Cornell University Law Library. THE GIFT OF Date,.^.*;?::^./../!^.;...!.^^ Cornell University Library JX 238.C6A4 1910 '*The Alsop claim-The case »' th'?. ""iJ^Jl ^ 3 1924 018 434 088 Cornell University Library The original of this book is in the Cornell University Library. There are no known copyright restrictions in the United States on the use of the text. http://www.archive.org/details/cu31924018434088 THE ALSOP CLAIM The Case of The United States of America FOR AND IN BEHALF OF THE ORIGINAL AMERICAN CLAIMANTS IN THIS CASE THEIR HEIRS, ASSIGNS, REPRESENTATIVES, AND DEVISEES VERSUS The Republic of Chile BEFORE HIS MAJESTY GEORGE V OF THE UNITED KINGDOM OF GREAT BRITAIN AND IRELAND, AND OF THE BRITISH DOMINIONS BEYOND THE SEAS, KING, AND EMPEROR OF INDIA Under the Protocol of December i, 1909 WASHINGTON GOVERNMENT PRINTING OFFICE 1910 TABLE OF CONTENTS. Page. PR9TOCOL OF Submission i Introductory Statement — Historical RAsum^ 3 Outline of Elements of Case 44 Contract between the Government of Bolivia and John Wheelwright, Becember 26, 1876 50 Resolution of December 24, 1876 51 Resolution of December 23, 1876 52 Point I. — Legality and Binding Effect of the Contract of December 26, 1876, BETWEEN Wheelwright and Bolivia 55 Subpojnt A. — Negotiation of the contract 55 First. Power of Bolivian Executive to deal with and make contracts concerning disposition or operation of government estacas 57 Law of October 19, 1871 57 Statement of Wheelwright in case of Justicia 57 Decree of November 2, 187 1 58 Decrees of March 7 and May 29, 1872 58 Decree of September 19, 1872 59 Contract of April i, 1873, between Gama and Government of Bolivia^ 60 Statement of President of Bolivia concerning 60 Statement of Gama concerning 60 Finding of Court of First Instance in case of Justicia ". . . 63 Second. .Power of Bolivian Executive to adjust and to provide for the payment of obligations of the State to foreigners '63 Law of November 22, 1872 63 Resolution of February 7, 1876 64 Position of the Government of Chile concerning 64 Note of the Chilean Charg^, July 2, 1878 64 Subpoint B. — Ratification and approval of contract 66 Memoria of Minister of Finance and Industry presented to the Con- gress of 1877 67 Law of November 21, 1877 69 Law of February 12, 1878 69 Finding of Court of First Instance in case of Justicia 71 Subpoint C. — Recognition of validity and binding effect of contract by Chile and Bolivia 72 C By Bolivia in executive decrees 72 Notice published by Wheelwright, December 27, 1876 72 Decree of January 5, 1877 73 Decree of May 24, 1877 73 Decree of March 28, 1878 74 Decree of July 25, 1878 74 Decree of August 9, 1878 74 Decree of August 19, 1878 74 Decree of August 21, 1878 74 Decree of October 30, 1878 74 Decree of December 12, 1878 74 Decree of February 5, 1879 74 IV Table of Contents. Point I.— Legautv axd Binding Effect of the Contract op December 26, 1876, BETWEEN Wheelwright and Bolivia — Continued. Subpoint C— Recognition of validity and binding effect of contract by Chile and Bolivia — Continued C^. By Chile and Bolivia in diplomatic correspondence with each page. other 76 Chilean Minister to Bolivian Minister of Foreign Relations Au- 1 gust 13, 1900 77 Circular note of Chilean Ministry of Foreign Relations to Chilean Diplomatic Corps, September 30, 1900 78 C^. By Bolivia in diplomatic correspondence with United States. ... 79 The American Minister to the Bolivian Minister of Foreign Re- lations, July 31, 1906 80 Bolivian Minister of Foreign Relations to the American Minister September 21, 1906 81 The American Minister to the Secretary of State (telegram, Sep- tember 28, 1906) 82 Bolivian Minister of Foreign Relations to the American Minister, October 6, 1906 82 The American Minister to the Secretary of State (telegram, July 16, 1907) 83 The American Minister to the Secretary of State (telegram, July 22, Z907) 84 The American Minister to the Bolivian Minister of Foreign Relations, July 25, 1907 84 The Bolivian Minister of Foreign Relations to the American Minis- ter, September 10, 1907 84 The American Minister to Secretary of State (telegram, Septem- ber 17, 1907) 85 C*. By Chile and Bolivia in protocols and treaties 86 Mr. Wheelwright to Senor Belisario Salinas, November 23, 1883. 87 Senor Salinas to Mr. Wheelwright, December 11, 1883 87 Petition of John Stewart Jackson, March 21, 1884 88 Pact of Truce, April 4, 1884 88, 89 Supplementary Protocol of April 8, 1884 89 Bases of Treaties between Chile and Bolivia 91 Treaty of Peace and Friendship, May 18, 1895 92 Supplemental Protocol, May 28, 1895 92 Memorandum of the Bolivian Minister to Chile, May 23, 1895. . 93 Protocol of December 9, 1895 93 Protocol of April 30, 1896 . . ., 94 Treaty of October 20, 1904 94 The Bolivian Minister to the Chilean Minister of Foreign Rela- tions, October 2 1, 1904 94 The Chilean Minister of Foreign Relations to the Bolivian Min- ister, October 21, 1904 95 . C*. By Chile in executive decrees issued after the Chilean occupation of the Bolivian Littoral gg Decree of October 27, 1884 96 Decree of November 12, 1884 qy Report of November 15, 1884 oy Report of November 18, 1884 og Table of Contents. v Point I. — ^Legauty and Binding Effect of the Contract of December 26, 1876, BETWEEN Wheelwright and Bouvia — Continued. Subpoint C. — Recognition of validity and binding effect of contract by Chile and Bolivia — Continued. Page.. C^. By Chile in diplomatic correspondence with United States 99 The Chilean Minister of Foreign Relations to the American Min- ister, June 18, 1892 99 The American Minister to the Secretary of State, June 22, 1892 . 100 The American Minister to the Secretary of State, October 10, 1896. 100 The Chilean Minister of Foreign Relations to the American Min- ister, October 13, 1897 loi The American Minister to the Secretary of State, October 27, 1903 loi The American Minister to the Secretary of State {telegram, De- cember 4, 1903) lOI The Secretary of State to the American Minister; December 17, 1903 lOI The American Minister to the Secretary of State {telegram, June 14, 1904) 102 The American Minister to the Chilean Minister of Foreign Rela- tions, June 21, 1904 102 The Chilean Minister of Foreign Relations to American Minister, July 2, 1904 103 Memorandum — Debts of Bolivia — December 9, 1904 103 The Chilean Minister to the Secretary of State, January 30, 1905 103 The American Minister to the Secretary of State, August 5, 1907 . 104 The American Charg^ to the Secretary of State, August i, 1907 . 104 The Chilean Minister of Foreign Relations to the American Min- ister, April' 9, 1908 104 C. By Chile in cases prosecuted by Wheelwright beforeTier courts ... 105 Finding of Court of First Instance, in case of Justicia 105 Finding of Court of Second Instance, in case of Justicia, May 19, 1882 107 Finding of Court in case of Amanita, May, 1882 108 C*. By Chile before the United States and Chilean Claims Commis- sion in 1901 109 Statement of Agent of Chile 109 Point II. — The Wrongful Interference by Chile with the Rights, Titles, and Interests held by Wheelwright under his Contract WITH Bolivia and the Consequent Liability op Chile to Answer in Damages to the Government of the United States for and in Behalf of the Claimants in Resolution of December 23, 1876 in Resolution of December 24, 1876 113 Subpoint A. — ^The legal existence of the estacas of instruction and the power of the Bolivian Executive to contract for their operation 114 Origin of the Government Estacas, Early Spanish Laws 115 Opinions of Commentators 117 Laws of Bolivia 122 Decree of July 23, 1852 122 Decision of the Court in the Chavez case, October 28, 1872 123 Decision of the Court of First Instance in ca.se of Justicia 127 Power and authority of the Bolivian Executive 128 " Revindication" 130 I. The contention of Chile 130 Decision of the Court in case of Amanita, 1882 131 Decision of the Court of Second Instance in case of Justicia. 131 VI Table of Contents. Point II. — The Wrongful Interference by Chile, etc. — Continued. Subpoint A. — The legal existence of the estacas of instruction, etc. — Con " Revindication " — Continued. 1. The contention of Chile — Continued. The Chilean Minister of Foreign Relations to the American page. Minister, April 9, 1908 132 The Chilean Minister of Foreign Relations to the American Minister, October 15, 1909 ^33 The Chilean Minister of Foreign Relations to the Diplomatic Corps in Santiago, February 18, 1879 134 2. The question as discussed by historians 140 3. The question considered from the standpoint of the govern- mental acts of Chile i47 (a) Constitutional provisions I47 (6) .The treaty with Spain (1844) 150 (c) Treaties with Bolivia 151 Treaty of 1866 151. 152. i53 Treaty of 1874 153 The Chilean Charg^ to the Bolivian Minister of For- eign Relations, November 10, 1874 154 4. Authority of Bolivia to negotiate the Wheelwright contract, whether Chile's theory is correct or not 155 Subpoint B. — Nature of the Rights, Titles, and Interests granted under the Wheelwright Contract ' 160 Contract of April i, 1873, between Gama and Bolivia compared with Wheelwright Contract 163 Civil and Common Law Mortgage defined 168 Wheelwright Contract not analogous to 170 As defined by the Court of Second Instance in case of the Justicia . . 170 Contract of anticresis 171 As defined by Code of Chile 171 As defined by Escriche 172 Bolivian Executive not authorized to negotiate 178 Decree of 1852 178 Law of October 19, 1871 178 Decree of November 2, 1871 178 Decree of September 19, 1872 178 As understood by Wheelwright and the Government of Bolivia 179 Petition of Jose Santos Monroe, August 19, 1878 179 Decree of February 5, 1879 179 Subpoint C. — Enjoyment by Wheelwright, under his contract, of rights, titles, and interests which were possessed by the State 181 Decree of July 25, 1878 181 Decree of August 9, 1878 .' 181 Decree of August 21, 1878 182 Decree of February 5, 1879 182 Subpoint D. — The nondenounceability of the Government Estacas and the resulting freedom from the necessity of taking or remaining in physical possession thereof , 185 Decree of March i, i860 186, 192 Resolution of October 12, 1871 187, 192 Decree of November 14, 1873 189 Decree of December 20, 1873 189, 193 Decree of December 12, 1878 190, 196 Table of Contents. vii Point II. — The Wrongful Interference by Chile, etc.— Continued. Subpoint D. — The nondenounceability of the Government Estacas, etc. — Continued. Page. Decision of Court in Chavez case 191 Decision of Court of First Instance in case of Justicia 191 Opinion of Government handed to Prefect of Cobija, October 22, 1873. 192 Order of Prefect of Cobija 192 Decree of December 20, 1873 193 Decree of January 5, 1877 194 Decree of May 24, 1877 194 Decree of March 28, 1878 194 Decree of July 25, 1878 194 Decree of August 9, 1878 194 Decree of August 19, 1878 195 Petition of Jos6 Santos Monroy, August 19, 1878 195 Decision of Minister of Finance on above, August 21, 1878 195 Subpoint E. — Wrongful application by Chile, to the Bolivian Littoral, of certain provisions of the Chilean Mining Law 198 Circular of Chilean Ministry of Foreign Relations to Chilean Diplomatic Corps, February 18, 1879 199 Note transmitting above, March 3, 1879 200 Proclamation of March 25, 1880 200 Law of April 4, 1879 201 Letter of Wheelwright to the American Minister at Lima, June 28, 1884 203 Letter of John Stewart Jackson to Chilean authorities 207 Petition of John Stewart Jackson 208 Petition of John Stewart Jackson, November 21, 1883 209 Report of Government Attorney, October 9, 1884 209 Wheelwright before the Chilean Courts 209 I . The case of the Amonita 209 Statement of facts 209 Decision of Court, May 2, 1882 210 2.. The case of the Jusiicia 212 Statement of facts 212 Decision of Court of First Instance, May 14, 1881 212 Decision of Court of Second Instance. May 19, 1882 217 Subpoint F. — Obligation of a conquering nation to protect private vested rights held by residents of the conquered territory 221 Secretary of State Bayard to Minister Roberts, March 20, 1886 222 Point III. — Liability of Chile fully to Meet and Satisfy the Debt Recognized by the Contract of December 26, 1876 232 Subpoint A. — Because of appropriation of funds specifically set apart for payment of obligation 232 Resolution of December 24, 1876 233, 260, 263 Pact of Truce of April, 1884 235 Minister of Chile to the Bolivian Minister of Foreign Relations, August 13, 1900 236 Matta-Reyes Protocol of 189 1 240 Reportof Bolivian Minister of Hacienda and Industry, J877 . . . 255, 256, 257 Letter of Wheelwright of June 28, 1884 257, 258 Customs Receipts at Arica from 1869-1877 259 Treaty of Commerce and Customs between Bolivia and Peru, July 23, 1870 259, 260 VIII ' Table of Contents. Point III. — Liability op Chile fully to Meet and Satisfy the Debt Recognized by the Contract of December 26, 1876 — Continued. Subpoint A.— Because of appropriation of funds specifically set apart for payment of obligation — Continued. Page. Circular of October 5, 1876 260 Data concerning the Custom-House of Arica in relation to the Cus- toms Contract of Bolivia 261 Deposition of Henry S. Prevost, January 22, 1894 262 Treaty of October, 1878 263 Protocol of January 11, 1879 263 Customs Receipts at Arica, 1880-1884 263 Subpoint B. — Because of repeated promises to Bolivia to meet such obli- gation 271 Matta-Reyes Protocol, May 19, 1891 272 Treaty of Peace and Friendship, May 18, 1895 273 Supplemental Protocol, May 28, 1895 274 Memorandum of Claims against Bolivia assumed by-Chile, May 23, 1895 ■. 275 Treaty of Peace and Friendship, October 20, 1904 277 Bolivian Minister to the Chilean Minister of Foreign Relations, Octo- ber 21, 1904 278 Chilean Minister of Foreign Relations to Bolivian Minister, October 21, 1904 279 American Charg^ to the Secretary of State, August 5, 1907 279 Chilean Minister of Foreign Relations to American Minister, October 13, 1897 280 Chilean Minister of Foreign Relations to American Minister, July 2, 1904 280 Subpoint C. — Because of repeated promises made directly to the Govern- ment of the United States and based on ample consideration 283 The General Undertaking of 1879 285 The General Undertaking of February, 1884 285 Dismissal of Jackson's petition by Chilean Minister of Justice, October 18, 1882 285 Decision of Court of Second Instance in case of Justicia, May ig, 1882 286 Assurance of President of Chile 286 The General Undertaking of December, 1884 287 American Minister to the Chilean Minister of Foreign Relations, October 6, 1884 287 The General Undertaking of February, 1885 287 American Minister to the Secretary of State, March 16, 18S5 . . . 287 American Minister to the Secretary of State, May 3, i888 288 The General Undertaking of November, 1890 288 American Minister to the Secretary of State, November, 1890. . 288 The Specific Undertaking of June, 1892 288 American Minister to Chilean Minister of Foreign Relations, June 3, 1892 288 American Minister to Secretary of State, June 11, 1892 290 American Minister to Secretary of State, June 22, 1892 290 Chilean Minister of Foreign Relations to American Minister, June 18, 1892 291 American Minister to Chilean Minister of Foreign Relations, June 22, 1892 292 Table of Contents. ix Point III. — Liability op Chils fully to Meet and Satisfy the Debt Recognized by the Contract op December 26, 1876 — Continued. Subpoint C. — Because of repeated promises made directly to the Govern- ment of the United States and based on ample consideration — Cont'd. Page The Specific Undertaking of October, 1896 294 The American Minister to the Secretary of State, October 10, 1896 295 The Specific Undertaking of October, 1897 296 The Chilean Minister of Foreign Relations to the American Minister, October 13, 1897 297 The Specific Undertaking of 190 1 before the United States and Chilean Claims Commission 298 Assurances given by Agent of Chile 298 Decision of Commission 299 The Specific Undertaking of 1 903 300 The American Minister to the Secretary of State {telegram, June 13, igoj) 300 The American Minister to the Secretary of State, October 27, 1903 300 The Specific Undertaking of 1904 to Settle the Alsop Claim 300 The American Minister to the Secretary of State, June 18, 1904. 300 The American Minister to the Chilean Minister of Foreign Relations, June 21, 1904 301 The Chilean Minister of Foreign Relations to the American Minister, July 2, 1904 302 Point TV. — The Extent and Amount op Chile's Liability (Tort and Contract), and the Prayer op the United States por Judgment in Behalf of Claimants 315 1. Payment of interest 315 2. Payment should be made in undebased currency 322 Concerning the tort claim 322 Concerning the contract debt 327 Resolution of December 24, 1876 327 Wheelwright's letter of June 28, 1884 327 3. Costs of litigation in suits resulting in denial of justice 334 Subpoint A. — The Tort liability 340 A'. Damages arising from adverse decisions of Chilean Courts 340 Case of Amanita 34° Case of Justicia 34° Data showing production of mines to which Wheelwright was entitled 34i A^. Damages arising from wrongful application of Chilean law to government estacas 343 A^. Damages arising on account of expenses of litigation 344 Subpoint B.— The Contract liability 345 Prayer for judgment 347 THE CASE OF THE UNITED STATES. On December i, 1909, the Governments of the United States and Chile agreed, subject to the pleasure of His Late Majesty, Edward VII, upon the following Protocol of Submission of the, so-called Alsop claim, which has been the subject of diplomatic correspondence between the two Governments for many years. PROTOCOI, OF SUBMISSION. "The Government of the United States of America and the Government of the Republic of Chile, through their respective Plenipotentiaries, to-wit : "Seth lyow Pierrepont, Charge d' Affaires of the United States of America, and Augustin Edwards, Minister of Foreign Affairs of Chile, who, after having communicated to each other their respec- tive full powers, found in good and due form, have agreed upon and concluded the following PROTOCOl, OP SUBMISSION. "Whereas the Government of the United States of America and the Government of the Republic of Chile have not been able to agree as to the amount equitably due the claimants in the Alsop claim; "Therefore, the two Governments have resolved to submit the whole controversy to His Britannic Majesty Edward VII who as an 'amiable compositeur' shall determine what amoimt, if any, is, under all the facts and circumstances of the case, and taking into consideration all documents, evidence, correspondence, allegations, and arguments which may be presented by either Government, equitably due said claimants. "The full case of each Government shall be submitted to His Britannic Majesty, and to the other Government through its duly accredited representative at St. James, within six months from the date of this agreement; each Government shall then have four months in which to submit a counter case to His Britannic Majesty, and to the other Government as above provided, which counter case shall contain only matters in defense of the other's case. "The case shall then be closed unless His Britannic Majesty shall call for further documents, evidence, correspondence, or arguments from either Government, in which case such further documents, 40898—10 1 2 ' United States vs. Chile. — Alsop Claim. evidence, correspondence, or arguments shall be furnished within sixty days from the date of the call. If not so furnished within the time specified, a decision in the case shall be given as if such documents, evidence, correspondence, or arguments did not exist. "The decision by His Britannic Majesty shall be accepted as final and binding upon the two Governments. "In witness whereof, the undersigned - Plenipotentiaries of the United States and Chile have signed the above Protocol both in the English and Spanish languages, and hereunto affixed their seals. "Done in duplicate, at the City of Santiago, this ist day of Decem- ber, 1909. "(ly. S.) SETH Low PiBRREPONT. "(L. S.) AuGusTiN Edwards."" This Protocol having been brought to His Late Majesty's atten- tion and the Governments of the United States and Chile having through their accredited representatives near His Majesty's Gov- ernment, formally requested that His Majesty would consent to undertake the function of passing upon the controversy between the two Governments, His Majesty was pleased to receive the request favorably and graciously indicated a willingness to act as amiable compositeur under the Protocol. Upon the untimely and lamented death of His Majesty Edward VII, and upon the accession of His Majesty George V to the Throne, the Governments of the United States and Chile, through their duly accredited representatives near His Britannic Majesty's Government, consulted the pleasure of His Majesty George V regarding His Majesty's willingness to undertake under the protocol the same high function of passing upon the merits of this controversy; whereupon His Majesty was in turn pleased to receive the request favorably and also graciously to indicate a willingness to act as amiable compositeur under the Protocol above set forth. The Government of the United States therefore submits, in accordance with the terms of the Protocol, for His Britannic Majesty's consideration and determination, the Case of the United States. ol Appendix, p. i. THE UNITED STATES OF AMERICA. FOR AND IN BEHA1*=!=* Paragraph (h) of Section 2 of the Rules formulated by this Com- mission provided as follows : "If the claim is made in behalf of a corporation or joint-stock company or partnership, the nationality of the same and its domicile must be stated ; and if the claimant is not a corporation or joint-stock company, the nam,e of each person interested both at the date the claim accrued and at the date of verifying the memorial, with the proportion of each person's interest, must be stated." ' The Commission met in Washington on July 25, 1893, ^"^^ con- cluded its sessions on April 9, 1894, on which date the Commis- sioners declared that — "Inasmuch as we have not been able to make such an examination of the voluminous testimony in this (The Alsop) case and the impor- tant legal questions involved, as would enable us to reach a satis- factory conclusion, we decline to render any judgment thereon." <* o I Appendix, p. 6i. c H Appendix, p. 12. 6 II Appendix, p. i. <* II Appendix, p. 424. 26 United States vs. Chile. — Alsop Claim. [introductory On May i8, 1895, there was signed at Santiago a treaty of Peace and Friendship between the Governments of Chile and BoUvia, which again stipulated for the payment of this Alsop obligation. Article 2 of this treaty reads : "It (the Government of Chile) binds itself furthermore to pay the following debts which encumbered the Bolivian Littoral, namely; * * * The credit of Don Pedro Lopez Gama, now represented by the firm of Alsop and Company of Valparaiso."" This undertaking was affirmed and ratified in a supplementary protocol signed at Santiago on May 28, 1895, which provided in Article 3 that — "those credits which are not included in the declarations aforesaid and which are those of * * * Pedro Lopez Gama * * * shall be examined by the Govt, of Chile, which Government, in order to fix the amount due, and to agree as to the form of payment thereof, will take into account the origin of each credit, and also the antecedents of the same consigned by the Minister of Bolivia in Chile in his memorandum of the 23rd of the present month."' Shortly following the negotiation of this treaty and supple- mentary protocol, the American Minister at Santiago reported, under date of June 22, 1895, to the Department of State, a con- versation between himself and Sefior Gutierrez, the Bolivian Minister at Santiago, in which the American Minister stated that he had — "called his (Senor Gutierrez's) attention to the note of Senor Erraz- uriz (of June 18, 1892) and inquired whether provision had been made for the payment of the claim as promised in that note * * * the Bolivian Minister, however, informed me that the payment of a number of claims had been provided for (in the treaties pending between Chile and Bolivia) and that among these the claim of Alsop and Company was explicitly mentioned and that the amount fixed in the settlement was eight hundred and thirty-five thousand Bolivianos, the same as stated in the note of Senor Errazuriz referred to above." '^ In a protocol negotiated between the Republics of Chile and Bolivia, signed at Santiago, April 30, 1896, and designed to be explanatory of the protocol of the 9th of December, 1895, the arrangements for the liquidation of these debts, as provided in the treaty and protocol of May i8th and 28th, 1895, were recognized and confirmed, and there was imposed upon the Government of Bolivia the duty of submitting for the approval of the Bolivian Congress the protocol of May 28, above referred to."* oil Appendix, p. 452. cl Appendix, p. 65. 6 II Appendix, p. 457. "'II Appendix, p. 459. statement.) The Case of the United States. 27 Under date of October loth, 1896, Mr. Strobel, American Minis- ter at Santiago, reported to the Department of State regarding this claim, in the following language: "Sir: In reply to the Department's No. 99 of August loth last, enclosing a letter from the Honorable G. S. Boutwell, and instructing me to ascertain from the Government of Chile the proposed date of settlement of the claim of Alsop and Company, and whether by a treaty or by an understanding between the Governments of Chile and Bolivia the amount to be paid had been fixed, I have the honor to report that yesterday I had a conversation on the subject with Senor Eduardo Phillips, the Under Secretary of Foreign Relations, who gave me the following information : "On May 28, 1895, a protocol, supplementary to the treaties between Chile and Bolivia forwarded to the Department with my No. 85 of May 6 last, was signed. This protocol was approved by the Chilean Congress, in secret session, but is still awaiting the approval of the Congress of Bolivia, and has, therefore, not been published. It has an important bearing upon the claims assumed by the Chilean Government in accordance with the provisions of Article 2 of the Treaty of Peace and Amity of May 18, 1895. "According to the memorandum presented by the Bolivian Minis- ter at this capital, which is regarded as part of the protocol, the amount proposed as a settlement of the claim of Alsop and Company is, without calculating interest (sin computar intereses) eight hun- dred and thirty-five thousand Bolivianos of twenty pence, or nine hundred and fifty-four thousand, two hundred and eighty-five Chilean pesos. "By article 3 of the protocol, the Government of Chile, in order to settle the definite amounts to be paid, shall take into account the origin of the claims allowed, (el origin de cada credito) as well as the data furnished by the Bolivian Minister in his memorandum. "It is hoped that the protocol will be approved by the Bolivian Congress which is now in session, in a few weeks. The Chilean Gov- ernment cannot take up the question of the payment of the claims until this protocol has been approved and promulgated. "On receiving the above information, I inquired of Senor Phillips whether it was to be understood that the terms of article 3 of the protocol gave to his government the right of making a re-examination of the claims ; and I stated that if this was the case, it was contrary to the impression existing in the minds of the claimants as well as to my own understanding of the matter. He replied that, in view of the large amounts to be paid, it was natural that his government should desire to examine the papers on which the claims were based; but tha't he thought that as soon as the protocol was approved and promulgated, there would be no disposition to delay a settlement. "The Bolivian Minister here, Senor Gutierrez, whom I saw this afternoon, and with whom I spoke upon the subject, also seemed to be of this opinion. "As soon as the protocol is approved by the Bolivian Congress, I will again call the attention of the Chilean Foreign Office to the claim, with a view to obtaining some more definite assurance regard- ing its payment."'* "■ Appendix, p. 67. 28 United States vs. Chile. — Alsop Claim. [introductory On May 24, 1897, the Honorable John Sherman, Secretary of State of the United States, and Senor Don Domingo Gana, Chilean Minister at Washington, signed a supplemental convention, reviv- ing the Convention of August 7, 1892, which had "failed, through limitation, to conclude its task," it being provided, in the supple- mental convention, that the revived Commission "shall be limited to considering claims duly presented to the former Commission in conformity with the terms of the Convention and with the rules that governed its labors," a certain claim specifically named being excepted. The Agent of the Government of Chile renewed before the revived Commission the arguments of the Chilean Agent before the first Commission to the effect that, since Alsop & Co. was a^ partnership, .registered under the laws of Chile, it was a Chilean citizen, and that therefore, notwithstanding that all of the partners were American citizens, and that the whole commercial venture, as well as the capital invested, was American, the claim did not fall within the terms of the Convention, which stipulated for the adjudication of "all claims on the part of corporations, companies or private individuals, citizens of the United States, upon the Government of Chile. ' ' But, while the Agent of Chile made this contention before the Commission, he announced, by way of inducement to the Com- mission to dismiss the claim, in careful and well chosen but clear and specific language, the intentions of Chile with reference to the settlement of this claim. His exact words are as follows: "As is stated in the claimant's brief, it is among the liabilities that the Government of Chile engaged to pay for the account 0/ Bolivia. This explains exactly the situation of the claim. The Chilean Gov- ernment has always regarded it, and does still regard it, as a liability on the part of Bolivia toward the claimant; and in order to induce the Bolivian government to sign the definite treaty of peace which has been negotiated for many years, the Chilean Government offers to meet this and other claims as part of the payment or consideration which it offers to Bolivia for the signature of the treaty. This has always been the position of the Chilean Government, and is its posi- tion to-day, and if Bolivia signs the treaty, the claim of j^sop & Com- pany, as well as the other claims mentioned, will be promptly paid under the treaty engagement as a relief to Bolivia from the liabilities which that government has incurred and for the account of Bolivia." " After due deliberation the majority of the Commission (the American Commissioner dissenting, in an able and powerful decision) decided in favor of the contention of the Chilean Agent, II Appendix,, p. 569. statement.] The Case of the United States. 29 and dismissed the claim for want of jurisdiction, stating, however, that this was without prejudice to any rights which the claimant, or claimants, or Alsop & Co., or its liquidator, might have, either by diplomatic intervention, or before the Government of Chile or the courts of Chile. In rendering this decision, the Commission, after discussing the arguments advanced by the Agents of the respective Governments, and after considering the precedents advanced by the Agent of the United States in support of his con- tention (one of which, the Cerruti case, was directly in point), concluded their opinion with the following statement : "By this conclusion it is not denied that certain cases may arise (like the Cerruti case) in which redress may justly be granted by means of diplomatic intervention to an individual member of a society for injury to the partnership property. The demurrer is sus- tained wholly upon the ground that Alsop and Company, in liquida- tion, being a citizen of Chile, this Commission, under Article I of the Convention of 1892, has no jurisdiction to entertain the claim. The case is dismissed, therefore, without prejudice, however, to any rights which the claimant, or claimants, or Alsop & Company, or its liquidator may have, either by diplomatic intervention or before the Government of Chile, or the courts of Chile. Nor are the merits of the claim in any way prejudiced by this decision. According to the brief of the Honorable Agent of Chile, it is declared that this claim 'is among the liabilities that the Government of Chile engage to pay for the account of Bolivia. * * * fhe Chilean Government has always regarded it, and does still regard it, as a liability on the part of Bolivia towards the claimant; and in order to induce the Bolivian Government to sign the definite treaty of peace, which has been negotiated for many years, the Chilean Government offers to meet this and other claims as part of the payment or consideration which it offers to Bolivia for the signature of the treaty. This has always been the position of the Chilean Government, and is its position to-day, and if Bolivia signs the treaty, the claim of Alsop and Com- pany, as well as the other claims mentioned, will be promptly paid under the treaty engagement, as a relief to Bolivia from the liabilities which that Government has incurred and for the account of Bolivia.' "The claimant is, therefore, remitted for relief to the Government of Chile, whose assurances are thus given, and the case is dismissed. "" The Government of Chile having thus, in the most formal man- ner, undertaken to adjust this claim upon the conclusion of the then pending final treaty between itself and Bolivia, the Government of the United States, relying upon this clear and unambiguous promise, was content, without then further pressing upon the Chilean Government the question of the settlement of this claim, to wait reasonably upon the convenience of Chile, before again sug- gesting a liquidation of the indebtedness. "II Appendix, p. 569. 30 United States vs. Chile. — Alsop Claim. [introductory Having waited for a period of almost two years without (so far as the Government of the United States was aware) the Govern- ment of Chile having made any proposal looking to a settlement of the claim, the Department of State, in November, 1902, instructed the American representative at Santiago to bring the matter in a friendly and amicable way again to the attention of the Chilean Government, the Department stating that it felt "the necessitous condition of the claimants and their acknowledged equities, justify an appeal to the sense of justice and especially to the comity of the Chilean Government to take some action looking to the relief of the claimants."" The American Minister, acting upon these instructions, addressed a friendly note of reminder to the Chilean Foreign Office under date of December 29, 1902, in which he pointed out the equities of the claim, the formal undertaking of the Agent of Chile before the Claims Commission that the Government of Chile would settle the claim, and to the judgment of the tribunal dismissing the claim for want of jurisdiction, but without prejudice to any right which the claimant, or claimants, or Alsop & Co., or its liquidator, might have, either by diplomatic intervention or before the Government of Chile or the courts of Chile, and stated that it would greatly please him to be informed whether the Government of Chile was not now prepared to consider the matter of the adjustment of this claim. The reply of the Minister of Foreign Relations, received by the American Minister on January 17, 1903, is a remarkable as well as an interesting document. In this document the Government of Chile, for the first time in the history of the long and difficult nego- tiations for the settlement of this claim (which at this time had extended over a period of almost twenty years), began to suggest a doubt as to the obligation of Chile to pay this claim, and used lan- guage calculated to justify the inference that, notwithstanding the plain and simple language of the Commissioners, who dismissed the claim "without prejudice" and who formally declared "nor are the merits of the claim in any way prejudiced by this decision, " and who specifically and in terms incorporated the assurances of the Chilean Agent regarding Chile's oft-expressed intention to liquidate this liability, the Government of Chile was now prepared to contend that the decision of this tribunal was a bar to the further considera- tion of this claim by the two Governments. The essential portions of this note read as follows : "I Appendix, p. 71. statement] _ The Case of the United States. 31 "Prima facie, given the terms of the treaty of 1892 which organ- ized the Court of Arbitration of Washington, there seems to be no doubt that all discussion should be inadmissible between the Gov- ernment of the United States of America and that of Chile with regard to claims about things which happened before the date of the treaty cited, which subjects of both countries should try to present against the contracting Governments, much more so if sentence has already been rendered on these claims by the Honor- able Court of Washington. "Notwithstanding, as Y. E. considers that the statements of the ex-agent of Chile before the cited Court, and the reservations made by it in its sentence, my government might perhaps desire to favor persons who owing to circumstances foreign to the claim, are very badly off, as deference to Y. E. this Department will have no objec- tion to investigating whether there is sojnething in the antecedents referred to, which would allow a modification of the spirit of the Treaty of 1892. "As the antecedents I refer to are in transit remitted by the Chilean lyCgation in Washington, as soon as they are received in this Depart- ment, the undersigned will have the honor to answer the note of that IvCgation of December last in a more concrete manner." "■ To this remarkable document, the American Minister replied, under date of January 25th, calling attention to certain errors in ■ the Spanish translation of the English text of his note, particu- larly with reference to the word used to render the English word " dismissed " and said : "The decision of the Commission was that it had no proper juris- diction for the consideration of the claimant's case; but at the same time, it clearly recognized the justice of the claim, and the representative of the Chilean Government before the tribunal acknowledged the moral responsibility of his Government to pay the same at some future time."'' On February 9, 1903, the Chilean Minister of Foreign Relations, acknowledged the above, admitted that there was really an unintentional interpolation of the sentence pointed out by the American Minister, and concluded, after commenting upon the meaning of the word " dismissed" : "I might also make some rectifications of concept which are suggested to me by reading the two notes of Y. E. about this matter; but I have considered it more convenient to await the arrival of the necessary documents in order to appreciate the matter in due form, the remittance of which documents has already been announced to us by our diplomatic representative in Washington." " Information as to this exchange of notes not having reached the Department, the Secretary of State of the United States, under date of May 13, 1903, directed the American Minister to "press the Chilean Government for an answer to the representations" a I Appendix, p. 74. >> I Appendix, p. 75. <= I Appendix, p. 77. 32 United States vs. Chile. — Alsop Claim. [introductory which were to have been made under the instruction of November 6, 1902, and concluded: "The equity of the claim is established, nay, is even admitted, and the Department feels that a generous sum should at least as an act of consideration for. the necessities of the claimant, be advanced by the Government of Chile. Such considerate action would be greatly appreciated by the Government of the United States, and you will so advise the Chilean Government." " Nothing further having been heard, the Department, under date of June 11, cabled its Minister asking whether or not he could report progress in the Alsop case. Under date of June 13, the American Minister informed the Department that the Minister of Bolivia at Santiago, Sefior Gutierrez, had informed him that the Alsop claim was one of those which according to the stipulations of the treaty of Peace and Amity between Chile and Bolivia then under negotiation, would be assumed and paid by Chile." Rumors having been circulated that the pending negotiations between Chile and Bolivia had been broken off, or indefinitely suspended, the American Minister at Santiago took up the matter with the Minister of Foreign Relations, particularly with reference to the payment of the Alsop claim, whereupon the Minister of Foreign Relations stated that he would soon be in a position to make a cash offer to the claimants of Alsop & Co., in satisfaction of this long pending claim and if the same was not accepted the amount tendered would be handed over to Bolivia and the Alsop creditors, together with such others as might decline to accept a direct cash settlement with Chile, would be referred to La Paz for negotiation with the Bolivian Government.'' On December 4, 1903, Minister Wilson telegraphed the Depart- ment that the Chilean Minister for Foreign Relations wished to know if an offer of 954,285 Chilean pesos of 18 pence would be accepted in settlement of the Alsop claim,, payment to be made, at the option of the Chilean Government, either in Chilean gold dollars of 18 pence, or in Chilean 5 per cent bonds at the rate of 18 pence per Chilean dollar reduced to pounds sterling, and added that in case the claimants should decline this offer the said sum of Chilean bonds would be paid to the Government of Bolivia, which would then assume the responsibility and settle with the claimants. •= a I Appendix, p. 78. b I Appendix, p. 79. c I Appendix, p. 80. statement.) xhe CasB of the United States. 33 This offer amounted to $343,542 American gold. At the time this offer was made, the mere principal of the debt recognized by the Wheelwright contract amounted to $805,775 American gold (reck- oned at the value of the Boliviano at the date of the contract) , while the interest due under the contract, at the time this offer was made, amounted to the further sum of $1,087,796.25, the two sums due at that time amounting to $1,893,571.25. This does not take into consideration the unpaid portion of the $222,625.50 American gold, which the contract recognized as interest due, at the date of its making; nor does it take into consideration the large sums due from Chile to the claimants as damages for illegal interference by Chile with mining rights held by the concession- aries in the littoral. It can scarcely be wondered that the De- partment found itself obliged to telegraph to Mr. Wilson on December 17, 1903, that the Alsop claimants declined the offer as inadequate, and that the Department, unable to recommend accept- ance, held the question of intervention under consideration, but that it earnestly hoped a just settlement would be reached without having to decide the question." On March i, 1904, the American Minister concluded a note, which dealt in some fullness with the value of the contract side of the claim and Chile's obligation to pay the same, with the following language: "In conclusion, I have the honor to call Your Excellency's attention to the frequent official recognition by your Government, of the justice of this claim, and to express the hope that it may be found possible to make such an arrangement with these creditors, and such an oflFer in settlement of their claims as the Government of the United States, may with due regard for their just interest, recommend the acceptance of."'' On May 6, 1904, the Department instructed its Minister that the Department was unable to entertain the opinion that the Chilean Government had so far made an equitable offer of settle- ment, which should include substantial compensation for the damages suffered by the claimants, <^ and on June 9, 1904, the Department instructed its Minister by cable to advise the Chilean Government that — " the United States Government expects that a just and reasonable indemnity will be made in the Alsop claim, some of the claimants being in great need; that the United States Government expects a prompt and equitable payment of this claim adequate to the losses a I Appendix, p. 81. 6 1 Appendix, p. 84. c I Appendix, p. 85. 40898 — 10 3 34 United States vs. Chile.— Alsop Claim. [introductory sustained by the claimants; that such a settlement would not be unjust to the Chilean Government and would be very much appre- ciated by the United States Government." "^ On June 14, 1904, the American Minister reported to the Department that the Chilean Minister of Foreign Relations had informed him that the Chilean Government would become respon- sible for the settlement of the Alsop claim after and following the ratifications of the definite treaty of peace and amity with Bolivia; that the Chilean Minister of Foreign Relations authorized him to say that the treaty was assured, and would be concluded within three months; and that immediately thereafter he would take up the Alsop claim, giving it special, just, and even generous consideration." The Minister confirmed this cable under date of June 18, 1904, and referred to his conversation with the Minister of Foreign Relations for Chile, in the following language: "Upon the 13th, having recovered sufficiently to attend to busi- ness, I visited the Minister, Senor Don Emilio Codecido, and in the interview which took place, I called his attention to the urgent telegram which I had just received from the Department, relative to the Alsop claim. I recited to him the history of the case, and called his attention to the long continued injustice, to which the claimants had been obliged to submit, and to the patience of the Government of the United States, in dealing with the claim before the Chilean Government. I said to the Minister clearly and emphatically, that these continuous delays, and manifest neglect of international obligations, had made a very bad impression in Washington, and I hoped that His Excellency would join with me in removing that impression, by satisfying the demands of the . Alsop claimants, justly and promptly. "The Minister replied, that he had every disposition to meet the demands of the claimants, and to gratify the expressed wish of the United States, but that the Government of Chile could not depart from the position which it had taken, and to which it still adhered, i. e., that the payment of these claims was assumed by Chile contingent upon the signing of the definite Treaty of Peace and Amity with Bolivia. According to the views of the Chilean Government, this is the strict and just construction of the Treaty of Ancon. "The Minister stated, however, that the treaty with Bolivia would be signed and ratified within three months, and that he would authorize me to state as much to my Government. He added, moreover, that as an evidence of his Government's desire to gratify the desires of the Government of the United States, the Alsop claim would be taken up immediately after the ratification of the Treaty with Bolivia, and given special, and even generous consideration. I replied, that while my Government did not accept the views of o I Appendix, p. 86. statement.] The Case of the United States. 35 the Chilean Government, relative to its obligations in the premises, the expressions of its intentions for the future, would be highly appreciated."" The substance of this conversation was embodied in a note dated June 21, 1904, from the American Minister to the Minister of Foreign Relations of Chile, which reads as follows : "Upon the 13th inst., I had the honor to confer with Your Excel- lency relative to the Alsop claim, and expressed to you, after having submitted to your inspection the urgent telegram concerning the claim, just received from my Government, the pressing necessity for early consideration of this long pending obligation, and how greatly decisive action by Your Excellency's Government would be appreciated by the Government of the United States. "Your Excellency's reply to the observations which I had the honor to "make on this occasion was, briefly, that the Chilean Gov- ernment had held, and continued to hold, the claim of Alsop and Company, as an obligation payable by the Chilean Government, contingent only upon the sigiiing of the definite treaty of peace and amity with Bolivia, Your Excellency adding moreover, that this treaty would, without any doubt, be signed and ratified by the Governments of Bolivia and Chile, within the term of three months, and that I might consider myself authorized to convey infor- mation to this effect, to my Government. Continuing, Your Excel- lency was good enough to add, that immediately following the ratifications of the treaty, the Chilean Government would address itself to the consideration of the Alsop claim, and out of deference to the expressed wish of the Government of the United States, and the necessitous condition of the claimants, would give to it, special, just, and even generous consideration. "Upon the same date of my interview with Your Excellency, I conveyed, by cablegram, to my Government, the substance of your statement, as recited above, and upon the 15th, I received the following reply: — " 'Express to Minister for Foreign Affairs the President's appre- ciation of assurances given and communicated by your cablegram. On this basis Department is confident the matter will be satisfac- torily adjusted at the period named.' " '' Under date of July 2, 1904, the Minister of Foreign Relations replied to the above in the following language: "I have the honor to acknowledge the receipt of Your Excellency's note dated 21st ult., in which Your Excellency, referring to the con- versation with the undersigned respecting the Alsop claim, tran- scribes to me the following cablegram sent by your Government to that Legation on the 15 th of said month : " 'Express to Minister for Foreign Affairs the President's appre- ciation of assurances given and communicated by your cablegram. On this basis Department is confident the matter will be satisfac- torily adjusted at the period named.' "In this respect, it corresponds to me to reiterate to Your Excel- lency that the Alsop claim is included among the other claims for a I Appendix, p. 87. 6 I Appendix, p. 88. 36 United States -vs. Chile. — Alsop Claim. [introductory credits weighing on the Bolivian coast, the payment of which will be assumed by Chile on the terms to be established in the respective treaty at the close of the negotiations at present going on towards that object between the Governments of Chile and Bolivia. Only then will it be possible for the undersigned to give to the said Alsop claim the attention it deserves."" On August 9, 1904, notwithstanding the Department was convinced that the Government of Chile was obligated to pay this debt for and on behalf of BoUvia — ist, because of the arbitrary appropriation of the customs receipts which had been allocated to the payment of the debt; 2nd, because of the repeated promises made to Bolivia to pay the debt; 3rd, because of the formal promise of the Government of Chile before the Claims Commission to adjust the claim; and 4th, because of the many "direct prom- ises made by Chile to satisfy this obligation, and notwithstand- ing, further, that it was equally clear in its opinion that the Government of Bolivia could not relieve itself from liability on the original contract until that Government had in some way secured the liquidation of the same, the Department instructed its Minister to present the claim to the Bolivian Government and to ask for its prompt and careful consideration and for the pay- ment of a just and equitable indemnity for the claimants. Finally, on October 20, 1904, the Governments of Chile and of Bolivia entered into the long delayed and much discussed joint treaty,* in article 5 of which it was provided as follows: " The Republic of Chile devotes * * * the sum of two mil- lion pesos in gold of eighteen pence in the same form as the preced- ing for the cancellation of the credits arising from the following obligations of Bolivia : * * * (-he debt recognized to Don Pedro Lopez Gama, represented by Messrs. Alsop and Company, subrogates of the former's rights * * * " Regarding the extent to which the Government of Chile had by this undertaking obligated herself to meet Bolivia's debts it appears that the Government of Bolivia, seemingly in fear that some doubt might in the future arise, set forth its understanding of the undertaking of the Government of Chile in the following note: "Legation oif Bolivia, "Santiago, October 21, 1904. "Mr. Minister: The Government of Bolivia agrees with Your Excellency's Government on the necessity of determining the pur- port of the wording of Article 5 of the Treaty of Peace and Friend- a I Appendix, p. 90. 6 I Appendix, p. 440. statement.] The CasB of the United States. 37 ship signed today by Your Excellency on behalf of the Government of Chile and by the undersigned in representation of the Government of Bolivia. "Both in regard to the claims of the Corocoro, Huanchaca, and Oruru companies and of the bond holders of the Bolivian loan of 1867 ^ which were being paid out of 40% of the receipts of the Arica Custom House, and in regard to the claims against Bolivia of the bond holders of the Mejillones railroad, of Alsop 8c Co., (assignees of Pedro Lopez Gama), of the estate of Juan Garday, and of Edward Squire (representing the rights of John G. Meiggs), it has been agreed that the Government of Chile shall permanently cancel all of them, so that Bolivia shall be relieved of all liability, the Government of Chile being obligated to answer every subsequent claim presented either by private means or through diplomatic channels, and con- sidering itself liable for every obligation, bond, or document of the Government of Bolivia relating to any of the claims enumerated, Bolivia's liability being entirely eliminated for all time and the Government of Chile assuming all liabilities to their full extent. "My Government desires that Your Excellency may be pleased to state to me, on behalf of the Government of Chile, whether this is the purport which it has given to article 5 of the Treaty of Peace and Friendship signed today between the representatives of the two Governments. "I avail myself of this opportunity to renew to Your Excellency, the assurances of my high and distinguished consideration. " (Signed.) A. Gutierrez." "To His Excellency "Mr. Emilio Bei^IvO C, Minister of Foreign Relations, "City."'' To this the representative of the Government of Chile replied as'follows : "No. 1008. "Republic of Chile, "Ministry of Foreign Relations, "Santiago, October 21, 1904. "Mr. Minister: In reply to the note which Your Excellency addressed to me on this day I take pleasure, in compliance with your request, in defining the purport which this Chancellery assigns to clause 5 of the Treaty of Peace and Friendship signed today by Your Excellency in representation of the Government of Bolivia and by the undersigned on behalf of the Government of Chile. "My Government considers that the obligation which Chile con- tracts by Article 5 of the said Treaty comprises that of arranging directly, with the two groups of creditors recognized by Bolivia, for the permanent cancellation of each of the claims mentioned in said article, thus relieving Bolivia of all subsequent liabilities. "It is consequently understood that Chile, as assignee of all the obligations and rights which might be incumbent on or pertain to Bolivia in connection with these claims, shall answer any reclama- « I Appendix, p. 444. 38 United States vs. Chile.— Alsop Claim. [introductory tion which may be presented to Your Excellency's Government by any of the parties interested in the said claims. "I renew to Your Excellency the assurance of my highest and most distinguished consideration. " (Signed) Emiuo Be;i.i.o C. " To His Excellency "Mr. Alberto Gutierrez, E. E. & M. P. of Bolivia, " "[SEAI.1" These notes seem clearly to establish [that although if read alone the bare treaty provisions might perhaps be construed to place a limitation upon the amount which the Government of Chile was to pay upon the debts recognized as existing against the Gov- ernment of Bolivia, yet that in reality the Government of Chile obligated itself to pay the entire amount which should be found due upon these debts, irrespective of the question whether or not it might be able to do so from the sum specifically named in the treaty. In December, 1904, the Government of Chile made a direct offer of settlement to the claimants, this time, however, offering but 524,333 Chilean pesos, equivalent to $190,647.00 American gold. At the time this offer was made the value of the debt arising out of the contract (estimated as above) , to say nothing of the tort liability, amounted roughly to $1,930,000. The Department of State of the United States, having already char- acterized as inequitable an earlier offer which was almost as much again as this second offer, at once declined to urge upon the claimants the acceptance of the proposed sum and stated, in an instruction to its Minister, that — "the Department begs to say that the amount appears to be entirely inadequate to the just satisfaction of the claim, and not in accordance with the previous assurance given by the Chilean Min- ister for Foreign Affairs to the United States Minister at Santiago that the Alsop claim should receive just and even generous treat- ment. The amount offered appears to be disproportionate to the claimants' equity, considered in itself, to which. consideration (it) should be added that the claimants have waited a very long time in the vain hope that substantial compensation would be rendered to them for the obligation which accrued against Bolivia, and which, it is understood, was incurred by the Government of Chile." '' Pursuant to directions given by the Government of the United States under date of April 30, 1907, the Legation at Santiago again presented the matter to the Chilean Government on June- 27, 1907, and after a considerable number of interviews upon the o I Appendix, p. 444. b I Appendix, p. 91. statement.] The Case of the United States. 39 matter, the Minister of Foreign Relations of Chile, Mr. Puga Borne, authorized the American Charg^ d'Afifaires to make to this Government by cable the following statement regarding.this claim : [Paraphrase.] The Minister of Foreign Relations authorizes me to say that the obligation of the Chilean Government toward Alsop & Co. is limited by Article 5 of the treaty with the Bolivian Government. An offer is made of 568,192.67 Chilean pesos in gold, which amount is retained in the treasury by judicial order pending the decision designating real claimant, at which time the sum will be paid upon the express condition that acknowledgement of the full amount of the claim be made by claimant, thus canceling the indebtedness of both the Gov- ernment of Chile and that of Bolivia." In reporting this action the Charge added : "The Minister states that the amount above given constitutes the final offer of Chile. If the claimants are unwilling to accept it in full satisfaction they are invited to turn for payment to Bolivia."* The Department of State informed its Minister at vSantiago that the claimants declined to accept the sum tendered by the Chilean Government upon the terms stated, adding that in view of the fact that the sum was more than one-third less than a sum previously offered by Chile, which offer was itself declined by the Departm^ent of State as being inadequate, the Department found itself unable to recommend the acceptance of the offer. It should be observed that at the time this offer was made the contract debt, principal and interest, exclusive of the previ- ously accrued interest, acknowledged as due by the contract itself, amounted (estimated as above) to $2,287,471.25. The offer of Chile at this time amounted to about $200,000 American gold. On November 11, 1907, the Minister of Foreign Relations informed the American Minister at Santiago that in making the last offer of settlement, the Government of Chile had omitted from the sum named certain items of accrued interest, which would raise the sum offered from 568,192.67 Chilean gold pesos to 589,870.30 Chilean gold pesos, at 18 pence. '^ "Under date of April 9, 1908, the Minister of Foreign Relations of Chile addressed to the American Minister at Santiago a lengthy note, in which the Minister of Foreign Relations set forth in considerable detail the attitude of the Chilean Government regard- = I Appendix, p. io8. 6 I Appendix, p. no. ^I Appendix, p. in. 40 United States vs. Chile. — Alsop Claim. [introductory ing the Alsop claim and its relation thereto, and in which he made a further offer, this time stating that — "my Government is ready to pay, in bonds, and in consideration of the total cancellation of the claim, the sum of 524,332.81 pesos gold of i8d each as principal, and 78,649.92 pesos in gold coin at i8d each as interest on coupons due thereon (including the coming coupons, which will be due June 10). The bonds earn 5 per cent interest and have an accumulative sinking fund of i per cent per annum." " In a note dated July 31, 1908, the Charge d' Affaires of the Chilean Legation at Washington forwarded to the Department of State a copy of the same note of the Chilean Minister of Foreign Relations, using in his note of transmission the following language : "It is also my duty to inform Your Excellency, in pursuance to instructions received, that this Legation is only authorized to fur- nish to the State Department, if Your Excellency should deem desirable, antecedents and information regarding this case, the negotiations regarding which have been and are still being con- ducted in Santiago." '' The Department of State, moved to feel by these persistent offers of a sum apparently so inadequate to the equities of the claimants under their contract, that perhaps the Government of Chile was in possession of facts of which the Government of the United States was ignorant, and which would justify the reduction proposed by the Government of Chile, and taking advantage of this kindly offer of the Chilean Legation at Wash- ington, requested, under date of August 29, 1908, that the Min- ister of the Republic of Chile at Washington should ftnnish to the Department "copies of the documents and a statement of the evidence which yotu" (the Chilean) Government regards as justifying the reduction which it proposes."" In making this request the Department of State indicated that it did so because it was animated by a desire to make, as to the matter of the set- tlement of this claim, no request which equity and justice did not support. No reply having been received by it to this note, the Department of State repeated its request on November 24, 1908. <* On November 26, 1908, the Minister of the Republic of Chile at Washington stated that he had informed his Govern- ment of the request and that he would communicate with the Department of State upon receiving the documents requested. " a I Appendix, p. 142. cl Appendix, p. 144. ^I Appendix, p. 147. I' I Appendix, p. 112. ^ I Appendix, p. 145. statement.] The Case of the United States. 41 On January 24, 1909, the Department of State, still not having received the documents promised, instructed the Minister of the United States at Santiago, by cable, to inform the Government of Chile that the Department of State, being most desirous of reaching a fair and equitable determination upon this whole matter, awaited the antecedents mentioned by the Minister of Chile and requested by the Department of State. <^ On February 26, 1909, the Minister of the United States at Santiago cabled the Department of State that he had received a reply from the Minister of Foreign Relations of the Government of Chile in which it was stated that the antecedents called for by the Department of State had on the same date been sent to the Minister of Chile at Washington.* On March i8th the Department of State com- municated the substance of this telegram to the Minister of Chile at Washington and requested that he forward to it at his earUest convenience the documents which his Government was then for- warding to him.' This note the Minister of Chile acknowledged under date of March 19th, and assured the Department of State that he would hasten to transmit to it whatever information he might receive bearing upon the subject.'^ Nothing having been heard in the meanwhile, and the evidence which the Chilean Foreign Office stated had been forwarded to the Legation of Chile at Washington not having been received, the Secretary of State of the United States on April 15th, took up the matter per- sonally with the Minister of Chile at Washington. In the course of an interview which followed, the Minister of Chile stated that the Government of Chile had no evidence such as that called for, that is, evidence going to show that the amount due under the contract w^s not really due the claimants, and that to justify its reduction the Government of Chile relied upon the fact that the sums specified in the treaty between the Governments of Chile and of Bolivia for the settlement of this and other claims was not sufficient to meet in full the demands of all the claimants, and that the amount offered Alsop & Co. was its pro rata share of the sum so stipulated to be paid.'' It would thus appear from this correspondence and from this statement made orally by the Minister of Chile at Washington that the Government of Chile has no evidence going to show that the amount called for, principal and interest, by the contract "■1 Appendix, p. 147 ^I Appendix, p. 150. f> I Appendix, p. 148. f^For Memorandum of interview, see I Appendix p. 150. 42 ■ United States vs. Chile. — Alsop Claim. [introductory between John Wheelwright as Uquidator for Alsop & Co. and the Government of Bolivia is not legally and equitably due the claimants. Indulging the conviction that, if Chile had no evidence going to show that the whole amount called for by the contract was not equitably due, then the Government of Chile should, pursuant to its many solemn promises and undertakings made to the Government of the United States and to BoUvia to settle this claim, make some adequate offer to meet the liabiUty imposed by the Wheelwright contract, the vaUdity of which has never been questioned by either Bolivia or Chile, the Department of State directed the American Minister at Santiago to present to the Government of Chile a note diplomatique in which, after setting forth the facts in the case as above mentioned, it was stated that the Government of the United States confidently expected that the Government of Chile would at once either make such a settlement of this contro- versy as should comport with the equity of the claimants and with the dignity and international integrity of Chile or pursuant to a suggestion made by the Government of Chile, immediately agree with the United States upon a protocol submitting the entire con- troversy to an arbitral tribunal for a decision of the case upon the merits in accordance with the broad principles of equity and inter- national law. The Government of the United States at the same time indicated that it felt most deeply that the added expense and delay which this latter course would entail upon the claimants were, under the existing circumstances, without warrant and not to be justified. "^ In case, however, Chile elected to arbitrate, the Government of the United States submitted with the note a draft of protocol of submission. The Government of Chile having upon the receipt of this alterna- tive proposal elected to arbitrate rather than to settle the claim, the Minister of the United States at Santiago formally submitted the draft protocol which had been incorporated in the note already delivered to the Chilean Government. This draft protocol pro- vided in the broadest possible ternis for the submission to the arbitration tribunal of the entire controversy between the two Governments. Under date of October 15, 1909 (the note was not actually deliv- ered until November 27th), the Minister of Foreign Relations of " I Appendix, p. 157. statement.] The Case of the United States. 43 Chile replied to this note of the American Minister and therein set forth the views of the Chilean Government regarding the matters discussed in the American notc-^ From the time of the delivery of the American note until Decem- ber I, negotiations proceeded between the representatives of the respective Governments at Santiago looking to the submission of the dispute between the two Governments to arbitration, and on the date last named the Protocol was signed submitting the matter to His Britannic Majesty Edward VII for determination, which Protocol the two Governments have already had the honor to bring to Your Majesty's attention. Therefore in view of, and pursuant to, the provisions of that Protocol, which stipulates that, — "The full case of each Government shall be submitted to His Britannic Majesty, King Edward VII, and to the other Govern- ment through its duly accredited representative at St. James, within six months from the date of this agreement" — The Government of the United States of America now submits in detail for the consideration and determination of His Britannic Majesty, the following documents, evidence, correspondence, alle- gations, and arguments, in The Case of the United States, the elements of which case and the allegations and contentions concerning which, are arranged in accordance with the plan here- inafter set forth:' "■ I Appendix, p. 210. 6 It will be observed in all the discussions which follow, that each document has been fully quoted in its essential parts wherever used even though it has been already- quoted in full and is to be so quoted thereafter. This has been done with the thought that such a course would facilitate the study of the case, since it would avoid the neces- sity, otherwise present, of turning forward or back in order to consult the exact text of the quotation used. POINT I. THE GOVERNMENT OF THE UNITED STATES, FOR AND IN BEHALF OF MR. JOHN WHEELWRIGHT, MR. GEORGE FREDERICK HOPPIN, MR. HENRY W. ALSOP, MR. JOSEPH W. ALSOP, MR. EDWARD McCALL, MR. GEORGE G. HOBSON, MR. GEORGE J. FOSTER, MR. THEODORE W. RILEY, MR. HENRY CHAUNCEY, AND MR. HENRY S. PREVOST, AMER- ICAN CITIZENS (THEIR HEIRS, ASSIGNS, REPRESENTATIVES, AND DEVISEES), FORMERLY DOING BUSINESS IN CHILE UNDER THE FIRM NAME OF ALSOP AND COMPANY, ALLEGES, CONTENDS, AND MAIN- TAINS THAT THE CONTRACT OF 1876 MADE BY AND BETWEEN JOHN WHEELWRIGHT, AS LIQUIDATOR FOR ALSOP AND COMPANY, AND THE GOVERNMENT OF BOLIVIA (THE VARIOUS OBLIGATIONS OF WHICH CONTRACT HAVE SINCE ACCRUED AGAINST AND BEEN ASSUMED BY THE GOVERNMENT OF CHttE) IS A VALID AND LEGAL INSTRUMENT NEGOTUTED AND CONCLUDED IN STRICT ACCORDANCE WITH BO- LIVIAN LAW, AS PROVED BY THE FOLLOWING FACTS AND CIRCUM- STANCES: Sub-Point A. The contract was duly and properly negotiated and con- cluded by officers of the Bolivian Government having authority to make such contract. Sub-Point B. The contract thus legally negotiated and concluded by the Executive Department of the Bolivian Government was duly and properly ratified and approved by the Bolivian Congress. Sub-Point C. The contract so made and ratified has been repeatedly recognized as a valid and binding instrument by the Govern- ments both of Chile and of Bolivia. C ^ The validity and binding effect of this contract have been repeatedly recognized and approved by the Govern- ment of Bolivia in and by a number of executive decrees pro- mulgated for the express and specific purpose of carrying this contract into effect. 44 Po*""-] The Case of the United States. 45 C ^ The validity and binding effect of this contract have been recognized and approved by the Government of Bolivia as well as by the Government of Chile in the diplo- matic correspondence passing between those two Govern- ments. C ^ The validity and binding effect of this contract have been repeatedly recognized and approved by the Govern- ment of Bolivia in its diplomatic correspondence with the Government of the United States. C ^ The validity and binding effect of this contract have been repeatedly recognized and approved by the Govern- ments of Bolivia and Chile in the various formal protocols and treaties made by 'and between said Governments, in which protocols and treaties provision has been expressly made for the payment of the debt recognized as due by said contract. C ' The validity and binding effect of this contract have been recognized and approved by the Government of Chile in a number of executive decrees issued to its officers of local administration concerning the enforcement and operation of this contract, after the occupation of the Boliv- ian Littoral by the Chilean forces. C ° The validity and binding effect of this contract have been repeatedly recognized and approved by the Govern- ment of Chile in its diplomatic correspondence with the Government of the United States. C ' The validity and binding effect of this contract have been recognized and approved by the Chilean courts in cases prosecuted by said Wheelwright before said courts, said cases involving and depending upon rights claimed by said Wheelwright under said contract. C ^ The validity and binding effect of the Wheelwright contract were distinctly recognized by the Government of Chile through its Agent before the United States and Chilean Claims Commission in 1901, at which time a specific promise was made to pay the debt arising under the contract. 46 United States vs. Chile. — Alsop Claim. [Point ii. POINT II. THE GOVERNMENT OF THE UNITED STATES, FOR AND IN BEHALF OF THE CLAIMANTS, AMERICAN CITIZENS, ABOVE NAMED (THEIR HEIRS, ASSIGNS, REPRESENTATIVES, AND DEVISEES), ALLEGES, CONTENDS, AND MAINTAINS THAT THE GOVERNMENT OF BOLIVIA, BY AND THROUGH THE CONTRACT OF 1876, DULY, PROPERLY, AND LEGALLY GRANTED TO THE CONCESSIONARIES UNDER THAT CON- TRACT, CERTAIN RIGHTS, TITLES, AND INTERESTS IN THE GOVERN- MENT ESTACAS LOCATED IN THE BOLIVIAN LITTORAL, WHICH RIGHTS, TITLES, AND INTERESTS WERE IN THE NATURE OF AND CONSTITUTED A CONCESSIONARY GRANT ANALOGOUS TO A LEASEHOLD INTEREST, _WHICH CONCESSIONARY GRANT WAS, UNDER THE CONTRACT, TO RUN FOR A TERM OF TWENTY-FIVE YEARS; THAT THE GOVERNMENT OF CHILE, UPON TAKING POSSESSION AND ASSUMING CONTROL OF THE BOLIVIAN LITTORAL, WRONGFULLY INTERFERED WITH AND CONFISCATED IN A MANNER CONTRARY TO THE WELL ESTABLISHED AND UNIVERSALLY RECOGNIZED PRINCIPLES OF INTERNATIONAL LAW CERTAIN OF THESE VESTED RIGHTS, TITLES, AND INTERESTS THUS GRANTED TO THE CONCESSIONAIRES UNDER THE CONTRACT OF 1876; AND THAT FOR THIS WRONGFUL INTERFERENCE, DEPRI- VATION, AND CONFISCATION, THE GOVERNMENT OF CHILE IS LIABLE IN TORT TO THE GOVERNMENT OF THE UNITED STATES, FOR AND IN BEHALF OF THE CLAIMANTS, ABOVE NAMED— AS IS CLEARLY AND DISTINCTLY ESTABLISHED BY THE FOLLOWING CONSIDERATIONS, DISCUSSIONS, AND AUTHORITIES. Sub-Point A. The estacas of instruction had under Bolivian law a due, proper, and legal existence; the Executive of Bolivia was duly, properly, and legally authorized and empowered to grant such rights, titles, and interests as were granted to Wheelwright under the contract of December, 1876, and this conclusion is undisturbed by the Chilean contention regarding " revindication." Sub-Point B. The rights, titles, and interests in said government estacas, granted by the Bolivian Government to Wheel- wright, by and under the contract of December 26, 1876, constitute a concessionary grant analogous and equal to a leasehold for years; but said rights, titles, and interests do not constitute and were not intended to constitute an estate or interest identical with or equivalent to a common law or civil law mortgage, nor to a contract of anticresis either under the code of Chile or under the general princi- ples of the civil law. P"'""!-! The Case of the United States. 47 Sub-Point C. Under the concessionary grant to Wheelwright of Decem- ber, 1876, Wheelwright enjoyed in the government estacas for purposes of occupation, possession, and exploitation the rights, titles, and interests which were possessed by the State. Sub-Point D. Among the rights, titles, and interests in said govern- ment estacas which by virtue of this relationship and status Wheelwright enjoyed under this contract, with reference to the government estacas therein granted, were (1) the right to hold said estacas free from the penalty of denouncement for abandonment; and (2) the resulting freedom from the necessity of taking, or remaining in, the physical possession of the estacas chosen and designated by him under his contract. Sub-Point E. The Government of Chile violated and confiscated these fundamental and all important rights, titles, and interests of Wheelwright under his contract, by applying to Wheel- wright's rights, titles, and interests in said government estacas under and pursuant to his contract, the provisions of the Chilean law, under which law it became necessary for him to expend large sums to avoid the penalty of denouncement and under which law and by the application and enforcement thereof he was deprived (improperly and illegally) of certain rich mines to which he was entitled under his contract. Sub-Point F. This application of the provisions of the law of Chile to the private vested rights held, possessed, and enjoyed by Wheelwright in the Government estacas, under his con- tract, in a way and manner which amounted to and re- sulted in a deprivation and confiscation of certain of these private vested rights so held, possessed, and en- joyed by Wheelwright under his contract, constituted a violation of well settled and universally recognized prin- ciples of international law, for which wrongful acts the Government of Chile is liable to respond to the Govern- ment of the United States in damages. 48 United States vs. Chile. — Alsop Claim. [Point iv. POINT III. THE GOVERNMENT OF THE UNITED STATES FOR AND IN BEHALF OF THE CLAIMANTS, AMERICAN CITIZENS (THEIR HEIRS, ASSIGNS, REP- RESENTATIVES, AND DEVISEES), ABOVE NAMED, ALLEGES, CON- TENDS, AND MAINTAINS THAT THE WHEELWRIGHT CONTRACT OF DECEMBER 26, 1876, RECOGNIZES AND IMPOSES THE OBLIGATION TO PAY 835,000 BOLIVIANOS WITH INTEREST AT THE RATE OF FIVE PER CENT FROM THE DATE OF THE CONTRACT UNTIL SAID SUM WAS DUE, WITH INTEREST THEREAFTER AT THE LEGAL RATE UPON SAID PRINCIPAL AND INTEREST ; AND THAT THE GOVERNMENT OF CHILE IS LIABLE UNDER A DIRECT OBLIGATION, QUASI AND EXPRESS, FOR THE AMOUNT DUE TO THE CONCESSIONARIES UNDER THE CONTRACT OF 1876, INCLUDING INTEREST AT THE RATE AND UPON THE AMOUNTS INDICATED ABOVE, FOR THE FOLLOWING REASONS AND UNDER THE FOLLOWING SPECIFIC PROMISES AND UNDERTAKINGS: Sub-Point A. The Government of Chile is liable for such indebtedness because it deliberately and with knowledge appropriated the funds already specifically set apart and appropriated to the payment of this obligation. Sub-Point B. The Government of Chile is liable for such indebtedness because of repeated solemn undertakings made to the Gov- ernment of Bolivia to pay such indebtedness, the Govern- ment of the United States for and in behalf of the claim- ants having the rights of a beneficiary under these formal and solemn undertakings. Sub-Point C. The Government of Chile is liable for such indebtedness to the Government of the United States because of many solemn diplomatic undertakings and agreements made and repeatedly renewed by the Government of Chile directly to the Government of the United States, and based upon ample considerations. POINT IV. THE CLAIMANTS IN THIS CASE HAVE SUFFERED, BY REASON OF THE VIOLATION BY THE GOVERNMENT OF CHILE THE RIGHTS VESTED UDDER AND BY VIRTUE OF THE CONTRACT OF DECEMBER 26, 1876, NEGOTIATED AND CONCLUDED BY AND BETWEEN THE GOVERN- MENT OF BOLIVIA ON THE ONE SIDE AND JOHN WHEELWRIGHT ON Point IV.] The Case of the United States. 49 THE OTHER, DAMAGES IN THE AMOUNTS HEREINAFTER SET FORTH ^ SAID DAMAGES ARISING FROM AND HAVING THEIR ORIGIN IN BOTH TORT AND CONTRACT, AND HAVE ALSO SUFFERED THE LpSS, PRIN- CIPAL AND INTEREST, OF THE DEBT RECOGNIZED AS DUE AND PAY- ABLE UNDER THE CONTRACT, UPON BOTH OF WHICH ACCOUNTS (TORT AND CONTRACT), AND FOR THE AMOUNTS HEREIN NAMED« AND SET FORTH, THE CLAIMANTS PRAY JUDGMENT. Sub-Point A. Damages are due to the concessionaries in this case by reason of the failure, on the part of the Government of Chile,, properly to recognize, observe, and enforce the rights, titles, and interests possessed by the concessionaries in the gov- ernment estacas located in the Bolivian Littoral, upon and subsequent to the assumption of possession and controL of this Littoral by the Chilean Government. These dam- ages are divisible as follows : A^ Damages arising from the failure of the courts of the Government of Chile to adjudge to Wheelwright the posses- sion and enjoyment of certain government estacas to which he was entitled under the Bolivian laws. A^ Damages arising from the wrongful application by the Chilean courts and officials to the government estacas held by the concessionaries under their contract of those provisions of the Chilean mining law which related to and governed the denouncement of mines for abandonment. A^ Damages arising by way of disbursements for ex- penses of litigation made necessary by reason of the im- proper application to the government estacas of various provisions of the Chilean mining law (said expenses includ- ing court fees, witness fees, and attorney's fees), as welL as for necessary increase of working staff in order ade- quately to protect the interests of the concessionaries. Sub-Point B. Damages are due to the concessionaries in this case upon the contract debt which was recognized by the Wheelwright contract as due to the concessionaries. , 40898 — 10 4 CONTRACT BETWEEN THE GOVERNMENT OP BOLIVIA AND JOHN WHEELWRIGHT, PARTNER AND REPRESENTATIVE OF ALSOP AND COMPANY. The contract of December 26, 1876, negotiated and concluded by and between John Wheelwright, representing Alsop & Co., and Manuel I. Salvatierra, representing the Government of Bolivia, upon which contract rest and from which contract flow the rights, titles, and interests claimed by the Government of the United States for and in behalf of the claimants, reads in words and figures as follows : Settlement executed between the Minister of Finance and Industry, Doctor Manuel Ignacio Salvatierra, in representation of the National interests, and John Wheelwright, partner and repre- sentative of Messrs. Alsop and Company of Valparaiso, for the con- solidation and amortization of the credits which he has pending against the State. In the City of La Paz of Ayacucho, at eleven o'clock of the 26th of December, 1876, before me citizen Patricio Barrera, Notary of Finance, Government and War, and the undersigned witnesses, there appeared, on the one part. Doctor Manuel Ignacio Salvatierra, Minister of Finance and Industry, as irepresentative of the National interests, native of the City of Santa Cruz, resident in this capital, married, and of the legal profession; and of the other part, John Wheelwright, partner and representative of Messrs. Alsop and Company of Valparaiso, Republic of Chili, a native of the United States of North America, a merchant, also married, and transi- torily in this City, both being of full age and competent to execute this deed, and whom I certify that I know, and they stated, that in order to consolidate and liquidate the credits pending against the State, arising out of the transfer of the rights which were recognized in favor of Don Pedro Lopez Gama, a Supreme Decree has been issued, dated on the 24th of the present month, in which is embodied the definite settlement for which this deed is ordered to be drawn out, and which is as follows : 50 Contract.) The Case of the United States. 51 "Resolution of December 24, 1876. "Ministry of Finance and Industry, "La Paz, December 24, 1876. "In view of a proposition made by Mr. John Wheelwright, a member and representative of the firm of Alsop and Company of Valparaiso, in liquidation, for the purpose of providing for the consolidation and payment of its claims against the Government by an assignment of the rights which were acknowledged in favor of Pedro Lopez Gania, a new compromise has been concluded in a cabinet meeting with Mr. Wheelwright which finally terminates this matter. It is drawn up in the following terms : "First: The sum of 835,000 bolivianos is acknowledged as due the aforesaid representative of the firm of Alsop and Company, together with interest at the rate of 5 per cent per annum, not addable to the principal, and to be reckoned from the date on which this contract is duly executed. "Second. The said principal and interest shall be amortized by means of drafts all of which are to be drawn in quarterly install- ments on the surplus which, from the date on which the present customs contract with Peru terminates, shall arise from the quota due Bolivia in the collection of duties in the Northern Custom House, over and above the 405,000 bolivianos which the Peruvian government now pays, — whether the customs treaty with that Republic is renewed or whether the National Custom Plouse is reestablished. "Third. All of the silver mines of the government in the depart- ment along the coast are hereby devoted to the payment of the said amortization for which purpose 40 per cent of the net profit shall be utilized, except in the mine known as 'Flor del Desierto,' concerning which provision is made in the ensuing article. " Fourth. The aforesaid mine called ' Flor del Desierto,' together with one other of the government mines to be selected by the party concerned, are hereby devoted to the payment of the interest claimed as due, amounting to 170,700 bolivianos prior to December 18, 1875, and 70,000 bolivianos for the year now expiring. In the mine called ' Flor del Desierto ' the quota due the Govern- ment and appUcable to the payment of this amortization shall be 50 per cent of the net proceeds, and in the other mine it shall be 40 per cent, as in the remaining mines granted. The surplus remain- ing after the payment of this interest shall be apphcable to the amortization of the capital acknowledged as due, as provided in 52 United States vs. Chile. — Alsop Claim. [Contract. clause 3, it being a condition that if one or both of the conces- sions produce nothing or little, then this obhgation and every claim to said interest due shall be finally canceled. "Fifth. The operation of the mines of the Government let as concessions in the foregoing articles shall be subject to the contract concluded this date on the subject, the interested party being permitted to assign these rights and this compromise to such persons or companies as he may deem suitable, giving notice thereof to the Government. "Sixth. In all cases in which sums of money are paid or received the Chilean peso or the Peruvian sol of stamped silver shall be considered equivalent to the boliviano, either in this contract or in that regarding the mining concessions. "Let the proper document be executed, inserting therein this compromise and the contract connected therewith which is mentioned above. Let this be recorded. [h. S.] "Daza. "Oblitas. "Carpio. "VlLIvEGAS. "SaIvVATIERRA." "acceptance. " On the 26th of the current month, at eleven o'clock, I made known this supreme decree which precedes, to Mr. John Wheel- wright, representative partner of Messrs. Alsop and Company, who, fully informed of its contents, accepted the contract in legal form, before me, of which " I hereby certify. "(Signed.) John Wheelwright. "Patricio Barrera, "Notary of Finance, Government and War. "Resolution of December 23, 1876. "Ministry op Finance and Industry. "La Paz, December 23, i8y6. " In accordance with the compromise made this day it has been agreed by the Government in Cabinet Council with Mr. John Wheelwright, representative of the firm of Alsop and Company, that the operation of the Government mines which have been let out as a concession to said firm on the same date shall be subject to the following clauses and conditions : '^•"'"•"•l The Case of the United States. 53 " I. Mr. John Wheelwright shall have a period of three years within which to examine the Government silver mines and find the necessary capital with which to put them into operation, it being his duty to take the necessary preliminary measures to this end as soon as possible. The mines shall remain at the disposal of the concessionary during these three years, and the Government shall enable it to gain actual possession thereof by giving the proper instructions to the authorities. "2. By virtue of the concession which has been made to him the concessionary shall be entitled to organize joint stock companies for the operation of one or more claims, either on the coast or abroad; or else to conclude contracts with the owners of adjacent mines in order to secure the most certain means of operating all or any of the said concessions which in the opinion of the concession- ary or companies organized are profitable or will at least pay the cost of working them where veins are already discovered or may be discovered during the three years assigned in the first clause. "3. The concessionaries may hire and employ in their mining work either foreign or native engineers, employees, or laborers, who shall, during the period for which they are hired, be exempt from all military service as well as every civil or municipal office, except in cases of necessity in order to preserve public order and peace. "4. The concessionary or companies in charge of the work shall present semi-annual balances, on the strength of which, together with the records of the books, the distribution shall be made of the net proceeds, 40 per cent being applied by the Government to the paying off of the debt according to the terms agreed upon in the compromise of this date, and sixty per cent going to the petitioner. "5. The Government shall appoint one or more agents to super- intend the work performed, who shall be compensated out of the common funds of the enterprise. "6. This contract shall last for 25 years, after which time, if there is any residue after paying off the Government's debt in accord- ance with the compromise; it shall be turned over to the Govern- ment. "7. If, within the first three years or thereafter until the expira- tion of the 25 years mentioned in the foregoing article, any persons or companies should offer to operate one or more of the mines included in this contract, they may do so provided the present con- cessionary does not care to undertake the operation thereof and so 54 United States vs. Chile. — Alsop Claim. [Contract. states in writing to the Government, or else deliberately neglects to make such statement. "8. The Supreme Government shall grant to the petitioner free of charge, during the continuance of this contract, such lands of the Government as may be necessary for the erection of his buildings and mining establishments. Let this be recorded. " Daza. " Obutas. " Carpio. " VlIvI^EGAS. " Sai^vatierra. "acceptance. "On the 26th of the present month, at eleven o'clock, I made known the Supreme Decree which precedes to Mr. John Wheel- wright, partner and representative of Messrs. Alsop and Company, who, being notified of its purport, accepted it in legal form, of which I certify. " (Signed.) John Wheei^wright. "Patricio Barrera, "Notary of Finance, Government and War. "continuation. "In conformity with which, ratifying respectively the two Supreme Decrees embodied herein, which, in the original, exist in the archives of the collection under number 410, after being legalized by me, the Notary, in conformity with the present and in the most legal form, they covenant: that they oblige and compromise themselves in the name of those they represent, the party of the second part for himself as partner, to the observance and fulfillment of all and every clause contained in both Supreme Decrees. In witness thereof, they affirmed, sealed and signed before the witnesses who were present, Doctors Manuel Vargas and Benjamin Martinez, residents of this City, single men, both lawyers and of full age, before whom this was read from beginning to end, no objection of any kind being made to the tenor of it, and of which I give faith by signing. "(Signed.) Manuei. I. Salvatierra, "John WheeIvWright, "Manuel Vargas, "Benjamin Martinez."" "For Spanish text, see I Appendix, p. 4. POINT I. THE GOVERNMENT OF THE UNITED STATES, FOR AND IN BEHALF OF MR. JOHN WHEELWRIGHT, MR. GEORGE FREDERICK HOPPIN, MR. HENRY W. ALSOP, MR. JOSEPH W. ALSOP, MR. EDWARD McCALL, MR. GEORGE G. HOBSON, MR. GEORGE J. FOSTER, MR. THEODORE W. RILEY, MR. HENRY CHAUNCEY, AND MR. HENRY S. PREVOST, AMERI- CAN CITIZENS (THEIR HEIRS, ASSIGNS, REPRESENTATIVES, AND DEVISEES), FORMERLY DOING BUSINESS IN CHILE UNDER THE FIRM NAME OF ALSOP AND COMPANY, ALLEGES, CONTENDS, AND MAIN- TAINS THAT THE CONTRACT OF 1876 MADE BY AND BETWEEN JOHN WHEELWRIGHT, AS LIQUIDATOR FOR ALSOP AND COMPANY, AND THE GOVERNMENT OF BOLIVIA (THE OBLIGATIONS OF WHICH CON- TRACT HAVE SINCE ACCRUED AGAINST AND BEEN ASSUMED BY THE GOVERNMENT OF CHILE) IS A VALID AND LEGAL INSTRUMENT, NEGO- TIATED AND CONCLUDED IN ACCORDANCE WITH BOLIVIAN LAW, AS PROVED BY THE FOLLOWING FACTS AND CIRCUMSTANCES: Sub-Point A. The contract was duly and properly negotiated and con- cluded by officers of the Bolivian Government having authority to make such contract. Prefatory Summary. It will be observed, from the discussion which follows, that this question involves two points, — (i) The authority of the Bolivian Executive to deal with and make contracts concerning the disposition or operation of the government estacas; and (2) The power to adjust and to provide for the payment of obligations running from the State to foreigners. Considering these points in their order: — (i) An Act dated October 19, 1871, passed by the National Constituent Assembly of Bolivia authorizecl the Executive to "celebrate contracts of renting and working in partnership all the mines (estacas minas) belonging to the state in the mineral districts of the republic." Acting under and in accordance with the 55 56 United States vs. Chile. — Alsop Claim. [Point i, provisions of this law the Bolivian Executive issued certain supplemental decrees dated November 2, 1871, and March 7, May 29, and September 19, 1872. Pursuant to the terms of these various decrees and the law upon which they were based, the Government of Bolivia made with Pedro Lopez Gama, under date of April i, 1873, a public contract leasing the mines of the littoral to Gama, under an arrangement which provided that fifty per cent of the net proceeds of the operation of the mines should go to Gama and the other fifty per cent should go to Bolivia. This contract was, as a matter of law, an exact counter- part of the Wheelwright contract. The courts of Chile have recognized that the Wheelwright contract was made under the authority of the same laws and decrees and that it was a valid, legal and binding contract. (2) A law dated November 22, 1872, authorized the Executive to arrange claims actually pending against the State. Operating ■under this law an arrangement was made with Wheelwright Tinder date of February 7, 1876, and it must be considered that the same law applied to the arrangement of December of the same year. That this law authorized the Executive to make such contracts has not only been conceded but insisted upon by the Chilean Government in connection with the difficulties arising between itself and the Government of Bolivia regarding the Antofagasta Nitrate and Railway Company. Discussion. It would seem that, in the light of all the facts and circum- stances surrounding this case and considering the express authori- zations which, as hereinafter set forth, were, as to these matters, at various times extended to and conferred upon the executive .branch of the Bolivian Government, it cannot be successfully maintained that at the time the documents relied upon in this case were drawn up, the Bolivian Executive did not have the complete power and authority to arrange, negotiate, and con- clude with John Wheelwright, the decrees of December 23rd and December 24th, 1876, and the contract of December 26th, 1876, which incorporated such decrees as part of a notarial instrument. It will at first sight be obvious that the negotiation and con- clusion of the contract of December 26th, 1876 (embodying the Sub-Point A.) The Case of the United States. 57 decrees of December 23rd and December 24th) involved the exer- cise by the Executive of two distinct powers: First, — the power to deal with and contract concerning the disposition or opera- tion of the government estacas; and, second, the power to adjust and to provide for the payment of obligations running from the State to foreigners. Considering these powers in their order: , First — The power to deal with and to contract concerning the dis- position or operation of the government estacas: On the 19th of October, 1871, the National Constituent Assem- bly of Bolivia passed a law which contained, upon this point, the following stipulations : "Sole Article. — Let the Executive be authorized, under the obli- gation of reporting to the next Assembly, for the following objects : "Fifth. — To celebrate contracts of renting or working in partnership all the mines (Fstacas Minas) belonging to the State, in the mineral districts of the Republic." ° While the wording of this statute, — "Let the Executive be authorized, under the obligation of reporting to the next Assem- bly ", — might perhaps suggest that its operation was limited to the time between its enactment and the meeting of, or at least the report to, the next Assembly, an examination of the actual facts makes it clear that the Bolivian authorities considered it in force and operated under it for a number of years following the date of its enactment. It appears from the proceedings before the court of first instance at Antofagasta in the suit brought by John Wheelwright to recover possession of the mine Justicia, one of the government estacas, to the possession of which he claimed he was entitled under his contract, that at various times and continuously from the date of the statute down to the date of the contract with Wheelwright, the officials of Bolivia considered the law as binding and effective and that indeed, acting under its authority, they had at an earlier date made, with Pedro Lopez Gama, a special contract for the working of these government estacas. Upon this point, Mr. Wheelwright, the plaintiff in the case of the Justicia, made the following state- ment : "The Government proceeded to it, perfectly authorized by laws of the country, amongst which figures that of the 19th October, 1871, which authorized the Executive to let, or work in partnership, all "■1 Appendix, p. 297. 58 United States vs. Chile. — Alsop Claim. [Pointi. the estacas of the State. In conformity therewith, the decrees of the 2d November, 1871, and 7th March, 29th May and 19th Septem- ber, 1872, were dictated, by which offers were invited for the working of them, and, afterwards, on the ist April, 1873, the tenders made by Mr. Pedro Lopez Gama were accepted, and later on, in 1876, the Contract with the plaintiff was celebrated." " A perusal of the decrees referred to by Mr. Wheelwright makes it entirely clear that the Executive of Bolivia did consider this statute as in force and as authorizing him to act thereunder, cer- tainly down to and including the instrument of April ist, 1873, under which Mr. Gama claimed his rights. To examine these decrees in some detail : The decree of November 2, 1871, provides as follows: "I, Augustin Morales, Provisional President of the Republic, etc.. considering that the State should derive every benefit from the estacas mines which it holds as its property in every vein that is being worked; that the Government is bound to fulfill the law of the 19th of October last which authorized it to rent or exploit in part- nership all the estacas mines belonging to the State: ' ' Decree "ArTici^E I "That a tender is invited for the working of the estaca mines of the State in partnership, the State being considered as an industrial partner; H: H: :^ ^ :): :ic ^ "ARTICI.B III "That the Government as an industrial partner does not bind itself to reimburse losses to the partners who furnish the capital; "Article VII ' ' The company shall be organized in accordance with the pro- visions of the laws of the country, and the work shall be subject to the Code of Mines, it being understood that the State, because of the part it takes as a partner, does not waive the privilege which it enjoys in mining matters. "The Minister of Hacienda and Industry shall be charged with the execution and fulfillment of this Decree. "Done at the illustrious and heroic capital of Sucre November 2, 1871.'"' • - By the decrees of March 7 and May 29, i872,<^ the tender called for by the decree of November 2, 1871 , was extended until the first of October, 1872. «II Appendix, p. 108. ^1 Appendix, p. 299. cj Appendix, p. 301. Sub-Point A.] The Case of the United States. 