States was not the owner of the property in question on May 1, 1919, and could not be liable by virtue of this section. The owner of the premises on May 1, 1919, could not relieve itself of its liability by divesting itself of the title by conveyance subject to taxes, nor does the United States by its purchase undertake to become bound to pay such taxes.

Assuming that the taxes and special assessments constituted liens against the property at or prior to the date of the deed to the United States, such taxes ceased to be liens upon the land after such land was acquired by the United States. (15 Op. Atty. Gen. 167; 17 Op. Atty. Gen. 44.)

Held, That the United States is not liable for the payment of the taxes or special assessments on this property, and the tax liens, if any existed at the time the Government acquired the land, can not be enforced. In consequence there can be no obligation to pay penalties imposed by reason of the nonpayment of the taxes and special assessments in question. 012.311, Apr. 11, 1923.

ASSESSMENTS FOR IMPROVEMENTS

2131. The United States entered into an agreement of sale of the Detroit target range in the city of Detroit, Mich., the terms of which provided that the United States furnish an abstract of title, "certified to date showing a good merchantable title in the United States of America and to be free and clear of any and all encumbrances." Prior to the execution of this contract of sale the city of Detroit levied against this property certain assessments for the construction of a lateral sewer abutting thereon. Efforts to have the city of Detroit cancel these assessments because they were levied on property of the United States have been unsuccessful.

Since the abstract of title will disclose the lien for these assessments, the Government's grantee may assert that the existence of such liens constitute a breach of contract even though they may have been invalid and may be set aside. The term "encumbrances" as used in the contract is more comprehensive than "liens." It includes liens and any other burden resting either upon the real estate itself or the title which tends to lessen the value of the fee or interfere with its free enjoyment.

Held, That the property of the United States and the instrumentalities whereby it performs its proper governmental functions are not subject to taxation. (McCullough v. Maryland, 4 Wheat. 316; and Osborn v. Bank of U. S., 9 Wheat. 738.) The provisions of the Constitution imply exclusion of all other authority over the property which could in any manner interfere with the rights of the United States or obstruct the Government's exercise of such rights. These powers of Congress are subject to no limitations. (Van Brocklin v. State of Tennessee, 117 U. S. 151.) The doctrine of exemption of the property of the United States from taxes so far as lands are concerned is recognized in express terms and affirmed by the statutes of the State of Michigan in section 2 of the act ceding jurisdiction of the United States over any land in the State of Michigan, acquired by the Government March 4, 1874 (Howell's Michigan Statutes, Vol. IV, sec. 10179), which declares:

The United States may enter upon and occupy any land which may have been or may be purchased or condemned, or otherwise acquired, and shall have the right of exclusive legislation and concurrent jurisdiction together with the State of Michigan over such land and the structures thereon, and shall hold the same exempt from all State, county, and municipal taxation.

It follows that the property, while the title to it is in the United States, no matter for what purpose it was acquired or held, is exempt from taxation. This exemption continues as long as the property belongs to the United States

and includes any taxation by authority of the State, whether it be strictly for State or for mere local and special objects. (Wisconsin Central Railroad Co. v. Price County, 133 U. S. 496.) The Attorney General (15 Op. Atty. Gen. 167; 17 id. 44) held that even where taxes had been assessed upon land prior to its acquisition by the Government, such taxes cease to be a lien upon the land after such land had been acquired by the Government and jurisdiction ceded to the United States.

If it be urged that the assessment in this case is not a tax but a special assessment levied upon real estate for the amount of the benefits resulting to the abutting property by reason of the public improvement made, the same reasons given by the courts against the authority of the State to tax Government property apply with equal force. In Fagan et al. v. City of Chicago, 84 Ill. 227, cited with approval by the Supreme Court of the United States in Van Brocklin v. State of Tennessee, 117 U. S. 151, the court said (p. 234):

A municipal corporation has no power to assess or exact from the State or the general government any sum for benefits conferred. The power to levy taxes or impose assessments for benefits can only be exercised on the governed, and not on the governing power, whether State or Federal.

The Comptroller of the Treasury has held that the United States is not liable for an assessment levied by local municipalities under a State statute for public works, even though the improvement may be a direct and substantial benefit to the property. (2 Comp. Dec. 375; 4 id. 1116; 11 id. 629; Dig. Op. J. A. G. 1912, p. 1024.)

The further question as to whether the agreement for the sale of this rifle range by the United States operates to charge the land with a preexisting assessment unlawfully made and not created and assented to by the Government is answered in the negative because, if the land could be burdened with such liens, the value of the fee would be diminished without the Government's sanction or consent; and as the power to levy these assessments involves the power to destroy, for obvious reasons the municipalities of the State are without such power. 012.311, Dec. 6, 1921.

LEASED TO UNITED STATES

2132. The lessor or owner of property is not relieved from the payment of taxes thereon by reason of the fact that the Government is in possession thereof as lessee. Taxes levied by State and local authorities upon property leased by the United States are in no sense taxes upon Government property since they are levied not upon the interest which the Government acquires through the lease, but upon the interest or title retained by the lessor or owner of the property. 012.31, July 3, 1918.

