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Sections 3411 and 3417 of the Revised Statutes, contained in chapter eight of the title "Internal revenue," provide as follows:

"SEC. 3411. Whenever the outstanding circulation of any bank, association, corporation, company, or person is reduced to an amount not exceeding five per centum of the chartered or declared capital existing at the time the same was issued, said circulation shall be free from taxation; and whenever any bank which has ceased to issue notes for circulation deposits in the Treasury of the United States, in lawful money, the amount of its outstanding circulation, to be redeemed at par, under such regulations as the Secretary of the Treasury shall prescribe, it shall be exempt from any tax upon such circulation."

"SEC. 3417. The provisions of this chapter, relating to the tax on the deposits, capital, and circulation of banks, and to their returns, except as contained in sections thirty-four hundred and ten, thirty-four hundred and eleven, thirty-four hundred and twelve, and thirty-four hundred and sixteen, and such parts of sections thirty-four hundred and fourteen and thirty-four hundred and fifteen as relate to the tax of ten per centum on certain notes, shall not apply to associations which are taxed under and by virtue of title National banks.""

The question for determination is the meaning attached to the words (sec. 3411, Revised Statutes)—

"Whenever the outstanding circulation of any bank, association, corporation, company, or person is reduced to an amount not exceeding five per centum of the chartered or declared capital existing at the time the same was issued, said circulation shall be free from taxation."

This section of the Revised Statutes was taken from section 14 of the act of March 3, 1865 (13 Stat., 486); section 9 of the act of July 13, 1866 (14 Stat., 146.)

It is provided by section 5596 of the Revised Statutes that all acts of Congress passed prior to the 1st day of December, 1873, any portion of which is embraced in the revision of 1878, are repealed, and that the section applicable thereto shall be in force in lieu thereof.

Section 5600 of the Revised Statutes provides that the classification or arrangement of the several sections of the Revised Statutes are for convenience merely, and no inference or presumption of a legislative construction is to be drawn by reason of the title under which any particular section is placed.

Said section 3411 of the Revised Statutes is under the title "Internal revenue," being a part of chapter 8, under the heading of "Banks and bankers."

While the carrying into the revision of the statutes of 1878 of any portion of an act of Congress passed prior to the 1st day of December, 1873, repeals said prior statute, and the section in the Revised Statutes which stands as its substitute becomes the law upon the subject, yet I do not understand that the language carried into the Revised Statutes should receive a different meaning from that which it naturally had as it stood in the act of Congress from which it was taken by the revisers, unless there is something in the act it revises that shows a clear intent to attach a different meaning to the words. On the contrary, it should receive its original meaning. It is evident from a reading of the acts from which section 3411 was taken that the banks therein referred to are State banks or State associations which ceased or shall cease to exist or which have been converted into national banks.

This view of the original language of the act from which said section 3411 was taken is well expressed by the AttorneyGeneral in 14 Op. Att. Gen., 110, wherein he says:

"When said section 14 declares that whenever the outstanding circulation of any bank shall be reduced to an amount not exceeding five per centum of the chartered or declared capital existing at the time the same was issued, said circulation shall be free from taxation,' it is quite obvious that the exemption applies to the tax imposed by said section 110. Section 14 proceeds upon the assumption that State banks will cease to exist or be converted into national banks, and the last five per cent of their circulation is relieved from any tax, on the groundas it is presumed-that, by the destruction of their notes or otherwise, that amount of circulation can not be withdrawn and taken up by such banks."

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The Merchants' National Bank of Baltimore is not a State bank or association which has ceased to exist, nor has the same been converted from a State bank into a national bank, and hence is not one of the kind of banks contemplated by said section 3411, which shall be free from taxation when its circulation is reduced to an amount not exceeding 5 per cent of its chartered or declared capital existing at the time the same was issued.

I am therefore of opinion that said bank is not entitled under the provisions of section 5218 to a refundment as claimed.


Where a surfman in the Life-Saving Service was absent without pay for

twenty-two days in a 28-day month, one-thirtieth of the monthly installment of his pay should be deducted for each day he was absent. A substitute surfman in the Life-Saving Service who served twenty-two days during a 28-day month, is entitled for such services to twentytwo-thirtieths of his monthly compensation.

(Comptroller Tracewell to the Secretary of the Treasury, March 9, 1905.)

I am in receipt of your communication of the 3d instant, requesting my decision of the questions stated in a letter from John G. W. Havens, superintendent Fifth life-saving district, dated March 1, 1905, as follows:

"A regular surfman is absent February 1 to 6, because of sickness in his family.

