Papers Relating to the Foreign Relations of the United States, Transmitted to Congress, With the Annual Message of the President, December 4, 1876

No. 53.
Mr. Scruggs to Mr. Fish.

Legation of the United States,
Bogotá, June 5, 1876. (Received July 14.)

No. 170.]

Sir: The Department is already aware of the character and purpose of Mons. de Gogorza’s mission to this country. Its final result only remains to be stated.

On the 26th ultimo, the President approved an act of Congress authorizing him, under certain conditions, to negotiate for opening a ship-canal transit between the gulfs of Darien and San Maguiel.

This law, a copy and translation of which I inclose, forms the basis of a contract with Gogorza, a copy and translation of which I likewise inclose herewith.

It will be observed that under this arrangement the syndicate have eighteen months’ time, from the date of the contract, in which to make a report of the exploration of the proposed route of the canal; that should this prove satisfactory, eighteen months more are allowed in which to form a company for construction; and that within ten years thereafter, or at farthest seventeen from the date of this concession, the canal must be opened to the public service.

I have, &c.,

WILLIAM L. SCRUGGS.

[Inclosure 1 in No. 170.—Translation.]

Law of May 26, 1875, (No. 33,) to authorize the executive power to negotiate for opening canal communication between the Atlantic and Pacific Oceans.

The Congress of the United States of Colombia decrees:

• Article I. The government of the United States of Colombia favors a project of canal communication between the Atlantic and Pacific, across the Isthmus of Darien. Said canal to be without locks or tunnels, and outside the belt conceded to the Panama Railroad Company.
• Art. II. For this purpose and for the celebration of a contract to which the present law shall give origin, the national executive is hereby authorized to treat with any individual or company which may offer the following securities and agree to the following conditions:

  1. The duration of the privilege to be ninety-nine years from the time the canal is put into public service, either in whole or in part, and from the time the company shall commence collecting transportation duties.

  2. From the date of the contract for opening the canal the government can neither construct itself, or authorize the construction by others, of another canal between the two oceans through the territory mentioned in the first part of this article; and should the grantee or contractor construct a railway auxiliary to the canal across said territory, neither the government nor any of its grantees can construct another interoceanic railway in the same territory during the time conceded for the opening and benefice of the canal.

  3. The exploration, survey, and fixing of the line of the canal shall be at the expense of the grantee; said survey and exploration to be made by an international commission of competent engineers, whereof two shall be Colombians. The commission of engineers shall be named within six months from the date of the contract for opening the canal; within the six months next following (excepting unforeseen accidents) the exploration of the general line of the canal shall be made; and within the six months next succeeding the grantee shall make report to the Colombian government or to its diplomatic agent accredited to France or England of the result of the exploration; said report accompanied by duplicate of scientific observations to show whether the proposed enterprise is practicable, and, if so, its probable cost.

  4. The grantee shall have eighteen months’ time in which to organize a company for the opening of the canal, counting from the end of the last six months, mentioned in condition 3.

  5. Within ten years from the date of the formation of the company for its opening, the canal must be completed and ready for the public use; but if, after the completion of more than one-third of the entire line, and owing to circumstances independent of the will of the grantee it should be found impossible to complete the whole within the ten years specified, the executive may concede an extension of four years more.

  6. The canal must have sufficient width, depth, and other conditions necessary to its navigation by steam or sailing vessels of from five to six hundred tons.

  7. The necessary wild lands for excavation of the canal and its harbors, the erection of wharves and warehouses, and all necessary appendages, as also for the construction of a railway, should that be decided upon, are conceded to the grantee or contractor, provided said wild lands, together with the canal and the railway, revert to the republic at the expiration of the time of the privilege.

  8. A belt of land not to exceed one hundred metros in width on either of its banks is likewise conceded for the use and benefit of the canal: Provided, That the neighboring proprietors be not deprived of a perfect right of easy access to its ports and the free use of any and all roads that may be opened thereto by the grantee or the company; and

  9. Should the territory through which the canal may pass or the railway be constructed, be the property of individuals, the grantee will have the right to its appropriation, which shall be done by the government according to legal formalities, the proprietors to be indemnified therefor at actual value by the grantee.

