417.00/322: Telegram

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

119. Department’s April 22, 4 p.m. paragraph three. Legation believes that jurisdiction of Commission should be extended also to unpaid obligations of the Nicaraguan Government incurred during that period. An example is the loan of the Hibernia Bank to the Chamorro Government.

With reference to provision for payment of claims, the Legation believes that legislation providing for such payment should be coincident with legislation creating the Commission and that such legislation should be presented to the Legation, the High Commission and the bankers and approval obtained before submission to Congress. The present special session will probably terminate early next week. There is obviously not time to prepare adequate legislation, obtain its approval, and have it passed by Congress before the present session adjourns. It is estimated that the work involved would take at least three months. It is therefore recommended that this matter be submitted to Congress at the next regular session.

The Legation believes it important that any legislation intended to provide funds for payment of claims should be considered by the Department and the bankers in connection with the proposed new financial plan.

I shall not discuss this matter with the President until the Department’s reply is received.