Mr. Egan to Mr. Foster.

No. 326.]

Sir: I beg to refer to my No. 318 of 2d instant in relation to the question of compensation in the Baltimore case, and to say that on receipt of your telegram of 5th, I had an interview with the minister of foreign relations on the matter, and brought to his attention the importance of making a frank and friendly offer, which would be so much more conducive to friendly relations between the two countries than a protracted litigation. He on the other hand contended for the convenience of arbitration, especially because such a mode of arrangement would not call up any discussion in Congress; however, he finally said that if the United States would not willingly accept this mode of settlement Chile should adopt the other. On the 8th instant we had another interview, when the minister asked me if a sum of $50,000 would be [Page 63] accepted by the United States. I made reference to the sum paid by the United States to Italy in the New Orleans lynching cases, and expressed the opinion that under all the circumstances of present case, so different from those of New Orleans, the indemnity should be $100,000. The minister promised to consult with his colleagues of the cabinet and give me an answer at 3 o’clock on 9th instant. He was very positive, however, that the Shields case could not be included in this arrangement on account of the difficulties that such inclusion might cause in the Chamber of Deputies.

On 9th instant, on account of the impossibility of having a meeting of the cabinet, the minister was not prepared to give a definite answer, but stated that his excellency the President had suggested that the President of the United States might be asked to name the sum to be paid. To this I replied that I did not think the President would undertake to do so, as he would practically be in the position of dictating the sum that Chile should pay, and that such a step would take away in great measure the spontaniety of the action of the Chilean Government. We arranged another interview for 11th instant. When we met on 11th instant the minister informed me that the question had been discussed by the cabinet and the conclusion had been arrived at to make an offer of $75,000 in gold, which I promised to communicate and recommend to my Government. Upon receiving assurance of the acceptance of this proposal the Congress will at once be asked to vote the amount named.

On 8th instant I telegraphed and on yesterday I forwarded telegram conveying the offer of the Chilean Government.

In my interview of yesterday I referred again to the general list of claims and the minister promised to give them his consideration with a view to arranging an arbitration as soon as we shall have definitely arranged the case of the Baltimore.

I feel it my duty to say that nothing could be more cordial and friendly than the manner in which the minister, Señor Don Isidoro Errazuriz, has treated this whole matter of the Baltimore question, and I have expressed to him, officially and personally, my acknowledgments for the friendly spirit he has shown.

I have, etc.,

Patrick Egan.