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No. 121.]

BOLIVIA.

No. 4.

Mr. Markbreit to Mr. Fish.

LEGATION OF THE UNITED STATES,

Cochabamba, April 11, 1871. (Received June 13.) SIR: Before leaving La Paz I received a letter dated London, February 16, from Colonel George E. Church, the manager of the Bolivian Steam Navigation Company for the navigation of the Marmore and Madeira Rivers and their tributaries, informing me that he was about to return to the United States, to make arrangements for the transportation to Bolivia of two iron steamboats and one steam-launch, (built in the United States.) At the time of writing, Colonel Church, although aware of the revolution which had broken out in this country, had not yet learned its result.

In view of the importance of this enterprise, not only to Bolivia and Brazil, but to the commerce of the world in general, and remembering the interest demonstrated by the Department, where in dispatch No. 6, of October 7, 1869, it instructed me to use my good offices (unofficially) with the Brazilian charge d'affaires in furtherance of said enterprise, I deemed it expedient to ascertain, if possible, the intentions of the new government relative to the same. Accordingly on the 31st ultimo, with this purpose in mind, I had an unofficial interview with Colonel Morales and his secretary general, in which the former expressed himself most heartily in favor of that enterprise, and of every undertaking tending to the development of the country.

At my request Colonel Morales directed his secretary general to address me an official note, which, although not in such strong terms as had been agreed upon, may nevertheless be of considerable service to Colonel Church, as it will convince his associates that the new Bolivian administration is disposed to lend its assistance in carrying out this undertaking. I may add that all the prominent men in the republic are earnest advocates of this navigation scheme, looking upon it as the natural outlet for the immense productions of their country, and as the. only means of ridding themselves of constant revolutions and political disturbances.

I inclose herein a translation of the note referred to.
I am, &c.,

[Translation.]

L. MARKBREIT.

SECRETARIATE GENERAL FOR FOREIGN AFFAIRS,
La Paz, March 31, 1871.

SIR: In virtue of the verbal conference which has taken place between the undersigned and yourself, (U. S. H.,) relative to the inquiry which you were pleased to make concerning the intentions entertained by the (excelentisimo) government of Bolivia in reference to the protection of the enterprises for the fluvial navigation of the eastern territory, His Excellency the Provisional President of the Republic has directed me to reply to you that he finds himself (que se halla) animated by the most patriotic sentiments to protect, with all his force, (con todas sus fuerzas,) all enterprises tending to the development of the riches of Bolivia, and the navigation of her vast rivers; and Colonel Church, being among this number, (y en contrandose el Sr. Coronel Church su el numero de ellos,) may rest persuaded of the philanthropic intentions of

his excellency Colonel Morales, the undersigned being able to assure you that ho (Colonel Church) will not be prejudiced in his interests.

In this manner I reply to you, subscribing myself your attentive, sincere servant,

Hon. LEOPOLD MARKBREIT,

Minister Resident of the United States, &c., &c., &c.

CASIMIRO CORRAL.

No. 126.]

No. 5.

Mr. Markbreit to Mr. Fish.

LEGATION OF THE UNITED STATES, Cochabamba, May 15, 1871. (Received July 3.) SIR: Inclosed I have the honor to transmit a decree (inclosure No. 1) issued by the provisional government of Bolivia, together with a note. (inclosure No. 2) from the secretary general, defining the course which the Bolivian government intends to pursue in all cases of claims presented by foreigners, and declaring in how far the government will admit of diplomatic intervention on behalf of such claimants. I beg to call your attention to article 4 of said decree. I also inclose a copy of my reply (inclosure No. 3) to the secretary general's note.

I am, &c.,

L. MARKBREIT.

[Inclosure No. 1.-Translation.]

Augustin Morales, Provisional President of the Republic, invested by the people with ample faculties, considering

1. That the equality of all persons before the law is the basis of a republic;

2. That the government cannot invade nor usurp the attributes of judicial power, which has the mission to judge and decide upon all claims of a private nature;

3. That various diplomatic agents have presented certain claims-which may be just or unjust-directly to the government, in favor of their subjects, thereby involving diplomatic discussion, without having previously invoked, on the part of those interested, the intercession of the courts and tribunals charged with the administration or justice for all citizens;

4. That such proceedings are contrary to the rules of international law;

5. That it is necessary to determine a general rule, in order that all claims of foreign subjects may be adjudicated in accordance with the laws of Bolivia and the usage of international law:

It is therefore decreed:

ARTICLE I. The government of Bolivia will not admit diplomatic reclamations, nor the interposition nor good offices (personeria) of the public agents of other nations, in questions of private interests, unless such questions have been previously submitted for adjudication to the courts and tribunals of the republic.

