File No. 817.51/989b
The Acting Secretary of State to Minister Jefferson
Washington, August 2, 1917, 5 p.m.
You will please inform President Chamorro that the Secretary of State will be prepared to approve the payment to the Government of Nicaragua for back salaries of a sum between 200,000 dollars and 250,000 dollars immediately upon the pending financial plan being favorably acted upon by the Nicaraguan Congress, and being adopted in legally binding form.
You will informally state to President Chamorro in connection with the foregoing that it was found impracticable to make any payment out of the Treaty fund to the Government of Nicaragua prior to the final adoption of the financial plan, as certain creditors of Nicaragua are claiming that a statute of the United States makes it unlawful for the Government of the United States to pay money to Nicaragua while their debts are still unsatisfied. These creditors, so Department is informed, will, however, withdraw their contentions under the statute as soon as the plan is finally made effective. The precise amount which the Secretary of State will pay to the Government of Nicaragua for back salaries will depend on the date when the financial plan becomes effective, and to which interest must be computed, and will also depend on whether the National Bank debt is reduced through the sale by Nicaragua of its stock in this bank, or through an application of the Treaty money.