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their rights precisely as if that military order had never been given. That course should be followed now. The withdrawal of that order will not, however, prevent the military government from disputing in any court of competent jurisdiction the validity of the concession, either as complainant or as defendant, just as any individual whose rights may be affected may dispute it, and in any such proceeding the claimants of rights under the concession will be bound to establish their rights precisely as if no such decision had been made; nor does this decision, or the withdrawal of the prohibitory order under it, prevent the taking of the customary proceeding, in case the concession should be held to be valid, for its annulment upon the ground that it is detrimental to the public interests.

There is one matter upon which the decision of the Department, however, is conclusive, and which is not deemed to be open for determination by any court, and that is upon the power of the Spanish Government to grant such a concession on the 28th of August, 1898. That is a political, not a judicial, question, and the view taken by the Department is that the date itself is not conclusive. Each such case must be considered by itself on its own merits. Acts of Spain in Cuba between the signing of the protocol and the evacuation, done in good faith and in the ordinary exercise of governmental powers, are to be treated as the valid acts of a government de facto, while acts done for the purpose of withdrawing or withholding property or valuable rights from the government about to succeed, and not done in good faith for the legitimate purposes of government, are to be treated as invalid.

Very respectfully,

Maj. Gen. LEONARD WOOD,

Military Governor of Cuba, Habana, Cuba.

ELIHU ROOT, Secretary of War.

THE GRANT OF FRANCHISES BY SPANISH OFFICIALS IN CUBA AFTER THE SIGNING OF THE PROTOCOL OF AUGUST 12, 1898.

[Submitted June 19, 1901. Case No. 771, Division of Insular Affairs, War Department.] SIR: I have the honor to acknowledge the receipt by reference of a communication on the above-entitled subject, addressed to the Secretary of War by the military governor of Cuba, under date of June 5, 1901, which letter is referred to me "for remark." In response thereto I have the further honor to submit the following:

There is no doubt in my mind that the United States is justified in reviewing such exercises of sovereign authority by Spain in Cuba as took place after Congress passed the resolution of April 20, 1898, calling upon Spain to withdraw from the island. But I do not believe that in making such review the United States is at liberty to adopt the hard and fast rule that all exercises of sovereign authority by Spain in Cuba after a given date, other than the date on which the transfer of sovereignty was effected, are to be considered null and void. To adopt such a rule is to declare null and void each and every official act of all officials in all branches of the government of Cuba by Spain during the designated period, for each official of that government acted pursuant to authority derived from Spanish sovereignty and as the agent or instrument of that sovereignty.

I think it must be conceded that the ordinary exercise of governmental powers by Spain in Cuba during the interim between the protocol of August 12, 1898, and the evacuation, January 1, 1899, is to be treated as valid. Such of the acts resulting from such exercise as may be termed public or political were properly subject to modification or repeal by the United States when that Government entered into possession of the territory and assumed the exercise of sovereignty. But such of said acts as created rights of property and conveyed them to individuals or associations are not subject to such unlimited discretion. It does not follow that these grants must all be recognized without question, but I do not think they are subject to the arbitrary approval or disapproval of the military government, nor to the test of any date preceding that of the treaty of peace, whereby the rights of Spain in Cuba were "relinquished."

If the Crown of Spain possessed the proprietary title to property in Cuba, it could exercise the ordinary right of alienation and convey such of said property as remained in its possession during the progress of the war. As between belligerent nations, the test of ownership and its appurtenant privileges is possession; and the test of the exercise by belligerents of the privileges appurtenant to ownership and possession is good faith toward its adversary. This is the rule as to property actually existing prior to the grant, such as real estate or personalty.

Sovereignty may properly exercise its powers in such a way as to create property or property rights as a result of such exercise; as by the grant of patents, copyrights, franchises, and exclusive privileges. Such exercise of sovereign powers by a nation at war is to be tested in the same way as conveyances of property in esse. If the territorial limits of the grant are confined to territory within the possession and sovereignty of the sovereign making the grant or conferring the privilege, the exercise is thereafter to be tested by the good faith of the parties. It is impossible to say what evidence is sufficient to show good faith, or the want of it, in any or all cases. The question must be determined by the facts appearing in each case as it arises. Take, for instance, the grant of a patent by registration in a provincial registry of Cuba prior to December 10, 1898. Such property rights as were thereby conferred by the sovereignty of Spain would be recognized and protected by the present government of Cuba, although it would be an instance of the expelled sovereignty projecting its authority into that of the new government. But suppose that, in addition to granting the exclusive right to manufacture the patented article, the letters patent provided that for a period of fifty years the materials used in manufacturing said article should be admitted free of duty. Such provision might be binding upon Spain while it continued in possession of Cuba, but would not be binding upon the new government, because such attempted extension of sovereignty and con

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tinued exercise of sovereign power in that territory would be judged mala fides when tested by the rights of the United States. The Crown of Spain had the right to convey real estate to which it had proprietary title and of which it was in possession up to the date of the treaty of peace. But suppose it had conveyed the forts commanding Habana harbor to an individual. The United States would not be required to respect such conveyance. The Crown of Spain had the right to authorize the construction of a dam across the Matadero Creek in Habana. But suppose the purpose and effect of its construction were to cut off a portion of the city from marine commerce and to flood a large section of country. Such concession would justly be held to lack the element of good faith. On the other hand, suppose Spain, in order to secure food for the troops in Habana, had purchased in September, 1898, a quantity of flour from a merchant in Habana, and in payment conveyed to him a vacant lot or parcel of land in Habana of which the Crown of Spain had proprietary title and which was worth no more than the flour. Would the United States be at liberty to ignore the rights of the merchant because of the date of the conveyance?

war.

