# Appendix — Mescalero Apache Tribe v. United States > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385003_1523%3A2 ## Record - **Collection:** Supreme Court brief - **Document type:** Appendix - **Published:** January 1, 1976 - **Citation:** 425 U.S. 911 ## Text IN THE SUPREME COURT OF THE UNITED STATES OCTOBER TERM, 1975 No. 95-939 * MESCALERO APACHE TRIBE, ET AL., SHOSHONE- BANNOCK TRIBES OF THE Fort HALL RESERVATION, IDAHO, AND Te-MOAK BANDS OF WESTERN SHOSHONE INDIANS OF NEVADA, ET AL., Petitioners, UNITED STATES OF AMERICA, Respondent. APPENDICES TO PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF CLAIMS I. S. WEISSBRODT RICHMOND F. ALLAN Weissbrodt & Weissbrodt 1614 Twentieth Street, N.W. Washington, D.C. 20009 FRANCES L. HORN Of Counsel: PIERRE J. LAFORCE HowARD L. SRIBNICK Wilkinson, Cragun & Barker Rosin A. FRIEDMAN 1735 New York Ave., N.W. Washington, D.C. 20006 Fenuary 2, 1976 Counsel for Petitioners. Washington, O.C. + THIEL PRESS + (202) 638-4521 * — (t) Page TABLE OF CONTENTS —— A. Opinion and Judgment of Court of Claims ........... l B. Order of Court of Claims 2enmying rehearing.......... 53 C. Opinion and orders of Indian Claims Commission in Docket Nos. 326-A and 22-G............52005. 55 D. Order of Commission in Docket No. 326C .......... 186 E. Opinion and Order of Commission denying rehearing in Docket No. 326-A ...... 2.6.2.0 050065 189 F. Statutes Involved (1) Act of September 11, 1841 and 31 U.S.C. ~ ELSE FESO C CETTE ETT 208 (2) Section 28 of Act of May 25, 1918 and 25 Dee eee en ese eeneececccccccce 209 (3) Acts of March 3, 1883 and March 2, 1887 eh ee ee eeesecocecccecc cs 212 i ee heehee eeweeeeessceececces 213 (5) Clauses 1, 2, and 5 of section 2 of Indian Claims Commission Act ..........22-eeeeee0: 214 (6) Constitution of the United States, Amend- TTT ULE LULL LELELETTeeee 214 ---> — o- _—«§ hoa so provides, we can- not refuse interest because the amount is relatively la Peoria Tribe v. United States, 177 Ct. Cl. 762, 770, 775 n. 6 (1966) (Davis, J., dissenting), rev’d, 390 U.S. 468 (1968). The 1841 statute provides the Indians with a right to re- cover within the jurisdiction created by paragraph (1) of the Indian Claims Commission Act—“claims in law or equity arising under the Constitution, laws, treaties of the United States, and Executive orders of the President,” 25 U.S.C. § 70a(1) (1970). This language tracks that of the early spe- cial jurisdictional statutes, and as such does not create any equitable right to enforce general trust duties undertaken by the United States where, for some reason, the 1841 statute is inapplicable. See United States v. Omaha Tribe of In- dians, supra, 253 U.S. at 283. However, in establishing the Indian Claims Commission Congress did not, as we have noted many times before, merely consolidate all the old special jurisdictional acta. It went further, providing a new cause of action for “claims based upon fair and honorable dealings that are not recog- nized by any existing rule of law or equity.” 25 U.S.C. § 70a(5). See Otoe and Missouria Tribe of Indians v. United States, 181 Ct. Cl. 593, 602, 131 F. Supp. 265, 271, cert. denied, 350 U.S. 848 (1955). This does not mean that the United States has agreed to pay the Indians for all pre- 1946 wrongs. Gila River Pima-Maricopa Indian Commumity v. United States, 190 Ct. Cl. 790, 797, 427 F. 2d 1194, 1197-98, cert. denied, 400 U.S. 819 (1970). We have, how- ever, determined that such a clause does extend government liability when three conditions are met; first, that there be an express undertaking by the United States, by treaty, agreement, executive order, or statute, of a duty of trustee toward the Indians; second, that the United States has failed to meet its obligations; and third that the tribe has suffered damages as a result. Aleut Commumity of St. Paul Island y. United Stat:s, 202 Ct. Cl. 182, 196, 480 F. 2d 831, 838-39 (1973). These three conditions are met here, and should result in recovery by the Indians of profits 50 50 lost by breach of fiduciary duty by the United States, al- though the measure of damages under traditional trust law. lost profits at simple interest, differs from that mandated by the 1841 Act. See Ute Tribe of Indians v. United States, 45 Ct. Cl. 440, 470 (1910). In 1883, by statute, Congress declared that money admit- tedly belonging to the Indians would, instead of being given to the Indians, be “covered into the Treasury for the benefit of such tribe.” Act of March 3, 1883, ch. 141, 22 Stat. 590. In 1887, the Secretary of the Interior was, again by statute, explicitly given the power to use these funds, but only for the benefit of the tribes on whose account the funds had origi- nally been added to the fund. Act of March 2. 1887. ch. 320, 24 Stat. 463. These two statutes, in the most traditional sense, created a trust for the benefit of the Indians, a fact belatedly recognized by the Treasury in 1908. 2 J. Story, COMMENTARIES ON Equity JURISPRUDENCE §$ 980 (1836); sce RESTATEMENT OF TrUsTs 2p, § 24, comm. b, illus. 1 (1959) ; Te-Moak Bands of Western Shoshone Indians v. United States, supra, 31 Ind. Cl. Comm. at 506-508. Under standard trust law, which has remained largely con- stant through the last century, a trustee’s duties include (un- less explicitly negated by the terms of the trust, not a problem here) the obligation to make trust funds productive by invest- ing whatever money is not required by the terms of the trust to be distributed. See RestaTEMENT oF Trusts 2p, Introduc- tory Note at 1, § 181 (1959). From 1883 to 1887, the terms of the statute pern.itted no disbursal at all, so the duty arose to make the entire amount in the fund productive. The 1887 Act amended the terms of the trust to allow the Secretary of the Interior to spend the funds in the IMPL fund for the benefit of the tribe on whose account the money was covered into the Treasury. From 1887 on, then, the duty to make funds productive was limited to surpluses remaining in the account, after charges, which would not be needed in the reasonably foreseeable future. When the annual surplus in the total IMPL fund for all Indians which, according to Treasury Department reports, fell below $1,000,000 for only one year (fiscal 1925) between 1902 and 1930 and reached to 51 51 over $9,000,000 in fiscal 1923,’° was left to lie fallow earning absolutely no interest, the tribes to whom portions of the fund belonged suffered sufficient damage to allow recovery under the fair and honorable dealings clause for the breach of trust. This is wholly apart from the 1841 Act and furnishes an alternative and supplementary ground for recovery by the appellees. 10 See STATEMENT OF BALANCES, APPROPRIATIONS, AND EXPENDITURES OF THE GOVERNMENT FOR THE FISCAL YEAR ENDED JuNe 30, 1902 at 98-99 (no date) ; Ibid. for the Fiscal Year Ended June 30, 1903 at 116-17 (no date) ; Ibid. for the Fiscal Year Ended June 30, 1904 at 114-15 (no date); Ibid. for the Fiscal Year Ended June 30, 1905 at 118-19 (no date) ; /bid. for the Fiscal Year Ended June 30, 1906 at 108-09 (1907) ; [bid. for the Fiscal Year Ended June 30, 1907 at 144-45 (1908) ; STATEMENT OF BALANCES, APPROPRIATIONS, AND DISBURSEMENTS OF THE GOVERNMENT FOR THE Fiscal YEAR ENDED JUNE 30, 1908 at 124—25 (1908) ; Jbid. for the Fiscal Year Ended June 30, 1909 at 138— 39 (1909); Jbid. for the Fiscal Year Ended June 30, 1910 at 128- 29 (1911) ; Ibid. for the Fiscal Year Ended June 30, 1911 at 146-47 (1912) ; COMBINED STATEMENT OF THE RECEIPTS AND DISBURSEMENTS, BALANCES, ETC., oF THE UNITED STATES FoR THE Fiscat Year ENpep June 30, 1912 at 105 (1912) ; Ibid. for the Fiscal Year Ended June 30, 1913 at 121 (1913); Ibid. for the Fiscal Year Ended June 30, 1914 at 124 (1914) ; Ibid. for the Fiscal Year Ended June 30, 1915 at 142 (1915); Ibid. for the Fiscal Year Ended June 30, 1916 at 128 (1916); Ibid. for the Fiscal Year Ended June 30, 1917 at 142 (1918) ; /did. for the Fiscal Year Ended June 30, 1918 at 142 (1919) ; Ibid. for the Fiscal Year Ended June 30, 1919 at 154 (1920) ; Ibid. for the Fiscal Year Ended June 30, 1920 at 162 (1921); Jbid. for the Fiscal Year Ended June 30, 1921 at 173 (1921); Ibid. for the Fiscal Year Ended June 30, 1922 at 176 (1923) ; Ibid. for the Fiscal Year Ended June 30, 1923 at 101 (1924) ; Ibid. for the Fiscal Year Ended June 30, 1924 at 103 (1925) ; Ibid. for the Fiscal Year Ended June 30, 1925 at 107 (1926) ; Ibid. for the Fis- cal Year Ended June 30, 1926 at 106 (1927) ; Ibid. for the Fiscal Year Ended June 30, 1927 at 157 (1928) ; /bid. for the Fiscal Year Ended June 30, 1928 at 157 (1929) ; Ibid. for the Fiscal Year Ended June 30, 1929 at 155 (1930) ; Ibid. for the Fiscal Year Ended June 30, 1930 at 332 (1931). 53 APPENDIX B IN THE UNITED STATES COURT OF CLAIMS App. No. 2-74 THE UNITED STATES OF AMERICA v. MESCALERO APACHE TRIBE, ET AL. App. No. 10-74 THE UNITED STATES OF AMERICA, V. THE SHOSHONE-BANNOCK TRIBES OF THE FORT HALL RESERVATION, IDAHO App. No. 12-74 THE UNITED STATES OF AMERICA, v. TE-MOAK BANDS OF WESTERN SHOSHONE INDIANS OF NEVADA, ETC. Before COWEN, Chief Judge, DURFEE, Senior Judge, DAVIS, SKELTON, NICHOLS, KUNZIG and BENNETT, Judges. ORDER This case comes before the court on motion for rehear- ing, filed August 25, 1975, by the appellee, Mescalero Apache Tribe, and on motion for rehearing, filed August 25, 1975, by the appellees, Shoshone-Bannock Tribes 54 and Te-Moak Bands of Western Shoshone Indians. Upon consideration thereof, together with the response in oppo- sition thereto, without oral argument, IT IS ORDERED that the said motions, filed August 25, 1975, for rehearing be and the same are denied. BY THE COURT /s/ Wilson Cowen [Oct. 3, 1975] Chief Judge DAVIS, Judge, Dissenting: My usual practice, when I have been in dissent, is not to vote for rehearing (even though I continue to believe the decision of the majority to be wrong) unless there are extraordinary circumstances calling for reconsideration — other than the error (in my view) of the initial decision. Here I find such circumstances in the failure of the court’s opinion to deal explicitly and adequately with the appel- lant’s claim under the “fair and honorable dealings” clause (apart from the 1841 statute). I therefore vote to rehear the case on that issue alone. 55 APPENDIX C [427] BEFORE THE INDIAN CLAIMS COMMISSION Docket No. 326-A TE-MOAK BANDS OF WESTERN SHOSHONE INDI- ANS OF NEVADA, suing on behalf of the Western Shoshone Nation of Indians, Plaintiff, v. THE UNITED STATES OF AMERICA, Defendant. Docket No. 22-G MESCALERO APACHE TRIBE, et al., Plaintiffs, v. THE UNITED STATES OF AMERICA, Defendant. Decided: October 4, 1973 Appearances: Pierre J. LaForce, Charles A. Hobbs, and Frances L. Horn, Attorneys for Plaintiff in Docket No. 326-A. Wil- kinson, Cragun and Barker were on the Briefs. Richmond F. Allan and Ruth H. Duhl, Attorneys for Plaintiffs in Docket No. 22-G. Weissbrodt and Weissbrodt were on the Briefs. [428] 56 Gordon W. Daiger, with whom was Mr. Assistant Attorney General Kent Frizzell, Attorneys for Defendant. OPINION Blue, Commissioner, delivered the opinion of the Commission. INTRODUCTORY STATEMENT The accounting reports filed in these cases show that the defendant has kept substantial amounts of each plaintiff’s money in a non-interest-bearing account in the Treasury of the United States during the period between 1883 and 1930. The account is known as Indian Moneys, Proceeds of Labor. We describe it in detail later in this opinion. | The plaintiffs contend that the defendant was required to invest this fund, and its accumulated interest, at the best interest rate attainable or to pay the highest statutory rate for treasury deposits, whichever would provide the greater return, and that it is liable to them for its failure to do so. We reserved ruling on this contention in our 1970 opinions in these dockets, directing the parties to fully research the pertinent statutes and historical materials. Te-Moak Bands of Western Shoshone Indians v. United States, Docket 326, 23 Ind. Cl. Comm. 70, 79 (1970); Mescalero Apache Tribe, Docket No. 22-G, 23 Ind. Cl. Comm. 181, 186 (1970). Pooling their resources, attorneys for the plaintiffs, on June 1, 1971, filed an elaborate brief on the defendant’s obligations to make all Indian trust funds productive, accompanying it with two volumes of legal and historical records. The defendant answered on September 13, 1972, [429] [430] 57 with an equally elaborate brief, accompanied by similarly voluminous records. A short reply was filed by the plaintiffs. Oral argument was held before the Commission on December 4, 1972. The briefs and argument in Dockets 326 and 22-G have been adopted by reference in nine other accounting cases.! The latter cases involve several other unproductive funds in addition to Indian Moneys, Proceeds of Labor. The Commission is now ready to decide. The extraor- dinarily thorough work of the lawyers on both sides has greatly helped us to reach our present decision. The purpose of this opinion is to decide the questions now before us. While we hope the history of the development of Indian trust law herein may prove useful elsewhere, our rulings in the case of each plaintiff who adopted the Te-Moak-Mescalero briefing will be made by separate order, accompanied wherever necessary by a separate opinion. We start with the proposition that the duties of the United States with respect to the Indian tribes’ moneys must be based on written law: the Constitution, treaties, and acts of Congress. We look, of course, to the legal tradition in which the draftsmen of our written law were ISan Carlos Apache Tribe of Arizona, the White Mountain Apache Tribe of the Fort Apache Reservation, et al., Docket 22-H; Northern Paiute Nation, et al., Docket 87-A; Klamath and Modoc Tribes and Yahooskin Band of Snake Indians, Docket 100-B; Fort Peck Indians of the Fort Peck Reservation, Montana, Docket 184; Blackfeet and Gros Ventre Tribes of the Blackfeet Reservation, Gros Ventre and Assiniboine Tribes of the Fort Belknap Reserva- tion, Dockets 279-C and 250-A; Confederated Tribes of the Goshute Reservation, Docket 326-B; Shoshone-Bannock Tribes of the Fort Hall Reservation, Docket 326-C; Three Affiliated Tribes of the Fort Berthold Reservation, Docket 350-G. [431] 58 trained, the common law and equity jurisprudence, for the implications of their words.* But the search for rules governing the administration of Indian trust funds begins as a search of the Statutes at Large. The ensuing discussion is in chronological order, since Indian trust law developed as a by-product of history rather than according to plan. I. 1797 TO 1837: THE BEGINNING OF THE IN- DIAN TRUST FUNDS The earliest Indian trust fund of the United States appears to be the one set up in 1797 by Robert Morris for the Seneca Nation. In consideration of the Senecas’ grant of four million acres in western New York, Morris agreed to invest $100,000 in stock of the Bank of the United States to be “held in the name of the President of the United States, for the use and behoof of the said nation of Indians.’”’ The Government approved Morris’s contract with the Senecas and assumed administration of the trust.? In numerous treaties of the late eighteenth and early nineteenth centuries, the United States agreed to pay annuities to the Indians, either perpetually or for a 2Smith v. Alabama, 124 U.S. 465, 478-479 (1888); Rice v. Minnesota & Northwestern Railroad Co., 60 U.S. (1 Black) 358, 374-375 (1862). See also United States v. Wong Kim Ark, 169 US. 649, 654 (1898). For the application of equity to the interpreta- tion of the Government’s treaty and statutory obligations, see Seminole Nation v. United States, 316 U.S. 286, 295-297 (1942); City of Lincoln v. Ricketts, 84 F.2d 795, 797 (7th Cir. 1936); Indian Claims Commission Act, §2(1), 25 U.S.C. §70a(1) (1970). Scontract of September 15, 1797, 7 Stat. 601. See also Seneca Nation v. United States, 173 Ct. Cl. 917 (1965), rev Docket 324-A et al., 12 Ind. Cl. Comm. 755 (1963); subsequent proceedings, 28 Ind. Cl. Comm. 12 (1972). [432] 59 term.* But these were direct payments out of the treasury in fixed dollar amounts and did not represent interest on any principal fund set aside for the Indians.° Another early Indian trust fund was established by the treaty of February 27, 1819, between the United States and the Cherokee Nation, 7 Stat. 195. Here, the Govern- ment agreed to sell certain ceded lands and invest the proceeds to provide income for the support of education among the Cherokees. A similar educational fund, fi- nanced from ceded lands, was established for the Kansas Indians under the Treaty of June 3, 1825, 7 Stat. 244. The Cherokee fund was to be invested, under the direction of the President, in “‘stock of the United States, or such other stock as he may deem most advantageous to the Cherokee nation.’ The Kansas treaty does not #4 list of the annuities due from the United States to various tribes, with reference to the treaties and statutes authorizing them, appears in the report of the Commissioner of Indian Affairs of November 25, 1852, at 308-313 (item D-80 in the Appendix to the Defendant’s Memorandum on the Status of Indian Trust Funds and the Tribes’ Rights to Interest on Particular Funds, filed September 13, 1972). Hereinafter exhibits reproduced in said appendix will be cited as “D-1,” “D-2,” etc. The plaintiffs designated their compilation of historical exhibits as Appendix B; and items reproduced therein will be cited hereinafter as ““B-1,”’ ““B-2,”’ etc. 5The distinction between trust funds and annuities is well illustrated in the Senate debate of 1831 on a bill to provide for the payment of $6,000 annually to the Seneca Indians in lieu of the actual yield on their $100,000 trust fund, which varied with prevailing interest rates. See 7 Register of Debates in Congress 29-30, 78-85 (1831). The bill was approved, and the Seneca trust fund was commuted to an annuity. Act of February 19, 183i, c. 26, 4 Stat. 442. SThe word “stock” frequently meant bonds in the nineteenth century, and appears to have been construed exclusively in this sense where used in the treaties and statutes reviewed in this opinion. Cf. Peoria Tribe v. United States, 390 U.S. 468, 470 (1968). [433] 60 even mention investment of the educational fund; but in fact it was invested, in state bonds.’ Three treaties made in 1831 appear to be the earliest in which the United States agreed to pay interest itself on the proceeds of ceded Indian lands, rather than to invest them.® Five percent was the stipulated rate. This appears to be the first mention in an Indian treaty of 5 percent, which later became the prevailing interest rate on Indian trust funds. Despite the treaty language requiring the United States itself to pay the interest on the 1831 funds, Congress decided that these funds should be invested. The fourth section of the Act of June 14, 1836, c. 88, 5 Stat. 36, 47, directed the Secretary of War to invest “in a manner which shall be, in his judgment, most safe and beneficial for the fund,” with a proviso that he should make no investment at a lower rate than five percent. Investment meant actie’* buying bonds, usually through a stockbroker, stonng the certificates in an iron safe in the office of the Commissioner of Indian Affairs, and clipping and presenting the coupons for payment when interest became due.? Depositing the funds in the 7§. Doc. 426, 25th Cong., 2d Sess. 6 (1838—D-17). STreaties of February 28, 1831, with Senecas of Sandusky, 7 Stat. 348; of July 30, 1831, with Senecas and Shawnees residing at and around Lewistown, 7 Stat. 351; and of August 8, 1831, with Shawnees residing at Wapaghkonnetta and Hog Creek, 7 Stat. 355. 9See Select Committee to Inquire into And Report the Facts in Relation to the Fraudulent Abstraction of Certain Bonds, Held by the Government in Trust for the Indian Tribes, from the Department of the Interior, Abstracted Indian Trust Bonds, H.R. Rep. No. 78, 36th Cong., 2d Sess. (Serial 1107, 1861), especially testimony of Secretary of the Interior Jacob Thompson at 27-45, former Commissioner of Indian Affairs Luke Lea at 46, and Mr. J. A. Williamson at 237. See also ‘“‘General Remarks” at pages 6-7 of S. Doc. 426, 25th Cong., 2d Sess. (1828—D-17). [434] , 61 U.S. Treasury, with the Government paying interest on them, was not considered investment, but as something done in lieu of investment.!® It is therefore inaccurate to state that the Act of June 14, 1836, or similar legislation, required the Government to “pay” interest to the Indians. The Government as trustee was required to buy securities bearing 5 percent or higher interest; but the issuers of the securities were to provide the interest. The 1836 legislation was doubtless influenced by the contemporary happy position of the treasury. The public debt had been extinguished in 1835, except for $328,582.10 which remained outstanding solely because the creditors had not come forward to receive payment. A surplus of at least $14,000,000 was anticipated in the treasury at the end of 1836. By the Act of June 23, 1836, c. 115, sec. 13, 5 Stat. 55, Congress provided that any such surplus over $5,000,000 should be distributed to the States of the Union. The estimate proved low, and $28,101,644.94 were actually distributed. See R. Bayley, The National Loans of the United States, 67 (2d ed., 1882) (D-5). Under such circumstances it would have made little sense for the United States to pay interest to the Indians in order to keep funds it did not need. 10Sc¢ Reports of Commissioner of Indian Affairs, for 1840 at 278 (D-41), for 1842 at 396 (D-48), for 1852 at 306 (D-80), for 1874 at 465 (D-83), for 1875 at 151 (D-84), for 1876 at 263 (D-85), for 1879 at 310 (D-86), for 1905 at 483-84 (D-87), for 1906 at 448-49 (D-90), and for 1909 at 150 (D-91). 62 II. 1837 TO 1841: THE DEBACLE OF THE STATE BONDS By the fourth section of the Act of January 9, 1837, c. 1, 5 Stat. 135, Congress extended the investment [435] provisions of the Act of June 14, 1836, so as to apply to “all moneys that may hereafter be received under the treaties therein named, or under any others containing similar stipulations for the payment to the Indians annually, of interest upon the proceeds of the lands ceded by them.” The 1837 act was entitled, “An Act to regulate, in certain cases, the disposition of the proceeds of lands ceded by Indian tribes to the United States.” It applied only to trust funds established from the proceeds of sales of ceded lands. The first section provided that the net proceeds of such sales should be paid into the U.S. Treasury in the same manner as moneys received from sales of public lands. The second section was a permanent appropriation authorizing the withdrawal of such Indian moneys in conformity with treaties requiring their payment or investment. The third section read as follows: And be it further enacted, That all investments of stock, that are or may be required by said treaties, shall be made under the direction of the President; and special accounts of the funds under said treaties shall be kept at the Treasury, and statements thereof be annually laid before Congress. By 1838 there were some 13 Indian trust funds in the custody of the Secretary of War (as head of the department where the Bureau of Indian Affairs was then located) and one in the custody of the Secretary of the Treasury. They arose under various provisions of ten or more but offered to continue paying interest in coin. 63 [436] more treaties. All were invested in state bonds, which had a total face value of $3,674,462.79. !! State bonds were probably chosen as investments for the Indian trust funds because Federal bonds were un- available (the national debt having been extinguished in 1835) and private securities were deemed inappropriate. ! As it turned out, January 9, 1837, was a highly inop- portune time to establish a policy of investing the Indian trust funds in preference to depositing them in the Fed- eral treasury and paying out interest. A financial crash occurred within a matter of weeks, and in May most banks were forced to suspend specie payments. State bonds were severely affected. Tennessee paid interest only in the form of an unwithdrawable credit to the Treasurer of the United States on the books of the Union Bank at Nashville. Alabama and Mississippi defaulted outright on the interest payments. Maryland was unable to redeem its matured bonds, but offered to continue 'l Figures for the cost of the bonds given in Senate Document 426 (D-17) add up to $3,849,441.70; but H.R. Rept. 892, 25 Cong., 2d Sess. (1838) (seeD-18), states the cost was $3,851,056.21. 12R. Bayley, The National Loans of the United States 67 (1882) (see D-5). In 1835 and 1836, before making the initial investment of the largest Indian trust fund of the period, the Chickasaw fund, Secretary of the Treasury Levi Woodbury did consider bank stock, but rejected this form of investment in favor of state stock. See contemporary correspondence in defendant’s exhibits D-9 and D-43. The Secretary may have been influenced by contemporary English law, which prohibited trustees from invest- ing in stock of any private company, without express authorization in the trust instrument. The only “legal’’ investments were Government and Bank of England Annuities. T. Lewin, A Practical Treatise on the Law of Trusts and Trustees, 308, 311 (1837); J. Willis, Duties and Responsibilities of Trustees, 126 (1827); see also G. Bogert, Trusts and Trustees, §613 (2d ed., 1960). 64 65 [437] paying interest in coin. Finally it defaulted on interest [438] investing nine trust funds totaling $2,580,100.'* These too. | [439] were in addition to the invested trust funds. which in By the fall of 1837, the United States itself had to go back in debt, borrowing $10,000,000 on treasury notes. See Act of October 12, 1837, c. 2, 5 Stat. 201; and D-5, p. 67. Until 1833 the United States appears to have created trust funds only when it got the money from purchasers of Indian lands. Where it did not get the money from third parties, but wished to secure the Indians a perma- nent income, the Government used annuities. This policy was changed during the Jacksonian pros- perity. An educational trust fund of $70,000 was set up by direct disbursement from the Federal Treasury under Article 3d of theChippewa, Ottowa and Potawatamie treaty of September 26, 1833, 7 Stat. 432. Trust funds were also established by direct disbursement from the treasury for the Cherokees under the Treaty of December 29, 1835, 7 Stat. 478; for the Menominies under the Treaty of September 3, 1836 (by Senate amendment), 7 Stat. 509, and for the Ottawas and Chippewas under the Supplemental Article to the Treaty of March 28, 1836, 7 Stat. 496. During the ensuing depression, the Government did not quit promising to set up Indian trust funds by direct disbursement of its own money, but it quit making the disbursements. The Commissioner of Indian Affairs re- ported on November 28, 1840, that Congress was annually appropriating $131,005 interest in lieu of 13 See contemporary correspondence to and from the Secretary of the Treasury in exhibits D-13 and D-14, and S. Doc. 52, 27th Cong., Ist Sess. (1841—D-32). I4These funds are listed as follows on page 278 of the Commissioner’s Report (D-41). We have corrected a number of erroneous citations in the original. Names of Tribes Principal Interest Authority of Trust Ottawa and $ 200,000 12,000 Senate amendment Chippewa to Treaty of March 28, 1836, 7 Stat 497. Osage 69,120 3,456 Treaty June 2, 1825, 7 Stat. 242, as modi- fied by Sen. Res. Jan. 19, 1838, Sen. Jour. 25th Cong., 2d Sess., 155. Delaware 46,080 2,304 Supplementary Article Sept. 24, 1829, 7 Stat. 327, as modified by Sen. Res. of Jan. 19, 1838, supra. Sioux of the 300,000 15,000 Treaty Sept. 29, Mississippi 1837, 7 Stat. 538. Sac and Fox of 200,000 10,000 Treaty Oct. 21, the Mississippi 1837, 7 Stat. 540 Sacand Foxof §——‘157,400 7,870 Treaty Oct. 21, the Missouri 1837, 7 Stat. 543. Winnebago 1,100,000 55,000 Treaty Nov. 1, 1837, 7 Stat. 544. Creek 350,000 17,500 Treaty Nov. 23, 1838, 7 Stat. 574. lowa 157,500 7,875 Treaty Oct. 19, 1838, 7 Stat. 568 $2,580,000 $131,005 [440] 66 1840 had a face value of $3,998,462.73.'5 Since the uninvested trust funds were all to be established by direct - payment from the treasury rather than from the proceeds of land sales, the Act of January 9, 1837, was inapplica- ble. But in all cases except the Ottawa and Chippewa fund, the treaty or Senate resolution creating the trust required it to be invested rather than deposited at interest. The Annual Report of the Commissioner of Indian Affairs for 1879 (D-86), at 310, shows four of the nine funds (Osage, Winnebago, and both Sac and Fox) as still uninvested. It also shows 24 subsequently established funds as uninvested, with Congress appropriating the annual interest. Most of the treaties and statutes creating the latter funds expressly authorized their deposit in the treasury at interest. In the earlier cases, however, this alternative to investment appears to have been authorized only by the annual appropriation acts which provided the interest. The depression which started in 1837 was still going on in 1841. See Message from the President of the United States, H.R. Ex. Doc. 1, 27th Cong., Ist Sess. (1841—D-12). Some of the state bonds remained in default two years !ater (D-14), and one state was still in default 35 years later. See Annual Report of the Commissioner of Indian Affairs for 1876 (D-85, p. 275). '5invested trusts administered by ; Secretary of War (D-41, p. 276): $1,897,321.76 Chickasaw fund, administered by Secretary of the Treasury (H.R. Doc. 145, 26th Cong., Ist Sess., 3 (1840) (D-19): 2,101,141.03 Total invested Indian trust funds in 1840: $3,998,462.79 67 III. 1841 to 1880: INDIAN TRUST FUNDS RE- QUIRED TO BE INVESTED IN FEDERAL BONDS ONLY. Against such a background Congress enacted the Act of September 11, 1841, requiring all “funds held in trust by the United States, and the annual interest accruing thereon, when not otherwise required by treaty [to] ...be invested in stocks of the United States bearing a. . . rate of interest not less than five per centum per annum.” The following is the complete text of the act, which appears at 5 Stat. 465: CHAP. XXV.