Papers Relating to the Foreign Relations of the United States, 1918
File No. 422.11G93/945
The Minister in Ecuador ( Hartman) to the Secretary of State
Sir: I have the honor to enclose herewith triplicate copies, together with translation, of note No. 1, of January 11, 1918, from the Minister for Foreign Affairs, in reply to my note No. 254, dated November 30, 1917, wherein I transmitted textually to the Government of Ecuador, as directed, a certain portion of Department’s [Page 402] telegram of November 26, 1927, 5 p.m., relating to the failure of Ecuador to comply with its obligations growing out of its contractual relations with the Guayaquil & Quito Railway Co.
In the last paragraph, on page 2 of enclosure No. 2, the Department will observe that the Minister for Foreign Affairs does not make complete answer to Department’s said telegram, but says that he has “transmitted to the Ministries of Public Works and the Treasury the pertinent parts of Your Excellency’s communication for their reply.”
I have no opinion as to when they will reply, but, judging from previous experience, it will probably be in the distant future.
I have not answered this note, deeming it proper to be submitted to the Department for further instructions, which I respectfully await.
I have [etc.]
The Ecuadoran Minister of Foreign Affairs ( Tobar y Borgoño) to the Minister in Ecuador ( Hartman)
Mr. Minister: I beg to refer to Your Excellency’s note, No. 254, dated November 30, in which, by order of the American Government, you are pleased to quote me a telegram received by you from the Department of State, relative to the refutation of statements made by me in my note of February 28, of last year, addressed to the Legation worthily directed by your excellency.
Whereas, reads the telegram referred to, the original contract of 1897 between the Government of Ecuador and the Guayaquil & Quito Railway Co. provides that the difficulties that might arise between the two parties should be a matter of diplomatic concern, of sufficient importance to be settled by arbitrators appointed by the Presidents of Ecuador and the United States; and, whereas the arbitration contract of 1908 rendered valid that agreement by giving it the legal status of an award, which has been repeatedly transgressed by Ecuador, the Government of which seems to have the intention of violating it afresh; whereas the daily allotments to be set aside from the customs receipts, in accordance with the agreement of 1908, have been neglected; and, finally, taking into consideration the failure of the two attempts at arbitration in 1913 and 1914, it must be admitted that there has resulted a case of denial of justice. The Government of the United States, the telegram goes on to say, sees nothing in the said note of February 28 to give reason for any change whatever in its attitude; for years it has pointed out repeatedly in an explicit manner to the Ecuadoran Government its intention to exercise its rights by the interposition of diplomatic influence to protect the American interests of the Guayaquil & Quito Railway Co. The telegram ends by admonishing the Government of Ecuador to collect the deposits in accordance with the arbitration contract, and demanding that it shall name an early date for said collection.
The communication to which I hereby reply may thus be reduced to two points: the one being an exposition of the American Government’s opinion to the effect that the affairs of the Guayaquil & Quito Railway Co. show cause for diplomatic intervention, since such action was authorized from the beginning by assigning to the Presidents of Ecuador and the United States their part in the arbitration tribunal, and because there has been a denial of justice; the other part relates to the interpretation and fulfilment of the contracts of the Ecuadoran Government with the said company.
Your excellency will pardon me for not replying to the second part; for, as I have had occasion to state at other times, it is not within the province of the Department under my charge to reply thereto. I have transmitted to the Ministries of Public Works and the Treasury the pertinent parts of your excellency’s communication, for their reply.
With respect to the first point, namely, the question of legalizing diplomatic intervention, I regret not to be able to agree with the communication to which I reply.
[Page 403]Your excellency, quoting the telegram from the Department of State, says that the original contract of 1897 provides that the differences that should arise between Ecuador and the company must have been of sufficient importance in the opinion of the contracting parties to be settled by arbitrators appointed by the Presidents of Ecuador and the United States, and that, hence, it is shown that in said contract diplomatic intervention was admitted. Clause 27 of the said original contract does, indeed, provide that the controversies or disagreements that might arise between the two contracting parties should be settled by the President of Ecuador and the President of the United States, or by the arbitrators they themselves might appoint; and that clause has been allowed to stand in the subsequent reformatory contracts; but, is it possible to deduce from that fact the legality of diplomatic intervention? No, by no means. The arbitrators are the persons of the Presidents; that is to say that at the present moment they are Doctor Baquerizo and Mr. Wilson, just as they were Mr. Taft and Mr. Plaza, and as previously they might have been Mr. Alfaro and Mr. Roosevelt. If, in the contract, Presidents are spoken of, it is because the persons who were to fill those offices could not have been designated by name, since it was not known who they might be at the time when the parties might have to appeal to them. If the Presidents were designated as arbitrators, or to appoint the arbitrators, it was not because of any intention of bringing about the intervention of diplomatic machinery; but thereby was sought only wisdom and justice, by the selection of judges who, on account of their high political position, would be a guaranty of that wisdom and justice, both in respect of the award and of the selection of the persons who were finally to render it. Had there been any other thought in mind, it is very certain it would have been stated that it should belong to the two Governments to make the appointment. Hence I think there could be no room, in any way, for accepting diplomatic intervention on the part of the American Government founded on the fact that the two Presidents, or those who may be appointed by them, are the arbitrators.
