&
58TH CONGRESS, | SENATE. - } Document
2d Session. No. 206.
PAN-AMERICAN RAILWAY
REPORT SUBMITTED TO THE SECRETARY OF STATE BY
CHARLEs M. PEPPER, COMMISSIONER TO CARRY
OUT THE RESOLUTION OF THE SECOND
INTERNATIONAL CONFERENCE
OF AMERICAN STATES
TRANSIVIITTED BY THE PRESIDENT TO CONGRESS
MARCH 15, 1904
With Map
March 15, 1904.—Read; referred to the Committee on Foreign Relations
and ordered to be printed. -
WASHINGTON
GOVERNMENT PRINTING OFFICE
1904
Transportation
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Message of transmittal ---------------------------------------------------- 5
Permanent committee -----------------------------: - - - - - - - - - - - - - - - - - - - - - - - 7
Countries visited --------------------------------------------------------- 7
Intercontinental survey----------------------- -------------------------- 10
MEXICO.
Pan-American and interoceanic lines - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 12
Remarkable growth ------------------------------------------------------ 13
Laws and policy---------------------------------------------------------- 14
United States capital ----------------------------------------------------- 15
CENTRAL AMERICA.
Geographical conditions -------------------------------------------------- 16
Guatemala:
Recent contracts ----------------------------------------------------- 17
Laws and concessions------------------------------------------------- 18
Salvador---------------------------------------------------------------- 19
Honduras---------------------------------------------------------------- 19
Nicaragua:
Government projects------------------------------------------------- 21
Agriculture and mines------------------------------------------------ 22
Costa Rica:
Present System----------------------- > - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 23
Extensions and variations -------------------------------------------- 23, 24
Panama ----------------------------------------------------------------- 24
SOUTH AMERICA.
General situation--------------------------------------------------------- 25
Argentine Republic:
Bolivian extension --------------------------------------------------- 26
Commerce and freights ----------------------------------------------- 26
Era of construction and earnings -------------------------------------- 27, 28
National policy ------------------------------------------------------ 28
Chile:
Trans-Andean law---------------------------------------------------- 31
Work in PTOgreSS- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 33
Longitudinal line ---------------------------------------------------- 34
Nitrate traffic -------------------------------------------------------- 35
Bolivia:
Acre indemnity and President's policy-- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 36
Pan-American sections------------------------------------------------ 37
Present projects------------------------------------------------------ 38
Rubber and mines-------. . . . . . . . . . . . . ------------------------------- 39
4 CONTENTS.
Peru: Page.
Cerro de Pasco line--------------------------------------------------- 41
New railroad guaranty law-------------------------------------------- 42
General routes ------------------------------------------------------- 42
Peruvian corporation earnings----------------------------------------- 44
Franchises in force --------------------------------------------------- 44
Ecuador----------------------------------------------------------------- 46
Colombia:
Feasible lines -------------------------------------------------------- 47
Pan-American estimates ---------------------------------------------- 48
Brazil:
Reaching the Amazon ------------------------------------------------ 50
Intercontinental variations-------------------------------------------- 50
Systems in operation ------------------------------------------------- 51
Uruguay----------------------------------------------------------------- 52
Paraguay --------------------------------------------------------------- 54
Venezuela --------------------------------------------------------------- 54
Present mileage ---------------------------------------------------------- 55
Branch lines------------------------------------------------------------- 55
Water transportation ----------------------------------------------------- 56
Gauger and engineering--------------------------------------------------- 57
Application of electricity-------------------------------------------------- 58
Labor cost --------------------------------------------------------------- 60
Principles in common: .*
Similiar laws--------------------------------------------------------- 61
Mutual defense------------------------------------------------------- 62
Markets and trade:
Brazil and Argentina as customers------------------------------------- 63
Neglected opportunities----------------------------------------------- 64
Unsatisfactory conditions --------------------------------------------- 66
European rivals------------------------------------------------------ 66
Mississippi Valley commerce - - - - - - --- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 67 -
Concluding observations:
Suggestions ---------------------------------------------------------- 68
Acknowledgments---------------------------------------------------- 68
APPENDIXIES.
Appendix “A,” Mexican railway statistics--------------------------------- 70
Appendix “B,” Argentine railway statistics-------------------------------- 72
Appendix “C,” Honduras statement-------------------------------------- 74
PAN-AMERICAN RAILWAY.
M E S S A. G. E.
FROM THE
PRESIDENT OF THE UNITED STATES,
TRANSMITTING
A LETTER, FROM THE SECRETARY OF STATE SUBIMITTING A
COPY OF THE REPORT OF THE COMMISSIONER, APPOINTED
TJNDER, AUTHORITY OF THE SUNDRY CIVIL APPROPRIATION
ACT APPROVED MARCH 3, 1903, TO CARRY OUT THE RESOLU-
TION WITH RESPECT TO THE PAN-AMIERICAN RAILWAY
ADOPTED BY THE SECOND INTERNATIONAL CONFERENCE OF
AMERICAN STATES, HELD IN THE CITY OF MEXICO DURING
THE WINTER OF 1901–2.
To the Senate and House of Representatives:
I transmit herewith, for the information of Congress, a letter from
the Secretary of State, submitting a copy of the report of the com-
missioner appointed to carry out the resolution with respect to the
Pan-American Railway, adopted by the Second International Confer-
ence of American States, held in the City of Mexico during the winter
of 1901–2.
THEODORE ROOSEVELT.
WHITE HOUSE,
|Washington, March 15, 1904.
The PRESIDENT:
The undersigned, Secretary of State, has the honor to lay before the
President the report of the commissioner appointed by the President
under authority of the sundry civil appropriation act, approved March
3, 1903, to carry out the resolution with respect to the Pan-American
5
6 PAN-AMERICAN RAILWAY.
Railway, adopted by the Second International Conference of American
States, held at the City of Mexico during the winter of 1901–2.
The appendix and map referred to in the report will, I am informed
by Mr. Pepper, be submitted at an early date.
Respectfully submitted.
JOHN HAY.
DEPARTMENT OF STATE,
Washington, March 14, 1904.
-*-
REPORT OF CHARLES M. PEPPER, UNITED STATES AND
PAN-AMERICAN RAILWAY COMMISSIONER.
WASHINGTON, March 19, 1904.
SIR: The undersigned, United States and Pan-American Railway
Commissioner, appointed by the President under authority of the
sundry civil appropriation act approved March 3, 1903, to carry out
the resolution of the Second International Conference of American
States, held in the City of Mexico in the winter of 1901–2, with
respect to the Pan-American Railway, has the honor to submit the
following report and accompanying papers:
The Second International Conference of American States approved
the recommendation of the Pan-American Railway committee, the
tenth clause of which is embodied in the third section of the resolution
adopted by the said Conference and is as follows:
That the United States of America be invited to initiate, with the representatives
and diplomatic officers of the other republics accredited in Washington, the adoption
of such measures as may be deemed best calculated to result in sending to the said
republics, within one year, competent and reliable persons whose duty it shall be
accurately to determine the resources of each country and the location and condition
of the railway lines now in operation; the existing condition of their commerce and
the prospects for business for an intercontinental line, in case said line be constructed,
and also to ascertain what concessions each of the respective governments is willing
to grant to the enterprise.
In furtherance of this provision the commission was issued by the
President, and instructions were given by the Department of State to
the undersigned reciting his familiarity, by reason of his service as a
delegate on the part of the United States to the Second Conference,
with the purpose of the mission and what was desired to be determined
and ascertained thereby. The Ministers of the United States accred-
ited to the respective Republics interested in the projected interconti-
mental railway connection were instructed by the Department to coop-
erate with the Commissioner in his labors.
The Ministers accredited in Washington also communicated officially
with their respective governments and facilitated the mission.
The permanent Pan-American Railway committee appointed by the
f*AN-AMERICAN RAILWAY. 7
Second Conference, with headquarters in Washington, extended very
efficient aid to the work. This committee is composed as follows:
Hon. H. G. Davis, of West Virginia, chairman.
Mr. Andrew Carnegie, of New York.
Mr. Manuel de Azpiroz, Ambassador of Mexico to the United States.
Mr. Manuel Alvarez Calderon, Minister of Peru to the United
States.
Mr. Antonio Lazo Arriaga, Minister of Guatemala to the United
States.
The funds necessary to supplement the appropriation were advanced
by the Hon. H. G. Davis and Mr. Andrew Carnegie.
COUNTRIES VISITED BY THE COMMISSIONER.
In pursuance of the resolution of the Second Conference and under
the authority conferred by the Congress of the United States, the
undersigned, in his official capacity, personally visited the Republics of
Brazil, Uruguay, Argentina, Chile, Bolivia, Peru, Ecuador, Panama,
Costa Rica, Nicaragua, Honduras, Salvador, Guatemala, and Mexico,
in the majority of cases going to the capitals to confer with the respec-
tive governments, visiting the commercial centers, and traveling, as far
as practicable, over the route surveyed by the Intercontinental Railway
Commission appointed on the recommendation of the First Inter-
national Conference of American States, held in Washington in 1889–90.
The subject as presented to the governments was on the ground of
national and international polity and the advantage to them of stimu-
lating within their borders the construction of the links in the main
Pan-American Trunk Line and branches, which would form part of
the proposed intercontinental system and which would aid both in
their internal development and their external commerce. The official
character of the mission being understood, it was not necessary to
explain that your commissioner in no way represented private enter-
prise, but instead that his purpose was to gather the facts and give
publicity to the conditions which were likely to inform and encourage
private capital in utilizing the inducements offered by the different
Republics. It is not inopportune at this point to state the very gen-
erous welcome which was extended to the mission and the exertions
which were made by the various governments to promote its aims.
EvKNTS THAT HAVE STIMULATED THE PROJECT.
Since the Second Conference was held in Mexico a number of favor-
able circumstances have combined to give substantial support to the
Intercontinental Railway Project and to show that genuine progress is
being made. Among these events have been:
First. Actual construction work on railroads in Mexico south to the
border of Guatemala and from the terminus of the present system of
8 PAN-AM ERICAN RAILWAY.
railroads in the Argentine Republic north to the frontier of Bolivia
and beyond, thus closing the sections which were open when the sur-
vey of the Intercontinental Railway Commission was made from the
northern limit of Guatemala to the southern boundary of Bolivia.
Second. The marked advance among the various countries in deter-
mining disputed boundaries and settling other questions at issue, by
this means eliminating causes of friction which retarded railway com.
munication among them.
Third. The passage of the law by the Congress of Chile providing
for the construction of the Trans-Andean line, which will give the
Atlantic and Pacific coasts through rail communication.
Fourth. The legislation proposed by several of the republics, and in
some cases, as in Peru, already adopted, with the view of establishing
guaranty funds and other elements of permanent railway policy.
Fifth. The definite conclusion of the question of the Isthmian Canal
and the measures which insure the early construction of this inter-
national waterway.
Progress at both ends.-The importance of the decision of the Mexi-
can Government to prolong its lines to the frontier of Guatemala can
not be overestimated both in the favorable influence on the commerce
of the United States and Mexico, and in the effect on the republics of
Central America by the encouragement to intercommunication which
is thus given. For several years the Mexican lines south remained
stationary, and while this was the condition there was little induce-
ment to construct the intercontinental links through Guatemala and
the other Central American countries. The concession granted for
building a railway which would continue the present system to the
borders of Guatemala was almost contemporaneous with the meeting
of the Second Conference in the City of Mexico. The details of this
enterprise, which in a short time will result in placing the capital of
Guatemala in direct communication with New York are given in a
summary of the countries.
When Mexico was taking steps to prolong its lines to its southern
borders the Argentine Republic was carrying to completion long-con-
sidered plans for extending its system to Bolivia and northward, so that
ultimately Buenos Ayres will be connected with Lima, in Peru. For
a period of years the railroads of the Argentine Republic had their
terminus at the town of Jujuy, 178 miles (286 kilometers) from
the southern limit of Bolivia. Until these lines reached Bolivia incen-
tive was lacking in that Republic to construct railroads which would
form part of the Intercontinental System north and south. Since the
Second Conference closed its sessions the Argentine Republic has taken
measures to prolong the railways not only to the border, but beyond,
into Bolivian territory, under the terms of the convention celebrated
between the two countries. The road is now being constructed. This
PAN-AMERICAN RAILWAY. 9
is of unusual importance to the Argentine Republic, Uruguay, Bolivia,
and Peru.
Boundary disputes settled and railway legislation promoted.—The
delimitation of disputed boundaries and the settlement by diplomatic
negotiations or by arbitration of various controversies have been very
notable within the last few years and have prepared the way for the
closer communication which was not wanted so long as the Sovereignty
of territory was undetermined. It is sufficient to recite some of
these agreements, such as the arbitration of the limits of the Argentine
Republic and Chile in the Cordilleras; the convention recently signed
by Peru and Ecuador for the arbitration of the disputed territory in
the Napo River region; and, of the very highest importance, the treaty
between Brazil and Bolivia, under which the boundaries of the Acre
rubber-producing territory are determined and a beneficial impulse
given to railway building in the great Amazonian interior of South
America. All the boundary and similar controversies are not yet
terminated, but the progress that has been made and the friendly
spirit shown by the interested nations justify the belief that those yet
undetermined will form no barrier to the policy of railway intercom-
munication which now is so strongly favored by all of the Republics.
The Trans-Andean Railway law passed by the Chilean Congress and
the matured plans of the Government for carrying out that legislation,
which will make possible the through-rail journey from Valparaiso to
Buenos Ayres, may be taken as significant of the feeling of interna-
tional friendship now so pronounced, and also of the appreciation of
the advantages of extending commerce. The project itself is likely
to be completed within five years at the longest, so that the Andes will
be pierced and the transverse line of railway communication, which
from its nature will feed the Intercontinental System, will be fully
established.
With regard to the enactment of national railway policies in order to
meet deficiencies in existing laws and to furnish both inducement and
security to capital, it is noteworthy that as one result of the recom-
mendations of the Second Conference very practical measures have
been adopted. In some of the republics projects of laws have been
formulated, partly, as your Commissioner has been informed, as a
result of the data collected by him and the suggestions he has been
able to make. This is notably so in the Republics of Peru and Bolivia.
The Peruvian law, which was enacted in February of the present year,
creates and sets aside a special revenue as a permanent fund for guar-
anteeing capital invested in railway construction of specified routes,
that have for their purpose the internal development of the country,
and especially of lines that will be part of the Intercontinental Sys-
tem. The legislation is significant of the progressive policy of the
Peruvian Government.
10 PAN-AMERICAN RAILWAY.
Under the treaty with Brazil for the settlement of the Acre dispute
Bolivia receives a cash indemnity of £2,000,000 or, approximately,
$10,000,000 gold, which is to be applied to railway construction. The
announced policy of the Bolivian Government, as indicated in the mes-
sage of His Excellency, Gen. Jose Manuel Pando, the President, to
the Congress, is to use this fund as the basis for further railway credit.
It assures the building of the sections which are lacking in the Inter-
continental Route, for these are given the first preference.
Beneficial influence of the Panama Canal.—The influence of the
Panama Canal on railroad construction is both a moral and a material
one. The moral effect of the opening of this great highway of water
transportation is foreseen in the assurance of stability which its con-
trol by the United States carries. The material benefit will come
from the overflow of capital to private enterprise, and this points not
only to adjoining countries, but to others more remote. This opinion
has been expressed so freely to your Commissioner, and so many tan-
gible evidences of its soundness have been given, that the value of the
Panama Canal as a factor in Pan-American railway development can
not properly be omitted from a report of this character. The indirect
result is the encouragement it gives in the countries of the Pacific coast
to prolong many existing small lines from the sea farther to the
interior because of the assurance of an outlet to the commerce which
is dependent on distant markets.
VALUE OF THE INTERCONTINENTAL SURVEY.
The discussion of the general subject of this report and the data
submitted here with would be incomplete without a statement of the
very great value of the Intercontinental Survey made by the various
engineering corps during the years 1892–1896 under the direction of
the Commission, of which Mr. A. J. Cassatt was president. The
surveys, which were organized by Mr. W. F. Shunk as engineer-in-
chief, were the outcome of the recommendation of the First Conference,
They were the first continuous and systematic exposition of the nature
of the project of an Intercontinental Trunk Line joining the three
Americas, an idea which had long been advocated by Mr. Hinton Rowan
Helper.
The territory which it would traverse, the engineering and other
problems which would be encountered, the resources and probable
traffic that could be developed were described, and a rough estimate
made of the cost of construction, the whole forming a preliminary
study and a tentative location of the main line and branches. The
results of the surveys were embodied in a series of volumes including
maps and profiles as well as tables and the general text. The last vol-
ume was published in 1898. Consequently it is only since five years
PAN-AMERICAN RAILWAY. 11
that the labors of the engineering corps have been available. Your
Commissioner has found that within this short period much practical
good has been secured from these publications.
Work of the engineers utilized.—The conclusions of the engineers
have been accepted quite generally. Their pioneer labors have formed
the bases, heretofore unattainable, for a comprehensive study of rail-
way development in Central America and South America, and have
been of special benefit in various exploitation enterprises collateral to
railway building, the success of which would be dependent on means
of communication. They also have formed the groundwork for fur-
ther studies by geographical societies, scientific commissions, govern-
ment engineers, and individuals. One outcome of this discussion has
been the suggestion of variations in the tentative locations and alterna-
tive routes which might result in shortening some of the proposed
sections, thus reducing materially the estimated cost of construction.
An illustration of their more immediate value is found in the use
made of the studies and locations of the engineering corps for the actual
building of links in the general Pan-American system. This, notably,
has been shown in the line from Oroya to Cerro de Pasco, in Peru,
recently finished, which forms a direct section in the Intercontinental
Project. It also has been shown in the extension of the Guatemala
Central Railroad, opened to traffic in November, 1903, which likewise
forms a part of the Pan-American plan and which promises to be
extended along the route of the survey to Ayutla on the Mexican
border within a short time.
With this preliminary statement of the general subject your Com-
missioner submits the detailed information collected by him in the
different countries and the conclusions drawn from that information.
MEXICO.
Mexico, as the real junction point of the intercontinental extensions
with the railway systems which already are connected with the United
States, is of peculiar interest in view of the certainty of completing
the section which will join that Republic to Central America and ulti-
mately to South America. The utility of this connection was recog-
nized in the general railway law of April, 1899, which declared that it
was of supreme importance to prolong the system toward the south
in such manner that the Republic could be leagued with the Central
American lines in the same way that it already was joined on its northern
border with the railroads of the United States. This project, further-
more, was included in the specified enterprises which were to be aided
by cash subsidies and by other liberal concessions.
Under the authority of the general railway law the franchise was
granted for the line known by its corporate title as the Pan-American
12 PAN-AMERICAN RAILWAY.
Railway, which should start from a point on the National Tehuantepec
Railroad and should continue through Tonala to the border of Guate-
mala. The point selected was the station of San Geronimo, which is a
few miles northeast of the town of Tehuantepec. The route surveyed
to the border of Guatemala was 260 miles (418 kilometers). On Janu-
ary 1, 1904, 88 miles (141.5 kilometers) were constructed, leaving 172
miles (276.5 kilometers) to be built. By the terms of the concession
the subsidy is granted in bonds to the amount of $12,000 Mexican
silver, bearing 5 per cent interest, for each kilometer constructed, or
$3,816,000 for the whole line, and 80 kilometers are required to be
built each twelve months. The entire system must be finished by
September 11, 1907, but your Commissioner was informed there is a
probability that the earnest desire of the Mexican Government for its
earlier completion will be gratified. This railway is to be of standard
gauge, 4 feet 8% inches.
In view of the termination of the Vera Cruz to the Pacific Railroad,
which has placed the City of Mexico in direct communication with the
Isthmus of Tehuantepec, including the Pan-American junction point
of San Geronimo, the branch running southeast from Oaxaca, which
formerly was considered a necessary part of the intercontinental con-
nection, is not of immediate consequence. It has been extended as far
as Ejutla.
Progress ºn building interoceanic lines.—No less important than the
north and south connection are the projects for interoceanic roads
which will join Tampico and the other Gulf of Mexico ports with the
ports of the Pacific. These are of significance, both from the world
commerce in transit which they are expected to handle and from the
interior trade which they will help to develop. On January 1 of the
present year there was only one means of through interoceanic rail-
way communication. This was from Vera Cruz, on the Atlantic, via
Cordoba and Tehuantepec, to Salina Cruz, on the Pacific.
Four other through lines are planned. These are, first, the exten-
sion of the road known as the Cuernavaca and Pacific from its present
terminus on the river Balsas to Acapulco, probably via Chilpancingo;
second, the Mexican Central from Tuxpan to Colima, a distance of 48
miles, from which place a line now runs to the port of Manzanillo;
third, the International Railroad from Durango to Mazatlan, 220 miles
(354 kilometers), at an estimated cost of $12,500,000 gold; fourth, the
Kansas City, Mexico and Orient from Chihuahua to Topolobampo,
435 miles (700 kilometers).
On the Kansas City, Mexico and Orient line 124 miles (200 kilome-
ters), Chihuahua to Minaca, have been constructed, and 45 miles (72
kilometers), from Topolobampo toward Minaca, also have been built.
Work is in progress on the other sections.
PAN-AMERICAN RAILWAY. 13
The Cuernavaca and Pacific Railroad is controlled by the Mexican
Central, and as that company is extending its main branch from Gua-
dalajara through Tuxpan and Colima to Manzanillo, the probability is
that it will first reach the Pacific over this route.
The extension of the International from Durango to Mazatlan will
place New Orleans within 1,300 miles of a Pacific seaport.
Some of the interoceanic extensions have been deferred temporarily
while awaiting the action of the Government in changing the basis of
its monetary system, but none has been abandoned.
Remarkable railway growth.-The growth of the Mexican railroads
has been one of the marvels of the last quarter of a century. In 1873,
when the pioneer line, the Mexican and Vera Cruz, was concluded, the
total extent was 335 miles (540 kilometers). In 1903 there were in
operation 9,701 miles (15,612 kilometers). This did not include the
horse tramways and the electric and other traction lines in the cities
and States. At this date there are approximately 10,000 miles (16,000
kilometers) of railroads in actual operation.
