Papers Relating to the Foreign Relations of the United States, With the Annual Message of the President Transmitted to Congress December 6, 1904

Mr. Vignaud to Mr. Hay.

[Telegram.—Paraphrase.]

American Embassy,
Paris, May 2, 1904.

(Mr. Vignaud sends text of letters and substance of contract exchanged to-day by Messrs. Day and Russell.

Paris, April 28.

Mr. J. P. Morgan, Hotel Bristol, Paris.

Dear Sir: As representatives of the Government of the United States, having full power so to do, we have the honor to say that the Government desires to, and does hereby, appoint your firm, J. P. Morgan & Co., its agents, to see to and to effect the transfer and payment by the United States at the Bank of France, Paris, of the $40,000,000, constituting the price of the New Panama Canal Company’s property.

Upon delivery of the property by the latter company to the representatives of the United States, the Government will place such $40,000,000 with your firm as such agents, to be transferred and paid to the company, or upon its order to the liquidator of the old Panama Canal Company, at the Bank of France, in gold coin, or such other form as may be agreed upon between your firm and the company, as speedily as may be convenient.

It is understood that your firm will see to, and pay for, insurance, and take all other reasonable precautionary measures, and that it will charge the United States nothing, and pay no interest, and shall not be accountable for any profits made under agreements it may make with third parties. Please signify your acceptance.

Morgan’s answer addressed to us bearing same date:

We beg leave to acknowledge the receipt of your valued favor of this date, addressed to our senior, in behalf of the United States, and constituting us as fiscal agents of the United States for the purpose of and with the powers mentioned in your said communication. We accept said appointment, under the terms and powers indicated, and hereby express our complete accord with the understanding you state. We are, dear sirs,

Very truly, yours,

J. P. Morgan & Co.

Substance of contract between company and United States.

[Agreement 28th April.]

Company will make delivery of property covered by general conveyance of April 16, upon execution and delivery of this agreement. Payment of 40 millions gold to be made after delivery of said property in Bank of France through agents hereafter mentioned, as follows: Upon call and order of company, at such time or times as it may designate to said agents, in following order and manner: Twenty million francs to credit Jean Pierre Gautron, liquidator; five million francs to credit of company; remainder, 40 per cent to company and 60 per cent to Gautron, proportionately. United States, upon such delivery of property having been made, will pay through Morgan & Co., in gold coin, in Bank of France, in manner aforesaid, and shall remain obligated until full amount paid in manner aforesaid, and the United States agrees that payment shall be so made without regard to any suits, attachments, injunctions, or causes of any nature whatsoever. All expenses incident to carrying out agreement of even date between United States and Morgan, shown by copies of letters attached, shall be borne by company, United States to be protected from all costs whatever, of transmitting and paying at Paris. Agreed that phrase “third parties” in letter to Morgan, includes company, and that company may make agreements with Morgan Company, not inconsistent with provisions of said letters. This agreement not to be construed to change or be inconsistent with agreements and conveyances heretofore made between company and Government.)