treasury of the Philippine Islands. Stating the relationship of the Philippine Islands to the United States, the court said, at page 314:

The islands constitute a dependency over which the United States, for more than a generation, has had and exercised supreme power of legislation and administration, Posadas v. National City Bank, 296 U. S. 497, 502, a power limited only by the terms of the treaty of cession and those principles of the Constitution which by their nature are inherently inviolable.

and, at page 319:

But it is contended that the passage of the Philippine Independence Act of March 24, 1934, c. 84, 48 Stat. 456, and the adoption and approval of a constitution for the Commonwealth of the Philippine Islands have created a different situation; and that since then, whatever may have been the case before, the United States has been under no duty to make any financial contribution to the islands. Undoubtedly, these acts have brought about a profound change in the status of the islands and in their relations to the United States; but the sovereignty of the United States has not been, and, for a long time, may not be, finally withdrawn. So far as the United States is concerned, the Philippine Islands are not yet foreign territory. By express provisions of the Independence Act, we still retain powers with respect to our trade relations with the islands, with certain exceptions set forth particularly in the act. We retain powers with respect to their financial operations and their currency, and we continue to control their foreign relations. The power of review by this court over Philippine cases, as now provided by law, is not only continued, but is extended to all cases involving the Constitution of the Commonwealth of the Philippine Islands.

Thus, while the power of the United States has been modified, it has not been abolished.

That case was decided in 1937. While the Philippine Independence Act of March 24, 1934, has subsequently been amended in various particulars by the act of August 7, 1939, 53 Stat. 1226, there has been no change in the basic relationship between the two Governments. The sovereignty of the United States has not been withdrawn; and, while the Philippine government has been granted a large measure of autonomy in local matters, its trade and fiscal relations with the United States are prescribed by statutes of the United States, and the meaning and scope of those statutes would appear to be finally for determination by the United States Government and not by the Philippine government. See Asiatic Petroleum Co. v. Insular Collector of Customs, 297 U. S. 666. At least, so far as taxation of the property of the United States is concerned, the Philippine Islands are still to be regarded as having the character of a dependency of the United States, and it would be diametrically opposed to all concepts of that relationship to hold that the dependency has the power finally to decide as against the sovereign that the sovereign has authorized the dependency to tax the sovereign's property. It would seem axiomatic that the sovereign, with full power to grant and revoke benefits, must retain the power finally to determine the extent of the benefits granted by its own statutes; and nothing is found in the Philippine Independence Act relative to administration of the export tax provisions, or otherwise, which would have the

effect of transferring that power to the Philippine government. Authority to administer the provisions of a statute does not carry with it the power finally to determine disputed questions of law as to the construction of the statute being administered. The principle is illustrated by the case of Dugan v. United States, 34 Ct. Cls. 458, cited in your letter. In that case the Commissioner of Internal Revenue had made allowances or awards in favor of an Army post exchange officer for the amount of special taxes paid as a retail liquor dealer. The auditor for the Treasury Department certified the allowances for payment but the Comptroller of the Treasury declined to approve his action. In the Court of Claims it was insisted that the decision of the Commissioner was conclusive and, therefore, not open to review by either the accounting officers or the courts. The Court, refusing to adopt this view, stated (p. 466):

His decision in respect of disputed questions of fact, in the absence of frand or mistakes in mathematical calculation, would certainly be final and not open to review; but in the absence of disputed questions of fact, where his decision involves the construction of the law under which he acts, we think a different rules applies.

This principle or distinction was last announced by the Supreme Court in the case of Medbury v. The United States (173 U. S. R., 492, 497), where, in speaking of the authority of the Secretary of the Interior under section 2 of the act of June 16, 1880 (21 Stat. L., 287), concerning the repayment of the excess of $1.25 per acre for lands sold within the limits of a railroad land grant for double the minimum price where such lands were afterwards found not to be within such grant, the court, speaking by Mr. Justice Peckham, said: "If there were any disputed questions of fact before the Secretary his decision in regard to those matters would probably be conclusive, and would not be reviewed in any court. But where, as in this case, there is no disputed question of fact, and the decision turns exclusively upon the proper construction of the act of Congress, the decision of the Secretary refusing to make the payment is not final, and the Court of Claims has jurisdiction of Fuch a case."

