File No. 817.51/705.

The Minister of Nicaragua to the Secretary of State.

As I had occasion to inform your excellency in a verbal conversation last Thursday, it has not been possible to reach with the bankers, Brown Brothers & Co. and J. & W. Seligman & Co., a satisfactory understanding which would fill completely the purposes of the Government and that are based in trying to improve the terrible economical crisis that the country is at present suffering under.

In the impossibility of obtaining a loan, my Government finds only one solution possible, which is to issue an indispensable amount of national currency (bills), the equivalent of one and a half million of córdobas (which equals the dollar), and to guarantee their emission; and in order that there should be no depreciation of the bills [Page 952] emitted, the Government will guarantee this issue with the product of a tax that will produce five hundred thousand dollars (córdobas) annually, eighty thousand córdobas from the tax on the abattoirs, and which can be duplicated, and twenty thousand córdobas from the excise tax.

Besides, as from this loan a part of the European creditors will be paid and who have asked the Government to make the issue and offering to accept the bills at par with the dollar, the amount so paid to the creditors can be reentered into the Fund of Conversion when the Canal Treaty is ratified.

My Government respectfully requests the opinion of your excellency on this subject matter.