Minister Merry to Acting Secretary of State Loomis.

No. 1040.]

Sir: I have the honor to forward herewith copy and translation of the reply from the Government of Nicaragua to the various inquiries made in your No. 613 of January 13 on representations of Seldon [Page 700] Bacon, esq., attorney for American merchants at Bluefields, Nicaragua, and answering my dispatch of January 30 to that government.

I am informed that the revisionary custom-house at Bluefields is likely to be abandoned as impracticable and that the Weinberger contract for the exclusive navigation of the Escondido River will be modified. Both were in restraint of commerce, and providing it is not required that the government shall repay any part of the money received for the concessions I do not think it will be difficult to establish a status that will better permit the protection of all parties in interest.

* * * * * * *

The assurance that it is intended to conciliate the interests involved and the fact that changes are already being made in that direction warrant the expectation that in this connection there will be less friction hereafter.

I have, etc.,

William Lawrence Merry.

The Minister for Foreign Affairs to Minister Merry.

Mr. Minister: I have had the honor of receiving the very courteous and important note of your excellency, dated January 30 last past, referring to the various subjects of fiscal administration and navigation on the Atlantic coast of Nicaragua.

The President of the Republic has fully informed himself with much affability of the subjects of your excellency’s note, and with his instructions I have the pleasure to reply in the following terms:

I state to your excellency in the first place that by virtue of the executive decrees of November 12, 1902, 4th of October, 1903, and 14th of May, 1904, the customs and other duties also collected by this government shall be paid in gold or its equivalent value in public treasury notes at 500 per cent in all the Republic, and that while in the interior these duties are collected in paper money, silver is demanded on the Atlantic coast, although the note has a value less than half that of silver. On this point permit me to express to your excellency that, in conformity with article 6 of the decree of May 14, cited, its terms do not include the customs of the Atlantic coast. The treasury note not circulating in this region and the government having to pay all its expenses of administrative service in silver, the customs duties are collected in the same money, as is just and natural, in conformity with the decree of October 4, also cited to your excellency, and thus also for this motive the mentioned decree does not apply to the customs of the coast the mentioned decree of November 12, which established the duty in gold owing to the depreciation of the notes.

For said reason the customs duties, as is seen, are paid on the Atlantic coast simply in silver without regard to any equivalent in relation to gold and this is perfectly just and regular.

In regard to the custom-houses of revision at Bluefields, Leon, and Granada, the establishment of these had the object of an exact and effective control in the introduction of merchandise and payment of customs duties. Notwithstanding, before having received your excellency’s note, and having in mind the inconveniences which the two entry practices presented, one at the Bluff and the other at Bluefields, and to the solicitation of some merchants, my government decided that while it accords with convenience in the matter, the formalities of two custom-houses shall be complied with in one only. And if it be true that at present there is alone installed the revision custom-house at Bluefields this is because it is not now considered necessary in Leon and Granada; but they will be installed by virtue of the said law if found necessary. Although in the contract of Mr. Solomon is included the merchandise destined to Pearl Lagoon for the revision and payment of duties and wharfage, subsequently, by the decree of January 29 last, it is fixed that the concession should be understood as applicable to the merchandise in the extension of the river Escondido, excluding consequently the merchandise destined to that district which has been introduced by free [Page 701] sea, consequently only the articles that arrive at Pearl Lagoon by the way of river Escondido are subject to such regulations.

With regard to the contract celebrated with Mr. Weinberger, by which is conceded the navigation of the river Escondido and its affluents, I should show your excellency that this does not prejudice acquired rights, and thus it is clearly provided in article 6 of said contract. If any person considers himself damaged in his rights prior to that, he can make the reclamation to which he has right in due form before the competent tribunals, which until now has not been done.

Although, supposing that in 1892 this ministry, by medium of correspondence, directed to the United States minister, has manifested that the privileges of the port of San Juan del Norte are applicable to the remainder of the Atlantic coast, that circumstance has no present force, because the incorporation of the old Mosquito Reserve to this Republic in 1894 and the absolute renouncement of the economic autonomy in 1898 have left without value the treaty of 1860 between England and Nicaragua. And it is to be noted that this has been foreseen in the same treaty.

Until now I have not had the satisfaction of replying to the estimable note of your excellency, because this ministry awaited the report of the commissioners that the government sent to the Atlantic coast, who have just arrived at this capital, to proceed with more certainty in these matters.

Your excellency can entertain the assurance that my government finds itself in the best disposition to agree to all the facilities necessary to reciprocal commerce on our eastern coast between the United States and Nicaragua in such manner that will conciliate the interests of the citizens of that and this Republic, mutually respecting the rights which belong to each.

I approve of this occasion to reiterate to your excellency, etc.,

Adolfo Altimirano.