George Wilhelmy, present, of age, and residents, the former a proprietor and the latter a public employé, whom I testify that I am acquainted with. Witness: I. GUERRERO, CHAS. ANDERSSEN. Witness: GEORGE WILHELMY. POMPEYO F. PELAEZ. A seal which says, "Treasury-General of the State of Sinaloa.” Mr. Charles Anderssen, captain of the schooner Montana, paid to-day three dollars, the charges for the power of attorney, which he executed in your office on the 16th instant in favor of the lawyer Don Carlos F. Golan. Mazatlan, March 20, 1877. EVARISTO VALDEZ. C. POMPEYO F. PELAEZ, Notary Public, present. Taken from the register on the fourth day after its execution upon these two useful sheets with the respective stamps. Corrected. (A Sign.) POMPEYO F. PELAEZ, N. P. A seal which says, “Mexican Republic, Pompeyo F. Pelaez, Notary Public." Upon the margin of the first page, is found a stamp of the value of five dollars, canceled in this manner: Mazatlan, á 20 de Marzo de 1877." A seal which says, "Mexican Republic, Pompeyo F. Pelaez, Notary Public." On the margin of the second page is found a stamp of the value of fifty cents, canceled in the same manner. Enough. This power is sufficient for the objects in it expressed. Mazatlan, March 20, 1787. The lawyer: CARLOS F. GOLAN A stamp of ten cents, cancelled thus: "Mazatlan, Marzo 20, de 1877.” CARLOS F. GOLAN. It is a copy taken entire from the power of attorney, which is found on pages 40 and 41 of the principal register of the proceedings relative to the proceedings prosecuted against the excess of 349 packages of foreign goods, brought in the American schooner Montana, which I authorize and sign in Mazatlan, on the 1st of August 1877. Lawyer ANDRES HORCASITAS, Secretary. [Inclosure No. 4.] The prosecuting attorney being notified on the same date, said: "that simply because the obligations of his position imperatively demand it, and with the object at the same time that a matter so delicate as this may be reconsidered by the surperior tribunal, he appeals from the sentence of which he is notified and signed. YAONA. (A rubric PALAEZ, Secretary. (A rubric.) The lawyer Don Carlos F. Golan, being notified on the same date, with the representation which he has in this matter, said, that the proecuting attorney having appealed, he agrees to appeal, and asked for the testimony in the case, or, in other words, in regard to all the proceedings with exclusion of the proofs presented by both parties and signed. PELAEZ, Secretary. (A rubric.) It is a copy: GOLAN. (A rubric.) Mazatlan, July 11, 1877. ANDRES HORCASITAS, (A rubric. Secretary. [Inclosure No. 5.] DEPARTMENT OF FINANCE AND PUBLIC CREDIT, SECTION 1. In reply to your communication of the 13th instant, relating to the affair of the schooner Montana, in which you are pleased to request me to make the corresponding declaration in regard to whether there should be presented to the custom-house at S. Ex. 96- -3 Mazatlan the documents covering the cargo of the said vessel, which is destined to Guatemala, to the end that they may be deposited in accordance with the provisions of the circular of this department of February 28 of the present year, I have the honor to state to you that, in conformity with the provisions of that circular, the documents covering goods destined to foreign ports should be presented and deposited in the respective custom-house[s]. As you are pleased to request, I inclose an authorized copy of the judicial proceedings and of sentence pronounced by the judge of the district of Sinaloa, with reference to the detention of the effects carried by the said schooner Montana for Guatemala. Liberty in the constitution. Mexico, June 14, 1877. ROMERO. To the CHIEF CLERK in charge of the Department of Foreign Affairs, present. [Inclosure No. 6.] DEPARTMENT OF FINANCE AND PUBLIC CREDIT, SECTION 1. I am informed of your communication of the 31st of July last, in which, referring to the detention suffered by the American schooner Montana, you are pleased to ask this department if, during the time which has elapsed since the issuance of the circular of February 28, 1877 (in which the concession made to steamers was extended to al kinds of vessels, enabling them to engage in the carrying trade, with the precantion. that while in port they should deposit in the custom-house the respective documents covering effects for other countries) up to the time of sending the telegram of March 15 of the same year to Mazatlan, there was any agreement or measure issued to annul the provisions established requiring the presentation and deposit of the documents covering the merchandise in transit, or whether the said telegram was the result of an error committed in the said deparment, and in reply I have the honor to say to you that in the circular of this department No. 74 or April 11 last, the provisions in force in regard to this matter are clearly explained, but, in attention to the desires of the department under your worthy charge, I will repeat them here in extract. Up to the 15th (11th) of January, 1875, there was no provision of any character authorizing a foreign vessel in any manner whatever to come to a Mexican port bring. ing merchandise in transit destined to another foreign port; that on that date (January 11, 1875) the mail steamers touching in Vera Cruz were authorized to engage in that trade, it being required of them that while in port, or before finishing their dis charge, the respective documents covering effects destined to other countries should remain deposited in the custom-house; this provision was issued to the custom-houses of Tampico, Tuxpan, Campeche, and Progreso, in which ports the mail steamers touched, for which reason this privilege was extended to those custom-houses; this extension was not made to other custom-houses of the Gulf, nor to any of those of the Pacific. On the 28th of February, 