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In this connection attention is called to the following correspondence between the owners of the steamship Loa and the chief of the national customs service of Panama:


Chief of the National Customs Service, Panama:

PANAMA, July 2, 1904.

Please certify below whether the steamship Loa, which entered this port on the 26th of June last, was authorized to proceed to the La Boca wharf. Yours, etc.


Panama, July 2, 1904.

The writer, chief of the national customs service of Panama, certifies : That the Chilean steamship Loa was duly received at 9 a.m. on the 26th ultimo, and was authorized to discharge and receive cargo where most convenient to do so. With regard to the observance of formalities in order to proceed to La Boca, this is a matter which pertains exclusively to the governor of the Zone, because that is American property.

As the boat was received by the Panaman authorities, it was natural that in order to enter and tie alongside of the wharves of the said port of La Boca, it was subject to comply with the formalities required by the authorities of that place (La Boca).



The United States learns with regret that the officials of the Republic of Panama are apprehensive that the course adopted by the United States will substantially reduce the revenues of that Republic. Permit me to express the belief that future developments will show such fear to be without foundation. The construction of the canal will cause a large increase in the population of the Zone and of the Republic. Vast expenditures of money will be made by the Commission in canal construction, which will be expended largely in the commercial centers of the country, to wit, Panama and Colón. This will occasion increased importations, with resulting increase of revenue to the Government exercising sovereign jurisdiction over those cities.

The United States has sought at all times to secure and preserve for the Republic of Panama sufficient means for adequate revenues. In this connection, permit me to call your attention to the fact that the proposed treaty with Colombia contained the following provision (Art. VIII) :

"The ports leading to the canal, including Panama and Colón, also shall be free to the commerce of the world, and no duties or taxes shall be imposed, except upon merchandise destined to be introduced for the consumption of the rest of the Republic of Colombia, or the Department of Panama, and upon vessels touching at the ports of Colón and Panama and which do not cross the canal."

Under such a provision merchandise imported into the ports of Colón and Panama for consumption within those municipalities would have entered free of duty.

The convention between the Republic of Panama and the United States permits the Republic of Panama to impose customs duties on merchandise imported into those cities for consumption therein, as well as elsewhere in the Republic. Your attention is directed to the fact that under the rule of law established by the United States Supreme Court, goods from the United States were entitled to free entry into the Zone as soon as the sovereignty of the United States permanently attached to the territory. (Vide Dooley v. United States, 183 U. S., 151; Cross v. Harrison, 16 Howard, 164).

It was recognized that free entry into the Zone of goods from the United States might work a hardship on the trades people of the near-by cities of Panama and Colón, as the latter were obliged to pay customs duties to the Republic of Panama. To meet this contingency, the order of June 24, 1904, regulating commerce with the Zone, provides as follows:

"The governor of the Canal Zone is authorized to enter into and carry out an agreement with the President of the Republic of Panama for cooperation between the customs service of the Canal Zone and that of the Republic of

Panama to protect the customs revenues of both Governments and to prevent frauds and smuggling.

"The governor of the Canal Zone is hereby authorized to enter upon negotiations and make a tentative agreement with the President of the Republic of Panama respecting reciprocal trade relations between the territory and inhabitants of the Canal Zone and appurtenant territory and the Republic of Panama; also a readjustment of the customs duties and tariff regulations, so as to secure uniformity of rates and privileges and avoid the disadvantages resulting from different schedules, duties, and administrative measures in limited territory subject to the same conditions and not separated by natural obstacles. The governor shall report as to such negotiations and proposed agreement to the chairman of the Isthmian Canal Commission for submission and consideration by the Commission and such action by competent authority as may be necessary to render said agreement effective in the Canal Zone."

Admiral J. G. Walker, chairman Isthmian Canal Commission, advises this Department that although several attempts have been made by the authorities of the Canal Zone to initiate negotiations contemplated by the foregoing provisions of said order and by the provisions of laws Nos. 65 and 88 of the National Assembly of Panama, the authorities of the Republic of Panama decline to enter upon such negotiations. Permit me to express the hope that the Government of Panama will recognize the desirability of taking up this matter with the governor of the Canal Zone and ascertaining if a satisfactory solution of the existing discrepancies in customs duties and administration is attainable. The Government of the United States sincerely desires to effect such an arrangement on terms both just and generous to the Republic of Panama. Accept, sir, the renewed assurances of my highest consideration.



