Papers Relating to Foreign Affairs, Accompanying the Annual Message of the President to the Second Session of the Thirty-ninth Congress
Mr. Burton to Mr. Seward
Sir: Referring to my No. 246 and to so much of my No. 217, as treats of the proposed construction of an interoceanic canal across the isthmus, I now have the honor to add the annexed papers relating to the same subject.
The congress declined to approve the grants made by ex-President Murillo during his administration, and that contracted by General Mosquera as Colombian minister in Great Britain, treated of in numbers above referred to; but enacted a law authorizing the President to grant a privilege for opening a canal to the best bidder after publication. The law is contained in Diario Oficial, No. 686, which, with a translation of the law, is hereto annexed.
I have the honor to be, sir, your obedient servant,
Hon. William H. Seward, Secretary of State, Washington, D. C.
Law disapproving the contract celebrated by the executive power on the 25th of January last with the agent of Henry Duesbury, esq., and defining a basis for the privilege of opening an interoceanic canal.
The congress of the United States of Colombia decrees:
Article 1. The contract celebrated by the executive power on the 25th of January last, with Señor Eustacio de la Torre Navaez, the agent of Henry Duesbury, esq., for the opening of an interoceanic canal through Colombian territory, is hereby disapproved, in toto.
Art. 2. The executive power is hereby authorized to enter into a contract granting the exclusive privilege for opening an interoceanic canal through any part of the Colombian territory on the following bases:
1. The grant shall be for the term of ninety nine years, to be computed from the day on which the canal shall be opened to the public, and on which the grantee or his representative shall commence collecting tolls for the transit or navigation of the canal.
2. During the existence of the grant, the government shall not make or authorize any other company or individual to make a canal, putting the two oceans in communication through the territory of Colombia. If the grantee of the privilege shall construct a railroad as auxiliary to the canal, across said territory, the government shall not make or authorize any company or individual to make another interoceanic railroad over said territory during the existence of the privilege granted for the canal.
3. The canal shall be completed and opened to the use of the public within ten years from the date of this grant; but if from fortuitous circumstances independent of the will of the grantee, after the construction of a third part of the canal, it shall appear that it cannot be completed within the ten years, the executive power is empowered to extend the time for four years more.
4. The canal shall be so constructed as to be navigable by the largest vessels now in use, the Great Eastern excepted.
[Page 552]5. The grantee is hereby granted the unappropriated lands necessary for the excavation of the canal, the establishment of marine ports, landings, places of embarcation, moorings, warehouses and in general for everything necessary tor the construction and service of the canal, likewise the land which may be necessary for the line of the railroad, if it shall be made. These lands shall revert to the republic with the canal and railroad, at the expiration of the grant.
6. A belt of land on each side of the canal not exceeding 30 metres wide is also granted to the grantee, but along the whole line the neighboring proprietors shall have a perfect right to easy access to the canal and its ports, as well as to the road which may be constructed, without charge by the company.
7. If the territory on which the canal is to be excavated or over which the railroad is to be constructed shall in whole or in part be private property, the grantee shall have the right to appropriate it to his use according to law, and indemnity being made to him.
8. During the time the grantee shall hold the canal, he shall have the right to use the ports at the end of the canal for the anchorage of its boats, for the embarcation of goods to be left in said ports or transferred to other boats, in order to be sent on their way over the canal, in case they shall not have been destined to be sent over it by the boat bringing them; to use the intermediate ports necessarily and especially destined for storage and deposit free from all objects and merchandise which may be destined for transit, or to be disembarked at the intermediate ports, in which the republic shall have the right to place such agents as it may think necessary to prevent contraband traffic. The edifices which may be constructed by the grantee for deposits at the ports and landings shall be so arranged that a single person will be sufficient to guard against contraband.
9. The ports at either end of the canal shall be free and open for the commerce of all nations, and there shall be no import duties collected in them, except on articles intended for consumption in the republic. Said ports shall, therefore, be open to importation from the opening of the canal, and custom-houses and revenue guards will be established in them as the government may judge convenient, for the collection of the import duties on effects destined for other points in the Union and to guard against contraband. The employés which the government may esteem necessary to perform this service shall be paid entirely by the company, and their salaries fixed by the government.