The question of good faith is one which arises between the United States and Spain. It relates exclusively to the relative and respective rights of these two nations as they were affected by the events of the The United States, being the victor, is in a position to decide for itself whether or not its adversary acted in good faith. It is not a question for the courts to determine. It is international, and courts are without jurisdiction. It is to be resolved by the authorities charged with the maintenance of the rights of the United States in Cuba and with carrying out the purposes of the United States with regard to that island. It appears very clear to me that the powers of determination possessed by these authorities, exercised with judgment and regard for the recognized powers of national sovereignty, will afford ample protection to the interests of the United States and Cuba, and at the same time "discharge the obligations that may, under international law, result from the fact of its (Cuba's) occupation for the protection of life and property" (Art. I, treaty of peace), and likewise carry out the provision of the treaty "that the relinquishment or cession can not in any respect impair the property or rights which, by law, belong to the peaceful possession of property of all kinds" (Art. VIII).

* * *

I note that in the letter under consideration the military governor says:

The opinion here has been that the authority of the Spanish Government, from the signing of the protocol up to the date of completion of evacuation, did not, under the circumstances existing, authorize that Government to grant concessions conveying property or valuable rights or privileges; that it was, in fact, simply in police control of the territory pending its occupation by the victorious enemy. I believe that such is the only safe basis to proceed upon; otherwise we shall have trouble for years

over concessions granted by Spanish officials during that period. It would seem, inasmuch as all these grants involved property or valuable rights belonging to the future government of Cuba, that their transfer by the Spanish Government at that time was unauthorized.

These remarks do not, of course, apply to any administrative measures, measures of a sanitary character, or those taken on the ground of public necessity, but only to such acts as resulted in the transfer of property of the State or concessions or privileges of value, to grant which involved the rights of sovereignty, and which were not necessary as an administrative

measure.

I italicize the concluding paragraph of the foregoing quotation in order to direct attention to the fact that the military governor recognizes the necessity of admitting that Spain properly exercised sovereign powers in Cuba, during the period under consideration, for the purposes designated in said paragraph. By reference to the protocol of August, 1898, it will be seen that said protocol made no exception and did not undertake to preserve to Spain the authority necessarily exercised in measures to which the military governor refers. If the protocol put an end to Spain's right to exercise sovereign powers in Cuba, it ended the right for all purposes.

I am of the opinion that the military government of Cuba is not at liberty to adopt the rule "that the authority of the Spanish Government, from the signing of the protocol up to the date of completion of evacuation, did not, under the circumstances existing, authorize that Government to grant concessions conveying property or valuable rights or privileges; that it was, in fact, simply in police control of the territory pending its occupation by the victorious enemy." Such is not the rule of international law. ed., vol. 2, chap. 33, secs. 23, 24, 25.)

(Halleck's Int. Law, 3

Such is not the position taken by the United States at the peace conference in Paris.

At that time the United States dealt with Spain as being possessed of both sovereign and proprietary rights in Cuba, and required Spain to relinquish both.

Such is not the theory formulated in the treaty of peace.

By that instrument the United States recognized the right of Spain to convey both sovereignty and proprietary title in Cuba.

Such is not the rule adopted by the President of the United States in this matter.

It will be recalled that during the proceedings of the mixed commission to arrange the terms of the evacuation of Cuba the American commissioners learned that the Spanish officials were granting franchises and selling government property, and thereupon reported the facts to the President, who called upon the Spanish governor-general of Cuba to prevent further grants of such character. If the President had been of the opinion that the action of the Spanish authorities was null and void, because taken after the protocol was signed, he

would hardly have added to the complications then existing by presenting an unnecessary demand.

To now declare that as to Cuba after August 12, 1898, Spain was "simply in police control of the territory pending its occupation by the victorious enemy" is to take the position that at that date the United States had effected the complete conquest of Cuba and that the rights of the United States are based on that conquest. My understanding is that the position taken by the Administration is that the rights of the United States in Cuba are based upon the treaty of Paris (December 10, 1898), and not on conquest. Complete conquest, sufficient to transfer sovereign and proprietary rights, imposes obligations and liabilities which the United States avoided by the treaty of peace.

From the foregoing it follows that when a claim is made that the Spanish Government granted a franchise or conveyed property in Cuba while the condition of war existed there or after the protocol of August 12, 1898, was signed, the first question to be determined is, Was the grant by the Government of Spain in fraud upon the rights of the United States?

This question is to be determined by the authorities of the United States charged with maintaining the rights and promoting the purposes of the United States in Cuba. Each case must be adjudged on its own merits and the question resolved by consideration of the facts, circumstances, and conditions involved in the transaction. Each case is a bridge which can not be crossed until reached.

If it should be determined that the grant is void for want of bona fides or because it violates the rights of the United States, such determination should be declared and an order issued prohibiting the exercise of rights under said grant. This would end that particular case. If it should be determined that the grant was not void as against the rights of the United States, it is not necessary for the United States authorities to declare such determination, and they should not do so. By refraining from making such declaration the executive department enables the courts of Cuba to determine the questions of procedure and authority of the officials under Spanish law. It does not follow that because Spain could have granted the concession that therefore Spain did grant it.

The Government of Spain is a constitutional monarchy, and the validity of a concession may involve a constitutional question. The grant of franchises or concessions which the Government was authorized to make was regulated by law and required to be accomplished by following a procedure established by law. In every case the validity of a concession would involve the question of whether or not the grant had been made pursuant to these Spanish laws.

I doubt not that this question may be judicially determined by the

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