Mr. Hunter to Mr. Hay.

No. 519.]

Sir: Referring to Department’s instructions No. 299, of November 27, 1900, with inclosures as stated, relating to the claim of Siegfried Koenigsberger for certain moneys confiscated by the Guatemala customs authorities and for the annoyance and loss attendant upon the action complained of, I have the honor to submit the following report:

It appears that Gustave and Siegfried Koenigsberger, who are brothers, the former a German subject and the latter a naturalized American citizen, have been for the past ten years engaged as partners in the broker business in this city.

On the morning of December 7, 1899, these men left here on the Guatemala Central Railroad for the port of San José, on the Pacific coast of this Republic, having checked their two valises as baggage through to the pier of said port. On their arrival there in the afternoon they applied for permission to embark on the steamer leaving [Page 257] that evening for Salvador, and having identified their valises, which stood at the end of the pier ready for embarkation, in accordance with instructions given when same were checked in Guatemala City, they were requested by the customs authorities to open them, in order to ascertain whether they contained silver intended to be smuggled from the country. As they refused to comply with this request, they were taken ashore with their valises and detained in the office of the comandante, where, next morning, December 8, 1899, in the presence of the Messrs. Koenigsberger and our consular agent, Mr. Upton Lorentz, the valises were opened under protest and found to contain $1,792 in silver coins of Guatemala, Peru, and Chile, there being a shortage, according to the claims of the Messrs. Koenigsberger, of $508, as they affirmed that the valises had contained $2,300. The amount found, $1,792, however, was confiscated by the authorities, and an investigation ordered with the view of instituting criminal proceedings against the Koenigsberger brothers, who that morning were released under promise of our consular agent to produce them when needed.

On being released the Messrs. Koenigsberger, without permission from the local authorities, took the first train for Guatemala City, in company with Mr. Lorentz, but were intercepted at Escuintla, where they were arrested and detained twenty-four hours and then ordered back to the port. This order was about to be put into execution when, just as they reached the railroad station en route for the port, they were liberated by virtue of a telegraphic order from the President, which I had secured on the representations of our consular agent, who had arrived in this city the previous evening.

A few days after these occurrences the Messrs. Koenigsberger came to this legation to thank me for their prompt release and to complain of the alleged unlawful seizure of their silver at the railroad depot, exhibiting at the same time two metal checks of the Guatemala Central Railroad as proof that the two valises had been seized while in the care of the said railroad.

In response to their request I brought the matter to the attention of the minister of foreign affairs, who promised an investigation and report at an early date; but before receiving his promised note I left my post for the United States on leave, and among the matters of unfinished business which I left in the hands of Mr. McNally, chargé d’affaires, was this case.

On my return I found that nothing had been done in the matter, and the Messrs. Koenigsberger again having asked my aid in securing the return of their silver, I took the matter up anew, and on investigation discovered for the first time that one of the brothers, Gustave, was a German subject and that he had laid the case before the German minister, who, on hearing the facts, refused to take any action in the matter.

About the same time also Mr. P. Dalgliesh, a British subject, had a sum of $13,000 confiscated, which he was attempting to smuggle out in the same way, and had laid his case before the British minister, who also refused to uphold him in the matter.

By way of further comparison of similar cases, I should say that the case of $3,000 taken from a Chinaman at Champerico was different, in that the money was seized at the railroad depot before same had been transferred to the pier, and that for this reason I was able to secure its return, as the grounds for suspicion were much less. In the present [Page 258] case, on the contrary, I found upon investigation that the valises had reached the end of the pier, where nothing is ever taken except such things as are intended to go aboard the steamer. I should perhaps explain here that the pier at San José is not in the hands of the railroad company, but is a separate corporation, and is a structure some 900 feet long, extending out from the beach into the deep water of the ocean beyond the breakers, and from the extreme end of which all passengers, baggage, and freight must be transferred to steamers by means of small launches. Anything, therefore, which is sent out to the end of the pier is presumably for exportation, and in the present case this presumption is so strong that no other view can be reasonably taken of it except that it was the intention of the Messrs. Koenigsberger to smuggle out the silver contained in their valises.

