817.516/220: Telegram

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

283. Legation’s 280, December 5, 2 p.m.73 President Moncada has asked me to tell you that he will give immediate instruction to his agents in the United States to cease negotiations with the bankers. He would like you to name a person to confer with the present group of bankers or with another group and he states that he will accept any suggestion by you or that person whether it be to continue with the present group if they are willing or will interest another. In the meantime he would like you to ask the present group to continue beyond December 31 until definite arrangements have been made. He states that he is well satisfied with the present bankers, that he is of the opinion that they have been of great assistance to Nicaragua and that his desire is that dividends which the bank and railway [Page 662] may fairly declare without in any way prejudicing themselves be made available to him for public works of which the country is in urgent need. The above has been shown to President Moncada and meets his approval.

There are indications that the President would like nothing better than to have the present banking group remain. Aside from that however the obvious next step would appear to be to induce the bankers to stay on at least for a time. You have already given President Moncada many indications of your confidence in the present banking group and I believe that a suggestion that he request them to continue to serve the Government of Nicaragua would soon be entirely in order and would assist President Moncada in extricating himself from his present predicament. He could make the request through the Department and a favorable report of the auditors would enable him to justify himself before his followers, many of whom are exerting great pressure upon him to nationalize the bank and the railroad.

The President said that he had lost confidence in both … and . . . ., both of whom wished to nationalize the bank and the railroad and that he hoped they would resign.

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