Third. That the nations named shall pay annually, directly to the company, companies, or individual owners of said lines, as a compensation for the services rendered them and in the terms and under the conditions established, a subsidy, the total amount of which shall not exceed thirty cents per gross registered ton of said vessels, for each 1,000 miles sailed, outward and homeward.

Fourth. That the subsidy provided for in the preceding article shall be distributed among the subscribing nations. in proportion to their population, as determined by their last census, and in default of such data, by the most reliable official sources. As an approximate proportion the following figures are indicated:

Fifth. That the bids shall be presented in Washington, before the Federal Government of the United States; and the proposals therefor shall be published in not less than three daily newspapers among those having the largest circulation, and also in each of the countries contributing to said subsidy. The advertisement shall describe the service required; the frequency of the proposed voyages; the dimensions, speed, and conditions of said vessels, and such other details as the subscribing nations may deem proper to enumerate. The period of one hundred and twenty days shall be allowed for the presentation of bids, and the same shall be opened in the presence of the representatives of said nations, authorized to this effect; the

bidders shall conform to the rules prescribed by said representatives, who shall have the right to accept or reject the bids which may be offered.

Sixth. That the vessels of the subsidized line or lines shall register in the merchant marine of the countries referred to in these recommendations, whenever the Government interested shall require it, in proportion to the quota of subsidy paid by each.

Seventh. That in the event of war between one or more of the countries subscribing to the subsidy with any of the nations represented in the Conference, the vessels of said line registered in such merchant marine shall register under the remaining countries, in the proportion indicated, until a state of peace shall be established.

Eighth. That whatever be the flag of the subsidized vessels they shall enjoy in the ports of the contracting Governments, in all that pertains to international commerce, the rights and privileges of national vessels, including the coasting trade in those countries in which it is or may hereafter be declared free.

Ninth. That this convention shall last ten years, at the expiration of which it shall be considered extended ten years, provided that twelve months before the expiration of said period formal notification of its dissolution shall not have been given. Such dissolution may be partial; and in such event the nation or nations separating shall be exempt from the payment of said subsidy.

J. M. P. CAAMAÑO.

E. C. VARAS.

MORRIS M. ESTEE.
JACINTO CASTELLANOS.
E. A. MEXÍA.

TELEGRAPHIC COMMUNICATION.

The Committee on Communication on the Pacific has the honor to propose that it be recommended to the Governments represented in the Conference and whose countries

border on the Pacific Ocean, with respect to telegraphic communication:

First. That Government aid be given to the company which shall connect the principal ports of the nations bordering on the Pacific by means of a submarine telegraphic cable, whose termini shall be, for the present, the port of San Francisco, in the United States of America, and that of Valparaiso, in Chili; taking as a basis, for the purpose of determining the total amount of aid, that the cost of transmission for each word shall be less than the minimum amount now charged by the existing companies, at whatever distance the city or locality to which the cablegram is addressed may be situated.

Second. That the total amount of aid agreed upon shall be paid by the Governments interested, in the proportion established for the payment of the aid to the steam-ship transportation companies; proceeding, with respect to the presentation and acceptance of bids, in accordance with the fifth article of its report on Communication on the Pacific.

J. M. P. CAAMAÑO.

E. C. VARAS.

MORRIS M. ESTEE.
JACINTO CASTELLANOS.
E. A. MEXÍA.

POSTAL COMMUNICATION.

The Committee on Communication on the Pacific has the honor to propose that it be recommended to the Governments represented in the Conference, and whose countries border on the Pacific Ocean, with respect to postal communication:

That the Governments with which this committee is concerned, and all of which have accepted the convention entered into in Paris on the 1st of January, 1878, for a "Universal Postal Union," adopt the conventions as to postal drafts and as to the exchange of postal money-orders, respectively entered into, at the said city of Paris, on the

4th of June, 1878, and 3d of November, 1880, or, that they enter into special conventions, having the same ends in view.

