The Minister in Nicaragua ( Hanna ) to the Acting Secretary of State

No. 456

Sir: With reference to my telegram No. 107 of June 13, 10 [7] a.m.,44 reporting that this Government had furnished General Matthews with pay for the Guardia Nacional for the month of June and maintenance for the month of July, I have the honor to report that General Matthews now informs me that the Government has subsequently furnished him with $90,485.13 for the following purposes:

Pay for the Guardia Nacional for July, 1931 $50,168.30
Maintenance for Guardia Nacional for August, 1931 33,733.50
Maintenance for Military Academy for August, 1931 3,250.00
Maintenance of prisons and penitentiaries for August, 1931 3,333.33
Total $90,485.13

In this connection, General Matthews has also informed me that the deposit slips furnished by the Banco Nacional of Nicaragua show that the following amounts have been allotted for the Guardia from the $1,000,000 loan of February 5, 1931:

March 27, 1931 $1,000.00
27, 9,000.00
April 17, 7,150.00
May 15, 17,000.00
June 20, 17,000.00
July 10, 20,000.00
15, 12,633.05
Total $83,783.05

The arrangement set forth in the “Statement of Policy in Nicaragua” dated February 5, 1931, contemplated that $17,000 per month would be necessary for the increase in the Guardia and the Military Academy, and that this amount would be made available beginning with the month of February, 1931. Funds necessary for the initial equipment of the increase in the Guardia made under that arrangement amounting to approximately $20,000 were to be “taken out of the first monthly payments”, the supposition being that there would be a short delay in putting the plan into operation. It might be considered, therefore, that from February to July inclusive there have been available six monthly payments of $17,000 totaling $102,000. It would therefore appear from the above item totaling $83,783.05 that there is [Page 858] still available, on this basis of calculation, $18,216.95 of the total amount allotted for the Guardia for those six months.

General Matthews points out further, however, that a deposit of $39,500.27 made on April 9, 1931, was presumably drawn from the loan although the deposit slip furnished him by the Banco Nacional gives no information concerning the source from which the sum was drawn. If General Matthews is correct in his belief that this amount was drawn from the loan, is would appear that the allotment of $17,000 per month has been overdrawn by $21,283.32.

It would appear that the Government, in any case, is proceeding on the basis that the monthly allotment of $17,000 has been available since and including February, 1931. It is reasonable to suppose, if this assumption is correct, that the Government will also consider that the Guardia will have completed its participation in the loan on January 31, 1932, provided the Government continues to allot $17,000 monthly from the loan from now until and including the month of January, 1932. If General Matthews is correct concerning the $39,500.27 mentioned above, the monthly allotment of $17,000 will have terminated sometime in the month of December.

General Matthews, naturally, is much interested in this phase of the financial support he can expect for the Guardia, and I am therefore giving the Department the foregoing statement with the thought that it may become useful at some subsequent date.

Respectfully yours,

Matthew E. Hanna
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