No. 106.
Mr. Scruggs to Mr. Frelinghuysen.
Bogota, June 19, 1883. (Received July 14.)
Sir: In the eighth article of the Salgar-Wyse contract for opening an interoceanic ship-canal across the Isthmus of Panama, as approved by the Colombian Congress May 28, 1878, there is, as you are aware, a clause which provides that “the expenses of maintaining such a public force as may be deemed necessary to the security of the interoceanic transit, shall be borne by the canal company.”
This somewhat ambiguous clause has quite recently given rise to a spirited controversy between the Colombian Government and the company’s agent here. The Government demands that the company shall pay the entire expense of maintaining such a force as may be necessary to preserve order on the Isthmus while the work of excavation is going on; and it estimates this “necessary force” at 3,000 men, and the expense of equipping and maintaining them at nearly 3,000,000 pesos annually; the company hold that the provision referred to contemplates the protection of the water transit after it shall have been opened, and not the preservation of public order on the Isthmus, nor even along the line of the projected works, whilst the canal is yet unopened, but that Colombia is bound to maintain order there at her own expense.
The result of this somewhat acrimonious controversy has been an agreement whereby the company is to pay $50,000 (pesos de ley) annually to the Colombian Government for the maintenance of a force of 300 men along the line of the works, said force to be under the command and direction of Colombian officials; but is not, under any circumstances, to be detailed or transferred to other duty.
This arrangement, however, aside from its wanting the approval of the directors of the company, is probably unsatisfactory to the Colombian Government. At any rate, it has sent Dr. Colúnje (a former president of the State of Panama, and afterwards Colombian minister for foreign affairs) as special commissioner to Paris to try to negotiate some satisfactory and permanent arrangement with the company touching the purport of the clause referred to.
I have, &c.,