No. 282.
Mr. Phelps to Mr. Frelinghuysen.

No. 77.]

Sir: Recently there was introduced in the assembly an act declaring the contract with Henry Meiggs, for the construction of the Oroya Railroad, &c., to be forfeited, and directing the Government to take possession of the road, plant, &c.

I wrote to you in No. 58, at some length, concerning this road and the Trujillo road.

I may state here that so late as 1880 the Peruvian Government recognized the validity of the Meiggs contract, made a new one with the then representatives of Meiggs, and gave the right of transfer to any parties whatever. The transfer was made in accordance therewith. The contract has been complied with. The war and the occupation of Lima and the line of the road by the enemy here, of course, prevented prosecution of work in construction.

Article 7, as modified by the assembly, provides “Property of the nation may be disposed of to satisfy the public needs.”

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I should be pleased to receive instructions how to proceed in the event of forcible proceedings in cases where I consider the contracts to be unquestionably valid.

I am, &c.,