pay a fine on account of an offense charged on a third party, viz, the Mendoza firm that had chartered the Belgika. That firm now being bankrupt, the Belgian company can not even seek its remedy against it for the repayment of the sum paid on its account. The minister of Belgium ventures to hope that these considerations of equity will induce the Government of the United States to grant to the Belgian company the refundment of the fine that it paid on account of an act that it could in no wise be charged with. No. 14.] Mr. Hay to Baron Moncheur. DEPARTMENT OF STATE, Washington, December 24, 1901. SIR: I have the honor to acknowledge the receipt of your memorandum of the 20th instant, relating further to the fine imposed in March or April on the owners of the steamship Belgika, and to inform you that I have once more called the attention of the Secretary of War to the matter, with the request that he cause a report of the proper authorities in the Philippine Islands to be made and sent to me. Accept, etc., Mr. Hay to Mr. Wauters. JOHN HAY. No. 17.] DEPARTMENT OF STATE, Washington, January 11, 1902. SIR: Referring to the minister's note of March 11, 1901, and to subsequent correspondence in reference to the claim of the Compagnie Générale des Philippines, etc., against this Government for the refundment of a fine of 75,000 francs imposed on one of its vessels, the Belgika, for a violation of certain regulations governing commercial intercourse between the islands of the Philippine Archipelago, prescribed by the military authorities of the United States in the Philippines, I have the honor to say that there exists, and has existed since February 4, 1899, in the Philippine Archipelago, an armed insurrection, having for its object the overthrow of the authority and sovereignty of the United States. The character and extent of this insurrection requires the United States to prosecute its rights by force of arms. By the laws and usuages of nations, commercial intercourse in an insurgent district under such circumstances becomes lawful only by the permission of the military authorities conducting military operations therein. This permission is subject to such terms and conditions as the military authorities see fit to impose, and persons availing themselves of the privilege secured by such permission and voluntarily engaging in commercial intercourse must respect the conditions of the license. The Philippine Archipelago is subjected to military occupation by the forces of the United States. The right to regulate commercial intercourse with territory subject to military occupation is one which neutral nations are bound to respect. In the exercise of this right to regulate commercial intercourse with insurgent territory subject to military occupation, the military gov ernor of the Philippine Islands, on December 21, 1899, issued General Order No. 69, prescribing certain regulations for commercial intercourse between the several islands of the archipelago. A copy of this order is herewith transmitted. Among other provisions the order contained the following: ARTICLE 9. Vessels licensed for the coasting trade will not be allowed to call at unequipped ports along the coast of the archipelago without special permission of the military governor or department or district military commander, who, in authorizing such trade, will prescribe the conditions under which it is permitted. Vessels found violating this section shall be subject to a fine of not less than 100 pesos, or more than the value of the cargo provided the value thereof exceeds 100 pesos. It appears from a report of the United States military authorities, which has just been received through the Secretary of War, that the Compagnie Générale des Philippines, etc., a Belgian corporation with headquarters at Brussels, voluntarily availed itself of the mitigation of the strict rule of war made by the United States, and of its own motion engaged one of its vessels, the Belgika, in the trade subject to the provisions of General Order No. 69. It came to the attention of the government of the Philippine Islands that the Belgika had violated the requirements of article 9, above quoted. The charge was then investigated by the proper authorities and found to be true, whereupon a fine of $30,000, Mexican, was imposed and collected for said violation. The company now seeks repayment of the amount of that fine. In support of its application the company contends as follows: 1. A fine imposed for violation of the provisions of article 9, of General Order No. 69, series 1899, must be recovered through seizure of the cargo and not of the ship. Article 9 does not sustain this contention. That article plainly provides that * * * * Vessels licensed for the coasting trade will not be allowed to call at unequipped ports without special permission. * * Vessels found violating this section shall be subject to a fine * of not less than 100 pesos, or more than the value of the