ment in the vehicle itself is paramount to its interest in the value thereof. Accordingly, it is my opinion that in the consideration of offers in compromise submitted to you in cases involving the forfeiture of vehicles seized for violation of the internal revenue laws, the inability of the Government in any case to obtain from a sale of the vehicle, after deducting the expenses of forfeiture and sale, as much as the amount offered, may be properly treated by you as uncertainty as to collection within the meaning of that term as used in my opinions of October 24, 1933, and October 2, 1934, above mentioned. I assume, of course, that your request for my opinion does not relate to cases which have been referred to this Department for the institution of forfeiture proceedings or otherwise. Perhaps I should also state that I deal herein only with the question of power, the exercise of which is discretionary and may depend upon considerations other than monetary. Respectfully, HOMER CUMMINGS. TO THE SECRETARY OF THE TREASURY. CONSTITUTION FOR THE GOVERNMENT OF THE PHILIPPINE ISLANDS The proposed constitution for the government of the Philippine Islands, as adopted by the Constitutional Convention, is in substantial conformity with the provisions of the act of March 24, 1934, 48 Stat. 456. Certain differences between the provisions of the proposed constitution and the provisions of the act discussed and held to be immaterial. DEPARTMENT OF JUSTICE, SIR: I have your letters of February 19 and March 5, transmitting a copy of a "Draft of Constitution for the Government of the Commonwealth of the Philippine Islands as adopted by the Constitutional Convention ", and a copy of an opinion of the Judge Advocate General with reference thereto. You request my opinion whether the proposed constitution conforms with the provisions of the Act of March 24, 1934, c. 84, 48 Stat. 456. In a few instances, as pointed out by the Judge Advocate General, the strict letter of the statute has not been followed. Thus, the statute refers to the new government, authorized to be established and to function pending final and complete withdrawal of the sovereignty of the United States, as "the government of the Commonwealth of the Philippine Islands", while the proposed constitution provides that "the government established by this Constitution shall be known as the Commonwealth of the Philippines." This difference is of no consequence and, in fact, the words in the statute are only descriptive, evidencing no purpose that the term employed by the Congress for convenience of designation should be regarded as mandatorily determining the precise name of the government. Section 1 of the statute provides that the new government shall exercise jurisdiction over "all the territory ceded to the United States by the treaty of peace concluded between the United States and Spain on the 10th day of December 1898, the boundaries of which are set forth in article III of said treaty, together with those islands embraced in the treaty between Spain and the United States concluded at Washington on the 7th day of November 1900." The constitution, after reciting the substance of the quoted provision, adds thereto, "and in the treaty concluded between the United States and Great Britain on the second day of January, nineteen hundred and thirty, and all territory over which the present Government of the Philippine Islands exercises jurisdiction." If it were a fact that these additional words embraced lands beyond the contemplation of the statute they would be of no effect though finally included in the constitution. It is my understanding, however, that they do not embrace any lands not included within the terms of the statute. The treaty with Great Britain merely established boundaries which theretofore had been uncertain. I therefore regard the added words as unobjectionable. The Judge Advocate General also mentions the fact that the proposed constitution contains provisions respecting the making of war, the appointing and receiving of ambassadors, other public ministers and consuls, and the negotiation of treaties. However, the "Ordinance appended to the Con stitution" provides, in the precise words of the federal statute, that "foreign affairs shall be under the direct supervision and control of the United States ", pending final withdrawal of American sovereignty. The Judge Advocate General suggests the advisability of an unequivocal declaration, beyond this, that the war power and the power over foreign affairs shall not be exercised pending such withdrawal of American sovereignty. I do not regard this as necessary and, as indicated, the provision follows the statute literally. "Foreign affairs ", I think, is sufficiently broad to contemplate foreign wars as well as all peace-time dealings with foreign nations. In my opinion the proposed constitution substantially conforms with the provisions of the Act of March 24, 1934, c. 84, 48 Stat. 456. Respectfully, TO THE SECRETARY OF WAR. HOMER CUMMINGS. RECONSIDERATION OF OPINION OF ACTING ATTORNEY GENERAL DATED JULY 19, 1918-APPLICABILITY OF THAT OPINION TO QUESTION OF TAXABILITY OF COMPENSATION PAID TO OFFICERS AND EMPLOYEES ADMINISTERING STATE