Numerous other cases have occurred, particularly in Venezuela, where the arbitrary annulment of a contract by the Executive without. appeal to the courts was held to justify diplomatic interposition and to render the government liable. Nor has the presence of the Calvo clause in the contract, by which the alien contractor undertakes to make the local courts his final forum and to forego his right to claim the diplomatic protection of his own government, been considered as denying to the claimant's government the right to interpose in his behalf where there has been an arbitrary annulment of the contract by the local government. This conclusion has been based on one of several grounds. In some cases, the arbitrary action of the government was held to be a tort, thus rendering the construction of the contract unnecessary. In other cases, the arbitrary action and the failure of the government to secure a judicial construction in first instance was held to relieve the claimant from his own stipulation to resort to the local courts and forego the diplomatic protection of his government. In any event, it was held that the citizen could not contract away the right of his own government to interpose diplomatically in his behalf, the right of his government to intervene being superior to the right or competency of the individual to contract it away.2

Arbitrator, Moore's Dig. VI, 730. In Oliva (Italy) v. Venezuela, Feb. 13, May 7, 1903, it was held that claimant's unlawful expulsion, preventing compliance with the contract, was an arbitrary act, justifying damages for money expended and time lost. Ralston 771. See also Paquet (Belgium) v. Venezuela, March 7, 1903, Ralston, 269; Aboilard (France) v. Hayti, June 15, 1904, Arbitrators Vignaud, Renault and Solon Menos, 12 R. G. D. I. P. (1905), Documents, 12, 13-17; Punchard et al., Antioquia Railway (Gt. Brit.) v. Colombia, July 31, 1896, 88 St. Pap. 19; La Fontaine, Pasicrisie internationale, 544; Cedroni (Italy) v. Guatemala, March 18, 1898, La Fontaine, op. cit., 606; the concessions in the last case were gratuitous.

1 Sen. Doc. 413, 60th Cong., 1st sess., p. 105. Rudloff (U. S.) v. Venezuela, Feb. 17, 1903, Ralston, 187; Kunhardt (U. S.) v. Venezuela, Morris's Rep., Sen. Doc. 317, 58th Cong., 2nd sess., 189-190; Selwyn (Gt. Brit.) v. Venezuela, Feb. 13, 1903, Ralston, 322; North & South American Construction Co. (U. S.) v. Chile, Aug. 7, 1892, Moore's Arb. 2318, and final settlement in For. Rel., 1895, I, 85–86; Milligan (U. S.) v. Peru, Dec. 4, 1868, Moore's Arb. 1643.

2 Martini (Italy) v. Venezuela, Feb. 13, 1903, Ralston, 819; Selwyn (Gt. Brit.) v. Venezuela, Feb. 13, 1903, Ralston, 322; Milligan (U. S.) v. Peru, Dec. 4, 1868, Moore's Arb. 1643; Delagoa Bay Railway case, McMurdo (U. S. and Great Britain) v. Portugal, June 13, 1891, Moore's Arb. 1865; see also International Law Association, 24th Rep. (1908), address of Jackson H. Ralston, pp. 192, 193; Mr. Bayard to

3. Various acts of foreign governments have been construed as sufficiently arbitrary to warrant the United States in intervening in contract claims or to authorize international commissions to award indemnities. Thus, the proposed depreciation by Haiti of the value of certain bonds issued to American citizens for work and materials was held to justify the United States in protesting and eventually interfering. Lord Salisbury,2 the British Foreign Secretary, protested likewise against a proposed act of Peru tending to weaken certain security hypothecated to the holders of Peruvian bonds. So, the diversion of the security of certain revenue pledged to the payment of the claims of citizens of the United States, even when contractual in origin, has been held to warrant interposition.3

4. The United States has on several occasions intervened to secure the payment to one of its citizens of the damages arising through breach of contract by a foreign government where such breach involved an element of tort. Thus, the seizure by the President of the Dominican Republic of the Ozama bridge brought about the diplomatic interposition of the United States in behalf of Thurston, an American engineer who had built the bridge under contract with that government. The most recent case of this character was the arbitrary expulsion of Treasurer-General Shuster from Persia, in which case the Department of State took an interest and by its firm position helped to secure the full payment of salary for the entire unexpired time of the contract.5

5. The equitable character of the claim has at times induced the

Mr. Scott, Minister to Venezuela, June 23, 1887, Moore's Dig. VI, 725. Infra, § 371

et seq.

