File No. 2540/8.

The Secretary of State to Minister Fox.

[Telegram.—Paraphrase.]

(Mr. Root informs Mr. Fox that this department understands from his dispatches and otherwise that the Government of Ecuador contemplates taking possession of the Guayaquil and Ecuador Railway on the ground that it has not been finished within time limited by contract between that Government and Archer Harmon, dated June 14, 1897, and the supplementary contract dated November 26, 1898, without making allowance for the extensions of time to which the railway company is entitled because of the delays caused by domestic war, rebellion, natural catastrophes, and epidemics under the sixteenth article of the contract, and notwithstanding the fact that the railroad is nearly completed and can be completed within a few months. Mr. Root also states that this has been characterized by Mr. Fox as confiscation, which certainly has that appearance, and he has inferred from Mr. Fox’s dispatch that President Alfaro and Mr. Carbo take the same view.

Mr. Root instructs Mr. Fox to take the following steps:

  • First. Say to Mr. Carbo that I deeply regret the injury to the credit and good name of Ecuador done by the mere agitation of this contemplated confiscation, and I sincerely hope that it will go no further. It appears to me inconsistent not only with the interests, but the honor of Ecuador.
  • Second. Lodge a formal protest with the Government of Ecuador against the proposed spoliation of the property and rights of American citizens.
  • Third. Give formal notice to the Government of Ecuador that the President of the United States is ready to name an arbiter to act with another arbiter or arbiters in settling by arbitration all controversies or disagreements arising under the said contracts between the contracting parties, pursuant to the twenty-seventh article of the contract, and request that the President of Ecuador name an arbiter pursuant to that article.)