Memorandum by the Secretary of State 35

Statement of Policy in Nicaragua

The Secretary of State for the past week has discussed the present situation in Nicaragua in all its details with Mr. Hanna, American Minister to Nicaragua, General McDougal, Chief of the Guardia Nacional of Nicaragua, and Major General Frank R. McCoy, who supervised the Nicaraguan elections of 1928.

Mr. Hanna informed the Secretary that before leaving Nicaragua President Moncada authorized him to say:

That he favors a material increase of the Nicaraguan military forces operating against the bandits in the Segovias, (the bandit area) and believes that the increase should be approximately 500 men;
That he desires Mr. Hanna to present his views to the Secretary of State and to advise the Secretary that, in view of the Guardia Agreement under which the United States is cooperating with Nicaragua in the creation of a Guardia Nacional, he would be in full accord with the Secretary’s decisions as to how the new military force should be created;
That he favors the construction of roads in the Segovias to aid in combatting banditry and for the development of the economic resources of that area;
That in order to accomplish this, in view of the reduced revenues of the Government, he desired the Directors of the National Bank of Nicaragua to agree to make an advance of approximately $1,000,000 during the next 12 months to Nicaragua for these purposes; and
That he requested the assistance of the Secretary of State in these matters and desired his advice in concerting measures for the pacification of Nicaragua and its economic development.

The Secretary of State has been happy to learn that the Board of Directors of the National Bank of Nicaragua has consented to make [Page 842] a loan to the Nicaraguan Government which will be sufficient to permit of the increase of the Guardia by 500 men, in addition to the 1650 men agreed to by the Secretary of State in his letter to General Moncada of November 24, 1930, as the minimum Guardia force. Although this letter was not answered it appears that the arrangements set forth therein were accepted as shown by instructions given to General McDougal on December 10, 1930.36

In this connection the Secretary of State again reiterated that any increase in the Nicaraguan forces must be solely through an increase of the Guardia which is the non-political, non-partisan force provided for in both the Tipitapa and the Guardia Agreements.

The Board of Directors of the National Bank of Nicaragua, in its meeting on February 3, 1931, unanimously decided to allocate the loan as follows:

  • $20,000 per month for the continuation of work on the two railroads, one from San Jorge to San Juan del Sur, and the other from Leon to El Sauce;
  • $30,000 per month for the continuation of work on the Atlantic Highway;
  • $30,000 per month for pacifying and developing the Segovias.

General McDougal assured the Secretary of State, in the conferences discussing the matter, that this force of 2150 men will be sufficient not only to replace the Marines from the Marine Brigade now guarding American lives and property in and near Matagalpa and stationed for moral effect in the Segovias, but also vigorously to prosecute the campaign against the bandits.

The additional expense involved in increasing the Guardia by 500 men will cost, General McDougal states, $15,107.07 per month. $19,823.08 will be required for the initial equipment of these additional forces.

In addition, $2000 per month will be required for the additional expenses involved in expanding the training school for native officers in the Guardia. With this expansion it will be possible to train and prepare sufficient Nicaraguan officers to officer completely the Guardia by January 1, 1933.

$17,000 per month will thus be necessary for the increase in the Guardia and the military academy. In addition $20,000 is required as stated above for initial equipment. As it is understood that the Bank of Nicaragua will make these monthly funds available to President Moncada beginning with the present month of February, 1931, and as there will inevitably be a short delay in putting the plan into operation, it is proposed that the funds necessary for the initial [Page 843] equipment be taken out of the first monthly payments. Thereafter, $17,000 per month will be turned over to the Guardia in addition to the present expenses of the Guardia, the military academy and the penal institutions. The balance allotted for the Segovias, namely $13,000 per month, is to be spent in the work of road building in the Segovias necessary to support and carry out the operations against the bandits and to furnish employment for the population in that area.

In order further to hamper the activities of the bandits, the Secretary of State and his advisers feel that the recruitment of the additional 500 men should be carried out, in so far as possible, among inhabitants in the Segovias, as this will supply the Guardia with men more familiar with the terrain in that region.

While the Bank of Nicaragua left to the discretion of the President the proportion of the $20,000 allocated for railway construction to be used on each of the two railroads above mentioned, the Secretary of State desires Mr. Hanna to represent to President Moncada that in the Secretary’s opinion it is highly desirable that three-quarters of this amount, or $15,000 per month, should be spent on pushing forward the completion of the railroad from Leon to El Sauce. This railroad will form not only the main line of communication to the Segovias and hence will directly support the operations against the bandits, but also will furnish an outlet for the economic development of that area and should consequently be pressed to the utmost.

It should of course be distinctly understood that this plan is dependent upon not diverting any of this increased Guardia force to work which can be done, in accordance with the understanding set forth in the Secretary of State’s letter of November 24, 1930, by the Guardia Municipal in protecting the cities and the peaceful portions of Nicaragua. To whittle away the force of the Guardia by such details would amount to a destruction of the entire plan.

This plan calls for 1500 men of the Guardia in the bandit area exclusively, approximately 200 members of the Guardia on the East Coast, and about the same number in the coffee growing regions. This leaves but 250 Guardia for other Guardia activities elsewhere in the Republic and it is therefore essential that no time should be lost by President Moncada in organizing the local Guardias Municipales as rapidly as possible as set forth in the Secretary of State’s letter above referred to.

As stated in that letter, the time is rapidly approaching when the Marines must be taken out of Nicaragua. The Secretary of State has already in that letter notified President Moncada that the very latest time must be after the elections of 1932. The Secretary of State has also notified the Navy Department to make their arrangements for the [Page 844] training of the Guardia so as to be able to withdraw not only their instruction battalion but also the Marine officers in the Guardia by that time. The feeling here, as represented in Congress and by the public in general, is getting stronger all the time that these steps are necessary and that the United States Government must not be drawn into the position of policing Nicaragua indefinitely.

The plan discussed in the conversations held during the last week by the Secretary of State contemplates that the Guardia will have taken over the situation in the bandit areas by June 1, 1931, and that the present detachments of approximately 600 Marines stationed outside of Managua, principally at Ocotal and in the region of Matagalpa, will have been withdrawn and their function taken over by the new force of the Guardia.

On the assurance by General McDougal that this substitution of Marines outside of Managua by Guardia can be done not only with safety to the military situation but with actual advantage in having one homogeneous force operating in that region, those Marine detachments will be withdrawn as rapidly as practicable and returned to the United States. By not later than June first, next, the Marine forces in Nicaragua will consequently have been reduced to an instruction battalion in the city of Managua and the aviation force.

This statement of policy sets forth the basis on which the United States Government is willing to continue, for the temporary periods mentioned, to maintain Marine forces in Nicaragua and Marine officers in the Guardia Nacional.

H[enry] L. S[timson]
  1. The following notation appears on file copy: “Two originals initialed by the Secretary given to Mr. Hanna February 6, 1931, one of which was for President Moncada. 3 carbons also given Mr. Hanna; one for Legation at Managua, one for Marine Commandant and one for Guardia Commander. One copy given Gen. McDougal for information of Gen. Fuller, Major General Commandant of Marines.”

    The memorandum was subsequently initialed by President Moncada. A copy of the memorandum was also transmitted to the Navy Department on February 19, 1931.

  2. See President Moncada’s letter to General McDougal, Department of State, Press Releases, February 21, 1931 (Publication No, 164), p. 132.