Mr. Burton to Mr. Seward
Sir: In my No. 217 I expressed the opinion that the message of President Murillo to the present congress presented an illusory picture of the actual state of the country, especially of its financial condition. The correctness of that opinion is now verified by the startling message of acting President Rojas Garrido to congress, to be found in “Diario Oficial,” No. 622, hereto annexed, announcing an existing deficit in the revenues of $1,300,000, about one-half the amount of annual expenditures, which has to be met immediately, or the consequences will be most disastrous.
As I have heretofore stated, one-half the available national income is pledged to foreign creditors. A further increase of the tariff and the price of salt manufactured at the government works—the two principal and only considerable sources of revenue—is impracticable. The country has no credit in Europe. Its agent, who has been seeking a loan in London for the last year, backed by General Mosquera, the President elect, has entirely failed. The deficit is not, therefore, to be met by the loan. The only resort would seem to be, the sale of the emerald mines, the remainder in the Panama railroad, or the privilege of constructing a canal across the isthmus, or all together. A bill has passed the congress authorizing the President to sell the emerald mines, but as they are under a lease for a long term and their products after its expiration will be uncertain, they probably could not be sold for anything like their real value. The price for the canal privilege added to that of the mines would still be insufficient. The national interest in the railroad must be looked to, it would seem.
The contract celebrated with an English company for opening a canal across the isthmus of Darien will not be approved by the congress, and it has decided that its sanction is necessary. In addition to the deficit already mentioned may be named $120,000 more received by the government from the canal company, and which will have to be refunded. Neither is it likely that a grant will be made just now to Mr. Teller. The President will probably be authorized to treat on the subject with any person or company he may prefer.
Another present embarrassment to the government arises out of the purchase by General Mosquera of two steamers in England at the price of $300,000. He did this without authority, but the vessels are on their way to, if not now in Colombian waters, must be paid for, and congress feels itself constrained to adopt the contract, although the nation has no use for them and is without the means to pay their purchase price. I happen to know that the Peruvian minister, lately received here as the representative of the revolutionary dictatorship of General Prado, has offered to buy the vessels provided Colombia will, as the present administration is inclined, unite with the Pacific republics in their alliance against Spain. This offer will probably be accepted, although the fear entertained that this alliance might be looked on by the United States as releasing them from fulfilling their obligations contracted by the 35th article of the existing treaty, as against Spain in case she should invade the isthmus in a war thus officiously and quixotically assumed by Colombia, has caused the latter to hesitate.
Since writing the above, acting President Rojas Garrido has asked a distinguished personage here, who studies the affairs of our country with much interest and understandingly, if, in his opinion, the United States were inclined to give notice for a termination of the treaty of 1846, and thus withdraw the guarantee over the isthmus. The President said he had fears of this; that a continuance of the guarantee was indispensable to the safety of Colombia. That the present is a grave crisis for Colombia, the war on the Pacific, the division among the Colombian people, and the desperate state of her finances, all considered. That he must have a million and a half of dollars very soon to enable the administration to move on; and that he saw no means of obtaining it except by an [Page 533] arrangement with the Panama Railroad Company. That such an arrangement would have a tendency to induce the United States to continue the guarantee. He requested this gentleman not to mention this conversation except under very special circumstances.
From this short review it will be seen that the situation and prospects of this country are by no means flattering. The consequences resulting from this unhappy state of affairs, which may more particularly concern the United States, will be a sale of the reserves in the railroad and of the privilege of constructing a canal. I believe it pretty certain that both transactions will be consummated within the next two years, and that our citizens will be preferred as the purchasers, and by judicious action may secure both.
I have the honor to be, sir, your obedient servant,
Hon. William H. Seward, Secretary of State, Washington, D. C.