35TH CONGRESS,?              SENATE.                     Ex. Doc.
1st Session.                                             No. 72.
MESSAGE
OF
TIE PRESIDENT OF THE UNITED STATES,
IN ANSWER TO
4 resolution of the Senate respecting the Isthmus of Tehuantepec.
JUNE 11, 1858.-Read. Motion to print referred to the Committee on Printing.
JUNE 12, 1858.-Report in favor of printing submitted, considered, and agreed to.
To the Senate of the United States:
In answer to the resolution of the Senate of the 19th ultimo, re —
specting the Isthmus of Tehuantepec, I transmit herewith a report'.
from the Secretary of State, with the documents by which it is accom —
panied, together with the copy of a letter from the Postmaster General of the 24th ultimo to the Department of State.
JAMES BUCHAANAN.
WASHINGTON, June 11, 1858.
DEPARTMENT OF STATE,
Washington, June 11, 1858.
The Secretary of State, to whom was referred that branch of theresolution of the Senate of the 19th ultimo, requesting the President;'to inform  the Senate whether any efforts have been made or au —
thorized by the executive department, or any officer thereof, to induce
the government of Mexico to annul or impair the grant of February
5, 1853, for the construction of a plank road and railroad across the.
isthmus of Tehuantepec, as recognized in the treaty published at,
Washington, on the 30th of June, 1854, and to obtain a new grant
of the same, or like character, for other parties; and, if so, that hecommunicate the names of those parties, together with the terms-,
conditions, and considerations of the grant, and all-the correspondence
connected therewith," has the honor to lay before the President thepapers mentioned in the list subjoined.
Respectfully submitted,
LEWIS CASS.
The PRESIDENT.




2                  ISTHMUS OF TEHUANTEPEC.
List of documents.
1. Mr. Letcher to Mr. Webster, (extract,) April 25, 1852.
2. Same to same, (extract-enclosures,) no date.
3. Mr. Rich to same, (extract,) August 31, 1852.
4. Mr. Conrad to Mr. Conkling, (extract,) October 14, 1852.
5. Mr. Conkling to Mr. Everett, (extract,) November 23, 1852.
6. Same to same, (extract,) February 2, 1853.
7. Same to same, (extract,) same date.
8. Same to same, (extracts,) February 3, 1853.
9. Same to same, (extract-enclosures,) February 6, 1853.
10. Same to same, (extract-enclosures,) February 22, 1853.
11. Mr. Hargous to Mr. Marcy, May 7, 1853.
12. Mr. Conkling to same, (extract,) May 14, 1853.
13. Mr. Marcy to Mr, Gadsden, (extract,) July 15, 1853.
14. Mr. Gadsden to Mr. Marcy, (extract-enclosure,) April 5, 1856.
15. Mr. Hargous to same, April 21, 1856.
16. Mr. Marcy to Mr. Forsyth, (extract,) August 16, 1856.
17. Mr. Forsyth to Mr. Marcy, (enclosure,) November 15, 1856.
18. Mr. Cass to Mr. Forsyth, (enclosure,) July 17, 1856.
19. Mr. Forsyth to Mr. Cass, (extracts-enclosures,) September
15, 1856.
MJr. Letcher to Mr. Webster.
[Extract.]
No. 5.]           LEGATION OF THE UNITED STATES OF AMERICA,
Mexico, April 25, 1852.
SIR: Since the rejection of the Tehuantepec treaty I have held no
intercourse with the minister of foreign relations. I am  satisfied,
however, that the administration and congress are anxious to escape
from the consequences of the act which they have perpetrated, and
that they will adopt some plan of legislation by which the right of
way will be granted. I think I may say they are determined on this
course.
The first plan proposed in congress was to grant to a Mexican
company the right to construct a way of communication. The stock
was to be divided into shares of $1,000 each. This company was to
be under the control of the government.  The second proposition was
to authorize the president to make a contract with any company for
the construction of the way of communication.
The first scheme was withdrawn, and the second did not receive a
moment's consideration.
The president then advised the congress, in secret session, through
his minister, to take the entire control of the subject, promising to cooperate in any contract which they might adopt. In consequence of




ISTHMUS OF TEHUANTEPEC.                      3
this communication, the proposals of Mr. Sloo, an American citizen,
were introduced, which have been received, as I have been informed,
with considerable favor. I have the honor, herewith, to transmit a
copy of the proposition of Mr. Sloo.
It was stated in congress, and confirmed by the administration, that
all the requisitions in regard to Tehuantepec contained in the annual
message of the President of the United States should be complied with;
and that if Mexico should be coerced to do more by the strong arm of
power, the responsibility of the consequences would not then rest upon
her.    *    C    * *        *    *    *    *    *    *    *
I have the honor to be, sir, your obedient servant,
R. P. LETCHER.
Hon. DANIEL WEBSTER,
Secretary of State.
[Translation.]
The undersigned, A. G. Sloo, in view of the great existing necessity
for establishing an interoceanic communication between the Atlantic
and Pacific waters by the Isthmus of Tehuantepec, asks of the Mexican republic, for himself and his associates, a privilege upon the following bases:
ARTICLE 1. The communication through the Isthmus of Tehuantepec shall be opened, in the first place, by means of a wagon road, constructed either of wood or of stone, and when the wants of travellers
or the transportation of goods require it there shall either be built a
railway or a canal.
ARTICLE 2. When the road shall be passable, its transit must be
considered as neutral and common to all nations that are at peace with
Mexico.
ARTICLE 3. The execution of the work shall be on account of A. G.
Sloo and his associates, who will enjoy the exclusive privilege for a
period of forty years after the road shall have been completed.
ARTICLE 4. The construction of the plank or stone road shall be
commenced within a year, counting from the date of the privilege, and
completed in as short a space of time as possible.
ARTICLE 5.- There shall be granted to the contracting company one
league of land on each side of the line of communication, with the
liberty to take from any of the lands belonging to the republic such
timber, stone, limestone, or other materials, as may be required for
the construction of said road. In case the lands to the extent of one
league on each side of the line should belong to private individuals,
the latter shall be indemnified, agreeably to the provision of the
Mexican constitution.
ARTICLE 6. The transit duties which may be fixed upon goods or
passengers shall go to the contractors for the period of forty years, at
the end of which, all such duties shall belong to the Mexican government.
ARTICLE 7. Two-fifths of the net produce of the tolls or transit




4                  I-THMUS OF TEHUANTEPEC.
duties upon goods and passengers shall, for the period of forty years,
belong to the government of Mexico, and the same shall be paid to it
every six months or annually.  For the period of forty years after the
road has become the property of the government the latter shall pay
to the contractors the same two-fifths of the net produce.
ARTICLE 8. The Mexican government, as well as the contractors,
may each respectively appoint agents, superintendents, and mediators,
(interventores,) to see that the revenue of the roads is punctually collected.
ARTICLE 9. The exclusive right of navigating the river Coatzacoalcos shall form part of the privilege for opening the way of communication.
ARTICLE 10. The following articles shall be exempt from  duties,
viz: timber, screw pins, canvas and iron hoops, worked stone and
wooden houses, as well as such provisions as, in the opinion of the
collector of customs, shall be deemed necessary for the exclusive support of the laborers employed in the construction of the road.
ARTICLE.11. All steam vessels employed in carrying the mail and
passengers exclusively shall be exempt from tonnage duties.
ARTICLE 12. The Mexican government shall not be at liberty to impose more transit duties during the existence of the privilege than
such as may be established by consent of the company, without any
injury accruing to the capital which may be employed in the republic,
either directly or indirectly.
ARTICLE 13. The government shall open at each extremity of the
Isthmus such ports as it may deem suitable to the interests of the
public treasury, and shall locate at every point where it thinks it expedient to do socustom-house officers, and such guards of safety as it
may consider necessary for the protection of the revenue and the
security of the interests of the nation.
ARTICLE 14. The government shall pledge itself to protect the company in the peaceful prosecution of the work, and guaranty to the
latter quiet and undisturbed possession of the same during the whole
term of the privilege, at the expiration of which the route, in the condition in which it may then be found, its interests, stations, and all
that properly belongs to the same, shall become the property of the
Mexican republic.
ARTICLE 15. All differences which may arise between the government and the contractors shall be adjusted by the supreme court of
justice.
ARTICLE 16. Mexico shall preserve sovereign jurisdiction over all
the territory across which the communication may be established; and
this territory can neither be sold nor transferred, nor pledged away,
either whole or in part, to any foreign nation.
ARTICLE 17. Should the contractors think proper to establish colonies
of foreign families, they will have to subject themselves to the existing
laws of the republic which gvern the matter, or to those which may
be enacted in future by the general congress.
RAMON ARISTA,
MANUEL PAYNO.
MEXICO, 2pril 23, 1852.




ISTHMUS OF TEHUANTEPEC.                      5
Mr. Letcher to Mr. Webster.
[Extract. 1
No. 8]                    LEGATION OF THE U. S. OF AMERICA,
MEXICO, -~, -
SIR:   *       *      *       *       *      *       *      *
Congress adjourned sine die on the night of the 21st instant, having
passed a bill authorizing the government to make a contract, subject
to their approval, with some company, giving Mexican citizens the
preference, to open a way of communication between the two oceans
across the Isthmus of Tehuantepec.
A copy of the bill, as it passed, marked No. 3, is herewith enclosed.
I enclose also copies of a memorial and proposals to undertake the
work, made in behalf of Col. Sloo, an American citizen, by his agents,
all of whom are Mexican citizens.-(Marked No. 4.)
It is said that the government will probably close the contract upon
the terms specified in the proposals. But upon this subject I do not
pretend to be accurately informed, as I have constantly refused, since
the rejection of the treaty, to hold any conversation with Mr. Ramirez,
or any one else, in regard to any new scheme.
I have maintained the same ground I occupied when the treaty was
rejected, without giving up one inch.
I am told there is a secret article, which is to form a part of the
contract, in case it goes into effect, binding Col. Sloo to stand between
MVexico and the New Orleans company, and to pay all just claims
which that company may have against Mexico, growing out of the
rejection of the treaty. I may not be accurately advised, but such is
said to be the purport of the article.
I have the honor to be, sir, your obedient servant,
R. P. LETCHER.
Hon. DANIEL WEBSTER,
Secretary of State.
[Translation.]
The most excellent the president of the republic has been pleased to
address to me the following decree:
"Iariano Arista, president of the United Mexican States, to the
inhabitants of the republic, know ye that the general congress has decreed as follows:
"ARTICLE 1. The government shall enter into a contract, or shall
promote the formation of a company of native citizens, who shall, in
both cases, be preferred to foreigners, or of both natives and foreigners,
for the purpose of opening, by canal, railroad, or wagon road, a way
of communication between the Atlantic and Pacific oceans by the
Isthmus of Tehuantepec. The government shall not execute the con



6                 ISTHMUS OF TEHUANTEPEC.
tract which it may make until the same shall have been first approved
by the general congress.
"ARTICLE 2. The government, in order to make use of the power
granted to it in the preceding article, shall be subject to the following
conditions:
"1st. That the contract which is entered into shall not contain any
clause which, through the rights it grants, may countenance reclamations of foreign governments against the republic, or impair, in any
respect, the full and speedy exercise of its sovereignty in the said
Isthmus of Tehuantepec.
"2d. That, in' order to lend to the undertaking the most efficient
and constant protection, the government may be one of the copartners.
"3d. That the interoceanic communication by tho Isthmus shall
be free and open to all the nations of the globe.
"4th. That, in order to render firm and perpetual the advantages
of the communication, the government may negotiate with those
powers which are allied to the republic by treaty, for the express
recognition of neutrality of the passage by the Isthmus in case of war.
"MARIANO YANEZ,' President of the Chamber of Deputies.
" GABRIEL SAGAZETA,
"President of the Senate.
"FRANCISCO ENCISCO,
"Deputy Secretary.
"GERONIMO ELIZONDO,
"Senator Secretary.
"Wherefore, I order it to be printed, published, circulated, and
given due fulfilment.
"Palace of the national government at Mexico, May 14, 1852.' MARIANO ARISTA.
"To Don JosE F. RAMIREZ."
And I communicate it to you for your knowledge and consequent
purposes.
God and liberty. Mexico, May 15, 1852.
RAMIREZ.
[Translation.]
The law which empowers the government to enter into a contract
or to promote the formation of a company, native, foreign, or mixed,
for the purpose of opening, by canal, railroad, or wagon road, a way
of communication between the Atlantic and Pacific oceans by the
Isthmus of Tehuantepec, having been published, we, the subscribers,
have drawn up the proposals which we enclose to your excellency, and
trust that you will examine them and take them into consideration.
We have preferred to form a mixed company rather than one entirely Mexican, because we think that this will render the work more




ISTHMUS OF TEHUANTEPEC.                      7
practicable; there will be more capital invested in it; a greater number of interests will work in its favor; and the enterprise will go
forward with more rapidity and perfection to its completion. To limit
ourselves solely to what the country itself can give, in view of its
present resources and circumstances, would, in our opinion, be to deprive ourselves of many efficacious means of realizing our idea, and
perhaps to condemn ourselves to never seeing it realized.
The conditions which our proposition contains are entirely harmonious with the law, and no one who considers them impartially will
fail to acknowledge the advantages which they offer to the nation.
The nation accords to the undertaking the plenitude of its sovereignty;
it possesses for a certain time a part of its profits; the absolute property finally remains with it; and the foreign stockholders renounce
every right or pretension which is not equally granted to Mexicans.
It would have been easy to form a company entirely Mexican in
name, and to have its shares afterwards pass to foreigners, thus enabling a mixed enterprise, or one entirely foreign, to appear to be
altogether Mexican, and to obtain rights in preference to any other
company; but such a course not being proper we abstained from following it, being persuaded that the truth must manifest itself at all
events.  We will not omit to make here one observation, which is,
that when a company is once organized, the transfer of its stock from
one set of hands to another indiscriminately cannot be prevented, and
that what was purely Mexican at its origin may become mixed or
foreign afterwards.  In order to reach such an end, it would be necessary to provide that, when the shares were all taken by citizens of the
republic, in no case could they be transferred to any one unless he had
the same qualities-a prevention which it would be impossible to carry
into effect, both because it would be an-attack on property, and because it would occasion great obstructions in the common order of civil
affairs.
Your excellency will be pleased to receive this proposition, and to
report the same to the most excellent the president. We do not doubt
that, upon a careful examination of it, it will obtain his respectaole
approval as well as that ofthe august chambers.  If so, he will share
with us the satisfaction of having promoted a work of benefit to the
world, and of advantage and honor to Mexico; we being subject, in
all respects, to its laws, and in perfect agreement with its supreme
authorities.
We proffer to your excellency the assurances of our high consideration.
God and liberty. Mexico, March 15, 1852.
MANUEL PAYNO,
RAMON OLARTE,
Agents for A. G. Sloo.
JOAQUIN PESADO,
FRANCISCO ARANGOIZ.




8                  ISTHMUS OF TEHUANTEPEC.
[Translation.]
Contract entered into between the supreme government of the republic, of
the one part, and Joaquim Pesado and Francisco Arangoiz, representatives of a Mexican company, and Ramon Olarte and Manuel
Payno, agents of A. G. Sloo, of the other part, for the opening and
construction of a way of communication between the waters of the Gulf
of Mexico and those of the Pacific ocean, by the Isthmus of Tehuantepec.
ARTICLE 1. The contractors bind themselves to carry into effect the
way- of communication, making it by water as far as possible, and
constructing from such point the roads which will be mentioned in
article 13.
ARTICLE 2. The government grants to the contractors and to their
associates the exclusive privilege of navigating the river Goatzacoalcos
for the whole time established by the present contract; but all the
inhabitants and owners of lands and other property situated on the
bank of the river can import such articles as they need, and export
their agricultural or manufactured products, in vessels of Mexican
construction.
ARTICLE 3. It also grants to the contractors and their partners, by
way of donation, a strip of land, one league wide, on each side of the
road which is opened, if the lands should be of the public domain;.but if they should-belong to private persons, only the ground necessary shall be taken, its owners being indemnified according to law.
ARTICLE 4. The contractors may take, gratis, from the lands of the
public domain any material which may be necessary for the construction of the road or of its appurtenances, and for its preservation.
ARTICLE 5. Such materials can also be taken from the grounds of
private persons, but on indemnifying the owners, in conformity to
article 112 of the constitution.
ARTICLE 6. During the time that this contract lasts, the contractors
shall enjoy the exclusive privilege of transportation by the way of
communication, and, consequently, can collect tolls, transit duties,
and storage, and any other charges for carrying merchandise, or the
prices of passage, agreeably to the tariff which shall be approved by
the government; and the government cannot exact an impost or contribution of any kind, either on the transit of merchandise, on passengers, or on the capital invested in the undertaking.
ARTICLE 7. The government exempts from tonnage duty the company's steam vessels, which, sailing under the Mexican flag, maybe
appointed to convey correspondence and merchandise'in transit.
ARTICLE 8. The company can import, free of duties, the materials
and implements necessary. for the construction and preservation of the
road and its appurtenances, previously obtaining the permission of the
government, through its inspector, with a memorandum of the articles
which it is proposed to import. In can also introduce, upon the same
conditions, goods which cannot be obtained on the Isthmus, and which
may be needed by the laborers and persons employed in the labors of
the road, for their subsistence and clothing.




