Mr. Sherman to Mr. Merry.

No. 8.]

Sir: I have to acknowledge the receipt of Mr. Baker’s dispatch, No. 870, of the 22d ultimo, calling attention to a clipping from the New York Herald of October 11 last, in which the statement is made that the Department had a short time before sent him a telegram directing him to examine the concession granted by Nicaragua to the Atlas Steamship Company for the navigation of Lake Nicaragua and the River San Juan del Norte, and in case he should find that said concession conflicted with the rights of the Nicaragua Canal Company to enter a strong protest against it.

In reply, I have to inform you that no instructions on the subject have been sent to Mr. Baker. You will, however, examine the matter of the concession and report your views thereon to the Department, but you will take no other action until you are further instructed.

Respectfully, yours,

John Sherman.