817.1051/304

The Chargé in Nicaragua (Hanna) to the Secretary of State

No. 1066

Sir: With reference to the Department’s instruction No. 519 of May 29, 1929, (received here June 29, 1929) in regard to the amendments proposed by the Nicaraguan Government in the Agreement for the establishment of the Guardia Nacional, I have the honor to submit for the Department’s consideration the following developments in this matter which seemingly were unknown to the Department when the instruction was drafted:

The instruction states near the bottom of page 2 in connection with a discussion of the strength and cost of the Guardia that “it would seem advisable that a further study of this matter should be made in the near future by the Nicaraguan Government, the American Legation and the Chief of the Guardia, in order that both Governments may be more fully informed regarding the present needs of the organization, and in order that arrangements may be made to provide for its financial requirements in a satisfactory and permanent manner”, and a reference to the study thus proposed is made in the drafts of the notes to be exchanged by the Legation and the Nicaraguan Government, copies of which were transmitted with the instruction. A study of the nature indicated was nearing completion when the instruction was received by the Legation.

The circumstances which gave rise to the study were as follows; the cost of the Guardia has been for some time a subject for criticism by the press of Managua directed against President Moncada and indirectly involving the marines as well as the Government of the United States. More recently the criticism took on added violence when it became known that General McDougal had asked for and the President had authorized an allotment of ¢1,000,000. (one cordoba equals one dollar) for this purpose annually, previous allotments having been made on a basis of ¢760,000. annually. The criticism became still more serious shortly thereafter when General McDougal requested that ¢650,000. of the surplus on July 1, 1929, be set aside for the Guardia. Additional detail in this connection was reported in the Legation’s despatches 1056 and 1057 of June 25, 1929.56

This criticism, made by the press of Managua irrespective of party affiliation with one exception, greatly disturbed President Moncada. [Page 638] He had touched upon the subject on a number of occasions when I was conferring with him on other matters, and on June 24, when the latest attacks became most virulent, he asked me if I would be willing to assist him by making a thorough investigation of the whole subject of the expenses of the Guardia. His request took the form of a strong appeal for my personal as well as official cooperation. He asserted his determination to defend the Guardia against every unjust attack and to maintain it at a strength commensurate with its duties and added that he would do this even though there was no Guardia Agreement and solely because he thinks it absolutely essential. He said that he could not disregard, however, the storm of criticism and protests and that it was essential for all concerned that the strength and cost of the Guardia should not exceed the absolute necessities of the situation.

I immediately conferred with General McDougal and, as was to be expected, I found him no less desirous than myself of cooperating with President Moncada in the study which he wished to have made. General McDougal lost no time in making a thorough study of the question in all its phases, and our conclusions in the matter were embraced in the seven points mentioned on the enclosed memorandum. It will be noted that the enlisted strength of the Guardia is not to exceed 2,000 men. This number is actually the present enlisted strength of the Guardia although that fact is not stated in the memorandum. An effort is also to be made to make a further reduction of 200 in the enlisted strength but this may be stopped at any moment by the Chief of the Guardia if it becomes apparent that such further reduction is inadvisable.

It will also be noted that by points five and six President Moncada agrees to the disbandment of the Hacienda Guards and the Voluntarios. On more than one occasion recently I have taken advantage of opportunities to remind President Moncada of the undesirability of these two organizations and he had told me that he desired to get rid of them. In the last days of June he gave the Minister of Hacienda an Executive Order to disband the Guards beginning on July 1. I also told President Moncada, in the course of the study that General McDougal and I made of this matter, that the disbandment of the Voluntarios would be an essential point in any conclusions that we would reach.

Under point three of the memorandum the total strength of the Guardia may be restored to what it now is or even to a greater strength if changing conditions should make such an increase necessary.

Finally, point seven of the memorandum is intended to meet the keen desire of the Nicaraguan authorities that the Guardia should [Page 639] make more effective use of the Jueces de Mesta, a desire in which General McDougal has concurred provided a way could be found to place the Jueces de Mesta more directly under the control of the Guardia. President Moncada has stated that he believes this can be done.

