aforesaid privileges and the said free rights of way and of transit shall be held, used, and enjoyed by the United States of America (but not by any other nation, state, or government, except Nicaragua) without cost or charge, and freely, whether the same be made through the dominions and territories of Nicaragua as they now exist, or whether the said troops, munitions of war, public officers, agents, employés, mails, public property, vehicles, and vessels, &c., shall be sent, transported, or conveyed by means of improved navigable rivers, canals, or turnpikes, or railroads, or any other public improvements which may be hereafter made in the State of Nicaragua, either by the governments or citizens of the contracting parties, or by the governments, citizens, or people of any other nation, kingdom, or country; and the citizens of the United States shall have and enjoy all the rights and privileges of travel, passage, transit, and conveyance for themselves and their property and vessels of all kinds through the territories and dominions of the State of Nicaragua as they now exist or through such canals or roads, railways or turnpikes, or other improvements as may be hereafter made in said state, upon terms and conditions in every particular as favorable as those enjoyed by the citizens of Nicaragua, or by the citizens of any other nation, king. dom, or country.

ARTICLE XII.

In consideration of the premises as set forth in the foregoing eleven articles, the United States of America doth solemnly agree and undertake to protect and defend the State of Nicaragua in the possession and exercise of the sovereignty and dominion of all the country, coasts, ports, lakes, rivers, and territories that may be rightfully under the jurisdiction and within the just and true limits and boundaries of the said state; and when the circumstances and condition of the country may require it the United States shall employ their naval and military force to preserve the peace and maintain the neutrality of the said coasts, ports, lakes, rivers, and territories, and to hold and keep the same under the dominion and sovereignty of the Government of the State of Nicaragua or of the government of such state or political community of which Nicaragua may voluntarily become a member, or with which, of her own accord, she may hereafter be identified: Provided, however, that the said sovereignty and dominion of the State of Nicaragua, so guaranteed as above, shall not be held, maintained, or exercised by said state in any such manner as to conflict or to be inconsistent with the rights and privileges herein secured to the United States and her citizens; and to prevent all misunderstanding, it is expressly stipulated that the United States are not bound, nor do they undertake, to aid, assist, or support Nicaragua in offensive wars or wars of aggression waged and carried on by said state with foreign powers or with the neighboring states, outside of her just limits, and beyond the territories rightfully within her jurisdiction; but the contracting parties agree and undertake that, if necessary, the naval and military forces and the entire means and resources of both the contracting parties shall be employed to put down all wars and bloodshed arising therefrom, and to suppress all violations of the peace and interruptions of the neutrality of the said State of Nicaragua; and for further explanation it is understood that if the State of Nicaragua should become involved in a war with any foreign power or neighboring state within her own borders, to defend the territories rightfully belonging to her, or to recover such territories wrongfully wrested from her, the United States engages to defend Nicaragua in carrying on such war within her own rightful limits, provided, how

ever, that such war is just, and provided, moreover, that if peace is prevailing in the State of Nicaragua, no wars or hostilities shall be first commenced in said state by either of the contracting parties without previous friendly consultations, and unless with the consent of both their governments, given according to their laws and constitutions, respectively.

ARTICLE XIII.

The contracting parties, in negotiating this treaty, have had in view the contract entered into between the State of Nicaragua, through their commissioner, José Trinidad Muños, and a certain company styled "Compania de transito de Nicaragua," composed of certain persons named Willard Parker, Simeon H. Ackerman, Asher Kursheedt, and David J. Brown, through the said David J. Brown as their agent, which contract was executed and signed by said commissioner and agent on March 14, 1849, and ratified by the legislative power of the State of Nicaragua on March 16, 1849, and approved by the executive power of said state on the 17th of March, 1849. Now, in view of this contract, it is further agreed as follows:

1st. If the above-named company shall accede to this treaty in all its parts, or if they shall voluntarily abandon their contract, or if they shall forfeit their rights under said contract by failing to perform and execute the terms and conditions thereof in due time, then this treaty shall remain and be valid in all its parts.

2d. But if the said company shall not accede to this treaty in all its parts, and if they shall not abandon or forfeit their said contract, but if they shall execute the same and comply with its terms, and build the said works all in the time required, then, in such case, this treaty in all its parts, wherein the State of Nicaragua grants to the United States, or to a company to be chartered by the President or Congress thereof, the exclusive privilege to be the constructors and owners of said works, shall be void, and of no force or effect.

