Office of the Historian

No. 501.
Mr. Baker to Mr. Evarts.

Legation of the United States,
Caracas, October 28, 1879. (Received November 28.)
No. 167.]

Sir: I herewith inclose a copy and translation of the preliminary (Pereire) contract referred to in my number 164.

* * * * * * *

The commissioners of the grantee, appionted to examine the situation on the ground, arrived in Caracas some time since. * * *

I have, &c.,

JEHU BAKER.
[Page 1046]
[Inclosure in 167.—Translation.]
Caracas, September 27, 1879.

The illustrious American, Regenerator and Provisional President of the republic, General Guzman Blanco, animated by the desire of giving a fruitful impulse to the different elements of national wealth, and making use of the faculties conferred upon him by the congress of plenipotentiaries, in representation of the people, who unanimously acclaimed him for the reorganization and direction of the country, authorized the minister plenipotentiary of the republic in France to hold conferences with Mr. E. Pereire, a respectable capitalist of Paris, with the object of forming the bases which would give for result the patriotic end proposed to himself by the illustrious American. Messrs. Rójas and Pereire laid down the aforesaid bases in the document inserted below.

In consequence, Mr. Pereire has named commissioners to proceed to examine on the ground the convenience and possibility of the points comprehended in the expressed bases, and the report which they may give him being obtained, he will proceed to establish the conditions under which he will propose the partial contracts to which they may give place, which, as also the bases, will be opportunely submitted to the consideration of the national legislature, according to what is enjoined in the eighth paragraph of the seventy-second article of the federal constitution; and in virtue of which, the national executive, through its respective ministries, will move the citizens’ military delegates, presidents of the states, governors of territories, and other civil and military authorities of the republic, to lend their assistance to the exploring commission in order thus to facilitate the result of their charge.

Let it be communicated to whom it concerns and be published.

DIEGO B. URBANEJA.

The minister of interior relations:
JOSÉ I. PAZ CASTILLO.

The minister of exterior relations:
A. F. BARBERÜ.

The minister of finance:
I. RIERA AGUINAGALDA.

The minister of war and marine:
I. M. ARISTE GUIETA.

The minister of public credit:
NICHOLAS D. DELGADO.

The minister de fomento:
B. MILÁ DE LA ROCA.

The minister of public works:
J. C. CASTRO.

The governor of the federal district:
JULIO F. SARRIA.
Legation of the United States of Venezuela at Paris,
Paris, August 19, 1879, 15 Place of the Madeleine.

Mr. Minister: I have the honor to inclose a copy of the protocol which I signed yesterday, in the name and representation of the government of the republic, with Mr. Eugenio Pereire, for the formation of the Agricultural and Industrial Society of Venezuela. This negotiation, initiated when the illustrious American, President of the republic, arrived in France, reached yesterday its first period. What is wanting is the work of time, and the fulfilment of the promises made is the name of the Government of Venezuela.

I cordially congratulate you upon the realization of this grand thought. It is the first time since we existed as a nation that foreign capital will touch our ports in order to enter generously into fertilizing our soil without demanding in return the money of our slender treasury. It is the first time that is offered to the republic, in a manner truly positive, the means of developing its marvelous riches, until now operated in a disheartening manner.

I judge it unnecessary to say to you that this negotiation has been brought to a close under the inspiration of the illustrious American, President of the republic, and that I have had no share in this great march of Venezuelan civilization, except the honor of signing the document in which it is consecrated.

The President desires that the greatest publicity may be given in the republic to this negotiation, so that all the interests represented by the national industry, under its double phase, agricultural and commercial, may at once hear the words of encouragement and efficient protection offered them from now by this great enterprise.

I do not need to tell you that the Messrs. Pereire occupy in the financial world of [Page 1047] France a position so elevated that the capital of ten millions of francs, with which the Agricultural and Industrial Society of Venezuela is to begin its works, is subscribed beforehand. If the results correspond to their desires, the country will have all the millions required for the development of its internal wealth.

