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It appears that this suit was brought to recover the sum of $10,858.76 which the Coca-Cola Company claims to have been illegally exacted from it by the defendant as collector of internal revenue.

The case

was tried in the United States district court for the northern district of Georgia, and a mistrial resulted through the inability of the jury to agree. The plaintiff's thereupon offered to compromise their claim if the Government would refund one-half of the taxes, and you now request my opinion as to your power to accept such offer if, in your judgment, it is for the interest of the Government to make such compromise.

In my judgment, you are without power in the premises. It is true that Revised Statutes, section 3229, provides for the settlement of cases arising under the internal-revenue laws, but it is obvious that the section refers to suits commenced by the Government to recover taxes. Under Revised Statutes, section 3169, an ampler power is given to the Secretary of the Treasury to compromise claims, but such claims are limited to those “in favor of the United States." I know of no statute which authorizes you to compromise a suit against the United States. Except as modified by the statutes already cited, the power to determine whether compromises should be made of pending litigation, would seem to rest with this Department, as the suits are necessarily under my control and subject to my direction. As was said hy my predecessor, in 22 Opinions, 491-494:

Nevertheless, it is advisable to add, under the circumstances, that the primary, broad, and general control by the Attorney-General of suits in which the United States is interested, conferred by the statutes and established by decisions of the Supreme Court, of which the Confiscation Cases (7 Wall., 454) may be mentioned, fully authorizes such disposition of pending litigation of the Government, including the class of cases which embraces the one before us, as seems to him meet and proper. He exercises superintendence and direction over United States attorneys and general supervision over proceedings instituted for the benefit of the United States, and to him is necessarily intrusted, in the exercise of his sound professional discretion and because of the nature of the subject, the determination of many questions of expediency and propriety affecting the continuance or dismissal of legal proceedings. (2 Opin., 482, 486.) He may absolutely dismiss or discontinue suits in which the Government is interested; a fortiori he may terminate the same upon terms, at any stage, by way of compromise or settlement.”

Without expressly deciding whether I am authorized to compromise an adverse claim against the Government under this general power to conduct its litigation. I am clearly of opinion from an examination of the papers that the present suit should not be compromised, but that the United States attorney should be instructed to press the case to a final decision. If these duties have been illegally exacted, they should be repaid in full; and if, on the contrary, their exaction be lawful, no part thereof should be paid to the plaintiffs. The responsibility of deciding whether these duties have been lawfully exacted seems to rest with the judicial department of the Government. I have instructed the United States attorney accordingly. Respectfully,


Acting Attorney-General. The SECRETARY OF THE TREASURY.


All Chinese persons who, on August 12, 1898, were citizens of the Re

public of Hawaii, became, by virtue of section 4 of the act of April 30,

1900 (31 Stat., 141), citizens of the United States. The provisions of sections 1075 and 4076, Revised Statutes, which con

fer upon the Secretary of State the authority to issue passports to citizens of the United States, are not in terms mandatory, and that officer may, in his discretion, either grant or withhold a passport as the public interests may require.


August 29, 1901. Sır: I have the honor to cknowledge the receipt of your letter of August 24, 1901, inclosing the application of one Ng. Faun, of Honolulu, Territory of Hawaii, for the issuance of a passport to him as a citizen of the United States. It appears that on July 29, 1892, the applicant, then a subject of China, was admitted to citizenship in the Kingdom of Hawaii; and it further appears, from the letter of the Acting Governor of the Territory of Hawaii, that on August 12, 1898, said Ng. Faun was a citizen of the Republic of Hawaii.

You request my opinion as to whether it is your duty to issue a passport to Ng. Faun.”

Your obligations in the matter are defined by sections 4075 and 1076 of the Revised Statutes, which provide that:

“The Secretary of State may grant and issue passports, and cause passports to be granted, issued, and verified in foreign countries by such diplomatic or consular officers of the United States, and under such rules as the President shall designate and prescribe for and on behalf of the United States."

It is further provided that:

“No passport shall be granted or issued to or verified for any other persons than citizens of the United States."

Your inquiry thus presents two questions: First, is Ng. Faun a citizen of the United States. Second, if he be such a citizen, is it your duty to grant him the passport for which he applies.

