File No. 815.77/101.

The American Minister to the Secretary of State.

No. 94.]

Sir: Referring to your cablegram of the 5th instant, in regard to the fears expressed for Mr. Washington S. Valentine that he may be dispossessed of the wharf and railroad at Puerto Cortés without adjustment of his claims in connection with them, I have the honor herewith to enclose a copy and a translation of a note of yesterday’s date, received last evening from the Minister for Foreign Affairs in reply to a note1 which I addressed to him on the 6th instant and in which I paraphrased your above-mentioned telegram. The Minister’s note is accompanied by certified copies of Decree No. 281 of the National Congress, dated the 5th instant, whereby the Executive was called upon immediately to proceed to recover the National Railroad, and the Executive Order, also dated the 5th instant, whereby the President directed the Governor of the Department of Cortes to take possession of the said railway with its appurtenances and accessories.

I have [etc.]

Charles D. White.

The Minister for Foreign Affairs to the American Minister.

Mr. Minister: I have the honor to acknowledge receipt of your excellency’s courteous note addressed to me under yesterday’s date in which you advise me that according to representations made by the attorneys of Mr. Washington S. Valentine it appears that he fears that he may be dispossessed of the railroad and wharf of Puerto Cortes without the adjustment of his claims connected with both properties having been made; that said attorneys of Mr. Valentine [Page 597] affirm that he is willing to relinquish control and management of said railroad and wharf provided his interests be duly protected; but that he protests against any act by the Government of Honduras by which he might be deprived in any measure of his properties without adequate compensation.

Your excellency adds that your Government, without discussing at present the legal merits of the claim of Mr. Valentine, is convinced that his claim possesses certain equities that should be satisfactorily, met; and that any act violative of such equities could not be considered by your Government as an indication of the friendship with which it would like to see the acts of my Government toward American enterprise animated.

In reply, and under instructions of the President, to whom I have given account of your excellency’s important note, I have the honor to inform you that there is no reason whatever for complaint on the part of the representative of Mr. Valentine because of the action of the Government in respect to the railroad of Puerto Cortés, to which the decree issued yesterday and sent to the Gobernador Político of Cortés for execution was confined.

As your excellency must know, the railroad of Puerto Cortes, exclusive property of the Government, was turned over on August 1, 1908, to Mr. Valentine, with whom a contract of lease was made which was never perfected in the form prescribed by the Constitution of the country, which requires for the validity of these contracts the approval of Congress. Nevertheless Mr. Valentine has in fact been administering and managing the railroad and enjoying the proceeds from it without having any right thereto.

The Congress now in session—in view of the contracts entered into with Mr. Valentine and the fact that, in spite of the invalidity of the same, Mr. Valentine continued in possession and control of the railroad—declared by Decree No. 28 of the 5th instant that the Executive proceeded hastily and unconstitutionally in delivering the railroad to Mr. Valentine by virtue of a contract which, to be perfected, needed the approval of the Legislative Assembly; and directed the said Executive Power, availing itself of the most proper and efficacious means, to proceed immediately to recover that property and to determine the consequent obligations toward (deducir las responsabilidades consiguientes al) Mr. Valentine.

By virtue whereof and in compliance with the said decree the Government, through the Ministry of Fomento and Public Works, issued a decree, which your excellency will find enclosed1 as an annex to this note, in which it is ordered: (1) that “the Gobernador Politico of the Department of Cortes, with previous injunction (requerimiento) and notification of the Decree of Congress of which mention has been made and of the present order to the administrator or agent of Mr. Washington S. Valentine, take possession of the railroad with the appurtenances and accessories, with formal judicial inventory, advising the said administrator or agent in order that he may attend the transfer and inventory if he wishes to do so; (2) that Mr. Valentine be required to give account of the returns from the railroad during the time he has exploited it, and that liquidation be made in order that there may be adjudicated to each of the parties the portion that belongs to it.”

As your excellency will see, the Government in taking possession of the railroad has taken possession of an enterprise entirely the property of the nation and not of Mr. Valentine, a property that figures in the inventories of transfer subscribed by the representative of the said Mr. Valentine on August 1, 1908, with a value of $1,140,976.35, plus the warehouses, etc., at $33,428.94, values which illegally and without the approval of Congress as the Constitution provides had been turned over to Mr. Valentine.

But the Government in issuing the order cited, in compliance with the legislative decree to which I have made reference, has desired to clothe the act with every kind of guaranty for Mr. Valentine; wherefore it ordered that a formal judicial inventory be made, being disposed, upon liquidation of accounts, to recognize and pay the sum or sums, if there should be any, due to Mr. Valentine by reason of the transaction.

My Government has no knowledge of any claim on the part of Mr. Valentine connected with the railroad. It has confined itself to the exercise of a right conferred by the Constitution, and your excellency may be sure that it is and always will be the most faithful guardian of the rights and privileges of foreigners that reside in Honduras, and very especially of Americans.

[Page 598]

Your excellency is well aware that in Honduras the interests of American citizens enjoy every kind of security, it being the aspiration of my Government to demonstrate to your excellency its most sincere and cordial friendship by the protection that it affords to American undertakings established in Honduras, of which an example is the New York, Rosario & Honduras Mining Co., of which the same Mr. Valentine is a director, including important negotiations which it has pending with American enterprises, which are the most cordial examples of its friendship for America and the Americans.

My Government, Mr. Minister, cherishes the hope that your excellency, in view of these documents, will recognize the right that warrants the act of recovery of the railroad and will also see that no prejudice be done to the rights which Mr. Valentine may claim—not over the railroad, for this is the property of the Government, but—with reference to the participation which he may have in the proceeds of the railroad.

I pray your excellency kindly to take note of these explanations and of the sentiments expressed by my Government, and I avail [etc.]

Mariano Vásquez.
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