Purchase of Danish islands ...

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Class _Lt_5_6 Book: -A S -^

57th Conc^ress, ) HOUSE OF REPKESENTATIVES. J Report 1st Sesslo7u- S \ No. 27-19.

PURCHASE OF DANISH ISLANDS.

Appendix

Select Committee ox Purchase of Danish Islands,

House of Kepkesentative;?,

March <29, 1002.

The committee met ut 11 o'clock in the room of the Committee on F'oreign Affairs.

Present: Mr. Dalzell, chuirman: Mr. Hitt, Mr. Cousins, Mr. McCall, Mr. Richardson, Mr. Dinsmore, Mr. Cowherd.

The chairman hiid l)efore the committee the following- resolutions for the appointment of the committee:

Remlved, That a select comaiittee of seven members of the House of Representatives be appointed by the Speaker whose duty it shall be to examine into the truth of all the allegations and charges made by the said Walter Christmas, agent and representative as aforesaid, in his said secret and confidential report to the Danish Government as to the methods pursued and to be pursued by him and any of his assistants in the United States, and the contracts made or proposed to be made by him or other persons acting in any way for him, or as assistants to him, for the purpose of, or which in any manner had for their object, the bribery of, or the attempted bribery of, members of the United States Congress, or of the payment of any valuable consideration of an}^ kind or character to them, or to any of them, to vote for or to assist in procuring the proposal, adoption, or ratification of said treaty of sale of the said islands as aforesaid. Said committee shall have power to subpcena and examine ^vitnesses, under oath, and to send for records, papers, and all other evidence that may be necessary for a full and com])lete investigation of the subjects herein mentioned, and it shall be authorized to sit during the sessions of the House and to have such printing and binding done as it shall deem necessary. The committee shall make a full report to the House of the result of its investigation at as early a date as is practical^le. The expenses of the investigation shall be paid out of the contingent fund of the House of Representatives.

The Speaker announced the appointment of Mr. Dalzell, Mr. Hitt, Mr. Cousins, Mr. McCall, Mr. Richardson, of Tennessee, Mr. Dinsmore, and Mr. Cowherd as oriembers of the said committee.

Attest: A. JNIcDowell,

Chief Clerk.

AFFIDAVIT OF NIELS GRON.

District of Columbia, Washington City:

Personal h' appeared before me, the undersigned, Niels Gron, and made oath in due form of law that he is a native of Denmark, but now a citizen of the United States; that he was in Copenhagen, Denmark, from the 7th day of December, 1901, to the loth da_v of February, 1902. That he arrived in the United States, returning from Dennuirk, on the 2«)th day of February, 1902, and came at once to Washington City; that he brought with him a copy of the special and confidential report made l)y Walter Christmas to the Danish Government of date October 1, 1900, less one page thereof, which is missing from the report; that a large part of said report has been published in many of the newspapers of Denmark, and that he himself translated said report into English and delivered a copy thereof to Hon. ,)ames D. Richardson, M. C, within the last week; that he knows the said Walter

Christmas personally, and that said Christmas has admitted, in a statement over his own signature, which statement has been published in the newspapers of Copenhagen, that the cop}' of the report as published in the Danish papers is a correct cop}-. He further makes oath that he has faithfully translated extracts from Copenhagen newspapers commenting on said report as they appeared in said papers from about February 1, 1902, to a late date, and that he has also delivered said extracts, with the newspapers from which 'they were taken, to said Richardson.

Niels Gron.

Sworn to and subscribed before me this March 27, 1902.

[l. s.] Aaron Russell,

Notary PiMic.

STATEMENT OF NIELS GRON.

When early in February last the contents of Mr. Walter Christmas's secret report to the Danish Government, relative to the transfer of the Danish West India Islands to the United States, liecame public, a party comprising a large portion of Denmark's best and most influential men and highest interests, realizing that since Christmas had, in the furtherance of the pending treaty, served liy direct authority hrst the Secretary of State of the United States and afterwards the Danish prime minister, Mr. Horring, it would be impossible to disassociate his efforts from the treaty or the methods set forth in his report from the official negotiation.

