the islands,' which obligations and charges it likens to the local debts which pass with ceded territory. It appears, however, by the explanation given in the memorandum of the origin of these charges and obligations, and of the manner in which they were contracted, that they include the whole of what is commonly called the Cuban debt. The American Commissioners, therefore, while reaffirming their position as to the exclusion by the protocol of any proposal for the assumption of such charges and obligations, will examine the subject in some of its aspects.

"It is true that the financial department of the Island of Cuba, commonly called the 'Cuban Treasury,' was not a branch of the Spanish Treasury, but it is equally true that it was accountable to the Spanish Secretary for the Colonies, the Ministro de Ultramar, and that it was managed by a body of officials appointed by the Crown, at whose head was a high functionary called Intendente General de Hacienda. In each year a budget was made up by the Spanish Colonial Secretary on data furnished by the Intendente General, and this budget was submitted to and acted upon by the Cortes. If in any year the revenues collected in Cuba were insufficient to meet the burdens imposed upon them, the deficit was charged to the island, and formed a new item of the Cuban debt. It thus appears that the finances of the island were exclusively controlled by the Spanish Government, and that the debt was in no sense created by Cuba as a province or department of Spain, or by the people of the island. In reality it is notorious that the denial to Cuba of any financial autonomy and of any power to protect herself against the imposition by Spanish officials of enormous burdens for purposes foreign and adverse to her interests, has been the most prolific source of discontent in the island. The debt-creating power, such as commonly belongs to communes or municipal corporations, never was delegated to Cuba. Such a thing as a Cuban obligation, created by the island in the exercise of powers either inherent or delegated, is unknown to the markets of the world.

"Having briefly sketched the system of financial administration with respect to Cuba, we may consider the origin of the debt.

"Prior to 1861 no so-called Cuban debt existed.

"The revenues of the island were as a rule far more than sufficient to pay the expenses of its government, and produced in each year a surplus. This surplus was not expended for the benefit of the island, but was sent to Madrid. The surpluses thus disposed of amounted, from 1856 to 1861 inclusive, to upward of $20,000,000.

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In 1864, in order to meet the national expenses of the attempt to ' reincorporate' San Domingo into the Spanish dominions, and of the 'expedition to Mexico,' the Spanish authorities issued bonds to the amount of $3,000,000. Subsequently new loans were made, so that the so-called Cuban debt had swollen by 1868 to $18,000,000.

"In that year the ten years' war for Cuban independence broke out, a war produced by causes so generally conceded to be just as to need no exposition on this occasion. All the expenses of this war were imposed upon Cuba, so that in 1880, according to a statement made at Madrid in that year by a Spanish Secretary for the Colonies, the so-called Cuban debt amounted to upward of $170,000,000.

"Subsequently the Spanish Government undertook to consolidate these debts, and to this end created in 1886 the so-called Billetes hipotecarios de la Isla de Cuba, to the amount of 620,000,000 pesetas, or $124,000,000. The Spanish Government undertook to pay these bonds and the interest thereon out of the revenues of Cuba, but the national character of the debt was shown by the fact that, upon the face of the bonds, the Spanish nation' (la Nación española) guaranteed their payment. The annual charge for interest and sinking fund on account of this debt amounted to the sum of 39,191,000 pesetas, or $7,838,200, which was disbursed through a Spanish financial institution, called the Banco Hispano-Colonial, which is said to have collected daily from the custom-house at Havana, through an agency there established, the sum of $33,339.

"In 1890 a new issue of bonds was authorized by the Spanish Government, to the amount, as it is understood, of 875,000,000 pesetas, or $175,000,000, with the same guarantee as before, apparently with a view to refund the prior debt, as well as to cover any new debts contracted between 1886 and 1890. It seems, however, that only a small number of these bonds had been disposed of when in February, 1895, the last insurrection and movement for independence broke out. The Government of Spain then proceeded to issue these new bonds for the purpose of raising funds with which to suppress the uprising, so that those outstanding on January 1, 1898, amounted, according to published reports, to 858,550,000 pesetas, or $171,710,000. In addition to these a further loan, known as the Cuban War Emergency Loan,' was, as the American Commissioners are advised, floated to the amount of 800,000,000 pesetas, or $160,000,000, represented by what are called 'five per cent peseta bonds.'

