court shall perform its functions during one year in Rio de Janeiro, and shall commence its labors within the period of six months, counted from the day of the exchange of ratifications. Its mission shall be: 1, to accept or reject the claims; 2, to fix the amount of the indemnities; 3, to designate which of the two Governments is to pay them.

The payments may be made in bonds issued for the purpose, at par, to draw interest at 3 per cent and sinking-fund charges of 3 per cent.

ARTICLE III.

Because of the fact that the areas exchanged by the two nations are not equal in extent, the United States of Brazil shall pay an indemnity of £2,000,000 (two million pounds sterling), which the Republic of Bolivia accepts with the design of applying it principally on the construction of railroads or other works tending to improve communications and develop commerce between the two countries. The payment shall be made in two parts of £1,000,000 each, the first within the period of three months, counted from the exchange of ratifications of the present treaty, and the second on March 31, 1905.

ARTICLE IV.

A mixed commission named by the two Governments within the period of one year, counted from the exchange of ratifications, shall proceed to the demarkation of the boundary described in Art. I, commencing its labors within the six months following its nomination.

Any disagreement between the Brazilian and Bolivian commission which the two Governments may not succeed in settling shall be submitted to the arbitral decision of a member of the Royal Geographical Society of London, chosen by the president and members of the council of the same.

If the commissioners appointed by either of the high contracting parties to delineate the boundary fail to present themselves at the place and on the date agreed upon for the commencement of their labors, the commissioners of the other shall proceed of themselves to the marking, and the result of their operations shall be binding on both.

ARTICLE V.

The two high contracting parties shall conclude within the period of eight months a treaty of commerce and navigation based on the principle of the fullest liberty of land and river navigation for each of the nations; a right they shall both recognize in their dealings with each other perpetually, respecting fiscal and police regulations now established or that may in the future be established in their own territory. These regulations must be as favorable as possible to navigation and commerce, and they shall be made as uniform in the two countries as possible. It is, however, understood and declared that in this navigation is not included that from port to port of the same country, or internal river navigation, which shall continue in both countries subject to their respective laws.

ARTICLE VI.

In conformity with the stipulations of the preceding article and for the shipment in transit of articles of importation and exportation, Bolivia may maintain customs agents in the Brazilian custom-houses of Belém do Para, Manáos, and Corumbá, and in the other customs ports which Brazil may establish on the Madeira, and on the Mamoré, or at other points on the common boundary. Reciprocally, Brazil may maintain customs agents in the Boivian custom-house at Villa Bella or in any other customs post Bolivia may establish on the common border.

ARTICLE VII.

The United States of Brazil obligate themselves to construct in Brazilian territory, themselves, or by means of private enterprise, a railroad from the port of Santo Antonio, on the river Madeira, to Guajará-Mirim, on the Mamoré, with a branch, which, passing through Villa Murtinho or other near-by point (State of Matto-Grosso), shall extend to Villa Bella (Bolivia) at the confluence of the Beni and Mamoré. This railroad, which Brazil shall endeavor to conclude within the period of four years, both countries shall make use of, with the right to the same rates and privileges.

ARTICLE VIII.

The Republic of the United States of Brazil declares that it will canvass directly with the Republic of Peru the question of boundaries of the territory comprised between the source of the Javary and parallel 11°, attempting to arrive at an amicable settlement of the dispute, without responsibility for Bolivia in any case.

ARTICLE IX.

The disagreements which may arise between the two Governments with regard to the interpretation and execution of the present treaty shall be submitted to arbitration.

ARTICLE X.

This treaty, after approval by the legislative power of each of the two Republics, shall be ratified by the respective Governments and the ratifications exchanged in the city of Rio de Janeiro within the briefest period possible.

In faith whereof we, the plenipotentiaries above named, signed this treaty in two copies, one in the Portuguese and one in the Spanish language, affixing thereto our seals.

Done in the city of Petropolis this seventeenth day of November, in the year one thousand nine hundred and three.

SIR: Referring to the subject of my No. 114 of January 23, the boundary treaty between Bolivia and Brazil, I have the honor to state that the Chamber of Deputies ratified it on January 25 by a vote of 118 to 13, and the Senate on February 12 by 35 to 9. The Bolivian Congress having already ratified the treaty the exchange of ratifications will promptly be made.

After ratifying the treaty the Chamber of Deputies passed a bill providing for the raising of the money necessary to carry out the obligations of the treaty and providing for the administration of the territory. This bill will doubtless shortly pass the Senate.