10. The government of the republic declares forever neutral the ports at each end of the canal and its waters from one sea to the other; and consequently, in case of war between other nations, or between another nation and Colombia, the transit by the canal shall not be interrupted thereby; and the merchant vessels and persons of all nations of the world shall be privileged to enter said ports, and to pass through the canal, without molestation or delay, foreign troops excepted, which shall not be allowed to pass without the permission of congress.
11. War vessels of belligerents, whose manifest destination is to take part in hostilities, shall be prohibited from entering the canal.
12. The grantee shall have the right to introduce free of duty of any kind all the instruments, machinery, tools, materials for houses, provisions and clothing for the laborers, which may be necessary while constructing the canal.
13. No contributions, national, municipal or of any other kind, shall be imposed on the canal, the boats which may pass through its tow-boats, warehouses, wharves, machinery and other works and effects of the grantee, and which in the opinion of the executive power may be needed for the use of the canal, or its dependencies, during the existence of the grant.
14. The passengers, money, merchandise, objects and effects of every kind which may be transported on the canal, shall be exempt from every duty, national, municipal, or other character, whatever. This exemption shall extend to all the effects or merchandise which may remain on deposit in the ports, warehouses or landings of the grantee destined for the interior of the republic, or for a foreign country; but effects destined for interior consumption shall pay the national duties or imposts existing at the time when they shall be removed from the warehouses of the grantee; to which end he shall act with the knowledge of the agents of the republic and in conformity to the laws and the regulations which may be dictated by the executive power.
15. Travellers passing over the canal shall not need passports, except in case of foreign war or internal commotion, if the executive power shall deem it proper to require them; but the vessels passing the canal shall be obliged to present in the port at the end of the same, on their arrival, their registers and other sea papers, which may be necessary according to the laws and public treaties, to entitle a vessel to its free navigation. Vessels which may not have such papers, or that may refuse to present them, will be detained and proceeded against according to law.
16. When duties or imposts are payable on effects introduced into the territory adjacent to the canal, the vessels will pass through it with their hatchways closed and sealed by the custom-house at the end of the canal at which such vessels may arrive, and will receive on board one or more government employés, to see that nothing carried by said vessels shall be landed during the transit. If, after passing through the canal, the owner of a vessel shall desire to disembark or sell the cargo at the port at the end thereof, he shall be allowed to discharge the cargo, the forms of law being duly observed.
17. Boats carrying effects for the use of the canal, agreeably to section 12, may enter [Page 553] freely any point of the territory designated in the first part of this article when the same shall be necessary for the work on the canal or its commencement, although there may be no custom-house at such point. And to prevent fraud, previous notice shall be given to the proper custom-house of the port to which such vessels are bound.
18. During the existence of the grant, the grantee shall have the exclusive right to establish the tariff of prices for passing the canal, the use of the landings, warehouses, and wharves, provided they do not exceed the following rates: 75 cents per ton for vessels in ballast, $2 per ton for vessels laden, $10 for each person, and one-half of one per cent. on gold, silver, and platina, coined or in bars, and upon precious stones. These prices shall always be the same for the individuals, vessels, merchandise, and property of all nations, and no vessel shall pass the canal without having paid said prices. Nevertheless, all craft belonging to the government of the United States of Colombia, or that may be in its service exclusively, shall pass through the canal and enter its ports free of any charge by the company.
19. The enterprise of the canal is considered of public utility.
20. The Colombian government will dictate the appropriate regulations to prevent contraband trade which the grant of this privilege shall render necessary.
21. The grantee is authorized to propose to the executive power the regulations which he may believe fit for the police, use and security of the canal, ports, works, and establishments of every kind, but such regulations shall not be carried into effect without the express approvement of the national government, which, after approving, may reform or repeal them, as it may think proper, proceeding in all such cases in accordance with the laws of the republic.
22. In consideration of the right to collect toll the grantee shall be bound to transport with care, punctuality, and without regard to nationality; the passengers, animals, merchandise, goods, and materials of every kind that may be intrusted to him. The transportation shall be made without any special abatement of the tariff of prices other than that which may accrue to nations that have bound themselves by public treaties with the United States of Colombia, to guarantee positively and effectively to this republic the rights of sovereignty and property on the isthmuses of Darien and Panama, and the adjacent coasts, and the perfect neutrality of said isthmuses and their ports, to the end that the transit by these isthmuses and the canal shall never be interrupted, but it is expressly understood that the United States of Colombia, Colombians and their property shall enjoy all the benefits and advantages that any other nation may obtain in virtue of the provisions of this article.