Senator SCOTT. The Supreme Court in the case of Wilson v. Shaw, a 1907 case and I will omit the citation, stated that we hold a valid title to the Canal Zone and compared our title with the then-Territory of Alaska, the title we gave to Alaska at that time. The Court added:

It is hypercritical to contend that the title of the United States is imperfect and that the territory described does not belong to this Nation because of the omission of some of the technical terms used in ordinary conveyances of real estate.

Mr. Chairman, I also ask that a copy of this unanimous opinion by the Supreme Court be included in the record.

The CHAIRMAN. Without objection, that is so ordered. [The information referred to follows:]

[Supplied by Senator William Scott]


Statement of the Case



[No. 43. Argued October 19, 1906.-Decided January 7, 1907.]

Where the bill is solely to restrain the Secretary of the Treasury from paying specific sums to a specific party this court may take judicial notice of the fact that such payments have actually been made and in that event whether rightfully made or not is a moot question.

While the courts may protect a citizen against wrongful acts of the Government affecting him or his property, the remedy is not necessarily by injunction, suit

for which is an equitable proceeding, in which the interests of the defendant as well as those of the plaintiff will be considered.

Subsequent ratification is equivalent to original authority; and where Congress authorizes the acquisition of territory in a specific manner from a specific party, and it is otherwise acquired, the subsequent action of Congress in enacting laws for the acquired territory amounts to a full ratification of the acquisition, and the action of the Executive in regard thereto; and the concurrent action of Congress and the Executive in this respect is conclusive upon the courts.

The courts have no supervising control over the political branch of the Government in its action within the limits of the Constitution.

The title of the United States to the Canal Zone in Panama is not imperfect either because the treaty with Panama does not contain technical terms used in ordinary conveyances of real estate or because the boundaries are not sufficient for identification, the ceded territory having been practically identified by the concurrent action of the two interested nations.

Under the commerce clause of the Constitution, Congress has power to create interstate highways, including canals, and also those wholly within the Territories and outside of state lines.

The previous declarations of this court upholding the power of Congress to construct interstate or territorial highways are not obiter dicta; and to announce a different doctrine would amount to overruling decisions on which rest a vast volume of rights and in reliance on which Congress has acted in many ways.

25 App. D.C. 510, affirmed.

In a general way it may be said that this is a suit brought in the Supreme Court of the District of Columbia by the appellant, alleging himself to be a citizen of Illinois and the owner of property subject to taxation by the United States, to restrain the Secretary of the Treasury from paying out money in the purchase of property for the construction of a canal at Panama, from borrowing money on the credit of the United States, from issuing bonds or making any payments under the act of Congress, June 28, 1902, 32 Stat. 481, providing for the acquisition of property and rights from Colombia and the canal company and the construction and operation of the canal and the Panama Railroad. The Republic of Panama and the New Panama Canal Company of France were named parties defendant, but they were not served with process and made no appearance. A demurrer to the bill was sustained, and the bill dismissed. This decree was affirmed by the Court of Appeals, from whose decision this appeal was taken.

Mr. Warren B. Wilson, appellant, pro se:

The doctrine is fully established that in proper cases, compulsory process, both mandamus and injunction, may be issued by the courts at the suit of private persons interested, to require such officials to do or refrain from doing, in their official capacity, things which the court can see it is their positive legal duty to do or not to do. Marbury v. Madison, 1 Cr. 137; Kendall v. United States, 12 Pet. 524; United States v. Schurz, 102 U.S. 378; United States v. Black, 128 U.S. 40; United States v. Bayard, 4 Mackey, 312; Noble v. U.R.L.R.R. Co., 147 U.S. 165. That a bill to restrain an unlawful disbursement of public funds or issue of public obligations is a proper case, and a private citizen has the necessary special interest to enable him to sustain such a bill as the present, is also clear. Crampton v. Zabriskie, 101 U.S. 601; Dillon on Mun. Corp., §§ 914-924; Louisiana Board v. McComb, 92 U.S. 531; Rippe v. Becker, 56 Minnesota, 100; Pennoyer v. McConnaugh, 140 U.S. 1; Burke v. Snively, 208 Illinois, 320; The Liberty Bell, 23 Fed. Rep. 831.

The suit is not a suit against the United States.

