No. 909.
Mr. Bacon to Mr. Bayard.

No. 225.]

Sir: I have, been in this city over a month and have at length succeeded in getting his excellency, José Segundo Decoud, minister for foreign affairs, to enter into a protocol for the settlement of the Hopkins claim.

He was minister at the time the award was opened, and was also a member of the Senate when the former protocol was rejected and voted for it. He was, therefore, committed to it, and so expressed himself in our first interview, and agreed to enter into another, appointing a day for that purpose.

To my astonishment he advised me, a few days thereafter, that there was so much division and opposition as to the claim that he had resigned. I asked him to withdraw his resignation, as I regarded his services as almost necessary to Paraguay, at the moment, and that there was no sufficient reason for resigning in advance; that he was fully and openly committed to the claim, and it would be more consistent to enter into a protocol, have it submitted to Congress, and, if rejected, that would be the time to contemplate a resignation; but that, in a Republic, and especially in the United States, a resignation, under such circumstances, would not be expected.

Meantime, the President requested him to withdraw the resignation. He finally did so, and promised me to assemble the cabinet again for further consultation.

After the lapse of a week or so he said to me that the Government had entered into such contracts as would embarrass it in making the payments, as agreed in the former protocol, and proposed to pay only $10,000 cash, and the balance in four equal installments at six months each, extending through two years. I would not agree to this, and in fact to any alteration of the former protocol.

Having ascertained, however, that the Congress would most certainly reject the conditions stated therein, I proposed to accept $15,000 cash and the balance in three equal installments of $25,000 at six, twelve, and eighteen months, which was no great alteration, but enough to furnish grounds for Cabinet and Congressional approval. This proposition was finally acceded to, and a protocol (a copy of which is hereto attached and marked “Inclosure No. 1,”) signed in duplicate on the 21st instant. It was sent to the Senate on the 26th, and on yesterday, the 29th, that body asked from the President the correspondence between Mr. Decoud and myself.

Meantime the press is savage, dealing in abuse of Hopkins and the claim in general, and resorting to all manner of editorial shifts. Among others, begging the Congress to read a letter just received by one “Benites,” from Washington, from a lawyer retained by Paraguay, to the effect that the matter had been settled and Hopkins had no claim.

The Independiente went so far as to say that I had threatened Paraguay with a fleet—una escuadra Norte Americana—to which I sent an immediate and emphatic denial, and in reply the editor stated unblushingly that though I had not so said, still fleets were generally brought by powerful nations to coerce weak ones, and therefore it had [Page 1356] a right to say what it had said. Of course I do not notice the newspaper articles in general, but to an assertion so personal and offensive and one evidently intended and calculated to influence Congress, I deemed an instant denial imperative.

The constant recurrence of festivals in these countries tends greatly to retard business. In little over a month since my arrival here there have been six “fiestas,” two “pamperos,” and one public (state) funeral, which, together with five Sundays, aggregate fourteen days, or rather dies non.

I will advise the Department of future developments.

I have, etc.,

John E. Bacon.
[Inclosure in No. 225.]


Met in the office of the ministry for foreign affairs, Mr. John E. Bacon, chargé d’affaires of the United States of America, and his excellency José Segundo Decoud, minister for foreign affairs of the Republic of Paraguay, agreed, mutually, to terminate the old claim of the “United States and Paraguay Navigation Company,” in order to strengthen the bond of friendship, which both nations exert themselves to preserve and cultivate for their common welfare. And taking into account that this claim has been lately the subject of an extended correspondence, as also of several interviews and verbal discussions between the minister for foreign affairs of Paraguay and the chargé d’affaires of the United States of America, have agreed that, as a definite settlement, the Government of Paraguay shall deliver to the American legation the sum of $90,000 in gold, of legal currency in the Republic, upon the following terms:

Fifteen thousand dollars, in gold cash, to be paid in the present month of May.
Twenty-five thousand dollars, in gold, six months after date.
Twenty-five thousand dollars, in gold, twelve months after date.
Twenty-five thousand dollars, in gold, eighteen months after date.

All of these sums to be paid without interest.

The chargé d’affaires, Mr. John E. Bacon, manifests by this act, that, in the name of his Government, he accepts the above expressed sum, upon the terms stipulated, in full payment and satisfaction of all claim and demand whatsoever, on the part of the above-mentioned United States and Paraguayan Navigation Company.

In testimony of all of which they determined to set forth this definite arrangement, by the present protocol, signed in duplicate, one for each one of the parties, in both languages, Spanish and English.

  • John E. Bacon.
  • José S. Decoud.