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PART I.

Report of agent, with English translation of the award.

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REPORT OF JACKSON H. RALSTON, AGENT OF THE UNITED STATES AND OF COUNSEL, IN THE MATTER OF THE PIOUS FUND CASE.

May 30, 1902.

WASHINGTON, D. C., November 10, 1902. Hon. John HAY,

Secretary of State of the United States, Washington, D. C. Str: I have the honor to submit the following report as agent of the l'nited States in the matter of the claim of the Pious Fund of the Californias, submitted to arbitration by the United States and the Republic of Mexico under the terms of the protocol between the Hon. John Hay, Secretary of State of the United States, and Señor Don Manuel de Azpiroz, ambassador extraordinary and plenipotentiary to the United States of America for the Republic of Mexico, concluded at Washington on May 22, 1902, and ratified by the Mexican Senate

Before entering into an account of my own duties in connection therewith, it may be proper to recall some of the circumstances attending the claim in question.

As early as the year 1697 certain members of the Order of Jesus, I with the permission of the King of Spain and upon the condition that

they should not have power to draw against or from the royal revenues for such purpose, undertook the conversion of the Indians of the Californias, and to effect this end collected considerable sums of money and entered upon their work. From time to time large contributions

were made to assist the development of the missions established or designed to be established by them or by their successors, the total of such contributions down to the year 1731 reaching $120,000. In 1735 properties valued at about $400,000 were deeded for the same purpose, and in 1747 an additional contribution, finally amounting to the sum of $120,000, was made. Later, and about the year 1784, some $400,000 reached the fund from another source. These moneys, to which were added various smaller contributions from time to time from other sources, constituted what became known as "the Pious Fund of the Californias," which, during the earlier portion of its existence, was entirely managed and controlled by the Order of Jesus. Later, and upon the expulsion of that order from the dominions of the King of Spain, that Monarch acted as trustee, delivering the charge of the missions of Upper California to the Franciscans, and of Lower California to the Dominicans. When Mexico threw off her allegiance to Spain, the Mexican Government, through a junta, managed the fund for the pious uses intended by the founders. On September 19, 1836, Mexico enacted a law looking toward the establishment of a bishopric for the two Californias, and providing that the person selected therefor should receive from the public revenues

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$6,000 per annum, with certain additional allowances, and further providing that “the property belonging to the Pious Fund of the Californias shall be placed at the disposal of the new bishop and his successors, to be by them managed and employed for its objects or other similar ones, always respecting the wishes of the founders of the fund.”

The Mexican legation to the Holy See, on April 6, 1840, notified the Papacy that “the Mexican Government had taken all proper measures so that the new prelate may not lack a decent income, which is necessary to sustain the expenses and respect and the dignity of a bishop, and in addition, according to a decree of Congress, the Pious Fund destined for the support of missions in the Californias is to be placed at his disposal.”

Immediately after receiving this notification, and in consequence thereof, on April 27, 1840, the bishopric of the Californias was created, and Francisco Garcia Diego, last president of the missions, appointed thereto, he assuming his office in the latter part of the year.

On February 8, 1842, by decree of that date, the Mexican Government repealed the law of September 19, 1836, placing the management of the Pious Fund in the hands of the bishop of the diocese, and reassumed its direction, as the decree said, "for the purpose of carrying out the intention of the donors in the civilization and conversion of the savages.

On October 24 of the same year a further decree was passed, formally incorporating the properties of the Pious Fund into the national treasury, and directing the sale of the real estate and other property for the capital represented by their annual product at 6 per cent per annum, and acknowledging an indebtedness of 6 per cent per annum on the total proceeds of the sale, at the same time pledging the revenue from tobacco to the payment of the income corresponding to the capital of said fund.

