southerly along the shore of the Caribbean Sea to the mouth of the river Rama, the point of commencement. But the district thus assigned to the Mosquito Indians may not be ceded by them to any foreign person or state, but shall be and remain under the sovereignty of the Republic of Nicaragua.

III. The Mosquito Indians within the district designated in the preceding article shall enjoy the right of governing according to their own customs, and according to any regulations which may from time to time be adopted by them, not inconsistent with the sovereign rights of the Republic of Nicaragua, themselves, and all persons residing within such district. Subject to the above-mentioned reserve, the Republic of Nicaragua agrees to respect and not to interfere with such customs and regulations so established or to be established within the said district. IV. It is understood, however, that nothing in this treaty shall be construed to prevent the Mosquito Indians at any future time from agreeing to absolute incorporation into the Republic of Nicaragua on the same footing as other citizens of the republic, and from subjecting themselves to be governed by the general laws and regulations of the republic instead of by their customs and regulations.

V. The Republic of Nicaragua, being desirous of promoting the social improvement of the Mosquito Indians, and of providing for the maintenance of the authorities to be constituted under the provisions of Article III of this treaty, in the district assigned to the said Indians, agrees to grant to the said authorities, for the space of 10 years, with a view to such purposes, an annual sum of 5,000 hard dollars. The said sum shall be paid at Greytown, by half-yearly payments, to such persons as may be authorized by the chief of the Mosquito Indians to receive the same, and the first payment shall be made 6 months after the exchange of the ratifications of the present treaty.

For the payment of this sum Nicaragua will levy and especially consign a duty, to be levied according to weight, on all packages of goods that are imported into that port for consumption in the territory of the republic; and in case this duty shall not suffice for the payment of said sum, the deficit shall be made up from the other duties levied in the republic.

VI. Her Britannic Majesty engages to use her good offices with the chief of the Mosquito Indians, so that he shall accept the stipulations which are contained in this convention.

VII. The Republic of Nicaragua shall constitute and declare the port of Greytown, or San Juan del Norte, a free port under the sovereign authority of the republic. But the Republic, taking into consideration the immunities heretofore enjoyed by the inhabitants of Greytown, consents that trial by jury in all cases, civil or criminal, and perfect freedom of religious belief and worship, public and private, such as has hitherto been enjoyed by them up to the present moment, shall be guaranteed to them for the future.

No duties or charges shall be imposed upon vessels arriving in or departing from the free port of Greytown, other than such as may be sufficient for the due maintenance and safety of the navigation, for providing lights and beacons, and for defraying the expense of the police of the port; neither shall any duties or charges be levied in the free port on goods arriving therein, in transit from sea to sea. But nothing contained in this article shall be construed to prevent the Republic of Nicaragua from levying the usual duties on goods destined for consumption within the territory of the republic.

VIII. All bona fide grants of land for due consideration, made in the

name and by the authority of the Mosquito Indians since the 1st of January, 1848, and lying beyond the limits of the territory reserved for the said Indians, shall be confirmed, provided the same shall not exceed in any case the extent of 100 yards square, if within the limits of San Juan or Greytown, or one league square if without the same, and provided that such grant shall not interfere with other legal grants made previously to that date by Spain, the Republic of Central America, or Nicaragua; and provided further, that no such grant shall include territory desired by the government of the latter state for forts, arsenals, or other public buildings. This stipulation only embraces those grants of land made since the 1st of January, 1848.

In case, however, any of the grants referred to in the preceding paragraph of this article should be found to exceed the stipulated extent, the commissioners hereinafter mentioned shall, if satisfied of the bona fides of any such grants, confirm to the grantee or grantees, or to his or their representatives or assigns, an area only equal to the stipulated extent. And in case any bona fide grant, or any part thereof, should be desired by the government for forts, arsenals, or other public buildings, an equivalent extent of land shall be allotted to the grantees elsewhere. * It is understood that the grants of land treated of in this article shall not extend to the westward of the territory reserved for the Mosquito Indians in Article II further than 84° 30′ of longitude, in a line parallel and equal with that of said territory on the same side; and if it should appear that any grants have been made further in the interior of the republic, the lands acquired bona fide shall be replaced with those that are within the limits defined under the regulations agreed upon.

