the Crown officers in such instances did not pass to the officers of the United States, because the royal prerogatives and political powers of one government do not pass in unchanged form to the new sovereign, but terminate upon the execution of the treaty of cession, or are supplanted by such laws and rules as the treaty or the legislature of the new sovereignty may provide.

In Mumford v. Wardwell (6 Wall., 435) the United States Supreme

Court say:

Mexican rule came to an end in that department on the 7th of July, 1846, when the government of the same passed into the control of our military authorities. Municipal authority also was exercised for a time by subordinate officers appointed by our military commanders. Such commander was called military governor, and for a time he claimed to exercise the same civil power as that previously vested in the Mexican governor of the department. By virtue of that supposed authority, Gen. S. N. Kearney, March 10, 1847, as military governor of the Territory, granted to the town of San Francisco all the right, title, and interest of the United States to the beach and water lots on the east front of the town included between certain described points, excepting such lots as might be selected for Government use.

But the power to grant lands or confirm titles was never vested in our military governors, and it follows as a necessary consequence that the grant as originally made was void and of no effect. Nothing passed to the town by the grant, and, of course, the doings of the alcalde in selling the lot in question was a mere nullity.

In Pollard's Lessee. Hagan (3 How., 225) the Supreme Court of the United States say:

It can not be admitted that the King of Spain could, by treaty or otherwise, impart to the United States any of his royal prerogatives, and much less can it be admitted that they have capacity to receive or power to exercise them.

While the authority of the officers of the Crown of Spain to direct and control the action of municipalities in Cuba in these matters has ceased, it does not follow that the local officials of said municipalities are without restraint in exercising the powers of their several offices. This restraint does not arise by virtue of provisions of the Spanish law, nor from the fact that Spanish officers were permitted by the reigning monarch to exercise his sovereign prerogative to impose it. The authority of the existing government of Cuba to impose restraints of this character is derived from the laws of war and nations applicable to the conditions existing in Cuba, and the exercise of the authority to impose restraints upon the power of local municipal officials in such matters is justified by the character of said military government, the relation it sustains to all of its inferior branches, the obligations to the inhabitants of the island assumed by the United States, and the necessity of imposing such restraints in order to accomplish the declared purposes for which the occupation was established.

The extent of the authority of the military government in Cuba over the affairs of municipalities in the island is set forth by AttorneyGeneral Griggs, as follows (see letter to Secretary of War, July 10, 1899, 22 Op., 528):

Cuba, however, is now under the temporary dominion of the United States, which is exercising there, under the law of belligerent right, all the powers of municipal

government. In the exercise of these powers the proper authorities of the United States may change or modify either the form or the constituents of the municipal establishments; may, in place of the system and regulations that formerly prevailed, substitute new and different ones. Upon this line the same authorities exercising sovereignty over the island have the power to provide the methods, terms, and conditions under which municipal improvements which relate entirely to property belonging to the municipality or held by it for public use may be carried on. The old provisions of the Spanish law may be adopted, so far as applicable, or they may be entirely dispensed with, and a new system set up in their place.

Upon the question of procedure the conclusion reached by the writer is that the municipalities of Cuba may encumber or convey the land and other property owned by them by pursuing the procedure prescribed by the Spanish law relative thereto, saving and excepting the provisions requiring the assent and approval of the Crown of Spain or its officers, but subject to such restraints and requirements as may be imposed by the superior authorities of the military government of the island.

The foregoing report was referred to the military governor of Cub "for consideration" without action thereon by the Secretary of War.

REPORT ON THE DRAFT OF A PROPOSED ORDER OF THE MILITARY GOVERNMENT AUTHORIZING THE ORGANIZATION OF RAILROAD COMPANIES IN CUBA AND THE CONSTRUCTION, MAINTENANCE, AND OPERATION OF RAILROADS IN THAT

ISLAND.

[Submitted February 20, 1901. Case No. 2433, Division of Insular Affairs, War Department.]

SIR: I have the honor to acknowledge the receipt of your verbal instruction to examine and report on the proposed draft of an order of the military government of Cuba of the character indicated by above title. The draft of order which you handed me is herewith returned. I understood you wished the report thereon to review said order, not only as a proposed law for Cuba, but also as though it were a proposed law for one of the States of the Union.

The desired object of the investigation is to learn in what way and to what extent, if at all, said order would enlarge the powers of the public over private property and rights in matters relating to the construction, maintenance, and operation of railroads; what changes in procedure are contemplated, and to test the provisions of said order by comparison with the laws of the several States of the Union enacted for similar purposes. In pursuance of said general plan, I have the honor to report as follows:

I.

The proposed order does not provide a method for the organization of incorporation of railroad companies, nor require compliance with

the existing Spanish laws in regard thereto. I suggest that the order be amended so as to set forth complete authority and procedure for such incorporation, or that a general clause be inserted substantially as follows:

Railroad companies are hereby authorized to become incorporated in Cuba by following the procedure now established therefor by law, except as such procedure is modified by this order. Such incorporation and the shareholders therein shall be subject to the obligations and invested with the rights created or conferred by said laws and this order, and to the regulations and restrictions therein provided.

II.

Section II of proposed order is as follows:

The capital stock of a company of this class shall not be less than $6,000, United States money, for each kilometer of its main line.

The provisions of the Spanish law which this section would supplant are those of article 185, ninth section, commercial code, title "Railroad and other public work companies," as follows:

The capital stock of the company, together with the subsidy, should there be any, shall represent at least half the amount of the total estimate of the work.

