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All these difficulties might be avoided if, consistently with the good faith of Nicaragua, the use of this transit could be thrown open to general competition, providing at the same time for the payment of a reasonable rate to the Nicaraguan Government on passengers and freight.

With the Republic of Nicaragua a treaty has been concluded which authorizes the construction by the United States of a canal, railway, and telegraph line across the Nicaraguan territory. By the terms of this treaty 60 miles of the river San Juan, as well as Lake Nicaragua, an inland sea 40 miles in width, are to constitute a part of the projected enterprise.

Not content with these radical measures within the republic itself, he was unwise enough to create for himself a powerful enemy in the United States by meddling with the privileges of the Vanderbilt Steamship Company, then engaged in transporting the stream of gold-hunters to California over a Nicaraguan route.

At the date when this message is printed this Government has terminated diplomatic relations with the Zelaya Government, for reasons made public in a communication to the former Nicaraguan charge d'affaires, and is intending to take such future steps as may be found most consistent with its dignity, its duty to American interests, and its moral obligations to Central America and to civilization.

We support diplomatic efforts, but these efforts can never succeed if the Sandinistas win their war against the Nicaraguan people. Our commitment to a Western Hemisphere safe from aggression did not occur by spontaneous generation on the day that we took office. It began with the Monroe Doctrine in 1823 and continues our historic bipartisan American policy.

I feel that the latter course is the one demanded by the interests of this Nation, and I therefore bring the matter to your attention for such action in the premises as you may deem wise. If in your judgment it is better not to take such action, then I shall proceed at once with the Nicaraguan canal.

Honduras got to fighting with Nicaragua; the government I had done business with went out of business; and the Nicaraguan army recruited all my labourers and mounted them on my mules and horses, swiped all my grub, and told me to go home. I went. Why stay?

I invite attention especially to the last document accompanying the treaty, being a translation of a note of 26th September ultimo from Mr. Molina, chargé d'affaires ad interim of Nicaragua, to the Secretary of State, together with the translation of the ratification of the treaty by the Nicaraguan Government, thereto annexed.

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.

And Torquemada, thinking over the day's proceedings, was driven to confess that he was indebted for the suggestion to the fertile brain of the Nicaraguan Representative; in other words that he, the parroco, was praised for what was really the Commissioner's idea. And it is evident that if Mr.