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of May 26, 1876, and the clauses of the contract celebrated on the 28th of May of the same year, shall be submitted for the approval of the President of the union and the definite acceptance by the Congress of the nation.
In witness whereof they sign the present in Bogota, on the 20th March, 1878.
The foregoing contract is hereby approved, with the following modifications:
-It is, however, stipulated and agreed that if, before the payment of the security determined upon in article 2, the Colombian Government should receive any formal proposal, sufficiently guaranteed, in the opinion of the said government, to construct the canal in less time and under more advantageous conditions for the United States of Colombia, said proposal shall be communicated to the grantees or their representatives, that they may be substituted therein, in which case they shall be preferred; but if they do not accept said substitution, the Colombian Government, in the new contract which they may celebrate, shall exact, besides the guarantee mentioned in article 2, the sum of three hundred thousand dollars in coin, which shall be given as indemnity to the grantees.
Article 2, thus:
ART. 2. Within the term of twelve months from the date at which the international commission shall have presented the definite results of their studies, the grantees shall deposit in the bank or banks of London, to be designated by the national executive power, the sum of seven hundred and fifty thousand francs, to the exclusion of all paper money, as security for the execution of the work. The receipt of said banks shall be a voucher for the fulfillment of said deposit. It is understood that if the grantees should lose that deposit by virtue of the stipulations contained in clauses 2 and 3 of article 22 of the present contract, the sum referred to, with interest accrued, shall become in toto the property of the Colombian Government. After the conclusion of the canal, said sum, without interest, which latter will in this case belong to the grantees, shall remain for the benefit of the treasury, for the outlays which it may have incurred or may incur in the construction of buildings for the service of the public officers.
Article 3, thus:
ART. 3. If the line of the canal to be constructed from sea to sea should pass to the west and to the north of the imaginary straight line which joins Cape Tiburon with Garachiné Point, the grantees must enter into some amicable arrangement with the Panama Railroad Company, or pay an indemnity, which shall be established in accordance with the provisions of law 46, of August 16, 1867, approving the contract celebrated on July 5, 1867, reformatory of the contract of April 15, 1850, for the construction of an iron railroad from one ocean to the other through the Isthmus of Panama.'
In case the international commissions should choose the Atrato or some other stream already navigable as one of the entrances to the canal, the ingress and egress by such stream, and the navigation of its waters, so long as it is not intended to cross the canal shall be open to commerce and free from all imposts.
Article 4, thus:
ART. 4. Besides the lands granted in paragraphs 7 and 8 of article 1, there shall be awarded to the grantees, as an aid for the accomplishment of the work, and not otherwise, five hundred thousand hectares of public lands, with the mines they may comprise, in the localities which the company may select. This award shall be made directly by the national executive power. The public lands situated on the sea-coast, on the borders of the canal or of the rivers, shall be divided in alternate lots between the government and the company, forming areas of from one to two thousand hectares. The measurements for the allotment or locating shall be made at the expense of the grantees, and with the intervention of government commissioners. The public lands thus granted, with the mines they may hold, shall be awarded to the grantees
as fast as the work of construction of the canal progresses, and in accordance with rules to be laid down by the executive power.
Within a belt of two myriameters on each side of the canal, and during five years after the termination of the work, the government shall not have the right to grant other lands beyond the said lots until the company shall have called for the whole number of lots granted by this article.
Article 5, thus:
ART. 5. The government of the republic hereby declares the ports at each end of the canal, and the waters of the latter from sea to sea, to be neutral for all time; and consequently, in case of war among other nations, the transit through the canal shall not be interrupted by such event, and the merchant vessels and individuals of all nations of the world may enter into said ports and travel on the canal without being molested or detained. In general, any vessel may pass freely without any discrimi nation, exclusion, or preference of nationalities or persons, on payment of the dues and the observance of the rules established by the company for the use of the canal and its dependencies. Exception is to be made of foreign troops, which shall not have the right to pass without permission from Congress, and of the vessels of nations which, being at war with the United States of Colombia, may not have obtained the right to pass through the canal at all times, by public treaties wherein is guaranteed the sovereignty of Colombia over the Isthmus of Panama and over the territory whereon the canal is to be cut, besides the immunity and neutrality of the said canal, its ports, bays, and dependencies, and the adjacent seas.