"February 7 to 28, inclusive, he is sick and off duty on that account. The substitute he paid is paid $13. What shall the substitute be paid for the twenty-two days, and what is the pay of the surfman?"

Under the regulations of the Life-Saving Service governing the employment and payment of substitutes (see sec. 96 of Regulations) in case of absence for other cause than personal sickness the surfman was in a pay status for the first six days. during which he paid the substitute, and was absent himself and did not furnish a substitute for the remaining twenty-two days. Twenty-two-thirtieths of his monthly pay should be deducted for said latter absence, and he should be paid the balance eight-thirtieths of the monthly pay. (11 Comp. Dec., 130, 132.)

You are only required to pay the substitute from the 7th to the 28th, inclusive, and as this is a fractional part of a month, he should be paid one-thirtieth of the monthly compensation for each day he actually serves, or twenty-twothirtieths of the monthly pay. (11 Com. Dec., 24; id., 48; id., 84.)


Under a contract for the construction of two buildings, to be completed at the same time, but at a different price for each, where neither of said buildings was completed by the time specified, but were completed at different times thereafter, a provision in the contract for the payment of a fixed sum for each day's delay in the completion thereof will be construed as a providing for a penalty, and enforced only to the extent of the actual damage to the United States by reason of the delay in completing the work.

(Decision by Comptroller Tracewell, March 10, 1905.)

John W. Speckman, as trustee in bankruptcy of George W. Pierson, appealed, December 31, 1904, from the action of the Auditor for the War Department in settlement dated December 20, 1904.

The facts in this case appear to be as follows:

On September 2, 1902, said George W. Pierson contracted to erect for the United States a "boxing shop" and a "power plant" at the Frankford Arsenal, Philadelphia, Pa., the prices. for said buildings being $20,000 and $33,176, respectively. These two buildings were provided for in the same set of specifications and only one contract was drawn for their construction.

In the specifications, page 8, it is stated that the contractor shall "so conduct the work that on or before January 1, 1903, the buildings will be under cover, and that on or before March 15, 1903, shall be entirely completed."

On page 9 of the specifications, which are made a part of the contract, it is stated:

"In case of the failure of the contractor to have the work completed within the time specified or within such further time as shall be fixed or allowed for such completion, he willbe required to pay twenty dollars ($20) per day as liquidated damages for each day's delay (excepting Sundays) in the completion of the contract."

In his proposal for the work Mr. Pierson wrote:

"The work to be completed on or before March 15, 1903, and I make this proposal with a full knowledge of the stipulations and requirements which govern the work."

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In the body of the contract it is provided that the contractor is to

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"erect the following-described shop buildings at the Frankford Arsenal * * and to complete the same on or before March 15, 1903, this in accordance with his proposal dated and opened August 28, 1902, copies of all these papers hereto attached forming part of this contract. A forfeiture of twenty ($20) per day shall be assessed and collected from the party of the first part for each day's delay (excepting Sundays) in the completion of the contract.




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The work thus contracted for was not completed on or before March 15, 1903, as stipulated. On the contrary, one of the buildings was not completed until about June 1, 1903, and the other one was not completed until November 13, 1903.

The Auditor, in settling the accounts growing out of this contract, charged the contractor with, and deducted, $3,820 as liquidated damages, the sum of $20 per day from March 15, 1903, to November 13, 1903.

It has been noted that the two buildings contracted for, each at a separate price, are provided for in the same contract, and that these two buildings were completed at different dates.

In 2 Parsons on Contracts, fourth edition, page 438, it is said:

"Where the contract is to do several things, and one sum is to be paid for breach, that sum is intended and regarded as adequate compensation for a breach of the whole contract, for it is all the promissor is to pay if he breaks the whole. It would be unjust and oppressive to require him to pay the whole sum for violating any one of the least important items of the contract."


In Lyman v. Babcock (40 Wis., 503, 517) it was said:



"Where the sum is agreed to be paid for any of several breaches of the contract, and the damages resulting from the breach of all of them are uncertain, and there is no fixed rule for measuring them the cases are conflicting in the rule whether the sum should be held as a penalty or as liquidated damages. On principle, we are very clear that in such a case the sum should be held as a penalty, for it appears to us that it would be as unjust to sanction a recovery of the sum agreed to be paid for any one trivial breach, or for any one important breach, or for breach of the whole contract, as it would be to sanction such a recovery equally for damages

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