Papers Relating to the Foreign Relations of the United States, Transmitted to Congress, With the Annual Message of the President, December 3, 1888, Part I

No. 279.
Mr. Bayard to Mr. Walker.

Department of State,
Washington, March 6, 1888.

No. 63.]

Sir: I have to call your attention to the following facts, in respect of which your prompt action is desirable.

The Boston Ice Company, a partnership composed exclusively of citizens of the United States, has been for more than twenty-three years engaged in the business of shipping ice, lumber, and general merchandise to the cities of Aspinwall and Panama, in the Republic of Colombia, for sale by the agents or representatives of the company, and is now engaged in such business. It appears from papers laid before the Department that the shipping of ice to the cities of Aspinwall and Panama and the selling of such ice therein constitutes the principal part of the business of this ice company, in which part of its business it has a large amount of capital invested and many agents and officers employed. Indeed, the Boston Ice Company appears to be the only importer and dealer in ice in the two important cities named.

It appears that on November 21, 1887, President Nuñez promulgated a decree, countersigned by Mr. Eestrepo, minister of the treasury, for establishing a monopoly of the importation and sale of natural ice in the department. This decree you will find published in the Diario Oficial of November 24, 1887. It provides that the Government of Colombia reserves to itself the monopoly of the importation and sale of natural ice in the department of Panama; that the Government may grant said monopoly or privilege to an individual or to a company either by private contract or at public auction; that the grantee of such privilege may transfer it to another individual or company with the previous assent of the Government, and that from the day whereon the grantee of said privilege enters into the enjoyment thereof no individual or company shall import ice into said department of Panama without the consent of said grantee.

On January 21, 1888, Mr. Restrepo, minister of the treasury, issued a printed invitation for proposals or bids for the concession suggested by the above decree, with a form of the contract which would be required, a translation of which is herewith inclosed. You will probably have no difficulty in procuring a printed copy of this invitation in Spanish on making request in the proper quarter.

You will then ascertain and report whether, under the laws and usages of Colombia to which the native citizens of that Republic are subject, a monopoly in any article of trade or commerce is allowable, and whether the contract of concession suggested by Mr. Restrepo, minister of the treasury, is in conflict with the laws and usages of the United States of Colombia.

If you should discover that the granting of such a monopoly as is proposed in this concession is not warranted by the laws of Colombia, you will report the same to this Department and await further instructions.

If you should, on the other hand, discover that such a monopoly is not inconsistent with the usages and laws of that country, you will then make known unofficially to the minister of foreign affairs the ruinous result upon the business of the Boston Ice Company of enforcing such a decree on the conditions outlined in the proposed concession, and of the utter discouragement to the investment hereafter of any American capital, or the promotion of any American enterprise, if such a fate should await other American citizens who, like the company in question, have for more than twenty years lent the aid of their capital and business energies in faithful subordination to the laws of Colombia in the development of the convenience, comfort, and health of the people of that country.

The spirit of the treaty of 1846 is one of closest amity between the two countries, and under the terms of this treaty, especially under article 35, the active good offices of the United States have been exerted with the highest benefit to the Republic of Colombia.

It would be well for you to impress the minister with the fact that the severance of interests between the inhabitants of the two countries must necessarily be followed by a diminution of personal good feeling $ and it would be deeply regrettable if a check should now be given to the immigration of American citizens of reputation and wealth into Colombia, where their presence has been heretofore only productive of great good to that country and also to themselves.

As following these views, it would be well for you in a friendly manner to see whether a modification of the terms contained in the seventh article of this concession could not be obtained.

It is not the disposition of this Government to interfere in any way with the administration of the laws of another and a friendly power, but where the interests of American citizens have been sought to be secured by treaty and are unexpectedly exposed to invasion and injury it is part of the duty of one friendly government to point out to another the injurious results that must necessarily follow.

It is the wish of this Government that the overflow of numbers capital, and energy from the United States into the Republic of Colombia, should continue to benefit both countries, and that they shall understand that it is the part of friendship to point out all circumstances that may tend to jeopardize the good feeling that should be encouraged to exist between the citizens of the two countries. Monopolies are held in the United States to be obnoxious and to be violative of sound public policy, as being in restraint of trade and destructive of that equality which should exist before the law, and be followed by a government with the citizens under its control.