I can not comprehend on what the affirmation can be founded that the contracting parties in 1897 wished to put in movement the machinery of diplomacy by the wording of that clause. The arbitrator appointed by one of the Presidents should act in a diplomatic character if he represented his country in the exercise of his functions as arbitrator, or if at least he represented the supreme authority; but the arbitrators, in the present case, represent neither Ecuador nor the United States, nor the persons of the heads of the two Republics, whose only attribution is that of making the appointments. The arbitrators, in this case, as in every other, are nothing more than judges who are to exercise the functions of such, whether in accordance with law or equity—judges, who, once appointed, do not represent those who appointed them; nor are they to pronounce sentence in representation thereof. Therefore, the participation of the Presidents is no more than a procedure to bring about the designation of the judges, who, once designated, cause the participation of those who elected them to cease. Moreover, supposing the Presidents should have chosen to settle the disagreements themselves, they would do so, not as Presidents, but as judges, there being simply the concurrence of the two offices in their persons: that of the head of State in their own country, and that of arbitrator in this suit.
And that this has been the stand constantly maintained by the Ecuadoran Government, I have no need of reminding your excellency. Dr. José Peralta, Minister of Foreign Relations at the time, stated to the American Legation on June 1, 1911, that, as Article 23 of the Constitution sets forth clearly that all contracts entered into by foreigners with Ecuador carry with them the implicit condition of the waiving of all diplomatic claim, and as, furthermore, our Civil Code declares to be incorporated in the contracts the laws in force at the time of their celebration, it is understood in the transaction contract of September 30, 1908, as also in all the previous contracts the Government has entered into with the Guayaquil & Quito Railway Co., that this latter contracting party has waived the presentation of claims it may try to enforce against the Ecuadoran Government through diplomatic channels.
This same opinion has been set forth in the most explicit manner by the Ecuadoran Government which in 1913 rejected a proposed protocol relating to arbitration between the Government of Ecuador and the company, precisely because that project implied the transfer of the controversy to international and diplomatic ground, which was in opposition to that which Ecuador had been careful to determine from the start, namely, the distinction between the person of the President of the United States and the American Government, between the person of the President of Ecuador, and the Ecuadoran Government.
[Page 404]It has maintained the same doctrine every time the arbitrators appointed by American Presidents have attempted to assume a diplomatic character, to show which it will suffice me to quote the note from this Ministry, No. 269, of April 1, 1913, addressed to your Legation, in which that point is clearly expounded.
In the telegram quoted, it is said there is occasion for diplomatic intervention since there has resulted an instance of a denial of justice. I regret, also with respect to this, to have to disagree with that despatch. Is there really a denial of justice in the case in point? The reply must necessarily be in the negative.
There is denial of justice when a judge, a tribunal, an administrative authority, under any pretext, refuses to pass judgment on the matters which have been submitted thereto in regular form, and which await that judgment. That is a denial of justice, a censurable and punishable act, since, if well-organized nations prohibit their citizens from taking justice into their own hands, it is logical, natural, and necessary that the magistrates and authorities should decide all causes submitted to them.
Then, as a denial of justice is so grave an act in itself and in its consequences, to prove it, it is necessary that there should expressly appear the wilful refusal of the judge or authority to decide the matter, violating the law which imposes on him the obligation to do so, or when it appears in an equally indisputable manner that the matter, having been submitted to the judge or authority, either one maliciously or intentionally neglects the fulfilment of his duty; and so serious is a denial of justice considered, that it is generally held in international law to justify diplomatic intervention if it damages the interests of foreign subjects; but in this case, less than in any other, is there any room for speaking of an exception to the general rule requiring proof that the denial of justice has actually occurred. Now, it is not possible to found a complaint of a denial of justice, as is attempted in the telegram from the Department of State to which I refer, on the failure of the several arbitration tribunals to settle the differences that have arisen between Ecuador and the railway company: those failures are entirely due to causes which, if they may be imputed to any party, can not be attributed to the Ecuadoran Government.
I will remind your excellency that this Government was the first to demand an arbitral decision since difficulties arose with the railway company. The tribunal of 1907 and 1908 failed because, in the long period of its sittings, no other pertinent documents were presented than those setting forth the respective claims, one of which was formulated by a person who could not produce any document whatever in support of his legal representation, so that the tribunal could not take action with respect to the claims on account of an omission exclusively on the part of the railway company. This gave rise to the transaction contract of 1908, which contract makes evident the eternal good will of the Ecuadoran Government which resigned itself to the acceptance of that transaction settlement, since the railway company impeded an arbitral award. It can not therefore be said that the Ecuadoran Government was in any sense to blame for the failure of the first arbitration tribunal, and hence it can not well be established that there has been any denial of justice imputable to the said Government; on the other hand, your excellency will agree with me that the railway company, by not providing the representative who acted as its attorney with legal title therefor, did everything possible to prevent the hoped-for award being rendered.
