No. 239. Mr. Akerman to Mr. Fish. DEPARTMENT OF JUSTICE, August 7, 1871. (Received August 9.) SIR: Your letter of the 1st instant presents a question arising under the act of February 21, 1871, making appropriations for the consular and diplomatic expenses of the Government for the year ending June 30, 1872, and for other purposes. The last of the appropriations in that act is as follows: The pay to the government of Great Britain and Ireland, the second and last installment of the amount awarded by the commissioners under the treaty of July one, eighteen hundred and sixty-three, in satisfaction of the claims of the Hudson's Bay and of the Puget Sound Agricultural Company, three hundred and twenty-five thousand dollars in gold coin: Provided, That before payment shall be made of that portion of the above sum awarded to the Puget Sound Agricultural Company, all taxes legally assessed upon any of the property of said company covered by said award, before the same was made, and still unpaid, shall be extinguished by said Puget Sound Agricultural Company; or the amount of such taxes shall be withheld by the Government of the United States from the sum hereby appropriated. (16 U. S. Stat., 419.) Attorneys for Pierce County, Washington Territory, have transmitted to you a certificate of John Latham, auditor of Pierce County, Washington Territory, under the seal of the commissioner's court of that county, that a certain annexed paper is a true and correct transcript of the delinquent tax-rolls so far as relates to the taxes of the Puget Sound Agricultural Company of Pierce County, Washington Territory, with the percentage added thereto according to law, as fully and as amply as the same appears of record in my office. The paper annexed purports to be a statement of delinquent taxes due to Pierce County, Washington Territory, by the Puget Sound Agricultural Company, on one hundred and sixty-one thousand acres of land, from the year 1859 to 1869, inclusive. These taxes are distributed under the heads of county tax, school tax, territorial tax, and road tax, the whole amounting to $27,062 64; and there are additions of various percentages, running from twenty-five per cent. on the tax of 1869 to two hundred and seventy-five per cent. upon the tax of 1859, raising the total to the sum of $61,305 22. No explanation is given in the certificate or annexed paper of the reason for these additions. But it is probable that they are claimed as due for the delinquency of the tax payer. You request my opinion as to whether the law requires the retention in the Treasury of the amount of the said original taxes and of the additions thereto. The appropriation above quoted is in fulfillment of a stipulation in the treaty of July 1, 1863, which, after providing for a decision of the claims of the company by commissioners, engages in the fourth article that the sums awarded shall be paid in two installments, within specified times, "without any deduction whatever." (13 U. S. Stat., 652.) If this proviso is to cause the payment of a less sum than the amount awarded, it will produce a breach of the treaty, and make the country responsible to the foreign power for such a breach. A statute which may have such consequences should receive the strictest construction allowable under established rules. Not denying the right of Congress to repeal a treaty or any provision of it, so far at least as to control the action of the Executive in relation to it, yet I think that a statute which may have that effect should be held to mean no more than its language necessarily imports. Under this rule, when the term taxes is used in such an act of Con GREAT BRITAIN.. gress, without explanation from the context or other noticeable circumstances, it must be understood to mean taxes under the laws of the United States-that is, taxes known as national taxes, in distinction from State or Territorial taxes. When the Government is both a debtor and creditor of the same party, Congress might think it no substantial, though a literal, violation of an international covenant to deduct what is due to this Government from what this Government owes to the other party. But that Congress meant that the Government of the United States should become a tax collector for a Territorial county, and should execute this office by breaking a treaty with a foreign power, is not to be inferred from language which will bear any other interpretation. If it were intended that this money should be withheld for the benefit of Pierce County, Congress would probably have directed that it should be paid the treasury of that county. But no such direction appears in the statute. The provision is that the amount of such taxes shall be withheld from the appropriation-that is, shall be kept in the Treasury of the United States-a very fit place for taxes assessed by the United States, but not for taxes assessed by Pierce County. I am not informed whether any United States taxes were in fact assessed upon the property of the company. But it is