In States where a general income-tax has been imposed, the tax being levied on, amongst other things, income arising out of dividends in the public funds, a nice question arises whether this income-tax should be levied on dividends payable to foreigners resident out of the State; that is, whether a State may impose a tax on the interest of her own debt due to a foreign creditor. The practice in England itself has been not to impose this tax, but the English Government in India imposes a tax upon the interest payable on its debt to its creditors of all nations. Indeed the English holder of Indian Stock pays a double duty, first to the Indian and then to the English Government. In his recent speech on the Budget, of April 21 last, the present Chancellor of the Exchequer is reported to have said, that dividends belonging to foreigners residing abroad, to the amount of £70,000 annually, were not taxed, and to have added, “I say boldly that I know of no proper exemption "from taxes except in those cases where the taxes are not "worth collecting." (a).

The several states of the United States of America deduct an income-tax of the State from the interest on the State debt in all cases; but the Government of the United States levies no income-tax on the Federal debt, having, in fact, covenanted not to do so, when it raised its recent loans..

The Austrian and Italian Governments levy heavy income-taxes on the interest of their funded debts, and make no exception in the case of foreign creditors.

It may be quite right that a person having an income accruing from money lent to a foreign State should be taxed by his own country on his income derived from this source; and if his own country impose an income-tax, it is, of course, a convenience to all parties that the government, which is to receive the tax, should deduct it from the debt which in this instance that government owes to the payer of the tax, and thus avoid a double process; but a foreigner, not resident in the State, is not liable to be taxed by the

(k) The Times, April 21, 1871.

State; and it seems unjust to a foreign creditor to make use of the machinery, which, on the ground of convenience, is applied in the cases of domestic creditors, in order to subject him to a tax to which he is not on principle liable.

IX. It is a clear maxim of International Law that the property of the subject is liable for the debts contracted by the State of which he is a member. This proposition is discussed with learning and excellent sense by Grotius. After saying that-" Mero naturæ jure ex facto alieno nemo "tenetur nisi qui bonorum successor est ;" and citing some remarkable passages from Seneca, "Si quis patriæ meæ pecuniam credat, non dicam me illius debitorem, nec hoc as "alienum profitebor; ad exsolvendum tamen hoc portionem meam dabo; unus e populo non tanquam pro me solvam, "sed tanquam pro patria conferam. Singuli debebunt non "tanquam proprium, sed tanquam publici partem" (i); and after observing that by the Roman Law the debts of the "universitas," or corporate body, were, on failure of the funds of the universitas, binding upon individuals, "non "(qua) singuli, sed qua pars sunt universorum;" and that the whole tenor of the later provisions of that law were adverse to the principle of hypothecating one man's property for another's debts, even for public debts; he adds in admirable language:-" Hæc quanquam vera sunt, tamen jure gentium voluntario induci potuit, et inductum apparet, "ut pro eo quod debet præstare civilis aliqua societas, aut ejus caput, sive per se primo, sive quod alieno debito jus "non reddendo se quoque obstrinxerit, pro eo teneantur et obligata sint bona omnia corporalia et incorporalia eorum qui tali societati aut capiti subsunt. Expressit autem "hoc quædam necessitas, quod alioqui magna daretur injuriis faciendis licentia, cum bona imperantium sæpe non "tam facile possint in manus venire, quam privatorum qui plures sunt. Est igitur hoc inter jura illa quæ Justinianus "ait, usu exigente et humanis necessitatibus, a gentibus "humanis constituta."

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(i) De J. B. et P 1. iii. c. ii. ss. 1, 2.

CHAPTER IV.

RECOGNITION.

OUT of what elements the constitution of a State shall be composed, under what form of Government it shall exist, are questions of Public Law (a), with which, so long as the constitution and Government do not threaten the liberties of other States (b), International Law has no concern. But when a new State springs into being, and demands to be admitted into the great commonwealth of States, International Law requires that her political status be so far considered by other States, as to satisfy them that she is capable of discharging international obligations. The Recognition of the new by the old States signifies their conviction that she possesses such capacity. This subject of Recognition is closely connected with that of Intervention discussed at the end of the last volume, and is a kind of moral intervention by one State in the affairs of another (c).

(a) Vol. i.