Mr. Sherman, Sec'y of State, to Mr. Powell, Minister to Haiti, Oct. 26, 1897, Moore's Dig. VI, 729.

Lord Salisbury, British Foreign Sec'y, to Señor Pividal, Peruvian Minister, Nov. 26, 1879, quoted from Parliamentary Papers in Moore's Dig. VI, 724.

Walter (U. S.) v. Venezuela, Dec. 5, 1885, Moore's Arb. 3567-3568; Moses (U.S.) v. Mexico, July 4, 1868, Moore's Arb. 3465. See also the cancellation of the Greffuhle concession in Zanzibar (France) v. Great Britain, 1892, La Fontaine, 618, Moore's Arb. 4939.

Ozama Bridge claim, Thurston (U. S.) v. Dominican Republic, For. Rel., 1898,

274-291.

* Article of Clement L. Bouvé, Russia's liability in tort for Persia's breach of contract, citing note of Secretary of State Knox of Dec. 1, 1911, 6 A. J. I. L. (1912), 396-407.

Department of State to recede from its rigorous position of declining interposition where the claim originated in a contract.1

Equitable considerations alone, however, have rarely induced any stronger action than the use of good offices.

6. Where a definite arrangement for the liquidation of the claim has been made between the alien and the government, it will generally be enforced by diplomatic pressure, notwithstanding its contractual origin.2

$ 115. Arbitration.

7. Whatever hesitation there may have been on the part of the Executive to interpose diplomatically in behalf of citizens injured through the breach of a contract concluded with a foreign government, the Department of State has generally been willing to submit contract claims to the adjudication of international commissions, and these commissions have in general exercised jurisdiction over contract claims as over other claims.3 In instructions given by Mr. Pickering on Octo

1 Mr. Evarts, Sec'y of State, to Sir E. Thornton, May 2, 1879, Wharton's Dig. II, 658; see also correspondence between Mr. Fish and Mr. Thomas in 1874 in the Landreau case v. Peru, Moore's Dig. VI, 714-715.

2 Lord John Russell, British Foreign Sec'y, to Sir C. L. Wyke, Mar. 30, 1861, 52 St. Pap. 238, quoted also in Moore's Dig. VI, 719; Claim of Waring Brothers, railroad contractors (Gt. Brit.) v. Brazil, in which Great Britain insisted on the carrying out by Brazil of a decree which appropriated an indemnity for the loss sustained by Waring Brothers due to the government rescinding the contract. Moore's Dig. VI, 720-721, For. Rel., 1887, 54, 55. Sparrow claim v. Peru, For. Rel., 1895, II, 10361055; 1896, 492-494. The French claims against Venezuela liquidated under the convention of June 29, 1864, Moore's Dig. VI, 711–712. See also the settlement of the claim of W. R. Grace (U. S.) v. Peru, in which the failure of the government to carry out a judgment against it was construed as a denial of justice warranting diplomatic intervention. Mr. Neill to Mr. Hay, Sec'y of State, Nov. 19, 1903, For. Rel., 1904, 678.

3 Contract claims have been submitted to general mixed commissions dealing with general claims (as, for example, the U. S.-Mexican commissions of 1839 and 1868, the U. S.-Venezuelan commissions of 1885 and 1903 and many others) and to special commissions instituted to decide single claims (as, for example, the claim of Metzger & Co. (U. S.) v. Haiti, October 18, 1899, Day, Arbitrator, For. Rel., 1901, 262–276, and that of the San Domingo Improvement Co. (U. S.) v. Dominican Republic, Jan. 31, 1903, For. Rel., 1904, 270. See also Bordes (France) v. Chile, 1897, La Fontaine, 618 (award unpublished); Freraut (France) v. Chile, July 3, 1897, LaFontaine, 579. General mixed commissions have assumed jurisdiction of contract claims under the customary inclusive terms of the protocol "all claims," and even "claims" arising out of "injury to person or property of citizens."

ber 22, 1799, to the American plenipotentiaries to France, the envoys were directed to secure the adjustment of "all claims" of citizens of the United States against that government, and among these there were expressly enumerated the "sums due" to American citizens by contracts with the French government, or its agents.1

By the convention between the two countries of April 30, 1803, for the "payment of sums due" by France to citizens of the United States, provision was made for the satisfaction of "debts." 2 In the treaty of February 22, 1819, between the United States and Spain, by which each government renounced "all claims" of its citizens or subjects against the other government, Mr. Adams, Secretary of State, considered that contract claims had been included among those renounced.3 Mr. Adams added that there was no doubt of the right of the government to include such claims in the provisions of the treaty.

