Chapter 12 – Fiduciary Relationships: Sovereignty Held in Trust

Chapter 12 – Fiduciary Relationships: Sovereignty Held in Trust

Fiduciary Relationships, (Part A)

Many civilians are confused by the nature of fiduciary relationships. The following quotations can be of help in explaining and illustrating this more clearly.

1. In the Treaty of Paris after the Spanish American War, Spain ceded the sovereignty of Cuba, but it was not given to any other country. The United States was the (principal) occupying power. Hence, as summarized previously, the situation of Cuba after the Spanish American War provides good comparative analysis for Taiwan.

Article 1 of the treaty provided that:

Spain relinquishes all claim of sovereignty over and title to Cuba. And as the island is upon the evacuation by Spain to be occupied by the United States, the United States will, so long as such occupation shall last, assume and discharge the obligations that may under international law result from the fact of its occupation, and for the protection of life and property.

2. In their concurring opinion in Downes v. Bidwell, 182 US 244 (1901), Justices White, Shiras, and McKenna stated:

It cannot, it is submitted, be questioned that, under this provision of the treaty, as long as the occupation of the United States lasts, the benign sovereignty of the United States extends over and dominates the island of Cuba…. Considering the provisions of this treaty, and reviewing the pledges of this government extraneous to that instrument, by which the sovereignty of Cuba is to be held by the United States for the benefit of the people of Cuba and for their account, to be relinquished to them when the conditions justify its accomplishment, this court unanimously held in Neely v. Henkel, 180 US 109, ante, 302, 21 Sup. Ct. Rep. 302, that Cuba was not incorporated into the United States, and was a foreign country.
[bold-italics added]

Justice Gray in a concurring opinion stated:

So long as Congress has not incorporated the territory into the United States, neither military occupation nor cession by treaty makes the conquered territory domestic territory, in the sense of the revenue laws; but those laws concerning ‘foreign countries’ remain applicable to the conquered territory until changed by Congress. Such was the unanimous opinion of this Court, as declared by Chief Justice Taney in Fleming v. Page, (1850).

3. In a similar situation to Cuba after April 11, 1899, Taiwan is “foreign territory under the dominion of the United States.” The Taiwan Relations Act does not treat Taiwan as a sovereign independent nation, but rather as a “sub-sovereign foreign state equivalent.” The TRA contains a “foreign state equivalency” clause.

REFERENCE: Taiwan Relations Act [22 USC 3303 (b)]:

Application of United States laws in specific and enumerated areas

The application of subsection (a) of this section shall include, but shall not be limited to, the following:
(1) Whenever the laws of the United States refer or relate to foreign countries, nations, states, governments, or similar entities, such terms shall include and such laws shall apply with respect to Taiwan.
(2) Whenever authorized by or pursuant to the laws of the United States to conduct or carry out programs, transactions, or other relations with respect to foreign countries, nations, states, governments, or similar entities, the President or any agency of the United States Government is authorized to conduct and carry out, in accordance with section 3305 of this title, such programs, transactions, and other relations with respect to Taiwan (including, but not limited to, the performance of services for the United States through contracts with commercial entities on Taiwan), in accordance with the applicable laws of the United States.

In United States v. State of California, 332 US 19 (1947), the Supreme Court held that:

To speak of ‘dominion’ carries precisely those overtones in the law which relate to property and not to political authority.  Dominion, from the Roman concept dominium, was concerned with property and ownership, [332 US 19 , 44] as against imperium, which related to political sovereignty.

Fiduciary Relationships, (Part B)

Fiduciary Relationships as discussed in President McKinley’s 3rd Annual Message, (Dec. 5, 1899)

The withdrawal of the authority of Spain from the island of Cuba was effected by the 1st of January, so that the full re-establishment of peace found the relinquished territory held by us in trust for the inhabitants, maintaining, under the direction of the Executive, such government and control therein as should conserve public order, restore the productive conditions of peace so long disturbed by the instability and disorder which prevailed for the greater part of the preceding three decades, and build up that tranquil development of the domestic state whereby alone can be realized the high purpose, as proclaimed in the joint resolution adopted by the Congress on the 19th of April, 1898, by which the United States disclaimed any disposition or intention to exercise sovereignty, jurisdiction, or control over Cuba, except for the pacification thereof, and asserted its determination when that was accomplished to leave the government and control of the island to its people. The pledge contained in this resolution is of the highest honorable obligation and must be sacredly kept.

Note: Two facts must be remembered — (1) the United States was not opposed to Cuban independence, (2) the United States did indeed exercise sovereignty over Cuba from the date of the surrender of Spanish troops in Cuba (July 17, 1898), past the date when the Treaty of Paris came into effect (April 11, 1899), up until the end of USMG and the proclamation of the Republic of Cuba on May 20, 1902.

Fiduciary Relationships, (Part C)

The concept of occupied territory being held in trust is further clarified on page 44 of Military Government and Martial Law by William E. Birkhimer, 3rd edition (1914), Chapter VI “Effect of Occupation on Local Administration,” Section 63 “Instance occupation of Cuba” —

The position of the United States military authorities in Cuba, before the Spanish authorities abandoned the island in 1899, was one of military occupation, pure and simple; after that event, it was military occupation of a particular kind, namely, wherein the dominant military power exercised authority over the island as trustee for a Cuban nation not yet in existence, but the creation of which was promised and which was to have the assistance of the United States in establishing itself.

Also see Section 74 on page 49, which discusses the case of Neely v. Henkel, 180 US 109 (1901) —

The relation of the United States to Cuba, resulting from the war of 1898, came up for review before the Supreme Court. An American who in Cuba was charged with crime had been arrested within one of the States of the Union, and it was held that he was subject to extradition. The court remarked that, as between the United States and all foreign nations, the former held Cuba as conquered territory; as between the United States and Cuba, the latter was held by military power in trust for the Cuban people, to be delivered over on the establishment of a stable government. It was a military occupation.

