Mr. Foster to Mr. Bayard.
Madrid, August 26, 1885. (Received September 12.)
Sir: With my No. 366, of the 28th ultimo, I transmitted a copy of the law recently passed by the Spanish Cortes, authorizing the minister of ultramar to grant a concession for the construction of a system of railroads in the central and eastern provinces of the island of Cuba. The Gaceta de Madrid, of the 24th instant, contains the official publication of the law and the conditions upon which the bids are to be received for the concessions. As the dispatch referred to contains a full abstract both of the law and these conditions, I only deem it necessary to transmit at this time a copy of the publication in the Gaceta.
As noticed in my No. 366, the important question was whether the 8 [Page 756] per cent, guaranty to be given by the Government was to be made effective by the treasury of Cuba or of the mother country. The declaration of the minister of ultramar in the Cortes seemed to be sufficiently explicit on this point, but the companies and syndicate which were expecting to compete for the concessions claimed to have assurances that in the official publication for bids the guaranty of the national or peninsula treasury would be pledged; but such has not been the case. In the 9th article of the conditions it is expressly stated that “the payment of the sums necessary to make effective the said interest (the 8 per cent, upon the capital invested) shall be made by the general treasury of the island of Cuba as a charge in the general budget of that island.”
In view of this provision, one of the leading newspapers of Madrid states that it is generally believed there will be no bidder for the concession.
I am, &c.,