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provisions of the Act of Congress of February 25, 1927, quoted above), this permission granted by the Iowa Act is limited by the provision that "No banking institution may establish any office in a city or town in which there is already an established banking institution." There are, of course, such established banking institutions in Sioux City.

It consequently appears that a State bank could not establish a branch or an office of the type referred to in the Iowa Act of March 13, 1931, in Sioux City.

I am, therefore, of the opinion that the Comptroller of the Currency is without, authority to approve the application of the Live Stock National Bank of Sioux City, Iowa, to establish a branch in that city.

Respectfully,

WILLIAM D. MITCHELL.

To the SECRETARY OF THE TREASURY.

PORTO RICO-VALIDITY OF BOND ISSUE

The proposed issue for the Government of Porto Rico of bonds in the sum of $500,000, the proceeds from the sale of which are to be devoted to the continuance of the construction of works for development and use of the waters of the Toro Negro and Matrullas Rivers, being authorized by Congress and by Act No. 7 of the Legislature of Porto Rico of April 6, 1931, and all the statutory requirements regarding the issue and sale of these bonds having been complied with, said bonds, when issued in the amount and form proposed, will constitute valid and binding obligations of the people of Porto Rico.

DEPARTMENT OF JUSTICE,
August 19, 1931.

SIR: I have the honor to refer to your letter of July 30, 1931, stating that your Department has been authorized to sell for the account of the Government of Porto Rico bonds of the face value of $500,000, the proceeds from which are to be devoted to the continuance of the construction of works for development and use of the waters of the Toro Negro and Matrullas Rivers under the so-called Toro Negro project. The proposed bonds are to be issued under authority contained in section 3 of the Act of Congress approved March

2, 1917, entitled "An Act to provide a civil government for Porto Rico and for other purposes," as amended by the Act of March 4, 1927 (c. 145, 39 Stat. 951, 953; c. 503, 44 Stat. 1418; U. S. C., title 48, secs. 741, 745), and Act No. 7 of the Twelfth Legislative Assembly of Porto Rico, third session, approved April 6, 1931, a copy of which was enclosed with your letter.

You state that the bonds are to be issued and sold by you at the request of the Treasurer of Porto Rico (which request has been approved by the Governor), in coupon form, in the denomination of $1,000 each, to be dated January 1, 1931, and to bear interest at the rate of 414 per centum per annum, payable semiannually on January 1 and July 1 of each year, the principal thereof to be payable at the Treasury of the United States on January 1, 1951, and the bonds to be redeemable at par, with accrued interest, on January 1, 1941, or on any interest payment date thereafter. A copy of the form of the proposed bond is submitted with your letter and you request my opinion upon the legality of the issue.

Section 3 of the Act of March 2, 1917, as amended provides:

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66* * and when necessary to anticipate taxes and revenues, bonds and other obligations may be issued by Porto Rico or any municipal government therein as may be provided by law, and to protect the public credit: Provided, however, That no public indebtedness of Porto Rico and the municipalities of San Juan and Ponce shall be allowed in excess of 10 per centum of the aggregate tax valuation of its property * *. In computing the indebtedness of the people of Porto Rico, municipal bonds for the payment of interest and principal of which the good faith of the people of Porto Rico has heretofore been pledged and bonds issued by the people of Porto Rico secured by bonds to an equivalent amount of bonds of municipal corporations or school boards of Porto Rico shall not be counted, but all bonds hereafter issued by any municipality or subdivision

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for which the good faith of the people of Porto Rico is pledged shall be counted."

You state that the records of your Department show that the aggregate assessed valuation of real and personal prop

erty in Porto Rico on December 31, 1930, amounted to $326,144,346; that on the said date there were outstanding bonds of the Government of Porto Rico of the face value of $29,103,000; that the total amount of temporary loans outstanding was $766,494.54; and that since the amendatory Act of March 4, 1927, the good faith of the people of Porto Rico has been pledged to the payment of principal and interest on municipal bonds aggregating $1,361,500, which must be added to the foregoing, thus making a total of $31,230,994.54, to be considered when ascertaining the total bonded indebtedness which the Government of Porto Rico is authorized to incur. Therefore, it is apparent that the proposed issue will not increase the bonded indebtedness beyond 10 per centum of the aggregate of the assessed valuation, the maximum permitted by law.

