No. 89.
Mr. Osborn
to Mr. Evarts.
Legation of
the United States,
Santiago,
Chili, January 3, 1881.
(Received February 24.)
No. 187.]Sir: In the circular note which Minister Valderrama
addressed to the diplomatic corps on the 10th of November last, a copy and
translation of which accompanied my No. 181, is found the following
sentence:
The cession (meaning the cession of Tarapacá by Peru), carried with
it, moreover, the obligation on the part of the victorious nation of
accepting as its own all the hypothecate bonds given by the Peruvian
Government to its foreign creditors.
The guano beds in the Tarapacá district, as is well known, have been
mortgaged by Peru to secure the payment of a large part of her public debt,
and the expression here quoted was very generally accepted as a formal
recognition of these obligations in the event of a change in the sovereignty
of the district. Subsequent discussion in the newspapers and in the two
houses of Congress, however, apparently developed the fact that the country
was not prepared to accept this doctrine as its policy, and the minister has
felt himself called upon to explain in another note, a copy of which I
herewith inclose, with English translation.
It will be observed that the interpretation which had so very generally been
accepted was entirely erroneous, and that the minister does not desire to be
understood as having committed his government to the payment of any part of
the Peruvian debt or the recognition of any of its mortgages, but that all
claims in the district referred to are to be settled in accordance with the
principles of international law.
[Page 122]
If the influences which have driven Minister Valderrama into writing the
inclosed note shall continue in the ascendency, I fear that Peruvian
mortgage bonds are likely to remain a very precarious investment.
I am not aware that any of these mortgage securities are held by American
citizens. The loan for which they were issued was raised in Europe,
principally in Great Britain and France.
I have, &c.,
[Inclosure in No.
187.—Translation.]
Mr. Valderrama to
Mr. Osborn.
Republic of Chili, Ministry of Foreign
Relations,
Santiago, December 24,
1880.
Sir: On the 10th of November ultimo I had the
honor of addressing you informing you of the result of the conference
held on board the Lackawanna in the bay of Arica, in the last days of
October.
In view of the instructions given to our plenipotentiaries in the event
of certain contingencies arising in connection with the conference, I
then stated that the ceding of the territory claimed by Chili would have
implied on the part of Chili a recognition of the mortgages executed by
Peru to her foreign creditors. This expression has not been properly
understood, as appears from the interpellations directed to the
government in both houses of Congress.
By some, without taking into consideration the special circumstances of
the case, the circular of the 10th of November was understood to be an
absolute definition of the rights of creditors in the nature of an
assertion of a principle; such an interpretation of it is not correct.
The statement referred to is intimately connected with the instructions
given to our plenipotentiaries, and both refer to the occurrences of
certain contingencies that never took place.
It is known that the conference at Arica was productive of no result, and
that matters continued in the same condition they were before the said
conference was held. This statement thus becomes merely an expression of
a fact which might have occurred had the allies accepted all the
conditions with which it was connected. It might also have been a result
of certain compensations or advantages provided for in the instructions,
but it embraces no recognition of a right as has been supposed by
some.
It was not intended in the circular alluded to, to define the rights of
creditors. Its scope was confined to certain facts that had already
occurred and others that might have grown out of the Arica conference if
certain circumstances then in view had taken place. The failure of the
negotiation left matters in the same condition in which it found them,
and consequently the rights alleged by certain parties with regard to
the Tarapacá district will be settled according to the precepts of
international law. This is the line of conduct which the Government of
Chili has observed from the beginning, and in which it has the purpose
of continuing.
With this explanation of the true meaning of the statement which has been
so imperfectly understood, I avail myself of the opportunity of offering
to you the sentiments of high consideration with which I am,
&c.,
