Minister Lee to the Secretary of State.

No. 36.]

Sir. I have the honor to report that the following-named railways are in operation or in project in the Republic of Ecuador:

The Guayaquil and Quito Railway, a corporation holding a charter under the laws of the State of New Jersey. The construction of this line has been met by the issue of bonds and preferred stock, placed principally in the European market and guaranteed by the Republic of Ecuador. The annual payments amount to about $800,000. The Government of Ecuador has been borrowing money from local banks to fulfill their obligation in this respect. The road passes through tropical forests up the slopes of the Andes and through vast mountain gorges until it reaches the city of Rio Bamba, about 10,000 feet. This station is approximately 130 miles from Quito, the capital, and so far it is the last station on the road. The rest of the journey must be made in diligence or on horseback over the side of Chimborazo and across high rolling country to Quito.
Bahia de Caraques to the cocoa district of Chone. The road has been partially built (by funds locally provided by taxes on imports and exports) from the terminus for 2 or 3 miles in the direction of Chone, but is not yet in a condition to render any service in the conveyance of produce or merchandise.
The Curaray Railway, from the interior to the Amazonian region of Ecuador. This road is also to be built with special funds set apart for the purpose and administered by local authorities. No actual work has as yet been done on this line. A staff of American engineers has been occupied in laying out the route and drawing up a report as to the course of the line and the probable cost. The difficulties are great.
Manta and Santa Ana Railroad. A private enterprise obtained by a local firm, Messrs. Volcker & Guzenbach (German and Swiss), to run from the port of Manta through the tagua and coffee districts of the northern province of Manabi. It is said to have been taken up by a London firm. The low value of the principal product, tagua, offers little encouragement for the building of a railway.
A railway from Guayaquil to Salinas, on the Pacific coast (cable station) has been proposed. The measure was carried through Congress in 1904 by a lawyer of Guayaquil, acting as representative of a foreign syndicate. Large concessions of land were granted to the company. The district is well adapted to raising of cotton and the line would pass through a tract of country prolific in pitch and asphalt wells (conceded to the company) to Salinas, where the salt supply of the Republic is obtained. Such a road would also obviate the necessity of the long and tiresome journey up the Gulf of Guayaquil and the River Guayas to the city. So far nothing has been undertaken.
Santo Rosa to Zaruma. A concession obtained by a French syndicate and passed through Congress. No work has been done.

The line of the Guayaquil and Quito Railway (marked No. 1 in this dispatch) has been surveyed and leveled as far as the city of Quito. The progress of the work is delayed on account of the non-arrival of materials, rails, engines, etc.

I have, etc.,

Joseph W. J. Lee.