File No. 417.00/253

The Commissioner on Public Credit ( Lindberg) to the Secretary of State

interim report no. 4

Sir: In reply to a recent cable sent to the American Minister I have the honor to transmit to you herewith three copies of the certified awards in connection with six American claims disallowed in toto and one disallowed in part, with the reasons therefor shown in detail.1

The commission has given as much or more study to the rejected claims than to others, not only in accord with the principles enunciated but many other incidents, which it is deemed inadvisable to incorporate in its public records, for reasons which can be understood.

The rules of prescription were not detailed in the report of February 4, but the four followed in general were those in reference to Mixed Claims Commission, war claims of 1912, customs bonds, and general prescription of legal rights left dormant or unexercised for a considerable length of time.

The commission is in existence but it is not accepting new claims. Its work is so dovetailed with the High Commission that not until payments are finished will it cease its functions.

Attention is invited to the fact that the commission, due to shortness of time, to lack of office personnel and appropriations, and that the bulk of investigation and work of analysis has fallen upon and had to be assumed by one member, did not permit of preparing long legal opinions, findings and statements of facts in each individual claim, but every decision made after study and application of rules.

The only reason for the probable success of its work is loss of hope on part of creditors and the extraordinary receipt of canal funds. The commission has relied upon and expects the support of the Nicaraguan [Page 846]Government in scaling claims of natives and of the United States Department of State in scaling claims of Americans and the foreigners. The law creating the commission gives it the authority to judge and fix the internal debt, and this fact together with the incidents surrounding its creation not only has inspired confidence in it among foreigners and natives but its awards will have great weight not only in the executive branch of the Government but also in the courts, and the minority creditor who does not come in is bolstering himself up with false hopes for an uncertain future. No tribunal or commission, no matter how strong or powerful, can compel the recalcitrant creditor to accept unless he so desires. Awards have not been officially sent to creditors due to uncertainty as to amount of cash available.

Furthermore, the commission has made friendly agreements with creditors which are binding and is loath to reconsider any award except under the most urgent circumstances, amounting to denial of justice. Confident none such can be found.

The total amount of awards of the commission are as follows:

In cash $1,426,696.79
In bonds 3,800,000.00
Total $5,226,696.79
Amount of cash available:
Customs revenues in hands of Collector General of Customs $1,092,695.96
Funds in United States as per advices from financial agent 334,000.83
Total cash $1,426,696.79
Authorization by Congress for the issue of guaranteed customs bonds in an amount not to exceed $4,000,000.00
Customs revenues on hand with Collector General of Customs pertaining to last half November and December, 1917 $66,992.94

In the amount of bonds awarded is a small amount set aside for contingencies, concerning which you were advised by cable.

The following is a copy of a cable, signed by all three members of the High Commission, sent to the Nicaraguan financial agent, to be presented to the State Department:

The High Commission unanimously request the State Department to authorize them to begin payment of awards of Commission on Public Credit. The wait is causing discontent, interest is creeping up and agricultural operations are suffering from lack of funds. If budget deficit is delaying matters, why not interpret plan to begin functioning January 1, thus leaving available the balance of customs revenues of November and December, such budget deficit to be expended under rigid examination by High Commission. If any foreign diplomatic claim or others are delaying matters, commission will set aside small reserve enough for contingencies. Mere fact of beginning payments will exert favorable influence on a few strong creditors who have ideas of holding out.




Respectfully submitted,

A. F. Lindberg

  1. Not printed here. See telegram of March 26, 1918, 2 p.m., from the Minister in Nicaragua, ante, p. 843.