But the establishment at the Balize, now reaching far beyond its treaty limits into the State of Honduras, and that of the Bay Islands, appertaining of right to the same State, are as distinctly colonial governments as those of Jamaica or Canada, and therefore contrary to the very letter, as well as the spirit, of the convention with the United States as it was at the time of ratification and now is understood by this Government.

The interpretation which the British Government thus, in assertion and act, persists in ascribing to the convention entirely changes its character. While it holds us to all our obligations, it in a great measure releases Great Britain from those which constituted the consideration of this Government for entering into the convention. It is impossible, in my judgment, for the United States to acquiesce in such a construction of the respective relations of the two Governments to Central America.

To a renewed call by this Government upon Great Britain to abide by and carry into effect the stipulations of the convention according to its obvious import by withdrawing from the possession or colonization of portions of the Central American States of Honduras, Nicaragua, and Costa Rica, the British Government has at length replied, affirming that the operation of the treaty is prospective only and did not require Great Britain to abandon or contract any possessions held by her in Central America at the date of its conclusion.

This reply substitutes a partial issue in the place of the general one presented by the United States. The British Government passes over the question of the rights of Great Britain, real or supposed, in Central America, and assumes that she had such rights at the date of the treaty and that those rights comprehended the protectorship of the Mosquito Indians, the extended jurisdiction and limits of the Balize, and the colony of the Bay Islands, and thereupon proceeds by implication to infer that if the stipulations of the treaty be merely future in effect Great Britain may still continue to hold the contested portions of Central America. The United States can not admit either the inference or the premises. We steadily deny that at the date of the treaty Great Britain had any possessions there other than the limited and peculiar establishment at the Balize, and maintain that if she had any they were surrendered by the convention.

This Government, recognizing the obligations of the treaty, has, of course, desired to see it executed in good faith by both parties, and in the discussion, therefore, has not looked to rights which we might assert independently of the treaty in consideration of our geographical position and of other circumstances which create for us relations to the Central American States different from those of any government of Europe.

The British Government, in its last communication, although well knowing the views of the United States, still declares that it sees no reason why a conciliatory spirit may not enable the two Governments to overcome all obstacles to a satisfactory adjustment of the subject.

Assured of the correctness of the construction of the treaty constantly adhered to by this Government and resolved to insist on the rights of the United States, yet actuated also by the same desire which is avowed by the British Government, to remove all causes of serious misunderstanding between two nations associated by so many ties of interest and kindred, it has appeared to me proper not to consider an amicable solution of the controversy hopeless.

There is, however, reason to apprehend that with Great Britain in the actual occupation of the disputed territories, and the treaty therefore practically null so far as regards our rights, this international difficulty can not long remain undetermined without involving in serious danger the friendly relations which it is the interest as well as the duty of both countries to cherish and preserve. It will afford me sincere gratification if future efforts shall result in the success anticipated heretofore with more confidence than the aspect of the case permits me now to entertain.

One other subject of discussion between the United States and Great Britain has grown out of the attempt, which the exigencies of the war in which she is engaged with Russia induced her to make, to draw recruits from the United States.

It is the traditional and settled policy of the United States to maintain impartial neutrality during the wars which from time to time occur among the great powers of the world. Performing all the duties of neutrality toward the respective belligerent states, we may reasonably expect them not to interfere with our lawful enjoyment of its benefits. Notwithstanding the existence of such hostilities, our citizens retained the individual right to continue all their accustomed pursuits, by land or by sea, at home or abroad, subject only to such restrictions in this relation as the laws of war, the usage of nations, or special treaties may impose; and it is our sovereign right that our territory and jurisdiction shall not be invaded by either of the belligerent parties for the transit of their armies, the operations of their fleets, the levy of troops for their service, the fitting out of cruisers by or against either, or any other act or incident of war. And these undeniable rights of neutrality, individual and national, the United States will under no circumstances surrender.