IX. Her Britannic Majesty and the Republic of Nicaragua shall, within 6 months after the exchange of the ratifications of the present treaty, appoint each a commissioner for the purpose of deciding upon the bona fides of all grants of land mentioned in the preceding article as having been made by the Mosquito Indians of lands heretofore possessed by them, and lying beyond the limits of the territory described in Article I. X. The commissioners mentioned in the preceding article shall, at the earliest convenient period after they shall have been respectively named, meet at such place or places as shall be hereafter fixed; and shall, before proceeding to any business, make and subscribe a solemn declaration that they will impartially and carefully examine and decide, to the best of their judgment, and according to justice and equity, without fear, favor, or affection to their own country, all the matters referred to them for their decision; and such declaration shall be entered on the record of their proceedings.

The commissioners shall then, and before proceeding to any other business, name some third person to act as arbitrator or umpire in any case or cases in which they may themselves differ in opinion. If they should not be able to agree upon the selection of such a person, the commissioner on either side shall name a person, and in each and every case in which the commissioners may differ in opinion as to the decision which they ought to give, it shall be determined by lot which of the two persons so named shall be arbitrator or umpire in that particular case. The person or persons so to be chosen shall, before proceeding to act, make and subscribe a solemn declaration, in a form similar to that which shall already have been made and subscribed by the commissioners, which declaration shall also be entered on the record of the proceedings.

In the event of the death, absence, or incapacity of such person or persons, or of his or their omiting, or declining, or ceasing to act as such arbitrator or umpire, another person or other persons shall be named as aforesaid to act in his or their place or stead, and shall make and subscribe such declaration as aforesaid.

Her Britannic Majesty and the Republic of Nicaragua shall engage to consider the decision of the two commissioners conjointly, or of the arbitrator or umpire, as the case may be, as final and conclusive on the matters to be referred to their decision, and forthwith to give full effect to the same.

XI. The commissioners and the arbitrators or umpires shall keep accurate records and correct minutes or notes of all their proceedings, with the dates thereof, and shall appoint and employ such clerk or clerks, or other persons, as they shall find necessary to assist them in the transaction of the business which may come before them.

The salaries of the commissioners and of the clerk or clerks shall be paid by their respective governments.

The salary of the arbitrators or umpires and their contingent expenses shall be defrayed in equal moieties by the two governments.

XII. The present Treaty shall be ratified by Her Britannic Majesty, and by the Congress of the Republic of Nicaragua, and the ratifications shall be exchanged at London as soon as possible within the space of six months.

In witness whereof the respective plenipotentiaries have signed the same, and have affixed thereto their respective seals.

Done at Managua, this 28th day of January, in the year of our Lord 1860.

[L. S.
[L. S.]

CHARLES LENNOX WYKE.
PEDRO ZELEDON.

DECLARATION.

In proceeding to the exchange of the ratifications of the Treaty concluded and signed at Managua on the 28 of January, 1860, between Her Majesty the Queen of the United Kingdom of Great Britain and Ireland, and the Republic of Nicaragua, relative to the Mosquito Indians and to the rights and claims of British subjects, the undersigned, Her Britannic Majesty's principal Secretary of State for Foreign Affairs, and the Envoy Extraordinary and Minister Plenipotentiary of the Republic of Nicaragua, hereby declare that the limitation laid down in the paragraph added by the Congress of the Republic to Article VIII* of the said Treaty applies to grants of land to the west of the meridian of 84° 30′ of longitude throughout the whole extent of the territory hitherto occupied or claimed by the Mosquito Indians within the frontier of the Republic, but not to grants in any part of the said territory to the east of that meridian line.

In witness whereof the undersigned have signed the present declaration, and have affixed thereto their respective seals.

Done at London, the 2d day of August, in the year of our Lord 1860.

[L. S.] [L. S.]

J. RUSSELL.

J. DE MARCOLETA.

* Page 153.

62.-President Buchanan's message to Congress, December 3, 1860.

[Extract.]

The discordant constructions of the Clayton and Bulwer treaty between the two governments, which, at different periods of the discussion, bore a threatening aspect, have resulted in a final settlement entirely satisfactory to this government.

In my last annual message I informed Congress that the British Government had not then

Completed treaty arrangements with the Republics of Honduras and Nicaragua in pursuance of the understanding between the two governments. It is, nevertheless, confidently expected that this good work will ere long be accomplished.

