No. 26.
Mr. Hall to
Mr. Frelinghuysen.
Legation of
the United States
in Central America,
Guatemala, July
25, 1884. (Received August 15.)
No. 241.]
Sir: In May, 1883, the Costa Rican Congress passed
a law making Port Limon, on the Atlantic, a free port for the term often
years. Ten months later, the same Congress, without giving any previous
notice of its intention, regardless of the foreign interests created,
foreign capital invested, and foreign enterprises undertaken under the
inducements held out by that act, repealed the law and established the
former tariff upon imports. I inclose copies and translations of both
decrees.
I inclose also an extract from a letter from Mr. Consul Morrell, with its
inclosure from a well-known American who has large interests in that
country. From these it appears that the publication and execution of the act
of repeal were simultaneous, the Government commencing at once to levy
duties on goods imported under the assurances of a free entry.
It appears also that the principal commercial interests of Limon are
American; that two merchants of the place are now abroad making purchases of
merchandise, in the full faith that it was to be a free port for ten years;
that, knowing nothing of the change, they will, of course, upon their
return, come into conflict with the Government.
Other parties were making preparations to enter into the business of raising
fruit for the markets of the United States.
While there may be no doubt as to the right of the Costa Rican Congress to
revoke the law referred to, it seems but just that some previous notice
thereof should have been given or a reasonable time allowed the interested
parties to adjust their business affairs to the new conditions. As the
matter now stands it has all the appearance of bad faith on the part of the
Government.
In view of these facts, I have deemed it my duty to instruct the consul at
San José to receive the protests of our citizens who may be injured in their
interests by the action of the Costa Rican Government, and especially those
who have imported goods under guarantee of the law now repealed. I have also
addressed a communication to the minister for foreign affairs, of which I
inclose a copy.
I have, &c.,
[Page 39]
[Inclosure 1 in No.
241.—Translation.]
Law No. 6 of May 22,
1883, making Limon a free port.
The Constitutional Congress of the Republic of Costa Rica decrees:
- Article 1. The district of Limon is
declared to be free of customs imports. The importation of
material of war is alone excepted from the exemption established
by this article.
- Art. 2. The Executive is authorized
to make the demarkation of the zone which is declared free, for
which the port of Limon and Rio Sucio must be taken as starting
points.
- Art. 3. He is authorized also to
remove the custom-house to Rio Sucio, to dictate all measures
conducive to that end, and to incur the expenses required for
the execution of this law.
- Art. 4. The exemptions thus
established shall commence to take effect on the 10th day of
August next, and shall continue during ten years.
Given in the hall of sessions of the
national palace, at San José, the 22d day of May,
1883.
- JUAN M. CARAZO,
President.
- VICENTE C. SEGREDA,
First
Secretary.
- A. SANTOS,
Second
Secretary.
Presidential
Palace, San
José, May 22, 1883.
Let it be executed.
The Secretary of State for the Department of Finance, Bernardo Soto.
[Inclosure 2 in No.
241.—Translation.]
Law No. 20 of the 19th of June, 1884, repealing law
No. 6 of the 22d of
May, 1883, by which Limon was made a free
port.
The Constitutional Congress of the Republic of Costa Rica, considering
that the law of the 22d of May, 1883, has not had the results that were
expected of it, but has produced grave prejudice to the customs revenue
and to commerce in general; that this revenue being assigned to the
payment of the internal debt, whose prompt cancellation is of lively
interest to the country, decrees:
Sole article. Said law No. 6 of the 22d
of May, 1883, is repealed. (1) The Executive shall provide the
necessary regulation for the custom-houses and customs guards.
(2) The Executive shall equip two small steam-cruisers for
watching the Atlantic coast.
Given in the hall of sessions of the national palace, at San
José, the 19th day of June, 1884.
- JUAN M. CARAZO,
President.
- JESUS SALANO,
Secretary.
- MANRO FERNANDEZ,
Secretary.
Presidential Palace, San
José, June 19, 1884.
Let it be executed.
The Secretary of State for the Department of
Finance and Commerce.
[Page 40]
[Inclosure 3 in No. 241,
extract.]
Mr. Morrell to Mr.
Hall.
Consulate of the United States,
San José, Costa Rica, July 1, 1884.
Sir: * * * I invite your attention to the
inclosed copies of law No. 6, dated May 22, 1883, making Limon a free
port for ten years from the 10th of August, 1883,
and of law No. 20, dated June 19, 1884, repealing
it. The question arises in my mind, “How can such things be?”
