Honduras Decree #116 – La Ceiba to Yoro Railroad

[Concessionaire: Standard Fruit Company – Government: Republic of Honduras]


(Translated from Spanish)

ARTICLE 1: The Concessionaire obligates himself to continue the construction of its main line of railroad, in La Ceiba, Atlántida from San Francisco in a western or southwestern direction, toward the places called San Juan, Cangelica, Placencia, Negrito or Tigre to the City of Yoro, building the railroad through those points most convenient to the Concessionaire, having the option to construct a branch to Isopo u Obispo which must be an extension of the main railroad and branches mentioned, with the same width and conditions as far as strength and materials used.

ARTICLE 2: The Concessionaire also obligates himself to construct solid bridges over the rivers crossed by the railroad spoken of in the foregoing number and when these are to be constructed over navigable streams they shall be such that they shall not interfere with navigation.

ARTICLE 3: In a like manner, the Concessionaire obligates himself to construct, in connection with the railroad, an ample and solid wharf in the Bay of Obispo or Isopo or in the port of La Ceiba, at his election, to which deep draft vessels may tie up. The wharf shall be 700 feet long by 34 feet in width and shall be so constructed that two or three railroad lines may cross it, so as to facilitate the discharge of the vessels that may tie up to it. Its general construction shall be such that it shall have sufficient resistance to sustain the weight of the locomotives with their cars, and to withstand the dashing of high seas.

ARTICLE 4: The Concessionaire obligates himself to carry gratis, in the regular trains of the railroad, the national mails, official correspondence, stamps and stamped paper, Government employees on public business, military commissions commanded by competent authority, it being understood that such commissions shall be composed of a number of men not to exceed 25. All Government freight and passengers not comprised in the foregoing paragraph, shall pay half the rates charted to private individuals with the exception of powder and other explosives, the carriage of which shall be performed in conformity with special agreements.

ARTICLE 5: The Concessionaire obligates himself to carry gratis, to and from the United States, all the mail delivered to him by the respective postal offices and addressed to the port touched by his ships.

ARTICLE 6: For the construction and operation of the railroad here under, the Government grants to the Concessionaire gratuitously, the useful dominion of a strip of national land, 50 meters wide in the uninhabited places, and 20 meters in the cities, towns, villages and settlements, the width of said strip to be increased as may be necessary in the case of cuts, fills, etc., all of which shall be indicated on the plans the Concessionaire shall submit for approval by the Government. Whenever the line shall cross privately owned lands, or those under private usufruct, the Concessionaire shall pay for their value at just appraisal of experts named in accordance with law.

ARTICLE 7: The Concessionaire shall have a right of way for the said railroad, by land as well as by water, it being understood with respect to the latter, to mean the bridges, stations and wharves; and besides, the space between the line and the stations that it may be necessary to establish for hydraulic power.

ARTICLE 8: Upon opening the railroad to the public traffic, it shall have been equipped and provided with sufficient motive power, cars for passengers and freight, tools and other accessories all of which shall be increased in conformity with the exigencies of the traffic.

ARTICLE 9: The Concessionaire shall have the right to exploit said railroad in while or in part, when and as the construction of the sections is completed and these are opened public service, in conformity with the following conditions:

a) The Concessionaire shall make and publish traffic regulations and a tariff for passengers and freight and an itinerary for passengers.
b) The tariff shall not provide higher prices per kilometer for the transportation of a person or the hauling of a ton of freight, than those that are now charged also per kilometer on the railroad existing between Puerto Cortes and La Pimienta.
c) The freight rates for Honduran products, shall be as low as possible, taking into consideration a reasonable compensation for the service, risk and capital invested, plus 25%.
d) The regulations and tariffs of said railroad shall be made known to the public by means of notices posted in all the stations of the line, and besides, they shall be published, every three months in the official paper. the changes in tariff shall be made known and shall be published in the same manner.
e) The Concessionaire shall not be permitted to grant preference or favoritism to any person or company, and the tariff shall be alike for all; nevertheless, the Concessionaire may reduce the freight rates, by means of special contract, with individuals and companies, for the transportation of immigrants, colonists, machinery, products and materials destined to the service of important enterprises whose purpose is the development of the country’s resources, as well as for the transportation of the products of such companies. The Concessionaire obligates himself on the other hand, to grant similar favorable conditions to any company organized under the laws of Honduras that may have enterprises similar to those previously mentioned.
f) The regulations and tariffs spoken of in the foregoing paragraphs shall previously be submitted for approval by the Government, as well as any changes made therein. The regulations, tariffs and passenger itinerary must be in effect within three months, to be counted from the date on which this contract is approved by Congress.
g) The Concessionaire shall have the right to collect wharfage for the use of the wharf in accordance with a tariff to be approved by the Government, during the life of this contract. This tariff shall come into force within the same period specified in the foregoing paragraph. If this tariff and the regulations and the tariff and itinerary spoken of in paragraph “f”, are not made within the time specified, the Executive may suspend the railroad traffic until such a time as it is put into force.

