136 AMERICAN DIPLOMATIC QUESTIONS 



The second treaty the one with Honduras retroceded 

 to that republic the Bay Islands, with the conditions that the 

 recipient should never part with them to any other nation, and 

 that British subjects, continuing to reside there, should be un- 

 molested in their property rights and religious freedom. By 

 this same instrument, England abandoned her territorial 

 claim along the shores of Honduras, occupied by the Mosquito 

 Indians, on the sole condition that Honduras should pay to 

 the Indians an annual indemnity of $5000 for ten years. This 

 treaty also met with the President's approval, although he 

 would have preferred the release of English territorial rights 

 less hampered by conditions. 



The third treaty (with Nicaragua) was the most important 

 one to American interests. By this compact England withdrew 

 from her protectorate over Mosquitia, but Nicaragua was re- 

 quired to establish a reservation along her shores for the Ind- 

 ians, permitting them to exercise local self-government, and 

 also allowing them at any time to incorporate themselves 

 absolutely into the body politic of Nicaragua, should they 

 so desire. In this contingency, the reservation would be 

 abandoned. Nicaragua was also obligated to pay annually 

 to the Indians the sum of 85000 for a period of ten years, in 

 default of which Great Britain reserved the right to interfere 

 in behalf of her former charges. Greytown was to become a 

 free port under Nicaraguan sovereignty. 



At last it seemed that all went well in Central America. 

 Had England absolutely and unconditionally surrendered all 

 her territorial claims in Honduras and Nicaragua, it would 

 have been more satisfactory to the United States ; yet, upon 

 the other hand, this arrangement was a long move in the 

 right direction, and it appeared to be a victory for the Ameri- 

 can interpretation of the Clayton-Bulwer treaty, and a vindi- 

 cation of the Monroe Doctrine as well. In his last annual 

 message (December 3, 1860), President Buchanan expressed 

 his satisfaction in the happy results of his diplomacy. " Our 

 relations with Great Britain," he said," are of the most friendly 

 character. Since the commencement of my Administration 

 the two dangerous questions arising from the Clayton and 



