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the work of construction. It was also decided that Chinese coolie labor would not be employed on the canal,

In March Secretary Taft visited the isthmus, reaching Colon March 30, to make an annual inspection of the work. He also investigated the question of the basis for the locks of the Gatun Dam. There was doubt as to whether the foundation was strong enough, but it was decided that the locks could be constructed with safety. Another question which he decided was the threatened strike of the steam shovel operators. Later in the Spring the members of the Appropriations Committee of the House of Representatives went to the isthmus to investigate conditions and to decide how much money would be needed to carry on the Work.

October 30 this same party went to the isthmus to make a similar inspection. The question of widening the locks, from 100 to 110 feet, was taken up. It is feared by the engineers of the canal that owing to the increase in the breadth of the beam of battleships and of large steamers of the Lusitania class the locks would not be of sufficient width. Civil Engineer Rosseau took up the question with the Secretary of the Navy, Acting Secrotary of War Oliver, and the original reports of the engineers who planned the canal was examined. All these documents were transmitted to the isthmus to be considered by the Canal Commissioners and the members of the Congressional party which visited Panama in October. This question has not yet been decided.

The following is the number of cubic yards of material excavated for the ten months for which the reports are available to time of going to press:

[blocks in formation]

Grand totals. 11.213,942 1.070,803 83,963 1,981.944 4,348,428 18,009.080

Thirty-two 9.7-ton. twenty-eight 70-ton and three 45-ton steam shovels, or a total of sixty-three steam shovels, are now in commission; seven 70-ton shovels have recently been delivered and will soon be in use; and, in addition, twelve 95-ton, seven 70-ton and eight 45-ton shovels will be delivered in the near future.

FORCE EMPLOYED. In the month of September, 1907, there were slightly over 41,000 employees on the isthmus on the rolls of the Commission and the Panama Railroad, approximately 4.200 of whom were Americans. There were actually at work on September 30, 29,845 men--23,607 men for the Commission and 6,238 for the Panama Railroad.

The following is a statement of the audited expenditures up to June 30, 1907:
Audited expenditures to June 30, 1907.....

$100,489,816.11 Divided as follows:

For canal property, rights of way and franchises.. .$50,000,000.00
For Panama Railroad stock ownell....

For material and supplies, including cost of purchase.

handling and transportation thereof, and exclusive
í of material issued and charged against the account
representing the work in which emploved..

Expenditures for salaries, wages, travelling and con-
tingent expenses, and materials used--
For general administration...

For government and sanitation.,

5.791, 157.03 For construction and engineering.

15,391,834.17 For plant-Including rolling stock, excavating machin

ery, shop machinery and tools, second main track on

isthmus, buildings, Zone waterworks and sewers, etc 19, 484,300.74 Loans to Panama Railroad Company Advances to Panama Railroad Company.

Individuals and companies--Representing expenditures

for supplies and service furnished the Panama Rail.
road Company and other interests engaged in allied
work, and for which collections have or will be
maile, and the proceeds thereof deposited in the
Treasury of the C'nited States



$100,483,816.11 Pay rolls on isthmus for June. 1907.

1,290.811.12 Pay rolls for Washington Office for June, 1907..

12.578.96 Approximately $10,000,000 will be expended during the year 1908 in the work of constriction.


The Hague Conference of 1907. The second International Peace Congress convened at The Hague on June 18, 1907. It consisted of 239 delegates, representing forty-six Powers. The speech of welcome was dellvered by Dr. Van Tets Van Goudrian, Foreign Minister of the Netherlands, M. Nelldoff, head of the Russian delegation, was chosen President of the Congress. Many of the most distinguished statesmen of the civilized world occupied seats as delegates. Among the American delegation were Joseph H. Choate. Gen. Horace Porter. former Ambassador to France; David James Hill, of the State Department; Rear Admiral Charles S. Sperry, Brig.-Gen. George B. Davis, William I. Buchanan, James Brown Scott. U. M. Rose, Congressman Richard M. Bartholdt. The Congress had been proposed by President Roosevelt, and was convened by Queen Wilhelmina upon the formal invitation of the Czar of Russia.

