This report states that among the propositions contemplated by this bill is:

"To extend the navigation laws of the United States to the islands and enact such tariff, internal revenue and other provisions as are necessary to afford a revenue for the support of the Government" (p. 1 of report).

The bill, further says the report:

"Provides preferential duties on dutiable articles going from the United States into Porto Rico, and from Porto Rico into the United States, and extends to Porto Rico the internal-revenue law and all other laws of the United States locally applicable" (pp. 3 and 4).

The report further says:

.

The questions that gave the committee most concern were in the second place what provision should be made with respect to tariff duties and internal-revenue taxes” (p. 4).

The bill further says (at p. 6):

*

*

"The bill as introduced provided for free trade between the United States and Porto Rico. This proposition was objected to on various grounds. It was urged that it was in violation of the policy of protection. ** They do not think that there is in the proposition any departure from the policy of protection, because that policy has only been maintained between the United States and the rest of the world. * ** The committee were of opinion that there would not result any injury, if any injury resulted at all, to any industry of the United States in the entry into the United States free from duty of all products of Porto Rico. Nevertheless the committee, although disregarding these objections, have thought it best in view of the urgent necessity of revenue for Porto Rico, to impose on all dutiable articles imported into Porto Rico from the United States 25 per cent of the tariff duties provided by the law passed July 27, 1897, and also to impose a similar duty on all articles dutiable under said act that may be imported from there into the United States which together with all the internal-revenue taxes that may be levied shall be collected for the use and benefit of the treasury of Porto Rico and for the support of the local government.” This makes it not only plain that duties were intended, but it was the application pro tanto of the actual tariff law of 1897, enforced through the United States as against foreign goods to the ports of Porto Rico; and it was moreover an imposition of duties not as the Constitution enjoins in art. 1, sec. 8, "to pay the debts and provide for the common defense and general welfare of the United States," but for the use and benefit of the treasury of Porto Rico and for the support of the local government."

III.

If there is any refuge left after this examination of the bill and report, it can only be in the provision of the Constitution, art. 1, sec. 10, clause 2, which provides that: "No State shall without the consent of the Congress lay "any imposts or duties on imports or exports,' etc. It might be urged that as the States may with the consent of

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Congress lay imposts or duties on imports or exports, Congress has by its action, given its consent to the imposition of such imposts and duties by Porto Rico for its local benefit.

It might possibly be an answer to this to say that the Government urges that Porto Rico is not a State nor a Territory, but only an appurtenant piece of property belonging to the United States, but we will not accept this argument, as we believe Porto Rico to be in the same category as Territory.

There is another answer more pertinent and more complete. The same clause of the Constitution cited above continues as follows:

And the net produce of all duties and imposts laid by any State on imports or exports shall be for the use of the Treasury of the United States."

The Foraker bill, sec. 4, specifically provided that the duties collected under it shall not be converted into the general fund or Treasury, but shall be held as a separate fund and shall be placed at the disposal of the President to be used for the benefit of the government of Porto Rico until the government of Porto Rico herein provided for shall have been organized, when all moneys theretofore collected under the provisions herein then unexpended shall be transferred to the local treas ury of Porto Rico.

We do not assent to the proposition stated above as a possible refuge of the Government, that the imposition of this tax could in any event be upheld as the imposition of an impost tax, by and with the consent of Congress, but if anybody should be disposed so to hold it, it is very clear that they could not be sustained on this point, there being a specific provision as to the disposition of moneys collected totally at variance with the disposition marked out by the Constitution for the cases where the States with the consent of Congress may impose imposts and duties.

THE QUESTION OF JURISDICTION.

In reference to the suggestion that the amount involved in this case was insufficient to give jurisdiction to the circuit court, reliance is placed on the decision of the court in Holt vs. Indiana Mfg. Co., 176 U. S., 70.

In that case the jurisdiction of the circuit court was sought to be sustained under two subdivisions of section 629 Rev. Stat.

Subdivision ninth conferred jurisdiction in all cases arising under patent and copyright laws and the court held that the assessment of taxes upon patent rights did not constitute any question arising under the patent or copyright laws.

Subdivision sixteenth conferred jurisdiction in all cases arising under the civil rights law and the denial to any citizens "of any right, privilege, or immunity secured by the Constitution." The court held that the imposition of the tax complained of did not co

In the present case the jurisdiction of the circuit e conferred by the fourth subdivision of section 629, confers such jurisdiction without reference to any versy in "all suits at law or in equity, arising under for revenue from imports or tonnage" and in all ca the internal-revenue or postal laws.

This statute is conclusive on the jurisdiction.

JANUARY 7, 1901.

F. R.

PAUL