File No. 819.77/141.

The American Minister to the Secretary of State.

No. 287.]

Sir: Referring to my despatch No. 281 of the 8th instant, I have the honor to inform you that Mr. Basil Burns Duncan, the concessionaire of the railway contract therein mentioned, has since then called upon me. He inquired as to the action taken by me which I fully explained to him, giving him my reasons as stated in my despatch No. 281 referred to. Mr. Duncan replied that he understood fully my reasons and had always understood this to be the attitude of the American Government which he thought perfectly reasonable. He was glad to have the Department of State examine his contract and as a patriotic American did not wish to do anything which might be disapproved by his Government.

In reply to my questions, he stated that he alone was interested in this contract at present but that he expected to interest certain persons in the United States. He expected to form an American corporation, the control of which would remain in the United States where also any stock and bonds which may be issued would be sold. It would be a strictly American enterprise. His plan was to construct the main line in a westerly direction, how far he could not now tell. Its purpose was to open up the country to sugar, cocoa, and banana plantations.

[Page 1084]

Since Mr. Duncan’s call I have had a conversation with Mr. McKay, the manager of the United Fruit Company’s plantations at Bocas del Toro, who is now temporarily here. Mr. McKay informed me confidentially that Mr. Duncan had spoken to him about his concession and that he had told him that the United Fruit Company would be glad to look into the concession when it had been definitely granted. Mr. McKay also confidentially informed me that he believed that the only other person now interested with Mr. Duncan was a Señor Florencio Harmodio Arosemena A., a Panaman of some property and an excellent engineer educated in Paris who had formerly been in the employ of the United Fruit Company. He added that Mr. Duncan was intending to construct his line of the same guage as the United Fruit Company’s lines in Bocas.

In reply to my inquiry as to whether there was any truth in the report which I had heard that the United Fruit Company was considering the construction of a railway from Puerto Limon, Costa Rica, to Bocas del Toro, Mr. McKay stated that the United Fruit Company was not considering such a line but that, as I was probably aware, Mr. Minor C. Keith had a strong desire, if he lived long enough, to complete the Pan-American Railway as far as Panama City. The Panaman section of this line he thought would presumably follow the Atlantic coast.

I have [etc.]

H. Percival Dodge.