Section 1 of the Act of April 6, 1931, reads in part as follows:

"That the Treasurer of Porto Rico is hereby authorized, empowered and directed to issue bonds of The People of Porto Rico up to the sum of one million dollars ($1,000,000.00), pursuant to the terms hereinafter set forth. The proceeds from the said issue of bonds of one million dollars ($1,000,000.00) shall be covered into the Treasury of Porto Rico in the fund created by the 'Act for the Development of the Water Resources,' approved April 29, 1927, and known as' Special Fund for the Development and Use of the Water Power,' and shall be applied by the Commissioner of the Interior to the construction of the works of the Toro Negro Hydro-electric Project, including the completion of the Cuineo Dam and the diversion of the waters of the Matrullas River for the generation of electric power at the Torro Negro-Hydro-electric Plant; Provided, that this bond issue shall be made and sold as the work progresses, in partial amounts of one hundred thousand dollars ($100,000.00), or such multiples thereof, as according to the estimate of the Commissioner of the Interior, shall be required to take care of the expenditures of construction, so that the progress of the work may continue without interruption

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Section 2 of said Act provides that the bonds may be in coupon form of the denomination of $1,000 or registered

form of the denomination of $5,000, or both, shall bear interest at a rate not exceeding 42 per centum per annum, payable semiannually on the first day of January and July, and shall be redeemable within twenty years from the date of issue, but reserving to the Government of Porto Rico the option and the right to redeem all or any of the said bonds at par, with accrued interest, on any interest payment date after the first ten years from the date of issue upon giving notice as prescribed by the Act, both principal and interest to be payable in Porto Rico, at the office of the Treasurer of Porto Rico, or at the Treasury of the United States, in gold coin of the United States of the present standard of weight and fineness.

Section 3 of said Act provides that the bonds may be sold by the Secretary of War of the United States, or by the Treasurer of Porto Rico, or by any fiscal agent appointed for the purpose by the Treasurer of Porto Rico, with the approval of the Governor, on terms most advantageous to the people of Porto Rico and as near the date of issue as possible; and that the Treasurer with the approval of the Governor, under the limitations prescribed therein, shall have absolute intervention and authority in all matters connected with the said bonds, including the terms and denominations thereof, and the manner, time, and method of their issue and sale. The Treasurer is authorized and directed to pay the principal and interest when due and an amortization fund for the redemption of the bonds is provided. For the payment of both principal and interest the good faith of the people of Porto Rico is irrevocably pledged.

There was transmitted with your letter a statement signed by the Commissioner of the Interior of Porto Rico, setting forth his estimate that a total amount of $500,000 will be required in order to continue until March 31, 1932, the projects for which the bond issue is provided, and also a statement signed by the Treasurer, setting forth his determinations in those matters left to his discretion, and this has been approved by the Governor in accordance with the Act of the Legislature.

I find that all the statutory requirements regarding the issue and sale of the said bonds have been complied with and

that the form of bond submitted is in conformity with the law and the determinations of the Treasurer, approved by the Governor. The form of bond properly recites that "under the provisions of section 3 of the Act of Congress, approved March 2, 1917, as amended by the Act of March 4, 1927, this bond is exempt from taxation by the Government of the United States, or by the Government of Porto Rico or of any political or municipal subdivision thereof, or by any State, Territory, or possession, or by any county, municipality, or other municipal subdivision of any State, Territory, or possession of the United States, or by the District of Columbia."

It is therefore my opinion that the bonds, when issued in the amount and form proposed, will constitute valid and binding obligations of the People of Porto Rico.

Respectfully,

JOHN LORD O'BRIAN,

To the SECRETARY OF WAR.

ACTING ATTORNEY GENERAL.

VETERANS' ADMINISTRATION-ADJUDICATION OF DIS

PUTED CLAIMS FOR INSURANCE BENEFITS

The Administrator of Veterans' Affairs has authority under the World War Veterans' Act, 1924, as amended by the Act of July 3, 1930 (46 Stat. 991), and the Consolidation Act of July 3, 1930 (46 Stat. 1016), creating the Veterans' Administration, in accordance with the proposed regulation submitted by him, to confer power on the Insurance Claims Council to effect a disagreement as required by section 19 of the amendatory Act in cases where no appeal is taken to the Administrator, under such regulations as he may promulgate to govern the procedure and action of that Council; and in cases in which an appeal is taken by the claimant from an adverse decision by such Council, the Administrator has authority to delegate to the Solicitor of the Veterans' Administration the power to act in the name of the Administrator.

DEPARTMENT OF JUSTICE,
September 14, 1931.

SIR: I have the honor to reply to your letter of August 21, 1931, requesting my opinion on whether the decision of rejection of a claim for insurance by the Insurance Claims

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