59 The decree of September 19th, 1872, provided as follows: "I, Augustin Morales, Constitutional President of the Republic, etc., "Considering: "That by unforeseen obstacles and the latest political events, the Engineer of the State has not been able to carry out the examination and measurement of the Estacas mines in the State of Caracoles; "That it is necessary to give greater scope to the contracts for the working of the said Estacas, and request tenders not only from national managers, but also from foreign ones ; "That the first of October is drawing near which was recently designated for the submission of tenders concerning said Estacas, and the Government has received from different parts complaints by interested parties on account of the shortness of the time, "DECREE; "Article i. A new tender is asked for the working of the Estacas mines of silver of the State of Uttoral in association with it in the sense that the State shall be considered as an industrial partner. "Article 2. The proposals shall be presented in a package sealed until the first day of April, 1873, on which day, at 12 o'clock, they shall be opened at a Cabinet meeting and in the presence of the Government Attorney, and they shall be classified so that the most advantageous one shall be accepted. "Article 3. The Government, as an industrial partner, shall not be obliged to reimburse losses to the partners who furnish capital. "Article 4. The duration of the association shall be fixed in the contract, and during the time that may be stipulated the State shall not be able to sell the Estacas involved. "Article 5. The partners furnishing capital shall make in their proposals an offer in advance on the net proceeds which the State is to receive. The sum advanced shall be considered as a deposit being the guarantee of the immediate commencement of the work and for every charge that might result from the fault of the managers; and its payment shall be made by an amortization of 6 per cent. , to be deducted from the net proceeds. "Article 7. The partnership shall be organized in accordance with the provisions of the national laws, and the working shall be effected in conformity with the mining code, it being understood that the State, by reason of its participation, does not renounce the privileges which it enjoys in mining matters. "Article 8. The Decree of November 2, 1871, is repealed. "Article 9. The Government recommends to the Prefects and Sub-Prefects that they take the most efficacious measures to safe- guard the Estacas of the nation, avoiding usurpation and trespass on the part of the miners. "Article 10. For the working of the Estacas in the mineral dis- tricts of the interior departments the Government shall again call for tenders. "Done at the City of La Paz, September 19th, 1872. "Countersigned: "Augustin Morales. "Minister of Government and Foreign Relations, in charge of the Office of the Treasury."* ,,r\ r> ., ■' Casimiro Corral. <'' I Appendix, p. 302. 6o United States vs. Chile — Alsop Claim. [Point i. Under the terms of the concession of April ist, 1873 (referred to by Mr. Wheelwright in his brief before the Chilean Court) , between Gama and the Government of Bolivia, negotiated and concluded under the above law and decrees, Gama was to work the govern- ment estacas and was to take as a recompense therefor 50 per cent of the net proceeds resulting from such operation, the remain- ing 50 per cent being, under this contract, turned over to Bolivia." Of this latter amount, one-fourth was to be apphed by the Govern- ment of Bolivia to the indebtedness recognized in favor of Gama by the contract of December, 1872. Concerning this contract of April ist, 1873, between Gama and the BoHvian Government, the President of Bolivia, in his message to the Bolivian Congress of 1873, used the following language: — "Estacas mines of the State in Caracoles. — The first of April an auction was held for the working and the exploitation of these estacas before the Board composed of the President and the members of the Council of State and the Fiscal of the District. Senor Lopez Gama, concessionary, made an advance of 1,250,000 Bolivianos with inter- est at 8 per cent, the amortization of 6 per cent, the commission of I per cent, to be paid out of the proceeds of the exploitation of which the State shall receive one-half of the net proceeds. "These b^ses and the details of the contract you will find in the publication which has been made thereof."' Concerning the transaction to which reference is here made by the President, it should be noted that in the instrument by which Pedro Lopez Gama transferred to Wheelwright his (Gama's) cred- its against the Government of Bolivia, the various circumstances attending the making of the Gama contract, the nature of the contract, and the circumstances which grew out of it, are narrated as follows: "For, among other stipulations of this transaction (Decree of Dec. 21, 1872) it was agreed that the sum recognized by the Gov- ernment of Bolivia as due to Don Pedro Lopez Gama, it would pay to him with twenty-five per cent of the net profits which the State might have in the working of the Estacas mines, the adjudication of which was to be made on the first of April, one thousand eight hun- dred and seventy-three, as per written instrument made at La Paz de Ayacucho, before the same Notary of the Treasury Don Patricio Barrera, and in which there was adjudged to Don Pedro Lopez Gama or to the anonymous company or companies that he might organize conjointly with the Government, and subject to the stipu- lations contained in the same instrument, the exploitation 'of all the Estacas mines belonging to the State, which in the judgment of the Company (Empressa) will meet at least the expenses of working them, in the veins already discovered, or that might thereafter be o I Appendix, p. 311. 6 I Appendix, p. 315. Sub-Point A.] The Case of the United States. 6i discovered in the Littoral of the Republic, subject to the Mineral Code.' "Fourth. That among the various stipulations of the transaction contract just mentioned, are those found in articles seventh, eighth and nineteenth, wherein it is covenanted: in the first, that the net profits derived from the working of the Estacas mines shall be equally divided, one-half to each, between the State and Pedro Lopez Gama or such company as may represent his rights; in the second, that from the one-half, or say the fifty per cent of the net profits assigned to the State, there shall be deducted the twenty-five per cent applicable to the amortization of the sum in which the Supreme Government of Bolivia recognized itself indebted to Mr. Pedro Lopez Gama, in the transaction contract of twenty-seventh of December, of one thousand eight hundred and seventy-two, already mentioned; and in the third, that in the unforeseen event of there arising any disagreement between the contracting parties as to the meaning of the convention 'the question shall be decided,' says this article, ' by two arbitrators selected by each party, and should the arbitrators be unable to agree, the two contracting par- ties shall name a third as umpire, to whose unappealable decision the contracting parties hereto submit from now.' " Fifth. That the disagreement foreseen in that article having arisen, when the first step was taken to carry into effect the contract in question, which was to take possession of the adjudicated Estacas mines; because the Supreme Government wished to give the fourth estacas in the Caracoles mineral region, whilst Mr. Pedro Lopez Gama claimed the third, which were the auctioned ones which belonged to the State according to law; the foreseen disagreement having arisen, as stated, it became necessary to make use of the arbitration provided for by said, article, and for that purpose the submission was constituted by public instrument executed at Sucre on the seventeenth of March, one thousand eight hundred and seventy- four, in accordance with the decree of the Supreme Government of Bolivia, dated the tenth of the same month and year, and in which said Supreme Government named Don Jose Maria Santbonez as arbi- trator and Don Pedro Lopez Gama named Don Fernando Valverde, The arbitration having proceeded legally and in due form, the arbi- trators gave their decision in Cochambamba, on the sixteenth of July, one thousand eight hundred and seventy-four and by which they declared : ' That the Estacas Mines contracted for by Don Pedro Lopez Gama and of which possession should be given him by the Supreme Government of Bolivia, in the Caracoles Mineral region, were those registered in accordance with the prescriptions of the law, and those to which pursuant to the same, the public treasury had a right, and that said estacas were: the fourth in the 'Descu- bridora;' the third in the rest; and in cases of denunciation, the one next to that of the denunciator; and finally, in cases of association, the seventh or the fifth respectively, in conformity with Article one hundred and ninety-nine of the Mineral Code.' "Sixth. That violating what had been agreed to, not only in article nineteen of the contract for the working of the Estacas mines, but likewise in the very instrument constituting the submission, the Supreme Government of Bolivia did not acquiesce in the resolution of the arbitrators, but appealed from the sentence of the arbitrators to 62 United States vs. Chile. — Alsop Claim. [Point i. consult the Court of Cochambamba. An appeal so unusual as well as contrary to what had been covenanted, gave occasion for the protest formulated by Mr. Lopez Gama in the City of Tacna, Repub- Uc of Peru, on the twenty-ninth of September, of one thousand eight hundred and seventy-four, before the Notary Don Daniel Fernandez Davila, and to sundry other claims which on that account he pre- sented to the Supreme Government of Bolivia; all of which, un- fortunately did not sufHce to make said Government desist from its appeal to the Court of Cochambamba, and produced no other result than the transmission of Mr. Lopez Gama's reclamation to the Assembly, which body closed its sessions without taking this mat- ter into consideration, and there is no hope of its so doing, as it does not have to reassemble for two years to come, and that is not sure, inasmuch as political events may indefinitely delay its next meeting. "Seventh. That not only for reasons easily understood from the aforementioned facts, but likewise because if the Supreme Govern- ment of Bolivia were willing now or later on to place Mr. Lopez Gama in possession of the third estacas mines, this tardy compliance with what was covenanted, would not be sufficient to prevent the contract of fourth of April, one thousand eight hundred and seventy- three, from becoming completely nugatory in its effects ; inasmuch as the wealth which was contained in the third estacas has been exploited, it would be entirely useless to invest heavy sums in them when loss is certain. In like manner such tardy compliance would not be sufficient to release the Supreme Government of Bolivia from its responsibility for damages and injuries, profits not made and emergent loss experienced by Mr. Lopez Gama in consequence of its failure to comply opportunely with its pact. For these rea- sons, he says, on the fourth of January of the present year, he addressed to the Supreme Government of Bolivia a long communi- cation, in which he considers said contract of fourth April, one thou- sand eight hundred and seventy-three, as extinct, because of the failure on the part of the Government to comply with the first of its obligations, claiming payment for the damages and injuries, profits not made and emergent loss incurred by him in consequence thereof; demanding payment of one million eighty-seven thousand five hundred dollars ($1,087,500) recognized by the Transaction con- tract of twenty-seventh of December of one thousand eight hundred and seventy-two and interest at eight per cent per year; accom- panying the account of what said reclamations amounted to; and making known that his rights to all that has been related, would be made valid and enforced by those to whom it legally appertaineth to do so." ° Finally, it should be observed, as to the authority of the Execu- tive to lease the government estacas under this statute, that the courts of Chile have expressly affirmed the binding force and effectiveness of this statute at the date of the Wheelwright con- "■1 Appendix, p. 327. Sub-Point A.) The Case of the United States. 63 tract.. The court of first instance at Antofagasta found, in the suit, already referred to, brought by John Wheelwright to recover possession of the mine Justicia, as follows : "Considering * * * "22. With respect to the second point, namely, if the Govern- ment could celebrate contracts; that by the law of the 19th Octo- ber, 1 871, the Executive was authorized to celebrate contracts of letting or of working in partnership all the estacas-mines belonging to the State in the mineral districts of the Republic, and in con- formity therewith, tenders were invited for the working of the said estacas by the decrees of the 2d November, 1871, 7th March, 29th May and 19th September, 1872, the whole concluding with the cele- bration of the contract with Wheelwright."" It is thus clear that the Executive of BoUvia and the courts of Chile have recognized that the power delegated to the Executive by the statute was properly delegated and conveyed, and that the Executive acting thereunder was able, properly and legally, to arrange for the exploitation of the government estacas, and specifically it has been held by the courts of Chile that this statute authorized the Bolivian Executive to enter into the Wheelwright contract of 1876. Second. — The power of the Bolivian Executive to adjust and to pro- vide for the payment of the obligations of the State to foreigners: — Under a law dated November 22, 1872, the National Assembly specifically and definitely authorized the executive branch of the Government to enter into arrangements respecting claims against the State. This law reads as follows : "Article 2: The Executive is authorized to enter into settle- ments about indemnifications and other claims actually pending against the State, whether by natives or foreigners, and to arrange with the interested parties the most convenient form in which their respective obligations will have to be fulfilled; referring these matters, only in case of not coming to an agreement, to the decision of the Supreme Court, with the obligation of reporting to the next Ivegislature."* In its resolution of February 7, 1876 (the very year in which the Wheelwright contract was made) the Cabinet Council of Bolivia asserted in express terms, in a document recognizing John Wheel- wright as assignee of the rights of Pedro Lopez Gama, that it was "■ II Appendix, p. 115. While the upper court (Court of Second Instance) over- ruled the decision of the lower court in this case (the Justicia), the upper court does not seem to have disturbed the findings, of which this is one. 6 II Appendix, p. 274. 64 United Stated vs. Chile. — Alsop Claim. [Pointi. operating under the authority conferred upon it by the law of November 22, 1872. The full text of this resolution is as follows: "Ministry of Finance and Industry, "La Paz, February 7, i8j6. "Having been considered in a Cabinet Council together with the foregoing statement of the government, the resolution of January 22 last, in which is stated the fact that it was made final by the Gov- ernment in the exercise of the authority conferred upon it by the law of November 22, 1872, is hereby declared to be still in force in all its parts. Let these documents be transmitted to the Prefect of the Department, in order that he may order the Treasury Notary to make the present proceeding and those connected therewith known to Mr. John Wheelwright, representative of the firm of Alsop & Co. and assignee of the rights of Mr. Lopez Gama, and that the neces- sary document may be executed. Let notice be taken hereof and let It be published." <* In connection with the discussion of the law of November 22, 1872, and the scope of the powers conferred by it, it is of interest to note that the Government of Chile has expressly taken the position that under this law and in accordance with its terms the Bolivian Executive was not only authorized to negotiate the settle- ments therein provided, but that such settlements did not need the approval of the Bohvian Congress in order to be binding upon it. This position was taken concerning the settlement made November 27, 1873, by and between the National Executive of the Government of Bolivia and the Antofagasta Nitrate and Rail- way Company (the attempted imposition of a tax upon which — the tax amounting to a minimum of ten cents'per quintal on salt- peter exported from Antofagasta — led to the war of 1 879-1 884, which resulted in the occupation of the Bolivian Littoral by Chile). In a formal note, dated July 2, 1878, the Chilean Charg^, acting under "express instructions to support" the claim of this company, communicated the views of the Government of Chile upon this point as follows : "On February 14, 1878, the National Constituent Assembly decreed as a minimum a tax of ten cents per quintal on salt petre exported by the Antofagasta Nitrate and Railroad Company and the supreme Government ordered under date of the 23d of said month the execution of that decree which was made public by a circular in the city of Antofagasta. "The Nitrate Company had considered itself tranquil in its property and its rights acquired after various vicissitudes and disturbances suffered from 1868 until the decree of December 31, 1872, which caused the settlement of November 27, 1873, registered in the Official Annual of the laws of Bolivia of that year, pkge 185, "■ I Appendix, p. 337. Sub-Point A.] The Case of the United States. 65 and incorporated in a political agreement. That transaction, reduced to a public instrument in Sucre, November 29, 1873, before the Government Notary Jose Felix Ona, left nothing pending because the Government accepted it by virtue of the authorization conferred upon the executive power by the law of November 22, 1872, inserted at page 220 of the Annual of I^aws and Supreme Decrees of that year, article two whereof provides definitely as follows: " 'The executive power is authorized to compromise concerning indemnities and other claims at present pending against the state, be they national or foreign, and to agree with the interested parties on the most convenient form in which it will fulfill its respective obligations, referring these matters only in case of disagreement, to the decision of the Supreme Court with the duty of rendering an account to the next Assembly.' "The law was explicit; it conferred upon the executive absolute powers, without the necessity of new revisions or applications, except simply to render an account of the action, in the cases in which the decision of the Supreme Court should be invoked. Therefore the transaction was immediately reduced to a public instrument and was inserted in the Annual and put into execution without first being submitted to the approval of the Assembly, to which the Minister of Hacienda limited himself to rendering an account of its execution in his official report of 1 874. In said report the Minister of Hacienda, referring to the Nitrate Company, stated that there had been settled by adjustment 'an odious question which, for a long time, had compromised, before public opinion, the integrity of the Government. Its decision held in suspense the fate of great capitals which the investors had expended to establish on a large scale in the desert of Atacama the nitrate industry.' " " It would therefore appear to be clearly and sufficiently estab- lished that the Wheelwright contract of 1876 was negotiated on the part of Bolivia by Manuel I. Salvatierra, Minister of Finance and Industry, under and pursuant to decrees made by the Cabinet Council; that the Council in making these decrees operated under the statute of November 22, 1872; that under this statute it must be considered that the Executive entered into contracts in connec- tion with the State obligations under an express grant of power by the legislative body ; and that in and by this contract the Execu- tive negotiated and arranged, inter alia, the disposition of the government estacas, to deal with which the Executive had an express delegation of authority by the legislative branch of the Government. "I Appendix, p. 229. 40898 — 10 -5 Sub-Point B. The contract thus legally negotiated and concluded by the executive department of the Bolivian Government was duly and properly ratified and approved by the Bolivian Congress. Prefatory Summary. From the documents set forth in the discussion following it will appear that the Minister of Finance and Industry reported to the National Congress of 1877 a detailed statement of the various measures which had been adopted by the Provisional Government under President Daza for the arrangement and liquidation of the obligations of the Bolivian Government, and that among the obligations so discussed in detail was the one running in favor of Wheelwright. Attached to this report was a copy of the executive decrees of December 23rd and 24th, 1876, upon which the Wheelwright contract was based. With this complete report before it for action, the Bolivian Congress, under date of November 23, 1877, passed a law expressing a vote of honor and confidence in the Minister of Finance. Later, under date of February 12, 1878, the Bolivian Congress passed a law which provided in its second article that "the measures adopted in the Ministry of Finance are approved of, with the exception of such as have been expressly derogated or modified by the disposition of the present Assembly." The Wheelwright con- tract does not appear among those which were disapproved by the National Congress. This vote of ratification by the Bolivian Congress was afterwards recognized by the Chilean court of first instance at Antofagasta in the case of the Justicia as being sufiicient. Discussion. Unlike a number of unratified and unapproved concessions made by the Executive of Bolivia, but which, nevertheless, the Government of the nationals interested in the concessions con- tended were valid, (for example, the Antofagasta Nitrate and Railway Company, difficulties on account of which, arising under its uiuratified contract, led to the war of 1879-84 between Chile and Bolivia), the Wheelwright contract of 1876 received the approval of the BoHvian Congress. In the memoria which the Minister of Finance and Industry presented to the National Congress of 1877 and in which he 66 Sub-Point B.) The Case of the United States. 67 discussed with considerable detail the various measures which had been adopted by the Provisional Government under Presi- dent Daza for the arrangement and liquidation of the obligations of the Bolivian Government, the Minister presented the circum- stances connected with the debt due Wheelwright and the arrange- ment which had been made for the settlement in the following language : "First. "The Government having perceived from the time of its inaug- uration its poor financial condition, endeavored to remedy it with certain provisions. Among these the circular of July 6, 1876, (2) which suspended the payment for services preceding the 4th May, and had as an object the estabUshment of a dividing line which should separate the situation and serve as a point of depar- ture for the operation of the new administration which began with an immense deficit from which it was necessary to free itself. "The Office of the Secretary General issued, on the 17th of Octo- ber of the same year, a decree imposing a tax upon copper bars, (3) a resort which, although exacting, was very timely in the penury which was being experienced. It produced the annual income of 15,000 bolivianos in time drafts. "When the Ministry was installed the question of the existence of the contract with John G. Meiggs concerning the lease of the salt- petre deposits of Toco was pending. Perfected and put into execu- tion as it was, without lawful reason for its rescision, censured only by malcontents who judged from passion alone it was taken up in Cabinet Council after the judicial question had been considered. This promptly reduced the fund of 70,000 soles which were received until December last, a fund which was increased by 3,500 bolivianos the premium obtained on account of the care taken in obtaining the drafts on Lima. Another Treasury increase for the poor state of finances is the suspension which upon the execution of the deed of transfer and separation of the National Bank, I made by an addi- tional agreement, of the premium of 10 per cent which this bank had been charging and desired to continue charging for the drawing of drafts on funds of the State from one of its branches to the other. " There was likewise obtained, also, in time drafts, the income of the coinage for the four months which ran from the first of Decem- ber, 1876, to the 31st of March of the present year. It reached the sum of 49,946 bolivianos. "Second. "This fund was the only one available as was set out in the budget. The others were not available and whatever others might have been raised should have belonged to John Wheelwright, rep- resentative of the credit of Lopez Gama, to whom, by the decrees of December i8th 1875, and January 22, 1876, there had been allotted all the revenues which were not pledged in the budget. Besides the contract accepted by these decrees, deprived the Government of 70,000 bolivianos cash from the Treasury of Cobija which had been annually assigned for the payment of the interest upon the debt acknowledged due him. This interest was excessive, having been charged at eight per cent per annum, compoundable. 68 United States vs. Chile.— Alsop Claim. Poi^'i- " With such a contract the Government found itself without funds whereof to dispose for all the ordinary ones had been exhausted and without means of creating any other resources because these were applied before hand to the extinguishment of said debt all the extraor- dinary revenues or those of a new creation. That contract could not be more burdensome because of the embarrassment and difificulty in which the Government was placed in attending to the necessities of its working and administration. " It was necessary, in view of a new proposal from Mr. Wheelwright to formulate and agree upon a compromise which' should better the conditions of the contract, favoring and lightening the burden of the Treasury and giving to the Government liberty and resources to obtain funds for itseTf . Thus the compromise of the 24th of Decem- ber, 1876, was reached whereby there was deducted from the admit- ted principal the interest which had already been paid and this latter was reduced to 5 per cent, not compoundable, the payment of the principal to be made by drafts upon the excess which might be obtained over the present amount of the proceeds of the custom house of Arica. "By this means the revenue from the copper bars and nitrates became free because even if these latter were considered by the resolution of the 30th of March of 1876, not to be included in the contract of the i8th of December, 1875, the force of this resolution by the terms of said contract might be disputed." * * * * * * * "The contract of the national customs house of Arica was oppor- tunely cancelled for the purpose of its termination or its substitution by another. For this latter purpose a Plenipotentiary with proper instructions has gone to I^ima. It is to be hoped that in case a renewal of the contract be made, that it will be with an increase proportionate to the great development and increment which our commerce has shown through the ports of Arica and Mollendo, and in accordance with other points of vital interest to the country. "If this be not so, the auction which the citizens are actually ask- ing, offers many probabilities of profit and advantage for the State; an improvement of this situation being evident in either case. "True it is, as has been stated in Section 2; that the increase over the actual amount of the proceeds of said custom house is 'destined to the payment of the debt admitted to be due to Mr. Wheelwright, but if in this there is inhibition which prevents the free employment of that fund, the satisfaction of the fulfillment of a duty and the exemption from a burden from which it was necessary to relieve ourselves, remains."'' To this memoria, which contained the above discussion of the Wheelwright obligation, there were appended the actual texts of the decrees of December 23rd and December 24th, 1876. The Bolivian Congress had before it, therefore, in this memoria, all the precise details of the Wheelwright contract, together with the facts and circumstances which attprided the making thereof, as well as the reasons which impelled the Government of Bolivia to adopt this method of settlement. With these things thus fully before "I Appendix, p. 340. Sub-Point B.) The Case of the United States. 69 it, the Bolivian Congress, under date of November 20, 1877, passed a law in which it extended a vote of confidence to the Minister of Finance, who, during the previous year, as above set forth, had made the Wheelwright contract of 1876 and who had, as just stated, reported fully thereon to this Congress. The law reads as follows : [Translation.] "Law of November 21. "vote; of honor to minister SALVATIERRA AFTER THE READING OF HIS MEMORIAL. "The National Constituent Assembly decrees: "Single article. In view of the merit displayed in the memorial just read by the Honorable Minister of Finance and Industry, Dr. Manuel Ignacio Salvatierra, he is hereby given a vote of honor and confidence. "Let this be communicated to the Executive for enforcement. " Hall of Sessions, La Paz, Nov. 20, 1877. "Mariano Reyes Cardona, president. "JORJE Delgadillo, deputy secretary. "Luciano Valle, deputy secretary. "Ministry of Government and Foreign Rei^ations. "La Paz, Nov. 21, 1877. "Let it be executed. "Daza. "Jose M. Del Carpio.""' It thus seems clear that it must be considered that the Bolivian Congress approved of the action of the Minister of Finance under the Provisional Government of President Daza in negotiating the Wheelwright contract. The contention of the United States that the Bolivian Congress approved this contract does not, however, rest upon this mere vote of confidence in the Minister of Finance (which, however, the Government of the United States believes would be sufficient to establish the fact of such approval) , because this contract was also the subject of definite expression of approval in the law of the Bolivian Congress dated February 12, 1878, on which date the Congress passed a law providing in terms as follows : "The National Congress Assembly, after having heard the report of its different Comm,issions concerning the acts of the Provisional Gov- ernment, and having debated consequently each matter with subjection to the interior regulation, "Decrees. "SoivE ARTICLE. — ^The acts of the Provisional Government are approved of in the following form. "First. — ^The Constitution of the State being sanctioned, and the bases for the formation of a Regulation of Elections and Munici- "■ Appendix, p. 342. 70 United States vs. Chile. — Alsop Claim. [Pointi. palities being dictated, it is declared inofficious to pronounce any decision on the reglamentary decrees of 15th December, 1876, and 30th March, 1877. "Second. — The measures adopted in the Ministry of Finance are approved of, with exception of sv^h as have been expressly derogated or modified by disposition of the present Assembly. "Third.— In the War Department, the measures of the Govern- ment relative to the organization of the army and of the columns of garrisons, the provision of arms, ammunitions and the rest of war utensils, and the promotion and re-establishment of the high class of Generals of the former Chiefs mentioned in the report of the Minister of War, are approved of. "Fourth. — All the decrees and resolutions dictated by the execu- tive in matter of justice authorizing same to submit to the Supreme Court the proposed modifications for the respective commissions and to formulate consequently the necessary reforms under the con- dition of rendering account to the next Legislature, are approved of. "Fifth. — The acts of the Government are approved of concerning ecclesiastical matters, including • the suspension of temporalities decreed against the Most Illustrious Archbishop of La Plata for having refused to give concourse of the vacant curacies in the arch- diocese. "Sixth. — The decree of loth August, 1877, is approved of, which re-establishes the official instruction which is actually given by pri- vate institutions. "Seventh. — ^The decrees are confirmed which have for their object the introduction of changes in the provisional circumscriptions of the Departments of Cochabamba, Potosi and Tarija. "Eighth. — The acts are approved of which refer to the branch of industry. "Communicate to the Executive Power for its performance and fulfilment. "Hall of Sessions at La Paz, of Ayacucho, this twelfth day of the month of February of 1878. " (Signed.) A. Quijano, President. " (Signed.) Samuel Velasco Flor Secretary,. " (Signed.) Abdon S. Ondarza, Deputy Secretary "Ministry of Government and of Foreign Affairs, "La Paz, 14th February, 18 j8. "Be it performed. "(Signed.) H. Daza. "(Signed.) J. M. DEL Carpio."" Inasmuch as the Wheelwright contract does not appear among those which v^ere disapproved by the Congress, it is clear that it must be conclusively considered that this contract had the consent and approval of this branch of the Bolivian Government. all Appendix, p. 75. Sub-Point B.] The Case of the United States. 71 This conclusion is amply and satisfactorily sustained by the finding of the Chilean court of first instance at Antofagasta in the case of the Justicia already referred to, in which that court found as follows: "Considering * * * "23. That two years afterwards, (that is, after the date of the Wheelwright contract) on the 12th February, 1878, (Fol. 118) the National Assembly approved the measures adopted in the Department of Finance by the provisional government inaugurated on the 14th May, 1876, except those which had been derogated or modified by express disposition thereof, amongst which the contract with Wheelwright does not appear."'* Thus it appears clear that not only was there no congressional action specifically annulling or setting aside the Wheelwright contract of 1876, or derogating from the rights, titles, and interests granted by it, but on the contrary, it must be considered, as indeed was found by one of the Chilean courts, that the contract was formally approved by the legislative branch of the Government of Bolivia ; and moreover, from that time to the present, the Govern- ment of Bolivia in all of its negotiations with the Government of Chile and in all its correspondence regarding this claim with the United States has ever and always acknowledged the legality of this contract, and in its negotiations and correspondence with the Government of Chile has insisted that that Government should meet the obligations called for by it. There can therefore be no question but that the contract has been duly and properly ratified by the executive and legislative branches of the Bolivian Govern- ment. all Appendix, p. 116. Sub-Point C. The contract so made and ratified has been repeatedly recognized as a valid and binding instrument by the Gov- ernments both of Chile and Bolivia. C ' The validity and binding effect of this contract have been repeatedly recognized and approved by the Govern- ment of Bolivia in and by a number of executive decrees proinulgated for the express and specific purpose of carrying this contract into effect. Prefatory Summary. As shown below, the Government of Bolivia repeatedly recog- nized and approved the legality and binding effect of the Wheel- wright contract by a series of executive decrees promulgated for. the express and specific purpose of carrying this contract into effect. These decrees were as follows: decree dated January 5, 1877, addressed to the Prefect of the Department of Cobija and signed by the President and the Minister of Finance and Industry ; a decree dated May 24, 1877, addressed to the same official and signed by the Minister of Finance and Industry ; and other decrees of the same character dated, respectively, March 28, 1878; July 25, 1878; August 9, 1878; August 19, 1878; August 21, 1878; October 30, 1878; December 12, 1878, and finally on February 5, 1879. All of these decrees directed the proper officials to render to Wheelwright all necessary assistance in the matter of securing possession of the government mines in the Littoral under and pursuant to the terms of his contract. Discussion. On the 27th of December, 1876, the day following that on which the contract between himself and the Government of Bolivia was finally concluded, John Wheelwright caused to be published in the newspapers of La Paz and Caracoles the following notice: "Mining Setts of the State on the Coast. "I hereby give notice to all who have adjoining properties, or who are in any way interested in the above mentioned mines, that, in virtue of a Supreme Decree of the 23 inst., I am in possession of all 72 Sub-Point c, ci.i The Case of the United States. 73 the Mining Setts of Silver belonging to the State in the Coast Depart- ment, and consequently that any arrangement which such persons may desire to enter into respecting same should be made with the undersigned, with whom they can communicate by addressing him at Valparaiso, post office box No. 254. "La Paz, 27th Dec'r, 1876. " (Signed.) John Wheelwright." " Nine days later, on January 5, 1877, Manuel I. Salvatierra notified John Wheelwright that the President of Bolivia and himself had addressed the Prefect of the Department of Cobija in the following words: " The Government, by the contracts of the 23d and 24th December last, which are registered in No. 691 of the 'Reforma,' has adjvdi- cated to Mr. Wheelwright, the representative of Messrs. Alsop & Co., of Valparaiso, in liquidation; all the mining Setts, Estacas Mines of Silver belonging to the State, sittuited in the Coast Department. "In order that this adjudication may be duly carried into effect, you will please render Mr. Wheelwright all the aid dependent on your authority, and you will arrange: That the Sub Prefects and other functionaries under your jurisdiction may, within their sphere, render Mr. Wheelwright such aid that he may be put in peaceful possession of the said Mining Setts. "Due compliance with this disposition is expected from your patriotism. "May God be with you. " (Signed.) H. Daza, "M. I Salvatierra."" On May 24, 1877, the Minister of Finance again directed the Prefect of the Department of Cobija as follows: "Ministry of Finance and Industry." " No. 58.) "La Paz, 24th May, 1877. " To the Prefect of the Department of Cobija. "Sir: Notwithstanding that orders have been given to your Prefecture to facilitate the taking possession of the Mining Setts {Estacg.s Minas) of the State by Mr. John Wheelwright to whom they were adjudicated, these orders are now repeated with the same object, in order that, by all the legal and judicious measures in your power, you may over- come all difficulties and remove every obstacle, either personally or by means of the Sub-Prefects and other functionaries who are com- petent to intervene in the matter. "The strict fulfilment of this order is expected from your zeal and patriotism. "May God be with you. "(Signed.) Manuel I. Salvatierra. "The foregoing is correct. "(Signed.) Manuel Penafiel."* oil Appendix, p. 143. 6 II Appendix, p. 144. 74 United States vs. Chile. — Alsop Claim. [Point i. Similar notices were issued under dates of March 28, 1878, July 25th, 1878, and August 9th, 187?.° On August igth, 1878, the authorities of the Department of Caracoles instructed the proper official to notify the representative of Wheelwright — "of all the operations of measurement, possession, and examination which may be performed by this Deputation. "It is also ordered that in all the minutes of possession, a clause be inserted, expressing the inviolability of the fiscal property in the event of its being encroached upon by intruders." ' Under date of August 21, 1878, the Minister of Finance and Industry issued a decree in which it was stated that — "In virtue of the reasons on which this petition is founded, and considering that Mr. Wheelwright took over the Fiscal Mining Setts {Estacas Minas Fiscales), under the Contracts of the Settlement of the 24th December, i8'j6, as the representative of the State, it is hereby declared that as such he should enjoy the same privileges as the State in the judicial measures which he may initiate and sustain in order to enter into and maintain possession of the said Fiscal Mining Setts." "^ Under date of October 30, 1878, the Bolivian Executive ordered that the Prefect of the Department of Cobija — "having assured himself that, as stated in this petition, the sub- altern functionaries oppose its execution, let them be proceeded against by law, and let others be named to replace them, subject to the approval of the Supreme Government." ° On December 12, 1878, the President directed the Prefect of the Department of Cobija to see to it that, whenever discoveries of minerals were made in his Department, the government mining setts were marked off, with the further direction that Wheelwright should be notified." Finally on February 5, 1879 (within four days of the seizure of Antofagasta by the Chilean forces), the President of Bolivia caused to be issued the following order: "Ministry of Justice, "Public Instruction and Worship, "La Paz, 5th February, iSjg. " To the Fiscal of the Coast District. "Sir: Repeated demands having been made to the Government on the part of Mr. Wheelwright, who, in association with the State, is working the Fiscal Mining Setts {Estacas Minas Fiscales) of your district, in order to render effective his action as administrator of the Society, which he is in virtue of his contract, the President of the Republic charges me to request you to forward to the Fiscal Ministry the following instructions : "First. — That the Fiscal of the District of Caracoles, who, accord- ing to law, represents the rights of the State, should put in force the oil Appendix, pp. 145-146. 611 Appendix, p. 146. cn Appendix, p. 147. Sub-Point c, CM The Case of the United States. 75 legal measures which the contractor may deduce, seeing that he is not guided by private interests, but as a partner with the Govern- ment, in place of putting obstacles in the way, as would seem to be the case from the evidence which accompanies one of his claims. "Second. — That as, according to Article 168, Clause 2, of the Mining Code, the neighbor can have free entrance to a mine when he presumes or fears some prejudice, the contractor^ Mr. Wheel- wright, cannot be refused the right of investigating personally, or by means of his agent, the encroachment of the neighbor on the bounds of the Fiscal Mine, in order to formulate the corresponding demand before the competent authority in the event of his fears being realized; while, on the other hand, this right of procedure, merely administrative, cannot be restrained by any opposition ■ whatsoever. "Third. — In the event of any well-founded dispute arising, infor- mation of the matter shall be passed to the competent judge in the form prescribed, amongst other depositions, by the law of loth November, 1873. "As will be observed, the Government, in the foregoing instruc- tions, does not make any new resolution, but only calls to remem- brance the legal dispositions mentioned, in order that they may have the most faithful and strict fulfilment. "May God be with you. " (Signed.) Daza. " (Signed.) Sbrpio Reyes Ortiz. "Given at the request of the party interested, Mr. Jos6 Santos Monroi, as representative of Mr. Wheelwright. " (Signed.) MeLquiades Loaiza, [seal.] " Chief of the Section of Justice.'^ It will thus be noted that from the time when the contract was granted, up until almost the very hoixr of the occupation of the Littoral by the invading forces of Chile, the Executive of Bolivia recognized the validity and binding effect of the contract of December, 1876, and rendered to Wheelwright, so far as it was able, all necessary assistance in order to enable him, pursuant to the terms of his contract, to take possession of the property, the Estacas de Instruccion in the Bolivian Littoral. o II Appendix, p. 148. Sub-Point C. C 2 The validity and binding effect of this contract have been recognized and approved by the Government of Bolivia as well as by the Government of Chile in the diplomatic correspondence passing between those two Governments. Prefatory Summary. While but little of the correspondence passing between the Governments of Bolivia and Chile upon this subject, has been at the disposal of the Government of the United States in connection with the preparation of this case, there is certain correspondence to which access has been had which shows that in such correspondence the two Governments have recognized the Wheelwright contract as a legal, valid, and existing obligation. This correspondence is set forth in the note dated La Paz, August 13, 1900, written by Senor Abraham Konig (Minister of the Republic of Chile, accredited to the Government at La Paz) to the Bolivian Minister of Foreign Relations. Discussion. For the obvious reason that the diplomatic correspondence passing between the Governments of Bolivia and Chile has not been accessible to the Government of the United States, it is possible for the latter to reproduce but little going to show that in such diplomatic correspondence between those two Governments . they have recognized the validity and binding effect of the Wheel- wright contract. However, the little correspondence that has been at the disposal of the Government of the United States in the preparation of this case recognizes in clear and unmistakable terms the legality and binding effect of the Wheelwright contract and the obligations which it imposes. In a note dated La Paz, August 13, 1900, written by Senor Abraham Konig, the Minister of the Republic of Chile accredited to the Government at La Paz, Senor Konig, in suggesting to the Bolivian Government a basis for the settlement of the pending 76 Sub-Point c, C2.] The Case of the United States. 77 difficulties between the two Governments, made the following proposal : "In compliance with the instructions from my Government, and starting from the antecedent accepted by both countries, that the old Bolivian littoral is and shall always remain Chilean, I had the honor to submit to Your Excellency the following bases for a Treaty of Peace and Amity : "The Government of Chile will be disposed, in order to conclude the Treaty of Peace with Bolivia, to grant, in exchange for the defi- nite cession of the Bolivian littoral we now occupy by virtue of the Pact of Truce, the following compensations: " (a) To take upon themselves, and to bind themselves to the payment of the obligations contracted by the Bolivian Government with the mining enterprises of Huanchaca, Corocoro, and Oruru, and the balance of the Bolivian loan contracted in Chile in 1867, after deducting such amounts which have been credited said account, according to Art. 6 of the Treaty of Truce. "Chile could also, in the same manner, pay the following liabilities affecting the Bolivian littoral: The one corresponding to the bonds issued for the construction of the railway from Mejillones to Cara- coles; the liability in favor of Mr. Pedro Lopez Gama, at the present time represented by the house of Alsop & Co., of Valparaiso; that of Mr. Enrique Meiggs, represented by Eduardo Squire, resulting from the contract, the former made with the Government of Bolivia on May 20, 1876, for the lease of the fiscal nitrate beds of Toco, and the one recognized in favor of the family of Mr. Juan Garday. These liabilities will be the object of a particular liquidation and of a detailed specification in a supplementary protocol." "■ Later, in the same communication, Senor Konig makes the following statement concerning the attitude of Bolivia upon this question as expressed in a communication from the Bolivian Minister of Foreign Relations to himself : "Several days after this, and as the natural result of the con- ferences. Your Excellency communicated to me the propositions agreed to by the Government, which are the following: '"The Government of Chile takes upon themselves the obligations contracted by Bolivia with the mining enterprises of Huanchaca, Corocoro and Oruru, and the balance of the Bolivian loan con- tracted in Chile in 1867. They will also take upon themselves the following liabilities which burden the Bolivian littoral: The one corresponding to the bonds issued for the construction of the railway from Mejillones to Caracoles; the liability in favor of Mr. Pedro Lopez Gama; that of Mr. Enrique Meiggs, resulting from the contract made with Bolivia in 1876 for the lease of the fiscal nitrate beds of Toco, and the one recognized in favor of the family of Mr. Juan Garday.'" ^ It is well to observe in this connection that the Ministry of Foreign Relations of Chile in its circular note to the Chilean oil Appendix, p. 471. 6 II Appendix, p. 472. 78 United States vs. Chile. — Alsop Claim. [Pointi. Diplomatic Corps under date of September 30, 1900, in speaking of this letter of Senor Konig, used the following language: "Our Plenipotentiary Minister in La Paz addressed to the Bolivian Foreign Office his above mentioned communication of August 13, 1900, in obedience to those instructions which express this Government's unalterable policy, a policy which it will consistently maintain until the solution of the problem is reached, a policy resulting from the ■ painful experience of seventeen years, and from the rooted convic- tion that to deviate from it is tantamount to abandoning the only way that leads to a complete settlement.""^ It thus appears that in an authorized correspondence and negotiation between the duly accredited representatives of the Governments of Chile and Bolivia the legality of the Wheelwright contract as well as the obligation imposed thereby was distinctly and definitely recognized by both Governments. oil Appendix, p. 529. Sub-Point C. C The validity and binding effect of this contract have been repeatedly recognized and approved by the Govern- ment of Bolivia in its diplomatic correspondence with the Government of the United States. Prefatory Summary. The correspondence set forth in the discussion under this point shows that on July 31, 1906, the American Minister at La Paz requested the Bolivian Minister of Foreign Relations to supply him with certain documents relative to the antecedents of the Alsop case, at the same time setting forth that the Government of Bolivia would not be relieved from responsibility until the original liability upon this contract was fully met; that on September 21, 1906, the Minister replied stating that the Government of Bolivia considered that the Government of Chile was exclusively liable for the payment of this obligation; that under date of October 6, 1906, the Minister of Foreign Relations forwarded to the Ameri- can Minister copies of the antecedents which had been requested; that on July 16, 1907, the American Minister reported that Bo- livia repeated its contention that the Government of Chile was liable for this obligation;- that on July 22, 1907, the American Minister reported that the Minister of Foreign Relations for Bolivia had instructed the Bolivian Minister at Santiago to take up with Chile the subject of the settlement of the claim; and that finally, on September 10, 1907, the Bolivian Minister of Foreign Relations again addressed the American Minister reiterating his views that for this obligation the Government of Chile alone was responsible. In all of this correspondence, the legality and binding effect of this contract was assumed to be and treated as being beyond question. Discussion. That the Government of Bolivia has considered as valid and binding the contract of 1876 between itself and John Wheelwright is clearly shown by the correspondence which has passed between it and the Government of the United States regarding this claim, 79 8o United States vs. Chile. — Alsop Claim. [Point i. as is amply demonstrated by the following correspondence passing between the representatives of the two Governments. Pursuant to the instructions of his Government, the American Minister at I^a Paz on July 31, 1906, addressed to the Minister of Foreign Relations of BoUvia the following note: "Legation of thb United States, "La Paz, Bolivia, July jist, igo6. "Sir: "Referring to this Legation's Despatch of September 27th, 1904, relative to the claim of Alsop & Co., and acting upon instruc- tions of June 15, 1906, from my Government, I have the honor to say that although Chile in the Treaty of October 20, 1904, assumed and agrees to satisfy this Claim (See Art V of the Treaty of October 20, 1904, and the notes between Bolivian Minister Dr. Gutierrez, and the Chilean Minister of Foreign Affairs, Dr. Bello Codecido, of October 21st, 1904, interpreting Art. V of said Treaty) s-wch assump- tion and agreement does not release Bolivia from, her original liability, should Chile default in the perform,ance of her obligation; and, in this connection, I have the honor to invite Your Excellency's attention to the following facts: (i) that the Alsop Claim has not been paid or satisfied; (2) That the Chilean Government inquired through the American Minister at Santiago, Mr. Wilson, on the 4th of Decem- ber 1903, whether an offer of 954,285 Chilean Dollars, would be accepted in settlement of the Claim; (3) That the Department of State at Washington replied on the 17th of December 1903, that the offer was declined as inadequate; (4) That subsequently the American Minister, Mr. Wilson, was informed by the Chilean Gov- ernment that as soon as the pending treaty between Chile and Bo- livia was concluded it would take up the Alsop Claim and give it particular and generous consideration; (5) That after the ratifica- tion of the Treaty of October 20, 1904, the Chilean Minister at Washington made an ofl'er of 524,333 Chilean Pesos in settlement of the Claim, which the Department of State, in a despatch of Jan- uary 10, 1905, characterized as 'entirely inadequate to the just satisfaction of the Claim and not in accord with the previous assur- ance given by the Chilean Government to the American Minister at Santiago, that the Alsop Claim should receive just and even generous treatment.' "No further offer having been received from the Chilean Govern- ernment, and the Claim being still unsettled, in order to assist my Government in arriving at a just estimate of the amount of money which Chile ought to pay on account of Bolivia in final liquidation of the Claim, if Bolivia is to be released from the original liability, I am further instructed by my Government to request that Your Excellency kindly furnish this Legation, for transmission to the Department of State at Washington, with duplicates of the following documents : " I . ' All of the accounts of the Alsop or Pedro Lopez Gama Claim which were the bases and subject of the liquidation of December 26, 1876; (See Supreme Decree of December 24, 1876). "2. 'All of the documents relating to the liquidation previous to that of December 26, 1876. Sub-Point c,c3.] Tiie Case of the United States. 8i "3. ' All, or the part of the ' Memoria ' of Dr. Manuel Ignacio Salva- tierra, Bolivian Minister of Hacienda, of November 20, 1877, rela- tive to the liquidation, or Decree of December 26, 1876, and also, the part of the said 'Memoria' relating to the liquidation of the Alsop Claim, as approved by the Constitutional Congress of 1878; (See Decree of February 12th, 1878); "4. ' All of the representations which Bolivia has made with respect to the Alsop claim to the Chilean Government; " 5. 'A full copy of the Protocol of May 19, 1891, relating to the principal and interests of the 'Pedro Lopez Gama credit; " 6. 'A full copy of the Protocol of May 28, 1895, providing that certain credits, including those of Pedro I/opez Gama (of whom Alsop & Co. were assignees) should be examined by the Government of Chile in order to fix the definite amount due. "7. 'Afullcopyof the ' Antecedents ' as countersigned by theMinis- ter of Bolivia in Chile in his Memorandum of May 23, 1895; and "8. 'A Memorandum showing what liquidation, if any, have been made between Chile and the Claimants, other than those of Alsop & Co. contemplated in Art. V. of the Treaty of October 20, 1904, and if any liquidations have been made, upon what bases.' "It gives me great pleasure to again renew to Your Excellency the assurances of my high esteem and most distinguished consideration. "Your obedient servant. "(Signed) WiivUam B. Sorsby. "His Excellency Dr. CivAudio Pinii^IvA, "Minister for Foreign Affairs of Bolivia, Present." °' Under date of September 21st, the Minister of Foreign Relations of Bolivia acknowledged the American Minister's note of July 31st in the following language: "No. 24 "Ministry of Foreign Affairs, "La Paz, September 21st, igo6. "Mr. Minister: "I have in my power, your appreciated communication of July 31st. last, calling attention to the fact that although Chile assumed in the Treaty of Peace celebrated with this Republic the obligation to satisfy among others the credit of Messrs Alsop & Co. this assump- tion and agreement does not free Bolivia from the original responsi- bility should Chile default in its obligation, and in view of which you deem fit to call the attention of this Ministry to various incidents of the negotiations initiated to bring about the above mentioned payment and ask that there be supplied to that I^egation, to be forwarded to the Department of State at Washington, duplicate copies of various documents relating to the matter. "In reply I beg to advise Your Excellency that my Government has always considered that the responsibilities derived from obliga- tions affecting the coast territory have followed the fortune of that territory and should be assumed by the holder thereof; the products of which have been enjoyed exclusively thereby, and that the generic responsibility founded on the general principles of law has assumed "■ I. Appendix p. 32. 40898 — 10 6 82 United States vs. Chile. — Alsop Claim. [Pointi. a positive character by the consummation of the Treaty of October 20, 1904, celebrated precisely with the object of settling all questions arising out of the cession of territory there contemplated and among them in a specific manner the credit of Messrs. Alsop & Co. By virtue of which, the same efforts which Your Excellency mentions in the Despatch under reply are proofs of the perfect and absolute understanding of the stipulation referred to, efforts which will surely result satisfactorily in view of the justice and equanimity of the Governments of Chile and the United States. "For these reasons and in the hope of contributing to a prompt understanding between the Governments mentioned, the Govern- ment of Bolivia does not find it improper to supply your Legation with the copies requested by Your Excellency, the originals of which are on file with the sole exception of that indicated by the Number 8, whose antecedents have not been made known to my Government by that of Chile, and in view of which the liquidation and payment of the credits which, like that of Messrs. Alsop & Co. previously devolved on Bolivia, are now and as a result of the arrangement of October 20th of the sole responsibility and province of the former Republic. "I renew to Your Excellency the assurances of my high and distinguished consideration. " (Signed) Claudio Pinilla. "His Excellency Mr. Wiiaiam B. Sorsby, "Envoy Extraordinary and Minister Plenipotentiary of the United States of North America." " Under date of September 28, 1906, the American Minister cabled the results of his, inquiries regarding this claim as follows : [Paraphrase.] Minister for Foreign Affairs' of Bolivia, in connection with the Alsop claim, states that the copies requested will be furnished within two weeks, but considers that the liquidation of all the claims referred to in the treaty of October 20, 1904, pertains exclu- sively to Chile, as a result of such treaty. He verbally refers to the notes exchanged at Santiago, October 21, 1904, between Sefior Gutierrez (Bolivian Minister to Chile), and the Chilean Minister for Foreign Affairs defining the purport of Article 5 of the treaty, in defense of his position. Minister for Foreign Affairs verbally says it is his understanding that Chilean claims have been settled, but does not know basis as Chile has not advised. '' On October 6, 1906, the Minister of Foreign Relations of Bolivia addressed to the American Minister at La Paz the following note, accompanying it by the inclosures therein specified: [Translation.] "No. 30.. "Ministry op Foreign Affairs ok Bolivia, "La Paz, October 6th, 1906. "Mr. Minister: "Referring to your estimable communication of July 31st. last, in which you request to be furnished with various documents, I a-l Appendix, p. 35. b I Appendix, p. 36. Sub-Point c, C3.1 The Case of the United States. 83 have the pleasure of remitting to your Legation, together with this despatch, the following : " 'Resolution of December 21, 1872, recognizing in favor of Pedro Lopez Gama the right to the value of One hundred and fifty thou- sand registered tons of Guano.' " 'Resolution of December 18, 1875 declaring Pedro lyOpez Gama not responsible for the failure of exploitation that paralyzed the payment of the credit.' " 'Resolution of January 22, 1876, supporting that of Decem- ber 18, 1875.' " 'Resolution of February 7, 1876, ordering the authorization of the respective public documents.' " 'Resolution of December 23, 1876, establishing the conditions of the exploitation of the estacas-minas adjudicated to the house of Alsop&Co.' " 'Resolution of December 24, 1876 agreeing to an adjustment with the representatives of Messrs. Alsop & Co.' " 'Protocol with respect to creditors signed May 28, 1895, by Senor Heriberto Gutierrez and Senor Luis Barros Borgono.' " 'Memorandum of May 23, 1895, to which the foregoing protocol refers.' "The documents enumerated are in duplicate, as per your request. "I have to say that as soon as the other copies are finished they will be remitted to your Legation. "I have the honor to renew the assurances of my most highest and most distinguished consideration. "(Signed.) Claudio Pinilla. " His Excellency Mr. William B. Sorsby, "E. E. and Minister Plenipotentiary of the United States of North A merica. Present. ' ' " It will thus be observed that the Government of Bolivia not only admits by these letters that the Wheelwright contract is valid but furnishes the documents upon which it considered that contract as resting. On July 16, 1907, the matter having been again brought to the attention of Bolivia by the American Minister at La Paz, the latter sent to the Department of State the following cable: [Paraphrase.] The Government of Bolivia insists that clause 5 of the Bolivian- Chilean treaty of October 20, 1904, when taken in connection with the explanatory notes of October 21, 1904, which were exchanged at Santiago between the Minister of Foreign Relations of Chile and the Bolivian Minister at Santiago, relieves Bolivia from its responsi- bility upon the claims specified in the treaty. The Acting Minister of Foreign Relations of Bolivia makes an offer to represent to Chile that the Government of Bolivia has received notice from the Govern- ment of the United States of the nonfulfillment of its obligation under treaty to settle the Alsop claim.' ol Appendix, p. 37. 61 Appendix, p. 38. 84 United States vs. Chile. — Alsop Claim. Potati. In taking this ground the Government of BoHvia again indicated that it regarded this contract as valid and binding. On July 22, 1907, the matter having been once more called to the attention of the Minister of Foreign Relations of Bolivia by the American Minister at La Paz, the latter again informed his Government by cable as follows : [Paraplirase.] Minister of Bolivia to Santiago is in La Paz on leave of absence until September. Minister of Foreign Relations of Bolivia has prom- ised me that the noncompliance by Chile with the treaty obliga- tions with respect to the settlement of the Alsop claim will be made the subject of representations by the BoUvian Minister upon his return to Santiago.'' Here again the Bolivian Government recognized the Wheelwright contract as a valid and existing liability and also that it was under some obligation to arrange for its settlement. On July 25th, 1907, the American Minister presented to the Minister of Foreign Relations a note enclosing a copy of the Department's instructions to the American Minister at Santiago. In replying to this note, under date of September loth, 1907, the Bolivian Minister of Foreign Relations used the following language : "No. 91. "La Paz, September loth, 1907. "Sir: I have had the honor to receive your despatch of July 25th, last, in which Your Excellency states that your Government has instructed you to call the attention of this Chancery to the fact that the Government of Chile, notwithstanding the agreements made with Bolivia in the Treaty of Peace of October 20, 1904, for the payment of the credits that weighed upon the littoral of Bolivia, has not yet cancelled that of Alsop & Co. "Your Excellency adds that when the two countries made the agreement referred to they did not consult the wish of the creditor, Alsop & Co., and therefore, in accordance with Article No. 5 of the Treaty of Peace, Bolivia is not free from the obligations that it contracted with the said creditor. Finally, Your Excellency desires that my Government discuss the matter with that of Chile in order to obtain the payment of the aforesaid credit, and thus complete that which was agreed upon in the Treaty of Peace and in the repetitions of October 21, 1904. "In reply, I wish to state that on this occasion my Government does not estimate in the same manner as Your Excellency the responsibility of Bolivia relative to the credit of Messrs. Alsop & Co., because, when we are treating of real obligations, the possessor of an object, whoever he may be, continues to be always attached to "I Appendix, p. 38. Sub-Point c, C3.] The Case of the United States. 85 the obligation. In the present case, Your Excellency may remember that at the payment of the credit acknowledged as due Messrs. Alsop & Co., various mines in the littoral of Bolivia were concerned, thereby constituting a true pledge, which still subsists not only in accordance with the principles of civil law, but also because of the fact that in the Treaty of Peace the Government of Chile expressly recognized this credit which falls on the said littoral, and which has become part of its territory. It seems that the creditor has also recognized it in a similar manner, because of the fact that he has already taken steps to obtain payment of the claim from that Government. Nevertheless, submitting with pleasure to the desire of Your Excellency, I have directed to the lyCgation of Bolivia in Chile the proper instructions, in order that by means of its friendly offices with that Government it may obtain an adjustment of this matter in the best possible way. "I trust that Your Excellency will accept the assurance of my highest and most distinguished consideration. "(Signed.) J. M. Saracho. "To His Excellency Mr. WilIvIam B. Sorsby, "Envoy Extraordinary and Minister Plenipotentiary "of the United States of America." '^ Under date of September .17, 1907, the Minister of the United States at La Paz again communicated to his Government by cable, stating that the Bolivian Minister for Chile was expecting to arrive in Santiago about the 25th of September and that he had been instructed to make the representations relative to the Alsop claim which had been promised in conference with the Acting Bolivian Minister of Foreign Relations and himself. It will appear from the foregoing correspondence that not only has the Government of Bolivia recognized that the Wheelwright contract of 1876 was a legal and binding contract, but that Gov- ernment has also furnished a number of documents which, in its judgment, form the basis of this agreement and comprise the ante- cedents thereof. It appears moreover that, at the instance of the Government of the United States, it has undertaken to endeavor to induce the Government of Chile properly to meet this obliga- tion. Finally, it is clear that the Government of Bolivia considers that the Government of Chile is under obligation directly and fully to meet this debt due under the Wheelwright contract. 3 I Appendix, p. 39. Sub-Point C. C * The validity and binding effect of this contract have been repeatedly recognized and approved by the Govern- ments of Bolivia and Chile in the various formal protocols and treaties made by and between said Governments, in which protocols and treaties provision has been definitely made for the payment of the debt recognized as due by said contract. Prefatory Summary. It will be observed from the discussion which follows that before the Pact of Truce of 1884 was signed, the existence of the Wheelwright contract was directly and specifically brought to the attention of the negotiators of that Pact by Wheelwright person- ally and by his agent, Jackson; that notwithstanding this no pro- vision was made in the Pact for the recognition of the Wheel- wright contract or the rights, titles, and interests which had ac- crued and vested thereunder ; and that while the Government of Chile provided in such Pact for the liquidation of the obligations due from Bolivia to citizens of Chile, yet under this arrangement Alsop & Co. have received not one cent of the millions of dollars which have been paid under the provisions of this Pact. It appears, however, that nothwithstanding this failure to recognize the claim in the Pact of Truce, the claim has been recognized for its full amount with interest in the Matta- Reyes Protocol of May 19, 1 89 1 ; that it was also recognized in the Treaty of Peace and Friend- ship of 1895 as supplemented by the protocol of May 28, 1895, and the memorandum of May 23, 1895, as also the protocols signed on December 9, 1895, and April 30, 1906. Moreover, in the final treaty of October 20, 1904, the payment of the debt is distinctly recognized as an obligation upon the part of Chile, and notwithstanding that in Article 5 of the treaty but 2,000,000 pesos in gold of 18 pence is appropriated for the payment of this and various other obligations due from Bolivia to various claimants and assumed by Chile in this treaty and that therefore it might appear that the liability of Chile was limited, nevertheless secret 86 Sub-Point c, c*.] The Case of the United States. 87 notes exchanged between the plenipotentiaries of the two Gov- ernments under date of October 21, 1904, show that the obligation assumed by Chile in this case was unlimited and that it was under- stood that Chile should answer for the full amount of these debts. Discussion. On November 23, 1883, Mr. Wheelwright addressed to Senor Belisario Salinas, the representative who, on behalf of Bolivia, signed the Pact of Truce on April 4, 1884, the following letter: " Antofagasta, 23d November 1883. "Beijsario Saunas, Esq'^ &c &c &c "Dbar Sir, Knowing that you come from La Paz accompanied by Mr. Belisario Boeto, in order to treat with Chili about terms of peace, I take the liberty to address you this letter, trusting that you will kindly attend to the recommendation which is the object of these lines, although I had not intimate relations with you during my stay in former years in that city. "Having, as you may perhaps know, a Contract by which the Bolivian Government adjudicated to me the divisions (estacas) called 'Public Instruction' of the Littoral in payment of a debt; a Contract which I am endeavoring to have respected by Chili on the same terms as by Bolivia in case the Littoral should remain under the dominion of the former of the two Countries, I take the liberty of introducing to you, through this letter, Mr John Stewart Jackson of Valparaiso, whom I have entrusted to adopt there, in. my name, the measures conducive to the obtaining of my desires. "Mr. Jackson being worthy of all consideration and having my complete confidence, I would esteem it very sincerely if you would extend to him in the execution of his commission, the same benevo lence and facilities which I embrace the hope you would have bestowed upon me personally. "Begging you kindly to excuse the liberty I have taken, "I have the pleasure to remain, "Yours truly, "John Wheelwright."" Under date of December nth, 1883, Seiior Salinas, writing from Santiago, replied to this letter in the following terms: "Santiago, nth December 1883. "John Whe;e;i> On December 9, 1895^ the representatives of the two Govern- ments signed a protocol which stipulated. Article 5, that " Bolivia does not recognize liabilities or responsibilities of any kind attach- ing to the territories that she shall transfer to Chile such liabilities having been assumed by the Government of Chile." " oil Appendix, p. 457. 6 1 Appendix, p. 372. cU Appendix, p. 459. 94 United States vs. Chile. — Alsop Claim. [Point i. On April 30, 1896, the representatives of the two Governments signed another protocol, which provided, Article 2, that — "The Government of Bolivia shall submit to the approval of the Congress of that RepubUc the Protocol relative to the liquidation of debts signed at Santiago on the 28th of May, 1895, as also the explanation to which the preceding article refers, defining the pro- visions of Article IV of the Protocol of the gthof December, 1895."" Finally, on October 20, 1904, the Governments of Chile and Bolivia agreed upon a general treaty, which was later ratified and proclaimed, and which provided in Article 5 as follows : "Article 5. The Republic of Chile devotes to the final cancellation of the credits recognized by Bolivia, for indemnities in favor of the Mining Companies in Huanchaca, Oruro and Corocoro, and for the balance of the loan raised in Chile in the Year 1867 the sum of 4,500,000 pesos gold of 18 pence payable at the option of its Gov- ernment in cash or in bonds of its foreign debt valued at their price in London on the day on which the payment is made and the sum of 2,000,000 pesos in gold of 18 pence in the same form as the preceding for the cancellation of the credits arising from the following obligations of Bolivia: — the bonds issued, i. e. the loan raised for the construction of the railroad between Mejillones and Caracoles according to the contract of July 10, 1872; the debt recognized to Don Pedro Lopez Gama represented by Messrs Alsop & Co., successors of the former's rights; the credits recognized to Don John G. Meiggs, represented by Mr. Edward Squire, arising from the contract entered into March 2oth, 1876, for renting nitrate fields in Toco, and lastly, the sum recognized to Don Juan Garday." '■ At the same time that this treaty was negotiated, the Govern- ment of Bolivia, fearing perhaps that some doubt might arise regarding the extent of the UabiHty of Chile under this treaty, set forth its understanding of the undertaking of the Government of Chile in the following note: "Legation of Bolivia, "Santiago, October 21, 1904. "Mr. Minister: The Government of Bolivia agrees with Your Excellency's Government on the necessity of determining the pur- port of the wording of Article 5 of the Treaty of Peace and Friendship signed to day hy Your Excellency on behalf of the Government of Chile and by the undersigned in representation of the Government of Bolivia. "Both in regard to the claim of the • Corocoro, Huanchaca, and Oruro companies and of the bond holders of the Bolivian loan of 1867 which were being paid out of 40% of the receipts of the Arica Custom House, and in regard to the claims against Bolivia of the bond holders of the Mejillones railroad, of Alsop & Co. (assignees of Pedro Lopez Gama), of the estate of Juan Garday, and of Edward Squire, it has been agreed that the Government of Chile shall perma- nently cancel all of them, so that Bolivia shall be relieved of all liability, a II Appendix, p. 460. 6 I Appendix, p. 440. Sub-Point c,c<.i The Case of the United States. 95 the Government of Chile being obligated to answer every subsequent claim presented either by private means or through diplomatic chan- nels, and considering itself liable for every obligation, bond, or docu- ment of the Government of Bolivia relating to any of the claims enumerated, Bolivia's liability being entirely eliminated for all time and the Government of Chile assuming all liabilities to their full extent. "My Government desires that your Excellency may be pleased to state to me, on behalf of the Government of Chile, whether this is the purport which it has given to article 5 of the Treaty of Peace and Friendship signed to day between the representatives of the two Governments. "I avail myself of this opportunity to renew to Your Excellency the assurances of my high and distinguished consideration. " (Signed.) A. Gutierrez "To His Excellency Mr. Emilio Bbllo C. "Minister, of Foreign Relations, City."'^ To this note, the representative of Chile made the following reply : "Republic op Chile "Ministry of Foreign Relations "Santiago, October 21, 1904. "Mr. Minister: In reply to the note which Your Excellency addressed to me on this day / take pleasure, in compliance with your request, in defining the purport which this Chancellery assigns to clause 5 of the Treaty of Peace and Friendship signed to day by Your Excellency in representation of the Government of Bolivia and by the undersigned on behalf of the Government of Chile. "My Government considers that the obligation which Chile contracts by Article 5 of the said Treaty comprises that of arranging directly, with the two groups of creditors recognized by Bolivia, for the permanent cancellation of each of the claims mentioned in said article, thus relieving Bolivia of all susequent liabilities. "It is consequently understood that Chile, as successor of all the obli- gations and rights which might be incumbent on or pertain to Bolivia in connection with these claims, shall answer any reclamation which may be presented to Your Excellency's Government by any of the parties interested in the said claim. "I renew to Your Excellency the assurances of my highest and most distinguished consideration. "(Signeid.) Emilio Bello C. [seal.] "To his excellency Mr. Alberto GuiterrEz, "E.E.M.P. of Bolivia." "■ It appears, therefore, that the two Governments, in the vari- ous treaties and protocols negotiated by them regarding the Bolivian Littoral and matters connected therewith, have uniformly and without doubt or equivocation recognized as legal and binding the Wheelwright contract of 1876. <» I Appendix, p. 444. Sub-Point C. C ' The validity and binding effect of this contract have been recognized and approved by the Government of Chile in a number of executive decrees issued to its officers of local administration concerning the enforcement and opera- tion of this contract, after the occupation of the Bolivian Littoral by the Chilean forces. Prefatory Summary. While, as will appear from the matter as it is more fully set forth hereinafter, the Executive of Chile and the local admin- istrative officers have on occasion recognized the vaHdity of this contract, such recognitions are not considerable in numbers. It is clear, however, that on October 27, 1884, the Chief Secretary of the Ministry of Finance directed that a report be made concerning the government mines which were operated by Wheelwright in the Littoral, and that a report of these was made under date of November 15, 1884. Discussion. In March, 1884, John Stewart Jackson, representing John Wheel- wright, filed before the Chilean authorities a petition in which he prayed, as has already been indicated, for protection by the Chilean Government of the rights of Mr. Wheelwright under his contract with the Bolivian Government." This petition appears to have been answered under date of the 26th of August, 1884, and was later the subject of a report to the Minister of Finance under date of October 9, 1884.* The Minister of Finance, moved by these memorials, thereupon took the following action: "Republic of Cmu, Ministry of Finance. "The undersigned, Chief Secretary of the Ministry of Finance, certifies: That in reference to the memorial presented by Mr. John Stewart Jackson, as representative of Mr. John Wheelwright, asking that the rights of his principal be recognized to certain mining sets (estacas-minas) situated in the Coast Province of the North, other- wise called Public Instruction Mines, the following decree has been signed thereon: = II Appendix, p. 296. i n Appendix, p. 276. 96 Sub-Point c, CM The Case of the United States. 97 " 'Santiago, 2'jth October, 1884. " 'Let the Governor of Antofagasta report on the state of the workings of the mining sets called the Public Instruction Mines, causing mean- while the legal position in which these mining sets were, at the time of the revindication of the territory of Antofagasta, to be respected. "'I/Ct the same be duly noted. '"(Signed.) Barros Luco.' "The above is in conformity with the original. "(Signed.) R. Sotomayor Valdbz, " Chief Secretary " [Stamp of the Ministry of Finance.] "No. 689.]"" Acting upon this, the Governor of Antofagasta made under date of November 12 the following order: "Office; op the Government of the Littoral of the North, "Chili, Antofagasta, 12th November, 1884. "I annex to the present a dispatch relative to a claim brought before the Supreme Government by Mr. John Wheelwright respecting the estacas of mines known in the time of the Bolivian dominion by the name of Estacas of Public Instruction. "As the said Minister asks the undersigned for a report respecting the state of exploitation of these estacas, and as you are in a better position to give information respecting Ihe matter, I beg that you will be good enough to report to this office on the subject. "May God be with you. "(Signed.) R. Rivera Jofr^."'' Under date of November 15th the following report was made concerning the subject-matter of this inquiry: "Caracoles, 15th November, 1884. "Office of the Sue-Delegate of Caracoles. "The undersigned, in fulfilment of the Report which your Honor asks in the preceding note, after having acquainted himself with the record mentioned therein, referring solely to the mineral dis- trict of Caracoles, setts forth: That he knows that since about a year before the occupation of this territory by the Chilian arms, Mr. John Wheelwright has maintained and does maintain here, up to the present date, a legal and salaried representative for the purpose of attending to and looking after the mining sets called Estacas of Public Instruction', and that, during that period of time, he has worked indiscriminately, either on his own account or by contracts with miners, amongst others the following estacas: That, of the mine 'Flor del Desierto,' that of the mine 'Rosales,' 'Esmeralda del Sur,' 'Alfin Hallada,' 'Cantiva,' 'San Martin,' 'Santa Isabel,' 'San Rafael,' 'Buena Esperanza,' 'Compania,' 'Julia,' 'Vallenar,' 'Juana,' 'Erontera,' 'Teresa,' 'Re- venton,' 'Disputa,' 'Mapocho,' ' Merceditas,' 'Tres Amigos,' 'Em- a II Appendix, p. 231. 6 II Appendix, p. 232. 40898 — II 7 98 United States vs. Chile. — Alsop Claim. [Point i. palme,' 'Limbo,' 'San Jos^,' 'Invitacion,' 'Zoila,' 'Francholina,' 'Candeleros,' 'Rosario,' y 'Transaccion.' "The foregoing is all that I have to report to your Honour about the matter. "May God be with your Honor. "(Signed.) E. Villegas."" This report appears to have been transmitted to the Central Government under date of November i8, 1884, with the following communication : "report. "Government of the Coast of the North Chile, "Antofagasta, November i8th, 18^84. "Complying with the preceding resolutiod, I have to say to Your Honor that in order to make the report called for, I addressed myself to the subdelegate at Caracoles, Don Enrique Villegas, a very competent person and who by his long residence there, is fully informed as to the work that has been performed and of the condi- tion of all the mines in that mineral district, where Mr. John Wheel- wright has a large part of the so-called PubUc Instruction estacas. Annexed hereto I send you the report just sent to me by that subdelegate, which refers to what is called for in the preceding resolution of Your Honor. Mr. Wheelwright is also in possession of various other Instruction estacas in several m,ineral districts north of Latitude 2j, concerning which it is somewhat difficult to report as asked, there being in those parts no competent authorities to give information. As the properties alluded to are scattered about it would be necessary to send special experts to report thereupon, and the undersigned does not deem himself authorized to do this. This is all that I can say in obedience to your order. "God preserve Your Honor. "R. Rivera Jofre;." '' It will thus appear that the executive branch of the Govern- ment of Chile has recognized the existence and validity of this contract through the action of local administrative officers who have made specific reports regarding the mines (specifying the same by name) which Wheelwright held under and pursuant to the terms of the Wheelwright contract of 1876. "II Appendix, p. 232. 611 Appendix, p. 227. Sub-Point C. C « The validity and binding effect of this contract have been repeatedly recognized and approved by the Govern- ment of Chile in its diplomatic correspondence with the Government of the United States. Prefatory Summary. The correspondence set forth or alluded to in the discussion wrhich follows upon this point shows that the Government of Chile has never in its diplomatic correspondence suggested any doubt as to the validity of this contract, but on the contrary it has repeatedly recognized the contract as creating a valid and existing obligation which the Government of Chile was prepared to assume and which it intended to assume upon the signing of the final treaty of peace between the Governments of Bolivia and Chile. Expressions going to this point have been made in numerous communications, among others, June i8, 1892, October 10, 1896, October 13, 1897, October 27, 1903, July 2, 1904, December 9, 1904, January 30, 1905, and April 9, 1908. It has, moreover, on various occasions made offers of settlement of this obligation, which action is the best evidence that the Government of Chile considered the obligation binding. These offers of settlement were made in December, 1903, December, 1904, August, 1905, and April, 1908. Discussion. In a note from the Minister of Foreign Relations of Chile to the American Minister at Santiago, dated June 18, 1892, the following language is used: "In reply I have the pleasure to inform Y. E. that in the preliminary Protocol of a Treaty of Peace between Chile and Bolivia, ratified by the undersigned in the city of Iquique, as Minister of Foreign Relations of the Constitutional Governmeni, the claim of Alsop and Company, which Y. E. has supported, for the sum indicated by Y. E. — $835,000 Bolivian pesos — figured among the liabilities that the government of Chile engaged to pay for account of Bolivia. "Regarding the payment of interest to which Y. E. refers, the govern- ment of the undersigned awaits what may be done in the negotiation that is to follow by the government that recognized the principal obligcLtion; 99 loo United States vs. Chile. — Alsop Claim. [Point i. the government of Chile, which only assumes the obligations of a neigh- boring and friendly country will endeavor to attend to this part of the claim once the government of Bolivia pronounces upon its legitimacy or validity, confining myself, as a proof of deference to the government of Y.'E. to offering the assurance that I will carefully take into account the resolution that may be adopted by the government of Bolivia in relation to this point. "Upon forwarding what has already been stated the undersigned is pleased that in the Protocol celebrated in Iquique in May 1891 the government of Chile has already taken into account the matter referred to in the esteemed communication of Y. E. to which I have the honor to reply."" On June 22, 1892, the American Minister at Santiago informed the Department of State at Washington that as to the question of interest upon the debt recognized in the above note he had "addressed a note under this date, enclosure No. 3, giving for the information of the Minister particulars of the contract entered into by the government of Bolivia and reduced to public record in La Paz on the 26th December i8y6, recognizing this interest in the same way as the principal debt, which the Sub-Secretary of Foreign Relations assured me would be entirely satisfactory." * Under date of October 10, 1896, the American Minister reported to the Department as follows: "/ have the honor to report that yesterday I had a conversation on the subject with Senor Eduardo Phillips, the Under-Secretary of For- eign Relations, who gave me the following information: "On May 28th, 1895, a protocol, supplementary to the treaties between Chile and Bolivia forwarded to the Department with my No. 85, of May 6th last, was signed. This protocol was approved by the Chilean Congress, in secret session, but is still awaiting the approval of the Congress of Bolivia, and has, therefore, not been published. It has an important bearing upon the claims assumed by the Chilean Government in accordance with the provisions of article 2 of the Treaty of Peace and Amity, of May i8th, 1895. "According to the Memorandum presented by the Bolivian Minister of this capital, which is regarded as part of the protocol, the amount proposed as a settlement of the claim of Alsop & Company is, without calculating interest {sin computar intereses) eight hundred and thirty- five thousand Bolivianos, of twenty-pence, or nine hundred and fifty- four thousand, two hundred and eighty-five Chilean pesos. "By article 3 of the protocol, the Government of Chile, in order to settle the definite amounts to be paid, shall take into account the origin of the claims allowed {en origin de cada credito) as well as the data furnished by the Bolivian Minister in his memorandum. "It is hoped that the Protocol will be approved by the Bolivian Congress, which is now in session, in a few weeks. The Chilean Government cannot take up the question of the payment of the claims until, this protocol has been approved and promulgated." "^ ol Appendix, p. 64 61 Appendix, p. 61. <= i Appendix, p. 67. Sub-Point c,c 8.) The Case of the United States. ,„, ,^ loi Under date of October 13, 1897, the Minister of Foreign Rela- tions in a communication to the American Minister at Santi- ago stated: "Chile, by the treaty of peace with Bolivia of May 18, 18^5, hound herself to satisfy various credits pending against the Government of Bolivia, amongst which was that of the house of Alsop & Co.'"^ Under date of October 27, 1903, in answer to a communication from his Government, the American Minister at Santiago wrote the Department as follows: "I have the honor to acknowledge the receipt of the Department's No. 247, asking to be advised of the truth of the report, that the pending negotiations between Chile and Bolivia have been broken off, or postponed indefinitely, owing to the unwillingness on the part of Chile to assume all that is demanded by Bolivia in the way of indemnity. "The report which reached the Department is not based upon facts. The negotiations are still proceeding, with every prospect of satisfactory exit, and / was advised, no longer ago than three days, by the Minister of Foreign Relations, that he would soon be in a position to m,ake a cash offer to the claimants of Alsop and Company, in satis- faction of this long pending claim. The Minister informed me that he would make the tender directly to me, and that if the same was not accepted, the amount tendered wotild be handed over to Bolivia, and the Alsop creditors, together with such others as might decline to accept a direct cash settlement with Chile, would he remanded to La Paz for the consideration of the Bolivian Government. "Whenever such tender is made, I will communicate with the Department by telegraph, asking for authority from the Alsop claim- ants to make settlement." ^ On December 4, 1903, the Department received a cable which embodied an offer made by the Chilean Minister of Foreign Rela- tions on December 3rd to the following effect: [Paraphrase.] The Minister of Foreign Relations of Chile desires to know whether an offer of 954,285 Chilean pesos of 18 pence would be accepted in settlement of the Alsop claim, payment to be made at the option of the Chilean Government either in Chilean gold dollars of 18 pence, or in 5 per cent Chilean bonds, at the rate of 18 pence per Chilean dollar reduced to pounds sterling. Should the claimants decline this offer the Government of Chile will pay this sum in Chilean bonds to the Bolivian Government, which will then assume responsibility and settle with the claimants.* On December 17, 1903, the Department informed its Legation that the Alsop claimants declined the offer as inadequate and it added that the Department was unable to recommend the accept- o I Appendix, p. 70. 6 1 Appendix, p. 80. . I02 United States vs. Chile. — Alsop Claim. [Point i. ance of the sum and that it held the question of intervention under consideration .<» Under date of June 14, 1904, the Department was informed by- its Minister at Santiago to the following effect: [Paraphrase.] The Chilean Minister of Foreign Relations stated that the Chilean Government would become responsible for the settlement of the Alsop claim after and following the ratification of the definitive treaty of peace and amity between the Governments of Chile and Bolivia. The Min- ister also authorizes me to say that the treaty is assured and will be completed within three months, and that immediately thereafter he will take up the Alsop clairn, giving it special, just, and even generous consideration. ' On June 21, 1904, in a note addressed to the Minister of For- eign Relations of Chile, the American Minister used the follow- ing language: "June 2ist, 1904. "Mr. Minister: Upon the 13th inst., I had the honor to confer with Your Excellency relative to the Alsop claim, and expressed to you, after having submitted to your inspection the urgent telegram concerning the claim, just received from my Government, the pressing necessity for early consideration of this long pending obligation, and how greatly decisive action by Your Excellency's Government, would be appreciated by the Government of the United States. " Your Excellency's reply to the observations which I had the honor to make on this occasion was, briefly, that the Chilean Government had held, and continued to hold, the claim of Alsop and Company, as an obligation payable by the Chilean Government, contingent orCly upon the signing of the definite treaty of peace and amity with Bolivia, Your Excellency adding moreover, that this treaty would, without any doubt, be signed and ratified by the Governments of Bolivia and Chile, within the term of three months, and that I might consider myself authorized to convey information to this effect, to my Government. Continuing, Your Excellency was good enough to add, that immediately following the ratification of the treaty, the Chilean Government would address itself to the consideration of the Alsop claim, and out of deference to the expressed wish of the Government of the United States, and the necessitous condition of the claimants, would give to it, special, just, and even generous consideration. "Upon the same date of my interview with Your Excellency, I conveyed, by cablegram, to my Government, the substance of your statement, as recited above, and upon the 15th, I received the follow- ing reply: " ' Express to Minister for Foreign Affairs the President's apprecia- tion of assurances given and communicated by your cablegram. On this basis the Department is confident the matter will be satisfacto- rily adjusted at the period named.' ""^ . 01 Appendix, p. 8i. 6 I Appendix, p. 86. cl Appendix, p. 88. Sub-Point c,c«.] The Case of the United States. 103 In acknowledging receipt of this communication, under date of July 2, 1904, the Minister of Foreign Relations of Chile used the following language: "In this respect, it corresponds to me to reiterate to your Excellency that the Alsop claim is inclvded among the other claims weighing upon the Bolivian Coast, the payment of which will he assumed by Chile on the terms to he established in the respective treaty at the close of the negotiations at present going on towards that Object between the Govern- ments of Chile and Bolivia. Only then will it be possible for the under- signed to give to the said Alsop claim the attention it deserves."'^ In December, 1904, the Government of Chile made a direct offer of settlement to the claimants of 524,333 Chilean pesos, and in connection therewith the Chilean Minister at Washington, on December 9, 1904, left with the Solicitor for the Department of State the following memorandum: [Translation.] "debts of BOLIVIA." " Bonds of the loan for the construction of a railway in Meiillones 2190000 " Alsop claim • 835000 " Meiggs " 120000 " Garday " 40000 "Total in the silver currency of Bolivia 3185000 "for the satisfaction of which Chile offers to Bolivia to deliver 2000000 Gold pesos of Chile (18 pence to the peso) which would be distributed pro rata. 524333 Chilian pesos or 39325 pounds sterling would go to the Alsop claim."'' The Department declined to urge the acceptance of the proposed sum.* On January 30, 1905, the Chilean Minister at Washington, Senor , J. Walker Martinez, in a communication addressed to the Secretary of State of the United States, states that — "In 1876 the Government of Bolivia recognized Alsop & Co. as assigns of Lopez Gama and granted them certain concessions. "Among the various liabilities assumed by Chile in the treaty of October, last, was that of applying two million pesos in Chilean gold to a pro rata settlement of the following group of claims against Bolivia. Bolivian. " Bonds of the loan for the construction of the Mejilliones Railway. . . 2,190,000 " Claim of Alsop & Co i 835,000 " Meiggs claim 1 20,000 " Garday claim 400,000 "Pesos of Bolivia 3,185,000 "All these claims are stated in their nominal amount in Bolivian pesos." " a I Appendix, p. 90. 61 Appendix, p. 91. "=1 Appendix, p. 92. I04 United States vs. Chile. — Alsop Claim. [Point i. On August I, 1907, the Chilean Government made a third offer this time offering 568,192 Chilean gold pesos." Under date of August 5, 1907, reporting an interview between himself and the Minister of Foreign Relations, the American Minister at Santiago said: "Chile there (in the treaty of October 20, 1904) promised Bolivia to pay certain debts which had been contracted by Bolivia and which at the time were Bolivia's own."'' On April 9, 1908, in a. note addressed by the Chilean Minister of Foreign Relations, a fourth offer was made for the settlement of this claim in the following words : "My Government is ready to pay, in bonds, and in consideration of the total cancellation of said claim, the sum of 524,332.81 pesos gold of i8d. each as principal, and 78,649.92 pesos in gold coin at i8d. each as interest on coupons due thereon."