hardly possible that the company could have had interests of great magnitude within the United States for the last ten years without liability to national taxes; and Congress might have inserted the proviso out of abundant caution, without knowing whether a claim for such taxes existed in fact. I do not overlook the fact that Territory is a creation of Congress, and sustains to the General Government a relation different in many respects from that sustained by a State. Nevertheless, its taxes are so different from the taxes of the United States, in the authority which immediately imposes them, in the agencies which collect them, and in the purposes to which they are applied, that Congress cannot reasonably be supposed to have intended to embrace them under the general name "taxes" in such a statute as that under consideration. I have not examined the questions of the regularity and sufficiency of the certificate from the auditor of Pierce County; of the validity of the county's claim for taxes, or of the validity of the assessed penalty; or whether the taxes, if valid at all, constitute a general debt of the company, or binds alone the property once occupied by it, and now recognized as belonging to the United States; because the construction which I have felt obliged to put upon the proviso in question makes such examination unnecessary. I am, therefore, of the opinion that neither the tax nor the penalty which Pierce County is said to claim from the company should be withheld, and that no taxes should be withheld under the proviso except such as may be found to have been legally assessed upon the property of the company by the Government of the United States. Very respectfully, &c., No. 240. A. T. AKERMAN. Mr. Hartley to Mr. Fish. TREASURY DEPARTMENT, Washington, D. C., September 2, 1871. (Received September 4.) SIR: I have to acknowledge the receipt of your letter of August 28, inclosing a copy of the opinion of the Attorney General on the question of the amount of taxes due from the sum appropriated for the payment of an award to the Puget Sound Agricultural Company. You ask to be informed whether any tax for the use of the United States, as imposed by any act of Congress, has been legally assessed upon any of the property of that company covered by the award in question. I herewith transmit in reply a copy of a letter from the Commissioner of Internal Revenue, to whom the subject was referred for report. In view of the result of the Commissioner's investigation, I am enabled to state that this Department is not informed of any unpaid assessment of tax due the United States, against the property of the Puget Sound Agricultural Company. Respectfully, &c., J. F. HARTLEY, Acting Secretary of the Treasury. Mr. Douglass to Mr. Boutwell. TREASURY DEPARTMENT, Washington, D. C., August 31, 1871. SIR: Yours of the 28th instant, inclosing letter of the honorable Secretary of State, with the opinion of the Attorney General upon the question "what taxes if any are to be withheld by this Government from the sum appropriated for the payment of an award to the Puget Sound Agricultural Company, by the act of February 21, 1871, required by the treaty with Great Britain of July 1, 1863," is acknowledged. You request me to state whether any such taxes have been legally assessed and remain unpaid to the United States. I perceive by reference to the second page of the "opinion of the Attorney General," that your inquiry relates to taxes assessed before the "award" was made. It not appearing at what time the award was made, I have caused investigation to be made with reference to the entire period covered by the operations of the internal revenue system, and find that no taxes have been assessed during that period on the property of the Puget Sound Agricultural Company which remain unpaid at the present date. Respectfully, J. W. DOUGLASS, [MEMORANDUM.-For the correspondence of the consul of the United States at Hong-Kong, see CHINA.] SIR: I have the honor to acknowledge the receipt of the volume of Consular Regulations; also of your dispatch of the 10th ultimo, No. 55. The festivities of the Greek New Year took place yesterday. The diplomatic body assisted at mass at the cathedral and from thence proceeded to the palace, where the King and Queen gave an official audience, and the customary address to the throne was delivered, to which Her Majesty responded. The eventful year which has just closed has not been without political and moral importance to Greece. In April last, the affair at S. Nierme, near Marathon, whereby four foreigners, including two members of le-. gations, were massacred by brigands, created an intensity of feeling in this community which cannot wholly die out, and may lead to that unity of public sentiment here which is essential to the thorough removal of the scourge of brigandage in Greece and the Turkish provinces. On the other hand, through misapprehension and misrepresentation of the facts of the case, this nation has been most unjustifiably assailed, especially