where the bottles contain more than one quart each, "on the quantity in excess of one quart," and this language may be construed to require the duty on each such bottle, irrespective of the number or the aggregate contents. But the view I take of the meaning and intent of these statutesthat the main contemplation of paragraph 295 is directed to the normal number of twelve bottles, and the contemplation of the proviso to the penalty of the dozen rate merely for a short package, and not to the extreme extent of that penalty as brought out by such a case as the present oneis at least equally consistent with the terms of the law. If any further justification for that view is needed, it will be found in the doctrine that an absurd or unreasonable result is not to be drawn from a statute unless plainly required by its language. That such a result would be reached in this case is shown by the fact that if the most extreme of the alternatives is adopted (and no reason is perceived for stopping short of that, as it is the logical goal), the duty on each of the double magnums of champagne in this importation, upon which the dutiable value was entered as $2.60, which is presumably somewhere near the cost to the importer, would be rather more than $30.50.

Very respectfully,

JOHN K. RICHARDS,

Acting Attorney-General.

The SECRETARY OF THE TREASURY.

STAMP TAX ON CALL LOANS.

Written or printed agreements between a borrower and a bank whereby all securities deposited as collateral to any, loan or indebtedness of the former shall also be held as security for any other liability of the borrower to said bank, whether then existing or thereafter contracted, are not taxable under the head "Mortgage and pledge," in Schedule A of the war-revenue act of 1898 (30 Stat., 461).

In order to render such an agreement taxable, the property pledged must be so definitely described therein as to be capable of identification, and the amount for which it is pledged definitely set forth in the instrument itself, or made certain by reference to some other paper.

If stock is hypothecated simply by the delivery of the certificates, or is deposited as the basis of credit without a mortgage or other instrument being executed, no tax thereon, collectible by the affixing and cancellation of an adhesive documentary stamp, can be imposed.

The provision named does not impose a tax upon anything which is not written or printed.

Stock pledged as security for loans would be taxable under the first paragraph of Schedule A, if accompanied by any paper or agreement or memorandum or other evidence of transfer such as is contemplated by the statutes.

The rule of construction in tax laws is that if there is doubt as to the liability of any instrument to taxation, the construction is in favor of its exemption.

DEPARTMENT OF JUSTICE,

March 20, 1900.

SIR: I have the honor to acknowledge the receipt of yours of November 10, 1899, inclosing copy of a letter received by you from the Commissioner of Internal Revenue, in which you ask my opinion upon the two following questions:

"First. Whether the transaction detailed in his (the Commissioner's) letter is subject to tax as a pledge under the provisions of the paragraph in Schedule A headed 'Mortgage or pledge.'

"Second. If your opinion should be in the negative on the first proposition, your opinion is requested as to whether stock pledged as security for loans may not properly be taxed under the first paragraph of Schedule A.”

Accompanying the Commissioner's letter is a copy of an instrument, which is as follows, and which presents the facts involving the transaction upon which the opinion is desired:

"Know all men by these presents, that the undersigned, in consideration of financial accommodations given, or to be given, or continued to the undersigned by National

Bank of the city of New York, hereby agree with the said bank, that whenever the undersigned shall become or remain, directly or contingently, indebted to the said bank for money lent, or for money paid for the use or account of the undersigned, or for any overdraft or upon any indorsement, draft, guaranty, or in any manner whatsoever, or upon any claim, the said bank shall then and thereafter have the following rights, in addition to those created by the circumstances

from which such indebtedness may arise against the undersigned, or his, or their executors, administrators or assigns, namely:

"First. All securities deposited by the undersigned with said bank, as collateral to any such loan or indebtedness of the undersigned to said bank, shall also be held by said bank as security for any other liability of the undersigned to said bank, whether then existing or thereafter contracted; and said bank shall also have a lien upon any balance of the deposit account of the undersigned with said bank existing from time to time, and upon all property of the undersigned of every description left with said bank for safe-keeping or otherwise, or coming to the hands of said bank in any way, as security for any liability of the undersigned to said bank now existing or hereafter contracted.