* The Department declined to accept this offer. • In the same note, the Chilean Minister of Foreign Relations used the following language: "The treaty was signed on October 20, 1904, and in Article 5 it was stipulated that Chile should devote the sum of 2,000,000 pesos (dollars) gold of 18 pence each to the settlement of some of Bolivia's debts specified in said article. Among them was the debt acknowl- edged in favor of Pedro Lopez Gama, represented by the house of Alsop & Co., who acquired the rights of the former." "^ It thus becomes clear from the foregoing correspondence that beginning with June, 1892, the Government of Chile has in its diplomatic correspondence with the Government of the United . . States repeatedly recognized the Wheelwright contract as a legal, valid, and existing obligation and has accompanied its statement of recognition thereof by promises to settle the same upon appro- priate occasion ; and that over and over again the Government of the United States has been assured that the debt due under the contract of 1876 would receive immediate consideration upon the conclusion of the treaty with Bolivia, which consideration, it was promised, would be "just and even generous." - I Appendix, p. io8. * I Appendix p. 142. c I Appendix, p. 135, Sub-Point C. C ■' The validity and binding effect of this contract have been recognized and approved by the Chilean courts in cases prosecuted by said Wheelwright before said courts, said cases involving and depending upon rights claimed by said Wheelwright under said contract. Prefatory Summary. The courts of Chile have recognized the Wheelwright contract as binding and effective in the two principal cases brought by John Wheelwright to establish in the Chilean courts his rights under the contract of 1876 after the Bolivian Littoral passed under the control of the Government of Chile. These two cases were those of the Justicia and the Amonita. Discussion. That the Wheelwright contract was a proper contract, entered into with due formality, and therefore legal and binding, was not only conceded, but stated by the courts of Chile in the case of the Justicia, the case in which Wheelwright sought to secure pos- session of the government estaca Justicia, which had been en- croached upon by certain persons made parties to the suit. In the course of the opinion rendered by the court of first instance in this case, that tribunal made the following statements : "9. That, far from this, subsequent thereto, innumerable dis- positions were dictated, which, as has been said in the fifth con- sideration, had for their object either to recognize and sanction the rights of instruction with respect to the estacas, or to regulate conveniently the exploitation thereof, it being fitting to note, in addition to those already indicated here, and, amongst others, the decrees of the 7th March, 29th May and 19th September, 1872, by which tenders were invited for the working of the estacas in conformity with the already cited laws of the 19th October, 1871, the order of the 13th February, 1874, in which notice is given to the. Public Ministry to revindicate the estacas mines of the mineral district of Aullagas, the order of the 24th of the same month and year, which is given to the Attorney-General in order that he may take possession of the said estacas, the circular of the 21st April, 1874, which contains instructions for the same object and 105 io6 United States vs. Chile. — Alsop Claim. point i. with respect to the mining districts in general, and lastly, the contract celebrated by the Government of Bolivia with the plaintiff on the 23d December, 1876. ***** =H * "19. That the effectiveness of the said decree ot the 23d July being proved, and that there belongs to Instruction the fourth or the third estaca, respectively, in continuation of those which may be measured to the discoverer of a lode in virgin or worked ground, it is fitting now to examine the validity of the contract celebrated between the plaintiff Wheelwright and the Government of Bolivia, a contract which gives rise to three questions which the defendants propound. " (i) If that Government could celebrate the contract without infringing the treaties. " (2) If the Laws of the Country authorized it for the celebration thereof, and " (j) If Chili, as revindicator of this territory, ought or ought not to respect it. " 20. With respect to the first point that although it is certain that on the 13th February, 1874, the Government of Chili, by means of Consul Reyes, declared that it did not acknowledge nor accept on its part the contracts, settlements or arrangements which the Govern- ment of Bolivia might celebrate or accord, in so far as they may impose burdens on or effect the territory of common participation; it is also true that in virtue of subsequent negotiations, the treaty of the 6th August of the same year was signed between the two Republics, by which Chili renounced in favor of Bolivia, all her rights to the territory of the said common participation. "21. That the high dominion belonging already to her over the territory, she could proceed, unencumbered, to the celebration of the contract with Wheelwright on the 23d and 24th December, 1876, in virtue of which she recognized to him, as representative of the house of Alsop & Company, the credit of eight hundred and thirty-five thousand Bolivian dollars, at the interest of five per cent, per annum, which was to be amortized, amongst other things, with forty per cent, of the product of all the estacas-mines of silver of the Coast Depart- ment, which were adjudicated to him for twenty-five years. " 22. With respect to the second point, namely, if the Government could celebrate contracts; that by the law of the 19th October, 1871, the Executive was authorized to celebrate contracts of letting or of working in partnership all the estacas-mines belonging to the State in the mineral districts of the Republic, and in conformity therewith, tenders were invited for the working of the said estacas by the decrees of the 2d November, 1871, 7th March, 29th May and 19th September, 1872, the whole concluding with the celebration of the contract with Wheelwright. "23. That two years afterwards, orl the 12th February, 1878 (fol. 118), the National Assembly approved the measures dictated in the Department of Finance by the Provisional Government inaugurated on the 4th May, 1876, excepting those which had been derogated or modified by express disposition thereof, amongst which the contract with Wheelwright does not appear."" o II Appendix, pp. 113-116. Sub-Point c, c'.i The Case of the United States. 107 In the court of second instance at Serena, the tribunal, while not considering specifically the question of the legaUty of this contract, accepted it and its binding effect without question and acted thereon, as is shown by the following extracts: "Serena, igth May, 18S2. "Reproducing the expository part of the sentence in first instance, and considering — "i. That the convention celebrated in the City of La Paz on the 26th December, 1876, between the Government of the Republic of Bolivia and Mr. John Wheelwright, representative of the firm of Alsop and Company, is a contract of "anticresis," by which con- vention there was recognized in favor of this firm a debt of eight ' hundred and thirty-five thousand Bolivian dollars, and there were adjudicated to him the estacas-mines of silver belonging to the State in the Coast Department, in order that the said debt should be paid with forty per cent, of their net products during the term of twenty- five years. "2. That on that contract Wheelwright founds the demand of folio I, in which he asks that the defendants may deliver up to him the part of ground of the Government estaca of the mine Justicia situated in the mineral district of Caracoles, which they have invaded. "3. That from the act of measurement of the said mine Justicia executed on the 12th October, 1878, which is extended in attested copy at folio 6 of the added writing, it appears that the Government estaca was not measured on that lode, on account of the Deputy of Mining having so ordered it, in consequence of the ground which the said estaca should have occupied being in dispute. "4. That it has not been shown that in the time elapsed since that day, the 12th October, 1878, until the date on which the district of Caracoles was reincorporated in the territory of the Republic of Chili, the said estaca should have been measured and the plaintiff put in possession of it. "5. That from such antecedents it results that the said estaca did not have real and positive existence, nor in that which relates to it, did the said contract of the 26th December, 1876, have full effect while the district of Caracoles remained under the dominion of the Republic of Bolivia. "6. That the plaintiff has asked that effect may be given to that contract celebrated in Bolivia and with the Government of that Republic, and supporting his claim on the privileges which the laws of that country conceded to the estacas mines called of Instruction when the territory in which the mine treated of it situated has returned to the dominion of the Republic of Chili. " 7. That the effects of the said contract, referring to an immovable property, situated to-day in Chili, ought to be arranged according to the laws of this country, inasmuch as the sovereignty is indivisible, and it would cease to be so in the present case if the district of Caracoles, which at present is a portion of Chilian territory, should be governed by laws emanated from another sovereign. "8. That the admission of the demand, by ordering the measure- ment and delivery of the estaca claimed, would not mean in reality the mere recognition of a right definitely constituted beforehand, but io8 United States vs. Chile. — Alsop Claim. [Point i. a mandate to the effect that a right should now be constituted in virtue t»f laws which ought not to rule in any part of the Republic, nor serve as a basis for the decisions of its tribunals. "9. That the estaca which the plaintiff claims in virtue of his contract of "anticresis" not having been delivered to him in the time of the Bolivian dominion in Caracoles, and such contract not being perfected except by the tradition of immovable property, that convention remained without effect with respect to the said estaca. " In conformity with these bases, and with that which is determined in the i6th and 2437th articles of the Civil Code, and in the ist Law, 14th title, 3d paragraph. It is declared that the demand of foHb i is without foundation. Let the sentence appealed from of the 14th May of the past year, extended at folio 230, be repealed." " It is thus evident that the courts of both first and second instance considered the Wheelwright contract as binding and operative in the case of the Justicia. In the Amanita case (May, 1882), the contract of 1876 was like- wise recognized as binding. The court in that case made upon this point the following statement : "4. That the Convention celebrated on the 24th December, 1876, between the Bolivian Government and Mr. John Wheelwright, partner and representative of the mercantile house of Alsop and Company, according to the terms of the public deed, which is extended at folio 180, was a contract of "anticresis," in which the Government of Bolivia conceded to Mr. John Wheelwright the estacas of Instruction of the mines of what was then called the Littoral of the North, in order that, for the term of twenty-five years, he might pay himself with their products, the sum of eight hundred and thirty-five thousand Bolivian dollars, and the interest thereof, which the said Government acknowledged to owe him (Article 2435 of the Civil Code)." * It is thus clear that the courts of Chile, so far as they have expressed themselves at all upon this subject, have considered the Wheelwright contract as negotiated and concluded with all due and legal- formality and therefore as binding and effective. I'll Appendix, p. 118 611 Appendix, p. 124. Sub-Point C. C* The validity and binding effect of the Wheelwright contract were distinctly recognized by the Government of Chile through its Agents before the United States and Chil- ean Claims Commission in 1901, at which time a specific promise was made to pay the debt arising under the contract. In his argument before the United States and Chilean Claims Commission, created by the Convention of August 7, 1892, and revived by the Convention of May 24, 1897, in which he contended in support of a demurrer that the Alsop claim was not within the jurisdiction of the Commission as established by the Conventions above mentioned, and that therefore the claim should be dismissed, the Agent of the Government of Chile made the following state- ment, including the solemn assurances therein incorporated: "As is stated in the claimant's brief, it is among the liabilities that the Government of Chile engaged to pay for the account of Bcftivia. This explains exactly the situation of the claim. The Chilean Gov- ernment has always regarded it, and does still regard it, as a liability on the part of Bolivia toward the claimant; and in order to induce the Bolivian government to sign the definite treaty of peace which has been negotiated for manj' years, the Chilean Government offers to meet this and other claims as part of the payment or consideration which it offers to Bolivia for the signature of the treaty. This has always been the position of the Chilean Government, and is its posi- tion to-day, and if Bolivia signs the treaty, the claim of Alsop & Com- pany, as well as the other claims mentioned, will be promptly paid under the treaty engagement as a relief to Bolivia from the liabilities which that government has incurred and for the account of Bolivia. "" The Government of the United States confidently submits that if there were in this case nothing more than this statement it would completely establish the binding effect and validity of this contract, and would fasten upon the Government of Chile the full responsi- bility of that Government to satisfy this claim, for its equitable value, the Government of the United States would possess a perfect obligation running from the Government of Chile to the Govern- ment of the United States for and in behalf of the claimants. In the statement thus solemnly made by the Agent of Chile before an international tribunal we have a full recognition of the legality of the debt, of the complete and unimpaired obligation of the oil Appendix, p. 569. log no United States vs. Chile. — Alsop Claim. [Point i. Government of Chile to pay it, and a full and solemn undertaking of Chile in Bolivia's stead and for her account to discharge this obligation among others recognized, said obligation to become absolutely binding upon the Government of Chile so soon as the two Governments should conclude the final treaty of peace then in process of negotiation. Thus these solemn assurances of the Government of Chile given before an international tribunal at a time when the Government of the United States was presenting to that tribunal for adjustment this and other claims which it had against the Government of Chile, constitute not only a recogni- tion of the obligation, but also a promise to pay the same, which, under any and all theories of international comity and good faith, the Government of Chile is in honor bound to fulfill. Conclusion. It is therefore confidently submitted that whether tested by the authority of the Bolivian Executive to make the contract, or by the approval and ratification of the contract by the Bolivian Congress, or by the subsequent recognition of the contract by the Govern- ment of Bolivia by means of executive decrees, or by and in diplo- matic correspondence between the Governments of Chile and of the United States, or by and in formal protocols and treaties between the Governments of Chile and Bolivia, which protocols and treaties provided in express terms for the liquidation of the debt rec- ognized by this contract, or by the decisions of the courts of Chile, or by the formal declaration and undertaking of its agent — the contract between the Government of Bolivia and John Wheelwright dated December 26, 1876, must be regarded as a valid, legal, and binding instrument ; and that this has been recognized by the Gov- ernment of Chile in its diplomatic correspondence with the Govern- ments of Bolivia and the United States, in its formal treaties and protocols with the Government of Bolivia, in the decisions of its courts, and finally in a solemn assurance given by the agent of the Government of Chile before an international arbitration tribunal. POINT II. THE GOVERNMENT OF THE UNITED STATES FOR AND IN BEHALF OF THE CLAIMANTS, AMERICAN CITIZENS, ABOVE NAMED (THEIR HEIRS, ASSIGNS, REPRESENTATIVES, AND DEVISEES), ALLEGES, CONTENDS, AND MAINTAINS THAT THE GOVERNMENT OF BOLIVIA, BY AND THROUGH THE CONTRACT OF 1876, DULY, PROPERLY, AND LEGALLY GRANTED TO THE CONCESSIONARIES UNDER THAT CONTRACT, CER- TAIN RIGHTS, TITLES, AND INTERESTS IN THE GOVERNMENT ESTACAS LOCATED IN THE BOLIVIAN LITTORAL, WHICH RIGHTS, TITLES, AND INTERESTS WERE IN THE NATURE OF AND CONSTITUTED A CONCES. SIONARY GRANT ANALOGOUS TO A LEASEHOLD INTEREST, WHICH CONCESSIONARY GRANT WAS, UNDER THE CONTRACT, TO RUN FOR A TERM OF TWENTY-FIVE YEARS; THAT THE GOVERNMENT OF CHILE, UPON TAKING POSSESSION AND ASSUMING CONTROL OF THE BOLI- VIAN LITTORAL, WRONGFULLY INTERFERED WITH AND CONFISCATED IN A MANNER CONTRARY TO THE WELL ESTABLISHED AND UNIVER- SALLY RECOGNIZED PRINCIPLES OF INTERNATIONAL LAW CERTAIN OF THESE VESTED RIGHTS, TITLES, AND INTERESTS THUS GRANTED TO THE CONCESSIONARIES UNDER THE CONTRACT OF 1876; AND THAT FOR THIS WRONGFUL INTERFERENCE, DEPRIVATION, AND CONFIS- CATION, THE GOVERNMENT OF CHILE IS LIABLE IN TORT TO THE GOVERNMENT OF THE UNITED STATES, FOR AND IN BEHALF OF THE CLAIMANTS, ABOVE NAMED— AS IS CLEARLY AND DISTINCTLY ESTAB- LISHED BY THE FOLLOWING CONSIDERATIONS AND DISCUSSIONS: The following are the provisions of the Wheelwright contract of December 26, 1876, upon which reliance is placed to establish the national grant of the said vested rights, titles, and interests: "Resolution of December 23, i8j6. "Ministry of Finance and Industry, "La Paz, December 23, 1876. "In accordance with the compromise made this day it has been agreed by the Government in Cabinet Council with Mr. John Wheel- wright, representative of the firm of Alsop and Company, that the operation of the Government mines which have been let out as a concession to said firm on the same date shall be subject to the following clauses and conditions : "i. Mr. John Wheelwright shall have a period of three years within which to examine the Government silver mines and find the 112 United States VS. Chile. — Alsop Claim. [Point ii. necessary capital with which to put them into operation, it being his duty to take the necessary preliminary measures to this end as soon as possible. The mines shall remain at the disposal of the concessionary during these three years, and the Government shall enable it to gain actual possession thereof by giving the proper instructions to the authorities. "2. By virtue of the concession which has been made to him the concessionary shall be entitled to organize joint stock companies for the operation of one or more claims, either on the coast or abroad; or else to conclude contracts with owners of adjacent mines in order to secure the most certain means of operating all or any of the said concessions which in the opinion of the conces- sionary or companies organized are profitable or will at least pay the cost of working them where veins are already discovered or may be discovered during the three years assigned in the first clause. "3. The concessionaries may hire and employ in their mining work either foreign or native engineers, employees, or laborers, who shall, during the period for which they are hired, be exempt from all military services as well as every civil or municipal oflEice, except in cases of necessity in order to preserve public order and peace. "4. The concessionary or companies in charge of the work shall present semiannual balances, on the strength of which, together with the records of the books, the distribution shall be made of the net proceeds, 40 per cent being applied by the Government to the payment of the debt according to the terms agreed upon in the compromise of this date, and sixty per cent going to the petitioner. "5. The Government shall appoint one or more agents to super- intend the work performed, who shall be compensated out of the common funds of the enterprise. "6. This contract shall last for 25 years, after which time, if there is any residue after paying off the Government's debt in accordance with the compromise, it shall be turned over to the Government. "7. If, within the first three years or thereafter until the expira- tion of the 25 years mentioned in the foregoing article, any persons or companies should offer to operate one or more of the mines included in this contract, they may do so provided the present concessionary does not care to undertake .the operation thereof and so states in writing to the Government, or else deliberately neglects to make such statement. "8. The Supreme Government shall grant to the petitioner free of charge, during the continuance of this contract, such lands of the Government as may be necessary for the erection of his buildings and mining establishments. Let this be recorded. "Daza. "Obutas. "Carpio. "Villegas. " Salvatibrra.° "I Appendix, p. 10. P°'n'ii-l The Case of the United States. 113 "Resolution of December 24, i8'j6. "Ministry of Finance; and Industry, "La Pax, December 24, i8'j6. ******* "Third. All of the silver mines of the government in the depart- ment along the coast are hereby devoted to the payment of the said amortization for which purpose 40 per cent of the net profits shall be utilized, except in the mine known as "Flor del Deiserto," con- cerning which provision is made in the ensuing article. "Fourth. The aforesaid mine called "Flor del Desierto," together with one other of the government mines to be selected by the party concerned, are hereby devoted to the payment of the interest claimed as due, amounting to 170,000 bolivianos prior to December 18, 1875, 3-rid 70,000 bolivianos for the year now expiring. In the mine called "Flor del Desierto" the quota due the Government and applicable to the payment of this amortization shall be 50 per cent of the net proceeds, and in the other mine it shall be 40 per cent, as in the remaining mines granted. The surplus remaining after the pay- ment of this interest shall be applicable to the amortization of the capital acknowledged as due, as provided in clause 3, it being a con- dition that if one or both of the concessions produce nothing or little, then this obligation and every claim to said interest due shall be finally canceled. "Fifth. The operation of the mines of the Government let as con- cessions in the foregoing article shall be subject to the contract con- cluded on this date on the subject, the interested party being per- mitted to assign these rights and this compromise to such persons or companies as he may deem suitable, giving the notice thereof to the Government." " a I Appendix, p. 9. 40898 — 10 8 Sub-Point A. The estacas of instruction had under Bolivian law a due, proper, and legal existence and the Executive of Bolivia was duly, properly, and legally authorized and empowered to grant such rights, titles, and interests as were granted to Wheelwright under the contract of December, 1876, and this conclusion is undisturbed by the Chilean contention regarding " revindication." Prefatory Summary. The discussion below fully establishes that the government estacas had a legal existence. This is shown, first, by the fact that it was under the Spanish mining law a long and well recog- nized right of the Sovereign to have set apart for him a royal mine next following those of the discoverer. This appears from Law XI, Title XXVIII, III, Partidas (1263); the Pragmatica of Don Alonzo XI, 1383; the Recopilacion de Castille, Don Phillip II (1553) ; ^^d the Laws of the Indies Book VIII, Title XI, Law II (Don Phillip II at Madrid, May 26, 1873; at El Pardo, Oct. 17, 1575; Don Phillip III at Madrid, Feb. 6, 1613). These provisions became incorporated in the mining law of the Spanish colonies, and so became part of the mining law which was in force in Bolivia at the time that country became independent. See Introduction, p. XXIII "Le Nueva Legislacion de Minas de la Repiiblica de Bolivia." See also the work of Jorje Rodriguez Cerda, entitled "The Estacas of Education of the Government of Bolivia." The Supreme Court of Bolivia has traced out the history of the gov- ernment estacas in this same manner. Moreover, the decree of July 23, 1852, which has been variously considered as practically codifying existing law or as creating the law regarding government estacas, has been pronounced consti- tutional by the Supreme Court of Bolivia and under that and various supplemental decrees, the Executive of Bolivia had ample authority to make the Wheelwright contract. The legal existence of these estacas in the Bolivian Littoral was in no wise effected by the contention of Chile, that in assuming 114 Sub-Point A.) The Case of the United States. fi 5" possession of the Littoral in 1879 it merely "revindicated" that territory, because it is evident from the early history of the Span- ish colonies and the application thereto of the doctrine of Uti possidetis of 18 10; from the constitutions of the Republic of Chile of 1822, 1823, 1828, and 1833, which latter constitution appears to have been in force until 1887-88 ; from a formal public treaty nego- tiated in 1844 between the Republic of Chile and the Government of Spain; from the treaties of 1866 and 1874 with Bolivia; and finally from the writings of various authors of recognized standing and repute — that this contention as to "revindication" is not well-founded in fact or in law; and moreover, even if it were well- founded, yet the rights of Bolivia in the littoral under the treaties of 1866 and 1874 ^^s such as adequately to authorize that gov- ernment either as a de jure or de facto government to enter into the Wheelwright contract of 1876 in such a way as to make that contract binding upon the Government succeeding to the sov- ereignty of the Littoral. Discussion. Origin of the Government Estaca. — Early Laws. — ^The policy of the Spanish law, so far as it affects the question under discussion, was in general terms announced and defined in Partida (1263, III, Title XXVIII, Law XL), in which, in discussing " In what things Emperors and Kings properly have seigniory," it was laid down that— "The revenues of ports, and the port duties (portadgos) which the merchants pay for the things which they export and import, and the rents of salt-works (salinas) or of fisheries, and of iron works (ferre- rias,) and of other metals, and the taxes and tribute (pechos y tributos) which individuals pay, belong to the emperors and kings; and all these things were tacitly granted (otorgadas) to them in order that they might have wherewith to maintain themselves with dignity in their expenditures; and wherewith to protect their lands and their kingdoms, and to carry on war against the enemies of the faith ; and in order that they might exempt their people from paying to them heavy taxes, and from other grievous burthens." (Hal- lack's Mining Laws of Spain and Mexico, p. 3.) In the Pragmatica of Don Alonzo XI, 1383, the same subject is dealt with as follows: "Right of ihe Kings in mines of gold, silver, and other metals, salt waters and springs; and prohibition to work them without a royal license. "All Mines of silver, and gold, and lead, and of any other metal whatever, of whatsoever kind it may be, in our Royal Seignory, shall belong to us; therefore, no one shall presume to work them without ii6 United States vs. Chile. — Alsop Claim. [Point ii. our special license and command; and also the salt springs, basins, and wells, which are for making salt, shall belong to us; wherefore, we command that they revert to us with the produce of the whole thereof; and that no one presume to intermeddle therein except those to whom the former kings, our predecessors, or we ourself may have given them as a privilege, or who may have held them from time immemorial." ' (Op. cit., p. 4.) In the Recopilacion de Castilla, of Don Phillip II (March 18, 1553). — denominated by Gamboa "The Old Code," it was pro- vided in Article 22 as follows: "Art. 22. Also, we ordain and command, that any person who shall have discovered, or who shall discover, a new Mine, and shall have made registry as directed in the preceding ordinance, shall enjoy a space of one hundred and twenty varas in length upon the vein, and sixty in width; and if he should wish to measure out the said space of one hundred and twenty varas, and sixty varas, across the vein, he shall be at liberty to do so, and he may do it in such manner as to him may appear expedient ; provided that he does not leave the fixed stake, and it shall be without injury to any other person, or persons, who may be on either side of him, and who may hold Mines opened and registered before him; and that, at the stakes of each first discoverer, one Mine to he left for us of the same dimensions as his own; and provided, that in the staking out and altering of boun- daries, and in all else, there he observed in the Mine, or Mines, which they shall leave, and mark out to us, all the provisions of these ordi- nances, in the same way and manner as they are to be observed and com- plied with by all persons who shall take and shall have Mines; and those who, after the first discoverer, shall have taken Mines, or who shall hereafter take them, respecting such Mine which for us is to he left at the stakes of said first discoverer, may proceed to take and work their Mines, and each of the Mines taken after the said first discoverer has taken his, and ours has been taken, shall be one hundred varas long and fifty wide, which space they may take across the vein, or as to them shall seem best, provided they do not leave the fixed stake, and do not prejudice a third party." (Op. cit., p. 25.) It was provided in the " Laws of the Indies, " Book VIII, Title XI, Law II (Don Phillip II at Madrid, May 26, 1573; at El Pardo, October 17th, 1575; Don Phillip III, at Madrid, February 6th, 1613): ' ' That the Mines of the King may he worked, leased, or sold, as may he. most expedient. "We grant to the Viceroys and Praetorial Presidents power and authority, if they consider that any of our Mines of silver, gold or quicksilver, discovered in their districts, cannot be conveniently worked on our account, and that it will be more advantageous expe- dient and profitable to lease or sell them, to so lease or sell them, as may be most advantageous and beneficial to our Royal treasury. And inasmuch, as there are other Mines which belong to us and are Sub-Point A.] The Case of the United States. 117 not worked, although very rich, and from which, if they were leased or sold, we might derive profit, and as it will be well that some suit- able means be adopted for this purpose: — We command the Vice- roys and Presidents, that, having informed themselves of the quality and richness of each one, they proceed to work, lease or sell them, as may best promote the increase of our Royal Treasury, and that they render an account of the whole to the Council of the Indies." (Op. cit. 164.) It will be observed from the above that certainly beginning with the Ordinances of 1563 — "The Old Code" — it was the law of Spain and of her dominions generally that adjoining every mine which should be discovered and marked out by any private person there should be located another mine belonging to the King. This law, as has just been pointed out, was included and made a part of the Ordinances of Peru, and these latter, ordinances, together with certain portions of the codes applying to Mexico, and to the Span- ish dominions generally, constituted the mining law of Bolivia at the time Bolivia separated herself from the mother country and continued to be the law of Bolivia from that time until August, 1852, with the exception of the period from 1835 to 1836, during which time a special code was in force in that country. Opinions of Commentators. — The sources and antecedents of the Mining law of Bolivia are set forth as follows in an introductory essay in Dr. Melquiades Loaiza's work " Le Nueva Legislacion de Minas de la RepfibUca de Bolivia," XXIII: "The Ordinance of 1584, which was also called the 'Ordinance of the New Pamphlet,' was ordered to be observed in the Indias, as is shown by Book IV of the Recopilaci6n de Indias, without preju- dice to the local laws of Peru, which, collected in a Volume with others of different subjects, formed Book III of the Ordinance of Peru; so that all these laws concerning mines were in force in the Indias. "Said Ordinances of Peru consist, — "I. Of the compilation of the ordinances of mines and mining of Peru, which is composed of those issued by the Viceroy Don Francisco de Toledo, at La, Plata, February 7, 1574. "II. Of those issued by the Viceroy Don Garcia Hurtado de Mendoza, Marquis de Canete, on March i, 1593. "III. Of the ordinances, additions and amendments which Licenciado don Juan Diaz Lupidana, a Judge of the Audiencia of lya Plata, Magistrate of Charcas, and Visitor General of Mines and Mining, under commission of the Viceroy Don Luis de Velasco, made on June 2, 1598, to the ordinances of the Marquis de Canete, which the Ordinances 15 of I^upidana, Title 13, together with those of the Viceroys his successors approved and confirmed in relation to everything not in conflict with those made by him (Lupidana) : the approving order is dated August 31, 1599, at Ciudad de los Reyes. "IV. Of those which, as has been said, the same Viceroy Velasco made concerning the Petition for and registration of any mines what- ii8 United States vs. Chile. — Alsop Claim. [Point ii. soever by_ reason of abandonment dated at Los Reyes, April 30, 1632, the order of July lo, 1603 being pertinent. "V. Of any other provisions of the subsequent Viceroys, such as Ordinance 17, Title VII, dated August 18, 1623, and Ordinance 18 of the same title, dated March 18, 1684: in fine, "VI. All other Royal Cedulas confirmatory of the privileges and ordinances of the miners which come down as late as 1680. "The compilation was made by Licenciado don Tomds Ball est eros by order of the Viceroy, the Duke de La Plata, Melchor de Navarro y Rocafull, having been published in Lima, by don Joseph de Con- treras in the year 1685. "In New Spain, in the meantime, only the ordinances of Castile were observed; but as it was afterwards seen that they were insuffi- cient to cover the new minerals, a careful reform thereof was under- taken which was given out in a pamphlet destined particularly for Mexico, with an order that it be adopted in Peru and Chile in so far as might be possible^ through its pertinent declarations and repeal- ing the ordinances of Peru in so far as they were in conflict therewith and with regard to matters concerning which this pamphlet made provision. "Don Francisco Javier de Gamboa, who had conducted in the Audiencia de Mexico the famous suits concerning mines, is the commentator of the Ordinances of New Spain. His work which has been of so much service to us to illustrate our comments was pub- lished in Madrid in the year 1761. Not only does he take care to make a learned and clear explanation of the laws, but he also treats concerning ownership and measurements of mines and puts in a clear light documents referring thereto. He makes, moreover, an explanation, although brief, of the Ordinance of Peru which because they have not been issued in a codified form we have had to cite with reference to the extract from Escalona in the Gazofilacio and to Garcia Calderon in his Dictionary of Peruvian Legislation, following in a few instances the citations of Gamboa and Cobo. "The Ordinances of Mexico and Peru were in force in Bolivia until November 13, 1834, the date on which the Mining Code sanc- tioned by Congress in that year was promulgated. Very soon its improprieties and defects were noted, wherefore its force was sus- pended on-October 5, 1846, a commission being named to formu- late a new Code. In the meantime and as the law of November II, 1839, afterwards provided, the old Ordinances came again to be in force. "A new project having been published in the periodical El Calaje of Potosi, the national convention by law of October 6, 1851, author- ized the Government to promulgate it having first obtained the report of the Supreme Court of Justice. The modifications which seemed proper in the judgment of that Tribunal having been made, and those which the Government suggested having been considered, it was put into effect by the law of September 10, 1852, having repealed the Ordinances in conflict with it." Later in his work. Dr. Loaiza, in commenting upon article 37 of the Mining Code of 1880, says: "The estaca mines of the State date from the colonial epoch. In New Spain (Mexico) Ordinance 14 of the 'Nuevo 'Cuaderno' which Sub-Point A.) The Case of the United States. 119 corrected old ordinance 22, directed that there be designated to His Majesty one mine next following that of the discoverer; but Gamboa, together with Jose de Saenz, feels that it fell into disuse because of the difi&culties and obstacles of a varied nature (See paragraph N of No. 7 of Article i of this law)." In Peru, the ordinances which designate an estaca for, the King, were in full force, as Escalona states in his " Gazofilacio" , pages 103 and 112. "Nevertheless, Escalona himself (page 1.04) calls attention to the propriety of the sale of said mine supported by reasons worthy of serious consideration; and in a cedula of the Viceroy, Don Fran- cisco de Toledo, of October 17, 1575, said sale at Public auction was suggested." The source and antecedents of the mining law of Bolivia have also been discussed by Enrique Mallea Balboa in the introduction to his work "La Legislacion Minera " (p. ix), in which that learned author has set forth the following facts : "The Ordinances of 1584, known as the ordinance of the 'Nuevo Cuaderno'; The Ordinances of Peru, consisting of various orders promulgated by the several viceroys ; and the Ordinances of Mexico, the observance of which in Peru was ordered by means of their respective 'declarations'. "These, briefly stated, were the Spanish and colonial laws that obtained in Peru. When the Republic of Bolivia declared itself free and independent, it lost no time in framing its own legislation in every branch of the law. "The Ordinances of Mexico and Peru, nevertheless, prevailed until 1834, when the defective code of mining, which remained in force only until 1836, was promulgated. The old ordinances, which were declared to be in force by the law of November 11, 1839, were observed until 1852 when a new code, which wa's in operation until 1880 and has remained in operation as affecting the old concessions, was promulgated." In a careful and learned essay by Jorje Rodriquez Cerda upon "The Estacas of Education of the Government of Bolivia" — written with special reference to the question ' ' Is the Government of Chile by the fact of conquest and revindication bound to respect the contract which the North American citizen, John Wheelwright, made with the Government of Bolivia concerning the exploita- tion of said estacas ? " — the writer quotes, with the introduction and " Article N: To which is added the mine (of 60 varas in those of silver and 50 in those of gold) which must be reserved for His Majesty together with the mine of the discoverer, the latter swearing that it is amongst the richest in accordance with the ordinances of Peru which conform to the ancient ordinances of Castilla, although it is better to sell it or rent it, as is provided, because oi the fact that the ore is of a low grade; and although in New Spain this designation of a mine for His Majesty is not put into practice, nevertheless, a fifth or a tenth, which is the recognition of the Sovereign, is paid, establishing the fact that in their origin all metals belong to the Royal patrimony. (Loaiza's note.) I20 United States VS. Chile. — Alsop Claim. [Point n. comment given below, the words of Don Pedro Nolasco Cobo as follows : "'The beginning of mining legislation," says Don Pedro Nolasco Cobo, in his Manual of Mining published in 1854, 'does not antedate the second half of the 14th century, but^rom its origin to the present, it has continued to follow, step by step, the development of ideas and progress, shaping itself to the new circumstances and disen- tangling the innumerable difficulties which each day the interest occasions. "'In fact, the most ancient monuments which we have upon this subject in our legislation belong to the edict of Alcali (Ordena- miento de Alcala), published in the year 1348. Laws 47 and 48 of Title 32 of this Code declared that all the mines of silver, gold, lead, or any other metal as well as the deposits, springs and wells of salt water, belong to the royal domain and they forbade, therefore, that they should be worked without the permission of the Sovereign. "'Before this time, in the judgment of the Spanish historians, mineral riches must have followed the feudal condition of the land wherein they were found, and belonged, if they were in freeholds, to the proprietor, or otherwise to the fuedal owner; since although in Spain the feudal system will not be found with all its character- istics as it is in other European nations, it cannot be denied that it existed in a clear and determined manner. The exploitation of the rich mines of Iberia, the important subject matter of the codi- fication of the Cartagenian and Roman conquerors, up to that time have been limited to a very narrow scope since no trace is to be found of their existence during such a long period and since the different codes and laws successively promulgated do not treat of them either in the assignment of the rights to which they might give rise or even in determining, as did the later ones, and the ancient Roman law, the portion of their proceeds which had to be paid in to the Treasury of the monarch. "'In the wise Code of the "Partidas' we find scarcely one dis- position more than the other made to declare either the inalien- ability of the sovereign's ownership over the mines or the right which he had to. the proceeds of the salt deposits and mines of iron or other metals.'" (Law 5, Title is, Part 2.) (Law 11, Title 28, Part 3.) ■ '"By the law which today is No. 2, of Title 18 of book 9 of the 'Novisima Recopilacion,' King John the First in 1787 granted to the temporary and permanent inhabitants of the Kingdom, the right to search for, to examine and to excavate mines of gold, silver, mercurv, tin, stones and other metals in their own land and in those belonging to others with the permission of the owner, provided always that they be obhged to give to the crown two-thirds of what they might extract, after the payment of expenses. '"But such a disposition which, taking into account the state of those communities, was really intended to give impetus to the industry, could not produce in practice the good results which were expected of it; either by resistence of the Nobles, owners of the territorial riches, opposed to everything which in their judgment could damage their interests, or (if we are to believe the preamble of Sub-Point A.] The Case of the United States. 121 the law 3, Title 18, Book 9, of the Novisima Recopilacion) , because of the prodigality itself of the monarchs. "'It was necessary that the energetic and incomparable will of Phillip II should come to reincorporate by new provisions all the mines under the ownership of the crown, not 'for the purpose of exploiting them on account of the latter, but in order that private individuals and even strangers might discover and work them. "'This king at various times concerned himself for the interests of the mining industry regarding special methods of acquiring private ownership in mines, and of the manner of working them after they had been incorporated into the crown, there to guarantee the enjoyment of this ownership, to better the former governing disposition, and to create special judges and tribunals who should see to the precise fulfillment of these dispositions, or finally, to fill the omissions and amend the defects of the former owners, going so far as to grant to this important industry the benefit of the special legislation. " 'He endeavored not only to overcome the resistance of the pos- sessors of the territorial wealth, but also to stimulate the mining industry and to foment therein a not inconsiderable source of fiscal revenue. " 'Thus it is that these laws defined the taxes and the imposts with which, in accordance with the quality of the mines and of the works to which they should give rise, they had to. contribute to the crown; they established the necessity of a registry, excavation and posses- sion in order to fix the priority, the bases of the right of property'; they provided rules for the exploitation and they imposed against those who did not observe them penalties which were so severe as to entail forfeiture; they prescribed the manner in which the mines had to be staked or marked and their dimensions; they conceded to the miners the right of making use of the public and municipal pastures and woods ; and finally, they prescribed that in case of litigation, the possessor should continue working the mine and render an account of its proceeds. ' "All these laws, which at the beginning were enacted only for Spain, were made operative in America by Law 3, Title I, Book 2 of the 'Recopilacion de Indias.' So that when they were incorporated by the orders of Phillip II, they were granted to his subjects resident upon the new continent under stated conditions. "One of these conditions was that which Ordinance 12, Title I, of the Ordinances of Peru, had created in favor of the c.rown and which was situated between the ' Descubridora ' and the 'Salteada' which were the first and second claims of the discoverer and which remained in force when the laws of the Metropolis were ordered to be executed in America. "Later, when the observance in the Vice-Royalty of Peru was ordered of the mining ordinances of New Spain, for by the royal order of December 8, 1785, there was expressly ratified in the 32nd declaration, the existence of the estaca reserved to the King by ordinance 18 of those of Peru, with the only difference that it was marked as next following those of the discoverer. "This right, created in favor of the crown, continued until the monarch himself renounced it by royal cedula of December 10, 1791, 122 United States VS. Chile. — Alsop Claim. [Point n. for the benefit of the discoverers as a reward for their constancy and labor to serve as a stimulus to new discoveries. "From that time, the reserve created in favor of the crown remained forever repealed, and continued only for the benefit of the discoverers, until the independence of Bolivia having been pro- claimed, the ancient ordinances especially those of Mexico applied to Peru, were declared to be in force by the Supreme order of August 5, 1829. So that at the date of the decree of 1852 they were only allowed to the discoverers the claims which articles i and 2 of Title 6 of the ordinances of New Spain conceded to them." Finally, it may be observed that the Supreme Court of Bolivia, in passing upon the question of the constitutionality of the decree of July 23, 1852, traced out the history of the government estaca in substantially the same way.'' Law of Bolivia. — It would seem from the above discussions that while the Decree of July 23, 1852, may be properly considered as a codified expression of the existing law, it was nevertheless perhaps the first express Bolivian statutory enactment upon the matter. The decree reads as follows : [Taken from "Coleccion Oficial de Leyes, Decretos, Ordens, &c.," for 1852.] " Decree of the 23d July, 1852. "The Constitutional President of the Republic, considering: " I . That, according to the principles of universal Jurisprudence and the existing Statutes of the Republic, every description of metallic lode found in the territory of the nation belongs to the dominion of the State, not conceding to the discoverers thereof more than three interests or 'estacas,' and the rest remaining public property. "2. That the want of funds of Instruction to fulfil its important and varied requirements, and the failure of some of its branches of income, impose on the Government the duty of searching for means of adjusting both without having recourse to the increase of taxes, ever prejudicial to the citizens. "Decrees. "Article i. In every mine, or lode of silver, gold, or other metal whatsoever, the interest or 'estaca' following those which may correspond to the discoverer or denouncer, according to the existing statutes, is applied of full right to the Treasury of PubUc Instruction. "2. The administrators of these funds in the Capitals of Depart- ments and the Governors in the Provinces shall take possession of the said estaca, giving account to the Prefect of the Department, and the latter to the Government, of the number and quantity of estacas adjudicated to the Department. "3. In consideration of the advantages which the sale or lease of the estaca might produce in favor of the funds of PubUc Instruction, the Government shall cause it to be sold or rented, in accordance with the formalities established by law. "' I Appendix, p. 348. Sub-Point A.] The Case of the United States. 123 "4. Only the administration of the proceeds of the adjudicated estaca belongs to the respective departmental Treasury, the Govern- ment reserving to itself, in consideration of the national derivation thereof, the right of applying them or expending them on the Estab- lishments of Public Instruction of the Department that it may judge most conyenient. "5. This decree shall be submitted to the next I^egislative Cham- bers. "Let it be printed, published and circulated. "Given in the Palace of Government, in the illustrious and heroic Capital, Sucre, the 23d July, 1852, the 44th of the Independence and 4th of Liberty. "Manuei. Isidoro Belzu, " (Signed.) Rafael Bustillo, "Minister of Public Instruction and Foreign Relations." "' , In view of what has been already set forth above regarding the origin of this law, its antiquity and at one time all but universal recognition in Spanish countries, it seems unnecessary to dwell upon the legality of the decree, further than to quote the judg- ment of the Supreme Court of Bolivia which, on October 28, 1872, pronounced the decree both effective and constitutional. "Considering the complaint filed by Don Jos6 Santos Munoz Chavez concerning the unconstitutionality of the decree of July 23, 1852, and the answer of the Attorney General which opposes it, because there has not been raised in conformity with Article 82 of the Constitution and 7 of the Law of Judicial Organization (of 1857), any concrete question that must be decided by applying or not applying the decree alleged to be unconstitutional; "Considering the amendment of the complaint so as to request the adjudication of the government estaca mine upon the vein of Cibelos Cut by the tunnel of San Bartolom^ in the mineral district of Aullagas which was refused because of said decree which is now alleged to be unconstitutional and, furthermore, as having been repealed; and the answer of the Government Attorney insisting upon the want of foundation of the complaint, and asserting the constitutionality and existence of said decree; "Considering the annexed record in which appears the petition that Chavez made for the adjudiciation of said estaca, the oppo- sition of the Minister of Public Works in representation of the Treasury interests and the order denying the same, issued by the Sub-Prefect of Chayanta; and "Considering that the functions of the Prefects and Sub-Prefects, when they intervene in conformity with Article 70, 323, and others of the Code of Mines in the registries and concessions of claims because of discovery, or in 'the allotment of mines, because of denouncements founded upon abandonment or others, are of a purely administrative nature, and are not immediately subjected except to .the examination and criticism of their respective superiors in the administrative departments; but that when said authorities, o II Appendix, p. 270. 124 United States vs. Chile. — Alsop Claim. [Pointn. exercising the aforesaid functions, injure private rights or interests guaranteed by the' law or by any title whatsoever, and provoke claims, or when the claim of a petitioner for mines which has been submitted to them, gives rise to the opposition of third per- sons, their jurisdiction ceases and that of the tribunals of justice commences in conformity with Articles 2 of the law of September 30, 1 871, and 333 of the aforesaid Code, without necessity of taking an appeal to the administrative superior; that, therefore, the Prefects and Sub-Prefects cannot, without committing an excess of jurisdiction, decide the controversies of a contentious char- acter which may come before them because they fall within the jurisdiction of the ordinary tribunals; Considering, as a fact, that the petition of Don Jose Santos Munoz Chavez for the adjudica- tion of an estaca in the vein of Cibelos was answered by the Gov- ernment Attorney, Dr. Estivaris, who, in representation of the pub- lic interest, opposed the concession maintaining that the estaca requested belonged to the State, that from that moment the ques- tion became a judicial one as it continues to be up to the present; Considering that Articles 82 of the Constitution and 7 of the Organic Law of the courts, confer upon the Supreme Court the power to decide matters of pure law, the decision whereof depended upon the constitutionality or the unconstitutionality of the laws; that neither the aforesaid articles nor any provision gives juris- diction over such matters to the lower tribunals of the first and second instance, so that the Supreme Court only intervenes in an appeal with regard to their nullity as it does in common lawsuits; that on the contrary said articles constitute a sole and exclusive attribute of the Supreme Court in order to guarantee the consti- tutional order; that the necessary submission to the examination and decision of the lower courts of matters which cannot be decided without involving the respect for the Constitution and legislative order would entail the division with them of a high political function which is peculiar to it, and even enable the interested parties to prescind from its intervention, obeying the judgments of the first. and second instance; Considering, therefore, that in the complaints concerning the adjudication of mineral interests when they have been encumbered by the opposition of the Ministry of Public Works or of any person, and have been converted into a contentious admin- istration or judicial discussions which must be decided in accord- ance with a law whose unconstitutionality is alleged, they may be legally instituted before this court without previous decision of the Superintendent of Mines or of the Supreme Government and without the intervention, in turn, of the lower courts of justice in accordance with their scale of jurisdiction; It is declared that the complaint of Don Jos6 Santos Munoz Chavez has been made in conformity with the laws before mentioned. Considering, on the other hand, that although Articles 82 of the Constitution and 7 of the Organic Law appear to textually provide the case in which the unconstitutionality of the law may alone be discussed, since they confer jurisdiction over the lawsuit upon its merits for its first and final decision exclusively upon the Supreme Court, the latter must, in conformity with the spirit of said articles, decide also all the questions of law intimately connected with the complaint and therefore could not, without changing the nature of an indi- Sub-Point A.) The Case of the United States. 125 visible action, refrain from deciding, in fact, the existence or repeal of the decree of July 23, proposed in a complex manner and which is inseparable from the question of its unconstitutionality; Considering, in fact, that the mineral deposits of the Indies, incor- porated into the patrimony of the Kings as royal perquisites of the crown, by law 3, Title 18, Book 9, of the 'Novisima Recopila- cion' were granted to their vassals in .property and possession in the terms and without other conditions than those indicated in Chapter 2, Second Ordinance of those of Mexico; but that such privilege did not repeal the restriction established by Ordinance 18, Title I, of those of Peru in accordance with which in every registry, one claim must be reserved for the king, situated between the 'Descubridora' and the 'Salteada' which were the first and second of the person making the registry; Considering that when by the royal order of December 8, 1785, the observance was ordered in the Vice-Rbyalty of Peru of the Ordinances of Mines of New Spain, there was expressly ratified in the 32nd declaration the existence of the estaca reserved for the King by said Ordinance 18, with the sole modification that the latter must be designated next following the claims of the discoverer; Considering that the independence of the Republic having been proclaimed and up to 1852, mining continued under the jurisdiction of the same ordi- nances and especially those of Mexico, already adopted in Peru and declared to be in force in Bolivia by the Supreme Order of August 5, 1829; Considering that the promulgation of the Code of Santa Cruz, repealed on October 5, 1836 and replaced by said insti- tutions which preceded it, did not introduce any permanent variation in the legislation concerning this department; Considering that no law of the Monarchy nor of the Republic has repealed said Ordinance 18 ratified by Declaration 32 of 1785; Considering that the State of Bolivia and its government having succeeded to the Kings of Spain in all their rights and perquisites inherent to the sovereignty because it had fully assumed its autonomy, the claims of which mention has been made which were reserved in the regis- tries of veins, passed ipso jure to the dominion of the State, the latter continuing in possession of the right in expectancy of obtaining a claim in every discovery; "Considering with regard to the unconstitutionality of the decree of July 23, 1852, issued during the time that Ordinance 18 and said Declaration were in force, that said decree, upon allotting to the Department of Public Instruction one estaca in each registry, did not explicitly provide anything regarding the Government estaca of which mention has been made; that such a silence, in conjunction with that which the other prior and subsequent laws preserve con- cerning the Government estaca, evidently shows that the said Decree did not create a new interest nor segregate a new allotment of those which were subject to the grants to individuals, having on the con- trary, been reduced to implicitly ordering the application to Public Instruction of one claim which already belonged to the private prop-, erty of the nation; Considering that in accordance with the prin- ciples of the Constitution and of the financial law of 185 1, the Execu- tive Power was not forbidden to meet the obligations of a branch of the public service with the rent of a private property of the State 126 United States vs. Chile. — Alsop Claim. [Pointn. which was not being used. Wherefore, inasmuch as there was no question of a legislative act but of an act purely and merely adminis- trative, the fact of empowering agents of the national service in the branch of education to operate the Government estacas without with- drawing them from the Public domain, the Government of 1 852 could, in exercise of its ordinary attributes, reestablish, as it substantially did, a reservation sanctioned by Ordinance 18 which had not been tacitly or expressly repealed, and to regulate its execution without affording a basis for qualifying such measures as unconstitutional. "Considering that with regard to the repeal of the decree of July, 1852 by the subsequent dispositions, that the Code of Mines of 1852, sanctioning the principle of the radical ownership of the nation in all the mines, has granted to individuals, as did the ordinances of Peru and Mexico, the right to work them after obtaining a grant ; Consider- ing that none of the provisions of said Code expressly or tacitly abrogates Ordinance 18, nor the decree of July which put it into effect, and considering that the additional article, embracing only the ordinances, laws and decrees in opposition to the provisions of the Code, has no effect with regard to the aforesaid ordinances, not only because the Government estaca mine can exist without infringe- ment upon the right which the Code gives to petition allotments which do not prejudice third parties who may have acquired them with pri- ority, but also because in the same colonial legislation itself both rights have been coexistent as compatible, that is, the one reserved to the crown and the right of the concessionaries sanctioned by the terms of the ordinance ; Considering, on the other hand, that a doubt, if any should exist, would disappear in the presence of the explicit ratifi- cation of the binding force of the decree of July, contained in the Dictatorial Circular of March i, i860, issued with the legislative power which that Government assumed whose laws are fulfilled and observed by the acceptation of the people as the laws are fulfilled which have emanated from the legislative body ; Considering, upon this same point, that independently of the motives aforesaid, the consistent assembly of 1871, in the law of October 19, has provided for the working and the use by way of lease or co-partnership, of the estacas of the State; considering that such a provision would have had no object if the Mining Code had repealed the decree of July which put into effect the reservation of Ordinance 18 since the State does not possess in a permanent and known manner other mining interests than those reserved by the decree which is assailed. "Considering, therefore, that on his part, Don Jos6 Santos Munoz Chavez has not justified his action proving the unconstitutionality or the repeal of the decree of July 23, 1 852, and that the Ministry of Pub- lic Works has duly shown that said decree was constitutionally issued and is actually in force with regard to mines — "The Supreme Court declares that the estaca mine prayed for by Don Jos6 Santos Munoz Chavez upon the vein of Cibelos, cut by the tunnel of San Bartolom6 in the mining district of AuUagas, can not be granted him because it is a property of the State, recognized by the aforesaid laws. Having been registered, let it be filed. — Sucre, October 28, 1872."" 1 1 Appendix, p. 348. Sub-Point A.] The Case of the United States. 127 It would however appear that, so far as the discussion of the present case is concerned, the question of the vaUdity and exist- ence of the decree of 1852 at the time the Wheelwright contract was concluded, has been finally determined in the affirmative by the finding of the court of first instance in the case of the Jus- ticia. While the decision of this court of first instance in this case was reversed gn appeal, the upper court expressly affirmed the findings of fact and law in the case other than those overruled, of which this latter was not one. The court of first instance in the above mentioned case dis- cussed the validity of the decree of 1852 in the following language: "Considering: i. That the decree of the 23rd July, 1852, in rec- ognizing the dominion of the State over every description of metallic lode which might be found in its territory, enacted that 'in every mine or lode of silver, gold or other metals whatsoever, the interest or estaca following those which may correspond to the discovery or denouncer, according to the existing statutes, is applied of full right to the Treasury of Public Instructions.' "2. That the ordinances to which the decree refers, are no others than those of Mexico, those of Peru, and the ordinances of New Spain, whose observance was prescribed by the Royal Schedule of the 8th December, -1785, which expressly ratified, in the 32d declara- tion, the subsistence of the estaca reserved for the King by the i8th ordinance, ist title of those of Peru, but this having to be measured after the setts of the discovery. "3. That the independence of Bolivia being proclaimed, there was declared subsisting, by order of the 5th August, 1829, the old ordi- nances and especially those of Mexico already adopted by Peru, and which continued in force until the year 1852. "4. That, according to this, the decree of the 23d July, of this year, enacted nothing new respecting the interest which in every mine belong to the State as successor of the Crown; it only deter- mined to what branch of the service the product should be applied^ "5. That, although in the pleadings there is no evidence that the said decree would be submitted immediately to the approval of the I^egislative Chambers, as is ordered therein, there have been pub- lished, after it, various dispositions embodied in laws, decrees, orders and dispositions, which recognize and sanction the legal existence of the estacas destined to public instruction, and regulate their exploita- tion, as, amongst others are the circular of the 2 ist May, i860, which ordered that the decree of the 23d July should be made effective, the decree of the 29th September and 9th October, 1871, respecting the estacas belonging to the State, the law of the 12 th of the same month and year declaring the estacas of instruction to be impre- scriptible, the law of the 1 9th October, of the said year, which empow- ers the executive to celebrate respecting same contracts of letting or for working them in partnership, the law of the 15th November, 1873, which directs that the Government may proceed to take pos- session of them, and many other dispositions which it would be tedious to enumerate. 128 United States vs. Chile. — Alsop Claim. ^ [Point ii. "6. That the constitutionality of the decree being established, and consequently, the legal existence of the estacas of instruction, it is incumbent to know if the decree which recognized that existence has or has not been derogated by the Mining Code of Bolivia, promul- gated on the loth August, 1852. "7. That the first article of the additional ones of the said code establishes that 'all law suits about mines shall be decided by the new code, ajl the other ordinances, laws, decrees and special regula- tions which may be opposed thereto remaining* null and void.' "8. That whatever may be the scope which may be given to this disposition, the derogation of the decree of the 23d July, 1852, will never be discovered in it, because the Code does not contain any disposition which may imply relation with the estacas of instruc- tion, nor did it create a new interest in favor thereof nor suppress the existing one. "9. That, far from this, subsequent thereto, innumerable dispo- sitions were dictated, which, as has been said in the fifth considera- tion, had for their object either to recognize and sanction the rights of instruction with respect to the estacas, or to regulate conveniently the exploitation thereof, it being fitting to note, in addition to those already indicated here, and, amongst others, the decree of the 7th March, 29th May and 19th September, 1872, by which tenders were invited for the working of the estacas in conformity with the already cited laws of the 19th October, 1871, the order of the 13th February, 1874, in which notice is given to the Public Ministry to revindicate the estacas mines of the mineral district of Aiillagas, the order of the 24th of the same month and year, which is given to the Attorney- General in order that he may take possession of the said estacas, the circular of the 21st April, 1874, which contains instructions for the same object and with respect to the mining districts in general, and lastly, the plaintiff on the 23rd December, 1876. "10. That it is impossible to presume that, with reference to the decree of the 23d July, there should have been in the long space of time elapsed since 1852, so considerable a number of laws, gubernative dispositions and judicial decisions, if.it had been derogated by the Mining Code. "11. That the constitutionality of the decree referred to, and its actual obligation being established in virtue of the preceding con- siderations, it is necessary to ascertain, in succession, the estaca which corresponds to instruction, which, according to the defendants, would be only the fourth in continuation of the three which were measured to the discoverer." ° Power and Authority of the Bolivian Executive. — That this decree of 1852 was always considered as constitutional and operative, both before and after this judgment of the Supreme Court, and that under it the Bolivian Executive was fully authorized to nego- tiate and conclude the Wheelwright contract of 1876 have been, it is believed, already sufficiently discussed under Point I, Sub- oil Appendix, p. 111-113. Sub-Point A.I The Case of the United States. 129 Points A and B supra, to render unnecessary any further discus- sion of this point at this time." It is submitted that these various provisions of the law of the Spanish colonies and of Bolivia, as well as the commentaries on these various laws, sufficiently establish the fact that the Decree of July 23. 1852, was a constitutional decree and that it embodied in it principles which had formed a part of the mining law of Spain from a very early period. It is also evident from the note on this page that under this law numerous other decrees and laws have been passed for the purpose of carrying the provisions of the same into effect. It is submitted that no valid objection can be raised to the above conclusions. " It might however be noted by way of addition to what was said under Point I supra that in his essay regarding the Estaca-Mines of the Public Educational Fund of Bolivia, already referred to above, Jorje Rodriquez Cerda, lists the various laws, decrees and Executive acts promulgated by the authorities of Bolivia for the opera- tion and enforcement of this decree, as follows: " Year i860. — A circular concerning the fulfillment which must be given to the decree of July 23. " Year 1871. — The decree of September 29, upon the estacas belonging to the State. " Year 1871. — The circular of October 9; explanations of the decree upon estacas of the State. " Year 1871. — Resolution of October 12. — The estacas of the State are not subject to prescription. " Year 1871. — The law of October 19. — General authorizations to promote the advance of the country. * * * * 5 th: To enter into contracts for the renting or exploitation in partnership of all the estaca mines belonging to the State in the mining districts of the Republic. " Year 1871. — The decree of November 2. — Estacas of the State. — An invitation to work them in partnership. " Year 1872. — Decree of March 7. — The term is prolonged for the auction and work- ing thereof. " Year 1S72. — Resolution of March 12. — Mining district of AuUdgas. — ^The outside workings of the Company "Arteche." " Year 1872. — Resolution of May 13. — ^The mineral district of Aulldgas; a new commission for its measurement and delimitation. " Year 1872. — Decree of May 29. — The auction called for by decree of November 2, 1 87 1, and explained by that of March 7, last, for the working of them is extended until the first of the coming October. " Year 1872. — The decree of September 19. — New bids are asked for their working. " Year 1873. — The law of November 14. — They are sold at public auction. " Year 1873. — ^The order of November 14. — Publication of the foregoing law and of the following one. " Year 1873. — ^The law of November 15. — The Executive is ordered to take pos- session of them. " Year 1874. — Order of February 13. — Aulldgas. — Prohibitions against the Minis- try of Public Works concerning the recovery of the estaca mines of the Treasury 40898 — I o — —9 I30 United States -vs. Chile. — Alsop Claim. [Point n. Revindication. (i) The Contention of the Government of Chile. — At this point it is perhaps well to dispose of a question to which it would appear the Government of Chile is not disinclined to attach some importance in connection with this case, namely, the appar- ent contention of the Government of Chile that the case is in some way affected by the theory which that Government has put forward concerning the alleged "revindication" of the Bolivian Littoral in which were located the mines granted to the conces- sionaries under their contract of 1876. From the statements made it would appear that the Government of Chile intends to put forth the claim that the Littoral always belonged to Chile as of right ; that the possession of Bolivia from 1866 to 1879 was by virtue of Chile's sufferance, which found expression in the treaties of 1866 and 1874 as a cession of territory upon condition; and that this condition having been broken by Bolivia, the territory reverted in 1879 to Chile, its original owner. Waiving for the present the question as to whether or not the rights of the concessionaries in this case would be in any wise Footnote — Continued. " Year 18^4. — Order of February 24. — AuUdgas.^Authorization to the General Treasurer with regard to the taking possession of the fiscal estaca mines. " Year 1874. — Resolution of March 10. — The time for 'arbitrating the Lopez Gama case is declared to have arrived. " Year i8'/4. — Resolution of the 26th of March. — AuUdgas. — ^The Government can- not modify nor revoke the decisions issued by the tribunals. " Year 1874. — Circular of April 21. — Prohibitions concerning the taking posses- sion of them. " Year 1874. — Order of May 20. — The Prosecuting Attorney of the District of Cochabamba is named the defender of the State before the tribunal of arbitrators. " Year 1874. — Resolution of May 20. — An explanation relative to the arbitration " Year 1874. — Order of May 27. — AuUdgas. — Instructions to the General Prose- cuting Attorney concerning the mode in which he should demand possession of the estaca mines of the Treasury. " Year 1874. — Resolution of June 12. — Various points of the questions propounded by the arbitrator judge, Sr. Santibanez, are decided. " Year 1874. — Resolution of July 17. — Disapproval of the conduct observed by the Prosecuting Attorney of the District of Cochabamba as defender of the State before the tribunal of arbitrators. " Year 1874. — Resolution of June 28. — AuUdgas. — The measurement of the estaca mines of the State is made by the Engineers Harris and Minchin. " Year 1874. — Order of July 31. — The initiative to propound questions with respect to the arbitral decision. "Year 1876. -^Jie-cx^e. of February 21. — ^The action relating to them is returned to the Ministry of Public Instruction. " Year 1876. — Resolution of December 23. — Conditions under which their exploi- tation should be conducted, and, finally, " Year 1876. — Resolution of December 24. — Alsop & Company. — Recognition of their debt and the conditions of its amortization." Sub-Point A.] The Case of the United States. 131 affected were this theory of the Government of Chile well founded either in fact or in law (and the Government of the United States contends that even in that event the rights of the concessionaries under the contract would not have been in any way affected) , it is perhaps well to look into this question, though it must be only cursorily, in order to determine whether or not the theory of revindication is well founded under all of the attending facts and circumstances. This discussion may be properly prefaced by quotations showing the position of Chile (so far as that position may be gathered from published writings) upon this question of revindication, as it affects the position of the claimants in this case. The first time that this doctrine seems to have been invoked in an effort to support the position assumed by the Government of Chile in this case was in 1882, when the court at Antofagasta in delivering its opinion regarding the case of the Amonita, hereafter discussed at some length, made the following statements: "Considering; i. That the territory comprised between the 23d and 24th parallels of south latitude, being occupied on the plea of revindication, by the Chilean arms, and the rupture of the treaty of the 6th August, 1874, being approved by the law of the country of the 3d April, 1879, Chili recovered the dominion over the National possessions which Bolivia had acquired in virtue of that treaty. "7. That Mr. John Wheelwright, not having a real right over the estacas of Instruction ceded by the said contract, nor that which the defendant possesses with the name of 'Amonita,' having ever been delivered to him, he cannot shelter himself, even under the doctrine of those authors of the Theoretical Right of Nations who, recognizing the positive principle of real right which authorizes the conqueror in a war to appropriate all the possessions which form part of the public dominion of the hostile State, nevertheless counsel the Nations who conquer a territory to' respect the real rights constituted in fiscal possessions of the Nation whose the conquered territory is; nor less to make good his 'anticretic' and imperfect title against a private person, the possessor of a mine, which, with all the others of the Littoral of the North, came to be National possessions of the Re- public of Chile, by the revindication and effective occupation of the said Littoral and to be governed by our Mining Code."" Some two weeks later the court of second instance at Serena made the following statement regarding the same point, in passing upon the questions involved in the suit instituted by Wheel- wright, for the possession of the mine Justicia: "6. That the plaintiff has asked that effect may be given to that contract celebrated in Bolivia and with the Government of that Republic, and supporting his claim on the privileges which the laws <»II Appendix, p. 124. 132 United States vs. Chile. — Alsop Claim. [Point ii. of that country conceded to the estacas mines called of Instruction when the territory in which the mine treated of it situated has returned to the dominion of the Republic of Chile." "^ More recently the matter has been mentioned in the diplomatic correspondence between the two Governments. The Minister of Foreign Relations of Chile, in his note of April 9, 1908, addressed to the American Minister at Santiago, used the following language: "These guaranties were all the less worthy of consideration on the part of the Chilian Government for the reason that the greater part of them had been given in the form of security on property situated in Chilian Territory which my country regained from Bolivia during the War of the Pacific (Caracoles Mines), while the remaining security was on property three-fourths of the proceeds of which went to Bolivia by virtue of the Truce Agreement (right to certain revenues of the Arica Custom House in which Bolivia had an interest), the remainder being devoted to the maintenance of the Customs service itself. "Therefore, one of these securities of the Alsop claim was given by Bolivia on Territory which was really Chilian, while Bolivia has had almost the entire usufruct of the property on which the other security was given since 1884.." ' Before passing to the next expression upon this point it may not be improper to suggest that these statements, certainly so far as they affect the. disposition of the Arica customs receipts, do not wholly coincide with the facts, as the following brief analysis will show: From the middle of 1880 to the Pact of Truce in 1884, the Government of Chile appears to have received all of the proceeds of the Arica Customs House, amounting roughly to five and a half million pesos. It does not appear that one . penny of this went to the Government of Bolivia. Under the Pact of Truce of 1884, twenty-jive per cent of the total Bolivian customs receipts of the Port of Arica went to the Government of Chile to defray the expenses of collection. (It should be noted that the Government of Peru had, in 1879, undertaken to do what appears to be precisely the same service, first for four per cent and later for five per cent of the customs revenues.) Of the remaining seventy -five per cent of the customs receipts so collected at Arica the Government of Bolivia was required to set aside forty per cent (of the full amount) for the liquidation of claims of Chilean citizens against the Government of Bolivia, and the remaining thirty-five per cent was by the treaty turned over to Bolivia. This latter sum (thirty-five per cent) appears to represent the total amount of the Arica customs receipts that really went into all Appendix, p. 119. 6 1 Appendix, p. 139. Sub-Point A.] The Case of the United States. 133 the Bolivian treasury. It would seem that under this arrange- ment the Government of Chile received directly and indirectly from 1884 up to the Treaty of Peace of 1904, $4,272,037 upon the twenty -five per cent account; $6,835,259 upon the forty per cent account — a total of $11,107,296, or a grand total from 1880 to 1904 of $16,596,387. The concessionaries had an absolute right to such part of this over and above 405,000 bolivianos annually as was necessary to liquidate their debt. Yet it must at this point be added that, notwithstanding this clear right of the concession- aries under their contract; and notwithstanding the Government of Chile had thus stipulated that forty per cent of the customs receipts should go to liquidate the claims of Chilean citizens, and notwithstanding the Government had at this time been repeatedly notified of the Alsop claim, and had been repeatedly importuned to make arrangements for its settlement, and, finally, notwith- standing the Government of Chile has since attempted to estab- lish that Alsop & Co. was a Chilean citizen, not one cent of the customs collected by Chile prior to 1884 and not one cent of the funds thus specifically set aside by the Pact of Truce of 1884 for the liquidation of Chilean claims was ever offered to Alsop & Co. to liquidate their claim and not one cent of said proceeds ever reached their treasury. More recently in a note from the Minister of Foreign Relations of Chile, dated October 15, 1909 (but not delivered to the Legation until November 27th), addressed to the American Minister at Santiago, the following language is used: "The assurances constituted by the Government of Bolivia, in favor of the credit of Alsop & Co., are so much less worthy of the consideration of my country, since the greater part of them had been constituted on property situated in Chilean territory, that my country recovered from Bolivia in the Pacific War (Caracoles Mines) and the rest from property three fourths of the proceeds of which went to Bolivia in virtue of the Truce Covenant (the right to certain receipts of the Arica Custom House in which Bolivia had an inter- est), the other fourth part being destined to the maintenance of the service in the same custom house. So that of the guaranties of the credit of Alsop & Co., one was granted by Bolivia in territory that was really Chilean, and the usufruct of the other has been almost entirely enjoyed by Bolivia since the year 1884. "With these antecedents given it is easy to prove that Chile does not affect any responsibility for the guaranties which the Govern- ment of Bolivia granted in favor of the credit of Alsop & Co.""^ It will be observed that this is but a repetition of the contention made by the Minister of Foreign Relations in his note of April 9, oj Appendix, p. 218. 134 United States vs. Chile. — Alsop Claim. [Point n. 1908,'' and displays equally with that a lack of precise information concerning the real facts attending upon this phase of the contro- versy between the two Governments regarding this claim. To return, however, to the question of revindication. In view of these repeated assertions, which are manifestly incomplete, it is desirable to note the position which the Government of Chile has assumed upon the question of revindication when it was seeking to justify in the eyes of the world the War of the Pacific, upon which it was but entering at the time the statements were made. Under date of February 18, 1879 (within four days after the Chilean troops, without a previous declaration of war, occupied the Bolivian port of Antofagasta) , in a note addressed to the various Foreign Ministers resident at Santiago, the Minister of Foreign Relations of Chile discussed this question in the following language : "Department of the Ministry of Foreign Affairs, "Santiago, February i8th, iSyg. "Mr. Minister. On the 12th of the present month, His Excel- lency the President of the Republic, ordered that Chilian forces should be transported to the shores of the Desert of Atacama, in order to recover and occupy in the name of Chili, the territories she used to possess there before adjusting with Bolivia the boundary treaties of 1866 and 1874. "The treaty of 1866 was annulled and disappeared on the celebra- tion of that which bears the date of the sixth of August, 1874, and this latter has just been abrogated by deliberate and persistent acts of the Government of Bolivia, acts which import not only the com- plete disregard of the obligations imposed upon her by that solemn compact but likewise an insult to the good faith and conciliatory spirit of Chili to which her national honor could not submit. "Having exhausted all the conciliatory expedients which her earnest desire for the tranquillity of South America caused Chili to constantly employ, all the appeals that were directed to her for the fulfilment of obligations legally stipulated in the treaty of 1874 being scorned and disdained by Bolivia, there remained no other resource for Chili but to again plant the flag in the territories of which, she had been owner and to return with it to numerous Chilian and foreign population and to their industrial establishments there established, that tranquillity, that confidence and that welfare, of which they had been deprived by the Bolivian administration. "Chili, who loves the peace of South America almost as much as the tranquillity of her own soil, and whose history and conduct has ever been characterized by temperance and moderation, has been grieved to see, in her relations with Bolivia, her hopes of an ami- cable arrangement destroyed one by one, and herself placed, at last, in the painful necessity of seeking a solution by the aid of force. «P. 132, supra. ,iM Sub-Point A.] .The Case of the United States. . 135 "She would not be, however, completely at ease, if, on taking this step, exacted at once by her conscience, her rights and her own dignity, she did not entertain the most intimate persuasion of find- ing in the calm and enlightened mind of Your Excellency, the most ample and complete justification of her conduct. Having received instructions to this effect from His Excellency, the President, I present Your Excellency's Government a brief and compendious review of the antecedents of the question and of the causes which have occasioned the latest events. "I. "The political emancipation of Spanish America having been established, the new republics did not delay in fixing their atten- tion upon the territories embraced by their respective nationalities and over which the empire of their laws should rule. The same principle that the American Republics had for their limits the same which corresponded to the colonial divisions of which they were formed having been admitted by the various sections of America, it was easy for Chili to know how far toward the North the field extended upon which she should exercise her national activity. "For this purpose it was sufficient to interrogate history, to con- sult the written thought of the Spanish sovereigns, and to examine the acts of jurisdiction which had been the consequences of this manifestation of the supreme will. "This triple testimony does not permit doubt to be entertained that the southern boundary of Chili was, at least, the 23rd parallel of south latitude, or what is the same thing, that the coast and desert of Atacama to the bay of Mejillones inclusive, formed part of the territory of the Republic. "In this conviction, the President of the Republic sent to the legislative body a message dated the 13 th of June 1842, in which the following words occur. ' ' — 'The utility of the substance called gitano which from time to time immemorial has been used as a fertilizer for working lands on the coast of Perii, being acknowledged in Europe, I have thought it necessary to send a commission of explorg-tion to examine the coast comprehended between the port of Coquimho, and the hill of Mejillones, for the purpose of discovering whether within the territory of the Republic guano beds exist, the working of which may produce a new branch of income to the public treasury; and although the result of the expedition did not fully meet the hopes that had been conceived, nevertheless from latitude 29° 35' to 23° 6', guano was found at sixteen points along the coast and on the neighboring islands, in more or less abundance, according to the localities in which those deposits exist.' "There accompanied this message a bill declaring the guano-beds national property, and proposing some regulations for their being worked. "The bill having been approved and become a law of the Republic on the 31st of December in the same year, the Government of Chili learned afterwards with surprise that Bolivia exhibited, for the first time, pretensions to the desert of Atacama. Such pretensions had been disclaimed beforehand by the Chief Magistrate of that Republic, without any protest .on the part of the other powers. 136 United States vs. Chile. — Alsop Claim. [Pointii. General Santa Cruz had, in effect, said in dictating the following decree, a few years previously, referring to Cobija; 'The necessity of encourgaing the only port in the Republic and bearing in mind that the want of funds to cover the expenses demanded by the projected works, renders useless all the means which the Govern- ment has adopted for the prompt realization of so interesting an object, I decree: Colonel Manuel Amaya is authorized to raise a loan of one hundred thousand dollars. * * *' "Later on, in a message dated August 6th 1833 General Santa Cruz, the President, said to the representative of Bolivia, as follows. " 'After your recess during the anterior legislature I have complied with the promise which I then made you of visiting in person the coast province, wishing to duly fulfil your wishes and the law of the 12 th of October of the last year passed in favor of our only port Cobija. * * * ' "With antecedents such as these, it could not be regarded without a certain amount of wonder, that Bolivia should on its part manifest pretensions, and exactions in direct opposition to the clear rights of Chili to the domain of the desert of Atacama, and which were, at the same time, incompatible with the convictions of the Supreme Magis- trate of that Republic unequivocally expressed in the documents I have just cited. "The Government of Chili, however, being desirous of forming, in respect to this important question, an opinion that should be completely exempt from the disturbing influences ordinarily created by national interest, undertook a careful examination of the archives, submitted to a lengthy examination the documents produced on both sides, and made a calm comparison of the titles with which each nation sustained its respective rights. "This agreeable task served to strengthen and confirm the -con- viction which it had, that the coast and desert of Atacama up to the 23 parallel were evidently an integral part of the national territory. "Deploring the error into which the Government of Bolivia had fallen, when it claimed to fix the dividing limit between both coun- tries at the mouth of a river called the Salado, the course of which, the geographers that it called to its support, mark out with a curious variety, sometimes at latitude 25° 30', sometimes in the 26° and even in the 27°, the Government of Chili, produced in answer to this vague, indecisive and, not infrequently, contradictory evidence, titles of unanswerable value, from the probatory force of which it is believed it difficult for any dispassionate mind to withdraw itself. "It was, in truth, easy to show that since the middle of the fifteenth century, the most respectable writers and those who inspire the greatest amount of credit, such as Pedro Cieza de Leon in his work entitled 'A First part of the Chronicle of Peru (Primera parte de la cronica del Peru) published in 1553, the Inca Garcilasso de la Vega, a celebrated compiler of the traditions of that country, in his Com- mentaries, which appeared in 1609 and 1616; the Jesuit Anello Oliva, who published a history of Peru, and others of equal fame — are of one accord in affirming that the desert of Atacama formed part of Chili. "But, and apart from evidence of this nature, there are official documents which prove that the territory of the Republic extended Sub-PointA.] The Case of the United States. 137 to the 23rd parallel, and that in the territory extending towards the south, jurisdiction has been exercised by the authorities of Chili since the colonial times. It appears, therefore, from these docu- ments, that some portions of territory in the desert of Atacama having been found fit for cultivation, towards the latitude of 24° 30', they were solicited 1879, by way of grant, from the Governor and Captain General of Chili, and by him granted to the discoverers. It also appears that Nuestra Sefiora bay, known under the name of Paposo, situated in 24° 30', that is to say, in the middle of the desert, was towards the end of last century, the centre of the commerce of the coast of Atacama, and the place of residence for nearly all the inhabitants of that region. Paposo, therefore, was the capital of a district which embraced all the region in which there were inhabit- ants and was governed by a judge appointed by the authorities of Chili. The royal orders of June s^-d 1801 and June 26th 1803, which are even more explicit, declare that Paposo was considered as the capital of all the coast and desert of Atacama and that all that territory was subjected to the authorities of Santiago. The royal cedula of the loth of October 1803, afterwards ordained that the desert of Atacama should be segregated from Chili and incorporated in Peru, but these letters-patent never took effect, and only served to leave the fact established in a yet more unequivocal manner that that region had pertained to the Captaincy General of Chili in the colonial times, and that it continued afterwards forming part of the Republic. "It is well known that in 1789 there sailed from Cadiz a scientific expedition composed of the corvettes Descubridora [Descubierta] and Atrevida commanded by Captains Malaspina and Bustamante. This commission, which the sovereign of Spain had entrusted to competent persons of well known ability, had for its principal object, the exploration of the coast of South America. To assure the great- est fidelity and exactness in the labors entrusted to their charge, there were placed at the disposition of the chiefs of the expedition all the documents of the Department of the Indies which existed in the Spanish archives and at the same time a circular was despatched, dated, Madrid, February 5th, 1789, giving orders to the Viceroys and Captains General of the New World, to aid and assist with all the elements at their disposal the mission of Captains Malaspina and Bustamante, and to give them free access to the valuable archives of the then suppressed Society of Jesus. "The expedition touched at Montevideo, doubled Cape Horn, and off Chiloe, commenced its survey of the coast of South America, northwards. The result of this expedition, prepared and provided with the most scrupulous care with all the elements necessary to assure the accomplishment of its important object, was the spherical chart, — still preserved, — presented to the King of Spain by Don Juan de Langara, Secretary of State and of Unisal Marine Affairs. In this valuable chart, whose importance is beyond discussion, the northern limit of Chili was designated at the 22nd parallel, and naturally assigns her, or recognized her dominion over, an extent of territory greater than that she had peaceably possessed since the colonial epoch. "As one of the manifold proofs that I could adduce in support of the jurisdiction that Chili has always exercised in that region, I 138 United States -vs. Chile. — Alsop Claim. [Pointn. do not consider it too much to observe that the Custom-House at Valparaiso alone, granted in fulfilment of the law of October 31st, 1842, during the period elapsing from that date until the year 1857, one hundred and thirteen permits to different vessels of different nations to load guano in Mejillones, Angamos, Santa Maria and the other ports of the coast of the Desert. "The manifestations of the sovereign will and the acts of juris- diction exercised by Chili, during the two epochs of its political existence, over the desert of Atacama up to the 23rd parallel, could not find space, were they to be all set forth, within the narrow limits of this communication. While limiting myself to indicate but a few, I have carefully borne in mind the consideration of not overtaxing the kind attention of Your Excellency.' "I am flattered, however, by the belief that they will suffice for your Excellency to be persuaded that it was not the part of Chili to abandon to Bolivia, territories of which she considered herself owner and lawful possessor. "While Chili firmly sustained her rights of dominion and peace- able possession in the Desert up to the 23d parallel, she did not cease to seek with careful anxiety all the means that appeared becoming "for the purpose of approaching a solution of the existing misunder- standing. The different steps taken for that purpose, did not conduce, however, to the desired result which was to have been expected and both Republics saw years pass by and the cordiality of their relations more and more estranged." '^ In view of the fact that this statement of the case was given at a time when it must be assumed that the Government of Chile was largely occupied in conducting an aggressive warfare, and that therefore it may be assumed that little leisure might be fotmd at the disposal of its Minister of Foreign Relations for the preparation of a paper of this nature, there is presented an additional discus- sion of this question prepared, it would seem from the title page, in the year 1900, long after the close of the war, and when there had been abundant time and opportunity to collect all possible data bearing upon this question from the standpoint of the con- tention of Chile. The author of this pamphlet, Rafael Egana, discusses this question as follows: "The Republics of South America, from the time that they declared themselves emancipated from the yoke of Spain, and con- stituted in free Republics, proclaimed that their limits were those that had formerly bounded the colony from which they arose. This principle of international law of the continent is known by the phrase 'uti possidetis of 1810.' "The historical authorities, the written orders of the Spanish monarchs and the jurisdictional acts of former governors, the natural and obligatory sources of the uti possidetis, uniformly coin- cided in estabUshing that the northern limit of Chile was, at the very least, the twenty-third parallel of South latitude (Lat. 23° S.) so " I Appendix, p. 263. Sub-Point A.] The Case of the United States. 