File No. 8573/13.

Chargé Wilson to the Secretary of State.

No. 621.]

Sir: Referring to Mr. Beaupré’s dispatch No. 585, of August 19, 1907, I have the honor to report that after long discussion the railway concession law has been passed by both houses of congress with some modifications from the bill as originally presented, and in this connection I inclose herewith duplicate copies of an article from the Buenos Aires Herald, of October 4, 1907, containing a translation of the law as passed.

I also have the honor to inclose duplicate copies of an article which appeared in the Standard, of September 28, 1907, in regard to the above law. [Not printed.]

I am, etc.,

Charles S. Wilson.

The Railway Concessions Law.

Article 1. All railway concessions, whether in respect of main or branch lines, to be hereafter granted, shall be governed by the clauses of the present law in accordance with the general law on railways, No. 2873.

Art. 2. The rolling stock, weight of rails, accessories, and other materials used in the constructions of the line shall be specified in the tender to be submitted for the approval of the executive power.

Art. 3. The concessionaire shall sign the respective contract within the term of six months from the date of promulgation of each law of concession.

In each concession the terms shall be fixed within which the plans must be submitted and the works must be begun and ended, and the fines shall be laid down to be incurred by the concessionaire in the event of the work not being completed within the specified time.

Art. 4. Before signing the contract the concessionaire shall deposit in the Bank of the Argentine Nation, as security, the sum of $200 national currency for each kilometer of the line, in cash or in national bonds, which shall be returned to him in proportion to the advance of the works.

Art. 5. Should the concescionaire fail either to sign the contract, or to submit complete plans, or start the work or finish the first 50 kilometers of the principal line within the terms fixed in accordance with article 3 hereof, the concession shall lapse, and, save in the case of unavoidable necessity declared by the executive power, the security deposited shall be forfeited. In such case the deposit shall be transferred by the bank of the nation to the order of the national council of education.

Art. 6. For each month’s delay in the performance of the work, the company shall pay a fine to be fixed by the executive power in the tender and to be deducted from the security deposited. In case the deposit should be thus exhausted and the company should be indebted to the extent of more than two months’ fines, the concession shall lapse in respect of the portion of the uncompleted line.

Art. 7. All lands shall be subject to expropriation by reason of public utility the occupation whereof may be necessary for the railway lines, stations, workshops, warehouses, etc., in accordance with the plans in each case approved by the executive power, and the concessionaire shall be entitled to effect such expropriation in terms of general law on the subject.

Art. 8. The materials and articles used in the construction and working imported into the country, shall be free of all customs duties, this exemption remaining in force until the 1st of January, 1947. The company shall pay during the said term whatever may be the date of its concession, a single tax equivalent to 3 per cent of the net returns from its lines, remaining exonerated during the said term from all other taxes, whether national, provincial, or [Page 46] municipal. The net returns shall be determined by recognizing as expenses 60 per cent of the gross receipts.

If the expenses should exceed this limit during three consecutive years the company shall be held bound to prove the same to the satisfaction of the executive power. The amount of 3 per cent of the net returns shall be applied to the construction or maintenance of the bridges and ordinary roads of the municipalities or departments crossed by the line, in the first place to the roads leading to the stations and in proportion to the extent of the line in each province.

The executive power will deposit in a special account in the Bank of the Argentine Nation, the sums which may be paid by the companies in execution of article 8. Without prejudice to such sums as may be voted by special laws or by that of the estimates, this fund may not be applied to any other purpose than the one expressly determined in the present law.

Art. 9. The passenger and goods tariffs shall be subject to the intervention of the executive power whenever the average gross earnings of the line during three consecutive years shall exceed 17 per cent of its share and debenture capital as recognized by the executive power and the expenses do not exceed 60 per cent of the receipts. If the proportion of expenses are greater during three consecutive years, the company will be held bound to show the same to the satisfaction of the executive power, and in such case the limit of the intervention will be proportionately raised. For these purposes the capital shall be determined by the executive power on the opening of the line for public service and may not be increased without its consent.

Art. 10. The charges for conveyance of materials and articles belonging to the nation and intended for the construction of the national or provincial works authorized by the laws of Congress shall be appraised at the rate of 50 per cent of the usual tariffs. On the same conditions shall be charged the conveyance of war “materiel,” national officials, officers and soldiers on public service, immigrants sent forward by the central immigration office, and provincial police officials and official telegrams.

Art. 11. The tariffs for the telegraphic lines for the use of the public shall be the same as those used by the national telegraph department. The apparatus and materials of the telegraphic line shall be subject to the approval of the executive power.

Art. 12. The company shall be bound gratuitously:

To convey, in special compartments in which letters and printed matter can be classified, the mail bags and the officials accompanying the same.
To extend parallel to the railway line and along its entire length a telegraph wire to be placed at the disposal of the Government for its own use, the maintenance and repair of the same to be borne by the company without any liability or charge to the State.
To set apart a building in the principal stations for telegraph offices and post-offices.
To permit the junction of the national wires with those of the company’s line.
To provide a way for horsemen over the principal bridges where such is considered necessary by the executive power.

Art. 13. The executive power may enjoin upon the company to render movable the bridges across rivers and canals which may be declared navigable, without compensation of any kind.

Art. 14. The final plans and the works in construction shall be subject to the inspection of the department of public works and all expenses incurred in or by such inspection shall be borne by the company.

Art. 15. Both the construction and the working of the lines shall be subject to the general law on railways and to such police regulations or regulations for inspection as may hereafter be issued.

The legal domicile of the company shall be in the capital of the Republic.

Art. 16.—The nation reserves to itself the right of at any time expropriating the works effected under the concession for the amount of the recognized capital plus 20 per cent.

Art. 17. Railway concessions may be transferred to third parties with the authority of the executive power; but the transfer of the concession or of the railroad and the lease of the same can not be effected in favor of any other railway company in the country, nor can the management be amalgamated with that of other companies without the sanction of Congress.

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Art. 18. The company may construct small branch lines not exceeding 30 kilometers for the purpose of connecting industrial or rural establishments, subject to the approval of the respective plans by the executive power.

Art. 19. The railway companies at present existing may, within the term of six months, counting from the promulgation of this law, avail themselves of the benefits set forth in article 8 hereof, providing they accept the conditions laid down in said article 8 and in article 9.

Art. 20. At the expiration of their present exemptions, the railway companies now existing who shall not avail themselves of the option contained in the preceding article, shall pay all the taxes and imposts which duly fall upon them, remaining in other matters subject to the prescriptions of the present law in so far as it does not interfere with acquired rights.

Art. 21. The sleepers to be employed on all the railroads in the Republic shall be of a hard wood indigenous to the country.

Art. 22. To be communicated to the executive power.

Juan Ortiz de Rozas.

Juan Orando,