817.51/1732: Telegram

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

45. Your 50, February 20 [21], 2 p.m.

Department in principle has no objection to suitable arrangements for providing money to the Diaz Government. While urgent need of funds is recognized, Department would not nevertheless view with favor certain types of arrangements that might conceivably be proposed. For example, the Department considers that the present is not an opportune time for the Nicaraguan Government to sell the bank or railway. In principle, however, it might be possible to devise some means whereby these might be pledged as security for temporary loan, but without commitment as to ultimate disposition thereof by the Government.
You will appreciate that while Department has raised no objection to original Keilhauer proposal Department has not been consulted regarding latest proposal outlined in your No. 50, February 20 [21], 2 p.m. concerning which Department’s views in the light of present information are as stated above.
In view of competition between Keilhauer and other interests for whom Rosenthal speaks, Legation will of course be impartial and will inform all interested parties including the President that before final arrangements are concluded Department must be fully informed of particulars thereof, pending which time there is no commitment other than in principle.
Cable immediately amount of receipts from customs and other sources since January first and also after consulting Ham and Hill indicate probable yield during next two or three months. Department also will be glad to have available data as to actual and prospective expenditures during the corresponding periods, also estimate of outstanding urgent obligations and minimum credit needs.