But this

ereign rights of the republic (Article III.; Draft, Article III.). commissioner must not meddle with the internal affairs of the Mosquito Indians, or exercise any jurisdiction in the Mosquito district. In so far as the Nicaraguan presidential decree of the 6th January 1875 (Case, p. 82) is in contradiction with this, it must therefore cease to take effect.

"The Mosquito Indians can not well be forbidden from using their old flag still. But they must connect therewith a sign of the sovereignty of the Republic of Nicaragua, to which they are subject, in order that this connection with the paramount authority may be generally recognizable (Draft, Article IV.). This is the more imperative, inasmuch as even states which only exercise a protectorate have insisted that the protected state should exhibit a sign on its flag denoting the protective connection ('as a mark of the protection').

"Thus, the Ionian Islands, so long as they were under the protectorate of England, had to indicate that connection on their flag (Phillimore, Commentaries upon International Law, I. p. 96, sq.).

"III. Self-administration comprises in itself the people's own administratration of their economical affairs. It is just where material interests are concerned that the right of self-government assumes special practical importance.

"The Mosquito Indians have to provide from their own means for all the requirements of their separate national existence and all the costs of their self-government. They have to procure those means for themselves, and can only derive them from the natural produce of their territorry and the most profitable disposal thereof. The cession to them of a territory of their own naturally includes the right of employing it to their own advantage. In consequence of the separate territorial and governmental position conceded to the Mosquito Indians, the district reserved to them forms a department economically dependent upon itself.

"As a necessary consequence of this, the Mosquito government must have the right of granting licenses for the acquisition of the natural products of its territory (wood, caoutchouc, gum. cocoanuts, minerals, etc.) and that of levying dues on such products.

"It would be against the universal principles of justice that he to whom the ground belongs should not be entitled to reap the produce of it himself or to transfer the collection of such produce to others for a consideration. The utilization of the Mosquito soil can but belong to the Mosquitoes only; therefore the Republic of Nicaragua can not be considered as entitled 'de délivrer des patentes pour l'exploitation des produits naturels de la Mosquitia,' and thus deprive the Mosquitoes of their source of revenue (Draft, Article V.). The pretension to such a right on the part of the government of the republic (Exposé, p. 49, sq.) rests upon a confusion of the political idea of a sovereignty with the notion of a private right of ownership.

"As the Mosquito Indians constitute a community endowed with its own self-government, under the dominion of the Republic of Nicaragua, they must be considered as also entitled to carry on their trade according to their own regulations (Article III.), and if they should deem it expedient, for the purpose of creating a revenue, to levy duties on goods that are imported into or exported from their district, they may do so.

"If the government of the Republic of Nicaragua claims these rights

for the republic en sa qualité de souverain,' and asserts its privilege 'de réglementer le commerce extérieur de la "Reserva Mosquita," de réglementer le cabotage, d'ouvrir et de fermer ceux des ports pour lesquels l'une ou l'autre de ces mesures lui paraît opportune' (Exposé, pp. 51, 63), 'd'imposer les droits généraux d'importation et d'exportation dans le territoire de la reserva' (Exposé, pp. 52, 53), this is only a consequence of its radically erroneous notion that the Republic of Nicaragua is entitled to the full and unlimited exercise of the rights of sovereignty even over the Mosquito territory. The assertion that the republic has a right 'd'appliquer dans le territoire de la reserva les droits généraux qui régissent les autres parties de la république' (Exposé, p. 63) is altogether contrary both to Articles III. and IV. of the treaty, whereby the 'general laws and regulations of the republic' are not binding in the Mosquito district, and to the right of self-government guaranteed to the Mosquitoes, for that undoubtedly comprises the exclusive right of self-taxation, both direct and indirect.

"In justification of its claim to impose a duty on goods imported into Greytown and intended for consumption in the Mosquito district on their reexportation by sea from that port, the government of the Republic of Nicaragua appeals to the final clause of Article VII., whereby the constitution of San Juan del Norte (Greytown) as a free port is not to prevent the Republic of Nicaragua from levying the usual duties on goods intended for consumption within the territory of the republic; for, as the Mosquito district also belongs to the territory of the republic, the latter must therefore be entitled to levy a duty on the goods exported to Mosquitia from the free port Greytown (Exposé, pp. 52, 53; Réponse, p. 18). But the words 'territory of the republic,' in the final clause of Article VII., which does not refer at all to the connection of Nicaragua with Mosquitia, can not, any more than in Article V., paragraph 2, bear the signification of the whole territory of the republic; they are only to be understood as the proper territory of the republic, exclusive of the 'territory reserved for the Indians' (Article VIII.). Moreover, the levying of a duty is incompatible with the free port character of Greytown (No. V.).

