Papers Relating to the Foreign Relations of the United States, Transmitted to Congress, With the Annual Message of the President, December 5, 1881

No. 572.
Mr. Hurlbut to Mr. Blaine.

Legation of the United States,
Lima, Peru, October 5, 1881, 11 p.m.

No. 19.]

Sir: I have just consummated an agreement made with the Calderon government on the 20th September for the grant to the United States for a naval and coaling station at Chimbote.

The concessions set forth in the protocol are not so strong as I would have liked to obtain, but they are all that the President alone, without the approval of Congress, could give. I look upon it, in the relative position of the two countries, as giving us, should it be accepted by you, a very valuable foothold, which can hereafter be rendered more exclusive in matters of jurisdiction.

There is no question under Peruvian law but that the act of President Calderon is as effective in transferring rights as if he were a regularly elected President, and looking to the future I can see great possibilities in this grant. Chimbote Bay is by far the best on the Pacific coast, and the coal-mines in the interior, to which it is the entrance by way of the railroad under construction, furnish ample supplies, of good quality, of inexhaustible quantity, and at low prices.

The protocol and the approval of the same by President Calderon are inclosed with this dispatch. I have not time to elaborate this question by this mail, but will do so by the next.

I have also, at my own risk, concluded with President Calderon an arrangement by which the unfinished line of railway will be turned over by the government to me, as intermediary or trustee, to transfer the same to an American company, to complete, develop, and operate it. By so doing, it is easy to limit such company in the price to be charged the United States for coal, which ought not in any case exceed $5 per ton, and yet leave a large margin.

The possibilities for such a company are very large, as the country to be developed by the road is singularly rich in mines of metals and in agriculture.

This grant will include the completed and incomplete portions of the road, on which the government has already spent over $9,000,000, and the whole work can be completed now for $10,000,000.

The principal terms will be the payment to the Government of Peru of $1,000,000 in money and the same sum in paid up stock to clear all existing incumbrances, for which sums they cede the clear right to construct and operate the road for twenty-five years after it is finished, without rent or liability to account. At the end of that period the Peruvian Government has the option to buy the road by paying the principal of its cost to the company or to lease it for twenty-five years more at 25 per cent. of net profits.

The papers cannot be ready before the next mail, and will contain other rights and privileges which I cannot now enumerate.

I have determined to accept this trust so as to save this very valuable grant from any possible chance of being lost to our country.

In great haste, I am your obedient servant,

S. A. HURLBUT.

[Inclosure in No. 19.]

protocol.

On the twentieth day of the month of September, one thousand eight hundred and eighty-one, the undersigned, Stephen A. Hurlbut, envoy extraordinary and minister plenipotentiary of the United States of America, and Manuel Maria Galvez, minister of foreign affairs of Peru, met in the office of the American legation for the purpose of establishing, in the name of their respective governments, an agreement with the object of giving due facilities to the American naval marine on the coast of the Pacific.

The propriety of such an agreement having been recognized by the undersigned, and they having also taken into consideration the stipulations contained in article XIV (fourteenth) of the treaty of friendship, commerce, and navigation now existing between the two countries, have agreed upon the following:

• First. The Government of Peru concedes to that of the United States of America the right and power to establish a station for coaling in the port and harbor of Chimbote, and all facilities which may be necessary in order that the ships of war and merchant vessels of the United States may be supplied with that article and may station themselves in said port.
• Second. The concession above made is not to be considerd as exculsive in favor of the Government of the United States, inasmuch as the Government of Peru reserves to itself the right to make analogous concessions to other friendly powers who may solict the same.
• Third. The land which the government of the United States may acquire for a coaling station, either from the state or from private persons, will remain subject to the general laws which rule in Peru in reference to the ownership of real estate.
• Fourth. The concession to which the first article of this protocol relates is of an indefinite duration, and the Government of Peru shall have the power to withdraw the same by first giving to that of the United States not less than one year’s notice.

In testimony of which the undersigned have signed the above protocol in duplicate, and have attached to both copies their respective seals.

M. M. GALVEZ.

[seal.]

S. A. HURLBUT.

[seal.]

[Inclosure 2 in No. 19.]

Señor Galvez to Mr. Hurlbut.

[Translation.]

Lima, September 23, 1881.

It is gratifying to me to announce to your excellency that, under to-day’s date, his excellency the provisional President has been pleased to issue a decree approving the protocol which I had the honor to sign with your excellency on the 20th instant, for the purpose of giving certain facilities to the American Navy on the Pacific coast, and that in proper time the necessary orders in the premises will be given by the ministries of marine and of the treasury, in order that the stipulations contained in the said protocol-agreement may have due fulfillment.

With sentiments of the most distinguished consideration, I subscribe myself,

Your excellency’s faithful and obedient servant,

M. M. GALVEZ.