File No. 417.00/54.

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


I have fully explained to President Diaz the Department’s attitude outlined in your telegrams of July 7 and July 18, and in order to make it perfectly clear to the Nicaraguan authorities I have reiterated that the Department has every disposition to help the Government of Nicaragua in every way in which it properly may, in order to enable it to place itself in all respects upon a sound financial and economic basis. President Diaz, Gen. Mena, and the Nicaraguan member of the mixed commission have agreed to the modifications proposed in the department’s telegram of June 26, and have expressed the hope that the submission of the revised decree to the assembly might be postponed until the loan had become assured. The assembly, they explain, would hesitate to pass a law providing for the immediate payment of damages from the treasury until the assembly felt sure that the treasury was able to make those payments. They believe, on the other hand, that several features of the revised decree would prove objectionable to the assembly and endanger the ultimate passage of the loan. Dr. Cuadra Pasos therefore advised postponement of pressing the modifications of the decree upon the assembly until that body passes the loan contract, in which the President and Mena concurred.