realized 40,502 7., whilst the next item on the list, 6,940 7., is interest on the nominal debt at 10 per cent. calculated to the 30th ultimo. If the attempt to establish constitutional government had proved successful, the creditors might fairly have claimed to be paid according to the letter of their bond; but the experiment having collapsed, it would be preposterous for them now to expect to be paid by Great Britain the risk premium and high rate of interest which they might fairly have claimed if they could have recovered it from the Fijian Government. 9. I would suggest that the four classes into which I have divided the creditors of the late Fijian Government might be dealt with upon the following liberal principles: Classes 1 and 2, the debenture holders and the bank, might be repaid the amounts actually advanced in each case, with the simple interest at the rate of 5 per cent. per annum. The arrears of salaries and wages due to Class 3 might, I think, be paid in full without interest; and the commercial and trade accounts found, upon full inquiry, to be due to Class 4, might be paid less 10 or 15 per cent. abatement the amount charged in such cases being probably based upon a liberal calculation of the risks involved in the transaction. "10. If the accompanying statement of liabilities were adjusted upon this principle the amount of indebtedness would be reduced from 87,6317. to about 71,000l. or 72,0007. “III. Fiji Bank Charter. "11. A copy of this document will be found attached to the report of Commodore Goodenough and Consul Layard already laid before Parliament. The Charter was granted on the 13th of August, 1873, by the King and his Ministers, the Constitution of 1871 being declared in the deed to have been at that time abrogated. The validity of the instrument may therefore, I think, fairly be questioned. It contains also some provisions which are inadmissible in a British Colony, such as a monopoly of banking for fourteen years, and exemption from taxation for a similar period. 12. I venture to recommend, therefore, that this Charter should not be recognized by Her Majesty's Government. The Company might, however, be allowed to retain so much of the 10,000 acres promised to them as they have actually been placed in possession of, and a charter might be given to them such as is usually granted to Banking Companies in Crown Colonies on their complying with the ordinary conditions." Sir Hercules Robinson, Governor, to Earl of Carnarvon, Colonial Secretary, "II. Liabilities. "5. In the next place, with respect to the liabilities incurred by the persons who administered the so-called Government of Fiji before the cession, I concur very generally with Sir H. Robinson's view of the relation in which the new Colonial Government stands toward those who had dealings with Thakombau's Governments, and the course which should be taken in respect of their claims. "6. You will cause it to be very clearly understood that Her Majesty's Government and the Colonial Government absolutely and entirely decline to admit that they are necessarily under any obligation to take up the liabilities incurred by those who have purported to administer the affairs of the Islands. No claim of the kind preferred by way of demand or as of right can for a moment be entertained, and to prevent any possible misconception of such a question it may be desirable to relieve the Government from any attempts to press such claims by passing an Ordinance declaring that no action shall lie against the Crown or the Colonial Government in respect of liabilities incurred by the late King or by any persons not in the employment of the Crown or the Colonial Government. "7. But although I think it necessary to define in the strongest manner the refusal of Her Majesty's Government to accept, or allow the Colonial Government to accept, any direct liability or obligation connected with the acts of persons for whom it has been in no way responsible, I am nevertheless of opinion that it will be for the credit of the newly constituted Government that voluntarily, and as an act of grace, it should offer to undertake the payment of so much of the debts incurred before the cession as after proper inquiry it may appear just and fair for it to assume. As Sir H. Robinson has pointed out, it will be necessary for this purpose to examine carefully all claims put forward, and as at present advised, I am of opinion that the four classes of the creditors of the so-called Fijian Government may be dealt with on the general principles laid down in paragraph 9 of his despatch of 20th October. But with regard to the time and manner in which any such payments are to be made, the Government of Fiji must reserve to itself the fullest discretion. 8. I am disposed to think that the best course will be for you to notify publicly, as soon as convenient after your assumption of the Government, that while the Government of Fiji declines to be responsible for any debts or liabilities incurred by or in the name of Thakombau or any other persons purporting to represent any Government of Fiji prior to the cession, it is nevertheless willing to consider any proofs that may be brought forward of money or supplies having been actually provided for public purposes; but the persons so applying to be reimbursed must be made clearly to understand that it will rest entirely with the Colonial Government (subject, if necessary, to a reference to the Secretary of State) to decide in each case whether the sum claimed, or a part of it, should be paid, and if so, at what time and in what manner the payment shall be made.” Earl of Carnarvon, Colonial Secretary, to Sir A. H. Gordon, governor of Fiji, "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. Spain will relinquish all claim of sovereignty over and title to Cuba. 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 |