prevailing rule which enables a creditor to demand payment in the kind of money known as legal tender, which is by no means the only kind of money in use in the United States.

But the purpose of this requirement of the act is simple, apparent, and commendable, being to compel the bank to keep on hand sufficient Mexican coins to pay the deposits of Mexican coins, and make it unsafe for the bank to export any considerable number of them so long as they remain the favorite currency of the Philippines.

The contention that said act applies only to incorporated banks and is therefore class legislation, is answered by the opening words of the act, which are: “Every bank of deposit in the Philippine Islands shall, etc."

When one recalls the stringent provisions of the Federal banking act and of the bank laws of the several States regarding surveillance, inspection, regulation, and control of banking institutions and the penalties therein prescribed for acts and omissions purely mala prohibita, it is manifest that the act of the commission does not violate the general principles under which the banking business is conducted in the United States.

In general the provisions of laws above referred to are too well known to need recital. There is one of a character similar to those of the act under consideration, to which attention is directed. The act of Congress approved July 17, 1882, provides:

No national-banking association shall be a member of any clearing house in which such certificates (silver) shall not be receivable in the settlement of clearing-house balances. (Supp. to U. S. Rev. Stats., vol. 1, p. 357, chap. 290.)

The purpose of this enactment was to prevent discrimination against the money issued by the United States known as "silver certificates."

The Secretary of War approved the views expressed in the foregoing report, and advised the attorneys for the Hongkong and Shanghai Banking Corporation as follows:

MAY 7, 1901.

GENTLEMEN: I have the honor to acknowledge the receipt of your communication of February 18, 1901, wherein you set forth certain objections offered on behalf of the Hongkong and Shanghai Banking Corporation to the legislative act of the American Philippine Commission, No. 53, entitled "An act to prevent discriminating against the money of the United States by banking institutions."

Your letter was referred to the law officer of the Division of Insular Affairs with instructions to examine the questions presented and report thereon. A copy of his report is herewith transmitted.

I concur in the conclusion reached by said law officer, that the provisions of said act do not contravene the principles established for the protection of property rights in the United States nor the accepted rules governing legislative regulation and control of the banking business in the United States.

Yours, respectfully,

Messrs. HOPKINS & HOPKINS.

ELIRU ROOT, Secretary of War.

IN RE, ORDER OF MAJOR-GENERAL OTIS REQUIRING SMITH, BELL & CO., A BANKING HOUSE AT MANILA, TO TURN OVER TO THE AMERICAN AUTHORITIES ONE HUNDRED THOUSAND DOLLARS, HELD BY SAID HOUSE AS THE PROPERTY OF THE INSURGENT FORCES IN THE PHILIPPINES.

[Submitted October 10, 1899. Case No. 738, Division of Insular Affairs, War Department.]

SYNOPSIS.

1. Under the law of military occupation and the well-established doctrine of belligerent rights, the United States was authorized to require said banking institution to pay to the military authorities of the United States the amount owing to the insurgent organization.

2. The right of the United States to enforce payment and secure the fund did not depend upon the possession or surrender of the draft issued by the bank when the money was received by it.

SIR: This matter arises as follows:

Smith, Bell & Co. is a British banking firm, with principal place of business at Manila, P. I., and various branch houses at different localities in the Philippine Archipelago. On January 23, 1899, the branch house at Legaspi, Luzon, sold a draft for $100,000 drawn in favor of Mariano Trias, who was the custodian of funds, or treasurer, of the insurgents. The military authorities of the United States called upon the firm at its Manila office and required said firm to pay over to the American authorities the sum of $100,000, being the amount of said draft. The firm complied under protest. The draft was not in the possession of the authorities of the United States and was not delivered to Smith, Bell & Co. Said draft has not been presented by any person to said banking concern, or any of its branches, and payment thereon demanded.

Smith, Bell & Co. applied to the British Government to secure relief. The firm represents that it has agencies in a number of places. in the island of Luzon, where its agents are in the power of the natives, and they fear that they will be compelled by force to deliver to the insurgents $100,000 if said draft is presented for payment.

The State Department transmitted to the War Department a communication from the British chargé d'affaires at this capital, making known the desire of the British Government to afford Smith, Bell & Co. such protection and relief as is possible. Upon receipt of the communication from the State Department the matter was referred to Major-General Otis for report on the facts. Replying thereto MajorGeneral Otis says:

Respectfully returned to the honorable the Secretary of War, Washington, D. C. Attention invited to my cablegram of June 27. The inclosed copy of letter of General Hughes contains some errors. He acted under my verbal directions in the

matter, and my information at the time was that the draft in question was drawn for $146,000 instead of $100,000. Inclosed and attached hereto is a true copy of the accepted and outstanding draft. It will be seen that it is drawn in favor of Mariano Trias, for funds received from General Luckban. It was accepted and made payable February 19, and on February 3, at Malolos, was indorsed to Sylvester Legaspi. Luckban was at the time and is still an insurgent general, commanding in the southeastern portion of Luzon and the islands of Samar and Leyte, where he has robbed and is still robbing the people without mercy. drawn treasurer of the insurgent government, ing the insurgent troops of southern Luzon. treasurer.

Trias was at the time the draft was and he is now the general commandLegaspi succeeded him as insurgent

The original draft is now in this city and will not be further negotiated. The party holding it has been informed that if he attempts to collect it or lets it pass out of his possession his house and lands will be confiscated to the United States, and he is thoroughly aware of that fact. The draft has already passed through the hands of several influential Filipinos, and it required some time to locate it.

