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File No. 815.156/3
[Received 11.15 p. m.] Department's September 29, 5  p. m. Returned Salvadorean territory October 13. While in Tegucigalpa, Messrs. Ewing, Casey, and I had interview with the President, who stated that Honduras was free to act, did not favor San Lorenzo as port, but said if Americans desired to build a port on Sacate Grande and connect same with Capital by road, tram, or railroal, said company could collect same tariffs as Germans now do until reimbursed for their outlay, when (lifferent arrangements could be made.
File No. 763.72112Am 1/4
6 Department in receipt of authentic proof of attempt on part of German firms of J. Rossner & Co. and Theodore Kohncke & Co. to transfer their interests at Amapala to Dr. Jose del Carmen Gasteazoro by means of secret contract. As this appears to be a direct attempt by enemy aliens to evade provisions of Trading with the Enemy Act and to set up a cloak for their commercial activities, you are instructed immediately to see President of Honduras and suggest to him that he now take the effective action which he promised in the interview which was had with him at the time of the visit of Mr. Long to Tegucigalpa, should he be furnished with proof of German activity in Amapala. You may further suggest that Honduras should at this time take drastic measures to bring to an end the activities of the German agents and say that this Government has found internment the only effective means of completely safeguarding its welfare in cases of this kind.
You may further state, in a most emphatic manner, that this Government feels convinced that the activities in Amapala of the firms of Rossner and Kohncke are a serious menace to its interests as well as to the interests of Honduras and therefore looks to the Government of Honduras to take immediately such action as is necessary to suppress the danger at that point.
Department sees no objection to your going to Honduras (with Mr. Casey] should you deem it advisable.” (File No. 815.156/2.)
File No. 763.72112Anr1/8
. Department's December 18, 6 p. m. Situation taken up with President and Foreign Minister yesterday. President stated, with regard to first, secret contract; the matter was not for diplomatic discussion but for judicial procedure—further necessary to establish identity third party injured. Replied stating people of Honduras injured together with injury accruing to United States through avoidance of Enemy Trading Act. President considers little possibility of German activity at Amapala, stating his Government watching Germans carefully. Further stated Department badly misinformed regarding German activities—that private persons had no doubt given false information. States regarding fraudulent sale German interests would not interfere with American shipping. With regard to internment of Germans, point somewhat evaded with suggestion by President that Germans could be interned commercially by United States black list, which would be effective. Unofficially cliscussed possibility steamship companies, in order to avoid possible violation enemy trading law, may decide not to visit Amapala. This question gave rise to considerable discussion, President stating situation of this character would seriously injure Honduras, and as Honduras was an Ally while Salvador was distinctly proGerman. Question steamship company's attitude taken seriously although [he] gave assurances this was unofficial discussion of that subject. Honduras will welcome establishment of agency to compete with Germans but is not in position financially to back proposition.
File No. 815.156/7
Jessi's. W.R. Grace & Co. to the Department of State
NEW YORK, December 20, 1917.
[Received December 24.] GENTLEMEN: Referring to previous correspondence with you regarding steamship terminal facilities at Amapala, Honduras, and particularly regarding the report of Mr. Boaz Long on that subject, beg to advise you that we are informed by the general manager of the Pacific Mail Steamship Co. at San Francisco, Mr. J. H. Rosseter,
* Corrected in accordance with second copy received Jan. 4, 1918, 10.53 a. m. (File No. 763.72112Am1/11.)
that he has received a letter from Mr. S. F. Casey, his representative
a at San Salvador, stating that Mr. Casey and Mr. Daulton Mann, assistant to the general manager, made a trip to Sacate Grande Island, where it had been proposed that a terminal should be established. Mr. Casey suggests that the matter be dropped, because 6 while it looks feasible on chart it is not so in reality, as at proposed site it is very shallow and pier would have to extend out quite a distance to reach deep water, which would mean a very large expenditure, and we doubt whether enough money could be earned to pay interest, not alone capital invested, as there is not enough traffic to warrant such an amount being expended."