This remarkable advance is a tribute to the far-sighted liberality and
the statesmanship of His Excellency Gen. Porfirio Diaz, under whose
successive administrations as President foreign capital has shown its
appreciation of the security and stability afforded it and has taken
advantage of the profitable returns resulting from developing the enor-
mous natural resources and fostering the commerce of the country.
Present and prospective railway building.—Mexican railway exten-
sion has an interest so widespread that as a matter of public informa-
tion your Commissioner subjoins in an appendix the tables prepared
for him under the direction of Mr. Leandro Fernandez, the Minister
of Communications and Public Works. These show the subsidized and
unsubsidized railroads for which concessions have been granted, the
work already done, and the distances yet to be covered. From the
data submitted it appears that on January 1, 1904, the total of the
systems which were engaged in extensions and new constructions, and
parts of which were in operation, was 9,740 miles (15,685 kilometers).
In brief, the existing concessions include 2,235 miles (3,597 kilometers)
of subsidized construction and 3,843 miles (6,188 kilometers) of unsub-
sidized construction, or in all 6,078 miles (9,785 kilometers). The
exhibit is of much utility both for the demand which it shows for rail-
way material and supplies and for its illustrations of the rapidity with
which the resources and trade of Mexico are being developed. The
total amount of subsidies granted by the Government in cash and
bonds for the lines now under construction or making extensions is
$30,522,000 Mexican silver. A few of the bonds bear interest at 6 per
cent, but the larger portion are 5 per cent. In addition to the cash
guaranties public lands to the value of $5,136,000 have been granted,
14 I’AN-AMERICAN RAILWAY.
General railway law.—Mexican railway policy is contained in the
general railway law or code of April 29, 1899. This embodies the
experience of thirty years, and may be taken as the expression both
of the purpose of the Government in aiding the building of railways
and of the principles of State supervision in operating them. The
distinguishing feature of the Mexican plan has been the liberal sub-
ventions granted in cash, in certificates of construction convertible into
interest-bearing bonds, and to some extent in lands. This legislation
now forms the basis of the railway policy adopted by other countries,
especially in the provisions to secure the construction of a certain
proportion of the projected lines each year by the payment in bonds
or cash for the divisions as completed. The requirement that a cer-
tain number of kilometers shall be built every twelve months insures
that the grantees and contractors will carry forward the enterprise or
that their inability to do so will be demonstrated. This provision has
been of benefit both in aiding the contractors and in allowing the Gov-
ernment to continue and conclude railway projects where the grantees
have shown themselves unable to take advantage of their franchise.
Among the leading points of the general railway law are these:
No railroad concession implies a monoply for the benefit of the
concessionaire, but a stipulation may be introduced into concessions to
the effect that within ten years no other concession shall be granted
for a line parallel to the former wholly or in part within a territory of
a width to be determined on both sides of the road, or that no subsidy,
exemption from taxes, or other franchises shall be allowed to lines for
the construction of which within said territory a concession may be
granted. -
In the matter of franchises and exemptions granted to concession-
aires, the law provides that foreign capital employed in the construc-
tion and operation of railways and the loans contracted for that pur-
pose be placed under the guardianship of the nation, and are exempt
from reprisal, confiscations, and attachments in case of war. The cap-
ital and property of a railroad company shall be exempt from all Fed-
eral and local taxation save the stamp tax, provided they are applied
directly to the purposes set forth in the concession. The stamp tax
applies only to the documents, acts, contracts, and transactions to
which the company is a party. The general routes of communication,
their appurtenances, the capital, shares, bonds, etc., employed shall
at no time be taxable by the States composing the Republic.
A company may import, free of all import and customs dues, all fixed
material for the line, rolling stock, telegraphic materials, cars, etc.,
necessary in the construction and operation of the line; also for main-
tenance and repairs of the railroad and telegraph lines, for a period
not exceeding five years, said articles also being exempt from all taxes,
whether Federal or local, for a like period,
PAN-AMERICAN RAILWAY. 15
Subsidies shall be paid with respect to sections of at least 100 kilo-
meters, constructed and accepted by the Department of Communica-
tions and Public Works, in the amount and according to the condi-
tions to be determined in each particular case, The subsidies shall be
paid in bonds of the public debt, the executive reserving the right of
deciding whether payment shall be effected in 5 per cent bonds of the
redeemable debt or in bonds of other descriptions, according to the
conditions and terms to be determined.
If the road terminal be at a seaport the company shall be entitled to
build one or more wharves, subject to the rules and conditions deter-
mined in the concession. Deposits and other mineral substances which,
according to the mining law, do not belong to the owner of the soil,
and which may be found during the construction of a railroad, shall
be the property of the company, provided they are denounced within
three months from the date of discovery.
The tariffs of railroad transportation shall include the rates for
which transportation shall be effected, and the conditions according to
which companies bind themselves to perform this service according to
the provisions of the law. General regulations governing the trans-
port of passengers and freight, and the liability of railroad companies
for possible damages sustained thereby, are covered in a special
chapter. - -
The full text, in English, of the Mexican railway law is given in the
Handbook on Mexico, published by the Bureau of the American
Republics, and therefore its insertion here is unnecessary.
United States capital invested.—The very large amount of capital
from the United States invested in the railroads of Mexico promises to
increase steadily, since the majority of the new undertakings, both for
railways and for the development of mining and agriculture, are con-
trolled by American citizens. The report made by Consul-General
A. D. Barlow fixed the amount of United States capital invested in
Mexican railways at 80 per cent of the total. Since that report was
made it has increased, but the detailed figures are not yet available.
An illustration of the amount of the later investments is found in the
improvements made by the Mexican National in widening the narrow-
gauge lines between Laredo and the City of Mexico to the standard
gauge, which, with the other betterments, cost $13,000,000 gold, and
materially advanced the value of the property. The extensions and
improvements of the various lines owned or controlled by American
capital, which it is expected will be made within the next two years,
will aggregate, your Commissioner was informed, between $20,000,000
and $25,000,000 gold.
As a final word on this phase of the subject, the report made by
Prof. A. E. Sayus, the representative of the French Ministry of Com-
merce and the Paris Board of Trade, may be cited. In his report,
16 PAN-AMERICAN RAILWAY.
expressing the utmost confidence in Mexico's future, Professor Sayus
said: -
After the monetary change now under way is realized there will come to Mexico
a stream of capital from the United States, England, and France, and one of the
greatest booms in the history of the world will result. The United States will lead
the movement. * * * The railroads which they control make the Americans
the industrial dictators of Mexico. As to railroads, the United States is without
competition.
CENTRAL AMERICA.
GEOGRAPHICAL CONDITIONS.
Besides being the natural field for the extension of the Mexican rail-
way system, the countries of Central America from their geographical
situation have the imperative necessity of promoting intercourse with
one another by means of railroads. This corresponds to considera-
tions of national welfare and to their physical configuration. Most of
them have made the building of interoceanic or transverse lines the
cardinal principle of their policy. This plan supplements the Inter-
continental Project, because north and south lines form the backbone
of the interoceanic system, and the greater progress that is made in
constructing railways from the Atlantic ports to those of the Pacific
the greater will be the encouragement to north and south roads, for
which they will serve as feeders. -
The Isthmian Canal promises to be a strong incentive to the develop-
ment of both longitudinal and transverse lines. The probability that
the Panama Railroad in meeting the demands for supplying material
and other construction work on the waterway will be unable fully to
provide for the international traffic which now follows that route indi-
cates the utility of other lines between the two oceans, while the food
and similar supplies that will be required show the necessity of increas-
ing the present limited means of transportation from the interior of
the region adjoining the Isthmus.
The status of existing railways and the most feasible undertakings
in the respective Central American Republics are given below. From
these statements it will be seen that the prospect for through rail
connection between New York and the Isthmus of Panama is not a
remote one. -
GUATE MALA.
The gap between the present terminus of the railways of Guatemala
and the Mexican border along the contemplated Intercontinental
Route is a short one. Not more than 30 miles (48 kilometers) of rail-
road building is needed in order to place the capital, Guatemala City,
|PAN-AMERICAN RAILWAY. 17
in direct communication with Ayutla, on the river Suchiate, at the
frontier where the junction will be formed with the Pan-American
line that is now being constructed in Mexico. Within the last few
months one interval has been closed. The extension of the Guatemala
Central Railroad from Santa Maria to Mazatenango, which was opened
in November, 1903, is directly on the intercontinental location.
The traffic to be obtained by handling the coffee crop is regarded as
sufficient inducement, taken with other recent railway movements, to
cause the building of the link to Ayutla in the near future, so that this
prolongation is likely to reach the Mexican border in advance of the
Mexican line from San Geronimo. When this is done the sections
lacking in the Pan-American Route will be from the junction of Santa
Maria, near the town of Escuintla, on the Guatemala Central, and from
that point through Brito south to the frontier of Salvador at Hacha-
dura, following a course parallel to the Pacific. The distance is 60.5
miles (97.5 kilometers.) There has been little incentive to build this
extension until the existing lines reached the Mexican boundary. With
that accomplished the inducement becomes a pronounced one.
Jºncouragement in recent Government contracts.-The most marked
encouragement to completing the intercontinental sections and to other
railroad projects, as well as to the increase of commercial relations
with the United States, has been given at a very recent date. This is
the contract celebrated by the Government with W. C. Van Horne and
Minor C. Keith, under which within two and a half years Guatemala
will have a through interoceanic route, placing San Jose and its other
Pacific ports in communication with Puerto Barrios on the Atlantic,
where the steamship lines give easy access to the Gulf cities of the
United States. The distance is 270 miles (434.5 kilometers).
Under this arrangement the section on the Northern Railroad, which
is now open between Guatemala City and El Rancho, a distance of 62
miles (100 kilometers), will be closed. The Northern Railroad, further-
more, substantially will be rebuilt from El Rancho to Puerto Barrios
to accommodate the traffic which is assured. An important provision
in this contract is the agreement of the Guatemalan Government that,
with the exception of coffee, no export tax shall be laid for a period of
thirty-five years on the agricultural products which may be transported
over the line for shipment. Another essential point is the stipulation
that the company shall be allowed to fix its freight and passenger rates
on a gold basis. This convention was signed in the city of Guatemala
January 16, 1904. Its influence on the railway and interior develop-
ment of the country will be most beneficial. One of the immediate
results, it is believed, will be to vitalize the enterprises for lines south
and east from what will constitute the interoceanic trunk between San
Jose and Puerto Barrios. -
S. Doc. 206, 58–2—2 ,
18 PAN-AMERICAN RAILWAY.
At the present time Guatemala has 347.4 miles (559 kilometers) of
railroad, as follows: Northern Railroad, 134 miles; Guatemala Central,
142.4 miles; Occidental Railroad, 51 miles; Ocos Railroad, 20 miles.
Two concessions are in force: One is for the construction of a line
between Coatepeque and Caballo Blanco, which comes within the pur-
view of the intercontinental plan; the other concession is for a railway
from Zacapa, on the Northern Railroad, to the northwestern frontier
of Salvador. Though no franchises are now effective there are also
propositions for extensions of the present systems from San Felipe to
Quezaltenango, 42 miles, and from Quezaltenango to San Marcos, 32
miles.
Provisions of the railway law.—The railways of Guatemala are
regulated by the provisions of the Commercial Code and by the general
railway law known as Decree No. 566, dated February 1, 1898. By
the terms of this decree persons or companies seeking franchises are
required to submit the plans to the Department of Fomento; when
indorsed by that Department the sanction of the Council of State is
sought, and finally the approval of the National Legislature. All con-
tracts celebrated by the executive power have to be approved by the
National Legislature. The contracts may be with designated indi-
viduals, with persons acting for others, or for companies that are to be
formed.
Concessions can be granted with subsidy or without it, guaranteeing
or not the capital which may be invested, with an interest proportion-
ate to the product. The Government shall include in the estimates the
share of pecuniary responsibilities required for fulfilling the obligation
contracted.
The State may exempt the enterprise from the payment of every
class of contributions, from the use of stamped paper and fiscal dues,
for the time which it may consider just or opportune, but in every
instance the exemptions shall be specified in the contract.
The right of eminent domain or expropriation for the benefit of
grantees holding franchises is enforced. The Government also under-
takes to procure uniformity in the gauge and the rails.
Incentives to railroad construction.—The Government offers every
inducement to promote the extension and development of railroads in
the country. The best evidence of its policy toward legitimate and
genuine capital is shown in the terms of the contract for the completion
of the Northern Railroad. -
The engineering difficulties of railroad construction in Guatemala are
not grave, as the lines skirt the foothills of the great agricultural regions.
The immense natural resources, consisting of the products both of the
tropical and the temperate climates, such as coffee, sugar, tobacco, the
cereals; the vast pasturage for live stock; the undeveloped timber
industries, and the unexploited mines, all open up prospects for prof-
PAN-AMERICAN RAILWAY. 19
itable traffic. The building of railways will be of utility both to the
United States and to Mexico as the nearest neighbors of Guatemala
who should rightfully control and get the benefit of the trade, which’
now is largely in the hands of Germany and Great Britain.
SALVADOR.
The Republic of Salvador has a part of the Intercontinental System
in operation and a further prolongation is intended by the Govern-
ment from the town of Santa Ana north to Ahuachapan, 30 miles (48
kilometers). When this line, for which a subsidy is proposed, reaches
Ahuachapan the extension northwest to Hachadura on the river Paz
at the boundary of Guatemala, or some other point of the Pan-Amer-
ican location, will follow. A branch likewise is under consideration
northwest toward the river Paz, a distance of 26.5 miles (42.7 kilo-
meters) and then from the Guatemala limit to the town of Zacapa on
the Guatemala Northern Railroad. The distance is 40 miles (64
kilometers). The surveys were made in 1896. ~
These proposed extensions aim to bring Guatemala and Salvador into
direct railway communication. When this is secured the southern pro-
jection, substantially along the Pan-American location, to Honduras is
probable. The surveys already made are from San Salvador, the cap-
ital, to San Vicente, 42.2 miles (68 kilometers); from San Vicente to
San Miguel across the river Lempa through Jiquilisco and Usulutan,
the distance being 62 miles (100 kilometers). This is the natural route
for the development of a large commerce in coffee and other agricul-
tural products.
From San Miguel to Guascoran, on the frontier of Honduras, is 36
miles (58 kilometers). As a part of the plan of railway expansion
toward the south it also is proposed to rehabilitate the lines from the
port of La Union to San Miguel, 53 miles (85.5 kilometers). Recent
development of the mining industry is encouraging this enterprise.
Though the area of Salvador is small the policy of the Government
toward railroad construction is a liberal one. The present system
connecting the interior with the Pacific port of Acajutla is owned by
an English company. It receives an annual subsidy from the Govern-
ment. The heavy coffee production of Salvador justifies building the
railways which are planned. The existing lines are narrow gauge.
HONDURAS.
The distance covered by the Intercontinental Survey across the
Republic of Honduras was 72 miles (115 kilometers). The geograph-
ical conditions are such that until the boundaries are reached, either
from Salvador on the west and north or from Nicaragua on the east
20 PAN-AMERICAN RAILWAY.
and south, there is not much object in building the line, although the
route is feasible and the engineering difficulties are not grave. .
. As in the other countries of Central America, the national policy of
Honduras first looked to the construction of an interoceanic line, the
purpose being to connect Puerto Cortez on the Atlantic side with
some point in the Gulf of Fonseca on the Pacific Coast. The road was
built from Puerto Cortez to La Pimienta, a distance of 60 miles (96
kilometers). Difficulties which arose at various times between the
bondholders and the nation interrupted the railway progress of the
country. The Government is at present making an investigation of
the whole subject with a view to bringing the controversies to an end.
Concession awa'iliary to the Pan-American project.—A concession has
been granted to an American citizen, Henry A. Spears, for a railroad
from the Bay of Fonseca to the town of Cantarranas, in the Depart-
ment of Tegucigalpa, which is 35 miles distant from the capital. This
would serve as an auxiliary to the Pan-American system. Cantarranas
is the center of the chief mining district.
Under the terms of the franchise the grantee is to receive 1,235 acres
(500 hectares) of public lands for every kilometer constructed. He is
given the right to preempt any mineral zone or mine which he may
discover during the construction of the railroad, provided that it falls
within 50 miles (80 kilometers) of either side. Exemption is granted
from all imposts and taxes, Federal or municipal, on articles used for
the construction of the railroad, and the grantee may introduce foreign
laborers, with the exception of Chinese, for work on the road. It is
thought that the importation of goods from the United States will be
greatly increased with the facilities for cheap and rapid transportation
to the interior and the reduction in all freight rates which will be
afforded by the proposed railway.
Honduras, in addition to its fruits and other tropical products, has
rich mines. Their development requires railroad lines, and the link
in the Intercontinental Route would be of marked benefit to the min-
ing industry. The Government is offering unusual inducements in the
way of land grants in order to secure immigration. The land laws
are liberal. Inducements also are held out for the establishment of
a bank at Tegucigalpa.
NICARAGUA.
Nicaragua at the present time has a narrow-gauge (3 feet 6 inches)
railway system of 160 miles (258 kilometers). This is known as the
National Line, and is owned and operated by the Government. Part
of this road is in the direct route of the Intercontinental Survey.
This part is from Chinandega and El Viejo, through the towns of Leon
and Nagarote, to Managua and over the branch line to Diriamba, with
PAN-AMERICAN RAILWAY. 21
a junction at Jinotepe, which would be the starting point for the exten-
sion of the Pan-American lines south to the frontier of Costa Rica.
An alternative branch has been suggested from Granada, on Lake
Nicaragua, to Nandiame, the gap between Jinotepe and Nandiama to
be closed by the construction of a short line. The route then would
be from Nandiame to Rivas and Pena Blanca, on the border of Costa
Rica.
Since the Second Conference closed its sessions Nicaragua has con-
structed a link of 38 miles from La Paz to Managua, and previously,
after the intercontinental survey was made, it had built about 40 miles.
The construction included the branch from Masaya to Diriamba.
Project sanctioned by the Government.—The Government has various
plans for joining Corinto and other Pacific ports with the Atlantic,
transverse lines being considered of the first importance. Since it is
definitely known that there will be no interoceanic waterway, inter-
oceanic railroads are looked upon as a vital feature of the national
policy both for the development of the natural resources—such as tim-
ber, bananas, and other fruits on the Atlantic slope, the coffee in the
interior and on the Pacific slope, and cattle in the southern region—
and for the purpose of knitting together the different Departments.
Three existing projects have received the sanction of the Govern-
ment. They are as follows: -
First. From San Jorge on Lake Nicaragua to San Juan del Sur on
the Pacific, through Rivas. This route is from San Juan del Sur along
the Bay of Nacascola through Buston. It offers no engineering diffi-
culties. The distance is 22 miles. The line would be a feeder to the
traffic of the Intercontinenal System.
Second. Through the northern and eastern part of the country
toward the Atlantic slope, traversing the five departments of Segovia,
Matagalpa, Jinotega, Esteli, and Chontales, which are very rich in
mineral, agricultural, and timber resources. The route proposed is
from the junction with the national line at Momotombo on Lake Ma-
nagua, through the Matagalpa and Jinotega coffee districts, to some
navigable port on the Grand River (Rio Grande). The length of this
line would be between 90 and 100 miles (160 kilometers). The pro-
longation from Matagalpa to the Grand River would be between 140
and 150 miles (241 kilometers). The head of navigation is at the mouth
of the river Sicsiewas. The name of this proposed road is the
Northern.
Third. The Atlantic Railroad following the route from San Ubaldo
on Lake Nicaragua to the Atlantic or to some river other than the
San Juan emptying into it. The proposed terminus is at Rama on the
river of the same name, where connection would be opened with Blue-
fields, or a port between Sabina Grande and Portilla, stations on the
National Line, to connect and form a single line. By the first route the
22 PAN-AMERICAN RAILWAY.
distance would be 102 miles (180 kilometers); by the second, 220
miles (354 kilometers). - - . * . . ;
Among the franchises granted in recent years was one for a line
from Monkey Point on the Atlantic through the valley of the Ramaqui
to a navigable port on the Rama. A large land grant was made for
this purpose, but the line has not been built. By its terms the con-
cession was to expire three years from April, 1901. There is also a
concession known as the Emery grant, which, in return for extensive
areas of timber lands, requires the building of 50 miles of railway
from the Lagoon of Pearls toward Matagalpa.
Agricultural and mineral resources.—The principal agricultural
products of Nicaragua are chocolate, coffee, corn, sugar cane, rice, and
tobacco. The timber possibilities are almost unlimited. Cattle raising
is growing in importance.
The country has very extensive mineral resources. The gold-
producing regions are widespread. By recent concessions it is hoped
to secure railways to cheapen the cost of transportation on the Atlantic
slope. A concession has been granted to a Pittsburg syndicate giving,
for a period of twenty-five years, special rights to locate and claim
mines within the departments of Cape Gracias a Dios, Segovia, and
Jinotega. It is believed that this concession will result in extensive
Operations along the Coco River and will open up great commercial
possibilities for eastern Nicaragua.
The Government of Nicaragua is seeking to secure foreign capital
for the establishment of a national bank, negotiations having been
opened with capitalists in London and New York. The establishment
of this bank would insure the success of the railroad enterprises, which
are of the most immediate importance. -
Since the Government owns and operates the only railway lines in
the Republic, there is no general railway law, but each concession is
the subject of a special law. In addition to extensive land grants the
policy is to admit free from customs duties railway material for con-
struction, rolling stock, etc., and also to exempt from federal and local
taxation. An effort was made to buy the National Line by English
capitalists who hold the mortgage bonds, but it failed. An American
syndicate also made an offer to the Government, but was unable to
comply with the terms submitted. The Government leased the
National Lines for ten years from January 1, 1904, with privilege of
renewal, to Mr. Julio Wiest, a German citizen. He is also to have
the preference on any new line that the Government may desire to
construct.
costa RICA.
In Costa Rica the Intercontinental Survey followed closely the
Pacific coast line from the junction at Pena Blanca, on the Nicaraguan
PAN-AMERICAN RAILWAY. 23
frontier, through the undeveloped province of Guanacaste to Liberia
and thence to Esparta, where a junction would be made with the
interoceanic line. The mineral discoveries in the neighborhood of
Liberia and the internal commerce which is developing have given
an impetus to the proposition to build a line north from Esparta to
Liberia and to Culebra Bay. This would form a part of the Pan-
American system.