—An Act to repeal a part of the sixth section of the act, entitled “‘An act to provide for the support of the Military Academy of the United States for the year eighteen hundred and thirty-eight, and for other purposes,” passed July seventh, eighteen hundred and thirty-eight. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That so much of the sixth section of an act entitled, “An act to provide for the support of the Military Academy of the United States for the year eighteen hundred and thirty- eight, and for other purposes,” as requires the Secretary of the Treasury to invest the annual interest accruing on the investment of the money arising from the bequest of the late James Smithson, of London, in the stocks of States, be, and the same is hereby, repealed. And the Secretary of the Treasury shall, until Congress shall appropriate said accruing interest to the purposes prescribed by the testator for the increase and diffusion of knowledge among men, invest said accruing interest in any stock of the United States bearing a rate of interest not less than five per centum per annum. [441] 68 Sec. 2. And be it further enacted, That all other funds held in trust by the United States, and the annual interest accruing thereon, when not other- wise required by treaty, shall in like manner be invested in stocks of the United States, bearing a like rate of interest. Sec. 3. And be it further enacted, That the three clerks, authorized by the act of June twenty-third, eighteen hundred and thirty-six, “to regulate the deposits of the public money,” be, and hereby are, directed to be retained and employed in the Treasury Department, as provided in said act, until the state of the public business becomes such that their service can conveniently be dispensed with. This act clearly superseded the third and fourth sections of the 1837 act, and the fourth section of the 1836 act, discussed above, which had given the President and Secretary of War discretion to invest the Indian trust funds in any kind of securities deemed safe and bene- ficial, so long as they bore at least 5 percent interest. It did not, however, change the general policy of these earlier acts, that the trust funds were to be invested, by purchasing certificates of outstanding issues, rather than deposited at interest in the U.S. Treasury as in a savings bank.. Now, however, only Federal bonds could be purchased as trust investments. A. The 1841 act is a direction to invest trust funds as well as a limitation on the kind of securities in which investment may be made. The defendant contends the 1841 act created no duty to invest. It was a housekeeping statute, the defendant states, dealing only with the kind of securities in which trust investments were to be made; the duty to invest, where it existed, was imposed by treaty or some other law. [442] 69 The plain language of the 1841 act, in our opinion, is enough to refute this contention. Congress knew how to phrase a statute so as to make it applicable to funds required to be invested by treaty. Thus, it wrote in section 3 of the 1837 act, 5 Stat. 135, “... all invest- ments of stock that are or may be required by said treaties shall be made under the direction of the President . . .” If it had intended the meaning claimed for the 1841 act by the defendant, it could have written: Sec. 2...all other funds held in trust by the United States, and the annual interest accruing thereon, where investment is required by treaty, shall in like manner be invested in stocks of the United States, bearing a like rate of interest. Congress did not use the underlined phrase. Instead, it used the phrase, “when not otherwise required by treaty”. The natural meaning of the words actually used is almost diametrically opposed to the defendant’s present interpretation. By 1841, the duty of private trustees to make the beneficiaries’ funds productive as well established ‘in contemporary law.'® It appears entirely probable that Congress would extend the rule of productivity to the public trust funds, if such rule did nut already apply to them. This is what the words actually used in the act of September 11 imply. It appears in the same degree improbable that Congress, using the words it did, could intend to perpetuate the anomaly of indefinitely idle public trust funds, if such previously existed. 16, J. Kent, Commentaries on American Law *230-232 (3d ed., 1836); T. Lewin, A Practical Treatise on the Law of Trusts and Trustees 305 (lst ed., 1837); J. Willis, Practical Treatise on the Duties and Responsibilities of Trustees 181 (1827). [443] [444] 70 The defendant’s position that the 1841 act applies only to trust funds required to be invested by some other law becomes even less tenable when one examines the Indian trust funds existing in that year which actually were invested. The defendant admits that these were within the purview of the act; yet a number of them were not, in fact, required to be invested by any prior law. The invested Indian trust funds in existence in 1841 consisted of:!7 (1) The Chickasaw National Fund, established under Article XI of the treaty of October 20, 1832, 7 Stat. 385, and Article XI of the Treaty of May 24, 1834, 7 Stat. 454. This trust fund was administered by the Secretary of the Treasury, by delegation of the President. See Presidential Message of December 23, 1835, and Senate Resolution of January 20, 1836, in Exhibits D-9 and D-43; cf. act of April 20, 1836, c. 53, 5 Stat. 10. (2) The following funds administered by the De- par*ment of War, in which the Bureau of Inaian Affairs was then located: Authontty for Establish- ment of Trust Art. 4, Treaty Feb. 27, 1819, 7 Stat. 197 Beneficiary 1. Cherokee Schools 17 See Commissioner of Indian Affairs’ Report of Novernber 16, 1842 (D-48); Report from the Secretary of the Treasury, Septem- ber 8, 1841, S. Doc. 116, 27th Cong., Ist Sess. (D-20); Commis- sioner of Indian Affairs’ Report of November 28, 1840 (D-41); and Secretary of the Treasury’s Rer ort of March 17, 1840, H.R. Doc. 145, 26th Cong., Ist Sess. (D-.9). The funds listed on this and the following page are in addition to the funds on deposit in the treasury at interest, listed above in footnote 14. — ee 10. 11. 12. 71 Beneficiary Cherokee Tribe Chickasaw Incompetents Chickasaw Orphans Chippewa, Ottawa, and Potawatomie, Education Chippewa, Ottawa, and Potawatomie, Mills, etc. . Choctaw Orphans Choctaw Tribe Creek Orphans Delaware Tribe Kansas Schools Menominie Tribe Authonty for Establish- ment of Trust Art. 10, Treaty Dec. 29, 1835, 7 Stat. 483 Art. IV, Treaty May 24, 1834, 7 Stat 451 Art. VIII, Treaty May 24, 1834, 7 Stat. 453 Art. 3d, Treaty Sep. 26, 1833, 7 Stat. 432 Administrative action Art. XIX, Fifth, Treaty Sep. 27, 1830, 7 Stat. 337 Art. III, Convention be- tween Choctaw and Chickasaw Tribes, Jan. 17, 1837, 11 Stat. 574 Art. 2, Treaty March 24, 1832, 7 Stat. 366 Supplementary Treaty, Sep. 24, 1829, 7 Stat. $27, as modified by Senate Res. Jan. 19, 1838, Sen. Journal, 25th Cong., 2d Sess. 155 (1838) Art. 5, Treaty June 3, 1825, 7 Stat. 245 Senate amendment to Treaty Sep. 3, 1836, 7 Stat. 509 [445] 72 Authority for Establish- Beneficiary ment of Trust 13. Osage Tribe Art. 6, Treaty June 2, 1825, 7 Stat. 242, as modified by Sen. Res. Jan. 19, 1838, supra Articles Fourth and Fifth, Treaty March 28, 1836, 7 Stat. 492 Art. 8, Treaty Feb. 28, 1831, 7 Stat. 350, as 14. Ottawa and Chippewa Nations 15. Senecas of Sandusky modified by Act June 14, 1836, c. 88, 5 Stat. 47 16. Senecas and Shawnees of Lewistown 1831, 7 Stat. 353, as modified by Act June 14, 1836, supra Art. VII, Treaty Aug. 8, 1831, 7 Stat. 357, as modified by Act June 14, 1836, supra Art. 4, Treaty Sep. 3, 1859, 7 Stat. 581 17. Shawnees of Wapaghkonetta and Hog Creek 18. Stockbridge and Munsee Schools Investment provisions are wholly lacking in the treaties numbered 10, 11, and 13 in the above list. The Menominie trust fund (No. 12 in above list) was created by a Senate amendment, the original treaty providing for neither a trust nor a fund. The Choctaw fund (No. 8 above) was established by a treaty between two Indian tribes, to which the United States was not a party, although the President and the Art. VIII, Treaty July 20, ~~ -—~——— OOOO rey [446] 73 Senate gave their approval. The intertribal treaty pro- vided for a sale by the Choctaws of an interest in their land to the Chickasaws, in return for the latters’ setting over to them a portion of the Chickasaw trust fund. The Chippewa, Ottawa, and Potawatomie United Nation “mill fund” (No.6 above) was created by administrative action. The circumstances of its creation are revealed thus in the Commissioner of Indian Affairs’ report of November 28, 1840 (D-41, at page 279): Beneficial objects for Chippewas, Ottawas, and Pottawatomies. By the 3d article of the treaty of 26th September, 1833, the United States contracted to apply $150,000 “to the creation of mills, farm houses, Indian houses, and blacksmiths’ shops; to agricul- tural improvements, to the purchase of agricultural implements and stock, and for the support of such physicians, millers, farmers, blacksmiths, and other mechanics, as the President of the United States shall think proper to appoint.” The above sum was applied, on the lst January, 1837, to the purchase of $130,850.43 of Maryland six per cent. stock, which has yielded, up to Ist July last, of interest, $19,627.52, and cost $150,000. There is no direct authority in the treaty for investing the above money; but it appears that a letter was, on the 14th December, 1836, addressed by my predecessor to the Secretary of War ad interim, proposing to invest the said sum in some safe and productive stock. This letter was subse- quently withdrawn, and for it appears to have been substituted, on lst January, 1837, a general author- ity from the Secretary to the then Commissioner of Indian Affairs to direct investments, &c.; under which, it is believed the above investment was made. [447] 74 The sum was very large for the purposes pointed out in the treaty; and the investment was judicious, in my opinion, as furnishing a permanent fund, the annual yield of which will be probably equal to all the Indian wants. The interest, however, ought to be reinvested until its expenditure is deemed advisable, so as to enlarge the fund. The Commissioner of Indian Affairs points out in the same report the dubious legal basis for holding in trust the funds appropriated under the fifth article of the Ottawa and Chippewa treaty of March 28, 1836 (No. 14 in the above list). This article provided for setting $300,000 aside for payment of the Indians’ debts. As originally written, it stated that if the debts did not amount to that sum, the balamce was to be “paid over to the Indians, in the same manner, that annuities are required by law to be paid”. A supplemental article, signed March 31, 1836, provided that the balance was to be retained “and vested by the Government in stock”. See 7 Stat. 497. In ratifying the treaty, however, the Senate further amended the fifth article to provide that the balance was “to apply to such other use as they [the Indians] may think proper”. Sen. Res., May 16, 1836, 4 Sen. Ex. Jour. 542. In his 1840 report, cited above, the Commissioner stated that he found no request by the Ottawas and Chippewas for the application of the balance of their debt fund, but that $75,460 of it had nevertheless been invested in Kentucky bonds. The Commissioner con- tinued (at page 281): It will thus be seen that there was no direct authority for the investment in Kentucky stock; but yet I cannot but regard the course adopted as the —_ [448] 75 most judicious and beneficial for the Indians, who should be paid the interest punctually and annually, which has not been done heretofore. The Commissioner of Indian Affairs’ Report was appended to the President’s Message to the Two Houses of Congress at the Commencement of the Second Session of the 26th Congress and published in House Executive Document No. 2, 26th Congress, 2d Session. Thus Congress was not only aware of the lack of express requirements for investment in several of the treaties under which trust funds had been established, but also knew that two of them had been established extralegally. There is no evidence that Congress disapproved of what had been done. On the contrary, the plain language of the 1841 act, which states, “all funds held in trust by the United States... shall...be invested... ,’’ implies an intent to legalize and adopt the Indian Commissioner’s actions. In support of its position that the 1841 act applied only to funds elsewhere required to be invested, the defendant points out, however, that the Government had certain trust funds which were not invested before 1841 and remained uninvested thereafter. Expenditures only from several funds alleged to fall in this category are shown in H. R. Ex. Doc. 31, 27th Cong., Ist Sess. (July 9, 1841—D-39). They bear such captions as “‘Awards under convention with the King of the Two Sicilies,”” “‘Awards under the first article of the treaty of Ghent,” and “Payment of demands for unclaimed mer- chandize”. Most of these appear to have been passive trusts, where the Government’s only duty was to pay over the beneficiaries as soon as they came forward and identified themselves. Such funds being subject to imme- diate withdrawal, investment may often have been infeasible. [449] 76 None of these funds appears to have been invested, or borne interest, before 1841. It seems, however, that the State Department trust funds, like the two award funds named above, were invested after 1841. See “Trust Funds, State Department,” H. R. Ex. Doc. 362, 49th Cong., Ist Sess. (1886—D-95); United States ex rel. Angarica v. Bayard, 127 U. S. 251 (1888); cf. Henkels v. Sutherland, 271 U. S. 298 (1926); Great Western Insurance Co. v. United States, 19 Ct. Cl. 206, aff'd 112 U. S. 193 (1884). The history of the trust funds which were unproductive in 1841 thus gives poor support to the defendant’s interpretation of the act of that year. Many cases of idle trust money in the Government’s custody can probably be explained on the practical ground that ready cash was needed for early disburse- ment, or that there had not been sufficient time to invest incoming funds. Congress knew cash must be available in the trust accounts a reasonable time in advance of anticipated expenses and distributions, and that it took time to collect and invest trust moneys from the field, such as the proceeds of sales of Indian land. See, e.g., remarks of Senator Wright concerning the Chickasaw fund at 9 Cong. Globe 32 (Dec. 17, 1840). Private trust law in 1841, and today, allows the trustee to hold cash a reasonable time before investment and prior to disbursement. J. Willis, Duties and Responsibilt- ties of Trustees, 181 (1827); cf. Barney v. Saunders, 58 U. S. (16 How.) 535 (1853); in re Thorp, 23 F. Cas. 1153 (No. 14,002, D.C.D. Me. 1846); and compare G. Bogert, Trusts and Trustees, § §611, 702 note 36 (2d ed., 1960). Clearly, Congress did not intend every last penny of the Government’s trust funds to be invested every moment; but it did intend all such funds to be invested if they were on hand long enough to make investment practica- [450] 77 ble. Cf. Menominee Tribe v. United States, 107 Ct. Cl. 23 (1946). B. Legislative history of 1841 act—Part 1: Section 2 had its source in Senate Amendment. The legislative history of the Act of September 11, 1841, in the first session of the 27th Congress serves only to confirm the statute’s plain language. On September !, 1841, Congressman John Quincy Adams asked the House of Representatives to act upon a series of resolutions condemning the investment of Federal funds—the Government’s own and those it held in trust—in state securities. The following one of them was passed: Resolved, That the further investment of any public funds of the United States in stocks of the several States ought forthwith to be prohibited by law; and that the Committee of Ways and Means be instructed to report a bill for that purpose.'