new state has nothing to do. The new state, on the other hand, is an entirely fresh being. It neither is, nor does it represent, the person with whom other states have contracted. They may have no reason for giving it the advantages which have been accorded to the person with whom the contract was made, and it would be unjust to saddle it with liabilities which it would not have accepted on its own account.'

"The fact that in certain treaties of cession contracts, regularly entered into for objects of public interest specially concerning the ceded territory, are taken over by the new sovereignty, can not be accepted as proving that without treaties all such contracts become obligatory upon the acquiring sovereignty. The stipulations of treaties are sometimes confirmatory of the law of nations, sometimes different from it. Presumably they should be regarded as not identical with it, since nations may well be presumed not to make unnecessary stipulations or fail to obey the law of nations.

"Calvo (sec. 101) does not seem to regard such treaties as mere repetitions of the law of nations; and Hall (sec. 27, note) reminds us of the motives of policy which govern the making of these as of other treaties. The stipulations are no doubt the result of the existence of general principles of the law of nations concerning debts and contracts as affecting an acquiring sovereignty; but those principles may well fall short of the proposition that all executory contracts by the central government for imperial rights and privileges, as well as local benefits, become obligatory as such contracts in all their terms upon the victorious sovereign acquiring the locality.

"As I have suggested, these concessions, made by a military monarchy for cables and railroads through its colonies, were by no means entered into without regard to the benefit and conveniences of the centrai government as sovereign over the colonies. They were, and this appears upon their face, concerning instruments with which the monarchy was to govern more easily and conveniently the subject colonies, for the general benefit of Spain as well as their own.

"To regard them as exclusively for local benefit would, therefore, be to ignore obvious facts.

"A debt or executory contract by a city or province, whether made by its people or by imperial authorities over it, for gas or irrigation works or other local works, including railroads of only local use, presents another question altogether. He who contends that the liability in such a case is destroyed by a mere change of sovereignty over the city or province, has clearly an unjust cause to maintain.

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It may well be that the treaties in question, some of which speak of 'contracts for objects of public interest, especially concerning the ceded territory,' intended to include only contracts for objects which were, or were supposed to be, or were liberally treated as being, local

objects, and not contracts for combined local and imperial objects. Probably neither a debt, nor even an executory contract of a city for gas works, or of a province for irrigation works or railroads of purely provincial interest, can justly be repudiated upon a change of imperial sovereignty, whether made by the people of the city or province or by imperial agents duly authorized to act for either. On the other hand, to charge the ceded province with contracts or debts for imperial objects, such as those concerning the relations between the central government and the locality, can not be justified by the mere fact that the contract concerns also local objects.

"But it may be said that contracts of this kind may properly be charged to the new sovereignty, which will be interested in the imperial objects and own the province. The old machinery for holding. and ruling the province can serve as well the new as the old sovereignty, and therefore the law requires the former to fulfill the contract made by the latter.

"Such a principle might, perhaps, be conceded if it were a fact that the relations between the new sovereignty and the province and the uses to be made by the new sovereignty of the province were, or could be presumed to be, identical with the preexisting relations and uses. But a presumption of the kind must be rested upon a great preponderance of probabilities, and no such preponderance exists. Geographically, politically, commercially, every way, a province or piece of territory will probably have different relations with the new and the old sovereignty. Take, for example, the colony of Florida, ceded by Spain to the United States. Of what use has Spain's machinery for exploiting, holding, and governing that colony been to the United States? Take Gibraltar and its connection with Spain and England. Take almost every instance of cession. Even in the instances of border provinces ceded to the neighboring nations, machinery for dealing with them from the east and protecting the border against a western enemy would ill suit the western sovereignty, while the old sovereign might have a monarchical and the new a democratic and autonomous system governing the province.

"Nor should we, in inquiring whether the nations have consented to a rule of law to the effect that contracts made by the old sovereignty for local and imperial objects shall be obligatory as such upon the new sovereignty, forget the extraordinary effects which must flow from such a law. What is there that may not be contracted for? What imaginable stipulations may not be made? To agree in a treaty to be bound by actual, known contracts, and to assent to a law about contracts in general, are two different things. Could nations commit themselves to anything more embarrassing and unsafe than a legal obligation to carry out specifically any promises whatsoever that may be made by others in any contracts for imperial and local objects? It

seems to me not, and that whoever asserts that nations have by common consent established such a law must furnish abundant and indisputable authority, whereas, as Hall says (sec. 217), this subject‘is one upon which writers on international law are generally unsatisfactory.' "Servitudes or easements, completely granted or established upon the ceded territory for the benefit of a foreign nation, have been supposed to diminish by so much the title of the owner of the province, so that when he cedes it he cedes it subject to the servitudes. On the other hand, it may be that the owner of the province may acquire from a foreign power a servitude over foreign territory for the benefit of the province, in such a way that it would become appendent or appurtenant to the province and go with it into whosesoever hands. the province might be transferred. This seems to be the meaning of Hall (International Law, 4th ed., p. 98) in speaking of the navigation and regulation of a river. In such a case the obligation runs with the land, and may be regarded as other than a mere personal obligation. But this is no reason for treating personal obligations, stipulated in an executory contract, as not personal obligations, simply because they may have some relation to a particular ceded locality.

