"NOTE.-Proposals, and the required samples of the papers and books, to receive consideration, must reach the office of the purchasing agent, Post Office Department, not later than 2 o'clock p. m., January 19, 1912, and the department will not give consideration to any bids which. are received at a later hour or date, whatever may be the cause of the delay."

On January 19, 1912, the Public Printer submitted an estimate, as provided by the statute, in response to your advertisement, stating in his letter of transmittal that should the actual cost of the paper, which must be purchased by the Public Printer as the result of public advertising, be less than the quoted prices, or should the cost of producing the work in the Government Printing Office be less than the prices given in his estimate, the difference between the prices quoted and the actual cost would be rebated to the Post Office Department. On January 20, 1912, subsequent to the opening of bids, the Public Printer submitted a supplemental estimate, quoting an aggregate reduction of $34,275 on his estimate of the previous day, because he received a lower quotation on paper, which he claimed reached him too late to form a basis for his original estimate. On February 2, 1912, the Public Printer submitted a second supplemental estimate, quoting an aggregate increase of $7,841.40 over his estimate of January 20.

The Assistant Attorney General for the Post Office Department, to whom the matter was submitted, expressed the opinion that the estimate furnished by the Public Printer was not a "bid," but an "estimate" required by law, and was not governed by the principles of law applicable to proposals of private bidders; and that it was, therefore, legally competent for the Postmaster General to accept the revised estimate of the Public Printer if, as provided by the statute, the prices given therein were lower than those contained in private bids. In this opinion I entirely concur.

The Government maintains at a large expense a Public Printing Office and a Bureau of Engraving and Printing. Generally speaking, its maintenance of these establish

ments can only be justified by their use. But in order that the work may be done on the best terms for the public interest the statute authorizes the Postmaster General to call for proposals from private bidders and requires him to procure these supplies " from the lowest responsible bidders," unless the Public Printer and the Chief of the Bureau of Engraving and Printing, respectively, shall submit estimates of the cost of furnishing the same supplies for prices less than those proposed by the lowest "bidder," in which event the statute requires that the materials shall be furnished or the work done by those Government establishments. The statute draws a clear distinction between proposals" to be made by private bidders and estimates" of the cost of furnishing the printed and engraved matter to be submitted by the Government establishments. The proposal made by the lowest bidder is to be accepted unless the estimate of cost made by the head of the Government establishment shall be lower. The proposals are required to be made by responsible bidders pursuant to "separate advertisements calling for proposals to furnish the same" (i. e., the supplies described in the act) "for a period of four years, upon such conditions as the Postmaster General may prescribe." There is no requirement in the statute that the Government Printing Office and Bureau of Engraving and Printing shall make or submit their "estimates" of the cost of doing the work before or at the same time the proposals of outside bidders are made. Nor are those estimates to be regarded in the same light as bids or proposals from outsiders. The statute gives to the head of the Post Office Department, in the public interest, the advantage of securing a bid or proposal from private manufacturers and dealers, and then, if the Government offices can better that price, the work is to be done by them. In this manner the Government is assured of obtaining the supplies on the best possible terms.

I have, therefore, to answer your question whether or not the revised estimates of the Public Printer may be legally accepted in the affirmative.

Respectfully,

GEORGE W. WICKERSHAM.

The POSTMASTER GENERAL.

POSTAL SAVINGS SYSTEM-PLEDGING OF LOANED

SECURITIES.

It is immaterial, under the postal savings depositories act of June 25, 1910 (36 Stat. 814), from what source the bank obtains the securities furnished the board of trustees as collateral to postal savings deposits, provided the board takes them in pledge on a valuable consideration with no other notice than that they are being used in the exact manner authorized by the owners thereof; and hence a bank may be permitted to pledge with the board of trustees as collateral to postal savings funds bonds loaned to it for that purpose.

When such bonds are transferred to the board of trustees by the bank in consideration of the deposit with the bank of postal savings funds, the board acquires a good title thereto as pledgee, since said bonds are negotiable instruments and the board is a purchaser for value without notice of any flaw in the title thereto. DEPARTMENT OF JUSTICE,

February 27, 1912.

