ssor having accepted the office of arbitrator of the
longstanding Missions boundary dispute, tendered to the President by the
Argentine Republic and Brazil, it has been my agreeable duty to receive
the special envoys commissioned by those States to lay before me
evidence and arguments in behalf of their respective Governments.

The outbreak of domestic hostilities in the Republic of Brazil found
the United States alert to watch the interests of our citizens in that
country, with which we carry on important commerce. Several vessels of
our new Navy are now and for some time have been stationed at Rio de
Janeiro. The struggle being between the established Government, which
controls the machinery of administration, and with which we maintain
friendly relations, and certain officers of the navy employing the
vessels of their command in an attack upon the national capital and
chief seaport, and lacking as it does the elements of divided
administration, I have failed to see that the insurgents can reasonably
claim recognition as belligerents.

Thus far the position of our Government has been that of an attentive
but impartial observer of the unfortunate conflict. Emphasizing our
fixed policy of impartial neutrality in such a condition of affairs
as now exists, I deemed it necessary to disavow in a manner not to
be misunderstood the unauthorized action of our late naval commander
in those waters in saluting the revolted Brazilian admiral, being
indisposed to countenance an act calculated to give gratuitous sanction
to the local insurrection.

The convention between our Government and Chile having for its object
the settlement and adjustment of the demands of the two countries
against each other has been made effective by the organization of the
claims commission provided for. The two Governments failing to agree
upon the third member of the commission, the good offices of the
President of the Swiss Republic were invoked, as provided in the
treaty, and the selection of the Swiss representative in this country
to complete the organization was gratifying alike to the United States
and Chile.

The vexatious question of so-called legation asylum for offenders
against the state and its laws was presented anew in Chile by the
unauthorized action of the late United States minister in receiving into
his official residence two persons who had just failed in an attempt at
revolution and against whom criminal charges were pending grow