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The Nicaragua Canal Commission, under the chairmanship of Rear-Admiral John G. Walker, appointed July 24, 1897, under the authority of a provision in the sundry civil act of June 4 of that year, has nearly completed its labors, and the results of its exhaustive inquiry into the proper route, the feasibility, and the cost of construction of an interoceanic canal by a Nicaraguan route will be laid before you.

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.

The fair-haired and blue-eyed natives of Matagalpa and Segovia are probably the descendants of the outlaws who made these provinces their highway from one ocean to another. Jinotega is pleasantly situated, and has many advantages over other Nicaraguan towns. The climate is temperate and moderately dry, the land very fertile. Pine trees on the surrounding ranges furnish fuel and light.

A single billiard-table, in a dimly-lighted room, at which three or four play all the evening, until the closing hour, at nine, and a dozen others sit round the walls on benches; a gambling room, licensed by the government, where only the smallest sums are staked; cock-fighting on Sundays; a feast day; and perhaps a bull-fight once or twice a year; private gambling carried on to a considerable extent by the higher classes, and aguardiente-drinking by the lower, complete the list of Nicaraguan diversions.

The Nicaragua Canal Commission, under the chairmanship of Rear-Admiral John G. Walker, appointed July 24, 1897, under the authority of a provision in the sundry civil act of June 4 of that year, has nearly completed its labors, and the results of its exhaustive inquiry into the proper route, the feasibility, and the cost of construction of an interoceanic canal by a Nicaraguan route will be laid before you.

The good will of Colombia toward our country has been testified anew by the cordial extension of facilities to the Nicaraguan Canal Commission in their approaching investigation of the Panama Canal and other projected routes across the Isthmus of Darien. Toward the end of October an insurrectionary disturbance developed in the Colombian Republic.

When Walker was elected president he found that the Accessory Transit Company had not lived up to the terms of its concession with the Nicaraguan Government. His efforts to hold it to the terms of its concession led to his overthrow.

He changed the whole attitude of the Senate concerning the route for an interoceanic canal. We all generally favored the Nicaraguan route. Senator Hanna became convinced that the Panama route was best, and he soon carried everything before him to the end that the Panama route was selected. During the first McKinley campaign, Mark Hanna was probably the most caricatured man in public life.

The treaty with Nicaragua of the 16th of February, 1857, to which I referred in my last annual message, failed to receive the ratification of the Government of that Republic, for reasons which I need not enumerate. A similar treaty has been since concluded between the parties, bearing date on the 16th March, 1859, which has already been ratified by the Nicaraguan Congress.

A variety of outrages and insults having been offered to British subjects, two individuals especially having been carried off from San Juan by Colonel Salas, of the Nicaraguan army, Mr Walker, Her Majesty's Consul-General and Agent stationed at Bluefields, requested Admiral Austen, the Commander-in-chief on the West India station, to send some ships-of-war to support and protect British interests in that part of the world.