817.00 Woodward Electoral Mission/123: Telegram

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

124. My telegram No. 79, May 25, 9 p.m.42 In view of President Moncada’s emphatic assurance given to me on May 25 that he would make available $25,000 per month for the electoral supervision for the months of June, July, August and September, with the specific [Page 809] understanding that his assurance was not contingent upon a loan to this Government or any other factor which might improve the Government’s financial status, I made no further representation in the matter until June 15 when, in view of the Government’s failure to provide the June allotment of $25,000, I transmitted to President Moncada a letter signed by Admiral Woodward requesting that this allotment be placed to his credit in the National Bank of Nicaragua. Having received no reply from President Moncada I called upon him on July 2 and requested that the June allotment be made available at once. He set forth again the financial difficulties of his Government but gave me his word that the June allotment would be provided immediately after July 4. On July 8 the Minister for Foreign Affairs called upon me and expressed the President’s regret that he had not kept his word in the matter but would give the electoral mission $5,000 that same day. He told me that the Government would take that sum from the $10,000 it had just received from the West India Oil Company as first payment on the purchase price of the oil tank at Corinto. I conferred with Admiral Woodward who told me that he must have at least $15,000 to meet obligations due, and prospective. I communicated this information to General Somoza immediately and he said he would confer at once with the President. The Minister for Foreign Affairs called upon me at noon time the following day, it being Saturday and all offices closed in the afternoon, and stated that unexpected demands made upon the Government had compelled the President to expend his available funds and that consequently there were no funds for the Electoral Mission. President Moncada had previously left Managua for his country residence. I endeavored to make clear to the Minister for Foreign Affairs worries created by the President’s failure to furnish funds for the Mission and he volunteered to see the President over the week-end and present my views of the matter. I gave him a letter to deliver to the President in which I urged the President to give the subject his immediate and serious consideration.

On July 11 the Minister for Foreign Affairs gave the Electoral Mission $10,000 that he obtained that day from the West India Oil Company as a second payment for the Corinto tank. The oil company made both payments in advance of congressional approval of the contract of sale with the expectations that the contract would be approved July 12. The contract has not yet been approved. I told the Minister for Foreign Affairs on July 11 that the foregoing, in acknowledgment of this matter, would be laid before the Department of State if the balance of the June quota was not made available in [Page 810] the next day or so. This has not been done and I have had no further communication from this Government on the subject.

The Electoral Mission will need additional funds by July 20. Lindberg has approximately 25,000 cordobas on hand as collections for July and his total collections for July will be from 80,000 to 100,000 cordobas. He customarily delivers this at the end of each month and it is applied almost exclusively to the Guardia for the following month. The Guardia has received its entire allotment for July. Lindberg is informed that internal revenues for the month will be approximately 40,000 cordobas, that is about one half the usual revenue from this source. The only practical solution that I can see is for the fiscal agents to make further advances on the existing million dollar loan to meet the needs of the Electoral Mission until the new loan can be approved or some other provision made. The effect this procedure would have on the new loan would be to increase the sums owed to the fiscal agent by the Republic mentioned in article 4 (c) (1) of the proposed fiscal agency agreement.

  1. Ante, p. 805.