File No. 817.51/565.
The Minister of Nicaragua and the Minister of the Treasury of Nicaragua to the Secretary of State.
Washington, Sept. 1, 1913.
Excellency: Having in a general way pointed out the pressing immediate needs of our country, we wish to add that there is but one bank in the Republic of Nicaragua, that it has an insignificant capital, so little that it can not extend loans to even a small percentage of those worthy of credit. The current rates of interest are from 18% to 24% for loans in general, even for those with which to move the crops. We need a bank with more capital, and an experienced man who understands dealing with our people at its head.
Very shortly the former “billetes” of our country cease to be legal tender. We need money now to supply in their stead the new standard “córdoba,” which is the equivalent of your American dollar.
The Mixed Claims Commission, created at your country’s suggestion, sorely needs money to begin to pay off the awards it has made. Already there is evidenced a tendency to endeavor to effect settlements direct with Nicaragua because the creditors have so far seen no practical evidence of finality in matters the Commission has taken up.
The original suggestions of Mr. Jarvis, a man who has in dealing with Latin America succeeded largely in Cuba, that he could arrange a loan for us of from two million to two million and a half dollars in gold, and could put up a million of it himself, on terms better than those of the present bankers, met with our approval and immediately Mr. Jarvis delivers this amount to the Department of State in Washington, or to whomsoever it shall designate, approximately 711,000 of which shall be used for liquidating our obligation and thus cancelling our contract with the present bankers, and the balance placed at the disposition of Nicaragua, we, having the authority of the President of Nicaragua to do so, will definitely appoint Samuel Miller Jarvis as Finance Commissioner, the appointment to be according to the terms of the agreement copy of which is attached to this letter, and have the appointment confirmed by our Congress now in session at home.
This offer is made in the belief that Mr. Jarvis can raise money in any reasonable quantity in the near future and that instead of two and a half millions the loan might be for as much as four millions, and at long instead of short time, with precisely the same guaranties as the present bankers have except the option on the Railroad stock.
After great reflection it occurs to us that any plan which did not comprehend liquidating with the present bankers prior to definitive naming of a Finance Commissioner might give rise to differences the effect of which might reflect little credit on the foresight of our [Page 1051] country, or possibly even give rise to question as to our fair intention towards those who have had business with our Republic.
We have [etc.]
- Emiliano Chamorro.
- Pedro Raf. Cuadra.