Article 6, thus:
ART. 6. The United States of Colombia reserves to themselves the right to pass their vessels, troops, ammunitions of war at all times aud without paying any dues whatever. The passage of the canal is strictly closed to war vessels of nations at war with another or other nations, and which may not have acquired, by public treaty with the Colombian Governments, the right to pass by the canal at all times.
Article 2, thus:
ART. 8. The executive power shall dictate, for the protection of the financial interests of the republic, the regulations conducive to the prevention of smuggling, and shall have the power to station, at the cost of the nation, the number of men which they may deem necessary for that service.
Out of the indispensable officials for that service, ten shall be paid by the company, and their salaries shall not exceed those enjoyed by employés of the same rank in the Barranquilla custom-house.
The company shall carry gratis through the canal, or on the auxiliary railway, the men destined for the service of the nation, for the service of the state through whose territory the canal may pass, or for the service of the police, with the object of guarding against foreign enemies, or for the preservation of public order, and shall also transport gratis the baggage of such men, their war materials, armament, and clothing which they may need for the service assigned to them.
The subsistence of the public force which may be deemed necessary for the safety of the interoceanic transit shall likewise be at the expense of the company.
Article 13, thus:
ART. 13. The government allows the immigration and free access to the lands and shops of the grantees of all the employés and workingmen of whatever nationality, who may be contracted for the work, or who may come to engage themselves to work on the canal, on condition that such employés or laborers shall submit to the existing laws, and to the regulations established by the company. The government promises them support and protection, and the enjoyment of their rights and guarantees, in conformity with the national constitution and laws, during the time they may sojourn on Colombian territory.
The national peons and laborers employed on the work of the canal shall be exempt from all requisition of military service, national as well as of the state.
Article 14, thus:
ART. 14. In order to indemnify the grantees of the construction, maintenance, and working expenses incurred by them, they shall have, during the whole period of the privilege, the exclusive right to establish and collect for the passage of the canal and its ports, the dues for light-houses, anchorage, transit, navigation, repairs, pilotage, towage, hauling, stowage, and of station according to the tariff which they may issue, and which they may modify at any time under the following express conditions:
1st. They shall collect these dues, without any exceptional favor, from all vessels in like circumstances.
2d. The tariffs shall be published four months before their enforcement in the Diario Oficial of the government, as well as in the capitals and the principal commercial ports of the countries interested.
3d. The principal navigation dues to be collected shall not exceed the sum of ten francs for each cubic meter resulting from the multiplication of the principle dimensions of the submerged part of the ship in transit (length, breadth, and draught).
4th. The principal dimensions of the ship in transit, that is to say, the maximum exterior length and breadth at the water-line, as well as the greatest draught, shall be the metrical dimension inserted in the official clearance papers, excepting any modifications supervening during the voyage. The ships' captains and the company's agents may demand a new measurement, which operations shall be carried out at the expense of the petitioner; and
5th. The same measurement, that is to say, the number of cubic meters contained in the parallelopipedon circumscribing the submerged part of the ship, shall serve as a basis for the determination of the other accessory dues.
Article 15, thus:
ART. 15. By way of compensation for the rights and exemptions which are allowed to the grantees in this contract, the government of the republic shall be entitled to a share amounting to five per cent. on all collections made by the company, by virtue of the dues which may be imposed in conformity with Article 14, during the first twenty-five years after the opening of the canal to the public service. From the twenty-sixth up to the fiftieth year, inclusive, it shall be entitled to a share of (6%) six per cent; from the fifty-first to the seventy-fifth to seven per cent; and from the seventysixth to the termination of the privilege to eight per cent. It is understood that these shares shall be reckoned, as has been said, on the gross income from all sources, without any deductions whatever for expenses, interest on shares, or on loans or debts against the company. The government of the republic shall have the right to appoint a commissioner or agent, who shall intervene in the collections and examine the accounts, and the distribution or payment of the shares coming to the government shall be made in due half-yearly installments. The product of the five, six, seven and eight per cent. shall be distributed as follows:
Four-fifths of it shall go to the government of the republic, and the remaining onefifth to the government of the state through whose territory the canal may pass.
