823.73 All America Cables Co./17: Telegram

The Ambassador in Peru (Gonzales) to the Secretary of State

LIMA, April 6, 1921—5 p.m.

[Received 11:58 p.m.]

23. Your April 4, 6 p.m. Saw President today, said he had already cabled full statement to Ambassador in Washington. Stated he would withhold signature for time but had incurred moral obligations to Marconi people and if a strong American company could give him grounds for changing plans already perfected it must act promptly. His preference for United States companies was so strong that he would strain points to have them operate in everything but he had to consider interests of country and while operation of the land telegraph and postal business by outsiders was imperative the agent of All America Cables Company had told him some time ago his company could not undertake such operation. Doubtless the Marconi Company would not have interest in operating the land wires and postoffice without the wireless, therefore an offer by Americans to have force should include the three.

GONZALES

823.73 All America Cables Co./24: Telegram

The Ambassador in Peru (Gonzales) to the Secretary of State

LIMA, May 1, 1921—noon. [Received May 2-9:20 a.m.] Hearing President had approved

34. Your April 30, 6 p.m. Marconi contract, I called on him and he confirmed report. I expressed surprise this final action taken without previous notice to me as at our last conference on the subject nearly three weeks ago matter was left open for American bids. He expressed great regret but said that after representative of All America Cables had the previous week presented to him all exceptions taken by that company to Marconi contract and he had acted favorably on those exceptions and the representative of the company had expressed satisfaction and stated that his company had no interest in the part of Marconi undertaking for operating telegraph and postal department, he, the President, supposed Department's interest in matter was ended.

'Not printed.

GONZALES

PROTOCOL BETWEEN THE UNITED STATES AND PERU, MAY 21, 1921, PROVIDING FOR THE ARBITRATION OF THE LANDREAU CLAIM

423.11 L 23/297

Memorandum by Mr. Hallett Johnson of the Division of Latin American Affairs, Department of State

[WASHINGTON,] January 10, 1920. A memorandum is attached herewith giving the origin and early history of the Landreau claim. As is shown by the negotiations carried on in 1912 and 1913, Peru has in effect admitted certain liability, and the method of adjusting the claim is really the only matter now requiring settlement. The negotiation began with the admission of Peru of a liability to the American claimants. (See Memorandum of February 5, 1914, File No. 423.11 L 23/253 1/2 and 423.11 L 23/244a.10)

During the years 1912 and 1913 negotiations were carried on for the conclusion of a protocol and several draft protocols proposed by the two governments were considered.

On November 15, 1913 an instruction 10 was sent to Minister McMillin enclosing a copy of a proposed protocol of September 21, 1912,10 and instructed him to state that the United States expected it to be used as a basis for arbitration.

In a telegram from Peru dated January 29, 1914 10 the Minister reports no progress toward obtaining acceptance of the protocol for arbitration owing to so many changes in the portfolio of Foreign Affairs of Peru.

On December 7, 1919 a telegram 10 was received from the American Minister stating that a new protocol, following practically the same lines of the others, had been received from the Minister of Foreign Affairs which proposed to submit the question, re settlement of Landreau case, to The Hague Tribunal.

On December 10, 1919 a despatch 10 was received from the American Minister at Peru enclosing a note from the Minister for Foreign Affairs, in which was enclosed a protocol, which, in the opinion of the Peruvian Government, may serve as the text for the arbitral convention in the final disposition of this claim.

H[ALLETT] JOHNSON]

10

Not printed.

During the years of 1844-1859, John T[héophile] Landreau, a Frenchman domiciled in Peru, made extensive explorations along the coasts and adjacent islands of that country and that in the course of these explorations he discovered large and valuable deposits of guano; that finding himself financially crippled because of the expenditures incident to these explorations, he applied, in 1858, to his brother, John C[elestine] Landreau, then residing in Louisiana, U.S.A., for financial assistance, which assistance was granted by his brother John C., who in return for this assistance was to share equally with John T., any reward which the Peruvian Government might allow for these discoveries.

In 1865, John T. after having ineffectually attempted to secure a recognition under the laws of Peru of his right to compensation for his discoveries, entered into a contract with the Government of Peru by which Peru, in terms of its own choosing, stipulated to pay to Landreau an average of six per cent of the net proceeds of the first five million tons of guano shipped from the deposits of guano discovered by him; that the consideration, upon Landreau's part, was the furnishing to the Peruvian Government of a list of his discoveries, and that list was furnished; that in making this contract John T. acted in two capacities, as a principal (for himself), and as an agent for an undisclosed principal (his brother, John C.), and that Peru has since had full and repeated notice of the American interest in the contract then made with the Peruvian authorities. The records also show that in 1868 the Peruvian Government sought illegally to repudiate this contract of 1865; that beginning with 1869– 1870 that country made extensive shipments of guano from the Landreau deposits, the shipments apparently equalling and in all probability far exceeding the five million tons stipulated in the contract; and that it then neglected and refused and has ever since neglected and refused, though repeatedly requested so to do, to pay to the American claimants their share of the proceeds of the guano so sold.