The cases already cited and the practically uniform course of authority, establish that suits of this character to restrain public officials from misapplying public money are not open to this or any other objection. The State, or the United States, as the case may be, has an interest in the question whether the funds in the treasury shall be preserved for lawful uses or wasted in unlawful uses, and in a similar case a private corporation would be made defendant.

But the legal impossibility of making the State or United States a party in such cases does away with the necessity and a decree may be had against the official. Osborn v. Bank of U.S., 9 Wheat. 738; Davis v. Gray, 16 Wall. 203; Dodge v. Woolsey, 18 How. 331; Allen v. B. & O. R. R. Co., 114 U.S. 311; Vir

ginia Coupon cases, 114 U.S. 269; United States v. Lee, 106 U.S. 196, 212-215; Tindal v. Wesley, 167 U.S. 204.

The thing sought to be prevented here is exactly of the kind that has been constantly controlled, namely, an unlawful expenditure of the public money, and issue of public bonds not in exercising administrative discretion, and not in government at all, but in an unauthorized business venture. A case involving that question is one of private right, as to which the courts should and do give judgment, and not a political one, upon which they do not pass. Crampton v. Zabriskie, 101 U.S. 601; Dillon on Mun. Corp., §§ 914-924; Rippe v. Becker, 56 Minnesota, 100; Burke v. Snively, 208 Illinois, 328.

The treaty with Panama is not a performance of the conditions of the act of Congress because: Whatever has been acquired has not been acquired in the way required by the statute, i.e., not by treaty from Colombia have not been acquired at all, either from Colombia or Panama. It is not a compliance, because what was acquired was not acquired by treaty from Colombia. The statute in terms, requires the property and rights described to be obtained by treaty from the Republic of Colombia; and in that event, the other conditions being met, purports to authorize a payment to the Republic of Colombia.

It is not a compliance with the terms used, that these rights and privileges shall have been obtained by force from the Republic of Colombia, or by treaty or otherwise from anyone else; nor does this act in terms authorize under any conditions the payment of any money to the Republic of Panama.

The treaty with Panama is not a compliance with the conditions precedent set out in the act, because the things required to be acquired from Colombia have not been acquired at all from Colombia or Panama. The boundaries of the strip supposed to be conveyed by the treaty with Panama, are not defined in that treaty, nor are any means afforded by which they can be defined. The grant is, therefore, void for uncertainty.

This condition precedent has, further not been complied with, because the President has not acquired, for and on behalf of the United States the perpetual control of a strip of land six miles wide, including jurisdiction to make police and sanitary laws, and establish judicial tribunals to enforce them.

Congress has under the Constitution no authority to employ the public funds arising from all sources, including taxes, imposts and duties, laid and collected. money borrowed on the credit of the United States, and the proceeds of the disposition of the territory and other property of the United States, in making or buying and operating commercial canals and railroads and conducting like enterprises, in foreign countries.

This measure can derive no support from the power to regulate commerce among the several States, with foreign States and with the Indian tribes.

The power is to regulate, not to carry on, commerce. The power to regulate commerce is the power to prescribe the rule according to which it shall be carried on or governed. Gibbons v. Ogden, 9 Wheat. 1; Cooley v. Port Wardens, 12 How. 299; Welton v. Missouri, 91 U.S. 279; Tiernan v. Rinker, 102 U.S. 123; Gloucester Ferry Co. v. Pennsylvania, 114 U.S. 196; Interstate Comm. Comm. v. Brimson, 154 U.S. 447; E. C. Knight Co. v. United States, 156 U.S. 1; Adlyston Pipe &c. Co. v. United States, 175 U.S. 211; Northern Securities Co. v. United States, 193 U.S. 197.

Argument for Appellee

The power is to regulate not to carry on commerce, and the power to carry on commerce cannot be implied from the power to regulate it.

The term "implied powers" in general use, is unfortunate and inaccurate. The better term is that used in Gibbons v. Ogden, "included," or "comprehended powers."

A grant of powers to do one thing implies no power to do anything else. It includes a full choice of means, but the thing proposed to be done must always be the particular thing authorized; thus, navigation is commerce. Consequently Congress may regulate navigation, “because in regulating navigation, it is regulating commerce." Gibbons v. Ogden, 9 Wheat. 1.

The measure can derive no support from the power to establish postoffices and post-roads. It is not even attempted by this statute to establish this canal as a post-road. The general statute, making all canals post-roads while the mail is carried on them, means all canals in the United States.

