of the President of May 9, 1904, so far at least as engineering and construction work is concerned:

"To make and cause to be executed, after due advertisement, all necessary contracts for any and all kinds of engineering and construction work."

5. Your question five is more difficult of solution. The instructions of the President stated by you relate to the carrying on of the government of the Canal Zone and the use of the local revenues of said zone. It is not wholly clear just what was meant by the words "local revenues of the zone." It would seem, however, that what was contemplated were moneys derived from the various sources of taxation, etc., local to the zone, as distinguished from miscellaneous receipts which might be collected as incident to the direct operation of building the canal and the use of a Congressional appropriation. I believe this is the correct construction of the language used by the President, and the answer will be predicated upon that view.

Article 2 of the treaty with the Republic of Panama proclaimed by the President of the United States February 26, 1904, provides:

"The Republic of Panama grants to the United States, in perpetuity, the use, occupation, and control of a zone of land and land under water, for the construction, maintenance, operation, sanitation, and protection of said canal, of the width of ten miles, extending to the distance of five miles on each side of the center line of the line of the canal to be constructed.

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Article 3 of the same treaty provides:

"The Republic of Panama grants to the United States all the rights, power, and authority within the zone mentioned and described in article 2 of this agreement and within the limits of all auxiliary lands and waters mentioned and described in said article 2, which the United States would possess and exercise if it were the sovereign of the territory within which said lands and waters are located, to the entire exclusion of the exercise by the Republic of Panama of any such sovereign rights, power, or authority."

The United States has thus become vested in perpetuity with the use, occupation, and control of the Canal Zone, and is now authorized to exercise all the sovereign powers in and over said zone which were inherent in the Republic of Panama

prior to the release, waiver, and transfer thereof to the United States by the terms of the treaty.

Section 2 of the act of April 28, 1904 (33 Stat., 429), provides:

"That until the expiration of the Fifty-eighth Congress, ⚫ unless provision for the temporary government of the Canal Zone be sooner made by Congress, all the military, civil, and judicial powers as well as the power to make all rules and regulations necessary for the government of the Canal Zone, and all the rights, powers, and authority granted by the terms of said treaty to the United States shall be vested in such person or persons and shall be exercised in such manner as the President shall direct for the government of said zone and maintaining and protecting the inhabitants thereof in the free enjoyment of their liberty, property, and religion."

By the terms of this section Congress has for the time being specifically authorized and directed that all the rights, powers, and authority which accrued to the United States under the treaty in question be vested in and exercised by the President and such persons as he may select. No restrictions or limitations are imposed, and until Congress, by express legislation, shall have prescribed the form of government of said zone, the will and sound discretion of the President and his Commission will control, subject only to the general spirit and purpose of the Constitution of the United States.

It must be borne in mind that Congress has not by any specific act extended the application of the Constitution and statutes of the United States to said territory. Some legislation must first be had to that effect before they can be made. fully applicable to the Canal Zone.

In the case of Downes v. Bidwell (182 U. S., 244), the court said, quoting from the syllabus:

"Every function of the Government being thus derived from the Constitution, it follows that that instrument is everywhere and at all times potential in so far as its provisions are applicable."

The meaning of these words is, as I understand it, that the general spirit and purpose of the Constitution would be applicable in the Canal Zone.

In his concurring opinion in the case of Downes v. Bidwell, Mr. Justice Gray said:

"The civil government of the United States can not extend immediately, and of its own force, over territory acquired by

war.

Such territory must necessarily, in the first instance, be governed by the military power under the control of the President as commander in chief. Civil government can not take effect at once, as soon as possession is acquired under military authority, or even as soon as that possession is confirmed by treaty. It can only be put in operation by the action of the appropriate political department of the Government, at such time and in such degree as that department may determine. There must, of necessity, be a transition period. "In a conquered territory, civil government must take effect either by the action of the treaty-making power, or by that of the Congress of the United States.

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"So long as Congress has not incorporated the territory into the United States, neither military occupation nor cession by treaty makes the conquered territory domestic territory, in the sense of the revenue laws. But those laws concerning 'foreign countries' remain applicable to the conquered territory until changed by Congress. Such was the unanimous opinion of this court, as declared by Chief Justice Taney, in Fleming v. Page, 9 Howard, 603, 617.

"If Congress is not ready to construct a complete government for the conquered territory, it may establish a temporay government which is not subject to all the restrictions of the Constitution."