I have the honor to subscribe myself, Mr. Minister, your most attentive, obedient servant,

J. M. DE RÓJAS.

His Excellency the Minister of Exterior Relations.

protocol for the formation of the agricultural and industrial society of venezuela.

Between the undersigned, José Maria Rójas, minister plenipotentiary of the United States of Venezuela at Paris, residing in the Place of the Madeliene, No. 15: In the name and in representation of his government, on the one part, and Eugenio Rodriques Pereire, president of the General Transatlantic Company, domiciled in Paris, Street Faubourg St. Honoré, No. 45, on the other part, the following protocol has been agreed upon, the government of Venezuela being inspired by its ardent wish to give a fruitful impulse to the different branches of the national wealth. With this object the government will accord to Mr. Eugenio Pereire the concessions whose enumeration follows, and which will be definitively made in Caracas by the competent ministries to the agents who for this purpose Mr. Eugenio Pereire will name.

In these writings of concession all the conditions of execution will be stated, be they of a gratuitous character or of a retributive character, in favor of the nation. The concessions which will have to be regulated are the following:

1.
The gratuitous concession and incomplete proprietorship of the unappropriated lands which the grantee may elect, according as they may be needed, for the purpose of introducing foreign colonization in Venezuela.
2.
The concession of all the beds of coal discovered or to be discovered in Venezuela belonging to the nation, subject to a duty which will be paid to the state upon the net product of the working, after deducting the interest and amortization of the capital employed. The said duty will be determined in the writing of concession.
3.
The concession of all the guanos and phosphates which the government can dispose of on the continent or on the islands of Venezuela, subject to a duty which will be paid to the state upon the net product of the working, and according as will be indicated in the writing of concession.
4.
The sole, exclusive, and gratuitous authorization to found at Ciudad Bolivar, at Caracas, or at any other point which may be designated in accordance with the government, a mint, in which will be converted into money of the country all the gold and silver of the Venezuelan mines; to this effect the government will guarantee the prohibition of the exportation of gold and silver, be it in ingots or be it in minerals.
5.
The concession of the laying of a submarine cable between the coasts of Venezuela and the point of the neighboring Antilles which may be most convenient, in case the concession actually in force shall not have been put in execution within the stipulated time.
The new concession will be made under the same conditions as the preceding one, and with a reduction of 50 per cent, on the prices of the established tariffs for the dispatches of the government.
6.
The concession by preference of all the mining wealth belonging to the nation, as mines of gold, silver, copper, lead, kaolin, asphaltum, subject to a duty to the state, which will be determined in the writings of concession, after receiving the interest and the amortization according to the usages of the country.
7.
The sole and gratuitous concession of a service of steamers on the rivers Orinoco, Apure, Portuguesa, Aranca, Uribante, and other navigable ways, as well as on the lakes of Valenica, of Maracaibo, and their affluents, as also on the most suitable points of the coasts of Venezuela, and the canalization of the River Tuy.
The post transports of the state, personal and material, will be made by means of the projected services under conditions which will be determined ulteriorly.
8.
The authorization by preference to establish railroads, wide and narrow tramways, and ordinary highroads, to which effect, as remuneration, the government compromises itself to give the necessary lands for their location, and besides to concede gratis a certain number of kilometers of land on both sides of the roads which shall be established.
9.
The sole and exclusive concession to work the forests of the territory Amazonas and other workable ones of Venezuela, subject to a duty to the state, which will be ulteriorly fixed, and which will be paid in cash or in new materials, at the election of the grantee, and on the conditions above indicated.
10.
The concession of the exclusive working of Peruvian bark in the states of Venezuela, subject to a duty which will be discussed as above said.
11.
The concession of the exclusive right to emit obligations with chance (obligaciones con lotes), as is practiced in France by the city of Paris and the Crédit Foneier.
12.
The exclusive and gratuitous authorization to create all the depositories, public markets, sale-rooms, with power to emit negotiable bills.
13.
The exclusive authorization to manufacture dynamite and other analogous explosive products in all the states of Venezuela, for which the government compromises itself to prohibit the entrance of said products, the manipulation of which might occasion serious dangers.
14.
The exclusive and gratuitous concession of the colonization of the islands of the territory Colon, on the condition of establishing on said islands, and after twenty years leaving them to the government, a wharf, a municipal house, a church, a penitentiary, and a population sufficient to uphold the existing cultivations, the colonization of which the government will engage itself to regulate.
15.
The exclusive and gratuitous concession to establish in Venezuela a central depository of emigration, destined to receive emigrants from all countries on their arrival and to distrbute them according to the necessities of the proprietories.
The grantee will have the right to employ his emigrants in the cultivation of the lands of his central depository until the reimbursement of what they owe shall be verified. The proprietaries who contract them will pay the expenses of passage and maintenance as well as the commission agreed on.
16.
The machines, instruments, and accessories proper for the working of all the concessions accorded to Mr. Eugenio Pereire will be exempt from all duty of entrance or departure.
17.
The recompense of the concessions which have said character will be agreed upon between the government and the grantee or his agents, taking for base the recompenses which have been previously stipulated in analogous cases.
18.
Mr. Eugenio Pereire will always have the right to cede all or any of the preceding concessions, provided the grantee offers the necessary guarantees of morality and solvency.

