Hearings, Reports and Prints of the Senate Committee on Foreign Relations

APPENDIX R

CONCESSION AND DECREES OF THE REPUBLIC OF NICARAGUA TO THE NICARAGUA CANAL ASSOCIATION OF NEW YORK.

The President of the Republic to the inhabitants thereof:

Know ye that Congress has ordered as follows:

The senate and chamber of deputies of the Republic of Nicaragua do hereby decreeONLY ARTICLE. The contract for a maritime interoceanic canal entered into the 23rd of March, ult., between Dr. Adan Cárdenas, commissioned especially by the supreme government, and Mr. A. G. Menocal, member and representative of the Nicaragua Canal Association organized in New York, is hereby ratified. This contract shall be a law of the Republic if Mr. Menocal accepts it as soon as he be notified, with the following modifications and upon the following terms:

The undersigned, Adan Cárdenas, commissioner of the Government of the Republic, party of the first part, and Aniceto G. Menocal, representative of the Nicaragua Canal Association, party of the second part, both having sufficient power, have entered into the following contract for the excavation of an interoceanic canal through the territory of Nicaragua:

ARTICLE I.

The Republic of Nicaragua grants the aforesaid Nicaragua Canal Association, and Mr. A. G. Menocal, representative of the said association, accepts on its behalf, for the purposes set forth in article 7, the exclusive privilege to excavate and operate a maritime canal across its territory, between the Atlantic and Pacific Oceans.

ARTICLE II.

The canal shall be of sufficient dimensions for the free and commodious passage of vessels of the same size as the large steamers used for ocean navigation in Europe and America, provided that no locks used in said work shall be less than five hundred and fifty (550) feet in length and thirty feet in depth.

ARTICLE III.

The State declares this work to be one of public utility.

ARTICLE IV.

The duration of the present privilege shall be for ninety-nine (99) years, to be counted from the day the canal shall be opened to universal traffic. During the aforesaid period the company shall have the right to construct and operate a railway along the whole extent of the canal, or those parts of the same that may be considered convenient for the better service and operation of the said work.

ARTICLE V.

The State binds itself not to make any subsequent concession for the opening of a canal between the two oceans during the term of the present concession, and also to abstain from granting a concession for a railroad, such as might compete with the canal for the transportation of merchandise, during the same period; but nothing in this article shall prevent the Government of Nicaragua from constructing or permitting the construction of such railways as it may deem advisable for commerce and internal traffic." Said Government also to have the right to construct or permit the construction of an interoceanic railway, if in course of time it be demonstrated that the canal is not sufficient to satisfy the demands of the traflic of all nations.

96-673 - 77 - 6

#18. Concession of the Republic of Nicaragua to the Nicaragua Canal Association of New York (1887), and An Act of Congress Incorporating the Maritime Canal Company of Nicaragua (1889) *

The withdrawal of the Frelinghuysen-Zavala treaty was followed by negotiations between. Aniceto G. Menocal, a member and representative of the Nicaragua Canal Association of New York, and the Government of Nicaragua, which resulted in a certain concession from the Republic, granting to the association the exclusive privilege of excavating and operating a maritime canal across the territory of Nicaragua between the Atlantic and Pacific oceans, with grants of lands, exemption from taxation, and other valuable rights and franchises, to aid in the construction, maintenance, and operation of the work.

required to complete the canal and open it for maritime navigation within ten years thereafter; but it was agreed that in case of unavoidable delays impeding the progress of the work the time should be extended.

In case of failure to complete the canal within the time designated in the contract or within the period of extension, if an extension should be granted, the concession was to be forfeited; and at the close of the term of ninety-nine years, or in the event of a forfeiture, the Republic was to enter upon possession of the entire work and all the establishments used in its administration in perpetuity, but the grantees were to have the right to lease the property for another period of ninety-nine years, on the condition of paying to the Republic 25 per cent of the annual net profits, in addition to the dividends due upon its shares in the capital stock. At the close of this second term the rights and privileges of the Maritime Canal Company were to expire and the canal was to belong to the Republic in perpetuity.