ARTICLE 10: The Concessionaire shall also have the right to publish regulations in conformity with Honduran Laws, for the transactions and maintenance of order on the trains, stations and properties of the railroad. Said regulations shall be submitted for approval by the Government, without which they may not be put into force, but once this requisite has been fulfilled, the authorities shall lend their aid and cooperation of the enforcement thereof. It is understood that the Concessionaire and all the employees of the enterprise shall be subject to the laws of Honduras and its authorities, and shall enjoy in conformity with the Law, the same guarantees and civil rights as do Hondurans, without any difference whatever.

ARTICLE 11: The Concessionaire shall have the right to borrow money for the construction, equipment, maintenance and operation of the railroad and its dependencies, as well as to issue bonds and other legal obligations for the purpose of guaranteeing the payment thereof, secured by the hypothecation of said railroad or any part thereof with its accessories. The Company, with the previous approval of the Government, may transfer the rights and obligations which arise from this and the other contracts to other persons, companies or other responsible economic enterprises. In no case may this transfer be made to another Government or to a foreign public corporation.

ARTICLE 12: It is understood and agreed that all the provisions of this contract referring to the Concessionaire, shall be applied to his successors or assigns, universal or singular, not only with respect to the rights, but also with regard to the obligations thereof.

ARTICLE 13: After concluding the study and routing of the railroad, the drawings of same shall be submitted to the Government for approval, the same which has to be done within six months, the Concessionaire will then start working on the extension of the railroad from west to east or southeast towards the City of Yoro, and from the moment that work begins, the Government will grant the Concessionaire two hundred fifty hectares of National land for each kilometer of railroad that it constructs in alternate lots for the Government and the Concessionaire. The measurement of the lots has to be done by a land surveyor appointed by the Government, and all expenses incurred will be the responsibility of the Concessionaire. These properties will be located on either side of the rail line, and in case there is no national land available, or there is not sufficient land, then the properties will be located as close as possible to the railroad. And it is clearly understood and agreed that the Concessionaire will have the right to cultivate those lands from the time he begins construction, but the title of these lands will only be given when the railroad is completed. There will be no obligation to pay for the use of these lands and the Government has the right to give to other people the titles of lands contiguous to the above mentioned lands.

ARTICLE 14: The Concessionaire is obligated to construct by next year, a branch from the main line to the town of El Porvenir, Atlántida. they will have the right to construct other branches, it being understood that all should have the same width and condition as said main line. For each six kilometers of branch that they construct, the Concessionaire will have the right to receive half of the lands that was granted for the main line, measured with the same width and under the same conditions mentioned in the preceding number.

ARTICLE 15: For the construction, exploitation and maintenance of the railroad and its branches, the Government grants the Concessionaire the following rights, exemptions and privileges:

a) The right to cut, gratuitously, the timber that may be on national lands and that is necessary for the purposes above mentioned, and for the supplementary constructions such as offices,houses, stations and warehouses, etc. He may also use for the same purpose, any other useful materials, such as rock, stone, lime, etc. found on national or communal lands; but in the latter case only when they are free or unoccupied.
b) The free use, for power of the rivers and other natural streams adjacent 10 kilometers from the railroad or its branches; but without prejudice to navigation or to towns that use them for ordinary purposes.
c) The free use of the coal and petroleum necessary for the service of the machinery and operations of the railroad, lighting, etc. which the Concessionaire, his agents or employees may discover within a strip of 10 kilometers on both sides of the railroad line.
d) The free use of the national lands for the construction of stations, warehouses, shops, dikes, wharves and depots for the service of the railroad.
e) Exemption of all fiscal or municipal taxes, be these ordinary or extraordinary, on everything related to the construction or operation of the railroad.
f) Exemption in time of peace from military service and drills for all the registered laborers and employees of the enterprise.

ARTICLE 16: The Concessionaire shall enjoy the right of constructing and maintaining telegraph and telephone lines, or any other apparatus for quick communication, for the exclusive use of the enterprise. Said lines may not be placed in public service except by prior special arrangement with the Government. The latter shall have the right to use, in case it becomes necessary, the said telegraphic and telephonic lines, pertaining to the Concessionaire, for matters concerned with the public service, and in times of war to control the services of the enterprises with reference to the said lines.

ARTICLE 17: The Government authorizes the Concessionaire to import free of import and municipal taxes, established or to be established, during the term of this contract, the machinery, cars, rails, cross ties, tools, dynamite and other explosives, oil, provisions in general, and all the materials which the Government considers necessary for construction, equipment, maintenance, administration and functioning of the railroad, their branches and all its dependents. The introduction of same will be checked by the original consular invoice that the Concessionaire will present to the customs administrator of La Ceiba. The exemption of taxes referred to the introduction of provisions, in which no kind of beverage will be included, will only last the fourteen years that the railroad’s construction will last, and the Executive can cancel it the moment he proves that it is being used illicitly.

ARTICLE 18: With previous authorization from the Government the Concessionaire will be able to bring to the country and employ them in the administration of the railroad, operators, and any other foreigner needed from any country, except Chinese and Negroes.

