File No. 817.00/1540.

The American Minister to the Secretary of State

No. 7.]

Sir: I have the honor to report that I have gathered the following impressions as to political conditions in Nicaragua at the present time:

Estrada has given a great deal of thought to the situation and has decided that the only hope for Nicaragua is close alliance with the United States. That his course will be antagonized by practically all the Central American Republics is already beginning to be proved by influences felt here. Extracts from Costa Rican papers are especially bitter and the action of Honduras on the American loan is being kept to the front. Guatemala’s attitude is understood to be strongly against Estrada’s policy and Salvador is understood to be somewhat less openly against him. In addition to this, the natural sentiment of an overwhelming majority of Nicaraguans is antagonistic to the United States, and even with some members of Estrada’s cabinet I find a decided suspicion, if not distrust, of our motives. To make the situation more critical for Estrada is the activity of the Zelayistas, who are constantly scheming and plotting his overthrow, as evidenced by the attempted blowing up of the Government palace and arsenal on the day of my arrival at Corinto. * * * Estrada believes he can force through his policies until such a time as they will justify themselves in the face of all difficulties, provided he can move without delay and can count on the earnest support of the United States. Whether or not he can succeed is, I must confess, in my opinion somewhat problematical, but it is at least worth a thorough trial. Not again for a long time may come another such opportunity to prove our good faith in Central America.

In his talk this morning President Estrada expressed a desire to learn the possible attitude of the Department on several questions, among them being the guaranteeing by the United States of free elections in Nicaragua and the proposition of the disarmament of the five Central American Republics. On the latter proposition he said that the armies now maintained by the five Republics could only be of use as against each other or for the illegal support of some Government, and that, in his opinion, all that was necessary was a competent [Page 656] force for the policing of the respective countries. His idea seemed to be that the United States should take the laboring oar in bringing about such a result, but intimated that he was willing to take the initiative by requesting it. * * * In any event, the loan to Nicaragua should be delayed as little as possible.

I have, etc.,

Elliott Northcott.