For some years the United States had been trying to bring about the settlement of a claim against the Nicaraguan Government preferred by an American company. This Emery claim, as it was known, arose in connection with a concession granted in 1898 for cutting and exporting mahogany. The concession provided that any differences which should arise between the Government and the company should be arbitrated by a tribunal of three members, one to be selected by the Government, one by the company, and the third by these two arbitrators. In 1903 an accusation of smuggling was brought against the company, and the questions raised were submitted to the stipulated tribunal. This decided that, inasmuch as the company had paid taxes to the Government three years in advance, amounting to $30,000, the concession could not be annulled, as President Zelaya wished to have done. Nevertheless Zelaya declared it annulled, and caused proceedings to be instituted for stopping the company’s exportations. This led the American Government to interpose. Under instructions from Washington, its Minister at Managua, Mr. Merry, addressed the following note to the Nicaraguan Minister of Foreign Affairs, December 15, 1906: "I have the honor to inform you that I have received instructions from my Government to make an urgent and firm request that your Excellency’s Government will settle the Emery company controversy by an international arbitration, and that until a decision has been given thereby, your Excellency’s Government will restore to the Emery company all its property, dismissing all legal prosecutions in the case, and permitting the company to resume its work under its concession, as if no controversy had arisen." This communication secured a promise of the desired international arbitration, and the stopping meantime of proceedings of interference with the company’s business. But when the protocol of arbitration was to be drawn the Nicaraguan Government refused to have any question of damages to the company included. On this contention the settlement was blocked for more than two years, and the patience of the Washington Government was about worn out. In just what wrappings of diplomatic language it made that fact apparent has not yet been disclosed to the public; but evidently the understanding of Señor Zelaya was duly penetrated. {80} On the 26th of May last (1909) his representative at Washington signed a protocol which provided that the questions at issue between the Government of Nicaragua and the Emery Company should be submitted to arbitration, unless the parties could make their own settlement within four months.