817.51/1732: Telegram

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

50. Legation’s 41, of February 11, 11 a.m. American backers of Keilhauer have apparently refused his proposition and he now proposes to arrange a personal loan on the condition, among others, that [Page 426]Diaz sell him 51 percent of the stock of the National Bank of Nicaragua for the $300,000 which it cost the Government some two years ago. Badly as Diaz needs funds and anxious as he is to sell the bank to any strong reputable American banking group he has refused to consider this offer which might place the $2,500,000 reserve in control of parties of unproven stability. Diaz still hopes to make an immediate temporary loan and later larger ones with the New York bankers now managing this bank regarding which the bankers will likely be approaching the Department.