Mr. Hunter to Mr. Hay.
Guatemala and Honduras,
Guatemala , November 12, 1898 .
Sir: Referring to the claim of R. H. May against the Government of Guatemala, I beg to submit the following:
It appears that in 1883 the Guatemalan Government conceived the idea of building a railroad from this city to the Gulf of Honduras, a distance of 195 miles. In the same year work was begun at Porto Barrios and pushed in this direction 134 miles to El Rancho, where construction ceased for the want of funds. This completed portion was, at Government expense, thoroughly equipped with rolling stock and all things necessary to put it in good running order, and then operated under lease, the last successful bidder being R. H. May, whose contract was signed on April 5 of the present year, and eleven days thereafter the new contractor took charge.
By the terms of this contract May agreed to operate and maintain the road for one year from above date for a monthly subvention of $35,000 and all revenues from the line and wharf at Porto Barrios. The contract may, however, be rescinded by either party giving the other two months’ notice. It is also stipulated that all questions arising under the contract should be settled by the laws of Guatemala and that no diplomatic interference should be permitted.
The affairs of the road seemed to run smoothly until the middle of September, when May came here and represented to me that all his accounts had not been paid and that he needed money with which to pay his men. [Page 651] The Government claimed as an excuse for delayed payments that the recent revolution and other demands had emptied the treasury. I urged a partial payment to relieve the situation, and on the 19th day of September May received $20,000, with a promise that other payments would soon follow. On the 22d May again appeared at the legation and informed me that a strike had taken place the previous day, and that all operations on the line had been suspended.
In order, if possible, to settle the trouble, I obtained for May on the same day (September 22) an audience with the President, and was present at the interview, which was quite animated, May contending that a strike had taken place, while the President held that May, and not the employees, had suspended operations.
The President, who seemed much exercised because of the suspension, wished to know how much it would take to pay the employees. May said that $58,000 would pay them to September 1 and $72,000 to September 21, the date of the strike. The President replied that while the Government had no money, he would procure the desired amount and order all accounts for extra work immediately audited and paid as soon as possible, provided the contract was rescinded, to which May agreed. This agreement was verbal. Immediately after the interview the President issued an order to the minister of fomento in accordance with his understanding of the agreement.
On September 30 May received a note from Jose M. Amerlinck, directing engineer, advising him that Martin Roberts had been designated to take charge of the road and to call at his office, etc. In accordance with this request, May called October 1 and conferred with the two chief government officials having supervision of the road and the new contractor. An affidavit of what occurred at the meeting is signed by the three persons named, who were present on that occasion. After this conference May, Roberts, and Amerlinck repaired to Zacapa, where May received the $58,000, but refused to turn over the road. He wired me that it would take $17,000 more to pay his men to September 21, the date of the strike. I saw the Government officials here and obtained for him this additional amount. After receiving this last amount he still refused to surrender the road.
Being fully convinced from reports received that no peaceful transfer would soon be made, Consul-General Beaupre and I conferred and thought best to visit the road unofficially and use our good offices to adjust matters. A muleback ride of 65 miles over a rugged, circuitous mountain trail brought us to El Rancho, the terminus of the road. We offered several suggestions to both parties, one which the Government rejected, and one by the Government which May rejected. Finding our good offices of no avail we returned to this city.
May soon followed and addressed to me a note protesting against the forcible seizure of the road on the part of the Government. I at once addressed a note to the minister of foreign affairs asking an explanation of the alleged arbitrary proceeding, to which the minister responded.
The Government claims that having complied with the terms of the agreement made by the President and May September 22 referred to, and the latter’s refusal to turn over the road in accordance with that agreement, it felt justified in taking possession in the manner stated.
May, however, puts a different construction on the agreement, and claims as his interpretation of it, a settlement of all accounts by cash [Page 652] or note, in addition to the amount stated as necessary to meet the pay rolls to August 21, before making the transfer.
As the Government construes the agreement one way and May another, and both state that I was present when the agreement was made, I feel it my duty to say that I was present as stated and certainly understood May to agree to turn over the road on receipt of the $58,000 and the prompt auditing of accounts for extra work to follow.
The subventions from April 16 to September 20 amounts to $180,833.33. Up to October 15 May received $172,824.62, $95,000 of which since September 19, the date I commenced using my good offices in his behalf. The balance due will not be known until his accounts from all sources are audited. The Government assures me that these accounts will be promptly passed upon and paid, and I have every reason to believe in the sincerity of this assurance.
It was quite natural for the Government to have felt anxious for a resumption of business on its national road, which has been interrupted for weeks, and over which nearly all foreign mails to and from Guatemala passed.
As proof that May was not discriminated against on the ground of his nationality, the new contractor, Martin Roberts, is a citizen of the United States.
In view of the foregoing, I feel that the Government intended no injury to May and that all his claims when audited will be paid.
I shall continue to use my good offices, and shall vigorously carry out any instructions the Department may see proper to transmit.
I have, etc.,