ISTHMUS -OF TEHUANTEPEC.                    9
ARTICLE 9. The liberty granted to the company for the transportation of merchandise shall be subject to the regulations which the
government may prescribe, it being understood that with such liberty
is not granted that of selling the merchandise at any point on the
Isthmus.
ARTICLE 10. The government shall open the navigable and coastwise ports which may be necessary for the better service of the way of
communication, which ports are to be selected by the contractors.
ARTICLE 11. The privileges which the government grants shall be
valid and exclusive for the contractors and their partners during the
whole time that the contract lasts.
ARTICLE 12. The government will protect, with its whole power,
the prosecution, preservation, and security of the works.
ARTICLE 13. The contractors bind themselves to commence a plank
road from the point at which the river Goatzacoalcos may not be navigable, and leading towards the Pacific, within the year at which the
present contract is dated, and to finish such plank road within three
years from its commencement; to commence the construction of a
railroad within a year from this last date, and to finish said railroad
in six years after; it being requisite in both cases that the contractors
shall give seasonable notice to the government of the works having
been commenced and of their having been finished.
ARTICLE 14. If the company should not comply with the obligations
imposed by the preceding article within the periods prescribed, it shall
lose its privilege, and the works which shall have been commenced,
the accumulations of materials, implements, machines, and any other
utensils which may have been gathered on its territory, shall inure to
the benefit of the nation without indemnity therefor, and the company
shall, moreover, incur a fine of two hundred thousand dollars, which it
guaranties in conformity to what is prescribed in article 24; but the
periods mentioned shall be suitably extended in case of war, pestilence,
shipwreck, or of the occurence of any other fortuitous event.
ARTICLE 15. The company also binds itself to construct the wharves
and docks which may be necessary for the service of the way of communication at the ports which are newly established at the extremities of the road.
ARTICLE 16. The company binds itself to establish a line of steamers,
under the Mexican flag, conformably to the laws of the country, to
run from Vera Cruz to the point at which the river Goatzacoalcos may
not be navigable, and from which the road or railway is to start.
ARTICLE 17. The company binds itself to convey, free of expense,
the correspondence which may come for any point of Mexico, and that
which is sent thence to other points where its steamers may touch, receiving and delivering it. with the customary formalities; in like
manner, it will convey all goods and articles which may be the
property of the government at half of the tariff rates. Likewise, it
will convey without any charge, going and returning, the officers,
troops, employes, or agents of the general government or of the States.
The metals and agricultural and manufacturing products of the republic will be conveyed at 25 per cent. less than the tariff price, and its
citizens at 20 per cent. less.




10                 ISTHMUS OF TEHUANTEPEC.
ARTICLE 18. The company will exert itself to have the Pacific
steamers continue making Acapulco their depository of stone? coal,
and it binds'itself to examine, as soon as possible, the coal mines in
the State of Guerrero, with a view of working them by means of contracts with their respective owners.
ARTICLE 19 For forty years, reckoning from the day on which the
tariff mentioned in article 6 goes into execution, the Mexican government shall annually receive forty-five per cent. of the net receipts of
the road, and for forty years more, reckoning from the conclusion of
the first Iorty, the government shall annually receive sixty per cent.
of the net revenues of the road, and for both periods the privileges
granted shall be valid and exclusive, and cannot be changed, except
by mutual consent; and at the end of that time the Mexican government shall enter into full and absolute possession of the road, with all
its trains, implements, and appurtenances, on the footing which they
may have bad at the time of their greatest augmentation, it being
understood that these, as well as the road, are to be delivered unincumbered and in perfectly serviceable condition, the old cars, machines,
and utensils to be not more than half worn, but it is not understood
that the vessels and steamers are to be included.
ARTICLE 20. The government and the company, each in its own behalf, can appoint comptrollers in proportion to the interests they respectively represent, in order to supervise, inspect, and explain the
accounts of the road during the term of their respective rights.
ARTICLE 21. The company obligates itself to observe the following
restrictions:
1st. The company cannot build fortresses on the isthmus, nor
organize military forces ofany kind. It shall not give passage to any
armed force, either Mexican or foreign, without express authority
from the government.
2d. The company cannot establish colonies on the lands which are
granted, unless with the consent of the government, being subject to
the regulations which it may prescribe for such case, and to the general provisions of the laws.
3d. The company shall immediately dismiss from  its service any
person who shall be engaged in or who shall protect smuggling, and
it shall assist the government in suppressing it.
4th. The company will endeavor to have every passenger observe
the custom-house laws of the republic.
ARTICLE 22. The differences which may arise between the govern.
ment and the company, or any of its copartners, shall be decided, in
the last resort, and upon final judgment, by the supreme court of
justice, in conformity to the laws; but the copartners who are foreigners cannot allege any kind of right or. privilege which is not enjoyed by Mexicans.  In order further to obviate any difficulties which
may arise on this account, it is agreed that neither the company nor
its members shall be able to alienate the whole or a part of their
shares to any foreign government, and that if they should do so, they
will lose by the very fact what is alienated, it accruing to the shares
of the government in the character of a fine. Neither can they enter
into any kind of contract or agreement with a foreign government or




ISTHMUS OF TEHUANTEPEC.                     11
its subjects when the effect of the contract entered into with them
would be to create a right which would be objectionable or different
from that expressed in this article.
ARTICLE 23. The transit by the way of communication shall be free
for all the inhabitants of the globe; but the merchandise proceeding
from countries which shall not have recognized by treaty the neutrality
of the isthmus shall pay 25 per cent. more than the merchandise proceeding from the countries which have entered into such stipulation.
ARTICLE 24. In order to guaranty the execution of the stipulations
contained in this contract, the contractors will deposit $500,000 in a
bank of the United States, or will give security for that amount, on
the responsibility of this contract, to the satisfaction of the minister
plenipotentiary of Mexico in that republic; it being observed that, in
case of the guaranty going into effect, it will be limited to the amount
deposited or given as security, without any further responsibility on
the part of the copartners.
MEXICO, lMay 15, 1852.
Mr. Rich to Mr. Webster.
[Extract.]
No. 20.]                    LEGATION OF THE UNITED STATES,
Mexico, August 31, 1852.
SIR:*          *         *        *           
The time for receiving bids for the Tehuantepec road has been again
further postponed to the 30th August, and it is said these postponements are made for fear of the United States, and that this government is anxiously waiting to hear from the United States to know
what are the intentions of our government in relation to the Garay
grant.
There were four sealed letters sent in yesterday for proposals for
opening the Tehuantepec road; the result will not be known for a
day or two.
I am, sir, with great respect, your obedient servant,
WILLIAM RICH,
Charge d'cffaires ad int.
Hon. DANIEL WEBSTER,
Secretary of State, Washington.




12                ISTHMUS OF TEHUANTEPEC,
Mr. Conrad to Mr. Conkling.
[Extract.]
No. 4.]                                DEPARTMENT OF STATE,
Washington, October 14, 1852.
*SIR:* *            *                  * *  *
A  few  general instructions are all that are necessary for your
guidance:
A communication affording a cheap and rapid means of transporting passengers and merchandise across the Isthmus of Tehuantepec has long been considered an object of great importanceto the
commercial world. To the United States in particular it is difficult
to estimate the value of such a communication.  Mr. Trist, who was
first appointed commissioner to negotiate a treaty of peace with Mexico, was authorized tooffer a large sum if she would agree merely to
put our citizens and government upon the same footing as her own in
regard to crossing the Isthmus by any communication then existing
or thereafter to be constructed.  The proposition was rejected by
Mexico, on the ground that she had, several years before, transferred
all her right in regard to this right of way to one of her own citizens,
(a Mr. Garay,) who had subsequently assigned them to British subjects. The British subjects alluded to transferred all their rights to
the grant to certain persons, and the same have now passed to an
association of American citizens, by whom it is now held. This association have taken measures to construct a railway across the isthmus.
With the knowledge and consent of Mexico a survey was made for
that purpose, which resulted in the discovery of an excellent harbor
on the Pacific, the existence of which appears to have been heretofore
unknown and the want of which had always been thought to present
an insuperable obstacle to the success of the undertaking. The enterprize was found to be in other respects of easier accomplishment than
had been supposed. Unwilling, however, to embark their capital in
this undertaking without the guaranty of their own government, they
applied to it for that purpose. Your predecessor was accordingly instructed to propose to Mexico atreaty on this subject. The proposal
was acceded to, and on the 22d day of June, 1850, a treaty was negotiated, by which, among other stipulations, Mexico virtually recognized the validity of the grant; but the provisions containing this
recognition not being as explicit as it was desirable they should be, it
was sent back to Mexico for amendment, without having been submitted to the Senate. A new convention was made, which was approved by the Senate and ratified by the President of the United
States, and was returned to Mexico to receive the assent of that government.  Before it was submitted to the Mexican congress, however,
that body adopted a decree by which they declared a formal decree,
(of the Dictator Salas,) on which the validity of the original grant
depended, to be null and void. The convention was subsequently
rejected by the same body. In the mean time those who were engaged
in making the survey were compelled, by an order from the Mexican




ISTHMUS OF TEHUANTEPEC.                     13
government, to leave the Isthmus before the survey was quite completed. It is understood a law has recently been passed by the Mexican congress authorizing the President to contract for the construction of a road across the Isthmus with any one who may undertake it.
The above is a brief history of this negotiation.   For more minute
information on the subject you are referred to the correspondence between the two governments, to be found in the archives of the legation, and in a pamphlet recently printed by order of the Senate, with
a copy of which you have been furnished.
Mexico having rejected the convention and repudiated the grant,
and having made no proposition whatever, either to our minister
there or through her representative here, this government cannot consistently, with a due regard to its own dignity, make any overtures to
renewthe negotiation. Nevertheless, this governmentanxiously desires
that some arrangement should be made whereby the communication
across the Isthmus may be established, and would listen to any reasonable proposition for that purpose. If, therefore, any such proposition
should be made, you will receive and transmit it without delay. It
is impossible to anticipate what form such a proposition may assume.
I would suggest, however, that this government would advise the
holders of the grant not to insist upon a literal compliance with its
terms, and if there be any clauses in it particularly obnoxious to the
Mexican government or people, those clauses might possibly be dispensed with or essentially modified.
You will therefore endeavor to ascertain what are the real objections
to the grant, and whet   andand how they could be obviated or removed.
It is understood that the grant of so large a portion of her territory
is very objectionable to that government.  If so, it might possibly be
exchanged for some suitable equivalent, such as a prolongation of the
privileges beyond the period mentioned in the grant. It is possible
the pride of the nation might be wounded by a direct recognition of
the grant. If so, this difficulty might be obviated by a direct cession
of the right of way to the United States.
You will bear in mind that the great and paramount object of fhis
government is to obtain a right of way across the Isthmus.  If this
object can be attained through the grant to Garay, it would, in justice
to the holders of that grant, prefer accomplishing it in that way. It
will in no event do any act to prejudice their rights against Mexico,
growing out of said grant; but, if all the efforts of the government
to obtain a recognition of the grant should be unsuccessful, it cannot
permit the existence of a right which Mexico refuses to recognize, to
present an insuperable obstacle to the prosecution of an enterprize in
which the whole people of the United States are so deeply interested.
In case, therefore, no proposition should be made to you based upon
the recognition of this grant, and you should perceive no indications
of a favorable change in the views or action of the government relative
thereto, you will cautiously sound the government, with a view to
ascertain, if practicable, whether it would be willing, on any and on
what conditions, to cede the right of way to the United States, taking
care, however, to say nothing which may lead it to infer that Congress




14                 ISTHMUS OF TEHUANTEPEC
may not, as intimated by the report of the committee of the Senate,
determine to enforce the performance of the grant.
It may be well to state that Mexico has always professed to be
anxious to open the communication, and it is said the President, by
virtue of the decree of Congress above referred to, has recently advertised for proposals for a contract for that purpose.  *     *
Supposing, however, that government to be sincere in these professions, it is believed that the object can never be accomplished by
Mexican capital, and that no foreign capitalists will embark in so
great an undertaking without some other guaranty for the protection
of their rights than the power and good faith of the Mexican government.
C. M. CONRAD,
Acting Secretary.
ALFRED CONKLINa,
&c., &d.,  &c.
Mr, Conk/ing to Mr. Everett.
[Extract.]
No. 1.]                       LEGATION OF THE UNITED STATES,
VMfexico, November 2', 1852.
SIR:      *       *       *      *       *  *       *
Congress has been in session since the 15th of last month; and ever
since about the time of my arrival the project of an interoceanic communication across the Isthmus of Tehuantepec has occupied no inconsiderable share of the attention both oft the executive and legislative
branches of the government, as well as of the'public at large.
After the adoption and abandonment in succession of various inconsistent modes of deciding upon the proposals invited by the government for executing this important work, they have'at length been
formally opened and referred to the chamber of deputies; but it
having been discovered that some of them had'been, in fact, made
known long ago,: and additional ones received from those who possessed this knowledge, it has just been decided to receive new proposals from those who had a right to complain of this breach of good
faith, and they are availing themselves of this license.  Of the means
resorted to, and, as it is said, openly invited by the deputies to obtain
votes, I abstain from speaking..
*   ~, ~ * -    *    -  *   *~
I have the honor to be, very respectfully, sir, your obedient servant,
A. CONKLING.
The honorable the SECRETARY OF STATE, Washington.




ISTHMUS OF TEHUANTEPEC.                     15
Mr. Conkling to Mir. Everett.
[Extract.]
No. 14]                      LEGATION OF THE UNITED STATES,
Mexico, February 2, 1853.
SIR:
-SIR:      *      *       *       *      *       *      *
I regret that the incessant agitation, for three months past, (in
itself a great moral and political evil,) of the Tehuantepec question,
has even yet led to no practical result, though it is now confidentially
said that a contract for the construction of a railroad across the
Isthmus is likely to be concluded in a few days with an American citizen named Sloo, and "his associates," and that I shall be invited to
negotiate with the Mexican government a convention designed to
secure the successful prosecution of the work, and its beneficial use
when completed.  Whether this expectation is to be fulfilled is a
question concerning which I shall not hazard an opinion.- Should it
be verified, I should regard it as so great a misfortune to have the
proposed negotiation postponed indefinitely, on account of the supposed want of authority in our minister here to entertain it, that, although my instructions on the subject were not framed with a view to
the contingency of a new contract for the execution of the proposed
work, and are not therefore in terms applicable to such a case, I think
I shall venture, keeping steadily in view the spirit of my instructions,
and the policy of the government as manifested in its past acts relative
to the subject, to engage in the proffered negotiation without awaiting further instructions, which, however, it is in my opinion of vital
importance that I should receive as soon as they can be prepared after
the terms of the new contract shall be made known to-our government....a e.   t   v                 t s. e.v.
I have the honor to be, very respectfully, sir, your obedient servant
ALFRED  CONKLING.
Hon. EDWARD EVERETT,
Secretary of State, Washington.
Mr. Conkling to Mr. Everett.
[Extract.]
No. 15]              LEGATION OF THE UNITED STATES, MEXICO,
February 2, 1853, at night.
SIR: After closing my accompanying despatch, No. 14, I received,
through the secretary of the legation, an oral message from  Mr.
Arroyo, the acting minister of foreign relations, to the effect that a
contract between the Mexican government and Mr. Sloo, for the construction of a railway across the Isthmus of Tehuantepec, would certainly be signed in the course of a very few days, and that the Mexican
minister at Washington would be immediately so informed.




16 fISTHMUS OF TEHUANTEPEC.
Such an instrument is know to have been prepared and drawn up
in form by legal gentlemen by order of the president, several days
ago, and to have ever since been before the president, by whom it has
been most carefully revised and corrected.  Its provisions have been
the subject of so much anxious thought and earnest discussion that it
seems reasonable to conclude that they are well adapted to the interesting and important end in view. I think it probable that a copy or
abstract of it will be forwarded at once to Mr. Larrainzar.
It having thus become my duty at the eleventh hour [the courier
leaves at an early hour to-morrow morning] to advert again to this
subject, I avail myself of the opportunity to subjoin a word of explanation relative to my observation, contained in the accompanying
despatch, of my intention not to decline to enter into a negotiation on
the subject, should I be invited to do so.
My apprehension touching the principle on which the government
of the United States saw fit to interpose in this affair after the assignment of the Garay contract to American citizens, (the New Orleans
company,) is this: Not that the government considered itself under
any obligation to these assignees, at their instance, and for their gratification or profit, thus to make themselves parties to this contract, in
its nature primarily, and, as Mexico has always insisted, exclusively,
cognizable in the Mexican judicial tribunals; but thati the United
States, without violating any principle of international law, might,
at their option, insist on the recognition by Mexico of the rights
claimed by these assignees, and in doing so, might further insist on
stipulations from  the Mexican government, deemed necessary to the
accomplishment of the great enterprise in view, and to its practical utility
whencompleted; and that considering the vast importance of the work
to the whole American people, it was fit and proper for their government to avail itself of the opportunity thus presented, to interpose in
the manner it did. If I am  right' in my interpretation of the past
official language and acts of the government on this subject, it would
seem to follow that I should be fully warranted, by the spirit of my
instructions, in concluding such a treaty with the Mexican government, relative to the new contract, as the government of the United
States deemed it proper to offer with regard to the Garay grant.  *
I have the honor to be, with great respect, sir, your obedient servant,
ALFRED CONKLING.
Hon. EDWARD EVERETT,
Secretary of State, Washington.
-Mr. Conkling to MJr. Everett.
[Extracts.]
No. 16.]                     LEGATION OF THE UNITED STATES,
Mexico, February 3, 1853.
SIR: By the British courier, which left Mexico at an early hour
this morning for Vera Cruz, 1 transmitted two despatches,Nos. 14




