NICARAGUA, COSTA RICA, AND SALVADOR. PROTECTION OF DANISH INTERESTS IN SALVADOR BY UNITED STATES OFFICIALS. No. 425.] Mr. Hay to Mr. Merry. DEPARTMENT OF STATE, Washington, October 25, 1901. SIR: Referring to the Department's Nos. 470 and 535,' dated, respectively, July 3, 1896, and February 6, 1897, relative to protection of Chinese subjects in Nicaragua and Salvador by the representatives of the United States in those countries, I inclose a translation of a note from the Danish minister at Washington explaining that his Government has no representatives in Salvador, and asking that under the circumstances the protection of the United States be extended to Danish subjects and interests in that country. Your efforts are to be confined to the friendly intervention in case of need for the protection of Danish subjects in their person and property from unjust and harsh treatment. You are not to hold any representative character or function as respects the Danish Government and are to act informally. Before taking any steps in the matter, however, you should represent to the Government of Salvador the wish of the Danish Government and the willingness of your Government to accede thereto, as herein indicated, provided the assent of the authorities of Salvador is entirely favorable. Its decision upon the subject should be reported to the Department. I am, etc. JOHN HAY. Mr. Hay to Mr. Merry. No. 429.] DEPARTMENT OF STATE, Washington, December 10, 1901. SIR: Referring to instruction No. 425, of October 25 last, I inclose herewith for your information a copy of a noted from the Danish minister stating that his Government will issue a notice to Danish subjects in Salvador that they have been placed under the protection of the United States as soon as it is informed that the Salvadorean Government assents to such protection. I am, etc., JOHN HAY. Mr. Merry to Mr. Hay. No. 691.] LEGATION OF THE UNITED STATES, SIR: I have the honor to forward herewith the reply of the Government of El Salvador to your request a See Foreign Relations, 1897, p. 425. as per your No. 425 of October € See under Denmark, p. 365. 25 and No. 429 of December 10, 1901, that Danish subjects in that Republic may be accorded the protection of the United States Government under the same restrictions applicable to the subjects of the Chinese Empire. You will note that the Government of El Salvador concedes this request. I respectfully await your instructions to so advise our consular officers in that Republic. With assurances, etc., WILLIAM LAWRENCE MERRY [Inclosure-Translation.] Mr. Trigueros to Mr. Merry. DEPARTMENT OF FOREIGN RELATIONS, SIR: The consul-general of the United States in this Republic has informed me in a note of January 28 last that the minister of Denmark in Washington has requested the Government of the United States to obtain from my Government the necessary authority for the diplomatic representative of the Government of your excellency to grant his official protection to the Danish subjects residing in the Republic. In reply it is my duty to inform your excellency that my Government has no objection to conferring that authorization in order that the diplomatic representatives of the Government of the United States may exercise their good offices in favor of the Danish subjects, with the same restrictions and in the same form that it is permitted them to use their good offices respecting the subjects of the Chinese Empire. I am pleased, etc., Mr. Hay to Mr. Merry. JOSÉ TRIGUEROS. No. 457. DEPARTMENT OF STATE, SIR: I have the honor to acknowledge the receipt of your No. 691 of the 20th ultimo, with inclosure from the Salvadorean minister of foreign affairs, from which it appears that the Government of Salvador has no objection to the exercise of your good offices and those of our consular officers in Salvador in favor of Danish subjects, with the same restrictions and in the same form as their exercise is permitted respecting Chinese subjects. You state that you will await the Department's instructions before advising the consular officers in Salvador. The Department's instructions in regard to the use of good offices in favor of Chinese subjects are contained in its No. 470, of July 3, 1896, and No. 535' of February 6, 1897, to your predecessor, Mr. Lewis Baker. As regards Danish subjects you will be guided by these instructions and that to you numbered 425 of October 25, 1901. You will instruct the United States consular officers in Salvador to act in accordance therewith. I inclose for your information copy of a noted which I have this day addressed to the Danish minister on the subject. I am, etc. a See Foreign Relations, 1897, p. 425. Printed, ante. JOHN HAY. d Printed, under Denmark. ARBITRATION OF CLAIMS OF THE SALVADOR COMMERCIAL COMPANY ET AL. v. SALVADOR. The SECRETARY OF STATE. SIR: The following report, in the form of a draft instruction and accompanying memorandum, in the case of the Salvador Commercial Company . Salvador is respectfully submitted. W. L. PENFIELD, Solicitor. [Inclosure.] Draft of instruction to United States minister to Salvador. SIR: I gladly avail myself of this opportunity to express the gratification with which the Government of the United States has observed the kindly feeling and unfailing courtesy shown by the Government of Salvador throughout its elaborate discussion of the claim of the Salvador Commercial Company. It also affords me unfeigned pleasure to express the sincere desire of the Government of the United States to cultivate and strengthen the cordial relations which have long and happily existed between the two Republics. Constantly animated by a high sense of justice, the Government of the United States is incapable of consciously lending itself to the commission of an act of injustice either toward its own nationals or those of other States; far less could it do so toward another friendly State. It entirely shares the views of the Salvadoranean Government that the question at issue between the two Governments is simply a question of right, and one which should be determined by the principles of equity, sanctioned by the conscience of all good men. This has been the sole criterion of its judgment; and such being its constant motive, it has no opinion to offer on the language quoted in the first counter-memorandum from the writings of