No condition could be held valid which deprived a citizen of the right to appeal to the protecting power of his own Government, for that is secured to him by the eternal principles of justice as reflected in well-known international law.

The United States have no reason to believe that any discrimination against its citizens is intended by the Government of Colombia, and therefore, in presenting this subject to the foreign office, you will do so personally and not officially, frankly stating the friendly object with which the present dispatch to you is penned; that is, to prevent injuries to important interests of citizens of the United States lawfully engaged in business in Colombia, following the laws of that country, and giving it the benefit of their capital and enterprise.

I am, etc.,

T. F. Bayard.

[Inclosure 1 in No. 63.—Translation from the Diario Official, published at Bogotá, Thursday, November 24, 1887, of decree number 719 of 1887.]

treasury department.

Decree number 719 of 1887 (21st of November) for the monopolizing of the importation and sale of natural ice in the department of Panama.

The President of the Republic considering that, by the decree number 858, of December 12, 1885, which is to-day the law of the Republic, agreeably to transitory article L of the Constitution, the National Government reserved to itself the administration of the department of Panama in all its branches;

That, by article third of said decree, there were delegated to the governor of that department the necessary powers to reorganize in all its branches the public administration of the said department, which implies that the Government had reserved them to itself;

That the delegation of powers to a Government official does not imply any surrender of the right to exercise the same by said Government, decrees:

Art. 1. The Government reserves to itself, as a financial measure for the Department of Panama, the monopoly of the importation and sale of natural ice in the said department.

Art. 2. The privilege which, by the preceding article, the Government reserves to itself, may be granted to an individual or to a company, either by a private contractor at public auction, and in accordance with the tenders of bids, which the Treasury Department will publish at appropriate intervals.

Art. 3. The grantee may transfer such privilege to another individual or company with the previous consent of the Government.

Art. 4. From the day whereon the grantee enters into the enjoyment of the privilege of which this decree treats, no individual or company shall import ice into the department of Panama without the consent of said grantee.

Art. 5. In case the Government does not grant this privilege, which by the present decree it reserves to itself, it will avail itself of the same when it may be deemed expedient, for which purpose the appropriate announcement shall be Issued with due notice.

Given at Anapoima, November 21, 1887.

Rafael Nuñez.

Vicente Restrepo,
Minister of the Treasury.

[Inclosure 2 in No. 63.—Translation.]

Official notice of the Government of Panama inviting proposals for the importation and manufacture of ice in that Department.

important.—official notice.—ice.

Until the 18th proximo, this Government, duly authorized, will receive proposals for the importation and manufacture of ice in the department, which will be transmitted to Bogota by cable.

Conditions for the proposals.

(1) The contract or concession will be for twenty years.

(2) The payment of the tax to be established will be made annually in advance at the general office of the department treasury, in silver coin 0.835 fine.

(3) The buildings, machinery, ice-houses, etc., in good condition, will become the property of the Government, without pay, at the termination of the concession.

(4) Security satisfactory to the Government will be given.

(5) It will be a strict condition to renounce diplomatic remedies for whatever dispute may arise, obeying unconditionally the national laws.

(6) The maximum price of ice of every kind shall not exceed 10 centavos per kilogram at retail.

By superior orders.

Francisco de Fabrega, Jr.,
General Secretary.

Panama, January 14, 1888.

[Inclosure 3 in No. 63.—Translation.]

Proposals invited for a contract of concession for the manufacture, importation, and sale of ice in the department of Panama.

Department of Treasury,
Bogotá, January 21, 1888.

Inasmuch as the contract of concession for the manufacture and sale of ice in the department of Panama, made at public auction to Mr. Christian A. Maal, has not been approved by his excellency the President of the Republic, and in consideration of act No. 42, of 1883, passed by the legislative assembly of the extinct State of Panama, and of executive decree No. 719, of the 21st of November last, published respectively in Nos. 7140 and 7240 of the Diario Oficial, all persons, citizens of this nation, or foreign citizens who may desire to obtain the concession for the manufacture, importation, and sale of ice in the aforesaid department are invited to send their proposals to this ministry on or before February 29 next, at 2 p.m.