Since the Second Conference, Costa Rica has made progress in rail-
way construction. With the exception of an interval of 15 miles,
through connection has been established from Puntarenas on the
Pacific to Port Limon on the Atlantic. The recent construction has
been from Santo Domingo to Esparta. The policy of the Govern-
ment is to secure a through interOceanic line. The section between
Esparta and Puntarenas has not been built, partly because of engi,
neering difficulties and partly because of a tentative plan to make the
extension to the port of Tivives, south of Puntarenas. The latter
route would furnish the longer link in the intercontinental location.
Government interest in the present system.—The railways of Costa
Rica comprise 257 miles (414 kilometers) and are mostly of narrow
gauge, 3 feet 6 inches. Fifty-five miles are owned and operated by
the Government. This line runs from San Jose, the capital, to Santo
Domingo, where there is a break of 15 miles; and then from Esparta
to Puntarenas. It is known as the Railroad to the Pacific. Formerly
the Government was a partner in the Costa Rica Railway, which runs
to Alajuela and San Jose from Port Limon, but it sold its bonds and
shares and the company now is entirely an English corporation. The
line covers a distance of 187 miles (301 kilometers).
The Northern Railway extends from Port Limon through the banana
region to the mouth of the river Matina. This is owned and operated
by an American corporation, the United Fruit Company. It is 65
miles (105 kilometers) long and is fed by branches on the various
banana plantations.
Important extensions in prospect.—No concessions for railways were
in force in Costa Rica at the beginning of the present year, but various
lines were under consideration. One was from the present terminus
of the Northern Railroad on the Matina River to a point on the river
Frio and to San Carlos on Lake Nicaragua. Another proposition
was for a line on the Atlantic slope from the river Jiminez and San
Carlos, a distance of 100 miles (160 kilometers). A third enterprise
proposed was from Mulle de Estero to the bay Culebra on the Pacific.
This would be a transverse line and would be 80 miles (111 kilometers)
in length. * *
A project which gives promise of more immediate results is that for
a line from Zent, on the Northern Railroad, through the southeastern
part of the country, to Boca del Toro, in the Republic of Panama.
24 PAN-AMERICAN RAILWAY,
...”
This would open up a large fruit-growing region, and the enterprise
has great commercial possibility. The concession is sought by inter-
ests identified with the United Fruit Company. The plans have been
submitted to the Government of Costa Rica, and your Commissioner
is informed that in all probability they will be approved; but at the
time of making this report the full details have not been received.
Proposed variation of Intercontinental Survey.—The gravest engi-
neering difficulties encountered in the Intercontinental Survey through
Costa Rica were from the transverse or interoceanic line along the
Cordillera of the Pacific slope. It presented many obstacles, and the
cost of construction would be considerable, while the resources to be
developed were not encouraging. On this account an alternative route .
was suggested on the Atlantic slope, but the survey was not made.
However, various engineering reconnoissances of this section have
been carried out, and it has been shown that there are no serious diffi-
culties, while the region to be developed has great agricultural prod-
ucts and also offers many advantages for stock raising. The construc-
tion of the Panama Canal assures a market for these products and
gives additional weight to the enterprise from Zent to Boca del Toro.
Costa Rica has no general railway law beyond the regulations for
operating the lines. Cash subsidies are not given, but freedom is
granted from customs dues and other taxes, and financial aid is extended
as far as the means of the Government permit. The existing lines
received very liberal land grants. The country is on the gold standard,
and therefore no trouble arises in regard to the basis on which the
freight and passenger rates shall be fixed. The commerce with the
United States is growing steadily both in exports and imports.
PANAMA.
There has not yet been time for fixing a general railway policy in
the Republic of Panama. The new conditions are looked upon as cer-
tain to encourage railway enterprises, and legislation will be formulated
by the Government. The present railroad between Colon and Panama,
with the additional demands that will be made on it by the construc-
tion of the waterway, is sure to require further facilities for handling
the international traffic until the canal is opened.
The scheme for a line from Chiriqui and David, on the Pacific slope,
to Panama, which would be part of the intercontinental connection,
lately has been revived. There is also a proposition for a line from
Boca del Toro through the fruit belt to the middle of the canal zone.
This would be the natural continuation of the line projected along the
Alantic slope from Costa Rica to Boca del Toro. So far as your Com-
missioner is informed, no plans yet have been formulated for railroads
east from the canal zone to Darien, and thence into the Department of
Cauca, in the Republic of Colombia.
PAN - AMERICAN RAILWAY. 25
SOUTH AMERICA.
GENERAL SITUATION.
The barriers which the great mountain ranges of the South American
Continent offer to railway construction are well known. The Atlantic
and the Pacific slopes, through the lack of railroad connection, have
been almost as far apart as if they were in different hemispheres.
The lack of continuous railway systems also has prevented the utiliza-
tion of the means of intercourse provided by the networks of naviga-
ble rivers. The geographical isolation of the various countries has
tended in some degree to their estrangement. But while the hindrances
to the construction of railroads are great, they are not insurperable,
and the era that is now opening promises to surmount them, improv-
ing the political relations and developing the commerce and resources
of countries which are neighbors.
The best understanding of the general situation and of the prospects,
both as to the Pan-American system and as to interoceanic-railway
connection, will be had by beginning at the southern end of the conti-
nent and describing the conditions northward to the Isthmus of Panama
and the Caribbean Sea, as well as the Atlantic coast.
ARGENTINE REPUBLIC.
The highly important relation of the railroad lines of the Argentine
Republic to the Intercontinental Location, as well as to the general inter-
communication of the South American nations, is apparent from a
brief glance at its geographical position. To the Pan-American project
it is on the south what the Mexican system is on the north. With the
lines of the Argentine Republic stretching northward, the most essen-
tial element of further extention is assured.
The present system of the Republic was prolonged to Jujuy, about
1,000 miles (1,610 kilometers) from Buenos Ayres, in 1890. From
that time for several years no further work was done. In 1894 the
Governments of the Argentine Republic and of Bolivia entered into a
joint convention under the terms of which the Central Northern Rail-
road was to be continued from Jujuy to Tupiza, or some other point in
Bolivia mutually agreed upon for the terminus. Under this arrange-
ment a joint survey was made, and the Argentine Government stipu-
lated that it would bear half the expense of building the lines within
the Bolivian territory. Afterwards this convention was modified, and
by a treaty which was negotiated in December, 1902, and made effective
in August, 1903, the Argentine Government covenanted to build the
Bolivian section and operate it until such time as that Republic elects
to acquire the property by paying the cost price. The Argentine
Government has the administration and management of the line under
26 PAN-AMERICAN RAILWAY.
the same conditions as a private enterprise and with due regard to the
sovereignty of Bolivia. This international arrangement by which one
nation builds and operates railway lines within the territory of another
nation establishes a precedent which may be followed in other cases.
Certainty of the Bolivian extension.—This treaty assures the build-
ing of the Pan-American link from Jujuy to Tupiza, a distance of 230
miles (370 kilometers). Its importance goes far beyond the mere
prolongation of the Argentine system, for when the line has reached
Tupiza it is certain that the further extension will be made through
Bolivia, so that within a few years this section of the Intercontinental
Route from the Argentine frontier on the south to Lake Titicaca and
the border of Peru on the north will be completed.
The Congress authorized the construction of the Argentine-Bolivia
line and provided the funds. Under this authority the detailed sur-
veys were made and the first contract let. This is for the section from
Jujuy to La Quiaca, the frontier customs outpost of the Republic. The
distance from Jujuy to La Quiaca is 178 miles (286 kilometers), and
from La Quiaca to Tupiza 52 miles (84 kilometers). This work has
been under way for several months and on January 1, 1904, the grad-
ing had been completed to a few miles beyond Volcan, which is 24
miles (39 kilometers) from Jujuy. Most of the bridge work and the
viaducts between Jujuy and Volcan were finished and a portion of the
rails laid. -
The estimated cost of the line from Jujuy to Tupiza is approximately
$10,000,000 gold. The construction to La Quiaca was to have been
finished by October, 1904, but in view of the engineering difficulties
and for other reasons the time has been extended. The line is to con-
form to the Central Northern in gauge, 3 feet 33 inches (1 meter).
Commerce and industries to be revived.—The Argentine Government,
in undertaking to prolong its own system, not only to the boundary
but into Bolivian territory, was actuated both by commercial and by
national reasons. The commerce over this route was very large at one
time, though all the freight had to be carried by pack animals. It fell
off till the amount was almost zero. In the period from 1882 to 1886
the traffic between Argentina and Bolivia, through what was known as
the Quebrada or Great Ravine of Humahuaca, reached 71,464 tons,
and in the year 1882 the Bolivian traffic in transit was valued at
$11,312,000. In 1885 the value was $12,022,000. Since 1890 the
transit traffic has decreased to about 1,765 tons annually, so that it is
only one-fortieth of what it was in the active period from 1882 to 1886.
The local commerce also decreased. The opening of the railroad from
Uyuni to Antofagasta on the Pacific coast in 1888 was one reason for
the decrease, as some freight was diverted.
Wide 20me of freights.-The zone of freights for Argentina is still a
wide one, and with railway facilities the commerce of this zone is likely
PAN-AMERICAN RAILWAY. 27
to become as important as during 1882 and subsequent years. Besides
this consideration, which includes the European traffic for goods ship-
ped to Buenos Ayres and Rosario, and thence by the railway to north
ern Argentina and Bolivia, the continuation of the line is expected to
have a beneficial bearing on the exploitation of the mineral wealth,
including copper, gold, borax, and petroleum, in Jujuy and the adjoin-
ing provinces. All the northern region of Argentina will be benefited
by the increase in its trade, as Bolivia is a good customer for the prod-
ucts, which include flour, sugar, tobacco, rice, alcohol, and wine, and
also mules and other live stock.
Bolivia. on its part has a considerable commerce in cocoa, coffee,
wools, and hides, which are shipped to the Argentine ports. The
freight rate for minerals by mules and other pack animals from Tupiza
to Jujuy averages $59 gold per ton, while the railroad tariff-from
Jujuy to the port of Rosario is $6, and from Rosario to Europe the
ocean charge is $7.50. Merchandise and agricultural products, while
transported more cheaply, pay relatively as much for the pack-animal
transportation as do minerals. The prospective cheapening of freight
rates was a strong incentive in authorizing the building of this line
through the Quebrada of Humahuaca.
Collateral to the Bolivian extension are branches and prolongations.
One of these is from the town of Tarija, in southeastern Bolivia, to
La Quiaca, where the junction will be formed with the Jujuy-Tupiza
line. Tarija is the center of a very rich agricultural region.
Jºra of active railway construction.—In 1880 the Argentine Republic
had 1,562 miles (2,516 kilometers) of railroads open. The lines in
operation on January, 1, 1904, were approximately 11,360 miles (18,294
kilometers), but the many extensions and the new roads under con-
struction make the exact figures at any given date of doubtful value
as an index of the railway situation.
For the last two years an extraordinary activity has been noted, due
chiefly to the enormous crops. This has resulted in betterments and
enlarged terminal facilities as well as in the building of branches and
extensions. It also has made easy the obtaining of capital for new
enterprises, and many franchises have been sought and granted. Since
the crops this year are larger than ever before, and since Argentina is
in the full tide of unexampled agricultural prosperity, a period of fur-
ther railway expansion unquestionably is at hand. The effect will be
felt in the demand for steel rails and rolling stock as well as in the
increased exports and imports. The interest in the movement is
therefore world-wide.
Owing to the level nature of the greater part of the country, rail-
road construction is simple and comparatively cheap. The freight
carried by the roads is chiefly agricultural products—wheat, corn, lin-
seed, wool, hides, and live stock—to the seaboard. The cargoes for the
28 PAN-AMERICAN RAILWAY.
interior consist of general merchandise and farm machinery, much of
which comes from the United States.
The leading seaboard terminal points are Bahia Blanca, which is
the outlet for the vast southern agricultural region; Buenos Ayres
and La Plata for the central pampas, and Rosario and San Nicolas on
the Parana River for the northern sections. At all these points exten-
sive harbor works have been constructed by the National Government.
Met earnings on capital investment.—The total paid-up capital of
the Argentine railways in stocks and bonds in 1902 was placed at
$539,000,000 gold, including the valuation of $55,000,000 for the lines
owned by the Government. The annual statement compiled for 1902
showed that the average net interest earned was 3.71 per cent. In
1901 the met interest earned by the private companies was 3.59 per
cent and by the national lines 1.11 per cent. For 1903 the business
of all the lines was greater than during the previous year.”
With the exception of the Government railways, the stock and bonds
of the companies are owned almost exclusively in Great Britain, though
French capital controls the systems in Santa Fe and some of the
adjoining provinces. During the last two years the fusion of several
of the English lines has taken place. Where the corporate amalga-
mation was not complete an identity of interests was established. This
combination, and the agricultural prosperity, were the causes of the
steady rise in Argentine railway shares in London.
The English lines which are seeking to maintain an identity of inter-
ests are broad gauge, 5 feet 6 inches, and form considerably more than
half the total system. The standard gauge of 4 feet 8% inches is util-
ized in the provinces of Entre Rios and Corrientes. It aggregates
nearly 1,000 miles. The narrow or 1-meter gauge, 3 feet 33 inches,
obtains on the National lines and on some of the roads controlled by
private companies.
The Government owns and operates about 1,366 miles (2,200 kilo-
meters) of railway lines, which serve as a means of regulating those
owned by the private companies and to insure competition. Its pres–
ent policy is to take the initiative in railroad construction and to build
in cases where national reasons justify the undertakings, though the
inducements may not be sufficient for private capital. In this way it
is building the Jujuy-Tupiza line, and it already owns and operates the
Central Northern from Tucuman to Jujuy, of which the interconti-
nental projection into Bolivia is the natural continuation. A.
Jºvolution of national railway aneasures.—The railway policy of the
Argentine Republic, as explained to your Commissioner in a mem-
orandum prepared by the able minister of public works, Mr. Emilio
Civit, has been one of evolution. The Government of the nation and
the Provincial governments from the beginning considered that the
a See Appendix “B” for latest statistics.
PAN - AMERICAN RAILWAY. 29
principal factor in cementing more closely the provinces with one
another and in fostering the exploitation of their resources was the
construction of adequate means of communication. With this end in
view they directed their energies to implant railway systems, granting
subventions, premiums and guaranties in cash and in land grants,
freedom from customs duties for materials and articles destined for
the construction and operation of the railway lines, and entire exemp-
tion from other imposts and taxes.
But, little by little, many persons taking advantage of the liberality
with which railway concessions were given, and attracted only by the
high interest which the guaranty of the State or of the Provinces
represented for the capital invested in them, solicited franchises with-
out other purpose than to secure this guaranty. Fortunately for the
nation, the greater part of these concessions could not be brought to a
head because of the crisis which supervened in 1890. Many of them
failed, and thus freed the country from obligations which, if they had
continued in force, would have produced financial disaster that would
have hindered the nation from fulfilling the stipulations made.
Even as it was the Government found itself surrounded with diffi-
culties in meeting duly the payment of the guarantees authorized
to the companies which had complied with the terms of their con-
cessions, and to resolve this subject in an equitable form it celebrated
with these companies conventions and arrangements in order to cancel
the past guaranties in a definite and absolute form. Taught by expe-
rience and given the development which the country had reached, the
Government now does not make cash subsidies or guaranties for the
railroads and only follows the course of encouraging their construction
by according freedom from imposts and free introduction of materials
for a determined time, and only in exceptional cases where they treat
of railway lines in sparsely populated regions such as the national ter.
ritories. In these cases cash subsidies and public lands are granted.
The aid extended by the National Government and by the Provinces
comprehends three periods:
First epoch. The Government accorded guaranties of interest upon
the capital invested; the gratuitous cession which the lines and the
construction work adjoining occupied, besides a fixed area of land
along the route for the purposes of colonization; freedom from customs
duties and all other classes of imposts and taxes.
Second epoch. The Government conceded guaranties of interest
upon the capital, exemption from imposts, and gratuitous grants of the
public lands which the line crossed.
Third and actual epoch. The Government concedes only the exemp-
tion from imposts and from customs duties for a fixed time and the
public lands which the line traverses.
30 PAN-AMERICAN RAILWAY.
Principles which govern concessions.—The principles of the railway
policy of the Republic are developed in the railroad law of 1891. The
regulation and supervision of freight and passenger rates, as well as
of the operation of the lines, are stricter than under the Interstate
Commerce Act of the United States. The cardinal point of the law in
so far as relates to franchises is that concessions shall be obtained from
the National Congress for lines connecting up one or more provinces
with another and the assent of the Congress has to be obtained for any
structural alterations in property or extension of the line, and from the
Government for any alterations or modifications of existing systems.
Where the obligation of the Government exists for the guaranty
of interest, this shall be considered as fulfilled on delivering to the
companies the sum necessary to complete the utility guaranteed, com-
puting as net receipts the excess of the gross receipts of the line
exploited over the cost of exploitation recognized in the contract of
concession. Franchises are forfeited if the contract is not undertaken
within one year after the law authorizing it is promulgated and if the
construction work is not begun within the period specified in the law
granting the concession. All railway companies are required to keep
a representative in the capital of the Republic, with full powers to
observe the terms of the law and the conditions of the concession.
In the franchise granted by the Congress at its recent session for a
line from the port of Rosario, on the River Plate, to the port of Bel-
grano, on Bahia Blanca, it is stipulated that the tariffs for freight and
passenger traffic shall be fixed by the Government whenever the gross
returns of the line exceed 14 per cent of the capital, the amount of
which must be agreed upon on opening the line to the public, in
accordance with the actual cost, and may not be increased without the
consent of the Government. Materials for the construction of this
railway not produced in the country may be imported free of duty
for twenty years, and during this period the line is to be free of
national taxes.
Basis of Government construction.—Where the Government initi-
ates the building of railways on its own account, legislation authoriz-
ing the executive to construct the line specified and fixing the cost is
enacted. This was done in the case of the Jujuy-Tupiza line and
others, for which provision was made at the same time. The execu-
tive was authorized to invest in the railway works designated a fixed
sum, which in that case was $15,230,000 Argentine currency, and to
emit obligations in the form of debentures on the value of the railroads
owned by the nation, fixing the interest and the amortization which
the debentures should enjoy. These were to be destined exclusively
to building the railroads provided in the law of Congress. The nation
guaranteed also the obligations created in constructing these lines and
PAN-AMERICAN RAIL WAY. 31
pledged their entire receipts to the service of the interest and the
refunding if the net receipts of the national railroads should not be
sufficient.
CHILE.
Railway construction has been a feature of the national polity of
Chile from the time when a North American, William Wheelwright,
of Massachusetts, proposed to connect the seaport of Valparaiso with
Santiago, the capital, and after overcoming many obstacles succeeded
in beginning the line. This was in the decade between 1840 and 1850.
An important advance has been made within the last year, when the
measures have been adopted which insure the union of Valparaiso on
the Pacific with Buenos Ayres on the Atlantic by a tunnel piercing the
Andes. This is known as the route of the Uspallata Pass. This, in
effect, is the extension of the original system. Its immediate bearing
on the Intercontinental Route is that when Chile is united with the
Argentine railways the country will have the benefit of through con-
nection with the lines extending northward.
The legislation which insures the building of this trans-Andean link
is the fruition of more than thirty years' agitation. It will be the first
railroad to cross the continent of South America. The Argentine
lines already have been extended west via Mendoza to the boundary
limit of Chile at the cumbre, or summit, of the Cordillera, passing
through Puente del Inca to Las Cuevas. The Chilean lines have
reached the lower heights of the Andes, but the summit has yet to be
surmounted. The actual gap through the passes which is to be closed
is not more than 29 miles (47 kilometers), but the engineering difficul-
ties are numerous and varied. Scientific and engineering commissions
studied the subject under the direction of the Chilean Government,
and ultimately a comprehensive project was evolved for crossing the
Cordilleras by means of a series of tunnels, the greatest of which will
be a spiral one. At the cumbre the height is 12,800 feet (3,900 meters).
The route is open for traffic by mules six months out of twelve. The
location as surveyed for the railway crosses the summit by means of
the tunnels below the highest elevation.
Points in the trans-Andean law.—In February, 1903, the Congress
of Chile passed a special law authorizing the President of the Republic
to contract for the construction of a railroad of 1-meter gauge (3 feet
3# inches) from the town of Los Andes to the summit of the Cordillera.
The railway now runs from Valparaiso and Santiago to Salto del Soldado,
which is beyond Los Andes, and the section between these two points
is declared of public utility. The salient feature of this law is the
guaranty by the State for the term of twenty years of 5 per cent per
annum upon an amount not to exceed £1,500,000, or $7,500,000. For
32 PAN-AMERICAN RAILWAY.
the payment of the guaranty the line is divided into three sections,
proportioned to the estimated cost of construction. The President is
authorized to contract by public bids for the building of the railway
and to adopt the measures necessary for making the contract effective,
including the manner and payment of the guaranty. The powers con-
ferred upon him in order to secure the construction of the road remain
in force until February 28, 1905.
Under this law estimates and detailed plans have been made by the
Department of Industry and Public Works. The terms of the con-
tract have been determined so that tenders may be received and the
bid be awarded by the Government. Your Commissioner is informed
that a competent engineer has been designated to visit Europe and the
United States for the purpose of conferring with intending bidders.
It is estimated that the time required for completing the trans-
Andean line will be from three to five years. The project is one of
the most important that is under way in South America. It will realize
the aspiration of the people of the two countries, Chile and the Argentine
Republic, that the Andes shall disappear. Both commercial and indus-
trial causes combine to render the enterprise a good one from a business
standpoint. There is a large prospective traffic in cattle which now are
driven from Chile to the Argentine pampas for pasturage, and when
fattened are driven back. When the animals can be transported in
stock cars the cattle industry will receive a decided benefit.
Passenger traffic also promises good returns. There are many
European colonies on the Pacific coast, particularly of Italians, French,
and Germans, and the movement to and from Europe is a constant one.
