No. 76.
Mr. Hall to Mr. Bayard.

No. 749.]

Sir: With my dispatch No. 450, of November 20, 1885, I transmitted a copy of a contract between the Guatemalan Government and one Martin Roberts for the construction of the so-called “Northern Railway of Guatemala,” by which it is proposed to connect this capital with the Atlantic sea-board. Mr. Roberts, it appears, did not succeed in inducing New York capitalists, fortunately for themselves, to invest in that scheme, and nothing has since been heard of it.

The Government has again entered into another contract, for the same object, with Mr. John T. Anderson, merchant and United States consular agent at Livingston. Mr. Anderson is a native of Canada, and a naturalized citizen of the United States. To carry out his enterprise he proposes, I understand, to form a company in New York City and to incorporate it under the laws of that State.

This railway was undertaken by the Guatemalan Government in 1883 and abandoned in 1885, soon after the death of President Barrios. During all of that period and for a year later it was a source of constant trouble and annoyance to the Department as well as to this legation. The construction of the first 60 miles was contracted for with Messrs. Shea, Cornick & Co., who brought out large numbers of laborers from New Orleans, and others followed who were not contracted, but ostensibly in search of work on the railway.

The reports that reached me of the want, destitution, sickness, and mortality among those laborers were such that I deemed it my duty to invite the Department’s attention to the matter and to suggest that a naval vessel should be sent to Livingston to convey the destitute laborers to New Orleans, from whence most of them came. In accordance with my suggestion, the U. S. S. Swatara was sent to that port and many of the laborers found to be in a deplorable state of destitution were taken on board and carried back to New Orleans. The Commander reported to his Department that the prompt arrival of the Swatara at Livingston was, no doubt, the means of saving many lives.

Soon after these occurrences the new government of Guatemala failed to observe its contract with Messrs. Shea, Cornick & Co., who, in consequence, were compelled to make an assignment of their claims against the government to their creditors. The creditors through their [Page 93] syndics made two successive adjustments of the claims with the government, both of which were in succession repudiated, and then the matter became the subject of a long correspondence between the creditors, the department, and this legation, which did not terminate until a year later.

I have the honor to inclose an English version of the contract with Mr. Anderson, and to invite the Department’s attention to Article IX, relative to the right of the contractor to import laborers and the obligation of the Government to employ all the means in its power to enforce the contracts made abroad with such labor.

The means that would probably be employed for that purpose would be the imprisonment of the laborer or other arbitrary methods, such as are employed in the coolie system, and could not, I imagine, be permitted to be applied to laborers contracted in the United States.

The present government of Guatemala is, no doubt, disposed to carry out this latest contract in good faith, but there is no assurance that any other government which might succeed it would be favorably inclined.

I have, etc.,

Henry C. Hall.
[Inclosure in No. 749.]

Contract between the Guatemalan Government and John T. Anderson—Northern Railway of Guatemala.


Article IX.

The enterprise, with the exception of Chinese, has the right to import the number of workmen it may need, and the government will employ all means in its power to enforce the contracts they make with the enterprise; said contracts will be considered valid in the republic, although celebrated in a foreign country; this will be consigned in the respective contracts.