The Secretary of State to the Minister in Nicaragua ( Jefferson )
Department transmitted substance your March 4th 10 A.M. to the British Embassy.9 The British Embassy informs the Department that it has received instructions to state that, if Public Credit Commission are unable to consent to separation of Bank claim from the others, the British Embassy will have no alternative but refuse to [sic] the offer made by the Commission, although they are reluctant to adopt such a course; that result would be that it would become necessary to deal with each claim separately and that they fear that an unfortunate impression would be produced upon the situation as explained; that, however, if the Bank claim was to be separated from the other items, the only result would be that this claim would have to be considered anew, the remaining items being settled and this position would be, in opinion of British Government, preferable to that resulting from reopening whole question Legation claim; that British Government unable to concur in view taken by Commission concerning Bank claim; that this claim was carefully investigated and reduced to Ten thousand pounds with object to facilitating settlement; that, if it should become necessary to refer claim to arbitration, it might be difficult to avoid reopening question of amount; that British Government is anxious to consent to any settlement of Legation [Page 665] claim which could properly be accepted by them having due regard to interests of claimants; that British Embassy requests good offices United States Government with view to securing such a settlement and taking advantage present opportunity to presenting question.
From this memorandum it would appear that the British Government was not willing to accept award of Commission. Department’s position in matter is that it is merely using its good offices to bring matter to attention of Commission, nevertheless, it is inclined to believe that, in order to make prompt settlement of this matter, Commission might settle Legation claim for Eight thousand pounds separating Bank claim and informing British Government that this claim will be referred to High Commission after awards have been paid, and that it will be given consideration and will be settled at such a time as Government of Nicaragua is in a position in the future to make settlement.
Should this arrangement for settlement appear to the Commission to form dangerous precedent, Department prefers to leave matter entirely in hands of Commission and will use its good offices in transmitting Commission’s reply to the British Embassy, at the same time informing the Embassy that Commission is about to proceed with its payments.