Under present conditions the travelers must make their trips between
the months of May and November, or bear the added expense of the
sea voyage through the Straits of Magellan to Montevideo. When
through rail connection is established, the journey from Valparaiso to
Buenos Ayres will be made in two days.
Mo dependence on Seacoast lines.—A leading and exceptional principle
of the Chilean railway policy has been the rejection of the theory that
for the seacoast countries the only practicable system is of transverse
lines, because maritime transportation supplies the necessary means
for freight and passenger traffic. Though Chile is the narrowest of
all the South American countries bordering on the ocean, its greatest
width being 102 miles, and though it has 2,700 miles of seacoast, the
country always has maintained the plan of a longitudinal railway
which would unite its most southern points with those farthest in the
north. The fruits of this policy are seen in the few sections that are
lacking in the line between Puerto Montt, at the head of the Gulf of
Ancud, and Santiago, and in the various links between Santiago and
Pisagua, in the north. These sections gradually are being joined, so
that a through trunk line is a question of not many years.
PAN-AMERICAN RAILWAY. 33
Nor is it impossible to conceive the time when the development of
internal resources, combined with reasons of state, will make feasible
the extension south from Puerto Montt to Punta Arenas in the Straits
of Magellan. The exploitation of the vast timber resources in the
great forest provinces of the south, Arauco, Coutin, Valdivia, and
Llanquihue, has begun and it is fostered by the growth of the trans-
portation facilities.
Government ownership and public works.-Government ownership
exists in Chile to a greater degree than in the other countries of South
America. There are private lines in the central and Southern districts,
and in the nitraté fields of Tarapaca the roads are owned by the com-
panies, yet the only general system not under Government control is
that in the north from the seaport of Antofagasta to the city of Oruro.
This traverses 285 miles (4.42 kilometers) of Chilean territory. The
capital of the company is owned chiefly in Great Britain. The gauge
of this road is one of the narrowest in the world, being 2 feet 6 inches.
Because of this practice of State ownership most of the railway
building is initiated by the Government which, through the Depart-
ment of Industry and Public Works, makes very comprehensive studies
and surveys. Much significance is given to the colossal plan of pub-
lic works presented to the Congress at the recent session by the Gov-
ernment. This proposes an appropriation of $256,000,000 Chilean
currency, or approximately $93,000,000 gold, for harbors, railroads,
etc. Of the $256,000,000 national money, $107,000,000 is to be devoted
to railway building, and out of this fund $76,000,000 is to be spent on
the longitudinal project. The proposition of the Executive is to spread
the work over a period of fifteen years, payment being made in Treas-
ury bills to bear interest at 5 per cent per annum. The recommenda-
tion is that the first installment of the improvements begin in 1905,
and that the railway allotment for the initial period be $19,000,000.
This comprehensive scheme gives a most excellent idea of the pro-
gressive and consistent railway policy which prevails in Chile.
Summary of work in progress.-Your Commissioner is under obliga-
tions to the Department of Industry and Public Works for a résumé
of the railway situation at the beginning of the present year. From
this it appears that the Government had in operation 1,415 miles
(2,278 kilometers); under construction, 160 miles (257 kilometers);
under study for definite projects, 291 miles (452 kilometers); under
general study, 1,045 miles (1,682 kilometers); projects to be studied,
1,127 miles (1,815 kilometers).
On the same date private companies had in operation 1,405 miles
(2,263 kilometers); under construction, 67 miles (108 kilometers);
under general study, 28 miles (45 kilometers); to be studied, 724
miles (1,166 kilometers).
S. Doc. 206, 58–2—3
34 - PAN-AMERICAN RAILWAY.
Of the three general systems—that is, the longitudinal, the branches
with direction toward the Cordilleras, and the branches toward the sea—
it appears that on the longitudinal line there were in operation 944 miles
(1,520 kilometers); under construction, 83 miles (134 kilometers);
under definite study, 77 miles (124 kilometers); under general study,
662 miles (1,065.5 kilometers); to be studied, 417 miles (671 kilometers).
Of the lines branching from the longitudinal backbone toward the
Cordilleras, there were in operation 500 miles (805 kilometers); under
construction, 13 miles (21 kilometers); under definite study, 83 miles
(134.5 kilometers); ‘under general study, 181 miles (291 kilometers);
to be studied, 707 miles (1,139 kilometers). * . .
The lines branching from the longitudinal trunk toward the sea
which were in operation were 1,473 miles (2,372 kilometers); under
construction, 130 miles (209.5 kilometers); under definite study, 121
miles (195 kilometers); under general study, 230 miles (371 kilome-
ters); to be studied, 727.miles (1,171 kilometers). -
From this general summary the total is shown to be 2,820 miles
(4,697 kilometers) in operation; 227 miles (365 kilometers) under con-
struction; 291 miles (452 kilometers) under definite study; 1,073 miles
(1,727 kilometers) under general study; 1,851 miles (2,981 kilometers)
to be studied.
The gauge of the Chilean railways varies from 5 feet 6 inches (1.68
meters) to the 1-meter gauge of 3 feet 3% inches, though a proportion
has the standard gauge, 4 feet 8% inches (1.45 meters). -
Longitudźnal Zºne and branches.—The stress laid upon the longitu-
dinal system is made clear in the numerous provisions of the Congress
for studies and surveys, in the actual construction that is going on,
and in the estimates and recommendations of the executive. It also
appears in the memorials of the representatives of the mining industry.
As will be seen from the statement furnished your Commissioner by
the Department of Industry and Public Works the longitudinal line is
looked upon as forming the trunk or backbone for two transverse
systems, one to the Cordillera and the other to the seaboard. In a few
years it is thought that a second trans-Andean line will be built from
this main stem, starting from Copiapo and forming a junction with the
railways of the northern part of the Argentine Republic centering at
Tucuman. -
This is not a new scheme. It was the project of the North Ameri-
can, William Wheelwright, who projected the railroad from Valpa-
raiso to Santiago. He also built the existing line at Copiapo, which
was the first railroad opened in Chile and in South America. This
was in 1851, and the first train was run on Christmas Day. Various
engineering reconnoissances were made from Copiapo through the
Andes, and the route was shown to be comparatively easy, as the
mountain passes are open and present few difficulties. Though the
PAN-AMERICAN RAILWAY. 35
project was approved by the Government, little headway was made
with it, but recently it has been revived and is now on a much more
promising basis. It is hoped that the old gold and silver mines in
this region may again be worked, while the copper production, which
is now 32,000 tons annually, is certain to be increased.
Mitrate traffic and future.production.—Realization of the plan for
filling in the sections and making a continuous longitudinal line north
from Santiago means that Iquique in Tarapaca will be reached, and
from that point there is now a railroad through the nitrate fields to
Pisagua.
Since the world’s supply of nitrate comes chiefly from the Tarapaca
fields, and since the world’s demand for these fertilizers is increasing,
a word may be said about the industry. It promises to furnish freight
for the railroads for a quarter of a century longer. The life of the
nitrate supply has been estimated by Mr. Francisco Valdes Vergara, a
recognized authority. He shows that the average term of increase
for every five years has been 47 per cent between 1845 and 1864; 65
per cent from 1865 to 1884, and 33.8 per cent between the years 1885
and 1903. Exclusive of the sale of Government lands, the nitrate has
produced in the last twenty-four years a rental of $273,032,349 gold,
and can produce in the next twenty years $435,876,644 gold.
It is estimated that there are now private properties containing at
least 35,000,000 tons of nitrate, and that in the Government properties
exists a reserve of 30,000,000 tons. At the end of twenty years, when
35,000,000 tons will have been extracted, it is assumed that the exhaus-
tion of the nitrate deposits will begin. The nitrate industry at this
time contributes 76.4 per cent of the Chilean exports, and its operation
involves the expenditure of nearly $11,000,000 for agricultural prod-
ucts and merchandise. It pays the Government directly $17,702,000
gold for export duties and no less than $3,560,000 gold indirectly in
import duties.
Conditions for franchises.—As the Government has initiated and
carried through most of the important railroad enterprises, Chile has
no general law concerning subsidies, land grants, and exemption from
customs dues and taxes. The policy, however, is indicated accurately
in the legislation for the trans-Andean line and in the guaranty of
interest which is provided for by that legislation. Where this method
is not followed and the State constructs the railway the means are
provided from the national treasury.
Where a railway is constructed as a private enterprise each conces-
sion is subject to special dispositions constituting a contract between
the States and the grantee. When the line is of recognized public
utility, sometimes interest, not more than 5 per cent, is guaranteed
on the capital invested, at a fixed rate per kilometer. The freight and
passenger tariffs have to be approved by the Executive, and these are
36 PAN-AMERICAN RAILWAY.
not to be lower than the tariff enforced on the State railways. The
roads controlled by private companies are subject to the legal prin-
ciples relative to contracts for transport and the general rules in the
Commercial Code.
BOLIVIA.
The national railway policy of Bolivia is intimately identified with
the Intercontinental Project. The sections which would be formed in
this Line are regarded as essential to the Republic’s development. The
meaning of the prolongation of the Argentine system into Bolivia has
been explained in the outline given of the former country’s railway
progress and policies.
A momentous event, and one which makes probable the early realiza-
tion of Bolivia's ambition for wider railroad intercourse, is the treaty
with Brazil for the settlement of the controversy over the Acre terri-
tory. This provides for a cash payment within two years of £2,000,000,
or nearly $10,000,000, by Brazil to Bolivia, the stipulation being that
the sum shall be expended chiefly for railway purposes. Even before
the treaty had been ratified the declared purpose of the Bolivian Gov-
ernment was to apply this indemnity to railway construction, securing
the lines which will give it a through system from the Argentine
border on the south to the boundary of Peru on the north, thus form-
ing the great midway artery of through railroad communication
between Buenos Ayres and Lima, as well as enlarging the means of
commercial intercourse with the Amazon region of Brazil.
President Pando’s policy.—The Intercontinental Route is so clearly
considered a part of the national system, and the preference for it is
shown so strongly, that your commissioner quotes from the message of
His Excellency, the President, Gen. Jose Manuel Pando, to the
Bolivian Congress, December 27, 1903. President Pando, in his mes-
Sage, said:
If, as is expected, the treaty with Brazil is perfected and put in practice, it should
be taken into account by the nation that the sum provided as the stipulated indem-
nity should be applied in the construction of railway lines. For this reason, and
complying with the duty which is incumbent upon the Executive to give account of
its acts and to manifest its propositions with the purpose of receiving the opinions of
the country, permit me to express briefly my thought in regard to the works for the
realization of which all citizens of the Republic aspire.
It is necessary for us to install railroad lines in the greatest possible extension of
our territory, consulting the probability of assuring, with the returns sought, the
interest on the capital invested; the necessity of putting into communication among
themselves the distant centers of population in order to foster the national unity and
give impulse to internal commerce and local industries, and finally the convenience
of opening a highway by distinct routes to our international communication.
With these ideas in mind, it is clear that the first lines to be constructed should be
that from La Paz to Oruro; that from Oruro to Cochabamba; that from Uyuni to
Tupiza, and that which joins these places with the very important one of Potosi.
The railroad from Uyuni to Tupiza would be important to complete the network
PAN-AMERICAN RAILWAY. 37
of international highways which will form the grand intercontinental system pro-
posed by the United States of America. - -
And since the Argentine Government actually is building the prolongation of the
Central Northern to Tupiza, the line which is to be constructed to Uyuni would com-
plete that work, giving us outlet to the Atlantic, with great advantage to the people
of our southern districts. -
Other lines of vital importance, whose realization should be procured, are those
from the Paraguay River to Santa Cruz, from Cochabamba to the Chimore, and from
La Paz to the Beni River.
The plan which should be proposed to effect these projects should be as follows:
To send a commission to confer with the most solid and well-established firms of
Europe and the United States which are engaged in railway construction, and to
bring about that with the use which Bolivia would make of its funds, they would
agree to provide the additional capital, based on fixed interest and corresponding
funding. This capital would be guaranteed by all the lines constructed and their
incomes and, besides, by the national revenues in case of deficiency. Everything
with previous studies and with estimates carefully calculated.
The general administration of the lines should be turned over to the capitalists or
the construction company, the Government reserving the immediate supervision and
the intervention necessary to protect this interest.
The combination being made to extend the principal lines and the construction
company having sufficient financial resources, it would not be difficult to realize the
others enumerated; that is, those from the Paraguay to Santa Cruz, and from
Cochabamba to the Chimore as well as those from La Quiaca to Tarija, from Potosi
to Sucre, and from La Paz to the Beni through the Yungas. -
As already stated the treaty between Brazil and Bolivia has been
ratified by both Governments so that the plans outlined by President
Pando can be carried out. Substantially, Bolivia has a cash capital of
$10,000,000 available for railway building and as a basis for securing
further credit and the cooperation of private capital. The treaty pro-
vides that the first installment of £1,000,000 shall be paid within three
months from the exchange of ratifications and the balance by March
31, 1905. Nothing so important in Inany years has happened as this
international agreement and the declared policy of the Bolivian Gov-
ernment as set forth in the message of the Executive.
Prime importance of Pan-American sections.—It will be observed
that the President places emphasis on the lines from La Paz to Oruro
and from Uyuni to Tupiza, which will complete the Bolivian links in
the intercontinental system.
The following summary of present and prospective railway con-
struction was prepared for your Commissioner by Mr. T. Clive
Shepperd, the efficient Director of Public Works:
Puno is the terminus of the Mollendo, Arequipa, and Puno line, worked by the
Peruvian Corporation, 4 feet 8% inch gauge. From Juliaca, near Puno, the line pro-
ceeds north toward Cuzco, and is completed as far as Sicuani. -
Puno to Guaqui, 110 miles (179 kilometers),-Lake navigation across Lake Titicaca,
worked by the Peruvian Corporation.
Gwaqui to Viacha, 40 miles (65 kilometers).-Meter gauge line owned and worked
by the Bolivian Government. Distance from Viacha to Alto de la Paz, 14 miles (22
kilometers). - *
38 - PAN-AMERICAN RAILWAY.
Viacha to Oruro, 128 miles (206 kilometers).-Proposed meter gauge line.
Orwro to Uyuni, 195 miles (314 kilometers).--Two feet 6 inches (75 centimers),
line owned and worked by the Antofagasta (Chile) and Bolivian Railway Company.
The scheme includes a proposition to acquire this part of the line and change the
gauge to 1 meter.
Uyuni to Tupiza, 147.5 miles (236 kilometers).-Not yet surveyed.
The distance between Uyuni and Tupiza usually is accounted as less
than that estimated above. The Argentine engineers, who made a pre-
liminary study, and the members of the Intercontinental Survey fixed
it at 125 to 130 miles. This line presents engineering difficulties, yet
it would traverse an immensely rich mineral region, not only causing
the reopening of mines which have been abandoned for lack of trans-
portation facilities, but also leading to the development of new ones.
The lowering of freight rates from the mines which now depend on
pack animals for their transport was estimated for a term of years.
This calculation showed that the average charge for minerals trans-
ported from Tupiza to Uyuni by pack animals was $24 gold per ton.
For the intervening points it was not much less.
Among the leading mines which would be traversed by the railway
in completing the through connection are Tasna, Chroloque, Quechisla,
Aramayo, Tatosi, and Guadelupe.
Since the Second Conference progress has been made in Bolivia in
the intercontinental scheme. The capital, La Paz, has been joined by
rail with the port of Guaqui, which is the head of navigation on Lake :
Titicaca. This line was built by the Peruvian Corporation, but was
taken over by the Bolivian Government, which has since operated it
and is paying the mortgage held on the property by the company.
Present projects and concessions.—At the present time only one rail-
way concession is in force in Bolivia. This is for the line known as
L'Africaine, and the franchise is held by French and Belgian capitalists.
The line is projected from Santa Cruz to the Paraguay River through
what is known as the chaco or tropical agricultural area. The com-
pany was given a large grant of public lands for colonization, and pro-
vision was also made for a subsidy from the national revenues on the
completion of the first 200 kilometers.
Some preliminary studies have been made, and the engineers of the
company went over the ground in the summer and fall of 1903, but
not much progress has been realized, and the prospect for early work
is not encouraging. The corporation also has the franchise for con-
structing a port and canal at Bahia Negra, which is the confluence of
the River San Rafael with the Paraguay, and which was to be the
terminus of the railroad.
Other projects are for the prolongation of lines of the Argentine
system from Lake Ledesma to Oran and to the interior of Bolivia via
Yacuiba. The distance is 300 miles (500 kilometers) from Santa Cruz
PAN-AMERICAN RAILWAY. 39
to the frontier of Argentina. There are also plans for lines through
the chaco of Tarija and the provinces of Azero and Cordillera to join
the Bahia Negra Railroad. They do not indicate early results.
An enterprise which has received support is for a railroad from La
Paz through the copper fields of Corocoro to Tacna, from which point
a railroad runs to Arica on the Pacific. A large traffic is now carried
on over this route by means of pack animals. No franchise has been
granted by the Bolivian Government for this proposed railway, and
definite surveys have not been made.
Opening up the rubber region.—The plans for connecting the heart
of Bolivia with its tropical territory, which give promise of the earli-
est realization, are those for a railway from the heights of La Paz to
Yungas, which is the center of the coca-leaf production and other
tropical products, as well as of lumber and firewood. By this project
the navigable waters of the Beni River will be reached and the capital
thus placed in communication with the rubber region by means of
railways and river navigation to Villa Bella, which is the customs-
house and port of northeastern Bolivia.
The proposition is for an electric railway from the heights of La Paz
by utilizing the hydraulic power in the river Undavi. The estimate
is that one section, 78 miles (125 kilometers), would cost $2,500,000, and
the other section, 31 miles (50 kilometers), $750,000, making a total of
$3,250,000. The Government has had the route carefully studied and
the detail plans have been completed. This project comes within the
immediate view of the Brazilian treaty, and presumably the funds for
carrying it out will be supplied from the indemnity. It is to be car-
ried forward in conjunction with other plans for electric traction from
the Heights, which is now the terminus of the railway from Lake
Titicaca, down to the city proper, as ordinary railroad construction is
too difficult and too expensive to carry a steam railroad from the
Heights to the basin in which the city lies.
JMines the basis of Bolivian railway growth.—The foundation of
Bolivian railway development lies in its mineral resources. This is
particularly true of the sections between Uyuni and Tupiza and Via-
cha and Oruro, which are the links lacking in the intercontinental
location. Viacha is a few miles from La Paz on the railroad that con-
nects the capital with Lake Titicaca. Concessions have been given at
various times for building the line to Oruro and surveys have been
made, but nothing practical has resulted.
The chief mineral products of Bolivia are gold, silver, tin, bismuth,
and copper. Borax also is produced. The present situation is not
unlike that which existed in Mexico fifteen or twenty years ago when
the mining industry was revived, new discoveries made, and abandoned
mines worked by new processes all through the facilities for transpor-
tation which were afforded by the construction of railroads.
40 . PAN-AMERICAN RAILWAY.
Bolivia, however, in one sense differs from Mexico in that it has tin
mines. It is, in fact, the only country on the continent where tin pro-
duction can be looked forward to as a profitable mining industry. The
zone extends from Lake Titicaca to the southern limit, about 300 miles.
The most productive area is between south latitude 17° and 19°. The
conditions in which it is encountered are not uniform. In some of the
districts it is mixed with iron pyrites and silver, while in others and in
the greater part it is found almost in pure form. In some instances
the deposits spread over a large superficial area, while in others the
mineral has to be sought at a depth of 1,000 feet. The width of the
veins is variable, being from 2 inches to 6 feet. In some of the mines
the mineral is found containing from 50 per cent to 65 per cent of pure
metal, while in others oxide of tin almost pure is shown in the form of
crystal grains. The four districts which produce tin in the greatest
quantities are La Paz in the north, Oruro in the center, Chorolaue in
the south, and Potosi in the east. The tin mines of Huanchaca have
contributed a large share of the freight traffic to the railroad which
runs from Uyuni to the Pacific coast.
The mining laws of Bolivia were amended and systematized in a
general code which was promulgated in 1903.
Liberal legislation probable.—Bolivia has a general railway law pro-
viding for a guaranty of 6 per cent on capital invested in railway con-
struction and also conceding other security, but its terms have been
too vague to induce capital to engage in these enterprises. There is
State regulation of the private lines both as to fixing freight and pas-
senger tariffs and as to other subjects. They are similar to the regu-
lations enforced on the Government line between Guaqui and La Paz.
It is probable that as a consequence of the more definite policy
which has been adopted by the present administration, and in order
fully to utilize the advantages of the Brazilian indemnity, legislation
will be enacted which will be more specific and will meet the condi-
tions that are necessary in order to induce investments. A new gen-
eral railway law was submitted to the Congress at the session of 1903,
but owing to lack of time for full consideration no action was taken.
PERU.
The most significant railway movement that has taken place in many
years is now in progress in Peru. Since the holding of the Second
Conference in Mexico the railroad extension from Oroya, the terminus
of the line built by Henry Meiggs for the Peruvian Government, has
been carried on to Cerro de Pasco and the line was opened for traffic
in January of the present year. The length is 83 miles (134 kilo-
meters). The route followed is almost precisely the one designated in
the Intercontinental Survey.
PAN-AMERICAN RAILWAY. 41
This railroad was built to foster the development of the great cop-
per deposits of the Cerro de Pasco region, which for the last three
hundred years have been worked chiefly for silver. These fields are
declared to be the greatest single deposits of copper in the world.
The estimated output for the future is 60,000 tons annually. The
average annual output of silver for a long period of years was 1,600,000
ounces, and from the time of their discovery in 1630 there is a credible
record of 40,000 tons of pure silver extracted. These mining proper-
ties were bought by North American capitalists, the company being
known as the Haggin syndicate. Its first measure was to build the
railway in order to secure the cheap and sufficient means of transpor-
tation that were lacking so long, as the sole facilities for freight were
pack animals.
Collateral to the silver and copper deposits the working of the
bituminous coal fields will follow, as it is the purpose of the syndicate
to exploit the various veins that have been discovered. These, undoubt-
edly, are of great commercial value because of the lack of coal in the
South American countries. The cheapening of fuel, both for general
use and for the smelting and amalgamation works, will be one of the
direct benefits of the exploitation of the coal mines.
