLICIT, AND AS AGAINST ANY CONCLUSION THAT MERELY BY VIRTUE OF SUCH GENERALITY IT WAS INTENDED TO INCLUDE PROPERTY OF THE UNITED STATES, THERE IS FOR APPLICATION THE CANON OF STATUTORY INTERPRETATION THAT THE SOVEREIGN IS NOT INTENDED TO BE AFFECTED UNLESS EXPRESSLY NAMED IN THE STATUTE OR INCLUDED BY NECESSARY IMPLICATION. SEE IN RE TIDEWATER COAL EXCHANGE, 280 FED. 648, 650, FOR A COMPREHENSIVE DISCUSSION OF THIS RULE AND ITS APPLICATION IN AMERICAN JURISPRUDENCE. FOR A RECENT DISCUSSION OF THE EXCEPTIONS TO THE RULE SEE THE OPINION OF THE ATTORNEY GENERAL DATED JUNE 18, 1941, CONCERNING ITS APPLICATION TO THE SOLDIERS AND SAILORS' CIVIL RELIEF ACT OF 1940. THE PRESENT MATTER SEEMS CLEARLY TO FALL WITHIN THE RULE AND NOT ITS EXCEPTIONS. IN DOLLAR SAVINGS BANK V. UNITED STATES, 19 WALL. 227, 239, THE SUPREME COURT OF THE UNITED STATES SAID:

* * * IT IS A FAMILIAR PRINCIPLE THAT THE KING IS NOT BOUND BY ANY ACT OF PARLIAMENT UNLESS HE BE NAMED THEREIN BY SPECIAL AND PARTICULAR WORDS. THE MOST GENERAL WORDS THAT CAN BE DEVISED (FOR EXAMPLE, ANY PERSON OR PERSONS, BODIES POLITIC OR CORPORATE) AFFECT NOT HIM IN THE LEAST, IF THEY MAY TEND TO RESTRAIN OR DIMINISH ANY OF HIS RIGHTS AND INTERESTS. HE MAY EVEN TAKE THE BENEFIT OF ANY PARTICULAR ACT, THOUGH NOT NAMED. THE RULE THUS SETTLED RESPECTING THE BRITISH CROWN IS EQUALLY APPLICABLE TO THIS GOVERNMENT, AND IT HAS BEEN APPLIED FREQUENTLY IN THE DIFFERENT STATES, AND PRACTICALLY IN THE FEDERAL COURTS. * * *

IN DISTRICT OF COLUMBIA V. AMERICAN OIL CO., 39 F./2D) 510, THE COURT OF APPEALS OF THE DISTRICT OF COLUMBIA, CITING THE SAID DOLLAR SAVINGS BANK CASE, HELD THAT A TAX LAW ENACTED BY CONGRESS FOR THE DISTRICT OF COLUMBIA IMPOSING A TAX ON "ALL" MOTOR-VEHICLE FUELS WITHIN THE DISTRICT OF COLUMBIA, SOLD OR OTHERWISE DISPOSED OF BY AN IMPORTER, DID NOT APPLY TO GASOLINE SOLD IN THE DISTRICT OF COLUMBIA FOR USE BY VARIOUS EXECUTIVE DEPARTMENTS AND GOVERNMENTAL AGENCIES. THE COURT SAID: TO SUSTAIN THE CONTENTION OF APPELLANT, IT MUST CLEARLY APPEAR THAT THE UNITED STATES INTENDED TO TAX ITSELF. SEE DOLLAR SAVINGS BANK V. UNITED STATES, 19 WALL. 227, 22 L. USED. 80. IN OUR VIEW, THE INTENT OF THE STATUTE WAS QUITE THE CONTRARY. * * *