It is conceded that the fund seized was intended to be used for promoting the insurrection and that the insurgents sought to utilize the bank as a means of transfer for said funds.

Under the laws and usages of war the United States may lawfully seize and retain such funds, and to that end may compel the person having such funds in his possession to pay over the same to the military authorities.

The most favorable view of the conduct of the bank in attempting to perform the service rendered the insurgents herein, is to consider the obligation assumed by the bank as creating an indebtedness to the persons associated in the insurrection and the draft as an evidence thereof. Such indebtedness may properly be collected by the United States as a military measure calculated to weaken the insurrection.

The real question involved appears to be as to the legality of said enforced collection, when the United States was not in possession of the written evidence of the indebtedness and therefore unable to surrender said writing to the debtor. Upon authority of the determination made of such question in the instance of the debts due the elector of Hesse-Cassel and collected by Napoleon, it may confidently be asserted that the action of the United States was lawful.

The elector of Hesse-Cassel was accustomed to sell the valor of his soldiers (Hessians) to other sovereigns. The money he received therefor he loaned to his subjects and to citizens of other German States on notes secured by real estate mortgages, payable to himself. After the battle of Jena he was forced to leave his principality, and on doing so carried away these notes and mortgages and thereafter retained possession of them. He entered the military service of Prussia, then at war with Napoleon. Hesse-Cassel was governed by the laws of military occupation until it was incorporated into the kingdom of Westphalia, over which Napoleon made his brother Jerome king, and

remained a part of that kingdom until 1813. During this period the Bonapartes, both Napoleon and Jerome, collected the amounts due on said notes and mortgages made payable to the elector and carried away by him. This seizure was justified upon the ground that the property was that of a person remaining in arms against the legitimate sovereign of the State. The Bonapartes had no difficulty in collecting such of these debts as were due from their subjects; but where the debtors resided in other States force could not be resorted to. To induce voluntary payment a portion of the debt was remitted. Upon the elector being again installed as ruler over Hesse-Cassel, he attempted to compel a second payment of the debts so paid to the Bonapartes. The question was, Whether debts owing to the elector were validly discharged by a payment to Napoleon and receiving from him a quittance in full? This question was finally determined in the affirmative. As to the exact point now being considered Phillimore says:

They rejected the doctrine that because the prince had retained possession of the instruments containing the written acknowledgments of the debtors he therefore had constructive possession of the debts. (Phillimore's Int. Law, III, 841.)

With reference to the same case Halleck says:

They rejected the consideration of the justice or injustice of the war, * * * nor did they attach any importance to the fact that the prince had carried away with him and retained possession of the instruments containing the written acknowledgement of the debtor. (Halleck's Int. Law, 3d ed., chap. 34, sec. 29; see also Hall's Int. Law, 4th ed., p. 588; Snow's Cases in International Law, p. 381).

If the relationship between the bank and the insurgent organization was that of debtor and creditor, and the United States was justified in collecting said debt, it follows that the original creditor is without the right to require payment a second time. If by force he compels the surrender to him of money or other property upon a claim of existing indebtedness by reason of this transaction, such use of force is without the sanction of laws and usages of war as applied in civilized warfare. It would be plain plunder. It would be "the felonious and forcible taking from the person of another goods or money to any value by violence or putting him to fear," which is the legal definition of robbery. Such acts of outrage are the usual attendants upon insurrection, riots, and other lawless forces. The military forces of the United States are now being used to destroy the power of the insurgents in the Philippines to perpetrate outrages by force and intimidation. One step in the progress of this undertaking is to prevent the insurgents from deriving any benefit from this fund of $100,000.

It may be advisable to inform Messrs. Smith, Bell & Co. of this fact, and, also, that said banking concern now owes recognition to the sov

ereignty of the United States and obedience thereto in the Philippines. The owners should be made to clearly understand that the United States requires them to see to it that the insurgents shall not benefit from this fund. If to comply with this requirement it is necessary to withdraw their funds and employees from localities infested by insurgents, such withdrawal must be made.

The fact that this banking concern is operating under an English charter does not relieve it from obedience to the authority of the United States, nor enable it to deal with the insurgents with impunity, nor justify it in demanding indemnity from the United States when its dealing with the insurgents involve it in disaster-financial or otherwise.

If the views herein expressed are approved by the State Department it may prevent further complications if the State Department could induce the Government of Great Britain to inform Messrs. Smith, Bell & Co. that said Government assents to the views entertained by the United States regarding this matter. Messrs. Smith, Bell & Co. are probably acting in ignorance of the laws and usages of war and the comity of nations, but in undoubting faith that the British Government will uphold them in the exercise of rights. accorded by the usages of trade in times of peace. The situation under the conditions existing in the Philippines is liable to create international complications, which could be obviated by a little judicious advice or admonition from a source respected by the intended beneficiary.

Meanwhile it might be well to ask Major-General Otis what, if any, objection or obstacle prevents the seizure of the draft.

THE CONFISCATION OF PRIVATE PROPERTY OF ENEMIES IN WAR. [Submitted February 1, 1901. Case No. 2414, Division of Insular Affairs, War Department.]

SYNOPSIS.

1. When the United States is engaged in war, foreign or civil, the President, as chief in command of a belligerent force, may prevent the shooting down of the soldiers of the United States by depriving the men who are doing the shooting of the means of securing ammunition.

2. The authority so to do is derived from the laws of war, and constitutes a belligerent right, the exercise of which is subject to the discretion of that branch of the Government which is charged with the conduct of belligerent undertakings. 3. For the accomplishment of this purpose the President may use all branches of the military establishment, including the several departments of a military government of territory subject to military occupation.