"Although it does not appear that any mention is made in these bonds of the revenues of Cuba, it is understood that they are regarded in Spain as properly constituting a part of the Cuban Debt,' together with various unliquidated debts, large in amount, incurred by the Spanish authorities in opposing by arms the independence of Cuba.

"From no point of view can the debts above described be considered as local debts of Cuba or as debts incurred for the benefit of Cuba. In no sense are they obligations properly chargeable to that island. They are debts created by the Government of Spain, for its own purposes and through its own agents, in whose creation Cuba had no voice.

"From the moral point of view, the proposal to impose them upon

Cuba is equally untenable. If, as is sometimes asserted, the struggles for Cuban independence have been carried on and supported by a minority of the people of the island, to impose upon the inhabitants as a whole the cost of suppressing the insurrections would be to punish the many for the deeds of the few. If, on the other hand, those struggles have, as the American Commissioners maintain, represented the hopes and aspirations of the body of the Cuban people, to crush the inhabitants by a burden created by Spain in the effort to oppose their independence would be even more unjust.

"The American Commissioners deem it unnecessary, after what has been stated, to enter into an examination of the general references, made in the Spanish memorandum, to cases in which debts contracted by a state have, upon its absorption, been assumed by the absorbing state, or to cases in which, upon the partition of territory, debts contracted by the whole have been by special arrangement apportioned. They are conceived to be inapplicable, legally and morally, to the socalled Cuban debt,' the burden of which, imposed upon the people of Cuba without their consent and by force of arms, was one of the principal wrongs for the termination of which the struggles for Cuban independence were undertaken.

"The American Commissioners have deemed it due to the Spanish Commissioners and to themselves to make these observations upon the general subject of Cuban charges and obligations,' apart from the special circumstances under which the present negotiations were begun. But, as they have heretofore stated, they consider the subject to be disposed of beyond all question by the Protocol. The suggestion that their Government should assume, either for itself or for Cuba or Porto Rico, the burden of the charges and obligations' now in question was not put forward during the negotiations that resulted in the conclusion of that convention, nor, if it had been so put forward. would it have been for a moment entertained by the United States.

"From unselfish motives, of which it is unnecessary to make a renewed declaration, the Government of the United States, at great sacrifice of life and treasure, has prosecuted the conflict which followed its demand for the relinquishment by Spain of sovereignty over Cuba. "One of the results of that conflict is the unconditional agreement, embodied in the first article of the Protocol, that Spain will relinquish all claim of sovereignty over and title to Cuba. Upon the simple fulfilment of that stipulation the American Commissioners are obliged to insist."

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Memorandum of American Peace Commission, Paris, Oct. 14, 1898, S. Doe. 62, 55 Cong. 3 sess., part 2, pp. 48–50.

"The American Commissioners, having listened with great respect to the arguments orally urged by the Spanish Commissioners in support of the articles offered by them, as well as duly considered the written

memorandum submitted in support of the same, must adhere to the rejection thereof as stated in the memorandum of the American Commissioners read to the Commission and attached to the protocol of the 11th instant. The chief additional reason adduced in the oral presentation for the acceptance of sovereignty by the United States in Cuba is that without such acceptance the people of Cuba notably of Spanish origin will have no protection of person and property. The United States recognizes in the fullest measure that in requiring the relinquish ment of all claim of Spanish sovereignty and the evacuation of the Island of Cuba it has assumed all the obligations imposed by the canons of international law and flowing from its occupation. The United States, so far as it has obtained possession, has enforced obedience to law and the preservation of order by all persons. It has no disposition to leave the island a prey to anarchy or misrule.

