THE SUB-TREASURY PLAN. 347 



"'I have to acknowledge the receipt, by reference, of your letter of the loth 

 instant, addressed to the honorable Commissioner of Internal Revenue, and in reply 

 to the inquiry therein contained relative to the authority under which the basement 

 under the United States custom-house and post-office building at Kansas City, Mis- 

 souri, is used for warehouse purposes, particularly for the storage of whiskey, I have 

 to refer you to act of Congress approved April 29, 1878, chapter 67, page 39, volume 

 20, U. S. Statutes at Large, and to section 2962, Revised Statutes.' 



" The act of Congress referred to provided for the purchase of suitable grounds on 

 which to erect a building to be used as a post-office, custom-house, bonded warehouse, 

 and office of internal revenue collector. Section 2962 of the Revised Statutes is as 

 follows : 



" ' Any merchandise subject to duty, except perishable articles, also gunpowder and 

 other explosive substances, except firecrackers, which shall have been duly entered 

 and bonded for warehousing, in conformity with existing laws, may be deposited, at 

 the option of the owner, importer, consignee, or agent, at his expense and risk, in 

 any public warehouse owned or loaned by the United States, or in the private ware- 

 house of the importer, the same being used exclusively for the storage of warehoused 

 merchandise of his own importation or to his consignment, or in a private warehouse 

 used by the owner, occupant, or lessee, as a general warehouse for the storage of 

 warehoused merchandise; such place of storage to be designated on the warehouse 

 entry at the time of entering such merchandise at the custom-house.' 



" The above citations constitute the authority by which the government at this 

 present time purchases lands, builds warehouses, and receives deposits for storage. 

 The appointment of agents to perform these duties is a necessary sequence. 



" In view of these facts, if the bill is unconstitutional, it is because of that pro- 

 vision which requires the government to loan money. If, therefore, it can be shown 

 that the government has loaned money, and that the Supreme Court has decided it 

 proper and legal, further objections to the bill must be confined to its details. 



"The act of February 16, 1876, placed in the hands of the Centennial Finance 

 Committee $1,500,000 of government funds, to be used in completing the arrange- 

 ments for the Centennial Exposition. This money was to be returned to the govern- 

 ment out of certain moneys, after the close of the exposition. A bond' in the sum 

 of $500,000 was exacted for the performance of the provisions of the act. When 

 the time for payment came, this committee refused to liquidate the debt to the gov- 

 ernment, setting up a different construction of the act. A suit was commenced, and 

 finally taken to the Supreme Court, where it was argued at length, Chief Justice 

 Waite giving the opinion of the court (U. S. Reports, S. C. 94, Otto IV., page 500), 

 which is given in part : 



"'The act of 1876 requires the payment of the United States before a distribution 

 of profits to stockholders. Not a word is said about restoring capital; in fact, there 

 is no mention of capital at all. The act of 1872 is not repealed. On the contrary, 

 it is left in full force in every particular, save that the liability incurred to the United 

 States is made payable after those contemplated by the act of 1872 are satisfied in 

 full. In this the United States made a concession to creditors, but not to the stock- 

 holders. Neither was anything taken from the stockholders; they retain all the 

 rights which the act of 1872 gave them. If there had been no appropriation by 

 Congress, the corporation would have been driven to the necessity of raising the 

 required means by borrowing or a further sale of stock. If by borrowing, the debt 

 so created would have to be paid with the others, before there could be any dividend 