This is sent for your information. The Pacific Mail is working steadily on the question of getting terminal facilities at Ainapala entirely free of German control and has been in communication with the Government of Honduras to this end. Yours very truly,
W. R. GRACE & Co.
ROBERT H. PATCHIN
File No. 763.72112Am1/10
WASHINGTON, December 29, 1917, 5 p. m. Department informed that port of Amapala closed. Report immediately by cable and give all details regard to cancelling of Kohncke as agents Pacific Mail referred to in your December 28, noon.1
File No. 763.72112Am1/12
The Minister in Honduras (Ewing) to the Secretary of State
[Received January 1, 1918, 3.10 a. m.] Department's December 29, 5 p. m., December 18, 6 p. m.; Legation's December 21, 2 p. m., December 22, 5 p. m., December 28, 11
2 a. m., December 29, 5 a. m. [p. m.]; all bear upon Amapala situation together with messages for Rosseter, San Francisco, and Valentine, New York City, sent through Department.”
Port Amapala not closed but Pacific Mail, to comply with enemy trading law, suspended service Amapala until establishment new agency other than blacklisted German firms. Representative Pacific Mail canceled Kohncke agency 25th, notifying President and public. This primarily precipitated action of this Government toward creation of agency other than German. Drechsel 1 using strong influence with Government to defeat plan. He positively refuses to sell lighters, threatening their destruction preferentially. Southern [other] influences also at work tending to defeat efforts toward effective solution Amapala situation. Representatives new company informed by President today of intended cooperation Honduranean Government, but fear stronger Germanic influence if not offset by strong support of United States. Belt.”
File No. 763.72112Am1/17
The Secretary of State to the Minister in Honduras (Ewing)
WASHINGTON, January 5, 1918, 8 p. m. Your December 21, 2 p. m., and December 22, 5 p. m. You will call in person upon the President of Honduras, in company with the commanding officer of the U.S.S. Cincinnati who has been ordered by this Government to proceed to Amapala for this purpose. You will present to the President a note reading textually as follows:
The Government of the United States sincerely regrets that the necessary elimination of enemy connections at the port of Amapala has resulted in the cessation, for the time being, of calls at that port by American steamships, and wishes that you be informed that it has been giving most careful consideration to the question of how best to aid in the re-establishment of communications along lines calculated to advance Honduran commercial interests.
The Government of the United States, particularly at this time, and in order to see that the interests of Honduras are further advanced, would look with favor upon the establishment in Honduras of a new Pacific port under favorable conditions, on the mainland or at a point to be connected with the mainland. With this end in view the Government of the United States will gladly lend its good offices to those American corporations who may be interested in undertaking such development, it being understood that the assurances given by President Bertrand at the tim of his conference with American officials and representatives of American companies during the visit of Minister Long to Honduras, included the idea that such corporation as should undertake the building of the port would collect all wharfage charges and dues until its capital and interest were returned in full, at which time a new arrangement could be entered into.
Representative of Kohncke & Co.
The Government of the United States offers all assistance in its power to facilitate the equitable conclusion of such an arrangement, should it be desired by the parties interested. Meanwhile the urgent necessity is apparent for perfecting an arrangement of a temporary character to provide for the handling of merchandise, so that American ships may resume their calls at Amapala with least possible delay. To facilitate this a working arrangement might be entered into with, or even a temporary concession granted to, some responsible persons sympathetic with the cause of the United States and the Allies for the operation of a lighterage and forwarding business. It would appear advisable that any such arrangement should be made subject to termination on six months' notice, with the proviso that the Honduran Government or the company empowered to operate a new port, should satisfactory arrangements for this purpose be concluded, should take over the equipment to be acquired for temporary needs at a price to be agreed upon when the operation would be effective.
Referring to Legation's December 28, 11 a. m., and December 29, 5 p. m.,' which were signed “Belt,” this Government would be prepared to give favorable consideration to a new temporary agency composed of pro-Ally Honduran or French or American firms, if satisfactory to Pacific Mail, to Legation, Consulate, and commander of the U.S.S. Cincinnati.
File No. 763.72112Am1/18
m.] Department's January 5, 8 p. m. In company with Captain of Cincinnati, Foreign Minister, [and] Secretary, [I] called officially on President on 15th, presenting joint note as instructed. Government yesterday formally replied as follows: 2
Under instructions of the President of the Republic, I have the honor to answer the esteemed note dated yesterday and signed by Your Excellency and Mr. F. H. Brumby, Captain of the U.S. Navy in command of the U.S.S. Cincinnati.
The President has seen with satisfaction the terms of the said note in so far as they express the sentiments of cordiality which govern the friendly relations that happily exist between the Government of the United States and that of Honduras and also as they bring out the earnest desire of both countries for closer industrial and commercial relations, and consequently wishing to bring at once, to the best attention, the project looking to the opening of a new
Not printed. 2 Text corrected by comparison with translation later received by despatch, (File No. 763.72112Am1/39.)