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[Inclosure.-Translation.

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MINISTRY OF FINANCE. Circular No. 43, ministry of finance, federal capital, August 8, 1902, is republished on account of having been previously printed with mistakes.

I hereby notify the heads of departments of finance, for their information, that the ministry has, through telegrams of this date to the collecting agents of the federal treasury in the States of Para and Amazonas, suspended the free navigation of the Amazon for importation and exportation to and from Bolivia, except for that merchandise in vessels that left the ports of shipment before this same date, all other except the above paying the regular duties.

JOAQUIM MURLINHO.

Mr. Bryan to Mr. Hay.

No. 464.]

LEGATION OF THE UNITED STATES,

Petropolis, October 31, 1902. Sir: Referring to my Nos. 441 and 444 of the 14th and 19th of August, respectively, relating to the ministerial decree which, in order to injure Bolivian commerce, imposes transit duties, I have the honor to report that the Governments of France and Germany have instructed their ministers to protest against this proceeding on Brazil's part. The British minister, also under telegraphic instructions, has called on me several times to inquire whether I had been directed to notify the foreign office here of displeasure on our part at this Government's unwarranted action. The French minister informs me that the minister for foreign affairs has reasserted to him with emphasis, both verbally and in a long note, his belief in the right of Brazil to impose transit duties. My colleagues, however, agree with me in the belief that Baron Rio Branco, an experienced diplomat who will become minister for foreign affairs on November 15, will not sustain his predecessor's contentions or attitude with regard to the commercial rights of Bolivia and of other nations. It is our separate conviction that long before January, when the rubber shipments begin, the new Government of Brazil will have solved the pending difficulties with regard to free transit on the Amazon River. Nevertheless, as I may be in error in this opinion, I deem the matter of sufficient importance to lay the facts before the Department as they present themselves to me, so that my successor may be thoroughly informed regarding every phase of this question, and so that the Department understandingly may be prepared to take such action in the premises as it may deem proper. I have, etc.,

CHARLES PAGE BRYAN.

Mr. Bryan to Mr. Hay. No. 466.]

LEGATION OF THE UNITED STATES,

Petropolis, November 19, 1902. SIR: Continuing the subject of my No. 464, of October 31, I have the honor to report that the French minister informs me that the legal adviser of the foreign office at Paris, in a lengthy opinion, has sustained his position regarding the illegality of the imposition of duties on merchandise in transit by the Amazon. I have, etc.,

CHARLES PAGE BRYAN.

Mr. Hay to Mr. Seeger. No. 302.]

DEPARTMENT OF STATE,

Washington, December 9, 1902. Sır: The Department has given consideration to Mr. Bryan's Nos. 441, 444, 464, and 466, of the respective dates of August 14, August 19, October 31, and November 7, 1902.

No. 441 transmits a copy of an official order of the minister of finance by which he attempts to close the free navigation of the Amazon by subjecting all goods in transit to Brazilian export and import duties.

No. 444 reports a correction of the order so as to make it apply only to goods going to and coming from Bolivia.

No. 464 reports the protests of the French and German ministers against the order.

No. 466 reports the French Government's approval of its minister's protest.

The Department notes by Mr. Bryan's No. 464 that it is the common belief of the diplomatic corps that the order would be rescinded by Baron Rio Branco upon his assumption of the office of minister for foreign affairs. It is hoped that by the time this instruction reaches you this expected action will have been taken. If not, you will make proper and temperate remonstrance against the measure, which, if persisted in, could not fail to injure United States commerce with the Amazon region. I am, etc.,

John Hay.

Mr. Seeger to Mr. Hlay.
LEGATION OF THE UNITED STATES,

| Petropolis, January 20, 1903. Sir: The optimistic prediction of Mr. Bryan, that “ long before January, when the rubber shipments begin, the new Government of Brazil will have solved the pending difficulties with regard to free transit on the Amazon River," is far from being fulfilled.

I have, consequently, in obedience to your No. 302, of December 9, made “proper and temperate remonstrance” against Brazil's obstruction to the commerce on the Amazon.

temperhe Amazon

e subject,

Inclosed are copies of memoranda on the subject, shown me by Doctor Pinilla, and of my note of to-day to the foreign office. I have, etc.,

EUGENE SEEGER, Consul-General in Charge of Legation.

[Inclosure 1.—Translation.] Opinion on the question of transit by the Amazon, by Mr. Louis Renault, professor of inter

national law of the faculty of Paris, member of the Hague conference, legal adviser of the minister of foreign affairs, etc.

I am of the opinion that the remonstrance made by Mr. Decrais to the Brazilian Government is well founded.