The work of the Congress was divided into four divisions, as follows:

1. Arbitration-President, M. Bourgeois, France; Honorary Presidents. Merey Von Kapos-Mere, Austria: Sir Edward Fry: England; Ruy Barbosa, Brazıl; Vice-Presidents, Dr. Kriege, Germany; Signor Pompili, Italy; Senor Esteva, Mexico.

2. Land War-Presidents, M Beernaert, Belgium. and M. Asser, Netherlands; Honorary Presidents, Baron Marschall von Bieberstein, Germany, Gen. Horace Porter, United States: the Marquis de Soveral, Portugal: Vice-Presidents, Constantin Brun, Denmark; Dr. Beldiman, Roumania; Dr. Carlin, Switzerland.

3. Maritime War-President. Count Tornielli. Italy: Honorary Presidents. Joseph H. Choate, United States; Tseng-Liang, China, Turkhan Bey, Turkey: Vice-Presidents. Herr Hammarskjold, Sweden; Dr. Drago, Argentina; Baron d'Estournelles de Constant. France.

4. Geneva Convention-President, Prof. de Martens, Russia; Honorary Presidents, Senor Don de Villay, Urrutia, Spain: M. Kurachi, Japan: Vice-Presidents, Sir Ernest Satow, England; Prof. Lammasch, Austria; Dr. Hagerup, Norway.

The sessions of the Congress, which were held in the Hall of Knights, finally concluded on October 18, after a long series of sessions. full of complicated discussions, at which much diplomacy was required to harmonize the interests of the nations represented.

PROPOSED PERMANENT COURT OF ARBITRATION. The one great principle for whose permanent establishment the American delegates fought from first to last was obligatory arbitration and a Permanent Court of Arbitral Justice. The idea was to have an international court, easily accessible and free of charge, with judges representing the various systems of laws of the world, and capable of insuring a continuation of arbitration by jurisprudence. The judges were to be selected, so far as possible, from the members of the Permanent Court of Arbitration. They were to serve twelve years and were to enjoy diplomatic privileges and immunities while exercising their functions. There were to be seventeen of the judges, nine to form a quorum. The president of the court was to be elected every three years. The tribunal was to sit at The Hague and was to meet once or twice yearly, in July and January. Each party to a dispute was to have its own judge to participate in the trial of cases submitted to the court.

It became evident. soon after the discussion began that, while a large majority of the delegates to the Congress favored some fixed system of permanent arbitration, the opinion of the conference was not ripe for a settlement of the problem. As early as August. M. Nelidoff suggested that the whole subject be postponed until the next Peace Congress, recommending that the Powers in the meantime study the question from the standpoint of universal interest. Germany led the opposition to obligatory arbitration in Its final form of advocacy by America and Great Britain on the basis of the Portuguese list of disputes regarding which it was proposed to submit in all cases, and unreservedly, to arbitration. Austria supported Germany, and Italy, though disposed to favor the American idea. was forced to join her allies against it.

It was Count Tornielli. of Italy. who suggested the final formula of a declaration which caused the postponement till the next Congress of definite action on the question. The South American States. headed by Brazil, prevented the acceptance of the plan for a new and permanently effective Court of Arbitral Justice. M. Ruy de Barbosa led the opposition. He took the position that in such a court all States. big or little. were entitled to an equal quota of judges. He and his South American colleagues therefore opposed, with final success, the proposed method for the selection and distribution of judges, which would have relegated these States and others to a second or third-rate position by only permitting them to elect judges in a certain rotation of years.

AN INTERVATIONAL PRIZE COL'RT. But if the United States was unsuccessful in bringing about obligatory arbitration and a permanent Court of Arbitral Justice. it

was at least partly recompensed by inducing the Congress to adopt another American idea --an International Prize Court. This achievement is generally regarded abroad as the most important piece of potentially constructive international legislation produced by the Congress. As now constituted. this is a far more solid and tangible body than the Permanent Court of Arbitration. which was the work of the Conference of 18). That court was, as M. de Martens, the distinguished Holland delegate put it. "a mere list of available judges."