ISTHMUS OF TEHUANTEPEC.                       17
and 15, prepared yesterday and last night, to be carried to Washington by Mr. Yturbide,'whom I appointed bearer of despatches for that
purpose, arid who had already left town for Vera Cruz.
These despatches were very hastily written, and under adverse circumstances, as therein. stated and explained. In number 14, adverting- to. the. probability of my being  invited  before long  to
negotiate a convention with the government of Mexico relative to the
construciion of a transit way across the Isthmus of Tehuantepec, I
took occasion to observe that, under the peculiar circumstances of the'
ease,'I should feel myself warranted in accepting such an invitation.
Afterclosing that despatch at a late hour of the day, I received' an
oral message from the. acting minister' of' relations, inferring a' very
high degree of pr0bability that a contract would be entered into by
his government' within'two or three days for the opening of this
transit way. Deeming it to be my duty to communicate this fact to
you, I prepared despatch' No. 15 for that  purpose, and availed myself of the occasion' to add some explanatory remarks touching the
observation I have mentioned contained in my despatch No.' 14.'.  *.,    -*;  " - *'  *:'    *.' *.
On the receipt of my instructions, &c., the- day before my embarkation at New York;: I read' them  and laid them'aside.  Finding, on
my arrival here, the condition of things I have described, I saw' no
reason for reverting to those parts of my instructions which relate to
the Tehuantepec transit way and the 11th article of the treaty of
peace, and accordingly left them to sleep in their repository.'*  *
It thus happened that I was' obliged to write on the subject without
referring to'my instructions, and with little reflection, relative to the
subject, though I was not altogether unmindful that'it was not quite
safe to'do so. On recurring to it to-day, and examining my instructions;an-d'powers, I deeply regret to find fhat the. impression under
which I wrote that'I was' fully authorized to conclude a convention
with this government on the subject, as well of Tehuantepec as of
Indian depredations;'is unfounded, my'full powers being limited to
the making of':a treaty upon this latter subject while in regard  t'o
the formeerI' am' only directed' to receive and transmit- to your: department any proposition relative thereto which' might be offered' by
the Mexiqan government.'
I have eth.e ihonor to. be, very respectfully,  sir, your obedient
servant,
ALFRED CONKLING.
Hon. EDWARD EVERETT,
Secretary of State, City of Washington.
Ex. Doc. 72-   2




18                ISTHMUS OF TEHUANTEPEC.
Mr. Conkling to Mr. Everett.
[Extract. ]
No. 18.]                     LEGATION OF THE UNITED STATES,
Mexico, February 6, 1853.
SIR: In my despatches Nos. 14 and 15, which I had the honor very
recently to transmit to the Department of State, I gave you reason to
expect that a contract for the construction of a transit way across the
Isthmus of Tehuantepec would very soon be entered into by the Mexican government. It is now my duty to inform you that, although
very serious doubts subsequently arose and continued until within the
last 24 hours whether this expectation would be verified, the contract
is at length concluded.
I transmit herewith, marked A, a copy of a communication received
at a late hour last night, announcing this result, and also a copy,
marked B, of the correspondent decree, a printed copy of which I received from the minister of foreign relations this morning, accompanied by a note, a copy whereof, also marked B, I have the honor likewise to enclose  The contract itself I have not seen. I am promised
a good translation of it as soon as it can be made, and will, without
delay, forward a copy of it to your department.
I transmit also, herewith, a copy of my note of this morning, in
answer to the two notes above mentioned. I am not sure it may not
appear to you that, in speaking as I have done of the conduct of the
president, I have departed from the strict line of official duty, and it
is due to myself, therefore, to state that in an interview with the
president, at his instance, two days since, and at a very trying crisis,
we had a free conversation on the subject of the Tehuantepec question,
in the course of which I became convinced that he was governed by
the motives and acting in the spirit described in my note, and I am
quite sure, situated as he is, that what I have written will be very
grateful to his feelings, and I am not without hope that it may
strengthen him in his responsible, harrassing, and, I am sorry to add,
still somewhat precarious position. You will observe that I have expressed my willingness to "receive overtures."  In assuming that I
have authority to do this, although a contingency has arisen not contemplated by my instructions, I trust I am not mistaken in supposing
that I have the requisite authority.        *       *  *  *
I have the honor to be, with very high respect, sir, your obedient
servant,
ALFRED CONKLING.
Hon. EDWARD EVERETT,
Secretary of State, Washington.




ISTHMUS OF TEHUANTEPEC.                    19
Mr. Arroyo to Mr. Conkling.
[Translation.]
NATIONAL PALACE, MEXICO,
February 5, 1853.
The undersigned, chief clerk, at present in charge of the office of
the secretaryship of relations, has the honor of addressing this communication to his excellency Alfred Conkling, envoy extraordinary
and minister plenipotentiary of the United States of America, to inform him that, in pursuance of the law passed by the general congress
on the 14th day of May, 1852, and the edict published in consequence
thereof on the 29th of July, of the same year, his excellency the
president ad interim, in the exercise of the powers with which he is
invested, has deemed it good to agree to and direct the preparation of
the necessary legal document approving the propositions relating to
the opening of an. interoceanic communication through the Isthmus of
Tehuantepec submitted to him, in the name of a mixed company, by
Messrs. Ramon Olarte, Don Manuel Payno, and Don Jose Joaquin!
Pesado, in behalf of A. G. Sloo & Company.
Together with the gratification which he experiences in communicating to his excellency Mr. Conkling a resolution which must be acceptable to the whole civilized world, the undersigned entertains a
hope that his excellency, seconding the wishes of his excellency the:
president of the republic, will immediately transmit it to his government, duly impressing it with the appreciation of the fact, and that
his excellency will, as the best proof of his approbation, be the first.
to give his assent to the speedy conclusion of a treaty of neutrality,
which shall hold out to all the nations of the globe advantages of immense value, and at the same time draw more closely the relations of
peace and friendship which now unite the two neighboring republics.
The undersigned, therefore, has the honor to renew to his excellency
the minister plenipotentiary of the United States the assurances of
his distinguished consideration.
J. MIGUEL ARROYO.
His Excellency ALFRED CONKLING,
Envoy Extraordinary and Minister Plenipotentiary
of the United States of America.
Mr. Arroya to Mr. Conkling.
[Translation. ]
NATIONAL PALACE,
Mexico, February 5, 1853.
The undersigned, chief clerk in charge of the department of relations, has the honor of enclosing to his excellency Mr. Alfred Conkling copies of the decree issued by his excellency the president ad
interim of the republic, approving the propositions for the opening
of the interoceanic communication through the Isthmus of Tehuantepec, alluded to in his note of this date, addressed to his excellency,




20                ISTHMUS OF TEHUANTEPEC.
and at the same time of tendering to him renewed assurances of his
very distinguished consideration.
J. MIGUEL ARROYO,
His Excellency ALFRED CONKLING,
Envoy Extraordinary and Minister Plenipotentiary
of the United States of America.
[Translation.]
DEPARTMENT OF FOREIGN RELATIONS.
His excellency the president ad interim of the Mexican republic
has been pleased to address me the following decree:
The president ad interim of the Mexican United States to the inhabitants of the republic, be it known: That, considering that the
opening of the Isthmus of Tehuantepec has come to be not only a
commercial requirement for the whole world, but also a political necessity for the preservation of the integrity and sovereignty of our
territory;
Considering that from the non-settlement of the question within
the narrowing period of time, which is still left to adjust it with every
element of independence and dignity, it might, perhaps, be involved
and blended with political questions, and the republic herself in serious complications, which will result in detriment to all her inhabitants;
And considering, lastly, that the approval of the propositions of
the mixed company, with which those of Oajaca and Garcia, and the
States of Oajaca, Tabasco, and Chiapas, have been united, will not
only result in great material well being to the nation, but that they
will also, and in a peaceable, quiet, and honorable manner, settle the
questions to which the subject has given rise; I have, in the exercise
of the powers with which I find myself invested, and in pursuance of
the law of the 14th of May, 1852, and of the edict published in consequence thereof on the 29th of July, deemed it proper to decree the
following:
SINGLE ARTICLE: Approved, together with the modifications and
explanations, which appear in the act of this date, which shall be published, the propositions for the opening of the interoceanic way of
communication through the Isthmus of Tehuantepec, submitted by
the mixed national and foreign company, under the name of A. G.
Sloo.
Wherefore, I order that the foregoing shall be printed, published,
and circulated, and that it be carried into due effect.
Palace of the national government, in Mexico, on the fifth day of
February, 1853. 
JUAN BAUTISTA CEBALLOS,
A. D. J. MIGUEL ARROYA.
And this I communicate to you for your information, and for its
consequent effects.
God and liberty, Mexico, February 5, 1853.
J. MIGUEL ARROYO.




ISTHMUS OF TEHUANTEPEC.                     21
Translation of the Sloo contract for the opening of and communication through the Isthmus of Tehuantepee, entered into on the one
part in the name of. the.supremengovernment of the Mexican republic,
by the most excellent Mr. Jos Miguel Arroyo, chief clerk, with the
charge of decrees of the department;of foreign and domestic relations,
and, for, the time being, entrusted with the business of said department; and, on the other part, by Mr. William  D. Lee, empowered
by Messrs. A. G.Sloo and his associates, and by Messrs. Ramon
Olarte, Mianuel Payno, and} Jose Joaquin Pesado, for the Mexican
partners ahnd contractors interested in the enterprize of the interoceanic communication of Tehuantepec, and representatives of the
whole company, which, under the style of Mixed Company, assumes
the aforesaid opening and communication upon itself, in agreement
with the compaknies:known as those of Oajaca and ofD. Felipe Garcia
and associates, and with the authorized agents of the States of Chiapas,
Tabasco, and Oajaca, under the following articles to which they have
agreed; the supreme government exercising the power conferred upon
it by the law of the  14th of May,. 1852, and of the further powers
granted to it by the decree of the 11th of January last:
1. The means of communication shall be carried on bywater,' in
the navigable part of it that may exist; and where the latter ends
with the Coatzacoalcos river, there shall the roads referred to in article 2 commence.' 
2. The contractors bind themselves to commence a plank road at
such point as the Coatzacoalcos ceases to be navigable, in the direction of the Pacific, in a year after the closing of'this contract, and to
complete it in three.years after its commencement; to begin. the construction of a railroad in a year, reckoning from the last date, and
completing the same, with all the requisite machinery and trains,
within the four years following, and to advise the supreme government, in both cases., of the commencement and of the completion of
the works'
3. The line of direction of the road shall be such as competent
engineers may lay down as the most practicable from  shortness of
distance and for facility of construction, starting from the point at
which, after due examination, the Coatzacoalcos ceases to' be navigable.
4. -The granees shall, at their own cost, and in the new ports
which the government may open at the two termni of the route, build
such wharves and embankments as may be necessary for the communication way. 
5. The government grants to the company the land required for
the carriage'and railroad, the wharves, embankments, storehouses,
depots, stations, sheds for stages and other vehicles, and hotels for
passengers; but should the lands' of the public domain prove insufficient for all the aforesaid requirements, those of private individuals
shall be taken for such purposes, the owners being indemnified therefor in conformity with the laws.'6. The company will be at liberty to take, without compensation,




22                ISTHMUS OF TEHUANTEPEC.
from the lands of the public domain, all materials whatsoever which
may be required for the construction of the road, or of its appurtenances, and for its preservation, [repairs.]
7. Such materials may be taken from the lands of private individuals also, but the owners shall be indemnified therefor in conformity
with the law.
8. During the time for which this contract shall hold the company shall enjoy the exclusive privilege of transportation through this
way of communication, and they shall, consequently, have power to
collect tolls, transit and storage dues, and what other rate soever for
freight on merchandise or passage fare, in conformity with the bill of
rates which the government shall approve, which government shall
not have the power to levy either impost or contribution of any kind,
either on the transit of merchandise, or on the passengers, or on the
capital invested by the company; but it does reserve to itself the right
given to it by article 32 of the edict, which says to the letter: "The
government binds itself not to impose any contribution or tax on the
road, on the merchandise and passengers that may go upon such
road, or on the capital invested therein; but it will have the power to
impose an additional duty on packages and passengers, at a rate not
to exceed one real, the whole proceeds thereof reverting to itself."
9. The company shall have the power to import duty free the
materials and utensils necessary for the construction and preservation
of the road, and of its appurtenances, on permission previously obtained from the government, through the channel of said government's
inspector, furnished with a note of the objects which it is proposed to
import. It will also have the power to import, under the aforementioned conditions, objects not procurable on the Isthmus, and which,
in the way of supplies and clothing, may be required by the workmen
and peons engaged in the works of the road.
10. The franchise granted to the company for the transportation
of merchandise will be subject to such regulations as the government
may make; it being understood that, by such franchise, the right is
not granted to said company to distribute them for consumption at
any point of the Isthmus.
11. The supreme government will open the seaports, and those
for the coasting trade, which may be necessary for the better service
of the communication road, there being, for the present, none other
than the port of Vera Cruz, on the Gulf of Mexico, and that of Ventosa, on the Pacific. This latter port shall be solely used for the reciprocal transit of passengers and merchandise.
12. The privileges which the government grants shall be binding
and exclusive in behalf of the company for the whole period of the
duration of this contract.
13. The government will apply all its power to the prosecution,
preservation, and security of the works.
14. The fulfilment of this contract to the satisfaction of the supreme government is guaranteed by a sum of $300,000, (three hundred thousand dollars,) real money, which the representatives of the
company shall pay in cash, within the terms which the supreme government may provide, and, in addition, fifty thousand dollars monthly,




ISTHMUS OF TEHUANTEPEC.                     23
until the making up of the sum total of $600,000, (six hundred thousand dollars.)  The latter $300,000 (three hundred thousand dollars)
shall bear interest at six per cent. per annum, since the former three
hundred thousand dollars shall be delivered without any interest as a
guaranty for the present contract.  But both amounts, with the interest attached to the latter three hundred thousand dollars, from the
date of their delivery, respectively, until the extinguishment of the
capital and the interest'which may accrue, shall be paid to the company through the one-half of the first proceeds to which the government may be entitled; the general treasury ftirnishing to said company as its security the certificates, bonds, or necessary documents for
the above mentioned sum of $600,000, (six hundred thousand dollars.)
The periods stipulated in articles 14 and 15 of the edict shall be prudently extended by the government in case of shipwreck or other uncontrollable cause, the tenor Of said articles being as follows:
~' ART. 14. The execution of the contract to the satisfaction of the
government is guarantied under a stipulated penalty, which shall not
be less than two hundred thousand dollars.  This amount shall be
secured by the deposit of the money or specie, or by mortgages, or by
securities given in conformity with law.  The grantee shall incur the
penalty of forfeiting the expenses incurred, the materials and implements found within the territory of the republic, and his rights under
the contract, if he shall not begin and complete the carriage road, and
if he shall not begin'the railroad, within the stipulated periods.
" AT. 15. Upon the beginning of the work on the railroad, the
deposit made by the grantee shall be returned to him, or the obligation in which the. stipulated penalty may consist shall be cancelled;
but if, after it will have been begun, he do not' complete it within the
periods assigned, he will incur the penalties above expressed, except
that of the fine, and he will only have the right of being considered
as a partner in the valub of the rails, trains, cars, and other materials
imported from abroad: Provided, That their original cost, with the
expenses added, shall exceed two hundred thousand dollars, for if
they should prove to be less he shall also incur the penalty."
15. The company binds itself to convey to any point bordering
upon the road, and free from cost, such mails as aire to pass over said
road, receiving and delivering them in the usual forms-. It shall, in
like manner, transport all articles and effects belonging to the government at one-fourth of the rate of prices; it shall also convey, going
and returning, without any compensation whatsoever, the officers,
troops, employes, or agents of the general government or of the States.
Metals and agricultural and industrial products of the republic shall
be transported for twenty-five per cent. less than charged by the tariff
of prices.
-16. For fifty years, reckoning from the day when the tariff of rates
mentioned in article 8 will have been carried into effect, the government of Mexico shall receive twenty per cent. of the net proceeds of the
road. During the whole of that period all the privileges contained in
this contract shall be valid and exclusive, nor shall they be altered
except by mutual consent; and at the expiration of the period mentioned the government will go into full and absolute possession of the




24                 ISTHMUS OF TEHUANTEPEC.
road, with all its trains, (which, at the least, must be such as are
necessary to convey five hundred passengers daily, and ten thousand
arrobas of freight,),its utensils and appurtenances; it being understood
that both these and the road are to be delivered in running and perfect
condition for service; the rails, cars, engines, and utensils being required to be, at least, of average fitness for use, and not including
herein the vessels and steamers., In order not to elude the delivery
of the road, and all its utensils mentioned in the preceding clause, the
company binds itself to deposit through the last ten years ten per cent.
of the net proceeds belonging to them, which deposit shall be returned
to them immediately upon the government's receiving, to its satisfaction, all the objects mentioned in said preceding clause.
17. The existence of light-houses at the two extremities of the road,
and also on the reef of the Alacraves, as an additional one in the port
of Acapulco, being a matter of the highest necessity for the vessels
navigating in the direction of the intercommunication way; and it
being equally necessary for the development of the resources of the
republic and for the construction of vessels that the bar of the GoatzaCoalcos, as well as the bed of said river, should, if practicable, be
deepened, the company shall set aside, annually, to make those improvements, upon plans approved by the government, two and a half
per cent. of the net yield of the road, until such works will have been
completed.  The light-houses, being once constructed, shall belong
exclusively to the government.
18. The government and the company, each in its own behalf, will
have the power to appoint representatives, in proportion to the interests
which they may respectively exhibit, to watch over, examine and state the
accounts of the road during the existence of this contract. The government, representing not more than the fifth part of the whole product,
will be considered, for its representation, in the light of clause 24 of
the edict, which says: "-The government shall be considered as a
stockholder to an amount of, at least, the third part of the whole of
the shares into which the undertaking may be divided."
19. The company binds itself to the observance of the following restrictions: Ist. It.shall not be lawful for the company to construct
forts on the Isthmus, nor to organize military forces of any kind. It
shall not afford-passage to any armed force, whether national or
foreign, without express authority from the government.  2d. The
company shall not introduce on the lands which it may occupy, in
relation to all that is said in article 5, a greater number of persons
than that which shall be necessarily required for their operations in
all of their branches.  3d. The company shall forwith dismiss from
its service any, whomsoever, of its employes that shall carry on, or
protect, smuggling, or shall commit any other misdemeanor; and it
shall afford the government every assistance in their prosecution.
4th. The company will cause every passenger to observe the revenue
laws of the republic.
20. Foreigners engaging in the undertaking shall be subjected to
the provisions of articles 21 and 22 of the edict, which say to the
letter: "Art. 21st. Those foreigners who may take share in the
mixed company, whether as stockholders, or under any, other title




