UjNITED STATES V. DIAMOND· MATCH CO.
Oonneetieut. March 10, 1886.)
INTERNAL REVENUE-MATCHES-PRIVATE DIES-STAMPS-INDEMNIFYING BOND -REv. ST. U. S. §§ 3419, 3423-eIRCULAR No. 136.
The bond required by circular No. 136, of date September 30, 1875, issued from the office of the United StatescolUmissioner of internalrevenue, though not prescribed. is yet not _prohibited by any statute; and, the object of the bond being to protect tlle United States against loss in the printing of stamps .. fromptivate dies, authorized by Rev. St. U. S. Ii 3423. the authority to make the regulations contained in the circular. and to take the bond, is incident to the exercise of the duties of tho commissioner.
At Law. Action by the United. States on an indemnifyinghond given ofthe commissioner of internal revunder circular No. 136 of the enue. . ' . Lewis E. $tanton, Dist. Atty., ·.f6r the United States. Green B. Raum, fOf defendant. . . ,. To the District Oourt of the United States/or the District of Connecticut: The undersigned having written cons!:Jntand stipulation by both parties in the above-entitle(l·cause as on file, appointed referee to hear the testimony in said cause, and report to the court the facts as proved before him, reports that on December 4, 1885, he heard the said duly sworn, and with their exparties, with their witnesses, who hibits, and by their respective counsel, Lewis E. Stanton, Esq., United States district attorney, for,the plaintiff, and Green B. Raum, Esq., fOr the defendant, and he finds the following facts to have been proved, and to.be true: Prior to the act of March 3, 1883, which repealed the tax which was imposed upon matches and other articles by section 3419 of the Revised Statutes, the government kept on .hand what were known as "general stamps," which were of a common design, and were for sale to and use by All parties who might have need for them; and also kept on hand, under the restrictions and subject to the existence of the bonds of indemnity hereinafter mentioned, private die-stamps, which were those printed from dies engraved for particular parties from special designs, each party providing at its own expense and owning its die and· plate, and being alone entitled to receive stamps printed therefrom. These private die-stamps were authorized by section 3423, of the Revised Statutes. It was, during the existence of the tax imposed by section 3419, the custom of the government to keep on hand from two months' ·to three months' supply of general stamps; and prior to September 30, 1875, it was its custom also to allow, without any indemnity against loss, the printing of private die-stamps in accordance with the estimates which the die-owners furnished of ,their anticipated needs. Shortly beforethat. date it was discovered that large quantities of such stamps were on hand which had been printed in accordance with the estimates therefor, and
UNITED STATESV. DIAMOND MATCH CO.
had never been purchased,and 'which never ,would be .purchased, because the parties who had given the estimates, and for whom the stamps werEl printed, had gone out of (This history of the reason which led to the'adoption of thEl provisions of the circular hereinafter mentioned was objected to by the defendant, was admitted, and the ruling of the referee admitting the same was duly excepted to;) Therefore the commissioners of internal revenue esta.blished the following regulation, promulgated in circular No.13G, dated September 30. 1875: "It appears that it has heretofore been the practice of this office to print supplies of private die propriety stamps. in anticipation of oruers therefor from. the person. firm. or corporation furnishing the design. and, in the of the failure or retirem,ent from business from· cause of fi rm, or corporation, the government has been subjected to a loss of the amount expended for paper and the printing and preparationfbr issue of thestarilpS left on hand. It is believed that this office is not warranted in subjecting'the government to losses of this character, and that the printing of stamps, before the receipt of orders therefor, should be, discontiliued, proper measuressbould be taken to arising from Bijch printing.. In future, there,fore, suchpe"sons. firms. or porations as order stamps printed from private dies. 'and desire to . We delays consequent upon the printing and preparation' of the stamps subsequent to the receipt of an order therefor, will be required to execute and me ill this office a bond conditioned for the payment tl;> the treasurer of the United States·. use of the United States, wheneverso by cQmmissioner of mternal revenue, of such sum or sumaas may have been paid by the treasury department for paper upon which the stamps are prin.tefl; togetherWitJ;1the printing, perforilting, gumming, and preparing for issue of such private die proprietary stampS, not exceeding an estimated three month:s' supply,as may be prepared the rlirections of the commissioIil\r of hItarnal revenue, in accordance with .the estimate and request of firm, or corporation ordering the .same. After the approval 0\ thej)ond, or simultaneously with the filing thereof, an estimlJ,te of a three months' aver:age consumption of stamps should be made by the pelson, firm, or corporation desiring stamps printed in anticipation of orders, and the same should companied by a request that such number be printed, 'and kept continuQusly f'H hand'awaiting orders therefor." . . In April, 1881, the defendant became the successor of several match manufacturing companies which had previously existed, was"thereafter the owner of 31 dies, was thelllrgest match manufacturer try, and was continuously needing from 300,000 to 400,000 stamps per month during the busy season of the year. It was a convenience to it that the government should have on hand constantly anadequate'supply Qf stamps for its needs, so that could he immediately filled; and it was also a pecuniary .benefit. not to be compelled to anticipate the demand, and to order the printing in advance from time to time, and to pay for the deliveries of stamps as they would be made under ,said orders. It required 21 days to fill an order. On the other hand, the government was under no obligation to print stamps in advance of orders, and run the risk of the 19S5 which might naturally be incurred by rea· sOn of the preparation'Qf dye-stamps for .people who WOUld. not want nor take them.