"Second. Said bank shall at all times have the right to require from the undersigned that there shall be lodged with said bank as security for all existing liabilities of the undersigned to said bank, approved collateral securities to an amount satisfactory to said bank; and upon the failure of the undersigned at all times to keep a margin of securities with said bank for such liabilities of the undersigned, satisfactory to said bank, or upon any failure in business or making of an insolvent assignment by the undersigned, then and in either event all liabilities of the undersigned, to said bank shall at the option of said bank become immediately due and payable, notwithstanding any credit or time allowed to the undersigned by any instrument evidencing any of the said liabilities.

"Third. Upon the failure of the undersigned either to pay any indebtedness to said bank when becoming or made due, or to keep up the margin of collateral securities above provided for, then and in either event said bank may immediately without advertisement and without notice to the undersigned, sell any of the securities held by it as against any or all of the liabilities of the undersigned, at private sale or broker's board, or otherwise, and apply the proceeds of such sale as far as needed toward the payment of any or all such liabilities, together with interest and expenses of sale, holding

the undersigned responsible for any deficiency remaining unpaid after such application. If any such sale be at broker's board or at public auction, said bank may itself be a purchaser at such sale free from any right or equity of redemption of the undersigned, such right and equity being hereby expressly waived and released. Upon default as aforesaid, said bank may also apply toward the payment of the said liabilities all balances of any deposit account of the undersigned with said bank then existing.

"It is further agreed that these presents constitute a continuing agreement, applying to any and all future as well as to existing transactions between the undersigned and said bank.

"Dated New York, the

day of

66

189-."

I think that I sufficiently answered the first question in the opinion which was rendered to you on the 21st of September, 1898 (22 Opin., 218). The instrument upon which the opinion was based in that case differed from the one now under consideration in that, in the outset, that instrument contained a promissory note signed by the borrower; then stipulated in express terms that the borrower had deposited with, and pledged to, the company from which the money was borrowed, and to which the note was given, as collateral security for the payment of the note, a certain number of shares of stock described in the said instrument. Following this express pledge of the said stock as security for the payment of a definite and certain sum of money, evidenced by the said note, were further stipulations in the said instrument, substantially the same as those contained in the instrument of which the above is a copy.

In the opinion referred to, I advised you that my construction of the law led me to the conclusion that the transaction was stampable only in so far as the property described was made security for the payment of a definite and certain sum of money, to wit, that sum which was evidenced by the note which was a part of the transaction. I reiterate what I said in my previous opinion, that any mortgage or other written instrument by which property is made security for the payment of a definite and certain sum of money, lent at

the time or previously due and owing or forborne to be paid, being payable, is, together with the other papers relating thereto, taxable as one transaction under the paragraph of Schedule A of the war-revenue act headed "Mortgage or pledge" (30 Stat., 461), and the amendment thereto of February 28, 1899 (30 Stat., 1390).

I do not think it necessary to discuss the question raised in some of the briefs filed in this matter as to whether shares of stock are "movable personal property," because the language of the statute is as follows:

"Mortgage or pledge, of lands, estate, or property, real or personal, heritable, or movable, whatsoever."

This is broad enough to include anything which is the subject of ownership, and, therefore, if shares of stock or other securities are conveyed by mortgage or other written instrument as security for the payment of a definite and certain sum of money, such transaction is taxable under the provision of the war-revenue act above cited, and the stamp or stamps required to pay the tax must be affixed to the papers, or some one of them, which constitute the evidence of the transaction. In order, however, to bring the transaction within the purview of the statute, it is my opinion that the property conveyed in the mortgage or pledge must be so definitely described therein as to be capable of identification from such description in case of foreclosure, and the amount for which the mortgage or pledge is operative must be a definite and certain sum set forth on the face of the instrument itself, or made certain by reference to some other paper in which the sum secured to be paid is specifically stated and which constitutes a part of the transaction.

If stock is hypothecated as security for the payment of money simply by the delivery of the certificates to the lender, or deposited as a basis of credit without a mortgage or other written instrument being executed or made, whereby the said stock is pledged to secure the payment of a definite and certain sum of money, it is my opinion that no tax collectible by the affixing and cancellation of an adhesive documentary stamp can be imposed.

The taxes provided for under Schedule A of the warrevenue act are stamp taxes, and the method provided for