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3rd. The selection of these lands must be made during the first two years of the 10 granted for constructing the canal. 4th. The Company shall not select lands that may already have been specified and measured, in order to be ceded to any other privileged Company. 5th. It is the business of the Company to prove that the lands are national lands, to make the plan thereof and to measure them.

XI. Privilege is granted to the Company for the time it remains in possession : 1st. For embarking merchandize to be left at the ports situated at the two extremities of the canal, or of transporting the same in other vessels by the canal, towards their destination, should the vessel carrying such goods not have been destined for passing through the canal; 2nd. To make use of the intermediate ports necessary or specially fit for storing and freely depositing all goods and merchandize destined for transit, and which it may be convenient previously to disembark at the said ports; in all which ports and places the Government may station such officers and take all such measures as it may deem necessary to prevent smuggling. The buildings erected by the Company for warehouses of deposit in the ports and landing-places are to be built on such a plan that a single individual may be sufficient to prevent smuggling.

XII. The ports at the two extremities of the canal shall be free and unrestricted for the commerce of all nations, and in them no anchorage, tonnage, port, or importation duties whatever shall be levied except upon the goods intended for consumption in other parts of New Granada. The ports will therefore be authorized for importation from the time of the opening of the canal, and the Government will establish in the same the Custom-Houses and preventive force which it may deem convenient for the purpose of collecting the importation duties upon the goods destined for other parts of New Granada, and for the prevention of smuggling.

XIII. The Government of the Republic declares the ports at both extremities of the canal and also the waters of the same from one sea to the other to be at all times neutral; and, consequently, in the case of war between other nations, or between either or any of them and New Granada, the trade by the canal shall not be interrupted on that account, and the trading vessels and individuals of all the nations of the earth, may enter the said ports, and pass by the canal without any let or hindrance whatsoever. Foreign troops are excepted, and cannot pass without leave from the Congress.

XIV. The Government of the Republic, in the Treaties concluded with other nations, will cause them to acknowledge the Granadian nationality, and to guarantee, if possible, the neutrality of the ports and canal mentioned in the foregoing Article.

XV. The privileged Company shall have the right of importing

freely, and without payment of duties of any class whatever, all machinery, instruments, tools and materials for building houses, as well as the food and clothing for the workmen, that may be required during the time granted for the construction of the canal.

XVI. No contribution, either national, municipal, or of any other class, shall be levied upon the canal, nor upon the tugs or towing-vessels of the Company, nor upon its warehouses, furniture, machinery, or other things or effects belonging to it of whatever kind, and which in the opinion of the Executive Government may be necessary for the service of the canal, or of its appurtenances, during the period granted to the Company for constructing and using the canal.

XVII. The passengers, specie, merchandize, effects and property of all kinds transported by the caual from one ocean to the other, shall be exempt from all duties and imposts, whether national, municipal, or of any other kind. The same exemption extends to all the goods and merchandize remaining in deposit at the ports, warehouses and stations of the Company, and destined either for the interior or for abroad; but the goods intended for consumption in the interior of the Republic shall pay the national imposts established, or such as may be hereafter established, on such goods leaving the warehouses of the Company, for which purpose the removal shall be with the knowledge of the officers of the Republic, and agreeably to the laws and to the regulations laid down by the Executive Power.

XVIII. Passengers travelling by the canal do not require passports, unless that in case of foreign war or of interior commotion the Government should think it convenient to require them in consequence of such circumstances; but all vessels passing through the canal shall be under the obligation of presenting at the port situated at the extremity of the canal where they arrivo first, their manifest and the ship's papers, as established by law or by public Treaties, in order that vessels may navigate freely. Vessels not possessed of such papers, or refusing to present them, may be detained and proceeded against according to law.

XIX. When there are national importation duties established upon goods destined for consumption in the territory adjacent to the canal, all vessels passing by the canal from one sea to the other, are to pass with their batches closed and sealed by the Custom-House of the port at which they arrive at either extremity of the canal; and they shall receive on board one or more Government officers, whose duty it is to watch that during the passage through the canal no part of the cargo be landed. But if, after having passed the canal, the owner of any vessel, should wish to disembark and dispose of the cargo at the port of the extremity

wherein he comes to such determination, the discharge of the cargo shall be allowed after the legal formalities.

XX. Vessels carrying effects destined for the works of the canal, agreeably to Article XV, shall have free access to any of the places comprised within the territory set forth in Article I, although ng Custom-House should be established, from the day on which the contractors may require it for the commencement of the works. And for the prevention of fraud, the contractors shall be obliged to give previous notice at the Custom-House of Carthagena should the vessel be destined for Caledonia Bay, and at the Custom-House of Buenaventura if for the gulf of San Miguel.

XXI. The Company has, during the term of the privilege, the exclusive right to establish the tariff of prices which are to be paid for the transit by the canal, use of ports, warehouses and wharves; and no vessel shall pass through the canal without paying such prices, the rate of which shall at all times be equal for individuals, vessels, merchandize, and property of all nations.

XXII. The construction of the canal is considered as a work of public utility.

XXIII. The Government of New Granada shall establish such regulations arising from the concession of this privilege, as may be necessary or convenient for preventing smuggling, and shall take, in concert with the contractors, such measures and precautions 28 prudence may dictate for protecting the country against the pretensions of any foreign Power.