THE CIRCUMSTANCES OF THAT CASE APPEAR CLOSELY ANALOGOUS TO THOSE HERE INVOLVED. THE CONGRESS AS THE "SUPREME LEGISLATIVE BODY" FOR THE DISTRICT OF COLUMBIA IMPOSED THE TAX ON "ALL" MOTOR-VEHICLE FUELS SOLD IN THE DISTRICT OF COLUMBIA AND DIRECTED THAT THE PROCEEDS OF THE TAX BE PAID INTO THE TREASURY OF THE UNITED STATES TO THE CREDIT OF THE DISTRICT OF COLUMBIA TO BE AVAILABLE EXCLUSIVELY FOR ROAD AND STREET IMPROVEMENT AND REPAIR. THE TERM "ALL MOTOR-VEHICLE FUELS" THERE INVOLVED IS AS BROAD AND INCLUSIVE AS THE TERM "EVERY PHILIPPINE ARTICLE" IN THE PRESENT STATUTE, BUT THAT DID NOT OVERCOME THE PRESUMPTION, BASED ON THE RULE OF STATUTORY INTERPRETATION STATED IN THE DOLLAR SAVINGS BANK CASE, THAT THE UNITED STATES DID NOT INTEND TO TAX ITSELF.

IN DUGAN V. UNITED STATES, 34 CT.CLS. 458, CITED IN YOUR LETTER, THE COURT OF CLAIMS HELD THAT ARMY POST EXCHANGES "ARE, IN THEIR CREATION AND MANAGEMENT, GOVERNMENTAL AGENCIES" AND SUSTAINED A REFUND OF INTERNAL REVENUE TAXES PAID BY THE POST/EXCHANGE OFFICER AS A RETAIL LIQUOR DEALER. THE COURT SAID, AT PAGE 468:

IT HAS NEVER BEEN THE POLICY OF THE GOVERNMENT TO TAX ITS OWN ENTERPRISES OR ITS OWN MANNER OR METHOD OF DOING BUSINESS; AND INASMUCH AS POST EXCHANGES ARE ESTABLISHED AND MAINTAINED BY IT FOR THE MENTAL AND PHYSICAL BETTERMENT OF ITS TROOPS IN GARRISONS AND POSTS, WITH RESULTING, IF NOT IMMEDIATE, BENEFIT TO ITSELF, WE THINK SUCH EXCHANGES ARE EXEMPT FROM THE PAYMENT OF SPECIAL TAX FOR THE SALE OF SUCH ARTICLES AS THE REGULATIONS PERMIT.

IN ASIATIC PETROLEUM CO. V. UNITED STATES, 65 CT.CLS. 100, THE GOVERNMENT INTERPOSED A COUNTERCLAIM FOR THE AMOUNT OF DUTIES ALLEGED TO BE PAYABLE TO THE PHILIPPINE GOVERNMENT ON FUEL OIL DELIVERED BY A CONTRACTOR TO THE PHILIPPINES FOR USE OF THE UNITED STATES NAVY. THE COURT HELD THAT AS BETWEEN THE GOVERNMENT AND THE CONTRACTOR THE CONTRACTOR WAS NOT LIABLE UNDER THE TERMS OF THE CONTRACT FOR ANY DUTIES PAYABLE ON THE FUEL OIL. THE COURT THEN PROCEEDED TO SAY:

WHILE NOT NECESSARY TO A DECISION OF THE CASE, IT IS NOT INAPPROPRIATE TO STATE THAT THE COURT IS IN EXTREME DOUBT AS TO WHETHER OR NOT THE OIL IN QUESTION WAS DUTIABLE. WHATEVER MAY BE SAID AS TO WHEN THE TITLE TO THE OIL PASSED, AS BETWEEN THE PARTIES, SUCH OIL FOR THE PURPOSES OF THE TARIFF ACT WAS THE PROPERTY OF THE UNITED STATES AT THE TIME OF ITS IMPORTATION INTO THE PHILIPPINE ISLANDS. IS THE UNITED STATES LIABLE FOR CUSTOMS DUTY ON PROPERTY IMPORTED BY IT AND FOR ITS OWN USE? THE ACT ITSELF IS SILENT ON THAT QUESTION. IT SHOULD BE REMEMBERED THAT NO DUTIES WERE DEMANDED UNTIL AFTER THE FULL COMPLETION OF THE FIRST CONTRACT UNDER WHICH 50,167.6058 TONS OF OIL WERE DELIVERED AND PAID FOR, AND UNTIL AFTER 14,460.7 TONS UNDER THE SECOND CONTRACT HAD BEEN DELIVERED. IT CAN THEREFORE BE SAID THAT THE CUSTOMS OFFICIALS THEMSELVES DID NOT AT FIRST REGARD THIS PROPERTY AS DUTIABLE. IT SHOULD ALSO BE NOTED THAT WHEN DUTIES WERE SUBSEQUENTLY ASSESSED IT WAS SOUGHT TO IMPOSE SAME ONLY ON THAT PORTION OF THE OIL WHICH WAS DELIVERED INTO NAVAL TANKS AT CAVITE, AND NOT ON THE OIL DISCHARGED DIRECTLY INTO THE U.S.S. PECOS. BOTH DELIVERIES WERE WITHIN THE JURISDICTION OF THE PHILIPPINE ISLANDS. THE FIRST SECTION OF THE ACT, 36 STAT. 130, PROVIDES THAT THE DUTIES THEREIN IMPOSED SHALL BE LEVIED UPON "ALL ARTICLES * * * ENTERING THE JURISDICTION OF THE PHILIPPINE ISLANDS FROM ANY PLACE OR PLACES, INCLUDING THE UNITED STATES AND ITS POSSESSIONS, AND IN ANY MANNER WHATSOEVER, EITHER WITH INTENT TO UNLADE THEREIN, OR WHICH, AFTER SUCH ENTERING, ARE CONSUMED THEREIN OR BECOME INCORPORATED INTO THE GENERAL MASS OF PROPERTY WITHIN SAID ISLANDS * * *.' * * *

THE PURPOSE OF THE STATUTE PROVIDING FOR CUSTOMS DUTIES ON IMPORTATIONS INTO THE PHILIPPINE ISLANDS WAS TO PROVIDE REVENUE FOR THE USE OF THE PHILIPPINE GOVERNMENT, FOR THE PROTECTION, AND PARTIAL SUPPORT OF WHICH THE UNITED STATES HELD ITSELF RESPONSIBLE. IT IS INCONCEIVABLE THAT CONGRESS IN THE ENACTMENT OF THE SAID STATUTE SHOULD HAVE INTENDED THAT THE UNITED STATES WOULD BE REQUIRED TO PAY DUTY ON ITS OWN OIL IMPORTED INTO THE PHILIPPINE ISLANDS, FOR ITS OWN USE, IN SUPPLYING ITS NAVY VESSELS USED IN THE PROTECTION OF THE PHILIPPINE GOVERNMENT, AS WELL AS FOR THE MAINTENANCE OF ITS OWN MILITARY AND NAVAL ESTABLISHMENTS IN THE NATIONAL DEFENSE. * * *

THUS, DESPITE THE WHOLLY INCLUSIVE FORM OF THE LANGUAGE USED IN THE PHILIPPINE TARIFF ACT THERE INVOLVED, TO WIT, ALL ARTICLES * * * ENTERING THE JURISDICTION OF THE PHILIPPINE ISLANDS * * * IN ANY MANNER WHATSOEVER," THE COURT EXPRESSED "EXTREME DOUBT" WHETHER PROPERTY OF THE UNITED STATES WAS INCLUDED AND STATED IT TO BE "INCONCEIVABLE" THAT CONGRESS IN THE ENACTMENT OF THE STATUTE SHOULD HAVE INTENDED THAT THE UNITED STATES WOULD BE REQUIRED TO PAY DUTY ON ITS OWN OIL IMPORTED INTO THE PHILIPPINE ISLANDS FOR ITS OWN USE.

FOLLOWING THAT DECISION THE QUESTION OF PAYING DUTIES ON PROPERTY IMPORTED INTO THE PHILIPPINE ISLANDS BY THE UNITED STATES GOVERNMENT FOR ITS OWN USE WAS REVIEWED BY THIS OFFICE ON A SUBMISSION BY THE PAYMASTER GENERAL OF THE NAVY AND IT WAS HELD IN DECISION OF NOVEMBER 2, 1929, 9 COMP. GEN. 180, THAT SUCH PAYMENTS SHOULD NOT BE MADE PENDING A DECISION BY THE SUPREME COURT OF THE UNITED STATES SUSTAINING THE LEGALITY OF SUCH CHARGES OR FURTHER LEGISLATION BY THE CONGRESS WITH RESPECT THERETO. SEE ALSO 11 COMP. GEN. 254, TO THE SAME EFFECT CONCERNING GOODS IMPORTED INTO PUERTO RICO FOR THE USE OF THE UNITED STATES GOVERNMENT, AND 20 COMP. GEN. 809, HOLDING THAT CERTAIN "SHIP UES" IMPOSED BY ORDINANCE OF THE VIRGIN ISLANDS MAY NOT LEGALLY BE ASSESSED AGAINST COMMERCIAL VESSELS ON ACCOUNT OF GOVERNMENT-OWNED CARGOES DISCHARGED AT VIRGIN ISLAND PORTS.

