international law the public debts which were a charge on Cuba should pass with the sovereignty. The argument was legally sound, and the only way it could be effectively met was by impugning the moral validity of the debts as obligations of the colonies.

The administration of the Spanish colonies had always been kept distinct from that of the mother country. Each colony collected its own revenues, and its deficits were made up not by Spain, but from the treasury of some other more prosperous colony. Thus for many years Cuba and the Philippines received their annual situado, or subsidy, from Mexico. In more modern times each colony had its own budget, and generally its own personal deficit. When the revenues were insufficient the expenses of the local government were provided for by consolidated mortgages, or floating debts which were charged to the colony for whose benefit they were contracted. Neither Cuba nor Porto Rico had ever been included in the general budget of Spain nor had their revenues or expenses ever appeared there. All the Spanish-American colonies when they separated from Spain had recognized this situation and had voluntarily assumed their existing public debts. Spain now desired the recognition in the treaty of the principle that a debt, being exclusively the debt of the colony and affecting its territory only, should go with the colony. The application of the principle could be intrusted to a commission to be provided for in the treaty of peace.

In one of their memoranda" the Spanish commissioners indulged in some moralizing upon the duties of a government toward its subjects in terms which, in the light of her history, must have suggested to the American public, if not to the American commissioners, the well-known habit of a certain distinguished personage of quoting the Scriptures: "The Sovereign, it is true," it was said, "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." 17 Sen. Doc. 62, p. 41.

Spain, therefore, could not consent to sacrifice the financial rights of her subjects who were the holders of the colonial debts. Language such as this was purely conventional and had a false ring, but the following words which closed one of the Spanish communications can not be read without sympathy by those who are familiar with Spanish history:

Issues which related to money only could not "fail to be solved satisfactorily between two parties, one of which is the greatest nation of the new world, immensely rich and prosperous, blessed with inexhaustible resources, whether due to nature or the prodigious activity of its inhabitants, which, on the one hand, acquires by this treaty territories of great importance, and thereby fulfils an aspiration of its policy in America, while the other party is a great and noble nation of the old world, a cordial friend of her late antagonist in days, for her, more prosperous, but now impoverished through the misfortunes heaped upon her during the century which is about to terminate; whose treasury is overburdened by obligations, and for whom the present treaty will mean the solemn confirmation of the loss of the last remnant of her American Empire.'

9918

But the American Commission had decided that the debts should not be assumed and that the Cubans should start their independent existence with the national homestead free from incumbrance. It must be conceded that this was legally a tour de force. According to the settled principles of international law the debts which had been legally incurred and secured as a specific lien on the colonial revenues, particularly when the proceeds had been used for the construction of public works, should have been held to run with the country.

The arguments advanced by the American commissioners were mostly either extremely technical or were based on such large general principles that they were without any real basis in public law. The distinction which it was sought to make between the relinquishment and the abandonment of sovereignty was not substantial, and the attempt of the Americans to sustain their view by citing Eschriche's Diccionario drew the remark 18 Sen. Doc. 62, p. 93.

that this was a very respectable work much used in Spain by young lawyers in the early stages of legal practise. Nor was the claim that the question of the debts was excluded from consideration by the language of the protocol tenable, as it was fairly one of the details connected with the relinquishment of sovereignty over Cuba and the cession of the other islands.

Mr. Day notified Washington that the Spanish Commission had expressed a willingness to relinquish sovereignty over Cuba if some responsibility for the debt was acknowledged, and that they had been requested to state whether they would decline to sign any treaty which did not contain such a provision.

This was the critical stage of the negotiations. On the evening of October 25 the Spanish ambassador called upon General Horace Porter, the American ambassador to France, and explained the situation to him. From General Porter he went to Mr. Reid and informed him that Montero Ríos could not return to Spain and must break off negotiations rather than abandon the claim to have at least a part of the Cuban debt assumed by the United States or Cuba.