There can be no doubt that in the absence of constitutional provisions a State is free to regulate as it sees fit the passage across its territory or on its waters. We

would have had no right to complain if Brazil, not having a commercial treaty with us, had subjected the transit on Brazilian waters to transit taxes. But this is not what she has done in the exercise of her sovereignty. She has by an act of legislation, even by her constitution, established free transit. We therefore contine ourselves to invoking against Brazil the rules which she herself has established and upon the upholding of which foreigners have a right to rely as long as they are not modified in accordance with legal forms. There would be no sort of security if a condition of things created by so solemn an act as the constitution could, by a simple ministerial decree, arbitrarily be modified to the detriment of the foreigners. That would be a genuine surprise which the governments charged with the protection of their own nationalities could not accept.

L. RENAULT.

(Inclosure 2.) (This was presented to the London foreign office by the Bolivian minister at that capital.) Memorindum on the suspension by Brazil of free transit to Bolivia through the Amazon.

The treaty of 1867, Article 6, declares that “the communication between the two States by the common frontier shall be free and the transit by it exempt from all national and municipal duties." Article 28: “All the conditions of this treaty which do not refer to frontiers shall be in force for the term of six years, after which they shall continue in force until one of the contracting parties shall notify the other of his desire to put an end to them and they will cease to exist twelve months after the date of this notification.” Article 29: "The contracting parties undertake to negotiate before the expiration of the fixed term of six years a new treaty with the alterations and provisions which experience and the interests of both countries may render necessary."

The treaty of 1867 was denounced by Brazil on the 6th of September, 1884, and if there had existed any right on the part of Brazil to suspend the free transit of merchandise along the natural waterways, a right which Bolivia had exercised ab initio, it would have been done at the expiration of the agreed term, i. e., on the 6th of September, 1885; but it was not done, and the transit of Bolivian exports down the river Madera, the only commercial route through Brazil from Bolivia existing at that time, continued as before.

Negotiations went on, and a new treaty was concluded on the 31st of July, 1896, and ratified by the Bolivian Government on the 15th of August of the same year, but the Brazilian Government kept it in suspense.

The treaty of 1896 was finally withdrawn from Congress by the Brazilian Government in July, 1902.

On the 19th of July, 1902, the Brazilian minister of foreign affairs, under pretext of this act of withdrawal, declared that "in future no free transit along the Amazon would be granted to produce coming from its affluents.” Soon after he explained that this resolution referred only to Bolivian traffic. At the same time he declared that "article 6 of the protocol of October 30, 1899, remained without effect." This article reads as follows: “As long as there is no Brazilian consul at Puerto Alonso the custom-houses of Manaos and Belem shall accept as valid, from the 15th of November next, all customs notes and other documents issued by the administrator of the custom-house of Puerto Alonso, provided they are accompanied by a certificate from the captain of the ship which receives the cargo."

Now, the Brazilian minister, in a recent explanation given to the Bolivian minister at Rio, propounded that “the Federal Government, in anticipation of a favorable vote of Congress accepting the treaty of 1896, had consented on the 23d of October, 1898, as an act of friendship toward Bolivia, to the recognition of the custom-house of Puerto Alonso, the commerce of that region receiving the provisional enjoyment of the advantage which would be granted in a permanent and definite form when the said treaty should be approved and come into operation."

This theory is utterly utenable because the protocol of October 13, 1899, says: “Article 4. Until the mixed commission shall have completed the definite demarcation of the frontier, there shall be adopted as provisional boundary a line which, departing from the Madera at latitude 10° 20', runs to latitude 70° 11'48", fixed by Captain Lieutenant Augusto da Cunha Gomes at the point of the source of the river Ja vary." And article 5: “The Bolivian custom-house of Acre shall continue established at Puerto Alonso until by the demarcation of the frontier in its neighborhood

the statement that it is in Bolivian territory has been confirmed, the Bolivian Gorernment undertaking in the contrary case to remove it to a suitable place."

Therefore the establishment of the custom-house of Puerto Alonso was not consented to by Brazil in anticipation of the approval of the treaty of 1896, as the minister propounds, but as a natural consequence of the delimitation of the frontier on the river Acre, Bolivia having the right to fix her own custom-house at any point within her frontier..

Brazil pretends that because the treaty of 1896 has been withdrawn from Congress the Federal custom-house of Manaos has the right of charging duties on merchandise imported to Bolivia (which is being done), and that the governor of Amazonas bas the right of collecting duty on the rubber exported from Bolivia as if it came from its own territory.

But the treaty of 1896 did not create any rights, because it was never in force, and its withdrawal does not in any way change the situation. The relations between the two countries were fixed by the treaty of 1867, and the commercial conditions established by it have continued to exist without interruption, as the rights acquired under a treaty can not be altered capriciously, nor can two neighboring countries exist without some kind of understanding in their commercial relations, and until a new treaty is signed the normal relations established by the previous one continue to exist. The only rights which Bolivia could not claim were those which she did not previously exercise, such as the navigation of the Brazilian rivers under her own flag.

