Papers Relating to the Foreign Relations of the United States, With the Address of the President to Congress December 4, 1917

The Secretary of State to Minister Swenson

No. 111

Department of State,
Washington, March 26, 1901.

Sir: I have given careful consideration to the views of the Danish Minister for Foreign Affairs in regard to the bases of a treaty for the cession of the Danish West Indies to the United States, as set forth in his excellency’s note to you of 21. February last, copy and translation of which accompanied your despatch No. 190 of the 23d of the same month.

On most of the points advanced by his excellency I am happy to find myself either in agreement, or in a position to concede the requests of the Danish Government, leaving two matters as to which complete concession on the part of the United States is not practicable at present, for reasons hereinafter stated, to wit: the civil status of the inhabitants of the ceded territories, and the commercial relations of the islands with the United States. The points upon which material accord is reached are, however, so vital to the negotiation, and so conclusive in removing the substantial obstacles which have heretofore existed to a satisfactory outcome that I entertain the belief that the way is now open for the acceptance by Denmark of the modified draft hereto appended, in which I have incorporated the essential changes suggested by M. de Schested.

In considering these amendments it will be convenient to follow the order in which they appear in the present draft.

Article I. The following change has been made at the end of the first paragraph:

comprising in said cession all title and claim of title to the territories in and about said islands over which the Crown of Denmark now exercises, asserts or claims jurisdiction.

This phraseology follows the language of the convention recently concluded between the United States and Spain to remedy a textual defect in the description in ceded Philippine Archipelago which was found to exist in the Treaty of Peace of December 10, 1898. It is believed to be a more convenient and practical definition of the cession than the formula employed in the earlier draft.

In the second paragraph of the same article the ceded sovereignty is further defined as “unencumbered” since it appears from the Danish presentment of the facts and arguments which, in its view, warrant and require the assessment of the compensation at four million dollars, that the sovereignty is in fact intended to pass without incumbrance on the part of the insular treasuries to the United States, and without the assumption by the United State of pecuniary obligations, whether at the insular treasuries or to other parties.

The statement of M. de Schested as to the propriety of excluding any interpretation whereby the United States might eventually acquire and enforce the claims and demands which the Danish Government at present possesses the right to enforce against the colonial treasuries, coincides with the desire and purpose of the United States in this regard. It is our wish to acquire the islands free from all debt and incumbrance whatsoever, a wish which would not be realized were the burdens under which they now labor merely assigned to the United States. As it appears to be his excellency’s view that doubt might arise on this point, I have added to the wording of the second paragraph of Article I the following proviso:

It being however understood and agreed that the consummation of said cession does not import the transference to the United States of the financial claims now held by Denmark against the colonial treasuries of the islands, but that the colonial treasuries are to be considered released from their debts and obligations to the Treasury of the Danish Government, and, it is, moreover, understood and agreed, that the United States will assume and continue to discharge from the time of the cession the current obligations heretofore contracted by the Danish Government towards the St. Thomas Floating Dock Company, and the West India and Panama Telegraph Company, the Danish Government transferring to the United States any pledges or securities which it may hold for its protection or reimbursement in respect to said companies.

With respect to the concluding passage of this proviso, it is the understanding of the United States that no incumbrance, governmental or financial, devolves upon the United States or attaches to the islands in connection with either of the corporations named.

The current arrangements with those companies pass with the transfer of sovereignty, the United States enjoying the rights and privileges heretofore enjoyed by Denmark, as regards the use of the dock and the business of the telegraph companies, while the companies remain responsible to us instead of Denmark for the observance of their obligations to the State. As a fact, much the same thing has taken place with regard to telegraphic and other cessions in Puerto Rico and the Philippine Islands, and, if my understanding of the relation between the companies named and the Danish Government be correct, I see no objection to meeting the views of his excellency in relation.

Article II. The concluding suggestion of his excellency’s note, that the arms of the Danish troops and the military stores in the’ said territory or islands shall not be included in the cession of the islands, has my entire acquiescence. In giving it conventional shape, however, it has seemed to me to be convenient to incorporate it as a proviso to the first paragraph of Article II, and in doing so I have followed the general lines of the similar stipulation contained in the Treaty of Peace between the United States and Spain, wording it as follows:

It being however agreed that the arms and military stores existing in the islands at the time of the cession and belonging to the Government of Denmark shall remain the property of that Government and may be removed by it within six months from the date of the exchange of ratifications of this convention, but in the meantime the Government of the United States shall have the option to purchase said arms and military stores upon satisfactory agreement with the Government of Denmark to that end.