ARTICLE II. Only in cases of refusal or delay of justice will the government admit the intervention of foreign public agents.

ARTICLE III. The government will not admit reclamations in questions which have already been disposed of in accordance with the laws of the country, nor in cases which have been finally adjudicated, in accordance with such laws, by the tribunals. ARTICLE IV. The government, however, will accept direct reclamations in cases permitted by international law.

The secretary general is charged with the publication of this decree, and will communicate the same to all concerned.

Done at the city of Cochabamba, this 8th day of May, 1871. (Signed)

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AUGUSTIN MORALES.

GARCIA.

[Inclosure No. 2.-Translation.]

SECRETARIATE GENERAL, SECTION FOR FOREIGN AFFAIRS, Cochabamba, May 9, 1871. SIR: The secretary general of state, in charge of the department for foreign affairs, has the honor to transmit herewith to the honorable Colonel L. Markbreit a decree issued by this government, declaring the conduct which it intends to observe in respect to demands and claims presented by foreign subjects against the state, cases of intervention in the same by diplomatic agents, and the right of the government to accept such intervention in cases permitted by international law, or not to admit the same in cases where the subject of controversy appertains exclusively to the courts and tribunals of the republic.

Colonel Markbreit, in his high illustration, (alta ilustracida,) will comprehend that the declaration contained in the aforementioned decree is simply a line of conduct which the government has imposed itself, as all are equal before the law, and because the executive of the country cannot arrogate unto himself a knowledge of questions belonging exclusively to the judicial power, which has the mission to administer impartial justice without distinguishing nationalities nor the quality of individuals.

Moreover, the honorable Colonel L. Markbreit knows that it is a universal principle of international law that the demands and controversies of foreign subjects cannot be subjected to a better or worse condition than those of native subjects or citizens, (nacionales,) and that, consequently, if they are, or believe themselves, damaged in their interests, they have the means at their disposal of invoking the laws of the country and solicit their enforcement.

This is in accordance with the demands of universal justice, of civilization, and of public law.

In noting the contents of the declaration alluded to, the honorable Colonel Markbreit will please judge, from its true standpoint, the frank, friendly, and circumspect conduct which the government of Bolivia proposes to follow in all questions of a private nature, in order to prevent and avoid any difficulties that might arise in his diplomatic relations, which so happily are being cultivated, (que tan felizmente se cultivan,) aud which it is vehemently desired to draw closer and closer with the (excelentisimo) Government of the United States of North America, so worthily represented by the honorable Colonel L. Markbreit.

The undersigned avails himself of this opportunity to assure the honorable Colonel Markbreit of the high esteem and respect with which he has the honor to subscribe himself his attentive and sincere servant,

Hon. Colonel L. MARKBREIT,

PEDRO GARCIA.

Minister Resident of the United States of North America in Bolivia.

[Inclosure No. 3.]

LEGATION OF THE UNITED STATES,
Cochabamba, May 12, 1871.

SIR: The undersigned, minister resident of the United States, in acknowledging the receipt of your excellency's esteemed note of the 9th instant, and the decree therein transmitted, in which the government of Bolivia defines the conduct which it intends to observe in reference to all demands and claims from foreign subjects against the state, has the honor to say, in reply, that he will take pleasure in communicating the same to his Government.

The undersigned is exceedingly gratified at the sentiments expressed in your excellency's communication relative to the laudable desire entertained by the government of Bolivia, to draw closer and closer the friendly relations which happily subsist between the two republics, and begs to assure your excellency that nothing shall be wanting on his part to contribute toward that end.

The undersigned avails himself of this occasion to offer to your excellency the assurances of his most profound and distinguished consideration with which he has the honor to remain,

Your excellency's obedient servant,

His Excellency Doctor DON PEDRO GARCIA,

Secretary General of Bolivia, &c., &c., &e

L. MARKBREIT.

No. 142.

No. 6.

Mr. Markbreit to Mr. Fish.

LEGATION OF THE UNITED STATES,

Sucre, August 28, 1871. (Received October 14.) SIR: I have the honor to report to you the arrival in this city, on the 30th ultimo, of Colonel George E. Church, president of the "National Bolivian Navigation Company."

In view of the importance of his enterprise, I believe that a brief detail of his operations during the last three years may be of interest to the Department, as showing the political relations existing between this country and its neighbors, and the great delicacy it has required to place Colonel Church's navigation and railway schemes in such condition as may insure their early realization.

