File No. 817.00/1556.


No. 21.]

Sir: I have the honor to report that political conditions here still remain very unsettled. Gen. Moncada is apparently trying to divide the Conservative party and a very bitter newspaper controversy is in progress between him and Chamorro.

Gen. Mena, minister of war, is still in control of all the arms and ammunition, but it seems that the only member of the cabinet in whom President Estrada has implicit confidence is Adolfo Diaz, minister of hacienda and Vice President.

The constitution of the mixed commission as directed by the Department has all been agreed to by the Nicaraguan Government and the decree constituting same should have gone to the assembly on yesterday, but a delay was caused by the absence of the foreign minister from the city. * * *

As the matter now looks to me President Estrada is being sustained solely by the moral effect of our support and the belief that he would unquestionably have that support in case of trouble. Estrada is unquestionably determined to carry out his policy of seeking our help as he has outlined it, and I believe that he will be able to do so, although the element of uncertainty in the matter is the possibility of his resigning, as I am reliably informed he has attempted [Page 657] to do once since I have been here, the resignation being torn up by a friend after having been written out. * * *

When the loan is negotiated I feel that some safeguard should be thrown around it to insure its proper expenditure. Otherwise I do not believe that President Estrada will be able to control the situation and prevent its waste. In this view President Estrada himself concurs. * * *

I have, etc.,

Elliott Northcott.