No. 114.
Mr. Hosmer
to Mr. Bayard.
[Extract.]
Legation of
the United States in Central America,
Guatemala, June 9, 1888.
(Received June 28.)
No. 819.]
Sir: In continuation of my No. 809, of May 9, 1888,
in which I inclosed a copy of my note addressed to the minister for foreign
affairs, in obedience to your instructions numbered 563, of March 27, to
employ the good offices of this legation in behalf of the Champerico and
Northern Transportation Company, to remedy the wrong alleged to have been
committed against that railroad by the Guatemalan Government, I now have the
honor to inclose to you a translated copy of Minister Barrutia’s reply
addressed to me on the 24th ultimo, and a copy of my rejoinder to the same
of this date.
I have, etc.,
James R. Hosmer,
Chargé d’Affaires ad
interim.
[Page 157]
[Inclosure 1 in No.
819.—Translation.]
Señor Barrutia to
Mr. Hosmer.
Sir: I have the honor to reply to your esteemed
note relative to the complaint and protest of the director of the
Champerico and Northern Transportation Company against the contract
celebrated by the Government with Mr. Luis Bueron and others for the
construction of a railroad between Quezaltenaugo and the port of Ocos on
the Pacific. You, sir, are pleased to indicate that in treating of this
matter you do so unofficially, and it is in the same sense that I have
the honor also to answer the cited note of your excellency.
Effectively my Government celebrated on the 8th of November, 1887, the
contract referred to, and in making it I had in view the rights acquired
by the owners of the railroad between Champerico and Retalhuleu; rights
that have not been prejudiced, as they could never be, as it goes
without saying that my Government maintains inviolate every perfected
contract made between it and other persons, whether they be foreigners
or natives.
This is so natural a position that any Government whatever that knows how
to respect itself should consider it as a sacred duty and make it in
every case the rule of its conduct.
I enter into these considerations in order to refer myself to the
sentiments of your note above cited, which I find very much in accord
with the convictions of my Government.
I am aware of the report of Mr. E. Rockstroh on the business in question,
as well as to any other relative to the distance between Ocos and
Champerico; but these reports, in my opinion, explain nothing in respect
to the business in question, because the concessionaries, according to
the contract, have the right to operate the railroad between the points
indicated (Champerico and Retalhuleu) without any other person, company,
or enterprise being able during the said time to construct another line
at a less distance from the said line, but always understood to be
between the points indicated.
Now, Champerico and Retalhuleu are very distinct, as you know, sir,
fromQuezaltenango and Ocos; they are not within the reserved strip and
consqeuently the Government has, with perfect right and without
violating other rights, contracted for this new line with Mr.
Bueron.
But, even admitting the case, which I may venture as a supposition, that
the Government should not have been correct, the Champerico railroad
enterprise should have raised the question, if it believed that its
rights had been injured in the sense that the contract indicates under
the bases of which the said enterprise was carried to completion.
Article XXV establishes that if between the Government and the enterprise
there should arise any question of any nature whatever it shall be
submitted to the decision of two arbiters, and I believe that the case
has arrived for an appeal to this recourse that should make clear the
acts, and would give the right to whom it may belong.
I am, etc.,
[Inclosure 2 in No. 819.]
Mr. Hosmer to Señor
Barrutia.
Mr. Minister: In acknowledging the receipt of
your excellency’s courteous reply of the 24th ultimo to my note of April
26, relative to the protest and complaint of the managing director of
the Champerico and Northern Transportation Company, I must beg
respectfully to differ from your excellency’s views as to Article XXV of
the contract applying to the question at issue. It does not arise from
any dispute as to the meaning of the contract or as to its application
to a particular state of facts, but is based upon a clear repudiation
and disregard by the Guatemalan Government of some of the essential
features of the agreement.
This is the opinion of my Government, in carefully reviewing the
contract, and so expressed in calling my attention to the memorial which
recited the facts upon which the complaint was based, and in instructing
me to unofficially intervene in the matter; and, by referring to the
memorial itself, I notice that it urges as follows:
“Your petitioner further states that he was refused a sight of the Bueron
contract until it was published, after approval by the President, in the
official gazette of the Government.”
[Page 158]
In such case it would have been impossible to have raised a question or
questions of specific nature in regard to the new contract, or called
upon arbitrators to decide upon matters of which the Champerico Railroad
Company were necessarily ignorant. Hence, as I am informed, the managing
director of the company filed with your excellency’s Government and the
honorable legislative assembly, then in session, a protest as to the
action of the Government in granting a contract to build a railroad
which, according to its proposed direction, would violate a pre-existing
agreement by the terms of which a reserved right was stipulated to
prevent the ruinous competition which would inevitably result by
building a new railroad running through the coffee-producing
country.
I am again constrained to urge upon your excellency’s notice that the
granting of the Bueron contract violates the vital feature of the
existing agreement with the Champerico Railroad Company in giving the
right to build a railroad within 15 leagues on either side of that
road.
The importance of this stipulation is emphasized by being expressed in
the second article of the contract, the first article being merely
declaratory of the concession, and it seems to me that the language is
most clear when it states: “No other person or enterprise, during the
said term (twenty-five years), having the power to construct another at
a less distance than 15 leagues on either side of the line “[“no
pudiendo construirse otro por distinta persona ó empresa durante el
mismo témino, á menor distancia de quince leguas á uno y otro lado de la
linea.”]
“On either side of the line “can have but one meaning, to my mind, and
that is, at any point measured from the line of the railroad at right
angles to the same. So that Ocos, or any other point on the projected
railroad, which is included in the Bueron contract, must, in the
definition of article second of the contract with the Champerico
Company, be measured from the line of railroad which has already been
accepted by the Guatemalan Government, and has been in active operation
for a period of nearly four years.
In thus urging upon your excellency’s notice my argument in support of
the good offices I am instructed to employ in behalf of the Champerico
and Northern Transportation Company, I desire to re-afiirm the
expression of my personal opinoin that your excellency’s Government will
be actuated by the desire to remedy the unintentional wrong which the
granting of the Bueron contract inflicts upon the railroad company whose
rights the existence of the new contract menaces, and upon further
consideration of the matter will cause that contract to be
rescinded.
From the nature of my instructions Tarn sure that my Government will be
gratified to learn that such a course has been pursued, and will
recongnize it as a practical proof of the reciprocity of that friendship
and good will which it sincerely entertains for the Republic of
Guatemala.
Renewing the assurances, etc.,
James R. Hosmer,
Chargé d’Affaires ad
interim.