J. M. P. CAAMAÑO.

E. C. VARAS.

MORRIS M. ESTEE.

JACINTO CASTELLANOS.

E. A. MEXÍA.

APPENDIX A.

MR. ESTEE'S REPORT ON THE COMMERCE ON THE PACIFIC COAST.

Few subjects can come before this Conference of graver importance to the American Republics than the Pacific coast trade.

This trade should be fostered by all these countries, if for no other reasons, because of their contiguous location, the abundance and variety of their products, the interchangeable character of what they produce, the large demand of some of these nations for what the others have for sale, and, above all, for the good neighborhood which frequent communication and successful trade relations necessarily creates, one with the other.

The American Republics are producing countries and it is to their interest to follow the pursuits of peace; none of them maintain large standing armies, or seek for territorial conquest; international jealousy does not exist among them; all are great producers of raw material; some carry on successfully extensive manufacturing, but in every view their foreign trade is the main source of their prosperity. New enterprises have recently been built up, so that the march of progress has left its imprint all over the continent, and while it is true that parts of Central and South America were among the first settled portions of the western world, still they are now but just coming to the front as great producers of what the world most needs, and what it must have. The wisdom of a liberal commercial policy on the part of the United States towards the other American states needs no argument to sustain; and while our interests vary as do our productions, yet there is a common ground on which all can meet; whatever may be done to cheapen or increase the opportunities of these countries to send their products to market or whatever will aid in opening new markets, will be a permanent benefit to all, and must be favored by all.

Trade creates a bond of union between nations as it does between individuals, and when lines of traffic are once marked out, they can not be easily changed, because the habit of people to go to a certain market for what they buy, in time becomes a custom of every day's experience, and thus that habit is not easily changed. Fair dealing is

the rock on which all trade relations rest; it inspires confidence and builds up and sustains personal and national friendships. Add to this the fact that one of the great causes of commercial success among neighboring peoples depends on getting acquainted with each other, and in letting each other know what each has for sale, and we can not fail to note the importance of securing and maintaining rapid and cheap steam communication one with the other.

Indeed, no one can long maintain the confidence and respect of the business world, when he seeks a competing market by sending his products to that market on vessels sailing under a foreign and a competitor's flag. In this case the ship is not an advertisement for the goods it carries. In foreign commerce the nation must stand behind, and in some sense indorse the shipper, and thus it is that commercial success depends largely in sending one's goods to market on ships carrying the flag of the country that produces the goods. Individuals can not maintain, even if they could build up, a foreign commerce.

To sustain a foreign trade you must be prepared to deliver what you have for sale at stated and regular periods-at convenient and usual localities—and for a reasonable price; for trade is only an exchange with your neighbor for some commodity of which you have a surplus, and which he wants, but which he will not want unless he can get it at the time, and at the price that pleases him.

That country which produces something the world must have, but which only a small portion of it can raise, occupies a most advantageous position, like China with its tea culture, South America with its coffee, India rubber, etc.

To maintain trade relations on the Pacific between the United States of America, Mexico, the Central and South American Republics there must, therefore, be frequent, regular, and cheap steam communication between all the ports of these respective countries. To show that a sufficient trade may be built up and maintained between them, I need but add that the trade of the countries south of us, including Cuba and all the West Indies, for 1888 was as follows:

Total exports, $564,000,000. Of this sum the United States took $212,000,000, or 36 per cent. For the same year the imports were $522,000,000, of which the United States only sent them the sum of $80,000,000, or 15.6 per cent. It will thus be seen that trade between the United States and the countries south of us is largely against the United States. I have therefore made, as a part of this report, a statement showing the population, imports, and exports of all ports on the Pacific side of the continent, so far as I have been able to obtain them; the present price of passenger and freight transportation to all of them; the population of most of the cities on the Pacific side of the continent; the character of our goods sent them and the kind of products brought from them; the number of ships necessary to carry on this trade; the frequency of the trips, and such other information as within the time allotted me I could obtain.