ISTHMUS OF TEHUANTEPEC.                     25
that should give them the right of interfering therein, of sharing in
its proceeds or claiming any of its grants, shall not hold greater rights
than shall the Mexicans, nor other means of enforcing themhthan -those
that are granted to the latter by the laws of the republic.  All questions of this nature, and such as may arise out of the acquisition,
preservation, or loss of shares in or rights over the said road, shall
be decided by the competent national courts, in conformity with the
laws of the republic.  The employes and officers of the company shall
be subject to the same conditions.  Art. 22. The person or persoias
who may contract for the opening of the road shall not have the right
of transferring or conveying the grant without previous consent obtained from the government, or of taking in either a government or a
State as a copartner.  A violation of any of those conditions will work
as a nullity of the grant, and the Mexican government shall have the
right of disposing of it at will, saving the shares lawfully acquired by
the individual stockholders."
21. The transit across the inter-communication way shall,be free to
all-the inhabitants of the globe; but an additional rate of twenty-five
per cent. shall be laid on the merchandises of those nations which will
not have entered into conventions of neutrality with Mexico.
22. So soon as the company may have been organized, an office for
the issue of bonds shall be established in Mexico; another shall, likewise, be opened in London, or in any other mart of Europe, and during
a period, which shall not be less than six months, one-third at least
of all the shares shall be held at the disposal of such Mexican citizens
as may choose to become subscribers to the stock.
23. The company shall h'ave the privilege of transporting the foreign
mails over the intercommunication way, in sealed bags; and such bags
shall be sealed by the agents of the post office, or by the collectors of
the several custom-houses. 
24. The company shall not have the power of selling or of conveying shares to the States of the confederacy, in exchange for waste lands
or for services of Indians.
25. The company accept, as an indispensable condition, all the
articles of the edict published by the supreme government, under date
of the 29th of July, of the year last past, that do not clash with or
stand in contradiction to the spirit, the text, and the letter of the
present contract.
NAVIGATION.
ARTICLE 1. The supreme government grants to the contractors and
to their associates the exclusive privilege of navigating the Goatzacoalcos river during the whole period assig ned for the existence of this
contract; but all the inhabitants and owners of plantations, or of any
other property situated on the banks of the river, shall have the power
of importing all such articles as they may require, and exporting their
agricultural or industrial products in vessels of Mexican build.
ARTICLE 2. The government releases from duties on tonnage all the
steamers of the company intended for the transportation of mails and
merchandise in transilu.
ARTICLE 3. The company binds itself to the establishment of a line




26                ISTHMUS OF TEHUANTEPEC.
of steamers, equal to the service of the intercommunication way, under
the Mexican flag, in accordance with the laws of the land, to ply from
Vera Cruz to such point of the Goatzacoalcos river where the railroad
shall start.
ARTICLE 4. The company engages to transport, free of cost, such
mail matter as may be intended for any point whatsoever of Mexico,
and such as may be sent thence to the other points where its steamers
may touch, receiving and delivering it in the usual form; to convey
likewise all articles and effects, the property of the government, for
one-fourth of the established rates; to transport, also, without any
compensation, going and returning, the officers, troops, employs, and
agents of the general government or of the States  The metals, the
agricultural or industrial products of the republic shall be transported
for twenty-five per cent. less than the established rates of prices.
ARTICLE 5. The company shallsee that the steamers on the Pacific
side shall continue to keep their coal depot at Acapulco, and it binds
itself to an examination, as speedy as possible, of the coal beds of the
State of Guerrero, in order that they may be worked under agreement
with their owners respectively.
ARTICLE 6. For due fulfilment of all that is contained and embraced
in this contract, the supreme government will come to an understanding, through its agents or attorneys, with the representatives of the
mixed company, mentioned in the caption of this instrument, or such
as may hereafter be their successors.
J. MIGUEL ARROYO,
M. PAYNO,
W. D. LEE,
JOAQUIN PESADO,
RAMON OLARTE.
MEXIco, February 5, 1853.
MKr. Conkling to Mr. Arroyo.
- ~'.'.     ~"LEGATION OF THE UNITED STATES,
Mexico, February 6, 1853.
The undersigned, envoy extraordinary and minister plenipotentiary
of the United States of America, loses no time in replying to the note
which he had the honor to receive, at a late hour last evening, from
his excellency Mr. Arroyo, acting minister of foreign relations, announcing the long delayed decision, now made by his excellency the
president of the republic of Mexico, in obedience to the law enacted by
the general congress on the 14th of May last, and of the convocatoria
promulgated in pursuance thereof on the 29th of July last, having for
their object the speedy construction of a transit way across the Isthmus
of Tehuantepec, for the purpose of facilitating the communication between the Atlantic and Pacific oceans.
Deeply impressed as the undersigned is with the vast importance of
this noble enterprise, he fully concurs with his excellency Mr. Arroyo
in the opinion that this decision cannot fail to be gratifying to the




ISTHMUS OF TEHUANTEPEC.                    27
whole civilized world; and fully aware as the undersigned is of the
numerous and almost insuperable difficulties which surrounded the
subject, and of the patriotic and self-sacrificing spirit and the firmness
and integrity of purpose with which his excellency the president has
encountered and at length overcome these difficulties, the undersigned
cannot doubt that his excellency the president has secured for himself
the merited gratitude of his country and the applause of all commercial nations.
The undersigned will hasten to communicate to his government the
decision and decree of his excellency the president; and in the meantime will be happy, in accordance with the invitation contained in his
excellency Mr. Arroyo's note, and with his own instructions to receive from this government any overtures likely to result, as the
undersigned earnestly hopes they may, in a treaty suited to the exigencies of the case and adapted to secure the happy fruits so eloquently
described by his excellency Mr. Arroyo.
The undersigned also has the honor to acknowledge the receipt,
this morning, of the note of his excellency Mr. Arroyo, enclosing
printed copies of the decree in question.
The undersigned has great satisfaction in renewing to his excellency Mr. Arroyo, the assurances of his high respect and distinguished consideration.
ALFRED CONKLING.
His Excellency J. MIGUEL ARROYO,
Acting Minister of Relations.
Mr. Conkling to Mr. Everett.
[Extract.]
No. 23.]                      LEGATION OF THE UNITED STATES,
Mexico, February 22, 1853.
SIR:*          *        *         *        *         *
Last evening I received from the acting minister of relations a note,
of which I have the honor to enclose a copy, marked A, and to which
I this morning returned an answer, of which I transmit a copy, also
marked A.
I earnestly hope, and with considerable confidence trust, that in the
line of conduct I have deemed it to be my duty to adopt relative to the
projected transit-way across the Isthmus Tehuantepec, I have not had
the misfortune to contravene the sentiments of my government, nor to
appear to you to have assumed an undue degree of responsibility.
The considerations by which I have been governed will have been
already sufficiently indicated in my former despatches, and I will only
add that if I have erred it has not been for want of deliberate and mature reflection, or of an anxious desire to discern and follow the path
of duty.
The prospect of being able to conclude a favorable treaty continues




28                iSTHMUS OF TEHUANTEPEC.
to be propitious; and, with respect to the propriety of adopting the
policy Ihave taken the liberty in my former despatches to/recommend,
of fully epowering me at once, under such additional instructions as
may be thought necessary, to act in the premises, I may be permitted
to mention the fact, in addition to the considerations I have already
had the honor to suggest, that I am informed directly and indirectly
of an earnest wish on the part of the Mexican government, that the
negotiation may be consummated before my departure from the country.
I have the honor to be, very respectfully, sir, your obedient servant,
ALFRED CONKLING.
Hon. EDWARD EVERETT,
Secretary of State.
Mr. Arroyo to Mr. Oonkling.
NATIONAL PALACE,
Mexico, February 21, 1853.
The undersigned, chief clerk of the department of relations, seasonably received the note which his excellency Mr. Alfred Conkling,
envoy extraordinary and minister plenipotentiary of the United States
of America, did him the honor of addressing him on the 6th instant,
in which, in answer to the note of this department of the day preceding, in relation to the decree issued, and the contract signed for the
opening of an intercommunication way through the Isthmus of Tehuantepec, his excellency stated that, in pursuance with the instructions
which he holds, and upon the invitation of the undersigned, he would
take pleasure in proceeding to a negotiation for the arrangement of a
treaty, guarantying the neutrality of the right of transit across said
road, and securing the fruitful results which it is bound to yield to
the world.
The undersigned has brought said note to the knowledge of his excellendy the trustee-general of the supremie executive power, and his
excellency, anxious to attain so laudable an end, and to promote, to
the extent of his ability, whatever may contribute to confirm the friendly
relations which exist between Mexico and the United States, and
place them on a solid and lasting footing, such  as considerations of
expediency and reciprocal benefits, -has appointed their excellencies
General D. Jose Maria Fornel and D. Joaquin Maria de Castillo y
Lanzas, plenipotentiaries of the republic, to proceed in the negotiation
with Mr. Conkling of the treaty to which reference has been made.
The undersigned flatters himself that his excellency will consider
this measure as a new proof of the friendly sentiments which actuate
Mexico in regard of the United States, and that, with the acknowledgment of the like sentiments on his part, his excellency will take
pleasure in carrying to a successful close a negotiation as philanthropic




ISTHMUS OF TEHUANTEPEC.                   29
in its objects as it must be important in its results to both countries
in view of the advantages which it is to secure for them.
The undersigned has the honor of tendering to his excellency renewed assurances of his distinguished consideration.
J. MIGUEL ARROYO.
His Excellency ALFRED CONKLING,
Envoy Extraordinary and Minister Plenipotentiary
of the United States of America.
Mr. Conkling to Mr. Arroyo.
LEGATION OF THE UNITED STATES,
Mexico, February 22, 1853.
The undersigned, envoy extraordinary and minister plenipotentiary
of the United States of America, hastens to acknowledge the receipt
last evening of the note of his excellency Mr. Arroyo, communicating
to the undersigned the information that his excellency General Lombardine, depository of the supreme executive power of the Mexican
republic, had been pleased to appoint two highly distinguished citizens, viz: D. Jose Maria Fornel, general of division, and D. Joaquin
Maria de Castillo y Lanzas, plenipotentiaries of the republic to negotiate with the undersigned a treaty relative to the projected transit
way across the Isthmus of Tehuantepec.
The undersigned has the honor to repeat to his excellency Mr. Arroyo the assurance contained in his former note referred to by Mr.
Arroyo of his readiness to enter at once upon the proposed negotiation;
and, to that end the undersigned will be glad to receive from the gentleman above named, as soon as may be agreeable to them, propositions for a treaty such as Mr. Arroyo has described, and which shall
be best adapted, by means of well devised guaranties on the part of
the two republics, not only to secure the speedy and proper completion
and beneficial use of the noble work in contemplation, but which, by
drawing Mexico and the United States into more intimate association,
shall have the happy effect also of augmenting and perpetuating their
mutual good will and promoting their prosperity and happiness.
The undersigned avails himself with pleasure of this opportunity to
offer to Mr. Arroyo the renewed assurance of his high consideration.,   -   ALFRED CONKLING.
His Excellency J. MIGUEL ARROYO,
Acting Minister of Relations.
Mr. Hargous to Mr. Marcy.
NEW YORK, May 7, 1853.
SIR: You will probably have been informed, by papers in your department, of my connexion with the grant of the Mexican government
to Garay, for the construction of an interoceanic communication
across the Isthmus of Tehuantepec. This connexion began in Feb



30                ISTHMUS OF TEHUANTEPEC.
ruary, 1849, as you will see by a petition of mine to the Senate, in
which I prayed Congress not to commit themselves irrevocably to any
other route, in authorizing contracts for carrying the mail to California. My petition undoubtedly attracted the notice of Mr. de la
Rosa, the vigilant and astute Mexican minister, at Washington, who
must have informed his government of it, and warned them of the
supposed danger of allowing United States citizens to become the proprietors of the grant. That these warnings alarmed the Mexican government, and led to a resolution on their part to nullify the grant,
was soon confirmed by my correspondents at Mexico. I lost no time
in making this known to Mr. Clayton, then Secretary of State, who
addressed an instruction on the subject to Mr. Clifford, then our minister at Mexico, directing him  to inform  that government that ours
would hold them accountable for any unjust discriminations against
United States citizens, who might be holders of the Garay grant.
When Mr. Letcher succeeded Mr. Clifford, he was instructed to make
a treaty with the Mexican government upon the subject of Tehuantepec. He was also officially instructed to apply for passports for
the engineers who had been employed by the American proprietors
to survey the route, and the passports were granted. Mr. Letcher
concluded a treaty upon the subject. By one of its articles, however, it was stipulated that it should not be submitted either to
our Senate or to the Mexican congress, without the consent of the
proprietor of the grant.  As some of the articles seemed to me
ambiguous, I could not conscientiously give this consent, and so
informed Mr. Webster, then Secretary of State.  The treaty was
consequently sent back to Mexico for amendment, but few of those
deemed by me necessary were made.- In its amended form, however,
I consented to its presentation to our Senate, whose sanction it received,
and was ratified by President Fillmore. Soon after the amended
treaty was concluded Mr. Letcher returned home on leave of absence.
He had scarcely left the City of Mexico when a bill was brought into
the Mexican congress proposing a repeal of the Garay grant, on the
ground that Salas, who succeeded Paredes as temporary president of
Mexico, transcended his authority in prolonging the time for the commencement of the works on the Isthmus under, the grant. I have no
legal proof of the fact, but from my knowledge of Mexican affairs,
and from the tenor of the letters of my correspondents, copies of
which are on file in your department, I am morally certain that this
measure was originated and consummated principally through the influence of the British minister at Mexico. The Mexican congress
having thus repealed the Garay grant, the treaty of that government
with ours for the protection of Americans interested in that grant of
course fell to the ground.
Besides the foreign influences brought to bear against that grant, I
am sorry to say that there were several combinations of our own citizens also, as will appear by Mr. Letcher's communication to Mr. Webster, under date the 14th December, 1851. This is made a high
misdemeanor by act of Congress, and one of the offenders was indicted at Washington, and probably would have been convicted if




ISTHMUS OF TEHUANTEPEC.                    31
President Arista had not refused to give up the original of a letter
which he had addressed to him on the subject.
Independently of the grant, I have already expended over a quarter
of a million of dollars out of a limited private fortune. I have made
this expenditure in consequence of assurances from my government
that it would protect my rights and interests.
Mr. A. G. Sloo, however, has obtained a new contract from  the
Mexican government, and, as I am informed, Mr. Conkling, the
United States minister at Mexico, has made a treaty with that government, recognizing that contract and guarantying the neutrality
of the Isthmus. Notwithstanding all this, I hope that I may still
rely with confidence enough upon the protection of my government
to feel assured that the treaty referred to will not be accepted by the
President, especially if it be true that our minister had neither
authority nor instructions to conclude it.
An answer upon this point, as prompt as your convenience will
allow, will greatly oblige your obedient humble servant,
P. A. HARGOUS.
Hon. W. L. MARCY,
Secretary of State, Washington.
Mr. Conkling to Mr. Marcy.
[Extract]
LEGATION OF THE UNITED STATES,
Mexico, May 14, 1853.
By the steamer Texas, which arrived at V'era Cruz on the 3d instant,
news was received of the failure of Mr. Sloo to pay the bills drawn by
his agent here in favor of the bankers who advanced the money due
to the Mexican government under its grant and contract for the construction of a transit way across the Isthmus of Tehuantepec. It is
out of my power adequately to describe the surprise and chagrin
occasioned here by these evil tidings. Nothing could have been
more unexpected or unaccountable. The news was brought from
Vera Cruz by an express in advance of the mail. The letters received by the latter gave information of Mr. Sloo's inability to raise
the funds requisite to meet his engagements, but they shed little
light upon the cause of his ill success.   *    *    *    Hopes
are still entertained that this unfortunate delinquency will be repaired; but, as the grant has been hypothecated to the bankers as
the only condition on which they would consent to advance their
money, as they are men of ample means,    *    *            The
great enterprise in question, already begun, will doubtless be communicated, in conjunction, however, with American citizens, and by
the aid of a liberal supply of American on their foreign capital.
I have the honor to be, with great respect, sir, your obedient
servant,
ALFRED CONKLING.
Hon. WILLIAM L. MARCY,
Secretary of State, Washington.




32                ISTHMUS OF TEHUJANTEPEC.
Mr. Marcy to Mr. Gadsden.
[Extract.]
No. 3.]                          DEPARTMENT OF STATE,
Washington, July 15, 1853.
SIR:.      *-     *       *      *      *       *      *
During the last administration, this government interested itself in
behalf of the assignees of a grant made by Mexico of the right of way
from the Atlantic to the Pacific across the Isthmus of Tehuantepec.
The privileges of the original grantee had passed, by assignment, to
citizens of the United States. A deep interest was felt by our people
generally in the object of this grant, and our government interposed
to give it effect. It has urged Mexico to respect the rights of the
present proprietors of the grant, but she has denied the validity of
that grant, and, by a formal decree of her legislature, declared it null
and void. There is in the archives of the legation an extensive correspondence on the subject, which will enable you, should it come up
for your consideration, to understand the condition of that question.
It is not proposed to instruct you at this time to resume this negotiation. Should the President hereafter conclude to do so, his views
will be fully made known -to you.
W. L. MARCY.
JAMES GADSDEN, Esq., &c.
Mr. Gadsden to Mr. Marcy.
[Extract. ]
LEGATION OF THE UNITED STATES,
Mexico, April 5, 1856.
I now enclose a communication from the attorney of Peter A. Hargous, esq., claiming to be a native. of Pennsylvania and a citizen of
the United States, invoking the interposition of this legation to an
attempted renewed controversy, for rights and immunities withheld,
on the ever belligerent Tehuantepec transit.
*      *      *       *              *      *.  *          *
JAMES GADSDEN.
Hon. WM. L. MARCY,
Secretary of State.