I recognize the weight of M. de Schested’s proposal that there be added to Article II a proviso that sums due to the Danish Government by individuals shall cover property taken over by the Danish Treasury for sums due to the same by individuals. In as much, however, as the described plantations on the Island of St. Croix, which have been taken over by the Danish Treasury as security for loans to the planters to the amount of $47,946.17 could hardly be expected to remain the property of the Danish Crown under the changed sovereignty of the territory, it has seemed expedient to give to the proviso the following form:—

And where the Danish Government shall at the time of the cession hold property taken over by the Danish Treasury for sums due by individuals, such property shall not pass by this cession, but the Danish Government shall sell or dispose of such property and remove its proceeds within months from the date of the exchange of ratifications of this convention.

Article III. After earnest consideration of the view of the Danish Government that the political status of the inhabitants of the ceded islands shall be defined as in Article III of the convention of October 24, 1867 so that they shall be given the option of acquiring the rights of citizens of the United States, I am unable to concede the point to the extent contemplated in M. de Schested’s note. In view of the pendency of judicial decisions with regard to the status of the inhabitants of the territories lately ceded by Spain to the United States, and in view of the fact firmly established under our Constitution that the Congress alone has the power to prescribe rules of naturalization, it is found impracticable to embody any express provision to that end in a treaty, the making of which is an executive, not a legislative function. The contingency of legislation to prescribe the civil and political status of the inhabitants of the Danish Islands should properly be recognized in the pending negotiation no less than it is recognized as an existing fact with respect to the inhabitants of Puerto Rico. It is to be borne in mind that the Danish Islands are closely adjacent to Puerto Rico, and every geographical, economical and political consideration points to their being embraced in the same measure of privilege as Puerto Rico, not only as relates to the civil status of the inhabitants but as to their commercial advantages; and this appears to be the expectation of the Danish Government. Desirous of meeting the Danish view as far as possible, I am prepared to modify Article III and provide that the inhabitants of the islands accepting allegiance to the United States may be admitted to the nationality thereof on such terms as may be provided according to the laws of the United States, the determination of their civil rights and political status being left to the Congress. In this sense the relevant part of Article III has been recast as follows:

In case they remain in the islands they may preserve their allegiance to the Crown of Denmark by making before a court of record, within two years from the date of the exchange of ratifications of this treaty a declaration of their decision to preserve such allegiance—in default of which declaration they shall be held to have renounced it, and to have accepted allegiance to the United States, but such election of Danish allegiance shall after the lapse of said term of two years, be a bar to their renunciation of their preserved Danish allegiance and their election of allegiance to the United States and admission to the nationality thereof on the same terms as may be provided according to the laws of the United States, for other inhabitants of the islands.

The civil rights and the political status of the native inhabitants of the islands shall be determined by the Congress.

Should the Danish Government raise objection to the foregoing last two lines, you may assent to their omission, pointing out that the antecedent clause

admission to the nationality thereof on the same terms as may be provided according to the laws of the United States for other inhabitants of the islands

conveys substantially the same meaning, but in acquiescing in such omission you should give M. de Schested to understand that we are unable to suggest or admit any substitutionary provision of different import.

It will be noticed that a clause is added, providing for the subsequent acquisition of the nationality of the United States by any Danish subject who may have elected Danish allegiance under the general provision of the article. This is put forward as a convenient concession to Danish interests in the islands but if His Majesty’s Government should not think it necessary, it may be omitted.

The proposal to add to Article III a provision that Danish subjects not living in the islands but owning property there shall not in any way be affected in their property rights by the cession, is cordially accepted. This Government can see no good reason for discriminating between insulars electing Danish allegiance and residence while retaining their insular property rights unimpaired, and native Danes owning insular property. The suggested proviso has accordingly been added in the following words:

Danish subjects not residing in the islands but owning property therein at the time of the cession shall retain their rights of property, including the right to sell or dispose of such property, being placed in this regard on the same basis as the Danish subjects residing in the islands and remaining therein or removing therefrom, to whom the first paragraph of this article relates.

Article IV remains unchanged.

Article V. In consideration of the statements made in the note of the Minister of Foreign Affairs in regard to the nature and amount of the financial obligations entailed upon the Danish Treasury by an unincumbered cession, and particularly in view of the exposition of the relation of the Cooperative Sugar Factories of the St. Croix to the Danish Government and the necessity of procuring the sanction of the Rigsdag to the annulment of the charter of that corporation, this Government is willing as a final concession, to increase its maximum offer to the sum asked by Denmark, to wit, $4,000,000; in the understanding that this sum is in full consideration for a free and unincumbered cession.