The essential facts set forth above have been admitted by Peru in the governmental order that accompanied the settlement which that Government made with J. T. Landreau in 1892. They not only admitted that Landreau had made important discoveries, but gave figures as to the amount of guano shipped from them. This order also states that the contract of 1865 was valid; that large sums were due under the contract; that Landreau had exhausted his remedies before Peruvian Tribunals, and that therefore that clause of the contract which forbade an appeal to diplomatic intervention was nullified and the matter was ripe for consideration by the Foreign Offices of the two Governments.

The Peruvian Government had notice of the American interest, as shown by the fact that in 1874 and again in 1877 the Peruvian Foreign Office acknowledged the receipt of documents expressly setting forth the American interest in the Landreau claim, the instrument transmitted in 1877 being a copy of a contract by which the Landreau brothers readjusted their respective interests, and by the further fact that from 1874 to 1890 the matter of the American interests in the Landreau claim was, through diplomatic channels, otherwise repeatedly called to the attention of the Peruvian Foreign Office by the American representative.

The Department was unable to assent to the contention of the Peruvian authorities that the settlement of 1892 with J. Theophile Landreau was to be regarded as a liquidation of the entire Landreau claim, and that, therefore, Peru's recognition and satisfaction of the American claimants in this case would amount to a double payment of a single claim. On the contrary, the Department insisted that as the Peruvian Government had been repeatedly informed of the existence of the American interest by documents deposited in the archives of the Peruvian Foreign Office, it was not competent for that Government and J. Theophile Landreau to enter into any settlement of the Landreau claim that could be legally or equitably regarded as a satisfaction of the American interests. There is nothing in the records to show that either party was or pretended to be authorized to represent in the settlement of 1892, this interest which the Peruvian Government is seeking to bar.

423.11 L 23/294

The Secretary of State to the Ambassador in Peru (Gonzales)

No. 1

WASHINGTON, May 6, 1920. SIR: Mr. Smith's despatches Nos. 431 and 432, of December 10, and December 17, 1919,11 concerning the proposed arbitration of the Landreau claim against Peru, were duly received, and the Protocol submitted by the Peruvian Government providing for arbitration by The Hague Tribunal, a copy of which accompanied your despatch of December 10, has been carefully considered.

I am very much gratified that the Peruvian Government has shown in a definite and concrete way its willingness to submit this longstanding claim to arbitration, with a view not only to doing justice to the claimants, but also to removing, once for all, a question concerning which there has been for many years a divergence of opinion between this Government and the Government of Peru. However,

"Neither printed; William Walker Smith had been Chargé at Lima. 115367-36-vol. II-43

taking into consideration all of the facts and circumstances, I believe that it would be more convenient and less expensive to both of the Governments concerned to have this matter settled by a special arbitral Commission, to sit at some place in the Western Hemisphere, rather than to submit it to The Hague Tribunal. Accordingly, the Department has drawn up a new Protocol, providing for the submission of the case to a Commission to sit at Habana, Cuba, and duplicate copies of this Protocol are enclosed herewith.13 If, for any reason, the Peruvian Government objects to having the Commission sit at Habana, this Government will agree to either Caracas, Venezuela, or Ottawa, Canada.

It is deemed advisable to submit the whole question of the claim for arbitration to the Commission upon its merits, rather than to attempt to specify the various points concerning which there has been disagreement. It will remain for the agents of the two Governments to discuss these points before the Commission. Therefore, this Government is willing to omit from the Protocol any statement involving an admission of liability on the part of Peru, although such admission appears to have been contained in the note of August 13, 1912,18 from the Peruvian Foreign Minister to the American Minister, and the Protocol which was proposed by the Peruvian Foreign Minister at about the same time, and communicated to the Department in the Legation's telegram of September 21, 1912.18 In short, it is proposed to submit to the Commission the whole question of liability, and not merely the question of the amount.

As you will note, the proposed arbitral Commission is to be composed of three members, one to be selected by each Government interested, and the third to be selected by the first two, from among the nationals of The Netherlands, Norway, or Denmark.

The fourteenth Article of the proposed Protocol contains a specific provision for the compensation to be granted to the Commissioners. While the Department is inclined to believe that it is well to include such a provision in the Protocol, in order to avoid any possible misunderstanding, it does not insist upon its inclusion.

You will please present this matter at your earliest opportunity to the Peruvian Foreign Minister, in accordance with the foregoing statement, and inform the Department fully in writing of his reply. It would also be well for you to telegraph briefly the substance of the reply.

With reference to the suggestion in Mr. Smith's despatch of December 10, last, I believe that it would be well for you to avail yourself of a suitable opportunity to mention this matter informally to

13 Not printed.