® The former President was particularly concerned with the safety of the James Smithson bequest, which, by a rider on the Military Academy Appropriation Act of 1838,'9 had been ordered invested, together with its accruing interest, in state stocks. He had just managed to secure payment of some of the defaulted state bonds in the Government’s trust portfolios by getting an amend- ment into the act which granted Federal public land revenues to the states. The Adams amendment required each state’s share to be first applied on its debt to the United States.2? Mr. Adams feared also that investment 18cong. Globe September 1, 1841, 419 (B-3). 19sec. 6, Act of July 7, 1838, c. 169, 5 Stat. 267. 20sec. 4, Act of September 4, 1841, c. 16, 5 Stat. 454. [451] 78 of Federal money in state stocks would lead to favoritism by Federal officials as between states. See H. R. Ex. Doc. No. 11, 25th Cong., 3d Sess. (1838) (D-29). On September 2, 1841, Millard Fillmore, the Chairman of the Ways and Means Committee, responded to Mr. Adams’ resolution by reporting out H. R. 34. It was read twice, as follows (D-34): An act to repeal the 6th section of the act entitled “An act to provide for the support of the Military Academy of the United States, for the year 1838, and for other purposes,” passed July 7th, 1838.” and to prohibit the investment of funds of the United States in stocks of the several States. Be it enacted by the Senate and House of Representatives of the United States of America in. congress assembled: That so much of the Sixth Section of the act entitled “An Act to provide for the support of the Military Academy of the United States for the year 1838 and for other purposes” passed July 7, 1838, as is inconsistent with this act, be and the same is hereby repealed; and the further investment of any public or trust funds of the United States in stocks of the several States is hereby prohibited. [Emphasis as in original hand- written bill] H. R. 34 was immediately put on a third reading, read, and passed without debate. 10 Cong. 421 (Sep. 2, 1841) (B-3). At this point, the bill meant approximately what the defendant contends the Act of September 11, 1841, means. It forbade investments of Federal funds in state securities,and no more. The next day the House-passed bill was read twice in the Senate. Senator Sevier said “‘that this bill was one of a [452] 79 most extraordinary character. It was to repeal existing contracts, and to violate treaty stipulations with the Indians. . . ”’ Senator Woodbury (the former Secretary of the Treasury, under whose direction state bonds had been purchased for the Chickasaw trust fund) answered “that the bill could only prospective in its character, and would have no effect on existing contracts”.”! Mr. Sevier moved to refer the bill to the Committee on Indian Affairs; but his motion lost, and H. R. 34 was referred to the Committee on Finance. 10 Cong. Globe 422 (Sep. 3, 1841). The choise of committees is significant, for it placed the bill under study by men whose concern was primarily with the public finances rather than Indian matters. One of the results was a uniform legislative treatment of the Smithsonian trust, the Indian trusts, and the other trust funds of the Government, which appears not to have occurred previ- ously or ever to have been repeated. The Finance Committee struck out all after the enacting clause, and on September 8 reported H. R. 34 out in the following form (D-37): That so much of the sixth section of an act entitled "an act to provide for the support of the Military Academy of the United States for the year 1838 & for other purposes” as requires the Secre- tary of the Treasury to invest the annual interest accruing on the investment of the money arising from the bequest of the late James Smithson of London, in the stocks of States, be & the same is hereby repealed; & the Secretary of the Treasury shall invest said accruing interest in any stock of the 2Isevier had sold $35,000 of Arkansas state bonds to Wood- bury for the Chickasaw fund in 1838. H.R. Doc. 65, 27th Congress, 3d Session (1843) (Ser. 420). 80 United States bearing a rate of interest not less than five per centum per annum. Sec. 2. Be it further enacted, that all other trist funds [interlined] held in trust by the United States {end interlineation] and the annual interest accruing thereon, when not otherwise required by treaty shall in like manner be invested in stocks of the United States, bearing a like rate of interest— The second section of the Act of September 11, 1841, thus derives from the Senate Finance Committee amend- ment, not from the original bill. C. Analysis of language of Section 2 of 1841 act. 1. “....all other funds held in trust by the United States... .” Whatever else the phrase in the Senate amendment “all other funds held in trust by the United States” extended to, there can be no reasonable doubt that it included the Indian trust funds. Indeed, the Senate’s attention was particularly focused on these funds during its considera- tion of H. R. 34. The Secretary of the Senate wrote to the Secretary of the Treasury on September 8, 1841%the same date the Finance Committee reported out H. R. 34 in amended form—requesting “for use in the Senate today a copy of the report of the Secretary of the Treasury dated 23 December, 1835, in relation to the Chickasaw funds or stock to be purchased for the same...” (D-42). The Secretary of the Treasury complied before the day was over, sending a copy of President Jackson’s 1835 message to the Senate proposing an investment program for the then newly-established Chickasaw fund. (D-43, D-44). [454] 81 The Secretary of the Treasury chose the same day, September 3, 1841, to respond to a resolution passed a month upon motion of Senator Sevier. This reolution instructed the Secretary to inform the Senate “what amount of Indian money, legacies, or trust funds have been invested in State stocks; and in the stocks of which States, and the amount of any such investments in each State where the investments have been made.” See Senate Journal, 27th Cong., Ist Sess., 136. Mr. Sevier explained that “the had called for this information in consequence of a section in the land bill, in which States were held up as indebted, and among them his own State [Arkansas], and he desired the facts in the case.”” 10 Cong. Globe 292 (Aug. 4, 1841). The “land bill” was the revenue-sharing measure then pending before Senate which became the Act of September 4, 1841 (supra, note 20). The section having to do with states’ indebtedness was the Adams amendment, men- tioned above, adopted in the House on July 6, 1841 (10 Cong. Glove 155). The Secretary’s report in response to the Sevier resolution covered all the invested trust funds of the United States then in existence, illustrating what the defendant concedes to have been meant by the phrase in the 1841 act “funds held in trust by the United States.” See S. Doc. 116, 27th Cong., 1st Sess. (Serial 390, D-20). The state stock held by the United States is described in three tables. The first is entitled, “Description of stock held by the United States in trust for the Chickasaw Indians.” The second is entitled, “State stocks held by the Treasury Department in trust for the Smithsonian Institution.”” No distinction between the trust status of the two funds is indicated, although the act creating the Smithsonian fund expressly states that it shall be held “‘in [455] [456] 82 trust,” while the word “trust”? does not appear in the treaties creating the Chickasaw fund. Compare §6, act of July 7, 1838, c. 169, 5 Stat. 276, with Act XI, Treaty of October 20, 1832, 7 Stat. 385, and Art. XI, Treaty of May 24, 1834, 7 Stat. 454. The third table in the Secretary of the Treasury’s report of September 8, 1841, covers the Indian trust funds administered by the War Department. It is entitled, “Statement showing the States in whose stocks invest- ments have been made out of Indian trust funds, the amount invested in each State’s stock and the par value of each.”” The funds referred to in this table are not identified by tribes, but can be identified by cross- reference to the Secretary of the Treasury’s Report of March 17, 1840 (H.R. Doc. 145, 26th Cong., Ist Sess.) (D-19), and the Commissioner of Indian Affairs’ Report of November 28, 1840 (D-41), and brought down to date by reference to the Commissioner of Indian Affairs’ Report of November 16, 1842 (D-48). These funds are listed above on pages 444-445 of this opinion. The word “trust” occurs in only one of the treaties or resolutions establishing the above-listed funds. See Art. 1, Cherokee Treaty of 1819, No. 1 in the list on page 444, supra. The words of art traditi nally used to create private trust funds, “for the use and general benefit of,” appear in only three treaties (Nos. 15, 16, and 17 above). These three, interestingly enough, are the only ones in the list where the trust provisions were amended unilaterally by Congress, something which would have been impossible with the kind of “technical” trust fund the Chippewas unsuccessfully contended for in Chippewa Indians v. United States, 307 U.S. 1 (1939). [457] 83 Most of the treaties establishing Indian trust funds contained no “magic” words at all indicating trust status. This was entirely consistent with private trust laws, which in 1841 as today required no particular formula or ceremony to create an express trust. See J. Story, Equity Jurisprudence §980 (1836), quoted beiow at page 500; Rstatement (Second) of Trusts § 24 (1959). As noted above, one of the funds was created by a treaty between two Indian tribes, and two were estab- lished by administrative action without express auth" ty of law. Despite the disparate formalities by which they were created, neither the administration nor the Congress discriminated among the above-listed Indian trust funds. Thus, the Commissioner of Indian Affairs termed his report of May 3, 1838, listing all of these same funds which were already in existence on that date, “a full statement of all moneys under the control of the Government, held in trust for the Indians.”’ S. Doc. 426, 25th Cong., 2d Sess. 2 (1838—D-17—emphasis in origi- nal). The House Indian Affairs Committee referred to the same funds, plus the Treasury-administered Chickasaw fund, without distinction, as “trust funds” on May 15, 1838. H. R. Rept. 892, 25th Cong., 2d _ Sess. (1838—D-18). In response to a resolution of the House of Representa- tives directing him to furnish a statement of “all the public moneys of the United States invested in the stocks of the several States”, the Secretary of the Treasury reported as follows on March 17, 1840 (H. R. Ex. Doc. 145, 26th Cong., Ist Sess. (1840) (D-19)). 84 . | have the honor to state that this department is not aware that any “of the public moneys of the United States,” held in their own right, are “‘in- vested in the stocks of the several States.” But some of the moneys held in trust by the United States have been invested in such stocks, either by agree- ment with those possessing the legal title, such as treaty stipulations with Indian tribes; or by author- ity of acts of Congress, such as that of the 7th of July, 1838, concerning the moneys received on account of the Smithsonian bequest. [Emphasis in original. | There followed a list of all the same funds set out on pages 444-445 of this opinion, except the Choctaw, Delaware, Osage, and Stockbridge and Munsee funds, which appear not yet to have been set up. The defendant concedes, at page 53 of its brief, that the funds listed in H. R. Ex. Doc. 145 (D-19), as well as the uninvested funds named in H. R. Ex. Doc. 31, 27th Cong., Ist Sess. (D-39), discussed in a previous section of this opinion, are comprehended in the term “funds held in trust by the United States”. Clearly, the phrase “funds held in trust by the United States” was in common usage in the government parlance of 1841. The term was broadly inclusive, and extended at least to all Indian funds held by the Government at the Washington level. It could have had no narrower meaning when used by Congress without limiting language in the act of September 11 of that year. 2. “...and the annual interest accuring there- on... The provision in section 2 for investing interest exemplifies the uniformity of treatment by the Finance Committee of the Smithsonian and Indian trust funds. [459] 85 Investment of the Smithsonian interest had been required by section 6 of the act of July 7, 1838, c. 169, 5 Stat. 267, which was adopted actually before Smithson’s bequest asmved from England, in eleven boxes of gold sovereigns.” Section 1 of the 1841 act requiring the Smithsonian interest to be invested in Federal bonds replaced the earlier law’s requirement for investment in state bonds. Adhering to its position that the 1841 act created no new duty to invest, the defendant contends the phrase “and the annual interest accruing thereon” applies only to the income from trust funds which some other law required to be reinvested. There was only one such fund