The position created becomes still more delicate when it affects the rights of third parties. Under the conditions of existing treaties foreign settlers established themselves in Bolivian territory, and during the last forty vears have been trading through the Amazon. English companies were formed, such as the Orton Rubber Company. English and other merchants advanced considerable sums of money to the merchants of that territory.

Without any warning, at a moment's notice, Brazil now begins to collect a probibitory duty on all merchandise going to Bolivia and 22 per cent ad valorem on rubber exported, besides 15 per cent charged by Bolivia, which inflicts a deathblow on all the trade of that region. It is to be remembered that the traffic through the Madera was not subject to the same conditions as that from the Acre. In the former there was never any dispute about boundaries, and free transit has existed ab initio, but now the State of Matto Grosso, seeing that Amazonas is allowed to collect duty on rubber coming from Acre, claims a similar right on all rubber coming from the Bolivian province of Beni.

This conduct of Brazil, being simply an abuse of her topographical position at the mouth of the great waterways of the Amazon, and being contrary to the law of nations, does not only affect the revenue and prosperity of Bolivia, but also and most injuriously all foreign settlers and people interested in the commerce of that part of the world. Bolivia is unable to protect them on account of her disadvantageous geographical position, and they have applied to the foreign offices of England, Germany, and France for protection. Their claim seems to be reasonable and worthy of prompt attention before they are ruined by the wanton action of Brazil.

[Inclosure 3.)

Mr. Seeger to the Brazilian minister for foreign affairs.

LEGATION OF THE UNITED STATES,

Petropolis, January 20, 1903. MR. MINISTER: Pursuant to instructions from my Government, I have the honor to submit to your excellency's kind consideration the following facts and conditions:

Your excellency knows that important commercial relations exist between the United States of America and that portion of the Republic of Bolivia whose only outlet is the Amazon River.

Through the decree of the honorable minister of fazenda of Brazil, of August, 1902, issued without a moment's warning and imposing prohibitory transit duties on all merchandise to and from Bolivia by way of the Amazon River, a great injury is done to the material interests of my country.

The Government of the United States of America has always considered the navigation of the Amazon through Brazil as being free to all nations, and it has consequently regarded the above-mentioned ministerial decree as only temporary and transient in its nature. For this reason it has refrained, until now, from submitting to your excellency the deep grievances of our merchants doing business in the Amazon region.

I beg your excellency to kindly consider that a continuance of the policy as applied in the ministerial decree above mentioned would be a death blow to our vast interests in eastern Bolivia.

I have taken the liberty to call your excellency's attention to these facts and conditions, feeling confident that you will exercise your great influence to bring about such changes in the premises as our important commercial relations with Brazil and the strong ties of close friendship that bind us to your glorious country give us reason to hope for.

I would be particularly grateful to your excellency if you would enable me to transmit your answer to our Department of State before my leave of absence takes effect, on February 1, next. I have, etc.,

EUGENE SEEGER, Consul-General, in Charge of Legation.

Mr. Ilay to Mr. Seeger'. No. 316.]

- DEPARTMENT OF STATE,

Washington, February 17, 1903. Sir: The Department has received your unnumbered dispatch of January 20 in relation to the obstruction to commerce on the Amazon River by the decree of the Brazilian Government, with which you inclose copy of your note to the Brazilian minister for foreign affairs, representing the injury to American commerce; copy of an opinion on the question of transit by Mr. Louis Renault, legal adviser of the minister of foreign affairs, etc.

The Department notes Mr. Renault's opinion that the Brazilian Government has, by its own constitution, established free navigation on the Amazon. There would seem to be foundation for this opinion in the provisions of the Brazilian Federal constitution of 1890, articles 6, 7, and 13, and especially in the first section of article 10, which reads as follows: Article 10. It is forbidden to the States as well as to the Union

1. To impose duties on the products of the other States, or of foreign countries, in transit through the territory of any State, or from one State to another, as also on the vehicles, whether by land or water, by which they are transported.

In view of your recent report of the signing of the agreement between the Governments of Brazil and Bolivia and the removal of transit restrictions, present discussion of this point is of merely academical interest. I am, etc.,

John Hay.

Mr. Seeger to Mr. Ilay.
LEGATION OF THE UNITED STATES,

Petropolis, February 22, 1903. Sir: I have the honor to refer to my unnumbered dispatch of January 20 and to transmit herewith a copy and translation of the ministerial decree of February 20, abolishing the transit duties recently levied by Brazil against Bolivian commerce on the Amazon.

While this decree does away with the very obnoxious and unjustifiable measure, it does not satisfy the Bolivian Government. I was informed by Doctor Pinilla, the Bolivian minister here, that he intends to formally protest against the phraseology of the document, especially against the word “tolerance.” His contention is that as the

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