The Prize Court plan. as finally adopted by the Conference and embodied in a "convention," provides for a working bench of fifteen judges, determines the method of their election by the forty-six Powers represented at the Conference, and lays down the conditions under which an appeal may be made to the Court in case of war. It is said in regard to the "convention" that it has not yet been signed by any of the Great Powers, and as to Great Britain, some doubt is expressed if she will sign until the Powers shall have reached an agreement on a code of laws of maritime warfare for the Prize Court to apply. The THE HAGUE CONFERENCE OF 1907-Coruinucd. *convention" comes before the present session of the t'nited States Congress, and will be submitted to the German, Austro-Hungarian and French Parliaments.

THIRTEEN “CONVENTIONS" APPROVED. The completed results of the sittings of the Peace Congress were embodied in thirteen "conventions," as follows:

1. The peaceful regulation of International conflicts. 2. Providing for an International Prize Court. 3. Regulating the rights and duties of neutrals on land. 4. Regulating the rights and duties of neutrals at sea. 5. Covering the laying of submarine mines. 6. The bombardment of towns from the sea. 7. The matter of the collection of contractual debts. 8. The transformation of merchantmen into warships. 9. The treatment of captured crews. 10. The inviolability of fishing boats. 11. The Inviolability of the postal service. 12. The application of the Geneva Convention and the Red Cross to sea warfare, and 13. The laws and customs regulating land warfare The right to sign these “conventions" will be open until June 30, 1908.

Great Britain has, for the present, refused to accept the decisions of the Third Committee on the rights and duties of neutrals in maritime warfare.

The decisions of the Fourth Committee have left open the question of the conversion of merchantmen into warships on the high seas by belligerents. Germany has reserved her rights in regard to the convention on "days of grace" and the circumstances in which merchantmen may be seized on the outbreak of war. The special convention on “Certain Restrictions upon the Exercise of the Right of Capture in Maritime War' is limited to the Inviolability of postal correspondence. the exemption of fishing boats, under certain conditions, from capture, and the treatment of captured crews of merchantmen, neutral or hostile.

The following joint propositions of America, Russia, Italy, Spain and Holland were embodied in conventions:

1. The commander of a fleet must spare historical monuments. churches, and buildings used for artistic, scientific. or benevolent purposes. and hospitals, on the condition that they are not used for military purposes, and are designated by special signs, which must be displayed by the inhabitants.

2. Before beginning the bombardment of a town the commander of a fleet must do all in his power to inform the authorities of the town of his intention.

3. Pillage is forbidden, even in a town or locality taken by assault.

4. The bombardment of undefended ports, towns. villages, or buildings is forbidden, but any military work existing in otherwise undefended places can be bombarded if the local authorities refuse to destroy it.

5. Undefended places can be bombarded if they refuse to furnish a fleet with necessary provisions. 6. The bombardment of a town or village for refusal to pay a ransom is prohibited.

THE DRAGO DOCTRINE. The Drago doctrine, formulated by Dr. Drago, of the Argentine Republic. as to the collection of public debts by force was presented to the Congress by its author in the shape of a provision that "In the collection of public debts the debts must be claimed in the ordinary courts of the debtor country. As finally framed in a Convention, through the initiative and efforts of Gen. Horace Porter, of the American delegation. the great principle has at last been definitely established that public debts must not be collected by force, except as a last resort. Speaking of the accomplishment. General Porter said:

We were confronted by two great difficulties. One was the desire of creditor nations to employ force: the other was the reluctance of debtor nations to recognize the right of using force for this purpose under any circumstances, My proposition was a compromise. It absolutely forbade the employment of force for this purpose until after arbitration should have been refused or after an arbitral award had been set at naught.

