As to the representation of this Government to Nicaragua, Salvador, and Costa Rica, I have concluded that Mr. William L. Merry, confirmed as minister of the United States to the States of Nicaragua, Salvador and Costa Rica, shall proceed to San Jose, Costa Rica, and there temporarily establish the headquarters of the United States to those three States.  I took this action for what I regarded as the paramount interests of this country.  It was developed upon an investigation by the Secretary of State that the Government of Nicaragua, while not unwilling to receive Mr. Merry in his diplomatic quality, was unable to do so because of the compact concluded June 20, 1895, whereby that Republic and those of Salvador and Honduras, forming what is known as the Greater Republic of Central America, had surrendered to the representative Diet thereof their right to receive and send diplomatic agents.  The Diet was not willing to accept him because he was not accredited to that body.  I could not accredit him to that body because the appropriation law of Congress did not permit it.  Mr. Baker, the present minister at Managua, has been directed to present his letters of recall.

Mr. W. Godfrey Hunter has likewise been accredited to the Governments of Guatemala and Honduras, the same as his predecessor.  Guatemala is not a member of the Greater Republic of Central America, but Honduras is.  Should this latter Government decline to receive him, he has been instructed to report this fact to his Government and await its further instructions.

A subject of large importance to our country, and increasing appreciation on the part of the people, is the completion of the great highway of trade between the Atlantic and Pacific, known as the Nicaragua Canal.  Its utility and value to American commerce is universally admitted.  The Commission appointed under date of July 24 last “to continue the surveys and examinations authorized by the act approved March 2, 1895,” in regard to “the proper route, feasibility, and cost of construction of the Nicaragua Canal, with a view of making complete plans for the entire work of construction of such canal,” is now employed in the undertaking.  In the future I shall take occasion to transmit to Congress the report of this Commission, making at the same time such further suggestions as may then seem advisable.

Under the provisions of the act of Congress approved March 3, 1897, for the promotion of an international agreement respecting bimetallism, I appointed on the 14th day of April, 1897, Hon. Edward O. Wolcott of Colorado, Hon. Adlai E. Stevenson of Illinois, and Hon. Charles J. Paine of Massachusetts, as special envoys to represent the United States.  They have been diligent in their efforts to secure the concurrence and cooperation of European countries in the international settlement of the question, but up to this time have not been able to secure an agreement contemplated by their mission.