The Acting Secretary of State to the Costa Rican Minister on Special Mission .

Sir: I have the honor to acknowledge the receipt of your note of the 16th instant, and to avail of this opportunity to inform the Government of Costa Rica, through you, that this Government is now advised that the recent diplomatic negotiations between Costa Rica and Panama for the settlement of the pending boundary controversy between them have failed. I have the honor, therefore, to say that this Government desires in a spirit of utmost good will and friendship toward both Governments, to remind the Government of Costa Rica of the proffer of the good offices of this Government to bring about the arbitration of the question at issue and to recommend prompt recourse to arbitration.

The Government of the United States is also advised that the Government of Panama is willing to submit to the Chief Justice of the United States as sole arbitrator the final decision as to which of the two boundary lines between Panama and Costa Rica under the Loubet award is the correct one, on condition that the Government of Costa Rica enters into a formal agreement with the United States Government that the decision of the arbitrator, whatever it be, shall be accepted by Costa Rica as final. In view of this acceptance, subject to the stated condition on the part of the Government of Panama, there can be no doubt that that Government is prepared to enter into a similar agreement accepting the decision as final. I have the honor, therefore, to request consideration of this subject by your Government, and to be advised by you upon your return to this country and resumption of your special mission, or otherwise as soon as may be convenient, whether the Government of Costa Rica will also accept Mr. Chief Justice Fuller as sole arbitrator, and will enter into the agreement proposed to accept his decision as final.

Accept, sir, etc.,

Alvey A. Adee.