There will be an immediate saving to the Nicaraguan Government of ¢100,000. annually on the cost of the Guardia, and an additional annual saving of approximately ¢400 per man for such reduction in the enlisted strength as may be made under point 2 of the memorandum. There will be a further saving of about ¢30,000. annually with the disbandment of the Voluntarios and of probably ¢50,000. annually by the disbandment of the Hacienda Guards. The total saving for the Government should be at least ¢200,000. and may reach ¢250,000. A further advantage of considerable immediate importance to President Moncada is that General McDougal will now require ¢550,000. from the surplus available on July 1 instead of ¢650,000. which he recently requested, thus setting free an additional ¢100,000. of the surplus for other purposes.

I called upon President Moncada today accompanied by General McDougal and gave him a copy of the enclosed memorandum as expressing the result of our study. He agreed to all of its provisions without hesitation or reservation and expressed his appreciation and gratitude for the cooperation we had given him. I directed his special attention to points five and six and he stated in reply that the Hacienda Guards have just been disbanded by Executive Decree and that the Voluntarios will also be disbanded without delay. He said that he desires the Guardia to take over the major part of the duties of the Hacienda Guards but that a small force of special agents in the nature of detectives, plain clothes men without military organization, will also be employed. I also understand that the President’s only serious problem in connection with the disbandment of the Voluntarios is to find some position, temporarily at least, for General Escamilla.

In view of the developments set-forth above, it would appear that an appropriate change should be made in the second paragraph of the draft note to be presented by the Nicaraguan Government. For the same reason the Department may desire also to make an appropriate change in the third paragraph of the note which refers to the Hacienda Guards.

General McDougal suggests with respect to paragraph four of the draft note concerning Articles II and VIII of the amended Agreement that its last sentence be so modified as to convey the following meaning:

It is understood that this term refers to the Ministers of Gobernacion and Hacienda but that all orders issued by or through them shall have their signatures as well as the signature of the President himself, [Page 640] and furthermore it is understood that all orders for the Guardia will be issued only through the Chief of the Guardia.

General McDougal fears that the Ministers mentioned may issue orders to him on their own initiative and responsibility without consulting President Moncada, and his suggestion is for the purpose of preventing this if possible.

With respect to the penultimate paragraph of the draft note regarding the execution of Article V of the Agreement I am in some doubt whether the term “Common law offenses” is an entirely accurate description in Nicaragua of offenses in mind.

I will await the Department’s further instruction before taking up this matter with President Moncada.

I have [etc.]

Matthew E. Hanna
[Enclosure]

Memorandum

1.
The Guardia will be maintained at an enlisted strength of 2,000 men at an annual cost that will not exceed 900,000 cordobas.
2.
An effort will be made to make a further reduction of 200 in the enlisted strength and a corresponding reduction in the cost, on the following basis and understanding:
(a)
The reduction to be made by natural losses, except that men whose enlistments expire and who are desirable will be reenlisted.
(b)
This additional reduction may be stopped at any moment if it becomes apparent to the Chief of the Guardia that the Guardia is being reduced below the absolutely necessary minimum for the performance of the duties imposed upon it, and the total enlisted strength of the Guardia may, if necessary for the performance of those duties, again be increased to a total of 2,000 enlisted.
3.
The total enlisted strength of the Guardia and its cost may be increased or decreased in the future to meet changing conditions, and Paragraphs 1 and 2 above are subject to this condition.
4.
The commissioned strength of the Guardia will be kept at a minimum for efficient administration and operation at all times.
5.
The Hacienda Guards will be disbanded in accordance with Executive orders already issued and their duties will be taken over as necessary by the Guardia.
6.
The existing force of Voluntarios will be disbanded and replaced by the Guardia.
7.
A study will be made to bring about effective cooperation of the Jueces de Mesta with the Guardia Nacional.
  1. Neither printed.