File No. 2160.
The Secretary of State to the British Ambassador .
Washington , December 19, 1906 .
Dear Mr. Ambassador: Your note of November 6 reminded me that a response has not yet been forthcoming to the memorandum which you left with me on the 23d of June last in relation to the administration or leasing of certain small islands on the North Bornean coast by the British North Borneo Company.
The matter has required much consideration and involved delay which I regret, and even at this late day I am not at all clear as to the most practical way to give effect to the desire of your Government by a formal agreement.
I apprehend that the difficulty in the way of a conventional delimitation of the boundary between the former possessions of Spain in [Page 547] the Sulu Archipelago, now belonging to the United States, and the North Bornean territories on or adjacent to the mainland of Borneo, may lie in the circumstance that the North Bornean domain is not an imperial possession of Great Britain, but is held by a British Chartered Company under grant of the native Sultans and under the protection of the Crown in virtue of such grant. If this be so, I can discern impediments to an international convention between our two countries for establishing a boundary line between their respective sovereignties—and I can equally see that objections might be raised to undertaking to fix that boundary by agreement between this Government and a chartered corporation having per se no national status.
Something of the same difficulty might arise in the case of the United States undertaking to lease the islands to a chartered company not having the standing of a government. The third condition of your memorandum illustrates this point, suggesting, as it does in effect, that such a lease should carry with it power to the company to grant titles and concessions binding upon the United States and to make valuable improvements, which would be an eventual charge upon this Government should the United States terminate the lease and reenter upon the property.
The second proposition of the company seems, on the whole, to be preferable and safer, namely, that the company be left undisturbed in the administration of the islands, without any detailed agreement, the United States Government simply waiving in favor of the company their right to such administration in the meantime—in other words, that the existing status be continued indefinitely at the pleasure of the parties. It might be agreed that such an understanding shall be with the British Government, acting on behalf of the interests of British subjects; that it shall not carry with it territorial rights (such as those of grants and concessions), that the waiver shall cover the islands to the westward and southwestward of the line traced on the map which accompanied your memorandum of June 23; that the company (through the British Government) shall agree to the exemption of the United States from any claim or allegation of responsibility arising out of acts done in or from any islands within the said line, and that the understanding shall continue until the two Governments may by treaty delimit the boundary between their respective domains in that quarter, or until one year’s notice of termination, to be given by either to the other.
I should be glad to have the views of your Government on these suggestions.
I am, my dear Sir Mortimer,
Very faithfully, yours,