Doc. No. 75. 153 



Company and the State of Nicaragua. Sr. Zepeda is one of the canal 

 commissioners. The conckision of the contract will be etfected in a day 

 or two more. I have had such provisions inserted as may serve to com- 

 mend it to the government of the United States. The contract entered 

 into with Mr. D. T. Brown, transmitted with my first despatch, has been 

 declared forfeited by the government of the State, in consequence of the 

 failure of the company to accept its provisions within the required time. 

 It had, however, never received the sanction of the Executive of the 

 Slate, without which it was of no effect. 



The people of this State have formed the highest hopes from the con- 

 struction of the proposed canal, and from their probable future relation 

 with the United States. But, as I have said in a previous communication, 

 these hopes are exceedingly vague. Such is the state of public feeling, 

 that should the government or the General Assembly of the State refuse 

 or neglect to act promptly in the matter of the contract and treaty, they 

 would be thrust from power with very little ceremony, and perhaps not 

 in the gentlest manner. But the government seems as favorably disposed 

 as the people, and 1 hope to be able to despatch the ratifications of both 

 treaty and contract by the 20th proximo. 



I need hardly say that the official agents of Great Britain in Central 

 America, and particularly at this point, are exceedingly jealous of our 

 operations, and neglect no means to thwart what they conceive to be our 

 objects. It is unfortunate that the interests of the United States in these 

 countries have been so long overlooked. The English have hitherto had 

 the control of affairs entirely in their own hands, and have done precisely 

 as they pleased. To # # * ^ strange as the assertion 



may seem, we may ascribe the dissolution of the republic of Central 

 America, and many of the subsequent distractions of the individual States. 

 The confederacy opposed a barrier to their encroachments on the Atlantic 

 coast, and the confederation fell with its last pillar, Morazan, treach- 

 erously shot in Costa Rica * # * * now a virtual 

 province of England. The seizure of the island of Raatan, and an arro- 

 gant claim to half the State of Honduras, followed quick upon these 

 events. The State of San Salvador, more discerning than the other 

 States, endeavored to check further encroachments, and protested firmly 

 against these high-handed measures. It was not long, however, before 

 she was punished by an invasion from Guatemala, incited by British 

 agents, and sustained by British gold, furnished under the disguise of a 

 loan, secured by a hypothecation of the revenues of the State. San Salva- 

 dor successfully resisted her assailants, and turned the tables against them. 

 In less than six months, however, an English fleet blockaded her ports, 

 and all possible means have since been resorted to to subdue her inde- 

 pendent spirit. But however much she has suffered, she has continued 

 to sustain her position, repelling insolence by insolence, and yielding 

 nothing. And at this moment the British consul general, having suc- 

 ceeded in procuring the return of Carrera (a tool of his own making) to Gua- 

 temala, against the wishes of nine- tenths of the inhabitants of the State, 

 is inciting that chief against San Salvador, offering a loan of $1,000,000, 

 secured (always !) by the hypothecation of the revenues and a mortgage 

 on the public domains. So, let the collision result as it may, British in- 

 terests will be subserved. My arrival here has been the signal for renewed 

 insolence towards this State, the government of which is in the weekly 