"I am unable to regard these contracts of concession, with their manifold personal stipulations, as other than what they purport to be; and the difference between them and servitudes, diminishing the title of the owner prior to the cession or appurtenant to the province ceded, or contracts to convey public lands, or what we conceive of as a 'franchise' to accomplish (as here) a public duty of the sovereign of the ceded province, or even a private (e. g., eleemosynary) work, where such franchise exists otherwise than as but an integral part of such an executory contract of the sovereign of the province as we have under consideration, seems to me to be an obvious one. These contracts are contracts. They are whole things with interdependent parts and reciprocal personal promises. We can not change their nature by calling them by other names, or repeating the word 'local' in connection with them. As such personal contracts, their promises bind those who made them. Any obligation of others in connection with their subject-matter is something different from the contract obligation, and may or may not coincide with the terms of the specific promises. "When we look into the present instance, we find the large capital upon which the subsidy was calculated has long since been invested by the railway company. The provinces of the Philippines have undoubtedly received, and they retain and will retain, the chief benefit from the railroad; the revenues out of which that part of the benefit was to be paid for are now in the hands of their new government; the creditor was induced very properly to look to those revenues for that purpose; and, moreover, the railroad was a most necessary piece of property, two-thirds of which was bought, as it were, by a guardian for the use

of his ward, the price to be paid as to two-thirds from the funds of the ward. The property has been furnished and is being maintained, and, from its nature, will be maintained, and must continue to benefit the ward, whose funds are now freed from the guardian's control. From these considerations it seems to me to follow that, although the contract as such has departed with Spain, there is a general equitable obligation upon the provinces to make some fair arrangement with the company as to the two-thirds benefit, and that they can not justly take advantage of the disappearance of Spain to retain what she procured for them, on the credit of their funds, and deny all liability for the price.

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Whether, based exclusively upon the reception (for the future, and, so far as geographical, political, and other differences will permit, a benefit to continue) of the benefit of the railroad, the United States has incurred any liability affecting one third or any such portion of the original indebtedness, it is unnecessary to consider, since if so it will be for Congress to deal with it.

"So much in answer to your question as to what obligations, if any, exist under said concession, either against the revenues of the Philippine Islands or those of the United States.

"You ask, if any such obligations do exist, what action can legally be taken in recognition and settlement thereof by the executive department of the United States or by the military government of those islands.

"It seems to me that the nonaction of Congress has confirmed to the President the responsibility and authority to continue the military government he has set up in the Philippines, as the only government, for the present and for an uncertain time, of a peopled country whose future permanent status is undetermined. (Treaty of Paris, Article IX.; opinion Attorney-General, July 22, 1898, concerning Hawaii.) Under such circumstances, I am of opinion that the President is not without authority to settle a preexisting accrued indebtedness of the kind herein explained, if he has good reason to believe that the settlement can not wisely and justly be left to await action by the future government.

"It is represented in the papers submitted to me that the large deficiencies in the receipts of the railroad company, occasioned by the disturbed state of affairs, etc., threaten its bankruptcy. If so, this is a fact which may be considered in determining the propriety of present action.

"You desire to know what particular action can be taken. I am of opinion that the President has authority, if he thinks it necessary, to apply the local revenues of the provinces through which this road extends to the discharge of their equitable liability, based upon so much of the concessionary agreement as has been already executed,

the amount of which liability he has authority to determine, in view of all the facts and circumstances. And what he can do the military government can do with his consent."

Mr. Griggs, Attorney-General, to Mr. Root, Sec. of War, July 26, 1900, 23 Op. 181; affirmed by Knox, At. Gen., June 14, 1901, id. 451.

"With reference to your inquiry as to what settlement was finally made with the Manila Railway Co., I have to advise you that the matter has been referred to the military government of the Philippine Islands and will receive the personal attention of Governor Taft on his return to Manila. While Governor Taft was in Washington, the representatives of the railway co. were given a hearing before Judge Taft and me, the outcome of which was a substantial agreement that the position taken in my report, to which you refer, is correct, and that the matter should be dealt with as a business proposition between business men, rather than as a legal proposition controlled by hard and fast rules of law. It was further considered that inasmuch as the railway company desired certain concessions to enable them to extend their railway and as the government of the Philippines desired such extension to be made, the matter could and would be disposed of in the negotiations and proceedings relating to the new concession." (Mr. Magoon, Law Officer, Bureau of Insular Affairs, to Mr. Moore, Aug. 9, 1902, MS.)

Oct. 10, 1898, the British ambassador at Washington inclosed to the Department of State a copy of the concession granted Cable concessions. by the Spanish Government to the Cuba Submarine Telegraph Company."

Jan. 18, 1899, he addressed to the Department of State another note, concerning the concessions granted by Spain in the Philippines to the Eastern Extension Australasia and China Telegraph Company."

Accompanying this note there was the following pro memoria: "The undersigned has been instructed by his Government to make the following representation in relation to the claims of the Eastern Extension Telegraph Company in relation to exclusive rights and to subsidy under their concessions from Spain in the Philippine Islands, which the company fear may not be fully recognized by the United States Government.

"The obligations contracted by Spain under those concessions are of a local nature and it will not be contested, as Her Majesty's Government believe, that they become binding on the United States Government on their taking possession of the islands or assuming effective control of them, whether under a formal protectorate or otherwise. On the faith of those concessions the company has expended vast sums for the benefit of the islands, and the obligations in question clearly belong to that class of local obligations which have always been held to be transferred with the sovereignty and to pass with the territory.

a Sir J. Pauncefote, Brit. amb., to Mr. Hay, Sec. of State, Oct. 10, 1898, MS. Notes from British Leg.

Sir J. Pauncefote, Brit. amb., to Mr. Hay, Sec. of State, Jan. 18, 1899, MS. Notes from Brit. Leg.