Mr. Gresham to Mr. Bayard.

Sir: Tour dispatch of the 10th instant, concerning the British position in respect to the Mosquito Reservation, has been received.

The declarations of Lord Kimberley touching the instructions under which the British naval and consular representatives are acting in that quarter, agree with the statements made by Captain Stewart of the Magicienne and by Vice-Consul Hatch to our naval commander. This wise policy, if continued, will, the President believes, promote a settlement of the troubles not inconsistent with the sovereign rights of Nicaragua.

Your comments upon the situation show that the reliance of the Department upon your intimate knowledge of the question has not been misplaced. You rightly interpret the purpose of this Government [Page 329] to confine its protection of American citizens and enterprises in that quarter to such interests as maybe legitimately established there.

As you have already been advised, a Nicaraguan envoy is now on his way to London to confer with Lord Kimberley in relation to the Mosquito troubles. Should Señor Barrios seek your confidence in this regard your good judgment will determine whether or not he should see your No. 270.

I am, etc.,

W. Q. Gresham.