(b) Ibid.

(c) Martens, t. i. l. 3. c. 2. s. 82. n. 6. De la Reconnaissance politique. Klüber, s. 23.

Oppenheim, p. 202. kap. 8. s. 9, in part very good and clear.

Saalfeld, s. 30. pp. 63, 64.

Wheaton, Elem. 33, 37, 42.

Heffters, ss. 23, 29, 92.

Martens, Nouvelles Causes célèbres, tom. i. p. 370. Cause quatrième:"Différends survenus en 1778, entre la Grande-Bretagne et la France, au sujet de la reconnaissance de l'indépendance des Colonies angloaméricaines."

Vattel, 1. iv. c. v. s. 68.

Bluntschli. Le Droit international codifié (1870), 1. xi. 2. Formation et Reconnaissance des États.

Such is the usual meaning of this term of International Jurisprudence; but it may also signify the act of acknowledgment by the State itself, from which the Province claiming its independence has revolted, of the independence of that Province.

Such, for example, were the formal Recognitions by the German Empire, in 1648 and 1654, of the Independence of Switzerland; of Holland by Spain; of Holland in 1649, and of Portugal in 1668; by Great Britain of the United States of America in 1782; by France when, in the Treaty of Paris in 1815, she recognised the independence of the kingdoms which had been seized upon and retained by her since 1790.

This Recognition is, of course, infinitely more material to the recognised State, than any act of the kind by a third Power can be. But it is the latter species of Recognition. that claims discussion in this place.

XI. In modern times, at least, the occasions for the application of this part of International Law can only arise

1. When a nation acquires by conquest a new territory, which she claims to have recognised as an integral part of her kingdom.

2. When a portion of a nation separates itself from the remainder, and claims admission as an independent community, into the society of States. The principle affecting such a claim is the same, whether this portion occupy a territory on the same Continent with, and contiguous to the country from which it has revolted, or a distant colony of that country; whether it be the case of Holland in the reign of Philip II., of Belgium in our own times, of the North American Colonies in the reign of George III., or of the South American Colonies in that of Ferdinand VII. (d).

(d) "It is perfectly true, as has been mentioned, that the term 'recognition' has been much abused; and, unfortunately, that abuse has, perhaps, been supported by some authority: it has clearly two senses, in which it is to be differently understood. If the colonies say to the mother country, 'We assert our independence,' and the mother country answers, 'I admit it,' that is recognition in one sense. If the colonies

3. There is also the case of the Governor of an Independent State assuming a new title, of which he claims the recognition by other States.

XII. 1. The first instance belongs more properly to a later part of these commentaries, which relates to the Rights of Belligerents, the Duties of Neutrals, and the Effects of War.

2. As to the second instance, the Recognition of a revolted Province or Colony by a State, other than that from which it has revolted, is of two kinds, Virtual and Formal.

The mere observance by a Third Power of a strict neutrality in the war between an old and a new State, especially when called upon by the former for intervention and aid, has some beneficial effect with respect to the nation which is struggling for independence. It allows impartially to both an equal rank and character as belligerents. The question of the right of Third Powers to assist either party has been already considered (e).

say to another State, 'We are independent,' and that other State replies, 'I allow that you are so,' that is recognition in another sense of the term. That other State simply acknowledges the fact, or rather its opinion of the fact; but she confers nothing, unless, under particular circumstances, she may be considered as conferring a favour. Therefore it is one question, whether the recognition of the independence of the colonies shall take place, Spain being a party to such recognition; and another question, whether Spain, withholding what no power on earth can necessarily extort, by fire, sword, or conquest, if she maintain silence without a positive refusal, other countries should acknowledge that independence. I am sure that my honourable and learned friend will agree with me in thinking, that his exposition of the different senses of the word 'recognition' is the clearest argument in favour of the course we originally took, namely, that of wishing that the recognition in the minor sense should carry with it recognition by the mother country in the major sense. The recognition by a neutral power alone cannot, in the very nature of things, carry with it the same degree of authority as if it were accompanied by the recognition by the mother country also."Speeches of Mr. Canning, vol. v. pp. 299, 300.

(e) Vide ante, vol. i. p. 463.

Mr. Canning's Speech on the Independence of South America, vol. v. p. 295.