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

No. 181

Sir: I have the honor to acknowledge the receipt of the Department’s Instruction No. 55 of April 5, 1934 (no file number), regarding the proposed reciprocal trade agreement between the United States and Nicaragua. Yesterday, I mentioned to the President that I had received no further information from the Nicaraguan Government as to whether it was prepared to enter into conversations with me. The President expressed surprise and said that he had instructed the Minister of Foreign Affairs to proceed with negotiations. He requested me to take up the matter with Dr. Argüello.

This morning I called on the Minister of Foreign Affairs and told him that I had had a talk with President Sacasa yesterday, that President Sacasa appeared to be in favor of initiating conversations. Dr. Argüello stated that he was studying the matter and suggested that as soon as I should return from my trip to San Salvador, he and I could discuss the matter at length.

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It was agreed, therefore, that on my return from my proposed trip, immediate discussions with the Minister of Foreign Affairs will proceed.

In my conversation with the President yesterday, he expressed the opinion that Nicaragua is more closely united with the United States than is any other Central American country, and that for this reason the United States should be prepared to afford Nicaragua the most favorable treatment possible. I felt it unwise to comment on this suggestion at that time. The President then continued that the bond between the United States and Nicaragua is the proposed canal envisaged under the Bryan–Chamorro Treaty. Doctor Sacasa then stated that his personal opinion is that the construction of the canal would be the greatest benefit possible to Nicaragua. I inquired whether or not there would be political opposition at this time in Nicaragua to such an achievement. He said that the opposition would be of no consequence; that it is fruitless to worry about opposition here, and that taken in conjunction with the Pan-American Highway project,12 it would be of great economic and commercial value to this country. Inquiring as to the possible reaction in other Central American countries, the President said that the construction of the canal would be of great benefit to Costa Rica, which would be encompassed by canals (Dr. Argüello, however, upon my repeating to him this conversation this morning, added that El Salvador and Costa Rica would undoubtedly show opposition to the construction of the canal, and added that these two countries were evidencing a united front at the present time).

This being the first suggestion since my arrival here that the Government is at present interested in our exercising our rights under the Bryan-Chamorro Treaty, I report the matter to the Department as being of more than ordinary interest.

I informed the President and the Minister of Foreign Affairs orally that although I had no instructions at the present time on this matter, I should be glad to have their views in order that I might transmit them to the Department.

Respectfully yours,

Arthur Bliss Lane