File No. 817.51/973
The Acting Secretary of State to Minister Jefferson
Washington, July 12, 1917, 7 p.m.
Your telegram July 4, 9 a.m. The recommendation numbered one is agreed to and the plan may read: “The Government of Nicaragua agrees that it will, et cetera,” in lieu of, “The Congress shall.”
Recommendation numbered three is agreed to, except that bankers desire National Bank debt to be paid and not dealt with as internal debt mentioned in this recommendation three and that treatment of Emery claim is left for future determination.
Recommendation numbered four is agreed to, and item of 75,000 dollars may be increased to 80,000 dollars.
Recommendation numbered five cannot be accepted in precise form submitted, but that portion of the plan relating to internal revenues may be modified to read as follows:
It being understood that the internal revenues above mentioned shall not be less than 60,000 dollars per month, and that if during any three months period they should aggregate less than 180,000 dollars the collection of such revenues will thereafter be made by the Collector General of Customs, unless the 1909 bondholders and the holders of Treasury bills agree to accept some other method for increasing or bettering these revenues.
Recommendations numbered two and six cannot be acted on immediately, but neither of the matters therein discussed are dealt within, or necessarily form a part of, the plan embodied in the Department’s telegram of June 21, 5 p.m., and in the Department’s opinion this plan as modified in accordance with the foregoing can now be finally accepted and a formal contract drawn up for execution with the interested parties.
[Page 1132]In respect of recommendation numbered six the bankers agree at once that at least fifty per cent of the direct tax on capital may be applied to the service of proposed internal bonds. In regard to the balance of the direct tax and the suggested surcharge on imports no decision can be given until after careful consideration of the economic effects thereof.