And realizing, further, that if the present treaty was consummated and permitted to take effect Denmark would be obliged to stand before the world as having made use of and the United States as having accepted such negotiations as said Christmas sets forth and describes in the above-mentioned report; and since it was thought that that would place the people of the two nations in an unfavorable and regrettable light, I was requested by the party referred to to journey with all speed from Copenhagen to Washington and lay before the representatives of the people of the United States the facts touching certain parts of the negotiations, in order that any further steps taken by the United States toward causing the taking effect of the treaty in question might be done with a full knowledge of the situation.

KiELS Gron.

Washington, D. C, March '27, 1902.

REPORT TO THE DANISH GOVERNMENT FROM CAPT. W. CHRIST- MAS, DIRCKINCK HOLMFELDT, OCTOBER 1, 1900.

To the Danish Government:

As early as Ma}^ 4, this year, I permitted mj'self to hand over to his excellenc}^ the prime minister a report of mj" work in the affair of the Danish West Indian Islands, while at the same time I re^quested that there might later be given me the opportunity of more fulh' explaining the case in person. Since in the meantime no such opportunity has been afforded me by his excellency, there remains no other way opon to me than by a renewed request to attempt to secure the high Government's attention to this matter.

1 believe it necessary to express m3-self as explicitly as possible with regard to all the details, as I am anxious to give an accurate and complete picture of what has happened to me in this affair, an affair about which I dare believe it will be understood has been one of honor and for the highest good, in which, therefore, 1 believe I owe those men who have assisted me. no less than nn'self, as clear a presentation as possible of all the relations and conditions pertaining to it, without which it will be impossible for my efforts to receive fair judgment.

Introduction

In order to explain how I, on the whole, came to interest myself in the sale of the West Indian Islands, let me briefly show how these islands, ever since my childhood, have plaj-ed a role in my life, and how circumstances have constantly kept my interest in them awake.

My family's economical situation has been closely connected with our colonies in the West Indies. My grandfather, Admiral Christmas, was in his time a very wealthy man. He invested his whole fortune in plantations on St. Croix, which in the beginning gave him a large income. The liberation of the slaves gave him and the other plantation owners a severe injury, which he never got over. At his death he was ruined, and the State took over his plantations. No wonder, then, that my interest in the West Indian colonies was earh' aroused. As second lieutenant I sailed down there on board a koflardimand and remained on the islands about six months.

I have since, both in men-of-war and privately, visited the islands seven times in the last ten years. I have seen how the plantation owners have become gradually impoverished, how one business firm after another has failed, and how shipping has been reduced. Often I have prepared plans for the betterment of the conditions on the islands. I have tried to establish a steamship connection between St. Thomas and St. Croix. I have worked out and sent to the Government a proposition for a more economical rule (or government) of the islands, and I have tried to start a compan}^ for the purpose of making use of the fertile soil on St. Johns by the help of Chinese coolies, but without success, since never have I met in this country an}- interest for the West Indian colonies. All have skeptically shrugged their shoulders whenever future possi])ilities for the distant islands were suggested. Without exception all have (at any rate heretofore) expressed the opinion that the islands' only future lay in annexation to the United States.

By studying the old West Indian literature, especially that touching the Danish Islands, I saw that the English, in the beginning of the century, won the colonies and appear to have had the intention of uniting them to the English West Indies. It was the intention of the English to establish a naval station at St. Thomas, but changed this plan when they discovered the large harbor on the east side of the St. elohns. Two English ships were sent into Coral Bay, the whole harbor was carefully measured, and a chart made of it. Iii the English naval chart archives mav still be found the large chart showing what a splendid, deep, excellently protected, and clean harbor St. Johns has. especially adapted to a naval or war station, as batteries or forts can be placed on far-extending peninsulas and on Bock Island, which absolutely protects the entrance, I got the idea that that harbor could be made a new and important source of income to the colonies. I decided to attempt to get established a large and modern harbor, where nature had pointed out such a good place and such excellent conditions. I did not doubt but that good use could be made of such a harbor, since the "West Indies, as far as harbors are concerned, is the poorest archipelago in the whole world.