ISTHMUS OF TEHUANTEPEC.                    33
lMr. Bellange to Mr. Gadsden.
MExrco, 1March 31, 1856.
SIR: In the name of Mr. Peter A. Hargous, a native of Pennsylvania and a citizen of the United States, whose power of attorney has
been intrusted to me, I take the liberty of informing you of the following facts, in consequence of which I am obliged to ask your protection to obtain justice from the Mexican government.
On the 5th of February, 1853, the Mexican government granted to
lessrs. Payno, Pesado, and Olarte, representatives of a company composed of Mexican and American citizens, a privilege for opening a way
of communication by the Isthmus of Tehuantepec.  By the 14th article
of the above mentioned privilege, the grantees were bound to deliver
into the Mexican treasury an amount of $600,000; but having no
funds, they applied to MIr. F. de P. Falconnet, a British subject, to lend
the amount required, offering in payment thereof bills drawn by a
Mr. W. D. Lee on A. G. Sloo, of the United States.  Mr. F. de P.
Falconnet accepted the proposal, under condition that Messrs. Payno,
Olarte, and Pesado should obtain from the Mexican government a full
authorization to pledge the privilege obtained as a warranty of the
payment of the bills drawn on the United States to the amount of
$600,000. The Mexican government consented to give the authorization, and the deed, by which the privilege was given as a pledge in
case the bills should not be paid, was duly drawn up on the 10th of
February, 1853. The 2d article of the deed above mentioned, and
approved by the Mexican government, authorized Mr. F. de P. Falconnet, in case the bills drawn on the United States should not be
paid, to dispose of the privilege in his favor, or in favor of any one
else he thought proper, without the intervention of any judiciary authority.  In consequence of the arrangements entered into by the parties interested in the business, the $600,000 were delivered by Mr. F.
de P. Falconnet into the Mexican treasury, and he holds the receipts
of the treasurer.  The bills drawn by W. D. Lee on A. G. Sloo were
sent by Mr. F. de P. Falconnet to the United States, and were not
accepted when presented nor paid when due.
I have thought proper to enter into all these details, although I
suppose that they must be known to you, merely for the sake of recalling to your memory all the facts relative to this business, and shall
proceed to inform you of what happened in consequence.
By a note dated the 2d June, 1853, Mr. Falconnet informed the
Mexican government that the bills drawn by W. D. Lee on A. G. Sloo
were neither accepted nor paid, and asked to be recognized as the
owner of the privilege in compliance with the 2d article of the deed of
pledge drawn up on the 10th of February, 1853. The Mexican government gave no answer to this note, or to the others which were subsequently sent by Mr. F. de P. Falconnet.
When Mr. F. de P. Falconnet agreed to lend the $600,000 he had
no other object in view than an exchange business between Mexico and
the United States, and never thought of fulfilling the engagements
entered into by the grantees of the privilege to open a way of communication by the Isthmus of Tehuantepec; lie therefore looked out in the
Ex. Doc. 72 —3




34                ISTHMUS OF TEHUANTEPEC.
United States for a capitalist of high standing and sufficient influence
to form a company able to repay the $600,000 advanced by him, and
to execute the engagements entered into with the Mexican government by Messrs. Payno, Olarte, and Pesado, in the name of a company which never existed, at least as far as capital is concerned.
In consequence Mr. F. de P. Falconnet entered, on the 16th of
April, 1855, into an agreement with Mr. P. A. Hargous, of New York,
and made him a formal cession of the privilege. The Mexican government was informed of this circumstance on the 8th of August, 1855,
and requested to recognize the legal cession made by Mr. F. de P.
Falconnet to Mr. P. A. Hargous.
On the 26th of November, 1855, Mr. F. de P. Falconnet received
at last from the Mexican government an answer to the various notes
which he had presented.  In said answer, it is stated that his excellency General Alvarez, president of the Mexican republic, has decided,
in a council of ministers.held on the 26th of November last, that Mr.
F. de P. Falconnet is recognized as sole owner of the privilege in
execution of the 2d article of the deed of pledge consented and authorized by the Mexican government, and signed on the 10th of February, 1853, by Mr. F. de P. Falconnet, and Messrs. Payno, Olarte,
and Pesado recognized by the government as sole and lawful agents of
the company they represented, and that the cession made byMr. Falconnet to Mr. P. A. Hargous is not recognized, without stating on
what motives this last decision is founded.
Since then all the efforts made by Mr. Falconnet, or his agents, and
by me to obtain from the Mexican government the approval of the legal
cession of his rights made by Mr. F. de P. Falconnet to Mr. P. A.
Hargous have been without any success. Being convinced that it is
useless to wait any longer for a favorable decision from the Mexican
government, I take the liberty to request you to grant to Mr. P. A.
Hargous the protection due him  as a citizen of the United States.
This appears to me the only course to be followed in this business; the
more so as I have been informed, from good authority, that Messrs.
Payno, Olarte, and Pesado have, in the name of this imaginary company, applied to government to obtain the entrance to the Goatzacoalcos of an agent sent from the United States to begin a plank road
over the Isthmus of Tehuantepec, although all the rights of said company have been forfeited, to all intents and purposes, by the non-execution of the engagements contracted by them  with the Mexican
government and Mr. F. de P. Falconnet, and although said forfeiture
has been declared and corroborated by the decision of the Mexican
government of the 26th of November last.
I do not doubt that, informed of the circumstances of the case submitted to you, you will take such measures as will protect, in an effective way, the rights acquired by Mr. P. A. Hargous, and insure his
acknowledgment by the Mexican government as owner of the privilege.
I shall feel highly favored by an answer to the present note, and,
meanwhile, I remain, sir, your obedient servant,
ALEX. BELLANGE.
General JAMES GADSDEN,
Minister Plenipotentiary of the United States.




ISTIIMUS OF TEHUANTEPEC.                    35
Mirt. Hargous to Mr. Marcy.
WASHINGTON, April 21, 1856.
DEAR SIR: You will probably recollect that in an interview which
I had the honor to have with you not long since, I stated that the
grant for a right of way across the Isthmus of Tehuantepec, commonly called the Sloo grant, had been forfeited to Mr. F. de P. Falconnet, a British subject.  This forfeiture took place pursuant to the
consent and with the authority of the Mexican government.  It was
occasioned by a pledge which was made of the grant to secure Mr.
Falconnet the reimbursement of $600,000, (say six hundred thousand
dollars) which he had advanced to that government in behalf ot the
Sloo company, and which has never been paid, even in part, by that
company.  In order to secure this great privilege to citizens of the
United States, I obtained an assignment of it from  Mr. Falconnet,
subject to the approval of the-Mexican government, but this approval
has heretofore been withheld, despite repeated applications.  I have
every reason to believe that Mr Gadsden, United States minister to
Mexico, has been well aware of the circumstances which I have mention, and of all the antecedents respecting this business.  Notwithstanding this, however, I have reason to apprehend that, the hesitation
of the Mexican government in granting my request has been occasioned either by his lukewarmness or by his opposition to me. That
I have cause to believe he must have ben actuated by the feeling
last mentioned, would seem to be shown by the fact that he has addressed representations to the Mexican government in. behalf of the
Sloo company.  I cannot believe that, in this proceeding, Mr. Gadsden has acted either under the instructions or sanction of my government.  You will at once see, however, how important it is for me to
be relieved from any doubt upon this point; I will consequently thank
you to address an answer to me at your earliest convenience.
I have received through the agents of Mr. Falconnet, in Mexico, a
copy of the note of Mr. Gadsden to Mr. De la Rosa, the minister for
foreign affairs of Mexico, which I inclose for your information, in case
the copy which Mr. Gadsden himself will undoubtedly have forwarded
to your department should not, by some accident, have reached there.
It will, of course, be obvious to you that as all the rights of the citizens of the United States in the Sloo grant were extinguished by its
transfer to Mr. Falconnet, who is a British subject, it must remain in
possession of the latter until his transfer to me shall be approved by
the Mexican government. It is unquestionably, I should suppose, the
policy and the interest of our government that citizens of the United
States and not British subjects should have exclusive control of the
privilege referred to. If, therefore, the Mexican government shall be
countenanced in much longer delaying my request, the danger to the
policy and interests to which I have adverted will be subjected is
submitted to your wise consideration.
I would have called on you at the department with this communication, but I am  suddenly summoned to New York to attend to important private business there. This, however, enables me to avoid




36                 ISTHMUS OF TEIIUANTEPEC.
engrossing any of your valuable time in conversation on the subject,
at present.
I have the honor to be, with great regard, your most obedient
servant,
P. A. HARGOUS.
Hon. W. L. MARCY,
Secretary of State, Washington, D. C.
Mr. Mlarcy to Mr. Forsyth.
[Extract.]
No. 2.]                        DEPARTMENT OF STATE,
Washington, August 16, 1856.
SIR:     4*      *       *      *       *       *      *       *
You are already aware that disputes have arisen among our citizens
in regard to the ownership of a grant made by the Mexican government for a right of way across Mexico, called the Tehuantepec route.
This is not, strictly speaking, an international matter. You will,
however, take occasion to make known to Mexico the deep interest felt
by the government and people of the United States in the success and
early completion of the enterprise now on foot for opening a passage
from the Gulf of Mexico to the Pacific ocean by Tehuantepec, and
that it is very much desired that the Mexican government should
exert all the legitimate power it has to remove the obstacles which lie
in the way of giving effect to that grant. There is no doubt that the
establishment of that thoroughfare would be advantageous to both
countries in a commercial point of view, and strengthen the ties of
friendship between them.
I am, sir, your obedient servant,
W. L. MARCY.
JOHN FORSYTH, Esq.,
&c., &c., &c.
M1r. Forsyth to Mr. Marcy,
No. 8.]                       LEGATION OF THE UNITED STATES,
Mlexico, November 15, 1856.
SIR: I have the honor to transmit herewith, and at his request, a
communication from A. Bellange, esq., the representative of Mr. P.
A. Hargous, on the subject of the Tehuantepec grant.
As I came to Mexico with the determination that this legation,
while under my charge, should not be made use of as an attorney's
office for either of the rival American claimants for the privileges of
this' transit, and to take sides with neither in a dispute which, it
appeared to me, was one that belonged to the courts of this country
to adjudicate, unless I had the positive instructions of my government




ISTHMUS OF TEHUANTEPEC.                     37
to the contrary, I have no remarks to make on this communication,
except that he does not give the precise version of my reply to him
when he called upon me as the American minister to espouse the
cause of his client, and to throw my official influence against that of
the Sloo or Mixed Company.
My answer was very frankly given that I did not deem it a question
for my official intervention; that it was a judicial question; that the
rival party had as much right as Mr. Hargous to demand my services
in their behalf; and that certainly they would have just and grave
cause of complaint if I, equally the representative of both, should
take sides against them. I added that in fortunate concurrence with
my own views of propriety were the instructions of my government
on the point, which I read to him.
It is for the department to determine whether I am to act under a
different view of duty.  So far I have seen no cause to believe that it
is an erroneous one, and I hope the department will not alter its instructions until I have been here long enough to ascertain the feelings
of the Mexican government on the subject.
I am, very respectfully, your obedient servant,
JOHN FORSYTH.
Hon. W. L. MARCY,
d&c., &c., &c.
Mr. Bellange to Mr. Forsyth.
MEXICO, November 12, 1856.
SIR: On the 29th of last month I had the honor to address you a
note, asking the protection of the government of the United States in
favor of Mr. P. A. Hargous, an American citizen, and remitted to
you all the documents relative to the business for which I claimed
said protection.
In an interview which I had with you subsequently, my note was
verbally answered by your stating that, according to the instructions
of your government relative to the Tehuantepec question, it was not
in your power to grant the protection asked for, and that, unless new
instructions should be received, you could not protect the interests of
Mr. P. A Hargous in an efficacious way.
The documents which I have had the honor to submit to your
perusal will have informed you of the real state of the case, and will
have enabled you to form an opinion respecting the side where mere
honesty and equity ought to call the protection of the government of
the United States. It would, therefore, be useless to relate again all
the antecedents and observations which have made the subject of the
note which I addressed to General James Gadsden, then minister
plenipotentiary of the United States, on the 31st of March last, and
which has met with so little attention on his part, at a time when a few
officious words from him might have finally settled the question to the
entire satisfaction of the American and Mexican governments, and of




38                ISTHMUS OF TEHUANTEPEC;
all parties seriously interested in the matter; however, I consider it to
be my duty, in the defence of the interest which has been trusted to
me, to lay before you such arguments as may favor Mr. P. A. Hargous,
and may incline the government of the United States to alter their
views upon the Tehuantepec question.
The facts which are established, beyond any doubt, by the numerous
documents which I have submitted to you, are the following:
1. That an imaginary company, composed of American and Mexican
citizens, without a cent of capital, obtained from the Mexican government a privilege to open a way of communication through the Isthmus
of Tehuantepec.
2. That to obtain said privilege they agreed to pay into the Mexican treasury $600,000.
3. That having no money they borrowed it from Mr. F. de P. Falconnet, a British subject, to whom the privilege was pledged, with
the authorization of the Mexican government, under the conditions
that he might dispose of it in any way he chose, without the intervention of any judicial authority, in case the bills, which were given
him on the United States, in payment of the $600,000 delivered by
him into the Mexican treasury, should not be paid.
4. That the bills were not paid, and that in consequence, at the
request of Mr. F. de P. Falconnet, said gentleman was declared by
the Mexican government to be the rightful owner of the privilege.
5. That Mr. F. de P. Falconnet, with a view to recover his money,
made a cession of his privilege to Mr. P. A. Hargous, that said cession
has not yet been approved by the Mexican government, who has sent
the matter before a commission, which has not yet given any decision.
6. That the company which originally obtained the privilege has
lost all right to saidiprivilege, because they have not repaid the $600,000,
because they have not complied with the 5th article of the secret
conditions, which imposed upon them the obligation to indemnity the
owner of the Garay grant, and because said privilege has legally
passed into the hands of Mr. F. de P. Falconnet.
7. That, therefore, the pretended company organized atNew Orleans,
under the name of the Tehuantepec company, has no right whatsoever
to the privilege granted by the Mexican government, and that the
people now employed by said company on the Isthmus may be, in
perfect justice, turned out by the Mexican authorities whenever they
may think proper to do so.
These facts,-which are clearly established by the documents which
have been put into your hands, show the real state of the case, and will
convince you that, if the intrigues which have for the last three years
deceived the American and Mexican government in their hopes to see
" thecommunications opened," are allowed to continue by the tacit protection of both governments, it is to be expected that, sooner or later,
such a state of things may occasion serious difficulties between both
nations. These difficulties may be easily avoided now, if the government of the United States consents to give its protection to Mr. P. A.
Hargous, and cause its influence with the Mexican government to
obtain the acknowledgment of the cession made by F. de P. Falconnet to P. A. Hargous.




ISTHMUS OF TEHUANTEPEC.                      39
If both governments sincerely wish to come to a final settlement of
this question, the principal point is to establish the legal possession
of the privilege, in order that men of capital and enterprise may find
all the necessary security for the large sums which are required for
the execution of so large an undertaking.  Until so important a point
is decided, no serious capital will be found for the enterprise in view,
and business jobbers are not the men to fulfil the conditions stipulated
in the grant.
The object mentioned would undoubtedly be obtained if the government of the United States would insist on the acknowledgment, by
the Mexican government, of the cession made by F. de P. Falconnet
to P. A. Hargous.. The question might thus be finally settled and
procure the following results:
1. The question would be adjusted according to the invariable
principles of justice and equity, and thus in an honorable way for both
governments.
2. Mr. F. de P. Falconnet would be put out of the question by
furnishing him with the means to recover his $600,00O, with the interest and damages.
3. The execution of the enterprise of opening the way of communication would be irealized by giving entire security to the American
capital employed in the business.
4. The claim of Mr. J. de Garay would be adjusted by due compliance with the secret articles of the grant.
5. A complete satisfaction would be given to the government of
the United'States, who desire to see a shorter way of communication
with California opened through more healthy climates.
These are the positive advantages which may be obtained by a
change in the policy of the government of the United States respecting a question which has remained pending ever since 1848; and I
hope that you will lay the present note, in favor of the interest which
I represent, before your government, and support the solution therein
recommended as the most favorable to a final adjustment, in view of
the interests of both governments.
I have the honor to be, sir, your obedient servant,
ALEX. BELLANGE.
JOHN FORSYTH, Esq.,
Minister Plenipotentiary and
_Envoy Extraordinary of the United States.
MIr. Cass to Mr. Forsyth.
No. 27.]                                 DEPARTMENT OF STATE,
cWashington, July 17, 1857.
SIR: The value and importance to Mexico of a railroad across the
Isthmus of Tehuantepec can scarcely be over estimated.  In this the
United States are also deeply interested.  The proximity of the
Isthmus to our shores, the salubrity of the climate, the adaptedness
of the ground for the construction of a railroad, and the great dim



