tional Arbitration Bureau. In accordance with Article XXIII of
the Convention providing for the appointment by each signatory power
of persons of known competency in questions of international law as
arbitrators, I have appointed as members of this Court, Hon. Benjamin
Harrison, of Indiana, ex-President of the United States; Hon. Melville
W. Fuller, of Illinois, Chief Justice of the United States; Hon. John W.
Griggs, of New Jersey, Attorney-General of the United States; and Hon.
George Gray, of Delaware, a judge of the circuit court of the United
States.

As an incident of the brief revolution in the Mosquito district of
Nicaragua early in 1899 the insurgents forcibly collected from American
merchants duties upon imports. On the restoration of order the
Nicaraguan authorities demanded a second payment of such duties on the
ground that they were due to the titular Government and that their
diversion had aided the revolt.

This position was not accepted by us. After prolonged discussion a
compromise was effected under which the amount of the second payments
was deposited with the British consul at San Juan del Norte in trust
until the two Governments should determine whether the first payments
had been made under compulsion to a _de facto_ authority. Agreement
as to this was not reached, and the point was waived by the act of the
Nicaraguan Government in requesting the British consul to return the
deposits to the merchants.

Menacing differences between several of the Central American States have
been accommodated, our ministers rendering good offices toward an
understanding.

The all-important matter of an interoceanic canal has assumed a new
phase. Adhering to its refusal to reopen the question of the forfeiture
of the contract of the Maritime Canal Company, which was terminated for
alleged nonexecution in October, 1899, the Government of Nicaragua has
since supplemented that action by declaring the so-styled Eyre-Cragin
option void for nonpayment of the stipulated advance. Protests in
relation to these acts have been filed in the State Department and are
under consideration. Deeming itself relieved from existing engagements,
the Nicaraguan Government shows a disposition to deal freely with the
canal question either in the way of negotiations with the United States
or by taking measures to promote the waterway.

Overtures for a convention to effect the building of a canal under the
auspices of the United States a