"The apprehension of the government of the Republic of Nicaragua that the duty-free importation of goods into the Mosquito district would cause or encourage smuggling in the other parts of the republic (Exposé, p. 51) is met by Her Britannic Majesty's Government with the objection that the frontier parts of the Mosquito district are quite impassable (Counter Case, p. 28, No. 93). Were this not the case, the Republic of Nicaragua would have no alternative but to establish an immediate customs line. The dif ficulty or impracticability of such an undertaking can not derogate from the right of the Mosquito Indians as once for all settled by the Treaty of Managua.

"It must therefore be allowed that the Republic of Nicaragua is not entitled to regulate the trade of the Mosquito Indians, or to levy import or export duties on goods which are imported into or exported from the Mosquito district (Draft, Article VI.) Articles I. and II. of the Nicaraguan presidential decree of 4th October 1864 (Case, p. 82), which are in contra diction with this, must consequently cease to take effect.

"IV. In Article V. of the Treaty of Managua the Republic of Nicaragua undertook to pay the Mosquito Indians an annuity of $5,000 for the term

of ten years, for the purpose of improving their social position and of maintaining their government authorities constituted in virtue of Article III. This annuity was to be paid half-yearly at Greytown to a person empowered by the chieftain of the Mosquitoes to receive it, and the first installment was to be paid six months after the exchange of ratifications of the Managua Treaty. This said exchange was effected on the 2d August 1860, in London.

"The payment of the annuity was irregular, and soon ceased altogether. When, in November 1865, the chieftain of the Mosquito Indians died, and his cousin, a boy of 11 years old, was proclaimed his successor, the Republic of Nicaragua refused to recognize him. It is not necessary to inquire here whether there were good grounds for the refusal, or whether it was to serve as a welcome pretext for withholding the payments of the subvention. The said chieftain afterward died (since 1875), and no objection has been raised against the legitimacy of his successor. Now, as the objects for the attainment of which the subvention was promised are still the same as they were before, and as the payment thereof is attached to no conditions whatever, there can be no doubt that the Republic of Nicaragua must be declared liable for the payment of the arrears to the amount of $30,859.03. This sum has meanwhile been deposited by the Republic of Nicaragua in the Bank of England on condition (Case, p. 78) that upon the delivery of an award for payment it is to be made over to the British Government for the benefit of the Mosquito Indians (Draft, Article VII.).

"When the Government of the Republic of Nicaragua intimates the desire to have the sum deposited in the Bank of England paid over to itself, in order that the said sum may be duly applied for the benefit of the Mosquito Indians, inasmuch as no one can be in a better position to judge of what is to be done than 'le Souverain dans ses domaines, et que le territoire de Mosquitia se trouvant dans les limites et sous la jurisdiction de la République, il est de son devoir de s'enquérir de ses besoins pour y subvenir autant que possible, prénant toutes les mesures qui peuvent contribuer à l'avancement moral et au progrès matériel de ce district' (Réponse, p. 16), it first of all overlooks the fact that the subvention is not only to serve for the improvement of the social position of the Mosquitoes, but also for the maintenance of their own government authorities. The Nicaraguan Government hereby seeks, in a way that is radically inadmissible, to take the place of the Mosquito government, whose own business is independently to attend to and provide for the concerns and interests of the Mosquitoes. For even in the treaty which the Republic of Honduras concluded with Great Britain at Comayagua on the 28th November 1859 it was stipulated that the ten years' subvention of $5,000 a year to be furnished by the said republic for the improvement of the intellectual and material position of the fully incorporated Mosquitoes should be paid to their chieftain (Article III, par. 2).

"The Republic of Nicaragua, however, can not be called upon to pay back-interest on the subvention sum in arrear. The subvention is not, indeed, as the Government of the Republic of Nicaragua intimates (Réponse, p. 18), a pure donation ('un don gratuit, un présent'), inasmuch as it was more properly promised 'in consideration' of the manifold advantages which were secured to the republic in the treaty and have

accrued therefrom, such as the relinquishment of the protectorate on the part of England, and the recognition of the republic's sovereignty over the whole Mosquito district, including the town of San Juan del Norte (Greytown). But, though the subvention has not the character of a pure donation, still it has the character of remunerating liberality, and the equitable nature of such an obligation precludes the liability for the payment of back-interest (Draft, Article VII.).

