817.51/1981: Telegram

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

303. Department’s 158, August 3, 4 p.m. Rosenthal left here yesterday and will reach New York about August 20. He is carrying letters from President Diaz to the bankers expressing the President’s interest in the loan and in financial reform. He will visit the Department. The President said yesterday that he felt that it would be a mistake to postpone the new financing even though the bond market now might [Page 556] not be entirely satisfactory and that he was fully prepared to accept the bankers’ plan so far as he understood it. He again said that a small initial loan would be satisfactory provided that the construction of the railroad were assured and he concurred in our view that a good financial plan embracing control of all revenues would in itself offer reasonable assurance that the Republic’s credit would make future issues possible as needed. He referred, however, to the difficult and embarrassing position in which he was placed by his ignorance of the plan which the Department and the bankers have been discussing and asked if we could not obtain a copy of the plan for his examination.

Could not the Department send me via Tegucigalpa a copy of the latest draft of the financial plan to be shown to the President with the explanation that it is merely intended as a basis for discussion and has not received the Department’s approval? He would then have an opportunity to study it by the time that Rosenthal reaches New York. I do not think that he would wish to ask the bankers for a copy of the plan through Cesar. We all feel that an especial opportunity for a constructive program for Nicaragua will be lost if action is postponed until after the election and General McCoy feels that such action would contribute immeasurably toward the success of a fair and free election, particularly in view of the very evident plan of the Conservatives to use money in the elections.

Eberhardt