BY THE ACT OF JULY 3, 1930, 46 STAT. 851, CONGRESS EXPRESSLY AUTHORIZED, UNDER STIPULATED CONDITIONS AND LIMITATIONS WITH RESPECT TO THE REQUEST FOR SERVICES OR THE USE OF FACILITIES, THE PAYMENT ON MERCHANDISE, ETC., CONSIGNED TO AGENCIES OF THE UNITED STATES GOVERNMENT IN THE PHILIPPINE ISLANDS OF CERTAIN CARGO CHECKING AND ARRASTRE CHARGES, IN THE NATURE OF SERVICE CHARGES, IMPOSED BY AUTHORITY OF THE PHILIPPINE GOVERNMENT, WHICH CHARGES THERETOFORE HAD BEEN NEGATIVED BY DECISIONS OF THIS OFFICE ON THE GROUND THAT THEY PURPORTED TO BE COMPULSORY IRRESPECTIVE OF THE NEED OR REQUEST FOR THE SERVICE, AND, THEREFORE, WERE TO BE REGARDED AS A TAX. BUT IT DOES NOT APPEAR THAT THE CONGRESS HAS AUTHORIZED THE PAYMENT OF IMPORT DUTIES NEGATIVED BY THE DECISION OF NOVEMBER 2, 1929, SUPRA, RENDERED SOME 12 YEARS AGO. THE LANGUAGE OF THE PHILIPPINE TARIFF ACT OF AUGUST 5, 1909, 36 STAT. 130 "ALL ARTICLES * * * ENTERING THE JURISDICTION OF THE PHILIPPINE ISLANDS" IS AS BROAD AND INCLUSIVE AS THE LANGUAGE OF THE EXPORT TAX PROVISION HERE INVOLVED,"EVERY PHILIPPINE ARTICLE SHIPPED FROM THE PHILIPPINES TO THE UNITED STATES," AND IT WOULD BE MOST INCONGRUOUS TO HOLD THAT UNDER THE FIRST ACT NO IMPORT DUTIES MAY BE COLLECTED BY THE PHILIPPINE GOVERNMENT ON PROPERTY OF THE UNITED STATES GOVERNMENT SHIPPED INTO THE PHILIPPINES, BUT THAT UNDER THE SECOND ACT THE UNITED STATES GOVERNMENT IS REQUIRED TO PAY THE PHILIPPINE GOVERNMENT AN EXPORT TAX ON ITS PROPERTY SHIPPED OUT OF THE PHILIPPINES, UNLESS OTHER PROVISIONS OF THE LATTER ACT CLEARLY REQUIRE THAT CONCLUSION; AND I FIND NOTHING IN THE OTHER TERMS OF THE PHILIPPINE INDEPENDENCE ACT, AS AMENDED, SHOWING OR INDICATING ANY INTENT THAT THE EXPORT TAX IS TO BE LAID ON PROPERTY OF THE UNITED STATES. WHAT LITTLE MAY BE INDICATED IN THE EXPORT TAX PROVISIONS WOULD POINT THE OTHER WAY. BY SECTION 6 (G) (1) THE PROCEEDS OF THE TAX ARE REQUIRED TO BE DEPOSITED WITH THE TREASURER OF THE UNITED STATES FOR THE PAYMENT OF PHILIPPINE BONDS ISSUED PRIOR TO MAY 1, 1934. BUT THAT SUCH PAYMENTS ARE REGARDED AS OBLIGATIONS OF THE PHILIPPINE GOVERNMENT AND THAT THE UNITED STATES GOVERNMENT IS NOT TO CONTRIBUTE THERETO IS SHOWN BY THE PROVISION IN SECTION 6 (G) (5) THAT ON OR BEFORE JULY 3, 1946, WHEN UNITED STATES SOVEREIGNTY IS TO BE WITHDRAWN, THE PHILIPPINE