grant, in respect to anything connected with the management and use of the canal, or between the aforesaid person or persons, corporation, or company receiving the grant, and the Republic of Nicaragua, with regard to anything in anywise affecting the canal or the matters and things connected with the same, they shall be decided by the governmental board, whose decisions shall be final.

ARTICLE 14.

Both governments pledge themselves to use their good offices with that of Costa Rica to the end that it may adhere to the stipulations of this treaty in the part affecting it, in case the question pending between Costa Rica and Nicaragua on the subject of the validity of the boundary treaty of 1858 be decided in its favor; and the Government of the United States, actuated by the desire that the boundary questions between the two republics may be no obstacle to the accomplishment of the work in question, pledges itself to use its good offices with the Government of Costa Rica to the end that the aforesaid questions may be settled by the arbitration of one or more impartial governments.

ARTICLE 15.

If at the expiration of a year from the date of the exchange of the ratifications of this treaty the adhesion of at least four of the maritime powers of Europe shall not have been obtained, the stipulations of the present convention, so far as they add anything to or modify the obligations contracted in the existing treaties, shall be null and void, the said treaties remaining in full force, and the Republic of Nicaragua being fully at liberty to act in the matter as it shall think most conducive to its interests.

ARTICLE 16. .*

The present convention shall be ratified, and the ratifications exchanged, at Managua, within eighteen months from this date, or sooner if possible.

Señor Cárdenas to Mr. Fish.

[Translation.]

LEGATION OF NICARAGUA,
Washington, February 9, 1877.

SIR: The honorable Secretary of State having informed the undersigned, during their interview yesterday, that a counter-draft of a treaty between his government and that of Nicaragua, which he had the honor to address to him on the 25th ultimo, was absolutely unacceptable, both on account of its form and on account of the essential modifications therein made to the draft presented by the honorable Secretary, the undersigned had the honor to state that he did not attach much importance to the form in which he had presented the modifications, but that he did to their spirit; and that, therefore, if the question of form could cause the discussion to be prolonged beyond the time at the disposal of the undersigned, in view of his desire to bring the negotiation to a speedy termination, he had no objections to withdrawing the modifications presented in the form proposed, and to the adoption, as a basis of discussion, of the honorable Secretary's draft, to which he proposed to make at the same sitting the observations which gave rise to the counter-draft.

This having been agreed upon, the undersigned had the honor to object in general to some of the principal stipulations of said draft, which he thinks inadmissible on account of its incompatibility both with the sovereign rights of Nicaragua and the spirit of its constitution and laws, as well as with the interests of the commerce of the world, and particularly with those of the republics of Central America; and he had the honor to hear that the honorable Secretary admitted the justice of some of his observations.

But as the day which the honorable Secretary had been pleased to appoint for this Interview was not the most suitable for a full discussion of the draft-it being the day appointed for the reception of the diplomatic corps-the undersigned became aware that the honorable Secretary did not propose to discuss the matter in detail, and was obliged to confine himself to the general observations alluded to, and promised to communicate to the honorable Secretary, as soon as possible, a memorandum of objections to the draft, which he has the honor to send herewith.

He has therein succinctly stated, as the shortness of the time has allowed, the

reasons for which, in his judgment, Articles I, IV, V, VI, VII, VIII, IX, X, XI, XII, XIII, XV, XVI, XVII, and XVIII of the draft of the honorable Secretary of State are inadmissible, leaving the remaining articles without observations, although if the objections made to the principal ones should be adopted, it would be necessary to modify them in order to cause all the parts of the draft to harmonize with each other, and to add some stipulations providing that none of the concessions and privileges granted by Nicaragua to the nations guaranteeing the neutrality of the canal and of the commerce of the world should ever be interpreted to the detriment of her sovereignty and of her fiscal interests.

The undersigned would, at the same time, have proposed the stipulations which, in his opinion, should be substituted for the articles which he thinks inadmissible; but, as most of them are condensed in the draft which has been rejected by the honorable Secretary of State, and which the undersigned considered as withdrawn, it would be desirable, if the honorable Secretary of State considers just, and accepts the reasons on which the undersigned has based his objections, and has thought of any way to avoid the difficulties in question, that he should state his views in a new draft.

