817.51/1735: Telegram

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

54. Department’s telegram 45, February 23, 5 p.m. Keilhauer proposition apparently definitely refused. Rosenthal group only one now known to be directly interested and it is hoped that they or any other reputable bankers may be induced to make an immediate loan to Diaz government. He understands that bank and railroad should not be sold now; that they may however be pledged as security but before any final arrangement is concluded the Department must have full particulars.

The following figures of receipts and expenditures have been received from the customs bank and High Commission. Receipts for January and February: Customs, $260,000; internal revenue, 130,000; war loans, 131,000; surplus revenues, 215,000. All these receipts have been spent except some 50,000 accruing to surplus revenues. Estimated receipts for the March, April, May: Customs, 340,000; internal revenue, 225,000; from the recent increases in taxes, 100,000.

Expenditures accrued for troops, 150,000; loan from Keilhauer, 50,000; loan from Commercial Bank, 35,000; provisions from local merchants, 50,000. Estimated expenditures for the March, April, May: budget, 425,000 plus 10,000 daily for the Army so long as it must be maintained. Assuming that the Army may be disbanded in a month and that war claims may be paid by bond issue some 400,000 to 500,000 are estimated as necessary for urgent obligations and credit needs. Excess customs deposits and internal revenue will of course not be available till July first.