The companies can not establish themselves before half of the capital stock has been subscribed to and 25 per cent thereof has been realized. (War Dept. Trans., p. 55.)

The probable purpose of said section II of the proposed order is to prevent weak or speculative companies from invading the field and subjective legitimate concerns to harassing competition for location and business. It naturally suggests the advisability of placing a limit at the other end of the stock issue as a possible means of preventing the stock from being watered. Another such means would be a requirement that the face value of stock should be paid in full upon being issued or the company authorized to begin business. Under Spanish dominion the danger of competition from speculative companies was slight because of the difficulty in securing a concession.

The distinguishing feature of the order, when compared with the Spanish law of railroads, is that it enables a railroad company to build a road and operate it without a "concession."

Under Spanish law it is not necessary to pay the full value of the stock before issued; and payment can be made in property duly appraised.

The attention of the Secretary is directed to the following provisions of the Spanish commercial code (War Dept. translation):

ART. 151. The articles of incorporation must include: The corporation capital, stating the value at which property, not cash, contributed has been appraised, or the basis on which the appraisement is to be made. The period or periods within

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which the portion of the capital not subscribed at the time of incorporation is to be contributed, otherwise stating the person or persons authorized to determine the time and manner in which the assessments are to be made.

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ART. 164. In all certificates of shares, either payable to order or to bearer, there shall always be entered the sum which has been paid on account of its nominal value or that they are fully paid. All shares shall be payable to order until 50 per cent of their nominal value has been paid in. (See also articles 170 and 171.) ART. 165. New series of stock can not be issued before the payment of the series previously issued has been made. Any agreement to the contrary included in the articles of copartnership or of corporation, in the by-laws or regulations, or any resolution adopted at a general meeting of members in opposition to this precept shall be null and of no value.

ART. 172. When the capital or the part thereof which a partner is to contribute consists of property the appraisement thereof shall be made in the manner prescribed in the articles of association, and should there be no special agreement on the matter the appraisement shall be made by experts selected by both parties and according to current prices, subsequent increases or reductions therein being for the account of the association.

In case of disagreement between the experts a third one shall be designated, selected by lot from among persons of his class who appear as paying the highest taxes in the locality, in order that he may adjust said disagreement.

Section IV of the proposed order provides as follows:

IV. When a railroad company has been duly recorded report thereof shall be made by the registrar to the secretary of public works, and the report shall be accompanied by a copy of the articles of incorporation signed by the president. Thereupon the company shall become invested with all the rights conferred by law on incorporated companies.

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The order omits to subject the companies to the obligations imposed by law on incorporated companies.

Paragraph I, Section IV, is as follows:

1. To make freely, by its engineers, agents, or any employees, searches and examinations in public records of any kind for the purpose of collecting the information and documents which may be needed for its corporate purposes, and to enter on any lands and waters for the purpose of determining the line of the railroad, and to make plans and designs and to perform other works which may be proper for the accomplishment of its purpose.

The right to examine public records is so universally considered in the United States a public right possessed by all in common that its exercise passes without question. But in Cuba an obstacle is encountered; many records of a kind considered "public" in the United States, made under Spanish authority in the island, are, or at least were, private property. If the provision "To make freely" in the first line of the above-quoted paragraph is intended to enable the company to examine these records without paying the owner for the privilege, it amounts to a confiscation of what has been and still is considered, locally, private property. Doubtless many of these records, perhaps all of them, should belong to the public, and the private titles now asserted thereto, abrogated. Ample justification and authority probably exists for such action; but the experience of this department in depriving former Spanish officeholders of the right to administer

their offices admonishes us that such course would not be acquiesced in without protest.

If the object of said provision is to secure access to said records for the purpose of securing necessary information, that object may be attained without raising the question above suggested by amending the provision so as to read, "To make freely upon tender of the legal fees therefor.' The provision allowing the company "to enter on any lands and waters for the purpose of determining the line of the railroad, and to make plans and designs and to perform other works which may be proper for the accomplishment of its purpose," is understood to relate to preliminary surveys and examinations necessary to determine the definite location. In the United States this right is secured to railroad companies either by statute, by common consent, or by the authority given by statute to licensed surveyors.

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Such corporation is authorized to enter upon any land for the purpose of examining and surveying its railroad line. (Ch. 16, sec. 81, Title, Railroads, Comp. Stats. of Nebr.)

In Cuba, under Spanish dominion, such authority must be secured by the action of various officials, boards, and tribunals, and the necessity of securing this special action constituted one of the many impediments to promoting public improvements by private enterprise.

The provision "and to perform other works which may be proper for the accomplishment of its purpose," if appearing in a statute of one of the States of the Union, would be liable to be construed as giving a broader authority than is required for preliminary purposes; in fact, as dispensing with the necessity for condemnation proceedings and relegating the proprietor to his remedy at law for a quantum meruit. I think this provision should be omitted, and that the remaining provisions of the paragraph are sufficient for the legitimate purposes of the company.

Paragraph 3, Section IV, provides as follows:

3. To acquire by expropriation such real estate and other property as may be necessary for the construction, maintenance, and operation of its railway, but property so acquired shall not be used for any other purpose.

In the United States the authority of railroad companies to expropriate property is confined to real estate. The provisions of the paragraph quoted give authority to expropriate the horses and mules, building materials, etc., used in constructing the roads, and forever afterwards authorizes the supply department of the roads to expropriate coal, iron, oil, and anything else needed to maintain and operate the line. Abuse of said power would be inevitable.

Paragraph 6, Section IV, is as follows:

To construct, acquire, and operate telegraph and telephone lines along the lines of its railroad.