Mr. von Holleben to Mr. Gresham.

[Translation.]

Mr. Secretary of State: Your excellency is aware that it has thus far been impossible to bring about a settlement of the financial difficulties on the Samoan Islands.

This fact is due in the opinion of the Imperial Government, on the one hand to the unskillful management of the officers there, and on the other chiefly to the lack that has hitherto existed of the necessary power to compel the natives to continue to pay the capitation tax which, according to the provisions of the Samoa act, they are bound to pay.

There is, moreover, considerable doubt as to how the customs revenues should be divided between the municipality of Apia and the Samoan Government, to which the note of Mr. Foster, late Secretary of State of the United States (bearing date of November 22, 1892), referred at some length.

[Page 670]

It is evident that such a state of things is very detrimental to the interests of foreign settlers in Samoa. In view of this fact, the Imperial consul at Apia was instructed, some time since, to offer some suggestions with regard to a remedy for the existing undesirable conditions. These suggestions are embodied in the report from Apia of January 27, 1893, a copy of which is herewith inclosed, and have, it appears, met with the approval of the American and British consular representatives there.

According to this, when the native taxes are not collected to a sufficient amount, the Samoan Government should receive one-third of the customs revenues; the municipality should have charge of the administration of the customs, while the administration of the finances should be subjected to a proper supervision.

In the opinion of the Imperial Government, these suggestions are well adapted to the circumstances. Should they be adopted, the salary of the chief justice should be paid in future, from the local revenues, whereas it appears from the inclosed copy of the report of the Imperial Consul at Apia, dated January 25, 1893, that, as matters now; stand, there will probably soon be no funds available for its payment.

I therefore have the honor, in obedience to instructions received, to most respectfully beg your excellency to inform me whether the United States Government is prepared to instruct its consul at Apia to enter into negotiations with the German and British representatives for the provisional settlement of the financial difficulties in Samoa on the basis of the suggestions which have been made, and to authorize him to take suitable steps, conjointly with his two colleagues, to secure the execution of the resolutions adopted by them.

As regards the remarks contained in the report dated January 27, 1893, of the Imperial consul at Apia (sub No. 2) concerning the necessity of the presence of a larger naval force, I may embrace this opportunity to point to the fact that those remarks demonstrate the correctness of the position hitherto taken by the Imperial Government in this matter, which was fully stated in the notes of this legation of October 15 and 24, 1892.

The Imperial Government will probably again advert at a suitable time, to the suggestions that have already been made by it on this subject, in the hope that the said suggestions may be viewed with greater favor by the United States Government.

Accept, Mr. Secretary of State, etc.,

Holleben.