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and the benefits of political and civil liberty are extended. Therefore we esteem her, but this does not mean that we should adhere with equal sympathy to her policy in the improbable case of her attempting to oppress the nationalities of this continent which are struggling for their own progress, which have already overcome the greatest difficulties and will surely triumph-to the honor of democratic institutions. Long, perhaps, is the road that the South American nations still have to travel. But they have faith enough and energy and worth sufficient to bring them to their final development with mutual support.

And it is because of this sentiment of continental brotherhood and because of the force which is always derived from the moral support of a whole people that I address you, in pursuance of instructions from His Excellency the President of the Republic, that you may communicate to the Government of the United States our point of view regarding the events in the further development of which that Government is to take so important a part, in order that it may have it in mind as the sincere expression of the sentiments of a nation that has faith in its destiny and in that of this whole continent, at whose head march the United States, realizing our ideals and affording us examples. Please accept, etc.,

LUIS M. Drago.

Mr. Tlay to Señor Garcia Mérou.

DEPARTMENT OF STATE,

Washington, February 17, 1903. My Dear Mr. MINISTER: I inclose a memorandum in regard to Mr. Drayo's instruction of December 29, 1902, a copy of which you left with me. I am, etc.,

JOHN HAY. (Inclosure.]

MEMORANDUM.

Without expressing assent to or dissent from the propositions ably set forth in the note of the Argentine minister of foreign relations dated December 29, 1902, the general position of the Government of the United States in the matter is indicated in recent messages of the President.

The President declared in bis message to Congress, December 3, 1901, that by the Monroe doctrine "we do not guarantee any State against punishment if it misconducts itself, provided that punishment does not take the form of the acquisition of territory by any nonAmerican power."

In harmony with the foregoing language, the President announced in his message of December 2, 1902:

No independent nation in America need have the slightest fear of aggression from the United States. It behooves each one to maintain order within its own borders and to discharge its just obligations to foreigners. When this is done they can rest assured that, be they strong or weak, they have nothing to dread from outside interference.

Advocating and adhering in practice in questions concerning itself to the resort of international arbitration in settlement of controversies not adjustable by the orderly treatment of diplomatic negotiation, the Government of the United States would alwars be glad to see the questions of the justice of claims by one State against another growing out of individual wrongs or national obligations, as well as the guarantees for the execution of whatever award may be made, left to the decision of an impartial arbitral tribunal before which the litigant nations, weak and strong alike, may stand as equals in the eye of international law and mutual duty.

Mr. Ames to Mr. Tlay. No. 255.)

LEGATION OF THE UNITED STATES,

Buenos Aires, May 5, 1903. Sir: I have the honor to inform you that the favorable reception given by the press of the United States to Doctor Drago's note re the collection of public debts by force has occasioned general satisfaction here. When I last called on Doctor Drago he showed me some thirty or forty articles relative to his note clipped from leading papers of the United States and sent him by the Argentine minister in Washington. He was very much elated over their favorable tone and pointed out to me with manifest satisfaction certain of the more complimentary comments. The leading newspapers here have also expressed their gratification at the favorable reception accorded the note in question by our press and have published translations of various excerpts therefrom. La Nación, in its issue of Sunday, the 3d instant, published an editorial which embodied extracts from the New York Sun, the New York Daily Tribune, the St. Louis Globe-Democrat, the Chicago Inter Ocean, the Boston Journal, the Atlanta Constitution, and other leading papers, and which concluded with the following paragraph:

The previous extracts, which are far from being all we have, show in an obvious manner the echo which the Argentine note of December 29 has awakened in the American people and the support which the doctrine it expounds has found in that country for the most part. As time passes this support will become more general and it will eventually lead the Anierican Government to declare itself definitely in favor of our doctrine. it is highly significant that among thousands of articles that have appeared in the United States there is not one that shows opposition to the propositions contained in the note referred to.

I can not but feel that this sentiment of satisfaction is reflected in a friendlier attitude toward America and Americans on the part of the general public here. Such impressions are, I know, often erroneous, but it seems to me that I notice a general:increase of cordiality toward us. It may have no value commercially or otherwise, but it seems worthy of cultivation. I have, etc.,

EDWARD WixsLow ANES,

Chargé l'Affaires ad interim.

MESSAGE OF PRESIDENT OF ARGENTINE REPUBLIC.

Mr. Ames to Mr. Hlay.

No. 257.]

LEGATION OF THE UNITED STATES,

Buenos Aires, May 6, 1903. Sir: I have the honor to transmit under separate cover three copies of the message read on the 4th instant, at the opening of the Argentine Congress, by the President of the Republic. The translations, or rather résumés, in English, which are inclosed herewith, are from the Standard and the Herald. The Standard's résumé is in most respects the better, and its rendering of the paragraphs anent the Monroe doctrine and the Argentine note I can commend as a particularly accurate translation. Such portions of the Herald's résumé as complete or amplify the Standard's version are printed in italics. These passages and the whole Standard excerpt taken together give an adequate rendering of the entire message.

