orted 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 relinquished 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.

The imposition of it, however, would obviously contravene our treaty
with New Granada and infringe the contract of that Republic with the
Panama Railroad Company. The law providing for this tax was by its terms
to take effect on the ist of September last, but the local authorities
on the Isthmus have been induced to suspend its execution and to aw