ELISEO PAYAN, President of the Senate to Legation of the United States , Bogotá , June 2, 1876 . The foregoing is a correct translation from Spanish to English of an authenticated law, No. 33, of May 26, 1876, now on file in this legation. WILLIAM L. SCRUGGS, May 26, 1876

Law of May 26, 1875, (No. 33,) to authorize the executive power to negotiate for opening canal communication between the Atlantic and Pacific Oceans.

The Congress of the United States of Colombia decrees:

• Article I. The government of the United States of Colombia favors a project of canal communication between the Atlantic and Pacific, across the Isthmus of Darien. Said canal to be without locks or tunnels, and outside the belt conceded to the Panama Railroad Company.
• Art. II. For this purpose and for the celebration of a contract to which the present law shall give origin, the national executive is hereby authorized to treat with any individual or company which may offer the following securities and agree to the following conditions:
  • The duration of the privilege to be ninety-nine years from the time the canal is put into public service, either in whole or in part, and from the time the company shall commence collecting transportation duties.
  • From the date of the contract for opening the canal the government can neither construct itself, or authorize the construction by others, of another canal between the two oceans through the territory mentioned in the first part of this article; and should the grantee or contractor construct a railway auxiliary to the canal across said territory, neither the government nor any of its grantees can construct another interoceanic railway in the same territory during the time conceded for the opening and benefice of the canal.
  • The exploration, survey, and fixing of the line of the canal shall be at the expense of the grantee; said survey and exploration to be made by an international commission of competent engineers, whereof two shall be Colombians. The commission of engineers shall be named within six months from the date of the contract for opening the canal; within the six months next following (excepting unforeseen accidents) the exploration of the general line of the canal shall be made; and within the six months next succeeding the grantee shall make report to the Colombian government or to its diplomatic agent accredited to France or England of the result of the exploration; said report accompanied by duplicate of scientific observations to show whether the proposed enterprise is practicable, and, if so, its probable cost.
  • The grantee shall have eighteen months’ time in which to organize a company for the opening of the canal, counting from the end of the last six months, mentioned in condition 3.
  • Within ten years from the date of the formation of the company for its opening, the canal must be completed and ready for the public use; but if, after the completion of more than one-third of the entire line, and owing to circumstances independent of the will of the grantee it should be found impossible to complete the whole within the ten years specified, the executive may concede an extension of four years more.
  • The canal must have sufficient width, depth, and other conditions necessary to its navigation by steam or sailing vessels of from five to six hundred tons.
  • The necessary wild lands for excavation of the canal and its harbors, the erection of wharves and warehouses, and all necessary appendages, as also for the construction of a railway, should that be decided upon, are conceded to the grantee or contractor, provided said wild lands, together with the canal and the railway, revert to the republic at the expiration of the time of the privilege.
  • A belt of land not to exceed one hundred metros in width on either of its banks is likewise conceded for the use and benefit of the canal: Provided, That the neighboring proprietors be not deprived of a perfect right of easy access to its ports and the free use of any and all roads that may be opened thereto by the grantee or the company; and
  • Should the territory through which the canal may pass or the railway be constructed, be the property of individuals, the grantee will have the right to its appropriation, which shall be done by the government according to legal formalities, the proprietors to be indemnified therefor at actual value by the grantee.
• Art. III. Within six months from the time in which the commission organized for the exploration of the canal-route shall have reported the results of their exploration the grantee or contractor shall deposit with the bankers of the republic in London $150,000, or 750,000 francs, as a guarantee of good faith.
• Art. IV. Two hundred and fifty thousand hectares of wild lands shall be appropriated gratuitously to the grantee or contractor, and this may be done directly by the executive. Said lands, situated on the maritime coasts or on the banks of the canal or rivers, shall be distributed in alternate lots with those reserved by the government. Their survey, in which a commissioner of the government shall take part, shall be at the expense of the grantee.
• Art. V. During the whole time of the privilege it is stipulated to the grantee as follows: The use of the ports situated at the termini of the canal for anchorage of vessels; the embarkation of such merchandise as may be therein for reshipment and transportation through the canal; the use of the necessary intermediate ports for anchorage, and for the deposit of articles and merchandise destined for the canal transit, or such as may have been disembarked therein; but the government of the republic reserves the right to station such officers as it may deem necessary in such ports in order to prevent contraband, and the building of the grantee or company should be so arranged as that one person may discharge this duty.
• Art. VI. The ports at the termini of the canal shall be free to the commerce of all nations, and in none of them can import-duties he collected except upon such articles as may be designed for consumption in the republic. Consequently, said ports shall be considered habilitados from the time the canal is opened, and there shall be established therein such custom-houses as the government may deem necessary to the collection of import-duty on such articles as may be destined for other ports of the union and the prevention of the introduction of contraband. The officers which the government may deem necessary to this service shall be paid by the company, and their salaries shall be fixed by the government.
