The Pious Fund of the Californias had its origin, in 1697, in voluntary donations made by individuals and religious bodies in Mexico to members of the Society of Jesus, to enable them to propagate the Catholic Faith in the area then known as California. The early contributions to the fund were placed in the hands of the missionaries, the most active of whom were Juan Maria Salvatierre and Francisco Eusebio Kino. The later and larger donations took the form of agreements by the donors to hold the property donated for the use of the missions, and to devote the income therefrom to that purpose. In 1717 the capital sums of practically all the donations were turned over to the Jesuits, and from that year until the expulsion of the Society of Jesus from Mexico the Pious Fund was administered by them. In 1768, with the expulsion of all the members of the Society from Spanish territory by the Pragmatic Sanction of Charles III of Spain, the crown of Spain assumed the administration of the fund and retained it until Mexican independence was achieved in 1821. During this period (1768-1821) missionary labours in California were divided, the territory of Upper California being confided to the Franciscans, and that of lower California to the Dominicans. Prior to the expulsion of the Jesuits, thirteen missions had been founded in Lower California, and by the year 1823 the Franciscans had established twenty-one missions in Upper California. In 1821 the newly established Government of Mexico assumed the administration of the fund and continued to administer it until 1840.

In 1836 Mexico passed an Act authorizing a petition to the Holy See for the creation of a bishopric in California, and declaring that upon its creation "the property belonging to the Pious Fund of the Californias shall be placed at the disposal of the new bishop and his successors, to be by them managed and employed for its objects, or others similar ones, always respecting the wishes of the founders". In response to this petition, Gregory XVI, in 1840, created the Californias into a diocese and appointed Francisco Garcia Diego (then president of the missions of the Californias) as the first bishop of the diocese. Shortly after his consecration, Mexico delivered the properties of the Pious Fund to Bishop Diego, and they were held and administered by him until 1842, when General Santa Ana, President of Mexico, promulgated a decree repealing the above-mentioned provision of the Act of 1836, and directing that the Government should again receive charge of the fund. The properties of the fund were surrendered under compulsion to the Mexican Government in April, 1842, and on 24 October of that year a decree was promulgated by General Santa Ana directing that the properties of the fund be sold, and the proceeds incorporated into the national treasury, and further provided that the sale should be for a sum representing the annual income of the properties capitalized at six per cent per annum. The decree provided that "the public treasuries will acknowledge a debt of six percent per annum on the total proceeds of the sale", and specially pledged the revenue from tobacco for the payment of that amount "to carry on the objects to which said fund is destined".

By the treaty of Guadalupe Hildago, 2 Feb., 1848, Upper Mexico was ceded to the United States by Mexico, and all claims of citizens of the United States against the Republic of Mexico which had theretofore accrued were discharged by the terms of the treaty. After the treaty of Guadalupe Hildago (and indeed for some years before) Mexico made no payments for the benefit of the missions. The archbishop and bishops of California claimed that, as citizens of the United States, they were entitled to demand and receive from Mexico for the benefit of the missions within their diocese a proper proportion of the sums which Mexico had assumed to pay in its legislative decree of 24 October, 1842. By a convention between the United States and Mexico, concluded 4 July, 1868, and proclaimed 1 Feb., 1869, a Mexican and American Mixed Claims Commission was created to consider and adjudge the validity of claims held by citizens of either country against the Government of the other which had arisen between the date of the treaty of Guadalupe Hildago and the date of the convention creating the commission. To this commission the prelates of Upper California, in 1869, presented their claims against Mexico for such part of twenty-one years' interest on the Pious Fund (accrued between 1848 and 1869) payable under the terms of the Santa Ana decree of 1842, as was properly apportionable to the missions of Upper California (Lower California having remained Mexican territory).

Upon the submission of this claim for decision the Mexican and American commissioners disagreed as to its proper disposition, and it was referred to the umpire of the commission, Sir Edward Thornton, then British Ambassador at Washington. On 11 Nov., 1875, the umpire rendered an award in favour of the archbishop and bishops of California. By that award the value of the funds at the time of its sale in 1842 was finally fixed at $1,435,033. The annual interest on this sum at six per cent (the rate being fixed by the decree of 1842) amounted to $86,101.98 and for the twenty-one years between 1848 and 1869 totalled $1,808,141.58. The umpire held that of this amount, one-half should equitably be held apportionable to the missions of Upper California, located in American territory, and therefore awarded to the United States for the account of the archbishop and bishops of California $904,070.79. This judgment was paid in gold by Mexico in accordance with the terms of the convention of 1868, in thirteen annual installments. Mexico, however, then disputed its obligation to pay any interest accruing after the period covered by the award of the Mixed Claims Commission (that is, after 1869), and diplomatic negotiations were opened by the Government of the United States with the Government of Mexico, which resulted, after some years, in the signing of a protocol between the two Governments on 22 May, 1902, by which the question of Mexico's liability was submitted to the Permanent Court of Arbitration at The Hague. This was the first International controversy submitted to the tribunal. By the terms of the protocol, the Arbitral court was to decide first whether the liability of Mexico to make annual payments to the United States for the account of the Roman Catholic bishops of California had been rendered res judicata by the award of the Mixed Claim Commission, and second, if not, whether the claim of the United States, that Mexico was bound to continue such payments, was just.

On 14 October, 1902, the tribunal at The Hague mad an award judging that the liability of Mexico was established by the principal of res judicata, and by virtue of the arbitral sentence of Sir Edward Thornton, as umpire of the Mixed Claim Commission; that in consequence the Mexican Government was bound to pay the United States, for the use of the Roman Catholic archbishop and bishops of California the sum of $1,402,682.67, in extinguishment of the annuities which had accrued from 1869 to 1902, and was under the further obligation to pay "perpetually" an annuity of $43,050.99, in money having legal currency in Mexico. The Government of Mexico has since the date of The Hague award complied with its provisions, and annually pays to the Government of the United States, in Mexican silver, for the use of the Catholic prelates of California, the sum adjudged to be due from it as a "perpetual" annuity.

Transcript of Record of Proceedings before the Mexican and American Mixed Claims Commission with Relation to. . . .. . . . . .Claim No. 439, American Docket (Washington, 1902); Diplomatic Correspondence Relative to the Pious Fund of the Californias (Washington, 1902); United States vs. Mexico. . . .. . . . . .Senate Document No, 28, 57th Congress, Second Session (Washington, 1902).

GARRET W. McENERNY