Unfortunately, it is against the Republic of Mexico, with which it is our special desire to maintain a good understanding, that such complaints are most numerous; and although earnestly urged upon its attention, they have not as yet received the consideration which this Government had a right to expect.  While reparation for past injuries has been withheld, others have been added.  The political condition of that country, however, has been such as to demand forbearance on the part of the United States.  I shall continue my efforts to procure for the wrongs of our citizens that redress which is indispensable to the continued friendly association of the two Republics.

The peculiar condition of affairs in Nicaragua in the early part of the present year rendered it important that this Government should have diplomatic relations with that State.  Through its territory had been opened one of the principal thoroughfares across the isthmus connecting North and South America, on which a vast amount of property was transported and to which our citizens resorted in great numbers in passing between the Atlantic and Pacific coasts of the United States.  The protection of both required that the existing power in that State should be regarded 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 refurbished 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.