On the morning of the 6th I had an informal and unofficial talk with
President Zelaya on the general subject suggested, without making known
to him the instruction contained in your cable message.
We hastily reviewed the arguments pro and con as to the claim that the
concession would end by limitation on the 24th of the current month. In
the course of this conversation the President assured me more than once
of his intention to act in absolute good faith toward the Maritime Canal
Company and toward the United States, under whose authority the company
is chartered.
At the close of the conversation the President requested me to submit to
him a memorandum of the statements I had verbally made to him. This I
did on the following day, marking the paper “unofficial memoranda.”
I inclose herewith a copy of these notes.
[Inclosure in No. 778.]
Unofficial memoranda regarding the date of expiration
of the concession to the Maritime Canal Company.
From a cable message which I have received from Mr. Sherman, our
Secretary of State, I am surprised to learn that apprehensions exist
that the Nicaraguan Government may declare the concession of the
Maritime Canal Company as having been forfeited for some cause not
stated.
I prefer to believe, Mr. President, that the apprehension referred to
is not well founded, that Nicaragua will continue to act in the
future as she has acted in the past while under your guidance, in
absolute good faith toward this company, notwithstanding the fond
wishes of the people of Nicaragua, of the people of the United
States, and of the commercial nations of the earth have not been
realized, because of the financial crisis which swept over the
civilized world during the last few years.
You have always consistently and frankly assured me that your
Government would do nothing to embarrass the efforts being made to
raise the means to complete this enterprise, which, in the words of
Mr. Sherman in a recent speech delivered on the floor of the United
States Senate, “will be the greatest achievement for the good of
mankind that is likely to happen in the course of a hundred
years.”
Secretary Sherman is no stranger to you. Mr. President. As member of
the United States Senate, as chairman of the leading committee of
that body, and in his capacity as a citizen, he has at all times
been a loyal, able, and persistent advocate of the building of this
canal by Government aid. You know he stands with you and by your
interests. Therefore you can afford to treat what he says with
respect and confidence. He states in a cable which I hold in my hand
that the concession of the Maritime Canal Company does not expire
until October, 1899.
Let us suppose that the Nicaraguan Government proceeds to declare the
concession forfeited. The other party in interest must, in
self-defense, join issue with you. Who is to decide? Will you
wrangle until October, 1899, or will you propose arbitration? In
either case, nothing has been done to promote the one great
object—the building of this canal. Valuable time has been lost,
possibly bad blood created, and expenses incurred—nothing more.
Your excellency will remember—and it is doubtless a matter of record
in the archives in this palace—that, after some differences which
had sprung up between Nicaragua and the Maritime Canal Company had
been adjusted in the year 1889, your Government officially approved
the surveys of the company and the work already done. By this
agreement an official recognition was given that the work of
construction actually commenced on the 8th of October, 1889. From
that date the contract had ten years to run. This term will not
expire until the 8th of October, 1899.
This is the view held by Mr. Blaine, who was also your friend, and it
is the view held by Secretary Sherman, as evidenced by his cable
message.
It may be profitable for us to make a brief review of the
circumstances attending the commencement of the work, and therefore
the beginning of the concession.
“The provisions of Article XLVII of the concession, relating to the
final surveys and the location of the line of the canal by a
commission of competent engineers, two of whom were to be appointed
by the Government of Nicaragua, have been fully complied with, and
the Government of Nicaragua has officially issued its decrees to
that effect. The company undertook at its own expense the final
surveys of the ground and the location of the line of the canal by a
commission of competent engineers, two of whom, Messrs. Blanchet and
Climie, were appointed by the Government of the Republic, as
required by the concession.
“This commission completed the final surveys and the location of the
canal, and their plans were afterwards signed, indorsed, and
approved in New York by Mr. Blanchet, who went on for the purpose of
assisting the engineers in tabulating and formulating the data which
they had obtained during the months which were spent on the ground.
The plans were then forwarded to the Government of Nicaragua, which
raised certain objections in reference to the same, claiming that
the surveys relating to the Tipitapa Canal were not as complete as
were required. The plans were elaborated so as to conform with these
objections, and were then returned to the Government, but Nicaragua
having taken exception to the concession which had been obtained by
the company from Costa Rica, refused at first to ratify and approve
the same, on the ground that they did not show that the entire line
of the canal would run through Nicaraguan territory only.
“On the strength of this objection, they refused to allow the
expedition which had been sent down in June, 1889, to commence work
on the canal, and this state of affairs existed until October 8,
1889, on which date the Government issued a decree approving and
ratifying the final surveys and plans as submitted, and authorizing
the commencement of the work of construction.
[Page 419]
“The same article of the concession granted to the company a term not
exceeding one year in which to commence the final surveys for the
canal, and one year and a half additional time for completing them.
These terms were to begin to be counted on the date of the
ratification of the contract, which took place on April 24, 1887, so
that the period within which to commence the final surveys expired
on April 24, 1888, and the time within which to complete them
expired on October 24, 1889.
“As already stated, on October 8, 1889, the Government decreed that
the plans had been commenced and completed within the said periods,
and the same were accepted.
“So it will be seen that the company has fully complied in every
respect with the provisions of the concession in reference to these
plans.
“Article XLVII of the concession also provides that within the period
commencing April 24, 1888, and expiring October 24, 1889, the
Maritime Canal Company of Nicaragua was to be organized and the work
of construction commenced. The canal company was incorporated by act
of the United States Congress in February, 1889, and its board of
directors organized on the 1st day of May, 1889, and, as already
stated, the Government admitted in its decree that the work of
construction was commenced on the 8th day of October, 1889. The
concession required that during the first year of the work, viz,
from October 8, 1889, to October 8, 1890 (the said work having been
commenced, as admitted by said decree, on the 8th day of October,
1889), at least $2,000,000 should be expended, and on the ___ day of
___, 1890, the Government having appointed two commissioners to
ascertain what moneys had been expended on the work, issued another
decree to the effect that this provision of the concession had been
fully complied with.
“It appears, therefore, that the Government has admitted that every
provision of said Article XLVII has been complied with by the
company and that the corporation has no further obligations to
perform under this article of the concession.
“Article XLVIII of the concession grants to the corporation a term of
ten years for the construction, completion, and opening of the canal
for maritime navigation. That is to say, the concession grants to
the company a period of two years and a half within which to
commence and complete the final surveys, to organize the Maritime
Canal Company of Nicaragua, and to commence the work of
construction, and grants them an additional term of ten years in
which to construct, complete, and open the canal. As already stated,
the first term of two years and a half would have expired on the
24th of October, 1889, so that the additional term of ten years
granted will not expire until the 24th of October, 1899. If,
however, it should be claimed that the said term of ten years for
the construction of the canal was to commence from the date on which
the work of construction was begun, irrespective of whether or not
the aforesaid term of two years and a half had expired, then the
said term of ten years will expire on the 8th day of October, 1899,
instead of on the 24th day of October, 1899.”
This unofficial memoranda is respectfully submitted, as you
suggested, for your excellency’s personal convenience.
In conclusion, I will express my gratification at the whole tone of
friendliness toward the prosecution of the canal enterprise under
American auspices which characterized your conversation with me
yesterday, and especially for the personal assurance yon were
pleased to give me that the franchise of the Maritime Canal Company
would not be interfered with by the Nicaraguan Government until it
lapses by its own limitation in October, 1899, unless, to use your
own words, “the Government of the United States may desire to make a
contract direct with this Government to build the canal itself.”