Up to this time, according to the statement made to your Commis-
sioner, the company has invested $10,000,000 in the mines and in
building the railroad, but other enterprises, such as smelters, will add
materially to this sum. Furthér railway building is probable. The
syndicate has concessions for several routes. On some of these, sur-
veys and tentative locations already have been made.
JFrom seaboard across the Andes.—By means of the Oroya and the
Cerro de Pasco railways Lima and Callao now have through rail com-
munication across the summit of the Cordilleras. With this basis
various projects, both toward the Amazon River country and north and
south along the line of the Intercontinental System become much nearer
realization. The Cerro de Pasco road is a potent factor in advancing
the Government policy of closing the gaps to Cuzco. The immediate
encouragement is for the line from Oroya to Jauja and Huncayo on
the south, while on the north hope is held out of the ultimate extension
of the Chimbote Railway to a junction with the Cerro de Pasco line.
In its present form the Peruvian railway system consists of a series
of unconnected lines running from the seaboard to the interior. They
serve the sugar cane and cotton production of the regions near the
coast, but, owing to their disconnection and the lack of a main trunk,
they have been of little aid in developing the whole country.
The chief railways are the Southern, which runs from the port of
Mollendo to Puno, on Lake Titicaca, and which has branches north-
ward as far as Sicuani, 87 miles from Cuzco; and the Central Railway,
which runs from Callao and crosses the Andes at an elevation of nearly
42 IPAN-AMERICAN RAILWAY.
15,700 feet in the great Galera tunnel. They are in effect transverse
trunk lines. The other railroads merely run from the smaller sea-
ports a few miles back, usually following the narrow valleys formed
by the rivers, or the more open passes. The lack of a main longitu-
dinal line, with which they could form junctions, materially limits their
traffic and lessens their utility in developing the resources of the dis-
tricts tributary to them.
Importance of new railroad guaranty law.—The policy of the
Peruvian Government, under the administration of His Excellency,
President M. Candamo, is pronounced in the support given to legiti-
mate railway enterprises. The proof of this is found in the law
passed by the Congress in February, 1904. It is a most marked
advance, and Peru is sure to reap great benefit from this progressive
and liberal measure.
The recommendations of the Executive, which were made both from
a strategical and a commercial point of view, and which have been
enacted into a permanent law by the Congress, were decidedly favor-
able to the Pan-American idea. The Government is given the power
to secure the construction of railroads by means of concessions with a
guaranty of yearly interest, or by means of the formation of public
companies with a similar guaranty of interest for their capital. The
funds for this purpose are taken from the tobacco tax which is set
aside as a permanent railway guaranty fund.
During the year 1904 £100,000, approximately $500,000, is set aside;
in 1905, $750,000; and in 1906 and continuously thereafter, $1,000,000.
The Peruvian pound is the exact equivalent of the English pound ster-
ling, and on this basis the calculation in dollars is easily made. Sub-
stantially, Peru has established out of its internal-revenue receipts a
specific and enduring fund of $1,000,000 annually dedicated solely for
the purpose of guaranteeing railway construction. This meets the
requirements of foreign capital, which always hesitates over vague
guaranties out of the general revenues or out of funds which can be
diverted by the State to other objects. The calculations and estimates
of the Peruvian Treasury Department leave no doubt that the tobacco
tax will produce the amount of revenue which is set aside. One
element of value in this legislation is its conservatism. It does not
pledge the Government to more than can be performed with the fiscal
resources of the nation.
With the specific basis provided, the Executive is authorized to pro-
vide for the construction of railway lines under various alternative
propositions, including during twenty years a guaranty of interest or
a cash subvention of a fixed amount per kilometer constructed, as has
been the policy of Mexico.
General routes established.—The legislation establishes general routes
which bear directly on the gradual linking together of the sections in
PAN-AMERICAN RAILWAY. 43
the Pan-American system. From Oroya to Jauja and Huncayo means
that ultimately Cuzco will be reached, and the through line between
Buenos Ayres and Lima will become a fact instead of an aspiration.
Whatever route be followed toward the Amazon will be a help in
E’an-American links toward the frontier of Ecuador. The alternative
locations are either from a point between Oroya and Cerro de Pasco
to some point on the river Ucayali or one of its affluents at which it is
navigable by steam at any time of the year, or what is known as the
Maranon River route from the port of Paita and from Piura to the
Falls, or Pongo de Manserriche, and thence to the navigable waters of
the Amazon. -
The latter route would be through the northern part of the country
and would insure the working of the iron-ore deposits which are
believed to exist in that region. The Ucayali River location would be
in harmony with the central highway or military route, which now
enables Port Bermudez, on the river Pichis, to be reached by mule
trails. From this point the journey is continued in small steamers
down to Iquitos, a distance of 1,000 miles. Port Victoria, which also
is suggested as the terminus of the line from Oroya, is farther up the
river Pichis than Bermudez.
Whichever location is followed, the central Government would be
placed in communication with this distant Amazon capital of Iquitos,
and the great rubber-producing and forest regions of eastern Peru
would be opened up to settlement, while the interchange of products
between the interior of Peru and Brazil would be developed. The
Department of Loreto, of which Iquitos is the port and the capital, is
Peruvian territory. Under present conditions the quickest means of
making the journey from Lima to Iquitos is to go to Panama, take the
steamer to New York, and in New York take one of the vessels to
Para at the mouth of the Amazon, and then follow the river for 3,000
miles to the destination.
It is also proposed to stimulate the construction of the line between
Sicuaniand Cuzco, a distance of 90 miles (14.5 kilometers). This project
offers no engineering difficulties. It is the natural northern extension
of the present system of the Southern Railroad. The traffic at present
is carried on by means of a cart road.
Regarding the projected links along the Intercontinental Route the
committee of the Peruvian Congress estimated that the line from Oroya
to Jauja, a distance of 77 miles (140 kilometers), could be constructed
at a cost of $3,000 per kilometer; that is, £420,000, or $2,100,000, for
the whole line. Between Sicuani and Cuzco the estimate was £2,000
per kilometer, £280,000, or $1,200,000, for the whole. The general
estimate of the Department of Fomento for railway construction in
Peru is $15,000 per kilometer in the coast region and $45,000 per kilo-
meter in the sierras or mountains. The studies and preliminary loca-
44 FAN-AMERICAN RAILWAY.
tions of Engineer W. D. Kelley in the Intercontinental Survey have
been of great value in affording an understanding of the cost of the
Peruvian railway projects, and especially in the Cuzco sections.
Earnings of the Peruvian Corporation.—At this time Peru has about
1,200 miles (2,000 kilometers) of railway lines, most of which are of
standard gauge, 4 feet 8% inches. The railways are the property of
the Government, but they are operated by the London company known
as the Peruvian Corporation (Limited). Under the agreement by
which the foreign debt of the country was assumed this corporation
took possession of the lines in 1890 for a period of sixty-six years, so
that its control will last till 1956. The Oroya line was completed by
the company from the terminus at Casapalca to Oroya.
The last report of the board of directors submitted to the annual
meeting of the shareholders, held in London on December 17, 1903,
states that the traffic has increased materially and that the last year
was the best in the history of the company, though some of the lines
suffered heavily from the interruption of commerce which was caused
by the prevalence of the bubonic plague.
The report shows that the gross receipts, which in the year 1890–91
were 1,840,000 soles, had increased in the year 1902–3 to 5,436,000 soles.
The sole is now calculated at 49 cents gold. The net receipts, which
in the first year of the corporation control amounted to 595,275 soles,
last year reached a sum of 2,023,305 soles. As the value of the sole
varied considerably until the gold standard was established the calcu
lation is best understood in pounds sterling. For the year 1890–91 the
net receipts were £91,771; for 1902–3, £204,438.
The increase in the business, which is admitted to be due largely to
the enterprise of the American syndicate in building the Cerro de
Pasco Railroad, has brought it about that the debentures of the Peru-
vian Corporation (Limited), which five or six years ago were quoted
in London at 36 per cent, were quoted in November of the last year
at 86% per cent. The authorized capital of the Peruvian Corporation
consists of £7,500,000 4 per cent cumulative preference stock and
£9,000,000 ordinary stock, a total of £16,500,000, besides which there
are debenture bonds to the amount of £3,700,000, a grand total of
£20,200,000, or $100,000,000.
JFranchises in force.—The concessions in force for railways in Peru
are as follows:
Chimbote to Recuay. Expires 1904.
Confluence Chuquicasa and Santa to Pallasca. Expires March, 1905.
Oroya to Huncayo. Expires 1904.
Lima to Pisco. Expires 1907.
Oroya to Gallarisquisca and to Ucayli.
Paita to River Maranon. Expires October, 1905.
Maranon to Manserriche. Expires October, 1905.
TAN-AMERICAN RAILWAY. 45
Manserriche to Cerro de Pasco. Expires October, 1905.
(These last three concessions are held by the syndicate which built the Cerro
de Pasco Railway.)
Chancay coast between Salinas and Veguata to a point on Cerro de Pasco line.
Huacho to Picuncha, Province of Cajatambo.
The concession for a line from one of the bays on the coast of the
Province of Chancay to some point between Oroya and Cerro de Pasco
is a recent one and is in the interest of the corporation which built the
Cerro de Pasco Railroad. The presumption is that the syndicate which
is developing the mines prefers to have its own line for transporting
the ores through to the coast rather than to depend on the Central
Railway from Oroya which is controlled by the Peruvian Corporation.
The extension of the Chimbote Railway to Recuay has been inter-
rupted temporarily, but it is expected that the project ultimately will
be carried out in order to develop the coal deposits which have been
discovered. In the more remote future there is the possibility of
building a railway from Cerro de Pasco to Yurimaguas, on the banks
of the Huallaga River, 300 miles of which would be along the intercon-
tinental location through the Pongos or cascades of Manserriche and
Aguirre.
The railway undertaking which is certain of early realization is that
of a coast line from Lima to Pisco. This was authorized at a recent
session of the Congress. The total extension is 126 miles (238 kilo-
meters). The Government guarantees for twenty-five years 7 per cent
interest on a capital of £500,000. Tenders have been submitted for
the building of this line, and the contract will be let at an early date.
The gauge is to be standard. The materials for this road should be
supplied by American dealers, and the construction work should be
done by American contractors if they are alive to the opportunity.
There is a railway from Pisco to Yea, or Ica, 25 miles (40 kilometers).
It has been suggested that ultimately an extension may be made from
Ica to Ayacucho and then to Cuzco, which would furnish an alterna-
tive route to the Intercontinental Survey in giving Lima railroad com-
munication with Buenos Ayres.
General railroad provisions.—The construction and operation of
railways in Peru is governed by the general railway law of 1892 and
by the Decree issued in 1903. The policy of the nation is shown in
the law which was enacted in February of the present year.
Under the law of 1892 the Executive is authorized to grant conces-
sions which may be deemed expedient, and to exempt from taxes and
from customs dues railway material for a specified period. The right
of way through the State lines also is granted and the right of eminent
domain affirmed. After the plans are approved by the Government,
the concession fails if a fixed amount of construction work is not done
every year. Since the gold standard is now maintained, no questions
46 PAN-AMERICAN RAILWAY.
arise regarding the basis on which freight and passenger rates shall
be fixed, or with reference to the financial guaranties of the State.
The mining resources of Peru are closely identified with its future
railway growth. The legislation on this subject is ample and the
mining code is a complete one. A small annual payment secures the
continued control of mines which have been preempted. The corps
of mining engineers maintained by the Government is of much benefit
to the industry. Numerous official publications are made for general
information.
ECUADOR.
The railway conditions in Ecuador have varied little since the Inter-
continental Survey was made and the information conveyed in the
report of the engineers is as appropriate to-day as at that time. How-
ever, there has been progress. Then the country had no railway lines.
Since that period the project for connecting Quito, the capital, with
the coast at Guayaquil has been advanced and the road is now in oper-
ation as far as Guamote. There have been constructed 115 miles (185
kilometers) from Duran on the bay opposite Guayaquil to Guamote.
There are 165 miles (266 kilometers) to be built to reach Quito. The
very difficult and expensive engerneering obstacles have been sur-
mounted in the sections already built, and it will be much easier and
cheaper to construct the remainder of the line than it was to build the
first divisions. The bonds of the Guayaquil and Quito Railway are
secured by a second mortgage on the customs dues of the Republic.
It has met these obligations regularly.
The policy of the Government in relation to railroad enterprises is
to pay the interest on the bonds guaranteed by a mortgage on the
internal-revenue receipts. No general law giving guaranties and
exemptions to railway companies has been enacted. Ecuador prefers
to have the lines built by contracts or concessions, the railroads becom-
ing the property of the Government after a term of years. Each
company negotiates its own terms as to land grants, exemption from
customs dues, guaranties, etc.
Besides the Guayaquil and Quito Railroad, the only projected lines
now under consideration are from Bahia de Caraquez to Quito, and
from the coast at a point to be determined to Zaruma in the province
of El Oro. Zaruma is in the southern part of Ecuador, and is the
center of a mineral district where several development enterprises
have been organized.
Inter-Andean growth predicted.—While the railway systems of Ecua-
dor have advanced little the internal wealth of the country, its coal
deposits, and especially its agricultural resources, it is believed, ulti-
mately will insure the building of means of communication. It is
realized that the inter-Andean region remains stationary because the
PAN-AMERICAN RAILWAY. 47
crops, which can be produced in abundance, lack the means of reach-
ing markets. Thus it has happened that the exports have been limited
to the districts bordering the ocean where cacao or chocolate is pro-
duced in large quantities and is exported with profit. On this subject
the Minister of Agriculture and Industry in his recent report said:
Not much time will have passed when the inter-Andean railway, vanquishing all
the obstacles which have halted our progressive march, will salute the wall of the
Andes and come with the whistle of the locomotive to awaken the spirit, almost
dead, of our mountain populations to the civilizing influence of industry and com-
merce, giving easy outlet to the richness of our fertile zones, and assuring us a broader
life by placing us in immediate contact with the coast and bringing us nearer to the
exterior at will, multiply the relations of common interest, break the yoke of preoc-
cupations and routine custom to which we have submitted blindly, and will stimu-
late us for work and supply the deficiencies of our education.
The line of iron and steel, covering an extension of 500 kilometers, from Duran to
the capital of the Republic, will traverse our climates and will go collecting in its
train diverse productions, to bear them to our ports and deliver them to the com-
merce of the world. The struggle for subsistence will then be borne among the
peoples of the interior, and from province to province will be established recipro-
cally the interchange beneficial to their respective provinces.
The Intercontinental Location through Ecuador after entering from
the Colombian boundary was to reach the city of Tulcan; thence
descending the central valley of that Republic it was to pass by the
cities of Ibarra, Quito, Ambuto, Riobamba, Cuenca, and Loja, into Peru.
COLOMEIA.
Your Commissioner deferred a personal visit to Bogota, but submits
the information gathered through various sources.
Not much progress has been made in actual railroad construction
since the First Conference was held in Washington, yet subsequently
a general railway law was passed, which in spirit was an effort to make
effective its recommendations. The Pan-American surveys also have
been used as a basis for various projects.
Under the law of 1892 the Executive is empowered to grant conces-
sions for the construction and operation of railways and to subsidize
the same at a rate up to $16,000 gold per mile for a 3-foot gauge.
These subsidies are to be paid on the opening of traffic of the various
sections, in revenue bonds redeemable out of import duties at the
national custom-houses. The total of such bonds redeemed in any one
year is not to exceed a fixed percentage of customs receipts, but the
bonds are to bear interest until redeemed. They are to be accepted
at the custom-houses in payment of duties.
Lines which are feasible.—The Department of Cauca bordering on
the Pacific is the one which would be traversed by the main trunk of
the Intercontinental Line. The richness of this Department has been
the subject of many reports and these details do not need to be recapitu-
48 PAN - AMERICAN RAILW A Y.
lated. The line in operation in this part of the country is a short spur
of 12 miles forming a section of the road projected and once partly
built from the port of Buenaventura to Cali, a distance of 80 miles
(129 kilometers). An agreement has been made and a franchise author-
ized for the rebuilding of this system and its extension to Bogota at
sometime in the future is probable. The development of the anthra-
cite coal deposits in the Cali district is certain ultimately to secure the
construction of railways as a profitable traffic is assured from the outset.
A concession has been granted by the Department of Antioquia to
two Americans, Messrs. Charles L. Wright and J. T. O’Bryan, for
the construction of a railroad connecting the city of Medellin with the
lower waters of the Magdalena River and with the Department of
Cauca. This would form a part of the Intercontinental System. The
projected line runs from St. Lucia, on the Cauca River, along the
Rover Porce to Medellin, a distance of 180 miles (290 kilometers).
The railroad is then to continue along the same valley to the head-
waters of the Porce in the district of Caldas, 12 miles from Medellin,
and to a termination on the border of Cauca.
It is the opinion that this line instead of competing with the Buena-
ventura road from the Pacific to Bogota would act as an aid, the two
working together in establishing a network of communication con-
verging from the capital on the one side west through the coffee
regions of Cundinamarca and the sheep-raising and rich industrial dis-
tricts of Tolima and Cauca, and from the other side drawing to itself
all the trade of Medellin, Manizales, and the commercial centers of
Antioquia, together with its rich mineral resources, and would find
the common outlet through the port of Buenaventura.
Under the terms of the concession a free right of way 164 feet (50
meters) is granted, and the free introduction of all necessary articles,
including food and medicines, required by the company. The grantees
are allowed to establish telephone and telegraph lines and the conces-
sion is to run for fifty years, after which the Government has the
option of purchasing at a fixed valuation or of continuing the conces-
sion for another twenty-five years. The company is authorized to fix
the freight and passenger tariffs on a gold basis.
Estimates of Pan-American route.—The Intercontinental Survey in
Colombia traversed a line crossing the western Cordillera of the Andes
to the valley of Cauca which was followed to Antioquia. Continuing
up this productive valley connection was to be made with many cities
and towns until at its head Papayon should be reached. A branch line
was to extend across the central Cordillera to Bogota, the main line
proceeding from Papayon into the valley of Patia via Posto, and thence
through Ipiales into Ecuador. A survey also was proposed from the
main trunk to Cartagena on the Caribbean Sea.
PAN-AMERICAN RAILWAY. 49
Chief Engineer Shunk's estimate of the cost of the Colombian sec-
...tions was as follows: From Quito northward to La Bolsa on the Cauca
River, 440 miles, $32,000 per mile; La Bolsa to Cali, 47 miles, $15,000
per mile; Cali to Cartago, 124 miles, $13,000 per mile; Cartago to
Poblanco, 100 miles, $32,000 per mile; Poblanco to Antioquia, 70 miles,
$24,000 per mile; Antioquia to Cartagena on the Caribbean Sea, 373
miles, $22,500 per mile. Later studies for specific enterprises on some
of these routes have not increased the estimated cost.
Present and prospective railways.-The railway lines now in opera-
tion in Columbia do not exceed 400 miles (644 kilometers). They are
mostly local roads, whith no common direction or terminus, and serve
only the needs of neighborhood traffic in widely separated localities.
A system of connected lines would be of incalcuable benefit to the
nation. It also would make possible the suggestion of the distinguished
soldier and explorer, Gen. Rafael Reyes, for a branch of the Intercon-
tinental System to connect with the immense network of navigable
river communications formed by the Amazon and its tributaries.
From the commercial and industrial standpoint there are also great
benefits to be reaped by Colombia from the construction of the Pan-
ama Canal. This will form an outlet for the products of a very wide
and immensely productive region, and should result in the early devel-
opment of the agricultural and mineral resources. The Panama Canal,
in this sense, is of even greater benefit to Colombia than to the coun-
tries of Central America. Its construction is a feasible basis for a
comprehensive plan of Colombian railways.
BRAZIL.
The direct interest of the South American countries bordering the
Atlantic Ocean in the Intercontinental System has been underesti-
mated, because of the assumption that all their resources are to be
fostered along the coast. This is far from being the truth. Their
interior development requires communication with the Andes as well
as with the Atlantic. This is especially so in the vast domain of
Brazil where, with the exception of the mighty Amazon and the great
San Francisco River, the watershed lies scarcely 50 miles back from
the coast and the river courses lead to the interior.
The Republic of Brazil has a progressive railway policy which looks
forward to communication with the Andes when immigration and col-
onization have advanced sufficiently in that direction to insure the
exploitation of those vast and rich tropical regions. The plans for
reaching the slopes of the Cordilleras, which would insure a junction
with the main transcontinental line, are well matured. One means will
be by joining together links to give through communication for north-
S. Doc. 206, 58–2—4
50 PAN-AMERICAN RAILWAY.
ern Brazil to the navigable streams. This plan is emphasized in the
Sanction it receives in the treaty for settling the dispute with Bolivia
over the Acre territory. &
Means of reaching the Amazon.—An explanation of the far-reaching
effects of the treaty, in so far as relates to Bolivia, has been given by
your Commissioner in describing the prospects in that Republic. But
its full influence only is appreciated when the relation of the two
countries is understood. Broadly speaking, it is meant to bring Brazil,
in so far as concerns commercial and industrial intercourse, to the
Bolivian Andes. The $10,000,000 indemnity which Bolivia receives
is to be used for railway construction and other public works that will
tend to better the means of communication and foster the commerce
between the two nations; but in addition to this Brazil agrees to build
within its own territory a railroad which will be the prolongation of
the Amazon navigation to the Bolivian system of navigation and
railways.
By article 7 of the treaty Brazil obligates itself to construct a rail-
road from the port of Santo Antonio, on the river Madeira, to Gua-
jaramerir, on the Mamore, with a branch which, passing through
Villa Murtinho, or some other nearby point (State of Matto Grosso),
shall arrive at Villa Bella, in Bolivia, at the confluence of the Beni
River with the Mamore. Brazil undertakes to finish this railroad
within four years, and both countries will have the right to the same
franchises and tariffs in using it.
This line from the Madeira to the Mamore will be about 300 miles
(483 kilometers) in length. There are a score of waterfalls between
Port Santo Antonio and Villa Bella, where is the Bolivian frontier cus-
toms-house. Canoes and portage have been the only means of freight
transportation, and the lack of facilities has hindered commerce. This
railroad around the Madeira Falls often has been mooted; engineering
reconnoissances have been made, projects submitted, plans approved,
and preliminary work begun, but the undertaking never has got
beyond this stage. Now the railway is assured.
