business to an end. Nicaragua granted the sections of land to the canal company, to be located on either side of the San Juan. If she now consents to surrender all the territory on the south side of that river to Costa Rica, it seems quite reasonable that an arrangement should be made between the two governments, such as shall meet the convenience and fulfill the just expectations of the canal company.

It is most earnestly to be desired, that upon further consideration you should devise a plan by which we can get over the present difficulty without the delay which would necessarily be incurred by waiting for further instructions. I commend this subject with renewed earnestness to your attention.

I offer you a renewed assurance of my very high consideration. DANIEL WEBSTER.

Señor Don FELIPE MOLINA, &c., &c., &c.

Mr. Molina to Mr. Webster.

WASHINGTON, April 9, 1852. SIR: I had the honor to receive your communication of yesterday, and in reply to it I beg to say, that as an earnest of my desire to co-operate with you in the accomplishment of the benevolent and elevated design of your government, I will assume the responsibility of agreeing to the stipulation that two, out of the eight sections of land granted by Nicaragua to the canal company, shall be situated on the Costa Rican side of the river San Juan, provided that an indemnity be paid to Costa Rica; that the company shall not select those two sections within ten miles from the entrance of the River Colorado into the sea, or the junction of the Sarapiqui river and the San Juan river, and that Costa Rica shall retain her sovereignty in regard to the two above mentioned sections of land thus selected.

The indemnity seems to me necessary in order to make the contemplated convention acceptable to the Costa Rican people, who have made up their minds, long ago, to abandon certain rights to the Nicaraguans on those very important and essential points contemplated in the treaty, but are not prepared to yield this comparatively small and insignificant matter. Were I to give my unconditional assent to it, they would be apt to regard the treaty no longer as an act of their own free will and wise deliberate moderation, but as a constraint put upon them.

I beg, therefore, to propose the sum of $100,000 as an indemnity, to be paid by Nicaragua to Costa Rica out of the revenues that the former is to receive from the company. The payments to be effected in four, five, or more, yearly instalments, as you may think proper. This sum will not appear exorbitant when it is taken into account that Nicaragua is likely to receive from the company about $100,000 every year, before the canal is completed, and that after the completion of the said work that amount will, perhaps, be increased to millions. One half of those profits belong, of right, to Costa Rica, but

will be entirely surrendered by the treaty. The proposed indemnity. would be a consideration for both the two sections in question, and for the cession of the delta comprised between the northern branch and the Colorado branch of the River San Juan, a cession not spoken of in the preliminaries of July last, but which I did not hesitate to assent to with a view to remove all further difficulties.

Having thus candidly submitted my views on this subject, and hoping that you will be pleased to take them, at your earliest convenience, into consideration, I have the honor to remain, with the highest regard and deep respect, sir, your obedient, humble servant,

Hon. DANIEL WEBSTER,

Secretary of State of the United States.

F. MOLINA.

Mr. Webster to Mr. Molina.

DEPARTMENT OF STATE, Washington, April 15, 1852.

SIR: I have the honor to acknowledge the receipt of your note of the 9th instant, in which you agree to stipulate, on behalf of your government, to allow the Atlantic-Pacific Ship Canal Company to locate two of the sections of land granted to them by the Nicaraguan government on the Costa Rican side of the San Juan river, in consideration of one hundred thousand dollars to be paid by Nicaragua to Costa Rica out of the revenues to be received by the former from that company. You offer is also made subject to other conditions.

It is to be regretted that the expectations of your government should be so high in regard to its differences with the Nicaraguan government. I had indulged the hope that the proposition contained in my note of the 8th instant would, under the circumstances, have been considered by you so moderate and reasonable that you would not, by rejecting it, lose the opportunity which it afforded Costa Rica to avail herself of the good offices of the United States and Great Britain towards accommodating the disputes between her and Nicaragua. Inasmuch, however, as you have otherwise decided, Mr. Crampton and myself will proceed to arrange the points at issue between our two governments in regard to the Mosquito shore, and to transmit directly to the Nicaraguan government, whose diplomatic agent here it is understood still remains without instructions, information of these arrangements, with a distinct statement of our joint opinions of the interests and duty of that government. As you are the recognized minister of Costa Rica to this government, it would be improper for us to address ourselves directly to that of Costa Rica, as such a proceeding would be a departure from diplomatic usage. I have to say, however, that a copy of the paper which we propose to communicate to the Nicaraguan government will be placed in your hands. I avail myself of this occasion, sir, to offer to you a renewed assurance of my very distinguished consideration.

Señor DON FELIPE MOLINA, &c., &c., &c.

DANIEL WEBSTER.

Mr. Molina to Mr. Webster.

WASHINGTON, April 19, 1852. SIR: I had the honor of receiving your letter of the 15th instant, in which you have the goodness to express a regret that the expectations of my government, as set down in my note of the 9th, should be so high; and that, consequently, you will proceed to arrange with Mr. Crampton the points at issue between the United States and Great Britain in regard to the Mosquito shore, and to forward to the Nicaraguan government a distinct statement of your joint opinions respecting the interests and duty of that government. And you further mention the intention of transmitting to me a copy of the paper that is to be addressed to the Nicaraguan government, for the information of that of Costa Rica.

In reply, I think it my duty to assure you that my government will be prepared to receive, with due respect and grateful acknowledgment, any suggestions proceeding from such exalted sources. But, at the same time, I cannot refrain from lamenting my misfortune in having failed to impress this government with my own convictions in regard to the extent of the rights of Costa Rica, as no opportunity has been offered for the full and mature discussion of those rights, in which case, I am led to think, that the moderation and self-denial of the party I represent would have been better appreciated.