THE HARBOR PROJECT AND ITS RESULT.

In the fall of 1898 I went to the West Indies and examined the conditions on St. Johns. This island has but very few plantations, but the numerous ruins of large stone houses and mills which lie scattered between grassj' paths and shrubs remind one of former culture and the soil's fertility. There is to be found splendid grass plains for cattle and extensive woods containing valuable species of wood. I got a large amount of the island's land upon my hands, and returned to Copenhagen to secure money for my project of bu\"ing the land and using it and for putting the harbor in order for receiving ships.

I worked upon that for several months; secured also a loan of money from different persons interested in my undertaking, but failed to secure enough capital to carry my plan through. I was then advised to seek capital in Germany, and that in a short time I succeeded in doing in Berlin. A syndicate was formed, and I went again to the West Indies, this time in order to study the conditions on the English and French islands and for the purpose of measuring and making a chart of the harbor on St. Johns. This I accomplished in the spring of 1899 and returned to Berlin with chart and plans.

The German svndicate that in the meantime had established itself was "Die Kolonial und Handelsgesellschaft St. Jun," and had laid large plans for bringing the island in under the German sphere of interest by first buying up all the land and afterwards to pat the harbor in order for German commercial ships and men-of-war. The plan had been presented to authorities of the German navy, who seemed to look upon it with favor, for just as desirable as it was for German}'^ to secure a foothold in the West Indies, so impossible did it seem if they should proceed openly by offering Denmark to bu}" the islands, for it was known that America would never allow another European power to establish itself in the West Indies. On the other hand it seemed possible that Germany, through the indirect way, as proposed by the Company St. Jun, could make use of the newh' made harbor, and gradually, as time would pass, secure control over the harbor and over the whole island.

I could have no scruples in working for that plan, since nothing could happen without the knowledge and consent of the Danish Government. To a degree it would be necessary that the directions of such a harbor company should be Danish, and leave its seat in Denmark.

The plan was, as already stated, adherence at the highest places, and it was attempted to get the Hamburg- American Line, which had about 60 steamers running^ in the West Indies, to take up the affair. That company's director, Mr. Ballin, had several conferences with the St. Jun Company director, Admiral Zirzou. Herr Ballin requested certain gnai'anties of the Governmont, which it hesitated to give, and the neootiations proceeded very skiwly.

On mv return from the West Indies the director^ of the •'Company St. Jun" asked me to go to Denmark to seek the Danish minister of finance, with a view of securing such concessions as to make the establishment of the new har1)or possible.

In June, 1899, I sought Herr Schlichtkrull. department chief in the ministry of finance, and later the minister of finance, Hovring. and presented to them 1)oth the plan, and at the same time explained to them how the situation had evolved itself. The minister was not disposed to give concessions or permission to establish a new harl)or, and he expressed as his opinion that the only thing which could be done for the West Indian Islands was to transfer them to America. Such a transfer would, in the opinion of the minister, be the final outcome. I informed the German syndicate of the result of ray interview with the minister of finance, and secured an agreement whereby I would be able to do as I might think best in the project of establishing the harbor in return for paying the syndicate a sum of monev.