Intercontinental variations.—In the Intercontinental Survey a tenta-
tive project was suggested for a branch from Huanchaca, in Bolivia,
across the eastern flats to Corumba, on the upper Paraguay; then up
the river Taquary, via Coxin, to reach the valley of the Paranahyba, and
after crossing that stream to ascend the valley of the Rio Grande to
Uberaba, which is the most northwesterly town of Brazil in railway
connection with Rio Janeiro, San Paulo, and Santos. No preliminary
location of this branch was attempted.
The ideas of the Brazilian Government are not exactly the same as
those advanced in the suggestion of the Pan-American engineers. In its
view the lines serving the purpose of general public utility, as well as of
PAN-AMERICAN RAILWAY. 51
local commerce, are from Pernambuco (Recife) to the San Francisco, and
from Santos, the port of the coffee-producing State of San Paulo, to
Jundiahy, which is the principal line of the Moygana. Proposed
extensions would connect with lines through the States of Goyaz and
Matto Grosso to the borders of Bolivia. National strategic, as well
as commercial and industrial reasons, seem to insure ultimate through
railway communication of this character. With the present limited
facilities it is necessary to go by ship to Buenos Ayres and then up
the Parana and Paraguay rivers more than 2,000 miles to reach these
two States. *.
The projected lines of an international character would also bring
the San Francisco in communication with the frontier of Uruguay,
forming an important division in the great project of an interoceanic
railway from Pernambuco on the Atlantic to Valparaiso on the Pacific
by way of Buenos Ayres. This scheme has received much discussion,
and some years ago a concession based on it was granted. The pro-
posed route from Pernambuco to San Luis, on the border of Uruguay,
is 2,794 miles (4,500 kilometers).
In southern Brazil there are also national strategic reasons as well
as local development and commerce to encourage the building of a
railway from Porto Alegre to Uruguayana on the Uruguay River. A
part of this general inter-railway communication which would join
Brazil with its neighbors is the Parana Railway. The starting point
of this road is Paranagua, and by extensions and branches it is expected
to reach Punto Grosso, Puerto Amazonas, and other points of inland
navigation. The Government leases this railroad to private parties.
Ten thousand miles in operation.—In the growth of the Brazilian
railways the policies of the Nation and of the various States usually
have been in harmony, and this has helped toward a closer union of the
different systems, though in so enormous a country necessarily there is
disconnection. At the present period—that is to say, the beginning of
1904—the total of railway lines is approximately 10,000 miles (16,100
kilometers).
The systems in operation are comprised in three groups. The first
is known as the Northern, and spreads over the States of Rio Grande
do Norte, Parahiba, Pernambuco, Alagoas, Sergipe, and Bahia.
The second group includes the States of Minas Geraes, Rio Janeiro,
and San Paulo, or the central part of the country.
The third group is chiefly in the State of Rio Grande do Sul and is
the nucleus of various lines of local importance for southern Brazil.
The majority of the railways are of narrow or 1-meter gauge, that
having been found most advantageous for the topographical and other
conditions.
A full review of the Brazilian railway systems was made in a report
52 PAN-AMERICAN RAILWAY.
to the Department of State by Mr. Thomas C. Dawson, secretary of
the United States Legation. The various lines are summarized as
follows:
Sorcabana system, a southwestern branch being extended toward
the frontier at Parana and toward Rio Grande do Sul.
Moygana, in the State of San Paulo, with extension projected to
Catalao, in the State of Goyaz, and thence to Cuyaba, the capital of
Matto Grosso. -
San Paulo and Rio Grande, trunk line between middle and southern
Brazil, to Porto da Uniao, head of navigation on the Iguassu River.
where the junction point is proposed of all the railway systems fol
southern Brazil, Paraguay, and northeastern Argentine; also for lines
projected to the border of Paraguay and to the Uruguay River.
This report is included in the Handbook on Brazil, published by the
Bureau of American Republics, and your Commissioner therefore does
not deem it necessary to repeat in detail the information which is
given so fully and intelligently.
The legal regimen of the Brazilian railways is found in a general law
and in a series of codifications. The leading provision is the guaranty
of 5 per cent interest on a capital fixed in accordance with various reg-
ulations as to cost of construction, installation, etc. The ownership of
the railways is partly foreign and partly by the Nation and by the
respective States. The foreign ownership is largely British though
there is some French and Belgian capital invested.
On the railroads marked preference is shown for railway material
and rolling stock, particularly for locomotives, manufactured in the
United States. This is especially notable on the lines controlled by
the Government.
URUGUAY.
Uruguay's relation to the Intercontinental Project as well as to the
inter-South American system of railways is apparent through its geo-
graphical position with reference to the Argentine Republic and to
Brazil and Paraguay. This international status has been recognized
in the legislation of the Republic. The law of 1884, which was a codi-
fication and amplification of previous laws, established definitely the
outlines of the Uruguayan railway systems. These were for roads of
the standard 4 feet 8% inch gauge, that should run from Montevideo
toward the Uruguay River in order to join the Argentine lines which
would enable through communication to be established with Bolivia
and Peru; also by a line to Rivera establishing the shortest route to
Asuncion in Paraguay, eastern Bolivia, and a junction with the inter-
continental trunk line; furthermore, lines toward Yaguaron and Lake
Merin which should serve to shorten the time to Rio Grande, Pelotas,
TAN-AMERICAN RAILWAY. 53
and Porto Alegre in Brazil; furthermore, the transverse line from
Colonia, opposite the city of Buenos Ayres, to San Luis, on the Bra-
zilian border, which would form a section of the ultimate interoceanic
line between Pernambuco and Valparaiso.
Practical measures of legislation.—The aim of this legislation was
farsighted statesmanship. It was to enable the port of Montevideo to
realize in full the advantage of being placed in railway communication
with the entire continent.
The law of 1884 was supplemented by legislation in 1889 which pro-
vided for what was known as the Interior of Uruguay Railroad, from
Colonia to San Luis, at a junction with the western lines at Perdio,
with the central ones at Durango, and with the northeastern at Cero
Chato (Puntas del Yi).
The main provision of the Uruguayan railway law was a guaranty
of interest not exceeding 7 per cent on a capital of £5,000 per kilo-
meter. Subsequently this interest was reduced to 3% per cent. The
law provided for exemption from trade and land taxes and for the
free admission of material used in railway construction. The amount
of capital guaranteed by the State is about $28,000,000. The invest-
ment in all the railways of the Republic, after the lines now under
construction are finished, will be $98,000,000. It almost may be said
that the connection of Uruguay with the Intercontinental System exists,
as there is only lacking, in the network of Uruguayan and Argentina
railways, a section of 22 miles (36 kilometers) between Concepcion and
Paysandu, where the great beef-extract industry is centered. When
this section is built there will be direct communication from Monte-
video to Jujuy, in northern Argentina.
Another point which will make through communication possible
will be by the crossing of the Uruguay River at Monte Caseros, and
the junction there with the railway from Santo Rosa to Montevideo.
Jalentity of interest maintained.—The railroads of Uruguay come
largely under the control of the corporation known as the Central
Uruguays, which is the owner or lessee of most of the lines. Under
the rearrangement of Uruguay's foreign obligations in 1890 the guar-
anteed interest on the main lines and on the northern extension was
fixed at 3% per cent. The guaranty for the latter was secured by the
hypothecation of 45 per cent of the customs receipts. The Central
Uruguays corporation is controlled by the interests that dominate the
Southern Railway of Argentina and the Buenos Ayres and Rosario
and Central Argentine railways. This fusion of interests is resulting
in various extensions and branches of the Uruguay lines.
The Government of Uruguay has extensive harbor works under
construction in Montevideo, and this is an additional inducement to
foreign capital for investment in railways and kindred enterprises.
54 PAN-AMERICAN RAILWAY.
In proportion to its population the country has the largest railway
mileage of any Republic in South America. The Department of
Engineers in its last annual report states that there is much progress
in building extensions and branches.
PARAGUAY.
The midcontinent situation of Paraguay makes it especially desira-
ble for that country to be connected with its neighbors by railroads as
well as by the means which the river systems furnish. Its relation to
the Argentine Republic, Brazil, and Uruguay has been shown in the
account given of the projected extensions of the lines in those Republics. .
The only railway in operation is that from Asuncion, on the Para-
guay River, to Villa Encarnacion, on the River Parana, a distance of
217 miles (350 kilometers). The section from Villa Encarnacion, which
will join with the Argentine lines running to Buenos Ayres, has not
yet been constructed, though this will not be a matter of many years.
When the Argentine extension to Posadas and the Central Uruguay
extension from Rivera to San Boya are completed, central Paraguay
will have quick communication between the Plate and the Paraguay
rivers, and this will add greatly to its internal development. This
region also will be the location for forming a junction for the inter-
continental trunk system and establishing communication between
Uruguay, the southern States of Brazil, part of the Argentine Repub-
lic, and Bolivia and Peru.
The country is in especial need of east and west lines. A general
law provides for subsidies of £4,000 per kilometer for construction
work, including the rolling stock. Concessions also are authorized on
a basis of 6 per cent guaranty on a capital of £6,000 per kilometer,
the guaranty to run from twenty to thirty years. At different times
concessions have been granted for promising projects. However,
advantage has not been taken of them.
VENEZUELA.
The interest of Venezuela in the Pan-American System being from
its geographical situation less direct and more remote in point of time,
your Commissioner did not consider it necessary at present to visit
that Republic.
The ultimate possibility of a branch from the main Intercontinental
System extending through Colombia to the Venezuelan seaports is
indicated in the report of the engineers. The suggestion was that the
line start at Medellin, in Colombia, and run via Pavas and Puerto Ber-
rio, Bucaramanga, Pamplona, San Jose de Cucuta, La Grita, Merida,
and Trujillo to Valencia, where a union would be effected with the
railroad now in operation between that point and Caracas.
PAN-AMERICAN RAILWAY. 55
SOME GENERAL POINTS.
PRESENT MILEAGE.
Though uniformity is lacking in the statistical methods of the dif-
ferent Republics, and though it is not possible to fix with exactness
the railways in operation at a given date because of the different sys-
tems employed, some excluding lines which are operated over routes
under construction, but not finished, and others counting lines that are
used in the construction work, but which are not yet carrying freight
and passengers, your Commissioner believes from the data collected
that the following is a correct summary of the railroads in operation
On January 1, 1904:
*

Miles. Kilometers.
South America ---------------------------------------------------------------- 27, 800 44, 765
Central America --------------------------------------------------------------- 1,033 1,663
Mexico.------------------------------------------------------------------------- 9, 700 15,612
Concerning the Intercontinental route the estimate of Capt. E. Z.
Steever, of the engineering corps, was that in 1896 the distance over the
general location from New York to Buenos Ayres was 10,471 miles
(16,860 kilometers). Of this he estimated that 6,702 miles were in
operation, leaving an interval of 5,285 miles to be covered. From the
time this report was made until the meeting of the Second Conference
in Mexico substantially no progress was made in closing up the links;
but your Commissioner finds from the data furnished him, which is
indicated in the detailed reports of the various countries, that some-
thing has been done toward shortening this total distance. Approxi-
mately 460 miles (772 kilometers) have been filled in on the main
location, leaving 4,825 miles (7,760 kilometers) to be constructed if the
route marked out by the Intercontinental Survey should not be varied.
The probability of shortening the distance, to which the engineering
corps called attention, seems to be verified by later surveys and loca-
tions in the interest of private enterprise.
Pranch systems and feeders.-In a report that aims to give practical
information which may be of immediate utility and to avoid dealing in
generalities, it is desirable not to indulge in prophecies or speculations.
Yet it is not possible entirely to omit discussion of branch systems and
projects of a general character when their influence on the growth and
development of the different countries is so clearly apparent.
The resolutions of the two International American Conferences in
regard to the Pan-American Railway specifically cover branch systems
or feeders, and these also are discussed in the Intercontinental Survey.
56 PAN-AMERſ CAN RAILWAY.
The illustrations afforded in Chile, the Argentine Republic, Mexico,
and Central America are striking.
Recent policies and legislation of the various governments also cause
to come within practical view the extension of the Bolivian and the
Peruvian systems toward the great region of the Amazon and other
inland waterways, as do also the plans of Brazil for bringing its vast
undeveloped districts into communication with one another by rail-
ways extending toward the eastern slopes of the Andes. With the
knowledge of the measures now in progress, the prospect of opening
the interior of the South American continent to colonization and com-
merce becomes feasible.
Tributary water transportation.—Water links form a part in many
great networks of railways, particularly in the earlier stages. The
illustrations are apparent from the great lakes and the rivers in the
United States and Canada and in the utilization of the Baikal lakes in
the trans-Siberian system in Russia. Their importance is even greater
in South America with its waterways of the Amazon, the Plata, the
Parana, the Paraguay, and the Orinoco.
In the general plan of the Intercontinental Line the only direct
water transportation link is across Lake Titicaca from Puno, in Peru,
to Guaqui, in Bolivia, a distance of 110 miles. But incidental to this,
as already has been shown, are the branch connections to be formed by
reaching the navigable waters of the river Beni, in Bolivia, the Uca-
yali or Maranon, in Peru, and the San Francisco, in Brazil.
The fullest contribution ever made to this subject was the report
presented to the Second Conference by Gen. Rafael Reyes, in which he
gave the results of the explorations of his brothers and himself through
the almost illimitable interior of the South American continent. In
that report he showed how railway connection could be formed with
the immense system of river communications of the Amazon and its
tributaries through an extension of territory of more than 4,000,000
square miles. Since this valuable contribution to the world’s progress
is available it is unnecessary for your Commissioner to discuss this
subject further than to point out, as he has done, how the connection
of the railway systems with the inland waterways is becoming nearer
realization.
Water transports and competition.—On the subject of a longitudinal
railway, which from its nature would parallel the Pacific coast, though
in some regions it would take a zigzag course, objection often is raised
that the idea is not feasible both because the steamship and sailing
vessel service meets all the needs of commerce, and because such a
line, if constructed, would have to be operated at a loss, since it would
be impossible to compete with the water transports. It is undeniable
that the maritime carriers take the freight which exists for them
along the seacoast. But no vessel or steamship line ever uncovers the
PAN-AMERICAN RAILWAY. 57
resources of the interior of a country. It is the railways which, by
their development of the natural wealth, make business for the water
carriers as well as for themselves.
The most striking illustration of the stationary nature of ocean
transportation is seen in Mexico. That country forty years ago had
the same advantages of water freights to the ports of Europe and the
United States from the Atlantic and to California on the Pacific that
it has to-day. But the ocean traffic practically had no increase until
the era of railway building added enormously to the business. The
statistics show that with the growth and the competition of the Mexi-
can railways the business of the steamship companies has developed
proportionately.
In addition to the internal development and the increase of trade, a
railway line substantially parallel to the Pacific coast would insure a
competition in traffic and passenger rates between local points which
would be highly beneficial. An examination of the freight and pas-
senger tariff between any of the intermediate points from Panama to
Valparaiso establishes the discrimination against local commerce and
travel. Such a line also would have a marked advantage in avoidance
of the delays resulting from quarantine. This was shown strikingly
during the last year when the bubonic plague prevailed and when
many ports, though uninfected, were deprived entirely of the means
of communication with one another. Where there was railway con-
nection many of the inconveniences of the quarantine were avoided.
Similarly, delays in the mails would be prevented. During the prev-
alence of the plague the mails from New York to Valparaiso, the
schedule time for which is about thirty days, were two months and
longer in reaching their destination. The same was true of Callao
and other cities in Peru.
Difference in gauges.—Objection is made that the different gauges
employed in the various railway systems is a bar to intercommunica-
tion by means of an international trunk line. This would have more
force if the standards adopted were unchangeable. But interconti-
mental railway connection, like other phases of railway construction, is
a gradual process. The chief and most important thing is to form a
junction so that the through means of travel will exist. After this
and when the traffic grows so as to increase the amount of through
freights the question of a uniform gauge can be determined. This has
been the history of railroad building in the United States, and it is the
history of railway construction in other countries. There are three
main widths, known as the broad gauge, 5 feet 6 inches (1.68 meters);
the narrow, 3 feet 3% inches (1 meter), and the standard, 4 feet 8%
inches (1.45 meters). The broad gauge obtains on more than half the
Argentine lines and also on some of the lines in Brazil, but the rail-
ways which maintain it do not form indispensable sections of an inter-
58 PAN-AMERICAN RAILWAY.
national trunk line. While the present policy of the companies does
not look to changing these broad-gauge lines into standard ones, few
of the new railways are built on that system.
The narrow or 1-meter gauge is the most common in the South
American countries, and its supposed cheapness causes it to be used
in many of them in the present stage of railway development. But
it can be widened, as has been shown by experience, and undoubtedly
in time this will be done in most of the countries. In some places the
third rail is used. The most recent evidence of the benefit of adopting
the standard gauge is shown in Mexico, where the National Railway
has been changed to it, and what is known as the Laredo route is now
standard from the border to the City of Mexico. The recommendation
of the two Conferences was for the standard gauge, and it is worthy
of mention that this width obtains on the existing and projected lines
as far as Guatemala, and also that it is the preference in Peru and on
a part of the Chilean system.
Engineering difficulties.—Your Commissioner, not being charged
with the duty of investigating technical questions of railway construc-
tion, has not thought it necessary to include in this report any state-
ment of engineering problems and difficulties. That subject is fully
covered by competent authority in the reports of the Intercontinental
Survey. A chief value of the Survey has been the basis for further
studies by experts who have utilized it for suggested variations in
route, some of which reduce the engineering obstacles to a minimum.
Broadly stated it may be said that the sections of the Interconti-
mental Line present no engineering hindrances that already have not
been met and surmounted in the lines constructed, such as the railway
from Callao to Oroya, with its infinity of grades, curves, bridges, via-
ducts, tunnels, and switchbacks, or in the Guayaquil and Quito Rail-
road, as well as in several Mexican ones. The question of a practical
nature is the cost of overcoming these obstacles and the ability of the
various governments to supply the deficiency where the prospective
traffic does not afford sufficient inducement to private enterprise.
That question is answered in the purpose of the Chilean Government
to bore a tunnel through the Andes, in the action of the Argentine
Republic in building a northern extension through the Quebrada of
Humahuaca into Bolivia, in the policy of the Bolivian Government for
the line connecting Tupiza and Uyuni, and in the plans of the Peruvian
Government for closing the gap to Cuzco.
Application of electricity.—In connection with the problems of
engineering, your Commissioner wishes to give publicity to the
suggestions he has received regarding the feasibility of utilizing
electricity as motive power in railway construction in some sec-
tions of the Andes. The enormous water force which exists seems
available for this purpose. The subject is receiving attention in its
PAN-AMERICAN RAILWAY. 59
possible application to the Jujuy-Bolivia line, where the cost of fuel
is very heavy, since coal has to be imported and then brought 1,000
miles from the seacoast. In the work of driving the piles and laying
the foundation for the piers and viaducts the native timber has been
used. It takes 3 tons of wood to generate a force equal to 1 ton of
coal. Moreover, these woods would not be available for any length
of time as a fuel supply for the engines. Studies are being made of
the potential water power of the rivers Yala, Reyes, and Jujuy.
Mr. Alejandro Bertrand, the distinguished Chilean civil engineer,
who was the technical expert of his Government in the boundary dis-
pute with the Argentine Republic, and who has made a most thorough
study of the Cordilleries in the work of delimitation, has advocated
the experiment of electric traction. His views, as repeated to your
Commissioner, are that, given the high cost of coal and fuel generally,
the possibility of utilizing electricity as a motive power generated by
natural hydraulic force might and perhaps ought to become a determin-
ing factor when the moment comes to select between two or more
possible routes. The balance might be in favor of a route more costly
in construction where such hydraulic force is at hand against one
cheaper to build on which it would be necessary to bring coal from
the seaboard for the operation. This idea forcibly imposes itself upon
the mind of any engineer in the Andes who beholds for days and days
the incessant spilling away of the countless millions of hydraulic
power embodied in so many torrents as their waters fall from level to
level.
Mr. Bertrand says that there are in the United States the best
experts in the transformation of hydraulic into electric power and in
the transmission of the latter to long distances. He suggests that some
of these join the future surveying parties and decide in each particular
case whether the idea is or is not a working idea. He further suggests
that there might be another possible reason in favor of an electrically
worked railway, especially if it could be worked from power stations
instead of with running engines, as the weight of the latter is such an
important factor in determining the dimensions of bridges and the
superstructure in general. In an undertaking for which every piece
of iron and steel must be brought to the place where it is to be used
from distances that make the cost of freight many times that of pro-
duction, and for which the skilled labor will reach a maximum price
while the native labor will be cheap, it seems that any method tending
to diminish the viaducts and bridges is worth consideration.
A practical test of the utility of hydraulics in their application to
electric traction may be afforded within a short time in Bolivia, where
comprehensive plans have been prepared for a railway to the Yungas
by means of electricity. Mention has been made by your Commis-
sioner of this project in discussing the Bolivian railways in prospect.
60 PAN-AMERICAN RAILWAY.
As bearing on the use of electrical energy furnished by hydraulic
plants, the recent investigation of Mr. Thormann, a prominent Swiss
engineer, may be valuable in South America, where the Cordilleras
create conditions similar to those which exist in Switzerland. Engi-
neer Thormann finds that the substitution of electricity for steam on
the Swiss railroads is quite practicable and has many advantages. In
that country the cost of changing over the system would be consider-
able. This obstacle would not be met in building new lines in the
South American countries traversed by the Andes.
Labor cost and efficiency.—Labor conditions differ so sensibly in the
various countries that your Commissioner does not deem it practi-
cable to make an estimate which would hold good in all cases. But
since the labor charge is the first and principal cost in railway con-
struction he has made notes of the data given him by those engaged
in the actual work. From these a general conclusion may be drawn
that the average labor cost for railroad building in the Republics of
Spanish America does not exceed 50 cents gold per day, with a prob-
able efficiency of 75 to 80 per cent, as compared with similar labor in
the United States. This allows for the difference in customs and for
the interruption, such as comes from the frequency of church and
national holidays.