139 that the desert and coast of Atacama, to the Bay of Mejillones, inclusive, formed part of Chilean territory. "The most trust- worthy and respectable ancient historians, as Pedro Cieza de lycon, in his Chronicles of Peru, published in 1553; the Inca Garcilazo de la Vega in his Royal Commentaries published in 1609; the Jesuit Anello Oliva in his History of Peru, and other per- sons equally authorized, agreed in affirming that the Desert of Ata- cama was Chilean territory. "The jurisdictional acts of the Governors of Chile also prove this fact. Thus in the year 1679 some tracts of land suitable for cultiva- tion having been discovered, in latitude 24° 30' S. they were asked as a grant from the Governor and Captain General of Chile and granted by him to the parties who discovered them, no other gov- ernor protesting although these were as jealous as they are at present of their rights and privileges of domain. "The Port of Paposo, situated in latitude 24° 30', the commercial centre of the Desert of Atacama was under the jurisdiction of a judge appointed by the Chilean Authorities. This Chilean jurisdiction was confirmed by Royal Orders of June 3rd, 1801 and of June 26th 1803. These orders explicitly declared that Paposo was the capital of the coast and desert of Atacama and was submitted to the au- thority of Santiago of Chile. "The testimony of the historians and the dominion exercised by the Chilean governors is corroborated by the written resolutions of the Spanish kings. To the royal orders of iBoi and 1803, which we have just cited, we may add the Royal letters patent of Oct. loth 1803 which order that the desert of Atacama be separated from Chile and thereafter incorporated with Peru. . This order that was never carried into effect leaves most clearly established that up to the date at which it was issued, that district formed part of Chile, and by the fact of not having come into force, it left in statu quo the state of things that it was intended to modify. "The interesting and valuable map drawn by the naval captains Alejandro Malaspina and Jose Bustamante, during the scientific expedition of 1789 by order of the king of Spain and with the assist- ance of the viceroys and captain generals of America, shows as the northern limit of Chile the 22nd degree of south latitude, thus assigning her a more extensive territory than she had always enjoyed without dispute. We should add, that by a royal decree, for the greater exact- itude of this map, all documents related with the matter in the archives of Spain as well as those existing in the colonies, were placed at the disposition of the commissioners. "It would be an endless and laborious task to enumerate all the proofs that confirm the fact, while for our purposes it is sufficient to leave it on the solid basis that we have demonstrated. "' These historical, scientific and political antecedents were admitted and recognized, in official documents by the Government of Bolivia. In 1832 General Santa Cruz dictated a decree in which, authorizing Colonel Manuel Amaya to raise a loan, he said in reference to Cobija : " 'This being necessary to protect the only seaport of the Republic, and seeing that the want of money to pay the expenses which must be incurred for the works proposed renders fruitless all measures that Government has adopted for the early realization of this important object, I decree * * *' I40 United States vs. Chile. — Alsop Claim. [Point ii. "Shortly afterwards, on the 6th of August, 1833, the same Presi- dent of Bolivia, General Santa Cruz, delivered to the Congress of the nation a Message in which we read : — ' After your recess in the ante- rior legislative period, I have fulfilled the promise I then made, to visit the coast province, desiring to duly carry out your wishes and comply with the law of Oct. 12 th of last year, in favour of our only seaport. ' "Analogous acts of the Chilean Government confirm the rights, never discussed, of this nation. Thus on the 13th of July, 1842, the President of the Republic addressed a Message to the Congress in which he said. — 'The utihty of the substance called guano being recognized in Europe, while from time immemorable it has been in use as a manure for fertilizing the land on the coast of Peru, I have judged it necessary to appoint an exploring commission to examine the coast lying between the Port of Coquimho and the Morro de Mejil- lones, in order to discover if in the territory of the Republic any deposits of guano exist, the export of which might form a new branch of income for the national exchequer; and though the results of the expedition have not freely corresponded with the hopes we have formed, never- theless from 29° 35', to 23° 6' of north latitude, guano has been found at sixteen places on the coast and on islands near it, in greater or lesser abundance, according to the localities where these deposits exist. ' ' ' This Message formed the preamble of a project of law in which the discovered guano deposits, were declared national property, as well as any that might afterwards be discovered, and rules were established for their working. This project was approved by Con- gress and was promulgated, Dec. 31st, 1842." So far as the Government of the United States is aware, this fairly represents the position of the Government of Chile upon the question of its revindication of the Bolivian Littoral. (2) The question as discussed by historians. — While it is not con- templated, as a matter of original investigation or discussion, di- rectly to enter into any extended consideration regarding this ques- tion (since in the opinion of the Government of the United States it is wholly immaterial so far as the rights of the concessionaries in this case are concerned whether the Government of BoUvia exercised the full and complete sovereignty obtaining over the Bolivian Littoral by virtue of a concession from Chile, as that Government appears to contend, or because the Government and sovereignty of Bolivia had always extended over that territory) — still the Government of the United States desires to call attention to the following facts and circumstances concerning this question. The origin of the territory of Bolivia and the extent of its terri- tories have been discussed by historians as follows: In an article upon the " Colonial History of South America, and the Wars of Independence," by Clements R. Markham, C. B., F. R. S., (Winsor's Narrative and Critical History of America, Sub-Point A.] The Case of the United States. 141 Vol. VIII), the following statements are made regarding the territories comprised later within the boundaries of Bolivia: "For more than two centuries and a half the whole of South America, except Brazil, settled down under the colonial govern- ment of Spain, and during the greater part of that time this vast territory was under the rule of the viceroys of Peru residing at Lima. The impossibility of conducting an efficient administration from such a centre, which was separated from its dependent parts by many hundteds of miles of mountains, deserts, and forests, at once became apparent. Courts of justice called Audiencias were, therefore, established in the distant provinces, and their presidents, sometimes with the title of captains-general, had charge of the executive under the orders of the viceroys. The Aiidiencia of Char- cas (the modern Bolivia) was established in 1559. Chile was ruled by captains-general, and an audiencia was established at Santiago in 1568. * * * (p. 295.) " In 1629 a single viceroyalty included Buenos Ayres, Assuncion, Charcas Potosi, and Cochabamba * * * (p. 360). "In 1776 Buenos Ayres was also elevated to the rank of a vice- royalty, the territory of which included the presidency of Charcas (the modern Bolivia) up to the Lake of Titicaca, and the province of Cuyo, which had hitherto been a part of Chile * * * (p. 315). "In April, 1825, the Dictator Bolivar made a triumphal progress through the principal cities of Peru, as far as Potosi and Chu- quisaca. In August a general assembly met, and decreed that Upper Peru, which had been a part of the viceroyalty of Buenos Ayres since 1777, should be a separate republic, with the name of Bolivia. General Sucre was elected the first president, from 1826 to 1828 * * * (p. 338). "The republic of Bolivia received an independent existence from Bolivar owing to the unanimous wish of the people. In Spanish times, as Upper Peru, or Charcas, it had always been ruled by its own Audiencia, but without a separate captain-general. Very jeal- ous of foreigners, the people expelled General Sucre after two years and were afterwards ruled for a long time by General Andres Santa Cruz, descendant of a long line of native chiefs. * * *" (p. 340). In further discussing this question of the limits of Bolivia, the same author, in a work entitled "The War Between Peru and Chile," makes the following comments, with the citations therein incorporated : "The rights of the case are as follows. When the South American republics became independent their Umits were, by general agree- ment, fixed according to the uti possidetis of the year 1810, that is to say that the boundaries of Spanish provinces, as recognized at that time, were adopted as the boundaries of the republics. On this principle the boundaries of the BoHvian province of Atacama, on the Pacific coast, extend to the southern limit of Peru on one side and to the northern limit of Chile on the other. Both had been clearly defined before the year 1810. The Peruvian limit, which is that of the province of Tarapaca, commences on the coast near Tocapilla in 22° 33' S., and passes up the ravine of Duende to the 142 United States vs. Chile. — Alsop Claim. [Point 11. river Loa. It was carefully delineated in 1628, and the boundary- marks are recorded in a document which is still extant. The northern limit of Chile was fixed at a place called El Paposo, in 25° 2'S.° "In 1776, when the viceroyalty of Buenos Ayres was created, orders were given that the province of Charcas should be included in it. The Umits of Charcas (modern Bolivia) were then said to be well known, and to have been defined in the ninth law for the Indies (Titulo 15, Book ii.). The coast province of Atacama was there declared to extend to the first Chilian" inhabited place at Paposo. The same boundary is given in the official descriptions by Dr. Cosme Bueno.* It is shown on De la Rochette's valuable map of South America, published in 1807, which was based on original Spanish authorities, including Malespina and the 'Mapa delas fronteras del Reyno del Peru, 1787.' Moreover this boundary was tacitly accepted by the Chileans. In their official map, accompany- ing the work of Claudio Gaye, Chile ends at Paposo. After Fitz Roy's survey, when the sailing directions were being prepared, inquiries were made of the Chilean authorities as to the position of the boundary, and it was placed to the south of 25° S." On Colonel Ondaza's official map of Bolivia (1859) the boundary is placed cor- rectly at Paposo. The topographical map of Chile by Pissis only extends to Copiapo, 27° 20' S. It will thus be seen that the boundary between Chile and Bolivia, according to the uti possidetis of 1810, was south of 25° S. ; and that this was acknowledged by implication, even on the part of the Chileans themselves. "It was only when the great value of Atacama was discovered that any question was raised. Thfen Chile laid claim to the 23rd parallel. It has been shown that her boundary was south of 25° S. This was, therefore, an unjustifiable claim, and as such all subse- quent arrangements that were based upon it, were vitiated. The Bolivian Government must have been ignorant of the rights of the case, for they appear to have looked upon the consent of Chile to accept the 24th parallel as a concession. Chile had no more right to 24° S. as a boundary than she had to 23° S. But General Mel- garejo, the President of Bolivia, agreed to a treaty with Chile, in that sense, bearing date the loth of August, 1866. It, however, was never ratified by the Bolivian Congress. Chile consented to with- draw her more exaggerated claim, and to adopt 24° S. as her boundary."* In return for this pretended concession it was further a The map of La Rochette (1807) places Paposo in 25° 46' S. Colonel Ondaza's map (1859) in 25° 33' S. The Admiralty chart in 25° 2' S.; with which the "Geo- grafia Nautica de la Republica de Chile," by Vidal Gormaz (p. loS) agrees. Vidal Gormaz notices that in the old maps Paposo is placed forty miles too far south. (Markham's Note.) b See Diccionario Historico-Biografico del Peru, per Manuel de Mendiburu, iv. p. 198. (Markham's Note.) c "South American Pilot." Part II. Sixth edition, 1865, p. 327. " Between the bight of Hueso Parado and Punta San Pedro:" that is in 25" 30' S. (Markham's Note.) (2 The Chileans then erected a boundary pyramid on the coast, fifty feet above the level of the sea, in 23° 58' 11" S. (intended as 24° S.) to mark their new temporary boundary. Vidal Gormaz (ubi sup.), p. 115. (Markham's Note.) Sub-Point A.] The Case of the United States. 143 stipulated that Chile should receive half the value of customs dues from mineral exported between the 23rd and 24th parallels, while Bolivia was to have the same privilege as regards the coast-line between the 25th and 24th parallels. As the whole territory in question belonged by right to Bolivia this was a tolerably cool arrangement on the part of Chile, especially as the rich deposits are situated to the north of 24° S. Other literature upon this question (which is somewhat extensive) seems to leave httle room for a legitimate doubt that the Govern- ment of Bolivia always possessed the legal title to the district known as the desert of Atacama as far south as Paposo. It is unnecessary even to list various critical essays which have been written on this subject, though in order that the discussion may be complete there is included below excerpts from one of the most careful discussions upon this subject. In Dr. Victor M. Maurtua's work "The Question of the Tacific" as "enlarged and brought up to date" by F. A. Pezet, F. R. G. S., the question is discussed in the following manner : "the; ancient geography. "The vast desert of Atacama, situated between 23'' and 27" of south latitude, was from time immemorial practically a no-man's- land, but a century before the Spanish invader discovered and con- quered the great Inca Empire, Tupac Yupanqui, the warrior Inca, sent an expedition to the south of his domain arid extended his empire to the Maule river, thereby incorporating the desert of Ata- cama with his vast possessions of South America. "The Spanish adventurers who overran this empire were the first to divide up its territory and form the first demarcations of the future independent republics. "Francisco Pizarro, the conqueror of Peru, as early as 1529 obtained a concession of territories comprising a length of 470 leagues, and the American historian, Prescott, takes this concession to extend from 1° 20' to 25° 31' 24" south latitude. "Diego de Almagro, Pizarro's lieuteriant, likewise obtained a con- cession of 200 leagues to the south of his chief's concession. The Royal Charter of the Crown of Spain, whereby this concession is granted, reads thus: "'He will discover, conquer and people the lands and provinces extending along the seaboard to the south and towards the east within 200 leagues in the direction of the Straits of Magellan, taking these 200 leagues from the point where end the Hmits of the govern- ment, which by the concession and our provisions we have entrusted to Captain Francisco Pizarro. ' * * * "To the south of Almagro's concession, a third concession was granted to Pedro de Mendoza, the governor of the River Plate. This concession was likewise of 200 leagues, and extended from the 144 United States vs. Chile. — Alsop Claim. [Pointn. southern limit of Almagro's possessions in the direction of the Straits of Magellan. " Almagro was succeeded by Pedro de Valdivia, the founder of the city of Santiago, the present capital of Chile; he was appointed Gov- ernor of Chile by President La Gasca, who was then governing Peru in the name of the Spanish Crown. La Gasca wrote on May 7th, 1548, to the Council of Indies, as follows: 'On the 23d of April, 1548, Pedro de Valdivia was sent as Governor and Captain-General of the Province of Chile known as 'Nuevo Estremo,' and which limits from Copiapo, which is at 27° from the equinoxial line toward the south until 41° to the north, to south straight meridian, and wide from the sea inland 100 leagues west to east.' "The Spanish monarch, Emperor Charles V., confirmed this con- cession in the following terms : '"Whereas, Licentiate Pedro La Gasca, our President, who was of the Royal Audiencia of the Provinces of Peru, and who at present is Bishop of Placencia, while being in the said Provinces of Peru, by virtue of the special powers which he held from us to appoint new Governors and make new conquests * * * we declare to be valid for the time which our grace and wish may last, or until we shall decide otherwise, that you shall have the Government of the said Province of Chile, within the limits which the said Bishop of Placencia indicated to you.' "This primitive divisory line, which shows the territorial rights of Chile and Peru, was never altered, and it was sanctioned by the principle of American public law, known by the incorrect name of Uti possidetis of 1810. "The Viceroyalty of Peru, which was constituted on the basis of the ancient government (gobernaciones) , comprised all the vast dominions of the Spanish Crown in South America. In later years it was broken up in order to organize the Viceroyalties of Santa Fe and of Buenos Aires. But neither of these partitions affected the northern boundary of Chile. "During the several centuries of the Spanish domination, that boundary line was invariably respected. None of the concessions which were made in favor of the Audiencias of Lima, Charcas and Santiago of Chile, altered this northern boundary, and it remained as it had been drawn up by La Gasca. During all this time 27"^ south latitude was the acknowledged northern limit of the govern- ment of Chile. "In 1646, Reverend Father Ovalle published at Rome his cele- brated work, 'Historic Relation of the Kingdom of Chile,' on the frontispiece of which appeared a map on which at the point desig- nated as Copayapu, which he names Port of Copiap6, was inscribed the following sentence: Peruani et Chilenensis regni confina. "And it is worth recalling that this boundary was not drawn by an imaginary line; it was marked out by means of regular land- marks. These landmarks occupy nearly exactly the position of the parallel which the concessions of Almagro reached. "Viceroy Abascal, in his report for the year 1806, says: '" The Viceroyalty of Peru, after the last dismemberments and annexations, has the following limits: On the north, the Province of Guayaquil; on the south, the desert of Atacama * * * com- Sub-Point A.] The Case of the United States. 145 prising in all its territory from 32' to the north of the equinoxial line to 25° 10' of south latitude.' "The several constitutions which have been promulgated by Chile have always acknowledged as the northern boundary of the Republic the line which divided it from the Peruvian Viceroyalty at Copiap6. "The following are extracts from such constitutions: "1822. The territory of Chile recognizes as its natural bounda- ries, on the south, Cape Horn; on the north, the desert of Atacama. "1823. The territory comprises from Cape Horn to the desert of Atacama. "1828. The Chilean nation extends in a vast territory, limited on the north by the desert of Atacama. "1832. Its territory comprises from north to south, from the desert of Atacama to Cape Horn. "1833. The territory of Chile stretches from the desert of Ata- cama to Cape Horn. "On March 31st, 1823, the Chilean Government established its most northern department, according to the following text: "First Department : From the desert of Atacama to River Choapa. "In 1826, this division was declared a province, as follows: "First Province : From the desert of Atacama to the River Choapa. "This province shall be known as Province of Coquimbo; its capital city will be La Serena. "When Spain finally acknowledged the independence of Chile by the treaty of 1844, its boundaries were thus described : 'All the territory which extends from the desert of Atacama to Cape Horn.' "And finally. President Bulnez, of Chile, and Minister Montt, in 1842, acknowledged the Papal Bull by which the Bishopric of La Serena was created, wherein the territory of this diocese is described as extending from the River Choapa to the desert of Atacama. "THE POSSESSION OF ATACAMA BY BOLIVIA. "Bolivia, before the War of Peruvian Independence, was known by the name of 'Upper Peru.' When General Simon Bolivar finally emancipated South America from the Spanish yoke, and definitely set up Peru as a free and independent republic, he constituted Upper Peru into an independent State under the name of Republic of Bolivia. "General Sucre, the first President of the new Republic, commis- sioned Colonel Francisco B. O'Connor, in 1825, to proceed to the Province of Atacama to make a thorough survey of its coast and to establish a seaport. In his instructions the following appears: 'There are three ports, and of these you may select the best. The said ports are: Atacama, Mejillones and Loa; the two first have no water, and the third is the one which the Liberator prefers, although it does not afford good anchorage, but solely on account of its close proximity to Potosi and of its river. Should it not be desirable, you will survey the other two, or any other, with a view of establishing thereat a large city. * * * ' "General Bolivar, the Liberator, issued on the 28th of December, 1825, the following decree: 40898 — 10 10 146 United States -vs. Chile. — Alsop Claim. [Pointii. " 'Simon Bolivar, Liberator, etc., etc., whereas: " 'First. These provinces have no established port, and, as in the partido de Atacama, there exists a port known by the name of 'Co- bija,' which offers many advantages; " 'And considering that it is a just reward to the merits of Grand Marshal Don Jose de ha. Mar, victor at Ayacucho, that his name be given to the above-mentioned port: After hearing the permanent deputation ; " ' Hereby decrees : " 'First. That from the first of January next, the port of these provinces be established at Cobija, under the name of Mar. " 'Second. That the necessary offices be established there, etc' "encroachment and invasion. "The beginning of Chilean encroachment on Bolivian territory was concurrent with the discovery of guano in the desert of Atacama. "Until 1842 Bolivia had been in unmolested possession of the littoral which she had acquired at the time of her erection as an independent republic. "In that year the Minister of Finance of Bolivia wrote to the Prefect of Cobija as follows : ' I have resolved to inform that pre- fecture that the most stringent measure be adopted, so as to prevent any incursions by the parties holding guano concessions outside of the limits of the Rivers Loa and Paposo, which comprise the littoral of this Republic' "Bolivia at the time had a custom house at the mouth of the Paposo river. Between the years 1842 and 1845 the Consul of Bolivia, at London, brought a suit against the Chilean frigate 'Lacaw' for having taken clandestinely a cargo of guano from the littoral. The British law courts sentenced the said ship, and the Chilean Minister at London raised no objection either to the suit or to the sentence. "The Government of Bolivia, in order to protect its guano deposits from any possible raids, commissioned the brig 'General Siicre' as a war vessel, and some time later this vessel captured the 'Rumera,' a Chilean ship, which was loading guano in Bolivian territory. "From the time of the guano discoveries, the incursions and raids on the Bolivian deposits by Chileans was continuous, so much so that finally the authorities at Cobija decided to put a stop thereto, and to this effect they captured and carried away a party of Chileans who were clandestinely extracting guano near Mejillones. The Chilean war ship 'Chile' came to their rescue, freed them, and landing a force at Mejillones, constructed a sort of small fort, over which they hoisted the Chilean flag. "When the Bolivian Minister in Chile presented his Government's claims against Chile for this and other aggressions, he stated that 'the present policy was in contrast with the course which had been followed only a short time before, when in the case of the schooner 'Janequeo,' accused of a similar offense, ample satisfaction had been given to the Bolivian Government, and that the aggressive act perpetrated by the man-of-war 'Chile' did not prove a pacific act of possession, but that it implied an outrage.' Sub-Point A.) The Case of the United States. 147 " Doctor E. S. Zeballos, who was at one time Minister of Foreign Affairs of the Argentine Republic, and Plenipotentiary of that Republic at Washington, in his treatise on Spanish-American Public Law, referring to the action of Chile, says: 'This is how Chile first appeared in Atacama, to the north of the Paposo river.' "Senor Montt, the President of Chile, in his Message to Congress on July 31st, 1842, said: " 'Inasmuch as the usefulness of the substance known as 'guano' has been recognized in Europe, although from time immemorial it has been used as a manure for fertilizing the land on the coast of Peru, I deemed it advisable to send a commission to explore and examine the seaboard from the port of Coquimbo to the head of Mejillones, for the purpose of discovering if any guano deposits existed in the territory of the Republic, which, properly worked, might furnish a new source of revenue to the treasury; and notwithstand- ing that the result of the expedition has not come up to our expecta- tions, guano has been discovered from 29° 35' to 23° 6' of south latitude.' "This Presidential Message served as the introduction to the bill that was discussed and passed by Congress on October 31st, 1842, to the effect that: 'All the guano deposits which exist in the Province of Coquimbo, in the littoral of Atacama, and in the adjacent islands, are hereby declared as national property.' "From the passing of this law dates the first official step of Chilean expansion to the north of her original frontiers. "But no sooner had this bill become law than Senor Olaneta, Bolivian Plenipotentiary in Chile, acting on instructions from his Government, demanded that the Chilean Executive 'shquld request Congress to formally revoke this law which extended the frontiers of the Republic to the prejudice of Bolivia' (January 30th, 1843). "The Chilean Foreign Office, in its reply, feigned surprise, stating that 'whatever opinion the Government might form, in view of the reasons and grounds that might be adduced, it could never enter its province to alter the existing laws, by making the declaration which it had been called upon to make.' "And thus was started the diplomatic controversy which had extended over a period of sixty years, and caused already one bloody war and created so much ill feeling in the southern continent." It would seem, from these statements made by historians of repute, that perhaps the Government of Chile has failed in its study of the case to give due weight to the consideration which may be urged against the position which it has assumed. (3) The question considered from the standpoint of the govern- mental acts of Chile: (a) Constitutional provisions. — That this is also a reasonable deduction from the facts of the case, seems to be made entirely clear upon taking into consideration the various early acts and expressions of the Government of Chile itself re- garding this matter. For example, Article III of Chapter i of Title I of the Political Constitution of the State of Chile, signed 148 United States vs. Chile. — Alsop Claim. [Point 11. by order of the Constitutional Convention October 23, 1822, lays down the boundaries of the State of Chile as follows : \" Political Constitution of the State of Chile. "Title I. — Relating to Chile and the Chileans. "chapter I. CONCERNING CHILE. "The territory of Chile has for natural boundaries: On the .south, Cape Horn; on the north, the uninhabited Atacama; on the east, the Andes; on the West, the Pacific Ocean. The Islands of the Chiloe Archipelago, the Island of Mocha, the Islands of Fernandez, the Island of Santa Maria and other adjacent islands belong to Chile."" The provisions of Article IV of Title i of the Political Constitu- tion of the State of Chile, promulgated December 29, 1823, makes the same provisions: "The territory of Chile extends from North to South, from Cape Horn to the uninhabited Atacama; and from east to west, from the chain of the Andes to the Pacific Ocean, with all the adjacent islands including the archipelago of Chilo^, the islands of Juan Ferndndez, Mocha and Santa Maria." '^ The provisions of Article II of the Political Constitution of the Repubhc of Chile, promulgated on the 8th of August, 1828, are likewise to the same effect. This article reads : "Its territory extends, from north to south — from the Atacama Desert- to Cape Horn; and from east to West from the chain of the Andes to the Pacific Ocean together with the islands Juan Ferndndez and others adjacent. It is divided into eight provinces which are: Coquimbo, Aconcagua, Santiago, Colchagua, Maule, Concepcion, Valdivia and Chiloe." ' Finally, it was provided in the PoHtical Constitution of the ■Republic of Chile, attested and promulgated the 25th of May, 1833, Chapter i. Article I, that: "The territory of Chile extends from the desert of Atacama to Cape Horn, and from the Chain of the Andes to the Pacific Ocean, taking in the Archipelago of Chiloe, all the adjacent islands and the Islands of Fernandez." " The following comments upon the language of these various constitutional provisions made by M. Gonzalez de la Rosa, in 1879, seem to embody a not improper interpretation of the words above used : "If the Constitution meant to imply that by the term 'from Ata- cama' the whole desert was included, it is evident that Chili ought a I Appendix, p. 353. 6 I Appendix, p. 354. ci Appendix, p. 355. Sub-Point A.] The Case of the United States. 149 to have wholly occupied said desert, that is to say, from the I/oa or at least from Cobija, Calama &c. But Chili had never even dreamt of such a proceeding, until lately, the discovery of the saltpetre caused her forgotten or at least neglected rights to bud forth. More- over it is impossible to recognize the mere utility of an object as the origin of the divine right of possession since in that case all our light fingered friends would obtain an undeniable right and excuse to the total suppression of the seventh commandment. On the other hand, the above mentioned article, which every Chilian is bound to obey and respect, on explaining or setting forth, the following are the natural limits of Chili, the Desert, the Andes, Cape Horn and the Pacific ocean, gives us to understand thoroughly that the Chilian ter- ritory is limited by, bounded by or has its termination in that spot where the sea, the Andes, the desert or Cape Horn commences. For if it were not so, if the Chilians believe they are correct in asserting that the northern limit does not exclude but includes the desert of Atacama, with equal justice they could maintain that to them apper- tain the Pacific, the Andes and all the sea and lands that extend from the cape to the pole. This is all the more absurd since when one speaks of boundary lines, one naturally implies lines which separate, and not territories that extend over a 100 leagues like the desert of Ata- cama. It is therefore most fully demonstrated, that the meaning of the Chilian statute which every Chilian is bound to obey, is that the limit or boundary line of the Republic of Chili to the north ought to be drawn at the point where the Atacama desert begins, not where it concludes, or in other words, that the Chilian jurisdiction terminates at the Salt River or the Paposo." The provisions of the Chilean Constitution of 1833 appear to have remained in full force and efifect until 1888, when, on August 9, the National Congress, ratified the following: "Project for Constitutional Amendment. "The National Congress, exercising the power conferred upon it, by Article 167 of the Political Constitution, ratifies the proposition for amendment contained in the following project, published in El DiARio Official, December, 1887: "Article i. Articles I and IX of the Constitution are surpressed; the word ' distinciones ' of the 4th paragraph of Art. XI; the second paragraph of Art. XXIV; and the clause 'aplicandose esta misma regla a los senadores suplentes' of the last paragraph of the same article. "Therefore, with the knowledge of the Council of State, the pre- ceding provisions are promulgated and are held to be an integral part of the Political Constitution of the State." (See Derecho Constitutional, published 1889, by Julio Banados Espinosa, p. 625.) The record of the proceedings of the Congress, at which it was decided to amend the Constitution containing the article giving I50 United States vs. Chile. — Alsop Claim. [Point ii. the boundaries of the State of Chile, are recorded in the Diario Official of 1887, p. 2719, as follows: "A quorum being present, the amendments to the Constitution were considered. "A project submitted by the Legislative and Judicial Committee was read. The first article read : "Arts. I and 9 of the Constitution shall be suppressed. "A member then asked that the suppressed articles of the Con- stitution be read to the Chamber. This was done. The project for the suppression of Articles i and 9 of the old Constitution was then adopted unanimously." ° The writer of the same work from which the various constitu- tional provisions above quoted are taken, JuUo Baiianos Espinosa also gives, on page 41 of his work, the Political Constitution of the Republic of Chile as it was in force in 1889 (the date on which his book was published) . In this Constitution there is no mention of the boundaries of the Republic of Chile. A foot-note explains that the articles have been re-numbered and that the numbers in paren- theses show the numbering in the original Constitution of 1833. From this numbering it appears that the original Article I of the Constitution of 1833 (relating to territorial limits) has been sup- pressed and the supression has continued in the Constitution in force in 1905, as the latter constitution is printed in the work, "American Constitutions," by Jose Ignacio Rodriguez, Chief Translator and Librarian of the International Bureau of the American Republics (See Vol. II, p. 207). It would thus appear that so far as one may determine the limits of Chile from the boundaries as defined in the Constitution, the Bolivian Littoral was never within the territory of Chile until after the War of the Pacific. (b) The treaty with Spain. — It should, moreover, be observed that the Government of Chile not only recorded in its Constitu- tion, as above set forth, the Hmits which it has itself placed upon its territories, but it has, as late as 1844, stipulated for and adopted the same limits in a formal and solemn treaty concluded between itself and the Kingdom of Spain. Under the Treaty of Peace, Friendship, and Recognition between Spain and Chile, signed at Madrid, April 25, 1844, ratifications exchanged at Madrid, Sep- tember 26, 1845, it was provided, in Article I, as follows r "Art. I. Her Catholic Majesty, exercising the power with which she is invested by the Decree of the General Cortes of the Kingdom, of the 4th of December, 1836, recognizes as a free, sovereign, and « I Appendix, p. 356. Sub-Point A.1 The Case of the United States. 151 independent nation, the Republic of Chile, the same being composed of the countries specified in its constitutional law, namely, all the territory which extends from the Desert of Atacama as far as Cape Horn, and from the Cordillera of the Andes to the Pacific Ocean, together with the Chiloe Archipelago and the islands adjacent to the coast of Chile. And Her Majesty renounces both for herself, her heirs and successors, all pretension to the government, dominion, and sovereignty of the said countries." " In the light of these repeated sovereign acts and expressions and in view of the historical facts regarding the colonial extent of Bolivia already set forth above, it is most difficult to perceive in what way the Government of Chile is able, with a due and proper consideration of the facts and circumstances involved, success- fully to contend that she has always owned the desert of Atacama and that she, therefore, really re-possessed herself of her own territory when in 1879 her troops overran and her Government assumed control of that region. (c) Treaties with Bolivia. — The conclusions above reached are, it is believed, in no wise affected by the contention of the Chilean Government, as generally set forth above, that the treaties of 1866 and 1874 constituted a cession of territory from Chile to Bolivia and that, therefore, Bolivia is, in effect, estopped to deny that the desert of Atacama did not, prior to the treaty of 1866, belong to the Government of Chile rather than to the Government of Bolivia. It is submitted that a consideration of the treaties themselves do not bear out this contention of the Government of Chile as will appear from the following quotations. In the Treaty of 1866 it was provided in the preamble as fol- lows: "The Republic of Chile and the Republic of Bolivia, desirous of bringing to a friendly and mutually satisfactory termination, the old question pending between them as to the settlement of their respective territorial limits in the desert of Atacama, and as to the working of the guano deposits on the coast of that desert, and resolved by this means to consolidate the good understanding, brotherly friendship, and the bonds of intimate alliance by which they are mutually united, have determined to renounce a part of the territorial rights which each, with good reason, beUeved them- selves to possess, and they have agreed to conclude a Treaty, which shall finally and irrevocably settle the aforesaid question,"* It will be observed from this language that the contemplated arrangement is to be reached in order to bring to a "friendly and mutually satisfactory termination" the old question pend- o I Appendix, p. 409. 61 Appendix, p. 417. 152 United States vs. Chile.— Alsop Claim. [Point ii. ing between them as to the settlement of their respective terri- torial limits in the desert of Atacama and that in order to reach this desired result the contracting parties "have determined to renounce a part of the territorial rights which each, with good reason, beUeved themselves to possess." It will be apparent from this quotation that the two Governments recognized the pendency between them of a dispute regarding their "territorial limits in the desert of Atacama." There is no statement what- soever that the Government of Chile claimed all the desert of Atacama, and it will also be observed that this preamble recog- nizes that the contestants are prepared to surrender territorial rights "which each, with good reason, believed themselves to possess;" thus recognizing the reasonableness of the contentions of Bolivia regarding her ownership of territory in the desert of Atacama. It is difficult to perceive in what way this language can be considered as a recognition by the Government of Bolivia that that Government never had any rights in the desert of Atacama any more than it is a recognition that the Government of Chile recognized that it never possessed, prior to the treaty, any rights in the desert of Atacama. The language in these clauses is entirely reciprocal and whatever one renounces the other renounces — whatever the one retains the other retains. It is submitted, therefore, that so far as the preamble goes, and it is only in the preamble that any statement is made that could be considered as a "cession of territory," both Governments stand in the same position. Moreover, this conclusion is not altered by the subsequent article which stipulates the boundary which shall thereafter be observed between the two Governments in the desert of Atacama. This article reads upon this point as follows : "Art. I. The line of demarcation of the limits between Chile and Bolivia, in the desert of Atacama, shall henceforth be the parallel of 24° south latitude, from the coast of the Pacific to the eastern limits of Chile, so that Chile to the south and Bolivia to the north shall have possession and dominion of the territories which extend to the before-mentioned parallel of 24°, exercising in them all the acts of jurisdiction and sovereignty which belong to the lord of the soil."" It will be observed that this expressly provides that to the south of the line and to the north of the line Chile and Bolivia respectively "shall have possession and dominion of the terri- tories — exercising in them all the acts of jurisdiction and sov- ereignty which belong to the lord of the soil." «I Appendix, p. 418. Sub-Point A. The Case of the United States. 153 It is difficult to perceive in the face of this language how- it can be successfully contended that the Government of Bolivia, by making this treaty, recognized in any way, e\en the slightest, a right in Chile to any territory north of the 24th degree of south latitude any more than (as has been already suggested) Chile recognized that Bolivia had a right to the territory south of the 24th degree of south latitude. It would seem, moreover, that the proper and reasonable interpretation of this treaty should be that each Government was willing to recognize that it made regarding sovereignty over territory claims which it was not able to substantiate and that a compromise was reached satisfactory to both parties, by which each Government gave up its extreme contention, and settled finally and definitively upon the 24th degree of south latitude as the boundary of their respective territories. The Treaty of 1874 does not, in any way, change the legal status of the two parties. It provides in its preamble as follows : "The Republics of Chile and Bolivia, being equally animated with the desire to consolidate their reciprocal and friendly relations, and to remove by means of solemn and friendly Treaties any causes which might tend to cool or paralyze them, have determined to con- clude a new Boundary Treaty, which, modifying that concluded in the year 1866, may assure in the future to the Governments of both Republics the peace and perfect harmony necessary for their liberty and progress." "* It will be observed that this preamble, which in a way restates the inducements which led the parties to make a new treaty, makes no statement that the boundary recognized in the earlier treaty was not a due and proper boundary or that it was not a satis- factory boundary to both parties. On the contrary, it appears from Article I of this treaty that the boundary in the Treaty of 1866 was merely reaffirmed. This article reads: "Art. I. The 24th degree of latitude from the sea to the moun- tain range of the Andes in the divortia aquarum is the boundary between the Republics of Chile and of Bolivia."' It is difficult to perceive how language could be more specific upon the question as to the exact limits which are to be observed between the two countries, so far at least as such boundaries limit the district under discussion. Almost no boundary "known to man can be determined with greater exactitude or which is less subject to change or alteration than that which is laid out along a parallel of latitude or a meridian of longitude. "■ II Appendix, p. 287. 6 II Appendix, p. 288. 154 United States vs. Chile. — Alsop Claim. [Point ii. It is entirely evident, moreover, from the correspondence which accompanied the negotiations for the Treaty of 1874 that while the stipulations of the Treaty of 1866 that each should have "posses- sion and dominion of the territories, exercising in them all the acts of jurisdiction and sovereignty which belong to the lord of the soil," were not repeated, yet each understood, save as to the inhibitions contained in the treaty itself, that this was the situa- tion of each Government in respect to the territory on its side of the boundary. In a letter from the Chilean Chargd in Bolivia to the Bolivian Minister of Foreign Relations, under date of Novem- ber 10, 1874, the Charge, Don Carlos Walker Martinez, in com- menting upon a national decree of the BoHvian Congress, which provided that ".the guaranties to which the second paragraph of Article IV refers are extended to the capital, trade, and persons of the inhabitants of the I^ittoral," said: "The extension to all the other inhabitants of the littoral of the rights which Article IV of the Treaty concedes to the Chileans pre- sents no difficulty to me, since Bolivia is mistress and arbiter, capable of making what laws she sees fit, and of favouring any she pleases. The wish of my Government, in exacting the dispositions comprised in that Article, never was to leave other nationalities, nor the Boliv- ians themselves, in a worse position than the Chileans; its sole object was to give guaranties of stability and security to the trade and commerce of our country, opened up on such a large scale on the littoral of this Republic." (British and Foreign State Papers, vol. 71 > P- 905-) Again he said, in the same letter : "Chile has never claimed to extend her limits to the other parts of the mountain range, far less to seize from, Bolivia one inch of her territory. * * * To the narrow-minded and suspicious persons who have reproached your Excellency with having ceded immense tracts of Bolivian territory in accepting the provisos of Article I, it would be well to reply that the Republic of Chile desires nothing further than to shut herself in between the sea and the mountains in order to obtain that which is her ambition; peace, well-being, and progress." [Op. cit. p. 906.] The Government of the United States confidently submits that there is, in the history of the true limits and extent of the Bolivian territory along the coast, as also in the express treaty provisions of the treaties of 1866 and 1874 ^^id in the correspondence which attended their negotiation and conclusion, absolutely nothing which, in any way, gives credit to the contention of the Chilean Government that that Government, prior to the Treaty of 1866 and Sub-Point A.) The Case of the United States. 155 subsequent to its repudiation of the Treaty of 1874, actually pos- sessed any rights whatsoever in the littoral north ci the 24th degree of south latitude; and if it be that the contention of Chile is sound that her repudiation of the Treaty of 1874 restored the status quo ante of the Treaty of 1866, then by the very terms of the provisions of the Treaty of 1866 they were remanded to their original contentions, — that is, the contention on the part of Bolivia that her territory lawfully extended to the south of the boundary line fixed and the contention of Chile that her territory extended through the desert of Atacama on the north. Either this was the situation, or, and this is believed as the better view of the situation in which the parties found themselves upon the termi- nation of the Treaty of 1874, the boundary limit provided in 1866 and reaffirmed in 1874 remained unchanged by the abrogation of the Treaty of 1874 and was, therefore, binding upon the parties. It is finally submitted that in the face of these various agree- ments, above set forth, it can not be successfully contended tiiat the Government of Chile is to be regarded as in any way entitled to the territory north of Paposo prior to the Treaty of 1866 between Chile and Bolivia; and that, therefore, any and all argu- ments and contentions based upon an alleged revindication of the Bolivian Littoral must fall to the ground. (4) But whether Chile's theory is correct or not, Bolivia had author- ity to negotiate the Wheelwright contract — But granting for the sake of argument that all that has been said above regarding the original ownership of the Bolivian Littoral is erroneous, and that in point of fact and law the Government of Chile was the real sovereign of the territory comprised in the desert of Atacama during the time of the separation of the Spanish colonies, still it must be conceded that, under the Treaties of 1866 and 1874, when interpreted in accordance with the generally recognized rules of international law, the Government of Bolivia did, as of right, exercise in such territory a full and complete sovereignty at the time the Wheel- wright contract was made, and that whether this exercise of sovereignty was de jure (as it is beheved it, was) or de facto (as it is believed it was not) , still the Government of Bolivia had the power to grant to Wheelwright the concession of 1876. The decisions of the courts and the expressions of text-writers are abundant to establish this. The question came before the Supreme Court of the United States as early as 18 19 in the case 156 United States vs. Chile. — Alsop Claim. [Point u. of the United States v. Rice (4 Wheaton 246, 253) at which time that court,* by Mr. Justice Story, delivered the following opinion: "The single question arising on the pleadings in this case is, whether goods imported into Castine, during its occupation by the enemy, are liable to the duties imposed by the revenue laws upon the goods imported into the United States. It appears, by the pleadings, that on the first day of September 18 14, Castine was captured by the enemy, and remained in his exclusive possessidn, under the command and control of his military and naval forces, until after the ratification of the treaty of peace, in February 18 15. During this period, the British government exercised all civil and military authority over the place; and established a custom-house, and admitted goods to be imported, according to regulations pre- scribed by itself, and among others, admitted the goods upon which duties are now demanded. These goods remained at Castine, until after it was evacuated by the enemy; and upon the re-establishment of the American government, the collector of the customs, claiming the right to American duties on goods, took the bond in question from the defendant, for the security of theni. "Under these circumstances, we are all of opinion, that the claim for duties can not be sustained. By the conquest and military occupation of Castine, the enemy acquired that firm possession which enabled him to exercise the fullest rights of sovereignty over that place. The sovereignty of the United States over the territory was, of course, suspended, and the laws of the United States could no longer be rightfully enforced there, or be obligatory upon the inhabitants who remained and submitted to the conquerors. By the surrender, the inhabitants passed under a temporary allegiance to the British government, and were bound by such laws, and such only, as it chose to recognize and impose. From the nature of the case, no other laws could be obligatory upon themi, for where there is no protection or allegiance or sovereignty, there can be no claim to obedience. Castine was, therefore, during this period, so far as respected our revenue laws, to be deemed a foreign port ; and goods imported into it by the inhabitants were subject to such duties only as the British government chose to require. Such goods were in no correct sense imported into the United States. "The subsequent evacuation by the enemy, and resumption of authority by the United States, did not, and could not, change the character of the previous transactions. The doctrines respecting the jus posiliminii are wholly inapplicable to the case. The goods were liable to American duties, when imported, or not at all. That they were not so Hable, at the time of importation is. clear, from what has already been stated; and when, upon the return of peace, the jurisdiction of the" United States was re-assumed, they were in the same predicament as they would have been, if Castine had been a foreign territory, ceded by treaty to the United States, and the goods had been previously imported there. In the latter case, there would be no pretence to say that American duties could be demanded ; and upon principles of public or municipal law, the cases are not distinguishable. The authorities cited at the bar would, if there ■ were any doubt, be decisive of the question. But we think it too clear to require any aid from authority." Sub-Point A.) The Case of the United States. 157 The Courts of Great Britain laid down the same principle in the case of United States of America v. Prioleau, 1866 (35 Law Journal, Chancery, N. S. p. 6, 9.) in which Vice Chancellor Wood made the following^ statements : " There are one or two points which, I think, are tolerably clear in this case. The first point is with reference to the right of the United States of America, at this moment, to the cotton, subject to the agreement. I treat it first in this way. It has scarcely been disputed on the present argument, and could hardly be disputed at any further -stage of the inquiry, that the right is clear and distinct, because the cotton in question is the admitted result of funds raised by a de facto government, exercising authority in what were called the Confederate States of America; that is to say, several of those states which, in union, formerly constituted the United States, and which now, in fact, constitute them; and that de facto government, exercising its powers over a considerable num- ber of states (more than one would be quite enough) , raises rcioney — be it by voluntary contribution, or be it by taxation, is not of much importance. The defendant Prioleau, in cross-examination, admits that they exercised considerable power of taxation; and with those means, and claiming to exercise that authority, they obtained from several of the States of America funds by which they purchased this cotton for the use of the de facto government. That being so, and that de facto government being displaced, I apprehend it is quite clear that the United States of America (that is to say, the government which has been successful in displacing the de facto government, and whose authority was usurped or displaced, or whatever term you may choose to apply to it), the authority being restored, stand, in reference to this cotton, in the position of those who have acquired, on behalf of the citizens of the United States, a public property; because otherwise, as has been well said, there would be nobody who could sue in respect of, or deal with, property that has been raised, not by contribution of any one sovereign state (which might raise a question, owing to the peculiar constitution of the Union, if it had been raised in Virginia or Texas, or in any given State), but the cotton is the product of levies, voluntary or other- wise, on the members of the several states which have united them- selves into the Confederate States of America, and which are now under the control of the present plaintiffs, and are represented, for all purposes, by the present plaintiffs. That being so, the right of the present plaintiffs to this cotton, subject to this agreement is, I think, clear, because the agreement is an agreement purporting to be made on behalf of the then de facto existing government, and not of any other persons. That case of The King of the Two Sicilies and the case of The King of Spain, and other cases of the same kind, which it is not necessary to go through, shew that whenever a gov- ernment de facto has obtained the possession of property, as a gov- ernment, and for the purposes of the government de facto, the gov- ernment which displaces it succeeds to all the rights of the former government, and, among other things, succeeds to the property they have so acquired. " Now I come to the second head of the question, and I confess at this moment, as at present advised (of course it will be 158 United States vs. Chile. — Alsop Claim. [Point 11. opened to more argument hereafter) , I do not feel much doubt on the subject, namely, the question whether or not, taking this prop- erty, they must or must not take it subject to the agreement. It appears to me, at present, they must take it subject to the agree- ment. It is an agreement entered into by a de facto government, treating with persons who have a perfect right to deal with them. I apprehend if they had been American subjects they might do so. One of them, Prioleau, is not an American subject (at least I have no evidence that he is) ; he is a naturalized British subject; he would have a perfect right to deal with a de facto government; and it cannot be compared with any one of those cases Mr. GifiFord put, of persons taking the property of another with knowledge of the rights of that other. That is a species of argument that cannot be applied to international cases of this description, and for a very good reason; if so, there would be no possibility during the existence of a government de facto of any person dealing with that government in any part of the world. The courts of every country recognize a government de facto to this extent, for the purpose of saying — you are established de facto, if you are carry- ing on the course of government, if you are allowed by those whom you affect to govern to levy taxes on them, and they pay those taxes, and contribution is made accordingly, or you are acquiring property, and are at war, having the rights of belligerents, not being treated as mere rebels by persons who say they are the authorized govern- ment of the country. Other nations can have nothing to do with that matter. They say we are bound to protect our subjects who treat with the existing government; and we must give to those subjects, in our country, every right which the government de facto can give to them, and must not allow the succeeding govern- ment to assert any right as against the contracts which have been entered into by the government de facto; but, as expressed by I^ord Cranworth in the case referred to, they must succeed in every respect to the property as they find it, and subject to all the conditions and liabilities to which it is subject and by which they are bound. Other- wise, I do not see any answer to Mr. James's illustration, and I do not see why there should not have been a bill filed to have the Alabama delivered up; * * * because on the theory of the present plaintiffs, it was their property just as much as their cotton is now. If the case had been this (and it is the only case I can consider as making any difference, but that difference would be fatal to the plaintiff's case in another point of view): if they had been a set of marauders, a set of robbers (as was said to be the case in the kingdom of Naples, truly or untruly), devastating the country, and acquiring property in that way, and then affecting to deal with your subjects in England, it would not be the United States, but the individuals who had been robbed and suffered, who could come as plaintiffs. That would be fatal to the claim of the United States as plaintiffs. The United States could only come to claim this becaiise it has been raised by public contribution; and although the United States, who are now the government de facto and de jure, claim it as public property, yet it would not be public property unless it was raised, as I have said, by exercising' the rights of government, and not by means of mere robbery and violence. Sub-Point A.] The Case of the United States. 159 " I confess, therefore, I have so little doubt, that this agreement is one that would be binding on the plaintiffs, that I cannot act against these gentlemen without securing to them the reasonable benefit of this agreement; and I cannot put them under any terms which would exclude them from the reasonable benefit of what they are entitled to, and must be held entitled to, as I think, at the hearing of the cause." In a question which arose before the United States and Vene- zuelan Claims Commission of 1885, Findlay, Commissioner, in the case of Beales, Nobles & Garrison, discussed this question in the following language: "It may also be stated, with great confidence, that a government de facto, when once invested with the powers which are necessary to give it that character, can bind the state to the same extent and with the same legal effect as what is styled a government de jure. Indeed, as Austin has pointed out, every government, properly so called, is a government de facto. A government de jure but not de facto, says he, is that which was a government, and which, according to the view of the speaker ought still to be a government, but, in point of fact, is not. (Austin, Juris, vol. i, 336)." [Moore International Arbitrations, Dig., V. 4, p. 3553.] Finally, the matter has been very succinctly and definitely set forth by Wheaton in his Elements of International I^aw (page 50, 8th edition, by Dana) , wheire he says : "So, also, where foreign governments and their subjects treat with the actual head of the State, or the government de facto, recognized by the acquiescence of the nation, for the acquisition of any portion of the public domain or of private confiscated property, the acts of such government must, on principle, be considered valid by the law- ful sovereign on his restoration, although they were the acts of him who is considered by the restored sovereign as an usurper. " Conclusion. It is therefore submitted that from whatever view point the question is observed, it is still conclusively demonstrated that in making the contract of 1876, the Government of Bolivia acted entirely within its sovereign rights de facto or de jure as the case may be, and that therefore those rights, being private rights, were legally and properly conferred upon Wheelwright, and were such rights as must receive consideration and protection by the sov- ereignty succeeding that of Bolivia. • Sub-Point B. The rights, titles, and interests in said government estacas, granted by the Bolivian Government to Wheel- wright, by and under the contract of December 26, 1876, constitute a concessionary grant analogous and equal to a leasehold for years; but said rights, titles, and interests do not constitute and were not intended to constitute an estate or interest identical with or equivalent to a com- mon law or civil law mortgage, nor to a contract of anticresis either under the code of Chile or under the gen- eral principles of the civil law. Prefatory Summary. The discussion following will show that under the contract of 1876, provision was made for two distinct matters: First, the con- tract recognized as due Wheelwright a certain sum specified, which was to draw interest as provided, and also recognized as due a further sum as accrued interest, and secondly it provided in express terms for a lease of all the government mines, located in the Littoral, for a period of twenty-five years. This latter phase of the contract constituted a mining concession. This mining conces- sion was, as just stated, in the form of a lease for a term of twenty- fiye years, and was granted in accordance with the strict provisions of Bolivian law authorizing the grant or lease of the government mines. The terms of this lease were such that, of the net proceeds of the mines, the concessionaries took 60 per cent as profit and a return for their risk, the other 40 per cent of the net proceeds going to the Government of Bolivia. It was also and further stipu- lated that the 40 per cent going to the Bolivian Government should be applied to the payment of the debt recognized in the other part of the Wheelwright contract, until such debt should be paid. This contract was exactly analogous to an earlier contract made between Pedro Lopez Gama and the Government of Bolivia, it being provided in the Gama contract that the concessionaries and the Government should share the net proceeds equally. A prior contract between Gama and the Bolivian Government regarding a debt due from the Government to Gama had provided for the payment to Gama of 25 per cent of the share which should come 160 sub-PotatB.] The Case of the United States. i6i to the Government as the result of the contemplated leasing of the mines, which lease was afterwards actually made to Gama. In view of what is said above, it is clear that this Wheelwright contract does not constitute a mortgage, since it is not a " security " for a debt, it being at most a source from which a debt is to be paid. The Government of Chile also insists upon this point. Moreover, it is not a contract of anticresis, since the proceeds of the mine do not go entirely to the liquidation of the debt, because a part thereof belonged to the concessionary; and, further, there is no relationship between the payment of the debt and the duration of the contract, and therefore by paying the contract debt the Government of Bolivia would not have become entitled to the possession of the mines until the expiration of the lease. This becomes clearly evident from the nature of anticresis, as that has been set forth and commented upon by civil law writers. Finally, it is clear from the various laws and decrees under which this contract was made that the National Executive was not authorized to make an anticretal contract of the mines, but was simply authorized to sell or lease them; and that the Bolivian Government has interpreted the contract as being a leasehold in which the state was interested as a partner, Wheelwright being designated as the "administrator of the Society." Discussion. An examination of the provisions of these decrees as above set forth will show that they provide for and grant the following rights, titles, and interests: First. The contract gave to Wheelwright, representing the con- cessionaries, the exclusive right to possess and operate such of the " Estacas de Instruccion Publica " located in the Littoral, or Coast Department, of Bolivia, as he (Wheelwright) should within aperiod of three years from the date of the contract select (Art. I, Decree of Dec. 23, 1876), provided that in case he failed to work any of the estacas he had designated such estacas might be operated by other persons, if Wheelwright stated in writing to the Government that he did not care to undertake the operation of such estacas, or if he deliberately neglected to make such statement. (Art. 7, Decree of Dec. 23, 1876). Second. The contract conveyed to Wheelwright for the conces- sionaries an absolute right to hold, possess, and operate these mines, 40898 — 10 1 1 1 62 United States vs. Chile. — Alsop Claim. point ii. under the provisions of the contract, for a period of twenty-five years from the date of the contract. (Art. 6, Decree of December 23rd) . Third. The contract stipulated and provided that the net pro- ceeds to be derived from the operation of these mines were to be divided in the following proportion: 40 per cent was to go to the Government of Bolivia and 60 per cent to the lessees (Art. 4, Decree of December 23; Art. 3, Decree of Dec. 24). Fourth. The contract further stipulated and provided that said 40 per cent of the net proceeds belonging to the Government should be and was thereby appropriated, set aside, and applied to thepay- ment of the 835,000 bolivianos, with interest at 5 per cent, recog- nized as due by the contract (Art. 4, Decfee of December 23d, and Art. 3, Decree of December 24th.) Fifth. The contract stipulated and provided that the lessee was to pay to the Government of Bolivia at the expiration of the lease- hold interest (that is, at the expiration of twenty -five years from the date of the contract) such remaining sum or sums of the said 40 per cent belonging, to the Government of Bolivia as were left after paying off, in accordance with the plan agreed upon, the debt of 835,000 bolivianos with interest recognized by the contract as due from the Government of Bolivia to the concessionaries. (Art. 6, Decree of December 23rd.) Sixth. The contract contained a special provision stipulating for the liquidation of the accrued interest recognized under the contract, by providing that this interest was to be met, if met at all, by the sums realized from the operation (though under another and different plan for the distribution of the net proceeds) of two mines, one of which was named in the contract. (Arts. 3 and 4 of Decree of December 24th.) Seventh. The concessionaries were to hold the mines for a full period of twenty-five years (Art. 6, Decree of December 23rd) and it was immaterial to the life of the lease whether or not the debt was paid. Indeed the contract contemplated, as is shown by express words (Art. 6, Decree of December 23rd), that the debt would be paid before the expiration of the twenty-five years, and provided for the distribution of the proceeds in such an event. In connection with the consideration of the nature of the interest in the Government mines in the Bolivian Littoral which these decrees vested in John Wheelwright, as Liquidator of Alsop & Co., and the relationship between this interest and the debt (principal and interest) recognized by the Decree of December 24, Sub-Point B.) The Case of the United States. 163 1876, as due to the said Wheelwright, representing the hquidating firm of Alsop & Co., it is of interest to note a similar arrange- ment which Pedro Lopez Gama (the assignor of the indebtedness recognized by this contract) had made for the liquidation of this same general credit against the Bolivian Government. It appears that in December, 1872, the Government of Bolivia entered into a contract with Doni Pedro Lopez Gama, which, inter alia, recognized as due to Gama from the Government of Bolivia a certain specified indebtedness and stipulated therein that it would liquidate the sum recognized as due, by the appli- cation thereto of 25 per cent of the net profits which should come to the State from the working of the government estacas, a concession for the granting of which was to be made on the first of April following. Three persons, one of whom was Gama, offered bids under the adjudication which took place on the first of April, in accordance with the plan above stated. The contract was awarded to Gama and the government estacas in the Coast Department were turned over to him for exploitation under a separate and distinct instru- ment, apparently having no connection whatsoever with the con- tract of December 21, 1872, above referred to. The instrument leasing to Gama the mines reads as follows : "A proposal which Pedro Lopez Gama makes to the Supreme Govern- ment of Bolivia in regard to the work and exploiture of the Estaca- Mines of silver, whichhelong to the State in the Littoral of the Republic by virtue of the Supreme Decree of the igth of September 1872. "bases of the present proposal. "First. Pedro Lopez Gama, for himself or through collective or anonymous societies, for the formation of which he is duly author- ized, assumes the working and exploiture of all the Estaca Mines which belong to the State, which in the judgment of the manage- ment [will] bear at least the cost of working in the veins already dis- covered or which hereafter shall be discovered in the Littoral of the Republic of Bolivia, subject to the Code of Mining. "Second. The Manager, Pedro Lopez Gama, binds himself to begin work six months after the signing of the instrument of the present contract, or earlier, if he should find it expedient, after the delivery and taking possession of the Estaca-Mines, which have been sur- veyed by national engineers or engineer, at the veins which are known and worked; the operations to begin in the Estaca-Mines which the Company may indicate. "Third. The Supreme Government of Bolivia shall give the respec- tive orders to the Littoral authorities, as well as to the engrifleers 164 United States vs. Chile. — Alsop Claim. [Point 11. or engineer of the Nation, so that, expediting the survey of the 'Estacas' of the State in the veins already discovered, they may. monthly give over possession to the Manager the greatest possible number of thern. To better facilitate this operation, and especially in cases where the direction of the veins of the Estaca of the State might have turned off, and where therefore their direction might .have been badly taken, the Manager binds himself to lend to the engineer of the State the cooperation of the engineers of the Com- pany. ) "Fourth. The Manager can contract and employ for the service of the works engineers, employees and working men, be they for- eigners or nationals; who during the time of their respective con- tracts with the Management shall be exempt from all military service and all civil and public demands. "Fifth. The Manager, Pedro Lopez Gama, binds himself to employ or cause to be employed by the Companies which he might form, by virtue of the authority contained in Art. i of the contract, all the capital that may be necessary for the developement of the enterprise on a great scale. "Sixth. The Manager, Pedro Lopez Gama, offers as a guaranty for the faithful fulfilling of this contract, besides the Credit which the Supreme Government of Bolivia has acknowledged due to him upon the product of said Estaca-Mines, a loan of one million two hundred and fifty thousand pesos at an annual interest of 8^0, at 6% amor- tization and 1% commission. Said 1,250,000 shall be collected by the Manager from the office of the National Bank of Bolivia in Valparaiso in the following manner: 250,000 pesos three months after ratifying of this contract, 500,000 three months thereafter and the remaining 500,000 six months after, the payment of the previous quota. "Seventh. The net profit which the working and exploitation of the Estaca-Mines, to which this contract refers, produce, according to half yearly balances which the Management shall present, shall be distributed between the Government and the Manager in the fol- lowing manner: fifty per cent (50%) for the State and fifty per cent (30%) for the Management. "Eighth. Of the fifty per cent belonging to the State shall be deducted that part which is destined for the payment of the credit which has been acknowledged in favour of the one making the Proposal, according to the Supreme Decree of the 21st of December 1872; as also that which will be necessary to cover the payment of interests, commission and amortization of the loan expressed in the clause 6 of this contract; and the balance which results in favour of the State, shall be to the order and disposal of the Supreme Government. "Ninth. The Supreme Government may appoint, if it judge expe- dient, an Interventor or Official Agent, who may act as attorney in all the operations of the Company; it being understood that the initiative and direction of the works and the management of the business in general, pertain exclusively to the Company. " Tenth. The Company is authorized to sell or to utilize the metal which it exploits in the market which best suits it, be it in the Republic or outside of it. "Eleventh. The Company, to make effective its rights, shall enjoy all the privileges which the Fiscal enjoys. Sub-Point Bj The Case of the United States. 165 " Twelfth. The duration of this contract shall he for the term of fifty years. '^Thirteenth. The State shall he considered as a social partner, and in its quality as such is not responsible for the losses which the Company might suffer. " Fourteenth. During the fifty years duration of this contract, the Supreme Government of Bolivia cannot contract, sell, rent, alienate nor exploit any of the Estacas of the State which they own at present or may own hereafter in all the territory to-day known as the Littoral, where the mineral deposits of Caracoles and others are found. "Fifteenth. The Supreme Government shall order all the local authorities of the Littoral to contribute by all means in their power, to help the engineer or engineers of the State to safe-guard the property and persons of the Company ; and especially it shall recom- mend them to fulfill Art. 9 of the Supreme Decree of the 19th of September last, in which it recommends the taking of the most efficient means to protect the Estacas of the Nation from usurpations and trespass on the part of miners. "Sixteenth. If the protection which the authorities of the Littoral could give may not be sufficient to safe-guard the properties and persons of the Company, taking into consideration the distance which exists between the mines, the incomplete police organiza- tion, and the distance between the coast and the mines, the Company is authorized to organize its own police sefturity and to furnish escort for its shipments to the journey's end. "Seventeenth. To meet cases of usurpation or operation upon any of the Estaca-Mines of the State, the Supreme Government, at the time of notification to the authorities of the Littoral of the celebration of this con- tract, shall indicate to them the shortest and most decisive means how they should proceed to effect the handing over of Such estacas -as should have been usurped or worked hy others at the time of the giving over of them to the Company. "Eighteenth. The Supreme Government grants in favour of the Company during the term of this Contract such land, property of the State, as it may need for the erection of its houses and establishments. "Nineteenth. In the unexpected case that there should be any difference of opinion between the Supreme Government and the Company as to the meaning of this contract, the question shall be resolved by two arbitral judges, selected by either party, but if the referees should not agree between themselves, the two contracting parties shall elect an umpire to whose decision both contracting parties shall submit themselves without appeal. "La-Paz, April ist, 1873. " (Signed.) Pedro Lopez Gama." "In La-Paz de Ayacucho, on the ist of April 1873, at 2 p. m., this being the day appointed by the Supreme Decree of the 19th of September ultimo to consider the bids for the Company to work and exploit the Estaca Mines of the State in Caracoles, the Board of National Auctioneers, composed of the Ministers of State, with the exception of the Minister of Government, who was absent on account of sickness, and in the presence of the President and Dean of the Council of State, who were called for that purpose, and of the Fiscal i66 United States vs. Chile. — Alsop Claim. [Pointu. (Attorney) of the District, the President of the Republic presiding, proceeded to the opening of three sealed papers, the only ones that were ptesented at the hour appointed by the aforementioned decree, the first one containing : the proposal of Messrs. George Earl Church, Emile Erlanger and Julius Beer; the second that of Mr. Pedro Lopez Gama; and the third that of Mr. Narciso Noriega, attorney for Mr. Carlos von der Heyde. " The three proposals having been read and examined at the same time, and after a ripe discussion, the Board qualified the one of Mr. Pedro Lopez Gama a.s the one most advantageous to the State and which offered the m,ost simple combination; in consequence, it was accepted in pref- erence to the other proposals, the Board enlarging Art. ij in the following term,s: "' Article I"/. In, case of usurpation, penetration into any of the estacas of State, or of deviation of the veins, the Supreme Government shall name a commission of judges, who in consort with those whom, in equal number the interested parties shall nominate, and after previous information to the engineers or specialists of both parties, shall resolve according to equity and justice all questions which shall arise between the mining proprietors and the State by reason of said estacas. '"To this end the Government demands of all mine proprietors to present their titles in the mining District of Caracoles, to the end that they may be transcribed into the public registers, and thus facilitate the decisions of the arbiter-committee.' "The Board also disposed that the proposals should be handed to the Minister of Finance for their publication, and that he order the execution of the writing of the contract with Mr. Lopez Gama, as also that he give the orders which would lead to its execution. "Signed by the gentlemen present and by the President of the Republic. "Frias. "P. Garcia. "Juan de Dios Bosque. "IlvDEFONSO SaNJINES. "Mariano Baptista. "Jose M. del Carpio. "Jose Victor Perez. "Manuel Virreira, "Chief Officer of the Treasury." "Ministry op Finance and Industry, "La Paz, April 2, 18-73. "Send to the Prefect of the Department the contract of Mr. Pedro Lopez Gama, that he cause the said gentleman to be notified of the previous resolution, and in consequence the public instrument be made out before the Notary Public of Finance of the Department : Publish the three proposals which have been presented, together with the minutes of acceptation of that of Mr. Pedro Lopez Gama; transcribe to the Prefect of the Department of Cpbija, and give the respective orders for the fulfillment and execution of the referred contract. "Garcia."" «I Appendix, p. 311. Sub-Point B.] The Case of the United States. 167 It will be observed that these documents provide, first, for the leasing of the government estacas for a period of fifty years under and pursuant to the earlier decree of September 19, 1872, which authorized the consideration of bids for the working and exploitation of the government mines; secondly, that it provided that the proceeds should be divided, fifty per cent to Pedro Lopez Gama and fifty per cent to the Government; thirdly, that the por- tion going to the State was by these documents appropriated (a) to the payment of the credit acknowledged in favor of Gama by the decree of 1872; (b) to the payment of a loan made con- temporaneously with the execution of this contract; (c) the balance was to go to the National Treasury. Moreover, the company was to enjoy the rights enjoyed by the Government, that is, stand in the place of the Government; the State was to be considered as a social partner; and the concessionary was to be placed in possession of those mines which had been "usurped by private parties, " as well as have rights against those who had penetra.ted from adjacent mines into the government estacas and taken ore therefrom, — questions arising under both headings to be resolved "according to equity and justice" by a board therein constituted. It is obvious at a glance that there is no relationship between this contract and the prior credit of Gama or the credit created by that instrument, save that the portion of the Government's share of the net proceeds resulting from the operation of the mines should be applied to the liquidation of these debts; and, so far as the liquidation of the Gama credit of December, 1872, is concerned, Gama would have stood as to the Government's share, had the contract been given to either of the other two parties, just as he stood under his own contract. The agreement between Wheelwright and Bolivia, as set forth in the two decrees of December 23rd and 24th, which became the essential part of the contract of December 26, 1876, embodies an arrangement exactly and precisely similar to the arrangement made with Pedro Lopez Gama. A study of the contract of December 26, 1876, will show, as already indicated above, that it consists of two essential and distinct elements which touch one another and overlap at one point only. In the first place, this contract recognizes as due to John Wheelwright as liquidator of Alsop & Co., a debt of 835,000 bolivianos (to dra,w interest at 5 per cent per annum until paid) 1 68 United States vs. Chile. — Alsop Claim. [Point n. together with a certain specified amount of accrued interest and provided methods of payment for these sums, one of which was by- appropriation thereto of a part of the income to be derived from the operation of the go\'ernment mines. This is equivalent to the Gama contract of December, 1872. In the second place, this contract of I'Sye embodied and constituted a concession or lease to Wheelwright of the government estacas formerly leased to Gama, as above set forth. This is equivalent to the Gama concession of April ist, 1873. The terms of the lease in this case have, however, been changed so that in place of the pro- vision of the Gama contract which gave to the Govermnent 50 per cent of the net proceeds from the operation of the mines, the Wheelwright contract gave to the Government but 40 per cent of the net proceeds from the operation of the mines, Wheelwright, representing Alsop & Co., being entitled to the other 60 per cent of the net proceeds as a compensation for his operation of the mines. The provisions of this lease also differed from the provision of the Gama contract in that it provided that all, instead of one-fourth, of the Government's share should be applied to the liquidation of the principal debt until such debt should be entirely paid, principal and interest. It becomes obvious from this analysis of this side of the Wheel- wright contract that the concessionaries had two sources to which to look for the discharge of the obligation recognized by the con- tract. First, the customs receipts of the Arica Custom House, and the correspondence of the parties in interest plainly shows that it was to this source that the concessionaries primarily looked for the discharge of their obligation; secondly, the Government's share of the net proceeds which might be realized from the opera- tion of the government estacas in the Bolivian Littoral. This latter arrangement is, as already stated, precisely the same sort of a contract as that which was entered into between Gama and the Bolivian Government in 1873, and it is not in terms or in effect a pledge, or mortgage, or hypothecation of the mines of the Boliv- ian Littoral for the payment of the debt, whether contemplated from the fundamental principles of the common law, or the like principles of the civil law, as will appear from the following anal- ysis and examination of authorities. It is elemental under the common law that in a pledge or mort- gage the thing pledged or mortgaged is given as security for the debt and not in liquidation of the debt; that, save perhaps in the Welsh mortgage, to-day almost obsolete, the mortgagor never looks Sub-Point B.i The Case of the United States. 169 .to the thing mortgaged for the satisfaction of his obHgation, prin- cipal or interest, except only when the debt is due and the creditor fails to meet the same and the thing pledged or mortgaged is, under the modern practice, sold, i. e., foreclosed, and the proceeds appHed to the payment of the debt. It is clearly evident from an examina- tion of its provisions that the Wheelwright contract of 1876 does not in terms nor in effect convey to Wheelwright anything that in any way resembles a mortgagee's interest in property mortgaged to him as security for the debt due to him from the debtor. On the contrary, the relationship existing between Wheelwright and the Government of Bolivia is the same relationship which would exist between A and B in a case stated as follows : A, owing B, leases to B his, A's, farm for a period of twenty-five years, under an agreement which provides that B shall take 60 per cent of the net proceeds of the operation (working) of the farm, and that A shall take 40 per cent of the net proceeds of the operation of the farm, with a stipulation that the 40 per cent belonging to A shall be applied to the debt due from A to B until said debt is paid, after which the 40 per cent shall go to A. In this case there is no relationship whatsoever of mortgagor and mortgagee. It is a simple case of lessor and lessee. The lessee has the right to the farm under his lease for the period of twenty-five years, irrespec- tive of the question of the payment of the debt due from* A to B. If the debt is paid in five years, then the 40 per cent goes directly to A, for the balance of the term, viz. , for twenty years. If the debt is not paid in twenty-five years, or at the end of the lease, B sur- renders the leasehold and has still an obligation against A for the balance of the debt then unpaid, which balance is not affected in any way by the surrender of the lease, and there is in such contract nothing in the nature of a right of foreclosure should the debt remain unpaid at the expiration of the lease. This is precisely the nature of the interest which was held by Wheelwright for the concessionaires in the government estacas of the BoHvian Littoral. The concessionaires were to hold the mines for a period of twenty-five years. During these twenty-five years they were to retain 60 per cent of the net proceeds of the operation of the mines and were to turn over to the Government of Bolivia the balance, or 40 per cent of the net proceeds derived from the operation of the mines. The 40 per cent belonging to Bolivia under this contract was to be applied to the payment of the debt recognized as due by the contract, so long as any part of that debt remained unpaid. If th*e debt were paid in full before lyP United States vs. Chile. — Alsop Claim. [Pointn. the expiration of the twenty-five years, the 40 per cent accruing to 1:he Government of Bolivia after the payment of the debt was to be paid to the Government of BoHvia. This arrangement not only does not constitute but does not resemble a mortgage. The Government of Chile has more than once recognized this fact, and in the note of the Minister of Foreign Relations of Chile to the American Minister at Santiago, dated April 9, 1908, the posi- tion of the Government of Chile upon this point was set forth as follows: "However, the liberality of my Government in assuming the settlement of this claim by paying a considerable part of it was not duly appreciated by the representative of this firm, who, not being satisfied with the amount assigned to him in the Treaty of Peace, claimed, as the Chilian Minister at Washington saw fit to express it on more than one occasion, that by reason of the fact that this debt was secured by property situated in the Territory acquired by Chili in virtue of this same Treaty, my Government was under obligation to pay it in its entirety. ' ' Your Excellency will realize how inadmissible such an argument is if you consider the fact that the security for the Alsop claim is, like that of many creditors of the Bolivian Government, not a civil law mort- gage, but simply a financial guaranty given by the nation for the purpose of insuring the fulfillme'nt of a contract." '^ That the contention thus set forth by the Government of Chile, to the effect that this Wheelwright contract in so far as it affects the mines of the littoral is not a civil law mortgage, is a correct interpretation of the civil law governing this question seems certain, from a consideration of the fundamental principles of the civil law as they were understood and enforced in the old Roman law. (See Moyle's Institutes of Justinian, Excursus 2.) It must therefore be conceded as established not only from a consideration of the instrument itself but also from the contention of both the United States and Chile that the Wheelwright contract not only does not purport to convey, but does not in fact create or convey, any right, title, or interest to the littoral mines which under the principles of either the common law or the civil law may be properly designated as a mortgage. It should, however, be observed that the court of second instance at Antofagasta in the case of the Justicia, (hereinafter discussed at some length) held upon the question of the nature of the contract of 1876, as follows: " I. That the convention celebrated in the City of La Paz on the 26th December, 1876, between the Government of the Republic of a I Appendix, p. 137. Sub-Point Bj The Case of the United States. 171 Bolivia and Mr. John Wheelwright, representative of the firm of Alsop & Company, is a contract of ' anticresis ,' by which convention there was recognized in favor of this firm a debt of 835,000 Bolivian dollars, and there were adjudicated to him the estaca mines of silver belonging to the State in the Coast Department, in order that the said debt shpuld be paid with 40 per cent of their net products during the term of 25 years."" It is believed that this decision of the court is not sound in law, and for the following reasons: In. the first place the Code of Chile defines the term " anticresis " as follows : "Art. 2435. Anticresis is a contract whereby there is delivered to the creditor a real property in order that he may pay himself out of its proceeds." '' After stipulating several general provisions regarding contracts of anticresis, the code further provides in Article 2444 as follows: "Art. 2444. The debtor cannot request the restitution of the prop- erty given in anticresis except for the entire satisfaction of the debt ; but the creditor may restore it at any time and pursue collection of his debt by the other legal methods without prejudice to what may be stipulated in the contract." '' That the Wheelwright mining contract of 1876 was not a con- tra,ct of anticresis within the meaning of the provisions of the Chilean code, above cited, is evident from the following considerations: In the first place. Article 2435 provides that the creditor takes over the property "in order that he may pay himself out of his proceeds." As has been already pointed out the Wheelwright contract is not, in its essence, a contract negotiated and concluded in order that Wheelwright might satisfy himself out of its proceeds. On the contrary it must be observed that Wheelwright evidently expected to have his debt paid from the Arica customs and the appropriation of the Government's percentage of the net proceeds resulting from the operation of the Government's mines was merely an additional source to which he might look in order to secure the more rapid liquidation of his debt. The Wheelwright mining con- tract of 1876 was essentially a cpncessionary grant, under which but a portion of the proceeds would, in any event, be applied to the debt, the balance of the proceeds going to the concessionaries as a return upon the risk which they took and the investments which they rnade in the operatipn of the mines. This mining concession was purely a mining venture identical in its character, as has already been pointed out, with the arrangement between Gama and the Bolivian Govern- ment of 1873. oil Appendix, p. ii8. b\ Appendix, p. 357. 172 United States vs. Chile.— Alsop Claim. Point n. Again, the Wheelwright contract fails to meet the requirements of the first clause of Article 2444, as above quoted, which provides that "the debtor cannot request the restitution of the property given in anticresis except for the entire satisfaction of the debt." A perusal of the contract will show that there is absolutely no relationship between the duration of the mining contract and the satisfaction of the debt. The contract was to run for a period of twenty -five years, during which time the proceeds due the Gov- ernment under the contract were to be appropriated and applied to the payment of the debt so long as any portion of that debt remained unpaid, after which this share was to go directly to the Government of Bolivia. The discharge of the debt gave to the Government of Bolivia absolutely no right to demand the sur- render of the government estacas held by the concessionaries until the end of the lease. If the debt had been paid by the middle of 1882, as it would have been had the Government of Chile not inter- vened, still the contract would have continued to exist and still the concessionaries would have retained possession of and operated, had they so chosen, the government mines in the Littoral up to and including the expiration of the twenty-five years of the lease, namely, 1901 . As a matter of fact, the only seeming analogy which exists between the Wheelwright contract and the contract of anti- cresis is the fact that the contract provides that the Government's share of the proceeds resulting from the operation of the mines may be applied to the payment of the debt and that this seeming analogy is false in essence becomes only too evident when an analysis of the contract is undertaken. It is, therefore, confidently asserted that even under the pro- visions of the Chilean Code the contract of 1876 cannot be regarded as a contract of anticresis. But not only does this contract fail to satisfy the technical requirements of a contract of anticresis as thus set forth in the Chilean Code, but it also fails to satisfy the requirements of an anticretal contract under the general rules and requirements laid down by writers and commentators upon the general principles of the civil law. Escriche, in his Dictionary of Legislation and Jurisprudence, discussing the subject of " anticresis," makes, sub voce, the following comments : "Anticresis: A contract whereby the debtor places in control of the creditor a real or immovable thing, with the right to receive its proceeds until with their value payment of the debt is made; Sub-Point Bj The Case of the United States. 173 and more especially a contract in which the debtor consents that his creditor enjoy the fruits of the heritage which he delivers to him in place of the interest on the money which he has loaned from him until he pays him his debt. Anticresis used commonly to be called a contract of "a use for a use" (gazar y gazdr) because one gives the use (enjoyment) of a producing thing and the other gives the use (enjoyment) of his money." <» It will be observed that in no particular does the Wheelwright contract satisfy the requirements of the contract of anticresis as thus set forth. The accuracy of this assertion is apparent when it is considered that, First, this contract did not give the "right to receive its pro- ceeds until with their value payment of the debt is made," since the contract in the first place does not provide for the application to the liquidation of the debt all of the proceeds resulting from the operation off the mines, but, on the contrary, applies but a portion of the proceeds to the liquidation of the debt — the other portion of the proceeds going to the concessionaries as compensation for their undertaking. In other words, to repeat again what has already been pointed out above, the Wheelwright contract, so far as the mines were concerned, was a mining concession, under which Wheelwright was to operate the mines by an arrangement which provided that a certain percentage of the proceeds should go to the concessionaries as a profit upon their undertaking, and the balance of the proceeds should go to the State as a considera- tion for the rights granted to Wheelwright under the concession. As a subsidiary and auxiliary matter purely, the object being merely to provide an additional source from which, if necessary, the debt due from the Bolivian Government to the concessiona- ries might be met, the contract also provided that the percentage ' due to the Bolivian Government under the contract should be applied to the payment of the debt due to the concessionaries. This latter arrangement was, however, independent of and in addition to the concession itself, which provided merely for the leasing of the mines and the division of the net proceeds. Further, to repeat again, there was absolutely no relationship between the payment of the debt and the duration of the con- tract. Indeed, the contract in terms expressly recognized that the debt might be discharged before the expiration of the lease- hold term and specifically provided for the disposition of the fund belonging to Bolivia under the concession in such an event. It will thus be perceived that this mining contract does not, as a o I Appendix, p. 365. 