Minister Swenson to the Secretary of State
Copenhagen, October 4, 1901.
Sir: I have the honor to acknowledge the receipt of your cablegram of the 14th ultimo,8 and to confirm mine of September 20,1 in reply thereto, relative to the new proposal of the Danish Government in reference to the St. Croix sugar factories, copies of which you will find enclosed herewith.
The Danish Government has been in hopes of effecting an agreement with the stockholders in the company referred to, whereby the colonial treasury of St. Croix would be released from the 5% guarantee undertaken in 1876, and still in force. The Danish Government would then be in position to cede the islands to the United States, unincumbered by said guarantee.
As you will remember, the former Ministry had entered upon negotiations with the stockholders, and seemed to be making some progress towards a satisfactory solution of this difficulty. Later developments, however have proved that they were oversanguine in their expectations for early results. The new Ministry, which has continued these negotiations, says that it has practically given up all hopes of arriving at an understanding that would prove acceptable to the Rigsdag. The stockholders flatly decline to entertain any proposition looking towards a compromise (an acceptance for instance of 50% of the par value of their stock); but insist that in case of sale of the islands the Danish Government is morally bound to redeem in full, the obligations contracted by the colonial treasury of St. Croix in respect to [Page 496] the sugar factories. The Ministry and the Rigsdag are of a different opinion; and there is the difficulty.
The Minister of Foreign Affairs says that by legislative authority the Danish Government could force the stockholders to its own terms; but that such action would be unpopular and would require about a year’s time. He declares himself ready, however, to adopt this procedure and to sign the treaty substantially as now submitted, in case he is assured of the necessary sanction after so long a lapse of time, which he doubts.
The situation, as it appears to me, is this: the present liberal Ministry has many pledges to redeem; it must exert itself in every direction to fulfill the high expectations it has raised among the people; and it wishes to fortify itself against expected criticism from within and without its own political party by obtaining a larger compensation for the islands than that virtually agreed upon by the former Ministry.
Recent incidents, with which you are acquainted, and of which I have been accidentally informed, have exerted a powerful influence in leading the Ministry and others concerned to believe that the United States is overanxious to buy and, consequently, willing to pay a higher price than heretofore supposed. Under the circumstances, I am of the opinion that no treaty can be concluded before or during the coming session of Congress unless the United States Government is prepared to raise the purchasing sum to at least five million dollars.
The additional million would be considered as compensation for the sugar factories, and Government plantations, and some method would undoubtedly be discovered to release the treasury of St. Croix from the obligations referred to above.
I have [etc.]