On the Cerro de Pasco Railway in Peru the average wages paid was
1 sol, or 49 cents gold per day. The grading was done entirely by
cholos, half-breed, or native full-blood Indians. The stone masonry
work for bridges, piers, etc., was by Italian masons under contract.
On the Argentina extension from Jujuy to Tupiza the highest rate
was $1 national money, about 42 cents gold. The labor employed is
both native and Italian, there being a large number of Italians in the
Argentina Republic.
In Mexico, where there has been much railroad building, the bulk
of the labor has been by natives. From a series of reports furnished
your Commissioner it does not appear that the average payment has
amounted to 35 cents gold, if it has reached that amount.
In Nicaragua, when some railways were under construction two
years ago, the wage rate was not equal to 20 cents gold.
In Brazil, near the coast, during a long period, railway labor did
not fetch more than 28 cents per day, while in the interior it was as
low as 15 cents. The rate is now said to be somewhat higher, owing
to the improved financial conditions.
It has to be recognized that the pay of agricultural labor in any
country can not be taken as the basis for railway work. In most
places where your Commissioner made inquiries he found it was con-
siderably lower. In Guatemala, where the wages are fixed by Govern-
ment decree, the rate of pay is 9 cents gold per day, but for a long
period laborers on the coffee plantations did not receive more than 6
PAN - AMERICAN RAILWAY. 61
cents. It also has to be taken into account that in many of the coun-
tries there is not enough native labor to be spared from agriculture for
employment in railroad building even if it were competent for the
task. Most of the governments put no obstacles in the way of
importing railroad hands, though usually special regulations are made.
In Honduras, under a recent concession, the admission of contract
laborers, with the exception of Chinese, was allowed.
Labor from the West Indies has supplemented the deficiency in the
Central American countries. The Costa Rica railways were built
chiefly by Jamaica blacks. In Guatemala, in the extensions of the
Central Railroad, sappers and miners were brought from Martinique
to clear the path through the forests.
PRINCIPLES IN COMMON.
The leading provisions of the railway laws of the different republics
have been given in the detailed statements concerning the various
countries. On one point, which is a matter of international agreement
rather than of laws, your Commissioner sought special information.
This was with reference to the through transit of goods from the rail-
way system of one country across the territory of another. The Pan-
American Railway committee of both Conferences recommended that
the traffic in transit through the different republics should not pay
customs dues or taxes of any other kind. In every instance your Com-
missioner was informed that the respective governments stood ready
to make such arrangements as soon as the occasion should arise.
Peru and Chile have conventions with Bolivia under which through
transit from their ports across the boundary and into Bolivian terri-
tory is accorded. The Central American republics have similar
arrangements among themselves. The treaty between the Argentine
Republic and Bolivia for the prolongation of the Central Northern
contemplates a similar agreement when the boundary line is crossed
by the railway. In the same manner Chile and the Argentine Repub-
lic will adopt a convention when the trans-Andean line is completed.
The question presents no obstacle to the Intercontinental Project.
The recommendations of both the First and the Second Conferences
that materials for the construction and operation of railroads be
exempt from import duties is almost universally observed, while in
the majority of the republics there is also provision for exemption
from national taxation, and sometimes also from provincial or munic-
ipal taxes. The willingness to grant subsidies, public lands, and to
guarantee interest on capital invested is indicated almost universally.
, Similar provisions in the laws.-The salient features of the railway
laws of the republics visited by your Commissioner are similar and
are in harmony with the Latin system of jurisprudence and the prin-
ciples of the codes which obtain in Spanish-American countries. The
62 PAN-AMERICAN RAILWAY.
State regulation of common carriers is closer and more detailed than in
the United States, both as to freight and passenger rates and conditions
of traffic and operation of the lines. But if the Government super-
vision is more strict it also may be said that the protection from the
interruption of traffic through strikes and similar causes is more direct
and the control of the relation of employers and employees, including
the mutual obligations of the employees and the employing corpora.
tions, is enforced more rigidly.
In nearly all the republics the free carriage of the Government
mails is made one of the conditions of the franchise. The abstract
principle of the ultimate reversion of the railways to the State is
affirmed in the provision for acquiring them after a fixed period,
usually ninety-nine years. The present tendency seems to be away
from government ownership, except in the specific cases where con-
siderations of national policy cause lines to be projected and built at
the expense of the nation.
Understanding for mutual defense.—No international agreement look-
ing to future contingencies in the control of intercontinental lines has
been formulated, and it may be said that none is practicable. At least
there is no immediate requirement for special provision to be made in
the laws. Yet in a general survey of the whole subject the importance
of protection to commerce in the event of war between European pow-
ers, or of a European war against one or more of the American nations,
has to be taken into account. As stated in the report of the Pan-
American Railway committee to the Second Conference, commerce
might be seriously interfered with by the interruption of water com-
munication, but the danger from this cause would be minimized if the
Republics of all America could connect with one another by rail and
thus not be dependent on recourse to the seas. A through railway
line would benefit them all, and would render them, with the support
of the United States, impregnable from European assault and free from
unwarranted and undesirable aggression from foreign powers.
MARKETS AND TRADE.
The subject of the commerce that is to be developed under railway
building has two branches. The first has a direct bearing on railway
construction as affording the chance for a wider, though temporary,
market in supplying steel rails, rolling stock, and bridge material.
The second branch relates to general trade and the permanent demand
which may be created.
In describing the prospects in the various countries, both as to the
Intercontinental Line and as to other projected railways, your Commis-
sioner has indicated those that promise the earliest realization. This
has been done in order that advantage may be taken of the opportu-
FAN-AMERICAN RAILWAY. 63
nity to supply the material needed in their construction. Generally,
this may be understood from the account given of concessions and of
extensions where actual work is in progress or is probable at an early
date.
In carrying out existing enterprises steel rails have been bought
both in the United States and in Europe. It is your Commissioner's
observation that, in spite of the advantage of Ocean freights which
European shippers have, the mills of the United States can supply
both Central and South America with the steel rails needed in the con-
struction of projected lines and in the betterment of existing lines.
There is a prospective profit which will justify seeking this trade.
Outside of rails a marked preference has been shown for rolling
stock of United States manufacture. Locomotives, passenger cars,
and freight cars are made after patterns more useful to the local needs
and the special conditions of the traffic. Notwithstanding the foreign
ownership of the lines in South America and the natural disposition
of the European owners to favor their home industries, these do not
compete successfully with the American manufacturer either in price
or in adaptability where the latter chooses to enter the field and fight
for its control.
Preference for American rolling stock. —The most striking instance
of the preference for American locomotives and other rolling stock is
afforded by Brazil. The last report of the Department of Public Works
in that Republic gives the existing rolling stock and other materials.
In nearly every case the American type or model has the lead. The
Westinghouse system is in general use. In locomotives the United
States is far ahead, as also in passenger cars, while in freight cars
Great Britain has the lead. The American type of live-stock cars is
used almost exclusively. The largest use of English-made freight
wagons on the railways is on the road from Jundiahy to Santos for
handling the coffee crop. It exceeds 2,500.
The summary in detail is as follows:

y Locomo- Passenger | Freight
Country. tives. cars.” C8 TS.
United States------------------------------------------------------ 616 576 2,357
Great Britain. ----------------------------------------------------- 279 333 5,716
France and Switzerland -----------------------------------------. 43 30 491
Belgium and others ----------------------------------------------- 8 92 1,459
It will be observed that Germany, which has a very important com-
merce with South America, exports few, if any, locomotives and cars
to Brazil, and this is true also of the other countries. They receive a
proportion of steel rails from Germany, but very little rolling stock.
Argentine Republic a good customer.—The largest individual cus-
tomer for steel rails and railway materials is the Argentine Republic,
-64 PAN-AMERICAN RAILWAY.
yet the United States does not have the share of this trade which it
should have. In the last year for which statistics are available Argen-
tine imports of steel rails were $1,107,600, of which only $153,000 was
from the United States; railway materials, exclusive of rails and rolling
stock, $1,779,466, of which $332,358 was from the United States. Of
locomotives the importations amounted to $345,000, to which the United
States contributed only $16,600. The importation of railway cars
amounted to $247,000, of which $138,000 was from the United States.
Out of importations of tramway materials, amounting to $313,718, the
United States contributed $201,400. In the same year the Argentine
Republic imported $125,000 worth of bridge materials, none of which
was from the United States. The almost exclusive ownership of the
Argentine railways in London is one explanation of the relatively
small imports from the United States, the bulk of them being from
Great Britain, which was enabled slightly to increase her trade with
the Republic through the demand for coal and railway materials in the
year when both Germany and the United States suffered a loss due to
unfavorable conditions.
While the English ownership of the majority of the lines causes the
British mills to be favored in buying railway material, the Argentine
Government purchases without preference or prejudice in the market
which offers the best bargain. It sent a representative to Europe to
!ace orders for 20,000 tons of rails, 3,000 tons of bridge building
material, and other steel appliances for use on the Jujuy-Bolivia
extension and the other State railways. In January of the present year
this agent placed the order for the steel rails with the Belgium mills
at Liege, and the same mills may secure the order for bridge materials.
Meglected and present opportunities.—Figures for the last four or
five years regarding the importation of North American rails, rolling
stock, etc., into the different countries do not afford a fair test of the
ability of the United States to secure this trade because of the inability
of the mills to fill the home orders during that prosperous period.
Your Commissioner was given repeated instances where the prefer-
ence had been for the United States, but orders either were rejected
outright or delayed so that the contractors found it necessary to turn
to the European mills. This diversion of trade need not have perma-
nent results unfavorable to the United States if American manufac-
turers choose to address themselves to the demand which now exists
in South America.
The rails on the Cerro de Pasco line, the locomotives, and rolling
stock, as well as the bridges, were from the United States. This also
was true of the Guayaquil and Quito Railroad, in Ecuador. The Peru-
vian Corporation in recently buying locomotives sought those of
American manufacture. In Guatemala the extension of the Guate-
mala Central was made entirely with material from the United States.
PAN-AMERICAN RAILWAY. 65
In Costa Rica the Northern Railroad bought all its material for the
line, as well as for the pier at Port Limon, in the United States, and
the English company found advantage in getting some of its rolling
stock in the same manner.
The opportunity for supplying bridge-building material seems to
have been overlooked in the Argentine Republic. If the American
mills can supply bridges for Egypt, they can also do it for any part
of South America.
A possible loss of orders for the mills of the United States is indi-
cated in the establishment of the steel plant at Monterey, Mexico,
where the policy of protective duties is likely to be enforced, so that
the Mexican railways probably will place some of their orders with
the Monterey company. Attention also has been drawn to the increase
in the coal and coke production in Mexico. The Government commis-
sion studying the monetary question placed the production in 1903 at
1,000,000 tons, and hazarded the opinion that it would reach 2,000,000
tons in 1905. Yet, while Mexican industries are being stimulated, the
loss of the United States in any one direction in that Republic is
bound to be made good in the general progress and prosperity.
It should be noted that the manufacturers of the United States find
little difficulty in meeting European competition in the supply of
material for electric railways. Even where these and similar enter-
prises are controlled by European capital it is found advantageous to
make liberal purchases in the United States. In Peru two enterprises
of this character, which were lately completed, got both their plant
and their material from the United States.
Permanent trade from railway growth. –In reviewing the question
of permanent markets, the opportunities created by the construction
of railways are of high importance. Individual illustrations, rather
than general deductions, serve to make this clear. In Central America
and in some parts of South America the railway right of way was
protected by barbed wire fences. This caused plantation owners to
see its utility. At once they began giving orders, and the importa-
tions of barbed wire are now quite large.
The development of mines through railway transportation is so
often noted that it is hardly necessary to give the specific instances,
though Mexico affords so strong an example that it can not be over-
looked. The probability of railway construction in Bolivia and Peru
through the mineral fields is a sufficient indication of what may be
done there, for American mining machinery already has an excellent
market, which will be expanded with the expansion of the mineral
I’eSOUll'COS.
In the agricultural regions the demand follows the locomotive. This
is specially shown in the Argentine Republic, where the increase in
S. Doc. 206, 58–2—5
66 PAN-AMERICAN RAILWAY.
importations from the United States is largest in thrashing machines
and other farm implements, including vehicles.
Unsatisfactory conditions analyzed.—In any discussion of markets
in foreign countries it is not desirable or practicable to overlook the
unsatisfactory condition of the trade of the United States with South
America. Substantially it is at a standstill in so far as relates to
exports. The balance against the United States shows no favorable
change. In 1903 the imports from South America were $113,000,000
and the exports to it $46,000,000. It is true that the exports were the
heaviest for any one twelve months in the last ten years, and also that
there was an increase of $7,000,000 over the preceding year. But in
1902 there had been a drop and the exports in 1903 only exceeded
those of 1901 by $4,000,000. The increase was due chiefly to the
Argentine Republic, the United States sharing in the agricultural
prosperity of that country. The increase to the tropical countries
was hardly worth mentioning.
It will not be questioned that it is desirable for the United States to
take advantage of every mile of railway construction to secure the
growth and the permanency of its exports both to Central America
and to South America. The plea of a lack of demand does not bear
scrutiny. In the course of his travels your commissioner found the
Indian natives in the most isolated interior regions of Bolivia consum-
ing American canned goods, wearing fine French shoes, and adorning
themselves with gaudy handkerchiefs of German make. The products
of civilization were in demand there.
The most common objection of the long credits required is a valid
one and has to be met. However, within a few years past a noticeable
tendency has been shown by European firms to shorten the credits
extended in the Spanish-American countries, and there is something
in the nature of an approach, not to cash business, but to reasonable
time accounts. In the commercial centers on the Pacific coast, where
some American business has been established on a solid foundation,
this matter has been adjusted satisfactorily. The leading American
house which controls its share of the trade of Peru, Chile, and Bolivia
estimates its loss through credits at only one-half of 1 per cent. Amer-
ican firms which have commercial connections in Buenos Ayres also
have been able to extend reasonable credits and do business, with a
minimum of loss.
|Warfare of European rivals.-The deadly commercial warfare of
Great Britain and Germany in South America calls for only a word of
comment from your Commissioner. It is waged with varying for-
tunes. Sometimes the stand made by England seems liable to repel all
assaults in particular lines of trade, yet in the course of a few years
the outworks are shown to be undermined by German competition.
It is an economic phenomenon that Germany, with relatively a very
TAN-AMERICAN RAILWAY. 67
small capital invested in the railways, the industries, and the develop-
ment enterprises of the South American countries should win so large
a share of the profits of trade, but the phenomenon does not alter the
condition.
The interest of the manufacturers and merchants of the United
States in the conflict of the commercial belligerents is to enjoy the
legitimate benefit of the neutral. They have shown their capacity to
compete with both parties to the struggle when they desire. The
immediate issue is to meet the competition of cheap German-made
goods both in the imitations, such as of American sewing machines,
and in articles which are of German production and are original.
From the views given him by the leading importing firms your Com-
missioner does not think it either desirable or necessary for the
factories of the United States to try to meet the excessively cheap
stuff of German manufacture. The reaction from that cheapness has
begun. The demand now is for good goods at fair prices. The
United States can meet that demand better than Germany.
Commerce for the Mississippi Valley.—Incidental to the growth of
markets through the building of railways a few words may serve to
state the advantages to the Mississippi Valley and the Middle West
which are in immediate prospect. It has been shown how the railway
extension is spreading through Mexico to Central America and Panama.
The market which Mexico affords does not need to be recapitulated,
but it should be borne in mind that the countries beyond also are
COIASUIDO €I’S.
The present tendency is particularly toward the consumption of
goods for which the Middle West has exceptional means of producing.
The demand for builders’ hardware grows, while that for farm machinery
and vehicles of all classes is continuous. The consular reports have
shown the increase in popularity of furniture manufactured in the
United States, while the foreign shoe market in Colombia and other
countries has been captured by the factories which took the pains to
adapt their lasts to the local peculiarities. The markets for flour,
bacon, and packing-house products are so well understood that it is not
necessary to discuss them in detail.
A fair proportion of the products of the Middle West find their way
south over the railway lines, and in exchange are received the fruits
and other tropical products of the southern countries.
CONCLUDING OBSERVATIONS.
The conclusion formed by your Commissioner, as a result of the
inquiries which he has been occupied a year in making, can be briefly
stated. He desires to put it as strongly as can be expressed in words.
It is the opportunity for the United States to extend its commerce by
encouraging railway building in the republics which are its neighbors
68 PAN-AMERICAN RAILWAY.
*
and friends and which look to it for guidance. The benefits of this
extended commerce will be enjoyed by all the nations of the three
Americas. r-sº
The attitude of the respective Governments, and their earnest
desire for the increase of United States investments, has been declared
with frankness and sincerity. They can not be expected to bar them-
selves completely from European capital, yet their preference for
North American investments and enterprises is significant. Their
policy, as the result of experience, is to treat with reputable and
legitimate companies or individuals. For capital of this character
there is every encouragement, not only in the growing stability of the
governments, but also in their ability to carry out their guaranties
and in their disposition to enact legislation which will meet reasonable
requirements. - -
Suggestions.—As the mission of your Commissioner was merely to
gather trustworthy official information and to give publicity to exist-
ing conditions and prospects, he does not consider that specific rec-
ommendations are necessary. However, for the promotion of the
Intercontinental Railway project, and the encouragement of other rail-
way enterprises, as well as for the benefit of capital which may desire
further facts, he suggests the following sources of information: -
The permanent Pan-American Railway committee, with headquarters
in Washington, of which the Hon. H. G. Davis, of West Virginia, is
chairman.
The International Bureau of American Republics, with headquarters
in Washington.
The reports of the ministers of the United States to the Department
of State, and the consular reports which are made public through the
Bureau of Trade Relations and the Department of Commerce and
Labor. -
The Embassy of Mexico and the legations of the Central and South
American Republics in Washington.
Acknowledgments.-Your Commissioner desires to express his sin-
cere appreciation to the Secretary of State, and through him to the
President of the United States, for the honor conferred in the selection
for the mission of carrying out the resolution of the Second Interna-
tional Conference of American States with regard to the Pan-American
Railway. He also desires to make his acknowledgments to the United
States Ministers at the various capitals who facilitated his labors, both
in his official presentation to the Governments and by their individual
efforts in supplying the data which was sought.
It his furthermore his desire to testify the very great assistance ren-
dered him in his mission by the Ambassador and the Ministers in Wash-
ington of the republics visited for their exertions in presenting the
12 AN-AMERICAN RAILWAY. 69
subject to their Governments, and to convey his appreciation of the
hearty cooperation extended by the respective governments.
Recognition of the benefit derived from the support and sugges-
tions of the permanent Pan-American Railway committee is fitting.
The chairman, the Hon. H. G. Davis, since the First International Con
ference of American States, of which he was a member, by his persist-
ency of purpose has brought the Intercontinental Railway Project within
the sphere of realization, and his name always will be identified with it.
The indorsement and sanction of Mr. Andrew Carnegie, with his
wide practical experience, also have served to fix the idea in the pub-
lic mind as one worthy of the efforts of governments and of individuals.
Mention should be made finally of the aid afforded by the news-
paper press of the various republics in the full exposition of the project
and of the intelligent and sympathetic spirit in which they have advo-
cated it.
I have the honor to be, sir,
Very respectfully, your obedient servant,
CHARLEs M. PEPPER,
United States and Pan-American Railway Commissioner.
Hon. JOHN HAY,
Secretary of State, Washington.
APPENDIXES TO THE PAN-AMERICAN RAILWAY REPORT.
APPENDIX A.— Mearican railways.
The following table, prepared under the direction of Mr. Leandro Fernandez, the
Minister of Communications and Public Works, gives the subsidized and unsubsidized
steam railway lines of Mexico under construction January 1, 1904, and other
particulars relating thereto:
Name of railroad.
Date of COIl-
CéSSłOD.
SUBSIDIZED LINES.
Nature of subsidy.
Com-
pleted.
To be
COIſl-
pleted.
[1 km. equals 0, 62137 miles; monetary unit is Mexican silver.]

Conditions.
Hidalgo -----------
Vera Cruz to Alva-
rado.
Merida, to PetO - - -.
Merida, to Vallado-
lid.
Pachuca, to Tam-
ico (Mex. Cent.
y.).
Tlacopepec to Hu-
ajuapan.
Chihuahua to Pa-
cific (Kans. City,
Mex. and Ori-
ent).
Mexico, Cuern a -
va. C. a. and Pa-
cific (Mex.Cent.).
Xico and San Ra-
fael.
Oaxaca to Ejutla-.
Guadalajara to
M. a n z a n ill o
(Mex. Cent. R.
R.).
Southeastern Of
Yucatan.
70
Feb. 2, 1878,
and 5 ad-
ditions.
May 26, 1878,
and 3 ad-
ditions,
May 28, 1878,
and 2 addi-
tions.
Dec. 15, 1880,
and 7 addi-
tions.
June 5, 1888,
and 4 addi-
tions.
Apr. 20, 1891,
and 8 addi-
tions.
May 11, 1891,
and 6 addi-
tions.
Dec. 31, 1895,
and 3 addi-
tions.
Apr. 6, 1898,
and 2 addi-
tions.
Apr. 15, 1898,
and 1 addi-
tion.
Oct. 5, 1898. --
June 17, 1897,
and 3 addi-
tions.
$8,250 per km. in 5
er cent bonds; 265
xms. subsidized.
$8,000 per Irm. in 6
per cent bonds at
par.
$6,250 per km. in 5
per cent bonds.
$6,250 per km. in 5
per cent bonds for
90 kms.
$6,500 per km. in 5
per cent bonds.
$6,000 per km. in 5
per cent bonds for
32.5 kms.; $4,500 in
5 per cent bonds for
150 kms.
First section, $1,400,-
000; second section,
$12,000 per km.;
third section, $7,000
per km.
$12,527 per km. in 5
per cent bonds for
310 kms.; $5,000 per
km. in 5 per cent
bonds for 75 kms.;
$6,000 per km. for
150 kms.
Total subsidy of $937,-
500 in 5 per cent
bonds.
$6,000 per km. in 5
per cent bonds.
