817.154/62a: Telegram

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


126. In view of the existing financial situation in Nicaragua and the relations between the Government of Nicaragua, the Banco Nacional de Nicaragua, and the railroad management,4 the Department desires that Commander Warfield should not propose any large road construction program to the President without first giving the [Page 702] Department an opportunity to consider it and particularly to consider the manner in which funds are to be obtained. The Department feels that it will be to the best interest of Nicaragua if Commander Warfield will study first the general needs of Nicaragua either for railroad or road construction and the routes thereof and submit a preliminary report as soon as possible.

The Department has been informed that the Finance Minister of Nicaragua recently asked the board of directors of the railroad to declare a large dividend to be used for road construction and that the American directors do not feel that the railroad can properly do so. It is, of course, important that further friction between the Government of Nicaragua and the bankers over matters of this kind should if possible be avoided. It is suggested, therefore, that the question of the extent of the program and the manner in which funds shall be provided should be dealt with at the conference proposed by the President of Nicaragua as reported in your telegram No. 222, September 5, 4 p.m.5 I have accepted suggestion of the President regarding this conference in a personal letter which was forwarded by air mail September tenth.

  1. See pp. 651 ff.
  2. Ante, p. 654.