"When I assumed the government that was the situation, and in addition the inhabitants of the Acre, who had again proclaimed their independence, were masters of the whole country, excepting Puerto Acre, of which they did not get possession until the end of January. Although since January negotiations have been initiated by us for the purpose of removing amicably the cause of the disorders and complications which have had their seat of action in the Acre ever since the time when for the first time the Bolivian authorities penetrated thither, in 1899, yet the Government of La Paz has nevertheless thought proper that its President and his minister of war should march against that territory at the head of armed forces with the end in view of crushing its inhabitants and then establishing the agents of the syndicate." The Brazilian President proceeded then to relate that he had notified the Bolivian Government of the intention of Brazil to "defend as its boundary the parallel of 10° 20' south," which it held to be the line indicated by the letter and the spirit of a treaty concluded in 1867; and that Bolivia had then agreed to a settlement of the dispute through diplomatic channels. "Upon the Bolivian Government agreeing to this," he continued, "we promptly reestablished freedom of transit for its foreign commerce by Brazilian waters. Shortly after this the syndicate, by reason of the indemnity which we paid it, renounced the concession which had been made it, eliminating thus this disturbing element." In conclusion of the subject, President Alves reported: "To the Peruvian Government we have announced, very willingly, since January, that we will examine, with attention, the claims which in due time they may be pleased to make upon the subject of the territories now in dispute between Brazil and Bolivia." The result of the ensuing negotiations between Brazil and Bolivia was a treaty signed in the following November and duly ratified, the terms of which were summarized as follows in a despatch from the American Legation at La Paz, December 26: "Three months after exchange of ratifications Brazil is to pay an indemnity of £1,000,000 and in March, 1905, £1,000,000. A small strip of territory, north Marso, Brazilero, embracing Bahia Negra and a port opposite Coimbra, on Paraguay River, are conceded, and all responsibilities respecting Peruvian contentions are assumed. The disputed Acre territory is conceded by Bolivia. A railroad for the common use of both countries is to be built from San Antonio, on Madeira River, to Cuajar Ameren, on Mamore River, within four years after ratification. Free navigation on the Amazon and its Bolivian affluents is conceded. A mixed commission, with umpire chosen from the diplomatic representation to Brazil, will treat all individual Acre claims."