• Art. VII. The government shall declare the waters of the canal, from ocean to ocean, as well as the ports at its termini, neutral for all time. Consequently in case of war between other nations, or between any one of them and Colombia, the canal transit shall not be interrupted thereby. All merchant vessels or citizens of any nation of the world may enter and cross the canal transit without molestation or detention; provided that no foreign troops be permitted to pass thereby, except by permission from the Colombian Congress.
• Art. VIII. The entrance to or transit of the canal shall be most rigorously prohibited to war-vessels of any nation or nations at war with other powers, and whose manifest purpose may be to take part in hostilities.
• Art. IX. The grantee or contractor shall have the right to import, free of duty, such instruments, machinery, building material, victuals and clothing for laborers, &c., as may be deemed necessary during the time allowed for the opening the canal.
• Art. X. No municipal or national contribution-tax or impost of any kind shall be levied upon the canal, the ships traversing it, or upon the company’s tugs, warehouses, wharves, machinery, or other works pertaining thereto, and which, in the judgment of the national executive, may be necessary to the service of the canal during the time conceded for its construction and use.
• Art. XI. Passengers, money, precious metals, merchandise, and articles and effects of every kind, passing through the canal, shall be exempt from all municipal or national transit-tax, as well as from imposts of whatever kind. And this exemption shall be extended to all merchandise or effects deposited in the ports, warehouses, or wharves of the company, whether destined for the interior or exterior. But all articles destined for consumption in the republic shall be liable to such national impost-duty as may be established; the collection of such duty to be made at the instance of government officials and according to the regulations dictated by the executive, when the goods are taken out of the company’s warehouses.
• Art. XII. Passengers by the canal transit will not be required to have or exhibit passports, except in time of foreign war or internal commotion, when the executive may demand them. But vessels carrying their charters and other necessary papers, as provided by public laws and treaties, shall pass the canal transit freely: Provided, That vessels without such papers, or, having them, refuse to exhibit them, may be detained and proceeded against according to the laws.
• Art. XIII. Vessels carrying articles destined for the works of the canal may, in conformity with Article IX of this law, enter freely at any point of easy access to one or the other terminus of its surveyed route.
• Art. XIV. The canal enterprise shall have the character of a public benefice and utility.
• Art. XV. The grantee or contractor shall transport gratuitously, in his vessels, men destined for the service of the union; likewise such police force as may be necessary to traverse the route either by rail or water in the interests of exterior security and peace; and should the company be without vessels, it is still obligated to pay the passage of such troops or police.
• Art. XVI. All the necessary regulations for the prevention of the introduction of contraband articles under this privilege, will be prescribed by the Colombian government.
• Art. XVII. During the period of the privilege granted under this law, the grantee shall have the exclusive prerogative of establishing the schedule of transit tariffs, including rates of storage in his warehouses, the use of his piers and wharves, but said tariff rates shall not exceed sixty-five cents per ton of ballast, nor two dollars per ton of cargo. And, in addition to the tariffs of the company, the government will be entitled, as a national rent, to twenty-five cents upon each ton of transit in the canal. Should the company find it necessary to establish a system for gauging the tonnage of vessels, this must be in accord with the government.
• Art. XVIII. The grantee, or his successors to the franchises herein provided, cannot assign or hypothecate them in any manner whatever, to any foreign government or nation.
• All differences of construction, or other disputes that may arise from the grant of franchise here made, shall be decided by the federal supreme court.
• Art. XIX. A reserve of ten percent. of the stock issued by the company organized by the grantee, may be held in favor of the founders and abettors of the canal enterprise as a capital stock for his or their personal benefit.
• Art. XX. The grantee or his representatives shall forfeit the franchises herein authorized or acquired by contract, made in virtue hereof, under the following-named conditions:
  • Should they fail to deposit, in the manner stipulated with the executive, the sum agreed upon as a guarantee of good faith.
  • Should the work not be formally commenced within the first year of the ten allowed for the construction or the opening of the canal; in which case, the sum deposited as guarantee, mentioned in Article III, will be forfeited to the republic.
  • If, at the expiration of the time fixed in condition 4, Article II, and of the extension therein provided for, a survey and location of the route of the canal shall not have been made.
  • Should the grantee or company violate the prescriptions of Article XX (?); or
  • Should the transit of the canal be suspended, except by reason of unforeseen circumstances, held excusable under the common law, for more than six months.
• Paragraph.—In the cases 2d, 3d, 4th, and 5th, above mentioned, the federal supreme court shall decide whether or not the franchises shall have become extinct.
• Art. XXI. In all the foregoing conditions under which the franchise is declared lost, the wild lands mentioned in stipulations 6th and 7th of Article II, as also those alienated under Article IV, shall revert to the republic, likewise all edifices, materials, works, &c., pertaining to the canal or company connected therewith.
• Art. XXII. The diplomatic or consular agent of the republic resident in the country wherein the company is domiciled, shall be a member of its board of directory, and shall, under the by-laws of the company, enjoy all the prerogatives of the other members.
• Art. XXIII. The maintenance of such public force as may be deemed necessary to the security of the interoceanic transit shall be at the expense of the company, and estimated as part of the general expenses of the enterprise.