I answer the first question in the affirmative. Section + of the act of Congress of April 30, 1900, provides:

“ That all persons who were citizens of the Republic Hawaii on August twelfth, eighteen hundred and ninetyeight, are hereby declared to be citizens of the United States and citizens of the Territory of Hawaii."

This comprehensive language includes Chinese citizens of Hawaii, unless they are excluded by express language or necessary implication from the privileges of citizenship by other portions of said act.

Whatever doubt may be suggested in this connection by section 101 of said act, was resolved by my predecessor, who, in two opinions given to the Secretary of the Treasury on January 16, 1901, expressly decided that Chinese persons who were citizens of the Republic of Hawaii on August 12, 1898, became, by virtue of the section of the act already cited, citizens of the United States.


I am informed that the same conclusion was reached by Judge Estee, of the United States district court for the Territory of Hawaii, in the cases of the United States v. Ching Tai Sai and I'nited States v. Ching Tai Sun.

The second question suggested by your inquiry must be answered in the negative. The act of Congress which defines your duty in the matter of the issuance of passports expressly says “the Secretary of State may grant and issue passports." The provision, therefore, is not in terms mandatory, and I know of no law which gives to the citizen a right to a passport.

Attorner-General Hoar, in an opinion dated June 12, 1869 (13 Opin., 89, 92), said:

“I do not understand that the granting of passports from your Department is obligatory in any case, but is only permitted where it is not prohibited by law."

In a later opinion of Attorney-General Taft (15 Opin., 117), it was held that the right of a naturalized citizen to a passport was "just as obligatory upon the Department of the Government charged with this matter as if he were a native-born citizen intending to go to the same country."

I do not understand this language, however, as intending to decide that the issuance of a passport is a matter of obligation, but that no just distinction can be made between a naturalized citizen and one of native birth.

Substantial reasons exist for the use by Congress of the word “may” in connection with authority to issue passports. Circumstances are conceivable which would make it most inexpedient for the public interests for this country to grant a passport to a citizen of the United States. For example, if one of the criminal class, an arowed anarchist for instance, were to make such application, the public interests might require that his application be denied.

Without expressing any opinion as to whether a passport should be granted to Ng. Faun, I advise you that it may, in your discretion, be granted or withheld. Respectfully,



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Where a scheme proposes, on account of certain investments by many

persons, to return to each something which, as to its certainty, amount, or value, is dependent, not upon the earning or producing power of the investment, nor upon business probabilities or expectations, but upon contingencies over which the parties to the transaction have no control and which they can not forecast, such a scheme has in it, and is dependent upon, the elements of chance within the meaning of ser

tions 3929 and 4041, Revised Statutes (26 Stat., 466). Where the operators of a scheme or plan induce others to invest therein

upon the promise that upon their doing so and making certain stipulated payments they shall receive a specified return, and it is known by such promisors, or it is so apparent that it ought to be known by them, that if such investors comply on their part and continue to make the stipulated payments all can not receive the promised return; or where such promise of return is absolute, but its performance and the ability of the company to perform is known by it to depend upon a continually increasing accession of new investors, or upon the lapses and consequent forfeitures of former ones or both; or where payments to previous investors are promised at a profit iar beyond what their investments can or are expected to earn, and are made, mainly, from moneys paid in by later investors upon the same terms, with no other provision for the ultimate payment of subsequent investors; or where such promise is absolute but its performance and the ability of the company to perform are known to depend to a considerable extent upon the broken promises and consequent forfeitures of other investors, such schemes are fraudulent within the meaning of

these statutes. Nor is it material, in this respect, that in either of said supposed schemes

the business is so successful that the time when the fraud in the scheme will find its victims is delayed indefinitely, so long as it is cer

tain that the time will come sooner or later. These cases distinguished from guessing contests.


September 7, 1901. Sir: I have the honor to respond to your note of August 9, 1901, requesting my official opinion whether mail matter relating to certain so-called bond-investment schemes. referred to in your note, is mailable under the provisions of sections 3929 and 4041, Revised Statutes, as amended by the act of September 19, 1890.

The statutes forbid the use of the mails for mail matter for the promotion or operation of, or “concerning any

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