As the matter now stands, I would only venture to suggest that, instead of stipulating a fixed amount of money, a provision might be inserted in the treaty or paper to be drawn to the effect that the State of Nicaragua should give to Costa Rica an indemnity for the two sections of land wanted by the company, and for the territory comprised between the Colorado branch and the northernmost branch of the river San Juan. This indemnity to be regulated by mutual agreement of the parties concerned, or through the arbitration of one of the other three Central American governments that should be chosen by lot.

This solution of the only difficulty remaining offers the advantage that it would not interfere with the immediate execution of the other arrangements contained in the treaty.

Requesting again your earnest attention on the subject, I have the honor to remain, with the highest consideration and deep respect, sir, your most obedient humble servant,

Hon. DANIEL WEBSTER,

Secretary of State of the United States.

Ex. Doc. 25-5

F. MOLINA.

[Translation.]

Mr. Marcoleta to Mr. Webster.

WASHINGTON, April 21, 1852.

Mr. SECRETARY OF STATE: All hope, for the present, being lost of reconciling the opinions and harmonizing the interests of the three States of Central America, for the establishment of the proposed confederation of said States, Nicaragua, one of them, could not view with indifference the neglect and the too long protracted suffering which her foreign relations experienced at the very time when it was necessary to act with the greatest activity, and to give an energetic impulse to the pending question.

Thus it is that, without renouncing any ulterior project of uniting the States under one common form of government, Nicaragua, inspired by an instinctive feeling of self preservation, and despairing of arriving at any definite result, has thought that she ought to separate and resume, with her independence and sovereignty, the direction and management of her foreign relations and affairs; not without a lively and keen regret at seeing her exertions rendered fruitless for the attainment of an object so natural and patriotic.

In consequence of a legislative decree Nicaragua proceeded to receive, with the requisite formality, the worthy representatives of the American Union and of her Catholic Majesty, as well as the consular agent of the United States at the port of San Juan del Sur.

The undersigned, whose mission remained virtually and practically suspended while he did not possess from the proper authority the powers necessary to continue his mission, has consequently resumed his former official position, giving, by this step, the necessary weight and authority to the powers which were formerly conferred upon him by the government of Nicaragua.

Thus the undersigned does not perceive, at present, the least difficulty in his taking part in the conferences or preliminary arrangements respecting the bases which have to be established in relation to the port of San Juan and of the Mosquito coast, and he hopes to be invited to them, claiming, as he does hereby claim, the right, inasmuch as the negotiations concern directly and immediately the political. mercantile, and territorial interests of his government.

The undersigned does not lose sight of the difficulties which complicate these negotiations, nor of the opposition which exists among the different interests that are brought into question in their discussion, nor does he fail to acknowledge the advantage and propriety of determining questions which hold, so to speak, in suspense the settlement of important interests, with very great detriment to all parties.

In the opinion of the undersigned the principal difficulty, and, at the same time, the easiest to remove, is the question of boundary between Nicaragua and Costa Rica. A question purely local, secondary, and foreign; one which ought to be treated only between the two governments interested in it; thus removing one of the principal, perhaps the most serious, obstacle which opposes the course, march,

and progress of the chief question, which could be of very easy solution without this serious impediment.

But, supposing that said complication exists, and that it exists. through the unnecessary choice of some of the parties interested, without reason or justifiable cause; and supposing, also, that every day renders it more necessary to arrive at the desired termination, the undersigned, consulting on one hand the dignity of the respective governments, and considering the existing state of things, and knowing also the sentiments which animate the government of Nicaragua in favor of her sister State, for whose prosperity it entertains the most. fervent wishes, for whose happiness and progress it feels and takes the most lively and profound interest, is of opinion that, without causing more delay, a final understanding should at once be sought; and, with this object, he has the honor to propose and submit to the enlightened decision of the honorable Secretary of State the enclosed projet of an arrangement which, on being duly considered, steps may be taken immediately with a view to lay down the clauses and to give them a public, legal, and authentic consideration, which shall define and irrevocably fix the destiny of all the States in general, and of each one in particular.

The undersigned is fully convinced that the honorable Secretary of State will find in said projet the most convincing proof of the desire which animates the government of Nicaragua to consult the general good; he believes that said projet offers advantages and imposes equal sacrifices upon all parties, and he is persuaded that the means most likely to encompass the end in view is a mutual agreement to consent to mutual sacrifices. Nicaragua comes the first to submit the proof of this self-abnegation, and if the parties interested pursue the same course there will be no difficulty in future in settling the various questions on whose solution depend the repose of the country and the development of common interests.

In the original plan there was imposed, almost by violence, upon Nicaragua, through the restoration of the port of San Juan, a series of sacrifices most detrimental to its dignity and interests; she was required to give an indemnity to the pretended Mosquito king, whom Nicaragua has never recognized nor is disposed ever to recognize; she was required to establish boundaries with the notorious king of Mosquito, in a territory which she has always claimed as that which formed an integral part of her own dominion, to which she has abundant rights, which rights Spain, a competent judge in this matter, has ultimately confirmed by a public treaty.

It was imposed upon her that she should yield to Costa Rica the district of Nicoya or Guanacaste on the Pacific coast, and on the Atlantic coast the right bank of the river San Juan, with the free navigation for sailing vessels on the waters of the river and the contiguous lake-all this with the greatest disregard of the recognized rights, and with well known detriment to the dearest and most vital interests of the government of Nicaragua.

In the original negotiation and on the proposition of Sir Henry Bulwer, the minister of her Britannic Majesty, there was imposed and carried out a complete denial of the question of right, thus depriving