File No. 817.51/861
Minister Jefferson to the Secretary of State
Managua, December 31, 1916, 3 p.m.
Department’s December 22, 4 p.m. Referring to the conference held in Washington, I deemed it advisable to first discuss the propositions outlined therein with President Diaz, General Chamorro and the incoming Minister of Finance, Mr. Benard. I requested Chamorro to make me memoranda of the amount which he considered necessary for running expenses. He will furnish this later. Pie wished me to know that he would enter office without a cent and would therefore need financial aid.
As a result of our several conferences they all wished the Department to bear in mind that they desired some plan whereby the whole indebtedness of Nicaragua might be arranged. They desire to ascertain, before presenting to Congress a bill appointing a fiscal agent with power to act, as to what assistance will be extended by the bankers, how much cash and how much in bonds.
Following are the propositions made by General Chamorro, Mr. Benard and President Diaz:
The Government will pay to the bankers from the treaty money following sums: Interest and sinking fund Ethelburga to January 1, 1917, $756,000; interest to the same date due bankers on the one million dollars, $210,413.70; and the debt of the National Bank $98,014. In return the Nicaraguan Government proposes to give bankers a guaranty on forty-nine per cent of the bank and railroad stock, amortization of the million dollars, in monthly payments of $9,000 for a period of 3 years which service will be placed in charge of the Collector General of Customs. Also the Government will receive the $240,000 which has accumulated since last July and is now being held by the Collector of Customs. Also the National Bank will deliver to the Government the products of the tax money which is being held by the bank for the interest of the emission of the emergency debt.
The Government will organize a commission for the purpose of scaling down as much as possible the debts already recognized by it including Emery claim. Said commission will be composed of Minister of Finance or some one he may designate and an American, preferably Lindberg, or some one that the American Government may designate. President Diaz refused to act stating that his services would be more valuable outside of the commission. In case the commission disagree in resolving amounts of claims the Secretary of State will be authorized to arbitrate the differences or he may designate some one to act as his representative in the final settlement of the matter.
General Chamorro’s purpose is to keep this matter as much as possible in the hands of the Secretary of State and his own. He desires to get prompt action and save all expense possible since a great deal of complaint has been made already here on account of high salaried officials in Government office, principally Americans.