23. The grantee shall transport gratuitously in their vessels the men in the service of the Union whom it shall be necessary to transport by the canal, or by the railroad auxiliary thereto, for the purpose of preserving public order or for foreign security, and if the company shall not have vessels, those which shall be used for this purpose shall be exempt from the payment of tolls or taxes of any kind whatever.
24. The grantee shall be bound to transport from one end to the other of the canal or railroad all the mail matter of the republic or that may come from foreign countries, receiving for this service one-third of the sums which may be collected for receiving, carrying, and delivering said mail matter, agreeably to the contracts which the company may make for the purpose, with the approbation of the government. The other two-thirds shall belong to the United States of Colombia.
25. The grantee shall be obliged to execute at his own expense, risk, and danger, all the works necessary for the establishment and construction of the canal between the two oceans by the route which he may select in any part of the Colombian territory.
26. The grantee shall pay to the government of Colombia, for the first twenty-five years, eight per cent. of the net profits of the enterprise, without making any deduction from the earnings for the interest on the capital invested in the work, nor of any sum which may be destined as a sinking or reserved fund. And for the adjustment of said per cent. the government will see, in the same manner as the shareholders in the enterprise, to the liquidation of its accounts according to the by-laws of the company, and of which accounts, the cost of the undertaking, its books and papers, such agents as the government may name shall have power to take possession, and to make such observations and demands as may be just, like any other shareholder, but he shall not have the right to intervene in the management of the affairs of the enterprise. The payment of this percentage shall be made annually where the executive power may designate. The grantee shall guarantee this percentage shall not be less than $600,000 annually, so that $600,000 shall be the minimum which the government will receive in any event.
27. At the expiration of the grant, the canal wharves, warehouses of deposit, edifices, and works of the enterprise at the end and along the route of the canal or in anywise connected with the canal or its management shall become the property of and be delivered to the republic with the railroad that may be constructed in aid thereof, and its appurtenances. In this purpose, after the completion of the work, the grantee shall make at his own expenses, in conjunction with the agents of the government, a descriptive inventory of the canal edifices and works connected with it, and of everything of value to be delivered to the republic. The grantee shall also make a like statement of all the works of a like nature which he shall make during the existence of the grant.
28. An exact duplicate, duly authenticated, of the documents mentioned in the foregoing [Page 554] article, shall be delivered by the grantee in the department of the government to which the branch of public works may belong, that it may be deposited in the national archives for whatever use may be necessary during the existence of the grant or after its expiration.
29. The grantee shall be obliged to make, one year before the expiration of the privilege, notice being given to the agents of the government to be named for the purpose, an appraisement and description of the works which are to be delivered to the republic, and deposit the same in such office as the executive power may designate, for use at the delivery of the canal and appurtenances to the government.
30. The grantee shall give security for the performance of the obligations in which he may bind himself, by depositing $150,000 in American dollars in Bogota, London, or New York, as the executive power of the republic may direct, as follows: $60,000 immediately on the approval of the contract by the executive power, and the remaining $90,000 within three months thereafter at the rate of $30,000 a month. Said deposit will not carry interest without interest on account of the dividends of the republic arising from the proceeds of the canal.
31. The grantee shall not sell, assign, or transfer this grant in any manner, to any foreign nation or government, nor apply in any case to any foreign power to intervene in any differences that may arise with respect to the same or to the works which may be constructed under it, but said differences shall always be decided by the judges and according to the laws of the republic. And in no case shall any right, immunity or exemption be claimed not expressly recognized in this grant.
32. In case the canal shall pass through any territory embraced by the privilege conceded to the Panama Railroad Company by the contract of April 16, 1850, the grantee shall be at the expense of obtaining the assent of said company to the construction of the canal.
33. The grantee shall bind himself to organize a company for the excavation of the canal, and to reserve one-tenth of the shares for Colombia capitalists who may wish to take part in the enterprise by not disposing of them until the end of six months after the organization of the company. Everything stipulated in this contract is to be understood as accepted by the company.
34. This grant shall be forfeited in the following cases:
1. If the grantee shall fail to make the deposit named in section 30 to the satisfaction of the executive power of the republic; 2. If the route of the canal be not explored and fixed within eighteen months; 3. If the work shall not be commenced in due form within the two first years of the ten given for the construction of the canal; 4. If the canal be not completed at the expiration of the time fixed in section 3 for its construction; 5. If the company shall attempt to sell the grant to a foreign nation; 6. If the company shall co-operate in any rebellion against the government of the republic, intended to overthrow its dominion over the territory through which the canal may pass; and 7. When the transit of the canal shall be suspended for more than six months, save in cases of inevitable accidents as defined by the ordinary laws.
