File No. 817.51/573.
The American Minister to the Secretary of State.
Managua, Sept. 16, 1913.
Department’s September 13. President Díaz says the option is worth more than $1,000,000, but in view of the dangerous economic conditions and the failure to secure funds elsewhere, he wishes the bankers to exercise their option on the 51% of the railroad.[Page 1054]
The earning capacity of the road amounts approximately to 10% on $3,000,000. On this basis I believe it worth fully $3,000,000.
Acting Manager Bennett says the value of the road is slightly greater than at the time of granting the option, owing to small additions to rolling-stock and improvements, and that the annual earnings have increased.
Kindly inform me whether the contract contemplates extension of the road and whether provision for expending the $1,000,000 by the Nicaraguan Government will be made.