Papers Relating to the Foreign Relations of the United States, With the Address of the President to Congress December 8, 1914
File No. 822.032/14.
Minister Hartman to the Secretary of State.
Quito, August 12, 1914.
Sir: I have the honor of enclosing herewith for the information of the Department copies of the Message of President Plaza to the Congress which assembled on August 10, 1914.
I have [etc.]
[Untitled]
All peoples of Latin America should feel satisfied with and proud of the high diplomatic position attained by the South American A. B. C, that is, the joint action of Argentina, Brazil and Chile in the matters that may affect the common interests of our America. The significant fact that the United States of North America has accepted the mediation of the A. B. O. in its armed conflict with the Government of Mexico connotes the formal recognition of a new international force that will greatly influence the honorable and pacific settlement of such future conflicts as might threaten the Latin American Republics, a force that must certainly be taken into consideration by European nations in their relations with those of this continent. Even if the A. B. O. mediation should yield no fruit in the conflict mentioned, its importance and significance are bound to be recognized, for it is an event of extraordinary import in the history and destiny of America.
In accordance with this view, the Government hastened to instruct our representative in Washington unconditionally to support the action taken by the representatives of Argentina, Brazil and Chile; and I am glad to inform you that Doctor Gonzalo S. C6rdova has worthily complied with those instructions, since he obtained from the Pan American representatives at the capital of the United States of North America the approval of his suggestion of the united support by the American peoples of the joint action of the three Governments, and they have courteously thanked the Government of Ecuador for the action of our representative.
Our earnest wish for the reestablishment of the international and domestic peace of Mexico, our fellowship with all the peoples of the continent and our admiration for the great Republic of the North, makes us desire that the A. B. C. mediation may result in an honorable and final solution that will fill a fair page of American history.
The Government of the United States of North America has suggested to us the possibility of concluding an arbitration treaty contemplating the pacific settlement of international conflicts that may arise; and our Government, desirous of assuring to the Republic the incalculable benefit of external peace, is earnestly considering this noble invitation and will respond to it in terms in keeping with the permanent interests of the country.
[Page 266]It was the intention of the Government that our country should, with all its industrial energies, participate in the Exposition at San Francisco, to which we were invited and which takes place in 1915. Unfortunately, it appears that this can not be done on account of the great outlays necessary for the support of the Army and Navy, engaged in defending constitutional order against the revolutionary action of the factions in arms.
The Government vigorously began the work of sanitation of Guayaquil and the water system of Quito as soon as the supervision thereof was placed in its hands, formerly being exclusively directed by the respective boards.
For the sanitation of Guayaquil a contract has been made with J. G. White & Co. Limited, an English concern; this contract comprises the introduction of potable water service, drains, sewerage and paving, which works will be done on the Government’s account under the technical direction of the company, for a remuneration of 12½ % of the total cost of the works.
The relations of the State with the Guayaquil & Quito Railway Company are developing in the direction given them by my administration since the first day of its existence, namely, such relations as should be had by the State with a private concessionary.
The contracts between this company and the Government have not been characterized by clear and simple stipulations; their terms have been semi-ambiguous and vague. Thus in the simplest matters relating to the rights of the Government and the unquestionable obligations of the company, there has always arisen some point for discussion, some unexpected allegation of rights, some unforeseen denial of obligation. There has therefore resulted a semi-permanent and vexatious misunderstanding, which keeps accumulating, and which will be submitted to the arbitral tribunal that is to consider all the controversies between the State and the Company.
Unfortunately, we cannot be sure when this arbitral tribunal will be constituted, since in spite of all our hopes the second attempt to set up the tribunal failed at the outset.
I informed you in my message of last year of the sudden termination of the mission of the Hon. Henry Janes, the Arbitrator appointed by the then President of the United States of North America, Mr. Taft. There were difficulties in the way of constituting a tribunal having as members Messrs. Janes and Dr. Alfredo Baquerizo Moreno, our Arbitrator; and when it was sought to clear away these difficulties, the new administration of the American Union, that of Mr. Wilson, recalled Mr. Janes and notified us of sending in his place Mr. Miller, a judge of high repute in his country.
Mr. Miller arrived at this capital in January, 1913, and some days afterward began the preliminary conferences with Dr. Baquerizo Moreno; there was but one official conference, at which the question arose of the manner of constituting the tribunal and the nature of the rules that should limit its deliberations. No agreement was reached, for although our Arbitrator went as far as possible to meet the proposals of Mr. Miller, he felt it his patriotic duty not to accept those that contravened the laws of Ecuador or substantially affected the equities and rights of the parties.
These conferences were going on when Mr. Miller unexpectedly left the country, thereby terminating the proceedings.
Our Arbitrator, Dr. Baquerizo Moreno, held that, in the matter of an arbitral tribunal relating to a contract concluded in Ecuador and having to decide a purely civil controversy arising from that contract, the arbitration must, first of all, be subject to the laws of Ecuador and to the jurisdiction which, by virtue of such laws and of the contract, the arbitrators should exercise., without regard to the persons to whom had been given the right to appoint the arbitrators, on the presumption that the authority of the appointing persons ceased with the appointment. Our representative therefore said that “there is no international law to be observed; there is only the law of the place of contract, of the execution of the work and of the judgment entered.”
Mr. Miller, from the first, took the opposite position, involving a secondary place for Ecuadorian law and a fundamental alteration of the nature of the arbitration agreed upon. It is probable that this sharply defined difference of opinion determined the unexpected retirement of the American Arbitrator.
We are therefore in a more unsatisfactory position than before the coming of Mr. Janes, since there is a certain justification for pessimism in view of the Arbitrator’s opinion on the point mentioned.
[Page 267]Meantime the formation of the arbitral tribunal is postponed, and the dispute between the Government and railroad company is not only vexatiously suspended but must, in the nature of the relations of the two parties, continue to be aggravated.
In any event, the Government will inflexibly maintain its policy of energetic protection of the interests, privileges and laws of the State while treating the rights and interests of the company with the greatest respect.
A troublesome controversy with the Railroad Company has arisen from the carrying of postal packages from Guayaquil to Quito. The company, making its own interpretation of article 23 of the contract of 1897, holds that it is not obliged to carry packages as an integral part of the mails, which are carried free of charge. But the Government contends that the company is explicitly and clearly charged with that obligation. In view of this disagreement it has been thought prudent to arrange an agreement between the two parties for continuing the service as to packages without prejudice to the submission of the controversy to the Arbitral Tribunal, on the understanding that if the tribunal decide in favor of the Government the company will return the sums which it is receiving for this service.