(This expression, “leyes comunes” in the original, shows that the bill was drawn by an English lawyer, and should no doubt be translated “according to the common law.” There is no such expression in the legal parlance of this country, or any other country in which the Roman civil law is the basis of its jurisprudence and legislation.—Translator.)
35. In the first case of forfeiture mentioned in section 34, the forfeiture shall be declared by the executive power immediately on the expiration of the time fixed for the deposit of either of the stipulated sums. In cases 2 and 3 named in said section, the executive power shall also declare the forfeiture if the route shall not be explored and located as stipulated, or if it shall appear by credible documentary evidence that no labor has been begun on the canal within the period fixed by said section; but if any labor shall have been performed, so that there is cause to doubt whether the company may have incurred or not the forfeiture named in the 3d case provided for, the judiciary shall determine the matter.
36. In cases 4, 5, 6 and 7, of section 34, the judiciary of the Colombian Union shall decide the questions of forfeiture.
37. In case of a declaration of the forfeiture of the grant or privilege, for any case the loss to the company shall accrue in favor of the republic; first, the sums pledged as security according to the requirements of section 30; second, all the unappropriated lands granted to the company by sections 5 and 6, which lands in the condition in which they may be at the time, shall revert to the republic; third, all the works, edifices, and improvements which shall have been made by the company in their then state, and the materials which shall have been prepared for any of the works on the canal or its appurtenances. The republic will make no indemnity for the edifices, works, improvements, and materials which may pass from the company to the government according to the provisions of this section.
38. The government of the United States of Colombia and the company that may secure the privilege shall be mutually bound to take the necessary steps with the governments of England, Prussia, Holland, France, and the United States of America, to induce them to guarantee positively the neutrality of the canal and sovereignty of the republic over the territory through which the canal may be constructed, the isthmuses of Panama and Darien and the adjacent coasts.
39. The diplomatic or consular agent of the republic resident in the domicile of the company [Page 555] shall be a member ex officio of the directive council thereof, with all the prerogatives which the other members may enjoy by the by-laws of the company.
40. The company shall bear, as general expenses of the enterprise, those which may be necessary to maintain the public force which may be judged necessary to preserve security to the interoceanic transit.
Art. 3. The executive power is authorized to demand as a condition of granting said privilege, that the grantees oblige themselves to enter into contract with the founders and partner and inspector general of the Buenaventura wheel-road, now in process of construction, to convert it into a railroad from the port of Buenaventura to the point on the river Cauca near Cali, by receiving the work now being executed and the available funds. The company shall grant to the national government, to that of the State of Cauca, and to the individual shareholders, shares in the new enterprise equal in amount to the sums paid by them respectively to the said Buenaventura Road Company.
Art. 4. The contract alluded to in the foregoing article shall be a simple transfer of the Bunaventura road privilege without imposing any burden on the national treasury.
Art. 5. If the privilege shall not be adjudged to Mr. Henry Duesbury, or to the company of which he is or may become a member, the executive power shall immediately order the return of the $120,000 received by the government of the republic in consequence of the agreement for the excavation of a canal celebrated on the 25th of January last between the agent of said Duesbury and the President of the United States of Colombia.
Art. 6. The executive power will cause this law and a project of a contract to be published in the most notable periodicals of Europe and North America, and will fix a prudent time for receiving proposals by a commissioner to be named in London, or other place which he may deem most appropriate, and accept the most advantageous offer, which the executive power of itself will approve finally: provided always, that the stipulations of the contract be in accordance with this law; and if they be not, the approval of the congress shall be necessary to the validity of such contract.
Done in Bogota, June 27, 1866.
SANTOS ACOSTA, President of the Senate of Plenipotentiaries.
ANIBAL GALINDO, President of the House of Representatives.
AURELIANO GONZALES, Secretary of the Senate of Plenipotentiaries.
FRANCISCO V. DE LA ESPRIELLA, Secretary of the House of Representatives.
Bogota, June 27, 1866.
Let this be published and executed.
Francisco Agudelo, Secretary of Finance and Public Works.