cargo. The subdivision of General Order No. 69, in which article 9 appears, relates to licensing vessels to engage in the coastwise carrying trade and deals with the shipping, not the merchandise shipped. The offense is committed by the vessel if it shall call at unequipped ports without special permission," and the vessel itself may be properly libeled for the penalty of such a violation. The cargo is referred to for the purpose of fixing the minimum amount of the fine. * * * 2. The company further contends that at the time said violation took place, the vessel was under charter to a business concern located at Manila, and that the government of the Philippines should look to the charter party and not to the owner of the vessel. This proposition can not be assented to. The owner came to the government of the Philippines and secured a license for the vessel to engage in the coastwise carrying trade. The license relates to the vessel and the conditions bind the licensee. It is incumbent upon the licensee to carry out the said conditions, and he can not evade responsibility for violations by establishing that such violation was the act of his agent, employee, or contractor without his knowledge or consent. He is bound to obey the terms and conditions of the license. The license permits the ship to be used for certain purposes subject to certain regulations under penalties for violations. If the licensee neglects to adopt adequate measures to prevent the ship from violating the requirements of the license, the fault is his and he is lawfully required to sustain the penalty. This is the rule applied to licensees in time of peace, and is manifestly just under the conditions existing in the Philippines. There is apparently no controversy over the fact that the Belgika called at the unequipped and closed ports, Hindan and Matalun, "without special permission of the military governor or department or district military commander." To excuse the failure to secure the special permission of any of the military commanders mentioned, the company presents the statement of the charterers that "as the captain of the port of Bay-Bay (BagBag) authorized us to send the vessel to the ports referred to, we fail to see how any responsibility can have been incurred by the steamer." (Letter dated April 11, 1900, from Mendoza & Co. to Major-General Otis.) The offense committed by the steamship Belgika was investigated and the amount of fine determined pursuant to the provisions of General Order No. 69 (1899), as follows: ART. 10. The fines and forfeitures which shall be incurred by virtue of these regulations shall be administratively adjudicated by the collectors at the principal ports of the islands, from whose decisions appeal may be taken to the collector of customs at Manila for final determination. The collector of customs at Manila determined the matter as follows: This vessel has, by imposing upon an inspector of customs (who probably not having been properly posted as to his duties), violated all the orders of the governorgeneral, and has for the gain of those interested in her made money out of illicit trade with the insurgents * I recommend that a fine of $50,000 Mexican be * * imposed upon the ship and that she be held until such fine be paid * * * This finding being reviewed by Major-General Otis, the amount of the fine was reduced to $30,000 Mexican, which amount was paid by the company owning the vessel. In view of the above this Government is unable to entertain the claim of the company for the refundment of the fine. In conclusion, permit me to call your attention to the fact that Belgian interests in the Philippines, in common with those of other nations, enjoy the protection of the United States afforded by an army of nearly 50,000 men and a squadron of our national war vessels; that to promote the commerce of the world the United States relaxes the rule respecting hostile territory and permits commercial intercourse with such portions of the archipelago as military exigencies permit, and to enable Belgian and other interests to carry on commerce the United States has garrisoned nearly 500 towns and stations in the islands, and opened to commerce more than 100 ports. Trusting that the Government of Belgium will recognize the fairness of the conclusions embodied in this note, I avail, etc., JOHN HAY. Baron Moncheur to Mr. Hay. [Translation.] LEGATION OF BELGIUM, Mr. SECRETARY OF STATE: I nave transmitted to my Government the communication that your excellency was pleased to address to me on the 11th of January last, and in which you advised me of the grounds upon which the claim of the Compagnie Générale Belge des Philippines for the restitution of a fine imposed on the owners of the steamer Belgika was rejected. My Government, after a perusal of that document, has no idea of contesting the strict right of the authorities of the United States to impose a fine on the steamer Belgika, but it directs me to point