in 1841, the Menominie fund, created by Senate amend- ment to the treaty of September 3, 1836, 7 Stat. 509. The defendant, in short, would have us hold that section 2 of the 1841 act is not self-executing. Section 1 of the act, however, clearly is self-executing. That section did not amend but repealed provisions of the act of July 7, 1838, relating to the investment of interest accruing on the Smithsonian fund. After Septem- ber 11, 1841, the only remaining law which required investment of the Smithsonian interest was section 1 of the act of that date. Section 2 of the 1841 act states that the annual interest accruing on all other trust funds of the United 22) Ww. Rhees, The Smithsonian Institution, Documents Rela- tive to its Origin and History 100, 101 (1901) [hereinafter cited as Rhees}. The driblets of interest on the Smithsonian investments which came in after September 11, 1841, were, in fact, reinvested by the Secretary of the Treasury in U.S. Government bonds. Rhees 243-244. [460] 86 States shall be invested in Government bonds “‘in like manner” to the Smithsonian interest. The words used give no justification for construing section 2 as any less mandatory and self-executing than section 1. If Congress had meant for Indian trust fund interest to be reinvested only when a treaty or other law so required, there would have been no need to use the phrase “and the annual interest accruing thereon”’ in section 2. Interest retained for reinvestment under a treaty so requiring was as much a “fund held in trust by the United States” as the original principal. Section 2 minus the phrase “and the annual interest accruing thereon” would have re- quired such retained interest to be invested. The presence of the phrase in the section, therefore, implies that interest not elsewhere required to be reinvested is now to be reinvested. Since invested interest, like the original principal, is alsc a “fund in trust by the United States,” interest earned upon the invested interest must be invested in turn. Hence the phrase, standing alone, would contem- plate accumulation and successive compounding of inter- est. in the case of the Smithsonian fund, accumulation was clearly required. The purpose of the accumulation was to augment the fund while Congress pondered the difficult question of how best to effectuate the donor’s purpose of founding “an Establishment for the increase and diffusion of knowledge among men.”’ Congress did not, in fact, found the Smithsonian Institution until eight years after receipt of the legacy, See act of August 10, 1846, C. 178, 9 Stat. 102.” 231 ittle reinvestment of interest and no augmentation of the fund actually took place, because the bulk of the legacy was invested in Arkansas bonds, which the state repudiated. Letter of Secretary of Treasury to Speaker of the House, February 17, 1844, [footnote continued] [461] 87 Section 2 of the 1841 act, of course, did not mean that every cent of interest on the Indian trust funds had to be plowed back like the Smithsonian interest. Expenditure of income was necessary from time to time in the case of the Indian funds (except the Menominie fund) to accomplish the purposes of the trusts. There is no need to do violence to the plain language of the 1841 act in order to permit such expenditure. The phrase “and the annual interest accuring thereon” does indeed provide for accumulation, but it does not stand alone. The next phrase, “except as otherwise required by treaty,’’ exempts interest that must be spent for trust purposes from the command to invest. Arguments that the phrase “and the annual interest accruing thereon” is not to be taken literally seem based on an assumption that Congress acted inadvertently in placing such language in section 2 after providing for reinvestment of the Smithsonian interest in section 1. We believe Congress knew what it was doing. We believe section 2 of the 1841 act means what it says. A problem sometimes encountered by trustees is what to do with income in excess of that needed to accomplish the purposes of the trust. The problem can arise only when the trustee’s obligation to pay out of the trust is measured by some standard other than the trust income. For example, if a testator leaves a fund to a trustee with directions to pay the income over to the beneficiary as it accrues, there will be no problem. If instead he directs the trustee to use the income for the education of the beneficiary, the problem will arise if the income exceeds the cost of education. reprinted in Rhees at 241-265. See also speech of Representative jJ.Q. Adams, reprinted at 268-273. [462] 88 A far-sighted trustor may anticipate the problem of surplus income and include appropriate instructions in the trust instrument. Accumulation is a favored solution where the demand on the fund is fluctuating or increas- ing. Cf. G. Bogert, Trusts and Trustees §8ll (2d ed., 1964). Congress foresaw the problem of surplus income under one of the earliest trust funds of the Federal Govern- ment, the Navy Pension Fund, and provided for accumu- lation. See § § 8-10, Act of April 23, 1800, c. 33, 2 Stat. 53. Until 1841 Congress did not provide a rule to govern disposition of*surplus income of the Indian trust funds. Most of the Indian trust funds then existing were of the class where the problem could not arise. For example, the trusts numbered 8, 15, 16, 17, and 18 in the list on pages 444-445, above, and all but the Osage and Delaware trusts listed in footnote 14, expressly required accruing interest “annually” to be paid to the Indians or wholly expended for specified purposes. In these trusts there could be no reinvestment of accruing interest, because it was “otherwise required by treaty.” Similarly, the problem of surplus income could not arise where the trustee was authorized to do nothing else with the income except reinvest it, as in the case of the Menominie fund. The problem of surplus income did arise, however, in 1840 under the Chickasaw orphan fund, the Chippewa, Ottawa, and Pottawatomie mill fund, the Creek orphan fund, and the Kansas school fund. The incumbent Commissioner of Indian Affairs, T. Hartley Crawford, reinvested the surpluses on his own initiative. [463] 89 The Commissioner gave full details on the reinvest- ments in his report of December 28, 1840. The report appears as an annex to the Message of the President to the Two Houses of Congress, H. R. Ex. Doc. No. 2, 26th Cong., 2d Sess., starting at page 228 (D-41). It was the latest document describing the administration of the Indian trust funds available when Congress considered the bill which became the 1841 act. If the Senate Finance Committee wished to examine existing practice, this is the document they would have consulted. It is possible that the Committee reviewed the report and intended the reference to reinvestment of interest in section 2 of the 1841 act as conscious approval of Commissioner Crawford’s action.** In any event, Con- gress did adopt as law a policy on reinvesting interest of the Indian trust funds similar to Crawford’s and similar to that required for the Navy Pension Fund,” when it enacted: ...all other funds held in trust by the United States, and the annual interest accruing thereon, when nat. otherwise required by treaty shall . . . be invested in stocks of the United States . . . 24ir. Crawford’s administration of the Bureau of Indian Affairs seems to have inspired extraordinary confidence. Despite the change of administration and of control of Congress from Democratic to Whig in 1841, Crawford, appointed by President Van Buren in 1838, remained in office. He survived during the entire Tyler administration, serving longer than any other Commis- sion of Indian Affairs in the 19th Century. F. Cohen, Handbook of Federal Indian Law 12 (1941). *5The Navy Pension Fund had been exhausted prior to adoption of the 1841 act. See H.R. Rep. No. 1, 27th Cong., Ist Sess. (Ser. 393, June 29, 1841). The last security held by the fund was sold on January 14, 1840. H.R. Ex. Doc. No. 145, 26th Cong., Ist Sess. 5 (Ser. 365, 1840) (D-19). [464] [465] 90 : The surrounding circumstances as well as the language used show the requirement for accumulation in section 2 of the 1841 act was no inadvertence. It solved the problem of surplus income. The requirement for invest- ment of accruing interest did not apply to interest a treaty commanded to be paid over to the beneficiary. It did not apply to interest currently needed to accomplish a treaty purpose, for example, to build schoolhouses. It applied to interest the treaty did not command to be paid out and which was for the time being in excess of that needed to accomplish the trust purposes. The defendant, however, has appealed from the words of the law to its subsequent administrative construction, writing thus: ...The documents furnished by the plaintiffs and defendant herein, along with other records to the same effect reposing in the National Archives, attest to the attentive interpretation that the respon- sible officials gave to the statute [of 1841]. They perceived that without express provisions in a prior treaty or, after 1871, a ratified agreement, they had no authority to invest accruing interest. The matter was so self-evident to them that after 1840 the question as to whether they did or did not have that authority never arose. We pass over the dubious proposition that an adminis- trative interpretation may be shown by the fact thai the administrators never considered the question, and reject the defendant’s contention on the merits. First, the statement is not factually correct.2° Second, history shows that the officers administering the Indian 26interest on the Ottawa and Chippewa fund, established with an original principal of $20,000 under Article 4 of the Treaty of March 28, 1836, 7 Stat. 492, continued to be reinvested after [footnote continued] 91 trust funds acquired $2,751,900 in state bonds for those funds subsequently to 1841. Annual Report of the Commissioner of Indian Affairs for the Year 1876, 275-277 (D-85). The construction of any part of a statute by men who repeatedly violated its clearest provision—to invest only in stocks of the United States—does not command respect. 1840. The fund grew to $62,496.40 by 1885. See Ottawa and Chippewa Indians v. United States, 42 Ct. Cl. 240, 245 (1907). Interest on the Creek Orphan Fund was also reinvested. This fund, amounting to $126,000 in 1840, grew to $251,055.97. See S. Rept. 411, 43d Cong., Ist Sess. (1874). From the materials submitted by the parties it has not been feasible to identify the occasions subsequent to 1840 when trust fund interest was reinvested, even in the case of the Menominie fund, where accumulation was required by treaty. The treasury appears not to have kept separate principal and interest accounts in the 1830’s, ’40’s, and °50’s. Published reports show only a cash account and an investment account. Interest was credited to the cash account when it was collected in the same manner as were additions to principal, such as the proceeds of land sales; and distributions to beneficiaries were debited in the same manner as sums expended to purchase investments. The investment account was simply a list of bonds held for the trust without indication of the source of the moneys used to purchase them. See Statements of the Secretary of the Treasury of the Chickasaw trust funds: H.R. Ex. Doc. No. 107, 29th Cong., Ist Sess. (1846) (D-77); H.R. Ex. Doc. No. 57, 32d Cong., 2d Sess., (1853) (D-50); and other reports in the same series cited in D-78. The Commissioner of Indian Affairs in his annual report of November 25, 1854 (B-11) stated that it would be a good policy to reinvest certain accrued interest then on hand, but that he had not done so due to the high premium on Federal bonds, pending new legislation authorizing the purchase of state stocks. Such legislation was not enacted, and the record does not show whether the suggestion of reinvestment was pursued. In any event, administrative observance of the 1841 act was so sporadic as to furnish no reliable guide to the meaning of the statute. See discussion and examples below. [466] 92 Finally, in our opinion, no course of administrative action, however consistent, can prevail over language as clear and unambiguous as that of the 1841 act. Loussville and Nashville Northern R. R. v. United States, 282 U. S. 740, 759 (1931). By the plain language of the 1841 act all interest on Indian trust funds which a treaty did not require to be paid out or otherwise used had to be invested. The act means exactly what it says. 3. “... when not otherwise required by treaty...” The exception in the Senate amendment to H. R. 34, *... when not otherwise required by treaty”, appears to have been adopted in response to Senator Sevier’s objection that the House bill would violate Indian treaties. The defendant points out that three treaties in force in 1841 required investment of Indian trust funds in state stocks. These treaties were (1) that of May 9, 1836, with the Chippewas of Swan Creek and Black River, 7 Stat. 503, (2) that of September 29, 1837, with the Sioux of the Mississippi, 7 Stat. 538, and (3) that of October 21, 1837, with the Sacs and Foxes of the Mississippi, 7 Stat. 540. It is difficult to believe that Congress was primarily concerned with avoiding technical breach of these treaties when it adopted the phrase “when not otherwise required by treaty”. It would have been nearly inexcusable in 1841 for a fiduciary to limit his investments to state bonds. An earlier Congress had no qualms about putting the Seneca and Shawnee funds in state bonds, despite treaty language contemplating deposit of the money at interest [467] 93 in the U. S. Treasury. See Act of June 14, 1836, discussed in Part I of this opinion. That action seems to have had no better justification than a desire to avoid paying interest during a period when the Government had no need to borrow. In other words, the trustee did not hesitate to harmlessly breach a treaty when its own self-interest so required. In 1841, on the other hand, with state bonds in default, the beneficiaries’ interests would have justified, if not dictated, that the trustee disregard directions to invest in state bonds in order to buy safe, punctually paying Federal issues. Cf. Restatement (Sec- ond) of Trusts § 167. In fact, none of the three trust funds required by treaty to be invested in state bonds was so invested in 1841. The Chippewa fund had not yet been set up on the Indian Office’s books, presumably because of delay in receipt of land sale proceeds. The Sioux of the Mississippi and Sac and Fox of the Mississippi funds were among for which Congress failed to appropriate the principal sum, paying only annual interest out of the treasury. They were never invested in state bonds. See above, footnote 14. The important function of the phrase, “when not otherwise required by treaty’, in the context of the Senate amendment, was to save existing treaty provisions for the disposition of trust fund interest which were inconsistent with reinvestment. 