In consideration of the rights, privileges, and franchises conceded to the company the Republic was to receive in shares, bends, certificates, or other securities issued to raise the corporate capital 6 per cent of the total amount of the issue, such amount in no event to be less than $4,000,000that is, 10,000 shares or obligations of $100,000 each-the same to be subject to no charges, assessments, or payments. The interest of the Republic was to be represented in the board of directors of the company by one member to be appointed by the Government with the same powers, privileges, and rights that other members might be entitled to under the act of incorporation and the rules made thereunder. As a further compensation it was stipulated that no tolls or charges sbould be exacted from Nicaraguan ships of war, and that merchant vessels belonging wholly to citizens of the Republic and sailing under the Nicaraguan flag should pay only one-half of the usual tolls for the use of the canal while engaged in the coasting trade or in reciprocal trade with other Republics of Central America or when beginning a foreign voyage with a cargo composed wholly of home products. Under certain circumstances like privileges were to be extended to the other Republics of Central America. A copy of this contract is attached to this report, marked Appendix R.

In accordance with the terms of the concession from Nicaragua and one of like terms from Costa Rica a company of execution was organized under the name of "The Maritime Canal Company of Nicaragua," and was incorporated by an act of Congress approved on the 20th day of February, 1889. A copy of this act is attached to this report, marked "Appendix S.

Report of the Isthmian Canal Commission (1904), pp. 120-121; Appendix R, pp. 389400; and Appendix S, pp. 401-402.

APPENDIX R

CONCESSION AND DECREES OF THE REPUBLIC OF NICARAGUA TO THE NICARAGUA CANAL ASSOCIATION OF NEW YORK.

The President of the Republic to the inhabitants thereof:

Know ye that Congress has ordered as follows:

ARTICLE I.

The Republic of Nicaragua grants the aforesaid Nicaragua Canal Association, and Mr. A. G. Menocal, representative of the said association, accepts on its behalf, for the purposes set forth article 7, the exclusive privilege to excavate and operate a maritime canal across its territory, between the Atlantic and Pacific Oceans.

ARTICLE II.

ARTICLE III.

The State declares this work to be one of public utility.

ARTICLE IV.

ARTICLE V.

The State binds itself not to make any subsequent concession for the opening of a canal between the two oceans during the term of the present concession, and also to abstain from granting a concession for a railroad, such as might compete with the canal for the transportation of merchandise, during the same period; but nothing in this article shall prevent the Govern ment of Nicaragua from constructing or permitting the construction of such railways as it may deem advisable for commerce and internal traffic." Said Government also to have the right to construct or permit the construction of an interoceanic railway, if in course of time it be demonstrated that the canal is not sufficient to satisfy the demands of the traffic of all nations.

96-673 - 77-6

The grantee company shall have the right to establish such telegraph lines as it may deem necessary for the construction, management, and operation of the canal. The Government shall have the right to occupy these lines for the public service without any remuneration to the company.

ARTICLE VI.

The Government of the Republic declares, during the term of this concession, the ports at each extremity of the canal, and the canal itself, from sea to sea to be neutral, and that consequently the transit through the canal in case of war between two powers or between one or more and Nicaragua shall not be interrupted for such cause; and that merchant vessels and individuals of all nations of the world may freely enter the ports and pass through the canal without molestation or detention.

In general, all vessels may pass through the canal freely, without distinction, exclusion, or preference of persons or nationality, provided that they pay the dues and observe the regula tions established by the grantee company for the use of the said canal and its dependencies. The transit of foreign troops and vessels of war will be subjected to the prescriptions relating to the same established by treaties between Nicaragua and other powers or by international law. But entrance to the canal will be rigorously prohibited to vessels of war of such powers as may be at war with Nicaragua or with any other of the Central American Republics.

Nicaragua will endeavor to obtain from the powers that are to guarantee the neutrality, that in the treaties that shall be made for that purpose, they shall agree also to guarantee a zone of land parallel to the canal and also a maritime zone in both oceans, the dimensions of which will be determined in such treaties.

ARTICLE VII.

This present agreement, with all its charges and advantages, shall be the object of a company of execution in agreement with Articles I, X, and those following thereafter.

Said company shall be the grantee, and whenever said name is used in this present contract, reference is made to it.

ARTICLE VIII.

The present concession is transferable only to such company of execution as shall be organized by the Nicaragua Canal Association, and in no case to Governments or to foreign public powers. Nor shall the company cede to any foreign Government any part of the lands granted to it by this contract; but it may make transfers to private parties under the same restriction.

The Republic of Nicaragua cannot transfer its rights or shares by selling them to any Government.

ARTICLE IX.