40                 ISTIIHMUS OF TEHUANTEPEC.
inution of distance in comparison with other more southern routes
between our Atlantic and Pacific possessions, all conspire to point it
out as far preferable to any other route outside of our own territory.
Under our treaty with the republic of Mexico, of December 30,
1853, the United States have acquired a right of transit across the
Isthmus which they will never, under any circumstances, abandon.
This may be sufficient for all practic l purposes, yet it is desirable
that the provisions of that treaty should be confirmed, extended, and
rendered more specific. It is, therefore, now proposed to enter into a
new treaty for this purpose.
But of what value will this right be to either the one or the other
republic, unless effectual measures should be adopted for the construction of a railroad between the two oceans. Already much precious time has been lost by the conflicting grants made for this purpose by Mexico.  But for these, this great work would have been in
successful operation ere the present day. The period has now arrived
when there should be no longer any delay in commencing, prosecuting,
and completing an undertaking in which not merely Mexico but all
commercial nations are so deeply interested. These conflicting grants
are two in number, and have usually been denominated the Garay
grant and the Sloo grant. On each of these I shall make a few observations.
On the 1st of March, 1842, the Mexican government granted to
Don Jose de Garay the privilege of opening a line of communication,
"by water, except where it is impracticable, when railroads and steam
carriages shall be used, between the Pacific and Atlantic oceans,
through the Isthmus of Tehuantepec."  And this passage, when
opened, is, in an enlightened spirit, declared to be " neutral and common to all nations at peace with the Mexican republic."  In order to
enable Mr. Garay to accomplish the undertaking, there was granted
to him in fee simple "all the unoccupied lands (belonging to the government) for a distance of ten leagues on either side of the line of
communication;" and it was further stipulated that   all foreigners
are permitted to acquire real property, and to exercise any trade or
calling, not even excepting that of mining, within the distance of fifty
leagues on either side of the line of transit."
In consideration of these concessions Garay was   to give to the
government, from  the time that the line of communication shall be.
opened for the transport of effects, a fourth part of the net profits of
the receipts for this purpose, deducting the expenses of administration, preservation and repair thereof."
No taxes or imposts were to be laid upon articles passing in transit
between ocean and ocean.
This was a liberal concession to Garay, and had it not been annulled by the Mexican congress, there can be no doubt that ere this a
communication would have existed by steamboat and railroad across
the Isthmus.
The limitation of time contained in this concession for the commencement of the work was extended from 1st July, 1044, until the
1st July, 1845, when it expired, and under the express terms of the
concession, " in case this should not be performed (the commencement




ISTHMUS OF TElIUANTEPEC.                   41
of the work) within the time specified, the exclusive privilege hereby
conceded to him (Garay) shall cease."
More than sixteen months after this limitation had expired, that is
to say, on the 5th November, 1846, General Don Jose Mariano de
Salas, at the time exercising supreme executive power, having previously attacked and subverted the government of Paredes by military
force, issued a decree extending to Garay the term for the commencement of the work, " for two years more, to be reckoned from the date
of the publication of this decree." Of course, the period of this extension expired on the 5th November, 1848, though the holders of the
Garay concession allege that they had commenced the work before this
date, and consequently saved the forfeiture of the grant.  However
this may be, the Mexican congress passed a decree on the 23d May,
1851, declaring that "the decree of the 5th November, 1846, is declared null and insubsistent, as the powers with which the provisional
government of that period were invested were insufficient to dictate it."
It is not my purpose to discuss the question whether the Mexican
congress had the right to annul this decree of Salas, or whether the
assignees of the Garay grant had used due diligence in commencing
the work. The former question you will find fully discussed among
the archives of your legation.
It is certain that this decree of the Mexican congress was passed
after a treaty upon the basis of the Garay grant, signed by the plenipotentiaries of the two governments, had been submitted to the Senate of the United States, and had been unanimously approved and
ratified by that body, with some amendments, and returned to Mexico. This treaty was, notwithstanding, rejected by Mexico, and the
Garay grant was annulled. This brings us to take some notice of the
Sloo grant.
The congress of Mexico, on the 14th May, 1852, passed a law inviting proposals for opening the interoceanicc ommunication across
the Isthmus of Tehuantepec.
In pursuance thereof, on the 5th February, 1853, Cevallos, president ad interim, in conformity with the law of the 14th May, 1852,
and the decree calling for proposals, published in consequence thereof
on the 29th July, 1852, accepted the proposals which had been " submitted by the Mixed National and Foreign Company, under the name
of A. G. Sloo," "for the opening of interoceanic communication
through the Isthmus of Tehuantepec."  On the same day (5th February, 1853) a contract was entered into and signed between the parties, a copy of which is herewith transmitted.
By the 14th clause of this contract it was stipulated that A. G.
Sloo & Co., as a guaranty on their part for its fulfillment, should deposit in the Mexican  treasury the sum  of $600,000, of which
$300,000 were to be deposited immediately, and the remainder in
monthly instalments of $50,000 each. Sloo & Co. being unable to
comply with this stipulation, on the 7th and 10th February, 1853,
an agreement was entered into, with the license and full approbation
of the Mexican government, under which Francisco de Palezieux Falconnet, a British subject, resident in Mexico, was to advance the above




4 2     -ISTHMUS OF TEIIUANTRPEC.
sum of $600,000 to the Mexican treasury, and accept bills of exchange, payable to his order for the same, drawn by William D. Lee
on the house of A. G. Sloo, of New Orleans.  In case of failure of
payment, for whatever causes, the grant or concession from the Mexican government was pledged and mortgaged for this sum  to Mr.
Falconnet, with power for him to proceed in a summary and extrajudicial manner and sell the concession " to the highest bidder who
may offer, without any judicial formality, or to adjudicate it to himself, if he chooses, without these appearers or their representatives
having any right of opposition or making any reclamation, since
now, in anticipation of the case, they confer upon him the most full,
irrevocable, and efficacious power that can be required in law, with all
the amplitude that may be legally sufficient," &c., &c.
The bills were protested, and have never been paid. Mr. Falconnet,
on the 2d June, 1853, addressed the Mexican government requesting
them to acknowledge him as the rightful owner of the concession, but
received no answer.  It is stated in a note of Mr. Lettsom, charge
d'affaires of her Britannic Majesty, to Don Luis de la Rosa, Mexican
minister for foreign affairs, under date of 22d April, 1856, " 6th.
That Mr. Falconnet, with a view of recovering his money, subsequently
made a legal cession of his privilege to Mr. Hargous, of New York;
that Mr. Falconnet, through his agents, on the 8th August, 1855,
informed the Mexican government of the cession being thus made;
but that to this communication the Mexican government returned
no answer; and that on the 5th November, 1855, Mr. Falconnet's
agents again addressed the Mexican government, requesting answers
to their letters of 2d June, 1853, and of the 25th February, 8th
August, and 5th November, 1855."
"7th. That no answers were given to any of these communications
until the 26th November, 1855, when Mr. Falconnet was informed by
the minister of public works that that gentleman had been acknowledged by the Mexican government as the owner of the privilege; but
that the cession of it by him  to Mr. Hargous was not recognized."
This information was given in a letter of this date from  the minister
to Messrs. Letcher, Torre &  Co., the agents of Mr. Falconnet, in
answer to the letters above mentioned, recognizing Mr. Falconnet
to be "the possessor of the grant in question, according to the above
mentioned contract of the 10th February, but not as regards the transfer which he has made of his right to Mr. Peter Amedee Hargous,
as stated by you in your last mentioned communication."  In the
note of 22d April, 1856, above referred to, Mr. Lettsom  insists, on
behalf of Mr. Falconnet, as a British subject, that the concession made
by him to Mr. Hargous should be recognized as the means of recovering
his $600,000, and "that the time granted by the second article of the
privilege should be reckoned naturally, only from the day (26 November, 1855) on which Mr. Falconnet's numerous applications to the
Mexican government were answered," (26 November, 1855.)  This
sum  has never been refunded to Falconnet, although withdut his
money the contract could not have been obtained.  It does not even
appear that any attempt has been made to refund it to this innocent
party, who had no interest in the transaction. So far from this, it may




ISTHMUS OF TEHIUANTEPEC.                    43,be fairly inferred from the 9th article of the charter of incorporation
under the law of Louisiana of the Tehuantepec Company, " founded
on the Sloo grant," that no intention exists of refunding this money,
until the amount shall be received by the company from the profits of
the road. Mr. Falconnet, therefore, with strong apparent reason,
now claims to be the owner of the Sloo concession, under the recognition
of the Mexican government, which, however, has withheld from him
the right of transferring it to Mr. Hargous.
In any event it would appear that whether the transaction be a
mortgage or an absolute title, neither Mr. Sloo nor the Tehauntepec
Company can, until they shall first refund the amount paid to Mr.
Falconnet to the Mexican government, with interest and damages,
deprive Mr. Falconnet of his interest in the concession.
On the 21st June, 1853, and notwithstanding the default in the
payment of the bills drawn on A. G. Sloo, he and his partners incorporated themselves by the name of "the Tehuantepec Company,"
under a law of the State of Louisiana, passed in 1852.
The second clause of the contract with the Mexican government of
the 5th February, 1853, required the contractors "to commence a
plank road at the point at which the river Coatzacoalcos ceases to be
navigable, in the year that this contract has been made and to finish
it in three years after having commenced it. To begin the construction
of a railroad in one year, counting from this last date, and to finish said
railroad, with all the necessary cars and engines, within the four following years, notifying the supreme government in both cases of having
commenced the works, and of their being finished."
By the 14th article it is provided, that " the contractor shall incur
the penalty of losing the expenditure already made, the materials
and tools collected together in the territory of the republic, and the
rights conceded to him  by the contract, if he does not commence and
finish the wheel road, and if he does not commence the railroad within
the stipulated time."
The Mexican government acted wisely in requiring the construction
of a plank road in anticipation of the completion of the railroad.
This could have been speedily constructed through the Isthmus from
the nature of the ground and the quantity of timber which it supplies, and the commercial world, as well as the republic of Mexico,
would have derived great benefits from this road. They could then
have waited for the construction of a perfect and permanent railroad.
The Tehuantepec Company have violated their engagement, and
forfeited the contract under which they act, by not having, even until
this day, commenced the construction of the plank road. They have
never laid a plank upon the route, and probably never intended to do
this. In their charter, under the Louisiana law, (2d article,) they
say nothing about the plank road, and simply declare that the "corporation is established for the purpose of constructing a carriage
road," &c.
It is, however, alleged by the company that they have constructed
a carriage (not a plank) road across the Isthmus, and I"the through
transit was effected on the 4th February, (last,) being one day within
the limit prescribed by the original grant."  Even if this were,uffi



41                 ISTHMUS OF TEHUANTEPEC.
cient, which it clearly is not, according to the address of the president
and directors of the Tehuantepec Company, dated at New Orleans on
the 9th May last, it is not expected by them that the carriage road
can be made available for traffic and travel before the 1st October
next.
But it is alleged that the Mexican government have accepted what
the company have done as a fulfillment of the original contract, and
have waived the construction of the plank road.  I have seen no sufficient evidence of this fact; but even if it were well founded, this
could not have been done without the consent of the government of
the United States.  Under the 8th article of the treaty with Mexico
of the 30th December, 1853, the United States have acquired a common interest with Mexico in "the early construction of a plank and
railroad across the Isthmus of Tehuantepec," and without our consent the forfeiture of the contract could not legitimately have been
waived.
The United States have a deep interest in the early construction of
this railroad, and it matters comparatively but little to them by whom
this object shall be accomplished. If the existing company were able
and willing to perform the task we should cheerfully waive all past
derelictions of duty on their part, and encourage them to proceed. I
regret to say, however, that it would seem almost impossible that the
railroad can be constructed by them.
Under the charter the capital stock is fixed at $10,000,000, and is
divided into 100,000 shares, of $100 each; 50,000 shares, or one-half
of this capital stock, says the charter, " shall be held and retained by
A. G. Sloo and assignees, and be considered fully paid, as a compensation for the contract." Thus one-half the entire capital is given to
Mr. Sloo as a bonus for obtaining the contract, and is entirely sunk
as a fund for the construction of the road.  In regard to the remaining 50,000 shares, without descending to particulars, it is quite evident, from a view of the charter, that but a small portion of these can
be rendered available for this purpose. In fact, it is not known or
believed that a single instalment was ever called in or paid upon the
stock subscribed.  On the contrary, there is good reason to believe
that Messrs. Sloo & Company intended to construct the entire road,
not by means derived from the stock, but by loans from  Europe,
secured on the railroad. Even if this had been possible at the date of
the charter, it has now become impossible by the high rate of interest
in London and Paris.
Tlhus you will perceive that the complications are endless, and the
right of none of the contending parties is clear; and thus the construction of this great international highway has been hitherto prevented. It is but just to observe, however, that on the face of the
papers the claim of Mr. Falconnet seems to be the best founded.
But the prospect for the construction of the road has now become
brighter; because Mr. Falconnet, the Tehuantepec Company, and the
owners of the Garay grant have united their interests, and now seek
to obtain from the Mexican government such modifications in the Sloo
grant as will secure the construction of the road. If these modifi



ISTHMUS OF TEHUANT EPEC.                    45
cations can be obtained, it is confidently believed that sufficient capital, energy, and enterprise will be enlisted to accomplish the object.
The Hon. J. P. Benjamin, senator in Congress, from  Louisiana,
and Emile La Sere, esq., of New Orleans, president of the Tehuantepec Company, will proceed to Mexico for this purpose, and the latter
will bear you these instructions. They will carry with them and
deliver to you copies of the agreement between the respective parties
above mentioned, the deed of trust, in pursuance thereof, and a new
charter of incorporation under the law of Louisiana.
The capital of the new company is to be $10,000,000, divided into
shares of $100 each. Eight millions of this stock is to be held open
for subscription. The remaining two millions, in full paid certificates of stock, together with one million of 8 per cent. bonds, are to
be delivered to the parties entitled as a full consideration for the transfer to the new company of the Garay grant and of all the rights of the
present Tehuantepec Company.  All their assets, property, the work
clone, in short everything belonging to them, or either of them, on
the Isthmus, or elsewhere, are to be surrendered to the new company,
so that it shall come into existence released and discharged from all
liabilities whatever, except the claim of Mr. Sloo himself, who, it is
understood, is now engaged in a lawsuit with the existing company,
and who denies that the president and directors of this company
fairly represent the Sloo grant.
No profits are to be divided arising from the transportation of passengers, merchandise, and other articles across the Isthmus until after
the completion of the railroad; but these are to be faithfully applied
towards its construction.
T'he company are not to divide, at any period of its existence, more
than at the rate of fifteen per cent. per annum upon its capital stock;
and whenever the profits exceed this rate the tolls are to be reduced to
that standard.  The new company are, of course, to be liable for the
contracts already entered into by the old company for mail coaches,
baggage wagons, and for making the bridges, completing the wagon
road, building piers, and furnishing steamboats for the navigation of'
the Coatzacoalcos river. It is also to satisfy Mr. Falconnet for $600,000
advanced by him to the Mexican government, but it will indemnify
itself out of the interest of that government in-the net profits of the
company, as provided for in the Sloo grant.
I have thus stated the general outlines of the new agreement,
because it has not, in its final form, been yet reduced to writing.
This arrangement furnishes strong reasons to believe that under it the
road will be constructed. The chief drawback is the controversy between Mr. Sloo and the present-company, who, however, have possession of the Isthmus, and have been prosecuting the work at considerable
expense.  It is to be hoped that this controversy will be amicably
adjusted between the parties.  You are hereby instructed, upon the
request of Messrs. Benjamin and La Sere, to make known to the Mexican government the object of their mission, and to give them such aid
in its accomplishment as you may deem advisable and effectual.
They may render themselves useful to you in obtaining the cessions
of territory from Mexico embraced by your instructions, and, if deemed




46                  ISTHMUS OF TEIUUANTEPEC.
expedient, you may employ their services for this purpose.  They are
both gentlemen of high character- and ppatriotic feelings, and will, I
have no doubt,'do all:that'thjey can, in compliance with your wishes,
to render your negoiiati0onSssuccessful.   But you are toabe:exclusively
the judgein' he matter.''..  -'
Without intending to decide positively what are the rights of Mr.
Falconnet, which have been recognized by the Mexican' governm ent,
as heretofore stated, you are instructed to insist.tb.at-that gpovernrmrent
shall extend a similar recognition to any American citizen or:company
who'has purchased or may purchase the same from or-under Mr. Falconnet.  We cannot agree that any distinction shall be' made in: favor
of British subjects over American citizens.   -; r
But Whatever may be the rights of the parties to conflicting Mexican grants, the interests of the governme'lt and people of thei United
States demand: that their.permanent right ofway aross'the Isthmus
shall be placed'upon sure treaty foundations.'For this purpose I
transmit articles -to be submitted to the Mexican, government.  The
first of ithese articles, after confirming the:stipulations in favor of the
United States, in the 8th article of the treaty of December, 1853, and
rendering them  applicable to any company or individuals by whom
the road may be constructed, contains an express cession of the right
of- transit' across;the Isthmus to the United:States and theit citizens,
in the most general -and comprehensive terms, reserving however to
the-Mexican republic its right of sovereignty-.'This: article, with a
single exception, does no more'than' substantially carry into effect the
provision o'f the-treaty of December, 18'53, securing ":the stable benefits of'the said transit way to the persons:and merchandise of-the
citizens of Mexico and the-United:States," and prohibiting either government from interposing "any obstacle to the transit of persons and
merchandiserof both nations.":'..: The exception referred to is embraced in the stipulation that this right
of transit shiall' be used and enjoyed in the same manner and upon
equalterms by both republics;" whereas te 8th- article of the treaty
of,December, 18.53,'provides only that "'at no, time shall' higher
charges be made on the transit of persons and'property of'citizens of
the'United States than,may be.made on' the persons and property of
Other'foreign nations.".  
It is certainly reasonable and equitable that: the United States, even.u.pon'the principle of mutual equivalents, should be placed upon an
equality with Mexico in the use and enjoyment:of the transit.' By
the- next succeeding article, they agree to extend: their  protection. to
all' routes of communication across the Isthmus, and to guaranty the
neutialityy of these routes,'as well as bind themselves to.eert.their
influence with' ofther nations to obtain from  them  a similar' guaranty
of neut ality..... -:        -,,' Th'ese: are;obligations of an important and responsible character,
without which'iit migh;t be difficult to obtain the capital necessary for
the -0onstructionl of the road; and in-consideration of these we imay
justly claim  to be placed, upon the; same footing: with  Mexico. But
we do not desire this for ourselves alone,, as you will: perceive& by,the
next succeeding' article,-buit for all other nations.'This provides for