1877, a circular was issued by this department, in which it was erroneously stated that the resolution of the 11th of January, 1875, had been extended to all the high ports of the republic, and the provisions of the said resolution of January 11, 1875, were extended to all [of] them; the circular of Febr ary 28, 1877, being in force, which demanded the deposit in the custom-house of the documents covering effects destined to other ports, it was decided by Secretary LaBdero, on the 15th of March, to send the telegram addressed to the custom-house of Mazatlan in regard to the Montana, to which your department is referred, in reply to another telegram of the said custom-house of the 7th of the same month of March. No evidence whatever in regard to the reasons on which that telegram was based appears in the proceedings, since nothing is found except the telegram of the collector of Mazatlan the decision authenticated by the secretary, and the memorandum of the reply authenticated by the chief clerk, Pizarro. For these reasons the terms of the telegram of this department of March 15, 1877, are not in conformity with the legal provisions then in force. Liberty in the constitution. To the SECRETARY OF FOREIGN AFFAIRS, Present. ROMERO. [Inclosure 3 in No. 763.] LEGATION OF THE UNITED STATES, SIR: I have received and carefully examined your excellency's note of the 9th instaut, in which are studiously and ably set forth the reasons upon which the Mexican Government bases its complete rejection of the claim which my government has instructed me to make for the detention of the American schooner Montana and the seizure of its cargo. Since March, 1877, I have presented the case in various ways to your excellency's government not less than six different times, and the questions involved have been discussed both verbally and in writing; and in view of the past discussions, I have been surprised to notice that your excellency has, in your note of the 9th instant, adopted an entirely different line of argument, and presented reasons altogether new, upon which to justify the rejection of the claim. If I have read said note aright, I understand your excellency to maintain: 1st. That the trade in which the Montana was engaged is prohibited by the treaty of commerce, 131, entered into between the United States and Mexico; and, 20. That the circular of the Treasury Department of January 11, 1875, does not authorize the said trade, and that the circular of February 28, 1877, of the same department, was erroneous, and on account of which the Mexican Government has incurred no responsibility. Let us first determine what was the trade in which the Montana was engaged; and second, what was the reason for her arrest and subsequent trial in the Federal courts. First. The Montana, belonging to a well known and established line of vessels, sailed from San Francisco, Cal., destined for La Paz and Mazatlan, in the Republic of Mexico, and for San José and Champerico, in the Republic of Guatemala, having merchandise for all the ports mentioned. There is no allegation that there was any defect under the Mexican law in the documents covering goods for the Mexican ports; nor that she took on any cargo at La Paz, Mexico, for the other Mexican port, Mazatlan. For the cargo shipped for San José and Champerico, Guatemala, the vessel had regular bills of lading, and a manifest attested by the signature and seal of the collector of customs of San Francisco. The cargo for the two latter ports was also noted down in the vessel's provision (rancho) list. On arrival at the first Mexican port, La Paz, the captain of the vessel exhibited to the custom-house the said manifest and provision list. It is not charged that any portion of the cargo was omitted from said doenments. The collector at La Paz attached said manifest to a letter which he sent to the collector at Mazatlan, lest, as he stated, "an abuse might be committed on the coast." Second. On the arrival of the vessel at Mazatlan she was seized by the collector, and finally submitted to the court on the ground that the laws of Mexico did not authorize a vessel touching at a Mexican port to have goods on board destined for a foreign port. This is clearly stated in the final presentation of the case to the court by the district attorney, in which he maintained that the Mexican tariff law prohibits the transit of commerce from one foreign port to another calling at any national (Mexican) port. (See court record April 10, 1877.) I understand your excellency to assume the position that the trade as above described in which the Montana was engaged was prohibited by the last clause of Article III of the treaty of 1831, which reads: "The liberty to enter and discharge the vessels of both nations of which this artiele treats shall not be understood to authorize the coasting trade, which is permitted to national vessels only." The words underscored are given in the Spanish version of the treaty, comercio de escala y cabotaje. Is the trade in which the Montana was engaged the "coasting trade"? I think it was clearly not such. The coasting trade is well defined and understood in American commerce and legislation, and about which there can be no possible difference of opinion. Webster defines it thus: 'Coasting trade.