GOVERNMENT WILL PAY INTO THE TRUST FUND TO BE ESTABLISHED FOR THAT PURPOSE ANY SUCH FURTHER AMOUNT AS MAY BE FOUND NECESSARY TO ASSURE PAYMENT OF SUCH BONDS. SECTION 6 (H) PROVIDES THAT NO ARTICLE SHIPPED FROM THE PHILIPPINES SUBJECT TO THE EXPORT TAX SHALL BE ADMITTED TO ENTRY IN THE UNITED STATES UNTIL THE "IMPORTER" SHALL PRESENT A CERTIFICATE OF THE PHILIPPINE GOVERNMENT AS TO THE PAYMENT OF THE EXPORT TAX "OR SHALL GIVE A BOND FOR THE PRODUCTION OF SUCH CERTIFICATE WITHIN 6 MONTHS FROM THE DATE OF ENTRY.' WHILE UNDER CERTAIN CIRCUMSTANCES THE UNITED STATES GOVERNMENT MIGHT BE REGARDED AS AN IMPORTER, IT CERTAINLY COULD NOT HAVE BEEN CONTEMPLATED THAT THE GOVERNMENT SHOULD EVER BE PUT IN THE ANOMALOUS POSITION OF HAVING TO GIVE A BOND TO ITSELF FOR THE LATER PRESENTATION TO ITSELF OF SUCH A CERTIFICATE, AND IT WOULD FOLLOW THAT THE LEGISLATION DID NOT CONTEMPLATE THE INCLUSION OF THE UNITED STATES GOVERNMENT AS AN "IMPORTER" WITHIN THE MEANING OF THE TERM AS THERE USED. WHILE THESE PROVISIONS MAY NOT AFFORD CONCLUSIVE INDICATIONS OF THE LEGISLATIVE INTENT, THEY CERTAINLY DO NOT LEND THEMSELVES TO THE VIEW THAT THE GOVERNMENT INTENDED TO TAX ITSELF TO AID IN PAYMENT OF THE PHILIPPINE BONDS, BUT, ON THE CONTRARY, THEY TEND TO INDICATE THAT THE CONGRESS DID NOT HAVE IN MIND THAT THE PROPERTY OF THE UNITED STATES WOULD BE SUBJECTED TO THE TAX. IN THE ABSENCE OF ANY COUNTERVAILING PROVISIONS CLEARLY SHOWING A LEGISLATIVE PURPOSE TO INCLUDE THE PROPERTY OF THE UNITED STATES WITHIN THE REACH OF THE TAX THERE APPEARS FOR APPLICATION THE GENERAL RULE OF STATUTORY INTERPRETATION THAT THE SOVEREIGN IS NOT INTENDED TO BE BOUND UNLESS EXPRESSLY NAMED. DISTRICT OF COLUMBIA V. AMERICAN OIL CO., SUPRA.

FOR THE REASONS HEREINBEFORE STATED, AND PURSUANT TO THE PRINCIPLES OF THE DECISIONS CITED, I THINK ANY DOUBT THERE MIGHT BE IN THE MATTER MUST BE RESOLVED IN FAVOR OF THE CONCLUSION THAT PROPERTY OF THE UNITED STATES GOVERNMENT SHIPPED FROM THE PHILIPPINE ISLANDS IS NOT SUBJECT TO THE EXPORT TAX PROVIDED FOR IN SECTION 6 OF THE PHILIPPINE INDEPENDENCE ACT. ACCORDINGLY, ANSWERING YOUR QUESTION SPECIFICALLY, I HAVE TO ADVISE THAT FUNDS APPROPRIATED FOR THE NAVY DEPARTMENT ARE NOT AVAILABLE FOR THE PAYMENT OF SUCH EXPORT TAX ON THE SHIP CANE WOVEN FENDERS REFERRED TO IN YOUR LETTER.