ISTHMUS OF TEHUANTEPEC.                     47
a perfect equality of the citizens and subjects of all nations with the
citizens of Mexico, in regard to charges and tolls on the railroad or
any other means of communication across the Isthmus.
The contemplated railroad will be a thoroughfare for all the commercial nations of the world, and the period has passed when restrictions of any kind upon such a thoroughfare can be patiently tolerated
for the benefit of one nation to the prejudice of the rest. The practice
of modern commercial nations, based upon the soundest policy, repudiates the idea that discriminations shall be made in favor of any
particular nation on the great avenues of international commerce.
Besides, this liberality is the true policy of Mexico.  It will enable
the railroad within her territory to compete successfully with the
Panama railroad and other rival routes across the Isthmus.  And,
after all, from her geographical position, she will derive great and
peculiar advantages from the railroad of which she cannot be deprived.
Nature has secured these to her, and with these she ought to be satisfied.
These views you are instructed to urge strongly upon the Mexican
government, and it is confidently hoped you will do this with success.
Should you fail in your efforts in favor of other nations, it is believed
you can obtain an equality for the United States with Mexico in this
particular.  We shall most reluctantly yield this point.  If we can
succeed, the equality of all nations on the route will soon follow.
Second article.  I have already anticipated in the preceding observations much of what I had to say in relation to this article.  It provides that the Mexican government shall establish two free ports, one
at either end of the Isthmus, where no tonnage or other duties shall
be levied on merchandise belonging to citizens, or subjects of any
nation passing merely in transit from ocean to ocean, and not intended
for consumption in Mexico.  The reasons will at once occur to your
mind against both the injustice and impolicy of any attempt on the
part of Mexico to raise a revenue by tonnage or other duties upon
articles merely passing in transitu over the road.  To prevent all
future disputes, however, this ought to be expressly stipulated by
treaty.  In regard to the two free ports, although deemed important,
these may be dispensed with, if Mexico shall persistently refuse to
establish them.
Whilst it is believed that, under the treaty of December, 1853, the
Postmaster General already possesses the right to enter into a contract
to carry the mail of the United States in closed bags across the Isthmus, yet, to prevent all disputes, it is deemed advisable to insert such
a clause as that proposed in the treaty.
The third article does no more than carry into effect and extend to
all the routes of communication which may now or hereafter exist
across the Isthmus the following provision in the eighth article of the
treaty of December, 1853:  The Mexican government having agreed
to protect with its whole power the prosecution, preservation, and
security of the work, the United States may extend its protection, as
it shall judge wise, to it, when it may feel sanctioned and warranted
by the public or international laws."  For this reason it is not presumed that objection will be made to this article. If the jealousy of




48                 ISTHMUS OF TEHUANTEPEC,,
the Mexican government, however, should interpose an insurmountable obstacle, the concluding portion of the article might be made to
read: " but upon failure to do this, for any cause whatever, the government of the United States may" extend its protection to all or any
such routes, according to the provisions of the eighth article of the
treaty of the 30th December, between the United States and Mexico.
The fourth article.  This is confined merely to the troops, military
stores, and munitions of war, belonging to the two governments. It
will have no injurious effect upon the general commerce of the citizens
or subjects of any nation. Mexico and the United States are the two
nations on whom and on whose citizens the burden of the construction,
preservation, and protection of the road will chiefly rest, and who are
the most interested in its success.  It cannot, therefore, be deemed
unreasonable that their troops, military stores, and munitions of war
should be transported over it free of toll; this right, in regard to the
United States, being confined to such troops, military stores, and munitions of war as may pass in transit between their Atlantic possessions.
Should it be found impracticable to induce the Mexican government
to assent to the portion of this article in favor of the United States, it
might be so modified as to prescribe that the troops of the United
States only shall pass free of toll, their military stores and munitions
of war paying no more than one-half of the usual rates.
Article fifth.  It is almost certain that the railroad across the
Isthmus, if properly conducted, will eventually become a source of
immense profit to the stockholders. This article is therefore intended
to prevent this profit from becoming too extravagant, and thus to protect the citizens and subjects of all nations against the imposition.
I desire you to understand distinctly that the exercise of any influence on your part in favor of the changes in the Sloo grant sought to
be obtained from the Mexican government by Messrs. Benjamin and
La Sere will be on condition that the new grant shall conform to the
stipulations in the foregoing articles.
Thus the President, confiding in your patriotism and abilities, has
entrusted to you a most important negotiation.  Should you succeed,
this will be productive of great and enduring benefits to your country,
and entitle your name to be enrolled in the list of her most distinguished diplomatists.
I am, sir, your obedient servant, ~
LEWIS CASS.
JOHN FORSYTH, Esq., &c., &c., &c.
ARTICLE 1. In addition to the stipulations contained in the 8th article of the treaty between the United States and the Mexican republic,
dated the 30th of December, 1853, all of which are hereby confirmed, no
matter by what company or individuals the plank and rail road, or either
of them therein mentioned, may be constructed, the Mexican republic
hereby cedes to the United States in perpetuity, and to their citizens and
property, the right of way or transit across the Isthmus of Tehuantepec, from ocean to ocean, over any railroad or other route of communication, natural or artificial, whether by land. or by water, which




ISTHMUS OF TEHUANTEPEC.                    49
may now or hereafter exist, or be constructed, to be used and enjoyed
in the same manner and upon equal terms by both republics and their
respective citizens; the Mexican republic, however, reserving its right
of sovereignty over the same.
ARTICLE 2. The United States hereby agree to extend their protection to any such railroad, and to all other routes of communication
across the Isthmus aforesaid, and to guarantee the neutrality of the
same. They also agree to employ their influence with other nations
to induce them to guarantee such neutrality.  And the Mexican republic, on its part, hereby undertakes, within    -  from the exchange of the ratifications of this treaty, to'establish two free portsone on the Gulf of Mexico, on the eastern, and the other on the Pacific,
on the western side of the Isthmus of Tehuantepec-where no tonnage
or other duties shall be imposed or levied by the Mexican government
on any effects or merchandise belonging to citizens or subjects of the
United States, or of any other country, intended bona fide for transit
across the Isthmus, and not for consumption within the territories of
Mexico. And no higher or other charges or tolls shall be imposed on
the conveyance or transit of persons and property of citizens or subjects of the United States, or of any other country, on or over any
railroad or other;route of communication across the Isthmus, than are
imposed on the persons and property of Mexican citizens. And the
Mexican republic recognizes the right of the Postmaster General of
the United States to enter into contracts with individuals or companies to transport the mails of the United States across the Isthmus, in
closed bags, not intended for distribution along the line of comnlunication, free from the imposition of all taxes or duties by the Mexican
government.
ARTICLE 3. The Mexican republic agrees that, should it become
necessary at any time to employ military force for the security and
protection of persons and property passing over these routes, or any
of them, it will employ the requisite force for that purpose; but upon
failure to do this for any cause whatever, the government of the United
States may, in its own discretion, employ such force for this and for
no other purpose, and when the necessity ceases, such force shall be
immediately withdrawn.
ARTICLE 4. The Mexican republic and the United States mutually
agree that no charges or tolls whatever shall be imposed upon any
railroad, or other route of communication, for the conveyance over it
of Mexican troops, military stores and munitions of war; nor of troops,
military stores and munitions of war of the United States, passing in
transit, backwards and forwards, between their Atlantic possessions.
ARTICLE 5. No company now in existence, or which may hereafter
be established, for the construction of a railroad, or any other route of
communication across the Isthmus of Tehuantepec, shall ever divide
more than at the rate of fifteen per cent. per annum to its stockholders
from tolls collected upon the same; and whenever the rate of tolls
shall be found to exceed this amount, they shall be reduced to the
standard of fifteen per cent. per annum.
Ex. Doe. 72-i




50                ISTHMUS OF TEHUANTEPEC.
Mr. Forsyth to Mr. Cass.
[Extracts.J
NO. 48.]                LEGATION OF THE UNITED STATES,
City of Mexico, September 15, 1857.
SIR: Department despatches, Nos. 27 and 28 of the series, have
been placed in my hands by the Hon. Emile Lasere, to whom they
were entrusted.
*      *      *       *      *.*     *       *      *
In respect to the privileges required by my instructions on the
Isthmus of Tehuantepec, there would not have been much difficulty,
had I been authorized to purchase them.  *      *   I had, before
receiving these instructions, sounded the government on the Isthmus
question, and had ascertained that I could, for a consideration, obtain
concessions even more ample than those contemplated in my instructions-concessionrs that would have given the virtual protectorate and
military occupation of that transit to the United States.
Messrs. Benjamin and Lasbre will, of course, reportto the department
the result of their private mission on behalf of the Garay, Hargous,
and Louisiana Tehuantepec Company interests. In obedience to your
directions, I introduced these gentlemen to the president, and informed
him that I was instructed to say that their scheme had the approval
of my government, and that I was ordered to support it.  Of the
course and private history of their negotiations I am unable to speak,
torI know nothing. *       *       *      *       *      *
The department will perceive, from the copy of the contract, herewith enclosed, which Messrs. Benjamin and Lasere have concluded in
the form of a grant to the Louisiana company, that it is neither in the
shape nor in conformity with the terms and conditions set forth in
your instructions to me. **       *  I did the only thing I could
to compel conformity to the instructions and to protect the interests of
the government of the United States; and this was, in the midst of
the mysterious negotiation, to call upon the president, and bring
pointedly to his attention the following extract from your instructions,
marking the condition upon which I was ordered to support the views
of Messrs. Benjamin and Lasere. The following is the extract:    I
desire you to understand distinctly that the exercise of any influence
on your part in favor of the changes in the Sloo grant sought to be
obtained from the Mexican government by Messrs. Benjamin and
Lasere will be on condition that the new grant shall conform to the
stipulations in the foregoing articles." I read to the president the
articles referred to, and told him that *  *  *  *  I felt it my duty
to say that my influence, as the representative of the United States,
in favor of the arrangement to be made, was to be considered as given
or withheld according as the arrangement was or was not in conformity with these articles. The president replied that the matter contained in these articles was of very grave and delicate import, requiring
the serious consideration of the Mexican government; that he could
not, in such an informal interview, presume tb give an'opinion upon




ISTHMUS OF TEHUANTEPEC.                    51
the subject, and advised that the matter should be brought formally
before the government through the minister of relations. In respect
to Messrs. Benjamin and Lasere, he remarked, that they had been
introduced to him by me as the minister of the United States, and
recommended to his favorable consideration, as I had been instructed
to say, by the President of the United States; that he was treating
with them as private persons, and making a contract for the best
advantage of Mexico, and he could not perceive what either the government of the United States, or the minister of the United States,
had to do with a question which was altogether and exclusively a
Mexican one. *       *       *      *
I regret that the public negotiation confided to me has not had so
happy an issue as the private one of Messrs. Benjamin and Lasere.
While these gentlemen carry home with them a privilege, be it worth
more or less, the government of the United States gets nothing, and,
I fear, loses something. It is certain that it has lost the valuable
time intervening between the receipt of my instructions and the 16th
instant, when Gen. Commonfort's full powers cease.    *        *
The note of Mr. Lerdo, of the 12th instant, in reply to mine of the
5th, taken in connexion with the restrictions of the 21st article of the
late grant to the Louisiana company, appeared to me to have a significance that I could not let pass. I accordingly addressed a note
to Mr. Lerdo, dated 15th instant, a copy of which is enclosed, protesting, in the name of my government, against any act or interpretation of any act by the government of Mexico which would in the
smallest degree diminish the security and effect of the guaranties contained in the 8th article of the Gadsden treaty, warning Mexico that
under no circumstances would the United States yield a jot of the
rights acquired by that treaty.
I am, very respectfully, your obedient servant,
JOHN FORSYTH.
Hon. LEWIS CASS, &Ce, &c.
fExtracts.]
LEGATION OF THE UNITED STATES,
Mexisco, September 5, 1857.
*      *.            *  $           * 
Second. The second object embraced in the proposed negotiation relates to the Isthmus of Tehuantepec. And as these objects cannot be
more succinctly stated than they are in the draught of articles for the
proposed treaty, the undersigned transmits to his excellency a copy of
these.
For the purpose of avoiding misunderstanding and unnecessary
subsequent explanations, the undersigned has the honor to state that
the concessions asked for in reference to Tehuantepec  *  *  *  are
unaccompanied by the offer of any pecuniary compensation.
If the government of Mexico should be inclined to entertain a treaty
negotiation, and for the objects briefly designated in this note, the




52~                ISTHMUS OF TEHUANTEPEC.
undersigned is ready, at the pleasure of his excellency, to enter upon
a conference to that end.
The undersigned takes this occasion to assure his excellency of his
very high consideration.
JOHN FORSYTH.
His Excellency Seior Don SEBASTIAN LERDO DE TEJADA,
Mlinister of Relations.
[Extracts of Translation.]
NATIONAL PALACE,
Mexico, September 12, 1857.
The undersigned, minister of foreign relations of the republic, has
the honor to reply to the note which his excellency John Forsyth,
envoy extraordinary and minister plenipotentiary of the United States,
addressed to him on the 5th instant.
In it his excellency has been pleased to state that, in compliance
with the instructions of his government, he transmits   *    *    *
*    *    *    stipulations relative to interoceanic communication
across the Isthmus of Tehuantepec.  His excellency adds, that he is
ready to confer, if the government of Mexico is disposed to open negotiations for such purpose.
The undersigned felt it his duty to communicate the contents of the
note  *    *    *  to his excellency the president of the republic,
receiving his sanction to the following reply.
*      *       *      *       *       *      *
Respecting the  *  *  draught, various concessions are likewise
therein proposed: as that of the perpetual right of way, the right to
pass an armed force, and the full power of granting [otorgar] protection on the Isthmus, which stipulations Mexico could not admit,
insomuch as they depreciate her rights of sovereignty over that territory.
Nevertheless, retaining its full and unqualified rights, the government of the republic is disposed to endeavor, in the most fitting
manner, to encourage and secure the benefits of interoceanic communication, not only in favor of the interests and commerce of Mexico,
but also in favor of the commerce of the United States and other
nations.
For these reasons, the negotiations might be fruitless, if his excellency Mr. Forsyth, following his instructions, cannot consent to
abandon the points indicated; but if he feels at liberty to modify the
proposals substantially, or to draw up new ones which shall not be
repugnant to the spirit of this note, there will then be no obstacle to
overtures with the Mexican government, animated as it is by the amicable sentiments consonant with the happy relations subsisting between
the two republics.
The undersigned has the honor of reiterating to his excellency Mr.
Forsyth the assurances of his very distinguished consideration.
S. LERDO DE TEJADA.
His Excellency JOHN FORSYTH,
Envoy Extraordinary, and
Minister Plenipotentiary of the United States.




ISTHMUS OF TEHUANTEPEC.                    53
[Extracts ]
LEGATION OF THE UNITED STATES,
Mexico, September 15, 1857.
The undersigned, envoy extraordinary and minister plenipotentiary
of the United States, has the honor to acknowledge the receipt of the
note of his excellency the minister of relations of the 12th instant,
in which he is informed that the government of Mexico declines entering into negotiations for a treaty on the basis of *  *     *
certain concessions to the United States on the Isthmus of Tehuantepec. The time having passed when the undersigned would have felt
authorized to depart from the letter of his instructions in the formation of a treaty, he has now nothing to do but to report to his government the answer of the Mexican government to its proposals, and
to await its further instructions.The undersigned cannot permit this occasion to pass without adverting to a passage in his excellency's note, which, takenl in connexion with the spirit of a late contract, made by the Mexican government with the Louisiana Company, for the opening of the Tehuantepec Isthmus route, appears to have an important significancy. His
excellency states, among other things, that "the right to pass an
armed force" over the Isthmus, if granted by Mexico, would " depreciate her rights of sovereignty over that territory;" while, in the grant
to the Louisiana company, dated the 7th instant, a restriction is
placed upon the company in article 20, which absolutely forbids it to
transport armed forces, foreign or national, over any road or transit
it may control. The undersigned has to observe that, if the granting
of a permission by Mexico to the United States for the transit of her
troops and munitions across the Isthmus be equivalent to a depreciation of Mexican rights of sovereignty over that territory, then Mexico has already, quo ad hoc, parted with that sovereignty. In the 8th
article of the treaty of 30th December, 1853, it is provided, among
other things, that "the two governments will enter into arrangements for the prompt transit of troops and munitions of the United
States, which that government may have occasion to send from one
part of its territory to another, lying on opposite sides of the continent."  It is true, the "arrangements" here spoken of have never
been made, but it is only because, up to this moment, the way across
the Isthmus has not been opened, and there has been no occasion for
the United States to ask for the fulfilment of this stipulation. When
that occasion does present itself the United States government will
insist, and will have a right to insist, upon the arrangements
necessary and proper to perfect the right, conferred by Mexico in this
article, to pass her troops promptly across the Isthmus. The undersigned would fail to act in the spirit of his instructions from his government did he not protest, as he now does, against any act or declaration, or any interpretation of any act or declaration, of the Mexican government, which may be supposed to call in question, or place
in jeopardy, the clear guaranties of the 8th article of the treaty of
1853. Peculiarly placed as the territories of the United States are,




