Mr. Merry to Mr. Hay.
Bluefields, Nicaragua, April 23, 1899.
Sir: I have the honor to confirm my cable of this date sent you via Nicaragua lines to San Juan del Sur, and also via New Orleans steamer to be forwarded thence, reading translated: “Respectfully suggest refusal duplicate payments customs duties to Government of [Page 570] Nicaragua here. Revolutionary Government was certainly de facto. This action necessary protection American interests and influence. Send instructions by cable. Please communicate Navy Department.” In the above cable Commander Dayton, of the U. S. S. Detroit, joins, and hence requests that Navy Department be advised. It becomes my duty to present my reason for this action. Upon my arrival here I was of opinion that the second payment of duties here should be made under written protest accompanying each receipt, properly authenticated. I called a private meeting of the five American mercantile firms now with closed doors and said to them substantially that the United States Government has sent a war ship here to aid me in the protection of American interests; that there is an impression that the late governor in tendente of this department had the general sympathy of the foreigners here and possibly the active aid of some of them; that if their “skirts are not clean” they should pay the duties again, under protest, and regard the loss as the result of their violation of their neutral obligations; that the British vice-consul has already paid the duties alluded to a second time, amounting to about $1,200, without protest, owing to the known fact that he had aided the revolutionists with merchandise, etc. I cautioned them that if their complicity is established it will place me in the embarrassing position of having to abandon their cause.
The reply of one and all was that they had nothing to fear from any fair investigation; that they had not aided the Reyes movement, although three of them acknowledged that some of their employees had left their service without their consent and joined him, but that not one of them has been again employed; that they had no control over their movements. They further stated that the present conditions are intolerable, and if they received no protection it would be both wise and just to so inform them in order that they can close out tlieir interests and leave the country. Some had offered to pay under protest and acceptance had been refused, since which they have been obliged by threats of attachment to close their stores, and if forced by law as well as international usage to pay duties the second time, they preferred to refuse and to incur the consequences. When asserting this they were aware that the merchandise of one of them (Weil & Co.) had been seized at the custom-house, by order of Colonel Torres, in part payment of amount again claimed. They had fair cause to presume that they will be treated in same manner. They have an invested and very active capital of about two and one-half millions, gold, with a business that will increase if not hampered by unjust exactions. The result of the interview was the cable sent you to-day in which Commander Dayton joined as per arrangement with me. En route from San Juan del Norte to this port a careful examination of authorities (inclosure No. 1) appears to fully justify this action. General Reyes had undisputed possession of the custom-house, Government public buildings, troops and war munitions, police force, postoffice, telegraph lines, and of the only Government steamer on this coast; in fact, of every Government agency. Were anything else needed to prove a de facto government the refusal of General Estrada to take possession when General Reyes offered to turn it over on February 3 because of some unacceptable conditions, proves that Reyes remained in power by the refusal of Estrada to act, and by his preference for an asylum in the United States consular agency during the period of Reyes’s continued occupancy. There was no other government between February 3 and 25, 1899. The governmental functions were actually exercised by the same individual, including the official [Page 571] who received the customs duties now alleged by Torres as having been illegally paid. The purpose of Torres (formerly a butcher by occupation) is evidently, as he expressed it, to “eastigar los extranjeros” (castigate the foreigners), and to him this appears a work both of love and obligation. What effect the interposition of Mr. Sanson will have has not fully developed, but I am under impression that his coming here was for the double purpose of producing the appearance of a desire to conciliate the United States Government and to checkmate my action if it proves unacceptable to President Zelaya. He is argumentative, but very agreeable to me, his politeness increasing with the complications. However, Torres, Estrada, and Mr. Sanson are but the agents of President Zelaya, executing his orders as they understand them, and without liberty of action. I shall have the honor to further address you soon, keeping you promptly advised of the situation.
With assurances, etc.,
United States Minister.