3d. Nevertheless, in such case as is set forth in the second section next preceding, if said company shall accede to the fifth (5th), the sixth (6th), the eighth (8th), and the eleventh (11th) articles of this treaty, and shall consent and agree that the United States of America, and the citizens thereof, shall have and enjoy all the rights and privileges therein granted to them, and as defined also in the tenth (10th) section of the third (3rd) article, then in such case the above-named fifth (5th), sixth (6th), eighth (8th), and eleventh (11th) articles of this treaty, as also the twelfth (12th) article thereof, shall be valid and obligatory between the contracting parties.

4th. But if in such case existing as is set forth in the second section above the said company shall refuse to accede or agree to the said ifth (5th), sixth (6th), eighth (8th), and eleventh (11th) articles hereof, as specified in the preceding third section, then this treaty shall be altogether void and of no force or effect whatever.

But the contracting parties, anticipating that said company, being satisfied that the great enterprise in view cannot succeed unless under the protection and patronage of the two governments, will concur and co-operate with them in the promotion thereof, they are assured that this treaty will meet their cordial approbation, and that it will be fully acceded to by them.

The present special convention between the United States of America and the State of Nicarauga shall be approved and ratified by the President of the United States of America, by and with the advice and con

sent of the Senate thereof, and by the Director of the State of Nicaragua, with the consent of the Legislative Chambers thereof, and the ratifications shall be exchanged in the city of Washington, Santiago de Managua or Leon, within the term of two years counting from this date. In faith whereof, we, the plenipotentiaries of the United States of America and of the State of Nicaraugua, have signed and sealed these presents in the city of Guatemala, on the twenty-first day of June, in the year of our Lord, one thousand eight hundred and forty-nine, in the seventy-third year of the independence of the United States of America, and in the twenty-eighth year of the independence of the State of Nica ragua. [SEAL.] [SEAL.]

ELIJAH HISE.
BUENAVA SELVA.

14. Contract between Nicaragua and the American Atlantic and Pacific Ship-Canal Company, signed at Leon, August 27, 1849, containing the grant which was subsequently accepted under Article VII of the ClaytonBulwer Treaty.

The Supreme Director of the State of Nicaragua, and "The American Atlantic and Pacific Ship-Canal Company," composed of Cornelius Vanderbilt, Joseph L. White, Nathaniel H. Wolfe, and their associates, being always citizens of The United States, desiring to settle the terms of a contract for facilitating the transit across the Isthmus of Nicaragua from the Atlantic to the Pacific Oceaus, by means of a ship-canal or railroad, have appointed as Commissioners on the part of the Supreme Director of the State of Nicaragua, Messrs. Hermenegilda Zepeda and Gregorio Juares, and on the part of the said company Mr. David L. White, with full powers to arrange and conclude a contract for the above-named purposes; which Commissioners having exchanged their respective powers, have agreed upon and concluded the following Articles:

ART. I. The State of Nicaragua grants to the said Company the exclusive right and privilege of constructing a ship-canal across its territory, by a single route, and at its own expense, from the port of St. John's of Nicaragua, or any other more feasible point on the Atlantic, to the port of Realejo, Gulf of Amapala, or Fonseca, Tamorinda, St. John's of the South, or any other point on the Pacific Ocean which the engineers of the Company may decide upon, by means of the St. John's river, Lake Nicaragua, River Tipitapa, Lake of Leon, or any other rivers, lakes, waters, and lands situated within its territory, with the object of connecting the two oceans, and to make use of, for its construction and navigation, said rivers, lakes, waters, and lands, both public and private. And the State also grants to the Company the exclusive right to the administration, management, and control of the said canal, according to the following Articles:

II. The dimensions of the canal shall be such as may be necessary for the passage of vessels of all sizes, and the point at which it shall terminate on the Pacific, in the event that the engineers of the Company shall decide upon two or more points as equally practicable, shall be that one most consistent with the mutual interests both of the State and the Company.

III. The Company binds itself to construct, at its own expense, in the harbors at the extremities of the route of said canal, custom-house buildings of the necessary capacity for the use of the State and Company.

S. Ex. 194-4

IV. The exclusive rights and privileges herein granted to the said Company by the said State, shall be enjoyed by the same for the fixed period of 85 years, counted from the day in which the canal shall be completed and put in use.

V. The Company hereby agrees to pay to the said State for the said grant the following sums of money, namely:

First. Ten thousand dollars by draft on the said Company in the city of New York, as soon as this contract shall be ratified by the Legisla ture of the State.

Second. Ten thousand dollars at the expiration of one year from this same date; and 10,000 dollars each year thereafter until the completion of the said canal; the above sums to be paid to the State in the city of Leon, or in the city of New York, as the State may elect. Also the said Company makes a free donation to the said State of 200,000 dollars of stock in the enterprise, which shall be delivered to the State as soon as the certificates of stock shall be distributed by the Company.