174 United States vs. Chile. — Alsop Claim. [Point n. contract of anticresis requires, give a right to receive its proceeds until with their value payment of the debt is made. Secondly — This is not a contract under which the BoHvian Government took the use of the money and Wheelwright the use of the mines with the understanding that it was a " use for a use." On the contrary, it was distinctly provided that the debt should draw interest, notwithstanding Wheelwright had the use of the government mines. This fact but emphasizes the contention just set forth that there is absolutely no relation between the mining concession and the debt, save that it was provided that the sum due Bolivia under the mining concession should, until the debt was paid, be applied thereto, and that the concession existed independently of the debt, and that the debt might survive the running of the leasehold term. Therefore, this is not a "con- tract in which the debtor consents that his creditor" enjoy the fruits of the inheritage which he delivers to him in place of the interest on the money which he has loaned from him until he pays his debt." The leasehold term was separate and distinct from and wholly independent of the payment of the debt, and con- tinued or terminated irrespective of the payment of the debt. Again Escriche says : "If the law wishes to safeguard, as it is supposed, the interests of the debtors, it had much better forbid them the sale with a right of repurchase (a Carta de gracia) than anticresis. Anticresis is usu- ally less disadvantageous for the debtor than such sale. By the sale a debtor is dispossessed, not only of the proceeds, but also of the ownership of his property but by anticresis he is only deprived of the proceeds; by the sale the buyer always acquires the right of receiving all the proceeds no matter what they may be and by anti cresis the creditor cannot receive any of the proceeds but what are apor- tioned to the interest of the sum loaned, being obliged to apply the ex- cess to the exclusive payment of the principal of the debt; by the sale the vendor is always exposed to the loss of the property sold by reason of the inability in which he may find himself of repaying it within the contract or legal term, as well as to the danger that the purchaser may by alienation transfer it into the hands of a third party from whom neither the one nor the other could reclaim it, and by anticresis the debtor always preserves the right to recover his prop- erty by paying what m,ay be wanted to cover the debt since the creditor can never sell it, not even under the same form in which he takes it and he can much less acquire title to it by prescription, only possessing it, as he does, conditionally."" Neither of the characteristics here pointed out by Escriche as belonging to a contract of anticresis are to be found in the Wheel- «I Appendix, p. 366. Sub-Point B.) The Case of the United States. 175 Wright contract. He says in the first place that "the creditor cannot receive any of the proceeds but what are apportioned to the interest of the sum loaned, being obHged to apply the excess to the exclusive payment of the principal of the debt." The contract in this case contains no provision requiring any such apphcation of the funds to the payment of this debt. Under this contract the concessionaries could apply to their debt only Bolivia's portion of the net proceeds and they could apply this indiscriminately to principal or interest. In the second place Escriche says : "By anticresis the debtor always reserves the right to recover his property by paying what may be wanted to cover the debt."" The Wheelwright contract is wholly lacking in this element of anticresis. The leasehold term ran in this case twenty-five years. It had this duration irrespective of whether or not the debt was paid. Indeed, in its terms it expressly recognized that the debt might be paid before the expiration of the term and con- tained specific provisions as to the distribution of the proceeds in such an event. The existence of the debt was not essential to the continuance of this contract and the Government of Bolivia could not by satisfying the debt due under this contract havfe terminated the leasehold term. The debt and the duration of the concession were wholly, distinctly, and absolutely independent each of the other. Again, Escriche further discusses the character of anticresis in the following language: "However it may be, the question of anticresis depends upon the question of interest on money and so long as it is lawful to charge interest for money which has been loaned it will be equally so to enter into contracts of anticresis which reduce themselves to receiving said interest in the form of proceeds. "In accordance with what has been said, anticresis is contracted when he who has taken money at interest delivers to the creditor real property in order that he may receive its proceeds by way of interests : ' Contrahitur antichresis,' says Argetreo, ' cum dibitar accepta sub usures pecunia, fundum creditori fruendum dat pro interusurio pecuniae.' {Anticresis is contracted, says Argentreo, when the debtor, money having been accepted at interest, gives to the creditor a property which must be enjoyed in place of the interest on the money accruing meanwhile.) "The word 'Anticresis' is Greek and it signifies the enjoyment of contrary use and its application is not inopportune to the contract whereby the creditor enjoys the property of the debtor while the debtor enjoys the money of the creditor. - I Appendix, p. 367. 1 76 United States vs. Chile. — Alsop Claim. [P»mt 11. " Anticresis is in accordance with the principles of compensatory justice; since it would not be just that the creditor should be deprived of the enjoyment of his money and the proceeds of the heritage and that the debtor enjoy both these things. "Anticresis is distinguished from pledge and mortgage: from pledge by the reasons which we have already pointed out; from the mortgage because in this latter the debtor retains possession of the thing mortgaged while on the other hand, prescinding for the moment from other differences, the thing given anticresis is delivered to the creditor. "Not only the debtor, but also the third person, if any, can deliver a thing in anticresis. "Real estate may be given in anticresis which produces fruits be they natural, such as those of a vineyard or an olive orchard, or be they artificial, such as those of a house. 'The creditor does not acquire by this contract anything except the right to receive the proceeds of the estate which is delivered to him with -the obligation of crediting them annually on the interest that may be due him and afterwards on the principal of his debt. " If the fruits of an estate are about equal in an ordinary year to a legal interest on the debt, that is, to the interests which do not exceed the rate fixed by law, it may be stipulated that the entirety of the proceeds shall equal the total of the interests : but if the value of the proceeds is greater than the amount of the legal interest the excess must be applied to the exclusive payment of the principal of the debt without the possibility of making increment that will open the door to usury, the creditor, therefore, being obliged to preserve in this case a quantity of the proceeds which he may collect in order to present it to the debtor: ' Non debet creditor,' says Argentreo, ' ampliares fructus precipere quam quanti- conveniat cum legitimis pecuniae usuris, alioquin usurae valiun contractum corrum- peret.' (The creditor must not, says Argentreo, receive greater fruits than what would equal the legitimate interest of the money, otherwise the vice of usury would vitiate the contract."" The contract wholly fails to satisfy the repeated elements of the contract of anticresis as here set forth, namely : "Anticresis is contracted when he who has taken money at interest delivers to the creditor real property in order that he may receive its proceeds by way of interest;" * * * "it signifies the enjoy- ment of contrary use * * * whereby the creditor enjoys the property of the debtor while the debtor enjoys the money of the creditor;" * * * "it would not be just that the creditor should be deprived of the enjoyment of his money and the proceeds of the heritage and that the debtor enjoy both these things. "'' The Wheelwright contract is not a contract in which the pro- ceeds of the mines held under it are to be appropriated in Ueu of interest, since such debt expressly draws interest. " I Appendix, p. 368. b I Appendix, p. 368. Sub-Point B.] The Case of the United States. 177 Perhaps the basic principle of the whole contract of anticresis is best expressed by Escriche when he says: "The creditor does not acquire by this contract anything except the right to receive the proceeds of the estate which is delivered to him with the obligation of crediting them annually on the interest that may be due him and afterwards on the principal of his debt. "'' It is not perceived that it is necessary to do more on this point than again to state how fully and fundamentally this contract fails to answer to this principle for the reason that the contract would exist independently of the debt. Finally, Escriche enlarges upon these principles and upon the effects which follow from them, in the following language: "The debtor cannot ask the return of the property given in anti- cresis prior to the entire satisfaction of the debt, interest and expenses, if there be any, as is provided, except for the interest, in the case of a pledge by law 21, title 13, part 5; and if the creditor should hold against the same debtor another credit contracted after the first, provided it be in writing, and the term of its payment is expired, he may retain the thing given in anticresis until the satisfaction of both debts, although the proceeds of the estate were not pledged to the payment of the second : but in this hypothesis anticresis would have no effect regarding the second debt against a third party to whom the debtor should sell or pledge the estate since he would have the right to reclaim it by paying the first debt as law 22, title 13, part 5, provides concerning a pledge. . "The creditor who may find the fulfillment of the obligations which he has to assume and which we have pointed out too onerous may, when he sees fit, abandon to the debtor the thing which he has received from him in anticresis, renouncing this guarantee, provided that he has not agreed with the debtor to care for the estate until the repayment of the debt, since everyone is free to forego what has been done in his favor unless there be an agreement to the contrary. "Although the debt is not paid within the time agreed the creditor cannot dispose of the thing received in anticresis, since he only holds it on deposit; he cannot appropriate it to himself as purchased because it has been loaned to him, even though it has thus been agreed with the debtor, since such an agreement is void even with respect to a pledge, according to law 41, title 5 and law 12, title 13, part 5 ; nor can he have it sold at public auction as a pledge, because he does not hold it in any other right than that of receiver of the proceeds, unless to the contract of anticresis that of a pledge or mortgage had been joined or unless the debtor had expressly authorized him to do this; but if it had been stipulated that if the debt was not paid within the time limit the estate should be understood to have been sold to the creditor for its just value in accordance with the appraisement of experts, this agreement would be valid and would have to be carried out as said law 12, title 13, part 5 provides in the case of a pledge. " '' "■1 Appendix, p. 368. ''I Appendix, p. 370. 40898 — lo 12 1 78 United States vs. Chile. — Alsop Claim. [Point n. But not only is this contract not in fact or in law a contract of anticresis and not only was it never intended by those who nego- tiated and concluded it to enter into such a contract, but the following facts conclusively demonstrate that it was beyond the power of the Bolivian Executive, acting under the decree of 1853 and the laws passed for the purpose of enabling the Executive to put that decree into effect, to negotiate an anticretal contract with reference to these estacas mines. The decree of 1852 provided in Article 3 as follows: "In consideration of the advantages which the sale or the leasing of these estacas will produce in favor of the ends of public instruc- tion the Government shall sell or lease them in accordance with the forms established by the laws." " The National Constituent Assembly in its law passed October 19, 1 87 1, authorized the Executive — ,' ' to celebrate contracts of renting or working in partnership all the mines (estacas minas) belonging to the State in the mineral districts of the Republic."* It will be observed that this law authorizes "renting or working in partnership " and does not authorize the making of a contract of anticresis. The executive decree of November 2, 1871, based upon the law of October 19, 1871, just quoted, provided as follows: "Article i. That a tender is invited for the working of the estacas mines of the state in partnership, the state being considered as an indus- trial partner. ^ -^ ^ ^ :^ :^ :f^ "Article 3. That the Government as an industrial partner does not bind itself to reimburse losses to the partners who furnish the capital. ******* "Article 7. The company shall be organized in accordance with the Code of Mines, it being understood that the State, because of the part it takes as a partner, does not waive the privileges which it enjoys in mining matters."' It will be observed that there is nothing in this decree authoriz- ing the making of an anticretal contract regarding the government mines of the Littoral. Moreover, on September 19, 1872, a further decree was issued by the Executive which provided: "Article i . A new tender is asked for the working of the Estaca mines of silver of the State of Littoral in association with it in the sense that the State shall be considered as an industrial partner. oil Appendix, p. 271. 6 II Appendix, p. 273. c I Appendix, p. 298. Sub-Point B.] The Case of the United States. 179 "Article 2. The proposals shall be presented in a package sealed until the first day of April, 1873, on which day, at 12 o'clock, they shall be opened at a Cabinet meeting and in the presence of the Gov- ernment Attorney, and they shall be classified so that the most advan- tageous one shall be accepted. "Article 3. The Government, as an industrial partner, shall not be obliged to reimburse losses to the partners who furnish capital. "Article 4. The duration of the association shall be fixed in the con- tract, and during the time that may be stipulated the State shall not be able to sell the Estacas involved. "Article 5. The partners furnishing capital shall make in their pro- posals an offer in advance on the net proceeds which the State is to receive. The sum advanced shall be considered as a deposit being the guarantee of the immediate commencement of the work and for every charge that might result from the fault of the managers ; and its payment shall be made by an amortization of 6 per cent., to be deducted from the net proceeds. "Article 7. The partnership shall be organized in accordance with the provisions of the national laws, and the working shall be effected in conformity with the mining code, it being understood that the State, by reason of its participation, does not renounce the privilege which it' enjoys in mining matters. "Articles. The Decree of November 22, 1871 is repealed. "Article 9. The Government recommends to the Prefects and Sub- Prefects that they take the most efficacious measures to safeguard the Estacas of the nation, avoiding usurpation and trespass on the part of the miners. "Article 10. For the working of the Estacas in the mineral dis- tricts of the interior departments the Government shall again call for tenders. "° It was under these decrees and laws, which authorized the Executive merely to lease or sell these estacas mines and not to pledge them under an anticretal contract, that the Wheelwright contract of 1876 between "Wheelwright and the Government of Bolivia was negotiated and concluded. Moreover, it is entirely clear that both Wheelwright and the Government understood that this was a partnership arrangement. In the petition addressed to the Minister of Finance and Industry on' August 19, 1878 by Jose Santos Monroy, for and in behalf of Wheelwright, Monroy makes the following statements : "By the aforesaid exploitation contract, there was formed between the Supreme Government and my constituent, a veritable mineralogical society, the management of which was confided to the latter." *" On February 5, 1879, in an executive decree addressed to the Fiscal of the Coast District, the Bolivian Executive made the following statements: "Repeated demands having been made to the Government on the part of Mr. Wheelwright, who in association with the State, is "■1 Appendix, p. 299. ''II Appendix, p. 177. i8o United States vs. Chile. — Alsop Claim. [Point n. working the fiscal mining setts (estacas minas fiscales) of your dis- trict, in order to render efi'ective his action as administrator of the Society, which he is in virtue of his contract, the President of the Republic charges me to request you to forward to the Fiscal Ministry the following instructions: "First. — That the Fiscal of the District of Caracoles, who, accord- ing to law, represents the rights of the State, should put in force the legal measures which the contractor may deduce, seeing that he is not guided by private interests, but as a partner with the Govern- ment, in place of putting obstacles in the way, as would seem to be the case from the evidence which accompanies one of his claims. "" It will be observed that in this decree the Executive distinctly speaks of the relationship between the Government and Wheel- wright as "in association with the State," that Wheelwright is acting as "administrator of the society," and that he is under this contract " a partner with the Government." It is confidently submitted that these expressions entirely preclude the idea that the relationship between Wheelwright and the Bolivian Govern- ment in this contract was different or other than the relationship which the Executive was authorized to conclude under the various laws and decrees above mentioned. It would, therefore, seem sufficiently established by the above discussions and the documents therein quoted, that the conces- sionary grant to Wheelwright of December 26, 1876, is not in fact or in law, and was not intended to be, a contract of anticresis; that it did create a vested right, title, and interest in the conces- sionaries to the government mines of the Bolivian Littoral; that this interest was a concessionary grant in the nature of a leasehold estate running for a period of twenty-five years, which conces- sionary grant carried with it certain rights, privileges, and immuni- ties heretofore discussed; that the concessionary grant was separate and distinct from the debt or the liquidation thereof; that there- fore the concessionaries had a right to the enjoyment of these rights, titles, and interests for the full concessionary term without let or hindrance or molestation; and that the Government of Chile, in so far as that Government derogated from, destroyed, or inter- fered with, these rights, titles and interests, or any of them, became liable to answer in damages for all such injury as their action may be found to have inflicted. o II Appendix, p. 148. Sub-Point C. Under the concessionary grant to Wheelwright of Decem- ber, 1876, Wheelwright enjoyed, in the government estacas, for purposes of occupation, possession, and exploitation, the rights, titles, and interests which were po'ssessed by the State. Prefatory Summary. The various decrees issued by the Government of BoHvia con- clusively demonstrate that under his contract of 1876 Wheelwright enjoyed for the purposes of occupation, possession, and exploita- tion the rights, titles, and interests which were possessed by the State. This was clearly apparent from the texts hereinafter given of the governmental decrees of 25th July, 1878, August 9, 1878, August 21, 1878, and February 5, 1879. Discussion. It is entirely clear that under this contract and for the term thereof, the concessionaries possessed in the government estacas in the Bolivian Littoral all of the rights belonging to the Govern- ment of Bolivia. This fact is recognized and is expressly stated over and over again by the Executive of Bolivia in the various orders and decrees issued by that Government with reference to the operation and enforcement of the provisions of the Wheel- wright contract. In the Government decree of the 25th of July, 1878, it was ordered : "I/Ct this representation be forwarded to the Prefect of the Department of Cobija, in order that he may cooperate effectively with the Fiscal and other public functionaries of Caracoles, so that in the sphere of their attributes, they may render the most active cooperation to Mr. John Wheelwright, who represents the rights of the State, with the object of putting him in possession of the mining setts (Estacas Minas) of the State, in fulfillment of the agreement of the 24th December 1876."'' On August 9, the Prefecture of the Department of Cobija was directed as follows : "In conformity with the reasons given by the Fiscal of the Department, and the claim made by the agent of Mr. John Wheel- <>' II Appendix, p. 145. 181 i82 United States vs. Chile. — Alsop Claim. [Pointii. wright being just and legal," it is ordered: That in all measurements and surveys of silver mines made in future by the Territorial Depu- tation, Mr. Wheelwright or his representative be notified, in pro- tection of the rights of the State, in order that he may form an opinion and take the necessary steps for the due fulfillment of the settlement of the 24th December, 1876. Likewise, that to all titles or minutes of pos- session, the clause protecting the rights of the State be added." " On August 21, 1878, there was issued from the Ministry of Finance and Industry, the following order signed by President Daza and Minister D. Medina: "In virtue of the reasons on which this petition is founded, and considering that Mr. Wheelwright took over the Fiscal Mining Setts {Estacas Minas Fiscales), under the contracts of the Settlement of the 24th Decemher, 1876, as the representative of the State, it is hereby declared that as such he should enjoy the same privileges as the State in the judicial measures which he may initiate and sustain in order to enter into and maintain possession of the said Fiscal Mining Setts. "^ The last order issued by the President and his Minister upon this matter prior to the occupation of the Littoral by the Chilean forces in 1879, the order being dated February 5, 1879, reads as follows : "Ministry of Justice, "PuBuc Instruction and Worship, "La Paz, 5th February, 187^. " To the Fiscal of the Coast District. "Sir: Repeated demands having been made to the Government on the part of Mr. Wheelwright, who, in association with the State, is working the Fiscal Mining Setts (Fstacas Minas Fiscales) of your district, in order to render effective his action as administrator of the Society, which he is in virtue of his contract, the President of the Republic charges me to request you to forward to the Fiscal Ministry the following instructions : "First. — That the Fiscal of the District of Caracoles, who, accord- ing to law, represents the rights of the State, should put in force the legal measures which the contractor may deduce, seeing that he is not guided by private interests, but as a partner with the Govern- ment, in place of putting obstacles in the way, as would seem to be the case from the evidence which accompanies one of his claims. "Second. — ^That as, according to Article 168, Clause 2, of the Mining Code, the neighbor can have free entrance to a mine when he presumes or fears some prejudice, the contractor, Mr. Wheel- wright, cannot be refused the right of investigating personally, or by means of his agent, the encroachment of the neighbor on the bounds of the Fiscal Mine, in order to formulate the corresponding demand before the competent authority in the event of his fears being reaHzed; while, on the other hand, this right of procedure, merely administrative cannot be restrained by any opposition whatsoever. oil Appendix, p. 146. 611 Appendix, p. 147. Sub-Point c] The Case of the United States. 183 "Third. — In the event of any well-founded dispute arising, infor- mation of the matter shall be passed to the competent judge in the form prescribed, amongst other depositions, by the law of loth November, 1873. "As will be observed, the Government, in the foregoing instruc- tions, does not make any new resolution, but only calls to remem- brance, the legal dispositions mentioned, in order that they may have the most faithful and strict fulfilment. "May God be with you. "(Signed.) Daza. "(Signed.) Serpio Reyes Ortiz. "Given at the verbal request of the party interested, Mr. Jos6 Santos Monroi, as representative of Mr. Wheelwright. "(Signed.) Melquiades Loaiza, "Chief of the Section of Justice.""' "[SEAL.]" That this right and interest thus defined by the various decrees and orders of the Bolivian Executive were real and vested rights, titles, and interests ; that they were fully and absolutely conveyed by the Government of Bolivia to the concessionaries; that the concessionaries were entitled to enjoy these rights, titles, and interests which had been conferred upon them by the contract up to and including the last moment of the period for which their concession ran; and that this interest thus granted under Bolivian law could not be adversely affected by even such a legislative act as the repeal of the decree of 1852 (which provided for the segre- gation of the government estacas) , is made quite clear by Dr. Mel- quiades Loaiza, who, in a semi-official treatise (*) entitled ' ' La Nueva lyCgislacion de Minas de la Republica de Bolivia," (published in 1885), and having quoted Article 37 of the Mining Code of 1880, which provided that "the Supreme Decree of July 23, 1852, relating to the Estacas Mines of Public Instruccion, is hereby repealed," made upon this point the following statement: "5. Notwithstanding what has been said in the foregoing num- ber, the estaca mines situated in the Department of the Littoral oil Appendix, p. 148. (6) "introductory decree by the government of BOLIVIA. "Ministry op Justice, Education and Public Instruction, ' ' La Paz, June 23, iSSj. ' ' The Government recognizes the patriotic labor and the importance of the work which, in accordance with his former petition, Dr. Melquiades Loaiza offers to complete, and grants him permission to reprint the new Mining Code and the coordi- nate provisions, together with the explanatory part which composes the notes, con- cordances, and comments which he points out, all of which is the private property of the author. The Government Attorney of the District shall take care that the integrity of the official text shall not be altered, following the decrees of October 23, 1871, and February 17, of the present year. Let it be registered and returned after having been properly transcribed to the Government Attorney of this District. "(Signed.) Campero. "(Signed.) Pedro H. Vargas." 184 United States vs. Chile. — Alsop Claim. [Point n. are not included in the derogation of Article 37 of this law; because there exists rights acquired by Alsop and Company of Valparaiso, whose credits against the Treasury must be extinguished by their returns, as is stated by the Minister of Hacienda and Industry in his Memorial of 1883." It will be thus observed that in the decrees of July 25, 1878, August 9, 1878, and August 21, 1887, Wheelwright is spoken of as representing the rights of the State, or as enjoying the rights of the State, or as the representative of the State; while in the decree of February 5, 1879, .the relationship between Wheel- wright and the State was said to be that of a partnership, Wheel- wright acting as the "administrator of the Society." Under these circum'stances, it cannot be doubted that the rights which the State held in these government estacas were, during the life of the lease, possessed by Wheelwright. Sub-Point D. Among the rights, titles, and interests in said government estacas, which by virtue of the relationship and status Wheelwright enjoyed under this contract, with reference to the government estacas therein granted, were (1) the right to hold said estacas free from the penalty of denouncement for abandonment, and (2) the resulting freedom from the necessity of taking, or remaining in, the physical possession of the estacas chosen and designated by him under his contract. Prefatory Summary. It seems wholly clear that among the rights, titles, and interests possessed by Wheelwright in virtue of his standing in the place of the State with reference to the governm.ent astacas was the right to hold the government mines free from the penalty of denouncem.ent for abandonment. This appears to be clearly assumed by the decree of March i, i860, and was specifically stated in the resolution of the 12th of October, 1871, which latter decree was recognized in connection with the Gama contract of 1873 in an opinion by the Prefect of the Department of Lamar under date of November 14, 1873, this opinion being ratified and approved by the Ministry of the Treasury on December 20 of the same year. This same principle was recognized in the decree of December 12, 1878, and also in the semi-official work of Dr. Mel- quiades Loaiza, "Nueva Legislacion de Minas." Moreover, the Supreme Court of BoHvia on October 28, 1872, rendered a decree which distinctly recognized the non-denounceability of the gov- ernment estacas. And this same position has been taken by the courts of Chile in the case of the Justicia. Moreover, it should be observed that • under the numerous decrees and orders issued by the Executive at various tim.es for the enforcem.ent of the rights of the Government to the govern- ment estacas it was distinctly recognized that the Government was entitled to the possession of the government estacas irre- 185 i86 United States vs. Chile. — Alsop Claim. [Pointn. spective of the actual fact of possession at the time the various decrees were issued, that is, whether the Government had at the time or ever had had possession or whether the possession was actually exercised by third parties. In either case, the decrees go to show that the Government was entitled to possession imme- diately upon request. This principle was distinctly recognized in those provisions which required that parties should surrender possession to the State and to the State contractor. Of such a character are the decrees of March i, i860, October 22, 1873, December 12, 1873, and December 20, 1873. Finally, this principle was distinctly recognized in the various decrees issued by the National Executive for the enforcement of the Wheelwright contract. In these decrees it was reiterated over and over again that Wheelwright was entitled to the posses- sion of all of the government mines in the littoral irrespective of the fact that they might be then in the actual possession of third parties, and in at least one decree it was stated that he was enti- tled to the possession of the government mines as against those in possession even though such adverse and trespassing possessors "should call to their aid the appeal of good faith." Discussion. Among the rights which attached to, and therefore which ac- crued in favor of, the conncessionaires under this contract by reason of their standing in the place of the State, was the right to hold the estacas mines under this contract free from the suscepti- bility of denouncement under Bolivian law. This fact is con- clusively proved by the following executive decrees, decisions of the courts, and opinions of authoritative writers: As early as March i, i860, a decree was issued by the National Executive which directed the various officers concerned to take possession of the government estacas irrespective of whether or not they were occupied by other parties. This decree reads as follows: "Treasury of Instruction. '■'Circular of March i. — Let the decree of July 23, 1852, be made effective. "The RepubHc of Bolivia. — Office of the Department of Public Instruction and Education. — In La Paz, March i, i860. — " To the Honorable the Political Chief of * * ^ "Mr.Pohtical Chief: "The Supreme Decree of July 23, 1852, applies to the funds of Public Instruction the fourth estaca of the mines which may be dis- Sub-Point D.] The Case of the United States. 187 covered, and since from information which this Department pos- sesses, it does not appear that said disposition has been complied with, His Excellency the President of the RepubHc, who incessantly strives to make effective everything which may contribute to the progress of Education, orders that from this date said disposition be put into effect for the purpose of which he relies upon the activity and patriotism of the officials to whom its fulfillment pertains. "With regard to the mines which may have been discovered from ' the date of such decree until the present, you will order that the fiscal agents shall receive the estacas belonging to Public Instruction, which by the negligence of the former administrations , have not been added to the wealth of that Section. "I communicate this to Your Honor by order of His Excellency, for its exact fulfillment. — God guard Your Honor. — Evaristo Valle. — A true copy. — The Chief of the Division, Nestor Galindo. " ° Under date of October 12, 187 1, the following resolution was entered regarding this matter: "RESOI.UTION OP THE I2TH OCTOBER, 1 87 1. " Department of Mining. The Estacas of the State are imprescrip- tible. "Ministry of Finance and Industry, "Sucre, 12th October, 1871. " circular. " To His Honor the Prefect of the Department of — "Sir: In the inquiry which the Sub-Prefect of the Province of Chayanta directed to the Government respecting the abandonment of the mines (Estacas Minas) which belong to Public Instruction, there has, under this date, been resolved in answer thereto, the fol- lowing : "Sir: The matters pending in the Departments of Finance and Industry having been placed for settlement in this Ministry, I have made myself acquainted with the inquiry which you conveyed in your note of the 9th July last respecting the denouncement which Dr. Jose Eino Mendoza made, on account of abandonment, of the mines of Public Instruction in the lodes Embudo and Melgarejo of the hill of Anconaza, mineral district of Ayllagas. "Most singular and even absurd has been the denouncement of Mr. Lino Mendoza, and stranger still is it that the public minister of that province should have been of opinion that the mines denounced had become liable to abandonment, as if the possessions of the State could be prescribed. "This abandonment does not, nor can it hold good with respect to the mines of Beneficence or of Instruction, which (as the Attorney General of the Republic pronounces) are national possessions, and are amply protected by the decree of their adjudication, which has in o I Appendix, p. 296. 1 88 United States vs. Chile. — Alsop Claim. [Pointn. view the creation of funds to meet one of the most vital necessities of the public administration. "Consequently, Mr. Sub-Prefect, there is no abandonment in the national possessions, which the mines of the State are and nothing else. "Which, by order of his Excellency, I communicate to your Wor- ship, in order that you may cause it to be published in the cantons and mineral districts of that province. "May God be with Your Worship. • "Rubric of His Excellency. "Casimiro Corral. "Which I transcribe to your Honor for your needful information' and in order that you may transmit it to the authorities within your jurisdiction, ordering its publication by the official periodical of that city, so that, becoming known, it may serve as a general rule. "May God be with your Honor. "(Signed.) Casimiro Corral. " " When in 1873 Sefior Pedro Lopez Gama made with the Govern- ment of Bolivia his contract for the operation of the government mines in the Bolivian Littoral he petitioned the Prefect of Cobija for a categorical declaration concerning the estacas which belonged to the Treasury. The Prefect consulted the Government on the subject and the Government replied to him as follows: "The location of each one of the estacas of the Treasury in the various registries of veins of silver, which have taken place in that Department, is found to be determined with entire precision by the law. The Supreme Decree of July 23, 1852, affirmed by legislative acts as a law of the State, designates for the Treasury of Public Instruc- tion the estaca next following those of the discoverer or denouncer in every vein of silver of other metal. Starting from this precedent and bearing in mind the provisions of the Mining Code pertaining to this subject, the designation of the Treasury claims of which Sr. Pedro Lopez Gama should take possession ought to give rise to no doubt. By Article 16 of said Code, which also refers to Article ig, the discoverers, through prospecting veins in new workings, are entitled to three estacas and of them the fourth belongs to the State. By Article 20, the discoverers of a vein in a mining district known and worked in other parts, are only entitled to two estacas. Of these the third belongs to the State. The exact applications of said disposi- tions in the mining districts of the Littoral overcomes any objection or difficulty that individual interest may interpose. "// any of the operators of that district should believe they have a right to the third estacas and invoke the decree of September 29, 1871, which by mistake stated that the fourth estaca always belonged to the Treasury, it is very strange that they forget the tenor of the explanatory circular order of October g, which, correcting the inexact expression of the decree, declares that the fourth and the third are respectively in the' very terms set out in the Code, those which belong to the State. " '' - II Appendix, p. 272. 6 I Appendix, p. 317. Sub-Point DO The Case of the Umted States. 189 Upon receiving this reply the Prefect rendered the following opinion upon the point raised by Gama: "Prefecture; op the Department, "Lamar, November 14, 187 j. "Considering: " I. That the discoveries of veins of silver made by Senor Diaz Gana through diverse prospectors took place in an unknown por- tion of the desert of Atacama to which the 'discoverer himself later gave the name of Caracoles; " 2. That in accordance with paragraph i, article 16, corroborated by article 19 of the mining code, there belong to every discoverer in a virgin workings three Estacas; "3. That article 20 provides only as an exception the fact that the discovery may have taken place in a known mineral district, known or worked in other portions; It is declared in conformity with the Executive Decree of October 23, 1871, and articles 16, 19 and 20 of the code of mines that the contractor Don Pedro I^opez Gama had to take possession of all the veins of estaca discovered by Don Jose Diaz Gana and prospectors which was discovered before work of any sort had been begun in the mineral district of Cara- coles and of the third estacas on the other veins except in the case provided for by article 199 of said code. Let it be registered and notification thereof be given to the said contractor, Don Pedro Lopez Gama, and that it be brought to the attention of the Supreme Government. "Fernandez Costas."" This opinion was in turn passed upon by the Ministry of the Treasury and Industry which, under date of December 20, 1873, pronounced the following decision : "Ministry of the Treasury and Industry. Nuccho, December 20, 1873. "Having examined at a Cabinet meeting the communication addressed by the Prefecture of Cobija, the statement of the Attor- ney General and the opinion of the Counsel of State, and consider- ing that, in accordance with the proposal accepted on the first of April of the current year, Senor Pedro Lopez Gama ought to take charge of the workings and exploitation in partnership of the Estaca mines belonging to the State on veins discovered in the Littoral, and of those which hereafter may be discovered; that from the certified copies of the grants attached taken from the Book of Public Records in the Prefecture of Cobija it appears that there have been successively adjudicated to the Department of Instruction Estacas determined with entire clearness in each one of the registrations; that, therefore, and such acts constituting the titles of property of the State which have not been annulled, can- celled or modified by any later disposition, the Estacas in them designated are those which the Government let in partnership as belonging to the State at the time of making the contract, and the a I Appendix, p. 319. igo United States vs. Chile. — Alsop Claim. [Point ii. same of which Lopez Gama ought to take possession ; the resolution issued in this proceeding by the Prefecture of Cobija on November 14th last is approved. " Let it be registered and returned. "Bai^ivian. "Mariano Baptista. "Daniel Calvo. "Mariano Ballivian. "PantalEon DalEnce."" The same principle was announced, indeed was the basis of the Decree of the Minister of Finance and Industry, dated December 12, 1878, which reads as follows: "Ministry of Finance and Industry, "La Paz, 12th December, 18 j8. "To the Prefect of the Department of Cobija. Sir: The President of the Republic has resolved: That, as soon as in the Department under your jurisdiction any discoveries of minerals have been made, and the legal Setts (estacas) have been adjudicated to the discoverers in conformity with the Mining Code, the respective authorities, shall, in fulfilment of the Supreme Decree of the 23d July, 1852, and other dispositions relative thereto, with- out waiting for any petition or other representation, proceed to the measurement, placing of boundaries, and adjudication to the State of the Fiscal Mining Sett (Estaca Mina Fiscal), under their imme- diate responsibility, the possession taken by any interested parties whatsoever , of such Mining Setts being null and void, even when they call to their aid the plea of good faith. "The authority charged with the measuring, placing of boundaries and adjudication to the State of the Fiscal Mining Sett, shall cause Mr. Wheelwright to be notified, in order that he, as representative of the State, may intervene in the said operations, in compliance with the Contracts of Settlement of the 23d and 24th December, 1876. "May God be with you. - "(Signed.) H. Daza. "(Signed.) Serapio Reyes Ortiz. "'' Dr. Melquiades Loaiza, in his semi-official work, " Nueva Legis- lacion de Minas," makes the following comments upon this point: "(C) Are the estacas mines capable of readjustment because of desertion? We answer in the negative, relying upon the conclu- sion of the text writers who have treated of this subject of which we shall cite Escalona, who has expressed his opinions in the follow- ing terms : ' The mines of His Majesty {of the State) cannot be asked for on account of abandonment at any time when they are not being worked because the right of abandonment only prevails against an individual and not against the legislator who is always exempt; besides, it is not just that the fault into which the royal ministers may have fallen in this regard should redound to the injury of His Majesty and thereby his condition be made worse.' " a I Appendix, p. 319. 611 Appendix, p. 148. Sub-Point D.] The Case of the United States. 191 But it is unnecessary in this matter to depend solely upon executive decrees in order to establish the imprescriptibility of the government estacas, since the Supreme Court of Bolivia has itself recognized this doctrine in the case brought by one Jose Santos Munos Chavez to determine the constitutionality of the decree of July 23, 1852. The court, in rendering its decision in this case (already quoted above), used the following language, it appearing from the narration of facts that an attempt was being made to secure possession of a mine for abandonment: "The Supreme Court declares that the estaca mine prayed for by Don Jos6 Santos Munoz Chavez upon the vein of Cibelos, cut by the tunnel of San Bartolome in the mining district of Aullagas, cannot be granted because it is a property of the State, recognized by the aforesaid laws. Having been registered, let it be filed. — Sucre, October 28, 1872.'.'° Finally, the matter would appear to be definitely determined, so far as the purposes of the present controversy is concerned, by the decision of the court of first instance at Antofagasta in the case of the Justicia, which recognized the non-denounceability of these mines under Bolivian law by citing and approving the decree of October 12, 1871, (quoted above) which stipulated the imprescriptibility of the government mines : "5. That, although in the pleadings there is no evidence that the said decree would be submitted immediately to the approval of the I^egislative Chambers, as is ordered therein, there have been pub- lished, after it, various dispositions embodied in laws, decrees, orders and dispositions, which recognize and sanction the legal existence of the estacas destined to public instruction, and regulate their exploita- tion, as, amongst others are the circular of the 21st May, i860, which ordered that the decree of the 23d July should be made effective, the decree of the 29th September and 8th October, 1871, respecting the estacas belonging to the State, the law of the 12th of the same month and year declaring the estacas of instruction to be imprescriptible, the law of the 19th October, of the said year, which empowers the executive to celebrate respecting same contracts of letting or for working them in partnership, the law of the 15th November, 1873, which directs that the Government may proceed to take possession of them, and many other dispositions which it would be tedious to enumerate."'' It is submitted that these various decrees and decisions of the Supreme Court of Bolivia as well as of the court of first instance in Chile established the principle that under Bolivian law the government mines were imprescriptible, at least as against the State, and in view of the facts established .under sub-point C, o-l Appendix, p. 352. i> II Appendix, p. 112. 192 United States vs. Chile. — Alsop Claim. [Pointii. supra, that under the Wheelwright contract the concessionaries stood in the place of, and enjoyed the rights belonging to, the State, it must be considered that the mines were imprescriptible as against the concessionaries under this contract. If the government estacas were imprescriptible of necessity they could not be acquired by a private person because of aban- donment, and if they could not be acquired for abandonment it necessarily follows that it was unnecessary for the State, or any person occupying the place of the State, to continue in possession thereof. In other words, neither the State "nor the partner of the State" needed to assume possession, nor, having assumed it;, to retain possession, in order to have an indefeasible right to the possession and enjoyment of the government estacas. There is almost no decree or law which was ever issued for the enforce- ment of the decree of 1852 which does not contain one or more statements establishing this fact. For example, it was provided in the decree of March i, i860, (quoted above) as follows: "With regard to the mine which may have been discovered from the • date of such decree until the present, you will order that the Fiscal Agents, shall receive the estacas belonging to the public instruction, which by the negligence of the former adm,inistration has not been added to the wealth of that section."'^ In the decree of October 12, 1871, the Minister of Finance and Industry affirms that — "Consequently Mr. Sub-Prefect there is no abandonment in the national possessions, which the mines of the State are, and nothing else.'"' In an opinion handed down to the Prefect of Cobija on October 22, 1873, the Government asserted: "The designation of the Treasury claims of which Senor Pedro Lopez Gama should take possession ought to give rise to no doubt ^ ^ ^ "If any of the operators of that district should believe they have a right to the third estacas and invoke the decree of September 2g, i8ji, which by mistake stated the fourth estaca always belonged to the Treasury, it is very strange that they forget the tenor of the explanatory circular ordered of October 9, which, correcting the inexact expression of the decree, declared that the fourth and the third are respectively, in the very terms set out in the Code, those which belong to the State." " In an order issued by the Prefect of Cobija in reliance upon the judgment thus given, the Prefect made the following declaration : " It is declared in conformity with the Executive Decree of October 23, 1871, and a,rticles 16, 19 and 20 of the code of mines that the - P. 2(;6, supra. >> II Appendix, p. 272. cl Appendix, p. 317. Sub-Point D.) The Case of the United States. 193 contractor Don Pedro Lopez Gama had to take possession of all the veins of estaca discovered by Don Jose Diaz Gana and prospectors which was discovered before work of any sort had been begun in the mineral district of Caracoles and of the third estacas on the other veins except in the case provided for by article 199 of said code. Let it be registered and notification thereof be given to the said con- tractor, Don Pedro Lopez Gama, and that it be brought to the attention of the Supreme Government."" In the subsequent ratifying decree of the Ministry of the Treasury- and Industry (dated Dec. 20, 1873) the Government asserts that — "In accordance with the terms of the proposition accepted on the ist of April of the present year, Senor Pedro Lopez Gama should take- charge of the working and exploitation in partnership, of the estaca- mines belonging to the State, in veins discovered in the Littoral and of those which in the future may he discovered."'^ It will be observed from these quotations that in every instance it was contemplated, and certainly in the last specifically provided, that the concessionaries should have the right to the possession and enjoyment of the government estacas belonging either to veins discovered in the past, or to veins to be discovered in the future, and this irrespective of the question as to whether or not they were in the possession of third persons or were still unoccu- pied, and that the decree of October 12, 1871, pronounced as "most singular and even absurd" the proposition that a private person could acquire a right to the government mines by settling^ upon or operating them. In other words, the question as to whether or not the State had been in possession of the mines becomes under these decrees entirely immaterial, since no one can merely by operating such mines acquire any title thereto. It would appear to result from the principle laid down in these decrees that when, and so soon as, a prospector located three estacas in virgin ground, or two estacas in worked territory, there at once arose in favor of the State an adjoining estaca, the fourth or third respectively, to which the State had an indefeasible title under all the laws and regulations of the mining code. Moreover, as the decrees already quoted above and those to be quoted here- after show, it was immaterial whether or not the actual limits of that estaca have been surveyed. The survey it would seem became necessary only when it was desired to place some one in possession of a given estaca, and only then, it would appear, in order that the grantee might be informed of the limits of his ground. "I Appendix, p. 319. 40898 — 10 13 194 United States vs. Chile. — Alsop Claim. [Pointii. The decrees issued subsequently to the making of the Wheel- wright contract seem sufficiently to establish this latter point. The initial decree dated January 5, 1877, issued by the Govern- ment of Bolivia for the purpose of putting Wheelwright into pos- session of the government mines of the Littoral directed — "That the Sub-Prefect and others under your (The Prefect's) jurisdiction may within their sphere, render Mr. Wheelwright such aid that he may be put in peaceful possession of the said mining setts." " On the 24th of May, following, the Government issued another decree reading as follows : "Ministry of Finance and Industry. "La Paz, 24th May, iSyj. " To the Prefect of the Department of Cobija. "Sir: Notwithstanding that orders have been given to your Pre- fecture to facilitate the taking possession of the Mining Setts (Bsta- cas Minas) of the State by Mr. John Wheelwright to whom they were adjudicated, these orders are now repeated with the same object, in order that, by all the legal and judicious measures in your power, you may overcome all difficulties and remove every obstacle either personally or by means of the Sub-Prefects and other functionaries who are competent to intervene in the inatter. "The strict fulfilment of this order is expected from your zeal and patriotism. "May God be with you. "(Signed.) "Manuei. I. Salvatierra. "The foregoing is correct. "(Signed.) "Manuel Penafiel."" On the 28th of March, following, the Perfect of the Department of Cobija was again directed to — "Render the petitioner, Mr. Wheelwright, the cooperation he asks for the prompt and peaceful possession of the Fiscal Mining Setts (Estacas Fiscales)."'' On the 25th of July, 1878, the Government decreed that the Prefect of the Department of Cobija, should — "Co-operate effectively with the fiscal and other public function- aries of Caracoles, so that, * * * they may render the most active co-operation to Mr. John Wheelwright, who represents the rights of the State, with the object of putting him in possession of the Mining Setts (Estaca Minas) of the State, in full settlement of the agreements of the 24th December 1876."'' Again the Prefecture of the Department of Cobija was directed^ under date of August 9, 1878 — ■ "That in all measurements and surveys of silver mines made in future by the Territorial Deputation, Mr. Wheelwright or his rep- = II Appendix, p. 144. 6 II Appendix, p. 145. Sub-Point D.) The Case, of the United States. 195 resentative be notified, in protection of the rights of the State, in order that he may form an opinion and take the necessary steps for the due fulfilment of the settlement of the 24th December, 1876. I/ikewise, that to all titles or minutes of possession, the clause pro- tecting the rights of the State be added."'' On August 19, 1878, it was ordered — "In conformity with the foregoing Superior Edict, the Actuary is hereby ordered to notify' Mr. Theodore Hohmann, the represen- tative of the Contractor of the Mines of Instruction (Estacas de Instruccion) of all the operations of measurement, possession and examination which may be performed by this Deputation. "It is also ordered that in all the minutes of possession, a clause be inserted, expressing the inviolability of the fiscal property in the event of its being encroached upon by intruders." " On the same day, August 19, 1878, Jose Santos Monroy, as the agent of Wheelwright, addressed a petition to the Minister of Finance and Industry in the following terms : " To the Minister of Finance and Industry. "Asks for the declaration which he states. . "I, citizen Jose Santos Monroy in behalf of Mr. John Wheelwright representative of the firm of Messrs. Alsop & Co. of Valparaiso, pre- sent myself to the Supreme Government through your worthy self and say : that at the time of concluding the transaction and contract for exploitation of the estaca mines of 23d and 24th of December, 1876, the Supreme Government and my constituent were undoubt- edly very far from imagining what obstacles and difficulties would be presented by private interests opposed to those of the public treas- ury, against the realization of that negotiation — But unfortunately the sad conviction now exists, that day by day those difficulties and obstacles against the interests of the nation become greater, owing to the facility with which the effective possession that the state should take of the estacas belonging to it, is eluded, which object is obtained by nothing more than a simple petition in which by merely saying I am opposed to this or that thing, the matter is declared contestable, and becomes a question to be heard before the ordinary courts, to be prolonged according to the caprices of the party who has brought it about. Nevertheless for the present it is not my purpose to seek from the Government a remedy for the inconveniences arising from the facility with which these matters are. declared contestable, because with respect to this I hope an occasion will soon offer for submitting some determined and concrete act to the knowledge and consideration of the Supreme Government, and for the time being I content myself by calling your attention to the matter I am about to occupy myself with. " By the aforesaid exploitation contract, there was formed between the Supreme Government and my constituent, a veritable mineral- ogical society, the management of which was confided to the latter, so that from the profits to which the former might be entitled, after deducting expenses, he should pay by amortization his credit of "11 Appendix, p. 146. 196 United States vs. Chile. ^Alsop Claim. [Point 11. 835,000 bolivianos with interest, not compoundable, at 5 per cent per annum, outside of the excess obtainable from the customs duties. Evidently the Government could not have made a more favorable contract for the payment of its very large debt, respecting which I make no mention of the past due interest to 1876, as they are subject to other special stipulations. " If therefore in the working of the estaca mines of the Coast (Lit- toral), my constituent has no exclusive personal interest, but on the contrary is an agent for the great profits which that working may produce for the nation, there is no reason why in the exercise of the rights belonging to him, he should not enjoy the exemptions and privileges to which the Nation is entitled under the laws in its judi- cial proceedings, all the more when as I have said being partners, there is no difference in rights. "On the other hand, according to said contracts the Government was under obligation to place my constituent in pacific possession of all the fiscal estaca mines; but the latter for the purpose of obtaining the quick- est possible profits for the benefit of the enterprise, has incurred heavy expenses to obtain that possession, and this has undoubtedly stimulated some parties interested in such speculations , to multiply these conten- tious oppositions, in the belief that in this way the acquisition of said estaca mines will be made impossible, as it will be necessary to carry on many suits for each. Under such difficulty, I have deemed it necessary to appeal to the Supreme Governm.ent that considering the fact that my constituent is merely its representative in the working of the fiscal estaca mines, it may be pleased to declare that in all administrative or contentious questions that may arise concerning them, he shall be exempt from the payment of judicial or actuary fees of every' kind and entitled to make use of the stamped paper of sixth class. It will be jus- tice & for this &c. Par August 19th, 1878. "S. M. (Mr. Minister) "(Signed.) "JosB Santos Monroy.""^ On August 2 1 the Minister of Finance and Industry passed upon the petition in the following words : "In virtue of the reasons on which this petition is founded, and considering that Mr. Wheelwright took over the Fiscal Mining Setts (Estacas Minas Fiscales), under the Contracts of the Settlement of the 24th December, 1876, as the representative of the State, it is hereby declared that as such he should enjoy the same privileges as the State in the judicial measures which he may initiate and sus- tain in order to enter into and maintain possession of the said Fiscal Mining Setts." * The question was once more the subject of a direction to the Prefect of the Department of Cobija on December 12, 1878, when the Minister of Finance and Industry made the following direction : "Sir: The President of the Republic has resolved: That, as soon as in the Department under your jurisdiction any discoveries of minerals have been made, and the legal Setts (estacas) have been adjudicated to the discoverers in conformity with the Mining Code, the respective oil Appendix, p. 177. 6 11 Appendix, p. 147. Sub-Point D.] The Case of the United States. 197 authorities in the matter, as well as the fiscal authorities, shall, in fulfil- ment of the Supreme Decree of the 23d July, 1852, and other disposi- tions relative thereto, without waiting for any petition or other represen- tation, proceed to the measurement, placing of boundaries, and adjudi- cation to the State of the Fiscal Mining Sett {Estaca Mina Fiscal), under their immediate responsibility, the possession taken by any interested parties whatsoever, of such Mining Setts being null and void, even when they can call to their aid the plea of good faith. The authority charged with the measuring, placing of boundaries, and adjudication to the State of the Fiscal Mining Sett, shall cause Mr. Wheelwright to he notified, in order that he, as representative of the State, may intervene in the said operation, in compliance with the Contracts of Settlement of the 23d and 24th December^ 1876." "^ It will be observed from these decrees, and more particularly from the one last quoted, that the right of Wheelwright to these estacas did not depend (i) upon whether either himself or the State was in possession of the mines; (2) nor upon the fact that the estaca for the State had been surveyed at the time the discov- erer had taken possession of the estacas belonging to him; (3) nor upon the fact that persons were already in possession of the government estacas, since such unauthorized possessors were re- garded as mere trespassers ; nor (4) upon the fact that such pos- sessors had taken possession in good faith, since even in this event, as in all the others, Wheelwright was entitled to have the mines measured and possession delivered to him. - II Appendix, p. 148. Sub-Point E. The Government of Chile violated and confiscated these fundamehtal and all important rights, titles, and interests of Wheelwright under his contract, by applying to Wheel- wright's rights, titles and interests in said Government estacas, held under and pursuant to his contract, the pro- visions of the Chilean law, under which law it became necessary for him to expend large sums to avoid the pen- alty of denouncement and by the application and enforce- ment of which law he was deprived (improperly and ille- gally) of certain rich mines to which he was entitled under his contract. Prefatory Summary. It will appear from the discussion upon this point that notwith- standing the Government of Chile at the beginning of the war of 1879 gave solemn assurances to the various Governments repre- sented at Santiago that it would protect the rights of aliens in the Bolivian Littoral (see its note dated March 3d, 1879) and notwith- standing that the Chilean Commander in the field asserted the same principle particularly "with respect to landed properties situated in the part to which these decrees refer" and that the National Con- gress ratified all that the Executive had done, the Government of Chile not only applied to the conquered territory the laws of Chile but it applied these laws where such laws worked to the detriment and even to the confiscation of private rights held by aliens in the conquered territory. The effects of this attitude were very early felt by Wheelwright, who found numerous parties settling upon the government estacas invading them from adjacent mines, and interfering generally with his operation thereof. Upon his taking the question to the courts as he did, particularly in the case of the Justicia and Amonita (though he is said to have conducted in all some 200 litigations) there was rendered against him one decision, the Amonita, 198 Sub-Point E.] The Case of the United States. , 199 holding that the government estacas were denounceable and another decision, the Justicia, which held that he was not entitled to the government estaca unless he had been actually in possession of the government mine at the date of the occupation of the Littoral by the Chilean Government. Both of these decisions violated rights possessed by Wheel- wright under Bolivian law and were therefore contrary to the principles of international law and to the promises which had been given by Chile at the beginning of the war. Discussion. Under date of February 18, 1879, the Minister of Foreign Relations of Chile, addressed to each of the Ministers and Diplo- matic Agents accredited to Chile a note in which he set forth the causes leading to the adoption by Chile of warlike measures against the Government of Bolivia. The opening paragraphs of this note read as follows : "On the 12th of the present month, his Excellency the President of the Republic ordered that Chilian forces should be transported to the shores of the Desert of Atacama, in order to recover and occupy in the name of Chili the territories she used to possess there before adjusting with Bolivia the boundary treaties of 1866 and 1874. "The treaty of 1866 was annulled and disappeared on the cele- bration of that which bears the date of the sixth of August 1874, and this latter has just been abrogated by deliberate and persistent acts of the Government of Bolivia, acts which import not only the com- plete disregard of the obligations imposed upon her by that solemn compact but likewise an insult to the good faith and conciliatory spirit of Chili to which her national honor could not submit. "Having exhausted all the conciliatory expedients which her earnest desire for the tranquillity of South American caused Chili to constantly employ, all the appeals that were directed to her for the fulfilment of obligations legally stipulated in the treaty of 1 874 being scorned and disdained by Bolivia, there remained no other recourse for Chili hut to again plant her flag in the territories of which she had been owner and to return with it to numerous Chilian and foreign population and to their industrial establishments there estab- lished, that tranquillity, that confidence and that welfare of which they had been deprived by the Bolivian administration." " Among the final paragraphs of this note there is to be found the following statements : "Fifty hours later, the Chilian law ruled in that region placing under its protection the interests of Chilians and foreigners, without the shedding of a single drop of blood and amidst the patriotic enthusiasm of a reunited people."'' 3 I Appendix, p. 263. 6 I Appendix, p. 294. 200 United States vs. Chile. — Alsop Claim. [Pointii. This note was transmitted to the "Honorable Ministers and Diplomatic Agents accredited to Chili" in a circular note which was dated March 3, 1879, and which reads in full as follows: "Sir: I have the honor of enclosing to your Excellency a state- ment of the motives which justify the recovery effected by Chili of the territory she used to possess in the Desert of Atacama between parallels 23 and 24 South Latitude. "I entertain the confidence that the perusal of this plain narra- tive will produce in the mind of your Excellency the conviction that Chili in her relations with Bolivia, did not abandon the policy of moderation and considerate conduct, which she so strongly admires, until she had exhausted all the resources in her power and imperiled the dignity of the nation and the valuable interests of her citizens residing in that territory. "The high and legitimate interest to which the Chilian Govern- ment aspires, that its international policy may be duly appreciated by those Governments whose friendship is to it an honor, and whose esteem it endeavors by unceasing efforts to deserve, has induced me to put in writing the exposition I now have the honor of placing in your Excellency's hands, begging that you will be pleased to bring the same to the knowledge of your enlightened Government. "/ need not assure your Excellency, that your fellow countrymen will find in the territory in which the laws of Chili have once more resumed their sway, every guaranty for the protection of their persons and interests. ' ' I avail myself of this opportunity to reiterate to your Excellency the expression of the sentiments of high consideration with which I remain, "Your Excellency's assured and obedient servant. "Alexander Fierro."" The Chilean Commander in the field, upon assuming possession of the Littoral " up to the river Loa," issued, under date of March 25, 1880, the following proclamation: "I, Marco Aurelio Arriagada, Commandant General of Arms of Antofagasta, and Chief of the Forces of occupation of the Terri- tory comprised up to the river Loa, in virtue of the faculties which belong to me from the military authority which I exercise, make known to all the inhabitants of the said Territory : "Inasmuch as, to the north of the 23d parallel, and as far as the river Loa, there are no authorities who may administer civil justice in all its branches, and criminal justice for ordinary offences, and the imperious necessity of attending to this important public service being evident, I Decree: "Article i. Let the Judge of Letters of Antofagasta be com- missioned in order that he may exercise the administration of civil and criminal justice with respect to the territory which extends from the 23d parallel to the north up to the river Loa, including Calama, and other points which depend on this military district. "Article 2. * * * « I Appendix, p. 263. Sab-Point E.] The Casc of the United States. 201 "Article 3. With respect to landed property situated in the terri- tory to which this decree refers* the Judge shall limit himself, for the present, to secure to the persons to whom by right it may belong, the pos- session or tenure, or to protect them therein, without judging as yet, respecting the dominion. "Article 4. In the sentences or decisions which may be pronounced in civil matters, the laws in force in the territory at the time of the cele- bration of the respective acts or contracts shall be applied respecting that which is judged. "Article 5. The civil acts or contracts, which may be executed or celebrated fifteen days after the publication of the present decree, shall be judged in conformity with the Chilian laws." " Under date of April 4, 1879, the National Congress approved a law which ratified the abrogation of the Treaty of August 6, 1874, with the Republic Bolivia, affirmed the occupation of the territory between parallels 23 and 24 of south latitude, approved the declara- tion of war against Bolivia, authorized the President to carry on the sanie, and conferred power necessary thereto, including the power to make certain necessary regulations for the government of the territory. This law reads as follows : "Whereas the National Congress has given its approval to the following "Projected Law: "Article First. The rescission of the Treaty of August 6th, 1874, which existed with the Republic of Bolivia, is approved and the conse- quent occupation of the territory lying between parallels 2j and 24. of South Latitude. "Article 2d. Congress gives its approval that the President of the Republic declare war against the Government of Bolivia. "Article 3d. The President of the Republic is authorized: " ist. To increase the forces by sea and land as much as he may dee-m necessary ; "2d. To use out of the national funds for the present up to four millions of dollars for the purpose to which this law refers, giving the corresponding account of such inversion at such times as the general accounts of public administration have to be rendered; "3rd. To contract for loans up to the sum of five millions of dollars, with power to hypothecate for payment thereof the prop- erties of the Nation, or to stipulate other guarantees; "4th. To declare ports of entry all such as he rnay deem necessary and provide for the service thereof until the passage of a law organ- izing the same. "Article 4th. The use of the public funds decreed by the Presi- dent of the Republic for the increase, provisioning and mobiliza- tion of the National Squadron and the forces of the Army, and for the administrative and customs service at Antofagasta and Mejil- lones, is approved, the respective account to be rendered in due course. i5 "(i) If that Government could celebrate the contract without infringing the treaties. " (2) If the Laws of the Country authorized it for the celebration thereof, and " (3) If Chili, as revindicator of fhis territory, ought or ought not to respect it. "20. With respect to the first point that although it is certain that on the 13th February, 1874, the Government of Chili, by means of Consul Reyes, declared that it did not acknowledge nor accept on its part the contracts, settlements or arrangements which the Gov- ernment of Bolivia might celebrate or accord, in so far as they may impose burdens on or effect the territory of common participation; it is also true that in virtue of subsequent negotiations, the treaty of the 6th August of the same year was signed between the two Republics, by which Chili renounced in favor of Bolivia, all her rights to the territory of the said common participation. "21. That the high dominion belonging already to her over the territory, she could proceed, unencumbered, to the celebration of the contract with Wheelwright on the 23d and 24th December, 1876, in virtue of which she recognized to him, as representative of the house of Alsop & Company, the credit of eight hundred a^id thirty-five thousand Bolivian dollars, at the interest of five per cent, per annum, which was to be amortized, amongst other things, with forty per cent, of the product of all the estacas-mines of silver of the Coast Department, which were adjudicated to him for twenty-five years. "22. With respect to the second point, namely, if the Government could celebrate contracts; that by the law of the 19th October, 1871, the Executive was authorized to celebrate contracts of letting or of working in partnership all the estacas-mines belonging to the State in the mineral districts of the Republic, and in conformity there- with, tenders were invited for the working of the said estacas by the decrees of the 2d November, 1871, 7th March, 29th May and 19th September, 1872, the whole concluding with the celebration of the contract with Wheelwright. "23. That two years afterwards, on the 12th February, 1878, (fol. 118) the National Assembly approved the measures dictated in the Department of Finance by the Provisional Government inaugurated on the 4th May, 1876, excepting those which had been derogated or modified by express ' disposition thereof, amongst which the contract with Wheelwright does not appear. "24. With respect to the third question, if Chile, as revindicator of this territory, ought or ought not to respect the contract cele- brated between the plaintiff and the Government of Bolivia, that its nature being borne in mind, and on account of the consequences which it involves, it ought to be decided according to the principles of international right, and on that account, the cognizance thereof corresponds to another Tribunal, in conformity with the 117th Article of the Law of the 15th October, 1875. "25. That while that does not take place or the titles of plaintiff are not opposed by whom and how it may concern, the latter has a perfect right to make it good at law, or to demand that which, through them, may be due him. " 26. That such being the case, there is no need to take this question into consideration, and less to treat of deciding it, as the defendants 2i6 United States vs. Chile. — Alsop Claim. [Pointii. desire, in conformity with the disposition which the Chilian Civil Code contains respecting revindication; it is impossible to apply thereto the laws of private right, which have for their object the regulating of the respective interests of private individuals between themselves in what may concern their persons, their goods and their agreements. "27. With respect to the question of fact of the present demand, namely, if an Estaca of Instruction of the mine Justicia was measured in the course, &c., which the plaintiff has proved, when the mine Justicia was measured in 1871, there was also measured, and in the same act, the corresponding Estaca of Instruction (Inter- rogatory, fols. 97, loi, 103, 131, 132 and 138). "28. That, in the same manner he has established, by the proof rendered, that the Estaca was measured and that it was bounded on the south of the mine Justicia with a slight inclination to the west, and contracting itself, with the mine Saturnina (Interrogatory, folio 146, 2d question; 'and Interrogatory, folio 138). "29. That, as it appears from the evidence at folio 6, pamphlet I, when in October, 1878, the mine Justicia was measued for the second time to Mr. Jos6 Maria Blacutt, who had then denounced it on account of abandonment, Mr. Benjamin Fisher objected to the operation being performed, asserting his right to the ground of that which, in the first measurement, had belonged to the Estaca of Instruction, but his opposition was rejected in legal form for want of titles, and that of the representative of the actual plaintiff, Mr. John Wheelwright was accepted, all which is corroborated by the said Blacutt in declaring to the tenor of the interrogatory of folio 146. "30. That likewise the plaintiff has established that the houses of the mine Cleopatra were constructed later than 1871, within the ground of the Estaca of Instruction, today of the mine Fusion. "31. That he has also proved, not only by the declarations of the witness who answer the interrogatories of folios 130 and 135, but also by the questions answered by Mr. Benjamin Fisher, at folio 112, and by Mr. Jos6 ado Cortez at folio iii, that the mine Fusion, composed of the Demasias Fisher and the Demasias Caracoles, is situated on the southern head, with an inclination to the south- west, of the mine Justicia, and, consequently, on the ground which belonged to the Estaca. "32. That, consequently, the position of the Estaca can be no other than that traced by the engineer, Mr. Makotiere, on the plans A. C. of the Government Engineer. "33. That, with the proof rendered to the tenor of the interroga- tories of folios 97 and 135, and the positions of folio 112, it has been established that in the early part of the year 1879, metal of good ley was extracted both from the mine Fusion and the mine Justicia, which were then in communication. "34. That, although the defendants, in the allegation of 'well- proved,' claim to have destroyed the contrary proof with that which they say they have rendered, it does not, withal, appear in the plead- ings; and, on the contrary, from the certificate of publication of evidence at folio — , it appears that they have not rendered any. "According to the preceding considerations, and in conformity with the I St and 2nd Laws, 14th title, 3d paragraph, and the 1698th Article of the Civil Code, it is declared: That the demand is well Sub-Point E.] The Case of the United States. 217 founded, and consequently, First. — That the defendants ought to deliver to Mr. John Wheelwright the part of ground of the Estaca of Instruction which they have invaded, together with the value of the metals which it may be proved have been extracted from the mine Fusion, and, Secondly — That they ought to put him in posses- sion of the said Estaca of Public Instruction. "Let it be noted. "(Signed) Taglb, J. "(Signed) MujiCA, V." » It will be observed that this decision was in favor of Wheelwright and that under it those who had occupied and exploited the estaca to the mine Justicia were directed to deliver to Wheelwright that part of the estaca which they had invaded, together with the value of the metals which he might prove they had extracted. The defendants in the case took an appeal to the court of second instance at Serena, which on the 19th of May, 1882, delivered the following opinion reversing the court of first instance : "Reproducing the expository part of the sentence in first instance, and considering — "i. That the convention celebrated in the City of La Paz on the 26th December, 1876, between the Government of the Republic of Bolivia and Mr. John Wheelwright, representative of the firm of Alsop and Company, is a contract of ' anticresis ' by which conven- tion there was recognized in favor of this firm a debt of eight hun- dred and thirty-five thousand Bolivian dollars, and there were adju- dicated to him the estacas-mines of silver belonging to the State in the Coast Department, in order that the said debt should be paid with forty per cent, of their net products during the term of twenty- five years. "2. That on that contract Wheelwright founds the demand of folio I , in which he asks that the defendants may deliver up to him the part of ground of the Government estaca of the mine Justicia, situated in the mineral district of Caracoles, which they have invaded. " 3 . That from the act of measurement of the said mine Justicia, executed on the 12th October, 1878, which is extended in attested copy at folio 6 of the added writing, it appears that the Government estaca was not measured on that lode, on account of the Deputy of Mining having so ordered it, in consequence of the ground which the said estaca should have occupied being in dispute. "4. That it has not been shown that in the time elapsed since that day, the 12th October, 1878, until the date on which the district of Caracoles was reincorporated in the territory of the Republic of Chili, the said estaca should have been measured and the plaintiff put in possession of it. "5. That from such antecedents it results that the said estaca did not have real and positive existence, nor in that which relates to it, did the said contract of the 26th December, 1876, have full effect while the district of Caracoles remained under the dominion of the Republic of Bolivia. oil Appendix, pp. 111-118. 2i8 United States vs. Chile. — Alsop Claim. [Point ii. "6. That the plaintiff has asked that effect may be given to that contract celebrated in Bolivia and with the Government of that Republic, and supporting his claim on the privileges which the laws of that country conceded to the estacas mines called of Instruction when the territory in which the mine treated of is situated has returned to the dominion of the Republic of Chili. "7. That the effects of the said contract, referring to an immovable property, situated today in Chili, ought to be arranged according to the laws of this country, inasmuch as the sovereignty is indivisible, and it would cease to be so in the present case if the district of Cara- coles, which at present is a portion of Chilian territory, should be governed by laws emanated from another sovereign. "8. That the admission of the demand, by ordering the measure- ment and delivery of the estaca claimed, would not mean in reality the mere recognition of a right definitely constituted beforehand, but a mandate to the effect that a right should now be constituted in virtue of laws which ought not to rule in any part of the Republic, nor serve as a basis for the decisions of its tribunals. "9. That the estaca which the plaintiff claims in virtue of his contract of 'anticresis' not having been delivered to him in the time of the Bolivian dominion in Caracoles, and such contract not being perfected except by the delivery of the property, that convention remained without effect with respect to the said estaca. "In conformity with these bases, and with that which is deter- mined in the i6th and 2437th articles of the Civil Code, and in the ist Law, 14th title, 3d paragraph. It is declared that the demand of folio I is without foundation. Let the sentence appealed from the 14th May of the past year, extended at folio 230, be repealed. "This decision has been resolved unanimously. Minister Varas records, in a special opinion, the reasons on which, for his part he founds the repeal. "Let it be published, and the documents returned. " (Signed.) Rojas, " (Signed.) Varas, "(Signed.) Cavada, " (Signed.) AjuirrE." « The errors in this decision are numerous. In the first place, it was held that this was a contract of anti- cresis. It has however been conclusively shown above that this is not a contract of anticresis, but an interest analogous to a leasehold interest, which interest was granted under express authority, authorizing the sale or leasing of the government mines, but not authorizing the disposition of them under anti- cretal contracts. Having announced this fundamental error, the Court next found or held that the government estacas had never been "measured on that lode" — "in consequence of the ground which oil Appendix, pp. 1 18-120. Sub-Point E.] The Case of the United States. 219 the said estaca occupied being in dispute." Although as a mat- ter of fact it might have been true that the government estaca had not been actually measured off, and for the reason given, yet as has been clearly shown above, this was, as a matter of law immaterial since the Government of Bolivia over and over again directed that Wheelwright should be placed in possession of the government estacas held adversely to the Government, even though these adverse and trespassing possessors called "to their aid the plea of good faith." The decision then asserts that it has not been shown that the "said estacas should have been measured and the plaintiff put in possession of it" prior to the occupation of the territory by the Chilean forces. This statement completely ignores the terms of the contract as well as the terms of the various laws and decrees upon which the contract was founded and the repeated orders issued by the Bolivian Executive commanding the local administrative officers to place Wheelwright in possession of the mines. The court next found "that from such antecedents it results that the said estaca did not have real and positive existence — while the District of Caracoles remained under the dominion of the Republic of Bolivia." It is believed that it has been conclu- sively shown that certainly from the decree of i860, it was the established law of Bolivia that the government estaca belonged to the Government irrespective of the fact as to whether or not it had been actually measured on the lode, and that both Gama and Wheelwright were under their concessions placed in posses- sion of government mines which had been tortiously taken pos- session of by private parties not representing the State, even where such parties as has just been stated called "to their aid the plea of good faith." Under their concessionary grants as interpreted by the decrees and laws of Bolivia, both Gama and Wheelwright were entitled to immediate possession of all gov- ernment estacas. The court next held that the laws of Chile and not of Bolivia were in force in the L-ittoral, and that "the contract, referring to immovable property, situated today in Chile, ought to be arranged according to the laws of this country." The court here clearly confused the question of the rights, titles, and interests which a private party might possess with the law which should govern an acquired territory. As will be fully shown in the sub-point next 220 United States VS. Chile. — Alsop Claim. [Point ii. following, it is a fundamental principle of international law that private rights must be respected by a conqueror, particularly where they refer to landed property, and that any violence of this principle renders the conqueror liable to the party injured. Having reached the above conclusion, the court then held that since this was a contract of anticresis, and since such contract could not be "perfected except by the tradition of immovable property," and since Wheelwright had never been in actual posses- sion of the estaca prior to the occupation of the Littoral by the Chilean forces, that therefore the "convention remained without effect with respect to the said estaca." This holding is erroneous because it assumes contrary to the facts and law, that this is a contract of anticresis, and consequently that Wheelwright had no right thereunder to any mines until he had been placed in actual possession of said mines. It is believed this latter point has already been sufficiently discussed to estab- lish that the State's right and therefore the concessionary's right in no wise depended upon but on the contrary was independent of the physical possession, either by the State or by its Agent, of the estaca. Having thus invoked the doctrine that under Chilean law a foreigner was entitled to no more consideration than a national, the court held that the decree of the court of first instance was repealed. The Government of the United States contends that for the reasons thus set forth this decision, like the decision in the case of the Amanita, constituted a clear violation of the rights, titles, and interests which under his contract had accrued to Wheel- wright in the government estacas; that therefore this decision constitutes a wrongful deprivation of certain of said rights, titles, and interests possessed by Wheelwright, for which action the Government of Chile is Uable to respond in damages under the well-known and universally recognized principles of international law hereinafter fully set forth. The amount of damage suffered by the concessionaries under and by reason of this decision will be fully set forth under Point IV, infra. Sub-Point F. This application of the provisions of the law of Chile to the private vested rights held, possessed, and enjoyed by Wheelwright under his contract, in a way and manner which amounted to and resulted in a deprivation and confiscation of certain of these private vested rights held, possessed, and enjoyed by Wheelwright under his contract, constituted a violation of the well settled and universally recognized principles of international law that a conqueror must respect private rights, for which violation the Government of Chile is liable to respond in damages. Prefatory Summary. It is believed that the discussion following hereafter will show that a conquering country is under obligation to recognize and protect private landed-property rights held by private parties — certainly those held by neutrals in territory acquired by con- quest — ^and further that where the laws of the conquering country are not sufficient to protect and enforce such private landed rights, it is the duty of the conquering country to pass the laws necessary to afford such protection. This has been the position assumed by the American Govern- ment in this very case, as is shown by the instruction issued to the American Minister at Santiago by Secretary of State Bayard on March 20, 1886, and the same principle has been frequently announced in the opinions of the Supreme Court of the United States, and likewise in the opinions of various writers upon inter- national law. Discussion. The position of the Government of the United States upon this point and in connection with this case was set forth with consider- able fullness by Mr. Bayard, Secretary of State of the United 2 22 United States VS. Chile. — Alsop Claim. [Point ii. States, in an instruction dated March 20, 1886, to the American Minister at Santiago. The instruction follows : "'No. 24. "Department of State, " Washington, March 20, 1886. "William R. Roberts, Esq., "efc.&c. &c. " Sir : I transmit herewith, enclosed, the documents presenting and substantiating the claim of Mr. John Wheelwright, an American citizen now residing in Antofagasta, against the Chilean government 'for wrongs done him as partner of the firm of Alsop & Co. by its non- fulfilment of obligations growing out of the transactions of the Bolivian government with Pedro Lopez Gama of whom Alsop & Co. became assigned in April 1875. "The petitioner states that while he was proceeding to carry out the terms of a contract made Dec. 24, 1876, between himself and the Bolivian Government, on the basis of the above assignment, his work was interrupted by the war between Bolivia and Chili, which broke out in 1879, and lasted till April 1884. The 'estacas' compris- ing Mr. Wheelwright's mining operations are included in the terri- tories conquered by Chili and have been occupied by various persons mostly of Chilian nationality, in violation of his vested right Against these persons Mr. Wheelwright has brought several suits, the first of which was decided in his favor, but the judgment was reversed in the Superior court of appeal at Serena on the 19th May 1882 by a decision given in Section VI of Mr. Wheelwright's printed petition. "This adverse decision takes the ground that the terms of the contract with the Bolivian government under which Mr. Wheelwright •claims, ought to be adjudicated in subjection to the laws of Chili, and not to those of Bolivia; that the estates claimed by the plaintiff under the Bolivian contract not having been delivered to him during the Bolivian dominion that contract remained without effect with respect to them, and that in conformity with these bases and certain articles of the civil code and laws of Chili here cited, Mr. Wheelwright's demand is without foundation and the previous de- cision is repealed. "Mr. Wheelwright claims that this and other similar decisions are tantamount to an actual seizure and confiscation of his property, for which he is entitled to compensation, the measure of which is to be determined by his contract with Bolivia of December 24, 1876 with interest added. ' ' The question that first presented itself, on the hearing in this case, was as to Mr. Wheelwright's nationality. The length of time during -which he had been absent f rorii the United States raised in my mind doubts which led me to call for additional proof. I am bound to say that by the proof consequently adduced these doubts have been dis- pelled. Mr. Wheelwright had undoubtedly been for a series of years resident from time to time in South America as the representative of large business interests in the United States and employed on duties which required from him such residence as a confidential agent. Possessed as he was of the system and details of vast mer- cantile transactions conducted by a house of long continued and Sub-Point F.] The Case of the United States. 223 wide spread activity and high business credit, it was natural that during these years his visits to his home should have been occasional and brief. But there is abundant evidence that he always main- tained his position as a citizen of the United States and that he paid an income tax to the United States. There is no proof of any renun- ciation of his allegiance to the United States or of his becoming naturalized or nationalized in either of the South American states in which he was from time to time resident. Were we to hold that citizens of the United States cannot without forfeiting their nation- ality reside from time to time in South American states as agents of their countrymen the business of both continents would receive a heavy blow. In affairs so vast, so intricate and so continuous as those of Alsop & Co., for instance, there could be neither consistency nor responsibility of action except through trusted agents, who while taking up continuous abode in their places of business action in South America, would, from early personal relation be in the confidence of their chiefs, making their simple business in this country the place to which their domiciliary duties would relate, and continuing to subject themselves to the laws of the country in which the firm was domi- ciled. As a matter of public policy, therefore, as well as of interna- tional law I cannot but conclude that Mr. Wheelwright's domicile, and nationality are in the United States. "As to his claim for redress for the wrongs which the present memorial warrants, I have also little doubt. The immense inter- ests he held, in 1879, in his representative, as well as individual capacity, under Bolivian laws, were virtually confiscated, under form of a judicial decision, by the government of Chili, in 1882. Were this confiscation put on grounds of municipal law, or of revolt against municipal authority it might be argued that the decision is one as to which we cannot sit in appeal. But the decision vests on an alleged rule of international law which, assumed as it now is, by the govern- ment of Chili, becomes a proper matter of discussion between our- selves and that government. It is asserted by the government of Chili, (for, in international relations, and the maintenance of inter- national duties, the action of the judiciary in Chili is to be treated, when assumed by the government as the act of the government) that a sovereign when occupying a conquered territory, has, by interna- tional law, the right to test titles acquired under his predecessor by applying to them his own municipal law, and not the municipal law of his predecessor under which they vested. The true principle, however, is expressed in the following passage cited in the memo- rialists brief. " 'But the right of conquest cannot affect the property of private persons; war being only a relation of State to State, it follows that one of the belligerents who makes conquest in the territory of the other cannot acquire more rights than the one for whom he is substituted; and that thus as the invaded or conquered State did not possess any right over private property so also the invader or conqueror cannot legitimately exercise any right over that property. Such is to day the public law of Europe, whose nations have corrected the barbarism of ancient practices which placed private as well as public property under military law.' (C. Masse Rapports du droit des gens avec le driot civil Vol. I. p. 123 Sec. 148-149). 224 United States vs. Chile. — Alsop Claim. [Pointii. "This doctrine has frequently been acted on in the United States. Thus it has been held by the Supreme Court that when New Mexico was conquered by the United States, it was only the allegiance of the people that was changed; their relation to each other, and their rights of property, remained undisturbed. Leitensdorfer v. Webb, 20 How. 176. The same has been held as to California. The rights acquired under the prior Mexican and Spanish law, so it was decided, were 'consecrated by the law of nations.' U. S. V. Moreno, I Wall 400: See U. S. v. Anguisola I Wall. 352; Town- send V. Greely, 5 Wall 326; Dent v. Emmeger 14 Wall. 308; Air- hart V. Massieu, 98 U. S. 491; Mutual Assurance Sac. v. Watts, I Wheat., 279; Delassus v. U. S. 9 Peters, 117; Mitchell v. U. S. 12 Peters, 410 U. S. v. Repertigny, 5 Wall. 211. "The government of the United States therefore holds that titles derived from a duly constituted prior foreign government to which it has succeeded are 'consecrated by the law of nations' even as against titles claimed under its own subsequent laws. The rights of a resident neutral having become fixed and vested by the law of the country cannot be denied or injuriously affected by a change in the sovereignty or public control of that country by transfer to another government. His remedies may be affected by the change of sovereignty but his rights at the time of change must be measured and determined by the law under which he acquired them. War is between States, and forms of governmerit may thus be changed and laws are forms of government, but cannot act retroactively to destroy neutral rights. The government of the United States is therefore prepared to insist on the continued validity of such titles, as held by citizens of the United States, when attacked by foreign governments succeeding that by which they granted. Title to land and landed improvements, is by the law of nations a continuous right, not subject to be divested by any retroactive legislation of new governments taking the place of that by which such title was lawfully granted. Of course it is not intended here to deny the prerogative of a conqueror to con- fiscate for political offences, or to withdraw franchises which by the law of nations can be withdrawn by governments for the time being. Such prerogatives have been conceded by the United States as well as by other members of the family of nations by which international law is constituted. What, however, is here denied, is the right of any government to declare titles lawfully granted by its predecessor to be vacated because they could not have been lawfully granted if its own law had, at the time in ques- tion, prevailed. This pretension strikes at that principle of his- torical municipal continuity of governments which is at the basis of international law. Holding as I do that the action of the gov- ernment of Chili — here complained of, by which citizens of the United States have been divested of their property, is in violation of this principle. "I am. Sir, "Your obedient Servant, "T. F. Bayard."" o I Appendix, p. 47. saB-Pointr.] The Case of the United States. . 