Mr. Tillman to Mr. Olney.

No. 72.]

Sir: I have the honor to hand you herewith copy of letter just received from Mr. Santos. It would seem from this letter and from the telegram mentioned in my No. 70 of April 9, that the two legal questions involved under the convention are conceded to be in favor of Santos, and there remains nothing now to be done except to ascertain the amount of damages. I have not seen Mr. Santos, but it seems that the determination of the damages might have been left to Mr. St. John, as he had consented to act in the case.

I have, etc.,

James D. Tillman.
[Inclosure in No. 72.]

Mr. Santos to Mr. Tillman.

Dear Sir: Since my arrival here on the 26th of March, Mr. Dillard has handed me your letter in answer to my telegram addressed to yon from Bahia. I have been communicating with General Alfaro by telegraph on a basis of agreement to settle my claim. I proposed that an [Page 104] impartial person, to be agreed upon by both parties, should be appointed to fix the amount of indemnity to be paid by the Government of Ecuador. Knowing the exhausted condition of the treasury of this country, I proposed that the amount should be paid in two, three, or four dividends, as best suited Ecuador, paying interest at the rate of 6 per cent per annum from the date of the award, the payment to be made, as is customary in such cases, into the Treasury of the United States by the representative of Ecuador in the city of Washington, the first installment to be paid on June 30, 1897, thus giving time for the next Congress of Ecuador to appropriate the required amount. General Alfaro has answered accepting the terms in a general way, and proposed to appoint Dr. Rafael Polit, a well-known lawyer now residing in Guayaquil, to fix the amount of the indemnity in view of the proofs presented as to the arbitrary appropriation of property by the officers of the Government of Ecuador and the consequent damages. As special deference to General Alfaro, I propose only to claim $110,000, as stated in my declaration, interest at 6 per cent, and lawyer’s fees. As the proofs of the values taken by the officers of Ecuador at the time of my arrest are so convincing and so numerous as to leave no doubt whatever, I accept the appointment of Dr. Rafael Polit to fix the amount after the indemnity is decided upon; then the Government of Ecuador will propose the terms for payment.

The agreement, as I understood it, is purely to fix the amount of indemnity in a friendly way—the terms of payment. It is not my intention in any way to deprive it of its diplomatic character, and I will leave that matter entirely in your hands. I think in less than thirty days Dr. Polit will be able to give judgment.

Very respectfully, yours,

Julio R. Santos.