Memorandum by the Chief of the Division of Latin American Affairs, Department of State (Welles)

The dispute in regard to the boundary between Honduras and Nicaragua was submitted to the arbitration of the King of Spain, who rendered an award in 1906. This award was accepted by Honduras but rejected by Nicaragua. The latter government asserted that the [Page 235] award had not been rendered within the time limit prescribed by the treaty under which the arbitration was held and that the arbitrator had exceeded his power. The matter remained open until 1918 when the threat of hostilities led the State Department to offer the good offices of this Government as mediator. Since 1918 several conferences have been held at which an effort was made to bring about an agreement between the two governments without placing the Department in the position of recommending a specific line or passing an opinion upon the validity of the award of the King of Spain. It has not so far been possible to reach such an agreement.

This afternoon the ministers of Honduras and Nicaragua and also the Minister of Foreign Affairs of Nicaragua, met in the offices of the Latin-American Division and reached an agreement to submit the following proposed solution of the controversy to the approval of their governments.

To submit to the decision of the Chief Justice of the United States Supreme Court the question of the validity of the award rendered by the King of Spain.
To leave to the decision of the same arbiter the laying down of the boundary line if the former award is held invalid.

It was agreed by the representatives of both countries that it would be preferable, if possible, to fix upon a line by direct agreement, which would be accepted if the arbiter held the King of Spain’s award to be invalid. It was understood, therefore, that the solution above outlined would not preclude direct negotiations for this purpose.