225 It is not without interest to note the exact language which has been used by the Supreme Court of the United States in some of the cases to which Mr. Bayard referred in the course of this opinion. The general principles of law involved were stated succintly and with some fullness by the great Chief Justice Marshall in the case of the United States v. Percheman (1833), 7 Pet., 51, 86, as follows : "It may not be unworthy of remark, that it is very unusual, even in cases of conquest, for the conqueror to do more than to displace the sovereign and assume dominion over the country. The modern usage of nations, which has become law, would be violated; that sense of justice and of right which is acknowledged and felt by the whole civilized world would be outraged, if private property should be generally confiscated, and private rights annulled. The people change their allegiance; their relation to their ancient sov- ereign is dissolved; but their relations to each other, and their rights of property, remain undisturbed. If this be the modern rule, even in cases of conquest, who can doubt its application to the case of an amicable cession of territory? Had Florida changed its sovereign by an act containing no stipulation respecting the property of individuals, the right of property in all those who became sub- jects or citizens of the new government would have been unaffected by the change; it would have remained the same as under the ancient sovereign. The language of the second article conforms to this general principle : ' His Catholic Majesty cedes to the United States in full property and sovereignty, all the territories which belong to him, situated to the eastward of the Mississippi, by the name of East and West Florida.' A cession of territory is never understood to be a cession of the property belonging to its inhabit- ants. The king cedes that only which belonged to him; lands he had previously granted, were not his to cede. Neither party could so understand the cession; neither party could consider itself as attempting a wrong to individuals, condemned by the practice of the whole civilized world. The cession of a territory, by its name, from one sovereign to another, conveying the compound idea of surrendering at the same time the lands and the people who inhabit them, would be- necessarily understood to pass the sovereignty only, and not to interfere with private property." The learned Chief Justice, had, in the earlier case of Soulard V. United States (1830), 4 Pet. 511, announced the same doctrine in the following language: "In the treaty by which Louisiana was acquired, the United States stipulated that the inhabitants of the ceded territory should be protected in the free enjoyment of their property. The United States, as a just nation, regard this stipulation as the avowal of a principle which would have been held equally sacred, though it had not been inserted in the contract. "The term 'property,' as applied to lands, comprehends every species of title, inchoate or complete. It is supposed to embrace 40898 — 10 15 226 ' United States vs. Chile. — Alsop Claim. [Point ii. those rights which lie in contract- — those which are executory as well as those which are executed. In this respect the relation of the inhabitants to their government is not changed. The new government takes the place of that which has passed away. " He also announced this principle in a subsequent case in which he said: "The right of property, then, is protected and secured by the treaty; and no principle is better settled in this country, than that an inchoate title to lands is property. " Independent of treaty stipulation, this right would be held sacred. The sovereign who acquires an inhabited territory acquires full dominion over it ; but this dominion is never supposed to divest the vested rights of individuals to property. The language of the treaty ceding Louisiana excludes every idea of interfering with private property ; of transferring lands which had been served from the royal domain. The people change their sovereign. Their right to prop- erty remains unaffected by this change. " (Delassusv. U. S. (1835), 9 Pet., 117, 133.) The doctrines thus announced by Chief Justice Marshall were reaffirmed in the case of Strother v. Lucas (1838), 12 Pet. 410, 435, 436, where Mr. Justice Baldwin laid down the following rules: "The State in which the premises are situated was formerly a part of the territory, first of France, next of Spain, then of France, who ceded it to the United States by the Treaty of 1803, in full propriety, sovereignty and dominion, as she had acquired and held it (2 Peters, 301, &c.), by which this government put itself in place of the former sovereigns, and became invested with all their rights, subject to their concomitant obligations to the inhabitants. (4 Peters, 512; 9 Peters, 734; 10 Peters, 330, 335,726, 732, 736.) Both were regulated by the law of nations, according to which the rights of property are protected, even in the case of a conquered country, and held sacred and inviolable when it is ceded by treaty, with or without any stipu- lation to such effect ; and the laws, whether in writing, or evidenced by the usage and customs of the conquered or ceded country, con- tinue in force till altered by the new sovereign. (8 Wheat, 589, 12 Wheat, 528, 535; 6 Peters, 712; 7 Peters, 86, 87; 8 Peters, 444, 465; 9 Peters, 133, 734, 747, 748, 749; Cowp., 205, &c.; 2 Ves., Jun., 349; 10 Peters, 305, 330, 721, 732, &c.) This court has defined property to be any right, legal or equitable, inceptive, inchoate, or perfect, which before the treaty with France in 1803, or with Spain in 181 9, had so attached to any piece or tract of land, great or small, as to affect the conscience of the former sovereign, 'with a trust,' and make him a trustee for an individual, according to the law of nations, of the sovereign himself, the local usage or custom of the colony or district, according to the principles of justice, and rules of equity. (6 Peters, 709, 714; 8 Peters, 450; 9 Peters, 133, 144, 137; 10 Peters, 105, 324, 331, 335, 336.) The same principle has been applied by this court to the right of a Spanish town, as a municipal corporation. (10 Peters, 718 to 736; passim, 144, 734, 736; 10 Peters 105, 324, 331, 335, 336; vide, also, i Ves., Sen., 453; 2 Bligh. P. C. N. S., 50, &c.) " Sub-Point F.] The Case of the United States. 227 In Leitensdorfer v. Webb (1857), 20 Howard, 176, Mr. Justice Daniel, speaking for the court, said: "This case is brought before the court upon a writ of error to the Supreme Court of the Territory of New Mexico. "Upon the acquisition, in the year 1846, by the arms of the United States, of the Territory of New Mexico, the civil government of this Territory having been overthrown, the officer, General Kearney, holding possession for the United States, in virtue of the power of conquest and occupancy, and in obedience to the duty of maintaining the security of the inhabitants in their persons and property, ordained, under the sanction and authority of the United States, a provisional or temporary government for the acquired country. By this substitution of a new supremacy, although the former political relations of the inhabitants were dissolved, their private relations, their rights vested under the government of their former allegiance, or those arising from contract or usage, remained in full force and unchanged, except so far as they were in their nature and character found to be in conflict with the Constitution and laws of the United States, or with any regulations which the conquering and occupying authority should ordain. Amongst the consequences which would be necessarily incident to the change of sovereignty, would be the appointment or control of the agents by whom and the modes in which the government of the occupant should be administered — this result being indispensable, in order to secure those objects for which such a government is usually estab- lished. "This is the principle of the law of nations, as expounded by the highest authorities. In the case of The Fama, in the 5 C. Rob., 106, Sir William Scott declares it to be ' the settled principle of the law of nations, that the inhabitants of a conquered territory change their allegiance, and their relation to their former sovereign is dissolved; but their relations to each other, and their rights of property not taken from them by the orders of the conqueror, remain undis- turbed.' So, too, it is laid down by Vattel, book 3d, cap. 13, sec. 200, that ' the conqueror lays his hands on the possessions of the State, whilst private persons are permitted to retain theirs; they suffer but indirectly by the war, and to them the result is, that they only change masters.' In the case of The United States v. Perche- man, 7 Pet., pp. 86, 87, this court have said: 'It may be not unworthy of remark, that it is very unusual, even in cases of con- quest, for the conqueror to do more than to displace the sovereign, and assume dominion over the country. The modern usage of nations, which has become law, would be violated, and that sense of justice and right which is acknowledged and felt by the whole civilized world would be outraged, if private property should be generally confiscated and private rights annulled. The people change their allegiance; their relation to their sovereign is dissolved; but their relations to each other, and their rights of property, remain undisturbed' Vide, also, the case of Mitchell v. The United States, 9th lb. 711, aiid Kent's Com., Vol. I., p. 177." 228 United States vs. Chile. — Alsop Claim. [Point ii. This same principle was announced by Mr. Justice Swain in the case of United States v. Moreno (1863), i Wall. 400, 401, in deliv- ering the opinion of the court as follows : "California belonged to Spain by the rights of discovery and con- quest. The government of that country established regulations for transfers of the public domain to individuals. When the sover- eignty of Spain was displaced by the revolutionary action of Mexico, the new government established regulations upon the same subject. These two sovereignties are the spring heads of all the land titles in California, existing at the time of the cession of that country to the United States by the Treaty of Guadalupe Hidalgo. That cession did not impair the rights of private property. They were conse- crated by the law of nations, and pi-otected by the Treaty. The treaty stipulation was but a formal recognition of the pre-existing sanction of the law of nations. The Act of March 3d, 1851, was passed to assure to the inhabitants of the ceded territory the benefit ' of the rights of property thus secured to them. It recognizes alike legal and equitable rights, and should be administered in a large.and liberal spirit. A right of any validity before the cession was equally valid afterwards, and while it is the duty of the court, in the cases which may come before it, to guard carefully against claims origi- nating in fraud, it is equally their duty to see that no rightful claim is rejected. No nation can have any higher interest than the right administration of justice." Upon this general principle ,see also the cases of Soulard's Heirs v. U. S. (1836), 10 Pet. 100; U. S. v. Segui (1836), 10 Pet. 306; Jones et al v. McMasters (1857), 20 How. S; U. S. v. Chaves (1895), 159 U. S. 452, 457; Korn & Wisemiller v. Mutual Assur- ance Society etc. (1810), 6 Cranch, 192. That the doctrine thus applied by the Supreme Court of the United States in passing upon the rights of private persons in acquired territory does not depend upon the terms of a treaty but upon the general principles of international law was set forth by Mr. Justice Swain in Dent v. Emmeger (1871), 14 Wall. 308, where he said: "Titles which were perfect before the cession of the Territory to the United States, continued so afterwards, and were in nowise affected by the change of sovereignty. U. S. v. Roselius, 15 How., 36. The Treaty so provided, and such would have been the effect of the principles of the law of nations if the Treaty had contained no provision upon the subject. According to that code, a change of government is never permitted to affect pre-existing rights of private property. Perfect titles are as valid under the new government as they were under its predecessor. Strother y. Lucas, 12 Pet., 412.'' That this principle thus announced in this case is not founded on a strict legal conception but that it has its sources in funda- mental considerations of humanity was well stated by Mr. Chief sub-PointF.i The Case of the United States. 229 Justice Marshall in the case of Johnson v. Graham's Lessee (1823), 8 Wheat; 543,589, in which he made the following statements: "The title by conquest is acquired and maintained by force. The conqueror prescribes its limits. Humanity, however, acting on public opinion, has established, as a general rule, that the conquered shall not be wantonly oppressed, and that their condition shall remain as eligible as is compatible with the objects of the conquest. Most usually they are incorporated with the victorious nation and become subjects or citizens of 'the government with which they are con- nected. The new and old members of the society mingle with each other; the distinction between them is gradually lost, and they make one people. Where this incorporation is practicable, humanity demands, and a wise policy requires, that the rights of the conquered to property should remain unimpaired; that the new subjects should be governed as equitably as the old, and that confidence in their security should gradually banish the painful sense of being separated from their ancient connections, and united by force to strangers." Moreover, it is clear that in adjudicating upon the rights of private citizens in territory taken over by a conqueror, a conqueror should not approach the matter in a narrow or technical spirit, as was clearly set forth by Mr. Justice Field, who delivered, the opinion of the court in United States v. Anguisola (1863), i Wall. 352. Mr. Justice Field said: "To these observations, so just and pertinent, we will only add that the United States have never sought by their legislation to evade the obligations devolved upon them by the Treaty of Guada- lupe Hidalgo to protect the.rights of property of the inhabitants of the ceded Territory, or to discharge it in a narrow and illiberal man- ner. They have directed their tribunals, in passing upon the rights of the inhabitants, to be governed by the stipulations of the Treaty, the law of nations, the laws, usages and customs of the former governments, the principles of equity, and the decisions of the Supreme Court, so far as they are applicable. They have not desired the tribunals to conduct their investigations as if the rights of the inhabitants to the property, which they claim, depended upon the nicest obser^'^ance of every legal formalit3^ They have desired to act as a great nation, not seeking, in extending their authority over the ceded country, to enforce forfeitures, but to. afford protection and security to all just rights which could have been claimed from the government they superseded." Moreover, authority is not wanting to establish the proposition that not only must the conquering nation respect the private vested rights held by inhabitants of the conquered territory, but that the conquering nation is under obligation to pass the necessary laws to enforce and protect such rights should the existing law of the conquering state, now applied to the conquered nation, be found insufficient for this purpose. 230 United States vs. Chile. — Alsop Claim. [Pointii. Upon this point Mr. Dana in his notes to Wheaton's International ' I^aw niakes the following comments (p. 434) : "In case of completed conquest. Completed conquest sup- poses the conquering power to have become the permanently estab- lished sovereignty of the country. This may be either by a cession from the former sovereign, or by a practical acquiescence by him or by the people of the territory in its subjection to the conquering State, or by the entire extinction of the political existence of the conquered State. "(i) Private Property of Citizens. When this change has taken place, it is to be observed that the relations of war give place to those of peace, and military authority to civil administration. There is no reason, therefore, why the State should confiscate the property of its. new subjects any more than of its old subjects; for the fact, that they were formerly enemies, is not a crime or a penal offence. Nations now respect the obligation of a citizen or subject to sustain his own State in war, and he is treated by the opposite belligerent as a prisoner of war, — in other words, as a lawful belligerent, and not as a criminal. (This reasoning does not apply to enemies in a civil war which has its origin in rebellion; for that is, in law, a criminal offence.) It follows, therefore, that the private property of citizens is not considered as transferred by the completed conquest to the conquering State. It is a distinct question, how far the completed conquest affects acts of ownership done by the conquering State while in hostile military occupation. Not only does the State, now become the sovereign, respect private rights and titles, hut is bound to make laws and regulations to insure to individuals the means of exer- cising and enjoying their rights, appropriate to the new political system under which they have passed." The same principle has been laid- down by Halleck, Volume 2, Baker's edition, page 494, where that writer makes the following comments : " § 26. We are of opinion that the above rule of international law laid down by Chief Justice Marshall, and repeated in numerous decisions of the Supreme Court of the United States, is correct. It not unfrequently happens, however, that much injustice and incon- venience will result to the owners of property in a ceded or con- quered territory, by the transfer of themselves and their property from one system of laws to another very different from the first, and wholly inadequate to afford remedies for a violation of the rights of property. And as the law of nations and the usage of the civilised world impose Upon the new sovereignty the duty to maintain and protect the property of the conquered inhabitants, it is bound to take the necessary steps to clothe equities with a legal title, so as tp bring them within the scope of legal remedies under its own laws. It is with this view that Congress has usually passed remedial Acts for the ascertainment and recognition of lands of private ownership in territories acquired by the tFnited States. Although the main- tenance of such property may be fully guaranteed by the law of nations and the stipulation of treaties, yet, in order to place it under the careful guardianship of our municipal laws, it is necessary to Sub-Point Fj The Case of the United States. 231 invest it with a new attribute of a legal title, without which the owner may be unable either to maintain his own possession or eject an intruder. For example, a right or title to lands which, under Span- ish or Mexican law, is abundantly sufficient for the security and protection of the owner in his rights, may be utterly useless for such purposes under our laws, as it neither secures him in the possession and enjoyment of his property, nor- enables him to bring a suit to eject an aggressor. A refusal or neglect to pass the necessary reme- dial acts in such cases, so as to invest equities with such legal attri- butes as will place all -private property, of whatsoever description, under the guardianship' of our laws, would be a violation of the obligations imposed upon us by the law of nations and the usage of the civilised world. A delay in applying such remedies is often equivalent to a denial of justice, or a confiscation of private property, and is, therefore, a breach of public law and a violation of national faith." ' Conclusion. It is submitted that the above discussion establishes that the conquering Government is under obligation to recognize and pro- tect private landed property rights held by private individuals, particularly those held by alien neutrals in territory acquired by conquest; and, further, that where the laws of the conquering country are not sufficient to protect and enforce such private landed rights, it is the duty of the conquering country to pass the laws necessary to afford such protection; and, finally, that where the conquering country fails to perform its duties in either one of these respects it must answer in damages to the country of which the injured party is a national. POINT III. THE GOVERNMENT OF THE UNITED STATES FOR AND IN BEHALF OF THE CLAIMANTS, AMERICAN CITIZENS, ABOVE NAMED, ALLEGES, CONTENDS, AND MAINTAINS THAT THE WHEELWRIGHT CONTRACT OF DECEMBER 24, 1876, RECOGNIZES AND IMPOSES AN OBLIGATION TO PAY 835,000 BOLIVIANOS WITH INTEREST AT THE RATE OF FIVE PER CENT FROM THE DATE OF THE CONTRACT UNTIL SAID SUM WAS DUE, WITH INTEREST THEREAFTER AT THE LEGAL RATE UPON SAID PRINCIPAL AND INTEREST; AND THAT THE GOVERNMENT OF CHILE IS LIABLE UNDER A DIRECT OBLIGATION, QUASI AND EXPRESS, FOR THE AMOUNT DUE TO THE CONCESSIONARIES UNDER THIS CONTRACT OF 1876, INCLUDING INTEREST AT THE RATE AND UPON THE AMOUNT INDICATED ABOVE, FOR THE FOLLOWING REASONS AND UNDER THE FOLLOWING SPECIFIC PROMISES AND UNDER- TAKINGS: Sub-Point A. The Government of Chile is liable for such indebtedness because it deliberately and with knowledge appropriated the funds specifically set apart and appropriated to the payment of this obligation. Prefatory Summary. The discussion of this point will show that by the contract of December 26, 1876, which embodied the governmental decrees of December 23rd and 24th of the same year, there were set apart and appropriated to the payment of this obligation all of the proceeds of the customs of Arica beyond the sum of $405,000 annually, which Bolivia was then receiving under the Peruvian-Bolivian treaty arrangement of 1875; that under the subsequent arrange- ment contemplated at the time the Wheelwright contract was made and subsequently consummated there would have accrued to Bolivia from the customs receipts of Arica sums sufficient to have discharged this debt as early as the middle of 1882 ; that ignor- ing the rights po'ssessed by Wheelwright under the contract of 1876 and with a full knowledge that such rights were possessed, the Gov- ernment of Chile appropriated to its own use the funds which, under this contract, would have gone to Wheelwright; that by this action the Government of Chile in reality took that which belonged to 232 Sub-Point A.) The Case of the United States. 233 Wheelwright; that under the well settled and uniformly recog- nized principles, not only of the common law but of the civil law as well, the Government of Chile appropriated money which cequo et bono belongs to the concessionaries under the Wheelwright con- tract; and that therefore an obUgation arises upon the part of Chile to satisfy the debt due under the Wheelwright contract. That the principles of the civil and the common law require that the Government of Chile shall restore the money thus appropriated by the decrees aforesaid to the payment of the Wheelwright con- tract, which money the Government of Chile tortiously conveyed to its own uses and which money, therefore, became cequo et bono due the concessionaries under the Wheelwright contract, is clearly evident from a consideration of the provisions of Book 3, Title 27, of the Institutes of Justinian; of the Commentaries upon quasi contracts in Sir Henry Maine's Ancient Law ; of Sohme's Institutes of Roman Law; of the decision by Lord Mansfield in Moses v. Macferlan; of the Commentaries of William David Evans, Esq., upon Pothier's treatise on the Law of Obligations; of the same writer's learned essay upon " Action for Money Had and Received;" as well as of various decisions of the courts of the United States and Great Britain. The same responsibility is fixed upon the Government of Chile by writers upon international law and by the practice of nations. Discussioii. Those portions of the contract of December 26, 1876, which are pertinent to the discussion of the present point read as follows: " Resolution of December 24, 18 j6. "Ministry of Finance and Industry, "La Paz, December 24, 1876. "In view of a proposition made by Mr. John Wheelwright, a member and representative of the firm of Alsop & Co., of Valpa- raiso, in Uquidation, for the purpose of providing for the payment of its claims against the Government by an assignment of the rights which were acknowledged in favor of Pedro Lopez Gama, a new com- promise has been concluded in a cabinet meeting with Mr. Wheel- wright which finally terminates this matter. It is drawn up in the following terms : "First. The sum of 835,000 bolivianos is acknowledged as due the aforesaid representative of the firm of Alsop & Co., together with interest at the rate of 5 per cent per annum, not addable to the principal, and to be reckoned from the date on which this contract is duly executed. 234 United States vs. Chile. — Alsop Claim. [Point m. "Second. The said principal and interest shall be amortized by- means of drafts all of which are to be drawn in quarterly install- ments on the surplus, which, from the date on which the present cus- toms contract with Peru terminates, shall arise, from the quota due Bolivia in the collection of duties in the Northern custom house, over and above the 405,000 bolivianos which the Peruvian Govern- ment now pays,^ — whether the customs treaty with that Republic is renewed or whether the National custom house is reestablished. "Sixth. In all cases in which sums of money are paid or received, the Chilean peso or the Peruvian sol of coined silver shall be consid- ered equivalent to the boliviano, either in this contract or in that regarding the mining concessions. "Let the proper document be executed, inserting therein this compromise and the contract connected therewith which is men- tioned above. Let this be recorded. " [sEAi,.] A true copy. "Jose Salinas,'^ "Chief Clerk of Foreign Relations." It is believed to be unnecessary at this point again to discuss the question of the legality of this contract, which it is believed has been already sufficiently discussed under Point I, supra, and therefore it will be considered as established that the contract of December 26th, 1876, embodying the decrees of December 23 and 24 of the same year, was a valid, legal, and binding instrument, being properly negotiated and concluded by persons duly author- ized thereto, and that the obligation to pay the principal and interest therein recognized as due and payable was complete and perfect. As is evident from the decree of December 24, 1876, as above quoted, and as has been pointed out in the Historical Resume of the case, the concessionaries in this case had the right and title to all of the Arica yearly custom receipts beyond $405,000, and yet the Government of Chile, notwithstanding the interests thus held by the concessionaries, appropriated the entire cus- tom receipts from the time they assumed control until the treaty of 1884 went into effect; and, further, notwithstanding such complete title so held by the concessionaries to these customs, not one cent was ever offered to them, or ever received by them, of the revenue which came from this custom house. As has been already set forth (see Point I, Sub-Point C, C^), the duly accredited representatives of the Governments of Bolivia and Chile drew up and signed at Santiago in April, 1884, a so- called Pact of Truce. Among the provisions of this Pact of Truce = I Appendix, p. 8. Sub-Point A.) The Case of the United States. 235 were certain ones which provided for the settlement of claims existing. against the Government of Bolivia and which were incor- porated in Articles 3 and 6 of the treaty, which read as follows: "Third: The properties sequestered in Bolivia from Chilian citizens by decrees of the Government, or by measures emanating from civil and military authorities, shall be immediately returned to their owners or to the representatives constituted by them, with sufficient powers. "The product which the Government of Bolivia may have received from said properties, and which may be proved by documents relating thereto, shall likewise be returned. "The losses which may have been suffered by Chilian citizens through the causes mentioned, or by the destruction of their prop- erties, shall be indemnified in virtue of the demands which the inter- ested parties shall bring before the Government of Bolivia. "Sixth. In the port of Arica the import duties on foreign goods destined for consumption in Bohvia shall be recovered in conformity with the Chilian tariff, and these goods shall not be subject to the imposition of any other duty in the interior. The returns of that Custom House shall be divided in this manner : Twenty-five per cent shall be applied to the service of the Custom House and to the part which corresponds to Chili for the despatch of the merchandise for consumption in the territories of Tacna and Arica, and seventy-five per cent for Bolivia. This seventy-five per cent shall be divided, for the present, in the following manner: Forty parts shall be retained by the Chilian Administration for the payment of the sums which may result as owing by Bolivia in the settlement which may take .place, according to the third clause of this pact, and to cover the unpaid part of the Bolivian Loan raised in Chili in 1867, and the balance shall be delivered to the Bolivian Government in currency or in drafts to its order. In the settlement and payment of the loan, it shall be considered on equal terms with the claimants for dam- ages in the war. "T^ie Bolivian Government, at its convenience, can inspect, by means of its Customs' Agents, the accounts of the Arica Custom House. "When the indemnities referred to in the third article have been paid, and the retention of the aforesaid fortieth part shall, on this account, have ceased, Bolivia can establish her interior Custom Houses in the part of her territory which she my deem convenient. In this case foreign merchandise shall have free transit through Arica."" Before considering the exact tiature of the provisions contained in the above quoted Articles i and 2 of the decree of December 24, 1876, it might be well to direct attention in a general way to the fact that nations not infrequently set aside — "hypothecate," as the arrangement is sometimes designated — a portion of their customs receipts for the payrnent of their national obligations and it would seem to be unnecessary to go into any extended discussion '"'II Appendix, p. 325. 236 United States vs. Chile. — Alsop Claim. [Pointm. to establish the propriety and legaUty of such a procedure, since this manner of liquidating national debts is so well known and universally recognized. However, among the more noted of the recent arrangements of this sort which have been made by various governments for the liquidation of their debts by the application thereto of their customs receipts may be men- tioned the liquidation by Venezuela, under the decision of the Hague Tribunal of 1904, of the debts due from her, first, to the preferred powers and, secondly, the debts due to the non-pre- ferred powers; also the liquidation of the foreign debt of Liberia by the customs revenue of that Government, w:hich is being appro- priated in certain proportions to the payment of her English loan, the customs service being administered by representatives of the Government of Great Britain; and more recently the liquidation of its foreign debt by the Government of the Dominican Republic through a formal treaty drawn and negotiated for that purpose by which it binds itself, pursuant to a liberal and far-reaching scheme of liquidation, to appropriate a certain proportion of its customs receipts to the liquidation of debts due from it to the nationals of the powers. To this there may well be added the Pact of Truce, just quoted, by which the Government of Chile stipulated for and secured the greater part of the Bolivian customs receipts collected at the port of Arica — an arrangement which was per- petuated by various protocols and treaties for twenty years. See also the provisions of the supplemental protocol of May 28, 1895- Thus, it is clear that an arrangement of this sort is not unusual, is recognized as equitable, and is always a proper, valid, and bind- ing arrangement for the purpose of discharging just obligations. Indeed, for that matter, the representatives of Chile have in their general correspondence with the Government of Bolivia, and aside from the Pact of 1884, expressly recognized, not only the propriety but the possible necessity of making arrangements of this sort for the settlement of national debts. For example, Senor Konig, the Minister of Chile at ha Paz, in his letter to the Bolivian Foreign Office under date of August 13, 1900, assured the Government of Bolivia that — "Should Bolivia later on intend to contract a loan in Europe, giving as a guarantee her custom revenues, it would not certainly be an obstacle to this operation the fact that the custom receipts Sub-Point A. The Case of the United States. 237 of Bolivia set aside for the payment of said loan are collected at a Chilean port, because, happily, the credit of my country enjoys generally in ^ the world a solid and well-merited reputation."'^ Moreover, the arrangements for the liquidation of debts due from Bolivia to Chilean citizens, as set forth and embodied in the treaties between Chile and Bolivia of 1866 and 1874, as well as the arrangement made in the Pact of Truce just quoted, are convincing evidence that the Government of Chile recognizes the propriety and validity of this sort of arrangement for the settlement of national debts. In view of this universally recognized practice it is believed to be unnecessary further to indicate or illustrate the power possessed by a sovereign nation either to pledge or to appropriate its customs, receipts to the payment of its just obligations, nor is it necessary to comment upon the propriety of such an act from the standpoint either of the debtor or of the creditor nation, since the principle is thus so well estabUshed and so recently and fully recognized. It should, however, be observed, in the first instance that the provisions of the decree of December 24, 1876, do not constitute in any proper sense, as to any part of the customs receipts of Bolivia, a real and technical pledging or hypothecation as is clearly apparent from an examination of the fundamental principles under- lying the law of pledges and hypothecations. It is elemental that in a mortgage, a pledge, or art hypothecation there exists, first, a debt, and, secondly, a security for the debt, and, save in rare instances and unusual circumstances the security— that is, the thing pledged, mortgaged, or hypothecated — is never taken to satisfy the debt, unless and until the debt upon maturity is not paid and the thing so mortgaged, pledged, or hypothecated is sold and the proceeds of the sale applied to satisfy the indebtedness. Strictly speaking, therefore, hypothecating is a giving of security and the thing hypothecated does not and is not used to pay the debt, but staiids. as a mere security, the payment of the debt being obtained from other sources. It is perfectly obvious from even a casual reading of Article 2 of the decree of December 24, 1876, that the customs receipts specified in that article are not pledged, mortgaged, or hypothe- cated in this sense. They are not in any sense a security for the payment of the debt recognized as due by the Wheelwright con- tract, but they are, on the contrary, the source — the very fund — from and by which the debt is to be paid. This Decree of Decem- » II Appendix, p. 478. 238 United States vs. Chile. — Alsop Claim. [Point in. ber 24, 1876 purports and does definitely and specifically appro- priate to the payment of this debt all beyond a certain definitely and precisely fixed sum which may be collected in certain of the Bolivian Customs Houses ; it is an actual appropriation of money, and not merely a pledging or hypothecating of customs receipts as security, by and through a contract which was negotiated and concluded by the Executive of the Government of Bolivia and ratified by the Bolivian Congress. This constitutes the strongest and clearest kind of an analogy to an ordinary appropriation bill recommended by an executive to the legislature, the bill being later passed by the legislature, thus constituting an appro- priation of the funds so voted. To put it finally, it seems incontrovertible that this contract made by the Executive and approved by the Bolivian Congress constitutes an absolute assignment of so much of the customs receipts of the Republic as is covered by the contract and is closely analogous, therefore, to a sale of so much of the national property. In view of what was said above regarding the custom of nations with reference to the application of customs revenue to the liquida- tion of national obligations, it seems obvious that a sovereign nation must be held to ^.ave the power to make an arrangement of the kind incorporated in the Wheelwright contract of December 26, 1876, and that such arrangement when so made has all of the sanctity that must be accorded to sovereign acts, and it is beHeved therefore to be unnecessary to enter into any extended argument to establish this point. It is, however, not without interest to note that we have in the private law of both countries an exact legal counterpart of the principles involved in this transaction. Under the familiar prin- ciple that you may mortgage anything which you may assign or sell, and, reciprocally, anything that you may assign or sell you may mortgage, it appears clearly evident that the courts of both England and the United States have fully recognized as a legal and binding principle of law and equity the right of private parties to make between themselves a binding agreement under circumstances that can not in principle be distinguished from the present, save in the fact that in the present case the sub- ject matter of the transaction was the national customs and that one of the parties to the agreement was a sovereign power. See Holroydv. Marshall, 10 H. of L., 191; Coombe v. Carter, 36 Ch. D., 348; and Tailby v. The Official Receiver (1888), 13 H. Sub-Point A.r The Case of the United States. 239 of L. and P. C. App., 523, in which the House of Lords distinctly- held that a merchant had the right to mortgage (and therefore it must be, under the principle above announced, the right to sell or assign) his future book accounts, not yet accrued. The principle underlying this determination has been repeatedly recognized by the various courts of the United States, and the specific doctrine announced in Tailby v. The Ofl&cial Receiver has been affirmed in the courts of the United States. It would therefore seem that so far as the law of England and the United States is concerned, the transaction between the Govern- ment of Bolivia and Wheelwright would have been a legal and binding transaction, if it had been between private individuals in the United States ; and if a private individual might under English and American law make a valid assignment of future book accounts, why may not a sovereign under the same fundamental doctrines make a valid assignment of future customs receipts, if it be assumed (what may not indeed be the fact) that in such matters the sovereign is subject to the same legal principles which bind and control the transactions of the subject. It appears, moreover, to be held equally that, under the general principles of the Roman law, the foundation of the civil law, this transaction would likewise constitute as between private parties a valid and binding agreement. Moyle, in his Institutes of Jus- tinian, Excursus II, p. 318, expounds the law upon this question in the following words : "Hypotheca possessed great advantages over the earlier forms of pledge, of which fiducia was quite obsolete in the time of Justinian. The pledgor was never deprived of the use and possession of his property, and yet the creditor was absolutely secured. The class of pledgable objects was largely augumented : money could now he lent on the security of things not yet in existence, e. g. future crops and expectations (' et qua nondum sunt, futura tamen sunt, hypothecae dari possunt, ut fructus pendentes, partus ancillae, fetus pecorum' Dig. 20. I. 15), or of mere incorporeal rights, real and personal (Dig. ib. 9. i; ib. II. 2; Dig. 13. 7. 18. pr.)." From this discussion, it seems sufficiently established that there is in the transaction of 1876 between the Goveriiment of Bolivia and John Wheelwright nothing which is hostile, not only to the spirit, but even to the letter of the principles of law governing the transactions of private individuals of the two countries, and no reason is perceived for contending that (subject to special constitutional hmitations, which do not appear in this case) what the citizen or subject may do under the general laws of a country may not also be done by the sovereign. 240 United States vs. Chile. — Alsop Claim. [Point in. To recapitulate, it should be observed that under the first and second articles of the decree of December 24, 1876, as has been already pointed out, the customs receipts as specified in this article are not pledged, mortgaged, or hypothecated. They are not in any sense a security for the payment of the debt recognized as due by the Wheelwright contract, but they are, on the contrary, the source — the very fund — from and by which the debt is to be paid. Further, this decree of December 24, 1 876, purports to appro- priate and does definitely and specifically appropriate to the pay- ment of this debt all beyond a certain definitely and precisely fixed amount which might be collected in certain of the Bolivian Customs Houses; it is not, therefore, merely a pledging or hypothecating of the customs receipts as security, but is an actual appropriation of money by and under an instrument negotiated and concluded by the Executive of the Government of Bolivia and ratified by the Bolivian Congress. In other words, you have, as stated above, the strongest and clearest kind of an analogy in this case between the recommendation of an appropriation bill by an executive to the legislature and the passing by the legislature of the bill so recom- mended, thus constituting an appropriation of the funds so voted. It would appear therefore that whenever the Bolivian customs receipts collected at the Port of Arica were in excess of 405,000 bolivianos annually, the excess thereof belonged, imder the- con- tract of 1876, absolutely and. unconditionally to John Wheel- wright. He had under his contract nothing to do in order to receive such excess except to draw the proper drafts. In other words, the money so collected by the Bolivian Government belonged, under this contract, not to that Government but to Mr. Wheelwright. That the money which should come in from the Bolivian cus- toms at Arica were not subject to the free disposition of the Gov- ernment of Bolivia, and moreover that they were not subject to the free and unhampered disposition, even of the Government of Chile under her compact of truce of 1884, was clearly recognized by the Government of Chile itself in the Matta-Reyes Protocol of 1 89 1, as is evident from the following quotation: " (2) The Government of Chile will take charge of and assume the payment of the obligations recognized by that of Bolivia in favor of the mineral enterprises of Huanchaca, Corcoro and Oruro, deducting the amounts in accordance with the compact of truce, as well as the credits which encumbered the income from the Littoral by reason thereof and which are that of the Garantizador de Valores, Bank of Chile, the bonds issued for the construction of the railroad of Mejillones, the Sub-Point A.i The Case of the United States. 241 credit acknowledged in favor of Lopez Gama, representing the house of Alsop & Company of Valparaiso, and that of 40,000 Bolivianos in favor bf the Garday family; the ptodiicts of the custom houses of Arica and Antofagasta in consequence remaining free of all encum- brances on importations for Bolivia. " "■ If this relationship between the customs receipts and these obligations be that which is recognized by this protocol, it seems entirely obvious that any person who should by force in whatever way exerted, or by whatever form manifested, take from Mr. Wheelwright the money thus belonging to him, became thereby guilty of a wrong which in equity and good conscience, cequo et bono, rendered him liable to Mr. Wheelwright for the money thus improperly appropriated. This principle is founded upon certain fundamental rules of justice which are operative in both the civil and the common law, and which have been developed with singular completeness in an unbroken line of decisions, dating, in the English law at least, from the time of Mansfield. The obligation imposed by law upon him who improperly appro- priates the money or property of another is known both to the civil and the cpmmon law as "quasi-contractual." The nature of this obligation will for the present purpose be sufficiently recalled by the following excerpts from text- writers and decisions. The nature of a quasi-obligation is set forth in book 3, title 27, of the Instutites of Justinian (Moyle's translation) as follows: "Title XXVII. — " Of Quasi-Contractual Obligations. "Having enumerated the different kinds of contracts, let us now examine those obligations also which do not originate, properly speaking, in contract, but which, as they do not arise from a delict, seem to be quasi-contractual. Thus, if one man has managed the business of another during the latter's absence, each can sue the other by the action on uncommissioned agency; the direct action being available to him whose business was managed, the contrary action to him who managed it. It is clear that these actions cannot properly be said to originate in a contract, for their peculiarity is that they lie only where one man has come forward and managed the business of another without having received any commission so to do, and that other is thereby laid under a legal obligation even though he knows nothing of what has taken place. The reason of this is to the. general convenience; otherwise people might be sum- moned away by some sudden event of pressing importance, and without commissioning any one to look after and manage their affairs, the result of which would be that during their absence those affairs would be entirely neglected: and of course no one would be = II Appendix, pp. 372-373. 40898 — 10 16 242 United States vs. Chile. — Alsop Claim. [P"'"' m- likely to attend to them if he were to have no action for the recovery of any outlay he might have incurred in so doing. Conversely, as the uncommissioned agent, if his management is good, la^s his prin- cipal under a legal obligation, so too he is himself answerable to the latter for an account of his management; and herein he must show that he has satisfied the highest standard of carefulness, for to have displayed such carefulness as he is wont to exercise in his own affairs is not enough, if only a more diligent person could have managed the business better. Guardians, again, who can be sued by the action on guardianship, cannot properly be said to be bound by contract, for their is no contract between guardian and ward : but their obliga- tion as it certainly does not originate in delict, may be said to be quasi-contractual. In this case too each party has a remedy against the other; not only can the ward sue the guardian directly on the guardianship, but the guardian can also sue the ward by the contrary action of the same name, if he has either incurred any out- lay in managing the ward's property, or bound himself on his behalf, or pledged his own property as security for the ward's creditors. Again, where persons own property jointly without being partners, by having, for instance, a joint bequest or gift made to them, and one of them is liable to be sued by the other in a partition suit because he alone has taken its fruits, or because the plaintiff has laid out money on it in necessary expenses : here the defendant cannot prop- erly be said to be bound by contract, for there has been no contract made between the parties; but as his obligation is not based on delict, it may be said to be quasi-contractual. The case is exactly the same between joint heirs, one of whom is liable to be sued by the other on one of these grounds in an action for partition of the inherit- ance. So too the obligation of an heir to discharge legacies cannot properly be called contractual, for it cannot be said that the legatee has contracted at all with either the heir or the testator; yet, as the heir is not bound by a delict, his obligation would seem to be quasi- contractual. Again, a person to whom money not owed is paid by mistake is thereby laid under a quasi-contractual obligation; an obligation, indeed, which is so far from being contractual, that, logically, it may be said to arise from the extinction rather than from the formation of a contract; for when a man pays over money, intending thereby to discharge a debt, his purpose is clearly to loose a bond by which he is already bound, not to bind himself by a fresh one. Still, the person to whom money is thus paid is laid under an obligation exactly as if he has taken a loan for consumption, and therefore he is liable to a condition. Under certain circumstances money which is not owed, and which is paid by mistake, is not recov- erable; the rule of the older lawyers on this point being that wher- ever a defendant's denial of his obligation is punished by duplication of the damages to be recovered — as in actions under the lex Aquilia, and for the recovery of a legacy — he cannot get the money back on this plea. The older lawyers however applied this rule only to such legacies of specific sums or objects as were given by condemnation: but by our constitution, by which we have assimilated legacies and trust bequests, we have made this duplication of damages on denial an incident of all actions for their recovery, provided the legatee or beneficiary is a church, or other holy place honoured for its devotioii Sub-Point A.I The Case of the United States. 243 to religion and piety. Such legacies, although paid when not due, cannot be reclaimed." (Imperatoris Justiniani Institutiones, Moyle translation, Vol. II, p. 155) Sir Henry Summer Maine, in his "Ancient Law," makes the following general remarks upon the subject of " Quasi-Contracts " : "The part of Roman law which has had most extensive influence on foreign subjects of inquiry has been the law of obligation, or, what comes nearly to the same thing, of Contract and Delict. The Romans themselves were not unaware of the offices which the copious and malleable terminology belonging to this part of their system might be made to discharge, and this is proved by their employment of the peculiar adjunct quasi in such expressions as Quasi-Contract and Quasi-Delict. 'Quasi,' so used, is exclu- sively a term of classification. It has been usual with English critics to identify the quasi-contracts with implied contracts, but this is an error, for implied contracts are true contracts, which quasi-contracts are not. In implied contracts, acts and circum- stances are the symbols of the same ingredients which are sym- bolised, in express contracts, by words; and whether a man employs one set of symbols or the other must be a matter of indifference so far as concerns the theory of agreement. But a Quasi-Contract is not a contract at all. The commonest sample of the class is the relations subsisting between two persons, one of whom has paid money to the other through mistake. The law, consulting the interests of morality, imposes an obligation on the receiver to refund, but the very nature of the transaction indicates that it is not a con- tract, inasmuch as the Convention, the most essential ingredient of Contract, is wanting. This word 'quasi,' prefixed to a term of Roman law, implies that the conception to which it serves as an index is connected with the conception with which the comparison is instituted by a strong superficial analogy or resemblance. It does not denote that the two conceptions are the same, or that they belong to the same genus. On the contrary, it negatives the notion of an identity between them; but it points out that they are sufficiently similar for one to be classed as the sequel to the other, and that the phraseology taken from the one department of law may be transferred to the other, and employed without violent straining in the statement of rules which would otherwise be imperfectly expressed." (Maine's Ancient Law, by Pollock, P' 332, 333-) Sohme, in his " Institutes of Roman ' ' Law (translation by Ledlie) , states the principles which underlie quasi-contracts in the fol- lowing language (p. 315) : "Where the facts of a case merely resemble a contract, but never- theless produce the same effect as a contract, we have a Quasi- Contract. The following are examples of quasi-contracts : " I. Enrichment sine causa and ex injusta causa. "Where A is enriched at the expense of B under circumstances which are either not sanctioned by, or are even opposed to, the policy of the law, we have, in the first case, an enrichment sine 244 United States vs. Chile. — Alsop Claim. Point m. causa, in the second case, an ^enrichment ex injusta causa. The person who is enriched under such circumstances (A) is under an obUgation to restore the amount by which he was enriched. The person at whose expense A was enriched can proceed against A by condictio." Perhaps the leading English case upon this question is that of Moses V. Macferlan (2 Burrow's, 1005, 1012), decided by Lord Mansfield in 1760. Without quoting the entire opinion, it will perhaps be sufficient to note one of the final paragraphs, in which the general principles are lucidly and succinctly set forth in the following language : "This kind of equitable action, to recover back money, which ought not in justice to be kept, is very beneficial, and therefore much encouraged. It lies only for money which, ex cequo et bono, the defendant ou^ht to refund; it does not lie for money paid by the plaintiff, which is claimed of him as payable in point of honour and honesty, althoughit couldnothavebeenrecoveredirom.hiva.hya.ny course. of law; as in payment of a debt barred by the statute of limitations or contracted during his infancy, or to the extent of principal and legal interest upon an usurious contract, or, for money fairly lost at play; because in all these cases, the defendant may retain it with a safe conscience, though by positive law he was barred from recovering. But it lies for money paid by mistake; or upon a consideration which happens to fail; or for money got through imposition, (express or implied) or extortion, or oppression; or an undue advantage taken of the plaintiff's situation, contrary to laws made for the protection of persons under those circumstances. "In one word, the gist of this kind of action is, that the defend- ant, upon the circumstances of the case, is obliged by the ties of natural justice and equity to refund the money." That Lord Mansfield, in thus laying down the law which in this case he was enforcing, was turning for his source to the civil law, with which, as a Scottish lawyer, he was thoroughly familiar, has been conclusively demonstrated by William David Evans, esq., in his valuable notes to Pothier's Treatise on the Law of Obligations or Contracts. (Vol. 2, p. 378, 380.) Mr. Evans says: "But if there is any subject to which the doctrine of an univer- sality of principle peculiarly apphes, it is that of reclaiming money unduly paid; not only upon the ground that there is no subject in its nature, more wholly referrible to the general rules of natural justice, as distinct from the laws founded upon local habit or munici- pal institution, but also upon the more favourite ground of prece- dent itself. It will be generally agreed that the system of law upon this subject, as administered in England, is chiefly to be deduced from the determinations of Lord Mansfield, and that the few cases respecting it of an earlier date are not of sufficient importance to form any regular system. But Lord Mansfield's own views upon the subject are peculiarly referrible to the principles of universal jurisprudence, as illustrated and embodied in the Roman law, and Sub-Point A.] The Case of the United States. 245 the whole series of his conduct respecting it is a continued, precedent of his recurrence to those principles. In the leading case of Moses v. Macfarlane[Macferlan], in which he embraced the earliest opportunity that occurred to him, of giving an exposition of the grounds and nature of the action for money had and received, he enters diffusely into the general doctrine respecting it, and states several principles which have ever since been looked up to as the standard of authority (even by those who think that in the particular application of these principles, he did not allow sufficient consequence to others by which they ought properly to have been restricted and controlled). But it will scarcely be contended that he found the materials of his exposition in any preceding volume of Reports; whereas a very slight comparison will evince the source of it to have been the juridical wisdom of ancient Rome. "This kind of equitable action to recover money, which ought not in justice to be kept, is very beneficial, and therefore much encouraged. It is only for money which, ex aequo et bono, the defendant ought to refund. " It does not He for money paid by the plaintiff, which is demand- ed of him as payable in point of honour and honesty, though it could not have been recovered from him by any course of law. "As in payment of a debt, barred by the statute of limita- tions. "Or contracted during his in- fancy. "Haec condictio ex bono et aequo introducta, quod alterius apud alterium sine causa depre- henditur, revocari consuevit. i. 66. ss. Lib. 12. Tit. 6 de Cond. Indeb. " Naturales obligationes non eo solo aestimantur, si actio aliqua earum nomine competit: veru- metaim eo si soluta pecunia repeti non possit. ss. Lib. 44. Tit. 7. de Obliget Actio, i. 10. Lib. 46. Tit. I. de fide jussoribus, i. 16. § 3- ' ' Naturaliter etiam servus obli- gatur, et ideo si quis ejus nomine solvat, vel ipse manumissus ex peculio, repeti non poterit. i. 13. de Condictione Indebiti. ss. 12. Tit. 6. "Naturale autem debitum in hac causa pro vero debito habe- tur, eoque etsi exigi non potest; solutum tamen non repetitur. Vinnius. Ad. Inst. Lib. 3 Tit. 28. 4.6. "Julianus verum debitorem post litem contestatam, manete adhuc judicio, negabat solvem- tem repetere posse : quia nee ab- solutus, nee condemnatus repe- tere posset, licet enim absolutus sit, natura tamen debitor perma- nent. I. 60. de Cond. Indeb. "Hue item plerique reserunt exceptionem Senatus Consulti Macedoniani ; nam et filius f ami- lias si mutuam pecuniam accepe- rit, et pater familias perperam 246 United States vs. Chile. — Alsop Claim. [Point m. " It lies for money paid by mis- take. ' ' Or upon a consideration which happens to fail. "Or for money got by imposi- tion, express or implied, or extor- tion, or oppression. "Or an undue advantage taken of the plaintiff's situation, contrary to laws made for the protection of persons, under these circumstances. "In one word the gist of this action is that the defendant, upon the circumstances of the case, is obliged by the ties of natural justice and equity, to refund the money. "The damages recovered in the case of Dutch v. Warren, shew the liberality of this kind of action; for though the de- fendant received considerably more, yet the difference only was retained against conscience, and therefore the plaintiff ex aequo et bono could recover no more, solverit, non repetit. Vinnius. Quoniam, naturalis obligate ma- net, ss. Lib. 14. Tit. 6 de Set. Maced. i. 9. 10. "Quod indebitum per errorem solvitur, aut ipsum aut tantum- dem repetitur, i, 7. de Cond. Indeb. "Is cui quis per errorem non debitum solvit, quasi ex con- tractu debere videtur. Inst. Lib. 3. Tit. 28. "The whole title in the digest de Condictione Causa data, Causa, non secuta, is an amplified view of this proposition. "Si quis dolo malo aliquem in- duxerit, aut metu iflato coegerit, ut promitteret non possum ad- diici ut credam, solutum ex his causis retineri posse. Vinnius. "Ex ea stipulatione, quae per vim extorta esset, si exacta esset pecunia, repetitionem esse con- stat, ss. Lib. 12. Tit. 5. de Cond. ob Turp. vel. Injust. Caus. i. 7. "Si naturalis obligatio jure civili improbata sit, aut destituta juris civilis auxilio, qualis est mulieris intercedentis. i. 16. § I. ad Set. Maced. prodigi promittentes, i. 6. de Verb. Oblig. pupilli sine tutoris con- tractu, licet haec admittunt ac- cessiones ea non attendetur et perinde repetitio datur, ac si quod ex causa solutum est nuUo jure debitum esset, Vinnius, 22. "Hoc natura aequum est ne- niinem cum alterius detrimento, sieri locupletiorem. i. 14. de Cond. Indeb. agreeably to the rule of the Roman law: Quod condictio in- Sub-Point A.] The Case of the United States. 247 debiti non datur ultra quam lo- cupletior est f actus qui accepit." The same learned author, William David Evans, esq., in the introduction to his critical essay upon the "Action for Money Had and Received, " lays down the fundamental principles under- lying quasi-contractual obligations in the following careful and well considered language: "If one person receives a sum of money for the purpose of paying it over to another, his obligation to make such payment is too plain to require any comment. The general obligation to refund money, which has been paid under a mistake, or obtained by fraud or extortion, or given for a purpose to which it has not been applied, is equally evident. According to the Roman law, actions of different denominations were adapted to the several cases, in which such payment was unduly made. The English law has adopted a general supposition, that the money which ought to be refunded was received for the use of the party by whom it was paid, and that the person receiving it made a promise to pay it on request. And the action used for this purpose is called AN ACTION FOR MONBY HAD AND RECEIVED. This action has also an extensive latitude as a mode of trying adverse rights; for if a person sells my property under a claim of title or otherwise, I may in point of form consider him as my agent and charge him with having received the money for my use and made a promise to pay. I have no intention at present of examining the different cases in which this is the proper form of action, where it is agreed that a right of action in some shape certainly exists. I shall only observe, that the extension of it has of late years been considerably favoured, and a party may now obtain redress upon this general allegation, in many cases where it was formerly deemed necessary to make a particular and circumstantial statement of his demand, whereby the danger of failing from an error in the statement was considerably increased: and in the case where a person has his election to bring his action, as for a wrong, or, waiving the injury, to consider the conversion of his property as an agency, and an obliga- tion to account, he must act consistently throughout, and not treat the same act as licit for one purpose, and tortious for another. If I charge a man with converting my corn or timber to his own use, and sue him for damages, it will be no justification that I owe him a sum of money; but if I proceed against him in an action for money had and received, in order to recover the produce, he may set off his debt, and I cannot oppose the argument that his being my creditor does not warrant his taking and disposing of my property. Where death or bankruptcy has taken place, the choice between these two remedies is often very important. "The present essay will be chiefly confined to the action for money had and received, as enforcing an obligation to refund money which • ought not to be retained. The Roman system of jurisprudence ranked this as a Quasi contract, being an intermediate order between 248 United States vs. Chile.— Alsop Claim. [Point iii. contracts properly so called, which were founded upon actual con- sent, and wilful wrongs. And without particularising their techinal distinctions, I shall, in referring to that law, in general consider the term Solutio indebiti, as comprising the general distinctions arising from a liability to refund. "This obligation was enforced according to the general principles of natural equity, the foundation of it being a retention by one man of the property which he had unduly received from another, or received for a purpose, the failure of which rendered it improper that he should retain it. The mere legal liability to the original payment was not the question in consideration, but the injustice of permitting the money or other property, under all the circumstances, to be retained. The introduction of the action for money had and received into the English courts, is not novel, and several cases had occurred previous to the appointment of Lord Mansfield, in which it had been properly applied, so that it was familiar in point of practice. But it was reserved to that eminent judge to trace the nature and principles of the action, with a most instructive perspicuity, and to direct the general application of it in its proper channel. "In some instances the particular decisions may be reasonably questioned, but the utility resulting from his general discussions must be universally allowed. In the case of Moses v. Macferlan, 2 Burr. 1005, which gave him the first opportunity of expressing his opinion, upon this ground of action, he very compendiously stated the nature and principles of it, coinciding in effect with the institutes of the civil law. The following extract from his opinion, will furnish a proper introduction to a more minute examination of the subject : — ' This kind of equitable action to recover money, which ought not in justice to be kept, is very beneficial, and therefore much encouraged. It lies only for money, which Hx JBQVO ET bono, the defendant ought to refund, it does not lie for money paid by the plaintiff, which is claimed of him as payable in point of honour and honesty, although it could not have been recovered from him by any course of law; as in payment of a debt barred by the statute of limitations, or con- tracted during his infancy, or to the extent of principal and legal interest upon an usurious contract, or for money fairly lost at play: because in all these cases the defendant may retain it with a safe conscience, though by positive law he was barred from recovering. But it lies for money paid by mistake; or upon a consideration which happens to fail ; or for money got by imposition, (express or implied) or extortion or oppression; or an undue advantage taken of the plain- tiff's situation, contrary to laws made for the protection of persons under these circumstances. In one word, the gist of this kind of action is, that the defendant, upon the circumstances of the case, is obliged by the ties of natural justice and equity, to refund the money.' "The maxim of the civil law, that it is naturally just that one man shall not be enriched to the detriment of another, hoc naTura ^QUUM EST, NEMINEM CUM ALTERIUS DETRIMENTO FIERI LOCUPLE- TiOREM,is particularly applied to the claim which we are at present examining. "The Commentary of Vinnius upon the title in the institutes, DE SOLUTIONS INDEBITI, contains a very instructive view of the subject. His general exposition of it, which agrees in substance with the pre- ^ixl^ Sub-Point A.) The Case of the United States. 249 ceding observations of Lord Mansfield, is as follows : — In order to ^ induce an obligation in favour of the person paying, and a right to reclaim what has been paid, two things are required. That what is paid should not be due; that it should be paid through error. In respect of the first ; there is no repetition of what is really due : and nobody can suppose that there is a right of repetition if what was paid was due both in point of law and of natural justice. But sup- posing it only due according to one of these : If it is only by strictness of law, without any obligation in point of equity, and could be repelled by a perpetual exception, the right of repetition is allowed; as such a suni cannot be said to be due except in name. But what is due according to natural justice is considered as being really due : and although the payment of it could not be enforced, yet if it is actually paid though by a person who supposes himself to be liable in point of law, it cannot be reclaimed. If a debtor has a perpetual exception, but which is founded upon some reason that does not remove his natural obligation, and not being apprized of it, pays the debt, he has no claim to repetition. Such is the exception of a judgment in his favour, as the sentence of the judge cannot destroy the obligation founded on the consent of the party, and therefore it was decided, that a person really indebted, but liberated by a judgment in his favour, could not insist upon a repetition. Also, if a person under the power of his father, borrowed money, from the payment of which he was protected by the sBnatus consulTum MACEDONiANUM, and after he became his own master (pater SAMiLiAs) paid the money, he was bound, as there was a natural obligation subsisting." The same principles which were laid down by Lord Mansfield in Moses v. Macferlan have been repeatedly voiced and applied by the American courts, one of the clearest statements of the principles being that made by Danforth, J., in The People ex rel. Dusenhury v. Speir (1879), 77 N. Y. 144, 150, in which that learned Judge stated the principle as follows : "There is a class of cases where the law prescribes the rights and liabilities of persons who have not in reality entered into any con- tract at all with one another, but make it just that one should have a right, and the other should be subject to a liability similar to the rights and liabilities in certain cases of express contract. Thus, if one man has obtained money from another, through the medium of oppression, imposition, extortion, or deceit, or by the commission of a trespass, such money may be recovered back, for the law impjies a promise from the wrongdoer to restore it to the rightful owner, although it is obvious that this is the very opposite of his intention. Implied or constructive contracts of this nature are similar to the constructive trusts of courts of equity, and in fact are not contracts at all. (Addison on Contracts, 22.) And a somewhat similar dis- tinction is recognized in the civil law, where it is said : ' In contracts it is the consent of the contracting parties which produces the obli- gation; in quasi contracts there is not any consent. The law alone, or natural equity produces the obligation by rendering obligatory the fact from which it results. Therefore these facts are called quasi 250 United States vs. Chile. — Alsop Claim. [Point m. contracts, because without being contracts, they produce obliga- tions in the same manner as actual contracts. ' (i Pothier on Obli- gations, 113.) And again at common law says Blackstone, (Vol. 3, page 165); 'If any one cheats me with false cards, or dice, or by false weights or measures, or by selling me one commodity for another, an action on the case lies against him for damages upon the contract which the law impHes, that every transaction is fair and honest. ' So if money is stolen, its owner may sue the thief for conversion; doubtless he may sue him for money had and received to his use, but in either of these cases could it be claimed that the wrongdoer was within the protection of the act passed to abolish imprisonment for debt, or that the contract implied by law was the contract specified in the first section of that act? Surely not. And to that class the present case belongs. The court below expressly puts the obligation upon the mere authority of the law, and makes a contract ' by force of natural equity. ' The learned judge says : ' The law implied a promise to pay over, as the judgment directed that to be done. ' So obligations are created in consequence of frauds or negligence, and in either case the law compels reparation, and permits the tort to be waived, but there is no contract. That can only come from a convention, or agreement of two, not by the option, or at the election of one. In the case before us there is not even an election, for the complaint states no contract, nor charges any assumpsit. " In view of the principles laid down in the excerpts above given, it cannot be successfully controverted that since the Government of Chile seized and appropriated to its own use that which belonged (under a contract recognized by all parties concerned as legal and binding) to John Wheelwright, the Government of Chile has become possessed of that which in equity and good conscience it may not retain, and which, under the universal principle of jurisprudence above set forth, must be returned to its proper and legitimate owner. It is moreover under this principle immaterial that the thing improperly and wrongfully taken by the Government of Chile was money rather than property of other kinds, since there can be no question but that one who tortiously takes from another money belonging to the other, is, under the principles announced, liable in equity and good conscience for its return. On this precise point Judge Wm. A. Keener, who has written what is doubtless the ablest English treatise upon the subject of " Quasi-Contracts," makes the following observation, which he supports by ample authority : "Since one has a right to recover the proceeds of property wrong- fully converted and sold, it necessarily follows that where the plaintiff's 'money has been tortiously obtained by the defendant, the snb^potat A.] The Case of the United States. 251 tort may be waived and an action for money had and received be brought. ''In Neate v. Harding, the Defendants entered the house of the plaintiff's mother and wrongfully took money belonging to the plaintiff. This money they deposited in a bank to their joint account. The plaintiff was allowed to recover against them in a count for money had and received." The principle controlling in such cases was well stated by Lord Mansfield in Clark v. Shee (1774) i Cowper, 197, 193 in which, speaking as to the action of money had and received, brought to recover money lost in a lottery, Lord Mansfield said: "This is a liberal action, in the nature of a bill in equity; and if, under the circumstances of the case, it appears that the defendant cannot in conscience retain what is the subject-matter of it, the plaintiff may well support this action." In the course of the court's opinion in Neate v. Harding (6 Ex, 349) , cited by Judge Keener, the following opinions were given : "Pollock, C. B. — We all agree that there ought to be no rule. The owner of property wrongfully taken has a right to follow it, and, subject to a change by sale in market overt, treat it as his own, and adopt any act d»ne to it. That doctrine was carried to a great extent in Taylor v. Plumer, 3 M. & Sel. 562, and is fully explained by Lord EUenborough in delivering the judgment of the Court. In this case the money taken belonged to the plaintiff; and it did not cease to be his money because it was in the defendants' hands; he was therefore at liberty to waive the wrongful act, and treat it as money received by the defendants for his use. The mere presence of the defendant Bowns might not have sufficed to render him liable; but there is evidence that he concurred in placing the money in the bank in the joint names." "Parke, B. — I am also of opinion that there ought to be no rule. The plaintiff was bound to prove a joint act by both defendants, and under such circumstances as entitled him to maintain an action for money had and received. All difficulty on the first part of the case was obviated by showing that the money was paid into the bank on the joint account. It then became the same as if one individual alone had placed it there; and in my opinion it was competent for the plaintiff either to bring trover or trespass for taking the particu- lar coin,, or to waive. the tort and sue for money had and received. I arrive at that conclusion by the same process of reasoning as in the cases cited; because it is admitted that, if a person wrongfully takes the goods of another and converts them into nioney, the latter has a right to recover the proceeds in an action for money had and received. That doctrine is explained in Lamine v. Dorrell, by Dowell, J, who says, 'that the plaintiff may dispense with the wrong, and suppose the sale made by his consent.' We need not go so far in the present case; all that is necessary is, that the plaintiff should have a right to waive the wrongful act; then the defendants having got the money of the plaintiff in their hands, must pay it back to him again." 252 United States vs. Chile. — Alsop Claim. [Pointm. This same principle has been the subject of repeated determina- tion by the American Courts. In the case of- Cory v. Freeholders of Somerset, 47 N. J. I,., p. 182, 186, Dixon, J., discussed the prin- ciples as follows : "The first question raised by the assignment of errors in this cause is whether money fraudulently obtained by the defendant below from the plaintiff can be recovered on the common count for money had and received, which does not set out the particulars of the fraud. "This may be answered by extracts from the opinion of the King's Bench, delivered by Lord Mansfield in Moses v. Macferlan, 2 Burr. 1005; 'If the defendant be under an obligation, from the ties of natural justice, to refund, the law implies a debt and gives this action (on the case, for money had and received to the plaintiff's use,) founded in the equity of the plaintiff's case, as it were, upon a con- tract. * * * One great benefit which arises to suitors from the nature of this action is that the plaintiff need not state the special circumstances from which he. concluded "that, ex csquo et bono, the money received by the defendant ought to be deemed as belonging to him." He may declare generally "that the money was received to his use," and make out his case at the trial * * * This kind of equitable action to recover back money which ought not in justice to be kept, is very beneficial, and therefore much encouraged. * * * It lies for money paid by mistake, or upon a consideration which happens to fail, or for money got through imposition (express or implied), or extortion, or oppression, or an undue advantage taken of the plaintiff's situation contrary to laws made for the pro- tection of persons under those circumstances. * * * In one word, the gist of this kind of action is that the defendant, upon the circumstances of the case, is obliged by the ties of natural justice and equity, to refund the money.' "The plaintiff's declaration is properly framed to sustain its claim." The federal courts have had the same principle in mind in similar cases. For example, in the Northwestern Mutual Life Insurance Co. v. Elliott, 5 Federal Reporter, 225, 229, Deady, D. J., commented upon the principle as follows : "But it is a mistake to suppose this suit is brought upon a con- tract actually made or attempted to be made by the parties, and within the purview or operation of the prohibition of the statute, or at all. On the contrary, it is a suit brought to recover money obtained by the defendant from the plaintiff, not upon the void contract of insurance, but the fraud of the defendant. True, the plaintiff might at common law, upon the facts, have maintained assumpsit for money had and received by the defendant to the plaintiff's use, and the law, in the interest of justice and by way of promoting the remedy, which was in form ex contractu, would have implied a promise on the part of the defendant to pay. But this would not have been a contract arising out of the void and illegal one, nor in any respect an affirmance of its validity, but only an implication or fiction of law that upon the facts — the. plaintiff being entitled ex cequo et bono Sub-Point A.) The Case of the United States. 253 to recover the money which the defendant had wrongly obtained from it — he promised to repay the same. "The case of Catts v. Pahalen, 2 How. 376, is directly in point and decisive of the one at bar upon this question. In it the supreme court held that when a person was employed to draw an illegal lottery, and secretly procured a ticket therein, to be purchased in the name of another for himself, and thereafter fraudulently pretend that such ticket drew a prize of $15,000. which was paid by the proprietors in ignorance of the fraud, that they might maintain an action against the drawer to recover the amount so fraudulently obtained. "In delivering the opinion of the court, Mr. Justice Baldwin said: 'The facts of the case present a scene of deeply concocted, deliberate, gross, and most wicked fraud, which the defendant neither attempted to disprove nor mitigate at the trial, the consequence of which is that he has not, and cannot have, any better standing in court than if he had never owned a ticket in the lottery, or it had never been drawn. So far as he is concerned, the law annuls the pretended drawing of the prize he claimed; and, in point of law, he did not draw the lottery. His fraud avoids not only his acts, but places him in the same position as if there had been no drawing in fact, and he had claimed and received the money of the plaintiffs by means of any other false pretence, and he is estopped from avowing that the lottery was in fact drawn * * * Xhe transaction between the parties did not originate in the drawing of an illegal lottery; the money was not paid on a ticket which was entitled to or drew the prize. It was paid and received on the false assertion of the fact. The contract which the law raises between them is not founded on the drawing of the lottery, but on the obligation to refund the money which has been received by falsehood and fraud, by the assertion of a drawing which never took place. To state is to decide such a case.' "So, here, assuming, as this defence admits, that this money was obtained from the plaintiff as alleged in the bill, the trust or contract which the law raises or implies between the parties is not founded on the illegal contract of insurance, but on the obligation of the defendant to refund the money which he obtained from the plain- tiff by falsehood and fraud, by the assertion and representation of a death which never took place." To state such a case is to decide it, also. Indeed, it appears to me that if the defendant had robbed the agent of the plaintiff in this state of this money on the highway, he might with as good grace defend an action to recover the stolen property, on the ground that the plaintiff was not authorized to do business in this state, as in the present case. Although the defendant was not authorized to do an insurance business in this state, this fact did not license the defendant to rob or defraud it under pretence of doing such business with it." (Northwestern Mutual Life Insur- ance Co. V. Elliott, Vol. 5. Fed. Rep., pp. 229 to 231.) Concerning the measure of recovery in such cases, Judge Keener remarks (Keener on Quasi-Contracts, p. 183) : '■' Since the plaintiff's claim rests upon the fact that the defendant cannot be allowed in good conscience to keep what he has obtained, the measure ' of the plaintiff's recovery is not the entire amount 254 United States vs. Chile. — Alsop Claim. [Pointin. paid by the plaintiff, but the amount which it is against conscience for the defendant to keep". Citing The Western Assurance Co. v. Towle, 65 Wise. 247, 253. In the case cited by Judge Keener, the court says: "We think the claim of the learned counsel for the appellant, that the amended complaint must be treated as an action to recover damages for the tortious acts of the defendants, and not an action upon an implied contract on the part of the defendants to pay the money received by them from the plaintiff wrongfully, was decided against them by this court in the case of Town'oj Fifield v. Sweeney, 62 Wis. 204. In that case, as one cause of action, the complaint alleged that the defendant furnished teams to work for the town at three dollars per day; that the teams worked in fact 232 days, and 'that the defendant falsely and fraudulently represented, by false statements of account and bills rendered, that his teams had worked in the aggregate 265 days; that he knew such statements to be false, and that he made them for the purpose of deceiving the town officers; that said officers believed such false representations, and by reason thereof paid the defendant for thirty-three days in excess of the time actually worked by his teams: that town orders were issued for said team work, and paid by the town treasurer before the error was discovered; and that the plaintiff has sustained dam- ages herein in the sum of $99. and interest.' There was also in the complaint in that action an allegation of a demand for the amount of the money fraudulently obtained from the town, and a refusal to pay, before the action was commenced, as in the case at bar. This case is, in all its general features, the same as the one at bar; and it was held that 'the whole complaint goes upon an implied assumpsit to repay the money so had and received, and interest thereon, and no other damage by reason of the fraud or mistake is claimed. The complaint as for money had and received by which the assumpsit is implied, and these facts do not change the action into tort.' "The court has repeatedly held that the plaintiff may waive the tort and recover upon an implied contract, when money or property has been obtained by the defendant from the plaintiff by the tor- tious acts of the defendant. Norden v. Jones, 33 Wis. 600; Keyes V. M. & St.P.R.R. Co. 2S Wis. "69 1 ; Elliott v. Jackson, 3 Wis. 649, 655 ; Grannis v. Hooker, 29 Wis. 65; Smith v. Schulenberg, 34 Wis. 41, 50; Wells V. Am. Exp. Co. 49 Wis. 224; Graham v. C, M. & St. P R. Co. 53 Wis. 473, 481. What was said in the last case cited is not, we think, in conflict with the decision in the case of Town of Fifield v. Sweeney, supra. Each complaint must be judged of upon the exact facts stated in it in order to determine whether it be an action in tort or on contract. And in determining that question, the evident inten- tion of the party in stating his facts must have effect in determining the question when the facts alleged might sustain a cause of action either in tort or on contract. As was said in the Graham Case: ' The original complaint was in tort ; and as the second amended com- plaint stated facts sufficient in themselves to constitute an action for tort, the court would presume that the pleader intended to go upon the tort as his ground of action, and not upon the implied assumpsit. To hold that the amended complaint was intended to Sub-Point A.] The Case of the United States. 255 be an action of tort would be consistent with the original cause of action stated, and would be a permissible amendment. To hold otherwise would be inconsistent with the original, and not permis- sible.' So, in the case at bar, the plaintiff having caused an attach- rnent to issue in the action, we must presume that he intended that his complaint should state a cause of action on contract, in order to sustain his proceeding by attachment ; and the facts alleged being sufficient to allow him to recover on the implied assumpsit, the complaint should be construed as an action upon contract, and not to recover damages for the tort." (The Western Assurance Co. vs. Towle, Wis. 65, p. 255, 256.) In view of the doctrines thus uniformly and universally laid down by the text-writers (both of the civil and the common law) and by the courts, the Government of the United States submits that not only under those principles of equity and justice which must always obtain in and control the intercourse of sovereign states seeking to honor and maintain the mutual respect each of the other, but also under the fundamental principles of the system of municipal law governing and controlling transactions between private parties of the respective governments, the Government of Chile has, by reason of her appropriation of funds which had already been allocated to the satisfaction of a legal and binding obligation, become liable to the Government of the United States for and in behalf of the claimants to the extent of the liability recognized by the contract which allocated said funds to the debt recognized in the contract. However, a complete exposition of this phase of the case of the United States requires that some explanation should be made regarding Bolivian customs receipts and arrangements at the time of, prior to, and immediately following the making of the Wheel- wright contract of 1876. It will be recalled that in the discussion of Point I, Sub-Point B, supra, an extract was inserted from the report of the Minister of Hacienda and Industry of Bolivia for the year 1877, in which the Minister set forth the circumstances and conditions out of which this contract arose in the following words : "Second. This fund was the only one available as was set out in the budget. The others which were not available and whatever others might have been raised should have belonged to John Wheel- wright, representative of the credit of Lopez Gama to whom, by the decrees of December i8th, 1875, and January 22, 1876, there had been allotted all the revenues which were not pledged in the budget. Besides the contract accepted by these decrees, deprived the Govern- ment of 70,000 bolivianos cash from the Treasury of Cobija which had been annually assigned for the payment of the interest upon the 256 United States vs. Chile. — Alsop Claim. [Point in. debt acknowledged due him. This interest was excessive, having been charged at eight per cent per annum,' compoundable. With such a contract the Government found itself without funds whereof to dispose for all the ordinary ones had been exhausted, and without means of creating any other resources because there were applied beforehand to the extinguishment of said debt all the extraordinary revenues or those of a new creation. That contract could not be more burdensome because of the embarrassment and difficulty in which the Government was placed in attending to the necessities of its working and administration. It was necessary, in view of a new proposal from Mr. Wheelwright to formulate and agree upon a com- promise which should better the conditions of the contract, favoring and lightening the burden of the Treasury and giving to the Govern- ment liberty and resources to obtain funds for itself. Thus the com- promise of the 24.th of December i8'j6, was reached whereby there was deducted from the admitted principal the interest which had already been paid and this latter was reduced to 5 per cent, not compoundable, the payment of the principal to be made by drafts upon the excess which might be obtained aver the present amount of the proceeds of the Custom House of A rica. "By this means the revenue from the bullion and nitrates became free because even if these latter were considered by the resolution of the 30th of March of 1876, not to be included in the contract of the 1 8th of December, 1875, the force 5f this resolution, by the terms of said contract might be disputed."" As has already been pointed out, the contract of December 26, 1876, consisted essentially of two parts. First, the recognition of the debt of 835,000 bolivianos, with interest at 5 per cent, and the attending provision which provided for the payment of this debt from the receipts of the Customs House of Arica ; secondly, a con- cessionary grant of a mining concession under the contract, which provided for the distribution of the receipts by certain fixed per- centages between the concessionaries and the Government of Bolivia, with the provision that the percentage belonging to Bo- livia should be applied to the liquidation of the principal debt so long as said debt remained unpaid, and after that to be paid over to the Government of Bolivia. Now it is perfectly clear from the report of the Minister of Haci- enda, as above quoted, that the Government of Bolivia consid- ered, understood, and acted upon the assumption that the debt was to be liquidated primarily from the receipts of the Arica Customs House. The Minister says: "Thus the compromise of the 24th of December 1876, was reached whereby there was deducted from the admitted principal the interest which had already been paid and this latter was reduced to 5 per cent, not compoundable, the payment of the principal to be made by drafts upon the excess proceeds of the Customs House of Arica."* a I Appendix, p. 340. 6 I Appendix, p, 341. Sub-Point A.] The Case of the United States. 257 That such was the real intention of the parties finds further con- firmation in another extract from the same report, also quoted under Point I, Sub-Point B, supra. This extract reads as follows: "The contract of the National Custom House at Arica was oppor- tunely rejected in vorder to be terminated or renewed by another. To attain this latter end a plenipotentiary constituted himself at Lima with the convenient instructions. It is to be hoped that in the event of arriving at the renewal same be made with the proportionate increase caused by the great development and increase which have taken place in our commerce at the ports of Arica and Mollendo as well as the arrangements of other points of vital importance for the country. Should such not be the case the offer which the Nationals at present make presents many probabilities of utility and advantage for the Country being evidently in both cases conductive to the improvement of the situation in this respect. " It is true, as said in the second clause, the increase over the actual sum of the product of that Custom House is destined to the payment of the indebtedness recognized to Wheelwright but even if thereby a privation is incurred which prevents the free employment of those funds the satisfaction remains of the fulfilment of a duty and the exemption of an obligation of which it was indispensable to be relieved."" It is also clear that Wheelwright understood and considered that he was to look primarily to the Customs House receipts for the pay- ment of his indebtedness. In his letter to the American Minister of June 28, 1884, he expressed himself on this point as follows: "As will be seen by perusal of the translated document alluded to, there exists two forms of security, from which payment is to be real- ized, the first and most important of which relates to Custom House revenue; and more especially so, as not having been able to induce Chile to give me undisturbed possession of the mines, in conformity with the Bolivian decree of twenty third of December 1876, only heavy expenses in maintenance of my rights instead of benefit have been the consequence of my efforts. " In view of these two pledges, not only entirely distinct, but affect- ing the territory of both Peru and Bolivia I suggested to the Minister of Finance that separate decrees be made, and he yielded to my request after being urged, but I regret to say that the separation of guarantees was not made with sufficient clearness as to treat them in the way desired. "I was actuated thereto, so as to be prepared for the opportunity of, in the first place, negotiating the drafts that for the total amount of indebtedness and interest, were to be delivered me, and which the .liquidating firm would most naturally prefer to pursue." Later in his letter, after calling attention to the fact that, not- withstanding his personal request addressed to the Bolivian nego- "■ I Appendix, p. 341 . 40898 — 10 1 7 258 United States vs. Chile. — Alsop Claim. [Point ra. tiators and his request through his agents at Santiago, John Stewart Jackson, addressed to the Chilean Government, no provi- sion for the settlement of his claim from the Arica customs receipts had been made in the Pact of Truce, Mr. Wheelwright said: "Yet it will be seen that Chile has taken eoccessive care, while dis- regarding my rights to protect such of her citizens as may have been prejudiced, and which losses originated mainly from mines in Bolivia. Not only so, but to provide therefor [it] has been stipulated in the treaty agreement that forty per cent of the Arica Custom House rev- enue be appropriated to this purpose. In adopting this measure, Bolivia may have been unavoidably obligated, under pressure from the conqueror, but Chile, already aware of the pledge given in 1876 by the former becomes a participant, to the exclusion of my previ- ously acquired rights as far as that percentage of revenue could be applied. "The proportion of 35 per cent of the entire receipts from the same source is to be appropriated by Bolivia with the consent of Chile, both being stolidly indifferent to what transpired nearly eight years since, and in consequence of belligerent acts until recently, has never been made effective, much to the detriment of neutrals, who, as before stated, compose the American firm of Alsop & Co. formerly transact- ing business in Chile. "The annual return from the aforesaid Custom House is estimated by the Chilian press not to fall short of $1,500,000, taking as a basis of calculations the receipts of the years 1882 and 1883. "Supposing that a minimum of ($1,000,000) one million dollars in silver be realized, there would result an excess of ($595,000) five hun- dred and ninety-five thousand dollars over and above the amount formerly paid by Peru to Bolivia. Or, granting to Chile, if need be, for indemnity, the twenty-five per cent allotted thereto, and deduct- ing from the remainder on the same basis, the ($405,000) four hun- dred and five thousand dollars specified in the contract of 6th of December, 1876 it would appear that Chile should pay to the under- signed instead of to Bolivia, the sum of ($345,000) three hundred and forty-five thousand dollars in silver yearly, or in like proportion, as the said Custom House duties may result to be more or less than the one million dollars in silver, taken as the annual estimate. "Likewise, it would seem but perfectly equitable that Chile should continue to pay in the manner aforesaid until the sum of ($835,000) eight hundred and thirty-five thousand dollars in silver, distinctly expressed in the contract of 6th December, 1876, and interest thereupon from that date at the rate of five per cent per annum, should cancel the indebtedness of Bolivia to the liquidating firm of Alsop & Co., represented by the undersigned, and formally acknowledged by the aforesaid Government of Bolivia. The forego- ing views are humbly submitted as a candid opinion of the case in point, and in view of all that has been experienced hitherto in the way of prejudices, disappointments, evasions, and unjust treatment, but without taking into account adequate compensation for all such dur- ing the period of years. "" "■ I Appendix, p. 17. Sub-Point A.] The Case of the United States. 259 That the Government of BoUvia and Wheelwright himself were justified in the reliance which they placed in the ability of the Government of Bolivia to discharge this indebtedness from the proceeds of the Arica Customs House, as provided in the Wheel- wright contract, is amply shown by the following table giving the customs receipts at the port of Arica for the years 1869-1877. This table shows that there was being received from the Arica Cus- toms House far more than enough (in 1875 more than double and in 1876 one and a half times, while in 1874 more than two and a half times) to meet the 405,000 bolivianos called for by the contract. Notes taken from tables appearing in the Memorias de Hacienda giving the receipts of the Northern (Arica) Customs House. Soles, ist half-year, 1869 211, 415. 