ng the validity of the
original payment of the debt to the _de facto_ regent of the
territory. An arrangement was effected in April last by the United
States minister and the foreign secretary of Nicaragua whereby the
amounts of the duplicate payments were deposited with the British consul
pending an adjustment of the matter by direct agreement between the
Governments of the United States and Nicaragua. The controversy is still
unsettled.

The contract of the Maritime Canal Company of Nicaragua was declared
forfeited by the Nicaraguan Government on the 10th of October, on the
ground of nonfulfillment within the ten years' term stipulated in the
contract. The Maritime Canal Company has lodged a protest against this
action, alleging rights in the premises which appear worthy of
consideration. This Government expects that Nicaragua will afford the
protestants a full and fair hearing upon the merits of the case.

The Nicaragua Canal Commission, which had been engaged upon the work of
examination and survey for a ship-canal route across Nicaragua, having
completed its labors and made its report, was dissolved on May 31, and
on June 10 a new commission, known as the Isthmian Canal Commission, was
organized under the terms of the act approved March 3, 1899, for the
purpose of examining the American Isthmus with a view to determining the
most practicable and feasible route for a ship canal across that
Isthmus, with its probable cost, and other essential details.

This Commission, under the presidency of Rear-Admiral John G. Walker,
U.S.N. (retired), entered promptly upon the work intrusted to it,
and is now carrying on examinations in Nicaragua along the route of
the Panama Canal, and in Darien from the Atlantic, in the neighborhood
of the Atrato River, to the Bay of Panama, on the Pacific side. Good
progress has been made, but under the law a comprehensive and complete
investigation is called for, which will require much labor and
considerable time for its accomplishment. The work will be prosecuted as
expeditiously as possible and a report made at the earliest practicable
date.

The great importance of this work cannot be too often or too strongly
pressed upon the attention of the Congress. In my message of a year ago
I expressed my views of the necessity of a canal which would link the
two great oceans, to which I again invite your consideration. The
reasons then presented for early action are even stronger now.

A ple