The United States commandeered the plant of the Bigelow-Hartford Carpet Co. The company submitted a voucher for $130,000 for rental of its premises to December 31, 1918. The disbursing officer inquires whether this account is payable as stated, or whether it is subject to deduction on account of State taxation under the award of the War Department Board of Appraisers fixing the rental as follows: "The board finds that the owner of the property requisitioned should be paid a rental thereof from the date of requisition, at the rate of $130,000 per year payable semiannually, subject to deduction therefrom of all taxes assessed, or that would be assessed against the requisitioned premises in case same are exempt from taxation while in the possession of the United States." This clause means that if the property is not subject to State taxa72746 3267

tion while occupied by the Government then a deduction should be made from the annual rental and if the property is not exempt from taxation there should be no deduction. The Bigelow-Hartford Co. has paid the taxes for 1918, and presents certificate to the effect that there are no exemptions from taxes and that their taxes have not been reduced any by reason of the occupancy of the premises by the Government. While it has been a settled law ever since the decision of the Supreme Court in McCullough v. Maryland (4 Wheat. 316), that a State has no power to tax the property or instrumentalities of the Federal Government, this principle has never been extended to the exemption from State taxes of private property leased or rented by the United States. The Comptroller has held that taxes on property rented by the Government are properly payable as part of the rental when specifically included in the terms of the lease. (24 Comp. Dec. 705.) There is no difference in the application of this principle whether the property be leased by the United States or commandeered. In the present case rental is not subject to deduction and the voucher should be paid. 481, Feb. 17, 1919.

2133. MILITARY CABLE AND TELEGRAPH SYSTEM. 2134. ROAD COMMISSION.

MILITARY CABLE AND TELEGRAPH SYSTEM

2133. The act of May 26, 1900 (31 Stat. 206), establishing the WashingtonAlaska military cable and telegraph system, provides:

*:

For the purpose of connecting headquarters, Department of Alaska, at St. Michael. by military telegraph and cable lines with other military stations in Alaska Provided, That commercial business may be done over these military lines under such conditions as may be deemed, by the Secretary of War, equitable and in the public interests; all receipts for such commercial business shall be accounted for and paid into the Treasury of the United States

of

Section 2, act of October 1, 1890 (26 Stat. 653), provides that—

The Chief Signal Officer shall have charge, under the direction of the Secretary of War, the construction, repair, and operation of military telegraph lines

Held, That the effect of the language of the above acts was to make said lines an instrumentality of the War Department, and that they can not be transferred to another department without legislative authority. Held further, That there was nothing in the law that would prohibit the War Department from charging tolls on messages from other departments, and transmitted over said system on official business, and the distribution of the tolls to the credit of the appropriations involved, on the principle that where supplies are furnished by one department or branch of the Government to another, the appropriations from which the supplies are furnished should be reimbursed by the department or branch of the Government to which they are furnished. 80-471, July 24, 1913.

The Chief Signal Officer of the Army recommended that a charge be made for official messages transmitted over the Washington-Alaska telegraph and cable system in Alaska by officials of the Territory of Alaska and by depart

ments other than the War Department, of one-half of the established commercial rate as fixed by the Postmaster General for Government messages transmitted over commercial Pacific cables. Held, That there was no legal objection to this action, in view of the authority conferred upon the Secretary of War by the act of May 26, 1900 (31 Stat. 206), authorizing commercial business to be done over the said system under such conditions as might be deemed by him equitable in the public interests," and that the charge so fixed would probably be accepted, in the absence of a showing to the contrary, as a proper charge to other departments of the Government for the cost of the service furnished them. Held further, That payments made by other departments for services so rendered might be accounted for and paid into the Treasury of the United States as prescribed for commercial business. 80–471, Apr. 8, 1914.

66

In view of the determination of Congress that the Washington-Alaska military cable and telegraph system is a nonmilitary activity, as evidenced by the allocation of its appropriation in the annual act for the support of the War Department, section 9, National Defense Act (41 Stat. 766), is held not applicable thereto, and the officer in charge may be authorized to make purchases of supplies direct rather than through the Quartermaster Corps. Jan. 16, 1926.

400.12,

ROAD COMMISSION

2134. The authority of the Board of Road Commissioners for Alaska to approve and certify vouchers for payment can not be delegated, even with the approval of the Secretary of War, for the reason that the statute establishing said board specifically requires expenditure of the road and trail portion of the "Alaska fund" (section 2, act of January 27, 1905, 33 Stat. 616), upon vouchers approved and certified by said board. 92-160, Sept. 18, 1917.

Secs.

HAWAII

2135. EMPLOYMENT OF ALIENS.

2136-2137. LANDS.

2138. MILITARY RESERVATIONS.

EMPLOYMENT OF ALIENS

2135. Under section 105, Hawaiian Organic Act, as amended by sec. 315, act of July 9, 1921 (42 Stat. 120), forbidding employment on public works in Hawaii of mechanics or laborers not citizens of the United States or eligible therefor, a noncitizen Filipino or Porto Rican may be employed if he possesses the qualification of service necessary to permit him to become a citizen under paragraph 7, added to section 4, act of June 29, 1906, by section 1, act of May 9, 1918 (40 Stat. 542). Foreign-born Japanese, Chinese, or Koreans, being denied citizenship, may not be so employed. Employment, however, otherwise than as mechanics and laborers would be governed by the same rules and regulations applicable to governmental employment generally, namely, rules promulgated by the President for carrying into effect the Civil Service Act. 230.22, Oct. 14, 1925.

On request for an interpretation of section 105, Hawaiian Organic Act, added thereto by the act of July 9, 1921 (42 Stat. 120), reading

That no person shall be employed as a mechanic or laborer upon any public work carried on in the Territory of Hawaii by the Government of the United States, whether the work is done by contract or otherwise, unless such person is a citizen of the United States or eligible to become such a citizen.