Mr. Hill to Mr. Merry.

No. 270.]

Sir: I have to acknowledge the receipt of your dispatch No. 308, of the 7th instant, inclosing a copy of the reply of the Nicaraguan Government to your request that it assent to the refunding to the American merchants in Bluefields of the money deposited by them with the British consul at San Juan del Norte, pursuant to the agreement between yourself and Mr. Sanson of April 29 last.

In refutation of the position assumed by the Nicaraguan Government on the subject, I have to say that the question of the double payment of customs dues by the American merchants is a diplomatic one.

The facts that the controversy, and the agreement made April 29, 1899, for its adjustment, are of a diplomatic character, imply that the discussion, consideration, and determination of the question are to be governed by the diplomatic procedure, in the absence of any express stipulation to the contrary. There is no stipulation in the agreement, on the part of this Government, to waive at any stage of the controversy the diplomatic jurisdiction it has thus far exercised, or to remit the question to the Nicaraguan authorities for their determination.

The Government of the United States does not admit the competency of any Nicaraguan court or tribunal to determine the rights of American citizens in Nicaragua when they have appealed to their Government for protection, and when it has taken up and made their cause its own; and the contention that it has agreed or consented to submit to the assumption and exercise of jurisdiction over such cause by any local Nicaraguan court or tribunal is so extraordinary that it can not be considered or discussed. If, in the face of the said agreement, the Government of Nicaragua persists in its indicated purpose to submit the question at any stage or in any form to its own tribunals for determination as between the two Governments, the Government of the United States will not only ignore the proceedings but will deem it a sufficient reason for it to proceed to determine the question in the proper way, and to use the necessary measures to enforce its decision.

Neither you nor any American consul will furnish any evidence whatever from the files of the legation or of any consulate for the use of the Nicaraguan authorities. All such evidence, whether in the form of affidavits or in whatever other form as has been taken in relation to the controversy, has been taken by the authority of this Government to enable it to discuss the question with the Government of Nicaragua; and the use to be made of that evidence rests exclusively in the discretion of the Government of the United States.

No evidence will be considered by this Government unless presented through the ordinary diplomatic channels.

You may furnish the Nicaraguan Government a copy of this instruction.

I am, etc.

David J. Hill,
Acting Secretary.