No. 53.
Mr. Frelinghuysen to Mr. Logan.
Washington, June 7, 1883.
Sir: I transmit herewith a copy of a memorial and certain accompanying papers and documents in relation to a claim of Mr. Edward C. Du Bois, a citizen of the United States against the Government of Chili. The claim, as you will perceive from the memorial and proofs, grew out of certain acts and proceedings of the Chilian authorities in Peru during the recent occupation of that country by the military forces of the [Page 108] former Republic, and took place under the orders and by the direction of duly commissioned officers of the army and navy of Chili.
For your convenience in the examination of the subject, I proceed to give you a condensed summary of the facts and circumstances upon which the claim rests.
On the 31st of October, 1871, the Government of Peru accepted certain proposals of Messrs. Benito Valdearellano and Dionicio Desteano, the former a Spanish subject, and the latter a citizen of Peru, for the construction of a railroad known as the “Chimbote, Huaraz and Recuay Railroad,” but before the contract was fully concluded these gentlemen renounced their rights under it in favor of Mr. Henry Meiggs, a citizen of the United States, who was at that time extensively engaged in the construction of railroads in Peru and other South American countries. In pursuance of this relinquishment by Messrs. Valdearellano and Desteano, Mr. Meiggs was accepted by the Peruvian Government on the 10th of November of the same year, and a contract was entered into with him for the construction of the road referred to. Mr. Meiggs immediately commenced the construction of the work, but was soon obliged to suspend operations in consequence of the embarrassments of the Peruvian Government and its inability to pay for the work according to the contract.
The twenty-second article of the contract provided for such a contingency by a hypothecation of so much of the road as might be finished at the happening of such an event, and under the stipulations and provisions of this article, Mr. Meiggs held possession of the road for the amount then earned by him and remaining unpaid by the Peruvian Government.
In the early part of the year 1874, that Government succeeded in making certain financial arrangements which would enable it to continue the construction of the road, and in March of that year, Mr. Meiggs entered into a contract with Mr. Du Bois, the claimant, by the terms of which Mr. Meiggs was to pay Mr. Du Bois ten million and a half dollars ($10,500,000) for completing the road according to the stipulations and conditions of Mr. Meiggs’s undertaking with the Peruvian Government. This arrangement between Messrs. Meiggs and Du Bois received the sanction of the Government in writing, and, in the ordinary formal manner, by the officer of the executive charged with such duties. The contract, the construction material on hand, the control of the road, together with all the legal and equitable rights and liens on the road which Mr. Meiggs had acquired by virtue of the stipulations of the twentieth article, were at the same time, in due form, transferred by Mr. Meiggs to the claimant Du Bois, who immediately recommenced the work, and in the procuring of construction material, obtaining laborers, building houses for their accommodation, building of a principal depot at Chimbote for construction material, warehouses and storehouses for the safe keeping and protection of said material as was portable, and in the general preparations necessary to the successful prosecution of the work, expended large sums of money.
The work went on until the year 1877, when the Peruvian Government, being then largely in debt to Mr. Du Bois, ceased altogether to meet the monthly payments provided for by the stipulations of the contract, upon which, he was obliged to stop the progress of the work, the arrearages then due to him being $400,000. Thirty-five miles of the road were completed and in running order, well stocked with engines, cars, machine shops, stations, and buildings. There was also on hand a large amount of rails, fastenings, sleepers, water-pipes, and other [Page 109] articles essential to the construction of the road and carrying on of the work, all deposited at Chimbote, and in addition a large amount of railroad plant, tools, and material for the work of construction, the private and personal property of the claimant, Mr. Du Bois.
In the autumn of 1877 Mr. Henry Meiggs died, and soon after Mr. Du Bois renewed his Meiggs contract with Mr. Charles Watson, the executor and principal legatee of Meiggs and his legal representative, and by the terms of this new contract Watson acknowledged the amount then due by Peru on the Meiggs contract to be three hundred and fifty-two thousand eight hundred soles, or dollars ($352,800), for the construction of the railroad. Mr. Du Bois continued to hold possession of the road under the stipulations of Article 22 of the contract. He ran that portion that was finished about thirty-five miles, and from the scanty earnings obtained a small surplus over running expenses with which he was enabled in part to pay the actual expenses of caring for the property at Chimbote, with which he hoped to resume operations on the road.
