ARTICLE XX.

WHEN WORK ON THE CANAL WILL BE BEGUN.

The United States of America engage to begin effective work on the canal within two years from the exchange of ratifications of this treaty, and to complete the canal within ten years after beginning it, in default of which this treaty shall become inoperative, Provided, however, That should there arise insuperable obstacles to retard the work during this time it shall be prolonged in proportion to the time lost by reason of such obstacles; And, Further, if at the expiration of the said ten years the canal shall not be opened to commerce between the two oceans, then, in consideration of the large capital invested in the work, and of the good faith and ability shown as well as of the difficulties encountered, the Republic of Nicaragua binds itself to extend this period so far as is just and necessary.

ARTICLE XXI.

Any difficulties between the parties hereto shall be submitted to the arbitration of a friendly power, if one can be agreed upon, or, failing such agreement, each party shall request a friendly nation to name an arbitrator, and the arbitrators thus named shall select a third; the decision of the arbitrating power or a majority of the Board of Arbitrators, as the case may be, shall be final and conclusive.

ARTICLE XXII.

The United States will aid by their good offices, if desired, in securing the union of the five Central American Republics under one representative government, and the reorganization of the said republics in one nationality being accomplished, the Central American Republics shall have the same rights and bear the same obligations as Nicaragua has and bears by virtue of this treaty.

ARTICLE XXIII.

FINANCIAL AID FROM THE UNITED STATES.

It appearing that the financial condition of Nicaragua is prosperous, that the republic is without incumbrance of debt, and that the government finds it necessary to finish as soon as possible certain railways within the republic, to extend its telegraph line, and to improve the navigation of the River San Juan, which enterprises will be of aid to the canal and favourable to its speedy construction and successful operation,

the Government of the United States agrees to loan to the Government of Nicaragua the sum of $4,000,000, to be applied to the above enumerated projects. Of this amount $1,000,000 shall be paid in the City of Washington within ninety days after the exchange of the ratifications of this convention, and the remaining $3,000,000 in instalments of $500,000 each every six months thereafter until the amount shall have been paid, but the failure to pay any of these sums from accident or non-action of Congress at the exact dates herein specified, such payments being made thereafter in good faith, shall not be held as affecting in any way the other engagements of this convention.

The Government of Nicaragua agrees that the Government of the United States shall be credited with and receive the share of Nicaragua in the net revenues of the canal, to be applied to the payment of this loan until it shall have been entirely extinguished, with the interest thereon at three per centum per annum, from the dates when the several sums shall be received by Nicaragua, and the Republic of Nicaragua may vote yearly through its Congress an additional sum from the general revenues of the republic to be applied to the payment of this loan and to aid in its speedy extinguishment; and further, the Government of Nicaragua assuming the repayment of said loan, binds itself to consider it until extinguished together with the interest thereon, as herein before provided, as a lien upon all rights of Nicaragua in the canal, its accessories and appliances, this lien to continue until the repayment of the sum so advanced with the interest, but the repayment is not to be exacted until ten years after the said canal shall have been completed, and opened to commerce.

ARTICLE XXIV.

Neither of the parties to this convention shall sell, assign or otherwise alienate or suffer itself to be deprived of its or any part of its interest, right or property in or to the said canal, railway or telegraph line, should the same be built, or their or any other adjuncts or accessories, or any of the works or establishments pertaining thereto without the consent of the other manifested by legislative enactment.

ARTICLE XXV.

RATIFICATION OF THE TREATY.

This treaty is concluded subject to ratification by the proper constitutional authority of each party hereto, and to the legislation by the

appropriate legislative bodies of each, which is necessary to carry it into effect. It shall be ratified as soon as possible, but within two years from this date, and the ratifications thereof shall be exchanged in the city of Washington within six months from the approval by the said legislative bodies of Nicaragua and of the United States of the present treaty. In testimony whereof the undersigned plenipotentiaries have hereunto affixed their hands and seals. Done in duplicate in the English and Spanish languages, in Washington this first day of December, in the year of our Lord, one thousand eight hundred and eighty-four.

APPENDIX IV.

CONCESSIONS AND DECREES OF THE REPUBLIC OF NICARAGUA TO THE NICARAGUA CANAL

ASSOCIATION.

The President of the Republic to the Inhabitants thereof:

KNOW YE That Congress has ordered as follows:

The Senate and Chamber of Deputies of the Republic of Nicaragua do hereby

DECREE.

ONLY ARTICLE.-The contract for a maritime inter-oceanic canal entered into the 23d of March, ult, between Dr. Adan Cárdenas, commissioned especially by the supreme government, and Mr. A. G. Menocal, member and representative of the Nicaragua Canal Association organized in New York, is hereby ratified. This contract shall be a law of the Republic if Mr. Menocal accepts it as soon as he be notified, with the following modifications and upon the following terms:

"The undersigned, Adan Cárdenas, Commissioner of the Government of the Republic, party of the first part, and Aniceto G. Menocal, representative of the Nicaragua Canal Association, party of the second part, both having sufficient powers, have entered into the following contract for the excavation of an inter-oceanic canal through the territory of Nicaragua.

ARTICLE I.

The Republic of Nicaragua grants to the aforesaid Nicaragua Canal Association, and Mr. A. G. Menocal, representative of the said association, accepts on its behalf, for the purposes set forth in Article VII., the exclusive privilege to excavate and operate a maritime canal across its territory, between the Atlantic and Pacific Oceans.

ARTICLE II.

The canal shall be of sufficient dimensions for the free and commodious passage of vessels of the same size as the large steamers used for ocean navigation in Europe and America, provided that no locks used in said work shall be less than five hundred and fifty (550) feet in length and thirty feet in depth.

ARTICLE III.

The State declares this work to be one of public utility.

ARTICLE IV.

The duration of the present privilege shall be for ninety-nine (99) years, to be counted from the day the canal shall be opened to universal traffic. During the aforesaid period the company shall have the right to construct and operate a railway along the whole extent of the canal, or those parts of the same that may be considered convenient for the better service and operation of the said work.

ARTICLE V.

The State binds itself not to make any subsequent concession for the opening of a canal between the two oceans during the term of the present concession, and also to abstain from granting a concession for a railroad, such as might compete with the canal for the transportation of merchandise, during the same period; but nothing in this article shall prevent the Government of Nicaragua from constructing or permitting the construction of such railways as it may deem advisable for commerce and internal traffic. Said government also to have the right to construct or permit the construction of an inter-oceanic railway if, in course of time, it be demonstrated that the canal is not sufficient to satisfy the demands of the traffic of all nations.

The grantee company shall have the right to establish such telegraph lines as it may deem necessary for the construction, management and operation of the canal. The government shall have the right to occupy these lines for the public service without any remuneration to the company.

ARTICLE VI.

The Government of the Republic declares during the term of this concession the ports at each extremity of the canal, and the canal itself,