During the summer of 1899 I found out. quite bv chance, that a circle of men in this country, in connection with some Americans, had, in 1897, attempted to etfect a transfer of the West Indian colonies to America. That committee consisted of General Bahnson, Captain Bluhme, Redaktor Corstensen, Count Frijs, Folkethingsmand Christopher Hage, Fabrikejer Hagemann, Atatsraad Gustav Hansen, Hojesteretsragf Octavius Hansen, and Radaktor Horup. The committee, through a native Dane, ]\Ir. Neils Gron, stood in touch with a number of American financiers, Mr. H. H. Rogers, Mr. Flint, etc.

As already noted, the patriotic motive of this committee was to efi'ect the transfer of the West Indian Islands to the United States. It worked with the knowledge and full authority of the Danish minister of finance, and the minister had given his consent to let the committee dispose of 10 per cent of the sales price for furthering the project, since it was taken for granted that the political conditions in America were such that an affair like the sale of the islands could not be carried through without a substantial expenditure of money.

Upon Mr. Hagemann's proposition, Mr. Neils Gron, in the name of the Danish committee, was to apply to Mr. H. H. Rogers for his assistance, and Mr. Rogers declared himself willing to put the matter through Congress on the condition that he be authorized to dispose of 10 per cent of the price. It was further arranged that the banking house of J. Pierpont Morgan in New York and Privatbanken in Copenhagen should represent the Danish Government. The firstnamed banking house should receive the sum from the American Treasury and deliver it to Privatbanken less 10 per cent, the commission to be paid to America. The work of the committee came to nothing, because the breaking out of the Spanish- American war stopped negotiations, which were not resumed later. But the committee still existed, inasmuch as it had never dissolved itself formally, and its subconnnittee, consisting of General Bahnsen. Herr Hagemann, and the chairman of the committee, Etatsraad Gustav Hansen, kept in constant touch with the American s^'ndicate through Mr. Neils Gron. This I discovered later, as when I went to America I thought the

D PURCHASE OF DANISH ISLANDS.

above-mer.tioned committee had long before given up the project of sale, and on the whole no longer exi.'^ted.

When I decided to take up the question of a sale, I presented myself to Department (3hief Schlichtkrull and laid before him mj plans. Herr Schlichtkruil expressed it as his conviction that my plan would find recognition if it could be carried through, since it was cleai; to the Government that it was best to hand over the islands, and the department chief expressed besides that there would hardly be any difficulty in getting the right to dispose of the 10 per cent commission, as the previously mentioned committee had had, Departme'nt'ch'ief ihquired of the minister if he would receive me, and on the following da}^ I called on the prime minister. ■. "^

The minister assumed a very skeptical position 'toward my project, since, evidently, he did not believe that I could accomplish anything in America. What I speciall}^ desired was to get permission to dispose of the same amount of money as the committee three years before and to secure a statement as to:,the amount Ddnmark would be willing to accept for the West Indian Islands. •

The prime minister assumed a very distant attitude as regards the first question, and said that if my plan succeeded could I (this expression his excellency used) figure upon the same support as the committee. His excellency expressed himself with greater force than I wish to report — his abhorrence for the political situation in America, which made it necessary to offer money in order to bring a political action, like that of transferring the islands, to a successful termination, but that he had long ago discovered the necessity for making such a money sacrifice, and he was ready to grant it. As to the amount desired for the islands, the minister did not wish to commit himself. He said:

""I can surely not then give you the islands in hands that would be quite contrary to all feelings of dignity."

And later:

" On the whole, it is not the idea to sell the islands. To that thought is His Majesty opposed. What could be done is to arrange a transfer on such conditions that we sustain no loss, but it must not appear that we sell."

When I left the minister he said:

I must honestly admit that I can not see how you can accomplish your project; but, of course I can not forbid you making the attempt, especially since the undertaking can become of value to the country. One can not cast away the private intuition which is necessary, especially here, when the Government can do nothing. It must constantly be remembered that what must be done is to get the American Government to take the first step toward acquiring the islands. The Danish Government is absolutely ignorant of your journey and undertaking.