The Department is well aware that the sword-point relations existing for three centuries between old Spaniard and Portuguese lost but little of their bitterness at the date of the independence of these countries, and their formation into empire and republics.

The vast valley of the Amazon, in Brazil, was found by the empire to be of very unwieldy management, and in the opening of the great river to all flags, before the settlement of frontier questions with the states at the headwaters, there was fear that imperial border might lose something of its proportions.

This was probably the principal cause for the policy of Brazil up to 1866 and 1867.

At this date, however, Brazil was engaged in a war with Paraguay, ostensiby to open the Paraguay River, that perfect freedom of communication might be had with the Brazilian province of Mato Grosso.

It attracted much attention among the liberal party of the empire that war was waged in the Plata Valley for freedom of navigation, while Brazil herself denied this freedom to the republics at the headwaters of the Amazon.

This contradictory position of the imperial government probably forced the opening of a part of the Amazon at least ten years sooner than it would have taken place in normal times.

Knowing the policy of Brazil in the Amazon, Colonel Church stipu lated, on the part of his company, that Bolivia should negotiate with Brazil the right to build a railway past the rapids of the Madeira River, and transfer it to the company. Moreover, that perfect freedom of navigation for all flags should be decreed from Borba to San Antonio. Up to the former point, as the Department is aware, this freedom exists, according to the Brazilian decree of December, 1867.

Bolivia made every effort to comply with its contract with Colonel Church. Two different legations were accredited to the court of Rio de Janeiro, but retired without results; and a year and a half was uselessly consumed. The Bolivian government then requested Colonel Church to undertake the negotiation. To this he consented and reached Rio de Janeiro, from Bolivia, in the midst of the great yellow fever season, in February, 1869. The result of a seventy days' negotiation was a concession made to him personally (see dispatch No. 55) by the empire, allowing the construction of a railway at the rapids, and a verbal assurance that in a short time the Madeira from Borba to San Antonio would be opened to all flags. At present this stretch of four hundred miles is only navigable for the Brazilian and Bolivian flags, by the treaty of March 27, 1867, between the two governments.

It appears that Colonel Church has organized the "Maderia and Marmore Railway Company" in London, (see dispatch No. 125,) and that the one hundred and seventy miles of road is already under contract with one of the most powerful associations of contractors in Europe, the Public Works Construction Company, of London. The whole line is to be in working order on the 1st of January, 1874.

In aid of the National Bolivian Navigation Company, the Bolivian government, in December of 1868, made a contract with Colonel Church for the negotiation of a loan of £2,000,000 sterling, the company offering as a guarantee its three-fourths of the import duties conceded to it as a subsidy, and its net earnings; while the government, giving the other fourth or import duties, was to enjoy, in consequence, seventeen per centum of the net products of the loan.

At the request of the government, Colonel Church undertook the negotiation of this loan, and was commissioned special agent for the purpose. It appears that he carried it to a great success in London and on the continent of Europe-so great, that it is virtually taken "firm" by a very prominent banking-house, namely, by Messrs. Emile Erlanger & Co. The company will thus find themselves in possession of several millions of gold, which will enable them to carry out their plans on a very large scale. Their custom-house subsidy alone must, in the course of time, give them immense returns. They have, in fact, in their hands almost complete commercial control over four-fifths of the 2,500,000 inhabitants of the Amazon Valley, and there is good reason to believe that their enterprise is destined to attract great attention.

All these operations have been undertaken and pushed ahead under the most extraordinary difficulties.

None of these, not even the Franco-Prussian war, the recent revolution in this republic, Peruvian and Chilian opposition to the loss of Bolivian trade by the Pacific coast, &c., have been able to impede the steady march forward of the National Bolivian Navigation Company.

It is evident that great political changes are to result in South America from the turning of Bolivian commerce from the Pacific to the Atlantic front of South America. Henceforth the commercial and friendly relations of Bolivia and Brazil must necessarily become very closely interwoven. For the first time, in fact, since the occupation of this contitinent by the Europeans, is a real solid effort being made to turn Portuguese American and Spanish American interests into a common channel, and make South America more homogeneous.

In solving this problem between Bolivia and Brazil, Colonel Church is doing a great service to every republic at the headwaters of the Amazon, and also to civilization.

His operations as special agent of Bolivia have, since his arrival, been submitted by the government to the national assembly, now in session in this city; which body, after a strong debate of eight days, has approved them in all their parts by a vote of forty-five in favor against seven in contra.

I am, sir, very respectfully, your obedient servant,
L. MARKBREIT.

HOD. HAMILTON FISH,

Secretary of State, Washington, D. C.

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