76 F.2d 817 (8th Cir. 1935), 10204, Langer v. United States

Docket Nº:10204.
Citation:76 F.2d 817
Party Name:LANGER et al. v. UNITED STATES.[*]
Case Date:May 07, 1935
Court:United States Courts of Appeals, Court of Appeals for the Eighth Circuit

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76 F.2d 817 (8th Cir. 1935)

LANGER et al.



No. 10204.

United States Court of Appeals, Eighth Circuit.

May 7, 1935

Appeal from the District Court of the United States for the District of North Dakota.

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Francis Murphy and George W. Thorp, both of Fargo, N. D., and James H. Harkless, of Kansas City, Mo., for appellants.

P. W. Lanier, U. S. Atty., of Fargo, N. D. (Harry Lashkowitz, Asst. U. S. Atty., of Fargo, N. D., and Donald M. Murtha, Asst. U. S. Atty., of Dickinson, N. D., on the brief), for the United States.


GARDNER, Circuit Judge.

The appellants were convicted under an indictment charging violation of the provisions of section 37 of the Criminal Code (R. S. § 5440, 18 USCA § 88). The indictment charges appellants and four other defendants, Joseph A. Kinzer, Paul J. Yoeter, G. A. Hample, and Oscar Erickson, with conspiring to administer corruptly and to cause the corrupt administration of certain acts of Congress for the promotion of their own political interests and for their own financial gain and profit, contrary to the true intent and policy of said acts, wasteful of the money so appropriated, and prejudicial to the interests and welfare of the United States, and the pulbic service thereof. At the close of the government's case, the defendants Joseph A. Kinzer, Paul J. Yoeter, and G. A. Hample were, on direction of the court, acquitted. The defendant Oscar Erickson was not tried.

The acts of Congress specified are: (1) The act approved July 21, 1932, 47 Stat. 709, see 15 USCA § 605 et seq.; (2) the act approved May 12, 1933, c. 30, 48 Stat. 55, 15 USCA §§ 721-727, 728; and (3) the act of Congress approved June 16, 1933, 48 Stat. 195, 15 USCA §§ 701-712.

As there is no contention that there was evidence of a conspiracy to obstruct or corruptly administer the act of Congress approved June 16, 1933, we shall make no further reference to it.

The sufficiency of the indictment was challenged by demurrer, by motion to quash, by motion for new trial, and by motion in arrest of judgment, all of which were overruled.

It appears from the record that appellant Langer was elected Governor of North Dakota in January, 1933, for a term of two years. He immediately appointed a relief committee composed of prominent citizens of the state of North Dakota. Appellant Kinzer was appointed as executive secretary of the state emergency relief committee March 9, 1933, and continued as such until the latter part of August, 1933. Appellant Vogel was the state highway commissioner, appointed July 15, 1933. Appellant Chaput was the business manager of a newspaper published at Bismarck, known as the Leader, and appellant McDonald was a solicitor for that newspaper. Chaput had a desk in Gov. Langer's official office, and performed duties of a private secretary to the Governor.

Stated without detail, the evidence in substance shows that the appellants belonged to the same political party or faction in North Dakota, the Nonpartisan League, and the government contends that the evidence shows a plan to compel and coerce clerks and employees engaged in distributing the funds provided by the federal statutes above mentioned for the relief of the needy in North Dakota to contribute 5 per cent. of their annual salaries for the personal uses of appellants, principally for the purpose of making it possible for appellants to purchase and conduct for their benefit and the defense and promotion of their political organization a newspaper called the Leader.

In support of their challenge to the indictment, appellants contend:

(1) That the Reconstruction Finance Corporation, whether acting through its board of directors, or through the Federal Emergency Relief Administrator (sections 603 and 723(a), title 15 USCA), is not the government of the United States, and that the moneys made available by that corporation to the several states pursuant to the provisions of the acts of Congress involved came out of its funds.

The indictment charges 'that the defendants, each and all of them, willfully, unlawfully, knowingly and feloniously combined, conspired, confederated and agreed together that they would corruptly administer and procure the administration of said Acts of Congress for the promotion of their own political interests, and for their own financial gain and profit, contrary to the

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true intent and policy of said Acts, wasteful of the money so appropriated and apportioned, and prejudicial to the interest and welfare of the United States and the public service thereof.'

