Mr. Olney to Mr. Sleeper .

No. 259.]

Sir: I duly received Mr. McKinney’s dispatch No. 200, of November 28, 1896, inclosing a copy of Minister Holguin’s note of November 10, 1896, and of his reply in relation to the claim of the Panama Star and Herald against the Government of Colombia.

This note of the Colombian minister is virtually a repetition of his report upon, that claim, a copy of which was forwarded to the Department on July 30, 1896.

Its conclusions of law are utterly at variance with well-established principles and can not be seriously considered, while the statement of facts therein contained are contradicted by the entire history of the case. The pretense that the suppression of the Star and Herald was the act merely of Governor Santo Domingo Vila, for which he, personally, should be held responsible, and not the Government of Colombia, has been denied in every instruction sent by this Department, and you will please inform that Government that this contention will not be again considered.

Secretary Bayard on May 15, 1886, directed a protest against the suppression of this American newspaper, holding Colombia responsible for the acts of General Vila, its civil and military governor of the national department of Panama, who, as subsequently shown, was also a secretary of state duly commissioned for that department. That the suppression was allowed to continue its full term and that the act was [Page 228] wrongful are among the admitted facts in the case. Secretary Blaine on January 31, 1890, in his letter to Minister Hurtado, said:

Although that action was manifestly arbitrary and wrongful, and has never been defended, the suspension was permitted to continue for two months. It was attended with serious detriment, not only to the rights of the company under the treaty as an American corporation, but also to its pecuniary interests.

He added:

It is now nearly four years since the Star and Herald was suspended, but the company has been afforded no redress at the hands of the Colombian Government for the great wrong inflicted. Such redress, it is thought, should now be tendered.

On February 11, 1895, my immediate predecessor, Secretary Gresham, in a note to Mr. Rengifo, said that the suspension was not the mere unauthorized act of General Vila, but that of the Colombian Government, which it was impossible for it to deny, and that this suspension “was an entirely arbitrary act of executive power.”

Now, after almost eleven years’ delay, the idea is suggested by Minister Holguin that the Star and Herald was not an American enterprise nor entitled to remedy as such for the wrong inflicted upon it. The allegations upon which the wrongs to this American newspaper were at first defended were denounced by Secretary Bayard as frivolous. This new evasion seems to be an effort to further trifle with the subject.

Colombia was originally officially notified by instruction of this Department of May 15, 1886, a copy of which was delivered to that Government by Mr. Jacobs, and again on January 31, 1890, through its minister at Washington, that the Panama Star and Herald was a company of American citizens, incorporated under the laws of the State of New York, and as such entitled to our protection. It was scarcely necessary to give this notice, as the charter was recorded both at Panama and Bogota, and the Colombian Government had accorded it the privileges authorized by law to such foreign corporations for the term of fifty years. Still further, the Colombian Congress, by resolution, had publicly thanked the Star and Herald as an American paper for its friendly conduct. President Nuñez even exempted it on September 15, 1885, from an order applying to other newspapers in the republic, “principally as a demonstration of appreciation of the United States.” Throughout the diplomatic correspondence in this claim until now the American nationality of the owners of the Star and Herald was admitted by Colombia, the only defense set up being that under our treaty the consequences of what Minister Hurtado termed the unjust suspension of this paper should rest and be allowed “to fall heavily on its responsible author.”

The decadence and the final sale of the local property of this once prosperous journal seems to have dated from its arbitrary suspension, and the assertion that because of the death of its president or the sale of its printing establishment the claim was at an end is absurd. Equally absurd is the attempt to evade payment by contending that the authority of the corporation given to Mr. Leonard Meyers to represent this reclamation died with the death of Mr. Spies, of New York, its first president, or because one of its officers and its manager resided in Panama. Minister Holguin does not contend that this claim was sold to the person who, he says, is now publishing the Star and Herald. To remove all doubts the alleged purchaser of that privilege, an American citizen, has placed on the files of this Department his [Page 229] authority, if any he has, to Mr. Meyers to represent the claim. The Star and Herald corporation is a legal “person” in contemplation of law, and is not to be deprived of its just compensation and damages by technicalities unknown to the law.

The only question then, is as to the proper amount of indemnification in this claim, and I invite your especial attention in this connection to Secretary Gresham’s note to Mr. Rengifo, of February 11, 1895, and repeat for your instruction that portion relating to the acceptance of a compromise offer. He said:

This Government can not believe that Colombia, on a reconsideration of the whole matter, will deny its liability to make the claimants a fair indemnity. The amount of the indemnity is another question. Although $91,000 has heretofore been asked, with the approval of this Department, the claimants announce their readiness to accept a compromise offer approximating what is right. This Government feels itself entitled to expect such an offer from your Government at an early day, and to insist that this matter, already so long delayed, be brought to a satisfactory conclusion.

On May 6, 1895, your legation wrote Secretary Gresham that the Colombian minister for foreign affairs requested such offer to be made by claimants, stating that the belief that for reasonable amount the claim could be settled without difficulty. In pursuance of this communication the claimants authorized Mr. Meyers to say that in view of the friendly relations between the two Governments they would meet Colombia halfway. When, however, this disposition was made known at Bogota your legation reports the attempt of Minister Holguin to deny that the suggestion of a settlement had been made by Colombia. And now, after 11 years, comes the assertion that the Star and Herald papers suffered no loss, as their types were used during the suppression for printing a newspaper under another name.

I am informed that during the suspension the types and printing establishment were leased to a German subject, Mr. August Kruger, who published with them a paper called the “Evening Telegram,” and something was saved in this manner to the owners of the Star and Herald. Of course, it was not the same newspaper, nor known as such, or General Vila would have closed it at once.

The Panama Star and Herald, and the edition called “La Estrella de Panama,” were published in several languages, with a very large circulation and advertising lists, not only in Colombia, but abroad. It needs no corroboration that, as stated by claimants, subscribers on the coast and elsewhere, as well as advertisers, sought other papers in the meantime, many of them never to return. If one of the large New York papers were discontinued for two months the result need not be figured; and in a country where revolutions were frequent the fear of renewed suspensions was a legitimate one. Claimants’ assertion that the wrong complained of led to great loss and final suspension is probably true, as their journals had prospered during previous years.

Even if the pretext now set up could be entertained or an accounting deemed possible after all these years’ delay, caused by Colombia itself, all controversy as to amount can be avoided by the very liberal terms which the claimants now offer. They have agreed, if payment be made at once, to accept in full settlement one-third of the sum due under their claim, which in its entirety has been approved by this Department. This, however, with the understanding that, if not acceded to promptly, no reduction whatever will be made. You will [Page 230] please remind the Colombian minister for foreign affairs that among the items of damage in the reclamation of the Panama Star and Herald is one of $30,000 for injury to the good name and business of the papers. This is entirely aside from the certified losses in subscriptions, advertisements, sales of copies of the daily and weekly editions, and of expenses incurred.

In my opinion this is a very reasonable compensation for the wrong and injury done.

You are instructed to present this offer at once and urge a final answer to the proposition, which you are requested to telegraph to this Department. * * *

I am, etc.,

Richard Olney.