by the government and press of England, until a bitterness of feeling has been excited here which is not likely to strengthen the friendly relations heretofore existing between Great Britain and Greece. The result of the legal examination, which involves an Englishman in the circumstances which led to the tragical ending, is not satisfactory to the English minister, and further complications are likely to grow out of this protracted affair. Two changes of ministry have occurred during the year. That of Mr. Deligeorgis gave promise of important reforms, and did effect much in the successful pursuit of brigandage, but the minister was without popular support. The idea that the King would, in face of this last fact, authorize the dissolution of the forthcoming Parliament, subjected the sovereign to very general and severe criticism. The return of Mr. Coumoundouros to power has restored the popular equilibrium, and the chief political organs now assert that the kingdom, has "returned at last to strictly constitutional government," the present cabinet being supported by a parliamentary majority. With the popularity which now surrounds the new minister, and the great opportunity which is afforded for positive and independent action in the important questions of brigandage, finance, and internal development, it may be expected that Greece will this year take some important steps in the right direction. The National Exposition of Industry, which has just closed, was a creditable evidence of the material resources of the kingdom, and which a supply of outside capital would largely develop. Attention has been given to the subject of commercial relations with the United States. The reduction of our import duty on dried currants will lead to the increase of the export from Greece, but it still seems desirable that a further reduction of the duty should be made in view of the fact that the existing rate is equal to about double the cost of the fruit in this market, and also because Great Britain is seriously suggesting the entire removal of the duty at her ports. This would divert shipments from the United States. The reports of our consuls at Patras, Zante, and Cephalonia encourage the belief that much more can be done than ever has been done in direct importations from the States, and practical efforts will be made to increase these commercial relations. I have, &c., CHAS. K. TUCKERMAN. No. 38.] No. 242. GUATEMALA. Mr. Hudson to Mr. Fish. LEGATION OF THE UNITED STATES, Guatemala, July 31, 1871. (Received September 4.) SIR: I have the honor to acknowledge the receipt of Department circulars Nos. 10 and 11, dated June 13 and 16, 1871, respectively. Referring to your No. 11, I have to state that all the foreign residents in this republic seek the protection of this legation, because none other is respected. During the late insurrection it became a necessity for me to extend it to them, to make their treaty rights be respected by the government and by the revolutionists. Among the number were British subjects, acting as agents of sugar and coffee estates. In employing the friendly offices of this legation, I have been careful not to give just cause for offense'; but at times I have had to meet arbitrary acts with unyielding firmness. The authorities have in no instance objected to my action, but approved my course and claimed the protection of the legation. The insurgent party also claimed the protection of the legation. Protection has been given to President Cerna's family, and his ministry and their families. Also the family of President Granadas and to his partisans. The granting these friendly offices to all parties has largely improved the position of this legation, and has drawn to its sustenance all the foreign residents and better class of natives. There is now not a doubt but my worst fears, as communicated to you in my several dispatches, would have more than been realized bad its influence and active efforts to prevent been less. Humanity called for the part I bore, and where there was so much to be justly apprehended, I believe my conduct would be excused, if not fully warranted, in acting in that behalf. I have the honor, &c., No. 243. SILAS A. HUDSON. No. 35.] Mr. Davis to Mr. Hudson. DEPARTMENT OF STATE, Washington, September 6, 1871. SIR: Your dispatches, numbered 37, 38, and 39, have been received. The efforts which you have made for the general protection of life and property, during the recent hostilities in Guatemala, meet with the approval of this Department. You are authorized to use your friendly offices, unofficially, in behalf of foreigners who are not represented in Guatemala, whenever it can be done without offense to the government to whom you are accredited. Meanwhile you should bear in mind that the protection authorized by circular No. 11 is defined, and differs from the friendly offices which may be exercised in behalf of citizens, other than those of Switzerland. I am, &c., J. C. B. 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