On June 1, 1911, the Ecuadoran Government expressed its wish that the arbitration tribunal should decide the fresh difficulties that had arisen. A party that not only does not refuse to appear before the judge, as provided, but that demands the operation of the tribunal, is not guilty of bad faith, nor of creating difficulties for the rendering of an award, requested by said party itself. It must be observed that, if the railway company did indeed present itself for arbitration, it caused the latter to fail by its omission to provide with legal powers those who have appeared as its attorneys: Mr. John Lane, who assumed that representation in the steps preliminary to the organization of the tribunal, was obliged to admit before the judge of the Province of Pichincha (Juez Letrado de Pichincha) that he held no power of attorney; the judge set a time in which he should prove his attorneyship, which time more than elapsed without Mr. Lane ever appearing to present any document whatever. Here, then, is the cause of the failure of the second tribunal, which is entirely imputable [Page 405] to the company that, nevertheless, has no scruple in posing as the victim, seeking the powerful aid of the American Government.
Dr. Alfredo Baquerizo Moreno, having been appointed arbitrator by General Plaza, President of Ecuador, and Dr. Henry L. Janes by the President of the United States, since the tribunal could not be of a diplomatic character, as is evident and indisputable, the arbitrators logically should have taken the oath of office before the proper authority. This was the stumblingblock; and it must be observed that, in this case also, the obstacles and the opposition, if presented by anyone, were certainly not presented by the Ecuadoran arbitrator: the resistance came from the other party; and there should, furthermore, be noted the fact that the representative and the attorney of the Guayaquil & Quito Railway Co. had from the beginning placed difficulties in the way of the oath of office being taken before the supreme tribunal. In view of this, how is it possible to found thereupon a case of denial of justice, which can in no way be proved? The course which should have been followed was so much the clearer since, in the year 1907, the arbitrators, Messrs. Borja and Fox, had appeared before the judge (Juez de Letras) to take the oath.
This second tribunal having miscarried as the result of the causes above-stated, the Government of Ecuador insisted on the formation of a new tribunal; and, Judge A. L. Miller having been appointed by President Wilson, it was requested that said gentleman should come as soon as possible to Ecuador, as in fact he did.
The tribunal became constituted by the formalities of the oath-taking before the Ecuadoran judge. It was therefore to be expected that the arbitrators would forthwith proceed with the discharge of their duties. As a preliminary, and in view of the lessons taught by past experience, the fiscal attorney requested that the company’s representative should produce his legal titles as such. Mr. Miller raised questions of form relating to the acceptance of the Ecuadoran lawyer’s petition, as also with regard to accepting the latter’s allegation. Under these circumstances it was very difficult to arrive at an agreement in the tribunal. Mr. Miller then left Quito without even making known the motive for his departure. I shall not refer to the other exacting demands of Mr. Miller, such as that two records of the proceedings should be kept simultaneously, also that the English language should be employed at the same time as the Spanish, and that two secretaries should be appointed, etc. The Ecuadoran arbitrator remained in Quito, and his good will to judge the cause is manifest.
Notwithstanding these antecedents, which are in accordance with the facts, to the Ecuadoran Government, and to Ecuador in general, is now attributed the responsibility for the failure of the several tribunals, as a reason for accusing it of a denial of justice, which, even though it existed, was not imputable thereto, being rather due to the attitude assumed by the other party. If there has been any denial of justice, the responsibility therefor is entirely attributable to the company, and possibly to one of the arbitrators appointed by the American President.
Your excellency, Mr. Minister, is acquainted, in all its details, with the sad history of these facts; there is therefore no occasion for me to insist with respect thereto; and as you are so acquainted therewith, you must agree with me that it is not possible to attribute to Ecuador any responsibility, great or small, for the lack of an arbitral award to settle the difficulties that exist or have existed in respect of the contract between the Guayaquil & Quito Railway Co. and Ecuador.
The matter is clear, exceedingly clear, and to such an extreme that I am convinced the Secretary of State, with his well-known spirit of strict justice must agree with me that the railway company has no reason for hoping to count upon the diplomatic support of the Government of the Union in the matter of its differences with Ecuador.
In view of the foregoing, I am obliged, much to my regret, to state to your excellency, that my Government, upheld as it is by justice, is bound not to accept, in any form, diplomatic intervention, since that has not been recognized previously, as it has been desired to show; neither is it possible to speak of a denial of justice as imputable to the Ecuadoran Government or authorities.
Believe me, Mr. Minister, that in expressing so categorical a negative I am forced thereto in obedience to strict duty, which obliges me to defend truth, justice, and the national interests which are upheld by truth and justice.
I avail [etc.]