Practically all international commissions, where the terms of submission in the protocol could be construed as sufficiently broad, have exercised jurisdiction over contract claims, for example, the United States-Spanish Commission of February 22, 1819, the three Mexican commissions of April 11, 1839, of March 3, 1849 (domestic) and of July 4, 1868, the United States-British Commission of February 8, 1853 and August 18, 1910, the United States-Peruvian Commission of January 12, 1863, the United States-French Commission of January 15, 1880, the United States-Venezuelan Commission of December 5, 1885, the Venezuelan Commissions of 1903 sitting at Caracas, and many others. A conflict arose in the commission of July 4, 1868, due to the 1 Am. St. Pap., For. Rel., vol. 2, 242, 301, 303; see also Moore's Dig. VI, 707–708. 2 Moore's Dig. VI, 708.

'Moore's Dig. VI, 717-718; Moore's Arb. 4502-4505.

'See Moore's Dig. VI, 718; Ralston, Report of Venezuelan Commissions; Moore's Arb. 3425-3590; J. Hubley Ashton, agent of the United States before the Mixed Commission with Mexico of July 4, 1868, in an elaborate argument in the case of the State Bank of Hartford (No. 535) and other similar cases, opposing a motion to dismiss for want of jurisdiction over contract claims, analyzed carefully the practice of the United States and the jurisdiction of international commissions in the matter of contract claims, especially under a protocol submitting "all claims . . . arising out of injuries to . . person or property." He cited decisions of municipal courts and international tribunals to show that under the terms "all claims" and "injuries" breaches of contract were included. Among others he cited decisions of the commissions under the treaty with Spain, 1819 (8 Stat. L. 258); with Great Britain, 1853

difficulty of reconciling vacillating opinions with proper judicial action. Commissioners Wadsworth, Palacio and Umpire Lieber (though the latter was not always consistent) had allowed claims on contracts. concluded between citizens of the United States and agents of Mexico for the furnishing of arms, munitions, and other material to the Mexican government, on the ground that the failure to pay for such goods constituted an "injury" to the "property" of an American citizen under the terms of the protocol. The Mexican commissioner, Palacio, while adhering to the view of his colleagues that contract claims were within the jurisdiction of the commission, believed that a demand and refusal of payment was a condition precedent to the allowance of the claim. Subsequently, upon the death of Dr. Lieber and the resignation of Commissioner Palacio, Sir Edward Thornton became umpire and Señor Zamacona the Mexican commissioner. Thereupon a different view was taken as to the jurisdiction of the commission over contract claims. Sir Edward Thornton considered that he ought to follow the practice of the Executive of exercising discretion in assuming jurisdiction of contract claims, for which reason, while admitting the jurisdiction of the commission over contract claims, he declined to allow such as were based upon voluntary contract, in the absence of clear proof of the contract and proof that gross injustice had been done by the defendant government. The decisions of the commission, therefore, are at times contradictory, claims of exactly the same nature having been allowed by Wadsworth, Palacio and Lieber, and rejected when Zamacona became the Mexican commissioner and Thornton the umpire.1

(10 Stat. L. 998); with New Granada, 1857 (12 Stat. L. 985); with Costa Rica, 1860 (12 Stat. L. 1139); with Colombia, 1864 (13 Stat. L. 685); with Ecuador, 1862 (13 Stat. L. 633); with Peru, 1863 (13 Stat. L. 639); with Venezuela, 1866 (16 Stat. L. 316), and with Peru, 1868 (16 Stat. L. 349). He also mentioned the three Mexican commissions. The argument is on file in the Department of State Library.

1 A full discussion of this perplexing question before the commission was undertaken by Commissioner Wadsworth in the case of Treadwell & Co. (U. S.) v. Mexico, July 4, 1868, quoted at length in Opinions of the Commission, vol. 4, 248, and vol. 7, 383. The claims were allowed in the cases of Manasse, Moore's Arb. 3462-3464; Iturria, ibid. 3464; Moses, Assignee, ibid. 3465; Newton, ibid. 3465; Morrill, ibid. 3465, and were disallowed by Thornton, umpire, in cases of supplies furnished, services rendered and other claims based on voluntary contract in the Phipps case, ibid.