I send herewith under separate cover two maps showing accurately the old and new boundaries between the two countries."

I have, etc.,

No. 130.]

THOMAS C. DAWSON.

Mr. Dawson to Mr. Hay.

AMERICAN LEGATION, Petropolis, March 18, 1904.

SIR: Referring to the subject of my No. 121 of February 15, 1904, the boundary treaty between Brazil and Bolivia, I have to say that the formal ratifications thereof were exchanged here on the 10th instant.

a Not printed.

The bill spoken of in that dispatch for the organization of the ceded Acre territory into a national territory became a law.

I have, etc.,

SIR: I send inclosed herewith a copy of the second annual message of President Rodriguez Alves, read on May 3, at the opening of the second session of the fifth legislature. I also send full translation of certain sections of special interest to the United States.

On the whole the message is of an optimistic tone, especially with reference to the progress of the work of building a modern harbor and dock system at Rio; a part, with the construction of a wide central avenue in the city and the creation of a new National Department of Health, of the plan to make Rio a healthy city, and particularly, to free it from yellow fever, in which much progress is already evident.

The financial situation is dwelt on at length and reflects the generally improved conditions of recent years in the government's finances which since the time of the funding loan agreement in 1898 has apparently nearly paid its way, at the expense, however, of largely increased taxes and customs duties. A gradual recovery from the crisis of 1900 is also apparent in the showings of exports and imports, which, according to the estimates, both record considerable increases over the previous years. The increase in exports is particularly noticeable the regular annual depreciation in the value of the coffee crop at last has been overcome by the increase of the value of the rubber and cotton exports.

The Peruvian situation is dwelt on at length, this being the only serious foreign complication Brazil has on its hands. Nothing new is, however, said on this point.

I have, etc.,

D. E. THOMPSON.

[Inclosure. Translation.]

Extracts from second annual message of President Rodriguez Alves, read at the opening of the second session of the fifth legislature.

The people of the Isthmus of Panama constituted itself last year into an independent state under the name of Republic of Panama. This important event was communicated here by the provisional government then organized. I replied to this communication at the same time with Argentina, Chile, the United States and Mexico, the five republics thus recognizing the new republic, for whose prosperity I have the best wishes.

After the denunciation by the Government of France of the commercial modus vivendi we had with that country, the latter renewed it by agreeing to desist from increasing the duties upon coffee, in exchange for the application of our minimum tariff to French products.

To the United States of America, the country which you know is the largest importer of the principal article of Brazilian exportation, and moreover, receives it free of duty into its markets, I have conceded, to be effective within the current fiscal year and beginning April 20 last, the reduction of 20 per cent in import duties of certain articles of their production, availing myself thus of the authority you gave me by article 6 of law No. 1144, of December 30, 1903.

Mr. Joaquim Nabuco, minister on special mission in Rome, comissioned to defend our right in the arbitrament of the boundary question between Brazil and British Guiana, already presented his third and last memorial to his Majesty the King of Italy, on the same occasion in which the English embassador presented his. The discussion between the parties being thus terminated, we await, with the greatest confidence in the justice of our cause, the sentence of the august sovereign.

Through the initiative of the Argentine Government, which I accepted with the greatest satisfaction, the Governments of the Argentine, Uruguay, Paraguay, and Brazil will be represented in a sanitary congress which will take place in this city, and the opening of which is fixed for the 5th of June next. * * # The preparations in Brazil for the transmissal of the articles destined to the universal exposition at St. Louis, in the United States of America, have been completed. The articles have been sent and the Brazilian commissioners have proceeded thither.

In view of the quantity and quality of the objects sent from almost all the States and from the federal capital the conviction is justified that our country will be well represented, and to this end the State governments have efficiently contributed, as well as the commercial associations and industrial concerns.

Our pavilion is almost completed-it is among the first completed-and according to the opinion of reliable persons it will be particularly prominent among all the other nations at that great fair for its beauty.

PROVISIONAL AGREEMENT BETWEEN BRAZIL AND PERU TERMINATING BOUNDARY DISPUTE, AND CONVENTION FOR THE ARBITRATION OF ALTO JURUÁ AND ALTO PURÚS CLAIMS.

No. 204.]

Mr. Thompson to Mr. Hay.

AMERICAN LEGATION, Petropolis, July 23, 1904. SIR: I inclose herewith copy of the provisional accord between Brazil and Peru, formulated as a means of settling in a friendly manner the boundary dispute between the two countries, and of a convention of arbitration entered into at the same time for the purpose of settling equitably and finally the claims of their respective citizens for losses and damages sustained by them in the regions of the upper Juruá and the upper Purús, together with translation of the same. I have, etc.,

D. E. THOMPSON.

[Inclosure 1.-Translation.]