VI. Said State shall receive for its proportion of the income of said canal, after the same shall be put in use, the following interests, namely: for the first 20 years, 20 per cent. annually out of the net profits, after deducting therefrom the interest of the capital employed in its construction at the rate of 7 per cent. per annum, and 25 per cent, each year thereafter out of said net profits, after deducting the said 7 per cent., until the expiration of the full period of the term hereinabove granted. And the State shall also receive 10 per cent. out of the net profits, without any deduction of interest, of any route which the Company may establish between the two oceans, whether it be by railroad, or carriage-road, or by any other means of communication, during the 12 years herein granted for the construction of said canal.

VII. The said Company shall be bound to make and present an annual report and account to the Government of Nicaragua, setting forth the receipts and expenditures, as well as a statement of the condition of the works of the canal; which report shall be certified by the proper officers of the Company. The State, however, shall have the right, through any Commissioners which it may appoint for that purpose, to inspect and examine at any time the books of the Company, to satisfy itself of the correctness of the said receipts and expenditures.

VIII. It is hereby stipulated that the State of Nicaragua shall have the privilege of taking stock in the said canal, to the amount of 500,000 dollars, within 1 year from the date of the ratification of this contract, which it may distribute, as it may deem proper, among any of its native citizens, or the citizens of the adjoining States, upon giving notice to the Company of such intention through The United States' Consul in the city of Leon.

IX. It is further stipulated that a majority of the stock of said canal shall always be owned by citizens of The United States; in evidence of which the stock-books of said Company shall always be open to inspection at the principal office of the Company, wherever the same may be located.

X. The Company binds itself to commence the preliminary surveys for said works within the period of 12 months from the date of the rati fication of this contract, and also to complete the said canal within 12 years from the same date. But if any fortuitous or unforeseen events, beyond the control of the Company, as for example, earthquakes, epidemics, wars, or any other events of this nature,—should appear during the progress of the work to suspend its execution, the time thus lost

shall not be reckoned as a part of the stipulated time above given for its completion. In case such event should occur, the Company shall give immediate notice to the Government of the same, for the purpose of deciding, in connection with the Company, upon the nature of such

event.

XI. If none of the events which are expressed in the preceding Article should occur, and the work shall not be completed within the said period of 12 years, then, whatever may have been done by the Company to that time in the prosecution of the work, shall be forfeited to, and become the property of, the State without any indemnity.

XII. The State gives to the said Company the right to take, free of any charge or indemnity, any of the public lands or forests within the State, all the wood, stone, lime, timber, or any other materials which it may require for the construction and use of said canal and its dependencies. And the said State hereby further gives to the Company the right to take and make use of such portions of the public lands as it may require for the establishment or erection of houses, stores, docks, wharfs, stations, and all other useful objects connected with the works of said canal. XIII. In case the Company shall require any materials, such as wood, lime, stone, &c., which may be found in or upon the lands of particular individuals, it shall be obligated to pay for the same at such price as may be agreed upon between the Company and such individuals. But all the lands which may be required for the passage of the canal in its entire route, shall be at the expense of the State, and the Company shall not be liable to pay any indemnity for the same.

XIV. All the articles that the Company may require, both for the surveys and explorations, and for the construction and use of the works of the canal, such as machines, instruments, tools, &c., and all other necessary materials, shall be admitted into the State free of duties of all kinds, and may be discharged in any of its harbours, or at any other point within its territory that the Company may select; in this last case, however, giving notice of such intention to the proper Government officer. But the Company shall have no right to introduce within the territory of the State any goods, merchandize, or any other articles of commerce for sale or exchange without paying the duties established by law. And they are also prohibited from importing any articles or materials, which may be monopolised or prohibited by the State, for any purpose, except for the use of the works of the canal.

XV. The State binds itself to facilitate and aid in every possible way the engineers, contractors, employés, and labourers who may be employed in the explorations and surveys of the route, and in the construction of the works of the canal; and to this end stipulates that all citizens of the country who may be so employed by the Company, shall be free and exempt from all civil or military service of the State whatsoever; but to entitle them, however, to the right of exemption from such military service, they shall have been previously in the employ of the Company, for at least the period of 1 month. The State also guarantees to all foreigners who may be employed on the works of the canal the same rights, liberties, and privileges as are enjoyed by inhabitants of the country; and also that they shall not be molested or disturbed in their labours while thus employed, by any internal commotions or disorders of the country; and at the same time that they shall be free and exempt from all taxes, duties, or direct contributions whatsoever during the time they may be in the Company's employ.

XVI. The said Company agrees to receive from the State as labourers upon the works of the canal any convicts who may be capable of labour,