the distinguished publicist, Mr. Charles Calvo, containing charges by the distinguished author of wrongful interventions of European States with those of South and Central America for the collection of indemnities. If it were necessary to defend the high sense of honor which uniformly governs its own conduct in analogous cases, the Government of the United States is not wanting in ample precedents to vindicate its title to a foremost place among the nations in its respect for justice between nation and nation as between man and man. It might refer to the restitution to Japan of an indemnity which it collected in the sum of $785,000; to China, of an indemnity collected in the sum of $453,400.90; to Brazil, of an indemnity collected in the sum of $96,406.73, which had been wrongfully obtained on misinformation of the facts; and to the restitution recently made to the Republic of Mexico of $690,863.85 American gold. Other instances might be cited. Some of these moneys were refunded in the light of a better information and understanding of the facts, even after their payment to this Government on award made in pursuance of international arbitration, after a full hearing of all the evidence and arguments on both sides. In the light of these high precedents and of the frequent displays of its magnanimity and of its justice, and of the numerous and striking proofs it has given of its strong and sincere friendship to the States of Central and South America, the reference to the cited text of Calvo would seem to be inapposite to this discussion. That the Government of the United States should consciously do an unjust act toward any individual or any State is an impossible conception. Its vast resources and great power have, in its conception, no measure of value in comparison with the principles of justice, by the vindication of which and by the constant display of kind and fraternal feeling would it seek to win its true position among nations. There is never on its part danger of the conscious abuse of power; yet I am aware that there is always danger of the abuse of conscious power; and ever watchful against such subtile influence and in the effort to maintain the equal poise of the balance, the conclusion reached, from a most careful and laborious study of all the correspondence and evidence submitted on either side in this case, and especially of the oral arguments and counter-memoranda submitted on behalf of the Salvadoranean Government, is that Mr. Sol, vice-president of El Triunfo Company, was guilty of an act of usurped authority in assuming the permanent presidency of El Triunfo Company; that Ŝol, Lopez, and Cochella were likewise guilty in their pretended removal of Burrell from the presidency thereof, and in their petition to have the court decree the company in a state of voluntary and judicial bankruptcy; that the court did not acquire lawful jurisdiction to decree the state of bankruptcy of said company; that these facts were apparent of record, and that the judge practiced an undue delay and discrimination of justice in passing on the question of his jurisdiction; and that the act of the President of Salvador in annulling the concession by arbitrary executive decree, on February 14, 1899, the next day after a call and notice had been issued and published by the majority stockholders for a general meeting of the stockholders, to enable them to take lawful steps to oust the usurping minority directors and to secure the release of the property by the court, was wrongful in itself and constituted in its effects a veritable intervention in the legal controversy between the parties, unduly influencing and affecting the regular and ordinary processes of justice and rendering nugatory the lawful measures contemplated and initiated by the majority stockholders; that this act of the President, whatever its motive, was indefensible from the standpoint of justice and private right, as well as of international law, and justifies and would require, if the controversy is not otherwise amicably, promptly, and satisfactorily adjusted between the parties, the intervention of this Government and the payment of an adequate indemnity to the American stockholders. The grounds on which the foregoing conclusions are based are set forth at large in the accompanying memorandum. Though the conclusion reached may not be satisfactory to either of the contending parties, the Department is not without hope of convincing them that the case has been considered with the sole aim of reaching a decision which will vindicate the supremacy of justice over might, whether the latter should be invoked against the Government of Salvador or should be exercised by it in the destruction of vested rights of private property. If, as urged by Salvador, it were wrongful for the Government of the United States to decide a controversy and fix the amount of an indemnity by the sheer exercise of power, not less wrongful was the act of the Executive of Salvador in arbitrarily destroying rights of private property. The arbitrary use of power is not less wrongful on the part of Salvador than of the United States; and the latter, sharing the feeling of abhorrence expressed in the counter memorandum for gross interventions of any kind "in which brute force always prevails over right," has reached its conclusion. The President of the United States can not take from any man the slightest right, or even a doubtful right, even as against a confessed wrongdoer, without submission to the courts, whose rule of decision is: Is it lawful; is it just? The Government of Salvador can therefore appreciate the inability of the Government of the United States to conceive any other procedure as compatible with the existence of the State, which exists only to safeguard rights of property, of contract, of life and liberty, which can not be taken away except upon a fair and impartial hearing and upon solemn judicial decision. It is conceivable that the President of Salvador, animated by patriotic motives, felt that El Triunfo Company was not fully discharging the obligations of the concession, and that in a feeling of repugnance at its supposed incompetency he thought to put an end, once for all, to alleged inconveniences suffered by the public service; but the fact remains that the property of El Triunfo Company was taken away