No. 42.
Mr. Hall to Mr. Bayard.

No. 509.]

Sir: With reference to your instruction No. 342, of the 23d ultimo, inclosing copies of letters from Mr. Alex. McPherson, dated Bridgeport, Baker County, Oregon, April 12, in which he asks for information concerning the recently reported gold discoveries in Honduras, I have the honor to inform you that I have complied therewith by forwarding to Mr. McPherson direct, via San Francisco, a copy of a report received a few days since, upon the mines of precious metals and mining industry of that country, by Mr. George Bernhard, who is now, in the absence of the consul, in charge of the consulate at Tegucigalpa. The report contains all the information asked for, and much more. I inclose a copy, and have no doubt it will be found of much interest. I inclose also a copy of my letter to Mr. McPherson. The placer gold mines of [Page 61] Honduras, which have recently attracted so much attention in the United States, have been known a long time. They lie on both sides of the boundary line between that state and Guatemala, and have never been worked with much success in either. From the inclosed report, it appears that they can be developed profitably by the hydraulic system only, which requires a large outlay of capital. With reference to these placers, Mr. Bernhard says, “They are not so rich as represented.” He also says that “experts have pronounced them equal to the best hydraulic washings of California, and that large investments of capital will meet with handsome profits.” This report, in so far as it relates to the immense mineral wealth of Honduras, the enormous production of the mines during the colonial period, and the new development that is about to be given them by American enterprise, intelligence, and skill will, I am persuaded, be found of interest.

I have, &c.,

[Inclosure 1 in No. 509.]

Mr. Bernhard to Mr. Hall.

Sir: In reply to yours of March 29, addressed to Daniel W. Herring, esq., United States consul at Tegucigalpa, requesting information about the mines and mining industry of Honduras, I beg leave, in the absence of that gentleman, to report as follows:

The gold and silver mines of Honduras are divided into ten mineral districts, having nearly two thousand known veins, beside which are the placer gold washings, situated on what is known as the “North coast,” that is to say, north of the Cordilleras, which, running east and west, divide the country into a north and south section. I am aware that these placers are attracting great attention in the United States, but from the best information which I can get on the subject, are not as rich as represented.

The alluvial deposits forming the gold washings average about 30 feet in depth, and cover hundreds of square miles, all of which is well watered and heavily timbered. Experts who have examined the placer country, particularly in the department of Olancho, unite in pronouncing it equal to the best California hydraulic washings, and say that large investments of capital will meet with handsome profits. On the other hand, the earth is too poor to pay the pan miner.

Gold-quartz veins abound on the north and south coasts, while between them lies the great silver belt of the country. This silver belt is over 50 miles in width, and extends across the country from east to west.

The gold quartz veins yield mainly a refractory ore, and the silver ores are principally sulphurets and galenas. Most all the silver veins carry gold in paying quantities. Many of these veins attained great fame for their production of the precious metals when Honduras formed part of the vice-royalty of Guatemala. Indeed, Honduras then produced four-fifths of the mineral wealth extracted by Spain from Central America. Many of the traditions of these would be incredible but for the corroborative proof furnished by the records in possession of the Government.

A case in point is the Claro Rico mine, located in the department of Choluteca, near the Pacific coast. This mine produced gold in such great quantities that the Crown of Spain doubted the genuineness of the metal, and appointed a royal commission to investigate, and in consequence, a special royal treasurer was stationed at the mine to receive the “Bang’s fifth,” the tribute paid by all mines to the Crown of Spain.

The richness of another mine, the Guayabillas, also known as the Gamblers’ mine, in the mineral region of Yuscarán, department of Pariso, once caused a great revolution. It would not be difficult to cite twenty other instances of rich mines in fact all the mineral districts contain a number of properties which have been remarkable for their production.

The records in support of the statements made of these mines date back to the last quarter of the seventeenth century, and are in a remarkable state of preservation. To search them, however, with any particular mine in view, is a work requiring considerable [Page 62] time, as their care is divided between the General Government and the municipality of Tegucigalpa, and no successful effort has been made to classify them.

The two principal causes loading to the abandonment of the mines since the independence of 1821, were numerous revolutions and the robbing, under legal permission, the mines of their pillars. These pillars were, in most instances, very rich, and afforded the native miner the readiest profit at the least outlay, but ultimately resulted in the complete ruination of the works.

By the native system of mining and reduction, ores yielding less than $60 a ton cannot be worked.

A few years ago the mining laws were amended by the adoption, with some modifications, of the Chilian mining code, and a vigorous effort was made by the Government to encourage the investment of foreign capital, and concessions of great value have been repeatedly granted to individuals proposing to organize companies to develop the mining industry of the country. The only concession, however, which produced any great result was granted to a Mr. Thomas R. Lombard, of New York City, who organized what is known as the Central American Syndicate Company. The great privileges possessed by this company have enabled it to secure what are considered the best mines in the country. Under its auspices nine companies have been organized in the State of New York, and are all developing their respective properties on a large scale. Judging from the work already accomplished and that said to be contemplated, all of these companies are in possession of ample funds to carry them to success. The companies have their headquarters in New York City, and are known as the Santa Lucia Mining and Milling Company, the Rio Chiquito Company, Santa Elena Mining Company, Honduras Mining Company, Yuscaran Mining Company, Animas Mining Company, and the Pariso Reduction Company.

As the Government derives no revenue from the imports or exports of the mines, no data is kept of the bullion exportations.

The Government has greatly aided the mining industry within the past ten months by the building of a practical cart road from the Pacific coast into the heart of the mining country. This is the only cart road in Honduras.

The mining laws are liberal, but, excepting in the case of the companies organized under the concession granted to Mr. Lombard, and now owned by the Central American Syndicate Company, titles to mines are not held in fee-simple. Aliens enjoy the same rights as citizens in respect to mines and real estate, and the General Government is disposed to grant extra privileges to those who can influence the introduction of capital.

A mining claim is 250 varas long, by from 100 to 200 varas wide, according to the dip of the vein. A vara is between 32 and 33 inches long. More than one claim, is allowed upon a vein.

The imports and exports on account of the mines are free.

Possession of mines is maintained for an indefinite term by the labor of four men. Natives engaged in mining can bo exempt from military duty.

Yours, &c.,

[Inclosure 2 in No. 509.]

Mr. Hall to Mr. McPherson.

Sir: I have received from the Department of State copies of your letter, dated the 12th ultimo, to the honorable Secretary, and one to myself of the same date, in which you ask for information concerning the mines and mining interests of Honduras. Within the past week I have received a report on that subject from Mr. George Bern-hard, an intelligent resident for many years of that state, and I have no doubt it will be found both interesting and trustworthy. I inclose a copy herewith.

I beg leave, however, to suggest to you, before making any definite arrangement, that two or more of your company should visit Honduras and acquire the necessary information by actual observation and experience. They should visit the capital, Tegucigalpa, which is most accessible from Amapala, the Pacific port of the country, and make their plans fully known to the Government, which I have no doubt will afford them all needed information and such assistance as it may be able to render.

The Hondurian Government manifests a great desire to give every protection to legitimate enterprises when undertaken by responsible parties with sufficient means to carry them out.

I am, &c.,