No. 40.
Mr. Gresham to Mr. Bayard.

Sir: I received your dispatches in relation to the Bluefields incident, of the 16th, and of the 20th ultimo.

It is gratifying to note your entire familiarity with the subject and the discretion you have shown in treating the question with Lord Kimberley.

The confused reports of the recent occurrences which from time to time reached the Department from our diplomatic and consular representatives in-Nicaragua, did not permit an intelligent review of the incident, and I have been obliged to await the report of Captain Watson, commanding the San Francisco, which was at once ordered from Brazil to Bluefields when the unfortunate loss of the Kearsarge defeated the purpose of this Government, to obtain earlier information.

I inclose for your perusal a copy of Captain Watson’s report under date of April 16, with its accompaniments.1 * * *

It appears to be conclusively established that the British naval and consular agents in Nicaragua have joined with the Nicaraguan commissioners in various arrangements for the administration of local government in the Mosquito Indian Reservation. The first of these agreements, reached in conferences held on February 36 and 27, between the Nicaraguan commissioner for the reservation, Señor Lacayo; the British consul at San Juan del Norte, Mr. Bingham, and Captain Howe, of H. M. S. Cleopatra, appears not to have been completed and announced until March 4, after the Cleopatra had visited Colon for the purpose of receiving instructions from London. It would seem that Her Majesty’s Government had cognizance of the proposed arrangement. The pro-visional agreement of March 4, proving abortive, it gave place to another understanding reached on March 19, between the same parties, which does not appear to have been announced until approved, on March 25, by the newly arrived special commissioner of Nicaragua, Señor José Madriz, the Nicaraguan minister for foreign affairs, by whom it was incorporated and proclaimed in a decree, dated March 28, purporting to establish a provisional government for the Mosquito Indian Reservation.

These several arrangements in terms rest upon what are called “contracts” and “protocols” between the representatives of Great Britain and Nicaragua. By Senor Madriz’s decree of March 28, these arrangements are to last “until the high contracting signatories, parties to the treaty of Managua, dated 1860, arrange the needful regarding the reserved territory.”

I am unable to see that this joint assumption of authority by British and Nicaraguan agents is compatible with the stipulations of the treaty of Managua. By that treaty Great Britain renounced all sovereignty over the reservation and recognized the sovereignty of Nicaragua over the same, and Nicaragua agreed that the Indians should 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 only to the future contingency of their agreeing “to absolute incorporation [Page 69] into the Republic of Nicaragua on the same footing as other citizens of the Republic, and * * * subjecting themselves to be governed by the general laws and regulations of the Republic instead of by their customs and regulations.”

The stipulations exclude all idea of local government by others than the Indians in the reservation. They allow no room for foreign intervention in the government of the reservation, or-for the administration of the affairs therein by resident aliens.

That the provisional plan formulated by the representatives of Nicaragua and Great Britain provides for the appointment of American, Indian and Creole representatives on the proposed governing commission in nowise alters the essential character of the transaction. The arrangement itself rests upon no sound basis of existing right. Its tendency can only be toward fortifying the assumption that “Mosquitia” is a territorial entity with sovereign rights.

The agents of the United States in Nicaragua have had no part in framing the reported provisional arrangement, and they have signified their intention not to participate in its administration. The proceeding has not, and can not have, the sanction of this Government directly or indirectly.

I am pleased to see by Captain Watson’s report that the landing of British forces in the territory was simply for the protection of life and property—American and native as well as English—and that it has not lasted longer than was warranted by events. * * *

With the foregoing views and the inclosed papers before you, you are in a position to express to Lord Kimberley the Presidents hope and expectation that the anomalous situation now disclosed may speedily cease and that no foreign agency shall be permitted to dictate or participate in the administration of affairs in the Mosquito Reservation.

I am, etc.,

W. Q. Gresham.
  1. Not printed.