See, also, In re Fassett, 142 U. S. 479, where the Supreme Court of the United States held that authority under the Customs Administrative Act of June 10, 1890, 26 Stat. 131, to determine the rate and amount of duties charged upon imported merchandise, etc., did not give jurisdiction finally to determine the primary question of whether articles were imported merchandise within the meaning of the act.

The question presented to this office in the present case is whether Navy appropriations are available to pay export taxes sought to be imposed by the Philippine Government on property of the United States shipped from the Philippine Islands to the United States by and for the use of the Navy. This office not only is authorized, but is required, to decide such question as to the use of appropriations. Section 8 of the Dockery Act, 28 Stat. 207, 208, as modified by section 304 of the Budget and Accounting Act, 42 Stat. 24; 19 Comp. Gen. 129; id. 478. The answer depends on whether the export tax provisions of the Philippine Independence Act were intended to extend

to property of the United States Government. That raises a general question of law which must be answered to decide the question of appropriation availability presented. While such decision will be controlling so far as the use of the appropriation for the payment of the export tax is involved, there is also involved the administrative duty imposed on customs officials by section 6 (h) of the act as amended, cited in the letter of the Secretary of the Treasury, to refuse admission to entry in the United States of any article shipped from the Philippines "subject to an export tax provided for in this section" until the importer has presented a certificate of the Philippine Government as to payment of the export tax, or has given bond for the production of such certificate within 6 months. This office may decide, on the basis that property of the United States is not subject to the export tax, that appropriations are not available to pay such tax. On the other hand, Treasury customs officials may decide with respect to the performance of the administrative duties imposed on them by section 6 (h) that property of the United States is subject to the export tax, as indicated by the action taken on the shipment here involved and, also, by the report of the Secretary of the Treasury, quoted supra, and on that basis may refuse to admit such property without a certificate that the export tax has been paid. This could result in a stalemate rendering it impossible for agencies of the United States to bring into the United States from the Philippine Islands any property of the United States which happened to be of Philippine origin. However, this possibility, which might prove embarrassing to the conduct of defense and other Governmental activities, does not relieve this office of its duty to decide the question presented as to the availability of appropriations to pay the tax, or lessen the obligation, in rendering such decision, to apply the principles of law and rules of statutory interpretation deemed to be applicable. Having concluded, on the basis of the matter as presently submitted, that it is not established that the Congress has authorized the payment of export taxes by the United States Government to the Philippine Government on United States property shipped from the Philippines to the United States, and, therefore, having decided that Navy appropriations are not available to pay such export taxes in the case submitted, I can only state the reasons for such conclusions and trust that they may be sufficient to justify agreement by the Customs Service with respect to the admission of such property on the ground that it is not subject to the tax, as stipulated in section 6 (h) of the act. If not, then this office will be glad to consider the matter further, at your request, on the basis of such arguments in support of a contrary conclusion which may be adduced by your Department, the Treasury Department, or the Philippine

Government, and if no agreement of views should be reached, apparently the matter would have to be left to legislative correction or clarification.

In Domenech v. National City Bank, 294 U. S. 199, the Supreme Court of the United States held invalid a tax sought to be imposed by Puerto Rico on a branch of a national bank organized under the laws of the United States. Respecting the power of a dependency to tax its sovereign or its instrumentalities, the Court said:

Puerto Rico, an island possession, like a territory, is an agency of the Federal Government, having no independent sovereignty comparable to that of a State in virtue of which taxes may be levied. Authority to tax must be derived from the United States. But like a State, though for a different reason, such an agency may not tax a Federal instrumentality. A State, though a sovereign, is precluded from so doing because the Constitution requires that there be no interference by a State with the powers granted to the Federal Government. A Territory or a Possession may not do so because the dependency may not tax its sovereign. True the Congress may consent to such taxation; but the grant to the island of a general power to tax should not be construed as a consent. Nothing less than an act of Congress clearly and explicitly conferring the privilege will suffice. [Italics supplied.]

* * *

So the question here is whether the Congress has directed, authorized, or consented to the imposition of an export tax by the Philippine Government on property of the United States. The Supreme Court has said that a general power to tax should not be construed as a consent and that nothing less than an act of Congress "clearly and explicitly" conferring the privilege will suffice.

