No. 83.
Mr. Hall to Mr. Bayard.

No. 755.]

Sir: With reference to and in continuation of my dispatch No. 754, of the 15th, I had the honor to transmit to you, on the 19th instant, a telegram announcing information received by me from the President of Nicaragua, to the effect that Costa Rica has withdrawn objections to the possible operations of the ship-canal surveying party on Costa Rican territory.

The translated text of President Carazo’s telegram is as follows:

Minister Hall, Guatemala:

The President of Costa Rica has addressed me the following telegram:

I have the pleasure to inform you that, at the solicitation of the canal company, my Government has granted permission, under this date, for making the necessary surveys in Costa Rican territory for locating the line of the canal.

[Page 102]

Señor Esquivel, minister for foreign affairs of Costa Rica, under date of the 2d ultimo, addressed a note to Señor Zavala, minister for foreign affairs of Nicaragua, in which be confirms and reiterates a former protest against the present interoceanic canal concession, granted by Nicaragua to Messrs. Menocal and associates, as an infraction of article 8, of the treaty of 1858, for the reason that the consultative voice of Costa Rica had not been heard.

In regard to the treaty of 1858, Señor Esquivel claims that until it shall have been declared by the arbitrator to be null and void, its observance is binding upon both countries, and that, even in such event, it will remain in force until the question of boundaries, which must result from the arbitrator’s award, shall have been settled.

He arraigns the canal concession upon the ground that the rights of Costa Rica to navigate the San Juan River, the right in common with Nicaragua to the Bay of San Juan del Norte (rights which Nicaragua has not conceded nor has Costa Rica possessed), are attacked and impaired thereby. He also alleges that the completion of the canal will result in grievous injury to the territory of Costa Rica, to her commerce, and to her river routes of communication; that the San Juan will be rendered useless for Costa Rican navigation; that the courses of Costa Rican rivers will be changed, and that many other grave injuries will be done to that Republic.

In the face of these charges he declares that the Costa Rican Government has no desire to create obstacles to the construction of the canal; that it is an enterprise of world-wide importance and interest, and that for a long time it has been the great desideratum of all Central American patriots.

These charges are, beyond a doubt, unfounded, and I am not aware that they have ever been made before; especially the charge that the courses of Costa Rican rivers will be changed and their navigation injured. The only effect the elevation of the waters of the San Juan to the level of the lake, as has been proposed, could have would be to make some of the Costa Rican streams which empty into it navigable during the whole year, whereas now they are mere creeks, during the so-called dry season. That section of Costa Rican territory near to the lake and the San Juan River is now almost wholly unproductive and sparsely inhabited. The completion of the canal would no doubt render it as valuable as any portion of Nicaraguan territory through which the proposed canal will pass. So well convinced of this fact were the prominent citizens of Costa Rica, as I reported to the Department in my dispatch No. 300, of January 12, 1885, that immediately after the signing of the canal treaty of 1884 the then President Fernandez and the now President Soto, as well as many other notabilities of that Republic, hastened to secure large tracts of public lands near to its proposed route.

The Nicaraguan minister, Señor Zavala, in reply to Señor Esquivel, expresses surprise and concern at receiving this uncalled-for protest in regard to a question which, having been submitted to arbitration, is beyond their discussion, but is again brought up at the very moment when a corps of engineers, charged with making the final surveys of the route, is about to arrive in Nicaragua, and that wire it not known that the Costa Rican cabinet is guided by enlightened counsels, it might well be supposed that the protest has no other object than the creation of obstacles to the consummation of a work of great interest, upon which the Central American States found all their hopes for the future, and that this conduct of Costa Rica is in complete opposition to that which it formerly observed whenever the same subject has been discussed.

[Page 103]

He further reminds the Costa Rican minister that the canal concession recently granted to Señor Menocal and associates is essentially the same as the one granted to same parties in 1880, to which Costa Rica made not the slightest objection; on the contrary, it accepted the idea, suggested by Nicaragua, to join with the other Central American States in offering to the company a guaranty of 3 per cent, profits upon the capital to be invested in the enterprise; thus approving and assenting to the legality of all that Nicaragua had done in granting the concession. The Government of Nicaragua is therefore at a loss to understand what can possibly be the motives of the Government of Costa Rica for protesting against acts which have already received its approbation.

The rejection by the Nicaraguan Congress of the treaty of July last between those governments has evidently aroused a feeling of deep resentment on the part of the Costa Rican Government, which will make any mutual settlement next to impossible.

I have, etc.,

Henry C. Hall.
[Inclosure 1 In No. 755.—Translation.]

Señor Esquivel to Señor Zavala.

Mr. Minister: On the 14th of May of the current year the Costa Rican Government, through this department and the worthy medium of your excellency, communicated to that of Nicaragua that it did not consent to the infraction of article 8 of the treaty of 15th April, 1858, committed by the Government of that Republic in entering into a contract for the construction of an inter-oceanic canal without having heard the consultative voice of the Government of Costa Rica, which had protested against such contract, that the just rights of the Republic may in no wise be prejudiced.