It would seem from the logic of this decision that the local government of the Canal Zone must be vested in the President and the Commission mentioned, and that said zone is not a part of the United States within the full meaning of the Constitution and laws of the country. The local revenues of said zone must therefore be handled in accordance with such rules and regulations as the President and the Commission may authorize. It does not seem necessary to decide whether those revenues are, in a general sense, moneys of the United States, because I am of opinion that they are not such moneys of the United States as are required to be accounted for to the Treasury Department, but that the accounting for said local revenues must be done under such rules and regulations as the President and the Commission shall prescribe, a report of the same being made to the President and to Congress, as required by the act of June 28, 1902. (32 Stat., 483.)

CLERICAL ERROR IN THE DESIGNATION OF AN OFFICER'S RANK.

Where through a clerical error an officer of the Navy was commissioned a passed assistant surgeon with the rank of lieutenant instead of with the rank of lieutenant (junior grade), which was the grade to which he was entitled, he is only entitled to the pay of the lesser grade. The exercise by the Secretary of the Navy of the discretion conferred upon him by the act of July 1, 1902, to direct payment of actual and necessary expenses instead of mileage is limited to travel performed repeatedly between two or more places.

(Decision by Assistant Comptroller Mitchell, July 26, 1904.)

C. A. Crawford appealed June 25, 1904, from the action of the Auditor for the Navy Department in settlement, dated June 7, 1904.

Doctor Crawford's claim to the Auditor was for mounted pay from July 1, 1899, to January 13, 1903, including the pay of a passed assistant surgeon of the Navy with the rank of lieutenant with mounted pay as assimilated to the pay of a captain in the Army, mounted, from December 16, 1901, and also reimbursement of actual traveling expenses.

The Auditor allowed the pay as claimed to December 15, 1901, except from June 1 to September 30, 1901, which had been settled previously, and mounted pay of a lieutenant in the Navy (junior grade) after that date, and also traveling

expenses.

From this settlement he appeals and claims the pay of a lieutenant in the Navy and mileage.

The first question to be determined is whether he holds the rank of lieutenant in the Navy, or only lieutenant of the junior grade, as the pay follows the rank.

He states that he was commissioned by the President December 16, 1901, a passed assistant surgeon with the rank of lieutenant and that such appointment was duly confirmed by the Senate.

In reply to request for information the Bureau of Navigation reports, under date of July 6, 1904, as follows:

"In reply to your letter of the 30th ultimo, appeal No. 10432, you are advised that the following is a copy of the

nomination sent to the Senate of Charles A. Crawford to be a passed assistant surgeon in the Navy:

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I nominate Assistant Surgeon Charles A. Crawford to be a passed assistant surgeon in the Navy, from the first day of June, 1901, to fill a vacancy existing in that grade on that date.'

"Mr. Crawford was commissioned a past assistant surgeon in the Navy, with the rank of lieutenant, from the first day of June, 1901. To give to Mr. Crawford the rank of lieutenant in this commission was a clerical error, and he should have been commissioned a passed assistant surgeon with the rank of lieutenant (junior grade), the rank to which he was entitled at that time. Mr. Crawford was not legally entitled to the rank of lieutenant in the Navy."

It thus appears that Doctor Crawford was nominated to the Senate as a passed assistant surgeon without mention of the rank, whether lieutenant or only lieutenant (junior grade), but he was by a clerical error commissioned passed assistant surgeon with the rank of lieutenant.

While it is true that section 1474 of the Revised Statutes provides that passed assistant surgeons shall have the rank of lieutenant or lieutenant (junior grade) without specifying the number in each rank, yet the rank is not left to the discretion. of the appointing power. That is determined by section 1485 of the Revised Statutes, which provides:

"The officers of the staff corps of the Navy shall take precedence in their several corps, and in their several grades, and with officers of the line with whom they hold rank according to length of service in the Navy."

To have given the claimant the rank of lieutenant at that time would have advanced him about twenty numbers in rank, which, without the advice and consent of the Senate, is specifically prohibited by section 1506 of the Revised Statutes as amended by act of June 17, 1878 (20 Stat., 143), which provides:

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the rank of officers shall not be changed except in accordance with the provisions of existing law, and by and with the advice and consent of the Senate."

I am therefore of opinion that the claimant was not legally entitled to the rank of lieutenant, and as the Auditor has allowed him mounted pay as a passed assistant surgeon with the rank of lieutenant (junior grade) from October 1, 1901, to the date he left the service, he is entitled to nothing more.