The comments of the local press on the message are generally unfavorable. It is contended that the internal questions, such as proper currency legislation, repeal of unconstitutional laws and taxes, the better administration of justice, the better ordering of provincial goyernments, etc.--questions of vital importance to the people—have been scarcely touched upon, while much stress has been laid on the extraordinary success and prosperity of the country externally, the establishment of peace with Chile, the tremendous crops, the greatly increased balance of trade in the country's favor, and all the other conditions, a knowledge of which is likely to improve Argentine credit abroad. On the other hand, and apparently for this very reason, the opinions of the European press, as quoted in the Buenos Aires papers, are for the most part complimentary. Unquestionably the message has strengthened Argentine credit abroad. I have, etc.,

Edward WINSLOW AMES,

Chargé d'Affaires ad interim.

[Inclosure 1.–From the Standard, May 5, 1903.)

MESSAGE

GENTLEMEN, SENATORS, AND DEPUTIES:

Congress opens this year's session with the Republic freed from fears, misunderstandings, complications, or dangers of any kind at home or abroad, other nations regarding it as in a flourishing and prosperous condition of vigorous development. The crisis has been long and severe, but we have known how to bear and surmount bad times and misfortunes by perseverence and firmness, while acquiring experience which we must utilize in the future.

An era of positive and real progress has now commenced. The country has full confidence in its own powers and is energetically devoting itself to reproductive labor. Capital is again flowing to it in large amounts, and Argentine credit, we note with intense satisfaction, is completely restored in the European markets, as it is the most powerful factor in our wealth and civilization.

The splendid harvests we have been favored with, which evoke remembrance of Biblical blessings, have stimulated enterprise in all classes, and this enterprise will be further stimulated by the prosperous year. The industrial, commercial life of the

a Spanish text not printed.

country has recovered its former vigor. Imports have increased, exports have reached unprecedented proportions, the revenue is increasing, and business in all branches shows a notable and favorable reaction.

FOREIGN AFFAIRS.

Our relations with otber foreign nations have been increasingly cordial and the representatives of the most distant countries have brought us their friendship and sympathy, giving proof of a feeling of human concord and solidarity.

You are aware that in spite of our boundary question with Chile having been subinitted to the arbitration of His Britannic Majesty, rivalry and distrust still existed between the two peoples and were accentuated by incidents inevitable in so prolonged a dispute respecting an extensive frontier. At a very critical moment, however, the two Governments entered into an agreement for general arbitration, the equivalence of their fleets, and the designation of the same arbitrator for the demarcation of the boundary line.

This agreement, which received your sanction after luminous debates, and also the unanimous approval of the people (constituting a noble example and a grand lesson which was applauded all over the world), prepared the way for the respectful obedience of the two peoples to the award of His Britannic Majesty, which put an end to the arduous controversy of more than half a century.

The two nations have thus averted, without loss of dignity, the great dangers to which their long-standing litigation had exposed them, and they understood that they had to avoid any criticism which might weaken the authority of a decree giving evidence of the spirit of the equity and justice which had guided the arbitrator.

I must now acknowledge the debt of gratitude due to His Britannic Majesty who, with such good will, accepted the opportunity to render this eminent service to the two peoples, who, thanks to him, will henceforth recognize the same line of demarcation.

The arbritrator proceeded with exceptional celerity, as if to compensate for the delays and prolonged expectations of the past, to make effective the power with which he had been invested, and the commissions appointed by him to mark out the boundary line have already completed their task. "The boundary marks fixed in the Cordillera will not only point out the line of territorial division but will also be an indestructible record of the realization of the most noble aspirations and ideals of the rights of nations.

The results of this policy begin to be felt. The two peoples are establishing a sure basis for their future relations upon reciprocal esteem and respect. Commerce is returning to its accustomed channels and the arts of civilization and peace are reviving.

The Argentine Republic has once more demonstrated the traditional elevation and disinterestedness of its international policy.

Much emotion was felt in America in consequence of the intervention of some European nations in Venezuela, one cause alleged for it being the omission to meet the service of the debt contracted by that nation in order to carry out some public works. This led to the supposition that when foreign citizens or subjects contracted for loans of a public character the State to which they belong is also a party to the operations, although the lenders might not have relied upon that intervention and might have calculated the circumstances of the borrowing country in order to fix the conditions of the loan. A private contract would thus be converted into an international obligation. This appeared to me to be the enunciation of a dangerous doctrine, to which I ought not to remain indifferent. The note, in which this Government made known to the United States its opinions upon the matter has already been made public, merely pointed out the dangers to the nations of this continent involved in the doctrine by virtue of which loans of a public character contracted for by foreigners, after taking into account the conditions of the borrowing country and imposing upon it more or less onerous stipulations and interest, can be converted at a given moment, without any exhibition of bad faith on the part of the debtor, into a cause of international complaint authorizing the employment of force and the subordination and tutelage of the local governments, if not their total disappearance, as the result of financial interventions.

