W. S. H. Lothrop. In effect, this act of the council was a refusal to recognize the claim of Usera et al. to any vested rights which were preserved by the eighth article of the Treaty of Paris of April 8, 1899. Messrs. Usera et al. subsequently and before the franchise was executed, by complaint in the United States district court in and for the district of Porto Rico, sought to enjoin the executive council from completing the grant and Lothrop from accepting the same upon the ground that complainants had a vested right or such a right as a court would protect. After presentation the court, through Judge Holt, decided, among other things, that

The legislative power of Porto Rico is, by the act of Congress of April 12, 1900, providing civil government here, vested in an assembly composed of two bodies, to wit, the executive council and the house of delegates. From this grant of legislative authority the granting of franchises is, however, excepted by section 32 of the act, and as to them the power is vested in the executive council only. As to them it acts in a legislative character and is no more subject to injunction than the Senate of the United States. If the Congress of the United States were about completing a grant of land to one party that already belonged to another under a valid Spanish grant, an injunction would not lie against Congress or its members, nor would they be necessary parties, but the right could be fully settled between the two individuals.

It was also held that upon the facts the complainants had no sufficient standing to obtain relief by injunction. It is understood that steps are being taken to appeal from Judge Holt's decision to the Supreme Court of the United States.

The Porto Rico Railroad Company, operating 200 kilometers of railroad in the island, and generally known as the "French Railroad," and the security holders of the same, have vigorously urged a claim of vested rights before the council. As the matter is one of much importance, I deem it proper to set forth a brief résumé of its history and status.

By a royal decree of Spain, issued December 17, 1886, the minister of colonies of the Kingdom of Spain was authorized to provide by public auction for the construction of a belt system of railroad in the island of Porto Rico, and as an inducement for the construction of such a railroad governmental assistance was offered by granting a guaranty of 8 per cent, to be paid out of the revenues of the island upon a certain estimated cost per kilometer of such railroad. The amount of the cost averaged $18,000 per kilometer.

There were no bidders at the first sale. Thereafter, by a royal order, a second auction was had, and on March 5, 1888, one Ibo Bosch obtained the concession and organized a company under the name of the Railway Company of Porto Rico. Caution money was deposited, as required by the contract, and work was commenced within some months thereafter; but delays occurred, and it is conceded the road was not completed within six years, the time prescribed by the terms of the concession. The corporation contends that the causes of this

failure to complete were the negligence and refusal on the part of the Spanish authorities to give their approval or indorsement of the plans presented within the time prescribed in the concession requiring such approval.

At the expiration of the six years there were only 160 kilometers finished. These enjoyed the guaranty of the interest provided for in the concession. Other portions of the road had been undertaken, but were not finished, for reasons, so the company further alleged, not within its power to control.

In 1896 the Spanish Government offered a further extension of four years to the company to complete the line, but made no definite order, and thereafter, by royal decree of May 1, 1898, it was decided that the matter should be submitted to the insular autonomic government of Porto Rico for settlement and adjustment, having regard to rights belonging to the company. Up to July 1, 1897, guaranty payments were made by Spanish authority. Porto Rico never actually paid any money after autonomic government obtained.

After American military occupancy, the company sought to have the guaranty paid by the United States, but no money was ever paid to the corporation. General Henry, military governor, by indorsement (dated March 6, 1899) upon a paper presented by the corporation relative to the contract of guaranty, wrote that as the parties "labored under many disadvantages, it is recommended that they be allowed to complete the whole road, provided that the time fixed be the least possible in the interests of the island, three-fourths of gross receipts instead of three-fifths to be retained by them."

As said before, however, no money was paid, and no construction was undertaken.

Brigadier-General Davis, as military governor, took no action whatsoever toward the payment of the guaranty claimed to be due.

When the civil government was inaugurated and grants of franchises and privileges or concessions were to be made by the executive council, application was made for the ratification of the concession previously made by the Spanish Government to the corporation, and a petition was presented asking that the corporation might be permitted to comply with the conditions indicated in the indorsement of Brigadier-General Henry and which were alleged to be a recognition of the rights of the company under the original concession.

The corporation stated that it was willing to decrease the guaranteed interest on the construction from 8 per cent to 5 per cent. A strong appeal was made to the council, based upon the alleged equities and legal rights of the company. These legal rights were said to be within the purview of the provisions of the treaty of Paris guaranteeing protection of property rights. It was also argued that General Henry had regarded the concession as an existing one, and that no forfeiture had ever been declared, even if right of forfeiture had ever existed.

Various petitions were presented by the municipalities and commercial bodies throughout the island praying that the concession made by the Spanish Government to the company be recognized, and that the obligation formerly assumed by the Government of Spain and the island of Porto Rico be undertaken by the new government of Porto Rico, with the modifications offered by the company, and that such provision be made as might enable the remaining portions of the railroad to be built at the earliest moment.

The executive council considered the entire matter from time to time, listened to argument, and finally, on December 3, 1900, unanimously adopted a resolution refusing to grant any subsidy or guarantee interest to the company, but expressing its willingness to accord to the corporation every privilege compatible with the economic life of the island.

In December, 1900, and in January, 1901, meetings were had with the representatives of the company and of its shareholders. The company submitted a proposition asking for franchises for certain new roads and the grant to it of a large amount of rural and urban land. The council expressed its willingness to award any grant of land, even had it the power to do so, a question which was seriously doubted, and again refused to recognize in any manner any obligation as existing under the former concession.