The measure can derive no support from the power to declare war, which, as construed in McCullough v. Maryland, 4, Wheat. 407 and Miller v. United States, 11 Wall. 268, means the power to declare and carry on war. That means the whole power the United States--both the power of the President and Congress.

The power is to carry on war, not to carry on commerce. This is commerce; transportation is commerce. Gibbons v. Ogden, 9 Wheat. 1; Joint Traffic Assn. v. United States, 171 U.S. 515.

The measure can derive no support from the provision that "Congress shall have power to lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defense and general welfare of the United States." Mr. Assistant Attorney General Russell, Mr. Glenn E. Husted and The Solicitor General for appellee:

Complainant is without right to sue.

There is no averment that he pays to the United States any taxes whatever. But if his is a taxpayer he is not entitled to bring such a suit unless he shows some direct and special injury to himself above that suffered by others. Grant v. Cooke, 7 D.C. Rep. 166; State v. Thorson (S.D.), 33 L. R. A. 584; 1 Beach, Mod. Eq. Juris., §§ 641, 642; 1 High on Injunction, § 9; Georgetown v. Alex. Canal Co., 12 Pet. 91, 99.

The payments sought to be enjoined having been made and thirty million dollars in bonds issued, of which the court will take judicial notice, this attempt to restrain payment is largely a moot question, which the court will not consider. Mills v. Green, 159 U.S. 651; Am. Book Co. v. Kansas, 193 U.S. 49, 52; Cheong Ah Moy v. United States, 113 U.S. 216.

Title to the canal strip having been acquired, this suit in effect seeks to restrain the Government from improving its property. The United States is therefore a necessary party. It has not consented to be sued and cannot be sued without its consent. Belknap v. Schild, 161 U.S. 10; International Supply Company v. Bruce, 194 U.S. 601; Oregon v. Hitchcock, 202 U.S. 60.

That this court will not attempt to enjoin the enforcement by the Executive of a statute simply because it is alleged to be unconstitutional is too well established to call for argument. Mississippi v. Johnson, 4 Wall 475; Sutherland v. The Governor, 29 Michigan, 320, 329; Georgia v. Stratton, 6 Wall. 50; Decatur v. Spaulding, 14 Pet. 497, 515.

The treaty with the Republic of Panama complies with the Spooner Act, if such compliance is necessary. This court has frequently affirmed the principle that statutes should be given a reasonable construction and application. United States v. Kirby, 7 Wall. 482, 486-487; Blake v. National Bank, 23 Wall. 309, 320; Lau Ow Bew v. United States, 144 U.S. 47, 59; In re Chapman, 166 U.S. 661, 667; Bate Ref. Co. v. Sulzberger, 157 U.S. 1, 37; Collins v. New Hampshire, 171 U.S. 30, 34; Knowlton v. Moore, 178 U.S. 41 77; Interstate Comm. Comm. v. Baird, 194 U.S. 38.

The Spooner Act, the treaty with Panama, and the construction of the canal are not unconstitutional. Monogahela Nav. Co. v. United States, 148 U.S. 312, 334; California v. Central Pac. Co., 127 U.S. 1; Luxton v. North River Bridge Co., 153 U.S. 525, 530; Gillman v. Philadelphia, 3 Wall 713.

MR. JUSTICE BREWER, after making the foregoing statement, delivered the opinion of the court.

If the bill was only to restrain the Secretary of the Treasury from paying the specific sums named therein, to wit, $40,000,000, to the Panama Canal Company, and $10,000,000 of the Republic of Panama, it would be sufficient to note the fact, of which we may take judicial notice, that those payments have been made and that whether they were rightfully made or not is, so far as this suit is concerned, a moot question. Cheong Ah Moy v. United States 113 U.S. 216; Mills v. Green, 159 U.S. 651; American Book Company v. Kansas, 193 U.S. 49; Jones v. Montague, 194 U.S. 147.

But the bill goes further and seeks to restrain the Secretary from paying out money for the construction of the canal, from borrowing money for that purpose and issuing bonds of the United States therefor. In other words, the plaintiff invokes the aid of the courts to stop the Government of the United States from carrying into execution its declared purpose of constructing the Panama Canal. The magnitude of the plaintiff's demand is somewhat startling. The construction of a canal between the Atlantic and Pacific somewhere across the narrow strip of land which unites the two continents of America has engaged the attention

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