File No. 817.51/1083

The Minister in Nicaragua ( Jefferson) to the Secretary of State


Department’s January 14, 5 p.m. Budget deficit to date for the year 1917 shows about $64,000 in arrears. The Government says that it will only pay $50,000.

From whatever funds used for this purpose, the same procedure as with canal funds should be followed. In addition thereto the two Governments should be in accord, whether the money should be applied pro rata, some claims paid in full, others scaled by varying percentage, or eliminated entirely.

With reference to the above deficit and based on a note just received from Foreign Office, and referring to the Department’s December 14, 4 p.m.,1 if it meets with approval of the Department, and setting aside the $50,000, I will address the Minister for Foreign Affairs in the following sense:

The money in the hands of Ham shall be transferred to the order of the High Commission in Managua to be credited to a special account for the Public Credit Commission awards as well as the available canal functionary monies, these latter funds to be left in the United States Treasury for the present. Awaiting decision as to the advisability of their transfer to the National Bank of Nicaragua in Managua or designating a temporary depositary in the United States. Disbursements shall be made from this account by means of checks or drafts to be signed by the two active members of the commission.

I believe that payments should begin as soon as possible.