Thereafter the matter was referred to the committee on franchises of the executive council, which committee subsequently presented to the council a suggested outline for a probable arrangement with the company. This suggested adjustment contemplates a reorganization of the company and presumably an American corporation to supersede the present one. The old company and its shareholders are to waive any and all claims of guaranty against the United States or the island of Porto Rico which may possibly exist under the terms of the original concession. In consideration of such waiver, and in order to enable the company to operate its road, new franchises for feeding lines are to be given, with a life of one hundred and fifty years, authorizing the construction of important lines within the next eight years, 13 miles of which are to be built during the first year, and in addition to this the company is to be exempt from taxation for twenty-five years.

The legislative assembly also passed a law authorizing a lease to be entered into between the executive council and the French Railroad, provided the executive council adjusted the differences between the Government and such company, and provided in its discretion the council might think such lease advisable.

Under this law the council may lease to the company for fifty years, at a nominal rental, several blocks of ground situated within the limits of the city of San Juan.

The representative of the railroad is now in Paris conferring with the bondholders of his corporation, the council having indicated that

it would be willing to confer with the company concerning any proposed adjustment until May 1, 1901. A cablegram from the representative of the security holders, dated April 12, 1901, advises the council that the memorandum of possible negotiation is acceptable and reorganization may be had, and that the company's representative would be in San Juan by May 1.

The matter rests in this way, awaiting all definite action.

Royalties to the public have been exacted in water, railroad, and wharf franchises, and various other restrictions have been imposed which are calculated to protect the best public interests, yet not too severe to deter the investment of capital.

The work of the council in framing election and registration orders for the election of a resident commissioner to Washington and 35 members of the house of delegates was by no means inconsiderable. Being the first election ever held under civil government, where citizens of the island were to act as election judges and clerks, a desideratum was simplicity of system. Congress had prescribed that the island should be divided by the executive council into seven districts, composed of contiguous territory, and as nearly equal as might be in population, but left all regulations as to ballots and voting to the council. A division was made in September, and after being fully advised of all the conditions, distances, roads, travel facilities, and conveniences of the people generally, orders were passed appointing a supervisor of elections, and creating seven election district boards, each consisting of three persons. The composition of these boards was one Porto Rican Federal, one Porto Rican Republican, and one American. Two hundred and nineteen precincts were established. Election judges and clerks were named by the district boards. There were 657 election judges, 622 of whom were Porto Ricans. The council reserved the power to approve or disapprove the work of the election boards, but exercised it in only a few instances where partiality and incompetency were manifest. The qualifications of voters were as follows:

The election shall be free and equal, and every male citizen of Porto Rico of the age of 21 years and upwards, who shall have resided in this island for one year next preceding the date of election, and for the last six months of said year within the municipal district where the election is held, and who in addition possesses any one of the following qualifications:

(A) Who is able to read and write; or (B) who, on September 1, 1900, owned real estate in his own right and name, or who on said date was a member of a firm or corporation or partnership which on said date owned real estate in the name of such corporation, firm, or partnership; or (C) who, on September 1, 1900, owned personal property in his own right and name not less in value than $25 shall be entitled to vote in the municipal district where he may reside, provided his name appears on the registry list as provided by order of this council.

A form of Australian ballot was adopted, and every facility the council could think of was invoked to insure full and free elections. The Federal party withdrew on November 4 after the registration of

voters, the alleged grounds of withdrawal being the general charge of "manifest partiality" by the executive council and "lack of protection for our right to vote." The opposition party went ahead and cast 58,367 votes to the Federals 148. The total registered vote was 123,140. The withdrawal of the Federals was quietly taken and so generally criticised that it marked what will probably be the last obedience to a custom common under the old, but almost unknown under the new, sovereignty. As things progressed, too, the voluntary act of having yielded all party power in the house of delegates was felt by the Federals, so we look for future participation on their part, which doubtless means closely contested elections in 1902.

A résumé of election orders and returns is appended.

To keep up with the various work of the secretary's duties the office force consists of one assistant secretary, one chief clerk (who is also a deputy secretary), one chief clerk for the executive council, two official interpreters (one elected by the council), three translators, and 10 other clerks, the entire assistance being no greater than is actually needed-in fact the number of employees has been reduced by 10 since May 1, 1900.

The methods of the office are systematized and its progress satisfactory.

Publications and reports are exchanged with the Federal and State governments, and the foundation of a good public library was begun; subsequently an insular library was established under the supervision of the commissioner of education, and exchanged publications are now sent there from this office.

We have no civil-service law in force in Porto Rico, but with other progressive legislation doubtless one will soon be adopted. I truly hope so, inasmuch as the public service in this or any other possession will be far more efficient after it is trained, and when once well equipped a man should be confident of his tenure and that he is in line for promotion according to his experience and desert.

In the department under my charge I have recently appointed, after competitive examinations had upon the appropriate general lines laid down by the Civil Service Commission of the United States, giving a high percentage (70 per cent) to knowledge of translation from English to Spanish and Spanish to English.

For your detailed information I beg to submit the annexed recapitulation of business done from May 1, 1900, to April 1, 1901.

Very respectfully,

Hon. CHARLES H. ALLEN,

WILLIAM H. HUNT, Secretary.

Governor of Porto Rico, San Juan, P. R.

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