Minister Merry to the Secretary of State.

No. 1009.]

Sir: I have the honor to acknowledge receipt of your No. 613, dated January 13, and have carefully noted instruction therein. I shall address a dispatch to the Nicaraguan Government covering the representations or Mr. Seldon Bacon, attorney for American citizens at Bluefields, by mail leaving here on 1st of February.

The Nicaraguan Government has lately made several contracts with our citizens, for which it has been paid in United States gold approximately one million dollars. * * *

The assertion of Mr. Bacon that the wholesale business on the Nicaraguan Atlantic coast is mostly conducted by foreigners is correct, [Page 699] but the assertion that in the interior it is conducted almost exclusively by native firms is misleading, inasmuch as there are many foreign firms located in western Nicaragua, so that the discrimination alluded to, while applicable to locations, is only in a restricted sense a discrimination against foreigners.

The establishment of aduanas de revision appears to be an unwise and onerous tax on commerce that no active commercial nation would consider practicable, and, as hereafter explained, there is good reason to doubt if the law will ever be enforced. The Solomon wharf concession at Bluefields appears to be in restraint of trade, and its enforcement will unavoidably create much friction. * * * It appears an unjust absurdity that merchandise landed at Pearl Lagoon shall be required to pay Solomon’s wharf dues at Bluefields, but that is one of the requirements in Act 10.

That steamships and all other vessels arriving at Bluefields Bay shall use Solomon’s wharf is an impossibility, for the reason that there is a depth of 13 feet on the bar, and at Solomon’s wharf there will not be over 6 to 7 feet depth at high water. On the contrary, Act 2 provides that the wharf is to be constructed of sufficient depth to accommodate any vessel that “can cross the bay and arrive at Bluefields” (que puede cruzar la bahia y llegar a Bluefields). * * *

I note your allusion to article 7 of the Anglo-Nicaraguan treaty of 1860 as establishing a free port at Greytown, or San Juan del Norte. It may interest you to know that such merchants as remain there have petitioned the British chargé d’affaires now at Managua to permit it to become a duty-paying port.

The numerous complaints recently received at Managua in regard to the concessions alluded to in your dispatch have caused the Managua Government to send a special commission thence to Bluefields, consisting of Dr. Isidro Oviedo, supreme court justice, and Don J. Ramon Seville, subsecretary of foreign relations and public instruction. These gentlemen should have arrived there at this date, and it is hoped that their investigation of the friction developed on the Atlantic littoral of Nicaragua by the attempted working of these exclusive concessions may be at least diminished through their modification, which I have no reason to presume will be objected to by the Nicaraguan Government, provided no return of funds is demanded. * * *

* * * * * * *

Meanwhile the fact that your attention has been called to the onerous impediments placed upon the commercial interests of our people on the Atlantic Nicaraguan coast through these exclusive concessions should induce official action beneficial to the complainants.

I have, etc.,

William Lawrence Merry.