"V. As is generally acknowledged in theory and practice, the essence of a free port consists in this, that all goods imported and exported therein free and without payment of duty remain within the jurisdiction of the port itself, either to be sold or consumed there, or to be again exported therefrom to a place in the interior or abroad. A free port, which belongs to the territory of a certain state, and therefore is under the sovereignty of that state, is to be looked upon in regard to the customs just as a foreign country. But so soon as the goods are imported from the jurisdiction of the free port into the other part of the state territory, they may, on their entry into this territory, and consequently passing beyond the jurisdiction of the free port, be charged with an import duty. It is only in this sense that the concluding words of Article VII. of the Treaty of Managua can be understood; they are set in their true light by the stipulation immediately preceding, whereby the Republic of Nicaragua is not to be allowed to levy transit dues on goods which pass from sea to sea through the territory of the republic on the projected interoceanic canal. In like manner the goods exported from inland ('les articles du pays') can not indeed be charged with an export duty when they go out of the free port, but they can be so charged on their passage from the state territory into the jurisdiction of the free port (Draft, Article VIII.). The Nicaraguan presidential decree of the 22d June 1877 (Case, pp. 92, 93), which contradicts these principles, and which has already been suspended, for so long as the dispute is pending, by presidential decree of the 10th April 1878 (Case, pp. 93, 94), for San Juan del Norte (Greytown), must therefore definitively cease to take effect for that free port.

"Inasmuch as no duties at all may be levied on goods in a free port, it is equally unallowable to levy duties on imported or exported goods for the purpose of meeting the costs of the administration of the port town and of the maintenance of the free port. The means for covering such local requirements must be raised by local taxation in other forms, as, for example, by levying a tax upon the consumption of goods imported duty free. The system of providing for the costs of the administration of the town and the maintenance of the free port of Greytown, introduced by presidential decree of the 20th February 1861 (Case, pp. 88, 89), by an import duty on the goods imported there, will therefore have to make room for some other system.

"There is no dispute about the right of the Republic of Nicaragua to levy 'duties and charges' on ships in the free port of San Juan del Norte (Greytown) for the purposes of the port (Article VIII.).

"Upon the other points brought forward by Her Britannic Majesty's Government for decision (Counter Case, pp. 32, 33, Nos. 15-19) it is not expedient to enter, inasmuch as some of them relate partly to administrative affairs and to reclamations in civil law by private persons, while, in

regard to others, the necessary statistical materials and particulars of account are not within reach.

“VI. The Government of the Republic of Nicaragua disputes the right of Her Britannic Majesty's government to take part in the affairs relating to the Mosquito Indians and to the free port of San Juan del Norte (Greytown), or to come forward as complainant in the present litigation, inasmuch as such a proceeding would involve an unauthorized intermeddling with the internal concerns of Nicaragua, and a reassertion contrary to treaty of the relinquished protectorate over Mosquitia (Exposé, pp. 53, 54, 63; Réponse, pp. 16, 17).

"This contention against England's legitimatio ad causam can not be pronounced well founded.

"Then, in regard to the port of San Juan del Norte (Greytown), the Republic of Nicaragua, in Article VII. of the Managua Treaty concluded with England, undertook the engagement to constitute and declare it a free port; and such constitution and declaration did ensue by presidential decree of the 23d November 1860 (Case, p. 87). But England has a treaty right to insist also that that constitution and declaration should not be merely nominal, but that the Government of the Republic of Nicaragua should not enact any provisions and regulations incompatible with the essence and character of a free port. Now, if English merchants, settled in Greytown or trading thither, appeal to the protection and interposition of the English Government against measures on the part of the Nicaraguan Government which are prejudicial to the free port character of Greytown, and thereby to their commercial interests, and if subjects of other states join in such steps, there would be nothing herein contrary to the rules of international law or to the ordinary practice generally acknowledged as admissible.

"In regard, however, to the affairs of the Mosquito Indians, it is true that England, in the Treaty of Managua, has acknowledged the sovereignty of Nicaragua and renounced the protectorate, but this still only on condition, set forth in the treaty, of certain political and pecuniary advantages for the Mosquitoes ('subject to the conditions and engagements specified in the treaty, Article I.') England has an interest of its own in the fulfillment of these conditions stipulated in favor of those who were formerly under its protection, and therefore also a right of its own to insist upon the fulfillment of those promises as well as of all other clauses of the treaty. The Government of Nicaragua is wrong in calling this an inadmissible intervention,' inasmuch as pressing for the fulfillment of engagements undertaken by treaty on the part of a foreign state is not to be classified as intermeddling with the internal affairs of that state, which intermeddling has unquestionably been prohibited under penalty. No less unjustly does the Government of Nicaragua seek to qualify this insistence on treaty claims as a continued exercise of the relinquished protectorate, and on that ground wish to declare England's interposition inadmissible. "Finally, the Government of the Republic of Nicaragua also expresses the desire (Réponse, p. 17) that the award should declare that the Treaty of Nicaragua [Managua], as having accomplished its purpose, is annulled in respect of Mosquitia, and that in future the parties concerned are bound in this respect to comply solely with the decisions adopted and enumer