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Show REPORT OB THE COWMISSIONER OF INDIAN AFFAIRG. 95. Of the claims submitted to the Office, some were itemized only as to the charges and not as to the articles purchased, and in many in-stances the charges were for'" Coupon books " and '' cash." A rule has been adopted to disallow all item of cash unless it shall be shown that the whole sum was actually paid'in cash to the debtor and that it was used by him solely' for beneficial purposes, and it is also re-quired that the purchases made with " coupon books " be itemized. Special investigations of accounts have been made at two agencies. At one, settlement was effected with the claimants at about 50 cents on the dollar, many accounts being thrown out entirely for fraud; at the other small reductions were secured. Investigations of a general character made at certain agencies have satisfiedthe Office t l~a tth e transactions betmeen whites and Indians have been so corrupt on the part of the whites that a fair settlement can hardly be effected other-wise than by a compromise based on a percentage of the claims. On , this conclusion I am now proceeding. TAXATION AND CARE OF TIIE FUNDS. Reference as made in my last annual report to a decision by Judge Munger of the circuit court of the United States for the dis-trict of Kebrasl~a, in which it was held that funds derived from the sale of inhaited Indian lands were taxable the same as the property of any ordinary citizen. On appeal to the United States circuit court of appeals, eighth circuit., at its December term in 1905, a deci-sion was rendered of which the following is the syllabus: 1. INDIAN LANDS-STATE TAXATION-~LLoTL~ENTs EXEMPT FROhl WHILE INAJJEN-ABLE.- Lands allotted to Indians, inalienable for certain periods of time during rphiell they are held in trust by the United States for the benefit of the allottees and their heirs under the act of August 7, 11882 (22 Stat., 341, c. 434, O 6), or the act of Rebruary 8, 1887 (24 Stat., 380, c. 119, S 5, are exempt fro111 taxation by any State or county during the period of the trust, because they are instrumentalities lawfully employed by the nation in the exercise of its pdrvers of government to protect, support, and instruct the Indians. 2 SA&IE-FEOCEEUOSF INAFRITED INDIAN LANDS EXE1IPl' FROM STATETA XATION.- The proceeds of the snies of such allotted lands by the Indian heirs of the allottees uhder the act of May 27, 1002 (32 Stat., 245, 275, O 7), which have been deposited by direction of the Secretary of the Interior in a bank selected hz the Commissioner of Indian Affairs to the credit of the heirs, in proper proyortions, subject to their checks only when approved by the agent or officer in charge, are held in trust by the United States for the same purposes as were the lands, ind are exempt from taxation by any State or county for the same reason. (2339 U. S. of A. as. County of Thurston, Xeb., et al.) 3. TRUST--NOC HANQE OE FOR= OF PBOWBTY DIVESTS-THE ~OBSTITPTE TAKES THE NATURE OF THE ORIGINAG--NcOh ange of form of property divests it of a trust. The substitute takes the nature of the original and stands charged wlth the same trust. The authorized sale of trust property by a trustee discharges the property wld from, and charges the proceeds of the sale in the hands or nuder ihe control of the trustee wlth the trust.. |