Protocol of a provisional agreement, concluded in Rio de Janeiro July 12th 1904, between the Governments of Brazii and Peru.

There met in conference on the 12th of July, 1904, in the Palace of Itamaraty, Rio de Janeiro, the minister of foreign affairs, Dr. José Maria da Silva Paranhos do Rio-Branco, and the minister plenipotentiary of the Republic of Peru, Dr. Don Hernán Velarde, duly authorized to conclude an agreement which would prevent any possible conflict between the Brazilians and the Peruvians in the regions of the alto Juruá and the alto Purús, and would permit the two Governments of Brazil and Peru to enter amicably into negotiations of an honorable and

definite agreement on the question of limits between the two countries, and they agreed on the following articles:

1st. The diplomatic discussion for a direct accord on fixing the limits between Brazil and Peru from the source of the Javary to the line of 11° south latitude will commence on the 1st of August, and shall close on the 31st of December of this year, 1904.

2nd. The two governments, desirous of maintaining and tightening more and more their friendly relations as neighbors, declare now their sincere purpose to resort to some other means of solving in a friendly way the international litigations, that is to say, to the good offices or to the mediation of some friendly government or the decision of an arbiter, if within the indicated period of time or within future limitations of time agreed upon they do not reach a direct satisfactory agreement.

3rd. During the discussion the following territories in litigation shall be neutral:

(a) That of the basin of the Alto Juruá from the headwaters of that river, and from its higher affluents, down to the mouth and left margin of the River Breu, and from there to the west along the parallel of the confluents of the same Breu to the western limit of the basin of the Juruá ;

(b) That of the basin of the alto Purús from the parallel of 11° to the place denominated Catay, inclusive.

4th. The policing of the two neutral territories shall be done by a mixed commission formed of one Brazilian commission and one Peruvian commission. Each commission shall be composed of a commissary of the rank of major or captain, of a commissary substitute of the rank of captain or lieutenant, and an escort of fifty men, and as many small boats as are necessary.

5th. To the left margin of the confluence of the Breu or at any other point above on the Juruá, as well as in Catay, or in some other near point on the Purús, there shall be established mixed police stations which shall furnish documents in order that the export duties of the products of the two temporarily neutralized regions may be collected in the Brazilian customs house, either of Manaos or of Pará, and shall receive the certificates of the payments of import duties which, in either of the two above-cited Brazilian customs houses of Manaos or Pará, or in the Peruvian customs house of Iquitos, may have been affected in despatching goods to their destination in the said temporarily neutralized territories. The export and import duties shall be the same as those which the Brazilian Federal Government now collects at its fiscal stations, and the half of the same shall fall to each one of the two countries.

6th. The crimes committed by the Brazilians in the two neutral territories shall be tried by Brazilian judges, and those committed by Peruvians by Peruvian judges. Individuals of other nationalities who commit crimes against Brazilians shall be tried by the judges of Brazil, and against Peruvians by the judges of Peru. As to those of other nationalities accused of crimes against individuals who are neither Brazilians or Peruvians, either Brazilian or Peruvian jurisdiction shall be competent to judge them, according to the common agreement of the commissaries of the two republics, after an examination of the case.

7th. Doubts or divergencies which may arise between the commissaries shall be made known to the two governments in order that they may solve them. 8th. The expenses of the respective personnel and material, including those of the escort, shall be charged to the two governments.

9th. Besides the two mixed commissions of administration, each government shall nominate a special commissary for the alto Purús and another for the alto Juruá, with the helpers and escorts that may be necessary, forming thus two other mixed commissions, which shall be charged with making a rapid reconnoissance of the two rivers in neutral territories.

10th. The personnel of the commissions treated of in the foregoing articles shall be designated within thirty days from the date of the present agreement and should reach the indicated regions with the greatest possible brevity.

11th. Both governments, by common agreement, shall formulate the instructions by which the mixed commissions shall govern themselves.

12th. The two governments of Brazil and Peru declare that the clauses of this provisional agreement do not in anywise affect the territorial rights which each of them defends. In the faith of which two copies of this agreement were written, each one of them written in the Portuguese and Spanish language, in the place and date above declared.

[L. S.]

[L. S.]

RIO-BRANCO.
HERNÁN VELARDE.