The ambassador suggested that possibly if Spain abandoned her demand for the assumption of the Cuban debt, some compensating advantage might be granted her in the form of a concession in connection with the Philippines. Mr. Reid could give him little satisfaction. He informed the ambassador that the American people, while not eager to retain the Philippines, were beginning to feel that as they had practically conquered the islands they had a right to retain them. He believed that the preponderance of sentiment in the United States favored that course, although an influential minority did not go to that length. It was possible, Mr. Reid suggested, that out of this condition the Spanish commissioners might be able to find something in territory or debt which would seem to their people at home like a concession.19

While waiting for the Spanish commissioners to decide 19 Mr. Day to Mr. Adee, Oct. 27, For. Rel., 1898, p. 936.

whether they would stand or fall on the question of the debt, Mr. Day asked the secretary of state whether the president would approve an article to the effect that the United States, while not assuming any independent liability of its own, would use its good offices with any people or government possessing sovereignty in Cuba for the acknowledgment of debts incurred by Spain of a pacific character in the island-the amounts to be determined by a commission. The American Commission, he thought, might feel inclined to make this concession on the strength of the precedents and opinions of publicists that local debts incurred specially for the benefit of territory are transferred with such territory. 20

But this disposition on the part of the commissioners to yield to argument and authority was promptly suppressed. Secretary Hay replied that he was directed by the president to say that

. . nor

"under no circumstances will the United States Government assume any part of what is known as the Cuban debt, would the United States engage to use its good offices to induce any government hereafter to be established in Cuba to assume such debt."21

The Spanish commissioners were then bluntly informed that the United States did not believe that there were any debts outstanding which had been incurred by Spain for existing improvements of a permanent character;22 that while the United States would, of course, assume the obligations imposed by the rules of international law, and which would follow from its occupation of Cuba, it declined to accept the burden of Cuban debts either for itself or for Cuba. Spain must, in the language of the protocol, simply relinquish her claim of sovereignty over and title to Cuba and cede to the United States the islands of Porto Rico and Guam in the Ladrones.

20 Mr. Day to Mr. Hay, October 25, For. Rel., 1898, p. 931.

21 Secretary Hay to Mr. Day, Oct. 25, 1898, For. Rel., 1898, p. 932.

22 For. Rel., 1898, p. 936. A royal decree of June 28, 1897, announced the issuance of bonds to the amount of 40,000,000 pesos due in forty years, secured by the Philippine customs on the general guarantee of Spain. The proceeds certainly were not used to construct public works, but the $20,000,000 paid by the United States probably represented about the amount that had from time to time been invested in such works on the islands.

The Spanish commissioners, with elaborate explanations and reservations, then accepted the articles proposed by the Americans, and suggested that the matter of the Philippines should be taken up. It was evident that the faint hope held out by Mr. Reid to the Spanish ambassador had been seized upon by the Spaniards. After the conference Señor Ojedo informed Mr. Day that a surrender on their part without some relief would mean national bankruptcy, and that they hoped they would receive liberal treatment in the matter of the Philippines. "He made further appeal," says Mr. Day, "to which I made no answer."

But it was to no purpose that Spain thus humiliated herself. At the conference on October 31 the American commissioners demanded the cession of the entire Philippine Archipelago, merely stating that the United States would assume any existing indebtness which had been incurred for public works and improvements of a pacific character in the Philippines.2

23

The decision to take the islands was not reached without careful consideration of conditions and possible consequences, and after much correspondence with Washington. The problem was worked out while the conference was in session. When the Peace Protocol was signed on August 12 public opinion in the United States had not crystallized, and the president, as we have seen, decided to leave the question of the future of the islands to be decided by the commission, which was to meet some months later. He realized that any demand for territory in the Far East must be made to square with the disinterested motives which had been proclaimed to the world at the beginning of the war. The original instructions stated that while still solicitous to adhere to our original purpose, we could not be unmindful that, without any desire on our part, the war had brought duties and responsibilities "which we must meet and discharge as becomes a great nation on whose growth and career from the beginning the

23 Sen. Doc. 62, p. 107.

24 See For. Rel., 1898, p. 904, et seq.