But if, which would be matter for regret, the honorable Secretary should be of a contrary opinion, the undersigned hopes that he will be pleased so to inform him as soon as possible, that he may prepare to obey the orders of his government, inasmuch as the time at his disposal, and the speedy change of administration will not now permit the continuation of negotiations in this matter.

The undersigned has the honor to reiterate to the honorable Secretary of State the assurance of his highest consideration and esteem.

Hon. HAMILTON FISH, &c., &c., &'c.

AD. CÁRDENAS.

Memorandum of objections made by the minister of Nicaragua to the draft of a treaty between the Government of the United States and that of Nicaragua, presented by the honorable Secretary of State January 25, 1877.

[Translation.]
ARTICLE I.

This article is inadmissible on the terms proposed, because, the invitation being limited to the principal maritime powers with which the contracting governments are on terms of peace and friendship, the other uninvited nations are excluded from the advantages offered to those accepting the convention, and are therefore subjected, according to the following stipulations, to a scale of tolls so high that it would exclude their flag from the use of the canal. This would be the condition of all the nations of the American continent (with the exception of the United States), and even of the republics of Central America, to whose territory the route belongs; and the canal, instead of being, as was to be hoped, and as the Government of Nicaragua desires to have it, a universal highway, open to the world, on conditions of perfect equality, would be coverted into a monopoly for the benefit of a few maritime powers, by the mere fact of the guarantee of neutrality, which guarantee is a purely moral one, and to which many of them are already pledged, without that privilege, by treaties with Nicaragua.

With regard to the stipulations and guarantees to which the article refers, which are acceptable in general, with some slight modifications, it would be desirable to add, in order to give greater security to the route, and to maintain equilibrium between the maritime powers guaranteeing its neutrality, and in conformity with the agreement made between the United States and England, a clause providing that none of them shall occupy, fortify, colonize, assume, or exercise any dominion, whatever over Nicaragua or over any part of Central America.

The neutrality of a strip five miles wide on each side of the canal for the object in view seems unnecessary. The neutrality of a great zone, ten miles wide, which would comprise one of the principal centers of the population of the republic, is purposeless. Two miles on each side are more than sufficient, and can be granted.

Paragraphs 3 and 5 of this article must be explained in such a way that it will be understood that the capacity of constructor of the canal or employé thereof does not involve the inviolability of person or property so as to place them beyond the reach of any legal action. The company and its employés must not consider themselves as beyond the relations of common law.

ARTICLE IV.

This article is absolutely inadmissible, because restrictions are thereby imposed upon Nicaragua, in the exercise of her administrative acts, which cannot fail to affect her independence, and which no other nation would admit under similar circumstances. The acts of the Congress of Nicaragua, in the exercise of its constitutional powers, necessary to invest a concession with the authority of law, would be liable to be rejected and nullified by any of the foreign governments to which is given the power of approving them in their spirit and form. This power, moreover, is superabundant, since the conditions of the concessions to be granted by Nicaragua are also fixed, and since Nicaragua pledges herself, by this convention, to a series of concessions calculated to favor the interests of the commerce of the world, and to give confidnce and security to the capital invested in the work, which obligations she would be bound to respect on making a grant.

The second condition of this article is inadmissible for the reasous stated in the observations on article 1; and because it would oblige the company undertaking to construct the canal, to increase the tolls to the detriment of the interests of non-favored commerce, or it would have to reduce them to a fair rate, to the prejudice of its own interests.

The creation of the board of control, to which the third condition refers, although admissible in principle, is not so with the latitude of powers conferred upon said board. It is proper that the nations guaranteeing the neutrality of the canal should unite in forming an international board of conneil of vigilance to exercise a general supervision over the enterprise, so far as regards the general use of the canal, and so far as this can, in any wise, affect the interests of the nations; it does not, however, seem proper for another kind of powers to be granted, to the prejudice of the interests of the enterprise, or for the right of intervention to be granted to said board in matters which, by reason of their very nature, are within the province of the Government of Nicaragua alone.

