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shall not be reckoned as a part of the stipulated time above given for its completion. In case such event should occur, the Company shall give immediate notice to the Government of the same, for the purpose of deciding, in connection with the Company, upon the nature of such


XI. If none of the events which are expressed in the preceding Article should occur, and the work shall not be completed within the said period of 12 years, then, whatever may have been done by the Company to that time in the prosecution of the work, shall be forfeited to, and become the property of, the State without any indemnity.

XII. The State gives to the said Company the right to take, free of any charge or indemnity, any of the public lands or forests within the State, all the wood, stone, lime, timber, or any other materials which it may require for the construction and use of said canal and its dependencies. And the said State hereby further gives to the Company the right to take and make use of such portions of the public lands as it may require for the establishment or erection of houses, stores, docks, wharfs, stations, and all other useful objects connected with the works of said canal.

XIII. In case the Company shall require any materials, such as wood, lime, stone, &c., which may be found in or upon the lands of particular individuals, it shall be obligated to pay for the same at such price as may be agreed upon between the Company and such individuals. But all the lands which may be required for the passage of the canal in its entire route, shall be at the expense of the State, and the Company shall not be liable to pay any indemnity for the same.

XIV. All the articles that the Company may require, both for the surveys and explorations, and for the construction and use of the works of the canal, such as machines, instruments, tools, &c., and all other necessary materials, shall be admitted into the State free of duties of all kinds, and may be discharged in any of its harbours, or at any other point within its territory that the Company may select; in this last case, however, giving notice of such intention to the proper Government officer. But the Company shall have no right to introduce within the territory of the State any goods, merchandize, or any other articles of commerce for sale or exchange without paying the duties established by law. And they are also prohibited from importing any articles or materials, which may be monopolised or prohibited by the State, for any purpose, except for the use of the works of the canal.

XV. The State binds itself to facilitate and aid in every possible way the engineers, contractors, employés, and labourers who may be employed in the explorations and surveys of the route, and in the construction of the works of the canal; and to this end stipulates that all citizens of the country who may be so employed by the Company, shall be free and exempt from all civil or military service of the State whatsoever; but to entitle them, however, to the right of exemption from such military service, they shall have been previously in the employ of the Company, for at least the period of 1 month. The State also guarantees to all foreigners who may be employed on the works of the canal the same rights, liberties, and privileges as are enjoyed by inhabitants of the country; and also that they shall not be molested or disturbed in their labours while thus employed, by any internal commotions or disorders of the country; and at the same time that they shall be free and exempt from all taxes, duties, or direct contributions whatsoever during the time they may be in the Company's employ.

XVI. The said Company agrees to receive from the State as labourers upon the works of the canal any convicts who may be capable of labour,

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upon such terms as may be agreed upon between the Company and the State.

XVII. The said Company agrees to transport across the said canal all passengers, goods, merchandize, and materials of every description which may be intrusted to it; and also stipulates that the canal shall be open to the transit of vessels of all nations, subject to fixed and uniform rates of tolls that may be established by the Company.

XVIII. The Company shall establish a tariff of fees or tolls for the transportation of all passengers, goods, wares, merchandize, and prop. erty of every description, and for vessels of all kinds passing through or along the said canal, which shall have the force of law from the moment in which it shall be communicated to the Government of Nicaragua, which shall be obliged to sanction the same within 8 days after its reception; and at the same time, with a view to induce the largest and most extended business by this route, the said Company agree to fix the said tariff of fees or tolls for the same, at the lowest possible rate consistent with the mutual interests, both of the State and the Company; and in case that the Company should determine at any time to alter such tariff, it shall be incumbent upon it to give 6 months' previous notice of such determination in the State paper of Nicaragua and in the principal seaport towns of The United States.

XIX. The rate of tolls and charges for the transit of the products and manufactures of the State of Nicaragua and the adjoining States shall be regulated by a particular and more favourable tariff, which shall be agreed upon between the State and the Company.

XX. The State grants to all steamers and vessels of the Company during the continuance of this contract, the right of ingress and egress to, from, and through all its harbours, rivers, and waters both on the Pacific and Atlantic Oceans, and the interior, and the use of the same free of all duties or charges of any kind whatsoever, as, for example, anchorage, tonnage, &c.