After patient discussion I had the supreme satisfaction of seeing my proposition accepted unanimously. This is a result of which America may well be proud."

GENERAL RESULTS. The general results of the Congress, with the notable part taken by America in bringing them about, are thus summarized for THE WORLD by Gen. Porter:

"Its great achievement has been to push forward in every department of international life American principles. It has affirmed in many directions the rights of neutrals against those of belligerents. It has placed restrictions upon the use of floating mines, which have been a menace to the commerce of the whole world. without impairing the right of nations at war to use anchored mines for self-defence. It has peremptorily forbidden the bombarding of undefended seacoast towns and villages. It has prohibited the levying of contributions by threat of bombarding. It has done much to strengthen security against the atrocities which often occur in war. It has shielded the non-combatant. It has strengthened the provisions for the relief of the wounded It has taken strict precautions against a revival of privateering in naval war by insisting that when merchant vessels are converted into cruisers they shall be formally enrolled on the naval list and placed in command of a duly commissioned naval officer, with a crew subject to naval discipline. Such questions as contraband of war and blockade, though no agreement was reached, and on every important question which came before us we have made a great and truly marvellous advance toward an agreement on more civilized lines, So great, indeed, has been the growth of international sentiment that it is probable that at the conference of the leading naval Powers which England intends to summon in 1908 we shall find ourselves able to settle some questions which have been a source of difference for a hundred years. It was America that proposed the Permanent Court of Arbitral Justice--not a mere court of arbitration. but a judicial court composed of the ablest jurists of all nations. representing all systems of law and all languages, This project. although it was described as a joint Anglo-American-German proposal, was substantially American,

Cuban Occupation in 1907. The military occupation of Cuba by the United States, which began in 1906, has continued without interruption during 1907. A military government with a clvil head was maintained. uov, Charles E. Magoon, appointed October 13, 1900, is the administrative head, and the list of assistants named upon his accession to this position is unchanged.

The restoration of conditions to such a state as will permit the withdrawal of American troops and the resumplion of control by an independent Cuban Government is slowly progressing. It is already self-evident that American occupation will continue for at least another year. This is said to meet the warın approval of business and financial interests.

The most important work of the year was the taking of a census in Cuba, on which will be based future municipal, State and national elections looking to the final re-organization of a home government. The enumeration began October 1 and was concluded November 14. The tabulation of the returns and compilation of results will consume several months and no election under this census will be held till a time this year yet to be designated.

Another important step was the appointment by Governor Magoon of an Advisory Coinmission to arrange plans for reforming the judicial systems of the Island and suggesting changes in municipal and provisional governments. This Commission has formulated a satisfactory plan of national sanitation by which all the work of health preservation and cleanliness will be taken from the local bodies and centred under Federal jurisdiction. This is considered an advanced step in the direction of guaranteeing future immunity froin yellow fever and other epidemics.

AMERICAN TROOPS IN CUBA. About 6.000 American troops remain in Cuba. This force is composed of the same detachments sent there at the outbreak of disturbances in 1906. It was not found necessary during 1907 to call out any portion of this force to quell disturbances or outbreaks. The Rural Guards were able to control all disorders, which have chiefly arisen through cattlestealing and similar breaches of the peace.

Two strikes of considerable magnitude occurred in Cuba during the year. The cigarmakers struck for payment in American money, and their demands were granted. Railroad employees struck for wages in American money and an eight-hour day:

The employers were willing to grant payment in American money, but said an eight-hour day would cause complications with connecting lines. This matter is pending adjustment.

All legislation in Cuba during the year was effected by decree of the Governor. No legislative body was sitting, although the Senate retains its vitality, but agreed not to resume its sessions during American occupation.