The company guarantees to the Government of Colombia that the share of the latter shall in no case be less than the sum of two hundred and fifty thousand dollars a year, which is the same as that received as its share in the earnings of the Panama Railroad, so that if in any year the five per cent. share should not reach said sum, it shall be completed out of the common funds of the company.
Article 20, thus:
ART. 20. The Colombian Government may appoint a special delegate in the board of directors of the company whenever it may consider it useful to do so. This delegate shall enjoy the same advantages as are granted to the other directors by the by-laws of the company.
The grantees pledge themselves to appoint in the capital of the union, near the national government, a duly-authorized agent for the purpose of clearing up all doubts and presenting any claims to which this contract may give rise. Reciprocally and in the same sense, the government shall appoint an agent, who shall reside in the principal establishment of the company situated on the line of the canal; and, according to the national constitution, the difficulties which may arise between the contracting parties shall be submitted to the decision of the federal supreme court.
Article 22, thus:
ART. 22. The grantees, or their representatives, shall lose the right hereby acquired in the following cases:
1st. If they do not deposit, on the terms agreed upon, the sum which by way of security must insure the execution of the work.
2d. If, in the first year of the twelve that are allowed for the construction of the canal, the works are not already commenced, in this case the company shall lose the sum deposited by way of security, together with the interest that may have accrued; all of which will remain for the benefit of the republic.
3d. If, at the end of the second period fixed in paragraph 5 of Article 1, the canal is not transitable, in this case also the company shall lose the sum deposited as security; which, with the interests accrued, shall remain for the benefit of the republic.
4th. If they violate the prescriptions of Article 21; and,
5th. If the service of the canal should be interrupted for a longer period than six months without its being occasioned by the acts of God, &c.
In cases 2, 3, 4, and 5, the federal supreme court shall have the right to decide whether the privilege has become annulled or not.
Article 23, thus:
ART. 23. In all cases of decisions of nullity, the public lands mentioned in clauses 7 and 8 of Article 1, and such lands as are not settled or inhabited from among those granted by Article 4, shall revert to the possession of the republic in the condition they may be found in, and without any indemnity whatever, as well as the buildings, materials, works, and improvements which the grantees may possess along the canal and its accessories. The grantees shall only retain their capital, vessels, provisions, and in general all movable property.
Given at Bogota on the seventeenth day of May, eighteen hundred and seventyeight.
The president of the senate of plenipotentiaries:
The president of the chamber of representatives:
The secretary of the senate of plenipotentiaries :
The secretary of the chamber of representatives:
Let it be published and enforced.
The President of the Union:
The secretary of the interior and foreign relations:
JULIO E. PEREZ.
BOGOTA, May 18, 1878.
FRANCISCO J. ZALDUA.
Note from Mr. Lucien N. B. Wyse, wherein he declares he accepts all the modifications made by law 28 to the contract for the construction of the interoceanic canal.
To the honorable Secretary of the Interior and Foreign Relations :
I have the honor to inform you that I accept each and all of the modifications introduced by Congress to the contract which I celebrated with Señor Eustorgio Salgar, your worthy predecessor in the department of the interior and foreign relations, for the construction of the interoceanic canal, which contract was approved by the executive power under date of March 23 last.
The modifications to which I have alluded are those recorded in law No. 28 of the 18th instant.
I hasten to lay this declaration before the Government of Colombia, so that it may be taken in consideration, in order that said law may be effective in all its parts. BOGOTA, May 18, 1878.