Mr. Volio, among other arguments in support of the repeal, says, “Such
things are done all the world over.” His boundary of this world, if not
of the whole universe, is probably limited to Spain and all the
Spanish-American countries. Would or could the United States Congress
repeal a law making a certain port free for ten years, in less than one
year I Is not such an act on the part of Congress virtually a contract
entered into with the entire outside world for a specified time? As it
is, this country will itself be the principal sufferer. Parties with
large capital were already making preparations to enter into business at
Limon on a large scale; but in consequence of this new law they have
retired. But how about the houses already established there? * * * Mr.
Willis, Mr. Keith’s representative, promised to give me some facts in
regard to this matter, which I will inclose to you if received in
time.
Yours, &c.,
[Inclosure 4 in No. 241.]
Mr. Keith to Mr.
Morrell.
San
José, Costa Rica, July 1, 1884.
Sir: Allow me to bring to your notice a great
piece of injustice which has been committed by the Government of this
Republic, in order that, should you think fit, you may bring the matter
before your Government.
According to a decree duly passed by Congress and sanctioned by the
executive power, Limon, on the Atlantic coast, was declared a free port,
together with a certain zone within given boundaries, for the space of
ten years, counting from the 10th of August,
1883, as may be seen from the decree to that effect duly published in
the official gazette of this Republic, dated the 23d May, 1883. Since
the 10th August last year, in conformity with the decree, said port and
zone have been free, but on the 19th of this month, without any previous
notice or warning, the Congress have thought fit to pass a decree
derogating completely this franchise, which decree has been duly
sanctioned by the executive power and published in the official gazette
of 21st instant.
The Government has already commenced to collect duties on goods that have
arrived or are arriving, although they may have been ordered months ago,
in accordance with the decree which establishes the freedom or exemption
from customs duties for ten years.
Within the last year a new industry has very much increased in the free
zone, and that is the planting and cultivation of bananas by persons of
all nationalities, who have made their calculations upon a free port. At
the present time from 25,000 to 30,000 bunches a month are exported to
New York, which amount is daily increasing, and several projects were on
foot for augmenting this business with foreign capital, which was being
subscribed for in Boston and New Orleans on the basis of a free
port.
Having a contract for the development of the Atlantic division of the
Costa Rica Railroad for five years, any change of this kind being made
is extremely prejudicial to my interests, not only increasing very
considerably the working expenses of the railroad, owing to my having to
pay a higher price for labor, but also tending to diminish instead of
augment the receipts of banana freights, upon which I had based my
calculations, owing to further planting consequent on the decree
declaring the port and zone free.
I may mention that the principal merchants in Limon, together with
myself, are American citizens, as you are aware, and I think should be
entitled to some protection from such an arbitrary act and want of good
faith on the part of the Government of one country and the citizens of
all others.
Two of the principal merchants of Limon are at present abroad making
purchases of merchandise, in the full faith of a free port for ten years> and know nothing of the change just
made, and will doubtless come into conflict with this Government, on
their arrival here, when duties are exacted. Having very large interests
at stake in
[Page 41]
this country, I am
extremely unwilling to come into conflict with the Government, or even
to do anything prejudicial to its interests in any way; hut certainly I
think that this is a matter that should be inquired into by the
different Governments, in the interests of their citizens residents here
who may have been misled into entering into business in Limon under the
veil of a free port.
Trusting you will give the matter your best attention,
I am, &c.,
[Inclosure 5 in No. 241.]
Mr. Hall to Señor
Castro.
Legation of the United States in Central
America,
Guatemala, July 25,
1884.
Sir: My attention has been invited to the act
of the Costa Rican Congress of the 19th ultimo, repealing the decree of
the 22d of May, 1883, by which Limon was made a free port for the period
often years. I have been informed also that the new act was immediately
carried into effect, without any consideration whatever for the foreign
interests created under the guarantees of the former law.
While awaiting the definite instructions of my Government, to which I
have communicated the facts above mentioned, I am constrained to protest
most respectfully, in behalf of American citizens whose interests are
affected, against the act of the 19th of June, 1884, and especially
against its immediate enforcement, as also against the collection of
duties upon merchandise imported under the guarantee and faith of the
act of the same Congress which declared Limon to be a free port from the
10th of August, 1883. At the same time I venture to assure your
excellency, in advance of definite instructions, that my Government will
expect for their citizens full indemnity for all losses and injuries
they may sustain in consequence of the action referred to of the Costa
Rican Congress.
I have, &c.,
