A few minutes before leaving the legation I received from Capt. J. C. Watson,
commander of the U. S. S. San Francisco, then at
Colon, a cable message informing me that he had received copies of
instructions, sent to me from Washington, dated the 12th and 24th of May,
concerning the Argüello case, and that he was ready to assist with all his
force. Unfortunately my latest Washington dates by mail were May 1,
therefore I was in the dark as to the instructions referred to; but I
assumed,
[Page 99]
for my purpose with this
Government on this occasion, that they were something pretty perpendicular,
containing a genuine American ring. Remarking upon Captain Watson’s cable
and the supposed tenor of my instructions referred to, I said that it was to
be deeply regretted that the recent course of Nicaragua toward Americans and
American interests, both in the matter of the canal and in affairs at
Bluefields and Rama, was of such a nature as to make a most serious
impression at Washington of the apparent unfriendliness of this
administration toward the United States, a great Government which is and
desires to continue to be a sincere friend to Nicaragua.
You express to me, Mr. Minister, your friendship for the United States, and
the President does the same; and then you jump on us with both feet and spit
in our faces. Your action in the canal matter has advertised to all the
civilized world your own lack of good faith and your indisposition to
protect the capital that would come bore and develop your naturally splendid
country. Nothing is so sensitive as credit; not even capital is so timid,
for credit—good faith—must go before capital. This is the rock upon which
capital builds. Your notice of the forfeiture of the canal concession, even
though it be upon a frivolous ground and one not warranted and not founded
in law, not only destroys the credit of the Interoceanic Canal Company but
it is the most ghastly stab under the fifth rib of the credit of your own
Government which could be inflicted by the keenest Damascus blade.
Your Government will, I am sure, Mr. Minister, withdraw the offensive notice
of forfeiture 5 but every hour’s delay is dangerous. I feel authorized to
say to you that President Cleveland, his Cabinet Ministers, and the
Senatorial Committee on Foreign Affairs are all awaiting with deep concern
the early and further action of the Nicaraguan Government, in both the canal
and the pending troubles at Bluefields. This is evidenced by the presence of
two powerful war steamers on your eastern coast. You must admit, Mr.
Minister, when you reflect candidly, that the United States has been most
forbearing and patient with your Government, and that their action toward
you has been in marked contrast with the brusque manner in which some of
your other good neighbors have dealt with you. I hope it is not true that
you have failed to appreciate this kindly spirit, that you have misconstrued
it, and that, therefore, you have ventured to treat us with a measure of
contempt which is usually only accorded to an adversary who is sadly lacking
in spirit, I am sure you could not have held this view, albeit your actions
might be so construed.
General Macauley then presented the case of the canal company to the minister
in brief terms, and we withdrew.
[Inclosure in No. 59.]
General Macauley to
the Minister of Foreign
Affairs.
Hotel
Supone,
Managua,
Nicaragua, May 30,
1894.
The Honorable el Ministro de
Fomento, Presente:
In behalf of the Maritime Canal Company of Nicaragua, which holds your
concession to construct the Interoceanic Canal, I have the honor to
present to you the following facts:
Article 14 of the concession provides, in brief, that within three
[Page 100]
years from commencement of the
work upon the Interoceanic Canal (October 8, 1889) the company shall
construct the Tipitapa Canal.
For many reasons—some of them certainly not the fault of the company—the
Tipitapa Canal has not been finished within the specified time.
On the 26th of April, 1894, the president of the Maritime. Canal Company
received in New York from Minister Horacio Guzman a copy of a letter
addressed on April 2 or 7, 1894, by Minister Gamez to to the “Agent of
the Interoceanic Canal Company” in “Granada,” reading as follows:
National Palace, Managua, April 7, 1894.