4. “... shall in like manner be invested in stocks of the United States. . .”” The applicable definition of “stock” in what in 1841 was the latest edition of Noah Webster’s American Dictionary of the English Language, the 13th, published at New York in 1834, read as follows: [468] 94 12. Money lent to government, or property in a public debt. See also footnote 6, above. In the accepted contemporary meaning of its words, therefore, the phrase, “shall in like manner be invested in stocks of the United States”, was a direction to invest in Federal public debt obligations. The defendant argues, however, that the change of language made by the Senate Finance Committee did not alter the purpose of H.R. 34. The amendment was adopted, the defendant says, to minimize the bill’s depressing effect on the market for state bonds, not to change its thrust from a limitation on the kind of securities in which Indian trust funds might be invested into a command to invest funds formerly permitted to lie idle. In support of this contention the defendant refers us to the following bills of the 25th Congress, which, it states, show the course of Congressional thinking on the subject of trust funds: S. 257, 25th Cong., 2d Sess., introduced by Senator Hugh S. White, Chairman of the Committee on Indian Affairs, on March 9, 1838 (D-24). This was an administration bill, drafted in the Indian Office, and forwarded to the Chairman by President Van Buren’s Secretary of War, Joel R. Poinsett, on March 6, 1838. See D-22 and D-23. It restated the 1837 act with amplifications and would have expressly re- quired the trust funds to be invested in state stocks. H.R. 791, 25th Cong., 2d Sess., introduced by Congressman Horace Everett (Whig, Vt.) on May 15, 1838 (D-27). This bill would have required invest- ment of the Indian trust funds in “stock of the United States, to be created for that purpose .. .” [469] 95 H. R. 867, 25th Cong., 2d Sess., introduced by Mr. Everett on July 2, 1838 (D-25). This bill would have provided for the payment of 5 percent interest on Indian trust funds deposited in the treasury, includ- ing funds required by treaty to be invested, during the period they might remain on deposit pending investment. We have considered the cited bills, and their legislative history, and find nothing to cause us to doubt that the 27th Congress meant what it said in the 1841 act. Common sense as well as the rules of statutory construction tell us that when Congress substitutes new language for old, by abandoning one bill for another, or striking out all after the enacting clause in a pending bill, it ordinarily intends a change in meaning. See 2 /. Sutherland, Statutory Construction §5015 (3d ed., 1943). The earlier bills failed, whereas the 1841 Senate Finance Committee amendment was approved and enacted. The different approach of the latter version may well be one of the reasons Congress adopted it after rejecting the earlier bills. 5. “... bearing a like rate of interest.” The reference to 5 percent interest is evidently taken from the Act of June 14, 1836, discussed above. Notably, it is the only portion of sections 1 or 2 of the 1841 act which shows any intent to preserve pre-existing law. In fact, the phrase substantially extended the 5 percent floor, since the 1836 act, even as extended by the Act of January 9, 1837, applied only to a limited class of Indian trust funds, that is, those made up of the proceeds of sales of ceded Indian lands. Five percent is a minimum figure. Nothing in the phrase prevents investment in Government bonds of [470] 96 higher yield, such as were actually issued in 1841 and on several subsequent occasions. Verbal analysis of the second section of the 1841 act emphasizes the sweeping character of the legislation against the defendant’s claim that it was a mere house- keeping measure. While the Senate Committee could have attained increased safety for the Indian and Smithsonian trust funds by a narrow amendment, it chose to command that “all” funds held in trust by the United States, even “the annual interest accruing thereon”, be invested in Government bonds, except when “otherwise required by treaty”’. We tum back to the legislative history in search of the Senate Finance Committee’s motives for adopting such far-reaching language. . D. Legislative history of the 1841 act—Part II: the Government needed the Indians’ money. The Senate took H. R. 34 up later in the same day it was reported by the Finance Committee. Mr. Calhoun asked how the trust funds were to be invested if there should be no United States stock to be had. The Chairman of the Committee on Finance answered as follows) 10 Cong. Globe 441, Sep. 8, 1841) (B-3): Mr. EVANS replied that all that had been taken into consideration in committee, and it was the unanimous impression that there would be a suffi- cient supply of United States stock in existence for the next three years at least, and that no difficulty could arise in that way. If, however, any difficulty of that nature should arise, provision could be made by Congress in time to meet it. The defendant characterizes Senator Calhoun’s ques- tion as “prescient”, and Senator Evans’ answer as “breezy”. We find them quite the opposite. [471] 97 The contemporary situation in regard to United States securities, which must have been that taken into consid- eration in committee, was this: The U.S. Treasury kept afloat during the entire four years of the Van Buren administration (1837-1841) by issuing and reissuing one-year notes. During this period expenditures had exceeded revenues by $31,310,014.20. The financial situation of the country became so bad that a special session of Congress was called to deal with the subject early in the new administration (Tyler’s, Harrison, elected in 1840, having died after one month in office). Congress decided that the only remedy was a loan redeemable at a time sufficiently distant to allow the public finances, aided by returning prosperity among the people, a chance for recovery. A bill was introduced authorizing a loan of $12,000,000 for an eight-year term, at an interest rate not exceeding 5 percent. It passed, as the Act of July 21, 1841, c. 3, 5 Stat. 438; but not before heavy opposition had caused the term to be reduced to three years, and the interest raised to not exceeding 6 percent. See Debates on H. R. 5, 27th Cong., Ist Sess., 10 Cong. Globe 111, 161, 162, 164-167, 175, 176, 178-181, 189-191. Clearly, the term of the 1841 bonds was what Senator Evans referred to in his answer to Senator Calhoun when he mentioned “the next three years”. The first of the bonds authorized by the Act of July 21, 1841, were sold in the third quarter of the year—at approximately the same time the Senate Finance Com- mittee was considering H. R. 34. These were the first bonds issued by the United States since 1825, and the only interest-bearing Federal securities then outstanding, except the current year’s treasury notes, which, because [472] 98 of their extremely short term, would ordinarily be unsuitable for trust investment. Bayley, The National Loans of the United States, (D-5), from which all the fiscal information in this discussion is taken, tells the sad subsequent history of the 1841 bond issue (p. 69): The loan proposed by the act of July 21, 1841 (5 Statutes, 438), owing to the short period which was to elapse before it became redeemable, does not appear to have met with much favor from those who had money to lend.” Up to December 20, 1841, the amount received, of the $12,000,000 asked for, was only $5,532,726.88, while the estimated deficiency on January 1, 1842, was $627,557.90, and the esti- mated excess of expenditures over revenue for the year 1842 was $14,218,570.68. In this emergency the Secretary [of the Treasury] recommended an extension of the time within which the residue of the loan, not yet taken, should be redeemable, the reissue of the treasury notes heretofore authorized by law, and an increase of the duties on certain classes of imports. A bill to allow the issue and reissue of treasury notes was introduced in the House January 5, 1842, and met with much opposition ... It finally passed both houses and was approved January 31, 1842 (5 Statutes, 469). 27See also excerpt from John Quincy Adams’ Diary for September 18, 1841 (quoted at page 61 of defendant’s brief): ...The secretary [of the treasury] has obtained one million, or a million and a half, of the twelve million loan authorized at a recent session of Congress, at five and a half per cent; but he wants already two millions more, and has no prospect of obtaining them at a rate lower than six per cent, if at all... [473] 99 By the Act of April 15, 1842, c. 26, 5 Stat. 473, Congress amended the Act of July 21, 1841, to authorize a 20-year term for the bonds not yet sold, to permit them to be marketed under par, and to raise the ceiling on the issue to $17,000,000. Sales were still unsatisfactory; and by the Act of August 31, 1842, c. 287, 5 Stat. 581, Congress authorized the treasury to issue up to $6,000,000 of one-year notes in lieu of unsold bonds. Thus the probable motive emerges for the Senate Committee’s changing H. R. 34 from the negative form of a prohibition on the purchase of state bonds to the positive one of a command to buy Federal bonds. The Federal Government needed the trust money. Its bonds were selling poorly, while the Indian trust funds alone offered a captive market reported to be worth $3,381,303.03 on the very day H. R. 34 first passed the Senate.” The members of the Finance Committee, with their special expertise in public fiscal affairs, perhaps foresaw that the 1841 bond issue would be only the first of an indefinitely long series of similar borrowings. In the 132 years since Senator Calhoun addressed his question to Senator Evans, the Government has not once been out of debt. Federal bonds have always been available, although not always bearing 5 percent or greater interest.” 28see S. Doc. 116, 27th Cong., Ist Sess. (1841) (D-20). The Committee had a precedent for its action. J. Perry, Trusts and Trustees, §455 (3d ed., 1882), states: ...It is said that the public policy in England of compelling trustees to invest trust funds in government funds originated largely in the necessities of the govern- ment, and the public advantage of creating a market and demand for government securities. us. Department of Commerce, Historical Statistics of the United States, Colonial Times to 1957, at 711 (1960); 27 [footnote continued] [474] 100 After short additional debate, H. R. 34, as amended by the Finance Committee, passed the Senate. On motion of Mr. Evans, the title was amended to delete the reference to prohibiting investment of United States funds in state stock. H. R. 34 went back twice to the House, and to the Senate once more, before all differences were reconciled. The whole process took only two days. There was no conference. Significantly, the second section of the bill, applicable to the Indian trust funds, was never changed from the time the Senate Finance Committee first reported it. See House Journal, 27th Cong., Ist Sess., 448, 452, 470, 491, 497, 510, 515, 516 (D-33); Senate Journal, id., 233, 248, 250, 253-258 (D-36). The legislative history is thus consistent with the plain language of the Act of September 11, 1841. Congress was telling the executive officers to take all the uninvested trust moneys they had at their disposal, even the accumulations of interest, and buy Federal bonds. The legislative history gives no support to the defendant’s interpretation that the act applies only to funds inde- pendently required to be invested, by treaty or some other law. E. Administrative construction—a history of law- lessness. Nevertheless, the defendant insists, administrative con- struction supports its interpretation of the Act of Encyclopedia Americana “United States,” 660 (1967). Senator Calhoun’s question to Senator Evans about what should be done if there were no Federal bonds to be had may have been disin- genuous. Calhoun opposed the 1841 bond issue on the ground of its “establishing a system of permanent loans”. 10 Cong. Globe 209 (July 22, 1841). [475] 101 September 11, 1841. We do not admit that administrative construction could prevail over the plain language of such an unambiguous statute. Loussville & Nashville Northern R. R. v. United States, 282 U.S. 740, 759 (1931). We have, however, examined the evidences supplied by both parties of administrative construction between 1841 and 1880. The following are representative samples: August 25, 1845: Commissioner of Indian Affairs advises the Secretary of War that Act of September 11, 1841, forbids investment of Indian trust funds in state bonds (D-49). January 29, 1847: Secretary of Treasury advises president of the Bank of Tennessee that 1841 act prohibits exchange of state bonds in Chickasaw trust for other state bonds (D-51). July 1; 1851: President of United States ex- changes Alabama bonds in Creek orphan fund for Virginia bonds (B-29). October 1, 1851: Secretary of Treasury ex- changes $185,000 worth of Alabama bonds in the Chickasaw trust fund for Tennessee, Missouri, and state-guaranteed railroad bonds (D-50). March 21, 1853: Attorney General advises Secre- tary of Interior that he may invest Wyandot funds in state stock despite treaty provision requiring invest- ment in Federal stock (B-8). Before opinion is published, it is revised to delete reference to state stock and to cite 1841 act as requiring investment of U.S. stock bearing not less than 5 percent interest (D-58, 6 Op. Att’y Gen. 2). November 26, 1853: Commissioner of Indian Affairs calls for funding Indian annuities and invest- ing in state bonds (B-9). June 24, 1854: Attorney General advises Secre- tary of Interior that 1841 act requires all funds held [476] 102 in trust by the United States to be invested in Federal bonds (B-10). August 10, 1854—November 30, 1857: Some time during this period Secretary of Interior invests $315,000 of Kaskaskia, Peoria, Piankeshaw, and Wea trust fund in state bonds. See Treaty of May 30, 1854 (proclaimed August 10, 1854), 10 Stat. 1082, and Commissioner of Indian Affairs Annual Report for 1857 (B-14). November 27, 1861: Commissioner of Indian Affairs, apparently completely ignorant of 1841 act, calls in annual report for enactment of a law “that all Indian funds hereafter committed to the United States for investment shall be invested in United States stocks only”’ (B-16). July 1, 1863: Commissioner of Indian Affairs invests $26,000 of Indian trust funds, proceeds of matured Kansas bonds, in new Kansas bonds (D-81). 