94 2nd half year 1869 404, 451. 08 ist half year 1870 332, 103. 87 ist one-fourth year 1872 224, 841. 64 In the whole year 1874 i, 079, 773. 00 In the whole year 1875 894, 525. 04 In the whole year 1876 677, 129. 21 In the whole year 1877 872, 552. 25 The customs arrangements at the time the Wheelwright contract was made and which were in contemplation by both parties during the negotiation of the contract, were as follows : Under date of July 23, 1870, the duly accredited representatives of the Governments of Bolivia and Peru had negotiated and con- cluded a "Treaty of Commerce and Customs." It was provided in articles 5 and 6 of this treaty that — "The commerce in foreign merchandise or effects which may be conducted into Bolivia by means ot the frontier of Peru * * * shall pay the duties of importation in the custom houses of Peru from which they may be shipped, their valuation being fixed in accordance with the Peruvian tariff, and the value of said duties being the property of Peru."" It was stipulated in article 8 of the treaty that — "The Republic of Peru, by virtue of the benefits which its nationals enjoy on account of the stipulations contained in articles i and 3, obligates itself, on its part, to pay to Bolivia the sum of four hundred thousand soles (S. 400,000), per annum, payable by the Treasury of Lima in monthly installments of thirty-three thousand, three hun- dred and thirty-three soles and thirty-three centavos (S. 33,333.33)." ° ff I Appendix, p. 379. 26o United States vs. Chile. — Alsop Claim. [Point in. By the terms of Article 1 5 of the treaty it was provided that the treaty should run for five years from the day " on which its execu- tion commences," but it was further provided in said article that — "In order that this treaty may terminate within the period of five years above fixed, it is necessary that either of the two High Contract- ing Parties shall give the proper notice to the other of its conclusion, eighteen months before the expiration of said period; but if neither of them should make such an intunation, the treaty shall continue for both parties until eighteen months after the day on which the notification of termination by either of them may be given."" Pursuant to the provisions of this article, the Government of Bolivia had, under date of October 5,1876, notified the Government of Peru of its intention to cancel this arrangement. This decree read as follows : [Translation.] Circular of October 5. "custom house op aeica : notice of the canceli.ation of the convention of commerce and customs. "Office of the Secretary-General of State, "La Paz, October 5, 1876. "Sir : I have the honor to address myself to Your Excellency with the object of communicating to you that the Government of Bolivia has resolved to give notice on this date to the most excellent Govern- ment of Peru of the cancellation stipulated in Article 15 of the Con- vention of Commerce and Customs concluded between both Republics and signed by their plenipotentiaries on July 23, 1870, to the end that the effects thereof . may cease within the term fixed by the aforesaid article of that Convention. "Your Excellency will understand that this act on the part of the Government of Bolivia does not imply the slightest disagreement in the friendly relations which it happily maintains with the Govern- ment of Your Excellency, and is only meant to open new negotiations which shall result in a new agreement which may be more equitable and more satisfactory to the true interests of both Republics. " I avail myself, Mr. Minister, of this occasion to reiterate to Your Excellency the assurance of the high consideration with which I subscribe myself Your Excellency's obedient and humble servant, "(Signed) Jorje Oblitas. "To His Excellency the " Minister of Foreign Relations of Peru, "Lima."'' It will be recalled that Article 2 of the Wheelwright decree of December 24, 1876, provided that — "The said principal and interest shall be amortized by means of drafts all of which are to be drawn in quarterly installments on the surplus which, frorfl the date on which the present customs contract with Peru terminates, shall arise, ffom the quota due Bolivia in the collection of duties in the Northern Custom house, over and above «I Appendix, p. 381. 61 Appendix, p. 383. Sub-Poinl A.] The Case of the United States. 261 the 405,000 bolivianos which the Peruvian Government now pays, — whether the customs treaty with that Republic is renewed or whether the National custom house is reestajalished." ■* It will thus be observed that at the very time the Wheelwright contract was drawn the Government of Bolivia had given notice of its intention to terminate the Treaty of 1870 and was evidently considering the question whether it should re-establish the national customs house, in which case it would itself collect the duties upon foreign merchandise imported into Bolivia, or should make a new arrangement by which that service should be performed by the Government of Peru. It will also be recalled that in his memorial to the Bolivian Congress in 1877 the Minister of Hacienda, as quoted above, pointed out that "the termination of this treaty and customs arrangement with Peru would undoubtedly result in an increase of the customs receipts proportionate to the great development and increase which have taken place in our commerce at the ports of Arica and Molendo." That this beUef of the Bolivian officials was justified by the receipts of the Arica Custom House seems to be shown by the fol- lowing table with notes annexed thereto, which table and notes are in the handwriting of and appear to have been prepared by Wheel- wright himself. While the total amounts given do not in all cases precisely agree with those already quoted above, they are sufiiciently near to indicate the extent of the importations coming through Arica to Bolivia. " Data concerning the Custom House of Arica in relation to the Customs Contract of Bolivia. Year. Gross receipts. Estimates. Net receipts. Quota for Bolivia. Quota for Peru. ' 994,383.90 826, 251.83 894,580.24 1,008, 656. IS ±,084, 686.02 983, 702. 16 707, 042. 20 24,912.00 24, 912.00 24, 912.00 54,090. 00 54, 090. 00 56', 080.00 56, 080-00 969. 47I-00 801,339.83 869,672. 24 954.566. IS 1,030,596.02 927, 622. 16 650, 962. 20 405,000.00 405,000.00 405,000.00 405, 000. 00 405, 000.00 405, 000. 00 405, 000.00 564,471.00 396,339.83 464,672.24 549,566.15 625, 596.02 522,622. 16 245, 962. 20 1871. 1872 1873 1874 1876 "NoTSs. I. This data is taken from an ofl&cial source. "2. According to the books of the Customs-House of Arica, it produced in the year 1875 only the sum of "937,393-43 hut to this sum there should be added "23,454.73 corresponding to 30 % of " 78,182.44 which the month of August produced, and " 22,854.00, corresponding to 20 % of ■ 114,270.32 for the month of September on account of the reduction made by the Gov- ernment upon the Customs-House. "3. The diminution of receipts noted in the last year is due to the importation which was made in that year via Arequipa and Lake Titicaca. " 4. There is not introduced through the Aduana of Arica a single package which is not for the consumption of the Department of Tacna and for the north and center of Bolivia and this has been so for more than six years back. '^ I Appendix, p. 9. 262 United States VS. Chile. — Alsop Claim. [Pointui. "According to this certain antecedent, the latter department's con- sumption is a twenty-ninth part of that of Bolivia, as will be seen by the following statement:, "Comparative table of the population of the Departmentof Tacna and the population of the North and Center of Bolivia : " Population of Dept. of La Paz, last census 443, 779 "Ditto for Cocacaomba 312, 919 " Population of the Department of Onuro 91, 754 "Half of the population of PotosI 127, 364 " Half of the population of Santa Cruz 77, 799 "Total consumers in Bolivia i, 053, 615 " Population of Dept. of Tacna, census of 1876 35, 906 "Difference of consumers in favor of Bolivia i, 017, 909 "Equal totals 1,053,615 1,053,615 ' ' Notes, i . As the Department of PotosI possesses the Custom-house of Arica as well- as that of Cobija, only one-half of its population is taken. "2. Likewise I take (half") of the population of Santa Cruz which is in the same situation, possessing both the markets of Sucre and Cochabamba." From these tables and figures it would appear that even if these data are but approximate it would seem reasonably evident that in place of Bolivia's getting the 405,000 bolivianos per annum from the customs receipts of Arica, which was coming to that Govern- ment under the existing arrangement with Peru under the table above given (which sum was but about one-half of the total receipts collected at that port), the Government of Bolivia was entitled to receive twenty -eight twenty -ninths of the net customs receipts collected at that port. It thus was not without reason that the Government of Bolivia and Wheelwright both regarded the liquidation of his debt as assured from this source. Concerning the termination of the Customs Treaty of 1870 between Bolivia and Peru, Mr. H. S. Prevost, in a deposition taken at Lima, Peru, on January 22, 1894, made the following statement: "That at the time of the execution, December i, 1876, of the con- tract between the government of Bolivia and the representative of the liquidation of Alsop and Co. there existed between the Republics of Peru and Bolivia the Customs treaty dated July 23, 1870, the ratifications of which were only exchanged and that only c6mmenced to take effect the 24th of December, 1872. This treaty which was revokable by any one of the parties with previous notice of 18 months was revoked by the government of Bolivia in the month of October of 1876. Therefore it should have expired in the month of April, 1878, but by the consent of both parties it continued to govern until the month of May, 1879, at which date the ratifications were exchanged and a new treaty, which had been signed in the month of October, 1878, commenced to govern. This new treaty still gov- erned at the date of the occupation of Arica by the military forces of Chile in the month of June, (1880) and continued to govern until the month of June, 1881 when the treaty which still at the present time regulates the custom house decisions between the Republics of Peru and Bolivia began to govern."" « II Appendix, p. 364. Sub-Point A.] The Case of ihe United States. 263 The Treaty of October, 1878, to which Mr. Prevost refers, which took the place of the Treaty of 1870 and which would have gov- erned the distribution of the customs receipts as between Bolivia and Peru, provided in Article 5 as follows : • "In compensation for the services which Peru affords to Bolivian trade, and for the facilities she gives in permitting the importation and exportation to be made through her ports, in permitting the use of her custom houses, the services of her employees, and public build- ings, there is established, as the sole charge therefor, a duty of four per cent, in silver soles or its equivalent in authorized bank notes, upon foreign merchandise, introduced through its territory for con- sumption in Bolivia; the invoice valuation, or the tariff list if that shouldbe preferable, may serve as a basis of value."'' Under a supplemental protocol dated January 11, 1879, it was provided in article i as follows: "The charge of four per cent established in clause 5 of said agree- ment, as compensation for the services that Peru lends to the com- merce of BoUvia, shall be raised to five per cent, and its applica- tion shall be made in accordance with the original invoice or the Peruvian customs tariff, if proper, and with the other conditions therein established."* As has been already stated, the war between Chile and Bolivia began in February of the year in which this treaty was made ; and, Peru having also become a party to the war, the Custom House at Arica was taken by the middle of the year 1880. From this time, the middle of 1880, until the Pact of Truce of 1884, the Govern- ment of Chile levied, collected, and appropriated all of the customs receipts of this port. These customs receipts, so levied, collected, and appropriated, were, according to the official returns of the Government of Chile, in the following amounts : Bolivianos. 1880 (second half-year) 287, 315. 00 i88i I, 278, 488. 00 1882 I, 622, 323. so 1883 I. 463, 201. 22 1884 837, 764. 56 Under the terms of the treaty existing between Bolivia and Peru at the time the war commenced it would appear that all but five per cent of this amount would have gone to Bolivia. Under this arrangement and distribution, therefore, Wheelwright would have received the following amounts : Nothing, perhaps, in 1880; in 1881, 809,564 bolivianos; in 1882, 1,136,205 bolivianos, or so much thereof as was necessary in order fully to meet the amount of his debt. Or in other words by the middle of 1882 the Wheelwright debt would have been fully satisfied. »I Appendix, p. 391. 61 Appendix, p. 395. 264 United States vs. Chile. — Alsop Claim. [Pointin. The Government of Chile by appropriating this money, which, under every principle of law, equity, and justice, belonged to Wheelwright, rendered itself fully and absolutely liable for the satisfaction of the Wheelwright debt, principal and interest. Not only is this conclusion, — the resultant of the broad and fundamental principles common to the civil law and to the common law, — supported by universal considerations of equity and justice which, aequo et bono, should govern the relations between sover- eign states themselves and between sovereign states and indi- viduals, but it is also in strict consonance with the rules laid down by writers on international law, as well as with the uniform practice which has heretofore obtained in international relations between sovereign states. It should in connection with a consideration of these proposi- tions be recalled that the first and second articles of the Decree of December 24, 1876, provided as follows: "First. The sum of 835,000 bolivianos is acknowledged as due the aforesaid representative of the firm of Alsop & Co., together with interest at the rate of 5 % per annum, not addable to the principal, and to be reckoned from the date on which this contract is duly executed. "Second. The said principal and interest shall be amortized by means of drafts all of which are to be drawn in quarterly install- ments on the surplus which, from the date on which the present customs contract with Peru terminates, shall arise, from the quota due Bolivia in the collection of duties in the Northern * custom house, over and abbve the 405,000 bolivianos which the Peruvian Government now pays,— whether the customs treaty with that Republic is renewed or whether the National custom house is re-estabUshed." " It will be observed that these articles (i) recognize a principal debt of 835,000 boUvianos, with interest at 5 % ; and (2) provide that this principal and interest shall be "amortized by means of drafts * * * drawn in quarterly installments on the surplus which *' * * shall arise from the quota due Bolivia in the collection of duties in the Northern custom house, over and above the 405,000 bohvianos which the Peruvian Government now pays." As has been repeatedly stated above, it is not beUeved that it can be successfully contended that this is not a complete appro- priation of these specified surplus funds to the payment of this obhgation, since nothing further whatsoever is necessary to do in order to entitle Wheelwright to these receipts except that there should first be an excess over the 405,000 bolivianos per year,, and second that he should draw drafts thereon. U Appendix, p. 150. 286 United States vs. Chile. — Alsop Claim. [Point m. • mine Justicia, justified its decision by citing among other pro- visions of the Chilean code that provision which stipulates that "Possessions situated in Chile are subject to the Chilean laws, although their owners be foreigners and do not reside in Chile." " Inasmuch as Mr. Wheelwright had already prosecuted a number of suits in the Chilean courts, in each of which, as already pointed out, the Chilean courts had decided agaipst him, he finally adopted and acted upon the quasi — suggestion above made by the Minister of Justice, and prepared a memorial to the American Minister in which, as an American citizen, he petitioned his Government for and in behalf of the American claimants that the intervention of his Government might be exercised in their behalf in order to secure the settlement of this claim. All but simultaneously with this action of Wheelwright, the American Minister at Santiago took up for consideration with the President of Chile the question of the settlement of the claim of Mr. E. S. DuBois (an American citizen) against Chile. In the course of the discussion between the President of Chile and the American Minister the matter of general adjustment of claims was .taken up, and the President of Chile gave the following assurance and made the following request : "The Government of Chile would honorably settle every claim upon it, which might be shown to be founded in justice, and entail an obligation upon the Government under the law of nations; that as regarded claims in particular, other than those provided for by special claims conventions, he did not think they ought to be pressed until Chile had actually closed the war; that as yet the Peruvians had not ratified the treaty of peace, and Bolivia would make no definite treaty until after the pending Presidential election ; that everything prom- ised a permanent settlement within the next four or five months, between all the belligerents, and that then the real business of arranging accounts, etc., should properly begin. In conclusion he requested me {the American Minister) to postpone any further action in the case, until such time as the definite arrangement with her oppo- nents would leave Chile free to consider the questions growing out of the rights of neutrals, which as before said,' cannot be very long. The President was very cordial, and I left with the conviction that his gov- ernment would honorably arrange the claim in accordance with the principles of law and equity. "Under the circumstances and in view of the situation, there seems to be much reason in the President's request; and in any event there is nothing further to be done until the time indicated shall have expired." ' r- oSee II Appendix, pp. 119 and 229. 61 Appendix, p. 41. Sub-Point c.) The Case of the United States. • 287 The General Undertaking of December, 1884. — Later, under date of October 6, 1884, the American Minister, in submitting to the Government of Chile a Hst of claims (among them the claim of Alsop & Co.), made use of the following language: "With a feeling of profound friendship for Chile and appreciating the difficulties in which the Government was placed during the earlier part of the last quarter of a century, my Government has contented itself with simply presenting them {American claims) to Y. E.'s Government for consideration, feeling entirely satisfied to await the arrival of a more auspicious moment, when the high sense of justice which has always characterized Y E.'s Government, would certainly bring about their settlement upon an equitable basis." " Subsequently, on December 6, 1884, in the course of a conversa- tion between the Minister of Foreign Relations and the American Minister at Santiago, concerning the negotiation of a claims con- vention between the United States and Chile, the Chilean Minister indicated the unwillingness of Chile to enter into any other claims conventions. To this statement the American Minister said: "In that case, Mr. Minister, the note addressed by myself to you, under date of October 6th, proposing a claims convention; upon the stipulations mentioned in my note of that date, to which I have been expecting a reply, is already answered. He quickly said to me ' No, I have not had time to study this case, and with your Government it is altogether a different thing, as I am quite confident that none but legitimate claims will be tolerated by your Government.'" The General Undertq,king of February, 1885. — Under date of March 16, 1885, the American Minister at Santiago reported as follows regarding the arrangements for the settlement of American claims: "Feeling uneasy about the unusual delay in replying to my note of Oct. 6th, ult., proposing a Convention, as also at the turn affairs have taken since the practical recall of Senor Lopez Netto, already reported in my despatches, I went to Valparaiso during the latter part of February, to seek an interview with the Foreign Minister upon the subject of our claims. I found that the latter gentleman ' had gone to the southern part of Chile, and that he would not return for a month. I then called upon the President, and also upon Senor Balmaceda, Minister of the Interior, who, under the Chilean law and usage, is the Premier of the Cabinet, taking the Presidential Office temporarily, in case of the death of the Chief Magistrate of the nation. Both promised me that, immediately upon their return to Santiago, some definite shape should be given to our matter. Senor Balma- ceda went farther than this, and said that, he was confident his Gov- ernment would consent to an amicable arrangement which would a I Appendix, p. 42. 288 United States vs. Chile. — Alsop Claim. [Pointiii. result in naming a round sum to indemnify our claimants, and at the same time avert the expensive machinery of a formal claims- tribunal." » Owing to the difficulties experienced by the Chilean Government in settling its claims with other powers, the American Minister consistently refrained from pressing the American claims upon the Chilean Government. In reporting upon this matter under date of May 3, 1888, he stated that in a conversation between himself and the President of Chile he had informed the President that — "My intention was to have a conversation with him (the newly appointed Minister of Foreign Relations) upon the subject of the claims of American citizens resulting from the war with Peru. It was also my intention to mention the matter to Your Excellency, in order that you might learn directly the views of my Government, with the hope that the new Minister might be prepared to discuss the matter fully, when I should have the honor to call on him for that purpose. "The Administration of President Cleveland, I said, has abstained from presenting these claims for consideration, from a desire not to embarrass the Government of Chile while negotiations were pending with European Governments for the settlement of similar claims, but now that these have terminated by settlement, my Government, naturally solicitous for the interests of its citizens, who for some time have been pressing their claims upon its attention, would like to nego- tiate for the appointment of a Commission for their adjustment believing also that such a settlement would promote the good rela- tions existing between the two Governments."" The General Undertaking of November, 1890. — In November, 1890, the matter of the settlement of American claims against Chile was brought to the attention of the Government of Chile by the American Minister at Santiago, and in the course of a conversation between the Minister and Sefior Don Domingo Godoy, upon this subject, the American Minister reports as follows: "He informed me that the Ministerio had already arranged all its datum in opposition to the claims, and requested that I should furnish the proofs in all of the cases so that they might be sent to the Fiscal or law adviser of the Government for his examination and report, after which, he said, his Government would be prepared to enter into an arrangement for the settlement of such of them as might appear to possess merit." " The Specific Undertaking of June, 1892. — On June 3, 1892, the Minister of the United States at Santiago addressed the following note to the Minister of Foreign Relations of Chile, in which a a I Appendix, p. 51. Sub-Point c] The Case of the United States. 289 specific demand is made for the payment of the Alsop claim, con- tract and tort: ,"Sir, in view of the pending negotiations between the government of Y. B. and that of the Republic of Bolivia with the object of estab- lishing and confirming between the two countries a definite treaty of peace, a result which, on the part of my government, I sincerely hope may be speedily arrived at, to the mutual and entire satisfac- tion of both Chili and Bolivia, I trust Y. E. will not consider it inop- portune to call the attention of Y. E. government to the claim of the representatives of the United States Commercial House of Alsop and Company, formerly of Valparaiso, the particulars of which Y. E. will find set out in my note of 30th September, 1890, addressed to the Ministerio of Y. E. The claim is marked No. 2 in the second series of claims mentioned in said note and is described as the claim of the "Representatives of the late John Wheelwright, liquidator of Messrs. Alsop and Company of Valparaiso." "As Y. E. will perceive the claim is for a debt of eight hundred and thirty-five thousand Bolivian soles ($835,000) with interest at the rate of five per cent per annum from the year 1 876 ; which debt was solemnly acknowledged by the Government of Bolivia and the payment secured by lien upon the income of the Northern Custom House over and above the sum of four hundred and five thousand soles ($405,000) per year. "Upon the occupation of Tacna and Arica as the consequence of the war between Chili, and Peru and Bolivia, this arrangement was arbitrarily set aside by the government of Chili to the great loss and suffering of the surviving partners and representatives of the House of Alsop and Company. "There are also questions with regard to rights in certain mining property, situated in the territory occupied as above stated, and transferred by the government of Bolivia to the representatives of Alsop and Company as further security in connection with same debt and interest thereon which rights have been refused recognition by the Tribunals of Chili. "Of these rights under a lawful contract the government of Y. E. was duly informed, anterior to the signing of the convention of truce with Bolivia, in a petition presented to Y. E. government, by Mr. John Stewart Jackson, attorney for the claimants, dated Valparaiso, September nth 1882. "At the urgent request of His Excellency President Santa Maria conveyed to the United States Minister, Mr. Logan, in February 1884, the consideration of the claims of United States citizens arising out of the conflict between Chili, Peru and Bolivia, was deferred, in the words of His Excellency: ' Until su^h time as a definite arrangement with her opponents would leave Chili free to consider the questions growing out of the rights of neutrals.' From considerations of profound friendship toward the Chilian Government and the Chilean people my government has, from time to time up to the present, postponed these claims although many of the claimants have been suffering great hardships on account of their losses including some of those interested in this particular one. In view of these considerations I submit to Y". E. that in whatever definite arrangement may be made between the government of Chili and that of Bolivia this clearly acknowledged liability to the Representatives 40898 — 16 19 290 United States vs. Chile. — Alsop Claim. [Pointiii. of the House of Alsop and Company should in right and justice, be taken into account and definite provision he made for its early liquida- tion a result which, in full reliance upon the high appreciation of inter- national honor which characterizes the government of Y. E. I sincerely hope to see accomplished. "I shall be prepared to submit to Y. E. in the course of a very few days all of the documents in the case. "Renewing to Y. E- the assurances of my high consideration and esteem I have the honor to remain. "Y. E. obedient servant, "(Signed) Patrick Egan.'"' Under date of June 11, 1892, the American Minister reported to the State Department further progress vphich he had made in the case of Alsop & Co. in the following language : "Sir: I have the honor to refer to my No. 306 of 3d instant enclosing a note addressed by me to the Minister of Foreign Rela- tions in regard to the claim of the Representatives of the United States Commercial House of Alsop and Company, otherwise known as the 'Wheelwright Claim,' and I beg to say that on yesterday I had an interview on the matter with the Sub-Secretary of Foreign Relations, when he told me that in consequence of the change of Ministry it was not possible, up to that t me, to send a written reply to my note of the 3d instant. He assured me, however, that in the definite treaty of peace now being negotiated between Chili and Bolivia, under which Bolivia will cede to Chili all territorial claims upon Arica and Tacna and Chili will undertake the payment of certain of the exte- rior debts of Bolivia, the payment of this debt to the Representatives of Alsop and Company will be undertaken by Chili. The 'validity of the debt to Alsop and Company has been fully admitted by the Bolivian Government in a memorandum with the Junto de Gobierno in Iquique, and in the course of the present negotiation I shall en- deavor to obtain an undertaking for its payment within a specified time by the government of Chili. "In a very short time more I will be able to place before the Chilian Government all the proofs in the remaining claims arising out of the war between Chili and Peru." " Under date of June 22, 1892, the American Minister forwarded to the Department a communication and its enclosures, which read as follows: " I have the honor to refer to my Nos. 306 and 310 of 3rd and nth instants in reference to the claim of the representatives of Alsop and Company formerly of Valparaiso, known as the 'Wheelwright Claim,' and now beg to enclose copy and translation of a note received from the Minister of Foreign Relations (enclosures Nos i and 2) dated i8th instant in which on the part of his government he practically assumes responsibility for the payment of the prin- cipal debt $835,000 Bolivianos in accordance with a protocol entered into in Iquique in May 1891; but inasmuch as Bolivia had not in a I Appendix, p, 58. . Sub-Point c.i The Case of the United States. 291 said protocol recognized the question of interest due on said debt from 26th December 1876 at the rate of five per cent per annum, amounting to $650,000 Bolivianos, he leaves the payment of said interest an open question. / have accordingly addressed a note under this date, enclosure No. j, giving for the information of the Minister particulars of the contract entered into by the government of Bolivia and reduced to public record at La Paz the 26th December 1876 recognizing this interest in the same way as the principal debt which the Sub-Secte- tary of Foreign Relations assured me would be entirely satisfactory. "In my No. 310 of nth instant I said that in the definite treaty of peace now being negotiated between Chili and Bolivia the latter would cede to the former all territorial claims upon Arica and Tacna. This I beg to correct. In the proposed treaty Bolivia will cede to Chih all territorial claims upon the province of Antofagasta. Inas- much as the definite ownership of Tacna and Arica will only be de- cided by vote of the people next year in accordance with the treaty between Chili and Peru, nothing can now be done with regard to them but it is understood that Chili has held out >0pes that should those provinces be definitely annexed to Chili she will then cede to Bolivia some portions of the territory in order to give to the latter an outlet to the sea." " "Enclosure No. 2 in No. J14. (Translation o'. Enclosure No. i] No. 1284 "Repubuc of Chile, " Dbpartmbnt of Foreign Relations. "Santiago i8th June i8g2. "Sir: I have had the honor to receive Y. E.'s communication dated 3d instant in which Y. E. 'in view of the pending negotiations between the Government of Bolivia and that of Chile to establish a definite treaty of peace between the two countries ' calls the atten- tion of the government of Chile to the claim of the representatives of the American Commercial House of Alsop and Company, hoping it will not be considered inopportune by the undersigned. "Y. E. refers to your communication of 30th September 1890, in which this claim is numbered 2 among those mentioned in said note, under the name of the late John Wheelwright, liquidator of the said House of Alsop & Co. asking the payment of a sum amount- ing to $835,000 Bolivian pesos with an annual interest of 5 per cent from 1876. "Y. E. states that this debt was solemnly ratified by the gov- ernment of Bolivia in the form mentioned and that, as a conse- quence of the occupation of Tacna and Arica by the Chilian forces the agreement celebrated with Bolivia 'was arbitrarily set aside by the government of Chile.' "Y. E. adds some data relating to the matter, the settlement of which Y. E. has been pleased to state the government of Y. E. has several times postponed out of considerations of friendship for the government and people of Chile, and closes asking the govern- "I Appendix, p. 61. 292 United States vs. Chile. — Alsop Claim. [Point m. ment of Chile to take the claim into consideration in whatever arrangement may be celebrated with Bolivia. "In reply, I have the pleasure to inform Y. E. that in the prelimi- nary Protocol of a Treaty of Peace between Chile and Bolivia, ratified by the undersigned in the city of Iquique, as Minister of Foreign Rela- tions of the Constitutional Government, the claim of Alsop and Com- pany which Y. E. has supported, for the sum indicated by Y. E. — 835,000 Bolivian pesos — figured among the liabilities that the govern- ment of Chile engaged to pay for account of Bolivia. "Regarding the payment of interest to which Y. E. refers, the gov- ernment of the undersigned awaits what may be done in the negotiation that is to follow by the government that recognized the principal obli- gations; the Government of Chile, which only assumes the obligations of a neighboring and friendly country will endeavor to attend to this ■part of the claim once the government of Bolivia pronounces upon its legitimacy or validity, confining myself, as a proof of deference to the government of Y . E. to offering the assurance that I will carefully take into account the resolution that may be adopted by the government of Bolivia in relation to this point. ' ' Upon forwarding what has already been stated the undersigned is pleased that in the Protocol celebrated in Iquique in May i8gi the government of Chile had already taken into account the matter referred to in the esteemed communication of Y . E. to which I have the honor to reply. " I avail, etc. " (Signed.) Isidoro Errazuriz. The Envoy Extraordinary and Minister Plenipotentiary of the United States of North America, Mr. Patrick Egan. " "Enclosure No. 3 in No. 314. " Eegation Of THE United States, " Santiago, Chili 22nd June 1892 "Sir: I have the honor to acknowledge the receipt of the atten- tive note of Y. E. dated i8th instant, in reply to mine of 3rd instant on the subject of the debt due from the government of Bolivia to the Representatives of the United States Commercial House of Alsop and Company, and I beg to express the sincere pleasure that it has afforded me to learn the cordial manner in which the indi- cations conveyed in my note haVe been received in the Ministerio of Your Excellency and of the inclusion of the debt referred to in the preliminary Protocol entered into in Iquique between Chili and Bolivia, participated in by Y. E. as Minister of Foreign Relations of the Constitutional Government. "For the purpose of enabling Y. E. to fix with precision this debt and to fully appreciate the validity of the claim for the interest thereupon at the rate of 5 per cent per annum from the 26th of December 1 876 I have the honor to quote for the information of Y. E. the following passage from the Supreme Decree of the Bolivian Government made 24th December 1876, which is as follows: 'Pri- mero — Se reconoco al expresado (Juan Wheelwright) represen.tante a I Appendix, p. 63. Sub-Point c] The Case of the United States. 293 de la casa Alsop y Compania el capital de ochocientos trienta y cinco mil bolivianos con el interes anual del cinco por ciento, no capitali- zable, que carrera desde la fecha del otargamiento de la escritura de este contrato.' "This contract was reduced to escritue publica in La Paz the 26th December 1876 before Patricio Barrera, 'Notario de Hacienda Gobierno i Guerra,' under the following title: 'Numero cuatro cientos diez— Transaction entre el Senor Ministro de Hacienda i Industria, Doctor Manuel Ignacio Salvatierra, en representacion de Ids intereses nacionales y el Senor Juan Wheelwright, socio i repre- sentante de los Senores Alsop y Compania de Valparaiso, para con- solidar y amortizar sus creditos pendientes con el estado,' and a full and certified copy of said Supreme Decree of 24th December 1876 and said escritura pubUca of the contract of 26th December 1876 is deposited in' the archives of the Ministerio of Hacienda of Y. E. Government attached to a solicitude of John Stewart Jackson dated nth September 1882 presented to said Ministerio in connection with this same case. "Availing of this opportunity to renew to Y. E. the assurance of my distinguished consideration. "I have the honor to remain, "Y. E. obedient servant, "(Signed.) Patrick Egan."" It will be noted from the above correspondence (i) that at this time the Government of Chile clearly and without reservation undertook to meet whatever obligation the Government of Bolivia should pronounce as legal and binding under the Wheelwright contract; (2) that a principal sum of 835,000 Bolivian pesos "figures among the liabilities that the Government of Chile engaged to pay for account of Bolivia;" (3) that as to the interest, the Government of Chile would pay interest, provided the con- tract called for interest; (4) that the Under-Secretary of Foreign Relations, upon being shown the contract and the provision therein regarding interest, assured the American Minister that this would be entirely satisfactory upon that question. In this connection it should not be lost sight of that for ten years the claim of Alsop & Co. had been continually pressed upon the Government of Chile; that in 1882 the question of the rights and titles of Alsop & Co. under the contract was fully presented before and discussed by the courts of Chile, and that in October, 1882, the question of the rights of Alsop & Co. was brought before the execu- tive branch of the Chilean Government, which, after considering and studying the case, instructed the petitioner to " make good his claim before whom and in the form which he might dpem con- "^I Appendix, p. 64. 294 United States vs. Chile. — Alsop Claim. [Point m. venient." From 1882 until 1892 the claim of Alsop & Co. was one of those claims the settlement of which the Government of the United States postponed after repeatedly calling the matter to the attention of the Chilean Government, out of consideration for the difificulties and embarrassments in which that Government found itself. In 1 89 1 in the protocols signed between the Governments of Chile and Bolivia, this obligation, to quote from the Chilean Minister, "figured among the liabilities that the Government of Chile engaged to pay for account of Bolivia," the treaty expressly providing that this credit amounted to 835,000 bolivianos, and that this sum drew interest. Finally, in 1892, the Govern- ment of Chile made directly to the United States the uncon- ditional promise set forth above. Up to this point there was never a suggestion from either the Government of Chile or the Government of Bolivia that the full amount called for by the contract was not equitably due and payable to the claimants in ' this case. Indeed, on the contrary, the exact sums called for by the contract with interest had been expressly recognized, and it can scarcely be supposed that the Government of Chile at the time it thus agreed with Bolivia and in addition obligated itself to the United States, had not investigated the claim and did not under- stand the basis upon which it rested. The Government of the United States, therefore, contends And maintains that under and pursuant to the above formal and solemn promise made by the proper officer of the Chilean Government to liquidate this claim under and in accordance with the terms of the contract between the Government of Bolivia and John Wheelwright, as liquidator for Alsop & Co., the Government of Chile has become finally and irrevocably obligated to the Government of the United States to satisfy this claim in accord with the terms of this promise thus freely, fully, and fairly given. The Specific Undertaking of October, 1896. — On August 7th, 1892, Mr. Patrick Egan, the American Minister at Santiago, and Isidore Err^zuriz, Minister of Foreign Relations of Chile, negotiated a claims convention which provided for the settlement of claims of the citizens of either country against the other." The Com- mission met in Washington on July 25, 1893, and the Alsop claim was one of the claims submitted to it for consideration and deter- mination.. The Commission concluded its sessions on April 9, 1894, on which date the Commission declared that "inasmuch a II Appendix, pp. 1-5. Sub-Point c] The Case of the United States. 295 as we have not been able to make such an examination of the voluminous testimony in this (the Alsop) case and of the many legal questions involved as would enable us to reach a satisfactory conclusion, we decline to render any judgment thereon. " « It was in defending this claim before this Commission that the Government of Chile for the first time since the matter was first brought to its attention, raised an objection regarding the nature of this claim, and it now did so notwithstanding that for more than a decade the claim had been pressed by the Government of the United States without question or complaint by the Government of Chile, and notwithstanding, as has been set out above, that the Government of Chile had specifically promised the Government of the United States to liquidate this indebtedness, principal and interest. The Government of Chile, through its agent, now advanced before the Commission the novel contention that Alsop & Co., was a Chilean citizen and therefore not American and not within the jurisdiction of the Commission. Matters were left in this shape until, pursuant to instructions from the Department of State, the American Minister at Santiago again took up the matter with the Chilean Government and asked for settlement of the claim of Alsop & Co. The American" Minister, under date of October loth, 1896, reported upon his instruction in the following language: "In reply to the Department's No. 99, of August loth last, enclos- ing a letter from the Hon. G. S. Boutwell, and instructing me to ascertain from the Government of Chile the proposed date of settle- ment of the claim of Alsop & Company, and whether by a treaty or by an understanding between the Governments of Chile and Bolivia the amount to be paid had been fixed, I have the honor to report that yesterday / had a conversation on the subject with Senor Eduardo Phillips, under Secretary of Foreign Relations, who gave me the following information: "On May 28th, 1895 a protocol, supplementary to the treaties between Chile and BoUvia forwarded to the Department with my No. 85 of May 6, last, was signed. This protocol was approved by the Chilean Congress, in secret session, but is still awaiting the approval of the Congress of Bolivia, and has, therefore, not been published. It has an important bearing upon the claim assumed by the Chilean Government in accordance with the provisions of Article 2 of the Treaty of Peace and Amity, of May i8th, 1895. "According to the memorandum presented by the Bolivian Min- ister at this capital which is regarded as part of the protocol, the amount proposed as a settlement of the claim, of Alsop & Co. is, without calcu- lating interest {sin computar intereses) eight hundred and thirty-five "■ II Appendix, p. 424. 296 United States vs. Chile.— Alsop Claim. [Point m. thousand Bolivianos, of twenty pence, or nine hundred and fifty-four thousand, two hundred and eighty-five Chilean pesos. "By article 3 of the protocol the Government of Chile, in order to settle the definite amounts to be paid, shall take into account the origin of the claims allowed {el origin de cada credito) as well as the data furnished by the Bolivian Minister in his memorandum. "It is hoped that the protocol will be approved by the Bolivian Congress, which is now in session, in a few weeks. The Chilean Government cannot take up the question of the payment of the claims until this protocol has been approved and promulgated. "On receiving the above information, I enquired of Senor Phillips whether it was to be understood that the terms of article 3 of the protocol gave to his Government the right of making a re-exami- nation of the claims; and I stated that if this were the case, it was contrary to the impression existing in the minds of the claim- ants as well as to my own understanding of the matter. He replied that, in view of the large amounts to be paid, it was natural that his Government . should desire to examine the papers on which the claims were based; but that he thought that as soon as the protocol was approved and promulgated, there would be no dis- position to delay a settlement. "The Bolivian Minister here, Senor Gutierrez, whom I saw this afternoon, and with whom I spoke upon the subject, also seemed to be of this opinion. "As soon as the protocol is approved by the Bolivian Congress, I will again call the attention of the Chilean Foreign OfHce to the claim, with a view to obtaining some more definite assurance regarding its payment.. "In the meantime, I should be glad to be informed as to what attitude is to be taken upon the payment of interest, which, from the terms of Mr. Boutwell's letter, seem to be included in the claim. "I have the honor to be. Sir, "Your obedient servant, "Edward H. Strobed." " It will be observed that, while at this interview the Minister for Foreign Relations suggested that the Government of Chile might desire to make a re-examination of the claim by way of assurance, no objection was taken or made to the contract itself, nor is there any indication that full payment should not be made in the amount for which the contract calls, principal and interest. The Specific Undertaking of October, 1897. — The question was again presented in a definite way by correspondence which passed between the American Legation at Santiago and the Minister of Foreign Relations in October, 1897. Under date of the 13th of that month the Minister of Foreign Relations of Chile addressed the following note to the American Minister at Santiago : "I Appendix, p. 67. Sub-Point c.i The Case of the United States. 297 "Republic of Chile "Ministry of FoxIEign Relations, "Santiago, October ij, iSpf. "Sir: I have duly had the honor to receive Your Excellency's esteemed note of September 28th last, my reply to which I have delayed until now as I had to attend to matters which I could not postpone. "In the said communication, referring to the memorandum which Mr. Simpkins, at that time Charge d'Affaires ad interim of the United States of America, delivered to the Sub-Secretary of this Department, Senor Eduardo Phillips, Your Excellency requests me to advise you as to the attitude my Government at present proposes to assume towards the Alsop claim, and whether the understanding of my government of its engagements with Bolivia is of such a nature as to enable the Alsop claimants to come to a direct agree- ment with Chile on the basis of the Chilo-Bolivian liquidation. "You add that, while making this enquiry, it is not the wish of the Government of the United States to be understood as suggesting that, an arrangement of the kind indicated be entered into between Chile and the Alsop claimants; and you conclude by stating that as the United States holds that no proceedings under the Chilo- Bolivian Treaty can impair the jurisdiction of the proposed Americo- Chilean Commission of Arbitration to deal with the case on its merits, you advise me that your note is merely interrogatory in character. "In reply, Mr. Minister, I have to say to Your Excellency, that notwithstanding my desire to reply to the questions which you haye put to me, I find it absolutely impossible for me to advance any opinion on the subject. "Chile, by the Treaty of Peace with Bolivia of May 18, 1895, bound herself to satisfy various credits which were pending against Bolivia, amongst which was that of the House of Alsop and Company. "That obligation contracted by Chile has no force, however, as long as the treaty by virtue of which it was contracted is not defi- nitely perfected. And as this requisite has not been complied with, inasmuch as the treaty cannot be perfected as long as our Congress does not approve, nor the Executive ratify, the Chilo-Bolivian pro- tocols which have been submitted to the consideration of the former, it will easily be seen that any resolution that my Govern- ment might take regarding these credits would be inopportune and inefiicacious. "On the other hand, Mr. Minister, the credit of Alsop and com- pany, like several others enumerated in the Treaty of May 18; 1895, will have to be the subject — as expressly established in the said Treaty — ' of a special liquidation and detailed specification in a com- plementary protocol.' "This circumstance alone would not -permit me to advance an opinion of any kind regarding a credit which is subject to an ulterior liquidation. "Please accept my sentiments of high, and distinguished con- sideration. "(Signed.) R. SiLVA Cruz."« " I Appendix, p. 69. 298 United States vs. Chile. — Alsop Claim. point in. The Specific Undertaking of igoi before the United States and Chilean Claims Commission. — As was set forth in the Historical Resumd, the two Governments on May 24, 1897, by the Honor- able John Sherman, Secretary of State of the United States, and Senor Don Domingo Gana, Chilean Minister at Washington, signed a supplemental convention, reviving the Convention of August 7, 1892, which had "failed, through limitation, to conclude its task," it being provided that the revived Commission "shall be limited in conformity with the terms of the Convention and with the rules that governed its labors," a certain claim specifically named "being excepted. The Agent of the Government of Chile renewed before the revived Commission the arguments of the Chilean Agent before the first Commission to the effect that, since Alsop & Co. was a partnership, registered under the laws of Chile, it was a Chilean citizen, and that therefore, notwithstanding that all of the partners were American citizens, and that the whole commercial venture, as well as the capital invested, was American, the claim did not fall within the terms of the convention, which stipulated for the adjudication of "all claims on the part of corporations, companies or private individuals, citizens of the United States, upon the Government of Chile." But, while the Agent of Chile made this contention before the Commission, he, at the same time, in order to induce the Commis- sion to dismiss the same, made, in careful and well chosen but clear and specific language, the following announcement regarding the intentions of Chile with reference to the settlement of this claim : "As is stated in the claimant's brief, it is among the liabilities that the Government of Chile engaged to pay for the account of Bolivia. This explains exactly the situation of the claim. The Chilean Government has always regarded it, and does still regard it, as a liability on the part of Bolivia, towards the claimant; and in order to induce the Bolivian Government to sign the definite treaty of peace which has been negotiated for many years, the Chilean Government offers to meet this and other claims as part of the payment or consideration which it offers to Bolivia for the signa- ture of the treaty. This has always been the position of the Chilean Government, and it is its position to day, and if Bolivia signs the treaty, the claim of Alsop and Company, as well as the other claims mentioned, will be promptly paid under the treaty engagement as a relief to Bolivia from the liabilities which that Government has incurred and for the account of Bolivia."" - II Appendix, p. 569. Sub-Point c] The Case of the United States. 299 After due deliberation, the majority of the Commission, the American Commissioner dissenting in an able and powerful deci- sion, decided in favor of the contention of the Chilean Agent, and dismissed the claim for want of jurisdiction," stating, however, that this was without prejudice to any rights which the claimant, or claimants, or Alsop & Co., or its liquidator, might have, either by diplomatic intervention, or before the Government of Chile, or the courts of Chile. In rendering this decision, the Commission, after discussing the arguments advanced by the Agents of the respective Governments, and after considering the precedents advanced by the Agent of the United States in support of his contention (one of which, the Cerruti case, was directly in point) , concluded their opinion with the following statement: "By this conclusion it is not denied that certain cases may arise (like the Cerruti case) in which redress may justly be granted by means of diplomatic intervention to an individual member of a society for injury to the partnership property. The demurrer is sustained wholly upon the ground that Alsop & Company, in liquidation, being a citizen of Chile, this Commission, under Article i of the Con- vention of 1892, has no jurisdiction to entertain the claim. The case is dismissed, therefore, without prejudice, however, to any rights which the claimant, or claimants, or Alsop & Company, or its liqui- dator may have, either by diplomatic intervention or before the Government of Chile, or the courts of Chile. Nor are the merits of the claim in any way prejudiced by this decision. According to the brief of the Honorable Agent of Chile, it is declared that this claim " ' Is among the liabilities that the Government of Chile engage to pay for the account of Bolivia. * * * The Chilean Government has always regarded it, and does still regard it, as a liability on the part of Bolivia towards the claimant; and in order to induce the Bolivian Government to sign the definite treaty of peace, which hais been negotiated for many years, the Chilean Government offers to meet this and other claims as part of the payment or considera- tion which it offers to Bolivia for the signature of the treaty. This has always been the position of the Chilean Government, and is its posi- tion today, and if Bolivia signs the treaty, the claim of Alsop & Com- pany, as well as the other claims mentioned, will be promptly paid under the treaty engagement, as a relief to Bolivia from the liabili- ties which that government has incurred and for the account of Bolivia.' "The claimant is, therefore, remitted for relief to the Government of Chile, whose assurances are thus given, and the case is dismissed. "J. B. PlODA, "The Commissioner for Switzerland-. "C. MoRLA Vicuna, "The Commissioner for Chile." '^ » II Appendix, p. 569. 300 United States vs. Chile. — Alsop Claim. [Point ra. The Specific Undertaking of 1903. — On June 12, 1903, as a result of an inquiry from the Department of State as to what progress had been made in the negotiations looking to the settlement of the Alsop case, the American Minister took up with the Chilean Foreign Office the question of the adjustment of this claim and reported to the Department the results of his interview and the assurances given to him thereat in the following cable: [Paraphrase.] Liquidation of all claims against Bolivia is assumed by Chile under the treaty, the signature of which is assured.*^ In reporting upon the claim under date of October 27, 1903, the American Minister stated: " I have the honor to acknowledge the receipt of the Department's No. 247, asking to be advised of the truth of the report, that the pend- ing negotiations between Chile and Bolivia have been broken off, or postponed indefinitely, owing to the unwillingness on the part of Chile to assume all that is demanded by Bolivia in the way of indem- .nity. ' ' The report which reached the Department is not based upon facts. The negotiations are still proceeding, with every prospect of a satis- factor}' exit, and I was advised, no longer ago than three days, by the Minister of Foreign Relations, that he would soon be in a position to make a cash offer to the claimants of Alsop and Company, in satisfaction of this long pending claim. The Minister informed me that he would make the tender directly to me, and that if the same was not accepted, the amount tendered would he handed over to Bolivia, and, the Alsop creditors, together with such others as might decline to accept a direct cash settlement with Chile, would he remanded to La Paz for the consideration of the Bolivian Government. "Whenever such tender is made, I will communicate with the Department by telegraph, asking for authority from the Alsop claim- ants to make settlement." ' The Specific Undertaking of 1904 to Settle This Claim. — On June 18, 1904, the American Minister at Santiago reported a conversa- tion which he had with the Minister of Foreign Relations of Chile on the 13th of that month, at which interview the American Minister had with much emphasis commented upon the continuous delays that had characterized the negotiations in this case. The American Minister reported the Minister of Foreign Rela- tions as replying that he had every disposition to meet the demands of the claimants and the expressed wish of the United States , but that a I Appendix, p. 78. i I Appendix, p. 80. Sub-Point c] The Case of the United States. 301 the Government of Chile could not depart irom the position which it had taken and to which it still adhered, i. e., that the payment of this claim is assumed by Chile contingent upon the signing of the definite treaty of peace and amity with the Government of Bolivia. According to the views of the Chilean Government, this was the strict and just construction of the Treaty of Ancon. "The Minister stated, however, that the treaty with Bolivia would be signed and ratified within three months and that he would ajithor- ize me to state as much to my Government. He added, moreover, that as an evidence of his Government's desiie to gratify the desires of the United States, the Alsop claim would be taken up immediately after the ratification of the Treaty with Bolivia, and given special, and even generous consideration." "■ This conversation was confirmed in the following notes which passed between the American Minister and the Minister of Foreign Relations of Chile under the dates given : "June 21 st, 1904. "Mr. Minister: Upon the 13th inst., I had the honor to confer with Your Excellency relative to the Alsop claim, and expressed to you after having submitted to your inspection the urgent telegram con- cerning the claim, just received from my Government, the pressing necessity for early consideraltion of this long pending obligation, and how greatly, decisive action by Your Excellency's Government, would be appreciated by the Government of f!he United States. "Your Excellency's reply to the observations which I had the honor to make on this occasion, was, briefly, that the Chilean Gov- ernment had held, and continued to hold, the claim of Alsop and Company, as an obligation payable by the Chilean Government, con- tingent only upon the signing of the definite treaty of peace and amity with Bolivia, Your Excellency adding moreover, that this treaty would, without any doubt, be signed and ratified by the Gov- ernments of Bolivia and Chile, within the term of three months, and that I might consider myself authorized to convey information to this effect, to my Government. Continuing, Your Excellency -was good enough to add, that immediately following the ratifications of the treaty, the Chilean Government would address itself to the consideration of the Alsop claim, and out of deference to the expressed wish of the Government of the United States, and the necessitous condition of the claimants, would give to it, special, just and even generous consideration. "Upon the same date of my interview with Your Excellency, I conveyed, by cablegram, to my Government, the substance of your statement, as recited above, and upon the 14th, I received the follow- ing reply : — ' Express to Minister for Foreign Affairs the President's appreciation of assurances given and communicated by your cable- gram. On this basis Department is confident the matter will be satisfactorily adjusted at the period named.' a I Appendix, p. 88. 302 United States vs. Chile. — Alsop Claim. [Point m. "I avail myself of this opportunity, to renew to Your Excellency, the assurances of my most distinguished consideration and esteem, and beg to subscribe myself, "Your Excellency's obedient servant, "Henry 1,. Wilson. "His Excellency, "Senor Don Emiwo Bello Codecido, "Minister of Foreign Relations." "* "Santiago, July 2nd, 1904. "Mr. Minister: I have the honor to acknowledge the receipt of Your Excellency's note dated 21st ult., in which Your Excellency, referring to the conversation with the undersigned respecting the Alsop claim, transcribes to me the following cablegram sent by your Government to that Legation on the 15th of said month: "'Express to Minister for Foreign Affairs the President's appre- ciation of assurances given and communicated by your cablegram. On this basis Department is confident the matter will be satisfac- torily adjusted at the period named.' "In this respect, it corresponds to me to reiterate to Your Excellency that the Alsop claim is included among the other claims for credits weighing on the Bolivian coast, the payment of which will be assumed by Chile on the terms to be established in the respective treaty at the close of the negotiations at present going on towards that object between the Governments of Chile and Bolivia. Only then will it be possible for the undersigned to give to the said Alsop claim the attention it deserves. "Iavail"&c&c * * * t "(Signed) Emiuo, Bello C. "His Excellency, "Henry E. Wilson, E. E. and M. P. of the United States of America." ' It will thus be observed that the Government of Chile has many times promised the Government of the United States in general terms fully to meet and satisfy the claims of American citizens against that Government and has on at least six occasions specif- ically promised the Government of the United States to meet the indebtedness recognized and provided for by the Wheelwright contract of 1876. It is difficult to see upon what ground the obligation thus repeatedly assumed in the most formal way by communications addressed through the proper diplomatic chan- nels can be evaded or avoided and it would appear unnecessary to enter into any legal discussion to establish the fact that under these various promises thus formally and solemnly given, the Government of Chile has become absolutely and fully obligated to the Government of the United States to meet the indebtedness recognized by the Wheelwright contract. In order, however, that the matter may be made entirely clear, and that there may "^I Appendix, p. 80. 61 Appendix, p. 90. Sub-Point c.i The Case of the United States. 303 be no shadow of doubt that even waiving for the moment the solemnity which must be attached to an international promise or undertaking, there still is in the undertakings above set forth such an obligation as would, had the transaction occurred between private parties of either Government, have bound such parties in a legal and binding contract, under the general principles of either the civil law or the common law — it seems desirable to set forth the following considerations: That the contract would be legal and binding between private parties, if it had been formed under the rules of the civil law, is perfectly clear and obvious, since there was upon one side a prom- ise, clearly and definitely expressed, to pay this obligation, and on the other side an acceptance of this promise and an action upon it, namely, a forbearance at that time further to press the matter for consideration. In view of the fact that under the civil law a consideration in the technical sense as known to the common law is not necessary to make a binding and .effective contract, and that all that is necessary to make a contract is that there should be an intent to contract and a meeting of the minds, it can not be doubted that under the civil law this promise of the Government of Chile was of a kind and character definitely and legally to bind her to the payment of the debt which was thereby assumed. It is believed unnecessary to enter into any extended discussion of these principles, which are so well recognized, but the following authorities may be cited for the purpose of supporting the state- ments' and contentions above made: Hunter's Roman Law, Bock II; Leage's Roman Private Law, p. 262, et. seq. ; IV Phillimore's International Law (3rd ed.), pp. 491 and 496, et seq.; Howe's Studies in the Civil Law, p. loi, et seq. See also I Pothier on Obligations, p. 2, et seq.; Langdell's Summary of the Law of Contracts, p. 60 et seq. and p. 126, et seq.; Pillans & Rose v. Van Mierop & Hopkins (1765), 3 Burr., 1663. But not only would the indebtedness as above set forth by Chile constitute, as has just been shown, a contract under the civil law, where no consideration in the technical sense is required, but this indebtedness would, under the strict technical rules of the common law, constitute a legal and binding contract, being based upon a sufficient and valid consideration. It will be observed that when this claim with others was first presented to the Government of Chile that Government stated that if the Government of the United States would refrain, or forbear, from 304 United States vs. Chile. — Alsop Claim. [Point m. pressing for settlement the American claims upon the Government of Chile, that Government would, as soon as it had arranged with other powers for the settlement of their claims, at once take up and adjust the claims of American citizens. It is a matter of record, as set forth above, that the Government of the United States, placing reliance upon this promise of the Government of Chile, did refrain or forbear from pressing upon the attention of the Government of Chile the claims of its nationals. And the Government of Chile was more than once informed that the reason for the patience, of the United States in the matter of the settle- ment of its claims was that the Government of the United States was placing full and complete reliance in the promise which the Government of Chile had thus formally and repeatedly given. These repeated promises and this patient forbearing continued for a long series of years, during which the Government of the United States showed every kindly consideration for the feelings of the Government of Chile and for the unfortunate conditions in which that Government often found itself placed. Such forbearance, at the instance of the debtor has under the common law a peculiar legal value. For hundreds of years it has been good law in England and, since the formation of the Ameri- can Colonies, in America that forbearance to sue is a good and ample consideration for a promise. This is settled by law in both England and America, as announced by text writers and enforced by the courts. The rule of law as laid down in Williams' Notes to Saunders' Reports (209a) is as follows : " (i) But if the promise be, in consideration of forbearance by such assignee of the debt, to sue the executor or administrator, that is a sufficient consideration, i Rol. Abr. 20, pi. 11. Pitt v. Bridge- water, S. C. Hard. 74, i Lev. 188. Russel v. Haddock. For it is suf- ficient in the case of any other debtor, whom the assignee of the debt forbears, at his request, to sue. Hard. 71. Reynolds v. Prosser. I Vent. 153. Oble v. Dittlesfield. i Rol. Abr. 20, pi. 60; though Potter v. Turner, Winch 7, and Palm. 185, S. C, was decided to the contrary: but this is contradicted by all other authorities (a)." (p. 220). "In all cases of forbearance to sue, such forbearance must be either absolute; Cro. Jac. 47. Fish v. Richardson; (or for a reason- able time; 2 H. & N. 517. Oldershaw v. King.) i Rol. Abr. 24, pi. 33. Johnson v. Whitcott (see 7 B. & C. 423. Payne v. Wilson); forbearance for a little; i Rol. Abr. 23, pi. 25; or for some time; ibid. pi. 26; is not sufficient. It must be shown in the declaration, that there was some person liable to be sued; 4 East. 455. Jones v. Ashburnham; but the omission is cured by verdict, i N. R. 172. Sub-Point c.) The Case of the United States. 305 Marshall v. Birkenshaw. And it is not necessary to state the precise nature of the debt forborne. Cro. Jac. 396. Thorne v. Fuller. Cro. Jac. 548. Austen v. Bewley. So desisting from a complaint before a justice of the peace, Cro. Eliz. 881. Rippon v. Norton, is a sufficient consideration; or forbearing to proceed upon a cap. utlaga- tum. Cro. Eliz. 909. Jennings v. Harley. Yelv. 19 S. C. See Selwyn's N. P. 49. Tit. Assumpsit, where all the cases are collected. See further, as to forbearance to executors, post. 1 Saund., notes to Barber v. Fox." (pp. 225-226). Chitty, in his Treaties on the Law of Contracts, states the prin- ciple in the following words : "And generally, any damage, or any suspension or forbearance of a right, or any possibility of a loss occasioned to the plaintiff by the promise of another is a sufficient consideration for such promise • * * * "As to particular kinds of forbearance, it is well settled that an agreement to forbear either absolutely, or for a certain time, or for a reasonable time, to institute or prosecute legal or equitable pro- ceedings to enforce a legal or equitable demand, is a sufficient con- sideration for the promise of the debtor, or of a third person, to pay the debt, or to do any other act. By such forbearance the creditor is delayed, and the debtor is, or may be, benefited; so that there concur both the ordinary grounds upon which a sufficient con- sideration may be rested." (Ch. 2, p. 24). The principle was, as stated above, very early announced and acted upon by the courts. In 21st James I, in Mapes Executor of Holdick V. Sir Isaac Sidney, the Common Bench, in an action of Assumpsit, "For that the Defendant in consideration the Plaintiff would forbear to sue one J'. S. upon an obligation of 80I., promised to pay unto him the said debt, " it was held by Lords Hobart, Winch, and Hutton (Jones being absent in Chancery) : "That the Plaintiff should recover; for they all conceived that a consideration to forbear to sue one such, for sucli a Debt is a good con- sideration; and it shall be intended a total and absolute forbearance, as Hutton and Winch held : And that if the Defendant paid it before upon this promise, and after the Plaintiff sued for the Debt, the Plaintiff is chargeable in an Action upon the Case ; for it is an implied promise in the Plaintiff, that he should forbear his Suit totally : But yet when the Plaintiff hath forborne a convenient time (when there is no time mentioned) if the Defendant do not pay the Debt according to his promise, the Plaintiff may well sue him upon his promise, and he needs not tarry all his life. And here, when he shows that he forbore per magnum tempus, viz. such a day and year, that well agrees with the writ ; and when the date of the writ doth not appear, it shall be intended that he did forbear until the day of the writ: And so the action is well brought. Hobart Chief Justice agreed with them, that the action was well brought, and the Declaration good, because he shows he did forbear it for a convenient time. And he held, that he was not bound by this agreement to forbear totally. And denied that upon this agreement he is chargeable 40898 — 10 20 3o6 United States vs. Chile. — Alsop Claim. [Point iii in an Assumpsit, if he (after this Debt recovered from the Defendant) should sue for the same Debt ; for it is not a promise to restrain him totally; and without express words he is not chargeable by promise; Wherefore it was adjudged for the Plaintiff." (Croke's Reports, Part II, p. 683, 684; Mapes Executor of Holdick vs. Sir Isaac Sidney). This case has been followed by a long line of decisions, affirming, amplifying, and making more certain the rule laid down, though leaving the fundamental doctrine untouched, many of which cases have been collected by Chitty in his work above cited. As has already been stated, the courts of the United States have repeatedly announced and followed the same rule. As early as 1809 the Supreme Court of New York, in an action of assumpsit in the case of Elting v. Vanderlyn (4 Johnson, 237), announced this principle: "The declaration stated, that one Zachariah Hoffman, now de- ceased, was, in his life-time, justly indebted to the intestate, in his life-time, in divers sums of money, &c. ; that the intestate, in his life- time, was about to sue the heirs of the said Hoffman, for the recovery of the sums so due him; 'that thereupon the said Jacobus Vanderlyn, in consideration that the said R. I. Elting, (the intestate), in his life- time, at the special instance and request of the defendant, would forbear to prosecute the heirs of the said Z. Hoffman, of which the defendant, in right of his wife, was one, he, the defendant, under- took and faithfully promised the intestate, in his life-time, and since, to wit, on the ist May, 1807, at, &c., undertook and promised the plaintiff's administrators to pay them the several sums of money so due and owing from the said Hoffman, in his life-time, to the said Elting, in his life-time, &c. ; that the said Elting, in his life-time, confiding in the said promise, &c., did forbear to prosecute, &c., for two years longer, and hitherto hath forborne to prosecute, &c., and that the plaintiffs, as administrators, since the death of Elting, have also forborne to prosecute,' &c. The defendant pleaded non- assumpsit, and non assumpsit infra sex annos. "The cause was tried at the Ulster circuit in September last, when the jury found a verdict for the plaintiffs. "A motion was made, at the last term, in arrest of judgment, on the following grounds : ******* "3. Because a promise to pay, in consideration of an indefinite forbearance, is void." "Van Nbss, J., delivered the opinion of the court. * * * "3. The consideration of forbearance generally is sufficient, with- out setting forth a specific time. There was, in fact, a total for- bearance for a long time, which brings the case within that of Mapes V. Sidney {Cro. Jac. 683). The court are of opinion, that the motion must be denied." The principle here laid down continues in force in New York, as'is shown by the opinion of Brown, J. in the case of the Trader's Sub-Point c] The C-ase of the United States. ■ 307 National Bank v. Parker (1892), 130 N. Y., 415, 420, where the following language is used : "On the contrary, the whole current of authority is to the effect that an agreement to withhold suit is a good consideration to support a promise to pay a debt, although no* fixed and definite time is expressly agreed upon. (Rolles Abgt. 27, pi. 45 ; Brandt on Surety- ship and Guaranty, §8; i Parsons on Contracts (6th ed.) p. 444; Walker v. Sherman, 11 Netc. 170-172; Mecorney v. Stanley, 8 Cush._ 85-88; Hakes v. Hotchkiss, 23 Vt. 231- Calkins v. Chandler, 36 Kich. 320; Lonsdale v. Brawn, 4 Wash. 148; Dawning v. Funk, 5 Rawle, 69; Sid-well v. Evans, i Penn., 383; King v. Upton, 4 Me. 387; Elting v. Vanderlyn, 4 Johns. 237; Watson v. Randall, 20 Wdnd, 201; Mut. Life Ins. Co. v. Smith, 23 Hun. 535). "The legal effect of such an agreement is to bind the creditor to withhold suit for a reasonable time. What would be a reasonable time, if not always a question of fact, would at least be a mixed ques- tion of law and fact, depending for its solution upon the circum- stances of each case. "The precise question at issue here was decided in this state in Elting v. Vanderlyn (supra). There the judgment was attacked on the ground that the promise to pay was in consideration of an indefi- nite forbearance, and was void. The court said : ' The consideration of forbearance generally is sufficient without setting forth a specific time. There was in fact a total forbearance for a long time, which brings the case within that of Mapes v. Sidney (Cro. Jac. 283).' This case has never been questioned or overruled. " In the case before us, there was total forbearance, as no suit wa,s ever brought against Hodgson or James on the note. "The general rule is that the waiver of any legal right, at the request of another party, is a sufficient consideration to uphold a promise. "There was clearly such waiver shown in this case, and the referee having found an express agreement to that effect, judgment in the plaintiff's favor necessarily followed." Other states of the American Union have announced a like rule. In the case of Mascole v. Montesanto (1891) 61 Conn., 50, 53, Andrews, C. J., delivering the opinion of the court, stated the principles as follows: "The first, fourth and fifth reasons are, in substance, that the note was without a valid consideration. We think, however, that a suf- ficient consideration appears. The note is expressed to be for value received. These words indicate a sufficient consideration in the absence of anything to the contrary. In this note not only is there nothing to the contrary, but a good consideration expressly appears. The withdrawal of the suit against his son without further costs was a sufficient consideration for the promise contained in the note. 'Any damage, or any suspension of a right, or any liability to a loss occasioned to one by the promise of another, is a sufficient considera- tion, for such promise and will make it binding, though no actual benefit accrues to the promisor.' i Rev. Swift's Digest, top page 195. 'A promise in consideration of ceasing suit is good, for that is a 3o8 United States vs. Chile. — Alsop Claim. [Point iii. benefit to the defendant as well as a damage to the plaintiff, though the action is not discharged.' Id., 196. The authority cited by Judge Swift on this point is Bidwell v. Cation, Hobart's Reports, 216. That case was as follows. Bidwell, an attorney, brought an action on the case against Catton, executor of Reve, and counted that whereas he had in Michaelmas term, 14 Jac, Prosecuted an attach- ment of privilege against Reve, the testator, recognizable in Miliary term, the testator, knowing of it, in consideration that at his request the plaintiff would forbear to prosecute said suit any farther against the testator, did promise to pay him fifty pounds; and then averred, etc. After verdict it was excepted in arrest of judgment : — first, that it was not alleged that the plaintiff had any just cause of action; and secondly, that the action still remains. But the court nevertheless gave judgment. For, first, suits are not presumed causeless; and the promise argues cause in that he desired to stop off the suit. Secondly, though this did not require the discharge of the action, yet it did require a loss of the writ and a delay of the suit, which was both a benefit to the one and a loss to the other. Sage v. Wilcox, 6 Conn., 81; Stoddard v. Mix, 14 Conn. 12; Pratt v. Humphrey, 22 Conn., 317. Nor is it material that the party who makes the promise in consideration of such forbearance should have a direct interest in the suit to be forborne or be directly benefited by the delay. Smith V. Algar, i Barn. & Adol., 603; i Chitty on Contracts, (nth Ed.,) 39, 41; I Parsons on Cont. 5th ed. 443." The courts of Massachusetts have expressed and followed a like rule. In Howe v. Taggart (1882), 133 Mass., 284, 287, .Field, J., speaking for the Court, made the following statement of the principle : "It seems to have been assumed in this Commonwealth that an agreement to forbear bringing suit for a debt due, even although for an indefinite time, and even although it cannot be construed to be an agreement for perpetual forbearance, if followed by actual for- bearance for a reasonable time, is a good consideration for a promise. Prouty v. Wilson, 123 Mass. 297. Robinson v. Gould, 11 Cush. 55. Boyd V. Frieze, 5 Gray, 553. Ellis v. Clark, no Mass. 389. Pratt v. Hedden, 121 Mass. 116. Mecorney v. Stanley 8 Cush. 85. Manter v. Churchill, 127 Mass. 31. See also Coles v. Pack, I^. R. 5 C. P. 65; Oldershaw v. King, 2 H. & N. 517." And finally it should be noted that even the youngest of the American States have invoked the same rule. In Marshall v. Old, 14 Colo. App. 32,' 35-36, the following statement is made by the court: "The complaint' distinctly says that in consideration of the defendants' agreement 'thie plaintiff forebore foreclosure for two years, and that from time to time he received from the defendants rents which had been collected by them from tenants of the premises. The forebearance was in consideration, not of the plaintiff's, but of the defendants' agreeiheht. It was therefore upon that agreement that the minds of the pairties united. In conformity with that agree- ment, the plaintiff forbore, and the defendants paid him the rent. Sub-Point c.) The Case of the United States. 309 By the acts of the parties, it became a valid and enforcible contract. The defendants made the offer and the plaintiff accepted it. It was not necessary for the plaintiff to agree, in words, to postpone foreclosure. His assent to the proposition was signified by his compliance with the terms of the offer. A request followed by per- formance constitutes a contract. Yancey v. Brown, 3 Sneed, 90; Strong v. Sheffield 144 N. Y. 392; Morton v. Burn 7 E. & A. 19; 2 American Leading Cases (5th ed.), 96, et seq. "And it is not necessary that there should be a stipulation to forbet^r for a specified time. An agreement to forbear for an indefi- nite time, if followed by actual forbearance for a reasonable time, is a good consideration for a promise. Elting v. Vanderlyn, 4 Johns. 237; Thomas v. Croft, 2 Rich. Law. 113; Howe v. Taggart, 133 Mass. 284; King v. Upton, 4 Me. 387; Moore v. McKenney, 83 Me. 80." It seems sufficiently established by the above citations and quotations, which might be indefinitely multiplied, that under the principles of municipal law governing the transactions between private individuals of both Governments the promises, as above set forth, would, had they passed between private individuals, have constituted a legal and binding contract. But, it is unnecessary to depend in the present case upon the analogy of the private law of either country. There have been repeated decisions of international commissions that a formal promise of this kind made by the proper representative of one country to the proper representative of another constitutes a legal and binding obligation upon the part of the Government whose officer ma"kes the undertaking. It is not without signifi- cance in this regard that before the first United States and Chilean Claims Commission, of 1894, the Government of Chile presented to the Commission a claim founded upon a similar promise given by the diplomatic representative of the United States, and the Commission, after examination, found the promise to be valid and binding and gave a substantial award thereon. The case to which reference is here made is the case of Ricardo L. Trumbull V. The United States, which, as given in a unanimous decision of the Commission, reads as follows : "In the opinion of the Commission the sections of the Revised Statutes of the United States (sections 3732 and 5278) upon which the respondent Government bases its demurrer are not applicable to the relations that subsisted between the claimant and the Honorable Minister at Santiago. "The first provision seems to have been enacted for the regulation of the officers of the United States in the performance of their duties, and the second as a rule for the settlement of expenses between the States and the National Government. 3IO United States vs. Chile.— Alsop Claim. [Point m. "By no rule or legal prescription was the memorialist bound to know the sections of the Revised Statutes or to act in conformity with them. "On the contrary, he knew that the Minister of the United States was instructed by his Government to proceed in a matter of extra- dition, and that the proceedings before the Chilean Court could only be conducted through an intermediary counsel. Mr. Trumbull was requested by the Minister to act as counsel. "He was justified in presuming that the Minister of the United States acted in accordance with his instructions from the Secretary of State, and also pursuant to the rule that the expenses of extradi- tion, including fees of counsel are paid by the demanding State. "He was right also in assuming that the Minister was authorized to say to him, ' to have no concern in the matter, as he (Trumbull) would be paid by the United States Government for his services.' "Whether the Honorable Minister of the United States at Santiago exceeded his authority in entering into the contract with Mr. Xrum^ bull is a question that, for the purposes of the demurrer, is Of no importance. " As a representative of the United States he made, as is confessed by the demurrer, a promise in the name of his Government, which, according to the rules of the responsibility of Governments for acts performed by their agents in foreign countries, cannot be repudiated. (Calvo, Dictionaire de Droit International et Prive, Vol. ii, p. 170. Also Calvo, Droit International Vol. i, §417). "As to the argument that the claimant has a complete remedy in the courts of the United States, it is to be said that the compe- tency of this Commission to take jurisdiction of this claim cannot be denied under the authority to settle and adjust amicably all claims of citizens of Chile and of the United States against the Government of either country. "The demurrer filed by the Agent of the respondent Government is therefore overruled. "The Commissioner of Chile concurs with his honorable colleagues in the foregoing decisions in so far as it establishes the responsibility of the Government for the acts of its agents, but does not accept, without certain limitations, the last point in said decision. " (Signed.) Alfred de Claparede, President. " (Signed.) Domingo Gana, Commissioner on the part of Chile. "(Signed.) John Goode, Commissioner on the part of the United States." (Moore's Int. Arb. Dig. Vol. 4, p. 3570.) The decision here given was promptly accepted by the Govern- ment of the United States as legal and binding and the award therein made was satisfied. This decision has since this time constituted a precedent for the decision of at least one other case in an international arbitration. In the case of John D. Metzger & Co. v. Haiti, arbitrated under a Protocol of Arbitration signed October 18, 1899, Judge William R. Day, the arbitrator in the case, in the course of his opinion, discussed this question in the following language: Sub-Point c] The Case of the United States. 31 1 "It appears from the diplomatic correspondence that the atten- tion of the Haitian minister at Washington having been called to the claim of Metzger & Co., as to the inadequate water supply for the mill, the minister at once gave assurances that Metzger & Co.'s grievances in that behalf should be adjusted on an equitable basis. On the 3rd of June, 1898, Mr. Leger, the Minister of Haiti at Wash- ington, in answer to a note from the Secretary of State of the United States at Port au Prince reported Metzger & Co.'s Mill still deprived of water, said in his note: '"In reply, I must not fail to confirm what I had the honoi' to state to you in an interview of the 2nd instant. According to the agreement reached with the solicitor of the Department, I informed my Government of Mr. Metzger's grievances, and the Secretary of State of foreign relations recently wrote to me that the matter had been settled within twenty -four hours.' "Afterwards the attention of the minister of Haiti at Washington being called to this agreement, he assured the State Department that it had been attended to for some time. An investigation shows that the honorable minister was laboring under a misapprehension in this regard. A visit was made to the Metzger estabUshment by the Mayor of the commune, who reported that water was furnished to the satisfaction of Mr. Metzger. Doubtless this report misled the minister. An investigation made by Minister Powell shows that there was very little water and the supply at that time was entirely inadequate. Until January, 1899, no successful attempt was made to carry out the contract. I am of the opinion that this arrange- ment agreeing to settle Metzger & Co.'s grievances, promptly accepted by the Secretary of State for foreign relations of Haiti, followed by the assurance of the secretary, conveyed by the minister to the State Department at Washington, that the matter had been settled within twenty-four hours, constituted a diplomatic agreement between the two countries which, upon settled principles of inter- national law, should have been carried into effect. It is claimed, on the part of the Government of Haiti, that this correspondence amounted only to an agreement on the part of Haiti to use its good offices with the commune of Port au Prince. I am of opinion that it amounted to much more than that. When the grievance was called to the attention of the minister at Washington, and through him reported to the secretary, no claim was made that the commune alone was responsible, and no attempt was made to limit the authority or responsibility of the Government. On the contrary, the minister and secretary promptly assumed responsibility for the grievance and assured the Government at Washington that it had been rectified. It cannot be that good faith is less obligatory upon nations than upon individuals in carrying out agreements. It is now strenuously urged that the Government of Haiti had no authority over the commune of Port au Prince, and must, in its relations with the commune, have limited its interference to friendly advice and suggestions. I do not understand that the limitations upon official authority, undisclosed at the time to the other government, prevent the enforcement of diplomatic agreements. The question came before the Chilean claims commission created by the convention of August 7, 1892, between the United States and Chile, in which a claim was made upon a contract entered into by the United States 312 United States vs. Chile. — Alsop Claim. [Point iii. Minister in Chile, in making which the Government of the United States claimed the minister had no authority and denied responsi- bility, claiming further that the agreement was in violation of the statutes of the United States, and that the plaintiff had a remedy in the United" States courts. The commission decided unanimously that it was immaterial whether the minister had exceeded his author- ity or not, as he had made the promise as the representative of the United States in the name of his Government, which, according to the rules of responsibility of governments for acts performed by their ■ agents in foreign countries, can not be repudiated. In the present case there is no claim that the minister was unauthorized to make the diplomatic representations stated. On the contrary, he was only carrying into effect the instructions of his Government. The learned commission referred, in support of their decisions, to Calvo Dictionaire de Droit International, Volume II, page 170, and Calvo Dictionaire International, Volume I, section 417; Moore's Digest International Arbitration, volume 4, pages 3569-3571. Nor is there any more avail in the argument that the remedy of Metzger & Co. is to be sought in the courts of Haiti against the commune. Even had Metzger & Co. such a right, this would not affect the right to arbi- trate the claim as has been done in this case. By the terms of the protocol the arbitrator is competent to take jurisdiction of the claim so far as the liability of the Government of Haiti is concerned (4 Moore International Arbitration, p. 3571). This view of the case renders it unnecessary to determine whether, as is claimed in argu- ment, the communal authorities are merely the agents of Haiti or whether, as contended by the minister of Haiti, the Government of Haiti had entirely made over the water works to Port au Prince, which alone received the revenues and managed its affairs. A dip- lomatic arrangement fairly and honorably entered into should in my judgment, be carried into effect. I have already stated what, in my opinion, Were the rights of Metzger & Co. under the arrange- ment made with the commune to supply them with water. This is the arrangement which should have been carried into effect. It should have been carried out by the Government of Haiti upon the I'esponsibility assumed by it. Because of the failure to give them an adequate supply of v/ater Metzger & Co.'s mill was compelled to remain idle, partially for a time and afterwards to entirely suspend operations. Much of the claim for alleged damages on behalf of complainant can not be allowed. The items showing remote and speculative damages do not directly result from the breach of the agreement. The claimants are entitled to compensation for loss of the use of the mill in whole or in part during the time in which they were unable to operate it by reason of the failure to furnish water and its impaired usefulness when an adequate supply was furnished to them. I am of opinion that damages fairly recoverable in a case of this kind will be compensated by the payment to Metzger & Co. by the Government of Haiti of the sum of $15,000." (Foreign Rela- tions, 1901, p. 270.) It would appear that not without reason did Judge Day, in the Metzger case, press so vigorously upon the matter of the sanctity of what he termed a "diplomatic agreement." Some Sub-Point c] The Case of the United States. 313. of the earliest writers upon international law discussed with some fullness the question of the good faith which must obtain between nations. Vattel, in his "Law of Nations," discussed this general subject in the following language: "§163. It is a settled point in natural law, that he who has made a promise to any one, has conferred upon him a real right to require the thing promised, — and, consequently, that the breach of a perfect promise is a violation of another person's right, and as evidently an act of injustice as it would be to rob a man of his property. The tranquility, the happiness, the security, of the human race, wholly depend on justice, — on the obligation of pay- ing a regard to the rights of others. The respect which others pay to our rights of domain and property constitutes the security of our actual possessions; the faith of promises is our security for things that cannot be delivered or executed upon the spot. There would no longer be any security, no longer any commerce between mankind, if they did not think themselves obliged to keep faith with each other, and to perform their promises. This obligation is, then, as necessary as it is natural and indubitable, between nations that^ive together in a state of nature, and acknowl- edge no superior upon earth, to maintain order and peace in their society. Nations, therefore, and their conductors, ought inviola- bly to observe their promises and their treaties. This great truth, though too often neglected in practice, is generally acknowledged by all nations: the reproach of perfidy is esteemed by sovereigns a most atrocious affront; yet he who does not observe a treaty, is certainly perfidious, since he violates his faith." (Vattel's Law of Nations, p. 196.) > "§164. As the engagements of a treaty impose on the one hand a perfect obligation, they produce on the other a perfect right. The breach of a treaty is therefore a violation of the perfect right of the party with whom v^e have contracted; and this is an act of injustice against him." (Vattel's Law of Nations, p. 196.) " §207. * * But public persons, by virtue of their office or of the commission given to them, have also themselves the power of making conventions on public affairs, exercising on those occasions the right authority of the sovereign by whom they are commissioned. There are two modes in which they acquire that power; — ^it is given to them in express terms by the sovereign : or it is naturally derived from their commission itself, — the nature of the affairs with which these persons are entrusted, requiring that they should have a power to make such conventions, especially in cases where they cannot await the orders of their sovereign." (Vattel's Law of Nations, p. 217.) ***** "§215. When a lawful power contracts in the name of the state, it lays an obligation on the nation itself, and consequently on all the future rulers of the society. When, therefore, a prince has the power to form a contract in the name of the state, he lays an obU- gation on all his successors; and these are not less bound than him- self to fulfill his engagements." (Vattel's Law of Nations, p. 225.) 