ARTICLE 19: The foreign employees of the Company or those immigrants, that the Concessionaire may bring will not be subject to pay during 10 years, taxes, extraordinary contributions, or any local payments for the introduction of machinery, tools, instruments, science or art books that may be necessary during this time. Also, these people will be able to introduce free of the mentioned taxes, all their furniture and personal effects that they bring with their family when they came to the country. The introduction will be done with the formality established in the final part of Article 17.

ARTICLE 20: The Government grants the Concessionaire the right to construct, equip and maintain the railroad and branches herein mentioned and to possess them in ownership, to administer and operate them free from all licenses, contributions or public charges of any kind what-so-ever, whether national or municipal, save as is specified in this contract.

ARTICLE 21: The Government obligates itself not to authorize any concession whatever for the construction of any railroad line parallel to the main line herein described, within a distance of 20 kilometers on each side thereof, but it is understood that all those railroads that have a different direction than the one aforesaid shall be permitted to cross the railroad herein mentioned, provided that the points wherein they terminate shall be at a distance of more than 20 kilometers. Nevertheless, the Government may permit the construction of any line that may connect with the Terminals of the Concessionaire’s railroad, with the right for the latter, to collect tariff rates for the transportation of freight and passengers.

ARTICLE 22: The Concessionaire obligates himself to carry from the United States of America, without any compensation for freight and unloading charges, all the materials that may be required for the construction of the offices that the Government may wish to establish for the various branches of public administration, in the place where the Concessionaire shall construct the wharf.

ARTICLE 23: There being constructed part of the railroad that we are discussing in this contract, the Concessionaire obligates himself to continue the job of extending it to the City of Yoro, and to complete the construction including the bridges and the wharf, fourteen years from the date of the approval of this contract by the national Congress; being understood that once it had expired and the Concessionaire had not yet constructed and completed all of the line from San Francisco to Yoro, it would lose in proportion to the distance unbuilt, the acquired rights stipulated in this contract, and in addition would pay the Government 1,000 pesos in gold for each non-constructed kilometer at the end of said 14 years and keeping the already constructed portion of the railroad as guarantee by the Concessionaire for said payment. But also it is understood that this would be exempted in case of force majuere. In case of non-compliance of any of the obligations mentioned in this clause, the Government could annul this contract by means of judicial inspection. Any other questions or difficulties that may arise among the parties during the duration of this contract will be resolved by two arbitrators appointed by each party, who may in case he be required, will appoint a third arbitrator, if they don’t reach an agreement on this, the third will be appointed by a judge of this State.

ARTICLE 24: The present contract shall last 99 years, to be counted from its approval by the National Congress, but the Government shall have the right to buy the wharf and railroad, with their stations, fixed material and rolling stock and other annexes and dependencies at the end of 75 years, to be counted from the time this contract is approved by congress, at a price to be agreed to by both parties or that may be fixed by experts named one by each party, who in the event of a disagreement, shall name a third, and who if they should fail to agree, shall be named by the First civil judge of the State, but in no case, shall the price of the railroad and wharf exceed the cost of its construction, less a rebate of 10%.

Should the Government be unable to purchase said railroad and wharf in the time and under the condition already expressed, it may do so at the end of each five years thereafter, until the expiration of this contract. If the negotiation of spoken of is not carried out, the railroad now constructed, its extension of the city of Yoro, the branches, bridges, wharf, stations, annexes, dependencies, fixed and rolling stock shall become the property of the State of the expiration of 99 years, to be counted from the date of the approval of this contract by the National Congress,without compensation for the Concessionaire, who obligates himself to deliver them unencumbered and in good serviceable condition. It is understood that after 75 years, the Concessionaire, his successors, or assigns, shall be begin to pay the State, the corresponding land fees, in accordance with the laws that are then in force for the lands, the useful dominion of which are granted to him by virtue of this concession.

ARTICLE 25: The Government shall enjoy the privilege, with all preference, to tie up to the wharf the Concessionaire shall construct, any steamships or vessels owned by it, and to load and discharge them without compensation whatever to the Concessionaire. The steamships and vessels of the owners of the railroad shall enjoy equal privileges.

ARTICLE 26: The Concessionaire obligates himself to give the Government half of the net product he obtains during the life of this contract from the dues to be collected from the wharf he obligates himself to construct, in accordance with the tariff to be approved by said Government. The latter shall have the right, through the employee it may designate, to inspect the books to be kept for the wharf operations.

ARTICLE 27: The Government and the Concessionaire agreed to substitute and reform by the present contract, those celebrated January 27, 1904 and February 27, 1906, which will be annulled the moment this one becomes effective. Regarding the trees that existed on the lots that were assigned to the Concessionaire by virtue of the preceding contract these will be disposed as of set forth by Decree #62 of March 4, 1909.

Given in Tegucigalpa at the meeting room of the National Congress, April 2, 1910. Romulo E. Durón, President; Ramón Fiallos, First Secretary; Rivera Retes, Second Secretary. The Executive Power. Therefore to be effective Tegucigalpa April 2, 1910. Miguel R. Dávila, Secretary of State in the Cabinet of Development and Agriculture by law, J.E. Alvarado.

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