File No. 422.11G93/682.

The Secretary of State to the Minister of Ecuador.

Sir: Referring to your note of the 8th instant in relation to the arbitration of the case of the Guayaquil and Quito Railway Company, I have the honor to state that, in order to avoid delay, the Department cabled the substance of your note to the Minister of the United States at Quito with instructions to communicate the substance of our understanding to the Ecuadorean Government and request its immediate confirmation of our concurring views on the points set forth.

The Department has received in reply a telegram1 from the Minister of the United States at Quito in which it is stated that the President of Ecuador declines to make any response until he shall have received from you a report which your Government has instructed you to transmit.

As the delays that have taken place are very considerable and as you pointed out that your Government was very desirous to avoid further delay, I have the honor to suggest that the interest of the parties concerned might be promoted if you would be so good as to telegraph to your Government, confirming the statement made through our Minister at Quito of the points on which we reached an understanding. These points being as follows:

  • First, that the Arbitrators, after entering upon their duties before the proper Ecuadorean judge, would, by virtue of this act, become a tribunal arbitral independent of every authority or court of Ecuador or the United States;
  • Secondly, that the Arbitrators would act as amiables compositeurs, that they would not be obligated to apply the laws of any nation to reach a decision but must be inspired only by the dictates of justice and equity according to their conscience and best knowledge and judgment, taking as their bases the antecedents of the case; and
  • Thirdly, that their judgments should be final.

In communicating these points of agreement to your Government, our Minister, under instructions of the Department, stated that the conditions set forth embraced the essential points which the protocol was intended to cover, namely:

  • First, the Arbitrators’ independence of local law and procedure in the conduct of the arbitration;
  • Secondly, their power to determine the principles applicable to the decision of the various questions involved in the case; and
  • Thirdly, the finality of their work, which necessarily means that it is not subject to review by the Ecuadorean courts.

In view of what you stated in your interview at the Department on the 8th instant, as to the deep and substantial interest which your Government felt in the prompt resumption and speedy completion of the arbitration, the Department does not doubt that you will cooperate with it in everything that may tend to enable your Government promptly to proceed with the arbitration.

Accept [etc.]

For the Secretary of State:
J. B. Moore.
  1. Not printed.