without due process of law. Such arbitrary executive action, even supposing it righteous in its results, is essentially unjust, since it proceeds by ignoring the substance of the forms of justice, without the observance of which there can be no security in the possession of any private right. [Subinclosure 1.] MEMORANDUM. From an attentive study of the documents submitted in the case the following facts are either admitted by both of the parties, or are, on the documentary evidence, established beyond dispute: On October 6, 1894, the Government of Salvador granted for the period of twentyfive years, together with certain other incidental privileges, the exclusive privilege of steam navigation of the port of El Triunfo; that said concession was, on October 25, 1894, assigned to the Salvadoranean corporation “El Triunfo Company, Limited," having a capital stock of $100,000 American gold, consisting of shares of $100 each; that 501 of these shares were, before the commission of the grievances hereinafter mentioned, and still are, owned by the Salvador Commercial Company, a corpora tion organized under the laws of the State of California; that the grant of said concession was lawful and valid, and that said El Triunfo Company acquired a vested right of property therein; that over 70 per cent of said capital stock has been paid; that said port was opened in 1895, and said company entered upon the use of its concession and expended large sums of money in the development of the same; that the profits of said concession during the year 1898 are stated by said company to have been $30,000 and are admitted by the Government of Salvador to have been $7,851.85 net for the first six months of said year. That by the statutes of El Triunfo Company its directors were to be five in number, with three substitute directors or alternates; that the officers of said company were to be a president, vice-president, treasurer, and secretary; that articles 12 and 18 of the statutes or by-laws of the company provide that a special or extraordinary meeting of the directors can only be called by the president; that at the general assembly of stockholders, held June 10, 1898, there were elected as directors H. H. Burrell, Simon Sol, J. H. Ellis, Francisco las Plazas, and G. Lozano; and as substitutes, C. Cochella, A. Canessa, and E. B. Ruano; that the minutes of the twentieth session of the board of directors, held June 10, 1898, show "present the Messrs. H. H. Burrell, E. B. Ruano, J. H. Ellis, S. Sol, and G. Lozano, appointed by the general assembly of stockholders in session to-day to form the board of directors, which should exercise its functions during the current year;" that the board of directors on said day elected as president H. H. Burrell, as vice-president Simon Sol, as treasurer J. H. Ellis, as secretary F. las Plazas; that article 9 of the by-laws provides for five directors and three substitutes, who, according to the order of their nomination, shall supply the places of absent directors; that no power is given by the corporation statutes or by-laws to the board of directors, or to a majority thereof, to appoint one of the substitutes as a permanent director; that such substitutes can act as directors, according to article 9 of the by-laws, only in the order of their nomination and only when the principal fails; and that the record does not show that any notice or opportunity was given to the regular directors to attend the meetings of the board hereinafter specified, except Directors Sol and Lopez, and fails to show that the substitutes were called in the order of their nomination, or that there was any such failure of the principals as would authorize substitute directors to act in their stead. That from the minutes of the continuation, September 1, 1898, of the twenty-third session of the board, signed by Lopez, Sol, and the substitute Cochella, failing to show the authority of Cochella to act as a regular director, it appears that they requested Burrell to resign the presidency-that is to say, they show that they "supplicated Burrell, the president, that for a prudent time he rest from the administration"--but it does not appear that he resigned or vacated his office; that after the session was ended and the said minutes were completed, dated, and signed, as aforesaid, the following addendum, undated, was made under the word "corrections," signed only by Sol and Lopez: "Inasmuch as the director of the Company of El Triunfo, Mr. H. H. Burrell, without giving notice and contrary to the express resolution of the board of direction, has absented himself, and this company not being able to continue without a head, as it finds itself, as vice-director, appointed conformably to article 11 of the statutes of the company, the undersigned assumes the office of president of the same. "SIMON SOL. "L. LOPEZ.” That article 11 gave no authority whatever to said Vice-President Sol to constitute himself permanent president of said company; that, as shown by the records of said company, the said Burrell attended said twenty-third session and every session of the board from the first to the twenty-third, both inclusive; that, in keeping with the above proceedings, the said Sol usurped the presidency of the board on the unfounded pretension that Burrell had vacated or been removed from his office as president; that this addendum to the minutes by Sol that he was president of the company on account of the absence of Burrell is a manifest subterfuge-styled in the minutes "corrections"-to give an air of legality to his usurpation; that the pseudopresident, Sol, made a pretended call of a meeting of the board for September 22, 1898; that said call was a mere nullity, and the action taken by Sol, Cochella, and Lopez, under that call at said pretended session and without call from the lawful president, assuming to depose Burrell from the presidency, is in fact an admission of the prior usurpation of Sol, sought to be legalized by another act of usurped authority; that another, the twenty-sixth and extraordinary, session of the pretended board was held October 14, 1898, without notice or call by the lawful president, and a resolution was adopted to throw the company into judicial bankruptcy; that a petition signed by said Cochella, Sol, and Lopez, dated October 17, 1898, was presented to the |