File No. 3010/4. The Acting Secretary of State to the Ecuadorean Minister. No. 20.] DEPARTMENT OF STATE, Washington, January 10, 1907. SIR: I have the honor to acknowledge the receipt of your note of the 4th instant, by which you communicate to the department the gratifying intelligence that Gen. Eloy Alfaro was inaugurated as constitutional President of Ecuador on the 1st of the same month, and have read with pleasure your assurance that the government of General Alfaro will continue to cultivate the cordial relations now existing with the United States. The American minister at Quito was on the 4th instant instructed by telegraph to convey to General Alfaro the President's congratulations and good wishes. Quito, January 10, 1907. SIR: I have the honor to confirm the following telegram dated January 3, 1907, and to acknowledge receipt of the department's telegram of January 4.0 Upon receipt of the department's telegram, I notified the foreign office and also requested an interview with His Excellency, when I personally presented to him the good wishes and congratulations of the President. His Excellency was much gratified and pleased. I have, etc., JOSEPH W. J. LEE. File No. 3010/12. The Ecuadorean Minister to the Secretary of State. [Translation.] LEGATION OF ECUADOR, Washington, March 9, 1907. MR. SECRETARY: The minister of foreign relations of Ecuador writes me in a note of the 4th of February last as follows: President Alfaro had the satisfaction of receiving the courteous greeting of congratulation addressed to him, through the most excellent Mr. Lee, by President Roosevelt on the occasion of his elevation to the chief magistracy. The Government for its part will take special interest in responding to the friendly sentiments of the President of your enlightened Republic and in maintaining the cordial ties which happily bind the two Governments and people. a Supra. I am glad to transmit the foregoing to your excellency, to the end that you may be pleased to convey to the most excellent President Roosevelt the high appreciation in which his courtesy is held by President Alfaro. I renew, etc., L. F. CARBO. ARBITRATION OF THE DIFFICULTY BETWEEN THE ECUADOREAN GOVERNMENT AND THE GUAYAQUIL AND QUITO RAILWAY COMPANY, AN AMERICAN CORPORATION. File No. 2540/8. Minister Fox to the Secretary of State. [Extract.] AMERICAN LEGATION, Quito, June 13, 1907. (Mr. Fox informs Mr. Root, referring to previous correspondence" eight, twelve, and also fifteen, that the railway crisis is reached, and that revolution is imminent owing to the railway problem. He also states that the American investments are reported as being in danger, the people insisting on confiscation. He further states that the railway company urges arbitration of her contract. He asks for instructions.) File No. 2540/8. The Secretary of State to Minister Fox. [Telegram.-Paraphrase.] DEPARTMENT OF STATE, Washington, June 15, 1907. (Mr. Root informs Mr. Fox that this department understands from his dispatches and otherwise that the Government of Ecuador contemplates taking possession of the Guayaquil and Ecuador Railway on the ground that it has not been finished within time limited by contract between that Government and Archer Harmon, dated June 14, 1897, and the supplementary contract dated November 26, 1898, without making allowance for the extensions of time to which the railway company is entitled because of the delays caused by domestic war, rebellion, natural catastrophes, and epidemics under the sixteenth article of the contract, and notwithstanding the fact that the railroad is nearly completed and can be completed within a few months. Mr. Root also states that this has been characterized by Mr. Fox as confiscation, which certainly has that appearance, and he has inferred from Mr. Fox's dispatch that President Alfaro and Mr. Carbo take the same view. Mr. Root instructs Mr. Fox to take the following steps: First. Say to Mr. Carbo that I deeply regret the injury to the credit and good name of Ecuador done by the mere agitation of this contemplated confiscation, and I sincerely hope that it will go no further. It appears to me inconsistent not only with the interests, but the honor of Ecuador. 85111-FR 1907-25 a Not printed. Second. Lodge a formal protest with the Government of Ecuador against the proposed spoliation of the property and rights of American citizens. Third. Give formal notice to the Government of Ecuador that the President of the United States is ready to name an arbiter to act with another arbiter or arbiters in settling by arbitration all controversies or disagreements arising under the said contracts between the contracting parties, pursuant to the twenty-seventh article of the contract, and request that the President of Ecuador name an arbiter pursuant to that article.) File No. 2540/29-31. Minister Fox to the Secretary of State. [Extract.] No. 51.] AMERICAN LEGATION, SIR: I have the honor to confirm my telegram of June 13, 1907, as follows: " In reply to the above I received the following telegram from the department, as follows: I have the honor to inform the department that I took the first opportunity to comply with the above instructions, and on Monday, June 17, called on Mr. Carbo and personally left my note of June 17, copy of which I inclose. The note of the minister of foreign relations in reply to mine, received yesterday evening, is herewith inclosed. In consequence of this note I to-day sent the following telegram to the department: It remains for me to say only that never for a moment was the good faith of the Ecuadorean Administration doubted, but the fear did obtain that extraneous circumstances would force action detrimental to the interest of American citizens. The representative of these interests waited until the last moment, and then only appealed to this legation. I am confident that the firm position taken by the department has strengthened the hand of the Ecuadorean Government. I have, etc., [Inclosure 1.] WILLIAMS C. Fox. No. 13.] Minister Fox to the Minister for Foreign Affairs. AMERICAN LEGATION, Quito, June 17, 1907. MR. MINISTER: I have the honor to inform your excellency that in view of the published facts with regard to the proposed action concerning the taking possession of the Guayaquil and Quito Railway by the Government of Ecuador, I am instructed by my Government to lodge with your excellency a formal protest against the proposed spoliation of the property and property rights of American citizens. I am further instructed to give formal notification to your excellency's Government that the President of the United States, pursuant to article 27 of the a Supra. Received June 19. See p. 388. contract between the Government of Ecuador and Mr. Archer Harman, is ready to at once name an arbiter in settling by arbitration all controversy or disagreements arising under said contract. I am charged to express the sincere hope that his excellency the President of Ecuador will also name an arbiter pursuant to the above-mentioned article of the contract aforesaid. In view of the vital importance of the interests involved, the fact that the steps already taken by the Government of Ecuador have caused serious concern to these interests, it is therefore confidently hoped that this action may be taken promptly to the end that all difficulties, disagreements, and misunderstandings may be speedily adjusted not only to the mutual advantage of the contracting parties, but at the same time to allay all uneasiness and distrust on the part of American citizens who have shown great confidence in Ecuador in investing in her securities. Fully convinced as I am of the high and honorable intentions of your excellency's Government, I deign to hope that the manner of settlement, as pointed out. of the vexed question, will appeal so strongly to your excellency that I may be able to so communicate to my Government. I take, etc., [Inclosure 2.