Mr. Herbert to Mr. Foster.

Sir: In accordance with instructions which I have received from my Government, I have the honor to inclose herewith for your information copy of a verbal communication from the German embassy in London, together with a copy of the reply which has been returned to it, respecting a difference of opinion which has arisen as to the appointment of the import and export duties in Samoa, leviable under Article VI of the final act of the Berlin conference of 1889, and at the same time to inquire whether the views of Her Majesty’s Government as explained in this correspondence meet with your concurrence.

If the treaty powers should be unanimously of opinion that they should decline to accept the decision of the chief justice, it appears to be desirable that some communication should be made to him to that effect.

In the event of the U. S. Government sharing this opinion, Her Majesty’s Government would be glad to be favored with their views as to the most courteous and acceptable method of making such a communication to the chief justice, and as to the terms in which it may most appropriately be couched.

I have, etc.,

Michael H. Herbert.
[Inclosure.]

Verbal communication.

The chief justice at Apia has recently decided that, according to the provisions of the Samoa act, the revenues from import and export duties received up to the present time for the municipality of Apia are not to be paid to the municipality, but to the Samoan Government. If this decision is carried into effect, the municipality would lose the greater part of the revenues. The decision of the chief justice has, therefore, caused in the municipality a considerable agitation, which has found its way into the European and Australian press. The Imperial German Government are of opinion that the decision of the chief justice has been issued without giving the municipality an opportunity to bring forward their rights; it reverses a state of law existing as yet with unanimous consent, and finally differs from the provisions of Article II, Section III, of the Samoa act, respecting the distribution of revenues. According to the opinion of the Imperial Government, these provisions must undoubtedly be applied to revenues from duties. It is to be added that the duties [Page 544] are chiefly raised from and borne by residents of the municipality. If only for this reason, it would be fair to grant these revenues to the municipality. This procedure is the more recommendable as it warrants the useful and appropriate expenditure of the revenues, which, in the present state of things, can not be expected to the same extent, if they are delivered to the Samoan Government.

The Imperial Government hope that Her Majesty’s Government agree with the Imperial Government that the former state should be maintained, according to which the revenues from duties belong to the municipality. In this case it would be necessary to inform the consuls of the unanimous opinion of the three Governments, and so instruct them to direct the president of the municipality, in the name of the treaty powers, to further receive the duties, for the use of the municipality. At the same time, it would be necessary to inform the chief justice hereof. The Imperial Government think that it is without doubt that the treaty powers are not bound to the decisions of the chief justice in questions affecting the construction of the Samoa act. This view is expressly shared in the provisions of Article III, section 4, of the Samoa act, according to which decisions of the supreme court are only conclusive “upon all residents of Samoa.”

[Inclosure.]

Lord Salisbury to Count Hatzfeldt.

Sir: With reference to my previous note of to-day’s date, I have the honor to acknowledge the receipt of your excellency’s note of the 20th ultimo, proposing that the three treaty powers should make an identic communication to the president of the municipal council of Apia in the sense of the views expressed by Mr. Consul Cusack-Smith in his dispatch No. 14, of May 25 last.

In reply I have to state that Her Majesty’s Government concur generally in Consul Cusack Smith’s recommendations. They can not go so far as to say that the Samoan administration should make it their first duty to protect and advance the interests of the foreign settlers; they think that rather an equal and impartial consideration should be given to the interests of both whites and natives alike, but they quite recognize the importance of cordial cooperation between the chief justice, the municipal president, and the consular body, and of the adoption by the two former of a more conciliatory attitude toward the foreign colony.

Her Majesty’s Government further agree that the resignation of Baron von Pilsach should not be accepted.

I should be glad to learn how your Government propose that the views of the three treaty powers should be conveyed to the chief justice and to the municipal president.

I have, etc.,

Salisbury.
[Inclosure.]

Lord Salisbury to Count Hatzfeldt.

M. l’Ambassadeur: Her Majesty’s Government have carefully considered, in communication with the law advisers of the Crown, the verbal communication made by Count Metternich, on the 24th ultimo, explaining the views of the German Government on the difference of opinion which has arisen as to the apportionment of import and export duties in Samoa leviable under the provisions of Article VI of the final act of the Berlin conference on the affairs of Samoa.

The matter at issue appears to resolve itself into a question as to the merits and validity of a decision given by the chief justice of Samoa, on the 28th March last by which these duties were assigned to the use of the Samoan Government. That decision is contested by the municipal council of Apia, who lay claim to the dues, and have formally appealed to the treaty powers for a determination of the points in dispute; and, in the meanwhile, a temporary compromise has been effected through the intervention of the consular board.

As matters at present stand, it seems clear that if the Samoan Government axe deprived of the duties they will be practically bankrupt and unable to carry on the [Page 545] administration, since it appears to be generally admitted that the capitation tax can not be collected; whilst, on the other hand, the municipality will be reduced to the same position if the duties are withdrawn from them.

The German Government state that, in their opinion, the decision of the chief justice should not be maintained; and they express a hope that Her Majesty’s Government will concur in this view; in which event they propose that the three treaty powers should overrule the decision in question, and instruct their consuls to direct the municipal president to receive and apply the import and export duties on account of the municipality.

Her Majesty’s Government are advised that the decision of the chief justice is not in accordance with the provision of the final act.

If the two parties—i. e., the municipal council and and the representatives of the Government—had submitted the question to the decision of the chief justice under section 4 of Article III, it would in the opinion of Her Majesty’s Government have been within his competence to adjudicate upon it and his decision would have been binding upon all parties; but in their judgment, having regard to what had taken place under the final act and the system of administration actually in force thereunder, it was not competent to the chief justice to make, as he did in this case a declaration as to the rights of the parties under section 3 of Article VI of the final act, upon an informal reference, and without the matter being properly argued before him.

In the opinion of Her Majesty’s Government, the view taken by the German Government is correct, and assuming the treaty powers to be unanimous they may under the circumstances decline to accept the decision of the chief justice; but in the event of there being any difference of opinion between them and Samoa, and of the question being referred to the chief justice under section 7 of Article III, his decision, whatever it might be upon such a reference, would apparently be binding upon all the powers.

As respects the actual merit of the decision itself apart from its informality, Her Majesty’s Government are advised that the language of section 3 of the final act is ambiguous, and that it would be well that a clear and explicit distribution of the duties, taxes, and charges between the Samoan Government and the municipality of Apia should be made.

Her Majesty’s Government are not without hope that the contending parties may still be able to arrive at a common understanding upon this point which shall be alike satisfactory to themselves and to the treaty powers.

I have, etc.,

Salisbury.