File No. 817.51/683.
Minister Jefferson to the Secretary of State.
Managua, September 23, 1914.
Department’s September 14. The President reports no means of reducing American salaries. Bill suspending for four months payment of interest on Ethelburga loan and bankers’ liens upon customs has been passed by lower House. On receipt of this information bankers have directed Collector of Customs to remit usual monthly amounts and Manager of the National Bank to suspend sale of gold drafts for córdobas. This is not generally known but will cause intense resentment. Period for conversion of billetes, or national paper money, into gold expires to-day. About 800,000 pesos still outstanding.
[Page 948]In view of the present situation, President Díaz has called a conference of forty “notables” to-morrow. I have suggested to him the extreme advisability of delaying action until after careful consideration of measures acceptable to all parties concerned. The Minister of Finance assures me, however, that it is not impossible that a new issue of billetes will be issued forthwith. Salaries of army, police, and telegraph operators several months in arrears, and dissatisfaction growing. I suggest that present use of even $50,000 to $75,000 for part payment of these, if done under supervision of Bank, may go far to hold back trouble for, say, sixty days, allowing time for passage of Canal Treaty.