From that conversation I considered myself at libert}'' to draw the following conclusion :

(1) The Danish prime minister and minister of finance desires nothing better than the transfer of the islands on conditions fair to the inhabitants.

(2) The minister considers it necessary and is willing to place a portion of the sales price to further negotiations in question at the disposition of "the private initiative."

(3) "The minister will accept a sum of money for the islands which will cover all expenses, the colonial debt pension, etc., so that the country get out of the affair without loss."

(4) That my object was to get the American Government to take the first step without havino- the Danish Government officially even suspect anything of my undertaking. I dare insist thiit my understanding of the four points was correct, and I have strictly kept to them point for point, as the following will show.

IVIY TRIP TO WASHINGTON.

In October, 1899, I went to America via London. I had no connections there, and not as much as a letter of introduction, but I had a decided opinion as to how I should manage, and I had good cards on hand,

(1) On President McKinley's platform in 1896, together with a few reforms of vital interest to the Union, was expressed the desire of securing the Danish West Indies Islands. The President and his followers, the Republicans, naturally, therefore, must consider the acquirement of our islands as being important, and therefore it would hardly become difiicult for me to interest the Government in Washington in my plans.

(2) I knew the sentiments of Americans against Germany and their anxiety as regards an attack upon the Monroe doctrine. I could clearly show that the idea of securing directly or indirectly the Danish Islands was not strange in influential circles in Germany.

(3) I knew that the Americans desired to establish a strong naval harbor in the West Indian waters. On the independent Cuba that could not be done. Porto Rico does not own a single good harbor, but America had, nevertheless, chosen San Juan, in Porto Rico, as the best place, and had voted $3, 000,000 to improve the harbor. (That project was stopped after I had been in Washington.) St. Thomas harbor is neither large enough nor especialh^ suited for a naval station, whereas the harbor on the cast side of St. John complies with all the requirements of that harl)or. I made a chart, and I felt confident that just that harbor would open the eyes of the Americans to the value of our islands.

All three suppositions proved themselves to be absolutel}^ correct.

From among the manj^ thanking houses in New York I chose the firm of I. & W. Seligman as one of the most recognized and most respecteVl, and which at the same time stood in close touch with the Government. The house Seligman is there the American's Naval Department special financiers, and is often used by the Administration in Washington to handle large money transactions. I have never had occasion to regret that selection. Since it was necessary for me to secure an introduction to President McKinley, Mr. Seligman secured me the same through a friend of the President, a wealthy shipbuilder of San Francisco, Mr. Scott.

Besides, I made the acquaintance of the President's brother, Mr. Abner McKinle3% who is a lawyer, and has a business in New York, together with a Colonel Brown. These two gentlemen are only very little respected, and their l>usiness, which specially consists in securing certain firms' contracts and concessions from the Government, is with out question anything but nice, but both Mr. Brown and Mr. Abner McKinley have the entree to the White House in Washington. They know most accurately all the winding paths through Congress, and are well informed as to what Memljers of Congress must ))e paid, as well as to the method which must be used to accomplish it.

As the situation was, I could not be too particular in the choice of my assistants, and I must say that the g-entlemen, Mr. Brown and Ahner McKlnley, have rendered me excellent assistance.

Ten days after my arrival in New York 1 was informed that Mr. Scott had secured me an introduction to the President, and that he awaited me. I went to Washington, and obtained an audience with the President, who received me most cordially. I informed him of the object of my visit, while I pointed to his platform of 1896, and expressed it as m}'^ personal conviction that the Danish Government would scarcel}' refuse to consider with favor a proposition from the Americans for the transfer of the islands on conditions which should prove fair to the inhabitants of the colonies. I made it clear that I acted entirely on my own responsibilit}", had no connection with the Danish Government, and told my motive was simply my own pecuniary interest in such a sale.

