763.72113/887: Telegram

The Acting Secretary of State to the Chargé in Guatemala (Thurston)

For Ames.

Referring my February 28, 1 P.M.22 think it desirable for you to proceed immediately to Honduras and report fully as soon as possible prospects of success. Believe it will be impossible to induce Honduranean Government to pass desired legislation for liquidating German interests unless, 1. It can be arranged to have American interests purchase and operate business now German owned and to replace German credits as the commercial life of Honduras at present is financed largely directly or indirectly by Germans. 2. Also may be necessary to arrange if possible to have American banks refund debt of Honduranean Government under arrangements which would satisfactorily guarantee payment of interest and principal by Honduras as it is reported difficult for latter to obtain money anywhere except from private German banking houses in Honduras. Believe it may be possible to interest banks here in this proposition. After preliminary discussion with Honduranean [Page 401] Government, report fully your opinion as to necessity of arranging for either one or both of the above propositions in order to secure desired legislation. In the meantime will endeavor to sound out interests in this country and will notify you as soon as possible if they are disposed to consider above favorably. If there appears to be no reasonable possibility of success in Honduras believe you should proceed from there to Nicaragua where we believe it will be easier to obtain desired results though situation of less importance than Honduras. Ely. Repeat to Tegucigalpa Honduras.

  1. Not printed.