LUCIEN N. B. WYSE, Chief of the International Scientific Commission for the Survey of the Isthmus, Member and Delegate from the Board of Directors of the Interoceanic Canal Association.
68.-Mr. Blaine to Mr. Lowell.
SIR: It has fallen under the observation of the President, through the current statements of the European press and other usual channels of communication, that the great powers of Europe may possibly be considering the subject of jointly guaranteeing the neutrality of the interoceanic canal now projected across the Isthmus of Panama.
The United States recognizes a proper guarantee of neutrality as essential to the construction and successful operation of any highway across the Isthmus of Panama, and in the last generation every step was taken by this government that is deemed requisite in the premises. The necessity was foreseen and abundantly provided for, long in advance of any possible call for the actual exercise of power.
In 1846 a memorable and important treaty was negotiated and signed. between the United States of America and the Republic of New Granada, now the United States of Colombia. By the thirty-fifth article of that treaty, in exchange for certain concessions made to the United States, we guaranteed "positively and efficaciously" the perfect neutrality of the isthmus and of any interoceanic communications that might be constructed upon or over it for the maintenance of free transit from sea to sea; and we also guaranteed the rights of sovereignty and property of the United States of Colombia over the territory of the isthmus as included within the borders of the State of Panama.
DEPARTMENT OF STATE,
In the judgment of the President this guarantee, given by the United States of America, does not require re-enforcement, or accession, or assent from any other power. In more than one instance this government has been called upon to vindicate the neutrality thus guaranteed. and there is no contingency, now foreseen or apprehended, in which such vindication would not be within the power of this nation.
There has never been the slightest doubt on the part of the United States as to the purpose or extent of the obligation then assumed, by which it became surety alike for the free transit of the world's commerce over whatever land-way or water-way might be opened from sea to sea, and for the protection of the territorial rights of Colombia from aggression or interference of any kind. Nor has there ever been room to question the full extent of the advantages and benefits, naturally due to its geographical position and political relations on the Western continent, which the United States obtained from the owner of the isthmian territory in exchange for that far-reaching and responsible guar
If the foreshadowed action of the European powers should assume tangible shape, it would be well for you to bring to the notice of Lord Granville the provisions of the treaty of 1846, and especially of its thirty-fifth article, and to intimate to him that any movement in the sense of supplementing the guarantee contained therein would necessarily be regarded by this government as an uncalled-for intrusion into a field where the local and general interests of the United States of America must be considered before those of any other power save those of the United States of Colombia, alone, which has already derived and will continue to derive such eminent advantages from the guarantee of this government.
The President deems it due to frankness to be still more explicit on this subject, and to elucidate the views of the United States Government with somewhat of detail, to the end that no uncertainty shall subsist as to the integrity of our motives or the distinctness of our aims.
It is not the wish or the purpose of the United States to interfere with any commercial enterprise in which the citizens or subjects of any foreign power may see fit to embark under a lawful privilege. The fact of the stock and franchises of the Panama Canal or the Panama Railway being owned in Europe, either in whole or principally, is no more a subject of complaint on the part of the United States than is the circumstance that the stock of many of its own great lines of railway is largely held abroad. Such ownership, with its attendant rights, is in the United States amply secured by the laws of the land, and on the Isthmus is doubly secured by the local laws of Colombia, under the superior guarantee of the United States.
Nor, in time of peace, does the United States seek to have any exclusive privileges accorded to American ships in respect to precedence or tolls through an interoceanic canal any more than it has sought like privileges for American goods in transit over the Panama Railway, under the exclusive control of an American corporation. The extent of the privileges of American citizens and ships is measurable under the treaty of 1846 by those of Colombian citizens and ships. It would be our earnest desire and expectation to see the world's peaceful commerce enjoy the same just, liberal, and rational treatment.
It is as regards the political control of such a canal, as distinguished from its merely administrative or commercial regulation, that the President feels called upon to speak with directness and with emphasis. During any war to which the United States of America or the United