At first the comments made upon this communication, before its exact terms were known, were not generally favorable to it, but afterwards there was a reaction of putlic opinion, as well in Europe as in America, and it was recognized as being justified and it was admitted that in the circumstances of the case we could assume no other attitude. The Argentine note was, in reality, confined to the enunciation of elementary principles including the indisputable rights of these nationalities to grow and be developed under the shelter of international law. Its doctrine does not exclude any of the obligations which that law imposes upon civilized peoples; it does not recognize supremacies or lessen responsibilities. Limiting itself to assert the sovereignty of nations, it expresses at the same time the commotions and alarm which would be produced by any act of colonization or conquest in any region of the continent.

The reply of the United States coincides, in substance, with these declarations and recommends international arbitration for settling questions which may arise in reference to national obligations. Though it has not stated its policy with regard to the compulsory recovery of public debts (which it was not in any way asked to do), it is satisfactory to state that the Argentine note has not fallen into a vacuum, but that authoritative and eloquent speeches have been delivered, even in the British Parliament, in support of our doctrine.

It is understood, in fact, that the Republic has not gone in search of protectors or alliances, but has merely stated its views respecting European intervention in a section of this continent which has been convoked more than once to hear the opinion of its States and to establish the consequent bases of a common right.

FINANCE.

The apprehensions of war and loss of crops in some provinces in the period 1901-2 determined a marked commercial paralysis and brought in their train an inevitable and severe shrinkage in the public revenue.

The ordinary and extraordinary expenditure of 1902 was fixed at $33,027,223 gold and $102,946,092 currency, as against an estimated revenue of $47,413,347 gold and $72,890,000 currency. Meantime the revenue from all sources only amounted to $40,240,264 gold and $69,129,483 currency, showing a deficit on the estimates of $7,173,082 gold and $3,760,516 currency, or say a total in currency of $20,108,432 c/1.

This would naturally have produced a very considerable difference but for the fact of the Executive, noting the decline in the revenue, having curtailed the expenditure to the greatest possible limit conformable with the regular march of government. Due to this system of economy and to the assistance lent to the treasury by the Banco Nacional provided by the budget law the deficit was reduced to its lowest expression, and has been cleared off since by application of surplus revenue over estimates during first months of this year.

The severe shrinkage in imports and revenue experienced last year was compensated by increase of exports which ran to $179,486,727 gold, being $11,760,625 gold in excess of the 1901 figure, and the balance of trade in favor of the country was represented by $76,447,471 gold, the effect of which has been felt in various ways, especially in the exchange market, which has constantly shown rates favorable to the country thus offering facility for payment of imports and official obligations.

The exchange rate is constantly improving. Our internal and external bonds are attaining the highest quotations.

Having resumed from July 1, 1901, the amortization of our foreign consolidated debt, suspended as from 1893, the service has been made punctually. In 1902 there was disbursed on this head $5,368,466 gold. This same year the nation amortized $8,028,993 currency and $159,600 gold of its internal debt; as, however, in respect of special laws there was an emission of $2,892,600 currency, the net decrease in our internal debt in 1902 was $5,136,393 currency and $459.600 gold.

The exactitude and correctness of our proceedings has undoubtedly tended to strengthen our credit and to afford greater facilities for financial operations. The quotation of some of our 5 and 6 per cent stocks over par allows us to foresee the possibility of reducing the interest at some future time by means habitually employed in other countries. This same improvement in credit has allowed the Executive to place on advantageous terms the bonds of the 1891 issue and those of the Banco Nacional, operations authorized by your honors, so that the promise to negotiate these securities only on honorable terms for the nation has been strictly fulfilled.

It must also be considered as a revelation of the wealth of the Republic and the confidence it inspires that an enormous stock of gold has flowed into the country, unequivocal proof of the realty and solidity of the economic reaction. In the caja de conversion alone there are over $23,000,000 gold issued against paper at the rate fixed by law. I am decidedly of opinion that this law should be maintained and that we should replace, when possible by the treasury, the funds distrained and applied to other objects for reasons already known. In this way the promise to convert the currency at the rate already fixed, which can not be modified without causing great economic and commercial perturbation, can be made effective within a period more or less measurable.

Among the measures to be recommended for legislative attention perhaps there is none more efficacious than that having for its object the revision of our taxation

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