No. 292.
Mr. Frelinghuysen to Mr. Gibbs.

No. 3.]

Sir: Mr. Phelps’ No. 58, and later dispatches, which you will find on iile in the legation at Lima, report the action of the Peruvian authorities in issuing executive decrees declaring forfeited certain railway and [Page 423] other contracts in which citizens of the United States are concerned, and providing for the settlement of debts under such contracts by extrajudicial means.

It is thought unnecessary to analyze these operations in detail, inasmuch as they rest on bases which this Government does not admit. This action assumes to Peru the right to dictate a decision involving the rights of citizens of the United States in contracts to which Peru is itself a party. We do not recognize the competency of either party to a contract to void it at will and enforce penalties on the other party.

I have to-day sent you a telegram to this effect, in the following words:

Gibbs, Minister, Lima:

We should not accept executive decrees interfering with contract rights of our citizens where Peru is a party.


I am, &c.,