No. 99.
Mr. Hall to
Mr. Bayard.
Legation of
the United States in Central America,
Guatemala, July 22, 1887.
(Received August 9.)
No. 691.]
Sir: With my dispatch No. 515 of the 17th June,
1886, I transmitted a translation of a contract, concluded on the 6th of May
of the same
[Page 134]
year between Irigoyen
and March and the Salvador Government, relative to a line of Spanish
steamers between Panama and San Francisco touching at the Central American
ports of the Pacific. By that contract the Government, in addition to a
money subsidy, conceded a rebate of 3 per cent. in the customs duties upon
all importations by those steamers into the ports of Salvador. This clause
of the contract was rejected by the legislature by decree of the 27th
September, 1886, a translation of which I had the honor to transmit with my
dispatch No. 603 of the 6th January last. The clause was rejected because
contrary to the treaty of 1870 between the United States and Salvador.
Under date of the 14th ultimo, the Government entered into an additional
contract with the same parties. I inclose a copy and translation of this
additional contract as it appears in the Diario Oficial of Salvador, a month
after its date, July 13, 1887.
Instead of giving the rebate directly to the importer, the Government
supplies the company with documentary obligations which are to be receivable
in payment of 3 per. cent, of the duties upon importations by that line.
These obligations will, of course, be transferred to importers for the
payment of duties. Practically, goods imported by these steamers will pay 97
per cent. only of the duties, or, say, 3 per cent. less than will be paid by
American vessels.
I would also invite the Department’s attention to the second article of the
contract. The steamers will carry the flags of the several Central American
Republics; the two named Mexico and Salvador will carry the flag of Salvador. Under such conditions it
seems to me that there can be no doubt that the rebate is contrary to our
treaty, to the sixth article especially, with that Republic. It is certainly
contrary to the intentions of the treaty, and I considered it my duty to so
advise the minister of foreign affairs of Salvador, through the medium of
Mr. Consul DuPré. I inclose a copy of my telegram, sent with that object, on
receipt of a copy of the contract.
It is not unlikely, however, that the steamers will carry whatever flags may
best suit the purposes of the owner for evading our treaties with these
states and our laws concerning discriminating duties.
I have, etc.,
[Inclosure 1 in No.
691.—Transalation.]
Additional contract with the Spanish Central
American Steamship Company of the Marquis de Campo.
Department of the Treasury, Salvador.
[undated].
Higinio Valdivieso, subsecretary of public works in charge of the
department, by special instructions of the President of the Republic, of
the one part, and Carlos F. Irigoyen as the authorized agent of the
Marquis de Campo of the other part, have agreed to the following
contract, additional to that of the 6th of May of the past year (1886),
approved by the National Assembly of the 27th September of the same
year:
Article I.
The second paragraph of Article 13 of said contract shall be substituted
by the following:
“A pecuniary subvention of $20,000 annually, by monthly installments,
during the first three years, payable in the current coin of the
country, and $18,000 annually during the two remaining years of the
concession, payable in the same form, and during the five years of the
concession a contingent subvention which shall be equal to 3 per cent.
of the customs import duties upon the merchandise which their vessels
shall bring to the ports of Salvador.”
[Page 135]
To effectually carry out this part of the subvention the Supreme
Government shall deliver to the agents of the company documents
receivable in payment of 3 per cent. of the customs duties, which
documents may be used in the entry of merchandise, the respective bill
of lading showing the same to have been imported by the company’s
vessels to accompany such entry, and a sum equal to the said 3 per cent.
in bonds of the public debt.
[“The bonds of the public debt have no marketable value; they are not
amortizable and earn no interest.”]
The said documents shall be delivered in advance and in amount estimated
to be sufficient for amortizement during six months, at the expiration
of which the corresponding liquidation shall be made.
[“It is not clear whether the government delivers to the company both
classes of obligations or only the debentures receivable in payment of 3
per cent. of customs duties.”]
Article 2.
The steamers of the company shall be under the flags of the five Central
American Republics, permission therefor being previously given by their
respective Governments. The two named Mexico and
Salvador, shall carry the flag of this
Republic (Salvador).
Article 3.
The Government shall instruct its consuls in England to furnish
sea-letters to the said steamers, authorizing them to carry the national
flag until their arrival at the ports of the Republic, when they shall
receive their respective registers free of expense.
Article 4.
The Spanish steamers which the company may employ as auxiliaries shall be
subject to the rights and obligations stipulated in the contract.
Article 5.
As the steamers of the company will arrive before the date of the
termination of contract with the Pacific Mail Company, it is agreed that
the stipulated service shall commence at once, and that the Government
in the mean while shall be bound to pay the contingent subvention only
as established by Article 1, and that the pecuniary subvention shall
commence to run from the day on which the Pacific Mail subvention
ceases.
Article 6.
The Government shall interpose its good and friendly offices with the
Governments of the other Republics to obtain the same concessions and to
remove the difficulties and obstacles which may arise in the
establishment of the line of Spanish-Central American steamers of the
Marquis de Campo. In faith of which we sign the present in San Salvador
the 14th day of June, 1887.
- Higinio Valdivieso.
- Carlos F. Irigoyen.
National
Palace,
San
Salvador, June 15, 1887.
Seen the foregoing contract concluded between the sub-secretary of
public works (fomento), Dr. Don Higinio
Valdivieso, in behalf of the Government, and Señor Don Carlos F.
Irigoyen, in representation of the Marquis de Campo, relative to the
addition to the contract of the 6th of May, of last year, touching
the Spanish-Central American line of mail steamers, and the
additional contract having been made in accordance with the
instructions to the effect given to Dr. Valdivieso, the executive
power accords the approval of the six articles of which it is
comprised.
Let it be communicated.
By the President.
The Secretary of State in the Department of Finance, etc.,
[Page 136]
[Inclosure 2 in No.
691.—Telegram.]
Mr. Hall to Mr.
Du Pré.
Guatemala, July 19,
1887.
I have before me the Diario Oficial of Salvador, of the 13th instant,
containing an additional contract relating to the Spanish-Central
American steamers. It stipulates, de facto,
discriminating duties against merchandise imported in American vessels,
and it is as contrary to the intentions of the treaty with the United
States as was the contract of the 6th of May of last year and contrary
to the reciprocal friendly relations between the two countries. You can
so make it known courteously to the minister for foreign affairs.