Matters remained in this situation until September, 1880, the war between Chili and Peru having in the mean time (1879) broken out. In that month (September, 1880), when the Chilians had become masters of the sea and of much of the southern part of the territories of Peru, and the armies of the belligerents were confronting each other near Tacna and Arica, when the northern part of Peru was entirely unmolested, and no Peruvian troops were in that part of the Republic where Chimbote is situated, when the nearest Peruvian forces were at Lima, 250 miles south of Chimbote, and the main bodies of both the contending forces at Tacna and Arica, about 600 miles distant in the same direction from Chimbote, a raid was made on the northern part of Peru by a Chilian military force under the immediate command of General Lynch. The force landed at Chimbote on the 10th of September, 1880, and took possession and control of the town as well as the country surrounding it. There was not a single gun fired in resistance to the Chilians and not a Peruvian soldier in the town or neighborhood, as the memorialist states.
Upon landing, the Chilian troops took possession of the railroad, station-house and other buildings, and the grounds connected with it, in which were stored the rolling stock, equipments, and material for the building of the road, and also the individual property of the claimant which he had purchased and brought there for the purpose of construction. These houses and grounds they appropriated as barracks and camping ground, and so soon as they were in occupation, the troops began an indiscriminate and wanton plundering and spoliation of all movable property in and about the premises, notwithstanding the fact that the commanding officer had been notified by the United States consular agent at Chimbote that the property belonged to Mr. Du Bois, a citizen of the United States, and a neutral, and the further fact that the consular agent had received assurances that Du Bois’s right as a neutral should be respected, his property protected from injury, as far as possible, and that nothing should be destroyed or taken away without a receipt or order being given therefor. Upon remonstrance being made by the consular agent to the Chilian officer in command, a small part of the articles taken away were temporarily returned, but the plundering, in the language of Mr. Hayball, the consular agent, went on, and continued “daily thereafter, openly, it being taken away by the launch load and shipped on board the Chilian vessels in the harbor, up to the very last day of the occupation; material from the station was [Page 110] sold about the streets of Chimbote by the very men appointed to guard it. * * * Not a single receipt was given in any instance, either by the officers or men, for any article taken.”
Before the re-embarkation of the Chilian troops all the locomotives and rolling stock in the station were destroyed or permanently disabled, and a large stock of lumber and other material set on fire and totally consumed, all by express order of General Lynch, the commander of the expedition. The exhibits Nos. 5a, 5b, 6a, and 6b, show the actual losses to the claimant from the appropriation, plundering, and destruction of property during the nine days’ occupation of the place by the Chilian forces (September 9 to 18), to have been 304,398 silver soles. These inventories, as it appears from the memorial and statement, were made immediately after the occurrences by the “chief of traffic,” the “station-master,” and the claimant’s bookkeeper, all of whom were familiar with the facts as well as with the property and values of the several articles.
After the evacuation of Chimbote by the Chilian troops, Mr. Du Bois re-entered upon and took possession of the railroad, and endeavored to repair the station-houses, rolling stock, and other property not completely destroyed or carried off, in the hope that on the return of peace he might be able to resume operations and reimburse himself—in part, at least—for the losses he had directly or indirectly suffered. In December, 1881, however, he received information that Chilian vessels had been dispatched to Chimbote, with orders from that Government to take possession of and remove all rails, cross-ties, and other material of said railroad remaining in his possession.
Upon getting this information Mr. Du Bois applied to the United States minister at Lima and entered a protest setting forth the facts, and on the 30th of the same month the claimant delivered in person to General Patricio Lynch, the commander of the Chilian forces, a copy of this protest. Notwithstanding the protest, however, the military orders were carried out, and during the months of December, 1881, and January, 1882, all the rails, plates, bolts, nuts, spikes, cross-ties, water-pipes, and other material not destroyed or taken in September, 1880, were carried on board the Chilian vessels then in the harbor of Chimbote, and taken, as the claimant was informed, to Chili, to be used in the construction of railroads and water-works in the southern part of that Republic, more than a thousand miles distant from any point that had been touched by the war.
As soon after as it was possible, Mr. Du Bois carefully prepared a detailed inventory of the property taken in this second visitation or raid, which was sworn to by him before the United States consular agent at Chimbote, and shows the loss he suffered on this occasion to have been one hundred and nine thousand five hundred and thirteen soles ($109,513), and the estimates of his loss of profits on the unperformed parts of his contract, which he was by this second seizure and spoliation rendered wholly unable to go on with, to be one million fifty thousand four hundred and eighty-eight soles ($1,050,488). His actual losses for property stolen, destroyed, and appropriated, it will thus be seen, were 413,911 silver soles, and added to this is his estimated losses resulting from the breaking up of his enterprise, one million fifty thousand four hundred and eighty-eight soles ($1,050,488), making the total demand 1,464,399 soles.