• Art. III. Within six months from the time in which the commission organized for the exploration of the canal-route shall have reported the results of their exploration the grantee or contractor shall deposit with the bankers of the republic in London $150,000, or 750,000 francs, as a guarantee of good faith.
• Art. IV. Two hundred and fifty thousand hectares of wild lands shall be appropriated gratuitously to the grantee or contractor, and this may be done directly by the executive. Said lands, situated on the maritime coasts or on the banks of the canal or rivers, shall be distributed in alternate lots with those reserved by the government. Their survey, in which a commissioner of the government shall take part, shall be at the expense of the grantee.
• Art. V. During the whole time of the privilege it is stipulated to the grantee as follows: The use of the ports situated at the termini of the canal for anchorage of vessels; the embarkation of such merchandise as may be therein for reshipment and transportation through the canal; the use of the necessary intermediate ports for anchorage, and for the deposit of articles and merchandise destined for the canal transit, or such as may have been disembarked therein; but the government of the republic reserves the right to station such officers as it may deem necessary in such ports in order to prevent contraband, and the building of the grantee or company should be so arranged as that one person may discharge this duty.
• Art. VI. The ports at the termini of the canal shall be free to the commerce of all nations, and in none of them can import-duties he collected except upon such articles as may be designed for consumption in the republic. Consequently, said ports shall be considered habilitados from the time the canal is opened, and there shall be established therein such custom-houses as the government may deem necessary to the collection of import-duty on such articles as may be destined for other ports of the union and the prevention of the introduction of contraband. The officers which the government may deem necessary to this service shall be paid by the company, and their salaries shall be fixed by the government.
• Art. VII. The government shall declare the waters of the canal, from ocean to ocean, as well as the ports at its termini, neutral for all time. Consequently in case of war between other nations, or between any one of them and Colombia, the canal transit shall not be interrupted thereby. All merchant vessels or citizens of any nation of the world may enter and cross the canal transit without molestation or detention; provided that no foreign troops be permitted to pass thereby, except by permission from the Colombian Congress.
• Art. VIII. The entrance to or transit of the canal shall be most rigorously prohibited to war-vessels of any nation or nations at war with other powers, and whose manifest purpose may be to take part in hostilities.
• Art. IX. The grantee or contractor shall have the right to import, free of duty, such instruments, machinery, building material, victuals and clothing for laborers, &c., as may be deemed necessary during the time allowed for the opening the canal.
• Art. X. No municipal or national contribution-tax or impost of any kind shall be levied upon the canal, the ships traversing it, or upon the company’s tugs, warehouses, wharves, machinery, or other works pertaining thereto, and which, in the judgment of the national executive, may be necessary to the service of the canal during the time conceded for its construction and use.
• Art. XI. Passengers, money, precious metals, merchandise, and articles and effects of every kind, passing through the canal, shall be exempt from all municipal or national transit-tax, as well as from imposts of whatever kind. And this exemption shall be extended to all merchandise or effects deposited in the ports, warehouses, or wharves of the company, whether destined for the interior or exterior. But all articles destined for consumption in the republic shall be liable to such national impost-duty as may be established; the collection of such duty to be made at the instance of government officials and according to the regulations dictated by the executive, when the goods are taken out of the company’s warehouses.
• Art. XII. Passengers by the canal transit will not be required to have or exhibit passports, except in time of foreign war or internal commotion, when the executive may demand them. But vessels carrying their charters and other necessary papers, as provided by public laws and treaties, shall pass the canal transit freely: Provided, That vessels without such papers, or, having them, refuse to exhibit them, may be detained and proceeded against according to the laws.
• Art. XIII. Vessels carrying articles destined for the works of the canal may, in conformity with Article IX of this law, enter freely at any point of easy access to one or the other terminus of its surveyed route.
• Art. XIV. The canal enterprise shall have the character of a public benefice and utility.
• Art. XV. The grantee or contractor shall transport gratuitously, in his vessels, men destined for the service of the union; likewise such police force as may be necessary to traverse the route either by rail or water in the interests of exterior security and peace; and should the company be without vessels, it is still obligated to pay the passage of such troops or police.
• Art. XVI. All the necessary regulations for the prevention of the introduction of contraband articles under this privilege, will be prescribed by the Colombian government.
• Art. XVII. During the period of the privilege granted under this law, the grantee shall have the exclusive prerogative of establishing the schedule of transit tariffs, including rates of storage in his warehouses, the use of his piers and wharves, but said tariff rates shall not exceed sixty-five cents per ton of ballast, nor two dollars per ton of cargo. And, in addition to the tariffs of the company, the government will be entitled, as a national rent, to twenty-five cents upon each ton of transit in the canal. Should the company find it necessary to establish a system for gauging the tonnage of vessels, this must be in accord with the government.
• Art. XVIII. The grantee, or his successors to the franchises herein provided, cannot assign or hypothecate them in any manner whatever, to any foreign government or nation.
• All differences of construction, or other disputes that may arise from the grant of franchise here made, shall be decided by the federal supreme court.
• Art. XIX. A reserve of ten percent. of the stock issued by the company organized by the grantee, may be held in favor of the founders and abettors of the canal enterprise as a capital stock for his or their personal benefit.
• Art. XX. The grantee or his representatives shall forfeit the franchises herein authorized or acquired by contract, made in virtue hereof, under the following-named conditions:

  1. Should they fail to deposit, in the manner stipulated with the executive, the sum agreed upon as a guarantee of good faith.

  2. Should the work not be formally commenced within the first year of the ten allowed for the construction or the opening of the canal; in which case, the sum deposited as guarantee, mentioned in Article III, will be forfeited to the republic.

  3. If, at the expiration of the time fixed in condition 4, Article II, and of the extension therein provided for, a survey and location of the route of the canal shall not have been made.

  4. Should the grantee or company violate the prescriptions of Article XX (?); or

  5. Should the transit of the canal be suspended, except by reason of unforeseen circumstances, held excusable under the common law, for more than six months.

• Paragraph.—In the cases 2d, 3d, 4th, and 5th, above mentioned, the federal supreme court shall decide whether or not the franchises shall have become extinct.
• Art. XXI. In all the foregoing conditions under which the franchise is declared lost, the wild lands mentioned in stipulations 6th and 7th of Article II, as also those alienated under Article IV, shall revert to the republic, likewise all edifices, materials, works, &c., pertaining to the canal or company connected therewith.
• Art. XXII. The diplomatic or consular agent of the republic resident in the country wherein the company is domiciled, shall be a member of its board of directory, and shall, under the by-laws of the company, enjoy all the prerogatives of the other members.
• Art. XXIII. The maintenance of such public force as may be deemed necessary to the security of the interoceanic transit shall be at the expense of the company, and estimated as part of the general expenses of the enterprise.

Given in Bogotá 26th May, 1876.

ELISEO PAYAN,
President of the Senate.

ANIBAL GALINDO,
Speaker of the House.

J. M. QUIJANO OTERO,
Secretary of the Senate.

ADOLFO CUÉLLO,
Clerk of the House.

Approved March 26, 1876.
[l. s.]

AQUILEO PARRA,
President of the Republic.

M. Ancizar,
Secretary of State.

Legation of the United States,
Bogotá, June 2, 1876.

The foregoing is a correct translation from Spanish to English of an authenticated law, No. 33, of May 26, 1876, now on file in this legation.

WILLIAM L. SCRUGGS,
Minister Resident.

[Inclosure 2 in No. 170.—Translation.]

Contract celebrated with Anthoine de Gogorza for opening an interoceanic canal.

The undersigned, to wit, Manuel Ancizar, secretary of state for the department of interior and foreign relations of the Colombian government, duly authorized by the President of the union, and Anthoine de Gogorza, for himself and General Stephen Turr, according to sufficient authority exhibited, have agreed to the following:

• Article I. Anthoine de Gogorza, in his own behalf and that of his client, General Stephen Turr, accepts in all its parts, and as part of this agreement, the Colombian law, No. 33, of the 26th of May, 1876, “authorizing the executive power to negotiate for opening canal-communication between the Atlantic and Pacific Oceans,” and submits to the provisions and conditions therein made. And in reciprocation the Colombian government hereby concedes to and puts them in possession of the franchises granted in section one, of Article II of the above-cited laws, counting the ninety-nine years of privilege from the date hereof.
• Art. II. The Colombian government authorizes General Turr and Sr. Gogorza, putting themselves in accord with the minister of the republic in Great Britain or France, and with Sr. Joaquin Sarmiento, should he be in Paris, to whom sufficient authority will be given, to associate with themselves two persons whom they may deem competent, and proceed to form an international commission of engineers to survey the Isthmus at Darien, and at the expense of the grantees to make the exploration mentioned in condition three, Article II of the law above cited, and within the time therein allowed; within twelve months thereafter to make report to the Colombian government of the result of said exploration in the manner provided in the above-cited condition three of the law: Provided, That should unforeseen accident, such as earthquake, inundation, or armed resistance of the natives cause delay, a reasonable extension of time be granted.
• Art. III. The tracing and fixing of the line of the canal in all its length, as also that of any auxiliary railway that may be projected from ocean to ocean, must be wholly beyond and to the east of a straight line connecting the Cape of Tiburon with the headland of Garachine, whose exact situation will be determined by the exploring engineers.
• Art. IV. Should the river Atrato be selected by the engineers as one of the entries to the canal, its mouth through which such entrance is proposed must be channeled and adapted to the ingress and egress of vessels of six hundred tons, and be considered part of the line of the canal. But the navigation of the Atrato, in so far as its channel may not constitute part of the canal, shall remain free and unincumbered.
• Art. V. Should the preliminary survey referred to (in Article III) show the practicability of a canal without locks or tunnels, the grantees, General Turr and A. de Gogorza and their associates, will, under the immediate patronage of the Colombian government, be authorized to form, within the eighteen months specified by the law, a company for the execution of the work.
• Art. VI. The deposit mentioned in Article III of the law cited, shall be made in such bank as the national executive may designate, the receipt of the bank being evidence of the fulfillment of said obligation. Said deposit may be in bonds of the Colombian foreign debt, at the market-price at the time of the deposit. It is understood that, in case the grantees should forfeit this deposit under provision of section two of Article XXIII of the cited law, the same, with the accumulated interest, will pass, without any reduction, to the Colombian government.
• Art. VII. The wild lands ceded by Article IV of the cited law, shall be adjudged to the grantees as soon as the deposit shall have been made. Those situated on the banks of the canal, rivers, or maritime coasts shall be divided into lots alternating with those of equal size reserved to the government, and fronting those reserved to the government on the opposite sides of the canal, rivers, or coasts. None of said lots shall measure less than three nor more than four thousand metros of front on said canal, rivers, or coasts, thus forming an area of, say, one thousand hectares, more or less. Within a belt of six and a half miles (1,000 miriametros) on either side of the canal, the government can concede no lands (to other parties) until the expiration of the ten years from the time of the commencement of the work, or until after the present grantees shall have received the entire quantity ceded them by the Article IV of the law above cited.
• Art. VIII. The number of fiscal agents which, under provisions of Article IV, may be placed at the termini of the canal, shall not exceed twice the number in the custom-house at Barranquilla; and their salaries, so far as the same may become chargeable to the company, shall not exceed those allotted to employés of the same class in said custom-house.
• Art. IX. Until the contingency mentioned in Article XIX (Article XVII?) of the law above cited, the tonnage of vessels shall be stated in their charters or registers, and that of their cargo shall be set forth in their manifests and bills of lading.
• Art. X. The grantees obligate themselves to constitute an agent in Bogotá, duly authorized to represent them in the adjustment of debts and disputes that may arise from adverse construction of contract; and for a like purpose, the government shall name an agent to reside near the domicile of the company. In every case where irreconcilable differences may arise, they shall be submitted to the decision of the federal supreme court.
• Art. XI. The term “Colombian dollars,” employed in the law and in this contract, signifies silver pieces of 25 grains of 900 each, being equivalent to 5 francs, or 100 cents each.
• Art. XII. By the “formal commencement of the work of the canal,” mentioned in section 2 of Article XXII of the law, is understood that work upon the line should be continuously executed for three months, by at least one thousand operatives under their respective chiefs, with the necessary machinery, implements, &c., for the excavation of the canal.
• Art. XIII. It is understood, and is hereby specifically stipulated, that vessels in the exclusive service of the canal, shall traverse the same free of all tax or duty.
• Art. XIV. Five years before the expiration of the ninety-nine of privilege, the national executive shall, with the concurrence of the company, name a commission to examine the canal and its appurtenances, and note what repairs, if any, shall be made before the canal and other property is turned over to the government when the grantees’ privilege shall expire.
• Art. XV. The nation grants permission to the grantees to establish, at their own expense, any telegraphic lines they may deem necessary to the construction and operation of the canal.

Signed in duplicate, in Bogotá, the 28th day of May, one thousand eight hundred and seventy-six.

[l. s.]

M. ANCIZAR.

[l. s.]

ANTHOINE DE GOGORZA,
For himself and General Turr.

Approved May 28, 1876.
[l. s.]

AQUILEO PARRA,
President of the Union.

Legation of the United States,
Bogotá, June 3, 1876.

The foregoing is a correct translation from Spanish to English of an original contract between Colombia and Senor Gogorza, and which I have seen.

WILLIAM L. SCRUGGS,
Minister Resident.