File No. 817.51/573.

The American Minister to the Secretary of State.


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.

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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.

(Not signed) [