437.11H23/20
The Secretary of State to the Ambassador in Cuba (Crowder)
Sir: The Department refers to its instruction to you of June 12, 1926, No. 720, and the note of the Cuban Foreign Office of July 13, 1926,17 in relation to the desire of Mr. Charles J. Harrah to obtain indemnification for losses growing out of the alleged illegal demolition of his railroad and appurtenances located in the vicinity of Marianao, Cuba, and the consequent destruction of the business for which the railroad was built.
In its note of July 13, 1926, the Cuban Foreign Office declines to enter into any negotiations for the arbitration of this claim on the ground that the matter could only be made the subject of an arbitration after it had been demonstrated that the claim could not be settled through diplomatic channels, and states that an investigation of the matter by the Foreign Office discloses that the claimant has failed to set forth the true situation with respect to the facts of the case and that an examination of the data procured as a result of the investigation justifies the conclusions:
- 1.
- That Mr. Charles J. Harrah does not appear to have ever been a concessionaire of any railroad on the coast between Playa de Marianao and Baracoa and the North Province of Habana.
- 2.
- That the railroad which was constructed on said shore was constructed in an unlawful manner, inasmuch as it was constructed fixed and permanent in character under the cover of a provisional authorization of one year for the installation of a portable railway.
- 3.
- That such railroad appears to have been constructed by Messrs. Victor Gonzales and Enrique Gómez, as was confessed and declared under oath before the judicial authority by Mr. Harrah himself.
- 4.
- That the demolition was properly ordered, as is shown by the fact that it was thus recognized by the President of the Republic in deciding the appeal interposed by Mr. Gómez and by the courts of [Page 903] justice in setting aside the contentious administrative appeal and confirming the resolution appeal.
As the facts relied upon by the Cuban Foreign Office to support its conclusions as to the identity, character, ownership and legal status of the railroad for the destruction of which Mr. Harrah is seeking compensation were so at variance with the facts as presented to the Department by Mr. Harrah and supported by seemingly competent evidence, the Department, after a very careful reconsideration of the whole matter, decided that it would be desirable to acquaint Mr. Harrah’s legal representative with the contents of the Cuban note in order that an opportunity might be afforded the claimant to restate his case in the light of the allegations of the Cuban Foreign Office. It may be observed in this connection that the Department felt that the reply of the Cuban Foreign Office to your presentation of the claim in accordance with the Department’s instruction of June 12, 1926, did not constitute a very satisfactory disposition of the case, since the note of the Cuban Foreign Office itself raises a question as to whether there might not, as a matter of fact, have been a serious injustice done to Mr. Harrah through the confounding of his railroad, which was actually built in 1908, of a fixed and permanent character, with an alleged portable railroad that was authorized to be constructed under the provisional permit of 1910, but which would appear never to have been actually built.
Mr. Harrah through his legal representative has submitted a memorandum dated March 29, 192718 to the Department containing a re-statement of his case and has made categorical replies to the allegations of the Cuban Foreign Office. In the light of this re-statement of the case and the allegations of the Cuban Foreign Office with respect to the facts as set forth by the Foreign Office, it would seem that three issues of fact are raised, namely: (1) Was the railroad which was destroyed built upon the public domain; (2) if built upon the public domain was legal authorization secured for placing the structure thereon or was such structure subsequently legalized; and (3) has the claimant established his ownership in and to the railroad which was destroyed pursuant to the order of the Cuban Government in 1917. In the determination of these questions, it would seem desirable to ascertain whether the claimant had a valid right to occupy the public domain and whether the claimant was in point of fact the owner of the railroad. If these questions are susceptible of determination in the claimant’s favor, then it is difficult to escape the conclusion that an arbitrary disposition was made of his railroad which would entitle him to reimbursement for whatever losses he may have actually sustained.
[Page 904]The Department considers that the Cuban Foreign Office should be furnished with the text of the rejoinder of the claimant to the note of July 13, 1926, from the Foreign Office, since the essential points at issue both as to fact and law are apparently covered in the re-statement of the claimant’s case. You are therefore instructed to take this matter up again with the Foreign Office in the sense of the foregoing, handing to the Foreign Office at the same time a copy of the claimant’s memorandum above referred to, which is transmitted herewith in duplicate. You will state that unless the Foreign Office is able to show that the claimant’s contentions are inaccurate the Cuban Government must admit that there was a lack of due process of law in the destruction of the road, a taking of property without the payment of compensation and that both justice and equity would seem to demand that steps be promptly taken to bring about a settlement which will make it possible for the claimant to realize on his property thus destroyed.
Please follow this matter closely and keep the Department promptly informed regarding developments.
I am [etc.]