The President admitted that he had always considered it natural and right that America should take over the islands, which, as he expi-essed himself, had for a long time been on the market. 1 made sure of that expression to remark that I had every reason to belive that the Danish King would never allow his colonies "" to be on the market;"" that His Majesty, on the other hand, found it out of harmony with the dignity of the country to sell any part of the land, but that it A^ould be of much economic advantage to the islands to get it under the large Repul)lic, and since His Majesty has only the good of his subjects at heart, do I feel sure that the King will not oppose any arrangement which will give to the Danish Islands such advantages as the natural harbor of the West Indian waters, the United States can oti'er them.

The President closed the audience when there were announced six Indian chiefs. He requested me to seek Secretary Hay the following day and to discuss the matter further with him, and thanked me for the visit.

The next morning I was received by Mr. Hay in the foreign ministry. I had taken with me my large chart of the harlior of St. John, and a pamphlet I had written on the conditions in the \^^est Indies, the fertility of the islands, the harbor conditions, etc. — in short, all which could make the Americans desirous of bu3'ing the islands. Mr. Ha}", however, did not need much information. He appeared to know all regarding the islands; also that a Danish committee had sought to secure the Government's interest for the sale three 3'ears before. Mr. Ha}^ was well informed as regards the unfortunate pecuniary status of the islands, and asked why Denmark did not permit the colonies to export sugar duty free to the mother country. When I laid m}^ chart of St. John Harbor on the table, it at once caught his interest. He asked me why it was that Denmark had so far neglected so excellent a national harbor as not to even have it marked oli' b}- buoys, etc.

I said that we had enough in St. Thomas Harbor which was quite good. Mr. Hay did not appear to take special interest in St. Thomas Harbor. He constantly returned to the harbor of St. John, and evidently believed my chart to be very unreliable. I showed him how much that harbor was thought of by others, and that if America did not care for it then it would interest Germany so much the 'more. That made a strong impression on Mr. Hay. He became actually very excited when he learned that a German company had contemplated making use of the harbor and of bu3dng the whole island. Once

PURCHASE OB^ DANISH ISLANDS. 9

he exclaimed: "Thev are trjang to sneak into the, West Indies, are they?"

When I was through reading the papers showing the above, he re<[iu'stod that he might be permitted to keep them and my chart while he thought over the atl'air. He got nw address, and 1 went The next morning early 1 was called up to Mr. Hay. That time Admiral Bradford, Chief of the Navigation Department, was present. My chart la}^ on the writing- table, and both by Mr. Hay and Mr. Bradford I was cross-exammed for about an hour. It was evident that the interest in the Danish West Indian Islands was advancing.

The next day I went to New York, where I remained until November 20, on which day I received a written request to come to iNIr. Hay. Mr. Hay immediately told me that he had had investigations made both as regards the German company on St. John and my chart; that my representations had been proven correct; and that he would now take steps to begin negotiations with the Danish Government for securing the Danish colonies.

1 asked him to i-emember that the Danish Government knew nothing of my visit to Washington, to which he replied that he could make no mistake as to my position, since I myself had declared not to possess credentials of any kind, but that Mr. Ha}" would highly appreciate it if I personally would accompany a trusted diplomat to Copenhagen and secure for him a secret meeting with the chief of the Danish Government.

Admiral Bradford said: "I have sent in m}^ report of the Danish West Indian Islands, and especially over St. Johns Harbor. I can tell you that my report could not be more favorable to 3'our plans," and the Admiral followed me out in the hall and said: "I will let 3^ou know that I not only wish the islands for the Nav'}^, but I intend to demand them."

On the 2Sth November I received two letters from Foi'eign Minister Hay, in one of which he informed me that he had written to the aml)assador in London about my earl}^ arrival. The other was an introduction to the ambassador in London, Mr. Choate.

I could first get away on the steamer sailing December 4, and as a friend of mine, Mr. AY. G. Pcdersen, had started on the 29th of November, I delivered to him a primaiy report to the prime minister, at the same time requested him personally to inform the foreign minister, both of which he did.