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I trust that this matter is now definitely settled and that there will be no default in the payment of the bonds at maturity.

With assurances of my highest consideration, I beg to remain, sir, etc.,

WILLIAM LAWRENCE MERRY.

[Inclosure. Translation.]

Law of March 19, 1994, Congress of Salvador, specifying method of indemnity payment to Salvador Commercial Company.

DECREE.

Article 1. The payment in representation to which refers the authorization contained in article 3 of the law of September 22, 1903, will not cancel the reclamation of the Salvador Commercial Company, and of the others interested, citizens of the United States, which shall be canceled as arranged in articles 7 and 9 of the contract signed at Washington, D. C., between the attorneys. respectively, of this Republic and of the same claimants, dated August 17, 1903. Article 2. Notwithstanding that the general ratification contained in article 1 of the law before quoted covers the point in question, it is enacted that the bonds emitted and ordered in virtue of the same possess the guaranty of 10 per cent of the custom-house receipts, which secures the payment of said obligations in the said proportion.

Article 3. The Executive power continues authorized to expend in the cancel lation of the said bonds up to 10 per cent of the customs receipts already referred to, being allowed to complete this fund of amortization with other national revenues, when by unforeseen circumstances it comes to be insufficient for the purpose for which it is intended.

Given in the hall of the sessions of the legislative power, San Salvador the 18th of March, 1904.

F. MEIJA, President (of Congress).

PEACE CONFERENCE BETWEEN THE PRESIDENTS OF NICARAGUA, GUATEMALA, HONDURAS, AND SALVADOR.

No. 961.]

Mr. Merry to Mr. Hay.

AMERICAN LEGATION,

San José, Costa Rica, August 31, 1904.

SIR: I have the honor to advise that on the 21st instant, at Corinto, Nicaragua, the Presidents of Nicaragua, Honduras, and El Salvador, and a special delegate representing the President of Guatemala, held a conference ostensibly for the purpose of securing the peace of Central America. * * *

The parties holding the conference have issued a lengthy manifesto, which indicates nothing of interest to our Government except that the four governments represented are controlled by parties who will aid each other by military force, if necessary, in maintaining the status quo, and that the peace of Central America is thus reasonably assured by making revolutionary efforts more difficult and less liable to achieve success.

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ARBITRATION OF THE BOUNDARY DISPUTE BETWEEN NICARAGUA AND HONDURAS.

Mr. Merry to Mr. Hay.

AMERICAN LEGATION,

San José, Costa Rica, October 28, 1904.

No. 983.] SIR: I have the honor to advise that the commissioners appointed by the governments of Nicaragua and Honduras, Señor Salvador Castrillo, representing the former, and Doctor Membrano the latter Republic, have arranged to submit the question of the boundary line between the two countries to the King of Spain, who has not yet signified his acceptance, but it is confidently expected that he will not deny the courtesy. The commissioners have returned to their respective capitals. It is now expected that Hon. José Dolores Gomez, "Primero Designado," to the presidency and presiding officer of the Nicaraguan Congress, will present the case of his government at Madrid. This action will secure the public peace in northern Nicara

gua.

* * *

I shall not fail to keep you informed of further movements in this matter which may come to my knowledge from reliable sources.

With assurances, etc.,

WILLIAM LAWRENCE MERRY.

PANAMA.

CONVENTION BETWEEN THE UNITED STATES AND THE REPUBLIC OF PANAMA FOR THE CONSTRUCTION OF A SHIP CANAL TO CONNECT THE WATERS OF THE ATLANTIC AND PACIFIC OCEANS.

Signed at Washington, November 18, 1903.

Ratification advised by the Senate, February 23, 1904.

Ratified by the President, February 25, 1904.

Ratified by Panama, December 2, 1903.

Ratifications exchanged at Washington, February 26, 1904.
Proclaimed, February 26, 1904.

BY THE PRESIDENT OF THE UNITED STATES OF AMERICA.

A PROCLAMATION.

Whereas a Convention between the United States of America and the Republic of Panama to insure the construction of a ship canal across the Isthmus of Panama to connect the Atlantic and Pacific Oceans, was concluded and signed by their respective Plenipotentiaries at Washington, on the eighteenth day of November, one thousand nine hundred and three, the original of which Convention, being in the English language, is word for word as follows:

ISTHMIAN CANAL CONVENTION.

The United States of America and the Republic of Panama being desirous to insure the construction of a ship canal across the Isthmus of Panama to connect the Atlantic and Pacific oceans, and the Congress of the United States of America having passed an act approved June 28, 1902, in furtherance of that object, by which the President of the United States is authorized to acquire within a reasonable time the control of the necessary territory of the Republic of Colombia, and the sovereignty of such territory being actually vested in the Republic of Panama, the high contracting parties have resolved for that purpose to conclude a convention and have accordingly appointed as their plenipotentiaries,

The President of the United States of America, John Hay, Secretary of State, and

The Government of the Republic of Panama, Philippe BunauVarilla, Envoy Extraordinary and Minister Plenipotentiary of the Republic of Panama, thereunto specially empowered by said government, who after communicating with each other their respective full powers, found to be in good and due form, have agreed upon and concluded the following articles:

ARTICLE I.

