Mr. Baker to Mr. Gresham.

No. 162.]

Sir: It is the purpose of this communication to give you, as briefly as possible, an idea of the present condition of things in Nicaragua.

In my dispatch No. 148 of November 22, I have advised you of the different situation of affairs between Nicaragua and Honduras, and I mentioned therein a circular letter of the Honduranean foreign office addressed to the Governments of Guatemala, Salvador, and Costa Rica, in which bitter complaints are made against the administration of Nicaragua, which is accused of aiding the Honduranean refugees in that country in their efforts to begin a new revolution against the Government of Vasquez.

Under date of November 28 the minister of foreign relations of Nicaragua, Don José Madriz, addressed a counter circular to the Governments above named and to the diplomatic corps resident in Central America deploring the fact that the Congress of Honduras should have seen fit to decree full powers to Vasquez to make war when such a declaration was merely intended as a provocation against Nicaragua, refuting in every manner the charges made by Honduras and throwing upon the latter the onus of having precipitated a war, in case the latter should take place.

The communication is a very lengthy one, quoting in detail numerous expressions of friendship from former notes exchanged between the two countries, and calling attention, among other things, to the existence of a treaty between Nicaragua and Honduras by which the two countries submit to arbitration any disagreement between them before adopting the method of settling difficulties by a war. For the purposes of an [Page 442] insight into matters, the final passage of Mr. Madriz’s letter will suffice. It is as follows:

The menace made against us by the Government of Honduras lacks foundation absolutely, and can not, therefore, but inspire in us sentiments of profound sorrow at seeing that our neighbor retrogrades in the road to civilization. We thought that, notwithstanding our domestic troubles, the relations between state and state were advancing toward the point of union, which is one of the most beautiful ideals of Central American patriotism, but we see the contrary with the utmost regret. Perhaps the unfortunate period of war shall return for Central America; perhaps cruel discord will drown friendliness. The seeds of our welfare can not germinate in a field sterilized by blood.

If it is possible to avoid this fateful result, Nicaragua whose spirit is quiet, who loves peace, and who is interested in the honor of her sister Republics as in her own, is ready to effect a reconciliation which shall conclude in an honorable manner the question causing the present situation. But if, unfortunately, this good desire should be ineffective, she is ready to defend herself alone, because her right is sufficient arm, and the patriotism of her sons a powerful defense.

In prevision, therefore, of the serious evil menacing her, and assured of having justice on her part, she throws on those provoking it the responsibility of whatever may happen, and, as the Government of Honduras has failed signally to comply with the engagement contracted with that of Nicaragua in the treaty of peace and friendship mentioned above, and in making offensive comments upon our country it has endeavored to bring the enmity of the remaining friendly nations upon us, this Government considers itself free to take the measures most convenient for the security of the sacred national interests intrusted to its loyalty and patriotism, until the Government of Honduras shall return spontaneously to the path pointed out by justice and the interest of people joined in history by the sacred ties of brotherhood and by the perspective of an identical and glorious future.

A copy of this circular was received by me to-day. Five days ago, viz, on December 1, General Ortiz, vice-president of the Republic, minister of war, and general in chief of the armies, left Managua for Leon, and two days afterwards 600 armed men from Chinendega and 600 from Leon were leaving their barracks for the frontier of Honduras.

* * * * * * *

The trouble is primarily caused and now developed by the Honduranean refugees in this country who have been given employment in civil and military posts, and whose only aim is to overthrow Vasquez’s administration regardless of the consequences of such action upon the, country which has given them asylum.

* * * * * * *

The Government has by recent decree levied a forced loan of $400,000, and is engaged now in collecting it. I send you herewith a translation of the decree.

The ministry has been nominally reorganized, but on account of illness of the one or the absence of the other the various departments are under the charge of two ministers for the present. The assignments are as follows: Foreign relations, J. Madriz; Gobernacion, Feo. Baca h.; Fomento, J. D. Gómez; Guerray Marina, A. Ortiz; Hacienda, Leonardo Lacayo.

The Constituent Assembly is still in session, but is expected to adjourn in a few days.

* * * * * * *

I beg to remain, etc.,

Lewis Baker.
[Inclosure 1 in No. 162.—Translation.]

The President of the Republic has issued the following decree:

In prevision of a conflict between this Republic and that of Honduras on account of the hostile attitude which the Government of that nation has assumed against [Page 443] Nicaragua, and as it is absolutely necessary to prepare ourselves conveniently for the defense of the national honor and sovereignty, and as it is indispensable to secure the means necessary for that purpose by a forced loan because the exhausted condition of the public treasury does not permit their being taken out of the ordinary revenues, the Government, using the faculties given it by decree of the Constituent Assembly of October 19 last, decrees:

1. Let there be assigned in the Republic a forced loan of $400,000, which shall be distributed in the following manner:

Department of—

Granada $100,000
Managua 80,000
Leon 60,000
Carazo 28,000
Chinendega 24,000
Rivas 24,000
Masaya 20,000
Matagalpa 18,000
N. Segovia 14,000
Chontales 12,000
Finotega 10,000
Esteté 10,000
Total 400,000

This loan shall be paid in three parts—the first, twenty-four hours after the notice shall have been given; the second, eight days after, and the third, fifteen days thereafter.

2. The collection of the present loan shall be made by the authorities, and the respective prefects shall name the assigning committees. The repayment to the voluntary lenders shall be made in the form and with the profits determined in decree No. 3 of last August.

3. The distributing committees shall be guided in the assignment of the contribution by article 6 of the decree of the Constituent Assembly of October 19, already mentioned, which exempts from loans those owning less than $5,000 besides their dwelling house.

4. Lenders who should not make their payments within the dates mentioned in article 1 of this decree shall be obliged to lend double the amount assigned to them; and they shall be paid by notes at two years’ time, earning only 6 per cent annually.

5. The prefects shall publish immediately the present decree, which shall be in force from this date, proceeding to the organization of the committees for compliance therewith.

  • J. S. Zelaya,
    The Subsecretary of War, in charge of the Ministry of Hacienda ad interim.
  • Ram. Mayorga.