File No. 817.51/855

Minister Jefferson to the Secretary of State


Department’s December 12, 4 p.m. Fully discussed Nicaraguan economic situation with President Diaz. He informed me that since he would be President for only fifteen days more, he would prefer to let the entire matter go over until General Chamorro becomes President and have me make all necessary arrangements with him.

In going over the list of claims with the President, I called his attention to dire necessity of scrutinizing every claim and the great importance of ascertaining, before any final steps are taken for payment of internal or external debts, the validity of the claims. For instance, the claims of 1912 would easily stand a cut of fifty to sixty per cent, and many others in proportion. I suggested to him that the Secretary of State and the Minister of Finance make an offer of settlement in such a manner and I know the claimants would be glad to get their money. He agreed with me and also informed me that he would give me every assistance in his power to help bring about such an arrangement and if necessary he might remain here or go to Washington to aid the Legation in such a plan of settlement of Nicaragua’s indebtedness.

My lowest estimate of Nicaragua’s indebtedness is approximately, internal debt and interest, $8,900,000, and external debt and interest, $8,650,000 to December 31, 1916.