Doc. No. 75. 169 



The commissioner of the American Atlantic and Pacific Canal Compa- 

 ny" has concluded his contract, and both treaty and contract are now 

 awaiting the action of the legislative chambers, which have been called 

 to meet in special session at Managua, on the 15th of this month. 



A copy of the contract is forwarded herewith, (A,) and precludes the 

 necessity of any extended reference here. It is far the most favorable in 

 its terms, for all parties, of the many which have been concluded for the 

 same object, and carries with it an air of earnestness not to be found in 

 any of its predecessors. The simple fact that the company proceeds at 

 once to make outlays of money, will be sure to inspire confidence. It 

 will be observed that the term of the contract is ninety-seven years, 

 (eighty-five years after the completion of the work, for which twelve years 

 are allowed,) with a subsequent interest of twenty years; while the con- 

 tracts of Palmer, the King of the Belgians, Louis Napoleon, <fce., &c., all 

 fall below fifty years. This more than compensates for the interest which 

 is allowed the State in the net profits of the work. It will also be ob- 

 served that the grant is not only for a canal, but for a rail or carriage 

 road — a provision which will enable the company to open a route at once 

 across this isthmus more rapid, easier, cheaper, safer, and more pleasant 

 than that by Panama. In distance this route will save 300 miles 

 on the Atlantic and upwards of SOO on the Pacific, besides passing 

 through one of the most magnificent and salubrious regions on the conti- 

 nent. It is only necessary to spend a few thousand dollars in clearing 

 out the obstructions on the San Juan, so as to permit the ascent of a small 

 steamer to open easy water communication to Grenada, from which place 

 to Realejo there is now a good road for the most part as level as the streets 

 of Washington. If steamers should touch at San Juan and Realejo, or 

 rather run so as to connect these points, the communication with Califor- 

 nia would be materially shortened, and letters, &c., transmitted some 

 days sooner than by way of Panama. 



I have had inserted in the contract provisions to the effect — 



1st. That the company (officers, &c.) shall always be citizens of the 

 United States, and that a majority of the stock shall always be owned by 

 American citizens. 



2d. That the contract shall be held inalienably by the individuals 

 comprising the company, and that the company shall never become con- 

 nected with or dependant upon any other company, whatever its object . 



3d. That the citizens and vessels, (Jfcc, of all nations shall be allowed 

 to pass through the canal on the same terms with those of the United 

 States, provided such nations shall first enter into the same treaty stipu- 

 lations with Nicaragua for the protection of the canal. 



4th. That the stock books of the company shall always be open for 

 inspection, and the tariff of rates on the canal shall be placed at the lowest 

 point consistent with the interests of the company, and shall never be 

 changed except after six months' notice given in the principal ports of the 

 United States. 



These provisions include all the suggestions made by the department, 

 with a single exception, viz: the specific determination of the rates of 

 transit. This I found impracticable, for reasons which must, I think, be 

 conclusive. In the first place, no work at all, corresponding either in 

 extent or character with the proposed canal, exists in the world, Avhich 

 might serve as a basis to proceed upon; secondly, the cost of the work 

 must be an important consideration in fixing such rates j and this_, without 



