Mr. Hay to Mr. Wauters.
Washington, January 11, 1902.
Sir: Referring to the minister’s note of March 11, 1901, and to subsequent correspondence in reference to the claim of the Compagnie Générale des Philippines, etc., against this Government for the refundment of a fine of 75,000 francs imposed on one of its vessels, the Belgika, for a violation of certain regulations governing commercial intercourse between the islands of the Philippine Archipelago, prescribed by the military authorities of the United States in the Philippines, I have the honor to say that there exists, and has existed since February 4, 1899, in the Philippine Archipelago, an armed insurrection, having for its object the overthrow of the authority and sovereignty of the United States. The character and extent of this insurrection requires the United States to prosecute its rights by force of arms. By the laws and usuages of nations, commercial intercourse in an insurgent district under such circumstances becomes lawful only by the permission of the military authorities conducting military operations therein. This permission is subject to such terms and conditions as the military authorities see fit to impose, and persons availing themselves of the privilege secured by such permission and voluntarily engaging in commercial intercourse must respect the conditions of the license.
The Philippine Archipelago is subjected to military occupation by the forces or the United States. The right to regulate commercial intercourse with territory subject to military occupation is one which neutral nations are bound to respect.
In the exercise of this right to regulate commercial intercourse with insurgent territory subject to military occupation, the military governor [Page 77] of the Philippine Islands, on December 21, 1899, issued General Order No. 69, prescribing certain regulations for commercial intercourse between the several islands of the archipelago. A copy of this order is herewith transmitted.
Among other provisions the order contained the following
Article 9. Vessels licensed for the coasting trade will not be allowed to call at unequipped ports along the coast of the archipelago without special permission of the military governor or department or district military commander, who, in authorizing such trade, will prescribe the conditions under which it is permitted. Vessels found violating this section shall be subject to a fine of not less than 100 pesos, or more than the value of the cargo provided the value thereof exceeds 100 pesos.
It appears from a report of the United States military authorities, which has just been received through the Secretary of War, that the Compagnie Générale des Philippines, etc., a Belgian corporation with headquarters at Brussels, voluntarily availed itself of the mitigation of the strict rule of war made by the United States, and of its own motion engaged one of its vessels, the Belgika, in the trade subject to the provisions of General Order No. 69. It came to the attention of the government of the Philippine Islands that the Belgika had violated the requirements of article 9, above quoted. The charge was then investigated by the proper authorities and found to be true, whereupon a fine of $30,000, Mexican, was imposed and collected for said violation.
The company now seeks repayment of the amount of that fine. In support of its application the company contends as follows:
1. A fine imposed for violation of the provisions of article 9, of General Order No. 69, series 1899, must be recovered through seizure of the cargo and not of the ship.
Article 9 does not sustain this contention. That article plainly provides that—
Vessels licensed for the coasting trade will not be allowed to call at unequipped ports * * * without special permission. * * * Vessels found violating this section shall be subject to a fine * * * of not less than 100 pesos, or more than the value of the cargo.
The subdivision of General Order No. 69, in which article 9 appears, relates to licensing vessels to engage in the coastwise carrying trade and deals with the shipping, not the merchandise shipped. The offense is committed by the vessel if it shall “call at unequipped ports * * * without special permission,” and the vessel itself may be properly libeled for the penalty of such a violation. The cargo is referred to for the purpose of fixing the minimum amount of the fine.
2. The company further contends that at the time said violation took place, the vessel was under charter to a business concern located at Manila, and that the government of the Philippines should look to the charter party and not to the owner of the vessel. This proposition can not be assented to. The owner came to the government of the Philippines and secured a license for the vessel to engage in the coastwise carrying trade. The license relates to the vessel and the conditions bind the licensee. It is incumbent upon the licensee to carry out the said conditions, and he can not evade responsibility for violations by establishing that such violation was the act of his agent, employee, or contractor without his knowledge or consent. He is bound to obey the terms and conditions of the license. The license permits the ship to be used for certain purposes subject to certain regulations under penalties for violations. If the licensee neglects to adopt adequate measures to prevent the ship from violating the requirements of the [Page 78] license, the fault is his and he is lawfully required to sustain the penalty. This is the rule applied to licensees in time of peace, and is manifestly just under the conditions existing in the Philippines.
There is apparently no controversy over the fact that the Belgika called at the unequipped and closed ports, Hindan and Matalun, “without special permission of the military governor or department or district military commander.”
To excuse the failure to secure the special permission of any of the military commanders mentioned, the company presents the statement of the charterers that “as the captain of the port of Bay-Bay (Bag-Bag) authorized us to send the vessel to the ports referred to, we fail to see how any responsibility can have been incurred by the steamer.” (Letter dated April 11, 1900, from Mendoza & Co. to Major-General Otis.)
The offense committed by the steamship Belgika was investigated and the amount of tine determined pursuant to the provisions of General Order No. 69 (1899), as follows:
Art. 10. The fines and forfeitures which shall be incurred by virtue of these regulations shall be administratively adjudicated by the collectors at the principal ports of the islands, from whose decisions appeal may be taken to the collector of customs at Manila for final determination.
The collector of customs at Manila determined the matter as follows:
This vessel has, by imposing upon an inspector of customs (who probably not having been properly posted as to his duties), violated all the orders of the governor-general, and has for the gain of those interested in her made money out of illicit trade with the insurgents * * * I recommend that a fine of $50,000 Mexican be imposed upon the ship and that she be held until such fine be paid * * *
This finding being reviewed by Major-General Otis, the amount of the fine was reduced to $30,000 Mexican, which amount was paid by the company owning the vessel.
In view of the above this Government is unable to entertain the claim of the company for the refundment of the fine.
In conclusion, permit me to call your attention to the fact that Belgian interests in the Philippines, in common with those of other nations, enjoy the protection of the United States afforded by an army of nearly 50,000 men and a squadron of our national war vessels; that to promote the commerce of the world the United States relaxes the rule respecting hostile territory and permits commercial intercourse with such portions of the archipelago as military exigencies permit, and to enable Belgian and other interests to carry on commerce the United States has garrisoned nearly 500 towns and stations in the islands, and opened to commerce more than 100 ports.
Trusting that the Government of Belgium will recognize the fairness of the conclusions embodied in this note, I avail, etc.,