Mr. Eugenio Pereire accepts the above-mentioned concessions, and after he shall have caused to be examined on the ground itself its importance and value, and should said examination result favorably, he compromises, himself to constitute in Paris a French anonymous society, the pricipal objects of which will be—

1st.
The working of all the concessions made by the Venezuelan Government to Mr. Eugenio Pereire.
2d.
The establishment and working of large machines for the manufacture of sugar, cigars, and other products.
3d.
The creation of steam saw-mills, manufactories of bricks, and other industries.
4th.
Mortgage loans on crops, merchandise, titles, and values.
5th.
The exchange and operations of a hank of commission.
6th.
Agricultural, industrial, and commercial undertakings.

The said society will be constituted with a capital of 10,000,000 of francs, represented by 20,000 shares of 500 francs each.

These 20,000 shares will be subscribed in cash, and on subscription a fourth part of the value of each one, that is, 125 francs per share, will be collected.

Besides the 20,000 shares equivalent to the capital brought, 20,000 shares will be created, called shares of grace, which will be attributed to the grantee in representation of the cession he will make to the society of the privileges above indicated.

After having deducted all the general expenses, there will be set apart from the net products of the enterprise—

1st.
Five per cent., to form the reserve fund prescribed by the French law.
2d.
The necessary sum to pay an interest of six per cent, on the capital actually disbursed for the shares.
To this effect, in case the products should be insufficient during the first operations, the unpaid interest shall be deferred and paid in the following operations:
3d.
Upon the sums which remain free after having set apart the above mentioned, there will be set apart—
A.
Ten per cent., which will be destined to the amortization of the shares of the capital, which will in this case be replaced (after the reimbursement of the sums delivered) by shares of grace equal to the 20,000 which will have been delivered to the grantee.
B.
Ten per cent. will be destined to the council of administration for division among its members as it judges proper.
C.
Eighty per cent., which will be equally distributed among the 40,000 shares of capital and of grace without distinction between them.

The council of administration of the society will be composed of from five to nine members, who will be designated in the statutes.

In case of the associated capital increasing, a number of shares of grace will be created equal to that of the new shares emitted, so that those shall always be equal to the number of the shares of the capital.

[Page 1049]

The new shares of grace thus created will be gratuitously delivered to the grantee, or to those who have a right to said shares, as a supplement to that paid in.

On the dissolution of the society, the duration of which will be fifty years, or in case of an anticipated dissolution, the necessary sum to reimburse the snares of the capital in principal and interest of six per cent, shall be taken out of its net active capital, and the excess shall be equally divided among 40,000 shares of capital and of grace without any distinction.

The government of Venezuela promises all its support to the grantee for the examination he at once proposes to make of the concessions it is disposed to accord him.

Done in triplicate at Paris, the 18th of August, 1879.

For the government of the United States of Venezuela.
The minister plenipotentiary:
J. M. de RÓJAS.

The writing approved.

The grantee:

EUG. PEREIRE.