"Art. 13. The provinces and towns directly interested in the construction of a line of general service shall contribute with the State to the subsidy granted, in the proportion and manner prescribed by the law referred to in Article II.; i. e., the special law granting the concession.' "In article 50 of the regulations for executing that law, we read: * * * "If the aid consists of the delivery of a sum in specie or bonds and stocks, it shall be paid to the company in the form and time stipulated, always on a certificate of the engineers of the State charged with the inspection. The payment of the subsidies in these cases shall be made to the company by the Government directly, and the Government in its turn shall be paid by the province and the town the part of the subsidy devolving upon them, as determined by the law. (Thus far the regulation is identical with that of 1877 for Spain, extended to Cuba in 1883.) If the subsidy consists of the exemption of customs duties, the formalities determined in the existing provisions or those provided in the future by the proper law or regulations shall be complied with. If the subsidy consists in the guaranty of interest, there shall be paid semiannually to the company by the public treasury of the island the difference between the net earnings, after deducting what is provided for in the special clauses of the concession, and the said interest. When, during four consecutive periods of six months, the net earnings of the operation shall equal or exceed the interest guaranteed, the right to such interest shall cease; but the treasury may continue to collect half of the excess on the said interest until it shall have been repaid for the advances made, if it has been so stipulated in the special clauses of the concession.' "The contract of concession has not been fully executed, but was, in some respects, to remain executory for eighty-seven years. It was a contract between the Spanish Government and the railroad company. The promises were made by the one to the other. I am of opinion that an identical contract between the United States and the company was not created by the ratification of the Treaty of Paris, and does not exist. "We need not inquire whether the contract would now survive had the Philippine government, or the provincial deputations, regarded as autonomous or even as merely part of the royal Government, made it, and had the benefits of it been wholly received by the provinces or archipelago. For the contract was made by Spain and partly for her own benefit. It was the indivisible personal contract of Spain and of the concessionaire. "It seems to be the consensus of opinion among authorities on international law that, upon the separation of part of a country from the sovereignty over it, debts created for the benefit of the departing portion of the country go with it as charges upon its government. "Hall's International Law (4th ed.), p. 98. "Rivier, Droit des Gens, Tome 1, pp. 70, 72. "Calvo, Le Droit Intern'l, T. 1, sec. 101; T. 4, sec. 2487. "Wharton's International Law Digest, sec. 5. "Anglo Saxon Review, June, 1899, Mr. Reed's article concerning the Philippine debt, etc. "Dana's Wheaton's Intern. Law, sec. 30, note. "Glenn's International Law, sec. 28. p. 50. "Field's International Code, secs. 24 and 26. "Gardner's Institutes of Intern. Law, p. 52. "Sen. Doc. 62, 55th Congress, 3rd sess., pt. 1, "Various bases are given for an obligation of a locality and its new government. The chief one is that a benefit goes with its attached burden. Another is the legal right of the original sovereign to bind the locality to pay any debt, even if not for local benefit. (Bluntschli, Droit International, sec. 59.) A third is the possession by the new government of the funds or revenues out of which the debt was to be paid. This obviously happens in the case of a revolutionary government getting control of the whole national territory. Still another is the fact that the creditor was lawfully induced to rely, and did rely, upon funds which are now in the possession of the new government. And as for the binding or mortgaging of the locality, it is not to be understood that more is meant, or now commonly practiced, than for a sovereign to agree that certain local objects or revenues should be bound. The creditor is not, as formerly, given a city or province in mortgage, with a right of sovereign jurisdiction. (Heffter, Droit International, sec. 71.) "As for the nature of the obligations supposed to bind the locality, they are not confined to simple debts, but are said to extend to boundary settlements, right of navigating rivers, right to maintain monasteries, colleges, etc. (Bluntschli, Droit International, sec. 47.) "As already suggested, all the promises of every contract entered into by the former government of a province wrested from it by victory in war do not transfer themselves to the new government, in defiance of the natural proposition that a man can not be bound by a stranger's promises. But benefits may be received by a province as well in pursuance of a personal contract of the sovereign partly for his own benefit as otherwise. They are none the less benefits received and retained by the province, and if the burden of the contract itself does not go with them, the burden of an obligation to do equity toward the contractor who has supplied them does go with them. There is an obvious difference between a mere debt for the repayment of a loan and an executory contract containing many stipulations to be performed on one side and the other. Where the former exists, and there are thousands of bonds, perhaps, in the hands of individuals, second or third holders of them, it would be obviously inconvenient, and seldom necessary to the ends of justice, to attempt to make a distinction between the real value of a work and the loan obtained by the original contracting sovereignty, so as to confine the obligation of the succeeding sovereign to such real value of the work, the benefit of which he gets. There is also a clear difference between ordinary executory contracts and contracts to convey lands. Chief Justice Marshall says, in Soulard. United States (4 Peters, 511): "The term "property," as applied to lands, comprehends every species of title, inchoate or complete. It is supposed to embrace those rights which lie in contract; those which are executory, as well as those which are executed. In this respect the relation of the inhabitants to their government is not changed. The new government takes the place of that which has passed away.' This was said concerning uncompleted titles to the public domain in Louisiana. In respect to public domain a contract to convey would, according to this view of the matter, be regarded as equitably diminishing the ownership of the sovereign who contracted, so that he could not afterwards convey an unincumbered title to a third person. Accordingly, the land in the hands of the third person might well be regarded as his only to the extent that it had not so been contracted about. But this would not mean that the third person was substituted as a contractor for the original contractor, so as to be obliged by the obligations which he had never stipulated. It would mean merely that he got no more title than was equitably left in his grantor at the time of the grant. The concessions here in question are executory contracts, not concerning the public domain owned by Spain, but containing many personal obligations of Spain and of other parties. Spain is regarded by the law of nations as having a personality of her own distinct from that of the power which has succeeded her in control of the ceded territory, and I am not aware of any authority for saying that such personal obligations, either on the part of the Government of Spain. or the other contracting parties, become binding as contractual obligations upon a government which made no such promises, or upon the individual toward a government to which he made no such promises. Hall says (International Law, sec. 27): "With rights which have been acquired and obligations which have been contracted by the old state as personal rights and obligations the H. Doc. 551-26 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.' 66 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. "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 |