Mr. Markbreit to Mr. Fish
Sir: I have the honor to report to you the arrival in this city, on the 30th ultimo, of Colonel George E. Church, president of the “National Bolivian Navigation Company.”
In view of the importance of his enterprise, I believe that a brief detail of his operations during the last three years may be of interest to the Department, as showing the political relations existing between this country and its neighbors, and the great delicacy it has required to place Colonel Church’s navigation and railway schemes in such condition as may insure their early realization.
The Department is well aware that the sword-point relations existing for three centuries between old Spaniard and Portuguese lost but little of their bitterness at the date of the independence of these countries, and their formation into empire and republics.
The vast valley of the Amazon, in Brazil, was found by the empire to be of very unwieldy management, and in the opening of the great river to all flags, before the settlement of frontier questions with the states at the headwaters, there was fear that imperial border might lose something of its proportions.
This was probably the principal cause for the policy of Brazil up to 1866 and 1867.
At this date, however, Brazil was engaged in a war with Paraguay, ostensiby to open the Paraguay River, that perfect freedom of communication might be had with the Brazilian province of Mato Grosso.
It attracted much attention among the liberal party of the empire that war was waged in the Plata Valley for freedom of navigation, while Brazil herself denied this freedom to the republics at the headwaters of the Amazon.
This contradictory position of the imperial government probably forced the opening of a part of the Amazon at least ten years sooner than it would have taken place in normal times.
Knowing the policy of Brazil in the Amazon, Colonel Church stipulated, on the part of his company, that Bolivia should negotiate with Brazil the right to build a railway past the rapids of the Madeira River, and transfer it to the company. Moreover, that perfect freedom of navigation for all flags should be decreed from Borba to San Antonio. Up to the former point, as the Department is aware, this freedom exists, according to the Brazilian decree of December, 1867.
Bolivia made every effort to comply with its contract with Colonel Church. Two different legations were accredited to the court of Rio de Janeiro, but retired without results; and a year and a half was uselessly consumed. The Bolivian government then requested Colonel Church to undertake the negotiation. To this he consented and reached Rio de Janeiro, from Bolivia, in the midst of the great yellow fever season, in February, 1869. The result of a seventy days’ negotiation was a concession made to him personally (see dispatch No. 55) by the empire, allowing the construction of a railway at the rapids, and a verbal assurance that in a short time the Madeira from Borba to San Antonio would be opened to all flags. At present this stretch of four hundred miles is only navigable for the Brazilian and Bolivian flags, by the treaty of March 27, 1867, between the two governments.
[Page 42]It appears that Colonel Church has organized the “Maderia and Mar-more Railway Company” in London, (see dispatch No. 125,) and that the one hundred and seventy miles of road is already under contract with one of the most powerful associations of contractors in Europe, the Public Works Construction Company, of London. The whole line is to be in working order on the 1st of January, 1874.
In aid of the National Bolivian navigation Company, the Bolivian government, in December of 1868, made a contract with Colonel Church for the negotiation of a loan of £2,000,000 sterling, the company offering as a guarantee its three-fourths of the import duties conceded to it as a subsidy, and its net earnings; while the government, giving the other fourth or import duties, was to enjoy, in consequence, seventeen per centum of the net products of the loan.
At the request of the government, Colonel Church undertook the negotiation of this loan, and was commissioned special agent for the purpose. It appears that he carried it to a great success in London and on the continent of Europe—so great, that it is virtually taken “firm” by a very prominent banking-house, namely, by Messrs. Emile Erlanger & Co. The company will thus find themselves in possession of several millions of gold, which will enable them to carry out their plans on a very large scale. Their custom-house subsidy alone must, in the course of time, give them immense returns. They have, in fact, in their hands almost complete commercial control over four-fifths of the 2,500,000 inhabitants of the Amazon Valley, and there is good reason to believe that their enterprise is destined to attract great attention.
All these operations have been undertaken and pushed ahead under the most extraordinary difficulties.
None of these, not even the Franco-Prussian war, the recent revolution in this republic, Peruvian and Chilian opposition to the loss of Bolivian trade by the Pacific coast, &c., have been able to impede the steady march forward of the National Bolivian navigation Company.
It is evident that great political changes are to result in South America from the turning of Bolivian commerce from the Pacific to the Atlantic front of South America. Henceforth the commercial and friendly relations of Bolivia and Brazil must necessarily become very closely interwoven. For the first time, in fact, since the occupation of this contitinent by the Europeans, is a real solid effort being made to turn Portuguese American and Spanish American interests into a common channel, and make South America more homogeneous.
In solving this problem between Bolivia and Brazil, Colonel Church is doing a great service to every republic at the headwaters of the Amazon, and also to civilization.
His operations as special agent of Bolivia have, since his arrival, been submitted by the government to the national assembly, now in session in this city; which body, after a strong debate of eight days, has approved them in all their parts by a vote of forty-five in favor against seven in contra.
I am, sir, very respectfully, your obedient servant,
Hon. Hamilton Fish, Secretary of State, Washington, D. C.