-Translation.] WILLIAMS C. Fox. No. 69.] The Minister for Foreign Affairs to Minister Fox. REPUBLIC OF ECUADOR, MINISTRY OF FOREIGN RELATIONS, Quito, June 18, 1907. MR. MINISTER: Replying to your official note of the 17th instant, in which your excellency states that in view of the facts published in regard to the Government of Ecuador intending to take possession of the Trans-Andean Railroad, and that your excellency has received instructions from Washington to present a formal protest against the proposed spoliation of the property and property rights of American citizens. Your excellency also advises me that you have received instructions to notify me formally that His Excellency the President of the United States, in accordance with the contract between the railway company and the Government of Ecuador, is ready to appoint the arbiter to arrange the controversy and differences that may arise, and that your excellency trusts that the Government of Ecuador will also appoint an arbiter, in order to form the tribunal which will solve the difficulties between the parties, which not only will be of mutual advantage but will overcome the lack of confidence which may arise in American citizens who have invested capital in Ecuador. Your excellency assures me that you are fully convinced of the honorable intention of my Government, and you hope that arbitration will be the means of settling all differences. It is to be regretted, Mr. Minister, that the Government of the United States has not had time to receive the necessary and complete information which surely your excellency will send concerning the matter. As soon as the proceeding of the Government of Ecuador is known I am sure the protest will be withdrawn, because it will be proven that there is no cause for it, as there is no reason to charge this nation with intention to ignore the law in regard to the railway company, which is constructing a railroad with the proceeds derived from the sale of bonds guaranteed by the Government, the interest of which together with the sinking fund has reached to-day 10,000,000 sucres, without including the earnings of the road which the company has retained. Notwithstanding the unlimited freedom of the press, there has not been, as far as I know, any occasion in which it has been mentioned that the railway company should be despoiled, nor insinuated that the right of arbitration be denied, and in case this was stated, there is no ground to believe that a government knowing its duties would accept it. Two days before receiving the note of your excellency the fiscal officer had asked before the proper judge that a board of arbitration be called, so that the protest of your excellency was presented when the country had already given a clear proof of honest proceedings. Although this is not the occasion for making a complete and reasonable defense of the rights and interests of this nation as shall be presented to the arbiters, your excellency will allow me to state that during the ten years the American company has been constructing the railway there has never been occasion to appeal to its minister in complaint of the Government of Ecuador, as can be shown by referring to the archives of your legation and to the Department of State in Washington. The notorious circumstance that the press of Ecuador has always criticized the Government for giving excessive support to the railway company will convince your excellency that the interests of the Americans are most secure, which will be seen among other cases of continued and decided protection. The fact that while the railroad is only near Latacunga, the railway company has already received bonds for the value of the whole line, when it should only have received the proportion corresponding to the miles constructed. This liberality of the Government had the object of aiding the company in continuing the work so that the line might be completed before the 14th of June of this year, as was promised. In view of these frank and plain statements, which your excellency can easily ascertain, I beg of you to express to the Government of the United States that much less than deserving a protest which is without ground the Government of Ecuador is entitled to the respect and consideration which it has always tried to merit, and more specially in its international relations. The good and uninterrupted relations which have existed between the two Governments should prevail to-day as the best means to secure the triumph of justice, which will insure to all the enjoyment of their rights without appeal to violence, which modern civilization has proscribed. My Government congratulates itself that His Excellency President Roosevelt, whose high standard of justice I take pleasure in acknowledging, is ready to appoint an American arbiter, designation of which I hope will be made as soon as he finds it convenient, accompanied by the assurance that His Excellency President Alfaro will immediately appoint the Ecuadorean arbiter, in order that the board may meet in Quito and solve the questions arising on account of the railway company not having been able to finish the road on the 14th of this month. Furthermore, I have the confidence that your excellency, knowing the serious and honest intentions of the Government of Ecuador, will please, in your high diplomatic position, and with impartiality and straightforwardness, as is characteristic of an American minister, inform the Government of the United States with regard to the true situation in respect to the affairs of the railway company, convinced as your excellency must be that between friendly countries, understanding their rights, everything is easily settled. Admirer as I am of the high policy of the Department of State at Washington, and sure that your excellency will know how to interpret it with your usual tact, I have, etc., File No. 2540/13. Minister Fox to the Secretary of State. [Telegram.-Paraphrase.] AMERICAN LEGATION, Quito, June 19, 1907. (Mr. Fox informs the department that the Government of Ecuador has expressed a hope that the President of the United States will promptly name arbiter in the railway question. He states that the President of Ecuador will do likewise.) |