The Papal Mediation.

We give the text of the Sovereign Pontiff's proposal of arbitration between Germany and Spain; so that it may be seen at a glance how closely the protocol followed its suggestions, merely amplifying in a technical and explicit sense the scheme of His Holiness:

Proposal of His Holiness Leo XIII., Mediator in the Question of the Archipelago of the Carolines and the Palaos, pending between Spain and Germany:

The discovery made by Spain, in the sixteenth century, of the islands forming the archipelago of the Carolines and the Palaos, and the series of acts accomplished in these same islands by the Spanish government for the benefit of the natives, have created, in the conviction of the said government and of the nation, a title of sovereignty, founded upon the principles of international law which are quoted and obeyed in our days in similar cases.

And, in fact, when we consider the sum of the above-mentioned acts, the authenticity of which is confirmed by various documents in the archives of Propaganda, we cannot mistake the beneficent course of Spain in regard to these islanders. It is, moreover, to be observed that no other government has exercised a like action towards them. This explains what must be kept in mind—the constant tradition and conviction of the Spanish people in respect to that sovereignty—a tradition and a conviction which were manifested, two months ago, with an ardor and an animosity capable of compromising for an instant the internal peace of two friendly governments and their mutual relations.

On the other hand, Germany, as well as England, declared expressly in 1875 to the Spanish government that she did not recognize the sovereignty of Spain over these islands. The imperial government holds that it is the effectual occupation of a territory which constitutes the origin of the right of sovereignty over it, and that such occupation has never been realized by Spain in the case of the Carolines. It has acted in conformity with that principle in the Island of Yap; and in this the mediator is happy to recognize—as the Spanish government has also done—the loyalty of the imperial government.

In consequence, and in order that this divergence of views between the two States may be no obstacle to an honorable arrangement, the mediator, having weighed all things, proposes that the new arrangement should adopt the formulas of the protocol relating to the archipelago of Jolo, signed at Madrid on the 7th of March last by the representatives of Great Britain, of Germany and of Spain; and that the following points be observed:

1. Affirmation of the sovereignty of Spain over the Carolines and the Palaos.

2. The Spanish government, in order to render this sovereignty effectual, undertakes to establish as quickly as possible in the archipelago in question a regular administration, with a sufficient force to guarantee order and the rights acquired.

3. Spain offers to Germany full and entire liberty of commerce, of navigation, and of fishery within the islands, as also the right of establishing a naval and a coaling station.