File No. 3010/38–40.

Minister Fox to the Secretary of State.

No. 333.]

Sir: I have the honor to inform the department that the Ecuadorian Congress met according to the provisions of the constitution on August 10. Owing to lack of a quorum in the Senate this chamber did not organize until the 12th instant, which it did by electing Senator Moncayo as president and Senator Larrea as vice president. The diplomatic corps was present, by invitation, at the opening ceremonies of the Senate.

The President’s message was submitted and read. I beg to inclose two copies of this document, together with a summary in the English language.

I have, etc.,

Williams C. Fox.

Summary of the message of the President of Ecuador to the National Congress of 1908.

President states that a revolutionary spirit still exists in the country; that the rebels have been untiring in their efforts to disturb the peace since the political transformation of 1906; that while his policy has ever been that of [Page 278] moderation and clemency, he is determined to uphold the Government and maintain peace at all costs.

Speaking of foreign affairs he says:

“The Government has exercised special care in cultivating, extending, and strengthening in the best possible manner friendly relations between Ecuador and the other powers, and I may affirm that the frankest and most loyal friendship binds us to the peoples of Europe and America, as the minister for foreign affairs will inform you in detail.

“The labor of our representatives abroad is satisfactory and praiseworthy, and the diplomatic corps representing their respective governments at this capital are distinguished and agreeable persons, who, surrounded by the hearty and well-merited appreciation of all classes of society, are, as it were, a pledge of international brotherliness and harmony.

“I have exerted every effort to obtain of the royal arbitrator, at the earliest possible moment, his sentence in our great litigation with Peru; the proper commission has already presented its report to the council of His Catholic Majesty, and very soon we may expect the highest justice from the august Spanish sovereign.

“The Government of Colombia and that of Ecuador, being both persuaded that our boundary differences should be settled in a direct manner and as a family matter, have signed the treaty which the minister for foreign affairs will present you—a treaty which removes all further motive for disagreement and reestablishes between the two countries without prejudice to a third, the union and oneness proper to peoples that formed one great nation in the epic period of our history.

“This step having been taken, I have insisted in my constant idea relative to the convenience of a Colombian confederation, an idea that has been enthusiastically welcomed by His Excellency President Reyes; and it is to be hoped that, very soon, its importance and utility being recognized, it may be carried into practice.”

The financial condition of the country is described more or less as follows:

Revenue for 1907 12,724,567.09
Expenditure for 1907 15,401,785.65
Deficit 2,677,218.56

Of the expenditure only 13,268,438.55 sueres correspond to the administration; the difference of 2,133,347.10 sueres having been expended in payments to the Guayaquil & Quito Railway on account of the cupon service and for transportation during the administrations of Gen. Plaza and Mr. Garcia and part of the present administration.

He claims that the excessive expenditure should cause no surprise in view of the necessity of keeping up the army on a war footing on account of revolutions on the one hand and the defective system for collecting revenues on the other.

He points out that the revenues have, in spite of all, increased on certain lines; but hopes that with a reformed system and the development of the country to be expected as the result of the railway communication now established with the coast the increase will soon be much greater. He offers to send to Congress a special message in which he will propose certain reforms in the financial system.

In order to fill up the deficit in the budget he states that the Government was obliged to obtain loans to the amount of 2,892,810.69 sueres, and that the difference of 215,592.13 sueres between the deficit and the amount of the loans is the balance on hand on December 31, 1907, distributed as follows:

In the treasuries. 130,408.27
In the consulates 85,183.86
Total 215,592.13

With respect to railways he says:

“The Transandean Railway, the surest foundation of the nation’s progress, has at last reached Quito; the desires of the patriotism have been realized, as [Page 279] well as my most fervent wishes; but this gigantic work has cost us inexpressible sacrifices, for the Government has been obliged to rescue it so that our hopes might not be defrauded or the prosperity of the Republic be retarded for much longer. In a special message I shall also give you an account of all the details and vicissitudes of this work, the true redeemer of the country; a work which we are not yet able to appreciate in all its magnitude. All that was possible and necessary to crown so great a work has been done; and the applauses of the whole Republic have sanctioned the efforts and sacrifices of those in charge of the Government.

“Respecting the differences which have arisen between the railway company and the nation, as they are already submitted to an arbitration tribunal, we must not advance any opinion; and it is our duty only to maintain our rights and trust that the wisdom and uprightness of the arbitrators may decide on what shall be equitable and just.

“On the 6th instant the work of localizing the railroad from Huigra to Cuenca was commenced, and according to what Mr. Edward Moriey, the constructor and manager, says, the locomotive will hail the cradle of Abdon Calderon within 28 months. I shall use every effort to insure the realization of this flattering promise, because the country in the south, rich in the precious metals, coal, stone, marble, and fertile lands, calls for a railway branch for the development of its enviable wealth.

“Mr. Catefort, the contractor of the railway from Bahia to Quito, petitioned that his contract, celebrated in the year 1902, might be considered valid. The Government refused to do so, but once submitted to arbitration it was declared that the contract had not yet become invalid. The constructors of this line propose to begin it soon.

“Mr. Catefort also made a contract for a railroad (Decauville) between Daule and Santo Domingo de los Colorados. The minister of public works will give you an account of that.

“It will also be convenient to prolong the Guayaquil & Quito Railway as far as Tulcan, at least for the present to Ibarra, thus affording communication between our principal port and the intermediate towns, the rich and fertile Provinces of Imbabura and Carchi.

“The moment has also arrived for the realization of the project for a railroad to Curaray, and the expenditure necessary for these important works should not scare us, because once peace is established and an adequate economic system adopted the nation wall have funds to attend to all its progressive needs. Furthermore, the railways themselves will be productive in a very short time; and some of them, such as that from Huigra to Cuenca, will yield profit almost immediately, owing in part to the simultaneous working of valuable coal deposits wiiich are in view.

“The railway to Quito being finished, the nation has fully entered the path of progress, and it is our duty to go forward always without stopping or retro-ceding before any obstacle, just as has happened in the work of the Trans-Andean Railway.”

He urges Congress to make better and more practicable laws to encourage immigration.

He speaks of the coming exposition, stating that some of the friendly nations have already offered to take part, and requires Congress to vote a sufficient sum to enable Ecuador to figure well.

He praises the army for its progress, morality, discipline, loyalty, and valor. He declares it the guardian of liberal institutions. He makes special mention of the military college and the school for officers.

Speaking of public charity, he regrets the lack of funds felt hitherto, and requests Congress to make better provision. He suggests that the church properties farmed out in accordance with the public-worship law, and which are not productive under the present system, should be turned over to the public charity institutions, reserving some provision for the religious communities absolutely dependent upon said properties.

He speaks of the bubonic plague in Guayaquil, and makes honorable mention of Dr. Lloyd, among others, as instrumental in eradicating the plague. He promises the Government’s support for the sanitary labors in Guayaquil, and expects that yellow fever and smallpox will soon be stamped out.