File No. 817.51/565.
The Minister of Nicaragua and the
Minister of the Treasury of Nicaragua to the Secretary of State.
[Not a translation.]
Legation of Nicaragua,
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.
[Inclosure—Not a translation.]
Memorandum of Agreement between the Republic of
Nicaragua and Samuel M. Jarvis, which becomes effective on
compliance with terms of letter dated September 1, 1913.
- 1.
- The Republic of Nicaragua shall through its Congress create
the office of Finance Commissioner, who shall attend to the
international financial affairs of the Republic; and he shall
cooperate with the Minister of Finance in Nicaragua under the
advice of the Secretary of State at Washington. It shall be the
duty of the Finance Commissioner, and he shall be required, at
all times to furnish to the Minister of Finance of Nicaragua and
to the Secretary of State at Washington any information which
either may request as to the financial affairs of the Republic;
and he shall make to the Minister of Finance of Nicaragua
quarterly reports of such affairs. He shall in no case be
interested in any concessions from the Government, except that
mentioned in Clause 7, referring to Banco Nacional de
Nicaragua.
- 2.
- The office of Finance Commissioner shall be filled by the
appointment by the President of Nicaragua of Samuel Miller
Jarvis of New York. And he shall continue to hold this office
during the existence of the present loan and of all loans
negotiated by him for Nicaragua, if approved and accepted by the
latter. His appointment shall be officially certified to the
Department of State at Washington.
- 3.
- Said Jarvis shall do everything in his power to arrange for
meeting the present financial needs of Nicaragua and shall have
authority to secure funds for the conversion of currency, the
refunding of all loans in a proper and economical manner on the
best terms obtainable by him, all contracts to be subject to the
approval of the Department of State at Washington, D. C., and
ratification by the Nicaraguan Government, and for the placing
of the finances of Nicaragua on a sound basis. All expenditures
of the loans to Nicaragua shall be made through the National
Bank of Nicaragua; and the books of the bank shall at all times
be open to the inspection of the Minister of Finance of
Nicaragua and of the Secretary of State at Washington.
- 4.
- Said Jarvis shall have at all times the active cooperation of
the Government of Nicaragua. He may also have the right to refer
for advice to the Department of State at Washington, independent
of the Minister of Finance of Nicaragua.
- 5.
- Said Samuel Miller Jarvis shall be empowered at once by
Nicaragua to investigate and report upon the financial and
economic condition of Nicaraguan financial affairs. And to
authorize and to have executed and carried out such action,
legal or otherwise, as shall be necessary to properly protect
and conserve the interest and welfare of Nicaragua; and to
recover whatever may be properly due her on any account or from
any source. And for this purpose he shall have the right to
investigate records and accounts, demand accountings, employ
auditors and legal and other services wherever necessary to
carry out the purposes of this article.
- 6.
- Said Samuel Miller Jarvis shall have proper compensation for
the services performed in pursuance of the duties devolving upon
him under this instrument And shall have reimbursement for all
his proper expenses incident to said work. Said expenses to be
determined and allowed from time 10 time as the same are
incurred. The compensation for services in connection with loans
shall be one per cent upon amount negotiated and approved by the
Department of State at Washington and accepted by Nicaragua. All
compensation for services in all other matters to be agreed upon
between the Government of Nicaragua and said Samuel Miller
Jarvis, and approved by the Department of State at Washington,
D. C.
- 7.
- Samuel M. Jarvis shall have the right to purchase a
controlling interest in the shares of the National Bank of
Nicaragua within a reasonable time to be determined by the
Secretary of State at a price to be agreed upon by the [Page 1052] Minister of Finance
of Nicaragua and said Jarvis, and in case they should be unable
to agree, to be fixed by a person to be designated by the
Secretary of State of the United States.
It is understood that the purpose of this transfer of the shares of
the bank is to assure its development as an institution whose
importance, strength and solidity shall comport with the dignity of
the Republic.