After the purchase of Upper California by the United States from Mexico in 1848, Mexico failed to pay any part of the income to the proper recipients in Upper California, and as a consequence, upon the formation of the mixed commission, under the treaty of 1868, to adjust claims of citizens of the United States or of Mexico against the other Government, the archbishop of San Francisco, and the bishops of Monterey and Grass Valley, through the American agent, presented their claim against the Republic of Mexico for a proper portion of the income of said fund, bringing it to the attention of the mixed commission on March 30, 1870, a formal memorial being filed December 31, 1870. A large amount of evidence was filed with the memorial, and Mr. Cushing, on behalf of Mexico, on April 24, 1871, filed a motion to dismiss for the reasons shown in the Transcript on page 67. After full consideration of this motion and of all the evidence adduced on behalf either of the United States or Mexico, the American arbitrator (Transcript, p. 523 et seq.) found in favor of the claimants for $904,700.99, and the Mexican arbitrator for the defendant Government (Transcript, p. 527 et seq.).

Because of this difference of opinion, the case was submitted to the umpire, Sir Edward Thornton, who, on November 11, 1875, awarded against Mexico and in favor of the claimants the sum of $904,700.99 in Mexican gold, being twenty-one years' interest at the rate of $13,080.99 per year; or, in other words, 6 per cent upon one-half of the capitalized value of the Pious Fund, it being considered by him that the proper

apportionment of interest in the fund itself between Upper and Lower California would be one-half to each (Transcript, p. 606). Attention being called to an error in computation, this sum total was, by the further order of the umpire, reduced to $904,070.99 (Transcript, p. 650). This award was duly paid by Mexico, although the Mexican secretary of foreign affairs, by a letter, on pages 77 and 78 of the Diplomatic Correspondence, said that “though the final award in the case only refers to interest accrued in a fixed period, said claim should be considered as finally settled in toto, and any other fresh claim in regard to the capital of said fund or its interest, accrued or to accrue, as forever inadmissible.” This position Secretary Fish (Diplomatic Correspondence, p. 79) declined to entertain. Mexico, on January 20, 1890, made its last payment on account of the Pious Fund award, and shortly thereafter, and on August 3, 1891, Hon. William F. Wharton, as Acting Secretary of State, took up the matter of the claim for interest which had accrued since 1869 (Diplomatic Correspondence, p. 23); the same subject being renewed by later Secretaries of State, including Hon. James G. Blaine, Hon. John W. Foster, Hon. Walter Q. Gresham, Hon. John Sherman, Hon. W. R. Day, and, finally, by yourself.

As the immediate result of the work performed under your direction, the protocol of May 22, 1902, was entered into with Mexico (Session Statutes, Fifty-seventh Congress, first session, Treaties, p. 142), providing for the reference to a tribunal, to be constituted in general conformity with the provisions of the Hague Peace Convention, of the dispute between the two countries, such tribunal having the power to determine:

“1. If said claim, as a consequence of the former decision, is within the governing principle of res judicata, and

"2. If not, whether the same be just;

"And to render such judgment and award as may be meet and proper under all the circumstances of the case.”

Pursuant to the terms of this protocol, the United States served upon Mexico on July 3, 1902, a copy of the memorial, setting forth the origin and amount of their claim," and on August 12, 1902, Mexico delivered to the Department of State of the United States “a statement of its allegations and grounds of opposition to said claim.' Meanwhile the United States had prepared and printed a copy of the proceedings had before the Mixed Commission of 1868, the work above referred to, on behalf of the United States, having been performed under my direction, pursuant to appointment by you as agent in the case under date of May 26, 1902.

Following the terms of the protocol, the United States selected as its nominees for the special tribunal to determine the matter in controversy, Prof. F. de Martens, of Russia, member of the Permanent Court of Arbitration, and the Right Hon. Sir Edward Fry, of England, likewise member of said court, while on behalf of Mexico there were named Mr. T. M. C. Asser and Jonkheer A. F. de Savornin Lohman, both of Holland, likewise members of said court, Mr. Asser taking the place of Sig. Guarnaschelli, of Italy, who has declined the position. The four gentlemen so named met at the hotel of the Permanent Court of Arbitration on Monday, September 1, 1902, for the selection of the fifth, who, under the terms of The Hague Peace Convention, was entitled to act as president, and their choice fell upon Prof. Henning Matzen, of Copenhagen, member of the Permanent Court of Arbitra

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