ineffectually' endetivol'ed to induce the commissioner of ihternal revenue to recede.ftomthe regulation contained in No. 136, and gave the borid' hereinafter recited, so as to have its orders immediately filled, and not to be compelled ,to: order the printing ofits stamps in advance. It gave the bond, hot Willingly, but for the purpose of gaining the advantages which it would forego 'if it did not comply. with theregulation. Had the bondnot been given I it could have received stamps in the needed amount, but it would, 'have been obliged to order and pay for them in advance, for a delayin, filling their orders would have caused aerious injury, and loss. To avoid any, danger of delay, it was necessary that eitherthe'government or it shotildkeep on hand a sufficient supply to m,eet its wants for , Had it been compelled to keep so large a stpck on hfi,ud, it would also have been necessary to raise a large amount ofmo,ney, ,which wOu1dhlilve subjected it to inconvenience, expense, loss of interest, and considerable pecuniary loss. The regulation requiring thehond was designed to oorrect an unwise.and uneconomical system of printing stamps,· snd was a discreet exeroiseof power, if, as is pereintlfter ,found as aconc1usiori of law, the of internal reyenue had ,suoh power. ' Said bo:qd is as follows:
"UNITED STATES INTERNAL REvENUE.
"Know all tnen by these tbat we, the Company, a corporatiol1.ot,thestate of and Iocaterl in the town and county o.t New. Ha.. v.,en.; state, p r..i M ..l.:p.·.al;:.and George W. Crouse, of Ak.ron. S-Ummit and Thomas Cornell, of the saure plaCe, Alfred M. Bar,bill, of theeame'l,>lace, as sureties,'iu,'e' held and firmly bound unto the Uitited States of America in the full and. just,s,um of sixteen thousand dollars IsWful of the United Statee,to Which" payment, well and truly to be made, .We bind ourMves,jointlyand se\'erllIly, our joint' and 'several heirs, executors. and firmlY:by these presents. Sealed with our seals, and this day !If in the year 1881. ' . ' , ."The foregoingobIigation are such that whereas, the said the Diamond Match Oompany is a proprietor of proprietary articles, or articles subject to stamp duty under Schedule A, and under the provisions of seotion 3423,Revised statutes, Qftha United States, has furnished, without .,expense to the United States, its 9wn, dies or designs for stamps to be used thereon; and whereas, the said the DtamondMa.tck Oompany, desirous of avoiding delaysinthe receipt of such of the aforesaid stamps as it may from 'time to time order, whieh wouldjbeunavoidable in case the same were not ,printed and prepared for issue. to, the receipt of the order by the commissioner of intetnaI and whereas, tQesaid lJ,iampnd Match (Jam.panllhas or may request. the. complissioner of internal J::evenue to prev,are and h,old subject to its Order, and to keep at all times on 1}and, three months' supply of the stamps afol'esaid. the estimate (df $uch supplt' having been made and fl1ed with the said commissioner of in'ternal revenlleby.fhe said the Diamond Match Oompany: now. therefore. ,·if the said, the Diamond Match Company Shall, whene.ver requested so, to do ,by the SaidcoJ»/liIi!,sionf)!' ,of illteml\\ 1'6venue,weH .R11c;J orcl/-.use:to Jlepaid, ,to of thfJ, for thll.pse of the /States. ,all anclevery sum 0>: sums of money as the commissioner of intemal 'revenue llhiill certify to have been paid by'the States for the paper, printing, gumming, and perforating and preparing for 'issUe, Of the stamp
herein,referred to, the same having been prepared in accordance withthees,which may at anythne b,e timate of the said the DianlOnd Match foun4 by said commissi<me:r tQ have been' printed tor a longer period than three months, (exc!usive,however, of such stamps as may have been printed within the three months next preceding the expiration, by repeal or wise, of Mllaws requiring the use thereof,) but not purchased by the said the Diamond Match Company, then 'this obligation ,to be void, and of no effect; otherwise to be and remain in full force and virtue. "L. iV.
BEECHER, Secretary. "GEORGE W. CROUSE.
"WM. H. SWIFT, President. "TnoMASW.OoRNELL. M. BARBER."
"THE :DIAMOND MATCH CO.
'L, S. ' ..