XXIV. The Company is authorized to propose to the Executive Government the regulations which it may deem convenient for the police, use, and safety of its line of communication, ports, works and establishments of all kinds ; but such regulations shall not be carried into effect without the express approbation of the national Gorernment, which, after having approved of them, may reform or annul the same as may be found convenient, proceeding always in accordance with the laws of the Republic.

XXV. In consideration of receiving payment of the dues and prices of transport as fixed by itself, the Company undertakes the constant transport, with care, punctuality and rapidity, and without exception of nationality, of travellers, cattle, merchandize, effects and materials of all kinds, that may be confided to its care, the same to be transported without any other special abatement in the tariff prices than that which may be accorded to the natious that may have bound, or may in future bind themselves by means of public Treaties concluded with New Granada, to guarantee positively and effectually to this Republic the rights of sovereignty and property over the isthmuses of Panamá and Darien and the coasts adjacent, and the perfect neutrality of the said isthmuses and ports

so that at no time the free transit by those isthmuses or by this canal be interrupted or embarrassed; but it is to be expressly noted, and is, therefore, here especially stipulated, that New Granada, the Granadians and their property shall enjoy all the benefits and advantages which any other nation may obtain by virtue of the provisions of this Article.

XXVI. The Company shall convey gratuitously the men in the service of the Republic, and the munitions of war which it may be necessary to send by the canal, in order to provide for ex. ternal safety or the maintenance of public order.

XXVII. All correspondence arriving from places within the territory of the Republic, or froin foreign countries, to be conveyed by the canal, or by the railroad mentioned in Article IV, must be forwarded by the post-masters of New Granada, and the Company shall undertake the obligation of transporting the said correspondence from one extremity of the canal or railroad to the other, receiving for this service a third part of the sums collected for the receipt, conveyance and delivery of the said correspondence; and the Government, whenever it may deem proper, can cause the correspondence to be conveyed by public servants, but without affecting the right which the Company has to one-third of the postage, fixed by the Government of the Republic.

XXVIII. All foreigners establishing themselves on the lands granted to the Company shall enjoy perfect liberty of worship.

XXIX. All foreigners settling on the lands granted to the Company have the right to obtain letters of citizenship on demanding the same, and declaring that they fix their residence in the territory of the Republic, and from the time of their receiving such letters they become entitled to exercise all political rights now established, or that in future may be established by the constitution and laws of the Republic in favour of other Granadians.

XXX. The Company contracts the obligation of executing at its own cost, risk, and hazard, all the works necessary for constructing and establishing the canal of communication between the two oceans, on the line it may mark out at any of the places comprised in the territory denoted in Article I.

XXXI. The contractors shall pay to the Government of New Granada for the first 80 years, 3 per cent., and for the last 19 years 5 per cent. upon the net amount of the annual profits of the undertaking, without taking into account for the payment of this per. centage, any deduction for presumed interest upon the capital invested in the works, or for any sums set apart as a reserve fund or as a sinking fund. And for the receipt of the said percentage, the Government shall depend in the same manner as the shareholders of the undertaking, upon the accounts produced and liquidated conformably to the statutes of the Company. And the Agent of the Republic appointed for that purpose shall have liberty to take cognizance of the said accounts as well as of the cost of the undertaking and of the books and documents relating thereto, and to make observations and institute claims on the same footing as any shareholder, but without authority to intermeddle with the management of the affairs of the undertaking. The payment of the said percentage is to take place annually at the place appointed by the Executive Power.

XXXII. At the expiration of the privilege the canal, wharves, warehouses of deposit, and all the buildings and works annexed, which the contractors may have constructed at both the extremities and along the course of the canal, either for the purpose of Custom-Houses or any other connected with the service and administration of the canal, shall become the property of the Republic, and shall be made over to the same, together with the auxiliary railroad and all its dependencies, should it have been constructed by the Company or by other parties in its name. To the above end, after the works are concluded, the Company shall, at its own expense, and with the aid of the Government agents, draw up a circumstantial inventory of the canal and of the buildings and works annexed and of all other property which is to be made over to the Republic. The contractors shall moreover make out similar statements descriptive of all subsequent works of the same kind which may be executed during the time they remain in possession of the privilege.

XXXIII. An exact and authentic duplicate copy of the documents mentioned in the preceding Article, shall be delivered by the contractors to the Secretary of State having charge of the department of public works, in order to be deposited in the public archives for the purposes that may occur during the course of the privilege and at the time of its expiration.

XXXIV. A year previous to the expiration of the privilege, the contractors, having previously notified the Government Agents appointed for that purpose, shall make a valuation of the works which on the conclusion of the privilege are to be made over to the Government; and of these valuations as also of the descriptive statements of the works made at the same time as the valuation, a duplicate copy shall be deposited in such office as the Executive Power shall direct, in order to be brought forward at the time of transferring the canal and its dependencies to the Government.

XXXV. The Company shall insure the fulfilment of the obligations which it undertakes for this privilege by the sum of 24,0001. sterling, which it shall place at the disposal of the Government of

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