choice of one or more arbitrators, it would be expedient that you should apprise me as soon as possible of the President's preferences. May it not be most prudent to have one arbitrator selected by each party, provided he be not objected to by the other party; and the two thus chosen authorized, should their judgments differ, to agree upon an umpire.

Hon. WM. L. MARCY, Secretary of State.

[No. 17.]

Mr. Dallas to Mr. Marcy.

[Extract.]

LEGATION OF THE UNITED STATES, London, June 27, 1856. SIR: I yesterday received from Lord Clarendon the answer to your Nos. 13 and 14, dated respectively the 24th and 27th of May, 1856. You will receive copies of those answers attached to this despatch.

The results of these papers are, first, a close to the controversy respecting the conduct of her Majesty's recent minister in the United States, Mr. Crampton, and of the three consuls, Messrs. Barclay, Matthew, and Rowcroft; and second, the taking a fresh point of departure in the negotiation as to the construction and effect of the treaty of April 19, 1850, and as to Central America generally.

Lord Clarendon, in his letter upon the subject of the treaty and Central America, expresses his readiness to enter into the communication with me proposed by the President, "in order to ascertain whether existing differences cannot be promptly terminated by direct negotiation, and if they cannot be so settled, then to discuss the conditions of arbitration on those points of difference as to which this method of settlement may be requisite or applicable." I shall, of course, therefore, lose no time in entering into this communication, and hope soon to apprize you of its progress and prospects.

*

Lord Clarendon to Mr. Dallas.

FOREIGN OFFICE,

June 26, 1856.

SIR: The despatch of the Secretary of State of the United States, dated the 24th ultimo, a copy of which was placed by you in my hands on the 11th instant, on the subject of the difference of opinion between the British government and that of the United States, regarding the construction and effect of the convention of April 19, 1850, and the subject of Central America generally, has received the attentive consideration of her Majesty's government.

Before I proceed to communicate to you the views of her Majesty's government, in reply to this despatch, I will beg leave to remark, in reference to Mr. Marcy's observation that direct communication upon the main subject had for some time ceased between Mr. Buchanan and myself, that such communication had ceased because it appeared to her Majesty's government that further correspondence was not likely to lead to a settlement of the question at issue. That question turned

upon the interpretation of the treaty of 1850, respecting which her Majesty's government learnt, for the first time, from Mr. Buchanan, that a view had been taken by the present government of the United States different from that of the preceding government. The treaty arose out of the various projects which had been started for commercial communications across Central America, between the Atlantic and the Pacific, and especially had reference to the scheme of a ship canal by the river St. John and the Lake Nicaragua. The main object of the treaty was to provide a security that such lines of commercial communication, through whatever part of Central America they might pass, should be free for the use of all nations, and should not fall under the exclusive control of any power.

These objects and purposes are clearly explained and stated in the first article, which is as follows:

"The governments of Great Britain and the United States hereby declare, that neither the one nor the other will ever obtain or maintain for itself any exclusive control over the said ship canal; agreeing that neither will ever erect or maintain any fortifications commanding the same, or in the vicinity thereof, or occupy, or fortify, or colonize, or assume, or exercise any dominion over Nicaragua, Costa Rica, the Mosquito coast, or any part of Central America; nor will either make use of any protection which either affords, or may afford, or any reliance which either has or may have, to or with any State or people, for the purpose of erecting or maintaining any such fortifications, or of occupying, fortifying, or colonizing Nicaragua, Costa Rica, the Mosquito coast, or any part of Central America, or of assuming or exercising dominion over the same. Nor will Great Britain or the United States take advantage of any intimacy, or use any alliance, connexion or influence that either may possess with any State or government through whose territory the said canal may pass, for the purpose of acquiring or holding, directly or indirectly, for the subjects or citizens of the one, any rights or advantages, in regard to commerce or navigation through the said canal, which shall not be offered on the same terms to the subjects or citizens of the other."

Her Majesty's government deemed that the plain and unquestionable interpretation of this article was, that each government was prohibited from doing what the words of the article explicitly declared that neither government should thereafter do; but that both governments retained the rights which they had previously enjoyed, where those rights were not expressly limited or abandoned.

