Papers Relating to the Foreign Relations of the United States, With the Address of the President to Congress December 2, 1913

File No. 817.51/613.

The Nicaraguan Minister of Finance to the Minister of Nicaragua at Washington.

undated

[Memorandum—Summary—Translation.]¹

There seems to exist in Washington an erroneous idea of the political and economic situation of Nicaragua.

As the loan secured is to be employed preferably in payment of the indebtedness to the bankers, increasing the capital of the [National] Bank, and monetary conversion, with $100,000 for the Mixed Commission, there will remain for the use of the Government only $640,000 to cover urgent administration expenses embracing salaries, liquor and tobacco bonds, maize imported from Salvador during the revolution at a cost of $35,000, payments to Cartago Court and Central American Bureau, and other expenses entailed by agreements.

This explains the insistence that no reserve be made for the account of the Mixed Commission, and you can easily understand what will happen if $300,000 more is drawn for this Commission, which is not sitting at present.

As evidence of the economic crisis in the country, note is made of the fact that all commercial houses in Granada and other sections are on strike; that all are suffering from loss of credit and cannot make importations, which in turn lowers our customs receipts and prolongs the economic crisis.

To meet this crisis the Government wishes to advance $500,000 which is not possible if $100,000 should be diverted for the Commission.

The purpose of the Department of State to set apart 25% or 20% of the customs receipts for the Mixed Commission would be disastrous. The present budget as passed shows a deficit of $170,000 which, with a decrease of imports, will probably amount to not less than $1,000,000. If a reduction of 25% is made you can readily judge whether the work of the administration can be carried on during the present year.

You may assure Mr. Bryan that all financial matters have been settled through the Bank and all claims submitted to the Mixed Commission, those that have been paid directly by the Foreign Minister having been based on the rulings of the Commission.

1. The original was shown to the Chief of the Division of Latin-American Affairs of the Department of State; the translation of the summary was read to the Secretary of State and filed December 13, 1913; it is not dated.