1863: Secretary of Interior sells at a premium $516,208.50 of Federal and state bonds in Indian trust portfolios and reinvests $497,850 of the proceeds in United States bonds (D-81). September 2, 1876: Secretary of Interior informs J. & W. Seligman, stockbrokers of New York, that he is forbidden by 1841 act from investing Indian trust funds in United States four and one-half percent bonds (B-25). October 31, 1876: Annual Report of Commis- sioner of Indian Affairs for Year 1876 (pages 275-77; see D-85) reveals $3,033,566.66 of state securities, all but $281,666.66 of these purchased or acquired by exchange after September 11, 1841, are held in Indian trust portfolios. All the issuing States except Kansas ($41,600 held) are in arrears on interest. [477] 103 February 14, 1878: Secretary of Interior informs Senator Ingalls that he is obliged by existing law to reinvest proceeds of redemption of United States bonds held in the Indian trust funds in other United States bonds (B-26). March 27, 1878: Acting Secretary of Interior in a letter to the chairman of the House Committee on Indian Affairs cites section four of act of January 9, 1837, c. 1, 5 Stat. 135, as authority to invest Indian trust funds “in any manner which shall be in bh» judgment most safe and beneficial”. He does not mention 1841 act, which superseded section four of the 1837 act (B-27). April 10, 1878: Secretary of Interior informs chairman of the House Indian Affairs Subcommittee that he is obliged by act of 1841 to invest proceeds of mature state and Federal bonds in United States bonds (B-28). June 6, 1878: Attorney General refers to ex- change in 1851 of state bonds in the Creek fund for other state bonds as an error of the President (B-29, 16 Op. Att’y Gen. 31, 37). May 27, 1879: Duncan Thompson, identified by plaintiffs as Solicitor of Interior Department, advises Secretary that Secretary has no authority to sell bonds in the Indian trust funds without a special act of Congress. Also advises that it would be illegal to purchase 4 percent Federal bonds for the Indian trust even though they yield more than available 5 percent Federal bonds, due to premium on the latter (B-32). (Actually, Mr. Thompson was a clerk in the Indian office.) June 23, 1879: Secretary of the Interior buys 4 percent bonds for the Indian trust funds (B-344, D-86). [478] 104 The foregoing history does not show any consistent administrative construction of the Act of Sepiember 11, 1841. It shows instead that the administrators sometimes observed the law and sometimes did not. After carefully examining all the legislative and his- torical materials submitted by both parties, we are more convinced than ever that the Act of September 11, 1841, meant exactly what it said. F. The 1841 act became a lost law as a result of recodification. The frequent administrative ignoring of the 1841 act was not helped by recodification. In 1873, Section 2 of the act became section 3659 of the Revised Statutes and was buried in the title dealing with the public moneys. The fourth section of the Act of January 9, 1837, al- though clearly superseded by the 1841 act, was not deleted, but carried forward as section 2096 in the title of the Revised Statutes dealing with Indians. When the United States Code was compiled in 1926, the 1841 act was dropped entirely, although it has never been re- pealed;™ but the fourth section of the 1837 act appears to this day, in the title on Indians, as 25 U.S.C. §158. In the 1931 edition of the Code, the 1841 act was restored, as 31 U.S.C. §547a in the title on Money and Finance. Since the word “Indian’”’ does not appear in the 1841 act, it is small wonder that in application to the Indian trust funds it has become, in effect, a lost law. 304 note in the United States Code Annotated states that it was omitted as superseded by 31 U.S.C. §547, entitled “‘Disposi- tion of trust funds received from foreign governments for citizens of United States’’. This note does not appear in the official edition, and is obviously incorrect. See 44 Stat. 1010. [479] 105 In American jurisprudence, however, a statute is not repealed by being forgotten, and must be enforced when rediscovered. District of Columbia v. Thompson Co., 346 U.S. 100 (1953). As Justice Story stated in Vidal v. Girard’s Executors, 43 U.S. (2 How.) 127, 196 (1844): ...It is no proof of the non-existence of equitable rights that there exists no adequate legal remedy to enforce them. They may during the time slumber, but they are not dead. IV. 1880 to 1918: INDIAN TRUST FUNDS DE- POSITED IN THE TREASURY In the late 1870's, five percent United States bonds became more anc more difficult to get as the Civil War issues matured or were called. In 1877, the Treasury sold a new issue at par with a four and one-half percent coupon; in 1878, it sold four percent bonds at a slight premium. To stay within the letter of the 1841 law, the Secretary of the Interior had to waste the principal of the Indian trust funds paying premiums as high as 19-3/4 percent to replace called bonds with the few 5 and and 6 percent governments still outstanding. These had less than five years to run until maturity, or were already in the call period.*! In 1876, Secretary Zechariah Chandler asked Congress to authorize deposit of the Indian trust funds in the treasury, at 5 percent interest, in lieu of investment. Congress did not act. In 1879, when Carl Schurz was Secretary, the Interior Department quit trying to comply 31 see letters of Secretaries of the Interior Chandler and Schurz reprinted in S. Rept. 186, 46th Cong., 2d Sess. (1880) (B-36); Annual Reports of the Commissioner of Indian Affairs for 1874 (page 457), 1875 (page 144), and 1876 (page 256) (Ex. D-83, D-84, and D-85); and R. Bayley, National Loans of the United States (D-5), pages 164-171 (1880). [480] 106 literally with the 1841 act and purchased 4 percent United States bonds. The Acting Secretary stated that the net yield to the Indians was higher than on outstanding 5 percent issues after payment of the premium.*” There is no doubt that Secretary Schurz correctly interpreted the 1841 act. The primary purpose of the lawmaker overrides inconsistent clauses. 2 J. Sutherland, Statutory Construction, §§4704, 4932. The primary purpose of Congress in 1841 was to require that all funds held in trust by the United States be invested in Govern- ment bonds, not that they be invested at 5 percent. Indeed, if obtaining 5 percent had been Congress’s pri- mary purpose, there would have been no need for the 1841 act, since the 1837 act already provided for this minimum rate. The obligation to invest the trust funds, therefore, survived the extinction of 5 percent bonds. Congress, however, soon resolved Secretary Schurz’s dilemma. The act of April 1, 1880, c. 41, 21 Stat. 70, read as follows: Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled. That the Secretary of the Interior be, and he is hereby, authorized to deposit, in the Treasury of the United States, any and all sums now held by him, or which may hereafter be received by him, as Secretary of the Interior and trustee of various Indian tribes, on account of the redemption of United States bonds, or other stocks and securities belonging to the Indian trust-fund, and all sums received on account of sales of Indian trust lands, and the sales of stocks lately purchased for temporary investment, whenever he is of the 325 Rept. 186, supra, also in B-34. See also Secretary Schurz to Secretary of the Treasury, February 8, 1879 (B-30). [481] 107 opinion that the best interest of the Indians will be promoted by such deposits, in lieu of investments; and the United States shall pay interest semi-annually, from the date of deposit of any and all such sums in the United States Treasury, at the rate per annum stipulated by treaties or prescribed by law, and such payments shall be made in the usual manner, as each may become due, without further appropriation by Congress. The 1880 act was the first general legislation authorizing the deposit of Indian trust funds in the U.S. Treasury at interest; but many such funds had been deposited there earlier and were drawing interest under the authority of treaties, special legislation, or annual appropriation acts. The Annual Report of the Commissioner of Indian Affairs for 1879 (D-86) pages 309-10, shows $8,229,511.57 in Indian funds “held in trust by the government in lieu of investment” at 5 percent interest, while the funds invested in bonds totalled only $5,180,055.83. By its plain language the 1880 act does certain things and does not do others: First, it makes deposit at interest an optional alternative to investment for certain trust moneys. It does not abolish investment in favor of deposit as the sole method of administering the Indian trust funds. The “best interests of the Indians” is the test for whether the funds are to be deposited or invested. Second, the 1880 act applies to certain specified Indian trust moneys only. These are: (1) Proceeds of redemption of the securities held in the trust funds in 1880. (2) Proceeds of sales of lands ceded by the Indians. [482] 108 (3) Proceeds of sales of the four percent Government bonds purchased in 1879. See S. Rept. 186, 46th Cong., 2d Sess., 2 (1880) (B-36). Third, it does not repeal the 1841 act. The direction of that statute to invest remains mandatory as to the trust funds not covered by the 1880 act, and optional as to those which are covered. Incidentally, the act legalized the Secretary’s 1879 purchases and authorized him to sell them if he needed special authority to do so, as his adviser, Duncan Thompson, thought. The 1880 act directs the payment of interest on the deposits, but does not set the rate. Instead, it adopts the rates fixed by treaties or “by law’’. The legislative history clearly shows what the latter phrase means. It means 5 percent. The Committee on Indian Affairs reported out, and the Senate took up on January 7, 1880, the bill (S. 605) to authorize the Secretary of the Interior to deposit certain funds in the United States Treasury in lieu of investment. There was no written report. As amended by the committee, the bill read as follows (40 Cong. Rec. 212, B-35): Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That the Secretary of the Interior be, and he is hereby, authorized to deposit to the credit of the proper nation or tribe, in the Treasury of the United States, any or all sums belonging to the Indian trust fund now held or which may hereafter be received by him as Secretary of the Interior and trustee of various Indian tribes, whenever he is of the opinion that the best interests of the Indians will be promoted by such deposits in [483] 109 lieu of investments; and the United States shall pay interest thereon semi-annually at the rate per centum which is required by treaty stipulation or by act of Congress, or, in cases where the rate is not stipulated, at 4 per cent, from the respective dates of deposit; such payments to be made in the usual manner, as each may become due, without further appropniation by Congress. Substantial debate ensued, in the course of which Senator Allison said (p. 213): As I understood this bill it simply provides that where money comes into the Treasury, by the payment of bonds or otherwise, it shall be deposited in the Treasury and draw the rate of interest prescribed in the treaties with the several tribes, if a special rate is prescribed. There are some treaties where no rate is fixed, but in 1855 it was provided by law that where there was no special treaty stipulation the rate should be 5 per cent. There was no such law passed in 1855. Mr. Allison seems to have been alluding to the 1841 act. Senator Conkling said (ibid. ): . .. I wish the Senator would explain the effect of the words: “Or in cases where the rate is not stipulated, at 4 per cent. from the respective dates of deposit.” What is to be the operation of this act upon a treaty which names no rate of interest, but which was made leaving that rate blank after an act of Congress had been passed declaring in all such cases it should be 5 per cent? What is the reason, in other words, that, in effect, that is not a treaty stipulation? . . . and if so, upon what principle is it, if we intend to observe treaty stipulations, that we propose this morning to declare that in all such cases hereafter the rate shall be not 5 per cent., but 4 per cent.? [484] 110 Senator Edmunds said that the bill appeared to require the Secretary of the Interior to deposit accruing interest in the Treasury at interest. He added (p. 214): ... The United States ought not to undertake to pay interest on these temporary deposits which are merely the interest belonging to the Indians and which by treaty stipulation we were not bound to pay interest on at all, but only to pay over through the Secretary of the Interior to the Indian tribes or for its benefit according to the stipulations of the respective treaties. Mr. Edmunds appears oblivious of the 1841 act. The bill was passed over. When it came up again, on February 5, Senator Pendleton, by direction of the Committee on Indian Affairs, moved a substitute, stating that the Committee had endeavored to meet the objections of Senators Conkling and Edmunds. The substitute bill, which was adopted, is in the exact language of the present act. The reference to four percent interest was out; as well as the reference to “any or all sums belonging to the Indian trust fund.” The bill was accompanied by a report, No. 186, 46th Cong., 2d Sess. (B-36), which quotes verbatim the Revised Statutes versions of both section 2 of the 1841 act and section 4 of the 1837 act. These sections expressly mention 5 percent interest. The report came after too long an interval to have much weight in determining the true meaning of either act; but it does show that the Senate of 1880 thought that the United States was required by statute to obtain interest at the rate of 5 percent on all existing Indian trust funds, except where otherwise provided by treaty. Cf. Rainwater v. United States, 356 U.S. 590, 593 (1958); Sioux Tribe v. United States, 316 U.S. 317, 329 (1942). [485] 111 The Indian Affairs Committee’s effort to meet Senator Edmunds’ objection to the earlier version of S. 605 resulted in a substantial gap of coverage in the 1880 act. Thus, all the invested Indian trust funds existing in 1880, regardless of their source, were authorized to be deposited in the treasury at interest; but the only new money that could be so deposited was proceeds of sales of ceded Indian lands to third parties. The 1880 act’s coverage did not extend to sums received by Indian tribes after 1880 from any other source. Fort Peck Indians v. United States, Docket 184, 28 Ind. Cl. Comm. 171, 176-81 (1972). The General Allotment Act of February 8, 1887, c. 119, 24 Stat. 388, partially filled the gap. This law