File No. 817.51/677.
Minister Jefferson to the Secretary of State.
Managua , September 10, 1914 .
Your September 9. Congress met in extraordinary session to-day. In a long conversation with President Diaz and later with the Minister of Finance, both emphatically held that it would be impossible [Page 947] to accede to the Department’s desire for postponement of contemplated action. Government employees unpaid, failure of crops, shortage in customs receipts, lack of funds for moving coffee crop, importunate creditors, given as reasons for immediate legislative action. The President’s address proposes reduction in budget from $3,500,000 to $2,000,000 United States gold, cutting all salaries. Both agreed not to take any action toward a new bond issue or issuance of paper money without prior notice to the Legation. They insist, however, that the moratorium must be put into operation for four months, affecting all debts and interest, including Ethelburga. Minister of Finance states that the Department has already taken up this last with General Chamorro and raised no objection. He complains bitterly against high salaries paid to Americans here, while Nicaraguan employees of the Government are on small salaries and many unpaid.