File No. 817.51/1084
The Minister in Nicaragua ( Jefferson ) to the Secretary of State
Department’s January 14, 4 p.m. Nicaraguan Government has authorized issue of bonds not to exceed $4,000,000 under ruling of High Commission. Due to lack of knowledge as to results of final offers on English, Italian, and French claims of diplomatic character, Debt Commission presents the approximate total of $5,200,000.
Italian and French representatives recommended their Governments to accept awards. British Legation claim is still pending. Last offer was £8,000 cash and £2,000 bonds. Spanish claims are practically settled with consul. Believe friendly agreements will be made. Complaint has been made about Dutch diplomatic claim but it deserves no better treatment than other Dutch claims.
Mixed Claims Commission judgments have been untouched in the hands of original holders and are to be paid approximately 15 per cent cash and 85 per cent bonds, while claims in the hands of third parties and speculators have been scaled to 50 and 30 per cent. Claimants who have not presented data as to their judgments have been protected and a reserve set aside. The commission has refused to increase amount awarded on Mixed Claims Commission judgments or to reopen cases where claim was ruled out.
Following being therefor partial payment parliamentary documents practically decided on which may be affected as to decision on budget deficit for 1917; on actual cash loans to Government 45 to 50 per cent in cash of principal only; on merchandise claims after scaling 30 to 35 per cent in cash; tobacco certificates 30 per cent in cash principal only; on Government budget salaries last four months of 1916 given preferential treatment all cash; on periods prior 20 per cent scaling and all cash salaries only. Other budgetary obligations such as services, subventions, and pensions scaled heavily; all awards of $100 and less to be paid in cash. Unpaid and accrued interest on all Government obligations has been entirely eliminated. All Government documents of credit sold or transferred have been scaled.
Of a total of 12,008,030 creditors claim $6,000,000 which have been reduced to a little over $2,000,000. Awards are to be settled by payments in checks or drafts and delivery of interim receipts pending receipt of definite bonds.
[Page 827]Sequence of payments as follows: First, creditors who claim over $100,000; second, Senators and Deputies of Congress now in session who have claims; third, the Department of Managua and thereafter by Departments according to the amount of debt. Payments to claimants are to be made direct as far as possible. Cannon and Groce claims are to be paid in full in cash.
Documents in the hands of direct heirs are not scaled on that account except in holders of Morales loan. In bankruptcy cases where claimant forced to accept Government documents and at less than amount of his proven claim, some consideration is given where the information presented can be relied on. This will help foreign trade credits. Seven, hundred war claims of 1912 settled, each on its merits, and very few command more than 40 per cent.
Balance of customs revenues on November 15 held by Ham and available for transfer to Nicaraguan Government is $1,092,695.96.