Finally, in article 9 of the said agreement of March 17, 1909, it is expressly stated that "the contracts annulled" are considered "cancelled and without any value," among which is the contract of August 20, 1907, providing for the extension of time. So that, even admitting, which cannot be done, that the said extension of time might be valid without approval by Congress, which is unconstitutional, it would nevertheless be at the present time cancelled and without any value, according to the agreement of annulment aforesaid.

The National Congress of the Republic so understood the matter at the time of issuing, on February 5, 1912, its Decree No. 28, in which it was declared : "Considering that the above-mentioned contracts are known to the Congress to be already annued by the parties thereto "; and in the disposing clause it says: "Article 1. It is declared that the National Congress can not recognize the said contracts in their present state."

From the foregoing the following conclusions are arrived at:

(a) The contract for the construction and exploitation of the wharf at Puerto Cortés terminated in accordance with the meaning of article 9 thereof on March 24, 1908: the date of completion of the twelve years approved by the National Congress, counting from the time that it began to be in force.

(b) Said contract has not been extended, because the concession of extension of August 20, 1907, was never approved by Congress, like the original contract of March 2, 1896, and that of March 24, 1896.

(c) Even if it were possible to accept the existence of an extension of the contract of 1896, through the concession of August 20, 1907, this extension was cancelled and deprived of all value by the agreement of March 17, 1909.

(d) In view of the status of the matter, Messrs. Valentine and Scott have no rights other than those expressed in article 9 of the contract of 1896, according to which the Government either takes from them the wharf and pays for it according to a fair valuation by experts, or allows them to dispose of it as they wish.

It was in view of these facts that the instructions were given to the Collector of the Port at Puerto Cortés.

A legal Government having now been organized in Honduras, its first duty has been and is to reorganize the public administration from every point of view. Finding that because of unjustifiable leniency in the first place, and because of the country's abnormal condition in the second place, the concessionnaires continued to avail themselves of the concession although the agreement for the continuation of the contract to construct and exploit the wharf at Puerto Cortés had expired March 24, 1908, the Government decided, in accordance with the aforesaid article [9], to buy the wharf, paying its value according to the just valuation of experts, which decision the Government communicated to Mr. Valentine by means of the Collector of the Port at Puerto Cortés. The answer of Mr. Valentine was that he preferred to continue to exploit the wharf himself, for the benefit, as he said, of the Government and of commerce.

As it was not the intention of the Government to allow the ex-concessionnaires to select what might best suit their own interests, but to protect those of the Republic, complying with those stipulations of the contract of 1896 relating to its expiration, new instructions were given to the said Collector to request Mr. Valentine to decide whether or not he desired to sell the wharf, appointing, in case he desired to sell, an expert appraiser who in his behalf should make the valuation in order to fix the sale price, and granting him a term of twenty days for this decision.

The conduct of the Government of Honduras has therefore been entirely in accordance with the explicit terms of the contract of 1896, annulled by that of March 17, 1909, and in accordance with justice and right, which form the guiding principle of its operations; and in setting forth the preceding details it confidently hopes that the Government of the United States, whose upright and just standard it is pleased to recognize, will see, in view of the authentic documents which are herewith enclosed, the right of the Government of Honduras to proceed as it has proceeded, returning to the public treasury an income that properly belongs to it, at the same time respecting the interest of the exconcessionnaires of the wharf provided for in the said article 9 of the contract of March 2, 1896, approved by the National Congress March 24, 1896, by buying the wharf in accordance with the just valuation of experts if the ex-concessionnaires so desire or allowing them to dispose of it according to their wish, de

stroying it or taking away the material, but to cease charging the wharfage to which the expired contract once entitled them, but to which they no longer have any right since the said date of March 24, 1908.

FOREIGN OFFICE,

Tegucigalpa, May 31, 1912.

File No. 815.77/132a.

The Acting Secretary of State to Messrs. Stetson, Jennings and Russell, attorneys for Mr. Valentine.

DEPARTMENT OF STATE,

Washington, June 25, 1912. GENTLEMEN: The Department acknowledges the receipt of your communication of the 15th instant in which you briefly review the developments in the matter of the claims of Mr. Washington S. Valentine against the Government of Honduras and state that Mr. Valentine is willing to make concessions to that Government upon condition that the whole matter in dispute shall now be settled by a board of arbitration. You suggest, on behalf of Mr. Valentine, that the Government of Honduras be advised, through diplomatic channels, of Mr. Valentine's proposal and that it be suggested to that Government that it appoint an arbitrator with full authority to pass upon all the questions now in dispute between Mr. Valentine and Honduras; that Mr. Valentine shall appoint an arbitrator to represent him, the third to be named by the first two or, in the event of their failure to agree thereon, to be appointed by the Department of State.

As this proposal evidently contemplates a private arbitration of this matter, the propriety and desirability of which are to be determined entirely by Mr. Valentine and the Government of Honduras, the question would appear to be one in which the Department has no official concern other than attaches by reason of its general duty to do all it properly may to facilitate the adjustment of difficulties and disputes between American citizens and foreign governments. Pursuant to this duty, however, it will be glad, in the event such a method of settlement is proposed to the Government of Honduras and that Government manifests an unwillingness to accept the proposal, to instruct the Legation at Tegucigalpa to exercise such informal and unofficial good offices as it properly may, with a view to securing acceptance of such a proposition.

