File No. 817.51/532.
The American Minister to the Secretary of State.
Managua, February 26, 1913.
Your February 24. Brown Brothers have rejected all proposals. Government must now either revoke the whole plan of monetary conversion or make a new contract with other bankers. Situation serious. Railroad 51% option expires March 23; bankers want not only to extend option on entire railroad to October 15 but also to accumulate for the purchaser by that date earnings up to $500,000. Nicaragua willing to extend entire option to June 30 but not willing to concede earnings.
With all the Government’s resources tied up in order to secure a loan which is now less than $400,000 the situation becomes more embarrassing daily. Any of the several suggestions of my recent telegrams would be acceptable to the Government and probably to the Assembly also.