as a responsible Government, and its minister was accordingly received.  But he remained here only a short time.  Soon thereafter the political affairs of Nicaragua underwent unfavorable change and became involved in much uncertainty and confusion.  Diplomatic representatives from two contending parties have been recently sent to this Government, but with the imperfect information possessed it was not possible to decide which was the Government de facto, and, awaiting further developments, I have refused to receive either.

Questions of the most serious nature are pending between the United States and the Republic of New Granada.  The Government of that Republic undertook a year since to impose tonnage duties on foreign vessels in her ports, but the purpose was resisted by this Government as being contrary to existing treaty stipulations with the United States and to rights conferred by charter upon the Panama Railroad Company, and was accordingly relinquished at that time, it being admitted that our vessels were entitled to be exempt from tonnage duty in the free ports of Panama and Aspinwall.  But the purpose has been recently revived on the part of New Granada by the enactment of a law to subject vessels visiting her ports to the tonnage duty of 40 cents per ton, and although the law has not been put in force, yet the right to enforce it is still asserted and may at any time be acted on by the Government of that Republic.

The Congress of New Granada has also enacted a law during the last year which levies a tax of more than $3 on every pound of mail matter transported across the Isthmus.  The sum thus required to be paid on the mails of the United States would be nearly $2,000,000 annually in addition to the large sum payable by contract to the Panama Railroad Company.  If the only objection to this exaction were the exorbitancy of its amount, it could not be submitted to by the United States.

The imposition of it, however, would obviously contravene our treaty with New Granada and infringe the contract of that Republic with the Panama Railroad Company.  The law providing for this tax was by its terms to take effect on the ist of September last, but the local authorities on the Isthmus have been induced to suspend its execution and to await further instructions on the subject from the Government of the Republic.  I am not yet advised of the determination of that Government.  If a measure so extraordinary in its character and so clearly contrary to treaty stipulations and the contract rights of the Panama Railroad Company, composed mostly of American citizens, should be persisted in, it will be the duty of the United States to resist its execution.