While the general merits of this case will be apparent from the foregoing narrative, I beg to mention in a specific way the following points:

The belief that it was the intention of the Koenigsbergers to smuggle out of the country the $2,300 which they affirm to have carried in their valises is greatly strengthened by their confession of their full intention to embark, by their having checked their baggage to the point of the pier, which is only done when such baggage is intended to go aboard, and by their refusal to exhibit the contents of their baggage when requested to do so.
That the action of the authorities in the confiscation of the silver and arrest of the Koenigsberger brothers was entirely within the scope of the law, as will be seen from the law itself, translations of extracts from which are hereto attached, marked “1,” “2,” “3,” and “4.”
The assertion that the law relative to the exportation of silver was a dead letter is, I think, fully controverted by the fact of the very existence of the present case, with its accompanying facts and circumstances, as well as those of Mr. Dalgliesh and the Chinaman referred to.

In view of the foregoing, I am of the opinion that Siegfried Koenigsberger has no ground of complaint, that he is not entitled to recover the silver confiscated, and that he may consider himself fortunate in having escaped penal proceedings, to which he was liable.

I have, etc.,

W. Godfrey Hunter.
[Inclosure 1—Translation.]

decree number 553.

José María Reyna Barrios, general of division and President of the Republic of Guatemala—

Whereas in consequence of economic difficulties the decrees of May and December last were given out, authorizing the banks to stop the redemption of their notes in the former case and limiting their issue in the latter;

Whereas the problem remaining unsolved which compelled the Government to take measures interfering with the established rules regarding exchange, it is incumbent upon the Government to prevent further evils;

Whereas the really serious obstacle the country has met with has not its origin in natural causes nor in others that affect our essential wealth, but in the lack of currency or circulating medium;

Whereas the gradual redemption of notes being reestablished, on account of the high price of exchange there is an evident tendency to export silver; and although this may be of immediate profit to exporters of said metal, it will bring upon the country an indigence of incalculable results;

[Page 259]

Whereas the banks, which must redeem their notes in exchange for their available funds in specie, and find it difficult at present to realize their assets, must necessarily protect themselves against possible difficulties, it is reasonable that they should hold their fiduciary paper in reserve without engaging in new business, thus giving rise to the danger that to the scarcity of the notes now being used as a medium of exchange will be added the lack of the silver that may have been exported:

Therefore, by virtue of the powers with which I am invested, and in the duty of looking after the general interests and welfare of the public, I hereby decree:

  • Article 1. From this date the exportation of coined silver is prohibited.
  • Article 2. The violation of the provision of the foregoing article shall be punished as contraband.
  • Article 3. Let the present decree be reported to the National Assembly at its next session.

José María Reyna Barrios.

The secretary of state for the department of finance and public credit.

Francisco C. Castañeda.
[Inclosure 2.—Translation.]

Whereas, that by decree No. 553 the exportation of coined silver was prohibited, but that said law made no mention of silver in bars and ore;

That according to reports made, with the view of evading said law, foundries for melting silver have been established to export it in bars and ore;

Therefore the constitutional President of the Republic decrees: That under the same penalties which are established in decree No. 553 against those who may try to export coined silver, the exportation of silver in bars or ore is hereby prohibited.

Let it be notified

Estrada C.

The secretary of state for the department of finance and public credit.

Rafael Salazar.
[Inclosure 3.—Translation.]

section 69, page 20, of the penal code of the republic of guatemala, year 1889.

Sec. 69. To perpetrators of a frustrated crime and to accomplices of a consummated one two-thirds shall be inflicted of the penalty assigned to perpetrators of a consummated crime.

[Inclosure 4.—Translation.]

laws of guatemala, volume 12—decree 497 of february 27, 1894—custom-house procedure—section 243, page 819.

Sec. 443. Besides the common penalty of confiscation the persons guilty of contraband or defraudation shall be subject to the following penalties:

When the value of the effects seized or of those that by the procedure may seem to have been the cause of the crime is over $10 and does not exceed $20, the penalty shall be two months’ imprisonment.

In similar cases, if the value is over $20 and does not reach $500, with four months’ imprisonment; from $500 to $2,000 the penalty shall be one year’s imprisonment; from $2,000 to $6,000, with two year’s imprisonment; and exceeding this last sum, with three years’ imprisonment.