Chargé Janes to the Secretary of State.
Santiago , August 5, 1907 .
Sir: In accordance with the instructions of the department, numbered 60 and dated April 30, 1907, the Alsop claim has again been presented to the Chilean Government.
On the 27th of June last a copy of the above instructions was delivered by me personally into the hands of the Chilean minister of foreign affairs.
Since that time I made several inquiries at the foreign office as to the progress of the matter. After the delay of the translation had been overcome, the claim was placed in the hands of the solicitor of the department who was obliged to undertake an unexpected journey to the north in response to a telegram announcing the dangerous illness of a parent. During the absence of this official I was told at the foreign office that the minister desired further to submit the legation note to the President before taking the matter up with me. After more than a month had elapsed since the transmittal of the legation note, I obtained an interview with Señor Puga Borne on the subject in hand, who treated me most courteously and discussed the matter in the most friendly spirit.
The minister stated that Chile considered her obligations in the matter of the Alsop claim reduced to the narrow limits fixed by Article V of the treaty with Bolivia of October 20, 1904. Chile there promised Bolivia to pay certain debts which had been contracted [Page 144] by Bolivia and which at the time were Bolivia’s own. Chile, the minister declares, bound herself only for a certain sum and as to certain specified claims. At the same time, Chile reserved to herself the right to examine the claims and to place upon them a value according to her best judgment; she may reconsider them ab initio, lay aside all acknowledgments of indebtedness made in the past by Bolivia, and obtain whatever terms she can from the creditors.
At this point a curious situation presents itself. Though Chile asserts she has not assumed in toto the debts that the claims enumerated import, having bound herself only in a certain sum, yet the treaty does not permit a partial payment of these claims. The Governments of Chile and Bolivia carried on a correspondence which had the object of making this clear. This correspondence was made public against the will and without the consent of the parties concerned. These notes of the foreign offices aimed to emphasize the phrase in the treaty “cancelacion definitiva” (full payment), and Mr. Puga Borne states that Chile promises Bolivia there that she will not pay a centavo of the 2,000,000 pesos unless the creditors relinquish all their rights, so that not only the indebtedness of Chile under the treaty but the original indebtedness of Bolivia as well will be completely wiped out and the creditors stopped from further proceedings on the debt.
Bolivia clearly feared that the creditors after accepting whatever amounts the treaty allowed them would then turn to that country and demand the difference of what Bolivia previously had acknowledged as a just debt. Mr. Puga Borne declares that the creditors must accept the treaty allowance as fully satisfying all demands.
The minister was asked if it did not appear worthy of remark that Chile should now offer as just compensation some 500,000 pesos, when only a few years ago over 800,000 pesos had been tendered without acceptance to the same parties in payment of the same debt. Just how the difference in the equitable valuations at the two distinct periods has crept in was hard to understand. This point the minister said he was not ready to discuss.
As the Alsop debt as it had been acknowledged by Bolivia was far in excess of 2,000,000 pesos, the minister was told it appeared that a pro rata division of such a sum among several claimants could hardly be considered a method growing out of a just appreciation of their separate merits. Mr. Puga Borne said that the sum stipulated did not measure merely the amount Chile was willing to advance for certain rights and privileges given her by Bolivia. This sum, he said, has been fixed for the satisfaction of the claims after a study of each one of these claims had been made. Then it was decided to provide for the pro rata division because it was discovered that the real value of the claim bore a fixed relation to the face value of the claim, which relation was equivalent to that borne by the 2,000,000 pesos to the sum total of the face value of the claims. Therefore the sum which fell to Alsop & Co. in satisfaction of their claim was believed by Chile to be the amount to which the claimant was entitled according to the dictates of justice.
On the day following this interview I visited Mr. Puna Borne again and showed him the telegram which I was about to send to you, containing the terms of the offer Chile was ready to make the [Page 145] Alsop claimants. The telegram as approved by the minister is as follows:1
In the meanwhile the foreign office is still engaged in the study of the antecedents of the claim.
The minister states that the amount above given constitutes the final offer of Chile. If the claimants are unwilling to accept it in full satisfaction they are invited to turn for payment to Bolivia.
I have tried to give all the details of the interview with Mr. Puga Borne, in order that the case in its present status may be seen from the standpoint of the Chilean Government.
I have, etc.,
- Supra, Aug. 1.↩