SIR: I have the honor to acknowledge the receipt of your letter of the 12th instant, referring to my opinion to you of the 3d November last, in which I held that the board of trustees of the postal savings depositary offices established by the act of June 25, 1910 (36 Stat. 814), were authorized, under section 9 thereof, to take from State banks of Wisconsin as collateral to postal savings deposits, public bonds, or other securities supported by the taxing power owned, not by said banks but by individual directors or stockholders thereof, and entrusted by them to such banks for the purpose of being pledged as such collateral.

You now inquire whether it is essential that the bonds so pledged shall be owned by the directors or stockholders of the banks concerned, and whether a bank may not be permitted to pledge bonds loaned to it for the purpose by a correspondent or bond firm under an arrangement by which the bank would give to the concern furnishing the security a surety bond conditioned to cover any loss which might result from the pledge of the bonds as security for postal savings funds; and, further, whether under such an arrangement the board of trustees would be amply protected.

The law of Wisconsin to which reference is made in your letter is sections 2024-36, chapter 94, of the Supplement to

the Wisconsin Statutes of 1898, and the pertinent part thereof is as follows:

"No bank, banker, or bank officer shall give preference to any depositor or creditor by pledging the assets of the bank as collateral security; * * *99

There is evidently nothing in this provision which prohibits the State bank from pledging, as collateral to postal savings deposits, bonds loaned to it for that purpose, since such bonds do not become part of its "assets," but are merely bailed to it for a limited purpose (Bowers v. Evans, 71 Wis. 133; Nonotuck Silk Co. v. Flanders, 87 Wis. 237; Boyle v. National Bank, 125 Wis. 498; Bank v. Gillespie, 137 U. S. 411; Hart, Law of Banking, pp. 381388). It is equally clear that the board of trustees, when such bonds are transferred to it by the State bank in consideration of the deposit with said bank of postal savings funds, acquires a good title thereto as pledgee, since such bonds or securities are negotiable instruments and the board is a purchaser for value without notice of any flaw in the title thereto (Murray v. Lardner, 2 Wall. 110). The deposit of postal savings funds in the bank furnishes the consideration, and the only notice the board has is that the bank is lawfully in possession of the bonds and authorized to use them for this very purpose. My former opinion that the bonds need not be the property of the bank necessarily involved the conclusion that the source from which the bank obtains them is immaterial, provided the board takes them in pledge on a valuable consideration with no other notice than that they are being used in the exact manner authorized by the owners of them.

Respectfully,

GEORGE W. WICKERSHAM.

THE POSTMASTER GENERAL.

POSTAL SAVINGS SYSTEM-SPECIAL IMPROVEMENT BONDS OF PORTLAND, OREG.

Certain special improvement bonds of the city of Portland, Oreg., which are not limited in their obligation to any special fund, are public bonds supported by the general taxing power of the city within the meaning of section 9 of the postal savings depositories act of June 25, 1910 (36 Stat. 816).

DEPARTMENT OF JUSTICE,

March 2, 1912.

SIR: I have the honor to acknowledge the receipt of your letter of the 12th ultimo requesting my opinion whether certain bonds of the city of Portland, Oreg., are "public bonds or other securities supported by the taxing power" within the meaning of section 9 of the act of June 25, 1910, chapter 386 (36 Stat. 816).

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In his opinion, inclosed with your letter, the Treasurer of the United States states that the above words have been construed by the board of trustees, under the discretion given them by section 9 supra, to mean "an obligation of a legally constituted municipality, constituting a proper charge that may be paid out of taxes levied against all the property, both real and personal, that is contained within the limits of the place that issues the bonds without any restrictions or limitations." I assume this construction of section 9 supra, and, furthermore, since no objection to these bonds is suggested to me other than that, not being payable out of the general tax levy of the city of Portland, but only out of a special-assessment fund, they are not, therefore, the absolute obligations of that city. I confine myself in this opinion to the sole question, viz, whether these bonds are the absolute obligations of the city of Portland, in the sense that they are payable out of the general fund raised by the ordinary tax levies, and I do not undertake to pass on their validity in any other respect.

These bonds belong to the class known as "special improvement bonds," and the conditions under which they are binding generally on the municipality issuing them are thus