-The trade which is carried on between the different ports of the same country, or under the same jurisdiction, as distinguished from foreign trade.” The laws of the United States regulating vessels engaged in the "coasting trade” describe it as "trading from one port within the United States to another port within the United States." (See section 4220, Revised Statutes and elsewhere.) The interpretation of the term "coasting trade" is so well known and so long established by commercial practice and judicial ruling both in England and the United States, that in those countries it is not susceptible of two constructions. It is that interior or domestic commerce distinguished from exterior or foreign commerce-the transportation of effects from one port of the same country to another port of the same country-which maritime nations usually reserve for their own citizens and vessels. It would be unreasonable to contend that by the Spanish words in the treaty of 1831 ("comercio de escala y cabotaje") it was designed to give any different meaning broader or narrower than the words "coasting trade" in the English version of the treaty. I will not lengthen this note by quoting from the dictionary of the Spanish academy, or of legislation by Escriche, as I do not even by intimation wish to impute to your excellency the unjust claim that it was designed to give a different meaning to the Spanish version of the treaty of 1831 to that contained in the English. I admit that in the interpretation of the treaty both versions are to be consulted and an ex amination of the meaning of the words employed, as defined by linguists and jurists, will fully sustain the construction of the treaty as given above. That the interior or domestic trade is reserved to the citizens of each country respectively is unquestionable. What the limit of that trade is understood to be in Mexico is pointed out in the Treatise on Jurisprudence (title 45, chapter I, section 3). The second division of commerce is interior and exterior. Interior commerce is that which the subjects of the same prince carry on among themselves, within their own state, whether by land or sea. That by sea is accustomed to be called coasting (cabotaje). (Febrero Mexicano tomo 2, page 272.) That the term “comercio de escala y cabotaje" refers to this interior commerce is very plain, from the connection in which it is used in Mexican legislation, where it is always employed in opposition or contradistinction to foreign commerce. See Arencel (tariff laws), 1872, art. 4, 12, 13; 1554, art. 469; 1845, art. 4, &c. The trade or commerce in which the Montana was engaged was not the "coasting trade” or “comercio de escala y cabotaje." It sailed from a foreign port and all its cargo was foreign merchandise. Although it touched at Mexican ports it was only for the purpose of discharging foreign goods. It loaded and carried no Mexican or other effects from one Mexican port to another. To prove that this kind of commerce is not regarded in the United States as a violation of the treaty clause prohibiting foreign vessels from engaging in the "coasting trade," it is specially excepted by an express law. Under the head of "transportation of merchandise in foreign vessel" it is enacted that "No merchandise shall be imported under the penalty of the forfeiture thereof, from one port to another port of the United States, in a vessel belonging wholly or in part to a subject of any foreign power; but this section shall not be colstrued to prohibit the sailing of any vessel from one to another port of the United States, provided no merchandise other than that imported in such vessel from some foreign port, and which shall not have been unladen, shall be carried from one port or place to another in the United States." (Section 4347, Revised Statutes.) In the United States the kind of commerce in which the Montana was engaged is allowed not only to Mexican vessels, but to those of all other nations, being regarded as a class of foreign commerce, which in no wise conflicts with the privileges of the coasting trade, which in all its commercial treaties the United States reserves exclusively to its own citizens. Your excellency has, therefore, fallen into a marked error in assuming that the United States does not allow the trade in which the Montana was occupied, and i seeking to apply to it the prohibition mentioned in the treaty of 1831, which refers to a maritime commerce altogether different. Let us examine the record point, for the first time advanced in your excelleney's note of the 9th instant, that the circular of the treasury department of January 11. 1875, does not authorize the said trade, and that the circular of February 28, 1877, was erroneous and on account of which the Mexican Government has incurred no respons sibility. What does the circular of 1875 say? That there is no express prohibition providuz that vessels which bring merchandise to the republic may not bring merchandise at the same time for other foreign ports"; and in answer to the application of the French and English steamers at Vera Cruz it is ordered that "no obstacles be placed in the way of captains of the steamers when they bring effects for foreign ports," only enjoising vigilance that no fraud be practiced while in the Mexican port. The circulat establishes no new law, nor does it make lawful that which before was unlawful. It only informs and instructs the officers of the treasury department that, under the law as it then existed, such commerce was not prohibited, and prescribes the manner which this lawful commerce is to be regulated (not restricted or modified) to prevent fraud. But your excellency says it was not intended that the circular should be applied to any other than certain Gulf ports. The best interpreter of a law is its own language, and your excellency will search in vain in the circular for any limitation for its effects to the Gulf ports. The public do not know to what ports copies of the cir cular were sent; it can only judge of the application and extent from what appears in the document itself. If it was not sent to Mazatlan and other Pacific ports, the only effect of such failure would be that the officials of those custom-houses would not have the benefit of the instructions contained in the circular, in regard to the measures enjoined to prevent fraud. The facts stated in the circular applied to all ports of Mexican territory, to wit: That there was no prohibition against the