In reply to that protest, your excellency in a note, dated the 23d of June was pleased to state that the Nicaraguan Government had no desire to reopen a discussion in which both countries had been so long engaged, which is submitted to arbitration, adding that it sustains the nullity of the treaty of 1858 and that the instructions your excellency had received were limited to a manifestation that the Government of Nicaragua did not consider itself bound to solicit the consultative voice of Costa Rica in regard to the disadvantages which the negotiations might possess for the two countries, using the words of article 8 of the said treaty, and that in the event of the treaty being declared valid, that will be one of the points which would be submitted to the decision of the arbitrator.

After the communication to which I allude, those days followed in which the hope was entertained that the differences between Costa Rica and Nicaragua would be arranged by a proposed conference of the two presidents. To-day that hope has vanished in consequence of the rejection of the treaty of Managua. My Government is not only in the position of confirming its former protest, but of amplifying it upon reasons based upon a study of the contract concluded between the Government of that Republic and Señor Aniceto G. Menocal for the opening of the interoceauic canal.

It has always been clear to my Government that the treaty of 1858 is synallagmatic. It became, in this Republic and in that a law, and as such was observed during long years. It can not be held to be null and void at the will of one only of the contracting parties. The question whether the treaty is valid or not is submitted to arbitration, and my Government tranquilly awaits the arbitrator’s decision. Until that treaty, which is revested with extraordinary solemnities, shall have been declared null, its observance is binding upon the two Republics.

There is still more upon this point. Even in the case that the arbitration should declare the treaty of 1858 to be null, which my Government really does not expect, according to the convention concluded in Guatemala it must continue in force until it shall have been definitely settled by treaty or by new arbitration, what will then become a question of boundaries; an old and grave question which the treaty of 1858 cut short, and about which the opinions of our respective Governments are wide apart.

[Page 104]

Under these circumstances your excellency’s Government entered into a canalization contract without hearing the Government of Costa Rica, notwithstanding the stipulations of the treaty of 1858, and notwithstanding that the contract to which I allude profoundly injures the national interests of this Republic, which, according to the treaty, is riparian in a part of the right bank of the San Juan; it has perpetual rights of navigation on this river and common right with Nicaragua in the Bay of San Juan del Norte, and its boundaries on the Pacific side extend to the central point of the Bay of Salinas. Failing to obtain the positive right arising from the treaty of 1858, Costa Rica supported by her legitimate titles, would be restored to her former boundaries marked by the lake, the San Juan River, and the River La Flor.

These precedents being established, I pass to the contract between that Republic and Mr. Menocal. Several of its clanses, as well as the surveys made up to to-day, indicate that the San Juan River will serve as the bed of the projected canal; that the banks of the river can be occupied, the mouth of the river changed, and the courses of other rivers running into Costa Rica territory, and in which she has indisputable rights, changed. The right to navigate the San Juan, the riparian rights to the same, and the right in common with Nicaragua to the Bay of San Juan del Norte are attacked and impaired by the contract to which I al ude, and its execution would result in grievous injury to the territory of this Republic, to its commerce, and to its river routes of communication.

It is true that it has been agreed that the excavations for the interoceanic canal are to be made in Nicaraguan territory, but it is none the less true that without violating that principle the waters of the San Juan can not be made use of, so that it will he rendered useless for the navigation to which Costa Rica has aright. Enormous modifications are to be made in the bays, and the present courses of Costa Rican rivers are to be changed and in this way grave injuries will be done to this Republic, ad greater still should the canal company change the traced route in virtue of the freedom of action which the contract I refer to concedes them.

For all this the Government of Costa Rica is under the necessity of confirming and does confirm and extend her former protest, and will not consent at any time that the excavation of the canal shall prejudice the rights of this Republic, whether by taking a part of her territory or the waters in which she has the right of navigation, or by modifications of the bay in which she has a common right, or by deviating the rivers that run in Costa Rican territory.

My Government is far from wishing to create obstacles to the canal enterprise; no one can attribute such intentions to a progressive administration, animated by Central American spirit, but it is its strict duty to maintain unharmed the rights and prerogatives of the country whose destines are confided in it.

Aware of the immense utility of an interoceanic canal, an enterprise which may be considered of universal importance, and which has for a long time been considered the desideratum of Central American patriots, my Government has always been and is disposed to hear propositions respecting the part that pertains to it in a work in which nature and her laws give joint rights to this Republic.

Notwithstanding, however great may be the importance of the projected canal, and although the construction thereof can count upon its sympathy, my Government can not consent to the carrying out of the work to the sacrifice of this nation, and it considers that the hour has arrived to formulate the present protest which the Government of your excellency should receive in no other light than as the fulfillment of the obligation of mine ever to preserve harmless the rights of Costa Rica.

I improve, etc.,

Ascension Esquivel,
[Inclosure 2 in No. 755.—Translation.]

Señor Zavala to Señor Esquivel.

Mr. Minister: With deep concern and not without surprise I have received the courteous note of your excellency, dated 2d November last, substantially confirming and amplifying your protest of the 14th of May of the present year against the canal concession to Mr. Aniceto Menocal, because the consultative voice of that Government had not been heard.