XXI. The State hereby stipulates that all vessels and steamers of the Company, and also all goods, merchandize, manufactured articles, or any other property which may be conveyed therein passing through the said canal from one sea to the other in either direction to any foreign country, shall be free and exempt from all kinds of Government duties or taxes whatsoever, and shall also be secure and protected from all interruption or detention in their course on the part of the State.

XXII. The Company shall furnish to the State annually a list of all its vessels employed in the navigation of the route, containing the names and descriptions of each of such vessels, which shall be registered in the archives of the State, and thereupon the State shall give to the Company a separate certificate of the register of each one of the said vessels, signed by the proper officer of the Government, which certificate shall serve always as a passport for said vessels through all the harbors of the State, upon presenting the same to the custom-house or harbour officer.

XXIII. The exclusive right which the Company has acquired by this. contract of navigating the said lakes, rivers, and waters of the said. State by means of steam vessels, from one sea to the other, is understood as not to exclude the natives of the country from free interior navigation by means of sailing, or any other vessels, excepting steam


XXIV. The Company binds itself to transport by the said canal, on board of any of its vessels, all the principal officers of the Government and its subalterns, in case of Government necessity, from one point of

said route to any other one at which said vessels may stop, without any charge to the State therefor.

XXV. The Company is to convey by any of its steamers or vessels, free of cost or charge over the route of the said canal, all the official correspondence of the State, in consideration of which the State agrees not to collect or recover any postage or duties of any kind upon any of the correspondence of the said Company.

XXVI. The Company binds itself to construct, at its own expense, bridges upon that part of the canal that may be made between the lakes and the Pacific, upon such principal highways as may be agreed upon between the State and the Company. The said State, with the consent of the Company, shall establish rates of toll or charges upon such persons or things as may pass over said bridges, the profits from which shall be appropriated to redeem the capital invested in their construction, and the interest thereon, at the rate of 7 per cent. per annum ; and when such capital and interest shall have been reimbursed to the Company, then the profits shall be divided epually between the State and the Company for the remaining period of this contract, but such bridges shall continue under the control and management of said Company.

XXVII. The State of Nicaragua, with the object of facilitating the colonization of the lands contiguous to the River St. John, and the adjacent rivers, and of the canal which in or along it may be constructed, makes a free donation to the Company of 8 stations or sections of land to be located at such points upon either one or both of the banks of the said river or canal as the Company may elect, each one of which stations shall be of 6 English miles in length, fronting upon the river or canal, and 6 miles in width, measured from the bank of the canal or river towards the interior. And the State further grants to the Company the right of alienating the lands which compose said sections to settlers, or any other person or persons who may wish to locate themselves upon the same. Said sections of land are granted upon the following condi


1. They shall be located by the Company in such a manner that they shall be at least 3 English miles distant from each other.

2. That no one of them shall be located within the distance of 41 English miles from the mouth of the St. John's river.

3. The State reserves to itself the right to such points as shall be necessary for its military fortifications and public buildings.

4. That the lands granted shall not be alienated to settlers until 6 months after the commencement of the survey of the route of the said canal.

5. The State reserves to itself the supreme dominion and sovereignty over said lands and their inhabitants.

6. That said lands shall not be alienated by the Company to any Government whatsoever.

XXVIII. The colonies which the Company may establish upon said lands shall be colonies of Nicaragua, and thereupon the settlers shall be subject to the laws of the State the same as the natives of the country, being, however, exempt for the term of 10 years from all taxes and direct contributions, and from all public service, as soon as each colony shall contain at least 50 settlers.

XXIX. The State further agrees that in case any event may hereafter occur, as named in the preceding Article X, to suspend or prevent the construction of the canal, or if the said contract shall become forfeited, or annulled by either or both of the parties, and also in case the said

contract shall continue in force for the full period of 85 years, mentioned in the preceding Article IV, the said State shall always acknowledge as private property the lands which may have been alienated or ceded by the Company to settlers or other persons in virtue of the legal title which the Company has acquired by this contract to the said lands.

XXX. The Company shall have the exclusive right to construct rail or carriage roads, and bridges, and to establish steam-boats and steamvessels on the said rivers and lakes as necessary accessories to and in furtherance of the execution of the canal; but the Company hereby stipulates and agrees that in case the construction and completion of the said canal or any part of it becomes impossible by any unforseen event or insurmountable obstacle of nature, to construct a railroad or rail and carriage road, and water communication between the two oceans, provided the same may be practicable, within the same period as is stipulated for the building of the said canal, and subject to the same terms, conditions, regulations, and restrictions, as far as they can be made applicable to the same.

