A resolution recommending that the Second Peace Conference at The Hague be requested to consider whether and, if at all, to what extent the use of force for the collection of public debts is admissible.

Dr. Drago has said that his proposal was "above all a statement of policy" for the states of the American continents to adopt. The resolution prepared for discussion at Rio de Janeiro proposed the question whether or not there should be submitted to the Second Hague Conference a question of law to which there was but one answer. For there is not the slightest doubt that as a matter of legal right, based on the practice and the principles applicable to the question proposed, each state determines for itself both the conditions under which it is justified in using force, and the extent to which it will go in the use of force, to collect the "public debts" due its subjects by another state. The Third Pan-American Conference in committee discussed the topic of its program and as a result of its deliberations formally resolved:

To recommend to the governments represented therein that they consider the point of inviting the Second Peace Conference at The Hague to consider the question of the compulsory collection of public debts; and, in general, means tending to diminish between nations conflicts having an exclusively pecuniary origin.

As a consequence of the action taken at Rio de Janeiro in 1906, the United States reserved the right to introduce to the consideration of the Second Hague Conference, as an addition to the regular program prepared by Russia, the question of an "agreement to observe certain limitations in the use of force in collecting public debts accruing from contracts."

The history of the subject in the Second Hague Conference has some interest. It was originally submitted to the conference in the following form:

Dans le but d'éviter entre nations des conflits armés d'une originie purement pécuniaire, provenant de dettes contractuelles, réclamées comme dues aux su jets ou citoyens d'une pays, par le gouvernement d'un autre pays et afin de garantir que toutes les dettes contractuelles de cette nature qui n'auraient pu être réglées à l'amible par voie diplomatique, seront soumises à l'arbitrage, il est convenu qu'um recours à aucune mesure coercitive impliquant l'emploi de forces militaires ou

navales pour le recouvrement de telles dettes contractuelles ne pourra avoir lieu jusqu'à ce qu'une offre d'arbitrage n'ait été faite par le créancier et refusée ou laissée sans réponse par le débiteur, ou jusqu'à ce que l'arbitrage n'aie eu lieu et que l'Etat débiteur ait manqué à se conformer à la sentence rendue.

The obvious effect of this language was to recognize the legality of the use of force except in the cases enumerated. An examination of the official reports of the proceedings shows that the delegation of Sweden was the only one to raise an objection on this point, though Italy and Spain reserved a favorable vote on the convention till the language in which it was formulated was explained and made more explicit. Reservations of one sort or another were made by some twenty-four delegations. This was a surprise to General Porter, who had introduced the proposal with a clear and searching inquiry into the advantages which, he believed, would accrue to all the states from the adoption of such a convention.

He had called attention to the "growing impression that the employment of armed force to collect unadjusted contractual debts from a debtor nation, unless restricted by some general international agreement, may become the most fruitful source of wars, or at least give rise to frequent blockades, threats of hostilities, and rumors of warlike intentions calculated to interrupt commerce, affect the markets of the world adversely, create a feeling of uneasiness, and disturb not only the countries concerned in the dispute but neutral nations as well." He showed that the disposition of neutral states to refuse to recognize the "pacific blockade," undertaken by a creditor state to compel the payment of such claims, necessarily leads to the effective blockade of actual war, and that the seizure of property and territory may naturally lead to a prolonged occupation, which may tend to disturb "the balance of power" and menace the world's peace. General Porter further pointed out that hostilities against a debtor state inevitably interrupt its foreign commerce, cut down its revenues from customs, and put it to the expense of resist ing force by force-all of which merely diminished its means of paying its debts and aroused the anxiety of the subjects of other states respecting their claims against the common debtor to such an extent

that their governments are frequently compelled to join in coercive measures against a debtor state whose finances may have become temporarily deranged from such natural causes as insurrections, loss of crops, floods, and earthquakes, and which, while without the means of making immediate payment, could meet all its obligations if given a reasonable time.

