No. 94.
Mr. Williamson to Mr. Fish.
Guatemala, October 6, 1874. (Received Nov. 17.)
Sir: I have the honor to report that the government of Guatemala has recently made a contract for the construction of a railroad from San José, the chief port, to this capital.
The contract was made with a Mr. W. F. Kelly, an Englishman, who has traveled much in Spanish-American countries, and who is reported to be the “bosom friend” of the prime minister, Mr. Samayoa. The official station of Mr. Samayoa, as minister of public improvement, placed him in the embarrassing position of finding it within the line of his duty to report on the merits of Mr. Kelly’s proposal, and to sign the contract on the part of the government.
Not long after the contract was made, Mr. Kelly left for Europe, and it is reported to me, on the best authority, that he bore the commission of minister plenipotentiary to the Sublime Porte from Guatemala.
Mr. Kelly is not reputed to be either a capitalist or a financier of ability. His countrymen here speak of him in a way not usually calculated to inspire confidence.
The road is to be built, according to the customary usage, from the proceeds of the sale of bonds. The entire cost is reported by the prime minister to be $2,559,000. He estimates that it will be possible to sell Guatemalan bonds bearing 7 per cent, interest for 70 cents on the dollar net. His published statements put down the increase of the public debt, by the completion of this enterprise, at $3,436,371. He places the total annual net earnings of the road at $329,350. Like all such schemes, the paper calculations made public look fair.
The physical obstacles for nearly half of the distance, that is, to Esquintla, are mainly those which are incidental to a tropical climate in the “tierra caliente.” On that part of the line there are no engineering difficulties. The ascent from the port to Esquintla, a distance of about thirty miles, is only 1,145 feet, and is so gradual that an ordinary traveler would not observe it. There are no large streams or swamps to cross, and no deep cuts or heavy embankments to be made.
The cost of that part of the road, according to the contract, will be $30,000 per mile. The cost of the other section, from Esquintla to Palin, sixteen miles, is estimated to be $49,750 per mile; and for the remaining section of twenty-two miles from Palin to this city, it is estimated to cost $36,500 per mile. On the two last-named sections the [Page 135] best engineering skill will be required. The difference of the altitudes of Palin and Esquintla, fifteen miles apart by the proposed railroad line, is 2,545 feet, according to a recent barometrical measurement. The difference of altitude between Palin and the city of Guatemala is about 1,500 feet.
I cannot persuade myself to believe the bonds can be placed upon the market at the figure named by Mr. Sarnayoa. Even if they were successfully negotiated at that figure, (70 cents on the dollar,) the experience of Honduras and Costa Rica points in a direction that scarcely warrants the belief that all of the money will be applied to the construction of the road. But if the bonds were negotiated on the favorable terms expected, and if the entire proceeds were honestly and judiciously applied to the fulfillment of the contract, in my opinion it would fall short of completing and equipping the road by a very large sum.
The road has my best wishes for its completion. I believe it would benefit our commerce by the more rapid development of this country.
I have, &c.,