So clear was this understanding on the part of the United States that in correspondence contemporaneous with the ratification of the convention it was distinctly expressed that the mutual covenants of nonoccupation were not intended to apply to the British establishment at the Balize.  This qualification is to be ascribed to the fact that, in virtue of successive treaties with previous sovereigns of the country, Great Britain had obtained a concession of the right to cut mahogany or dye-woods at the Balize, but with positive exclusion of all domain or sovereignty; and thus it confirms the natural construction and understood import of the treaty as to all the rest of the region to which the stipulations applied.

It, however, became apparent at an early day after entering upon the discharge of my present functions that Great Britain still continued in the exercise or assertion of large authority in all that part of Central America commonly called the Mosquito Coast, and covering the entire length of the State of Nicaragua and a part of Costa Rica; that she regarded the Balize as her absolute domain and was gradually extending its limits at the expense of the State of Honduras, and that she had formally colonized a considerable insular group known as the Bay Islands, and belonging of right to that State.

All these acts or pretensions of Great Britain, being contrary to the rights of the States of Central America and to the manifest tenor of her stipulations with the United States as understood by this Government, have been made the subject of negotiation through the American minister in London.  I transmit herewith the instructions to him on the subject and the correspondence between him and the British secretary for foreign affairs, by which you will perceive that the two Governments differ widely and irreconcilably as to the construction of the convention and its effect on their respective relations to Central America.

Great Britain so construes the convention as to maintain unchanged all her previous pretensions over the Mosquito Coast and in different parts of Central America.  These pretensions as to the Mosquito Coast are founded on the assumption of political relation between Great Britain and the remnant of a tribe of Indians on that coast, entered into at a time when the whole country was a colonial possession of Spain.  It can not be successfully controverted that by the public law of Europe and America no possible act of such Indians or their predecessors could confer on Great Britain any political rights.

Great Britain does not allege the assent of Spain as the origin of her claims on the Mosquito Coast.  She has, on the contrary, by repeated and successive treaties renounced and relinquished all pretensions of her own and recognized the full and sovereign rights of Spain in the most unequivocal terms.  Yet these pretensions, so without solid foundation in the beginning and thus repeatedly abjured, were at a recent period revived by Great Britain against the Central American States, the legitimate successors to all the ancient jurisdiction of Spain in that region.  They were first applied only to a defined part of the coast of Nicaragua, afterwards to the whole of its Atlantic coast, and lastly to a part of the coast of Costa Rica, and they are now reasserted to this extent notwithstanding engagements to the United States.