[Inclosure in No.
113.—Translation.]
Extract from the report of the minister of foreign
affairs.
Under its constitutional powers, the Government of the Republic resolved
to reserve for itself, as a means to increase the income of the
exchequer, the monopoly of the production and sale of ice in the
department of Panama.
To that end the minister of hacienda put up the new revenue at public
sale, and it was adjudged to the highest bidder, between whom and the
Colombian Government was celebrated a contract.
A company of the United States of America, called the Boston Ice Company,
had for some years back been importing large quantities of ice to the
Isthmus on its own vessels, and to such an extent that it had come to
have almost a monopoly of the sale of ice in Panama.
The Boston company, which did not care to be represented at the auction
sale of the privilege had in Bagota, considered the monopoly established
by the Colombian Government as a violation of its rights and complained
to the Government at Washington. The honorable legation of the United
States of America informed, this department that in the conception of
its Government the monopoly of ice in Panama was contrary to the law of
nations and to the treaty of 1846 now in force between the two
Republics.
Our Government has maintained the contrary, upon the ground that there is
no principle which can prohibit the establishment of monopolies, which,
like all fiscal resources, are the means employed by nations to obtain
from the public the funds necessary for their support.
It is true that in the specifications for bids at the auction sale of the
privilege there is a clause which obliges the grantee, if he be a
foreigner, to agree not to claim diplomatic intervention for the
settlement of differences arising from the interpretation and execution
of the contract. But that interpretation, far from being contrary to the
law of nations, is entirely in accordance with it. The clause simply
gives expression to the elementary principle that the courts and
tribunals of the nation in which proceedings of this kind are had, and
where their results must be realized, have jurisdiction of all lawsuits
arising from the contract.
[Page 259]
Such is the established principle of our law as to foreigners, and its
observance is so absolutely demanded that it can not be placed in doubt
without endangering the independence of nations.*
It is also true that in cases of denial of justice an appeal through the
diplomatic channel becomes a necessity, such action being a duty and a
right of states in behalf of their subjects or citizens.
But such exception is a necessary concomitant which there is no need to
express [in words]; and, so far as individuals are concerned, they can
renounce any rights whatever, provided they do not injure thereby those
of third persons. The Boston Ice Company, then, had full liberty to be
present at the public sale, free alike to natives and foreigners, and,
if its proposals do not figure in the sale, it was not because the
Government prevented it.
The arguments drawn from the treaty of 1846 to sustain the claim of
illegality in the creation of the monopoly and the sale of the privilege
turn upon the hypothesis already confuted, that the company had not the
full liberty to bid at the public sale.
Articles 2, 3, 7, 17, 18, and 35 of the treaty are cited to support this
view, but none of them are applicable to the present case.
Article 2 contains the most-favored-nation clause and could only relate
to this monopoly in case that Colombia had agreed with some other nation
not to monopolize the production and sale of ice in Panama, a thing
which has never happened.
Article 3 assures the liberty of commerce as to every kind of products,
manufactures, and merchandise. But this stipulation admits of an
exception intimated in the article itself and expressed in the fourth,
when the latter mentions articles of prohibited importation and illicit
commerce. So that the Government reserved to itself, as was natural, the
inalienable faculty to classify articles of import as either of lawful
or of illicit commerce.
This proposition will appear indisputable when it is noted that different
national, departmental, and municipal monopolies have existed in
Colombia since 1846 without any objection by the United States of
America that they were in violation of the treaty stipulations above
cited.
Article 7 plainly has no relation to the ice monopoly, since it merely
establishes the right of citizens of the United States to carry on
business in our territory by themselves or their agents.
Neither are articles 17 and 18 in point. They, indeed, while prohibiting
smuggling, establish freedom of commerce in all articles not contraband;
but, from the fact of specifying what articles are not contraband, it is
seen that such stipulations must have had exclusively in view the rule
for determining neutrality in time of war, commerce being, in effect,
free, in this limited aspect, in everything that can not be considered
contraband. More clearly, in said articles the only law considered is
the international law which declares lawful traffic in all merchandise
not contraband of war, and this does not imply that amongst articles
free by the law of nations there are not some, trade in which may be
prohibited by the public or constitutional laws of the respective
country.
But it is now demonstrated that no such exclusion took place, and that
the Boston Company abstained voluntarily from bidding at the sale.
If that company had a rightful claim for indemnity against the
Government, all the citizens of Colombia would have the right to make a
similar claim, since their condition can not be worse than that of the
citizens of the United States of America; all the individuals and
corporations of the United States which had carried on or were carrying
on the ice business in Panama at the time of the creation of the
monopoly could make the same claim; all the citizens of the United
States of America whose rights are the same as those of the Boston Ice
Company would have the same power; the subjects or citizens of the
Hanseatic cities, Spain, Great Britain, Italy, and the states with which
the Republic has existing treaties containing the most-favored-nation
clause would have the right to claim a similar indemnity; and, finally,
all foreigners, domiciled or transient, could make use of the same
privilege, since, conformably to our laws and practices, they all enjoy
among us the most perfect equality of rights. These consequences make
perfectly clear the incorrectness of the premise from which they are
drawn.
The liberty of commerce guarantied by the constitution, laws, and
treaties of Colombia ought not to be interpreted as the Boston Ice
Company claims it should be, since it would follow that all imposts,
taxes, and contributions which affect commerce would have to be
characterized as contrary to that liberty. In agreeing to such liberty
in its treaties, the Republic, like all civilized nations, could not be
obliged to [Page 260] render effective an
impossible situation, but only to guaranty the rights which the law
recognizes in the matter; so that, although these rights may be without
limit, they may be assured within the orbit pointed out by the laws. The
proof of this is that the Republic has prohibited, under its present
political organization, trade in arms and munitions of war, free before,
even to individuals; so that an absolute monopoly in the introduction
and sale of arms and munitions has been created, natives and foreigners
alike falling under the prohibition, and no one of the latter and none
of their governments has made any claim for indemnity.
