Evening star. [volume] (Washington, D.C.) 1854-1972, 1900-09-11
SPAIN'S GUARANTEES
Question of Tha oountry's Liability
9 Discussed.
Case OF FHE MANILA RAILWAY
General Equitable Obligations to
MaketFair Arrangement.
PRESIDENT MAY SETTLE IT

Some weeks ago Attorney General Griggs
received from the Secretary of War a re-
quest for an opinion as to what obligations,
II any. exist against this government, the
military government of the Philippine Is
lands or any of the provinces of the Philip
pines on account of quarterly subventions
guaranteed by Spain to the Manila Rail-
way Company, limited.
1t appears from the record that accord
ing to a method familiar with Spanish bust
ness and colonial dealings. a project OF a
railway from Manila to Dagupan. on the
northern coast of Luzon. was. in pursuance
of royal decree of April 0. 1895. made the
subject of public auction. held at Manila
and also at Madrid.
At that auction Mr. Hett was
the only bidder and subsequently was
declared the concessionaire, authorized to
build the road Afterward Mr.. Hett as
signed hts right to the present company an
English corporation, which proceeded to
construct and operate the road. This COM
pany now prefers claim against the United
States for certain sums Of money In &C
cordance with the plans OF the concession.
Spain's Guarantee.
By the terms of this concession the con-
cessonaire was guaranteed by the govern
ment of Spain an interest of per cent per
| annum on the capital spent on the con-
struction Of the road, Spain reserving to
herself the right to recoup two-thirds OF
the amount 1t guaranteed from the local
funds belonging to the provinces through
which the railroad line passes. me same
guarantee. or subsidy. was given by Spain
to numerous railroad. cable and other cor
porations and the decision now rendered
will apply to all of them.
The question involved Is whether the
United States Is bound to make good the
guarantee of Spain, or whether the reve-
nues Of the Philippine Islands or any OF the
provinces Interested may be used Tor the
purpose of carrying out the guarantee.
No Contract with United States.
cit is apparent that this contract" says
the Attorney General, was recognized as
one of utility to the government of Spain
and one Of benefit to the provinces In the
Island of Luzon through which the road
was to pass. Ultimately, as appears from
the royal decree of 1885, those provinces
were to bear two-thirds Of the expense OF
the guarantees This was a con-
tract between the Spanish government and
the railroad company. The promises were
made by the one to the other. am OF
opinion that an Identical contract between
the United States and the company was not
created by the notifications of the treaty
of Paris, and does not exist.
1T seems to be- the consensus of opinion
among authorities on international law
that upon the separation of a part of
country from the Sovereignty over It, debts
created for the benefit of the departing por-
ton of the country go with 1t as charges
upon its government AS already sug-
.gested. however, all the promises of every
contract entered into by the former gov
eminent OF q province wrested from 1t by
victory In war. do not transfer themselves
to the new government in defiance Of the
natural proposition that man cannot be
bound by a strangers promises.
But benefits may be received by q pro-
vince as well in pursuance of a personal
contract of the sovereign partly for his
own benefit and otherwise. They are none
the less benefits received and retained by
the province, and II the burden of con-
tract itself does not go with them the bur-
den Of an obligation to do equity toward
the contractor, who has supplied them.
here in question are executory contracts,
not concerning the public domain owned by
Spain. but containing many personal obli-
cations of Spain and Of other parties: Spain
Is regarded by the law of nations as having
a personality OF her own. distinct from that
of the power which has succeeded her in
control Of the ceded territory. and I am
such personal obligations either on the part
Of the government Of Spain or the other
contracting parties, become binding as con-
traetual obiiga lions upon a government
which made no such promises upon the
individual toward a government to which
he made no such promises"
For spain's BENEFIT.
The Attorney General then goes on to say
that these concessions were for the general
benefit Of Spain as well as for her colonial
subjects. To regard them as for local benefit
exclusively would. he says. be to ignore
obvious facts. On the other hand. to
charge the coded provinces with contracts
or debts for imperial Objects such as those
concerning the relations between the CEN
trail government and the locality. cannot be
justified by the mere fact that the con-
tract concerns also local objects. To agree
In treaty to be bound by actual known
contracts and to assent to law about
contracts in general are two different
things.
Gould nations" he asks commit them
selves to anything more embarrassing and
unsafe than legal obligation to carry out
specifically any promises whatsoever that
may be made by others in any contracts for
imperial and local objects? 1t seems to
me not. / am unable to regard these con-
tracts of concessions, with their manifold
personal stipulations, as other than what
they purport to be.
THE property in question has been fur
nished and Is being maintained and must
continue to be maintained. for the benefit Of
the ward. whose funds are now freed from
the guardians control.
Obliged to Make Some Return.
From these considerations, it seems to
me to follow" concludes the Attorney Cen
eral, that, although the contract as such
has departed with Spain. there Is a general
equitable obligation upon the provinces to
make some fair arrangement with the COM
pany as to the two-third benefit and that
they cannot justly take advantage Of the
disappearance of Spain to retain what she
procured for them on the credit of their
funds, and deny all liability of the price
Whether, basedsexclusively upon the recep-
ton Of the benefit of the railroad, the United
States has incurred any liability affecting
one-third Of any such portion of the original
Indebtedness IT Is Unnecessary to consider,
since. II so, tt will be for Congress to deal
with It !" = t.s'
The President Has Authority
In reply to the question that IL such obli-
cations do exist what action can legally be
taken in recognition and settlement thereof
by the executive. department of the United
States or the military government of the
Philippines. the Attorney General expresses
| the opinion that the President has authority
to settle a prsrexisting accrued Indebtedness
of this kind II he has good reason to believe
that the settlement cannot wisely and just
ly be left to await action by the future gov
eminent. Hsr also says that in his sopinSn
the President has authority. If he thinks it
necessary. to- apply the local revenues of
the PROVINCES through which this road ex-
tends, to the discharge Of their equitable