Section 1 of the act of August 7, 1939, 53 Stat. 1226, amended section 6 of the Philippine Independence Act of March 24, 1934, 48 Stat. 459, to read, in part, as follows:

SEC. 6. During the period beginning January 1, 1940, and ending July 3, 1946, trade relations between the United States and the Philippines shall be as now provided by law, subject to the following exceptions:

(a) On and after January 1, 1941, the Philippine Government shall impose and collect an export tax on every Philippine article shipped from the Philippines to the United States, except as otherwise specifically provided in this section. Said tax shall be computed in the manner hereinafter set forth in this subsection and in subsection (c) of this section. During the period January 1, 1941, through December 31, 1941, the export tax on every such article shall be 5 per centum of the United States duty; on each succeeding January 1 thereafter the export tax shall be increased progressively by an additional 5 per centum of the United States duty, except that during the period January 1, 1946, through July 3, 1946, the export tax shall remain at 25 per centum of the United States duty.

(g) (1) The Philippine Government shall pay to the Secretary of the Treasury of the United States, at the end of each calendar quarter, all of the moneys received during such quarter from export taxes (less refunds), imposed and collected in accordance with the provisions of this section, and said moneys shall be deposited in an account with the Treasurer of the United States and shall constitute a supplementary sinking fund for the payment of bonds of the Philippines, its Provinces, cities, and municipalities, issued prior to May 1, 1934, under authority of acts of Congress :

*

(4) * Any portion of such special trust account found by the Secre tary of the Treasury of the United States on July 4, 1946, to be in excess of an amount adequate to meet future interest and principal payments on all such

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outstanding bonds shall be turned over to the Treasury of the independent Government of the Philippines to be set up as an additional sinking fund to be used for the purpose of liquidating and paying all other obligations of the Philippines, its Provinces, cities, municipalities, and instrumentalities. To the extent that such special trust account is determined by the Secretary of the Treasury of the United States to be insufficient to pay interest and principal on the outstanding bonds of the Philippines, its Provinces, cities, and municipalities, issued prior to May 1, 1934, under authority of acts of Congress, the Philippine Government shall, on or before July 3, 1946, pay to the Secretary of the Treasury of the United States for deposit in such special trust account an amount which said Secretary of the Treasury determines is required to assure payment of principal and interest on such bonds:

(h) No article shipped from the Philippines to the United States on or after January 1, 1941, subject to an export tax provided for in this section, shall be admitted to entry in the United States until the importer of such article shall present to the United States collector of customs a certificate, signed by a competent authority of the Philippine Government, setting forth the value and quantity of the article and the rate and amount of the export tax paid, or shall give a bond for the production of such certificate within six months from the date of entry.

Section 18 (a) (6) of the Philippine Independence Act as added by section 5 of the said act of August 7, 1939, 53 Stat. 1231, 1232, provides that as used in section 6:

The term "Philippine article" means an article the growth, produce, or manufacture of the Philippines, in the production of which no materials of other than Philippine or United States origin valued in excess of 20 per centum of the total value of such article was used and which is brought into the United States from the Philippines.

Section 7 (a) of the said act of August 7, 1939, 53 Stat. 1233, 1234, provided that sections 1 to 5 of such act (which include the amendatory provisions just quoted) should become effective on January 1, 1940, if before that date the Ordinance Appended to the Constitution of the Philippines should be amended in certain particulars and

(2) The President of the United States shall have found and proclaimed that the Philippine Government has enacted, subsequent to the adoption of the amendments to the Constitution of the Philippines (as provided in subdivision (1) of this subsection), a law relating to export taxes (as provided in section 1), and has retained those Philippine laws relating to sinking-fund and currency matters which were in effect on May 20, 1938.

Pursuant to this section the President by Proclamation No. 2377, December 12, 1939, 4 F. R. 4861, proclaimed the fulfillment of the stipulated conditions, including the enactment by the Philippine Government of "a law relating to export taxes as provided in the said act of August 7, 1939."

Thus it appears that the said amendatory provisions of the act of August 7, 1939, have gone into effect and that the Philippine Government has enacted a law relating to export taxes as provided in that act. But as the Philippine law in that respect was required to be "as provided in section 1" of the act of August 7, 1939, supra, it could not transcend the limits of that section or legally impose taxes on the United States not authorized or consented to by the express