No. 109.
Mr. Kilpatrick to Mr. Blaine.

No. 9.]

Sir: Had I been able, I would, at the time the Government of Chili determined to arrest and suspend the functions of the government of Calderon, have given you the reasons as they are placed in my possession by the secretary of state, and everything done to preserve good faith as to promises made me here on the part of the government. But for four months I have been very ill; for the last two months at the point of death, unable even to write my own name. I am now just able to sit up, and for your information and on behalf of the honor and good faith of Chili I make this brief statement.

Chili guaranteed through me to demand no annexation of territory from Peru as an absolute condition of peace. This was done at your request. She agreed to demand no territory if security for future peace and safe and satisfactory indemnification could be secured otherwise, and in no case to annex territory save where a large majority of the actual residents were citizens of Chili and foreigners. She agreed to build up and strengthen the government of Calderon if possible, and, if possible, to make it respectable, constitutional, stable, a government with which she could treat for peace. These pledges were made in good faith and would have been fulfilled; but our new minister at Lima arrived. Whether true or false, he has the reputation of having impressed the government of Calderon and the people of Peru with the idea that the Government of the United States would not permit annexation of Peruvian territory to Chili under any circumstances. This was published and talked of. He, himself, emphasized this in his letter to the government of Piérola. He sent messages to the Argentine Republic urging them to send a minister at once to check the power of Chili. The whole conduct of Calderon, befriended and sustained by Chili, changed; and he is openly accused now by the Government of Chili of having without authority flooded the country with his own paper currency, of having gathered and collected arms, and of having organized secret forces, and finally of having placed himself in communication with the belligerent forces of Piérola, Montero, and Sola, and the Government [Page 150] of Bolivia, still in open arms against Chili, now threatening her outposts, and cutting, from time to time, her lines of communication. And so far had he succeeded that the department of Arequipa had proclaimed for him, and a promise made on the part of our own minister at Lima to said belligerents, that the Government of the United States would forcibly resist the disintegration of Peru and had determined to maintain and sustain the government of President Calderon.

These are the facts as given to me by the administration here to justify them in the course they have pursued. The arrival of your messenger with special and unknown instructions is beginning to create an excitement here and a resentment against the United States that will not be easily calmed. Chili has looked upon our country as its greatest friend; has been willing to make many sacrifices to comply with your requests; but now, in view of the course pursued at Lima, the threatening claims of some great Peruvian company professing to be backed by the Department at Washington, of which I send you a copy marked A, is creating an alarm and excitement here such as has never existed in Chili. I should like to give you details, but I am unable from extreme weakness to dictate another sentence.

Yours truly,

J. KILPATRICK.
[Inclosure No. 9.]

Mr. Shipherd to Mr. Kilpatrick.

Sir: I have the honor to inclose herewith official printed copies of communications on behalf of this company to the minister of Peru and Chili at Washington.

Duplicates of these inclosures were filed in the Department of State on the 11th instant, and the originals were personally delivered by * * * our counsel at Washington, on the 13th.

I place these copies in your hands, of course, without comment, and only for your early information. I have reason to suppose that you will receive instructions concerning the interests involved at an early day.

It may be proper to add that this company is now fully organized, with a capital of $250,000,000; that it includes the best legal, diplomatic, and money resources of the United States; that the title upon which it relies is approved unanimously by a large staff of eminent counsel, and that it has unqualified assurance of ample governmental backing. It has called for the property, and you may safely rely that it has at command every means of enforcing that call. I send you a recent copy of the Times, which does but reflect the average public sentiment here. All the papers (preliminary) in the case I sent to your address in this city before you sailed.

We are prepared to treat Chili fairly, even liberally, but only on condition that she recognizes our superior rights. If she raises an issue she will simply get nothing. Right must rule.

Your obedient servant,

JACOB R SHIPHERD.