possession of the territory which they occupied and take them under his
protection as British subjects;" and he added that in the event of the
success of their application "the British Government would then have
possession of the entire coast from Cape Conte to San Juan de
Nicaragua." In another letter, dated the 29th day of July, 1848, he
wrote:

I have not a doubt but the designs of Her Majesty's officers here and
on the Mosquito shore are to obtain territory on this continent.

The receipt of this letter was regularly acknowledged on the 29th day of
August, 1848.

When I came into office I found the British Government in possession of
the port of San Juan, which it had taken by force of arms after we had
taken possession of California and while we were engaged in the
negotiation of a treaty for the cession of it, and that no official
remonstrance had been made by this Government against the aggression,
nor any attempt to resist it. Efforts were then being made by certain
private citizens of the United States to procure from the State of
Nicaragua by contract the right to cut the proposed ship canal by the
way of the river San Juan and the lakes of Nicaragua and Managua to
Realejo, on the Pacific Ocean. A company of American citizens entered
into such a contract with the State of Nicaragua. Viewing the canal as a
matter of great importance to the people of the United States, I
resolved to adopt the policy of protecting the work and binding the
Government of Nicaragua, through whose territory it would pass, also to
protect it. The instructions to E. George Squier, appointed by me chargé
d'affaires to Guatemala on the 2d day of April, 1849, are herewith
submitted, as fully indicating the views which governed me in directing