Indeed, Mr. Minister, that new and uncalled for protest upon a subject which, is already beyond the discussion of our respective Governments, it having been submitted to arbitration, is again brought up at the very moment when a corps of engineers charged with making the final studies for locating the line of the interoceanic canal, is about to arrive at our shores; it could not otherwise than cause surprise and unfavorable [Page 105] impression upon my Government, because if it were not known that the deliberations of the enlightened Costa Rican cabinet are guided by an elevated spirit, it might be supposed that it was intended to create obstacles to the execution of a great work of universal interest, upon which these countries base all their future hopes. Moreover, it is in complete opposition to the conduct formerly observed by that Government, whenever this enterprise, of such vital importance, has been discussed.

In the opinion of my Government the note of this Department of the 23d June, in reply to that of your excellency of the 14th of May last, sufficiently explains its ideas upon the question submitted to arbitration, and its purposes, whatever may be the nature of the award, should have completely tranquillized the Government of your excellency.

Unless the Government of Costa Rica wishes to withdraw from the cognizance of the arbitrator, the question pending in regard to the validity of the treaty of 15th April, 1858, any protest or allegation in regard to rights to be derived from that treaty would be out of place because based upon a document whose substance is under judicial consideration; nor is this new arrangement justified by the circumstance that the efforts of both Governments to arrange the difficulty directly have failed, inasmuch as the proposed treaty of 26th July last contains a provision therefor in the event of its not being projected; and, moreover, the contracting parties agreed therein to submit to the arbitrator’s award.

The present reply, therefore, must be limited substantially to a repetition of the note of this department of the 23d of June last; but I deem it not out of place to make the following observations:

The canal concession lately granted to Mr. Menocal is essentially the same as the one granted to the same party in 1880. In the former as well as in the present concession the engagements of Nicaragua were limited exclusively to her own territory and waters. So true is this that your excellency’s Government in a note dated the 24th June of the same year (1880) recognized that in the contract referred to the boundary line as determined by the second article of the treaty of 1858 had been respected; a declaration the more honorable for Nicaragua, and an irrefutable proof of the spirit of harmony and fraternity which animated her Government, inasmuch as for a long time previous to the date of that concession my Government had persisted in the nullity of the referred to treaty. Subsequently the Government granted an extension of time for carrying out that contract., and not only the Government of your excellency remained silent upon the points now referred to in its reiterated protest, but in 1884 it accepted the idea of offering a guaranty to the same association of 3 per centum upon the capital invested in the enterprise, thus approving and assenting to the legality of all that Nicaragua had done in granting those concessions.

With these antecedents my Government is unable to understand upon what motices that of your excellency has decided to protest against perfectly legal acts which have already received its approbation.

Nicaragua has sustained the insubsistence of the treaty of 1858, because it has never been perfected, and she is convinced that the arbitrator will declare it to be null, for the reason that it is a doctrine current with writers upon international law that a compact which is void does not cease to be void even when it may for a time have been observed. Notwithstanding that treaty is now submitted to an arbitrator’s decision, Nicaragua would not now attempt to carry her pretensions of dominion to the Salto River, to which her primitive rights extend; neither is she disposed to consent that Costa Rica shall exercise rights dependent solely upon the validity of the treaty, much less when the treaty is interpreted in the sense maintained by the Government of your excellency.

In the opinion of my Government any discussion in regard to the rights of Nicaragua and Costa Rica in the case provided for by article 8 of the Arbitration Convention of Guatemala is premature, but I must at once say to your excellency that the article mentioned refers to a period subsequent to the arbitrator’s declaration; it says nothing in regard to the rule that must be observed previous to that decision; it respects the established status quo, otherwise it would give temporary validity, although in appearance only, to a treaty which should have been declared insubsistent, while the interpretations which each party would give to its stipulations would bring us back to the same or a worse situation than the one we are trying to get out of.

I can not let pass without observation the opinion expressed in your excellency’s note wherein you state “that the works of the canal would result in grievous injury to the territory of Costa Rica, to her commerce, and to her river routes of communication, and that the right to navigate the San Juan, the riparian rights to the same river, and the right in common with Nicaragua to the Bay of San Juan del Norte are attacked and impaired.”

Those rights, if they should become effective through a declaration of the validity of the treaty of 1858, would never give Costa Rica the right to deprive Nicaragua of her free action as lord and owner of the territory and waters.

On the other hand the same contract establishes that in whatsoever way the work [Page 106] of the canal may he carried out, the canal company is under the obligation to canalize the lower San Juan and to re-open the bay so that the right of navigation, which by the treaty would pertain to Costa Rica, far from being impaired, would be benefited by the construction of this work. From this stand-point the protest is still less explicable.

Having made these observations, which my Government has deemed indispensable in fulfillment of the high duties confided to it, and which the Government of your excellency with its enlightened judgment will appreciate in their full value, it remains for me to say to your excellency that they do not lessen in any manner the vehement desire of my Government to see our old differences cut short forever, and that the cordial harmony existing between the two Republics may remain inalterable. With these purposes, I have the honor, etc.,

Adrian Zavala.