Confidential

I have the honor to acknowledge the receipt of Your Graces
Confidential Despatch of the 16th November last, informing me that
the Government of the United States had declined to accept the
compromise of the question of Title to the Island of San Juan,
proposed by Lord John Russell's Despatch of the 24th of August, and,
in forwarding me a copy of the instructions issued to General Scott
by the Government of the United States, directing me to place upon
the Island a force Equivalent to that retained by the United States.

2. Immediately on receipt thereof I communicated with Rear Admiral Baynes, the Naval Commander in Chief, and on the following day he
called upon me. I laid before him Your Graces Despatch, and after
consultation, we mutually agreed, that as all was quiet at San Juan,
and as the next Mail (which is expected in the course of a few days),
would bring intimation of General Scott's arrival at Washington, and
probably some Communication from Lord Lyons which might affect the
proceeding, it would be advisable to defer carrying out the
instructions of Her Majesty's Government, until after that Mail had
been received; which arrangement I trust may meet with Your Grace's
approval.