File No. 817.51/865

The Secretary of State to Minister Jefferson


Bankers transmitted to Department copy of cable which they received from Foreign Bondholders dated January 5. Your opinion is requested as to statements made in this cable:

Committee very reluctant entertain any further reduction or postponement but if requested to do so by United States Government would be willing to consider arrangement on following basis: Part payment coupons next two years in cash and balance in interest-bearing certificates redeemable within period to be agreed. Full service debt under 1912 settlement to be resumed as from 1st January 1919 and if customs receipts exceed two hundred eighty-eight thousand pounds per annum fifty per cent of excess to be applied to amortization of funding certificates and when these are discharged to payment arrears sinking fund on bonds. If any new loan is contracted by Nicaragua any outstanding funding certificates and arrears sinking fund on bonds to be paid out of proceeds. No other claim to receive more favorable treatment than bondholders’ claim and bondholders’ preferential rights to be maintained. Acceptance of any such arrangement to be absolutely conditional on all arrears to 1st January 1917 being paid out of Treaty money before February 15. Writing fully. Signed Council Foreign Bondholders.