It is expected that all the expenses of American occupation will be paid from the Cuban revenues, but this is a matter

resting largely in the discretion of President Roosevelt. Congress in 1907 placed a clause in the Army Appropriation, bill authorizing the President to reimburse this Government for all the expenses of Cuban occupation, provided the Island revenues are adequate for the purpose after paying Governmental outlays at home. T'p to this time no reimbursement has been made. All surplus revenues have been utilized in building roads, public hospitals and other improvements. If this continues until the troops are withdrawn and an independent home government is re-established there will be no reimbursement. The expense of American occupation exceeded $1.000.000 for 1907, although the expenditures are much less than in the previous year. There were no transportations o! troops, building of new quarters or repairs, The pay departments of the Army, Navy and Marine Corps expended about $30.000 a month extra on account of the men being on foreign service.

THE PURPOSE OF AMERICAN OCCUPATION. The purpose of the American occupation and the progress being made were thus summed up by Secretary of War Taft and Assistant Secretary of State Bacon in reporting on their mission as Special Commissioners to Cuba:

"We went to Cuba for the purpose of securing peace. When we went we knew the Island was divided between two hostile and armed forces, and we desired to avoid a conflict between them for the reason that it would cause loss of life to the Cubans and a great destruction of property, a large part of which belonged to American citizens, and it would necessarily require the intervention of American troops and the expenditure of American lives and treasure. If the insurrectionary habit persists. if again the ('ubans divide into armed forces, the strong hand of our Government will have to be imposed at whatever cost to life and property, and permanent peace should then ensue, because it would be of our own keeping.

"We hope, however, that no such drastic remedy will be needed and that the lesson taught in this recent experience of the evil of unjust methods in elections will not be without its warning to future governments in Cuba. With the passage of proper laws for municipal governments, for elections, and for the independence of the judiciary, and with the holding of a fair election under the auspices of the United States for the vacancies effected in accordance with the compromise recommended, we are very hopeful that the Cuban Republic may be restored on even a more permanent basis than that which she enjoyed during four years of prosperity under President Palma."

in the Autumn of 1907 rumors emanated from Havana that a serious uprising against American authority was conteinplated. Nothing developed. It was then declared that many prominent American financiers and business men were fomenting this proposed revolutinn in order that American occupation might be made permanent. At the tiine of the uprising against President Palma and his governinent it was declared that leading Americans had furnished funds to the revolutionists so as to precipitate intervention. thus securing a stable government under which business enterprises might be better advanced and protected. The first cablegram sent by President Roosevelt to Secretary Taft after his arrival in Havana, dated September 20, 1900, was Is it possible to institute investigations to ste what Americans, if any, have been furnishing funds to the revolutionists?" After niaking inquiries, Mr. Tart replied: "It is quite went that no American Interests in New York or elsewhere have initiated movement or contributed to its success."

Similar denials were given out when the charge was renewed in the autumn of 1907 that American interests were supplying money for future uprisings,

The Santo Domingo Treaty. RATIFIED BY THE UNITED STATES SENATE FEBRUARY 25, 1907. Whereas, During disturbed political conditions in the Dominican Republic debts and claims have been created, some by regular and some by revolutionary governments, many of doubtful validity in whole or in part, and amounting in all to over $30,000,000 nominal or face value;

And, whereas, The same conditions have prevented the peaceable and continuous collection and application of national revenues for payment of interest or principal of such debts or for liquidation and settlement of such claims; and the said debts and claims continually increase by accretion of interest and are a grievous burden upon the people of the Dominican Republic and a barrier to their improvement and prosperity;

And, whereas, the Dominican Government has now effected a conditional adjustment and settlement of said debts and claims under which all its foreign creditors have agreed to accept about $12, 407,000 for debts and claims amounting to about $21,181,000 of nominal or face value, and the holders of internal debts or claims of about $2,028,258 nominal or face value have agreed to accept about $643,827 therefor, and the remaining holders of internal debts or claims on the jame_basis as the assents already given will receive about $2,400,000 therefor, which sum the Dominican Government has fixed and determined as ihe amount which it will pay to such remaining internal debt-holders; making the total payments under such adjustment and settlement, including interest as adjusted and claims not yet liquidated, amount to not more than about $17,000,000.