The proposals referred to will he subject to the following conditions:

rights of the contractor holding the concession.

I. The Government concedes to N. N. the exclusive right to manufacture, import, and sell ice in the department of Panama for the term of------- (which will not exceed twenty years).

II. From the time when N. N. enters upon the enjoyment of the concession granted to him, which will lake place ------ (number of months) after the grant of the concession, no person or company will be allowed to manufacture, import, or sell ice in the department of Panama without the consent of the contractor.

III. N. N. shall have the right to demand the expropriation of land which he may require for buildings, aqueducts, and warehouses needed for the manufacture, importation, or sale of ice. The seizure, to take effect under existing laws on the subject, provides indemnity which the contractor must pay.

IV. The Government declares that the manufacture, importation, and sale of ice in the department of Panama is a work of public utility (empresa de untilitad publica), and that, for such reason, it shall be exempt from all kinds of imposts, taxes, and duties, whether they be national, territorial, or municipal.

V. It also declares that the agents, employés, and servants of this work shall be exempt from all public service.

obligations of the contractor holding the concession.

I. N. N. shall pay into the treasury of the department of Panama in silver coin (835/1000 fine) the sum of-for each year during the continuance of the concession, and make such payments annually in advance.

II. N. N. shall bind himself to furnish, free of cost, to the charitable and military hospitals now established, or which may be established in the cities of Panama and Colon, and on the line of the railroad and the canal, all the ice which, in the judgment of the physician or superintendent of each establishment, they may need.

III. N. N. shall pay, for the benefit of public instruction, a fine of $25 for each day that he fails to supply said hospitals with the ice they may require, except in case of accidents.

IV. N. N. shall keep on hand the amount of ice required for consumption, and the places for its sale shall be open to the public from 7 a.m. to 5 p.m.

V. N. N. shall bind himself to sell ice at not over 10 centavos per kilogram.

VI. At the expiration of the concession, N. N. shall cede to the department of Panama, without right to any indemnity whatever, the buildings, machinery, apparatus, and store-houses set up on the isthmus for the manufacture and sale of ice.

VII. N. N. shall bind himself (if a foreigner) not to resort in any event to diplomatic reclamations in controversies which may arise in regard to the interpretation and execution of this contract.

VIII. N. N. shall, in like manner, be bound to submit himself to the respective judges and courts of the Republic for the settlement of said controversies.

IX. N. N. shall guaranty the fulfillment of this contract by mortgage security, or, bonds satisfactory to the department of treasury, to the amount of two of the annual payments due the department of Panama under Section I of these obligations.

general conditions.

I. The present contract shall become void, without further notice, if, within ------- (such a time) from the granting the concession, the manufacture, importation, and distribution of ice, in quantities sufficient for the consumption, should not have been commenced.

II. In like manner it shall become void in case of more than six months’ delay of any annual payment, or if the supply and sale of ice is suspended for more than one month, except in case of accidents. Such annulment of contract being proclaimed, the amount pledged to secure the fulfillment of the contract, under section 9 of the obligations of the contractor, shall belong to the Government.

III. The contractor shall not assign this concession to any other person or company without the previous consent of the Government, and in no event to a foreign government.

IV. The contract, made by virtue of this public bidding, shall be subject to the approval of the executive branch of this Government, without which it will not be binding.

The proposals shall be presented folded, closed, and sealed, and on the envelope shall be written the contents and name of the bidder; and they must be accompanied by a bond, drawn up on stamped paper of the first class, and signed in the presence of witnesses.

At 12 o’clock noon, on the 1st day of March, the papers will be opened, the bonds offered will be examined, and bids and counter-bids will be listened to, in which no person shall take part except those who have made written proposals and whose bondsmen have been adjudged to be satisfactory. In these bids and counter-bids (pujas repujas) the largest payment offered to the department and the shortest time for which the concession is desired will be considered as the best bid.

Vicente Restrepo,
Minister.

A true copy.

Attest:
[seal.]

Adolfo Aleman,
Oficial Mayor.