File No. 10511/1.

Minister Dawson to the Secretary of State .

No. 14.]

Sir: I have the honor to inclose herewith a copy and translation of a protocol recently signed here between the minister of foreign affairs and the Chilean chargé which settles the long-pending claim arising out of the destruction of the steamer Lautaro, under the Chilean flag, while in the service of the Department of Panama. An agreement was reached between the two governments in 1902, responsibility admitted by Colombia, and some payments made. A year and a half later Panama declared her independence, and with the restoration of regular government and solvency under President Reyes, the Colombian administration represented to the Chilean that it was inequitable to require the new and smaller Colombia to pay in full a debt contracted by and on account of a seceded department. This was, however, not insisted upon as a matter of right under international law, but on equitable grounds. By the final agreement the interest and one-third the principal are forgiven.

A careful reading of the recitals of the protocol shows, I think, that from them it can not fairly be inferred that Colombia insists or Chile admits that a continuous governmental entity is not responsible integrally for prior acts and agreements. The recitals are, however, not as clear on the point as they might be.

You will not fail to observe that the protocol in question explicitly recognizes the fact of Panama’s separation in the following words: “the Department of Panama which has separated itself from Colombia.” (See fourth and fifth lines of the second paragraph.)

I have, etc.,

T. C. Dawson.
[Inclosure.—Translation.]

protocol.

In Bogota on the 28th of September, 1907, there met in the department of foreign relations Gen. Vasquez Cobo, minister of foreign relations of Colombia, and the Hon. Dr. Emilio Rodriguez Mendoza, chargé d’affaires ad interim of Chile, for the purpose of agreeing on the terms of a convention to modify the (convention) which was made in Bogota October 17, 1902, between Felipe F. Paul, minister of foreign relations of Colombia, and Francisco J. Herboso, envoy extraordinary and minister plenipotentiary of Chile, by which the form of payment of the amount owed by the Colombian government for the burning and sinking of the ship Lautaro, belonging to the South American Steamship Company, was agreed.

The minister of foreign relations of Colombia and the chargé d’affaires of Chile being moved by the sentiments of closest cordiality which to-day exist between the Republics of Colombia and Chile and between their respective Governments, and also taking into account the fact that the Lautaro was lost while serving the Department of Panama which has separated itself from Colombia, and that the latter has already paid a large part of her value, and being fully authorized thereunto by their Governments, have agreed as follows:

1.
The balance amounting to £37,000 sterling, viz: £30,000 as principal and £7,000 as interest, which the Colombian Government owes according to the [Page 294] Paul-Herboso protocol, is by mutual agreement reduced to £20,000 sterling. Therefore, from the total amount should be deducted £7,000 interest and £10,000 principal.
2.
The payment of this £20,000 sterling shall be made in ten installments of £2,000 each month, the first payment to be made not later than October 5, proximo.
3.
Payment shall be made in drafts on London drawn to the order of the manager of the South American Steamship Company, and at not to exceed thirty days’ sight. They shall be delivered to the Chilean legation in Bogota.
4.
The drafts referred to in the preceding paragraph shall be exempt from payment for stamps and in general from any Colombian tax.

In faith whereof we sign the present protocol and seal it with our personal seals.

[l. s.]
A. Vasquez Cobo
.
E. Rodriguez Mendoza
.
Approved.
[l. s.]
R. Reyes
.
A. Vasquez Cobo,
The Minister of Foreign Relations.