You will, of course, understand that in view of the fact that these claims of Mr. Valentine against the Government of Honduras seemingly have their origin in violations of contract, it is not improbable that as an official question between this Government and the Government of Honduras, the rules governing the presentation of contract claims will be applicable and that before any affirmative official action could be taken by this Government, it would be necessary to examine the question of exhaustion of local remedies by Mr. Valentine and the suffering of a denial of justice as a result of his resort to the courts.

I am [etc.]

HUNTINGTON WILSON,

1 Not printed.

File No, 815.77/148.

The American Chargé d'Affaires to the Secretary of State.

[Telegram-Paraphrase.]

AMERICAN LEGATION, Tegucigalpa, August 31, 1912.

I have learned that about the middle of last July the President informed Mr. Valentine by cable that Mr: Greely would be permitted to collect wharfage pending final settlement, provided the wharf be sold to the Government, as it did not want to construct a new wharf. No reply was received for fifteen days and the Government proceeded, in accordance with decree No. 30 of the 10th ultimo, to construct a new wharf. Travelers from the north have advised him that work on the new wharf has already begun.

BELDEN.

ITALY.

SOVEREIGNTY OF ITALY OVER LIBYA; ATTITUDE OF THE UNITED STATES IN REGARD TO RECOGNITION THEREOF. RELINQUISHMENT OF EXTRATERRITORIAL RIGHTS.1

File No. 765,003.

The Italian Chargé d'Affaires to the Secretary of State.

No. 1704.]

[Translation.]

ITALIAN EMBASSY, Washington, October 30, 1912.

MR. SECRETARY OF STATE: In accordance with the telegraphic instructions that I have received from his excellency the Minister for Foreign Affairs, I have the honor to inform your excellency that in consequence of the recognition by the foreign powers of our sovereignty over Tripolitania and Cyrenaica, the special régime formerly enjoyed by foreigners in those territories, by virtue of the Capitulations of the Ottoman Empire, has ended, in conformity with universally accepted principles of international law. necessary instructions have consequently been issued to the Royal authorities in Libya for the application to foreigners, from November 1, of the dispositions of the general law, with the reservation of providing for the settlement of all pending questions by eventual accords and further dispositions.

The

Begging your excellency kindly to acknowledge this communication, I have [etc.]

G. CATALANI.

File No. 765.003/7.

The American Ambassador to the Secretary of State.

No. 247.]

AMERICAN EMBASSY, Rome, October 30, 1912. SIR: For some time past local newspapers have been giving currency to statements as to the recognition of Italian sovereignty over Tripoli and Cyrenaica.

Visiting the Foreign Office today, the Vice Minister for Foreign Affairs, Prince di Scalea, made reference to the matter and remarked upon the method with which the subject had been dealt with by our Government.

He then read to me a despatch from the Italian Ambassador in Washington detailing a late visit to the Department of State. He wrote that his conversation was with Mr. Adee and that he had

Continued from For. Rel. 1912, pp. 632-633.

broached the subject of the late treaty with Turkey, as to Italy's sovereignty over the territories in question, and that he hoped for action by the United States similar to that taken by other powers. Continuing, the Ambassador added that Mr. Adee replied that it was not the custom of his Government to proceed in that manner, especially with regard to affairs European; that when the United States took over the Philippine Islands and Porto Rico, foreign governments were not asked for their acquiescence nor for their recognition, and none was given. He said of course the United States Government was fully aware of what had taken place and as to the effect of the late treaty, and while it had no objection at all to the attitude of Italy, nevertheless an explicit form of recognition must not be expected.

It should be added that Prince di Scalea did not criticise our method but, on the other hand, seemed to treat the matter as the practical equivalent of what had been done in a more pronounced nanner by other nations.

It is assumed that our Consul at Tripoli has been advised.
I have [etc.]

THOMAS J. O'BRIEN,

File No. 765.003.

The Secretary of State to the Italian Chargé d'Affaires. No. 380.]

DEPARTMENT OF STATE, Washington, February 28, 1913.

SIR: I have the honor to acknowledge the receipt of the note (No. 1704) of October 30, 1912, by which, under instruction from your Government, you informed me that in view of the cessation of the special régime formerly enjoyed by foreigners in Tripolitania and Cyrenaica by virtue of the Capitulations of the Ottoman Empire, the necessary instructions had been issued to the Royal authorities in Libya in order that, from November 1st, 1912, the dispositions of the general law should be forthwith applied to foreigners, under the reserve of providing for the settlement of all pending questions by eventual accords and further dispositions.

In taking note of this communication. I have the honor to inform you that the appropriate diplomatic and consular representatives of this Government have now been instructed' to conform to the legal situation thus established in Libya.

I take this occasion further to inform you that the American Consulate at Tripoli will henceforth be administered as subordinate to the Consulate General at Genoa, under the supervision of the American Embassy at Rome. It is assumed that it will not be necessary to make application for a new exequatur for the Consul who has been exercising his functions at Tripoli since before the occupation of Libya by the Italian forces.

Accept [etc.]

140322

By telegrams of February 27; not printed.
-FR 1913-

39

P. C. KNOX.