It is a sufficient guarantee for the nations to have representatives to see that the company comply with the terms of the grant, which must be in accordance with existing treaties. Moreover, as the protection of the governments is conditional, and may be withdrawn, according to the stipulations of paragraph 6, article 1, if the company adopts regulations with respect to trade which are contrary to the spirit and design of this convention; and as, moreover, by treaties still in force between Nicaragua and other nations, a limit has been placed to the profits of the enterprise, it is neither proper nor necessary for the board of control to have the right to approve and reform the tariffs.

The fifth condition, which refers to an armed police in the neutral territory, is admissible, if it be provided that such police shall be governed by regulations made by the Government of Nicaragua, and that it shall act only within the limits of the canal and its dependencies, subject to the constitution and laws of the republic. A body of police, independent of the government, and not subject the laws of Nicaragua, would be an anomaly incompatible with the sovereignty of the State.

The sixth condition, in the part referring to the approval of the charges to be levied per ton upon each vessel, is inadmiss ble for the reasons stated in speaking of the powers of the board of control.

For the same reasons, and in view of what has been said in respect to the first part of article 4, the seventh and eighth conditions cannot be admitted.

The ninth condition would be acceptable provided that portion were suppressed which refers to private armed vessels, both in view of the danger of filibustering and piratical expeditions, and because this condition would render the convention unacceptable to those European nations which have condemned the principle of privateering.

ARTICLE V.

This article seems unnecessary, because as soon as the Government of Nicaragua makes a grant, by that very fact it becomes obliged to respect it until it becomes uull and void, according to its terms.

ARTICLE VI.

This is acceptable, with the addition, after the phrase "including the government of Nicaragua," of the following: "and the other governments of Central America."

ARTICLE VII.

This article is inadmissible, because the Government of Nicaragua cannot assume all the obligations of article 1, some of which would imply a renunciation of its sov

ereign rights to the zone occupied by the canal. Such is that of not maintaining exclusive authority over the canal, and of never erecting or maintaining on it or in its vicinity fortifications commanding it.

The result of this would be that the control of the canal would be taken away from Nicaragua, or that she would have a very small share of it, together with the other guaranteeing nations. Moreover, the article binds Nicaragua to all the guarantees of article 1, and to the others which are granted by this convention in an absolute manner, while the Government of the United States binds itself thereto only conditionally by the terms of article 15.

ARTICLE VIII.

The final portion of this article is objectionable, inasmuch as it provides that the ports of San Juan del Sur and Salinas may be used gratuitously as harbors of refuge and resting places for vessels having the right to pass through the canal; because this would oblige Nicaragua to declare open two ports unnecessary to her commerce, thereby occasioning her expense in maintaining guards for the protection of her fiscal interests, police, &c., for the prevention of smuggling, without receiving anything in return. It might be admitted, provided a fair reduction were made in the ordinary duties, in favor of the vessels referred to.

ARTICLES IX, X, AND XI.

These articles do not seem to come within the scope of this treaty. They treat of a grant, and the Government of Nicaragua is ready to allow, without any necessity of providing for it by treaty, and with some modifications, all that is asked therein for the company, and much more, and the company will not fail to demand it in its grant; moreover, the privilege of appropriating private property, as asked for, is at variance with the constitution and laws of the republic.

ARTICLE XII.

This article might be accepted with the addition after the phrase "except in the manner prescribed by this convention" of the following: "and according to the terms of the grant."

ARTICLE XIII.

This is inadmissible, because these docks, with a force of foreign police in the territory of Nicaragua, might be considered as points occupied by foreign nations. It does not tend, moreover, to facilitate the special object of this convention, and would rather obstruct the ports, since the same right would belong to all the nations adhering to the convention. It seems more proper that the construction of docks for the vessels of the whole world be left to private enterprise.

ARTICLE XV.

