817.1051/706

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

No. 478

Sir: Reference is made to your despatch No. 963 of November 14, 1932,67 transmitting a copy of a letter addressed to you on November 9, 1932, by the Jefe Director of the Guardia Nacional on the subject of the disbursements made by the Guardia under the terms of the Guardia Agreement between the United States and Nicaragua. The Department notes that General Matthews does not recommend that any action be taken now to legalize the financial operations of the Guardia, but does suggest that it might be advisable for the Legation to be prepared to act, should questions be raised regarding the legality of disbursements of funds in cases where Nicaraguan citizens either have been or are to be the recipients.

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It is the opinion of the Department that once the Guardia has been turned over to Nicaraguan control the Department will be unable to take steps to protect Nicaraguan citizens so involved; such persons should appeal for protection to the courts or other appropriate agencies of the Nicaraguan Government. The Department will, of course, desire to be kept informed in the event such cases arise, and to receive any expression of your views and recommendations which you may judge advisable.

The Department notes from General Matthews’ letter of November 9, 1932, that:

“Disbursements of Nicaraguan funds allocated to the Guardia Nacional for its pay and maintenance have, since the Guardia Nacional came into existence, been made in accordance with orders, regulations and instructions issued by the Jefe Director of the Guardia Nacional de Nicaragua under the general authority contained in the Guardia Agreement;”

and that:

“All disbursements of funds allocated to the Guardia Nacional de Nicaragua have been made on vouchers which are incorporated by the Paymaster, Guardia Nacional, into a monthly account which is submitted to the Ministro de la Gobernación and this account is audited by the Tribunal Supremo de Cuentas. The Tribunal Supremo de Cuentas informs the Paymaster, Guardia Nacional, of any matters noted in the audit which in its judgment is not in strict conformity with law, regulations, orders and instructions. To date all exceptions noted in this audit have been or are now in process of being adjusted.”

The Department assumes from the foregoing and from General Matthews’ statement that he does not recommend that any action be taken now to legalize the operations of the Guardia that it is deemed that there are no reasons to expect any claim on the part of the Nicaraguan Government against the United States Government arising out of the disbursements of Guardia funds which would make it advisable to seek formal approval from the Nicaraguan Government of such financial operations of the Guardia.

Very truly yours,

For the Secretary of State:
Francis White
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