ARGUMENT FOR PARAGUAY:

(JULY 19, 1860,)

BY JAMES M. CARLISLE, Esq.

Whatever may be the result of this case, it must be agreed that every latitude has been cheerfully accorded to the claimants, and that they have had the most abundant opportunity of establishing their pretensions, if it were possible for human ingenuity to do so.

But what, after all, have they accomplished? I do not feel that anything is hazarded in saying that they have signally failed upon every point which was essential to their

success.

The amount of their losses, which they attributed to the supposed unjustifiable action of the Paraguayan government, after having grown, from a comparatively humble beginning, to the vast proportions of a castle in the air in the mind of a dreamer, has gradually faded away in the light of truth and reason, until all that remains is a few straw-thatched sheds and huts, a rickety second-hand engine of six horse power, a saw-mill, described by their own millwright as "a miserable affair," an assortment of implements and "notions" of little value, at San Antonio; and at Asuncion, (it is hardly exaggeration to say,) "a beggarly account of empty boxes;" all under mortgage to the friendly government who had advanced to them a sum of ten thousand dollars, which had unfortunately become necessary to their very first step in the grand march in the high road to fabulous riches; and resulting, after the faithful application of the total value of their possession, in a balance of debt to that government of over six thousand dollars. The "violent wrongs" and "wanton outrages," with loud complaints, of which they had inflamed the mind of the American government and people, and of which, upon their ex parte representations, they had made a prima facie case, authorizing the interference of the government, have proved, one and all, to be acts strictly justifiable, and even due to a decent self-respect in any govern

ment upon the face of the earth, not prepared to degrade itself before the world, and proclaim its imbecility to its own people.

This may be regarded as strong language; but it is used with deliberation, and is warranted by the unquestionable proof now in the record.

The brief history of the case, as gathered from the archives of the United States State Department, and the documentary and oral proofs exhibited by the record, appears to be substantially as follows:

In the year 1845, Mr. Edward A. Hopkins, who had been formerly an officer in the United States navy, visited Paraguay in the character of an agent of the United States State Department, for the purpose of examining and reporting upon the agricultural and commercial resources of that country, with a view to the possible future establishment of relations with it. He had absolutely no diplomatic, consular, or other international character or functions; but was simply, as a private person, to gather this useful information, and return with it to his government. But the same presumptuous, vainglorious, and meddlesome character which has been attributed to him by the witnesses in this case, and which is abundantly evident in the transactions out of which this enormous claim has sprung, led him to assume upon himself the duties of a public minister, and to attempt to open negotiations with President Lopez for the recognition by the Uni ted States of the independence of the Paraguayan republic. President Lopez was far too experienced and sagacious to be deceived by these pretensions. But Mr. Hopkins had the indiscretion to disclose them to the Department which had employed him, and the present distinguished Chief Magistrate of the United States, then presiding over that Department, promptly administered to him a decided rebuke, and his employment ceased. Returning to the United States, he appears, from the deposition of Mr. Arnold, the president of this company, to have devoted himself to the scheme of introducing American capital and enterprise into that country. Mr. Arnold himself, having traveled in countries bordering upon Paraguay, had written some articles in journals or reviews upon the same or a kindred subject. These two appear to have been the founders of the company; and certainly their scheme was well conceived; and if its execution had been entrusted to Mr. Arnold, judging from the impression he has made before this commission, very valuable results would undoubtedly have followed. But it was at least neces

sary to any success whatever that a little decency and common sense should be employed in the management of such an affair.

The company was chartered by the Legislature of Rhode Island, with the high-sounding title of "The United States and Paraguay Navigation Company." It did not profess to derive any legal capacity, as a corporation, from the Paraguayan government. The stockholders, it is shown, paid in the capital of $100,000. This amount appears to have been wholly absorbed (with the addition of a balance of debt over and above that sum) in the purchase of an old steamer, to which they gave the new name of "El Paraguay," and her cargo, consisting of the machines and implements before referred to, and a small assortment of ordinary merchandise, which, together with the expenses of transportation, appear, by their own showing, to have amounted to about $114,000, or an excess of $14,000 over their whole capital. The steamer Paraguay, charged with her expenses, repairs, &c., at $90,000, was wrecked, and was abandoned as a total loss. The cargo was damaged. All this occurred before reaching the waters of Paraguay. It seems that, after tedious and no doubt expensive litigation, the sum of about $35,000 was recovered from the underwriters. But in the meantime the company had met with nothing but disaster. Arrived in Paraguay, they were received (as they themselves have taken great pains to show) with every hospitality and every demonstration of hearty and sincere welcome. It appears, by the testimony of Ferguson and others, that liberty was given by President Lopez for a reconnaissance of the country within prescribed limits, for the selection of a site for the erection of a saw-mill, and that this selection having been made at San Antonio, in the immediate neighborhood of the government barrack there, President Lopez ordered the troops to evacuate the barrack, and hospitably tendered to Mr. Hopkins the use of it for the accommodation of the employés of the company, while they should be constructing their own quarters. It is stated by Mr. Hopkins, in one of his despatches, that this loan was tendered for the term of two years, but there is no proof of this, nor is it at all probable; but if the fact were so, it would not alter the case. It was a mere gratuitous favor, liable to be withdrawn when it ceased to be merited.

