Bile No. 817.51/853
[Inclosure 1]
Minister Jefferson to the Minister for
Foreign Affairs
No. 166
American Legation,
Managua,
November 15, 1916.
Mr. Minister: Referring to my note F. O.
155, under date of September 5, 1916, and your excellency’s reply
thereto of September 30, 1916, which was only received October 23,
1916, I have the honor to further inform your excellency in
connection with this matter that on account of the delay in this
important matter reaching the Secretary of State and also during the
interim
[Page 914]
Mr. Cuadra,
financial agent of Nicaragua, under date of October 30, 1916, having
transmitted copies of contracts concluded by him October 26 on
behalf of the Nicaraguan Government with Brown Brothers and Seligman
and the National Bank, extending loans and interest which shall be
paid out of the money which Nicaragua will receive under this, now
therefore, pursuant to the Department’s telegraphic instructions of
November 13, 1916, 4 p.m. requesting me to again bring this matter
to the attention of your excellency’s Government in the same terms
to contrast serious defect in the last paragraph [sic] of my
communication to your excellency of September 5, 1916, which reads
as follows:
In affecting an arrangement with the Nicaraguan Government,
as to the disposition of the funds in question in the manner
prescribed by the treaty, it is the intention of this
Government to exercise its best judgment in seeking to carry
the purposes of the treaty with respect to the application
of these funds on Nicaragua’s indebtedness or for other
public purposes. Therefore the Department can take no
cognizance of the above-mentioned contracts at this time,
further than to inform the Nicaraguan Government of its
views respecting them as above briefly indicated and to
request that the Government of the United States may receive
from the Government of Nicaragua a statement regarding its
action in relation to these contracts which it appears to
have taken without proper regard for the stipulations of the
recently ratified treaty.
This further request is made in order that a full and complete
explanation may be made of its action in regard to those contracts
of July 31, and October 26, 1916, thus obviating unnecessary delay
attendant upon this important matter.
Accept [etc.]
[Inclosure 2—Translation]
The Minister for Foreign
Affairs to Minister Jefferson
National
Palace,
Managua,
November 20, 1916.
Mr. Minister: I have the honor to reply to
your excellency’s note of the 15th instant, relative to the same
matter to which your former note of September 5 referred, which
caused my reply of the 30th of the same month.
Your excellency is pleased to state in your note mentioned that, on
October 30 last, Mr. Cuadra, financial agent of Nicaragua,
transmitted to the Department of State of the United States copies
of contracts concluded by the same Mr. Cuadra, in the name of my
Government, with Brown Brothers & Seligman and the National
Bank, in order to extend the time of the loans and interest, which
will be paid out of the money which Nicaragua will receive.
Therefore, your excellency, pursuant to telegraphic instructions
from your Government, calls my attention to the matter in like terms
to those of your former note, which you wrote requesting complete
explanation of my Gvernment in regard to the contracts of July 31
and October 26, already cited.
In my note of September 30 last, I had the honor to make the
following declaration to your excellency:
In regard to the said contracts and in reference to the
observations contained in the note to which I am replying, I
have the honor to state to your excellency that my
Government will give, on its part, faithful compliance with
the stipulations contained in the Treaty which has just been
ratified, relative to an interoceanic canal, as they must be
interpreted; and duly appreciates the good disposition which
the United States Government has to choose the most adequate
means to fulfill the object of the Treaty in regard to the
disbursement of the funds which are to be applied to the
nation’s debts or to other public purposes, when the
agreement between both Governments concerning this
disbursement can be effected. My Government expects, on
these grounds, that from the previous agreement arrived at
by the two contracting parties, as to the use of the funds
proceeding from the aforesaid Treaty, there will be a
conciliation of Messrs. Brown Brothers & Co.’s and J.
& W. Seligman & Co.’s interests with those of the
other creditors of the country and with the end in view for
the progress and welfare of Nicaragua, as considered in
Article III of the Treaty so many times mentioned.
To that categorical explanation, which I confirm in this note, I must
add that, on October 21, I sent to the Legation of the Republic in
Washington a communication setting forth in synthesis the
correspondence with your excellency regarding the disbursement of
the three millions stipulated in the Treaty which has just been
ratified, and giving notice that they should abstain from all action
in the matter, whose settlement the two contracting Governments
would arrange, when the opportunity should arrive, conforming in all
things to the stipulations of the convention.
[Page 915]
My Government considered the instructions sufficient which were
communicated to the Chargé d’Affaires of Nicaragua, deeming it
unnecessary to state it in respect to the financial agent, because
he has no diplomatic representation before the Department of State
of the United States.
However, the orders have already been repeated by cable which
directed the abstention from any act whatsoever which might not be
in harmony with what was decided by my Government in order to give
faithful compliance to what was established in the Treaty, and
hereafter will not take any step which might appear in disagreement
with what has been declared by this office.
In closing [etc.]
