to Mr. Bayard.
Buenos Ayres, July 29, 1888. (Received October 1.)
Sir: Some of the railroads heretofore guarantied by this Government begin to develop serious complications. These concessions, having been granted on approximate estimates of cost of construction and value of earnings, impose upon the grantees certain obligations, the neglect of which now threatens to give them trouble.
The most of these concessions were given to English syndicates, with directories existing in London, and out of sight of their obligations here. The result seems to have been, they have given more attention to the [Page 16] collection of their coupons than the careful and enterprising operations of their investments contemplated in their undertakings. The Government complains they are not operating their roads properly, that they do not sufficiently keep up their road way and track, their equipment, etc., so as to render them of public and profitable utility, rather than a charge on the national treasury.
The whole subject was brought to the attention of Congress in the President’s opening message, as appears in inclosure 1 where he quite forcibly admonished all such derelict companies they must operate their charters according to contracts, or their expected profits would be made to supply their omissions.
This message has been especially communicated to the home office of the British Government by Hon. John Jenner, chargé d’affaires, in absence of Mr. Packenham, minister, and has resulted in notices issued by Lord Salisbury to the secretaries of the various companies to put themselves right.
The position of the Argentine Government, as said before, is that these guarantied roads must increase their receipts to the fullest possible standard of prudent management, or that the guaranties may be withdrawn or the amounts covered by them be applied to betterments.
The English Government is disposed to require its subjects to keep faith with this Government.
The letter of the Marquis of Salisbury to the secretaries of the Argentine railways is lofty in spirit and worthy of commendation.
I have, etc.,