Mr. Baker to Mr. Sherman.

No. 802.]

Sir: I inclose herewith a printed copy of a contract, and a translation of the same, made by the Government of Nicaragua with the Atlas Steamship Company, limited, a British corporation, for the exclusive navigation of the San Juan River and Lake Nicaragua. This exclusive right [Page 422] is in contravention of a provision of the constitution of this Republic, which prohibits the giving of exclusive privileges for the navigation of any of the waters of the State. One of the most prominent features that will probably challenge your attention is the interference that this is bound to create with any treaty that may hereafter be proposed for the building of the canal. While this contract assumes to protect the present concession of the Maritime Canal Company, it makes no provision for a future treaty with the United States. This is submitted for the consideration of the honorable Secretary, and I await any observations upon the subject you may desire to make.

I have, etc.,

Lewis Baker.
[Inclosure in No. 802.—Translation.]

contract

No. 256.]

Greater Republic of Central America, State of Nicaragua. Official Daily, Third Epoch.

Manuel Coronel Matus, minister of public instruction, temporarily in charge of the office of public works, representing the Government of the State, and Louis Wichmann, representing the Atlas Steamship Company, Limited, according to the authority given him, have arranged the following contract with the idea of developing the steam navigation of Lake Nicaragua and the River San Juan del Norte, which each day becomes less navigable, and to facilitate the communication to the Atlantic, on which great interests depend, and with the expectation of developing the commerce and agriculture and thus improving the situation in the country.

1.
The Government, in consideration of the great expenses to which the Atlas Steamship Company, Ld., will be subject, gives it the exclusive right of steam navigation in the Silico lagoon for 30 years from the final approval of this contract, and the exclusive right for the same time of constructing tramways and railroads along the line, and at the best places to avoid the obstacles in the River San Juan.
2.
The company is obliged to construct on its own account a narrow-guage railroad which will place in communication a point at the Colorado Junction and another convenient point on the Silico lagoon, avoiding the navigation of the dry and most difficult part of the River San Juan, thus making more rapid the transit during the summer to the port of San Juan del Norte. The length of this line will be, more or less, five miles, and at the terminals of the line the company shall build houses and wharfs, which are necessary for passenger and merchandise traffic and other services.
3.
The Government will give the company $5,000, silver, for each mile of railroad constructed, in successive monthly payments of $1,000, from the time the governor of San Juan del Norte has been advised that the work of railroad construction has been begun. In case the work is interrupted the payments will be suspended until the work is continued.
4.
The Government declares this a work of public utility. Therefore, the company can appropriate the lands of private parties which are required for the right of way, observing the laws which govern such action. The company will have the right to occupy, without paying for the same, the national lands which the line crosses and a strip of land 100 varas wide for the entire length of the line between the expressed terminals.
5.
The Government, in the same manner, gives the company the right to cut in the national woods adjacent to Lake Nicaragua and the River San Juan, without payment all the wood which is required for the use of steamers, tramways, railroads, wharves, houses, shops, etc., etc.
6.
The Government concedes to the company the right to occupy, in the ports and places of transit, the national lots of land which are necessary for the establishment of warehouses, tramways, offices, shops, stations, etc., etc. It is understood that the lots will be selected satisfactory to the Government, and in case any of them belong to private parties the Government will authorize appropriation of the same. The company will pay all damages if the prices can not be agreed upon with the respective owners.
7.
The employees and operators of the company will be exempt from civil and military [Page 423] service and the authorities will extend this exemption in all eases that may he for the good service of the company.
8.
The steamers, railroads, tramways, stations, shops, houses, etc., etc., used by the company will be free from national and municipal taxation during the term of this contract.
9.
The company can import free of custom-house and local duties all machinery, tools, materials, coal, provisions, and other articles necessary for the service, excepting strong liquors, which will be subject to the strict fiscal regulations and orders of the minister of the treasury.
10.
The company will have the free use of the national telegraph for its own service.
11.
The railroad being finished from the Silico lagoon, the Government, if it thinks advantageous to its interests and to those of the company, will move the custom-house at Castillo to a point which will hinder, in the least possible way, the rapid transportation of merchandise.
12.
The company is obliged to make with its steamers at least three trips a month between Granada and San Juan del Norte and vice versa, and to touch at least once a month in all the inhabitant ports of the lake where the steamer Victoria can enter, or other steamer of the same tonnage. On all its trips the company will carry, without remuneration, the mails of the State. The indicated trips will be subject to an itinerary, the Government and public being notified, which can not be changed without three months’ notice. For each violation of the itinerary, which is not justifiable, the company will be fined from $25 to $100, which will be paid to the Government.
13.
The passenger and freight rates will be in the money of the country and the most moderate which the expenses of the company will admit. The Government will have the right of 30 per cent discount in the passage of its employees and other persons who go on account of the Government, and 50 per cent discount on its cargo and troops.
14.
In case of war the steamers of the company will be under the order of the Government, and they may be used for its account. On their return such losses and damages will be recognized as their use has occasioned, which will be valued by an engineer appointed jointly and by two arbitrators, one by each party. If the arbitrators do not agree on the damages a third will be appointed by them, and the decision will be final.
15.
The company is obliged, when it is possible, to begin work on all parts of the River San Juan so that navigation can be carried on during the entire year without interruption and with facility. If the work to carry on these improvements requires large capital the Government may make new concessions to the company, in accordance with the surveys and information presented, with the idea of deepening the river six feet in the shallow parts and opening the bar for steamers of heavy tonnage.
16.
The present contract may be transferred to another person or foreign company but in no case to another government, either all of it or part of it, directly or indirectly. In case it is turned over to a company which has its headquarters outside of this country, a representative must be maintained in this country amply instructed and authorized for all judicial and extrajudicial business, and the said company will be subject to the laws of the State of Nicaragua.
17.
The company will have an agent in Nicaragua to carry into effect the preceding clause. The differences which may occur concerning the interpretation and application of this contract will be subject to arbitration in the manner outlined in clause 14. The arbitration tribunal will be established at least 15 days after notification has been made by either side, and its final decision will be given within six months, which will be without appeal.
18.
If within three years from date the railroad from Salico lagoon to the River San Juan is not completed this contract will be considered null. The work of construction of the said railroad line must be commenced at the latest within one year after signing this agreement, and in case it is not done the company will lose its deposit of $5,000 gold, which it is obliged to deposit within six months in the national treasury of the State under penalty of forfeiting this contract. This deposit will be returned to the company on the completion of the railroad.
19.
This concession will not be an obstacle in the way of the contracts which the Government has relative to the opening of the Inter-Oceanic Canal along the same line, nor will it affect the contract for the same which has been made.
20.
It is understood that the Government can not, during the time of this agreement, give a concession to any other steamship company which may be established in Lake Nicaragua.

  • M. C. Matus,
  • Louis Wichmann,
    For the Atlas Steamship Co., Ld.
[Page 424]

Approval of the, foregoing contract.

Observing the foregoing contract, and agreeing to its contents, the President of the State gives notice of his approbation. Managua, June 8, 1897.

  • Zelaya,
    The Minister of the Treasury, in charge of the Office of Public Works.
  • Lopez.