The overt acts charged consist principally of the solicitation of funds from the clerical help employed in North Dakota to assist in the management and distribution of such funds as came to North Dakota from the Reconstruction Finance Corporation and the Federal Emergency Relief Administrator.

The capital which the Reconstruction Finance Corporation uses is raised by subscription to its capital stock by the United States, and by borrowing. A part of the money of the corporation was allocated and made available to the Secretary of the Treasury to make payment on stock of the Federal Home Loan Banks subscribed for by him, and to the Secretary of Agriculture for relief of agriculture. Management of the corporation is vested in a board of directors consisting of the Secretary of the Treasury, or, in his absence, the Under Secretary of the Treasury, and six other persons appointed by the President by and with the advice and consent of the Senate. The corporation has power 'to select, employ, and fix the compensation of such officers, employees, attorneys, and agents as shall be necessary for the transaction of the business of the corporation, without regard to the provisions of other laws applicable to the employment and compensation of officers or employees of the United States.' Section 604, 15 USCA. Free use of the United States mail is granted to the corporation, and obligations issued under section 609 are fully and unconditionally guaranteed by the United States, and it is provided that 'all redemptions, purchases, and sales by the Secretary of the Treasury of the obligations of the corporation shall be treated as public-debt transactions of the United States.' Section 609. If default is made in payment, the Secretary of the Treasury is directed to pay the amount thereof. 'The Secretary of the Treasury, at the request of the Reconstruction Finance Corporation, is authorized to market for the corporation its notes, debentures, bonds, and other such obligations, using therefor all the facilities of the Treasury Department now authorized by law for the marketing of obligations of the United States. The proceeds of the obligations of the corporation so marketed shall be deposited in the same manner as proceeds derived from the sale of obligations of the United States, and the amount thereof shall be credited to the corporation on the books of the Treasury.' Section 609. 'The corporation, with the consent of any board, commission, independent establishment, or executive department of the Government, including any field service thereof, may avail itself of the use of information, services, facilities, officers, and employees thereof in carrying out the provisions of this chapter.' Section 604.

The Federal Reserve Banks are authorized and directed to act as depositories, custodians, and fiscal agents for the Reconstruction Finance Corporation in the general performance of its powers. Section 607. Borrowing by the corporation is subject to the approval of the Secretary of the Treasury, and property of the corporation is wholly exempt from taxation, except that its real estate is made subject to local taxation. The Secretary of the Treasury is made a liquidating officer of the corporation. Quarterly reports must be made to Congress, and monthly reports to the President and Senate and House of Representatives. False statements, willful overvaluation of security in applying for loans, forgery, counterfeiting, altering the written obligations of the corporation, embezzlement from it, false entries in its books, fraudulent participation in any transaction of the corporation, and giving unauthorized information concerning future action or plans of the corporation are punished as crimes. Section 616(a-c). Unauthorized use of the words 'Reconstruction Finance Corporation' is punished as a crime. When designated for that purpose by the Secretary of the Treasury, the corporation shall be a depository of public money, excepting receipts from customs, under such regulations as the Secretary of the Treasury may adopt. It may also perform all such reasonable duties as depository of public money and financial agent of the government as may be required of it. Section 612.

The question to be determined is whether Congress has created a corporate entity to act as a part of the government it has political department, or whether it has adopted a corporate form to be separate from and not to be considered as a part of the government. This question can only be determined by a consideration of the acts viewed in the light of the decisions

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of the Supreme Court. In a number of cases it has been held that it was the intent of Congress to create a corporation so separate and distinct as to retain its own individuality, and, hence, to share none of the privileges, immunities, or disabilities of the government. United States v. Strang, 254 U.S. 491, 41 S.Ct. 165, 166, 65 L.Ed. 368; United States ex rel. V. McCarl, 275 U.S. 1, 48 S.Ct. 12, 72 L.Ed. 131; Bank of United States v. Planters' Bank of Georgia, 9 Wheat. 904, 6 L.Ed. 244; Bank of Kentucky v. Wister, 2 Pet. 318, 7 L.Ed. 437; Sloan...

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