The people of all nations shall be invited to contribute the necessary capital to the enterprise, and it shall be sufficient for the fulfillment of this requirement to publish an advertisement for thirty (30) consecutive days in one of the principal daily papers of each of the cities New York, London, and Paris.

The capital stock of the final company shall be composed of shares, bonds, or obligations of any other kind, in such proportion as it may deem convenient. The issue and transfer of these obligations shall be exempt from stamp dues and from any other imposts or taxes established or that may be hereafter established in the Republic.

Of the capital with which the company shall organize, and which it proposes to distribute among the different countries interested in the enterprise, there shall be reserved at least five (5) per cent for the Central American Government and citizens that may desire to subscribe.

As soon as the company is ready to open subscription books it shall advise the Government of Nicaragua, which will invite the other Governments and through them private parties to subscribe. All such shares not taken within six months, following the date on which the Government shall have been advised of that circumstance, shall remain subject to the free disposition of the company.

ARTICLE X.

The company shall be organized in the manner and under the conditions generally adopted for such companies. Its principal office shall be in New York, or where it may be deemed most convenient, and it may have branch omces in the different countries of Europe and America, where it may consider it expedient.

Its name shall be the "Maritime Canal Company of Nicaragua," and its board of directors shall be composed of persons, one-half at least of them, shall be chosen from the promoters who may yet preserve their quality as such.

ARTICLE XI.

The Government of Nicaragua in its character of shareholder in the company of execution, bereinafter provided, shall have the perpetual right of naming one director, who shall be an integral part of the board of directors of the company, with all the rights, privileges, and advantages conferred upon them by the statutes of the company and the laws of the country under which it shall organize.

The Government shall also have the right, in its aforesaid capacity of shareholder, to take part in such elections as the company may hold.

ARTICLE XII.

The company is bound to keep a representative in Nicaragua vested with all powers necessary for the proper conduct of the service and for the transaction of its business with the Government.

ARTICLE XIII.

The canal will follow the valley of the River San Juan to Lake Nicaragua, through which will be designated the most convenient route for communication with the Pacific Ocean. In Any event, the company shall have the most ample freedom to select the route which it considers most convenient between the two oceans, for the excavation of the canal and its dependencies and its ports, particularly those serving for entrance and exit on both oceans. The company shall have the same liberty to adopt the route which may be deemed most advantageous and economical for the construction of the canal, after the final survey by a commission of competent engineers. However, should the company, after the survey of the river San Juan, find it necessary to abandon, in any place, the bed of the river, and cut a lateral canal, the Government of Nicaragua reserves the right of requiring from the company the duty of establishing a communication between the part of the San Juan, not used for canal purposes, and the dividing level of the canal, by means of a lock, or a series of locks, suitable for the navigation of ships of six feet draft. As soon as the final plans are adopted and laid before the Government, it shall notify the company within one month after their receipt whether or not they meet with its approval, in order that the company may proceed in accordance therewith. It is understood that this duty does not in any manner compel the company to place or maintain, in navigable condition for small craft, the lower part of the river which these locks may be intended to place in communication with the canal.

ARTICLE XIV.

Within three years, to be counted from the commencement of the work upon the Interoceanic Canal, the company shall, at its own expense, construct a navigable canal between Lake Managua and the navigable part of the Tipitapa River, near Pasquier, of sufficient dimensions to admit of the free passage of vessels drawing six feet and of 150 feet in length. When completed this canal shall be taken possession by the Government of Nicaragua, and will be, after that date, the property of the Republic, which, by virtue of its ownership, shall be bound to bear all expenses required in the future for the service, maintenance, repair, and operation of the canal. But the company shall have the right to make use of it for all purposes useful for the maritime canal enterprise, and to pass through it freely with its vessels, and those belonging to contractors employed in the service of the Interoceanic Canal, during the term of this concession, without being subject to any charge whatever, or to pay tolls or contributions of any kind to the Government of Nicaragua or to any person or company that may, through any cause, be in charge of the administration and operation of the work and its dependencies.

The Government of Nicaragua will place at the disposal of the company, free of all expenses and charges, all the lands that may be required, as well as the materials found thereon, or on those belonging to the Government and that may be utilized by the company in the execution of this work.

ARTICLE XV.

All expenditures for surveys, construction, maintenance, and operation of the Interoceanic Maritime Canal shall be borne by the concessionary company, without any subvention in money or guaranty of interest on the part of the Republic, nor other concessions than those specified in the present agreement.

« Previous Continue »

Books