To the Agent of the
Interoceanio Canal Company, Granada:
In amplification of my communication of the 20th of September
last, I have the honor of stating to you that the representative
of Nicaragua in Washington, Dr. Horacio Guzman, has not carried
into effect up to this date the instructions given him to sue
the Interoceanic Canal Company in the courts of the United
States for its failure to construct a canal on the Tipitapa
River, as it agreed to do under article 14 of the contract
entered into with this office on the 23d of March, 1887, because
he did not want to render worse the sad condition of the
company, which it was desired to help, hoping that it might rise
from its present prostration; but the Government of Nicaragua,
being now convinced that the rights of Nicaragua may be injured
by a continuation of such a condition of affairs, and being
convinced that the said contract has already been forfeited by
default in compliance with one of its principal stipulations,
believes that it is the Government’s duty to avail itself of
article 55 of the said contract in order that a court of
arbitration may decide about the point in dispute.
My Government, as I have before stated, declares as terminated
the aforesaid contract, and protests that only for the purpose
of adjusting itself to the provisions of the said contract it
submits this point to the decision of arbitrators.
Therefore it appoints as arbitrators on the part of the Republic,
the lawyers, Messrs. Buenaventura Selva and Augustin Duarte, and
in case of the failure of any of them not acting, and any
impediment that may arise from this time to the date on which
the court may assemble, the lawyers, Messrs. Modesto Barioa and
J. Francisco Aguita, will act in the order in which they are
named.
I hope you will please acknowledge receipt of this present
communication, because from this date will commence to run the
four months that Said contract grants to the company for the
appointment of arbitrators on its part.
I am, etc.,
José D. Gamez.
The letter of September 20th, 1893, to which the above letter refers, has
not yet been received by our company, nor have we any knowledge of its
contents, and Minister Gamez’s letter above copied had lost nearly one
month before we received even a copy—the original not having yet reached
us.
And now, sir, in the most respectful and amicable manner, permit me to
suggest that whatever may have been the fault of our company in the
noncompletion of the Tipitapa Canal, the remedy sought to be applied by
Minister Gamez is not feasible, has no existence in the concession
itself, and I am certain will be pronounced by your friendly and
honorable Government as untenable and to be withdrawn and canceled
without delay.
Article 53 of the concession contains the five distinct and only grounds
of forfeiture of this concession, not one of them being in default and
not one of them bearing any relation to article 14 or to the
construction of the Tipitapa Canal.
That the concession may contain many agreements and stipulations upon
breach of which action or claim might rest, including article 14, is
perhaps true; but, as said above, there are only five permitting the
extreme penalty of forfeiture, and they are clearly and unmistakeably
set forth in article 53.
I purposely refrain from complicating this single, solitary question with
any other in any form, omitting all argument, counterchange, or
[Page 101]
discussion of any other point
as tending to direct attention from the remarkable sentence thus passed
upon our company and its great work. I have full faith that your
Government, in consideration of its friendly neighbor, the United States
(whose goodwill and confidence our company also enjoys), will promptly
remove this surprising obstruction, and permit us to go forward to
thorough and rapid success upon the conditions of the concession as they
actually exist.
We do not ask or suggest that you waive or abandon any right falling to
you under the articles of the concession. We are ready, separately from
the question of this attempted forfeiture, to consider in good faith and
act upon any claim you may wish to present, whether under article 14 or
any other, but we sincerely and respectfully protest that your sentence
of forfeiture, where no forfeiture can lie, gravely damages our progress
and tends in many ways to retard the prosperity of your own country, for
whose fame and happiness you would gladly do so much.
I conclude by giving you the most profound assurances that all clouds,
except this one, are dispelled from the company’s horizon, and that the
construction of the Nicaragua Canal now, without delay, is an absolute
certainty.
But primarily we must be released as quickly as possible from the shadow
of the mistaken conditions of the letter above referred to, and to that
end I submit the petition to your Government.
Pardon me if I modestly suggest, in conclusion, that a company which has
paid you $150,000 in gold and has expended over $3,000,000 under your
concession, might well invoke your kindly forbearance and its
continuance under more serious faults than yet appear against us in
Nicaragua.
Urging upon you that the emergency calls for your promptest action,
I am, etc.,
Daniel Macauley,
Agent of the Maritime Canal Company of
Nicaragua,
