File No. 817.51/1015
Minister Jefferson to the Secretary of State
Managua, October 12, 1917, 9 a.m.
The Department’s October 6, 2 p.m. I informed Chamorro regarding status of Emery claim and advised him to cable instructions to his representative to accept financial plan after it is approved by the Department. This I believe he will do. He is extremely anxious to receive draft of plan at the earliest possible date since his Congress is daily adding to his expenses.
British Minister, September 21, 1917, directed a note to the Minister for Foreign Affairs in brief as follows: In acknowledging the receipt of a notice to the effect that the Legation claim had been registered with Public Credit Commission he states that British Legation claim was finally settled by default for nineteen thousand eight hundred pounds with interest to date which would bring claim to twenty-five thousand five hundred pounds and that no modification of the direct responsibility to his Government to pay the claim in full can be accepted pending any appropriate instructions from His Majesty’s Secretary of State and that he would make stipulation accordingly. Nicaraguan Minister for Foreign Affairs informed me that he only acknowledged the receipt of this note.
British Minister apparently is still negotiating with the Public Credit Commission.
While the French, Italian and Spanish have not recently directed notes to the Minister for Foreign Affairs they allege their former notes are as formal as those of British Legation. Germans have uniformly submitted under protest against any revision. The Commission is endeavoring to make equitable settlement of this class of claims and has made offer to settle British Legation claim for 9,000 pounds, percentage of cash and bonds later to be agreed upon. Regarding all the above claims see exchange of notes between the Nicaraguan Government and other Foreign Governments reported in Nicaraguan Report on Foreign Relations, Volume One, October 1911 to December 1913.
I discussed question of further guaranty issue of internal bonds with President Chamorro and suggested to him that the same be supervised by High Commission. He apparently is agreeable to this [Page 1144] but desired to know if the same persons already designated by the Secretary of State and himself were to supervise the bond service.
In order to make the bonds attractive and provide for payment of interest and amortization at 6% it will be necessary to apply the proceeds of the twelve and one-half per cent surtax on the general import duties, but under new tariff, which will approximate one hundred thousand dollars annually and also all of proceeds of tax on capital one hundred and twenty-five thousand dollars and in addition to contingent amortization as per plan. Chamorro suggests that Nicaragua’s share of bank and railroad dividends be also applied.