54                ISTEMUS OF TEHUANTEPEC.
on the borders of the two oceans, with Mexican territory intervening',
and offering a transit fully eight days shorter for the passage of her
citizens, her merchandise, and her troops, than by any other route,
it is not to be expected that the United States, in an age when steam
and electricity have made the saving of time so important an element
of progress, can forego the advantages or yield up the privileges
guarantied to her by solemn treaty stipulations. So far from it, the
government of the United States feels that it has a right to expect
from the comity of a friendly and neighboring republic an extension
of the facilities and privileges of transit over this important highway,
it being always understood that they are to be enjoyed in perfect consistency with the sovereign rights of Mexico over that territory, and
without detriment to the interests, the honor, or the prosperity of the
Mexican government or people.
This interesting question is surely destined to be the object of early
investigation and negotiation between the two governments; and if
the undersigned should chance to be the minister of the United States
when that time arises, he does not despair of being able to demonstrate, by fair argument, not only that the government of Mexico can
treat with that of the United States in the spirit of the Tehuantepec
articles, lately submitted to it, without depreciating her rights of
sovereignty, but that such a course is consistent with her clearest
duty and highest national interests.
The undersigned takes this occasion to assure his excellency of his
distinguished consideration.
JOHN FORSYTH.
His Excellency Senor Don SEBASTIAN LERDO DE TEJADA,
Minister of Relations.
[Translation. 
Department of Interior, [Fomento,] Colonization, Industry, and Commerce of the Mexican Republic.
FIFTH SECTION.
His excellency the president of the republic has transmitted to me
the following decree:
Ignacio Comonfort, president of the Mexican republic, to the
inhabitants thereof: Know ye, that, using the powers granted to me
by the plan of Ayutla, remodelled at Acapulco, I have thought proper
to issue the following decree:
SOLE ARTICLE. The privilege granted on the 5th of February, 1853,
to Mr. A. G. Sloo and associates, and to the company entitled
"Mixed," for the opening of interoceanic communication through
the Isthmus of Tehuantepec, is declared null and void; the grantees
having violated the obligations imposed by the decree of the above




ISTHMUS OF TEHUANTEPEC.                    55
date. Wherefore, I order it to be printed, published, circulated, and
duly carried into effect.
Issued in the palace of Tacubaya, September 3, 1857.
IGNACIO COMONFORT.
To the citizen Manuel Siliceo 
Communicated for your information and proper action.
God and liberty. Mexico, September 3, 1857.
SILICEO.
FIFTH SECTION.
His excellency the president of the republic has transmitted to me
the following decree:
The citizen Ignacio Comonfort, president of the Mexican republic,
to the inhabitants thereof: Know ye, that, using the power granted
to me by the plan proclaimed at Ayutla, and remodelled at Acapulco,
I have thought proper to issue the following decree:
ART. 1. A privilege is conceded to the company formed in New
Orleans on the 30th of July of the present year, called the " Louisiana Tehuantepec Company," for the opening of an interoceanic communication across the Isthmus of that name, according to the conditions expressed in the present decree.
2. The company shall establish the communication by water in the
navigable part of the Coatzacoalcos, and from the point where that
river ceases to be navigable shall begin the roads referred to in the
two succeeding articles.
3. The company, shall construct a railroad, which shall be commenced in eighteen months from the date of this decree, and finish
in each year a length of ten leagues (26 miles 731 yards) until the
entire completion of the line.
4. Until the railroad is completed, the company shall keep in good
serviceable order a convenient road, with the necessary bridges, for
the passage of carriages conveying passengers and merchandise of
small weight.
5. As soon as the necessary surveys are made, and the plans drawn
by the engineers for the line of the road, they shall be submitted to
the minister of fomento (internal improvements) for his approval.
6. The company shall build, at its own cost, within two years from
the completion of the railroad,.the moles and dykes necessary for the
line of communication in the ports of Coatzacoalcos and Ventosa,
which are open for foreign commerce. It shall immediately construct
such works as are necessary for discharging vessels and protecting
merchandise from damage.
7. The government grants to the company the land necessary for
the carriage road and railroad, the moles, dykes, warehouses, depots,
stations, sheds for stages and other carriages, and hotels for passengers; but if the public land is insufficient for these purposes, the company shall take lands of private proprietors, indemnifying the owners
according to law.




*56.ISTHMUS OF TEHUANTEPEC.
8. The company may take gratis from public lands materials necessary for the construction and preservation of the road, and its appurtenances. It may also use materials from private lands, indemnifying
the owners according to law.
9. The exclusive privilege of transport by the line of communication is granted to the company, which shall consequently have power
to levy tolls, transit dues, storages, and any other dues for freight of
merchandise, or conveyance of passengers; but the tariff fixed by it
shall not exceed fifty cents per league for each passenger, nor three
cents per league for each arroba (twenty-five pounds) of merchandise,
nor one per cent. on the value of precious metals and jewels for carriage across the entire length of the road.
10. The government shall exact no impost nor contribution of any
kind, whether on the transit of merchandise or passengers, or on the
capital invested in the road; but the company shall pay to the government each month twelve cents for each passenger and each package of
merchandise carried across the general line.
11. During the time necessary for the construction of the road the
company may import into the Isthmus, free of duty, the materials,
engines, iron work, carriages, and tools necessary for the construction
and preservation of the road and its appurtenances, as well as such
objects of first necessity as are not found on the Isthmus, and as may
be required for the maintenance and clothing of the laborers and persons employed on the road. After that time the company shall have
the right to import free of duty only the engines, cars, and rails
necessary for the road.  This latter exemption shall last during the
whole term of the privilege; and this, as well as the exemption first
mentioned, shall be used in accordance with the rules to be issued by
the minister of the treasury.
12. The government will protect with its whole power the prosecution, preservation, and security of the work.
13. The right granted to the company for the conveyance of merchandise shall be subject to rules to be issued by the minister of the
treasury, having for their object the prevention of abuses, and especially the facilitating of the prompt despatch of the merchandise.
This right shall not confer on the company the privilege of opening
any stores for sale of merchandise on the Isthmus.
14. The government shall keep open, for foreign commerce, the
ports of Coatzacoalcos, on the Gulf of Mexico, and of Ventosa, on the
Pacific.
15. The company shall construct first-class light-houses on both
termini of the line of communication, and another in the port of
Acapulco.  The first two to be finished within seven years, and the
third within ten years from this date, which shall belong exclusively
to the government. It shall also deepen the bar and bed of the Coatzacoalcos river, if practicable, according to plans to be approved by
the minister of fomento.
16. The present privilege shall last sixty years from  this date,
during all which time the government shall receive fifteen per cent. of
the net revenues of the whole line whenever dividends are declared to
the shareholders.  During all this time the exemptions and other




ISTHMUS OF TEHUANTEPEC.                    57.rights conceded to the company by the decree shall be valid and exclusive, and shall not be changed except by mutual consent; and at
the end of these sixty years the government shall enter into full and
absolute possession of the road, with all its trains, (which shall be at
least sufficient for the daily carriage of five hundred passengers and
ten thousand arrobas of merchandise,) tools, and appurtenances; it
being understood that the whole is to be delivered in a perfectly serviceable state for current use, the rails, cars, machines, and utensils,
not to be more than half worn.  The ships and steamboats of the
company are not included in this obligation.
17. The company assumes the payment to Mr. Francisco P. Falconnet of the six hundred thousand dollars, with interest and damages
legally due, lent to the Sloo enterprise, to enable it to comply with
the 14th article of the contract of the 5th February, 1853, liberating
the government from all future responsibility, and without diminishing its share of net profits fixed in the preceding article.
18. The company shall convey to any point of its whole line, free
of charge, the mails which pass on the road, receiving and delivering
them with the regular formalities. It shall also convey, for half its
tariff of prices, all products and objects belonging to the government.
It shall also convey gratis, going and returning, the officers, troops,
employes, and agents of the general government, and of the States,
when travelling on public service. The metals and agricultural and
manufactured products of the republic shall be conveyed for twentyfive per cent. less than the tariff of prices under regulations to be
issued by the minister of the treasury.
19. The government shall name two of the nine directors of the
company, with the same faculties and prerogatives as the other directors, and may establish a commission on the Isthmus to watch the
works undertaken in conformity with this privilege.
20. The following restrictions are imposed on the company: 1. It
shall construct no fortress on the Isthmus, nor organize an armed
force of any kind, nor give passage to any armed force, national or
foreign, without the express authorization of the general government.
2. It shall immediately discharge from its service any of its employes
engaged in smuggling, or protecting smuggling, or who shall commit
any offence, and shall aid the government in prosecuting the delinquents. 3. It shall enforce any measures designated by the general
government for the purpose of compelling all passengers to obey the
revenue laws of the republic.
21. The company, and all foreigners who may take part in it,
whether as shareholders or by any other right which may entitle them
to intervene in its operations, share in its profits, or claim any of its
concessions, shall have no greater rights than Mexicans, nor any other
means of enforcing them than those conceded to the latter by the laws
of the republic. All questions of this kind, and those which may
arise in relation to the acquisition, preservation, or loss of shares or
rights in the said road, shall be decided by competent national tribunals in conformity with law. The employes and servants of the company shall be subject to the same conditions.
22. The restrictions of the preceding article shall not apply to dis



5;8                ISTHMUS OF TEHUANTEPECo
putes or differences between foreign shareholders not within the republic, for, in this case, such disputes may be examined and decided
as if this restriction did not exist. But these decisions of foreign tribunals shall in no manner affect the prescriptions of this decree, nor
those of the company to which the privilege is conceded, which is to
be reputed Mexican for all the purposes of the concession, nor Mexican
interests.
23. The company shall not transfer, alienate, nor hypothecate this
privilege without previous consent of the government, nor admit as a
partner, in any case, any foreign government or state.
24. The transit by the line of communication shall be free for all
the inhabitants of the world; but the freight on. merchandise of nations who may not make a neutrality treaty with Mexico shall be inincreased twenty-five per cent.
25. The company shall open lists in Mexico for a period of four
months for subscription to its stock by Mexicans, and a third of the
whole of its shares shall be reserved for that purpose.  After that period, the company shall be at liberty to place its shares at any point
in the United States or Europe.
26. The company shall have the right to convey by its line of communication, in closed bags, which shall not be opened, foreign mails;
and these bags shall be sealed by the postmasters or collectors of
customs.
27. There is conceded to the company the exclusive privilege of
navigating the river Coatzacoalcos, under the Mexican flag, during
the whole time of the concession, establishing for the service of the
line steamboats or ships, which shall not be bound to be provided with
such offiers and crews as the laws require for vessels reputed national;
but their captains, employes, and servants shall be subject to the provisions of the twenty-first article of this decree.
28. The privilege conceded in the foregoing article shall not prevent
the inhabitants, owners of plantations or other property, situated on
the banks of the river, importing objects which they may need, or
exporting their agricultural or manufactured products in vessels of
Mexican build and under the Mexican flag.
29. The vessels of the company used solely for conveying correspondence and merchandise for transit across the whole line shall be
free from tonnage duty.
30. The company shall convey in its vessels, free of cost, the mails
which may come from any point of the republic, or may be sent from
the republic to any point at which its vessels touch, receiving and
delivering them in due form; in the same way it shall convey for half
its tariff rates all articles the property of the government, and without charge, whether going or returning, the officers, troops, employes,
and agents of the general government or of the States when travelling
on public service. Metals and the products of the agriculture and
manufactures of the republic shall be carried for twenty-five per cent.
less than the tariff price.
31. The maximum tariff of prices on the vessels of the company
shall be three-fourths of that fixed for the railroad.
32. If the company should require for depot or winter quarters any




ISTHMUS OF TEHUANTEPEC.                    59
other port on the Pacific than Ventosa, it shall give the preference to
Acapulco.
33. The company shall appoint an agent in Mexico with the necessary powers and instructions for coming to an understanding with the
general government and other authorities of the republic on all matters which refer to the obligations imposed on it by this decree.
34. This privilege shall become null and void if the company shall
not comply with any of the obligations, or shall infringe the restrictions
imposed in the present decree, as well as for a suspension of its work
on the road for the space of four months. In any of these events it
shall not only lose the concession, of which the Mexican government
may dispose at its pleasure, but all the expenses incurred and work
done on the Isthmus, which shall remain for the profit of the nation;
and shall also pay a fine of $50,000, which shall be secured to the
satisfaction of the minister of fomento.
35. In case there should be any doubt or difference in the execution
or interpretation of this privilege, it shall be decided by arbitrators
and amicable compounders, one named by the government and the
other by the company, who, before beginning their examination, shall
name a third in case of disagreement. Against the decrees of these
arbitrators and the umpire there shall be no appeal nor recourse
whatever.
Wherefore, I order that this be printed, published, circulated, and
duly enforced.
Given in the national palace of Mexico, on the 7th of September,
1857.
I.'COMONFORT.
To the citizen Manuel Siliceo:
And I communicate it to you for your information and due results.
God and liberty. Mexico, September 7, 1857.
SILICEO.
Mr. Brown to Mr. Cass.
POST OFFICE DEPARTMENT,
Washington, May 24, 1858.
SIR: In reply to your communication of the 21st instant, enclosing
a copy of the resolution of the House of Representatives of the 19th
instant, calling for information respecting the transit over the Isthmus
of Tehuantepec, I have the honor to enclose a copy of a letter which I
have just prepared and will send to the chairman of the Post Office
Committee, in reply to a call made by the committee on the same subject, which I hope will be satisfactory.
I have the honor to be, sir, your obedient servant,
AARON V. BROWN.
HOD. LEWIS CASS,
Secretary of State.




60                 ISTHMUS OF TEHUANTEPEC.
Mr. Brown to Mr. English.
POST OFFICE DEPARTMENT,
Washington, May 24, 1858.
SIR: In reply to your communication of the 20th instant, I have
the honor to state that no contract has been entered into with any
party or parties to carry the California mails by the Tehuantepec
route. Applications for such a contract having been repeatedly made
verbally, and, perhaps, in writing, the department advertised for proposals, which may be seen in the printed pamphlet of Proposals for
Louisiana, page 51. Having advertised for proposals on this line, and
received one or more bids on it, the department, after taking suitable
time for deliberation, has come to the conclusion to establish mail
service thereon from New Orleans, via Tehuantepec, to Acapulco, provided a satisfactory contract can be made for that purpose.  The
service is not proposed to be put on further than to Acapulco, because
the present line of steamers from Panama to San Francisco always
touch at Acapulco, and can take on the New Orleans mails and passengers.* It is not, however, proposed to make the first contract for
a longer period than one year from 1st October next, so that this contract and the one from New York to Aspinwall, may expire at the
same time. In the course of this year the practicability of the Tehuantepec route may have been fully tested, and its capability to
furnish the shortest, cheapest, and safest mail route to California fully
demonstrated.  The department, by the simultaneous expiration of
the contracts on these two routes, will be enabled to determine which
one to select, or whether to keep up both, accommodating the mails
and the passengers from New York and New Orleans, respectively, but
paying according to the amount of mail service rendered.
It is alleged that, by starting this line from  New Orleans, correspondence from the Atlantic side will be received nearly one week later
than at present, and from California to the Atlantic States in like
proportion-that is to say, that whilst letters sent from Boston and
New York to California, by Panama, would reach Acapulco about
~-  days after they had been written; others sent from New Orleans,
via Tehuantepec, to Acapulco would reach them in about-  days;
thus practically furnishing nearly a weekly mail, instead of a semimonthly communication, as at present.
The terms of the contract are not yet definitely settled, and, therefore, cannot be set forth; but the department does not anticipate much
difficulty in being able to obtain the service on reasonable and satisfactory terms. The authority of this department to make such a contract may be found in the second section of the act of March 3, 1851,
which the Postmaster General considers ample and undoubted.
Serious doubts have been expressed as to whether the road has been
yet or will be made in time sufficient for the performance of the con* It is not here intended that the line is to the port of Acapulco, but it is mentioned
only as a designation of the place at or near which the two lines are to be merged into
one. The legal form of the contract will be for service from New Orleans to San Francisco,
both being American ports, and strictly within the act of 1851.




ISTHMUS OF' TEHUANTEPEC.                   61
templated service. The department, however, will take care, in making
any contract, to provide that where there is no service there shall be
no pay, and that no fines or forfeitures shall be remitted for failures
arising from a want of a suitable road or for obstacles presented by
the insufficiency of river navigation, or of the bays, at either terminus
of the transit. If, therefore, the river, bay, or road, shall not be sufficient, the contractors, not the government, will be the losers by it.
The Tehuantepec route has long been a favorite one with the government and people of the United States. No opportunity has been
lost in endeavoring to secure it. Having at last secured it, by the
terms of the Gadsden treaty, and a reasonable probability now existing that the route has been, or will in a short time be, placed in a
condition to receive the service, the department sees no good reason
why it should not enter on the enjoyment of those advantages so
earnestly desired and so long anticipated by the people and government of the United States.
In proposing to make this contract, the Postmaster General does
not intend to decide any controversy which now exists, or may hereafter arise, between rival claimants under the grants or decrees of the
Mexican government. Who are the true owners of the right to make
the road is left to the proper tribunals to determine. It is enough for
the department that parties of undoubted responsibility, claiming to
be in possession of the road and to be the lawful owners of it, have
proposed to perform the desired service. If in this there shall be any
mistake, the contract with the parties will terminate with their loss of
the road, and the department be as ready to contract with the successful claimants as with the present ones. In any point of view, it would
seem to be the interest of the true owner of this right, whoever he may
be, that this contract should be made. It will materially aid in the
early completion of the road, and furnish the assurance that after the
United States had entered on the use of it, in the transmission of their
mails, that no wanton or illegal revocation of the right would be
tolerated.
The department, in arriving at the conclusion that the time had
come when the mail service of the United States ought to be placed
upon this new and additional route, has not been influenced, in the
slightest degree, by mere geographical partialities. Rightly considered, there is no rival and separate interests of the north or northeast to be prejudiced by the establishment of this route.
If it be shorter, safer, and more expeditious than other routes, it can
and will be adopted by the people of that portion of the United States,
both for postal and travelling purposes, as freely and fully as by those
of the west and southwest. If it present no such striking advantages,
then more southern transits, such as Panama, Chiriqui, Nicaragua,
&c., will continue to be used by all the northern or northeastern portion of the Union, whilst that of Tehuantepec would probably be used
by the people of the west and of the southwestern States, whose geographical positions rendered it to them the most desirable transit.
I am, very respectfully, your obedient servant,
AARON V. BROWN.
Hon. WM. H. ENGLISH,
Chairman Committee on Post Offices and Post Roads.