File No. 817.51/551.

Brown Brothers and Company and J. and W. Seligman and Company to the Secretary of State.

Sir: We have the honor to enclose herewith for your information, copy of a decree which was issued by the President of Nicaragua on June 22nd,1 1913, and which was put in the form of a contract which bears date of June 30th, .1913.

We beg [etc.]

Brown Brothers & Co.
J. & W. Seligman & Co.

Executive Decree issued by the President of Nicaragua on June 23, 1913.

Whereas, the contract of November 4, 1912, between the Government and Brown Brothers & Company and J. & W. Seligman & Company modified two prior contracts between the same parties dated respectively March 26th and May 25th, 1912, with the result that the bankers were relieved of the obligation to provide one hundred thousand dollars for the purpose of the Monetary Law of March 20, 1912, said sum being a part of certain five hundred thousand dollars mentioned in said contracts; and

Whereas, notwithstanding the provisions of said contract of November 4, 1912, the Executive considers it advisable that said sum of one hundred thousand dollars shall remain available for the purposes indicated, and desires that the bankers shall not avail themselves of the provisions referred to, but that on the contrary they shall provide said sum as an integral part of said five hundred thousand dollars upon the same conditions that would have governed if the contracts of May 25th and November 4th, 1912, had not been entered into;

Whereas, the bankers have offered to waive said provisions of said November 4, 1912, contract and to provide said one hundred thousand dollars for the purposes of said Monetary Law as originally agreed;

Whereas, the bankers have offered to waive their right to apply the Customs collections up to October 15, 1913, to the payment of the principal and interest of the Treasury Bills still outstanding and to the repayment of the amounts advanced and to be advanced by them under the supplementary contract of March 26, 1912, for the purposes of said Monetary Law;

Whereas, said offers by the bankers are upon the following conditions, namely:

  • First, that the one hundred thousand dollars above mentioned to be provided by the bankers shall be applicable exclusively to the purposes of said Monetary Law.
  • Second, that the Customs duties to be collected between June 30th and October 15th, 1913, after the payment of the costs of collection, shall be applied as follows:
    To the payment during each month to the bankers of the amounts which, under the provisions of the May 25, 1912, contract between the Republic and the Corporation of Foreign Bondholders, are payable for account of interest, sinking fund and service of the 1909 loan.
    To the payment during each month to the United States Mortgage and Trust Company of one-quarter of the balance of said Customs collections, said amounts to be treated as additions to the exchange fund established by the Monetary Law.
    To the payment during each month of a sum not exceeding three thousand dollars to the Mixed Claims Commission for salaries and expenses of said commission.
    After the foregoing payments shall have been made, any balance during each month shall be deposited with the National Bank of Nicaragua, Incorporated, to the credit and for the benefit of the Republic.
  • Third, that any failure on the part of the Republic to comply with any of said conditions shall operate to terminate the proposed arrangement.
  • Fourth, that such waivers shall in no manner affect the rights of the bankers under the Treasury Bills and Supplementary Agreements.

Now therefore the Executive decrees to accept the offers made by the bankers as above set forth and hereby authorizes and empowers Señor Pedro Rafael Guaclra, Minister of Finance of Nicaragua, to execute and deliver on behalf of the Republic such contract as may be required to give effect to the arrangement referred to.

  1. Should be 23d.