The United States guarantees and will maintain the independence of the Republic of Panama.

ARTICLE II.

The Republic of Panama grants to the United States in perpetuity the use, occupation and control of a zone of land and land under water for the construction, maintenance, operation, sanitation and protection of said Canal of the width of ten miles extending to the distance of five miles on each side of the center line of the route of the Canal to be constructed; the said zone beginning in the Caribbean Sea three marine miles from mean low water mark and extending to and across the Isthmus of Panama into the Pacific ocean to a distance of three marine miles from mean low water mark with the proviso that the cities of Panama and Colon and the harbors adjacent to said cities, which are included within the boundaries of the zone above described, shall not be included within this grant. The Republic of Panama further grants to the United States in perpetuity the use, occupation and control of any other lands and waters outside of the zone above described which may be necessary and convenient for the construction, maintenance, operation, sanitation and protection of the said Canal or of any auxiliary canals or other works necessary and convenient for the construction, maintenance, operation, sanitation and protection of the said enterprise.

The Republic of Panama further grants in like manner to the United States in perpetuity all islands within the limits of the zone above described and in addition thereto the group of small islands in the Bay of Panama, named Perico, Naos, Culebra and Flamenco.

ARTICLE III.

The Republic of Panama grants to the United States all the rights, power and authority within the zone mentioned and described in Article II of this agreement and within the limits of all auxiliary lands and waters mentioned and described in said Article II which the United States would possess and exercise if it were the sovereign of the territory within which said lands and waters are located to the entire exclusion of the exercise by the Republic of Panama of any such sovereign rights, power or authority.

ARTICLE IV.

As rights subsidiary to the above grants the Republic of Panama grants in perpetuity to the United States the right to use the rivers, streams, lakes and other bodies of water within its limits for navigation, the supply of water or water-power or other purposes, so far as the use of said rivers, streams, lakes and bodies of water and the waters thereof may be necessary and convenient for the construction, maintenance, operation, sanitation and protection of the said Canal.

ARTICLE V.

The Republic of Panama grants to the United States in perpetuity a monopoly for the construction, maintenance and operation of any system of communication by means of canal or railroad across its territory between the Caribbean Sea and the Pacific ocean.

ARTICLE VI.

The grants herein contained shall in no manner invalidate the titles or rights of private land holders or owners of private property in the said zone or in or to any of the lands or waters granted to the United States by the provisions of any Article of this treaty, nor shall they interfere with the rights of way over the public roads passing through the said zone or over any of the said lands or waters unless said rights of way or private rights shall conflict with rights herein granted to the United States in which case the rights of the United States shall be superior. All damages caused to the owners of private lands or private property of any kind by reason of the grants contained in this treaty or by reason of the operations of the United States, its agents or employees, or by reason of the construction, maintenance, operation, sanitation and protection of the said Canal or of the works of sanitation and protection herein provided for, shall be appraised and settled by a joint Commission appointed by the Governments of the United States and the Republic of Panama, whose decisions as to such damages shall be final and whose awards as to such damages shall be paid solely by the United States. No part of the work on said Canal or the Panama railroad or on any auxilliary works relating thereto and authorized by the terms of this treaty shall be prevented, delayed or impeded by or pending such proceedings to ascertain such damages. The appraisal of said private lands and private property and the assessment of damages to them shall be based upon their value before the date of this convention.

ARTICLE VII.

The Republic of Panama grants to the United States within the limits of the cities of Panama and Colon and their adjacent harbors and within the territory adjacent thereto the right to acquire by purchase or by the exercise of the right of eminent domain, any lands, buildings, water rights or other properties necessary and convenient for the construction, maintenance, operation and protection of the Canal and of any works of sanitation, such as the collection and disposition of sewage and the distribution of water in the said cities of Panama and Colon, which, in the discretion of the United States may be necessary and convenient for the construction, maintenance, operaiton, sanitation and protection of the said Canal and railroad. All such works of sanitation, collection and disposition of sewage and distribution of water in the cities of Panama and Colon shall be made at the expense of the United States, and the Government of the United States, its agents or nominees shall be authorized to impose and collect water rates and sewerage rates which shall be sufficient to provide for the payment of interest and the amortization of the principal of the cost of said works within a period of fifty years and upon the expiration of said term of fifty years the system of sewers and waterworks shall revert to and become the properties of the cities of Panama and Colon respectively, and the use of the water shall be free to the inhabitants of Panama and Colon, except to the extent that water rates may be necessary for the operation and maintenance of said system of sewers and water.

FR 1904 M- -35

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