commerce mentioned therein. The attention of the treasury department having been again brought to the subject in 1577, two years afterwards, it deemed it necessary to issue the circular of February 2, 1877. What is the effect of this circular, which seems to be such an obstacle in the way of a safe conclusion of your excellency that you must needs declare it erroneous and inconsequential? It merely gives to the circular of January 11, 1875, the plain and natural interpretation which its language justifies. It does not enlage the application or effects of the former; it simply orders by the direction of the general-in-chief in charge of the executive power "the fulfillment of the said circular of the 11th of January, 1875, in the terms specified therein." * # Your excellency is certain that I will perceive that the "erroneous resolution of the employé who, at that time had charge of the portfolio of finance has been the painful cause of the difficulties in which my government and your excellency have unfortunately found yourselves involved." Why should I so readily perceive the error when it is issued with the same authority and solemnity as the former circular; when it has received the most formal indorsement of the present secretary of the treasury; and when it has required more than twelve months for that official to discover the error and invalidity? I cannot understand in what consists its error and want of application to the ease. Certainly not because it was issued while an employé was in charge of that department, because it was issued by the express command of the present worthy chief magistrate of the republic, and was officially promulgated in the government newspaper. (See Diario Oficial No. 77, March 2, 1877.) Not for want of competency to make the declarations contained in it, for it emanated from the same power, and did not claim to go farther than the circular of Jannary 11, 1-75; and even if it did, the authority which issued it was as great as that which issued the one of 1875 [?] and could just as well enact new regulations. Its error cannot consist in the fact that the employé overlooked the stated fact that the circular of 1875 was only circulated in certain Gulf ports, for I have already shown that the latter enacted no new law, but merely recognized a pre-existing privilege, which was as much enjoyable in the Pacific as in the Gulf ports. The secretary of the treasury then in office afterwards indorsed the circular by his telegram of March 15, 1-77. It is now too late for the present secretary of the treasury and for your excellency to decline responsibility on account of the circular of 1877. The former has repeatedly and in the most solemn manner recognized its existence and validity. In his communication to the foreign office, dated June 14, 1877, he expressly recognized that it was in force. In answer to my request of September 6, 1877, for copies of the telegrams of March 15 and 30, 1877, your excellency's department sent me said copies from the treasury department, which copies refer to the requirements of said circular; and this was done with the full knowledge that they would enable me to present the case to my government; and at that time no intimation was given that the circular was erroneous and inconsequential. Finally, the present secretary of the treasury has officially and publicly recognized said circular by embracing it in his annual report to the Congress of the Union for 1877. (See annual report, page 14, and documents annexed No. 68, page 33.) I have thus shown, I think, most conclusively, that your excellency is not sustained (1st) in the claim that the trade carried on by the Montana is prohibited by the treaty of 1831; and (2d) that the circular of February 28, 1877, is neither erroneous nor can the Mexican Government decline responsibility therefor. With this I might well close this note, as I have answered the only two new points presented by your excellency which have an important bearing upon the case. But I deem it due to your excellency that I should hurriedly notice several points dwelt upon in your note of the 9th instant. While I regard the circular and telegrams of 1877 as having an important connection with the case, they are by no means essential thereto. They only state what the law and regulations were at that time. Your excellency says the commerce in which the Montana was engaged was unlawful, but you fail to quote or cite the provision of the law. I have searched the Arancel in vain for any such prohibition. The circular of January 11, 1875, as before stated, recognizes the non-existence of any such prohibition. The collector at Mazatlan, in his telegram to the secretary of the treasury, states that there is no article in the tariff laws absolutely prohibiting goods in transit by sea to foreign ports. (See telegram, February 22, 1877.) The district judge in his decision of the case in question decided as follows: “It cannot now be maintained that there exists any absolute prohibition of the commerce from one foreign port to another, calling at our ports," and then adds some liberal consideration worthy to be studied by a government refusing justice to an American vessel engaged in this lawful trade. (See decision of judge, consideration first.) Your excellency refers to the report which the collector has made of the case, but I have not been furnished with a copy thereof and no opportunity has been afforded to rebut it with reports from the captain of the vessel and the consul, I do not deem it necessary to notice his allegations, except so far as the facts were developed in the trial. Allusion is made to some suspicion of frand on the part of the vessel. No such charge was made on the trial and none has been proved, nor is it in any way an issue in the case. Your excellency alludes to a promise made by the captain and consul to await the |