pose to
deal with all possible ulterior questions in the broadest spirit of
friendliness.

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 pro