I came into office I found the British Government in possession of
the port of San Juan, which it had taken by force of arms after we had
taken possession of California and while we were engaged in the
negotiation of a treaty for the cession of it, and that no official
remonstrance had been made by this Government against the aggression,
nor any attempt to resist it. Efforts were then being made by certain
private citizens of the United States to procure from the State of
Nicaragua by contract the right to cut the proposed ship canal by the
way of the river San Juan and the lakes of Nicaragua and Managua to
Realejo, on the Pacific Ocean. A company of American citizens entered
into such a contract with the State of Nicaragua. Viewing the canal as a
matter of great importance to the people of the United States, I
resolved to adopt the policy of protecting the work and binding the
Government of Nicaragua, through whose territory it would pass, also to
protect it. The instructions to E. George Squier, appointed by me charge
d'affaires to Guatemala on the 2d day of April, 1849, are herewith
submitted, as fully indicating the views which governed me in directing
a treaty to be made with Nicaragua. I considered the interference of the
British Government on this continent in seizing the port of San Juan,
which commanded the route believed to be the most eligible for the canal
across the Isthmus, and occupying it at the very moment when it was
known, as I believe, to Great Britain that we were engaged in the
negotiation for the purchase of California, as an unfortunate
coincidence, and one calculated to lead to the inference that she
entertained designs by no means in harmony with the interests of the
United States.

Seeing that Mr. Hise had been positively instructed to make no treaty,
not even a treaty of commerce, with Nicaragua, Costa Rica, or Honduras,
I had no suspicion that he would attempt to act in opposition to his
instructions, and in September last I was for the first time informed
that he had actually negotiated two treaties with the State of
Nicaragua, the one a treaty of commerce, the other a treaty for the
construction of the proposed ship canal, which treaties he brought with
him on his return home. He also negotiated a treaty of commerce with
Honduras; and in each of these treaties it is recited that he had full
powers for the purpose. He had no such powers, and the whole proceeding
on his part with reference t