The Secretary of State to the American Chargé d’Affaires.


American and other foreign owners of industrially improper concessions to be obtained by the Nicaraguan Government by expropriation proceedings may, under the decree establishing the commission, appeal to the commission, it would seem quite clear, should they be dissatisfied with the award of Nicaraguan courts. In case of doubt [Page 637] on this point the Nicaraguan Government could give assurance by hastening expropriation proceedings in the courts and authorizing the presentation of the matter to the tribunal. Furthermore, application to such industrially improper concessions of the principle set forth in amendment of article 6 of the decree regarding illegal or unconstitutional concessions would apparently enable the Nicaraguan Government to revise such concessions to make them conform to the industrial needs of Nicaragua, by amicable arrangement wherever possible, with the concessionaires.

You will fully explain to President Diaz, regarding your telegram of July 12, the Department’s attitude as outlined in the present telegram, as well as in that of July 7. The Department has every disposition to assist the Government of Nicaragua in every way in which it properly may, and you will make this point perfectly clear to the Nicaraguan authorities. Having done so, you may, in your discretion, refrain from pressing the question of the modification of the decree as outlined in the Department’s June 26 until after settlement of the loan contract.