Mr. Fish to Mr. Hurlbut
Sir: I transmit a copy of a letter of the 20th instant, addressed to this Department by David Hoadley, president of the Panama Railroad Company, setting forth the reasons for the failure of that company to pay the subsidy due by them to the Colombian government on the 15th of August last, and subsequently. The letter also represents that information had been received that that government had directed its attorney general to commence suit against the company on the isthmus for the amount due, and to attach the company’s property for double that sum. A clause of the contract of the company is quoted to show that such a proceeding would be in violation of that instrument.
This Government must presume that, in entering into the contract, the company acted with deliberation, took into consideration both the ability and the disposition of the Colombian government to fulfill its part of the bargain, and its own ability to do the same under any contingencies, however unexpected or adverse. The abstract right of that government to hold the company accountable for any breach of the contract will not be questioned. This Government, however, will expect that if the Colombian government should deem it advisable to hold the company to the literal performance of their part of the contract, that it will itself be guided, in enforcing the penalty, by a strict observance of the terms. If, however, that government should take a more liberal view of the subject, and should cancel the contract of 1867, as proposed by the company, this Government, in view of the large interests of esteemed citizens embarked in the enterprise, would regard that course as a proof of a friendly disposition on the part of Colombia. It is not usual for this Government officially to interfere in matters of contract between citizens of the United States and foreign governments. There is no determination to disregard the rule in this instance. The considerable public interests involved in the matter may, however, be deemed to warrant you in at least making such informal representations upon the subject as may induce that government to pause in committing any harsh and premature act to the prejudice of the company. This course you will consequently pursue.
I am, &c.,