III. and IV. Fiji Bank and Polynesian Land Company. "*11. I see no reason to differ from the general conclusions arrived at by Sir H. Robinson as to these two Charters. Not only are they necessarily rendered void by effacement of the so-called Government which purported to grant them, but they are in some obvious respects contrary to those principles of policy which must prevail in a British Colony. If after inquiry you see no objection to dealing with these Companies in the manner proposed by Sir H. Robinson, you have my sanction for taking that course." Earl of Carnarvon, Colonial Secretary, to Sir A. H. Gordon, governor of Fiji, The Hawaiian debt. By the joint resolution of July 7, 1898, to provide for the annexation of the Hawaiian Islands, "the public debt of the Republic of Hawaii, lawfully existing at the date of the passage" of the resolution, “including the amounts due to depositors in the Hawaiian Postal Savings Bank," was "assumed by the Government of the United States" to an amount not to exceed $4,000,000; but, as it was declared that, until legislation should be enacted extending the United States customs laws and regulations to the islands, their existing customs relations with the United States and other countries should remain unchanged, it was provided that, so long as those relations should continue, the Hawaiian Government should pay the interest on the debt. By the protocol of armistice between the United States and Spain, signed at Washington August 12, 1898, it was provided: The Cuban debt. "Article I. title to Cuba. Spain will relinquish all claim of sovereignty over and "Article II. Spain will cede to the United States the island of Porto Rico and other islands now under Spanish sover ignty in the West Indies, and also an island in the Ladrones to be selected by the United States." In the peace negotiations at Paris, the American commissioners, Oct. 3, 1898, proposed the insertion in the definitive treaty of the following clauses: "The Government of Spain hereby relinquishes all claim of sovereignty over and title to Cuba." The Government of Spain hereby cedes to the United States the Island of Porto Rico and other islands now under Spanish sovereignty in the West Indies, and also the Island of Guam, in the Ladrones." The Spanish commissioners submitted, Oct. 7, 1898, a counter proposal, by which Spain was to relinquish her sovereignty over Cuba and transfer it to the United States, and by which the "relinquishment and transfer" were declared to embrace "all the prerogatives, powers, and rights" of Spain over the island and its inhabitants, and "all charges and obligations of every kind in existence at the time of the ratification of this treaty of peace, which the Crown of Spain and her authorities in the island of Cuba may have contracted lawfully in the exercise of the sovereignty hereby relinquished and transferred, and which as such constitute an integral part thereof." For the purpose of ascertaining what were such "charges and obligations,” it was proposed to be laid down that they "must have been levied and imposed in constitutional form and in the exercise of its legitimate powers by the Crown of Spain, as the sovereign of the Island of Cuba, or by its lawful authorities in the exercise of their respective powers prior to the ratification of this treaty," and that they must have been created "for the service of the Island of Cuba, or chargeable to its own individual treasury." It was, however, to be expressly declared that they should, within these limitations, include "all debts, of whatsoever kind, lawful charges, the salaries or allowances of all employees, civil and ecclesiastical, who shall continue to render services in the Island of Cuba, and all pensions in the civil and military services, and of widows and orphans." And it was proposed that similar stipulations should be inserted with regard to Porto Rico. The American commissioners, Oct. 11, 1898, rejected these proposals, on the ground that they appeared to convey not a proposition to "relinquish all claim of sovereignty over and title to Cuba," but in substance a proposition to "transfer" to the United States and in turn to Cuba "a mass of Spanish obligations and charges." "It is difficult," added the American commissioners, "to perceive by what logic an indebtedness contracted for any purpose can be deemed part of the sovereignty of Spain over the island of Cuba. In the article proposed it is attempted to yoke, with the transfer of sovereignty an obligation to assume an indebtedness arising out of the relations of Spain to Cuba. The unconditional relinquishment of sovereignty by Spain stipulated for in the protocol is to be changed into an engagement by the United States to accept the sovereignty burdened with a large mass of outstanding indebtednsss. It is proper to say that if during the negotiations resulting in the conclusion of the protocol Spain had proposed to add to it stipulations in regard to Cuba such as those now put forward, the proposal, unless abandoned, would have terminated the negotiations. The American commissioners, therefore, speaking for their Government, must decline to accept the burden which it is now proposed shall be gratuitously assumed." (S. Doc. 62, 55 Cong. 3 sess., part 2, pp. 22, 28, 33–34, 44–45.) "II. The cession and relinquishment of sovereignty embraces the cession and relinquishment of the rights and obligations constituting it. Spanish argu ment. "The idea of the sovereignty of a state was never confounded in the ancient world, and much less in the modern and Christian world, with the idea of individual or private ownership. Much less still with the authority of the master over the slave. "The sovereign, it is true, has prerogatives and rights over the territory and its inhabitants; but these prerogatives and rights attach to him not for his own satisfaction and enjoyment, but for the good government and the welfare of the people subject to his rule. For this reason the rights of the sovereign become obligations with respect to his subjects. The sovereign is bound to see that they have good government, and to their progress and prosperity. The sovereign is not the owner of the tax proceeds or of the revenues he receives from his subjects, to be used for his own personal benefit, but to meet with them all public necessities and attend to the public welfare. The fulfillment. of these obligations is the foundation of the legitimacy of his authority to enter into conventions and agreements of all kinds with third parties, to contract all the obligations necessary to raise means for the good administration of the government of his subjects, and to attend to the public service in the best possible manner. "These obligations exist from the moment they are contracted until they are fulfilled. And it is perfectly self-evident that if, during the period intervening between the assumption by a sovereign of an obligation and the fulfillment of the same, he shall cease to be bound thereby through relinquishment or any other lawful conveyance, the outstanding obligation passes as an integral part of the sovereignty itself to him who succeeds him. It