"As the Spanish Commissioners strenuously urge that the acceptance of sovereignty includes the assumption of the so-called Cuban debt, and as it is evident that this question divides the Commission and stays its progress, the American Commissioners, having carefully considered the arguments of the Spanish Commissioners, must again and finally decline to accept this burden either for the United States or for Cuba. In the articles proposed by the American Commissioners on the third instant there were contained certain stipulations which, the American Commissioners believed, while not enlarging the Protocol, would effectually preserve the evidence of title to property and make clear the nature of public property and rights included in the relinquishment of sovereignty and title. It having been urged that these, no less than the articles proposed by the Spanish Commissioners, enlarge the terms of the Protocol, the American Commissioners are now prepared, for the purpose of disposing of the question of Cuba, Porto Rico, and Guam, simply to embody in the treaty the precise stipulations of the Protocol on those subjects, neither adding thereto nor subtracting therefrom.

"The American Commissioners, therefore, offer as a substitute for the articles heretofore presented by them, the following:

"Article I. Spain hereby relinquishes all claim of sovereignty over and title to Cuba.

Article II. 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.""

Memorandum of American Peace Commission Paris, Oct. 17, 1898, S. Doc. 62, 55 Cong. 3 sess., part 2, pp. 52–53.

"The American Commissioners also reject the other articles of the draft submitted by the Spaniards.

Spanish rejoinder.

"They do not admit that the charges and obligations of the sovereign which proceed exclusively from the public service of the colony are part of the sovereignty. The Spanish Commission, without

entering upon a purely technical discussion of the question as to whether such obligations form part of the sovereignty or are merely an effect of the exercise of the sovereignty itself, for the result of such a discussion would be absolutely without effect upon the point on which. the Commissioners on both parts do not agree, will simply proceed briefly to set right the facts and the opinions which are set forth in the American memorandum of the 14th instant. In order to demonstrate that the colonial obligations of Spain in Cuba must not remain a charge upon that island, the American Commissioners state that these obligations were contracted by the Crown through the medium of its officials in the colony, but without any intervention or consent towards such obligations on the part of the colony.

"It is true, the colonial system then prevailing in Spain did not confer upon its colonies the right of having elected Chambers which would administer the supreme powers in conjunction with the sovereign. In the last twenty years, however, it was not thus. The Antilles had representatives in both Chambers who surely intervened in all the legislative acts bearing upon colonial obligations without ever protesting against their lawfulness or binding force. Moreover, besides this, it can not be denied that so long as this system prevailed, maintaining all the characteristics of legality established at the time, the acts which the colonial sovereignty performed within the powers with which it was invested by law, were perfectly lawful, and carried, as they could not fail to do, all their rightful consequences. It is a fundamental maxim of public law, without which the credit of a state could not exist, because the validity of all its acts would always be at the mercy of any triumphant revolutionary movement whatsoever. The wisdom of the acts of the sovereign may be discussed, but when they have been executed by virtue of his attributes and in the solemn form recognized and established by law, their lawfulness and binding character are not a matter for discussion.

"This principle was recognized by the First Consul when he concluded his first treaty of August 24, 1801, with Bavaria. In its fifth article he agreed to apply the provision of the Luneville treaty of peace with regard to the mortgage debts of the country on the left. bank of the Rhine. In those territories there were Diets which participated in the power of the sovereign, and for this reason the said treaty of Luneville demanded that such debts should have been agreed to by them. But in the Duchy of Deux-Ponts and in that part of the Palatinate of the Rhine which France acquired by the treaty with Bavaria there was no such governmental institution, and therefore the First Consul agreed in the treaty of 1801 that the debts should follow the countries, provided they had been registered at their origin by the supreme administrative authority.

"If the position opposed to this doctrine were maintained, the Russian people might be exempted from meeting all the obligations that