Mr. Du Bois, being thus disabled from further pursuing the enterprise and carrying out his contract, was compelled to abandon the whole matter, which he did on the 20th of July, 1882, having first [Page 111] secured from Mr. Watson, the legal representative of Mr. Henry Meiggs a release from the contract and at the same time a transfer and assignment of all interest in the present claim in these words:
In consideration of the rights of Mr. Du Bois for previous debt, for profits from failure to carry out the work, and for damages sustained, I, Charles Watson, have agreed to cede and transfer to him all my rights to the indemnity to be exacted from the Chilian Government for the materials seized and destroyed by authorities of its dependency, and for damages they have caused to the contractors of the Chimbote Railroad.
Mr. Du Bois thus becomes the sole representative of the claim now put forth. He has returned to his home in the United States, and now asks the interference of this, his own Government, in the assertion of his rights against that of Chili.
In view of these facts, and in anticipation of some questions that may possibly arise in your discussion of them with the minister for foreign affairs of Chili, I submit some observations which you will make such use of as you may find convenient and proper. In the first place, it is to be noted that from the moment of the breaking out of hostilities between Chili and Peru to the time of leaving the latter country, Mr. Du Bois maintained in good faith the strictest neutrality between the belligerents, never interfering by act, word, or deed for or against either. He had, moreover, no settled or permanent domicile in Peru, his absence from his home in the United States being for the single and specific purpose of constructing and building the Chimbote Bail-road. This work he undertook under a contract with the late Henry Meiggs, a citizen of the United States, who held a contract with the Government of Peru for the same work, and the transfer from Mr. Meiggs to Mr. Du Bois was approved by that Government.
The property destroyed was far from the seat of war and practically inaccessible by land, so that apparently the railroad and its appliances could not be used by the Peruvian authorities in the prosecution of the war, they being without force at sea to transport the rolling stock and materials to a point where they could be effectively used.
It appears, therefore, that no good end could be accomplished by the destruction of this property, for the taking or destroying of neutral property in an enemy’s country must be clearly necessary to the accomplishment of the just ends of the war, unless, indeed, the professed neutral has taken sides in the conflict or rendered aid or comfort to the belligerents, which does not appear in this case.
The second attack upon the property appears to be still less justifiable. At that time Chili was in possession of Lima; no Peruvian troops were in the neighborhood of Chimbote, and the property seems to have been appropriated for the purpose of constructing another railroad within the territory of Chili.
General Lynch, at the time of the first raid, seems to have recognized the right of Mr. Du Bois to reimbursement, for that distinguished Chilian leader stated to Mr. Hayball, the official representative of the United States at Chimbote, that the rights of Mr. Du Bois as a neutral should be respected, his property, as far as possible, protected, and that nothing should be destroyed or taken away without a receipt or order being given therefor. General Lynch was at that time the only representative at Chimbote of the authority of Chili. How far his promise was fulfilled in the occurrences of September and December, 1880, and the subsequent occurrences of January, 1881, is a question that must be left to the determination of the Chilian Government. But it is the duty of this Government to see that the rights of one of its citizens [Page 112] who had embarked his fortune in a legitimate enterprise are not disregarded, and should his property have been appropriated or destroyed in contravention of justice and the laws of nations, it becomes incumbent upon the United States to urge upon Chili the reimbursement of his just claims.
It is unnecessary to examine the rights of Du Bois as against the Government of Chili in the light of the rules and principles of international law. Without waiving a resort to settled doctrines, the admission of Chili of her liability for losses incurred by other neutrals through similar acts on the part of Chilian authorities relieves this Government from any such discussion. In the light of treaties concluded with other countries, but particularly with France, and relying upon the friendship which has existed so long between the two Republics, the President directs you to present this claim to the minister of foreign affairs, urging that Mr. Du Bois strictly observed his neutral character and relations during the war; that he was temporarily in Peru for a special and particular purpose; and the fact that provision has been made in behalf of other friendly neutrals for losses of a like character. The President expects the early attention and just consideration by the Government of Chili of the claim of this American citizen: and while the estimate of the indirect damages which have resulted to Mr. Du Bois in this connection may, from the nature of such claims, in fairness be open to revision either in extension or reduction, it is none the less expected that such an indemnity will be promptly admitted, and that the direct losses, which are readily ascertained, will be speedily acknowledged and paid with interest.
You will report the result of your proceedings to the Department.
I am, &c.,