The discordant constructions of the Clayton and Bulwer treaty between the two Governments, which at different periods of the discussion bore a threatening aspect, have resulted in a final settlement entirely satisfactory to this Government.  In my last annual message I informed Congress that the British Government had not then “completed treaty arrangements with the Republics of Honduras and Nicaragua in pursuance of the understanding between the two Governments.  It is, nevertheless, confidently expected that this good work will ere long be accomplished.”  This confident expectation has since been fulfilled.  Her Britannic Majesty concluded a treaty with Honduras on the 28th November, 1859, and with Nicaragua on the 28th August, 1860, relinquishing the Mosquito protectorate.  Besides, by the former the Bay Islands are recognized as a part of the Republic of Honduras.  It may be observed that the stipulations of these treaties conform in every important particular to the amendments adopted by the Senate of the United States to the treaty concluded at London on the 17th October, 1856, between the two Governments.  It will be recollected that this treaty was rejected by the British Government because of its objection to the just and important amendment of the Senate to the article relating to Ruatan and the other islands in the Bay of Honduras.

It must be a source of sincere satisfaction to all classes of our fellow-citizens, and especially to those engaged in foreign commerce, that the claim on the part of Great Britain forcibly to visit and search American merchant vessels on the high seas in time of peace has been abandoned.  This was by far the most dangerous question to the peace of the two countries which has existed since the War of 1812.  Whilst it remained open they might at any moment have been precipitated into a war.  This was rendered manifest by the exasperated state of public feeling throughout our entire country produced by the forcible search of American merchant vessels by British cruisers on the coast of Cuba in the spring of 1858.  The American people hailed with general acclaim the orders of the Secretary of the Navy to our naval force in the Gulf of Mexico “to protect all vessels of the United States on the high seas from search or detention by the vessels of war of any other nation.”  These orders might have produced an immediate collision between the naval forces of the two countries.  This was most fortunately prevented by an appeal to the justice of Great Britain and to the law of nations as expounded by her own most eminent jurists.

The only question of any importance which still remains open is the disputed title between the two Governments to the island of San Juan, in the vicinity of Washington Territory.  As this question is still under negotiation, it is not deemed advisable at the present moment to make any other allusion to the subject.

The recent visit of the Prince of Wales, in a private character, to the people of this country has proved to be a most auspicious event.  In its consequences it can not fail to increase the kindred and kindly feelings which I trust may ever actuate the Government and people of both countries in their political and social intercourse with each other.