XXXI. The State hereby binds itself not to sell or dispose of any of its public lands located upon or near the River St. John's, or upon or near any of the routes or points designated in Article 1 of this contract, until after the surveys shall have been made, and the route determined of the said canal.

XXXII. The State also binds itself to protect and defend the Company in the full enjoyment of the rights and privileges granted in this contract, and also binds itself not to contract with, or cede to, any Government, individual, or companies whatsoever the right of constructing a ship-canal, railroad, or any other communication across its territory between the two oceans, or the right of navigating by means of steamvessels any of its rivers or lakes which may be occupied by this Company while this contract continues in force. But, should this contract become forfeited or annulled, then the State shall be privileged and free to contract with any other individuals or companies as it may deem proper.

XXXIII. In case any dispute or controversy shall arise, during the existence of this contract, between the State and the Company, the same shall be determined by a reference to 5 Commissioners, to be chosen in the following manner, viz., 2 to be named on the part of the State, 2 named by the Company, and the fifth to be selected by the 4 thus appointed, who shall hear and determine the matters in controversy, and decide upon the same; which decision of the said Commissioners shall be final and without appeal, and binding upon both the State and the Company.

XXXIV. It is further provided, that in the event of the 4 Commissioners thus chosen not being able to agree upon the selection of the fifth, the State and the Company shall then choose 3 individuals, out of which number they shall select one to act as such fifth Commissioner; but should they disagree in such selection, then the choice shall be made out of said number by lot.

XXXV. After the period of the 85 years herein granted to the Company shall have expired, the Company shall surrender to the State the canal or roads, and its dependencies, revenues, and privileges, free from all indemnity, for the capital which may have been invested in the said work. But it is nevertheless stipulated that the Company shall receive 15 per cent. annually out of the net profits of the canal for the period of 10 years after such surrender, provided the cost of the same shall be less than 20,000,000 of dollars; but should the cost be 20,000,000 of dol

lars or more, then the Company shall receive said 15 per cent. for the period of 20 years after such surrender.

XXXVI. It is expressly stipulated on the part of the State of Nicaragua that the vessels, products, manufactures, and citizens of all nations shall be permitted to pass upon the proposed canal through the territory of the State, subject to no other or higher duties, charges, or taxes than shall be imposed upon those of The United States; provided always, that such nations shall first enter into such Treaty stipulations and guarantees respecting said canal as may hereafter be entered into between the State of Nicaragua and The United States.

XXXVII. It is finally stipulated that this contract, and the rights and privileges which it confers, shall be held inalienable by the individuals composing the Company herein named and their associates; and that it shall never, in whole or part, be transferred or assigned to any other Company, nor in any way become dependent upon or connected with any other Company, whatever may be the objects of the same.

XXXVIII. The present contract shall be ratified by the Legislature of the State in the shortest possible period; and on the part of David L. White shall be ratified immediately after, as agent of the Company which he represents, in virtue of the powers conferred on him to this effect.

In testimony of which we, the respective Commissioners, have signed and sealed the present contract in triplicate, in the city of Leon, in the State of Nicaragua, the 27th day of August, in the year of our Lord 1849.


15.-Mr. Crampton to Lord Palmerston.

WASHINGTON, September 15, 1849. (Received October 3.)

MY LORD: Mr. Clayton having requested me to call upon him at the Department of State, said that he wished to converse with me frankly and confidentially upon the subject of the proposed passage across the isthmus, by way of Nicaragua and the River San Juan, with regard to which he had long felt a great deal of anxiety-an anxiety lately very much increased by intelligence he has received from Mr. Elijah Hise, who has arrived at Washington from Guatemala, where he has been for some years chargé d'affaires of the United States.

Mr. Hise has, it appears, upon his own responsibility, and without instructions either from the late or from the present administration, signed, on the part of the United States, a treaty with the state of Nicaragua, by which the latter grants to the United States an exclusive right of way across her territories, including therein the River San Juan, for the purpose of joining the two oceans by a canal across the isthmus. The treaty contains a number of provisions, such as stipulations for the construction of forts and military works upon the banks of the San Juan for the protection of the proposed passage. These Mr. Clayton enumerated to me; but he read to me, at length, the article which he regards as the most objectionable in the treaty, by which it is stipulated that the United States guarantees to Nicaragua forever the whole of her territory, and promises to become a party to every defensive war in

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