provided for dividing the reservations into parcels ranging in size from 40 to 320 acres, and alloting the parcels tc individual Indians as their private property. Upon completion of the allotment of a reservation, the Indians were to become citizens of the United States and subject to the civil and criminal laws of the state or territory where they resided. Section 5 of the General Allotment Act authorized the Secretary of the Interior to negotiate with the tribes to buy the parts of their reservations left over after allotment, the so-called “surplus lands.” Actual sales to the United States were to be mide by formal agreements requiring the ratification of Congress to become effective. Section 5 further provided (24 Stat. 390): And the sums agreed to be paid by the United States as purchase money for any portion of any such reservation shall be held in the Treasury of the United States for the sole use of the tribe or tribes of Indians; to whom such reservations belonged; and the same, with interest thereon at three per cent per [486] 112 annum, shall be at all times subject to appropriation * ty by Congress for the educativnm and civilization of such tribe or tribes of Indians or the members thereof. The reason for the low interest rate was explained by Senator Dawes, the original sponsor of the allotment bill, popularly called the Dawes Act, when he presented the conference report (18 Cong. Rec. 974, January 25, 1887) (D-98): The other change is the difference between 5 per cent. and 3 per cent. interest. Five percent. is the uniform rate of interest paid for Indian funds, and the answer to that on the part of the House was that that rate was established at a time when all interest was at that high rate; all interest now is at 3 per cent. and less, and they insisted upon those two amendments, and the Senate yielded. The three percent provision of the Allotment Act applies only to moneys paid by the United States itself for the purchase of “surplus” reservation land pursuant to agreements negotiated under authority of the same Allotment Act. There is not merely an absence of overlap between the 1880 act and the General Allotment Act, but a gap between them. Prior to 1929 there would appear to be no general law authorizing the Treasury to pay interest on the proceeds of any sales of Indian land, except of those held in trust by the United States for the purpose of sale, and of those sold directly to the United States pursuant to the Dawes Act. Direct sales to the United States under other authority, for example, under flood control project legislation, would not be covered. Similarly, such direct sales to third parties as might be authorized by special acts of Congress would not be covered. Revenues from sources other than land sales were not covered. [487] 113 As to Indian tribal moneys not covered by either the 1880 act or the General Allotment Act, if the Government undertook to hold them in its custody, the unrepealed mandate of the 1841 act applied. It continued to require such trust funds to be invested in United States bonds. V. THE IMPL FUND: 1883—1930 During the course of the nineteenth century, as the Federal Government assumed increasing control over the internal affairs of the Indian tribes, its agents began collecting the miscellaneous revenues of the reservations. They collected the proceeds of sale of articles made and crops raised by the Indians; fees paid by white people for pasturing cattle or otherwise using reservation lands; proceeds of sales of hides from slaughtered Indian cattle and of reservation timber, sawed lumber, and other wood products; royalties on coal; fines levied on Indians by the Courts of Indian Offenses; and moneys from numerous other sources. Prior to 1876 the agents were not required to report these collections to Washington. In that year, the Indian Office undertook an investigation of what became of such funds, and asked an opinion of the Treasury Department as to whether they were public moneys. The Secretary of the Treasury ruled that they were not, and could not be deposited in the Treasury. As a result, the Interior Department ordered the Indian agents in the field to retain and account for these funds, and expend them only upon the personal direction of the Commissioner of Indian Affairs. Moneys representing the proceeds of labor of individual Indians were ordered to be expended for such individuals’ own benefit.*® 33See letter of February 21, 1881, Acting Chief Clerk, Office of Indian Affairs, to Secretary of Interior (in exhibit D-64), and [footnote continued] 114 This system of handling the miscellaneous revenues was not a success; and Congress, by a pencilled rider on the deficiency appropriation bill of March 3, 1883, c. 141, 22 Stat. 590, enacted as follows: The proceeds of all pasturage and sales of timber, coal, or other product of any Indian reservation, except those of the five civilized tribes, and not the result of the labor of any member of such tribe, shall be covered into the Treasury for the benefit of such tribe under such regulation as the Secretary of the Interior shall prescribe; and the Secretary shall report his action in detail to Congress at its next session. We have found no legislative history of the quoted paragraph, which we shall refer to hereinafter as “the 1883 act”. Both parties agree, and we agree, that its purpose was improved fiscal control (pl. brief, p. 27; def. brief, p. 98). The 1883 act is similar to the first section of the Act of January 9, 1837, discussed in Part II of this opinion. That section, a part of the 1837 act not superseded by the 1841 act, required the proceeds of sales of Indian land ceded in trust by treaty to be paid into the treasury prior to disbursement to the Indians or investment for their benefit.* The 1883 act extended the familiar pattern of centralized accounting to the proceeds of reservation products. letter of March 20, 1883, Commissioner of Indian Affairs to Secretary of the Interior (D-65). $4Covered into the Treasury” and “paid into the Treasury” are synonyms. Rice v. United States, 21 Ct. Cl. 413, 419-420 (1886), aff'd by equally divided court, 122 US. 611 (1887), quoted with approval in United States v. Johnston, 124 U.S. 236, 253 (1888). [489] 115 The treasury misnamed the new fund “Indian Moneys, Proceeds of Labor’’, abbreviated “IMPL”’, omitting the word “not” between “Moneys” and “Proceeds”, perhaps by clerical error. No interest was paid on the IMPL fund until the Act of June 13, 1930, c. 483, 46 Stat. 584, expressly required its segregation on the books of the treasury into separate accounts for the respective tribes, and payment of 4 percent annually from July 1 of that year on each account with a balance exceeding $500. Previously there was only a single fund in the treasury, the books showing each .ibe’s share being kept in the Indian Office. We have found no earlier provision for paying interest on the IMPL account, and conclude that the treasury acted lawfully in not crediting it with interest during the period between 1883 and 1930. The plaintiffs contend that the Act of September 11, 1841, 31 U.S.C. §547a (1970), applied to the IMPL fund. That act does not direct the Government to pay interest on trust funds, but rather to invest them. In fact, the IMPL fund was not invested, but lay idle in the treasury for 47 years. There is nothing inconsistent between the 1883 act’s requirement for covering the IMPL moneys into the treasury and the 1841 act’s requirement for investment. During the nineteenth century, being covered into the treasury at Washington was the normal prerequisite to investment of Indian trust funds collected in the field. Indeed, we are not aware that any such funds were invested at the field level during the latter half of the century. [490] [491] 116 Section 2 of the 1837 act, which governed the proceeds of sale of trust lands (required to be paid into the treasury by section 1) provided as follows (5 Stat. 135): ...all sums that are or may be required to be paid, and all moneys that are or may be required to be invested by said treaties, are hereby appropriated in conformity to them, and shall be drawn from the Treasury as other public moneys are drawn therefrom, under such instructions as may from time to time be given by the President. From the absence of similar language in the 1883 act it may be inferred that the IMPL funds were to stay in the treasury, pending later appropriation by Congress. The Acting Secretary of the Treasury in a letter to the Secretary of the Interior dated November 26, 1883, (D—71), took the position that they could not be paid out without further legislation. The question of whether they could be invested without further legislation was not before him, and he expressed no opinion on it. In fact, the legal situation in regard to investing the IMPL funds was markedly different than in regard to spending them. If they were trust funds, authority to invest already existed. Earlier in this opinion we have determined that the 1841 act was self-executing, as against the defendant’s contention that it operated only on funds required to be invested by some other law. The act meant what it said. When Congress used the word “all” it did not mean “some”. The language and legislative history of the 1841 act no more support an implied exclusion from coverage of future Indian trust funds than they do for those existing in 1841 which were not otherwise required to be [492] 117 invested. The usual rule of prospective operation applied to the 1841 act. The rule is stated thus in 2 J. Sutherland, Statutory Construction, §5102 at 509 (3d ed., 1943): Standards established by the medium of legislation are usually intended to have considerable breadth with the result that a statute may cover many situations that do not immediately occur to the mind. And so it is a general rule of statutory construction that a statute, expressed in general terms and words of present or future tense, will be applied, not only to situations existing and known at the time of enactment, but also prospectively to things and conditions that came into existence thereafter. Further, we see no reason why the 1841 act should not operate on funds held in trust by the United States in its treasury to the same extent as on trust funds held elsewhere. The mention in the 1841 act of one exception to its applicability, viz., the clause “when not otherwise required by treaty’, implies that there are no other exceptions. 2 J. Sutherland, Statutory Construction, §4915, note € at 413 (3d ed., 1943); cf. Smith v. Stevens, 77 U.S. (10 Wall.) 321 (1870). If an appropriation were necessary to get the IMPL funds invested, the 1841 act would serve the purpose, provided they were trust funds.™ Article I, §9 Clause 7 554 separate appropriation would have been necessary before the so-called trust funds mentioned in footnote 14 could be invested, since these were wholly fictitious. Their principal amounts had never been severed from the general fund in the treasury. They were mere unfulfilled promises of the United States to put up certain moneys. Moreover, by annually appropriating interest and refusing to appropriate principal although repeatedly requested to do so, Congress showed its intention that these imaginary funds were not to be invested, prior law, if any, to the contrary notwithstanding. [footnote continued] [493] 118 of the United States Constitution® requires no special formula for an appropriation; and Congress did not provide such a formula until after 1841,°’ thus confirming that none was required before.*® The IMPL fund, on the other hand, like the various Indian proceeds of lands funds in the treasury, represented actual moneys of the Indians paid into the treasury from outside sources. It did not have to be severed from the general fund, since it did not derive from the general fund and was not intermingled with the general fund, always being carried in a separate account. 36 “No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law; and a regular Statement and Account of the Receipts and Expenditures of all public Money shall be published from time to time.” There is a split of authority on whether this clause applies to trust funds. Stitzel-Weller Distillery v. Wickard, 73 App. D.C. 220, 118 F.2d 19 (1941), held it did. Emery v. United States, 186 F.2d 900 (9th Cir.), cert. denied, 341 U.S. 925 (1951), held it did not. See also United States v. Johnston, 124 U.S. 236, 253 (1888). 37 See $1 U.S.C. §627 (Act of June 30, 1906, c. 3914, §9, 34 Stat. 764). 38The language of section 2 of the 1841 act is quite similar to section 4 of the Act of June 14, 1836, discussed in Part I of this opinion, which reads as follows (5 Stat. 47): ...the Secretary of War be and he is hereby authorized and directed to invest, in a manner which shall be, in his judgment, most safe and beneficial for the fund, the sum of thirty-three thousand nine hundred and twelve dollars and forty cents, being money in the Treasury as the proceeds of lands purchased from the Seneca Indians of Sandusky by a treaty concluded on the twenty-eighth day of February, eighteen hundred and thirty-one, from the Senecas and Shawanese by a treaty concluded on the twentieth of July, eighteen hundred and thirty-one, and from the Shawanese, by a treaty concluded on the eighth of August, eighteen hundred and thirty-one, and upon which sum the United States are, by stipulations in the said treaties, bound to pay to the said Indians an annual interest at the rate of five per centum per annum; [Footnote continued] [494] 119 It is not necessary, however, to construe the 1841 act as an appropriation, since it did not require any funds to be drawn out of the treasury. The 1837 act contemplated the purchase of state bonds, which would normally involve disbursement of the price. The 1841 act on the other hand required the purchase of Federal bonds, which necessitated only a bookkeeping operation within the treasury—debiting the price of the bonds to the trust account and crediting it to the general fund. By 1883, due to recent legislation,*? even the bonds would remain in the physical custody of the treasury. Provided, That the said Secretary shall make no invest- ment of the said sum, or any portion of it, at a lower rate of interest than five per centum per annum. Despite the lack of the word “appropriate” in the section, the Seneca and Shawnee funds were withdrawn from the treasury under its authority and invested in state stocks. See D-41. 59act of June 10, 187 >. 122, 19 Stat. 58. The text follows: CHAP. 122—An act transferring the custody of certain Indian trust-funds Be it enacted by the Senate and House of Represen- tatives of the United States of America in Congress assembled, [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385003_1523%3A2. Public record. Not legal advice.