out to your excellency the many circumstances that make for the Belgian society. In the contract it had entered into with the firm Mendoza & Co. there was a formal clause inhibiting the said charterers from infringing in any way the provisions of law governing the coastwise trade in the Philippines. It did not participate, whether directly or indirectly, in the offense committed by Mendoza & Co. by means of the Belgika, but the bankruptcy of the said firm puts the Belgian society under a severe hardship, since its legal remedies in the case are now rendered worthless. My Government therefore hopes that the Government of the United States will kindly take into consideration the circumstances which place on innocent parties the penalty incurred by others, and that it will consent, in a spirit of equity, to reduce appreciably the amount of the heavy fine of $30,000 Mexican, which is a severe burden on the company. Remissions of this kind are frequently granted by Governments when they are, as in this case, satisfied of the claimants' good faith. By thus graciously conceding a similar favor to our fellow-countrymen, the Government of the United States would prevent an unmerited loss from compromising the outset of an enterprise worthy of being encouraged, and will secure the gratefulness of honorable men who intend to comply under all circumstances with the laws and regulations of the country. Ever since the occurrence which occasioned the fine, the Belgian company has maintained excellent relations with the American authorities in the Philippines, and has constantly striven to render every service that they wished for. Its steamers have very frequently been used for the transportation of troops and army supplies; more than once have they gone out of their regular course for that purpose. They have repeatedly declined to take cargo of private persons in order to give entire satisfaction to the American authorities. The minister for foreign affairs at Brussels, in sending me the foregoing communication, adds that the favorable reception of the request I am instructed to lay before your excellency, and to which he attaches great importance, would be taken as a flattering token of the good will of the United States toward our fellow-countrymen. I eagerly embrace this opportunity, etc., Mr. Hay to Baron Moncheur. MONCHEUR. No. 62.] DEPARTMENT OF STATE, SIR: I have the honor to acknowledge the receipt of your note of the 8th instant, relating further to the representation of your Government that the fine imposed upon the steamship Belgika, of the Compagnie Générale Belge des Philippines, for a violation of the regulations of the United States military authorities in the Philippine Islands, should be rescinded. In reply I have the honor to inform you that the case was brought to the attention of the Secretary of War, and was carefully considered, but he was unable to recommend restitution of the fine imposed upon the owners of the Belgika. The Department is therefore unable to comply with the request of your Government. Accept, etc., JOHN HAY. Mr. Hay to Baron Moncheur. No. 95.] DEPARTMENT OF STATE, Washington, October 13, 1902. SIR: Referring to your recent inquiries respecting the case of the steamship La Belgika, which was presented by your note of the 8th of April last, with a view to the condonation and return of the fine imposed upon that vessel for entering and trading at certain ports of the Philippine Islands, in violation of the ship's license to engage in the coastwise trade thereof, I have to inform you that after conference with my colleague, the Secretary of War, I find that he does not deem himself competent to reverse the decision already reached. Mr. Root holds that the order violated by La Belgika was one issued for the purpose of promoting the military operations of the forces of the United States, and the fine incurred was imposed by the commanding officer of the United States forces in the Philippines and collected and expended by the military government at a time when that government was an instrumentality of the United States for the suppression of an armed insurrection against the sovereignty and proprietary interest of the United States in that archipelago. He therefore deems himself without discretion to reverse the judgment against the vessel as an act of clemency. JOHN HAY. Accept, etc. SUGAR-BOUNTY CONFERENCE TEXT OF CONVENTION. No. 127.] Mr Townsend to Mr. Hay. LEGATION OF THE UNITED STATES, SIR: I have the honor to transmit herewith two official copies, together with a translation, of the sugar convention signed at Brussels, March 5, 1902, at 6 p. m. I have, etc., [Inclosure-Translation.] LAWRENCE TOWNSEND. Convention concerning the sugar régime. His Majesty the Emperor of Germany, King of Prussia, in the name of the German Empire; His Majesty the Emperor of Austria, King of Bohemia, etc., and Apostolic King of Hungary; His Majesty the King of the Belgians; His Majesty the King |