would be contrary to the most elementary notions of justice and inconsistent with the dictates of the universal conscience of mankind for a sovereign to lose all his rights over a territory and the inhabitants thereof, and despite this to continue bound by the obligations he had contracted exclusively for their régime and government. "These maxims seem to be observed by all cultured nations that are unwilling to trample upon the eternal principles of justice, including those in which such cessions were made by force of arms and as a reward for victories through treaties relating to territorial cessions. Rare is the treaty in which, together with the territory ceded to the new sovereign, there is not conveyed a proportional part of the general obligations of the ceding state, which in the majority of cases have been in the form of a public debt. "But the case to which the convention to be framed by this conference refers is clearer still. It is not the purpose here to transfer, together with the sovereignty over Cuba and Porto Rico, a proportional part of the obligations and general charges of the mother coun try, but only the obligations and charges attaching individually to the islands ceded and transferred. When not treating of general obligations common to all the territories subject to the sovereign contracting the same, but of the special obligations of the particular territories H. Doc. 551 -23 ceded which were contracted by its legitimate authorities, in no single case, not even in those treaties in which the victor has shown himself most merciless towards the vanquished, have the individual and separate charges and obligations of a ceded territory failed to pass therewith. Thus it may be considered as an absolutely essential condition. that the cession of territory carries with it the cession of the departmental, communal, and, generally speaking, individual obligations and debts of the ceded territory. The Great Conqueror of this century never dared to violate this rule of eternal justice in any of the treaties he concluded with those sovereigns whose territories he appropriated in whole or in part, as a reward for his victories. "Very well; it must be recorded that the sovereignty of Spain never ceased to administer its colonies in America, from the time of the discovery, separate from the mother country. Spanish America was always governed from the capital of the monarchy by a special council called 'Council of the Indies,' which in no wise interfered in the régime and government of the Peninsula, which was under a council designated as the Council of Castile.' "The territory discovered by Columbus and other illustrious Spanish explorers who have rendered such great though not always appreciated services to civilization being divided into vice-royalties and captaincies-general, each of these small states collected its own revenues and met its own expenses, or contracted obligations to meet the necessities of its own separate government; and when one of these territories found itself with a permanent deficit, as was the case in the island of Cuba, the nearest sister-colony came to its rescue. The viceroyalty of Mexico from 1766 to 1806 annually assisted the island of Cuba with heavy sums for its governmental needs and the development of its natural resources, at the time unexploited, which expenses it could not, at such time, meet from its own revenues. Not less than 108 millions of pesos came into Cuba from Mexico during that period, this assistance being known in the Spanish colonial administration under the name of Situado de México." During the present century Spain carried to the last extreme this system of the separate and independent administration of its colonies. The ministry of the colonies was the department where this administration was centered. Each colony had annually its own budget and deficits. When its own revenues were not sufficient to cover its own expenses, these were met by special operations in the way of consolidated, mortgage, or floating debts, and were chargeable to the colony for whose benefit such operations were conducted. **And the separation of the administration of the Peninsula and the colonies was for a long time so complete that the body of public employees in the executive and judicial services of the colonies was separate and independent, to the extent that these employees had not the legal capacity to be included in the similar hierarchical bodies of Spain, or to discharge therein like functions. "This régime is the one under which Spain has been administering Cuba up to the present time. "We are well aware that outside of Spain grave errors are fallen into, owing to the Spanish colonial system being unknown; but it is high time, and above all at this juncture is it necessary, that these errors be dissipated by comparing them with the actual facts and the provisions of Spanish laws. Cuba and Porto Rico have never been included in the general budget of the Spanish nation, nor have their revenues ever figured therein, which is also true of their expenditures. All outstanding obligations that have been legally contracted for the service of Cuba and Porto Rico, and which are chargeable to their individual treasuries, always distinct and separate from the treasury of the Peninsula, are Cuban or Porto Rican obligations, that is, local obligations, solely and exclusively affecting the territory of the islands and their inhabitants. "What has been said up to this point regarding the nature of the colonial obligations and those bound thereby, has never been disregarded (to their honor be it said) by the Spanish-American peoples. They achieved their independence through their own efforts, and the majority of them, before Spain had recognized it, had by prior and solemn act of their legislatures, declared as their own and as having preference those debts which the Crown of Spain had contracted during the continuance of its sovereignty for the service of such territories, and which debts were recorded in their respective treasury books. "Very few of the Spanish-American Republics delayed so honorable a declaration until the mother country had recognized their independence, as was said by the Argentine Republic in the treaty concluded with Spain on September 21, 1863, and by Uruguay, in that concluded on July 19, 1870: Just as they acquired the rights and privileges belonging to the Crown of Spain, they also assume all its duties and obligations." "Note that the Spanish-American Republics without exception recognized and assumed as their own these debts of every kind whatsoever, specifying them in the treaty of peace with Bolivia of July 21, 1847, wherein it is stated that they include all debts for pensions, salaries, supplies, advances, transportation, forced loans, deposits, contracts, and any other debt incurred during war times or prior thereto, chargeable to said treasuries; provided they were contracted by direct orders of the Spanish Government or its constituted authorities in said territories.' "Spain did not recognize the independence of any American state which had previously been her colony save upon this condition, which |