I do not understand that the “public foundations” to which his excellency refers, (amounting to $78,108 in St. Croix and to $100,941.84 in St. Thomas and St. John) are incumbrances upon the sovereignty or title of the islands which the United States Government is asked to assume. They would appear to be akin to our incorporated charities. If so, there is no discernible ground for their diversion from their charitable purpose.

Their continuance would appear to be a proper subject for regulation by the future municipal government of the islands, and this, following the Puerto Rican precedent will doubtless have ample powers to deal with them for the benefit of the poor, and to apply their proceeds as now. It would not be practicable for this Government to legislate upon the matter by treaty, and moreover, the circumstance that the foundations in question are partly applied “to encourage labor emigration” would make it impossible for the United States to intervene to apply the funds in any way, for our contract labor laws would be a bar to doing so. I am obliged therefore to omit the said foundations from consideration in estimating the sum to be paid. In fixing that sum at four million dollars, you must be careful to make it clear that our maximum limit is reached, and that this is done only in consideration of the cession of the islands, “in full, entire, and unincumbered sovereignty” as now stated in Article V.

All of the points presented in M. de Schested’s note have thus been passed in review, and in great part incorporated in the accompanying amended draft.⁸ The proposal that the convention shall regulate the future trade relations of the islands with the United States deserves, however, more extended notice than is above given to it.

M. de Schested says:

In this connection the Government must insist on securing for the islands free trade with the United States; as it seems natural that in this respect they ought to be given a position identical with that secured to Puerto Rico after March 1 next year.

I quite agree with his excellency, that it is natural for the economic and tariff systems of the islands to be on a footing similar to those of Puerto Rico. Unless a separate scheme of government should be adopted for the Danish group, which is deemed unlikely, it is almost a certainty that their administration will be, in the regular course of events, on a parity with that of the neighboring territory of Puerto Rico. It will be seen from the third section of the Puerto Rico Civil Government and Revenue Act approved April 12, 1900, that the trade relations between Puerto Rico and the United States are predicated upon the capacity of that island for self-supporting local administration. It is therein provided that

whenever the legislative assembly of Puerto Rico shall have enacted and put into operation a system of local taxation to meet the necessities of the government of Puerto Rico by this Act established, and shall by resolution duly passed so notify the President he shall make proclamation thereof, and thereupon all tariff duties on merchandise and articles going into Puerto Rico from the United States or coming into the United States from Puerto Rico shall cease, and from and after such date all such merchandise and articles shall be entered at the several ports of entry free of duty,

so that the contingency is comtemplated of free trade between Puerto Rico and the United States being instituted even earlier than the first day of March 1902, after which date it is provided that in no event shall any duties be collected on merchandise and articles going into Puerto Rico from the United States or coming into the United States from Puerto Rico.

The present civil and economic conditions of Puerto Rico are very encouraging, and promise full justification of the measure so enacted. Freed from the excessive burdens of the past, and with the added stimulus to internal development and productiveness which results from the new order of things, Puerto Rico is today virtually autonomous in financial and municipal matters. It is not to be expected that the Danish Islands, in entering upon a new epoch, freed from burdens not so weighty as those of Puerto Rico, endowed with equal or even greater natural resources, and peopled by a community used to orderly self-control and possessed of sound business methods, will lag behind the adjacent Spanish American possession in proving their aptitude to enjoy and rightly use as full a measure of privilege as their neighbor.

It is the belief of this Government, amounting to a certainty, that this will prove to be the fact, and that it will soon be practicable to give to the Danish Islands all the privileges of Puerto Rico. It will be the earnest effort of this Government to bring this about, as a fitting and just treatment of the important civil and economical questions involved in the cession of those islands to the United States. It is however impossible to forestall legislation in this regard.

I trust these views will commend themselves to the Danish Government, and that it will be convinced that it is the paramount desire of the United States to contribute in every possible way to the welfare of the islands and their people in the event of the cession being consummated. To that end, we are prepared to go to all possible lengths in making such conventional engagements as lie within the competence of the treaty making power; feeling assured that the legislative power, which has done adequate justice to the needs of Puerto Rico, will do no less toward the neighboring and equally favorably circumstanced Danish Islands.

You will take an early occasion to lay these views before the Government of His Majesty the King, and to ask favorable consideration of the amended project herewith transmitted.

I am [etc.]

John Hay

8. Not printed.