WORKMEN'S COMPENSATION FUND OF CALIFORNIA It is doubtful whether the opinion of the Acting Attorney General of July 19, 1918, should be reconsidered, for the questions dealt with therein are essentially different from the question now under consideration, and the conclusion reached in that opinion is not questioned and does not necessarily affect the case presented. The opinion of July 19, 1918, should be considered as confined to the specific questions therein considered and not as controlling in determining whether compensation paid from the State Workmen's Compensation Fund of California to officers and employees administering such fund is taxable by the Federal Government. DEPARTMENT OF JUSTICE, SIR: I have your letter of March 11 in which you request my reconsideration of the Acting Attorney General's opinion of July 19, 1918 [31 Op. 308], because, as you state, it may hamper your Department in following a policy which you believe to be justified by the more recent decisions of the Supreme Court. That opinion dealt with the following provisions contained in Section 11 (b) of the Act of September 8, 1916, 39 Stat. 756, 765, 767, and Section 504 (c) of the Act of October 3, 1917, 40 Stat. 316: "SEC. 11 (b): There shall not be taxed under this title any income derived from any public utility or from the exercise of any essential governmental function accruing to any State, Territory, or the District of Columbia, or any political subdivision of a State or Territory, * * *. Provided, That whenever any State, Territory, or the District of Columbia, or any political subdivision of a State or Territory, has, prior to the passage of this title, entered in good faith into a contract with any person or corporation, the object and purpose of which is to acquire, construct, operate, or maintain a public utility, no tax shall be levied under the provisions of this title upon the income derived from the operation of such public utility, so far as the payment thereof will impose a loss or burden upon such State, Territory, or the District of Columbia, or a political subdivision of a State or Territory; * * "SEC. 504 (d): Policies issued by any person, corporation, partnership, or association, whose income is exempt from taxation under Title I of the Act entitled 'An Act to increase the revenue, and for other purposes', approved September 8, 1916, shall be exempt from the taxes imposed by this section." The first quoted Section was interpreted as exempting income accruing to the State of Pennsylvania from the fund created by the State Workmen's Compensation Act. Section 504 (c) was interpreted as exempting insurance policies, payable out of such fund, from the taxes imposed on insurance policies generally, but this, under the terms of the statute, was controlled by the answer to the first question. Your General Counsel suggests that the Acting Attorney General erred in his comments upon certain decisions of the Supreme Court, and particularly in the following statement, when the matter is viewed in the light of subsequent decisions of the Court: "The function of the courts in this connection is merely to declare whether the acts of the several States or of the United States are within the constitutional limits prescribed to them; that is, whether they are exercising in the particular act in question their sovereign powers as defined by their respective constitutions. To determine this question, the courts have the standard of the Constitution, together with various rules of interpretation established by law. When it has once been determined that the act is within the constitutional power of the State or of the United States, there is no safe standard which the courts can employ to determine whether the particular act is essential to governmental action or not. Until such a standard is set up it seems to be exceedingly unsafe to permit speculation as to the operation and effect of various acts to control the judgment of the court upon the point of their essentiality.” [31 Op. 316]. You state you are now dealing with the question whether compensation paid to officers and employees administering the State Workmen's Compensation Fund of California is subject to the Federal taxing power under the Constitutionwhich is essentially a different question from those dealt with in the opinion. In view of this, and since you do not question the conclusion reached in the opinion and do not present a case necessarily affected by that conclusion, it is doubtful that a reconsideration should now be undertaken. However, as I understand it, you are concerned only to the extent that you wish to levy taxes upon income accruing to the officers and employees administering such state compensation funds but do not wish to appear to act in conflict with an opinion of the Attorney General. Addressing myself to the question thus presented, I have the honor to advise you that the opinion of July 19, 1918, should be considered as confined to the specific questions therein dealt with and not as controlling in the matter of the taxability of income payable from such state funds to individual officers and employees. Respectfully, HOMER CUMMINGS. TO THE SECRETARY OF THE TREASURY. |