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He quoted English and American statesmen to show that there is no absolute obligation on the part of a state to protect its subjects in their transactions with a foreign state, and that intervention in every case is entirely a matter of "expediency." He showed how easy it is for a state to be imposed upon by the ex parte statements of an unprincipled speculator who "is playing a game " in which "if he gains millions his Government does not share, but if he loses he demands that it go even to the extent of war to secure sums claimed to be due and often grossly exaggerated." He spoke of "the early consideration and profound study given the general subject" by Dr. Drago, "one of our highly esteemed colleagues in this conference," and concluded by summing up the advantages which would accrue to the creditor, the neutral, and the debtor states, respectively, were the present convention against the use of force agreed to by all states. The certainty that "all disputed claims would be subject to adjudication by an impartial tribunal," he stated, would eliminate the speculators who "trade upon the necessities of feeble and embarrassed governments," and he might have added (if it had been diplomatic to do so) it would tend, also, to eliminate the improvident stipulations to which debtor states had been accustomed to agree.

Of the reservations offered by the various delegations to the original convention submitted by the United States, there were two in particular which received the concurrence of several of the Latin American states: First, First, "recourse to arbitration should be permitted only in the case of denial of justice after the judicial remedies of the debtor state had been exhausted; " second, "claims arising from the public bonds of a debtor state should in no case be cause for a military attack or the actual occupation of American territory." The delegation of Venezuela led in insisting upon the first reserva

tion; the second was advanced by Argentina, and the reasons for it were explained by Dr. Drago in substantially the same language as that which he employed in his paper on "State Loans in Their Relation to International Policy," which appeared in the July (1907) number of this JOURNAL. The arguments of Venezuela were as those which she advanced repeatedly in her diplomatic correspondence with Germany, Great Britain, and Italy respecting the claims of their respective subjects against her. Common cause was made on these two points by eight of the Latin American states when the convention in its revised form came before the full conference for adoption. Argentina, Colombia, Ecuador, Guatemala, Nicaragua, Paraguay, Peru, and Uruguay voted for the convention, but made the two reservations. Venezuela abstained from voting because her delegation could only subscribe to the first paragraph of the convention, viz, the agreement not to use force for the recovery of contractual debts.

Forty-four states took part in the final vote of the full conference. Thirty-nine voted in favor of the convention; ten of these made reservations. Five abstained from voting - Belgium and Roumania, because the convention made no reservation in case the "vital interests" of a state were concerned; Switzerland and Venezuela, because they considered that their national laws gave adequate protection and remedies to foreigners; and Sweden, without advancing

any reason.

Such is the history of the first convention involving obligatory arbitration adopted by a Hague conference and recommended to the states of the world for ratification. It had its origin in the famous. instruction of December 29, 1902, written by Dr. Luis Drago, and though it fails to embody what he sought, it is not too much to say that it was largely due to his sympathy with the general proposition and to his influence upon several of the Latin American delegations in the Second Hague Conference that they did not abstain from voting for the adoption of the convention. The ratification of the present convention by the forty-four powers who took part in the Second Hague Conference will undoubtedly mark an important advance in the history of international arbitration.

CONSTRUCTION OF THE TERM DETTES CONTRACTUELLES

Before the subcommittee the term "dettes contractuelles" was considered "too vague" by Dr. Drago and the delegate of Servia, M. Milovanovitch. They wanted to know if it would apply to disputes arising from contracts to which two states were the direct parties as well as from contracts to which a state and the subjects of another state were parties. General Porter answered that "the distinction has little importance here." He might have answered that the language of the convention was not susceptible of the former construction. They wanted to know, too, if the term would apply to the claims arising from the public bonds of a state held by the subjects of another state. Dr. Drago believed that it would apply and desired that an exception should be made in express terms, because, as he contended, claims arising from the external debt of a state should never under any circumstances, at least so far as the states of the Americas were concerned, be recoverable by armed force. It would probably have pleased Dr. Drago to have had a declaration or reservation made in the convention on contract debts. somewhat similar to the one made by the United States in both the first and second Hague conventions for the peaceful adjustment of international differences, which reads:

Nothing contained in this convention shall be so construed as to require the United States of America to depart from its traditional policy of not entering upon, interfering with, or entangling itself in the political questions or internal administration of any foreign state, nor shall anything contained in the said convention be so construed as to require the relinquishment, by the United States of America, of its traditional attitude toward purely American questions.

M. Milovanovitch, on the other hand, sought, in order to avoid any misunderstanding, to have substituted for the words "de dettes contractuelles" the words "provenant de dettes publiques ou autres dettes contractuelles." It is difficult to see in what respect these words would have been an improvement. If the right to sue the government in respect to the interest or principal of the bonds is given generally by statute or specifically in the case of particular bonds, there is certainly no sound reason for not denominating the