It further appears from the evidence, and from the admission of Mr. Hopkins in one of his despatches, that the loan of $10,000 before referred to, was generously made to the

company when, as we have seen, their marine disasters had made them greatly need it. At home, in the United States, it became necessary for the company to raise funds by increasing its capital, and accordingly it was increased, and the further sum of $58,000 was paid in by the stockholders; and to issue bonds for the nominal amount of $100,000, which were purchased by the stockholders themselves at fifty-seven per cent. below par.

To supply the place of the lost steamer Paraguay, they procured a clipper schooner, the Blodget, at a cost of about $22,000; and she, in her turn, was wrecked, and proved an almost total loss, without any insurance, and never having entered the waters of Paraguay. She carried out on board of her, in detached pieces, two small steamers, which were afterwards, and after the pretended expulsion of the company, successfully employed for several years at Buenos Ayres; one of them, as Ferguson has testified, having earned, as Hopkins told him, $50,000 in about ten months. She carried out, also, a small cargo of merchandise, which was damaged, and probably was sold (as the witnesses say) without profit. Neither the saw-mill nor the cigar factory (of which more particular mention will be made) at all augmented the property of the company; but the contrary.

This rapid sketch of the investments and losses of the company, while it occasions a digression from the orderly narrative of events, reproduces at one view all the seed sown, (indicating what of it was lost and what germinated,) from which, as will presently be shown, a harvest of five millions of dollars has been seriously and somewhat indignantly claimed as the product of a few months.

Let us return now to Mr. Hopkins, established, by the favor of the government, in the national barrack at San Antonio. With him are Mr. Ferguson the millwright, Mr. Boyd the engineer, and McDonald the farmer, the "second-hand steam engine," ," "the miserable affair" of a saw-mill, and the other matters and things, which, together with the "costly improvements," their witness says, on his cross-examination by the counsel for the Republic, were worth, at "a full estimate, five thousand dollars. By the way, it would probably puzzle him to make out even this comparatively insignificant sum, from the judicial inventory signed by himself as a witness.

The steam engine proves to be defective in certain indispensable pieces. The saw-mill is an ordinary plantation mill, not intended to be worked by steam or water, and a "miserable affair." No attempt is made to work any other

machine-not even the "machines" for making butter, commonly called "patent churns." The people of the country are indisposed to labor. It is clearly shown by every witness examined upon this point, that nothing whatever could have been done not the first step taken-which required labor, but for the purely voluntary favor of the government, in the exercise of what are stigmatized as its despotic and tyrannical powers. A species of conscription was necessary to set the company on its rickety legs. President Lopez ordered the proper officers to select twenty men (ten in each of two neighboring villages) of the race of the peones, to be compelled to work for the company at San Antonio, at the stipend of three dollars per month, with a daily ration of a medioreal, (six and a quarter cents.)

The necessary clearing was made, and a few sheds erected. Various unsuccessful experiments were made with the sawmill. The water power proved to be wholly unavailable without the erection of an expensive dam of masonry, never erected. It was a little stream, ten or twelve feet wide, and of "seven inches solid water," (Ferguson,) or even less than that, as estimated by Captain Morice, R. N., whose deposition is in evidence. But at last the mill is got to work by steam. The ex parte deposition of Ferguson, exhibited to the government of the United States by the company, represents him (by the loose and general language used by Mr. Hopkins in drawing it up) as testifying that the mill was now in a condition to cut seven hundred running feet of plank every day; and upon this, extending it for an imaginary term of ten years, even millions of dollars are claimed. But Mr. Ferguson's note book, with entries made at the time, and which is produced upon the requirement of the counsel for the company, while it states the fact that the mill had cut that quanity after great efforts on his part, adds that he could not "keep her up" to that; and that "in truth she is a miserable affair.

But besides a mill, it was necessary to have timber. In these vast conjectures of wealth, what becomes of the element of timber?

It is clearly proven by the witnesses produced by the company, that timber is a government monoply. Not that the government cuts it and trades in the lumber and plank business, but that the raw material—the growing trees fitted for that business-belong to the government, and are a regular source of revenue, there being no taxation upon property as in the United States and elsewhere. This remark (which applies also to other monopolies of the State) may serve to