This article is not admissible in the conditional terms in which it is drawn. It makes the convention a unilateral contract, in which the only obligation contracted by the Government of the United States is imperfect, and consequently much less binding than the obligations contracted by it in this respect by the treaty of Managua of June 20, 1868, whereas Nicaragua pledges herself absolutely to do much more than she is obliged to do by the aforesaid treaty; which, viewed in connection with the stipulations of Article XVII of the draft, limits, to a certain extent, the obligations contracted by the United States, while Nicaragua contracts greater and much more serious

ones.

ARTICLE XVI.

Admitted, striking out the phrase "as the owner of a part of the banks of the San Juan River."

ARTICLE XVII.

First part accepted, striking out the 9th, in view of what was said in the observations on Article XV.

ARTICLE XVIII.

Admitted, changing the word Washington to Managua, it being easier to make the exchange in Nicaragua, the Government of the United States having a minister resident in Central America.

LEGATION OF NICARAGUA,

Washington, February 9, 1877.

Mr. Fish to Señor Cárdenas.

DEPARTMENT OF STATE,

Washington, February 16, 1877.

SIR: I have had the honor to receive your note of the 9th instant, repeating and amplifying remarks upon your counter-draft upon the subject of an interoceanic canal which you made during a recent conference with me.

In the interview which I had the honour to hold with you on the 8th instant, I presented the reasons and motives of this government for the several provisions in the draft of a treaty which had been submitted, to which you had excepted, and also the objection to the greater part of the amendments proposed in your counter-draft, while accepting on one or two points of detail the reasonableness of your exceptions to our draft, and expressing a willingness to modify the position of this government as to those points.

I regret to notice, from the paper now acknowledged, that your views upon the main and upon what are deemed the vital points of the question absolutely essential to the practical attainment of the result which both nations anxiously desire continue to be so contrary to those entertained on the part of the United States, that I can see no hope for the construction of the canal, or for its being undertaken, without a modification of the views presented by you. This is a result which I deplore for the interests of the United States and of Nicaragua, as well as those of commercial nations in general, and for myself personally.

The object is obviously so beneficent in its purpose that, if the work were to be completed upon an advantageous basis, it could not fail to increase the wealth and happiness of mankind. It certainly would be no dishonorable ambition for any man to have his name associated with such a scheme. It would also be affectation to deny insensibility to its failure. For its success, the President was disposed again to pledge the faith of this government to defend the neutrality of the work, as had been done in other instances touching interoceanic intercourse. In favoring the enterprise he has had an eye to nothing but its success. He was sure that this could not be compassed without a guarantee of the neutrality of the work by the chief maritime powers, and by grants from Nicaragua such as would be sufficient to tempt the cupidity and inspire the confidence of capital. It is feared that because this great natural pathway happens to lie within the jurisdiction of Nicaragua, she may be disposed to be somewhat unduly sensitive in regard to her sovereignty, and to assert her technical rights in the matter in a way not only inconsistent with her own interests, but with those of commercial nations generally. You will pardon me for suggesting that she seems to have undue apprehension of designs upon her sovereignty outside of the necessary limits of the canal, and does not appreciate that, whatever sacrifices other powers may make to insure success to the enterprise, must be met by at least some corresponding concessions, and in a spirit of justice, not to say of generosity, on her part. She will profit more than all other nations by the construction of the canal, and yet I am forced to think that her counter-draft of the treaty is unconsciously framed upon the theory that the world desires a transit through her territory and must make all exacted submission to obtain it. It is hoped that sooner or later this policy on her part will be changed.

For many years, and by separate treaties with very many of the nations of the world, Nicaragua has endeavored to enlist the support and the co-operation of other powers in the construction and the neutralization of this canal; but not a shovelful of earth has been removed toward the execution of the work.

A want of assurance as to the superiority of advantage of the route by the way of Nicaragua over other routes has, no doubt, to some extent prevented any real efforts in the direction of an actual construction of the work.

Other causes of impediment and of delay have, however, been even more operative. Among these may be mentioned the want of confidence in the terms of concession which Nicaragua might be disposed to grant to those who undertake the construction, and the entire uncertainty of the competence or even of the actual intent to undertake the work on the part of those to whom a concession may be granted. A concession on inadequate terms and conditions, or one granted to parties of insufficient credit or capi