With regard especially to the protection which, for a long course of time, the British government have afforded to the Mosquito Indians, this article, so far from requiring that protection to cease, acknowl edges its existence, and contemplates its continuance; for the article says that neither party will "make use of any protection which it affords or may afford, to any State or people, for the purpose of erecting or maintaining any fortifications, or of occupying, fortifying, or colonizing the countries therein specified." The treaty therefore does not require existing protection to cease, but only forbids using such protection for certain specified purposes.

I repeatedly informed Mr. Buchanan that it was the wish of her Majesty's government to withdraw from the protectorate of Mosquito, provided they could do so with honor, securing adequate provision for the king and the Indians of that country; that Ruatan was a possession of her Majesty's crown; and that, as her Majesty's government could not consent to abandon the protectorate of Mosquito, or to give

up the island of Ruatan, merely in pursuance of an interpretation given by the government of the United States to a treaty, which interpretation her Majesty's government did not admit, the most usual, as well as the most friendly course to pursue, was to refer the meaning of the treaty to the decision of a third power.

This offer was made by me to Mr. Buchanan by the direction of her Majesty's government; it was several times renewed and discussed between us. Mr. Crampton ought, undoubtedly, according to his instructions, to have communicated to Mr. Marcy, at the time when he received it, my despatch of the 10th of November, giving an account of my conversation with Mr. Buchanan; but his not having done so was of little consequence, as Mr. Buchanan had often assured me that everything which had passed between us had been duly reported to his government. I am therefore at a loss to understand how it happened that the President should, as stated by Mr. Marcy, have been induced only by certain collateral incidents to infer that arbitration by a third power of the difference between the two governments in relation to Central America, had been proposed by her Majesty's government.

A misconception has, however, taken place, which is to be regretted on account of the delay which it has occasioned; but this has been rendered comparatively unimportant by the despatch of Mr. Marcy, and the course of proceeding which he uow proposes for the adoption of the two governments. Her Majesty's government being as solicitous as the President to preserve unimpaired the friendly relations of the two countries, are prepared to enter into negotiations on these matters, with a sincere desire to bring them to a speedy and satisfactory conclusion.

Mr. Marcy is correct when he states that Great Britain lays no claim to any possession or territory on the Mosquito coast; and her Majesty's government consider now, as they always have considered, that the future condition of the Mosquito Indians, for which her Majesty's government are bound in honor to provide, might be assured by direct negotiation.

It is not contended, and never has been contended, that the British government, consistently with the stipulations of the treaty of 1850, could, in the name of the Mosquito Indians, "take with military force, and hold, San Juan de Nicaragua, or any other point in Central America;" and her Majesty's government agree with Mr. Marcy that such a proceeding would be irreconcileable with the independence and neutrality of the isthmus, and would render the treaty nugatory to the United States; but no such pretension has ever been advanced, and no such proceeding has been contemplated.

With respect to the district of Belize, her Majesty's government consider that the only question to be determined as regards Central America is that of the boundary between that country and the British possessions; and in the settlement of that question no insurmountable difficulty need be anticipated.

With respect to Ruatan and the other Bay Islands, these, at different periods, have been held by Great Britain as well as by Spain, and, having been again occupied by British settlers, formal possession was taken of Ruatan in 1839 by Great Britain, which has since been uninterruptedly maintained. The population increased fast, and magistrates were, from time to time, appointed by the superintendent of Belize until 1852, when these islands received a regular form of colonial government, solely for the purpose of their better internal

administration; but Great Britain did not thereby acquire any territorial rights that she did not previously possess.

The government of the United States, however, maintained that, even supposing the Clayton-Bulwer treaty was only prospective in its operation, these islands were no part of the British dominions earlier than 1852.

If the differences between the two governments on this subject cannot be arranged by direct negotiation, there seems no reason why they might not form the matter of a reference to a third power.

Her Majesty's government have learned with satisfaction that you are instructed to enter into communication with me in respect to Central America, in order to ascertain, in the first place, whether existing differences cannot be promptly terminated by direct negotiation, and, if they cannot be so settled, then to discuss the conditions of arbitration on those points of difference as to which this method of settlement may be requisite or applicable.