First section, $5,000
per km. in 5 per
centbonds; second,
$15,000 per km. 5
per cent b on dis;
third, $3,500 per km.
in 5 per cent bonds;
fourth, $6,000 per
km. in 5 per cent
bonds.
$5,000 per km. in pub-
lic lands,
JKºms.
161.6
70. 4
189. 0
175.9
187.5
80.0
272.0
292.4
152, 3
237.5
5.0
Rºms.
265.0
11.0
90.0
280.0
152.5
428.0
175. 0
835. 0
32 kms. to be completed
each year.
11 kms. to be constructed
when port of Anton Li-
zardo is open.
8 kms. to be constructed
each year on the Sotuta
branch.
4 kms. to be constructed
each year and all line
by Apr. 10, 1911.
All lines to be completed
by Dec. 30, 1906.
25 kms. to be constructed
each year. Entire line
by Apr. 11, 1914.
First section completed.
Second and third Sec-
tions to be completed
July 26, 1905; subsidy
to be paid for each 100
kms, constructed.
100 kms. to be constructed
by Jan. 8, 1905; 100 kms.
each 2 years following,
and the trunk line by
Dec. 31, 1908; branch
line by Dec. 31, 1903.
If the company chooses
Rio Balsas route to
Acapulco, the subsidy
is to be reduced.
Whole line to be con-
structed by Apr. 6, 1908;
10. kms. each year as
Dºll HIDOlūīYi.
Branch line to be com-
pleted by Apr. 10, 1905.
Branch from Zapotlan to
Colimatobe constructed
by Oct. 1, 1904; line
from Colima, to Manza-
nillo by Oct. 1, 1905.
50 kms, to be constructed
by Now. 23, 1904; 100
kms, each 2 years fol-
lowing, and entire line
by Nov. 23, 1916.
PAN-AMERICAN RAILWAY.
71
SUBSIDIZED 1.INES-Continued.

To be
g Date of COn- g COm- * * *
Name of railroad. cession. Nature of subsidy. pleted. rºa º Conditions.
Rºms Rºmé.
Ojapa to Alvarado. June 22, 1898, $4,000 to $8,000 per |........ 156.0 20 kms. to be constructed
and 2 addi- km. in public lands by Oct. 23, 1905; 20 kms.
tions. according to gauge. each year following,
and entire line by Oct.
23, 1912.
Pan-American ....] Sept. 11, 1901 || $12,000 per km, in 5 141.5 256.5 80 kms. to be constructed
per cent bonds. each year and entire
line by Sept. 11, 1907.
National Railway | Dec. 23, 1901 $8,000 per km. in 5 57.6 220.0 All lines to be completed
of Mexico: I. per cent bonds; to- by Dec. 23, 1906.
Mexico to point tal Sub V ention
of actual line ,000,
Mexico to New
Laredo. II. Ex-
tension from
point where pre-
vious line termi-
nates to New
Laredo. III. San
Miguel to Mon-
tery. IV. San
Miguel to Mata-
IDOT8S.
Durango to Guti- Jan. 1, 1903 $6,000 per km. in 5 -------. 220.0 50 kms, to be completed
errez (Mexican er cent bonds, 52 by Jan. 1, 1905, 50 kms.
Central Rail- ms. Subsidized. each yearfollowing, and
road). entire line by Jan. 1,
1908.
Total -----------------------|------------------------ 2,072.7 (3, 587.0
UNSUBSIDIZED LINES.
To be
* Date of con- Com- & 8 &
Name of railroad. * CODºl- Conditions.
CeSSIOIl. pleted. pleted.
fººms. Kms.
Mexican International June 7, 1881, 1,416. 7 1,244.0 | All lines to be completed by May 6, 1906.
and 7 addi-
tions.
Mexican § the North Apr. 15, 1890 133.3 106.0 All branches to be constructed by Apr. 15, 1905.
Ill IIleſall ).
I | dustrials (Mex. Aug. 5, 1895 9.6 |-------- All lines and branches to be completed by Jan.
Cent. R. R.). 5, 1911.
Ogarrio (tunnel of Nov. 9, 1896 7.3 22.7 Entire line to be finished May 9, 1907.
Dolores to Catoree).
Torresto Minas Prietas. June 10, 1897, 34.3 100.0 | Notice to be given by June 10, 1904, if election
*. 3 addi- is made to complete the 100 kms.
IOIRS.
Western (Toluca to June 16, 1898 - - - - - - - - 275.0 10 kms. to be constructed each year and entire
Iguala). line by June 16, 1910.
Paral and Durango- - - - June 29, 1898 81.2 163.8 25 kms. to be constructed each 2 years, and
entire line by June 25, 1905.
Mineral of Chihuahua- Dec. 24, 1898 21.2 : 138.8 20 kms, to be constructed each year, and en-
tire line by Dec. 24, 1908.
Rg º to Bahia. | Dec. 22, 1898 |- - - - - - - - 660.0 Entire line to be constructed by June 30, 1905.
an Jorge.
Coahuila, and Pacific -. Jan. 17, 1899 || 321.4 30.0 Entire line to be constructed by Jan. 17, 1907.
Cordoba to Huatusco.. Jan. 20, 1899, 21.0 49.0 Entire line to be finished by Jan. 20, 1904,
and 2 addi-
tions.
Nacozari (in State of Aug. 30, 1899 90.0 490.0 Line to be completed to Gulf of California.
Sonora). within 5 years from Aug. 30, 1904.
Belt line, Federal Dis- Oct. 12, 1899 20. () 72.0 10 kms. to be constructed each year, and en-
trict. tire line by Apr. 12, 1909.
Chºean a n d Apr. 15, 1903 |..... --. 32.0 Entire line to be constructed by Apr. 12, 1909.
QXCOCO,
Guayamas to San Mar- Nov. 20, 1899 |........ 110.0 33 kms. to be constructed by Aug. 27, 1904, 33
cial. kms. each following year, and entire line by
Aug. 27, 1906.
Cura and Carrizo in Dec. 13, 1899 14.5 l-------. Option to be made by Dec. 13, 1906, for con-
Coahuila. struction of branches.
Moridada to Muna - - - - Mar. 8, 1900 57. 0 57.4 Prolongation to Tekax to be finished within
* 4 years from Mar. 8, 1912.
Kansas City, Mexico Aug. 10, 1900, 50.0 164.0 50 kms. to be constructed each year, and entire
and Orient. º: addi- line by June 10, 1907.
OllS.

72
PAN-AMERICAN RAILWAY.
TJNSUBSIDIZED LINES-Continued.

To be
* Date of con- Com- *
Name of railroad. * COIn- Conditions.
CeSSIOIl. pleted. pleted.
Rºms. Km.8.
Cardenas to Villa Pa- May 3, 1901 |........ 131.0 | 10 kms. to be constructed each year, and entire
raiso. line by Nov. 3, 1911.
sº †: Bautista, to May 19, 1901 - - - - - - ^s ºn 6.0 | New contract promulgated Dec. 31, 1903.
8.00 Uille,
Mexico to Cienguillas. July à";*} tº & º sº sº tº * * 30.5 All sections to be constructed by Apr. 15, 1906.
8.In 8,Ol-
ditions.
San Vicente to Tem- || Mar. 6, 1902 ||-------. 10.0 Entire line to be constructed by Mar. 6, 1904.
ISCO.
Piedad to Facambaro. - May 15, 1902, - - - - - - - - 338.0 30 kms. to be constructed by May 24, 1904, 30
and 4 ad- kms. each year following, and entire line
ditions. by Oct. 30, 1910.
Ocotlan to Jamay ..... June 6, 1902 |...... -- 18.0 Entire line to be concluded by June 6, 1906.
Refugio to Brisbin - - - - - July 4, 1902 ||-------- 8.0 Entire line to be finished July 4, 1904.
Cabellos BlancOS to July 10, 1902 - - - - - - - - 107.0 20 kms, to be constructed each year, and
Atlapexco. entire line by July 10, 1907.
Cananea, Rio Yaqui Nov. 11, 1901, 64.8 330.0 25 kms. to be constructed by May 11, 1905, 50
and Pacific. and 2 ad- kms. each year following, and entire line
ditions. by Nov. 11, 1910.
Roque to Santa Cruz -- Aug. 12, 1902 - - - - - - - - 30.0 || 5 kms. to be constructed each year and entire
line by Aug. 12, 1907.
Hornos to Mazapil - - - - Aug. 25, 1902 15.0 140.0 20 kms. to be constructed each year and entire
line by Aug. 25, 1908.
Alamos to Yabaros, - - - Sept. 27, 1902 - - - - - - - - 88.0 | 20 kms. to be constructed by Sept. 27, 1904, 20
kms. each year following, and entire line
by Sept. 27, 1907.
Ocotlan to Atatanilco Feb. 19, 1903 |- - - - - - - - 50.0 Entire line to be constructed by Feb. 19, 1905.
(Mex. Cent. R. R.). e”
Tlalnepantla to Mex- | Feb. 24, 1903 |........ 12.0 Entire line to be constructed by Feb. 24, 1906.
1CO.
Xºlilº to San Juan Mar. 16, 1903 - - - - - - - - 14.0 | Entire line to be constructed by Sept. 16, 1905.
Ullll:8.
Jiminez to Hidalgo of May 12, 1903 | 162.7 || 457.2 50 kms. to be constructed each year.
Fº (Mex. Cent.
Avalos to San Pedro May 13, 1903 20. 0 17.5 10 kms. to be constructed each year and en-
OCampo. * tire line by May 13, 1908.
Kansas City, Mexico June 11, 1903 - - - - - - - - 80.0 20 kms. to be constructed each year from
and Orient. * Minoca and entire line to be completed by
--- - - June 11, 1907. --
Tºpee to Vera Cruz Nov. 21, 1902 |........ 12.0 Entire line to be constructed by Nov. 21, 1905.
Salamanca, to San Oct. 1, 1903 - - - - - - - - 44.9 || 15 kms. to be constructed each year and entire
Juan Vega. line by Oct. 1, 1908.
Linaresto Mineral San | Oct. 2, 1903 |- - - - - - - - 114.0 10 kms. to be constructed each year and entire
Jose. line by Oct. 20, 1910.
Marfil to San Gregorio || Oct. 24, 1903 30, 0 64.0 All sections to-be completed by June 30, 1910.
and Gonzalez.
Agostitlan to Marava- | Nov. 6, 1903 |........ 64.0 14 kms. to be constructed each year and entire
tio. line by Nov. 16, 1908.
San Mateo to Jilitla.... NOW. 12, 1903 |- - - - - - - - 80.0 | 15 kms. to be constructed each year and entire
line by Nov. 12, 1908.
Tlalpujahua to An- Nov. 28, 1903 |........ 38.5 10 kms. to be constructed each year and entire
gangūCO. line by Nov. 28, 1908.
Total --------------------------- 2,570.0 6,039.3
APPENDIX B.—Argenţine Railways.
The conditions and prospects of the railway lines of the Argentine Republic at
the beginning of 1904 are shown in the following statements submitted under the
authority of Mr. Emilio Civit, the Minister of Public Works:
UNDER CONSTRUCTION.
Kilome-
Name. terS. Observations.
NATIONAL. sº
Central Northern. --------------------. 286.0 | Prolongation to Bolivia.
57.0 | Branch from Perico to Ledesma.
200.0 | Branch from Anatuya to the Chaco.
Northern Argentine- - - - - * * * * * * * * * * * * * * 34.0 | Cable line to Famatina.
.0 | Branch from Servezuela to San Juan.
PAN-AMERICAN RAILWAY.
73
UNIDER, CONSTRUCTION.—Continued.
Kilome- *
Name. ters. Observations.
PRIVATE,
Southern of Buenos Ayres............. 12. 0 || Minor branches.
zº 140.0 Loberia to Three Arroyos.
Western of Buenos Ayres........... --. 90.0 | Branch of La Flora, to Meridian 5°.
130.0 | Branch from Timote to Olascoaga.
Central Argentine--------------------- 40. 0 || Branch to Rio 4°. e
Province of Santa Fe.................. 162.0 | Branch from San Francisco to Villa Maria.
Chacabuco to Sargento Cabral ........ 500.0
Total ---------------------------- 2,020. 0
CONCESSIONS GRANTED DURING 1903.
Andino-------------------------------- 146.0 Prolongation from La Coma to Dolores.
Northern Argentine------------------- 425.0 | Prolongation from Chumbicho to Rioja with
branch from Masan to Tinogasta.
Central Northern. --------------------- 48.0 | Prolongation to Guachipas.
Southern of Buenos Ayres------...----|---------- Branch from Tuan to Guaprache.
Western of Buenos Ayres. -------------|---------- Branch flºw Olascoaga to Timota (provisional con-
CeSSIOI! ).
Bahia Blanca and Northwestern...... 3.5 Branch from Puerto Galwan to Ing. White.
Central Cordoba-...-------------------. 30.0 | Branch from Lavalle to Banado of Obanta.
as ºn as ºr s is º ºs ºr sº From Rosario to Buenos Ayres.
Puerto Barranqueras to Rio Piedras---|- - - - - - - - - -
Tandil to Azul ------------------------|---------- Provincial concession.
Tasso to Flora. -------------------------|---------- DO.
Chacabuco to La Plata. ----------------|- - - - - - - - - - DO.
EXPLOITATION IN 1903.
[1 kilometer equals 0.62137 mile.]

Name. Gauge. Length. Passengers Cargo.
NATIONAL. Meters. Rºms. Number. Toms.
Indino -------------------------------------------------- a 1. 676 339 83,761 459,035
Central Northern ---------------------------------------- b 1.000 1,122 3. , 284
Northern Argentine ------------------------------------- b 1.000 563 33,033 51,548
Total--------------------------------------------------------- 2,024 372, 597 1, 116,867
PRIVATE.
Southern of Buenos Ayres ............. ----------........ a 1.676 3,980 6,833,240 3,050, 746
Western of Buenos Ayres -------------------------------- a 1. 676 1, 197 3,398.695 2, 203, 464
Buenos Ayres and Rosario. ... --------------------------- a 1. 676 1,997 3,437,797 2,403, 560
Central Argentine --------------------------------------- a 1. 676 1,785 3,991, 325 3, 615, 184
Buenos to the Pacific ------------------------------------ a 1.676 1,261 941,045 1, 225,533
Grand Western Argentine-------------------------------- a 1. 676 71.4 498,078 439, 193
Bahia Blanca and Northwestern------------------------- a 1.676 385 31, 615 75,989
Argentine, eastern--------------------------------------. c 1. 435 16] 23,330 81, 443
Northeastern Argentine --------------------------------. c 1.435 662 54, 103,028
Entre Rios----------------------------------------------- C 1. 435 758 132,273 309, 780
Province of Santa Fe -----------------------------------. b 1.000 1,392 301, 456 782, 470
Central Cordoba, northern section ---------------------- b 1.000 885 3. 559,931
Central Cordoba, eastern section - - - - - - - - - - - - - - - - - - - - - - - - b 1.000 210 63,624 404, 920
Cordoba and Rosario ------------------------------------ b 1.000 289 75,941 468, 560
NorthWestern Argentine. -------------------------------. b 1.000 196 231,255 545,
Cordoba and Northwestern. -- - - - - - - - - - - - - - - - - - - - - - - - - - - - b 1.000 153 38,793 29,684
Trans-Andime-------------------------------------------- b 1.000 I75 10,374 15,934
Central Chubut.........--------------------------------- b1, 000 70 y 4, 260
Total.--------------------------------------------------------- 16,270 20,269,583 | 16,319,579
Grand total ----------------------------------------|---------- 18,294 17,436, 446
| 20,642,180
a 1.676 meter equals 5 feet 6 inches.
c1.435 meter equals 4 feet 8% inches.
b1,000 meter equals 3 feet 33 inches.
74
PAN-AMERICAN RAILWAY.
RECEIPTs in 1908.

* Interest
Y ſe Gross re- Operating | Net *
Name. Capital. ceipts. expenses. receipts. a aftial
NATIONAL. Gold. Gold. Gold. Gold. | Per cent.
Andino ----------------------------------- $8,655, 607 $862, 194 $351,493 $510,701 5.90
Central Northern. ------------------------ 33,243,838 1,326, 586 886,092 440,494 1. 32
Northern Argentine. . . . . . . . . . . . . . . . . . . . . . 13,059, 337 175,919 171,283 4,636 .03
Total ------------------------------- 54,958,782 2,364,699 || 1,408,868 955,831 1. 74
PRIVATE.
Southern of Buenos Ayres. . . . . . . . . . . . . . . . 126, 165,967 12,775, 170 6,301,005 6,474,165 5, 13
Western of Buenos Ayres. - - - - - - - - - - - - - - - 38,780, 658 6, 127,752 3,105,475 3,022,277 7.79
Buenos Ayres and Rosario. - - - - - - - - - - - - - -. 60, 172,096 || 7,226,971 3,841, 617 3,385, 354 5, 62
Central Argentine............ ------------ 66,034,036 9,675,968 3,923,299 5,752, 669 8. 71
Buenos Ayres to the Pacific - - - - - - - - - - - - - - 42, 104, 241 || 4,273,075 | 1,917,049 2,356,026 5.59
Grand Western Argentine - - - - - - - - - - - - - - - - 23,766,206 || 2,783, 199 1,411,712 1,371,437 5. 77
Dahia Blanca and Northwestern - - - - - - - - - 8,316,000 298, 932 260,515 38,417 - 46
Argentine Eastern ----------------------- 5,571,720 239,928 171,092 68,836 1.23
Northeastern Argentine- - - - - - - - - - - - - - - - - - 26, 131, 105 280,050 267, 510 12, 540 .05
Entre Rios-------------------------------- 16, 174,040 648, 371 456,240 192,131 1. 19
Province of Santa Fe. . . . . . . . . . . . . . . . . . . . . 31, 738,624 2,664,808 || 1,383,032 1,281,776 4.04
Central Cordoba, northern section - - - - - - - 23,398,482 | 1,359,907 996,387 363, 520 1. 55
Central Cordoba, eastern section - - - - - - - - - 6, 451, 200 664, 649 264,904 399,745 6, 20
Cordoba and Rosario - - - - - - - - - - - - - - - - - - - - - 10,744,408 931, 309 528,037 403, 272 3.75
Northwestern Argentine - - - - - - - - - - - - - - - - - 5,401, 640 467,060 260,496 206,564 3. 82
Cordoba and NorthWestern - - - - - - - - - - - - - 6,618, 528 84, 535 77,084 7,451 . 11
Trans-Andine ---------------------------- 7,410,473 122,188 126,291 (a)
Central Chubut.--------------------------- 1,008,000 19, 77 16, 381 3,394 . 33
Total ------------------------------- 505,987,424 50,643,647 25,308, 126 25, 335,521 5.01
Grand total.------------------------- 560, 946, 206 53,008, 346 26,716,994 || 26, 291, 352 4, 69
a Loss, $4,103, or 0.05 per cent.
APPENDIx C.—Honduras railways.
The opportunities and inducements which the Republic of Honduras offers to rail-
way enterprises are set forth in the following letter from the Minister of Foreign
Affairs to the Minister of the United States accredited to Guatemala and Honduras:
REPUBLIC of Hon.DURAs,
DEPARTMENT OF For EIGN RELATIONs,
Tegucigalpa, January 24, 1904.
MR. MINISTER: I have the honor to reply to your welcome communication of
November 27 by transmitting the following information with respect to railroads,
which has been submitted to me by the minister of fomento and public works:
First. The total railway lines constructed in Honduras up to the 1st of January,
1904, is 56 miles. - - -
Second. Two concessions are in existence, one granted to the Omoa Company for
the construction of a railroad from Omoa to Trujillo, and the other granted to the
Ulua Commercial Company for the construction of another railroad from a point on
the river Humuya to the Guayape.
Third. The only laws in force in this country concerning railroads are those of
police regulation comprised in the regulation of el Ramo, promulgated the 28th of
February, 1888. *
Fourth. Honduras offers immense opportunities to capital for the construction of
railways, her immense forests abounding in every class of woods, her vast and fertile
lands up to this time undeveloped, her rich mines, and all, the natural products
which in general abound in her territory, and which can be made the basis of con-
cessions on the part of the Government. These offer a vast field for the investment
of foreign capital with the view of obtaining great benefits in the exploitation of such
founts of wealth. -
Foreign capitalists will find in Honduras an almost virgin country to exploit, and
one which offers them the riches of her soil in exchange for their cooperation in the
construction of commercial highways.
FAN-AMERICAN RAILWAY. 75
Fifth. The Northern Railroad of Guatemala passes very close to the western depart-
ments of Honduras and can be easily connected with the section of the Interoceanic
Railway constructed in this country, and the latter, being prolonged as is projected,
will be able by means of a branch which will start from the department of Chuluteca
to unite with the railways of Nicaragua, there not being in this country serious diffi-
culties for the lines of the Pan-American Railway through the land being level.
With high consideration, I subscribe myself attentively and your servant,
MARLANO WASQUEZ.
Mr. LESLIE CoMBS, etc.,
Guatemala.
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AMERICAN STATES ºf voºr
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Manuel Alvarez Calderon , Peru - º ſ -
- Antonio Lazo Arriaga . Guatemala f ſ
Chºrſes M.Apper
-
Commissioner REFERENCES. REFERENCIAS.
ºš 1904 | - htercontinents/Route, /g/n 77/74. ſºuta /ntercontinenta/, //neº Vºonca/
--- $774/75 of M4Ge, ſº -------- -- * , Popaseo Connections. -- Conexiºnes /*oovestos.
Scale of 300 Miles to 1 Inch º - Æð/ways ſo 99eration. ferrocary?es en ƺp/otación.
,-- Kil 300 800 300 * Under Construction or Surveyed/ -- en Construcción d7-32&das.
|Oneters -
E= = =t-i- I- - – == --------- -- Projected -- Proyectados.
500 250 O 500 |OOO 1500
- Whe boundžoes éetween coo/7&zes are ſoo/cated only 3%roximately
- Za indicación de /s/m/tes entre as pºses se hace solo aprox”gºmente.
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130° 120°- - |ICP |00° 90° Lon&lude West 80°from Greenwich 70° 60° 50° 40° 30° 20° MAendºes
ANDREW B.GRAHAM, PHOTO-LITHO.WASHINGTON, D.C.