File No. 817.812/141.

The British Ambassador to the Secretary of State.

No. 393.]

Sir: In 1912 an agreement was concluded by His Majesty’s Government and the Nicaraguan Government by which the latter formally agreed to pay to His Majesty’s Government the sums of £15,800 in settlement of outstanding claims of British subjects prior to that date, also of £4,000 for claims arising out of the revolution of 1912, i. e., a total of £19,800, together with accrued interest. These claims were all for compensation on account of illegal and arbitrary treatment or damage to property.

His Majesty’s Government have hitherto forborne from pressing for payment of these sums in view of the assurances frequently repeated verbally and in writing by the Nicaraguan Government to His Majesty’s diplomatic and consular representatives that the amounts would be paid out of the first money receivable by the Nicaraguan Government.

It would appear that in the course of the past 12 months agreements have been entered upon between the Nicaraguan Government and American bankers providing for the disposal of part of the three million dollars to be received by Nicaragua from the United States under the: Treaty of August 5, 1914, when ratified. Amongst others, the Nicaraguan Official Gazette of August 26 last (No. 194) published the text of two contracts signed in New York on July 16, 1915, between the Nicaraguan Government and the National Bank of Nicaragua and Messrs. Brown Brothers and Company and J. W. Seligman and Company which contain clauses authorizing and commissioning the United States Government to pay certain liabilities direct to the interested parties out of the three million dollars in question. The amount of liabilities so far incurred for payments out of this sum is not clear, but it is thought that it may exceed three million dollars.

In view of the priority of the British claims above mentioned recognized by a formal agreement between His Majesty’s Government and the Nicaraguan Government, I have the honor, under instructions from His Majesty’s Principal Secretary of State for Foreign Affairs, to enter hereby a caveat against the payment by the United States Government to the Nicaraguan Government of the three million dollars provided in the American-Nicaraguan Treaty without any provision being made for the settlement of the British claims in question.

I should add that there are other claims for goods or money supplied by British subjects to the Nicaraguan Government which were [Page 1119] not provided for in the Anglo-Nicaraguan Agreement of 1912, as they have never been disputed by the Nicaraguan Government and for the payment of some of which assurances have also been given by the Nicaraguan Government that they would be met out of the first money received by them.

I have [etc.]

Cecil Spring Rice.