Mr. Merry to Mr. Hay.

No. 921.]

Sir: In acknowledgment of your No. 575, of February 4, and No. 576, of February 9, inclosing the complaint presented by the attorneys [Page 540] of the Salvador Commercial Company, elated February 3, 1904, I have the honor to forward herewith copy of the dispatch which goes forward from this legation by first mail to the Government of El Salvador in compliance with instructions received from you.

* * * * * * *

With assurances, etc.,

William Lawrence Merry.
[Inclosure.]

Mr. Merry to Señor Morales.

Esteemed Sir: I regret to advise you, under instructions from the Government of the United States, that the trustee for the Salvador Commercial Company, acting under competent legal advice, has declined to receive the indemnity bonds agreed by the Government of El Salvador to be delivered to said trustee on December 17, 1904, and tendered thereto by the consul-general of El Salvador on January 10, 1904. The reason given for this declination is that the legislation enacted by Salvador fails to comply with the agreement of August 17, 1903, in the following particulars:

(1)
The said bonds are not secured by 10 per cent of the customs receipts, as required by article 2 of the agreement.
(2)
It makes the mere delivery of the bonds full payment of the claim, whereas under section 9 of the agreement the award on the claim is not to be deemed satisfied unless the bonds are paid at their respective dates of maturity.

The Congress of El Salvador convening proximately, it is respectfully suggested that your excellency’s honorable Government will rectify the above omissions by proper enactment, and thus carry out the agreement of August 17, 1903.

While assured that your excellency’s Government will recognize the propriety of the amendment of the legislative enactment of September 22, 1903, above alluded to, I am instructed to notify your excellency that unless there is a full compliance with the terms of the agreement of August 17, 1903, the United States Government will require the payment of the full amount of the arbitration award made on May 8, 1902. With confidence that your excellency’s Government will unhesitatingly provide for the execution of its agreement with the claimants, I respectfully await your further information thereon.

Be pleased, etc.,

William Lawrence Merry.