No. 25.
Mr. Logan to Mr. Frelinghuysen.

No. 280.]

Sir: On the 18th of the present month I received a telegram in the following words:

Senate Committee on Foreign Relations have adopted an amendment to bill incorporating the Maritime Canal Company and make eleventh an objectionable clause subject to any sovereign rights of the Government of Nicaragua.

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In reply I have to say that not having been furnished with a copy of the bill incorporating the Maritime Canal Company, my only knowledge of its provisions is derived from articles published upon it by El Mensajero of Costa Rica, and El Porvenir of Nicaragua. The article in the latter sheet contains, and comments upon, the eleventh clause referred to in your telegram; but it is evident either that there is a mistake about it in Nicaragua or that the clause or section has been altered by the company from the original draft. The article in El Porvenir is very severe upon those features of the bill which bear upon the question of the imperiled sovereignty of the republic, while it would appear from your telegram that the United States Senate does not consider the bill [Page 35] to go far enough in that direction. There is a conflict here which, without the bill before me, I am unable to reconcile.

El Porvenir article takes the strong position that the company’s concession had lapsed, and that it should not and could not legally be extended. It declares the pretension of the United States to sovereignty over the canal route to be of a piece with the similar pretension in reference to Colombia, and that it will neither be tolerated by the people of Nicaragua nor the powers of Europe with which the country has treaties. This paper has no official character, and its declarations are not of very great importance.

A brief review of late events will place you in knowledge of the present situation in Nicaragua.

Paragraph 3, of Article 47 of the concession, stipulates that the concessionees shall have two years time from May 29, 1880, in which to form the company, make the surveys, and begin the work. The expiration of that period being close at hand. Capt. E. P. Lull was sent out as a special commissioner to solicit an extension of the time. He arrived in Managua, the capital of the republic, on the 8th of February ultimo. Having satisfied the government, an Executive decree was issued extending the stipulated time to the 30th of September, 1884. This decree was ratified by the Senate on the 23d of February; by the house of Deputies on the 24th, and received the Executive signature the same day. Having accomplished the purpose of his mission Captain Lull left Nicaragua on the 24th ultimo, and as he did not communicate with this legation during the time he was in the country, I infer that he went away entirely satisfied.

There is one condition made by the Government of Nicaragua upon which the extension is based, and which must be accepted by the concessionees within four months to make it valid. The concession provides in Article 14 that the canal company shall construct a canal, within three years from the date of the concession, between the lake of Managua and the navigable part of the river Tipitapa. This part of the concession was not extended. The government is to have the privilege of cutting the referred-to canal at once, with funds from the general treasury; but it is to receive from the concessionees the sum of $200,000 in cash, to cover the outlay therefor. A contract for doing this work has already been let to the French contractor, A. P. Blanchet. As involving no concession to the contractor, the canal company’s rights cannot be interfered with, especially as they are fully protected in them by their concession.

The Nicaraguan Congress adjourned sine die on the 11th of the present month without further action in reference to canal matters than as above stated.

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I have &c.,