422.11 G 93/1258: Telegram

The Minister in Ecuador ( Boding ) to the Secretary of State

1. Department’s 1, January 6, 6 p.m. Government replies that contracts celebrated [consummated?] by a government with aliens [Page 927] should not give rise to diplomatic correspondence except in case of denial of justice or notorious injustice and further that the railway may argue before the judge its belief that the court has no jurisdiction, adding that the deposit of 600,000 sucres had no relation to contract for the construction of the railway.

Since the decision as to whether the sum in question was a deposit or payment seems to rest on the interpretation of section 2 of article 2 of the legislative decree ratifying the transaction contract of 1908, and as section 6 of the same article confirms article 27 of the contract of June 14th, 1897,7 [which provides that?] the Presidents of Ecuador and the United States or their appointees are to be the arbitrators of all controversies between the two contracting parties, and since regard of arbitration called for in the contract would likewise appear to be an act of injustice already committed, the Government’s claim relative to diplomatic intervention seems to me ineffective and I request permission to lay the case more fully before the President and strongly urge upon him the advisability of arbitration.

  1. Contracts of 1897 and 1908 not printed; for 1907–8 arbitration under art. 27 of the contract of 1897, see Foreign Relations, 1907, pt. 1, pp. 385 ff., and 1908, pp. 273 ff.