This confident expectation has since been fulfilled. Her Britannic Majesty concluded a treaty with Honduras on the 28th November, 1859, and with Nicaragua on the 28th August, 1860, relinquishing the Mosquito protectorate. Besides, by the former the Bay Islands are recognized as a part of the Republic of Honduras. It may be observed that the stipulations of these treaties conform in every important particular to the amendments adopted by the Senate of the United States to the treaty concluded at London on the 17th October, 1856, between the two governments. It will be recollected that this treaty was rejected by the British Government because of its objection to the just and important amendment of the Senate to the article relating to Ruatan and the other islands in the Bay of Honduras.

No. 1745.]

63.-Mr. Seward to Mr. Adams.

DEPARTMENT OF STATE, Washington, April 25, 1866. SIR: Towards the close of Mr. Polk's administration the British Government, disturbed, perhaps, by the recent acquisition of territory by the United States on the Pacific, showed what we thought to be a disposition to contend with the governments of the Central American states, with the ultimate object, as was supposed, of acquiring dominion there, and also a control of any ship-canal which might be made between the two oceans by the way of the San Juan River and Lake Nicaragua. British subjects had long before that time lent those governments money, the interest on which was in arrears, chiefly in consequence of the strife between the states which ensued upon their separation and as a confederacy.

War measures were determined upon to recover this interest; among others, the seizure of the island of Tiger, belonging to Honduras, in the Bay of Fonseca, was made by a British naval force in October, 1849. This seizure was protested against by Mr. Squier, the United States chargé d'affaires in Nicaragua, and a disavowal of the proceedings by the British Government was required by Mr. Clayton in an instruction to Mr. Abbott Lawrence, at London, of the 29th of December, 1849.

Insomuch as one route (by some supposed the best route) for the shipcanal from the lake to the Pacific lay along the Estero Real, which empties into the Bay of Fonseca, near Tiger Island, Mr. Squier deemed himself warranted in incorporating in a general commercial treaty with

Honduras, which he signed on the 28th of September, 1849, provisions for acquiring land for naval stations on that island or on the continent in its vicinity. By what is called a protocol, of the same date, Honduras ceded Tiger Island to the United States, pending the ratification or rejection of the general treaty, provided that the time should exceed eighteen months.

These stipulations were entered into by Mr. Squier without instructions from the Department, and when the treaty and additional articles were received, he was reproved for them. They were never laid before the Senate. It is not to be doubted, however, that they occasioned uneasiness to the British Government, and in a great degree led to the Clayton-Bulwer treaty of the 19th of April, 1850.

The preamble of that treaty states that its object was to fix the views and intentions of the parties in regard to the ship canal.

The first article of the treaty, still referring to the ship-canal, stipulates that neither party will erect fortifications commanding the same, or in the vicinity thereof, or occupy, or fortify, or colonize, or assume or exercise dominion in any part of Central America.

It seems obvious that the renunciation by the parties to this instrument of a right to acquire dominion in Central America was intended to prevent either of them from obtaining control over the proposed shipcanal. At the time the treaty was concluded there was every prospect that that work would not only soon be begun, but that it would be carried to a successful conclusion. For reasons, however, which it is not necessary to specify, it never was even commenced, and at present there does not appear to be a likelihood of its being undertaken. It may be a question, therefore, supposing that the canal should never be begun, whether the renunciatory clauses of the treaty are to have perpetual operation.

Technically speaking, this question might be decided in the negative. Still, so long as it should remain a question, it would not comport with good faith for either party to do anything which might be deemed contrary to even the spirit of the treaty.

It is becoming more and more certain every day that not only naval warfare in the future, but also all navigation of war vessels in time of peace must be by steam. This necessity will occasion little or no inconvenience to the principal maritime powers of Europe, and especially to Great Britain, as those powers have possessions in various parts of the globe where they can have stores of coal and provisions for the use of their vessels. We are differently situated. We have no possession beyond the limits of the United States. Foreign colonization has never been favored by statesmen in this country either on general grounds or as in harmony with our peculiar condition. There is no change or likely to be any in this respect. It is indispensable for us, however, to have coaling stations under our own flag for naval observation and police, and for defensive war as well as for the protection of our widely spread commerce when we are at peace ourselves. This want, even for our commercial marine, is nowhere more sensibly felt than on the track between Panama and San Francisco. The question then occurs what points beyond our jurisdiction would be most eligible for this purpose? Whatever opinion might be entertained in regard to any other sites, there would be no question that Tiger Island would be exceedingly desir able for that purpose.

Under these circumstances, you will sound Lord Clarendon as to the disposition of his government to favor us in acquiring coaling stations in Central America, notwithstanding the stipulation contained in the