This is the course which her Majesty's government have throughout been willing to adopt; and I have accordingly the honor to inform you that I am prepared to enter into the proposed communication, and I trust that our conferences will be conducted in that spirit of cordiality and frankness which, as Mr. Marcy justly observes, is dictated by the true interests of Great Britain and the United States. I have the honor to be, with the highest consideration, sir, your most obedient humble servant,

GEORGE M. DALLAS, Esq., &c., &c., &c.

CLARENDON.

Mr. Dallas to Mr. Marcy.

[No. 1.]

LEGATION OF THE UNITED STATES,
London, July 1, 1856.

SIR: Agreeably to the tenor of the two notes which are annexed in copy to this despatch, I yesterday had my first interview with Lord Clarendon on the subject of Central America.

As your instructions of the 27th May, 1856, desired me "first to ascertain whether adjustment by negotiation is practicable, and obtain as far as you can the views of her Majesty's government as to any mode by which that result can be reached," I determined to contine myself as closely as possible to that object, and to seek from Lord Clarendon as frank and full a development as he might be disposed to give at so early a period of the discussion.

Although it was made quite clear that Lord Clarendon considers an adjustment by negotiation practicable, I do not think that he imparted to me a very exact apprehension of his views as to the manner of attaining it. To be sure the conference took rather the character of a preface, a preliminary opening, than that of a precise explanation of objects or plans; but there were occasional suggestions made, and there was a prevading tone throughout all Lord Clarendon said which led me to believe that he either had himself a clew with which to solve each separate difficulty, and would unfold it, or was prepared to accept with candor any effective proposition.

As our conversation opened I remarked that, his mind having been long and carefully directed to the details of the subject on which we were entering, and his last letter to me of the 26th instant evincing a

strong reliance upon negotiation alone, I felt anxious to possess his views. It struck me that we had better avoid entangling ourselves with the former disputations on the subject, and that, as far as we could justly do so, we should consider ourselves at a fresh point of departure with our backs turned to the past. To this he assented. I added that, for the present at least, if not permanently, it would be well to set aside the conflict as to the interpretation of the treaty of 19th April, 1850, on the one hand; and on the other, to forego all reference to the possible resort ultimately to arbitration. Let us see whether, be the construction of the treaty what it may, we cannot discover satisfactory means of removing the separate points of practical difficulty. Lord Clarendon deemed this to be the right course, and entered upon a running colloquial explanation of his views.

1. On the Mosquito question. He said that the British government entertained an anxious and sincere desire to get rid of the protectorate, if they could do so with honor; and having that disposition, it would be really hard if some plan of doing it could not be fixed upon mutually satisfactory.

The projet of Mr. Webster and Mr. Crampton, of April, 1852, which Nicaragua had rejected, contained in its first article an arrangement that might, probably, not be so objectionable at this time-that was, to wall in the Mosquitos within a prescribed, but sufficient range of territory, and to provide some reasonable income or annuity for the King. Their safety from violence could be assured by guarantees.

It would be necessary that this should be effected, not upon the foundation of their assent-for they were to be considered and treated as infant wards-but in a way to satisfy her Majesty's government that what was done was for their permanent benefit, and a just equiv alent for the protectorate.

These Indians had, somehow or other, become the objects of British protection, as long ago as in the time of Charles II, and what had repeatedly been avowed as an obligation of duty and honor, could not now be abandoned until they were placed, in some manner, out of danger.

In reference to grants of land which may have been made to Englishmen, Americans, or others, it would be useless to perplex ourselves with their consideration. That subject might be referred to a commission.

The protectorate withdrawn, what was to be the status of San Juan? Why not make it a free city? Could any objection to that arrangement be suggested? Surely the assent of Nicaragua would not be withheld from what could not fail to be of immense advantage to her. The treaty of 1850 seemed to contemplate its being one of the free cities at the two extremities of the ship canal. If the ship canal company had altogether abandoned the idea of executing that work, still there must be a highway or transit of some sort there, over which a large commerce would be conducted, and the treaty would, in spirit at least, apply to it. If we were fortunate enough promptly to settle all the differences between the two countries connected with the treaty of 1850, it might be that capitalists would resume their confidence, and the company be enabled to go on with the ship canal, and not think of reducing that great work to a narrow and merely local accommodation; in which case San Juan would naturally, if not necessarily, be one of the free cities adverted to in the fourth article of the treaty.

If the company gave up the ship canal, then we must determine