And, whereas, A part of such plan of settlement is the issue and sale of bonds of the Dominican Republic to the amount of $20,000,000, bearing 5 per cent. interest, payable in fifty years, and redeemable after ten years at 10292, and requiring payment of at lea-t one per cent, per annum for amortization, the proceeds of said bonds, together with such funds as are now deposited for the benefit of creditors from customs revenues of the Dominican Republic heretofore received, after payment of the expenses of such adjustment, to be applied, first, to the payment of said debts and claims as adjusted and, second, ou of he balance remaining to the retirement and extinctio of certai concessions and harbor monopolies which are a burden and hindrance to the commerce of the country, and, third, the entire balance still remaining to the construction of certain railroads and bridges and other public improvements necessary to the industrial development of the country:

And, whereas, The whole of said plan is conditioned and dependent upon the assistance of the United States in the collection of customs revenues of the Dominican assistance of the L'nited States in the collection of customs revenues of the Dominican Republic and the application thereof so far as necessary to the interest upon and the amortization and redemption of said bonds, and the Dominican Republic has requested the United States to give and the United States is willing to give such assistance:

The Dominican Government, represented by its Minister of State for Foreign Relations, Emiliano Tejera, and its Minister of State for Finance and Commerce, Federico Velasquez H., and the United States Government, represented by Thomas C. Dawson, Minister Resident and Consul-Gencral of the United states to the Dominican Republic, have agreed:

I. That the President of the United States shall appoint a General Receiver of Dominican Customs, . who, with such Assistant Receivers and other employees of the Receivership as shall be appointed by the President of the United States in his discretion, shall collect all the customs duties accruing at the several customs houses of the Dominican Republic until the payment or retirement of any and all bonds issued by the Dominican Government in accordance with the plan and under the limitations as to terms and amounts hereinbefore recited; and said General Receiver shall apply the so collected, as follows:

First, to paying the expenses of the receivership; second, to the payment of interest upon said bonds; third, to the payment of the annual suns provided for ainortization of said bonds, including interest upon all bonds held in Sinking Fund; fourth, to the purchase and cancellation or the retirement and cancellation pursuant to the terms thereof of any of said bonds as may be directed by the Dominican Government; fifth, the remainder to be paid to the Dominican Government.

The method of distributing the current collections of revenue in order to accomplish the application thereof as hereinbefore provided shall be as follows:

The expenses of the receivership shall be paid by the Receiver as they arise. The allowances to the General Receiver and his assistants for the expenses of collecting the revenues shall not exceed 5 per cent. unless by agreement between the two Governments. On the first day of each calendar month the sum of $100,000 shall be paid over by the Receiver to the Fiscal Agent of the loan, and the remaining collection of the last preceding month shall

paid over to the Dominican Government, or applied to the Sinking Fund for the purchase or redemption of bonds, as the Dominican Government shall direct.

Provided, That in case the customs revenues collected by the General Receiver shall in any year exceed the sum of $3,000,000, one-half of the surplus above such sum of $3,000,000 shall be applied to the Sinking Fund for the redemption of bonds.

II. The Dominican Government will provide by law for the payment of all customs duties to the General Receiver and his assistants, and will give to them all needful aid! and assistance and full protection to the extent of its powers. The Government of the United States will give to the General Receiver and his assistants such protection as it may find to be requisite for the performance of their duties.

III. Until the Dominican Republic has paid the whole amount of the bends of the debt its public debt shall not be increased except by previous agreement between the Dominican Government and the United States. A like agreement shall be necessary to modify the import duties, it being an indispensable condition for the modification of such duties that the Dominican Executive demonstrate and that the President of the United States recognize that, on the basis of exportations and importations to the like amount and the like character during the two years preceding that in which it is desired to make such modification, the total net customs receipts would at such altered rates of duties have been for each of such two years in excess of the sum of $2,000,000 l'nited States gok.

Section IV. provides for the verification of the accounts by the appropriate officers of the two countries.


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