File No. 2160.

The British Ambassador to the Secretary of State .

No. 198.]

Sir: I communicated to the Marquis of Lansdowne the note dated December 10, 1904, which I had the honor to receive from Mr. Hay, regarding certain islands near the coast of British North Borneo over which the British North Borneo Company were desirous of continuing to exercise control.

At the conclusion of this note Mr. Hay stated that—

the Government of the United States would be willing to come to an understanding with His Majesty’s Government whereby a joint examination of the [Page 544] North Bornean neighborhood shall be made by two experts, one on behalf of each Government, under instructions to agree, if possible, upon a tentative line which shall conveniently and fairly represent the intention of the parties to the protocol of 1885, making report thereof to their respective Governments, with statements of any points upon which they may not be able to agree. The two Governments will then be in a position to determine upon a definite settlement of the matter in such a way as shall be found appropriate.

I am now instructed by the Marquis of Lansdowne to say that His Majesty’s Government fully appreciate the friendly spirit in which the proposal made in Mr. Hay’s note is put forward. At the same time His Majesty’s Government desire me to state that they do not consider that there is at present any necessity for carrying out a demarcation between the American possessions and British North Borneo, as there is no intention on their part to question the title of the United States to the islands aforementioned. His Majesty’s Government desired only to ascertain whether the United States Government would be willing to forego their right to these islands, out of consideration for the fact that the North Borneo Company had during many years carried on the administration of them under the apparent belief that the islands formed part of the company’s territory, and as the company attached importance to being permitted to retain control over them. It is thought that the possession of the islands may be of little importance to the United States, and, in view of the aforegoing explanations, I am instructed to inquire whether the United States Government would feel disposed to make the concession suggested.

I have, etc.,

H. M. Durand.