"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 contracts celebrated by the executive power have to be approved by the National Legislature. The contracts may be with designated individuals, 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 proportionate 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 undertakes to procure uniformity in the gauge and the rails. "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 profitable traffic."