314 United States vs. Chile. — Alsop Claim. [Point iii. It is unnecessary to say that the rules and principles thus laid down by Vattel have usually been considered by sovereign states as expressing the rules of conduct which, as to the matters involved, should be always observed between them. If nations are to live in harmony and goodf ellowship ; if equity and justice are to govern their relations ; if mutual respect is to obtain between and among them; if the society of nations is to be more than a hope; and' if peace and good will are to become the sovereign rulers of the world — then it must be, as laid down by Vattel, that each and every nation must be guided in all its dealings by such principles, a universal adherence to which by all the leading nations of the world is the fruition of the highest aspirations which civilization has developed; and, further, all nations must, as an initial pre- liminary and indispensable corollary to this attitude, stand for a scrupulous adherence to and full performance of each and every international promise and obligation, and it must in justice be said that no nation has more frequently asserted that these high principles should control the intercourse of States than has the Government of Chile. POINT IV. THE CLAIMANTS IN THIS CASE HAVE SUFFERED, BY REASON OF THE VrOLATION BV the government of CHILE OF THE CONTRACT OF DECEMBER 26, 1876, NEGOTUTED AND CONCLUDED BY AND BETWEEN THE GOVERNMENT OF BOLIVIA ON THE ONE SIDE AND JOHN WHEEL- WRIGHT ON THE OTHER, DAMAGES IN THE AMOUNTS HEREINAFTER SET FORTH, SAID DAMAGES ARISING FROM AND HAVING THEIR ORIGIN IN BOTH TORT AND CONTRACT, AND HAVE ALSO SUFFERED THE LOSS,^ PRINCIPAL AND INTEREST, OF THE DEBT RECOGNIZED AS DUE AND PAYABLE UNDER THE CONTRACT, UPON BOTH OF WHICH ACCOUNTS (TORT AND CONTRACT), AND FOR THE AMOUNTS HEREIN NAMED AND SET FORTH, THE CLAIMANTS PRAY JUDGMENT. Before proceeding to the discussion of the quantum of damages, including the contract debt, which the Government of the United States contends is due and payable in this case, it is convenient to discuss the following propositions: (i) Interest should be paid upon claims presented on behalf of its citizens by one government to another government; (2) the quantum of the obligations, tort and contract, should be computed and determined by the actual and precise value and extent of the loss at the time such loss occurred, such loss to be expressed in coins of a known standard value, and such obligations so arising must be satisfied by the payment of an undebased or undepreciated currency, or if by pay- ment of a debased or depreciated currency, then with an increase proportionate to the amount of debasement or depreciation; (3) the costs of litigation in suits resulting in a denial of justice should be regarded as proper elements in the claim for damages : Considering these in their turn : (j) Interest should he paid upon claims presented on behalf of its citizens by one government to another government. It is the contention of the Government of the United States that since the losses in this case have been suffered by reason of the tortious acts of the Government of Chile, that Government, being a wrongdoer, must not only reimburse the claimants for the actual money loss sustained at the time the loss was incurred, but as a tort feasor it must also pay upon such losses so suffered a fair 315 3i6 United States vs. Chile. — Alsop Claim. [Point iv. and equitable rate of interest from the date when the loss occurred to its settlement. The Government of the United States contends that every principle of justice and fair dealing in such cases requires the payment of a fair rate of interest to the concessionaries in the present case. Feeling that this contention is one of such self-evident justice and equity that it requires no extended argument, the Govern- ment of the United States will content itself by the citation of a few authorities and by setting forth a few of the precedents (in many of which it has been concerned), showing that interest is in such instances due and payable, as these instances have been collected and set forth in a report of "The Committee on Appropriations [of the House of Representatives] to whom was referred the bill (H. R. 2189) 'to provide for the payment of the award made by the Senate of the United States in favor of the Choctaw Nation of Indians, on the 9th day of March, 1859.' " This report reads in part as follows : "THE OBLIGATION TO PAY INTEREST ON THE AMOUNT AWARDED THE CHOCTAW NATION. "Your committee have given this question a most careful exami- nation, and are obliged to admit and declare that the United States cannot, in equity and justice, nor without national dishonor, refuse to pay interest upon the money so long withheld from the Choctaw Nation. Some of the reasons which force us to this conclusion are as follows: "6. By the principles of the public law, interest is always allowed as indemnity for the delay of payment of an ascertained and fixed demand. There is no conflict of authority upon this question among the writers on public law. "This rule is laid down by Rutherford in these terms: "'In estimating the damages which any one has sustained, when such things as he has a perfect right to are unjustly taken from him, or wiTHHOLDEN, or intercepted, we are to consider not only the value of the thing itself, but the value likewise of the fruits or profits that might have arisen from it. He who is the owner of the thing is likewise the owner of the fruits or profits. So that it is as properly a damage to be deprived of them, as it is to be deprived of the thing itself.' (Rutherford's Institutes, Book I, chap. 17, sec. 5.) "In laying down the rule for the satisfaction of injuries in the case of reprisals, in making which the strictest caution is enjoined not to transcend the clearest rules of justice, Mr. Wheaton, in his work on the law of nations,^ says: " ' If a nation has taken possession of that which belongs to another, IF IT REFUSES TO FAY A DEBT, to repair an injury, or to give adequate satisfaction for it, the latter may seize something of the former and apply it to [his] its advantage, till it obtains payment of what is Point IV.] The Case of the United States. 317 due, together with INTEREST and damages.' (Wheaton on Inter- national Law, p. 341.) "A great writer, Domat, thus states the law of reason and justice on this point: " ' It is a natural consequence of the general engagement to do wrong to no one, that they who cause an);^ damages, by failing in the per- formance of that engagement, are obliged to repair the damage which they have done. Of what nature soever the damage may be, and from what cause soever it may proceed, he who is answerable for it ought to repair it by an amende proportionable either to his fault or to his offense, or other cause on his part, and to the loss which has happened thereby.' (Domat, Part I, Book III, Tit. V, 1900, 1903.) "'Interest' is in reality, in justice, in reason, and in law, too, a part of the debt due. It includes, in Pothier's words, the loss which one has suffered, and the gain which he has failed to make. The Roman law defines it as 'quantum mea interfruit; id est, quantum mihi abest, quantumque lucraci potui.' The two elements of it were termed 'lucrum cessans et damnum emergens.' The payment of both is necessary to a complete indemnity. "Interest, Domat says, is the reparation or satisfaction which he who owes a sum of money is bound to make to his creditor for the damage which he does him by not paying him the money he owes him. " It is becaus.e of the universal recognition of the justice of paying, for the retention of moneys indisputably due and payable immedi- ately, a rate of interest considered to be a fair equivalent for the loss of its use, that judgments for money everywhere bear interest. The creditor is deprived of this profit, and the debtor has it. What greater wrong could the law permit than that the debtor should be at liberty indefinitely to delay payment, and, during the delay, have the use of the creditor's moneys for nothing? They are none the less the creditor's moneys because the debtor wrongfully withholds them. He holds them, in reality and essentially, in trust; and a trustee is always hound to pay interest upon moneys so held. "In closing these citations from the public law, the language of Chancellor Kent seems eminently appropriate. He says: 'In cases where the principal jurists agree, the presumption will be very great in favor of the solidity of their maxims, and no civilized nation that does not arrogantly set all ordinary law and justice at defiance will venture to disregard the uniform sense of established writers on inter- national law.' "7th. The practice of the United States in discharging obligations resulting from treaty-stipulations has always been in accord with these well-established principles. It has exacted the payment of interest from other nations in all cases where the obligation to make payment resulted from treaty-stipulations, and it has acknowledged that obligation in all cases where a like liability was imposed upon it. "The most important and leading cases which have occurred are those which arose between this country and Great Britain: the first under the treaty of 1794, and the other under the first article. of the treaty of Ghent. In the latter case the United States, under the first article of the treaty, claimed compensation for slaves and other property taken away from the country by the British forces 3i8 United States vs. Chile.— Alsop Claim. [Point iv. at the close of the war in 1 815. A difference arose between the two governments, which was submitted to the arbitrament of the Emperor of Russia, who decided that 'the United States of America are entitled to a just indemnification from Great Britain for all private property carried away by the British forces.' A joint commission was appointed for the purpose of hearing the claims of individuals under this decision. At an early stage of the pro- ceedings the question arose as to whether interest was a part of that 'just indemnification' which the decision of the Emperor of Russia contemplated. The British commissioner denied the obligation to pay interest. The American commissioner, Langdon Cheves, insisted upon its allowance, and, in the course of his argument upon this question, said: "'Indemnification means a re-imbursement of a loss sustained. If the property taken away on the 17th of February, 181 5, were returned now uninjured it would not re-imburse the loss sustained by the taking away and consequent detention; it would not be an indemnification. The claimant would still be unindemnified for the loss of the use of his property for ten years, which, considered as money, is nearly equivalent to the original value of the principal thing.' "Again he says: '"If interest be an incident usually attendant on the delay of payment of debts, damages are equally an incident attendant on the withholding an article of property.' "In consequence of this disagreement, the commission was broken up, but the claims were subsequently compromised by the payment of $1,204,960, instead of $1,250,000, as claimed by Mr. Cheves; and of the sum paid by Great Britain, $418,000 was expressly for interest. "An earlier case, in which this principle of interest was involved, arose under the treaty of 1794 between the United States and Great Britain, in which there was a stipulation on the part of the British government in relation to certain losses and damages sustained by American merchants and other citizens, by reason of the illegal or irregular capture of their vessels, or other property, by British cruisers; and the seventh article provided in substance that 'full and complete compensation for the same will be made by the British government to the said claimants.' "A joint commission was instituted under this treaty, which sat in London, and by which these claims were adjudicated. Mr. Pinckney and Mr. Gore were commissioners on the part of the United States, and Dr. Nicholl and Dr. Swabey on the part of Great Britain; and it is believed that in all instances this commission allowed interest as a part of the damage. In the case of The Betsey, one of the cases which came before the board, Dr. Nicholl stated the rule of compensation as follows : "'To re-imburse the claimants the original cost of their property, and all the expenses they have actually incurred, together with interest on the whole amount, would, I think, be a just and ade- quate compensation. This, I believe, is the measure of compensa- tion usually made by all belligerent nations, and accepted by all neutral nations, for losses, costs, and damages occasioned by illegal Point IV.] The Case of the United States. 319 captures.' {Vide Wheaton's Life of Pinckney, p. 198; also p. 265, note; and p. 371.) "By a reference to the American State Papers, Foreign Relations, vol. 2, pages 119, 120, it will be seen by a report of the Secretary of State of the i6th February, 1798, laid before the House of Repre- sentatives, that interest was awarded and paid on such of these claims as had been submitted to the award of Sir William Scott and Sir John Nicholl, as it was in all cases by the board of commis- sioners. In consequence of some difference of opinion between the members of this commission, their proceedings were suspended until 1802, when a convention was concluded between the two governments, and the commission re-assembled, and then a question arose as to the allowance of interest on the claims during the sus- pension. This the American commissioner claimed, and though it was at first resisted by the British commissioners, yet it was finally yielded, and interest -was allowed and paid. (See Mr. King's three letters to the Secretary of State, of 25th March, 1803, 23d April, 1803, and 30th April, 1803, American State Papers, Foreign Rela- tions, vol. 2, pp. 387, 388.) "Another case in which this principle was involved arose under the treaty of the 27th October, 1795, with Spain; by the twenty-first article of which, 'in order to terminate all differences on account of the losses sustained by citizens of the United States in consequence of their vessels and cargoes having been taken by the subjects of His Catholic Majesty during the late war between Spain and France, it is agreed that all such cases shall be referred to the final decision of commissioners, to be appointed in the following manner,' &c. ; the commissioners were to be chosen, one by the United States, one by Spain, and the two were to choose a third, and the award of the commissioners, or any two of them, was to be final, and the Spanish government to pay the amount in specie. This commission awarded interest as part of the damages. (See American State Papers, vol. 2, Foreign Relations, p. 283.) So in the case of claims of American citizens against Brazil, settled by Mr. Tudor, United States minister, interest was claimed and allowed. (See Fx. Doc. No. 32, first session Twenty-fifth Congress, House of Representatives, p. 249.) "Again, in the convention with Mexico of the nth of April, 1839, by which provision was made by Mexico for the payment of claims of American citizens for injuries to persons and property by the Mexican authorities, a mixed conamission was provided for, and this commission allowed interest in all cases. (House Fx. Doc. No. 291, Twenty-seventh Congress, second session.) "So also under the treaty with Mexico of Feburary 2, 1848, the board of commissioners for the adjustment of claims under that treaty allowed interest in all cases from the origin of the claim until the day when the commission expired. " So, also, under the convention with Colombia, concluded Febru- ary 10, 1864, the commission for the adjudication of claims under that treaty allowed interest in all cases as a part of the indemnity. "So under the recent convention with Venezuela, the United States exacted interest upon the awards of the commission, from the date of the adjournment of the commission until the payment of the awards. 320 United States vs. Chile. — Alsop Claim. [Point iv. "The Mixed American and Mexican Commission, now in session here, allows interest in all cases from the origin of the claim, and the awards are payable with interest. "Other cases might be shown, in which the United States, or their authorized diplomatic agents, have claimed interest in such cases, or where it has been paid in whole or in part. (See Mr. Russell's letters to the Count de Engstein, of October 5, 1818, American State Papers, vol. 4, p. 639, and Proceedings under the Convention with the Two Sicilies of October, 1832, Elliot's Diplo- matic Code, p. 625.) "It can hardly be necessary to pursue these precedents further. They sufficiently and clearly show the practice of this Government with foreign nations, or with claimants under treaties. "8th. The. practice of the United States in its dealings with the various Indian tribes or nations has been in harmony with these principles. "In all cases where money belonging to Indian nations has been retained by the United States, it has been so invested as to produce interest, for the benefit of the nation to which it belongs; and such interest is annually paid to the nation who may be entitled to receive it. Other writers upon this question have similarly expressed them- selves in connection with the question of interest in matters of international indemnification. Mr. J. C. Bancroft Davis, in his "Notes upon the Foreign Treaties of the United States (See Trea- ties and. Conventions between the United States and Other Powers, 1776-1887, pp. 1227-1229), in speaking of the w^ell-established. policy of the United States "to settle international disputes and individual claims by arbitration when possible" under claims con- ventions and treaties, says: "Many of these treaties have been the subject of consideration and construction by the Attorneys General and the courts of the United States. The following are some of the main points of general construction which have been determined. "XII. Interest, according to the usage of nations, is a necessary part of a just national indemnification." Phillimore in his work on International Law (Vol. IV, pp. 577, 583, 3d Edition) says: "DCCXIV. As to interest, the jurists generally speak of three kinds, viz. : "i. Interest naturally incident to the contract, either by express or implied stipulation, not founded on any wrongful act of a party (inter^t). "ii. Interest due for the non-performance of the contract, which the English call damages, and the French dommages-interets. "Hi. Interest, [or 'demurrage'] due from delay in the due per- formance of the contract, founded therefore on the wrongful act of a party, which the French call interets moratoires" Point iv.i The Case of the United States. 321 "DCCXX. The right to damages arises also from wrong done to property, that is, in this branch of Private International Law, to personal propefrty, or ex delicto, perhaps more properly ex maleficio. Thus, if a ship in foreign or colonial waters be wrongfully seized or appropriated, the interest of that locality will be allowed by way of damages against the wrongdoer." Story, in his work on the Conflict of Laws, p. 424 (8th Edition) makes upon this subject the following comments: "Analagous to the rule respecting interest would seem to be the rule of damages in cases of contract, where damages are to be recov- ered for a breach thereof ex mora, or where the right to damages arises ex delicto, from some wrong or injury done to personal prop- erty. Thus if a ship would be illegally or tortiously converted in the East Indies by a party, the interest there will be allowed by way of damages in a suit against him. So the rate of damages on a dis- honored bill of exchange will be according to the lex loci contractus of the particular party." Other international tribunals than those cited above have also held that interest was due and payable upon international claims. Protocol 29 of the Geneva Arbitration regarding the proceedings of September 2, 1872 states: "Count Sclopis, as President of the Tribunal, acknowledged the receipt, by the arlaitrators, of the note presented by the Agent of Her Britannic Majesty on the question of interest, and of the reply to the same, presented by the Agent of the United States. "The Tribunal then proceeded to consider that question, and a majority of forty-one decided that interest should be admitted as an element in the calculation for the award of a sum in gross." (Papers Relating to the Treaty of Washington, Vol. IV, p. 44) The principle here announced was afterwards followed in dis- tributing among the individual claimants the lump sum awarded by the Geneva Convention. (Moore's Int. Arb., Vol. 4, p. 4241.) See also upon this same point United States and Venezuelan Claims Commission, 1 889-1 890, Opinions delivered by the Com- missioners, p. 194, regarding the allowance of 6 per cent interest in the Idler claim. The Commission appointed by the Powers upon the question of indemnities for injuries suffered as the result of the Boxer uprising in China in tqoo provided in Resolution 5 (II) as follows: "(II) The amount of the indemnities can not in any case be augmented by interest at more than 5 per cent on personal claims and 7 per cent on commercial claims. Interest can only be allowed if it represents a loss actually incurred, and which shall have been proved in accordance with Article VII, given below. It will be 40898 — 10 2 1 322 United States VS. Chile. — Alsop Claim. [Point iv calculated from the day on which the wrong entitling the compensation took place." (For. Rel. 1901, Appen. p. 107 Commissioner Rockhill's Report, Nov. 30, 1901) Under the convention of 1858 between the United States and China for the adjustment of claims of citizens of the United States against China, the Commissioners stated in the final record of their proceedings, that — "The commissioners agreed, after consultation, that it was desira- ble to place on record the fact that interest has been allowed to the claimants at the liberal rate of 12 per cent, per annum, in considera- ^ tion of the circumstance that there will be some delay in making payment of the amounts awarded ; and it is further to be distinctly understood that the allowance of interest made in the awards, sev- erally, is absolutelj' final, and no more interest is to be allowed in any manner or upon any consideration whatever." (The Caldera Cases, 15 Ct. CI., pp. 546-580) The British courts have followed the- same rule wherever they have been called upon to pass upon international obligations. For example : in the case of Elkins v. East India Company [i 7 1 7], (i P. Wms. pp. 395, 396) the court in making a per curiam deci- sion said: "If a man has my money by way of loan, he ought to answer interest; but if he retains my money from me wrongfully he ought a fortiori to answer interest. (See Pearse v. Green, i J. & W. 135. Treves V. Townsend, 1 Cox, 50). And it is still stronger, where one by wrong takes from me either my money or my goods which I am trading with, in order to turn them into money." It is submitted that in the face of these numerous expressions of text-writers and of the uniform practice of international tri- bunals as set forth above, as well as under the rulings of the national courts of the two countries it cannot be doubted that the law and the equity of this situation requires the payment of interest upon the various accounts hereinafter set forth: {2) The quantum of the obligations, tort and contract, should be computed and determined by the actual and precise value and extent of the loss at the time such loss occurred, such loss to be expressed in coins of a known standard value, and such obligations so arising must be satisfied by the payment of an undebased or undepreciated currency, or if by payment of a debased or depreciated currency, then with an increase proportionate to the amount of debasement or depreciation. Concerning the tort claim. — The Government of the United States contends and insists that where the situation involves a dealing with constantly depreciating currency, the true way in which to Point IV.] The Case of the United States. 323 gauge the amount for which the sovereign tort feasor is Uable in any given case is to compute the- actual and precise value of the claim, at the time the loss occurred, in currency of a permanent and standard value, such actual loss to be regarded as the basis of the obligation imposed upon the sovereign by his tort. For example, if a sovereign should tortiously confiscate property (be- longing to a neutral alien) worth a thousand national units, of a face value of one hundred cents each, but of a real value of but fifty cents gold each, the real value of the obligation which such a tortious act would impose upon the sovereign would be not one thousand dollars gold, but five hundred dollars gold of standard coinage; and if the sovereign tort feasor should omit or neglect to pay and satisfy such obUgation within a reasonable time, this five hundred dollars gold standard value should draw interest at an appropriate rate. ' Moreover, to carry this illustraition further, if after twenty ypars the sovereign tort feasor finally undertook to discharge this original obligation of five hundred dollars gold of standard coinage with an appropriate interest, say 6 per cent, he could not meet such obligation by paying one thousand dollar bills or coins when such dollar bills or coins while on their face worth one hundred cents were, on account of depreciation, worth but twenty-five cents of standard coinage. In such a case the obligation of the sovereign tort feasor, if met in his depreciated currency, must be met by the payment, not of one thousand of his dollar bills or coins, but by four thousand of such bills or coins actually worth but twenty- five cents each in coins of standard value, with such additional sum as might be necessary to meet the interest. It is believed to be unnecessary to enter into any extended argument upon either the equity and justice or of the law covered by the above propositions. Indeed, it seems too clear for argu ment that, under the hypothetical circumstances above set forth, the amount of which the alien resident has been deprived by the sovereign tort feasor is the actual value of the money taken by the tort feasor, estimated in a coin of standard value at the time the money was taken. All commercial transactions are based upon this fundamental principle of right and justice. A merchant of a country having a depreciated currency purchasing goods from a country having a standard currency pays for such goods, not with his own depreciated currency, but with the standard currency of the country of the vendor; or if payment is made with a 324 United States vs. Chile. — Alsop Claim. [Pointiv. depreciated currency, then with an increase of such currency pro- portionate to the percentage of depreciation. Commercial trans- actions between individuals of different countries would be abso- lutely impossible upon any other theory. As to the second proposition, regarding the payment in a depreciated or debased currency of a debt the actual value of which has been estimated as above set forth, it should be said that the courts of England have time and again recognized the equity, under such circumstances as exist in this case, of paying debts in a currency undebased and undepreciated, or if in a currency debased or depreciated then with a proportionate increase. Upon this point, attention is called to the expression of text- writers and courts, who are clear in the announcement of the doctrine above set forth. PhilHmore, in his work on International Law, Vol. 4, p. 583 et. seq. (3rd ed.), makes upon this subject the following comments: "DCCXXI. A question often mooted, and not very satisfactorily or consistently settled either by the English or the United States tribunals, arises with respect to the value of the:, currency by which the amount of a debt, which has been contracted in one country and is sued for in another, is to be ascertained. "The following predicaments appear to embrace the cases which arise under this head : "(i) Where the par value [or rate of exchange] between the cur- rencies of the two countries is nominal or established by law. " (2) Where there is no established par. " (3) Where the debt has been contracted to be paid in a par- ticular specified coin. "(4) Where the currency, between the time when the debt was contracted or became due, and the time of actual payment, has suffered a depreciation in value." "DCCXXIV. The fourth predicament relates to the depreciation of money between the time when the debt was contracted or due, and the time when it is actually paid ; Nobilissima quaestio, as it has been not improperly designated. "This question may present itself in two very different forms: "i. As a case of international Law arising ex delicto of a wrong- doer, whether a state or an individual. "ii. As a case of international Law arising out of a contract between individuals, the subjects of or domiciled in different states, or from the dispositions of a unilateral act, such as a will or deed executed by an individual who is a subject of or domiciled in one state, which affects the rights of an individual who is a member of or domiciled in another state. "DCCXXV. As to the case of a wrongdoer, it has no analogy, as Sir William Grant observed, to the case of creditor or debtor; the obligation on the wrongdoer, he he a government or an individual, pointiv.] The Case of the United States. 325 is to undo the wrong act and put the party into the same situation as if he had never done it." See also the following paragraph DCCXXVI. In the opinion by Sir William Grant {Pilkington v. Commis- sioners for Claims on France, II Knapp, 12), to which reference is made by Phillimore, the learned Master of the Rolls expressed himself as follows: "The Treaty of 18 14 provides, generally, a compensation for all losses that British subjects may have sustained by the confiscation or sequestration of their debts, without distinguishing whether those debts were originally due from the French Government or from private subjects. It is impossible to assign a reason why, if the French Government seized the debts of one British subject and the goods of another British subject, it should make a compensation for the goods, but make no compensation on account of the debt. * * * "It is hardly possible, perhaps, that sequestration for fifteen months should not have been productive of some loss to a creditor; but a question has been discussed at the bar, how much another species of loss, which had accrued from a depreciation of assignats from the passing of the decree to the repeal of it, is to be charged to the French Government. That question is not directly brought before us by the adjudication of the Commissioners; but as it has been discussed at the bar, it may be better, to prevent future contro- versy, to say a word upon it. * * * "Great part of the argument at the bar would undoubtedly go to show that the Commissioners have acted wrong in throwing that loss upon the French Government in any case; for they resemble it to the case of depreciation of currency happening between the time that a debt is contracted and the time that it is paid; and they have quoted authorities for the purpose of showing that in such a case the loss must be bprne by the creditor, and not by the debtor. That point it is unnecessary for the present purpose to consider, though Vinnius, whose authority was quoted the other day, certainly comes to a con- clusion directly at variance with the decision in Sir John Davis's Reports (case of Mixt Monies, Sir J. Davis, p. 26, 6th Resolution of Judges); he takes the distinction, that if between the time of con- tracting the debt and the time of its payment the currency of the country is depreciated by the State, that is to say, lowered in its intrinsic goodness, as if there were a greater proportion of alloy put into a guinea or a shilling, the debtor should not liberate himself by paying the nominal amount of his debt in the debased money; that is, he may pay in the debased money, being the current coin, but he must pay so much more as would make it equal to the sum he bor- rowed; but he says, if the nominal amount of the currency, leaving it unadulterated, were to be increased, as if they were to make the guinea pass for 30s., the debtor may liberate himself from a debt of £1 I OS. by paying a guinea, although he had borrowed the guinea when it was but worth 21s. I have said it is unnecessary to con- sider whether the conclusion drawn by Vinnius, or the decision in Davis's Reports, be the correct one; for we think this has no analogy 326 United States vs. Chile. — Alsop Claim. [Point iv. to the case of creditor and debtor. There is a wrong act done by the French Government; then they are to undo that wrong act, and to put the party into the same situation as if they never had done it. It is assumed to be a wrong act, not only in the treaty, but in the repealing decree; they justify it only with reference to that which, as to this country, has a false foundation; namely, on the ground of what other governments had done towards them; they having con- fiscated the property of French subjects, therefore, they say, we thought ourselves justified at the time in retaliating upon the sub- jects of this country. That being destitute of foundation as to this country; the Republic themselves, in effect, confess that no such decree ought to have been made, as it affected the subjects of this country; therefore it is not merely the case of a debtor paying a debt at the day it falls due, but it is the case of a wrong doer, who must undo, and completely undo, the wrongful act he has done; and if he has received the assignats at the value of sod. he must not make compensation by returning an assignat which is worth only 2od. ; he must make up the difference between the value of the assignats at different periods. And that is the case stated by Sir John Davis (Sir J. Davis, p. 27), where restitutio in integrum is stated. He says, two cases were put by the Judges who were called to the assistance of the Privy Council, although they were not positively and formally resolved: he says, it is said if a man upon marriage receive £1000 as a portion with his wife, paid in silver money, and the marriage is dissolved causa praecontractus, so that the portion is to be restored in equal good silver money, though the State shall have depreciated the money in the mean time. So, if a man recover £100 damages, and he levies that in good silver money, and that judgment is after- wards reversed, by which the party is put to restore back all he has received, the judgment-creditor cannot liberate himself by merely restoring £100 in the debased currency of the time, but he must give the very same currency that he had received. That proceeds upon the principle, that if the act is to be undone, it must be completely undone, and the party is to be restored to the situation in which he was at the time the act to be undone took place. Upon that prin- ciple, therefore, undoubtedly the French Government, by restoring assignats at the end of 13 months, did not put the party in the same situation in which he was when they took from him assignats that were of a very different value." While the above remarks of the Master of the Rolls were ad- mittedly dicta, the point seems actually to have been presented for determination in a later case {Johnston's Case, II Knapp, 336), in which the court delivered upon this question the following judgment: "And their Lordships are further of opinion, that the subsequent acceptance by Mr. Johnston of the assignats tendered to him by the French authorities in payment affords no answer to the present claim; for as that claim is founded, not upon any alleged breach of contract, but upon a wrong committed, those who did the wrong must (to adopt the language of Sir William Grant, in Pilkington's case [2 Knapp, at p. 19]) 'undo their wrong act, and put the party into the same situation as if they had never done it.' The partial Point IV.) The Case of the United States. 327 restitution afterwards made can only be considered as reducing the amount of the loss, not as altering the character of the wrong com- mitted or as a satisfaction for the injury sustained. But it has been argued, that the payment in this case having been made by and accepted from the Government itself, varies this case from the one referred to, and that such payment provided that, 'sont except^s des dispositions mentionn^es ci-dessus ceux des dits sujets de sa Majesty Britannique qui, en recevant leurs rentes au tiers apr^ le 30 September 1797, se sont soumis eux- themes auxlois existantes sur cette mati^re.' But their Lordships are of opinion that this case is not affected by that exception, which is expressly confined to one species of compromise, voluntarily entered into between the wrong- doer and the injured party. Whereas the payment in this case was neither made nor accepted by a compromise, but formed a part of the wrongful act itself, and in respect of which Mr. Johnston had as little freedom of choice as in the original drawing of the bill." The application of these principles to the tort side of the present case leads to the following conclusion : If, to put a supposititious case, the Government of Chile in 1881 required the concessionaries in this case to expend one thousand Chilean pesos worth 90 cents American gold to the peso, the amount of the loss suflered by the concessionaries by such a transaction would be $900 American gold, and the loss thus suffered could now be equitably met by the Chilean Government only by the payment by that Government of $900 American gold, plus a reasonable rate of interest from that date until the present. Accordingly, the accounts hereinafter stated have been prepared and stated upon this principle. Concerning the contract debt. — The estimation of the extent of the obligation imposed by the contract depends upon the same fundamental principles. By the sixth article of the resolution of December 24, 1876, it was provided that — "In all cases in which sums of money are paid or received, the Chilean peso or the Peruvian sol of stamped silver shall be considered equivalent to the Boliviano, either in this contract or in that regard- ing the mining concessions." Speaking of this provision of his contract, Mr. Wheelwright, in his letter of June 28, 1884, to the American Minister in Bolivia, said: "After repeated interviews with President Frias and the Ministers of Foreign Relations and Finance, I succeeded in securing a recog- nition in my favor of the sum of ($870,000) Eight hundred and seventy thousand Bolivianos (hard dollars) leaving open to legal recourse the claim for interest amounting to ($200,000) Two hundred thousand dollars, more or less. This agreement was duly executed between the contracting parties, under date of the eighth of Febru- ary 1876. 328 United States vs. Chile. — Alsop Claim. [Pointiv. "The reduction of the indemnity from $1,087,500 to the sum of 870,000 Bolivianos was occasioned by the word "pesos" (dollars) being tenaciously construed by that Government as "febles" (a depreciated coin), and this being demanded as an initiatory pro- ceeding, I was reluctantly forced to accede thereto. Interest for six months at the rate of eight per cent per annum was paid me in Government drafts, which were duly honored in this city. "But a brief period elapsed before the Frias Administration was overthrown and General Hilarion Daza became Provisional Presi- dent. Shortly after, quiet was restored and I returned to I^a Paz to watch the progress of events, remaining there for some months, until a Cabinet was organized under the new Government. "This being effected, I sought a conference with the Ministers of Foreign Relations and Finance, during which I was informed by the latter that the acts of the Frias Administration would not be recognized by that of Daza; that any contract of February preced- ing was null and void; and that, as a preliminary proceeding, the ($35,000) Thirty five thousand Bolivianos (hard dollars) received by me for interest must be refunded. These dissenting points were discussed at length and finding that no advancement could be made while same were pending, I was compelled to conform thereto, with the compromise, however that, instead of returning the ($35,000) ■ Thirty five thousand dollars (Bolivianos) in money that sum should be deducted from the principal, and under the dilemma in which I was placed, this seemed in every respect expedient. "Taking ($835,000) Eight hundred and thirty five thousand Bolivianos (hard dollars) as a basis of negotiation, and after pro- longed discussions, another contract was signed in due form on the twenty-sixth day of December, 1876, and this being the one referred to in the first page of this memorial as that actually binding, I take the liberty of accompanying for your government a translated copy thereof Marked A. Subsequently, administrative authorizations, in support of the "Estacas de Instruccion Publica", i. e., the Gov- ernment Silver Mines, were, at my solicitation, issued, but being sub- sidiary, I merely advert to same herein, although copies can be pre- sented, if deemed advisable. "As will be seen by perusal of the translated document alluded to, there exist two forms of security, from which payment is to be realized, the first and most important of which relates to Custom House revenue; and more especially so, as not having been able to induce Chile to give me undisturbed possession of the mines, in con- formity with the Bolivian decree of twenty third of December 1 876, only heavy expenses in maintenance of my rights instead of benefit have been the consequence of my efforts. "In view of these two pledges, not only entirely distinct, but affecting the territory of both Peru and Bolivia, I suggested to the Minister of Finance that separate decrees be made, and he yielded to my request after being urged, but I regret to say that the separa- tion of guarantees was not made with sufficient clearness as to treat them in the way desired." It will be observed that this contract by its words, and as understood by one Of the parties thereto, appears to provide for the payment of the silver boliviano, the silver Chilean peso, or Point IV.] The Case of the United States. 329 the Peruvian silver sol, each of which was to be considered as equivalent to the other for the purpose of the payment of this obligation. Should it be argued that the Government of Bolivia was enti- tled to pay this indebtedness in silver bolivianos and that if upon any particular payment the boliviano was worth less than its value at the date of the making of the contract, then and in that event the loss resulting from such depreciation should fall upon the holders of the contract debt, it should be observed in reply that there is not a httle law both in England and America going to the point that where a certain sum is, as in this case, recognized as due by a formal instrument, which sum by the tortious act of the debtor is not paid at the due day and payment is thereafter delayed, such sum must be paid in its full value if not of the date of the instrument then at the due date; and that if after the due day payment be offered in a depreciated currency then the creditor is entitled to a proportionate increase to make good the depreciation. In this connection it is perhaps sufficient to quote, in support of this proposition, from Story on the Conflict of Laws, where the opinions both of civil law and common law jurists are clearly set forth. At page 434, sec. 313, of the work just cited. Judge Story says: "Depreciation of Currency. The question toucliing the effect of a depreciation of the currency, between the time when the debt is contracted or it becomes due,, and the subsequent payment thereof, which was hinted at in the preceding case, has since arisen in a more direct and solemn form and undergone no inconsiderable discussion. The French government, during the war between England and France, had confiscated a debt due from a French subject to a British subject; and subsequently an indemnity was stipulated for on the part of the French government; and there having been a. great depre- ciation of the French currency after the time when the debt was con- fiscated, the question arose, whether the debt was to be calculated at the value of the currency at the time when the confiscation took place, or subsequently; and it was held that it ought to be calcu- lated at the time of the confiscation. On that occasion the case in Sir John Davies's Reports already alluded to, was referred to, as well as the opinion of foreign jurists on the subject: and Sir William Grant, in delivering the opinion of the court, said: 'Great part of the argument at the bar would undoubtedly go to show that the com- missioners have acted wrong in throwing that loss upon the French Government in any case, for they resemble it to the case of deprecia- tion of currency happening between the time that a debt is contracted and the time that it is paid; and they have quoted authorities for the purpose of showing that in such case the loss must be borne by the creditor and not the debtor. That point it is unnecessary for 330 Umted,States vs. Chile. — Alsop Claim. [Pointiv. the present purpose to consider, though Vinnius, whose authority was quoted the other day, certainly comes to a conclusion directly at variance with the decision in Sir John Davies's Reports. He takes the distinction that if, between the time of contracting the debt and the time of its payment, the currency of the country is depre- ciated by the State, that is to say,' lowered in its intrinsic goodness, as if there were a greater proportion of alloy put into a guinea or a shilling, the debtor should not liberate himself by paying the nominal amount of his debt in the debased money, that is, he may pay in the debased money, being the current coin, but he must pay so much more as would make it equal to the sum he bor- rowed. But he says if the nominal value of the currency, leaving it unadulterated, were to be increased, as if they were to make the guinea pass for 30s., the debtor may liberate himself from a debt of £1 los., by paying a guinea, although he had borrowed the guinea when it was but worth 2 IS. I have said it is unnecessary to consider whether the conclusion drawn by Vinnius or the decision in Davies's Reports be the correct one; for we think this has no analogy to the case of creditor and debtor. There is a wroiig act done by the French Government; then they are to undo that wrong act, and to put the party in the same situation as if they never had done it. It is as- sumed to be a wrong act, not only in the treaty, but in the repealing decree. They justify it only with reference to that which as to this country has a false foundation ; namely, on the ground of what other governments had done towards them, they having confiscated the property of French subjects ; therefore they say we thought ourselves justified at the time in retaliating upon the subjects of this country. That being destitute of foundation as to this country, the republic themselves in effect confess that no such decree ought to have been made, as it affected the subjects of this country. Therefore it is not merely the case of a debtor paying a debt at the day it falls due, but it is the case of a wrong-doer, who must undo, and completely undo, the wrongful act he has done; and if he has received the assignats at the value of 5od. he does not make compensation by returning an assignat which is only worth 2od. : he must make up the difference between the value of the assignat at different periods. And that is the case stated by Sir John Davies, where restitutio in integrum is stated. He says, two cases were put by the judges who were called to the assistance of the Privy Council, although they were not posi- tively and formally resolved. He says, it is said if a man upon marriage receive i,ooo£ as a portion with his wife, paid in silver money, and the marriage is dissolved causa praecontractus, so that the portion is to be restored, it must be restored in equal good silver money, though the state shall have depreciated the currency in the mean time. So if a man recover damages, and he levies that in good silver money and that judgment is afterwards reversed by which the party is put to restore back all he has received, the judgment creditor cannot liberate himself by merely restoring ioo£ in the debased currency of the time; but he must give the very same currency that he had received. That proceeds upon the principle that jf the act is to be undone it must be completely undone, and the party is to fee restored to the situation in which he was at the time the act to be undone took place. Upon that principle therefore undoubtedly the French government, by restoring assignats at the Point IV.) The Case of the United States. 331 end of thirteen months, did not put the party in the same situation in which he was when they took from him assignats that were of a very different value. We have said that, as this point is not directly or immediately before us, it can make no part in our decree. At the • same time it may not perhaps have been without some utility to have given an opinion upon it, inasmuch as it was argued and dis- cussed at the bar. And we think therefore the commissioners have proceeded on a perfectly right principle in those cases in which we understand they have made an allowance for the depreciation of paper-money; and, considering that this case does not differ from those in which they have made that allowance, we are of opinion that the claimants ought to have the same equity administered to them in remunerating them for the loss they have sustained.' (") "313 b. Foreign Jurists. The opinions of Vinnius and Pothier, alluded to in the opinion of Sir William Grant, fully confirm his statements. Vinnius is of opinion that the value of the money at the time when it ought to be paid is the value which is to be allowed to the creditor. Of the same opinion, he adds, are Bartolus and Baldus and De Castro, and indeed jurists generally, with the excep- tion of DumouUn and Hotomannus and Donellus, who think that the value at the time of making the contract ought to govern. Hence, after having discussed the principle, Vinnius says, in con- formity with the opinions of the former jurists : ' Hoc autem f unda- mento posito, siquidem neutri contrahentium injuriam fieri volum- nus, ita definiendum videtur, ut si bonitus monetae intrinseca mutara sit, tempus contractus, si extrinseca, id est valor imposititius, tempus solutionis in solutione facienda, spectari debeat.'* " {"■) Pilkington v. Commissioners for Claims, 2 Knapp 17-21. "6 Vinnius, ad Instit. lib. 3, tit. 15, Textus, De Mutuo, Com. n. p. 599, ed. 1726; id. p. 664, ed. 1777, 1/Ugduni. The whole passage deserves to be cited. " Atque hinc pendet decisio nobilissimae quaestionis, si post contractum aestimatio nummorum creverit aut decreverit, utrum in solutione facienda spectare opor- teat valorem, quem habebant tempore contractus, qn qui nunc est tempore solu- tionis : intellige si nihil, de ea re expresse dictum sit, neque mora intervenerit. Molinaeus, Hotomannus, Donellus contendunt, tempus contractus inspiciendum esse, if est, ea aestimatione nummos reddendos, non quae nunc est, sed quae initio fuit, cum debantur. Nimirum nihil illi in pecunia numerata praeter aestimationem considerandum putant, totamque nummi bonitatem in hac ipsa aestimatione consistere: ac proinde creditori non facere injuriam, qui eandem aestimationem, quam accepit, reddit: tantiun enim reddere eum, quantum accepit, quod ad solutionem mutui sit satis. Itaque secundum horum sententiam, si 100 aurei mutuo dati sint, cum aureus valebat asses 50 deddantur autera sum singuli valent asses 55 debitor reddens creditori aureos, 90 aut in singulos aureos 50 asses reddit, quantum accepit, it liberatur: et vicissim si iniminuta sit ad eundem modum accepit, et liberatur: et vicissim si imminuta sit ad eundem modum aureorum aestimatio, non liberatur, nisi reddat aureos no, aut in singulos aureos asses 55. Bartolus vero (in I. Paulus. loi de solut.) Baldus (in I. res in dotem, 24 de jur. dot.). Castro (in lib. 3, de reb. cred.) et DD. Coram ut videre est apud Boer, decis. 327, contra consent, spectandum esse in proposito tempus solutionis, id est, aucto vel dimi- nuto nummorum valore, ea aestimatione reddi eos oportere, non quae tunc fuit, cum debantur, sed quae nunc est, cum solvuntur; neque aliud statui posse sine creditoris aut debitoris injuria. Quae sententia, ut milii videtur, et verior et 332 United States vs. Chile. — Alsop Claim. [Point iv. "Pothier holds the opposite opinion, and says: 'It remains to be observed, in regard to the price, that it may be rendered in a money different from that in which it is paid. If it is paid to the seller in gold, the seller may repay it in pieces of silver, or vice versa. In like manner, though, subsequent to the payment of the price, the pieces in which it is paid are increased or diminished in value, though they are discredited, and at the time of their redemption their place is supplied with new ones of better or worse alloy, the seller, who exercises the redemption, ought to repay, in money which is current at the time he redeems, the same sum or quantity which he received in payment, and nothing more nor less. The reason is that in money we do not regard the coins which constitute it, but only the value which the sovereign has been pleased that that they shall signify: "Eaque materia forma publica percussa, usum dominiumque non tam ex substantia praebet, quam ex quan- titate." D. i8, i, i. When the price is paid, the seller is not aequior est. Nam quod contrariae sentiae auctores unicum urgent, in nummis non materiae, sed solius aestimationis impositae atque externae, quam ob id vulgo extrinsecam nummi bonitatem vocant, rationem duci, nummumque nihil aliud esse, quam quod publice valet, ut simpliciter verum sit. Utique enim miateria numismatis f undamentum est et causa valoris : quippe qui variatur pro diversitate materiae: oporteque valorem hunc justa aliqua proportione materiae respondere: neque in bene constitua repub. nummo ea eastimatio imponi debet, quae pretium materiae, ex qua cuditur, superat, aut superet ultra modum expensarum, quae in signanda pecunia fiunt; quod ad singularum specierum valorum parum addere potest. Sed hoc ad actus et praestationes priva- torum non pertinet. lUud pertinet, quod so dicimus, creditis nummis nihil praeter eastimationem eorum creditum intelligi, necessario sequitiu", creditorem teneri in alia forma aut materia nummos accipere contra defini- tionem Pauli in d..i. 99 de solut. etiamsi damnum ex eo passurus sit: nam, qui recipit, quod credidit, nihil habet, quod conqueratur. Sequitur et hoc, si contingat mutari nummorum bonitatem intrinsecam, id est, si valore veteri retentio percutiantur novi nummi ex deteriore materia, quam ex qua cusi, qui dati sunt, puta, si qui dati sunt, cusi fuerint ex puro auro, postea alii feriantur ex auro minus puro et mixto ex aere, debitorem restituendo tot mixtos et con- taminates, quot ille puros accepit, liberari cum insigni injuria creditoris: et contra interpp. pene omnium doctrinam, qui hoc casu solutionem taciendam esse statuunt ad valorem intrinsecum monetae, qui correbat tempore contractus, testibus Gail. 2, obs. 73 ,n. 6 and 7. Borcholt. de feud, ad cap. un. quae sunt regal, num. 62. lUud enim maxime in hac disputatione considerandum est, quoniam hie finis nummi principalis est, ut serviat rebus necessariis comparandis, auctore Aristotle, i Polit. 6, quod mutata monetae bonitate sive extri'nseca, sive intrinseca, pretia rerum omnium mutentur, et pro modo auctae aut imminutae bonitatis nummorum crescant aut decrescant: quod ipsa docet experientia; eoque facit i. 2 C. de vet. num. pot. lib. 11. Crescunt rerum pretia, si deterior materia electa, aut manente eadem materia valor auctus sit: decrescunt electu materiae melioris, aut si eadem bonitate materiae manente valor imminutis fuerit. Fallitur enim imperitum vulgus, dum sibi persuadet, ex augmento valoris aurei aliquid sibi lucri accedere. Hoc autem fundamento posito, siqui- dem neutri contrahentium injuriam fieri columns, ita definiendum videtur, ut si bonitas monetae intrinseca mutata sit, tempus contractus si extrinseca, id est, valor imposititius tempus solutionis in solutione facienda spectari debeat. Atque ita saepissime judicatum est.'" Point IV.] The Case of the United States. 333 considered to receive the particular pieces, so much as the sum or value which they signify; and, consequently, he ought to repay, and it is sufficient for him to repay, the same sum or value in pieces which are current, and which have the signs authorized by the pri-nce to signify that value. This principle being well established in our French practice, it is sufficient merely to state it. It cuts off all the questions made by the doctors concerning the changes of money.' " " . With these observations and principles in mind, the Government of the United States begs to set forth the following statement of the legal situation in this case: (a) As already pointed out, this debt due under the contract of December 26, 1876, would, save for the tortious act of Chile, have been completely paid and discharged by the end of 1882 ; this date is, therefore, under the circumstances of this case, the due date of the contract. {b) The value of the silver boliviano during the time that pay- ment upon the contract debt would have been made, and within which it would have been satisfied had not the Government of Chile intervened, varied from $0,965 to $0,823 American money.' (c) Therefore, in estimating the value of the debt due from Chile, the Government of the United States is entitled to compute the real value of the boliviano at the precise time each payment would have been made. It will, however, for the sake of simplicity and utmost equity, adopt the lowest value (namely .823) to which the boliviano fell during the above named period within which complete payment would have been made had not the Government of Chile intervened and tortiously appropriated the customs receipts.' {d) In computing the amount of money which would have been received by Wheelwright at this time, had the Government of Chile not tortiously intervened in the payment thereof, there must be considered, first, the principal sum of 835,000 bolivianos, and, second, interest on that sum at the rate of 5 per cent per annum, « from the date of the contract until the end of the year 1882. These two sums, reduced to American gold at $0,823 for each boliviano (the Value of the Boliviano in 1882), equal $893,837.20, the value of the debt at the time when it would have been paid but for the tortious act of the Government of Chile. a Pothier, Traits du Contrat de Vente, n. 416. I quote from Mr. Cushing's excellent translation, n. 419, p. 264, 265. See Pardessus, torn. 5, art. 1495, p. 269-271. [Story's Note.] 6 For statement showing the bullion value of the Boliviano peso and Peruvian sol, see I Appendix, p. 478. . c It will be recalled that the original obligation due from the Government of Bolivia to Wheelwright drew interest at 8% compoundable, and that in the contract of December 26, 1876, this was reduced to the rate specified therein, namely, 5^. 334 United States vs. Chile. — Alsop Claim. [Point iv. (e) To this sum thus due at this time, namely, January i, 1883, there must be added, under the principles set forth under i , supra, interest at 6 per cent, the legal rate, since from this date, January i, 1883, Chile stands as a tortfeasor who has converted money belong- ing to another and who must therefore pay the legal and not the contract rate of interest, the contract for this purpose being non- effective." if) This principal sum of $893,837.20, plus interest thereon at 6 per cent for twenty-six years and eleven months, the principal and interest totaling $2,337,384.28, less the credit mentioned here- after, should be awarded in American gold or its equivalent in such currency as may be designated. (j) The costs of litigation in suits resulting in a denial of justice should he regarded as proper elements in a claim for damages and an award should be made to cover the same. The soundness of this proposition is attested by numerous precedents, some of the more important of which are gathered below: "By a convention signed at Lima March 17,^841, by James C. Pickett, charg£ d'affaires of the United States, and Don Manuel del Rio, acting minister of the department of Finance of Peru, the Peruvian Government agreed to pay to the United States the sum of 300,000 'hard dollars,' of the same standard and value as those then coined at the mint at Lima, in full satisfaction of claims of the United States 'on account of seizures, captures, detentions, seques- trations, and confiscations of their vessels, or for the damage and destruction of them, of their cargoes, or other property, at sea, and in the ports and territories of Peru, by order of said Government of Peru, or under its authority.' " "In the case of the ship General Brown, to which reference has heretofore been made, the sum of $454,091.18 was claimed, with interest, on account of the wrongful confiscation of the vessel and cargo. The claim included items not only for the value of the phip and cargo, and for freight, but also for the loss of profits on the voyage. The Attorney -General allowed: For the value of the vessel, $40,000; for the value of the cargo at the time and place ot seizure, $139,036; for freight earned on the cargo prior to its seizure, $14,000; for the return of the crew and for the expenses qJ legal pro- ceedings in Peru, $8, 7 32. 18; total, $201,768.18." (Moore's International Arbitrations, Vol. 5, pp. 4591 and 4598.) A similar precedent is to be found in the arbitration between Great Britain and the Netherlands Government in the case of the Costa Rica Packet. The facts and circumstances of that case, "See I Appendix, p. 481. Point IV.] The Case of the United States. 335 as reported by Mr. Moore in his International Arbitrations (vol. 5, pp. 4948 and 4950), are as follows: "By a convention signed at The Hague May 16, 1895, the Govern- ments of Great Britain and the Netherlands agreed to submit to arbitration the claims preferred by the former against the latter growing out of the arrest and precautionary detention in the Neth- erlands Indies of Mr. Carpenter, master of the whaling ship Costa Rica Packet, of Sydney, New South Wales. To this end the con- tracting parties agreed ' to invite the government of a third powar to select from its subjects a jurist of undoubted repute' to act as arbitrator. An invitation was accordingly extended to the Govern- ment of Russia, which named as arbitrator Mr. F. de Martens." "On the whole the British Case maintained that the proceedings against Captain Carpenter were destitute of reasonable causie and oppressive, and demanded damages as follows: For the crew, £8,000, which represented their share of the prospective profits; for the owners, £16,094 ^^^- lod., representing expenses and loss of anticipated profits; for Captain Carpenter, £7,500, including £2,000 for loss of profits, £^00 for expenses in defense and in traveling, and £5,000 for 'the arrest and imprisonment, the indignities, mental pain, and anxiety suffered, the loss and injury to his reputation, health, and credit, loss of time, etc' " Vfi ^ ^ •!• "P •p 'I' The arbitrator, Mr. P. de Martens, made upon this case the following award: "For these reasons: "I declare the Government of Her Majesty the Queen of the Netherlands responsible, and I, consequently, fix the indemnity to be paid at * * * "The sum total of 3,150 £ to Captain Carpenter. "The sum total of 1,600 £ to the officers and crew. "The sum total of 3,800 £ to the owners of the vessel Costa Rica Packet — "With interest on all these damages at the rate of 5% per annum, from the 2nd of November 1891, the date of the illegal arrest of Captain Carpenter, and / put the expenses at the total sum of 230 £, to be paid by the Government of Her Majesty the Queen of the Netherlands. "Done at St. Petersburg, in duplicate, the 13th (25th) February, 1897. "Martens." Another instance in which damages were awarded for ex- penses incurred is narrated by Mr. Moore in his Digest of Inter- national Law,' Vol. VI, p. 730-731 • In this case Mr. G. F. B. Jen- ner, British Minister to the Central American States, acting as arbitrator, made the following award: " I. $55,287.79 for subsidies earned, works executed, and expenses incurred under the contract of April 5, 1898. 336 United States vs. Chile. — Alsop Claim. [P"^ iv. "2. $6,874.11 representing interest thereon at 6% from Oct. 21, 1898, to the date of the award. "3. $41,588.83 for profits that would have been earned had not the Government prevented the performance of the contract. "4. $40,000 as 'indemnity for expenses incurred, two years' time lost, suspension of credit, and grave anxiety of mind.' " In still another case, that of Baldwin against Mexico, the Commission under the convention between the United States and Mexico of April 11, 1839, on a claim presented for damages for illegal imprisonment, indignity, injuries, etc., made an award which is set forth by Mr. Moore in his International Arbitrations (vol. 4, p. 3240) as follows: * "The American commissioners maintained that, without consid- ering whether the determination of the judge to imprison Dr. Bald- win was just and in conformity with law, or whether he had com- mitted a crime, it was certain that for such offenses he had suffered a disproportionate punishment. As to the charge of firing the shot, it was disproved. While he had a gun with him, it was found, when he was arrested, to be loaded. The American Commissioners awarded (i) for the outrage on Baldwin's person, by placing him in the stocks with a broken leg and then detaining him in prison as a criminal for eighty-four days, $20,000; (2) for permanent incurable injury to his leg, $10,000; (3) for the interruption of his business, and the injury to him as a merchant, $10,000; (4) for the expenses necessarily incurred in consequence of his criminal prosecu- tion, and in the presentation of his claim, $5,000; and (5) for costs of translation and consulting a physician, $174.75 — in ^^> ^45>i74-75- "The umpire, February 23, 1842, adopted the award of the American commissioners." " The same principle was applied by the commissioners sitting under this convention in the case of the Louisa. Mr. Moore has set forth the facts of that case, as well as the award thereon, in the following language : "The ship Louisa, the property of citizens of the United States, was seized at Acapulco in January 1821, by order of the Iturbide, for the use of the Mexican Government; and both the ship and the cargo were in like manner ordered to be paid for. Only a part of the money, however, was paid, and for many years the owners fruitlessly prosecuted a claim for the remainder. Their claim having been submitted to arbitration, the American and Mexican commissioners agreed to award a certain sum as damages resulting from the taking of the ship and cargo, and also to award the sum of $7,750 for the expenses incurred by the claimants in their « The convention provided that the arbitrator should be appointed by the King of Prussia, who on the 29th of August, 1840, designated Baron Roenne, then Minister resident of Prussia at Washington. (Moore's International Arbitrations, vol. 2, p, 1224.) Point IV.) The Case of the United States. 337 efforts to obtain payment of what was due them. On the former sum the commissioners allowed interest at 5 per cent from the time the principal. first became due, but they differed as to the allowance of interest on the award for expenses. The umpire, April 9, 1841, 'dis- charged' the Government of Mexico 'from the demand of interest on the said sum of $7,750. ' " (Moore's International Arbitrations, vol. 4, p. 4325.) Still another case is that of the William Lee, a whaUng ship. The case was presented to the Commission under the convention between the United States and Peru of January 12, 1863, which arose out of the detention of the ship for three months by the captain of the port, who refused to give the master a clearing. The Commission gave upon this claim the following award: "Including, then, in the determination of damages the loss of the whaling season to the William Lee, the $4,000 for repairs, $1,500 for all expenses during detention, and interest on all losses from the release of the ship in December 1885, at the rate of 6% per annum, the commissioners award to the owners of the whale ship William Lee twenty-two thousand dollars ($22,000) in the current money of Peru, or its equivalent in the current money of the United States." (Moore's International Arbitrations, vol. 4, p. 3407.) In the case of Dr. Marion A. Cheek against Siam an award was made by Sir Nicholas J. Hannen (Chief Justice of the Straits Settlements), sole arbitrator, March 21, 1898, of ticals 706,721 — one item of which is stated to be "for costs of recovering ticals 686,137 at 3 per cent, [ticals] 20,854." (Moore's Inter. Arbs., vol. 5, pp. 5072, 5073.) In a memorandum by the arbitrator (Moore's Inter. Arbs., vol. 5, pp. 5069-5072), he says: "I think that the Cheek estate is entitled to he paid for the costs of recovering the amount which I find is due to it. Dr. Cheek esti- mated these at 3 per cent on the amount, and this is the sum which I purpose to allow the estate under this head." This principle was also recognized and apphed by the Commission created under the act of Congress of February 25, 1831 (4 Stats. 446) , to carry into effect the convention of March 28, 1830, between the United States and Denmark. The Commission, finding that its rules would not operate equally upon the various classes of claims presented, changed at its sixth session these rules of decision (which it had pubUshed at the close of its fourth session), set aside all decisions which had been made in conformity with those rules, .and proceeded to make awards in accordance with a series of amended rules. On the 22nd of March, 1833, the new rules, which 40898 — 10 22 338 United States vs. Chile.— Alsop Claim. [Pointiv. read as follows, were ordered to be entered on the minutes of the Commission : "That in all cases of condemnation there shall be allowed, " ist. The value of the vessel agreeably to the following scale: " For Eastern vessels, $40.00 per ton. "For Northern vessels, $60.00 per ton. "2nd. The value of the cargo at the cost of the same in the port from whence she mailed, agreeably to the invoice, without any addition to the invoice for freight or insurance. "3rd. A premium of insurance, at the rate of eight per cent upon the value of the vessel and cargo. "4th. Freight, for the voyage in which the loss occurred, at the rate of twelve dollars per ton. " 5th. Demurrage, on the following scale : "$15.00 per day for vessels under 150 tons. "$20.00 per day for vessels between 150 and 200 tons. "$25.00 per day for vessels between 200 and 300 tons. "$30.00 per day for vessels over 300 tons. "That, in all cases of detention of vessel and cargo, there shall be allowed as follows : " ist. Freight, at the rate of six dollars per ton. "2nd. Premium of insurance, at the rate of eight per cent upon the value of vessel and cargo, respectively, at the commencement of the voyage. "3rd. For the detention of the vessel, for demurrage: "$20.00 per day on vessels under 150 tons. "$25.00 per day on vessels between 150 and 200. "$30.00 per day on vessels between 200 and 300. "$40.00 per day on vessels over 300 tons. "That for detention of cargo there shall be allowed for damages, at the rate of twelve per cent per annum; and in cases of detention where special damages shall be proved, as where the cargo was in whole or part of a perishable nature or was wasted or destroyed, an additional allowance shall be made according to facts. " This allowance to be in full for all injuries resulting from capture and detention, including cases in which voyages were broken up, and all other speculative or consequential damages. "In all cases the expenses incurred in defending the vessel and cargo in the course of judicial investigation shall he allowed in full, but no other claim for expenses shall be allowed. "In all cases where the claim is presented by an underwriter, he shall receive no (5ther or greater allowance for the loss or detention of vessel — cargo — or freight, than would have been allowed to the owner agreeably to the foregoing rules." Moore's Inter. Arbs., vol. 5, pp. 4568, 4569. Finally, in the case of the El Triunfo Company, Ltd., against San Salvador (Moore's International Arbitrations, vol. 6, pp. 649, 731), the arbitrators. Sir Henry Strong, Chief Justice of Canada, and Mr. Don M. Dickinson, made an allowance of $2,671.31 for the expenses of the Company in endeavoring to secure restoration before intervention by the United States; $18,864.77 f^^ expenses Point iv.i The Case of the United States. 339 of prosecuting the claims, exclusive of attorney and counsel fees, and $60,000 for attorney and counsel fees — the total award being $523,178.64. (For. Rels. 1902, pp. 859-861.) See also The Apollon, 9 Wheat. 362; Cyc. of L. & P-, vol. 11, p. 1 34, and cases there cited. It is submitted that these precedents conclusively establish that damages should be awarded in this case to cover the cost of the litigation undertaken by Wheelwright in the Chilean courts in an unsuccessful endeavor to secure a proper recognition of his rights, titles, and interests in the government estacas located in the Bolivian Littoral. Sub-Point A. Damages are due to the concessionaries in this case by reason of the failure, on the part of the Government of Chile, properly to recognize, observe, and enforce the rights, titles, and interests possessed by the concessionaries in the government estacas located in the Bolivian Littoral, upon and subsequent to the assumption of possession and con- trol of this Littoral by the Chilean Government. These damages are divisible as follows : A^ Damages arising from the failure of the courts of the Government of Chile to adjudge to Wheelwright the pos- session and enjoyment of certain government estacas to which he was entitled under the Bolivian laws. As was pointed out and fully discussed under Point 11, Sub- Point E, supra, the Government of Chile through its adminis- trative officers and its courts applied to the Bolivian Littoral the provisions of the Chilean law, notwithstanding such law derro- gated from and confiscated certain well defined rights, titles, and interests possessed by the concessionaries under their contract with the Bolivian Government of December 26, 1876, which rights, titles, and interests had already vested and accrued at the time the Chilean forces took possession and the Chilean Govern- ment assumed control of the Bolivian Littoral. Again, as has been already pointed out, the Chilean courts, in the case of the Amanita, held that the government estacas were denounceable, and in the case of the Justicia, that the concessionaries were not entitled to the government estacas unless they had already taken actual possession of such estacas at the date of the occupa- tion of the Littoral by the Chilean Government. And finally, as was conclusively shown under Point II, Sub-Point E, supra, both of these decisions of the courts were contrary to the rights en- joyed by the concessionaries and resulted in the infliction of serious damage upon them. 340 Sub-Point A, Ai.] The Case of the United States. 341 It has been impossible for the Government of the United States to obtain absolutely accurate figures as to the amounts which were taken not only from the estacas Amanita and Justicia of which the concessionaries were thus deprived under and pursuant to the judgments in those cases, but it has also been impossible for the Government of the United States to determine the exact amount which has been taken from the government estacas other than the Amanita and the Justicia to which the concessionaries were entitled, and of which they were deprived by reason of the above named decisions of the Chilean courts. There appears to have been no official record made of the production of the mines in the Bolivian Littoral. It has therefore been necessary to base the computations upon semi-official and non-official statistics and authorities, and the Government of the United States has at all times, in order to make certain it was well within the actual figures, taken the lowest estimates given. In making this computation, the Government of the United States has estimated, so far as it was able from the statistics at hand, the amount produced by each mine possessing and exploit- ing part or all of one of these government estacas; it has then assumed that the government estaca was one of four composing such mine, and therefore that one-fourth of the total production of the mine came from this government estaca, which was thus the fourth part of the mine. In the case of the Justicia, however, some variation from this rule was necessary because of the con- flict of title existing as to that estaca. In the case of the Justicia one-fourth of the proceeds of each mine participating in the wealth of that estaca has been taken. Moreover, while the Government of the United States has not, by reason of the facts above set forth regarding statistics, been able to assure itself that it has secured statements and statistics regarding all government estacas to which the concessionaries were entitled and of which they were illegally deprived, it has been able to secure and hereby presents the statistics set forth below regarding the following government estacas. This data has been compiled from the personal knowledge and information of engineers familiar with the conditions in the Lit- toral, as well as from statistics taken from the " Estadistica Minera de Chile," Volume II (1904-1905), page 225, et seq., and from a book published by the Sociedad de Mineria de Chile, and written by Mr. Felipe Labastie, who in turn compiled his data from Mr. Jos^ Tomas Cortes and other engineers and miners." "For Mr. Jackson's affidavit see I Appendix, p. 526. 342 United States vs. Chile. — Alsop Claim. [Point IV. Estaca Justicia. — Erroneously adjudicated to trespassers on the ground that the concessionaries were not actually in possession of the estaca at the time of the occupation of the Littoral by the Chilean Government. This estaca was occupied and divided between six different mines, as follows: Justicia mine proper, yielding a profit of $385, 500. 00 Demasias Fisher, or Carmela, " " " " 25, 000. 00 Caracoles, or Fusion, " " " " 17, 500. 00 Cleopatra, profits not known. S alumina, " " " Tarija, $428, 000. 00 EstacaBlanca Torre. — ^This was the estaca involved in the Amonita suit, which was erroneously adjudged to a trespasser on the im- proper ground that the government estacas were denounceable. The mines involved in the extraction of the metals from the Blanca Torre were the following : Blanca Torre, the net profit of which was $107, 815. 00 Amonita, " " " " " " 12, 000. 00 $119,815.00 Estaca Esmeralda. — ^This estaca was finally recovered by the concessionaries, but not until all of the ore had been taken out by the Esmeralda del Sur. The Esmeralda del Sur left a profit of i?i50, 000. 00 Estaca Desempeno. — ^This estaca was seized by the Patria, which mine produced a net profit of $85, 200. 00 Estaca Limbo. — ^This estaca was taken by the San Rafael mine, which mine was finally purchased for the concessionaries, but not until the greatest part of the metal had been extracted. The San Rafael produced $34, 800. 00 The following estacas were also lost before they could be taken possession of, and the mines working them yielded the profits shown : Estaca San Juan, taken by San Pedro, which left $30, 000. 00 Estaca Luzdel Pilar, )) " Brazil, ' 90, 000. 00 Estaca Patriota, )» " Italia, ti ' 24, 000. GO Estaca Tehualda, J) " Guacolda, ,) ' 71,300.00 Estaca Colorada, )» " Alerta, 1} ' 259, 200. 00 Estaca Olivia, ' 30, 000. 00 Estaca CarmeliM, tt ' "9, 000. 00 a I Appendix, p. 482. Sub-Point A, A2.] The Case of the United States. 343 The total produced by these mines exploiting government estacas to which the concessionaries were entitled, expressed in Chilean currency, was $1,331,315.00 Calculating, in accordance with the rule above set forth, that 25 per cent of this came from the government estacas the amount which should be divided between the Government and the conces- sionaries would equal $332,828.75 AAAhile the exact date at which these various sums belonging to the concessionaries were taken from these estacas cannot be given, it is certain that all of these estacas were worked out long before the year 1890. Taking January i, 1890, as the very latest date at which these mines were finally operated, it will be observed that the concessionaries have been deprived of 60 per cent of this out- put, namely, $199,697.25 (Chilean paper pesos), from that date until the present, and that the deprivation of the use of that money for this period of time was due to the erroneous judgments of the Chilean courts. This sum, reduced to American currency (the mean value of the Chilean paper currency for this period being 67 cents), equals $133. 797- 16 There is therefore due from the Government of Chile to the concessionaries, under all principles of equity and fair dealing, as well as upon strict legal principles, interest on the last named sum from 1890 until the date of the signing of the protocol, which, at 6 per cent per annum, totals 200,026. 75 Total principal and interest "$333,823.91 A^ Damages arising from the wrongful application, by the Chilean courts and officials, to the government estacas held by the concessionaries under their contract, of those pro- visions of the Chilean mining law which related to and gov- erned the denouncement of mines for abandonment. By reason of the application to the government estacas of the Littoral of those principles announced by the court in the case of the Amanita (see Point II, Sub-Points D and E, supra), it became necessary, in order to avoid denouncement of other mines, for the concessionaries to expend (contrary to the rights, titles, and interests of the concessionaries, and in violation of the principles of law involved) large sums of money for the working of these mines under the Chilean law. The total amount of money so expended 0-1 Appendix, p. 482. 344 United States vs. Chile.— Alsop Claim. [Point iv. equaled $36,498.93. These amounts were all expended after the occupation of the Littoral by the Chilean forces in 1879 and before January i, 1885. During this period the mean value of the Chilean peso was 67 cents American gold. Upon this basis the sum spent in working these mines equaled on January i, 1885, American gold $24,454.28 Interest on this amount from January i, 1885, to December i, 1909, equals 36,559. 15 Total . '1, 013- 43 A' Damages arising by way of disbursements for expenses of litigation made necessary by reason of the improper application to the government estacas of various provisions of the Chilean mining law (said expenses including court fees, witness fees, and attorney's fees), as well as for nec- essary increase of working staff in order adequately to protect the interests of the concessionaries. The full amount of disbursements for litigation made necessary by reason of the improper application to the government estacas of the various provisions of the Chilean mining law, said expenses including court fees, witness fees, and attorney's fees, totals, with interest calculated upon the various sums paid out each year from the end of that year until December i, 1909 $48,340.91 Damages arising, as above set forth, by reason of the necessary in- crease of working staff in order adequately to protect the interests of the concessionaries, computed in the same way $65, 359. 89 Total damages in tort (reckoned in American gold) — Sums taken from government estacas to which con- cessionaries were entitled (with interest from Jan. i , 1890, to Dec. I, 1909) $333, 823. 91 Sums paid out to avoid denouncements of mines (with interest from Jan. i, 1890, to Dec. i, 1909) 61,013.43 Legal expenses (with interest from date of expenditure to Dec. I, 1909) 48, 340. 91 Expenses of increased working force (with interest from date of expenditure to Dec. i, 1909) 65, 359. 89 Total "$508,538.14 ol Appendix, p. 484. 6 I Appendix, p. 490. Sub-Point B. Damages are due to the concessionaries in this case upon the contract debt which was recognized by the Wheelwright contract as due to the concessionaries in the following amounts : There is due to the concessionaries in this case, upon the con- tract debt recognized as due under the contract of December 26, 1876, (i) the principal and the interest provided for in said con- tract, said interest to be calculated to the date when such debt would have been paid but for the tortious act of Chile in appro- priating the customs receipts set apart by Bolivia to the payment of this obligation; and (2) interest on such total sum so due, from the time when it would have been paid but for this tortious act of Chile until the award is paid. As has been already fully discussed under Point III, the Govern- ment of Chile is under obligation to pay to the Government of the United States, for and in behalf of the claimants, the debt above described — (i) because under the general principles of law and equity fundamental to the judicial systems of the two countries, as well as under the rules and principles of international law and of international practice, the Government of Chile by deliberately and with knowledge appropriating funds which had been specifically set apart and appropriated to the payment of the original obligation, has become obligated to pay said obligation; (2) because the Gov- ernment of Chile has repeatedly tmdertaken to the Government of Bolivia to meet such obligation, the Government of the United States for and in behalf of the claimants having by reason of these obligations the rights of a beneficiary under these formal and sol- emn obligations; (3) because the Government of Chile has made to the Government of the United States many solemn diplomatic undertakings and agreements repeatedly renewed to satisfy this obligation. The contract of 1876 recognized as due to the claimants 835,000 bolivianos, which was to bear interest at 5 per cent from date until paid. As has been shown under Point III, Sub-Point A, supra, this debt would have been fully paid at least by the end of 1882 had not the Government of Chile seized and used the money com- ing from the Arica customs receipts which had been appropriated 345 346 United States vs. Chile. — Alsop Claim. [Point IV. for the payment of this debt. The value of this debt at the end of 1882, reduced to American gold, was : Principal $687, 205. 00 Interest 206, 632. 20 Total 893, 837. 20 From this date, i. e., from January i, 1883, to December i, 1909, the concessionaries have been deprived of this amount of money, upon which, therefore, they ought to receive interest for the reasons already given and at the rate already stated above, namely, 6 per cent, the legal rate of interest." Interest upon $893,837.20 for 26 yrs. and 11 months at 6%, equals $1,443,547.08 The total amount due on the debt is therefore 2,337,384.28 Against this sum there should be placed the following credits : The following estacas were worked by the concessionaries at a profit, the exact amount being indicated after each estaca: Al fin Hallada Mapocho Reventon Resales San Rafael (S. G.) Santa Isabel Year. Chilean paper. Kxchange. U. S. gold. 1882 1886 1890 1882 1886 1886 $7,144-70 5,828.16 30,050.30 7.650.35 6,488.40 30,142.82 87,304-73 71-63 46.76 48.73 71-63 46.76 46.76 $5,117-75 2,725-25 14,643-51 5,479-95 3.033-98 14,094.78 45,095-22 The contract provided that 40% of these net proceeds should be credited to the Bolivian Government on the debt of the capital account. 40% of $45,095.22 $18,038.09 To this must be added 6% simple interest up to Dec. i, 1909, as follows : On 40% of $5,117.75 or $2,047.10 for 26 years and 1 1 months $3,306.07 On 40% of $2,725.25 or $1,090.10 for 22 years and 1 1 months 1,498.89 On 40% of $14,643.51 or $5,857.40 for 18 years and II months > 6,648.15 On 40% of $5,479.95- or $2,191.98 for 26 5nears and 1 1 months 3,540.04 On 40% of $3,033.98 or $1,213.59 for 22 years and 1 1 months i ,668.69 On 40% of $14,094.78 or $5,637.91 for 22 years and II months 7,752.13 Total interest account 24,413.97 Total amount of this item * 42,552.06 ol Appendix, p. 481. 6 1 Appendix, p. 490. Sub-Point B.] The Case of the United States. 347 The total amount due, therefore, upon the contract debt is as follows : Total amount due on the debt as per above statement. . $2, 337, 384. 28 Amount to be credited on this account as per the above statement of proceeds derived from certain mines worked at a profit 42, 552. 06 Amount still due upon the debt 2, 294, 832. 22 The Government of the United States, therefore, prays for judgment in the following amounts, which represent the actual losses sustained by the concessionaries in this case by reason of the wrongful deprivation by the Government of Chile of certain rights, titles, and interests held by the concessionaries in certain government estacas granted to them by a contract between the concessionaries and the Government of Bolivia under date of December 26, 1876; and also on account of the principal and interest of the debt recognized as due and payable from the Government of Bolivia to the concessionaries imder and pursuant to the terms of the same contract above named: On the tort side of the claim $508, 538. 14 For the contract debt 2, 294, 832. 22 Grand total due from Chile 2, 803, 370. 36 Upon the final award made by the Amiable Compositeur in this case, there should be also awarded interest at 6 per cent upon said award from Dec. i, 1909 (the date to which the interest in the above account is carried), until the award is fully and finally paid. In addition to this amount the Government of the United States feels that there should be awarded to the concessionaries in this case a reasonable sum for legal expenses in prosecuting the claim since it became a matter of diplomatic representation. In this connectiqn it should be observed that the sole surviving partner of Alsop & Co. has since 1890 found it necessary con- tinuously to employ and retain the services of efficient counsel, and that in addition to counsel so employed, various of the claim- ants have also retained special counsel to represent their interests. Concerning the item of 240,700 bolivianos recognized by the Wheelwright contract as due to the concessionaries, for interest accrued and unpaid prior to December, 1876, it will be recalled that the contract provided that this amount should be paid from the proceeds of two mines, one of which, the Flor del Desierto, was designated, and the other of which was to be desig- 348 United States vs. Chile. — Alsop Claim. [Potativ. nated later, the mine actually chosen being the Disputa. The following account will show that while these mines never pro- duced a sufficient amount to pay off this interest, yet they did produce something, and it is believed sufficient to discharge this obligation under the terms of the contract. Accrued interest recognized by contract $230, 700. 00 Against this should be credited the following sums : Fifty per cent of $184,240.80 — the proceeds derived from the operation of the Flor del Desierto $92, 120. 40 Forty per cent of $107,663.74 — the proceeds derived from the operation of the Disputa . 43 , 065 . 496 135,185.896 Balance still due 95. 514. 104 , The Government of the United States desires, in connection with this prayer for judgment, to direct particular attention to the following considerations: (a) There is not in the amount prayed in judgment above one penny which represents a penalty. Every penny of the amount represents losses actually sustained by the concessionaries in this case. (6) In estimating the damages on the tort side of the claim as above set forth, there is not one penny of speculative profits. Every penny represents either an actual expenditure by the con- cessionaries, or a loss of money which was actually taken from mines to which they were entitled. It is true that as to the amounts taken from such mines the figures are not as accurate as could be wished, but they are as accurate as could be obtained; and in each case they apply to mines that were actually exploited and to the money actually taken from such mines. (c) As to the contract debt, it must be observed that in the whole course of the correspondence between and among the Gov- ernments concerned it has never been once alleged that the amount called for by the contract was not legally and equitably due, subject to a statement of account regarding the operations of the mines. Moreover, it should be observed that the Government of Chile has repeatedly undertaken an examination into the mer- its of this claim, as that Government specifically stated 'in con- nection with the negotiations attendant upon the treaty of 1895; and it is a matter of record that the Government of Chile was at that time furnished with the antecedents of the case. It must be Sub-Point B.] * The Case of the United States. 349 assumed that the information developed at that early time was not lost in the negotiation, of the subsequent treaty of 1904. But upon this point we are not obliged to rely upon surmises or upon reasoned deductions to show that the Government of Chile has no defense to the merits. The correspondence shows that in 1908 and 1909 the Government of the United States, always desiring that its representations in this case should be in accord- ance not only with its legal rights, but with the strictest and most absolute equity of the situation, and observing that the Govern- m.ent of Chile was persistently offering in settlement of the entire obligation sums grossly insufficient to meet even the principal of the debt, requested, after setting these things forth, that the Government of Chile, if it had any evidence going to show that the full amount called for by this contract were not equitably due, should furnish to the Government of the United States the evidence upon which it relied to support its position. The Govern- ment of the United States having waited for three months with- out receiving a reply, the matter was again called to the attention of the Government of Chile. Finally, after a delay of eight months, the Government of Chile explained that it had no evidence going to show that the full amount called for by the contract was not legally and equitably due the claimants, and justified its offers theretofore made in settlement of the claim by citing the terms of the treaty of 1904 between Bolivia and Chile, always excluding the secret notes which were exchanged by the plenipotentiaries. Considering that this statement was secured after a correspond- ence of so many months, and after, it must be assumed, the most careful examination of the entire claim at that time, and cer- tainly, if we may rely upon the correspondence passing between the two Governments, after a most thorough examination made many years earlier; and considering further that this statement should be taken in connection with the fact that the Government of Chile has, by its repeated offers of payment, and by its repeated statements — one of them before an international tribunal — that it would undertake to pay this obligation, which it recognized as a vaUd and binding obligation which it should meet, it is confidently believed that this admission of no defense to the merits of this case can leave the Amiable Compositeur in no doubt as to the full Uability of the Government of Chile in this case, and must eliminate from the consideration of the Amiable Compositeur all questions save that of the amount of the liability. 350 United States vs. Chile. — Alsop Clarm. [Point iv. (d) Moreover, and further, it must be always remembered on this question of amount, in connection with this admission of the Government of Chile, thus made after repeated examination — that it had no evidence going to show that the claim was not entirely meritorious — that the Government of BoUvia also has never questioned its legality or equity, and it must therefore be assumed that the claimants are equitably entitled to receive from one of these two Governments an amount sufficient to cover their entire losses, as those losses have been hereinbefore set forth. In this connection it will perhaps be not amiss to make a closing remark regarding the broad equities of the situation with refer- ence to what debtor ought in justice to be charged with the satis- faction of this obligation. The Government of Chile upon the discovery of guano deposits in the Bolivian Littoral early made claim to the vast region within which these deposits occurred. A diplomatic controversy arose almost immediately and continued from that time until the final absorption of the territory by the Government of Chile at the end of the War of the Pacific. Mean- while, however, by two solemn treaties, one in 1866 and the other in 1874, the territory in dispute had been definitely apportioned between the two contending Governments. From 1866 until the close of the War of the Pacific, the Government of Bolivia dealt with the territory in question as her own, as indeed it was. At the close of that war the Government of Chile took over this territory, and also appropriated the Bolivian customs receipts derived from Pacific ports. As has been pointed out above, the Government of Chile derived from these customs receipts, in addition to the 25 per cent with which she repaid herself for the cost of administration, more than sixteen millions of dollars. From the nitrate fields, the guano deposits, and the mines of pre- cious metals which she secured from Bolivia at the end of the war, all located in this same Littoral, the Government of Chile has secured a further net sum of some two hundred millions of dollars. It is true that the Government of Chile did but exercise a bellig- erent right when at the close of the war she insisted upon the retention of the Bolivian Littoral as compensation, but it is also true that the retention of this region by Chile deprived Bolivia of her richest territory. The Government of Chile has in her corre- spondence repeatedly recognized this fact, and not without a sense of equity and justice has repeatedly promised the Government of Bolivia that she would liquidate and discharge various obligations, Sub-Point B.] The Case of the United States. 351 among them the claim of the Alsop concessionaries, for the liqui- dation of which the Government of Bolivia had looked to the revenues to be derived from the Bolivian Littoral. While the Government of Chile was thus appropriating millions from the customs receipts of Arica, which revenues had been specifically appropriated and set apart for the payment of the concessionaries in this case, and which, therefore, belonged pro tanto to them, and while that Government was also securing other and much larger sums derived as revenue from the territory of the Littoral seized by her and retained after the War of the Pacific, the concessionaries themselves were, by reason of this unlawful action of the Government of Chile in appropriating the customs receipts of Arica, becoming more and more destitute, some of them being finally reduced almost to penury. The con- cessionaries state that the original liquidation of the firm was due to the failure of Bolivia to observe its contracts with Gama, who appears to have been the principal debtor of the original Alsop firm. Upon going into liquidation. Wheelwright spent months at La Paz in efforts, finally successful, to arrange for the settlement of the Gama debt, which had been assigned to the firm. Following this arrangement at La Paz, he went immediately into the Littoral, where, overcoming obstacles that might well have daunted the strongest man, he labored unceasingly in an effort to secure pos- session of the government estacas, from the operation of which he might hope to secure something towards the Uquidation of his claim. Before he accomplished his purpose, Chile took military possession of the Littoral, and his difficulties, already all but insuperable, were multiplied many times. For more than six years he lived in the desert wilderness of the Littoral, and sought with indomi- table will to secure the rights to which under his contract he was clearly entitled. Meanwhile, his representative at Santiago literally bombarded the Chilean Government with petitions in Wheelwright's behalf; and, that no avenue of redress or relief might be left untried. Wheelwright himself brought in the Chilean courts rnore than two hundred lawsuits in a vain and futile en- deavor to secure the enforcement of his rights. But it was all to no purpose. Bandied from court to court, from executive depart- ment to executive department, from the Government of Bolivia to the Government of Chile and back, Wheelwright at last found it necessary to do that which, tmtil all other recourse had been ex- hausted, he had consistently and conscientiously sought to avoid 352 United States vs. Chile. — Alsop Claim. [Point iv. in order not to embarrass the Government of Chile, namely, appeal to his own Government for diplomatic protection. This was in 1884, and from that time until the present the Government of the United States has, with the utmost patience, added its endeavors to those of the claimants in a thus far ineffectual effort to secure the liquidation of this claim. While the Government of Chile has been adding to the millions of revenue which it has received from the territory wrested from Bolivia at the end of the war, to which territory and to the customs Bolivia looked for revenues to discharge this obligation, the claimants, as already stated, have year by year become poorer and poorer, until at last some of them at least have found themselves in a condition of almost complete desti- tution. In view of these facts and circumstances, and of the principles of law involved, it is submitted that the Government of the United States, for and in behalf of the individual claimants under the contract of December 26, 1876, is entitled to an award for the amounts hereinbefore stated and the Government of Chile is under all moral, equitable and legal obligations to pay the same. The Government of the United States therefore prays from His Britannic Majesty, acting as amiable compositeur in this case, an award in the sum of $2,803,370.36, United States gold, as of December i, 1909, together with interest thereon at the rate of six per cent per annum until said award is paid, as well as such extra allowance for legal . expenses incurred by the claimants in the prosecution of this claim since 1885 as may seem to His Majesty reasonable and just. ■