After cb1cular No. 136. was issued, the practice of the parties who had revenue departmellt signed the required .bond w:as to send to their estimates for a three-months supply of stamps, which amount was continuously thereafter lFept in stock as nearly as posl;lible. When all. for stampawas sent by the :manufacturer, it was filled, and a 4:mier was sent by the department to the printing-office,. ,The practice of the parti\¥l.wbo had. not signed. the 't9 or<ie;r as theypeeded a.nd .the the bureau of engraving to print the required number. Private die-stamps, as well as general stamps, were printed by the United States upon paper which it purchased. The paper and the printing were paid for out of an appropriation by congress. The defendant paid for its dies and plates. On May 26, 1881, the defendant gave the commissioner of internal revenue, its estimate of a three-months supply of stamps for its use, whicp which amount it requested, ,to bE;lkept 'on,'bJnd. Afterwarlils j on January 27, 1882, the defendant .requested tha.t 1,890,'OO() :morestamps should be kept on hand. 'TheseamountB therooeipt of said estimatesal1d requests, kept in stock. On March t?, internal revenue department had on harid 69,988,736 Iltamps printed from the defendant's' private dies. The. trade in inatchesfeH off betWeeriMarch 1 and July 1,1883, and on July'2, 1883, theda,y after the repeal statute took effect, said department had 'on hand. 43,133,74J stamps printed from the defendant's private dies at its request as aforesaid.. Onsa,id day the Mmplissioner of ,internal revenue informed the defendant', iIi writing, that the expense of manufacturingsaid43,133,741 stamps had been $4,364.,37, and demanded payment of said sum. and of the printing, gumSaid 'Sum was the actualeostofthe pa:per . ming,perforating, and prl;lparing fodssue said stamps. , Noneaf these stamps were printed after April 1, 1883. They have never beenealled for nor paid for by the deferidant, and have been canceled and destroyed by the government. The .defenq..!\nt did not for the printing ofany March 3,1883; , No part of the amount of bas ever been paid,butis.still due. of to the ,defendant, 0» JulY.. in
accordance with the conditions of sllid bond, that said money was expended as aforesaid, for said stamps, the same, having, been, prepared in accOl;qance with the estimates of the, and on July 9,1883, said were found by said commissioner to have been printed for a longer period than three months, and prior to the first day of April, 1883. Of said printing the defendant was informed July 9, 1888. Thedefendant did not omit topUl'chase said stamps because of its failure or retirement from busiJ;le.'?f), or on account of its laches, but be· cause the qemand for the purchase of matches fell off, on account of the repeal of said tax, after,March 3, 1883. Upon the foregoing facts I find,' as conclusions of law, that the bond was not prescribednol' directed by any statute of the United States. Authority take it was, not given in direct terllls, ap,d it was not prohibited'by anystatu.te;The authOrity to make the regulation; and to take the bond was incident to the exercise of' the 'of'theoffice of of law, c()mmissioner ofihtertialrevenue:I further find, as tliat the said Qond is av'alid liond, and was properly and legally, 'and Without any undtieorimproper compulsion orooercion, executed by the defun'dant,and;was in IElgalsense a voluntary bond; and that the sum ofS4;864.37, with'interest theteon from and afterJuly 9, 1883, 'is N. SHIPMAN, Referee.' due'from the: defendant to the plaintiff.
NELSON '11. UNITED STATES.
March 11, 1887.)
The power conferred by the,constitution on the government of the United States to make wjtr and treaties implies the power to'acquire territory, either by conquest ,or treaty, and the power to govern such territory until it is tit to be admittl'ld. into the Union as from the acqUisition thereof..
The power of congress over a territory of the United States extends to all rightful subjects ,and methods of legislatio,n not denied to·it by the constitution, and consistent.with the spirit and geriiusof the s,ame,. and the purpose ' ' , for which such territory may have been acquired. .
CONSTITUTIONAL, LAW-POW:E;:RS OF CONGRESS-TERRITORIES.
has power, in .its discretion', to prohibit the importation" manusale of jntoxicating liquors in the district of .Alaska, and to . make' the. violation of such .prohibition a crime, punishable by tine and im, , " , . , , 4. lNDlcTMENT-STJ\.TUTORY CRIMES-ExCEPTioNS. As a rule, an exception in a, statute1:lY which certain particulars are withdrawn from the operation of its enactiJ;lglllause, d.efining a c.rime concerning a class or species, constitutes no part'of the definition of such crime, whether placed'near to or remote from suchenactfngclause;! sndan indictment charga 'Person with the viollltion of, suphstatute need ,not negative such excep, tlOn. . " , . IS. SAME-'--'IN'toXIdA'rlNG ':', . "', , " . '. " It isnbl1 necessary in 'an indictlIiunt f'()r the violatiotI of section 14 of the r actiof 1884, by the sale of into;J;ic$.ting liquor in the district of Alaska, t9 such sale was not ma.d e for,mecha,nic!,l, medicinal, Qrscientifi6 :but the 'same must be shown, if at all, as 'a defense. ..