Fiduciary Relationships, (Part D)

Fiduciary Relationships and Indian Affairs in the USA

Federal law gives the Secretary of the Interior and the Commissioner for Indian Affairs [now the Assistant Secretary of Interior for Indian Affairs] broad powers over all Indian affairs and all matters arising out of Indian relations. This includes veto power over all tribal contracts. Although the Navajo Nation has an elected council, set up under non-traditional Anglo guidelines, virtually every significant action of this council must receive BIA approval before it can become law or acted upon by the tribe. That approval process is often unnecessarily protracted and obstructionist.

After years of agitation and demands by indigenous governments, some changes have been realized in this relationship, resulting in relatively greater control of decisions on Indian reservations. Nevertheless, the federal government continues to insist that it, and not native peoples, is the ultimate arbiter of the degree of sovereignty exercised by indigenous nations. The importance of the exercise of US control in India affairs becomes increasingly clear when one understands the considerable natural resource reserves found within the territories of indigenous nations — many of which are considered strategic by the United States. In this respect, native peoples of the US experience similar economic invasions and controls as other indigenous peoples — be they the Yanomamis of Brazil, the Crees of Alberta, or the Penans of Sarawak. States consistently claim that it is their prerogative to exploit indigenous natural resources for the “national security,” and such matters are purely domestic in nature, beyond the scope of international scrutiny or rebuke.

What makes the economic condition of indigenous peoples in the US somewhat unique is the judicially-created “trust relationship” that requires the US to hold native lands and resources for the benefit of indigenous nations. ….. [S]ome legally enforceable rights for indigenous peoples do exist if the US breaches its fiduciary obligation to them. Even more interesting is the fact that the United States is a fiduciary under two trust obligations: one to the indigenous people it has colonized and how now live within territory claimed by the US, and one to the peoples of the Pacific Trust Territory, whose territories were placed in trust by the United Nations, with the US as trustee. A significant difference between these two trust arrangements is that the peoples of the Pacific Trust Territory did possess the absolute right to exercise self-determination when and if they choose to do so. No such right currently exists under international law for indigenous nations within the US, and the main difference in the attachment of international rights and status has to do with geographical separation from the colonizing power.

Also see —
High Court of American Samoa, Trial Division, CA No.129-85, May 7, 1987:

6. Cf. Morton v. Mancari, 417 US 535 (1974), upholding the constitutionality of an “Indian preference” statute for employment in the Bureau of Indian Affairs, which is charged with administration of Indian reservations and related programs. The purpose of these preferences, as variously expressed in the legislative history, has been to give Indians a greater participation in their own self-government, to further the Government’s trust obligation toward the Indian tribes, and to reduce the negative effect of having non-Indians administer matters that affect tribal life. Id. at 541-42 (footnotes omitted). The Indian preference, like the American Samoan preference, “is granted to Indians, not as a discrete racial group, but, rather, as members of quasi-sovereign tribal entities whose lives are governed by the BIA in a unique fashion.” Id. at 554. The Court characterized it as “political rather than racial in nature.” Id. at 553 n.24. The constitutional justification for this special political arrangement was found in the fact that the United States, by acquiring control over the Indians in the exercise of the war and treaty powers, had thereby undertaken a trust obligation to them. Id. at 552. Implicit in this trust obligation was the power, ad perhaps the duty, to employ Indians wherever possible in positions related to their own governance.

Sovereignty is never held in suspense

Rulers come and go; governments end and forms of government change; but sovereignty survives. A political society cannot endure [299 US 304, 317] without a supreme will somewhere. Sovereignty is never held in suspense.

— quoted from United States v. Curtiss-Wright Export Corporation, 299 US 304 (1936)

Note: There is much discussion in Taiwan and in overseas Taiwanese communities in regard to the Montevideo Convention. In the view of many people, the ROC on Taiwan meets that Convention’s criteria for statehood of (a) permanent population, (b) defined territory, (c) government, and (d) the ability to conduct foreign relations. Hence, in their view, it is totally unreasonable to deny Taiwan a seat in the United Nations.

However, all of these armchair experts overlook that facts that Oct. 25, 1945 is only the beginning of the military occupation of Taiwan, and international law specifies that “Military occupation does not transfer sovereignty.” The territorial title of “Formosa and the Pescadores” has never been transferred to the Republic of China or the Taiwan governing authorities. Therefore, at the most basic level, the ROC on Taiwan cannot be considered to have the ownership of “Formosa & the Pescadores” (aka Taiwan) because it is not in possession of the territorial title to these areas.

Importantly however, there is no doctrine under international law whereby the territorial title (or territorial sovereignty) of such a populated area as Taiwan can disappear. Hence, if the ROC or the Taiwan governing authorities do not have it, then some other government, somewhere in the world must have it. From the perspective of the laws of war, it can be maintained that the principal occupying power of the San Francisco Peace Treaty is currently holding Taiwan’s territorial sovereignty.

Sovereignty is not a “plant” which may wither away to nothing and then be reborn. Sovereignty is always there. In other words, since two major components of sovereignty (a) permanent population and (b) defined territory are still present, Taiwan’s sovereignty cannot have disappeared. Hence, the key issue for the Taiwanese people is to locate that sovereignty.

According to the analysis presented above, it seems reasonable to say that Taiwan’s sovereignty is being held in trust by USMG.  Accordingly, the native Taiwanese people are entitled to fundamental rights under the US Constitution.

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