The Chargé in Nicaragua ( Dawson ) to the Secretary of State

No. 496

Sir: I have the honor to report that, at President Sacasa’s invitation, I called on him on September 19, 1934, so that, to use his own phrase, he “might talk things over with me”. He told me over a period of more than two hours of his difficulties and troubles.

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Turning to the question of the proposed trade agreement between the United States and Nicaragua, President Sacasa expressed gratification at the ruling of the Department of Agriculture that “drawback” sugar would not be subject to quota provisions, of which he had been informed by Doctor Henri de Bayle, the Nicaraguan Chargé d’Affaires in Washington. He said, however, that he still hoped that it would be possible for Nicaragua to secure a sugar quota in connection with the negotiations for the trade agreement. I then remarked that Mr. Ignatius O’Reardon, the manager of the San Antonio sugar estate, the only exporter of refined sugar from Nicaragua at the present time had told me that a quota for Nicaragua would be of little use as, in his opinion, Nicaraguan sugar could not, in any case, compete in the domestic trade of the United States with American continental or insular sugar or that of Cuba because of advantages of the latter in freight rates and/or customs duties.

Doctor Sacasa then went on to say that what he hoped for was not only a quota but preferential duty on the same terms as Cuba. I explained to him that, as I understood the matter, Cuba is in a special status, provided for in our existing most-favored-nation treaties, and that I thought that the only way to give Nicaragua equivalent treatment would be to denounce all of our most-favored-nation treaties with sugar producing countries in contravention of our long standing policy on the question. The President did not seem to get the point although I reiterated it. I should be appreciative if the Department would advise me whether my interpretation is correct.

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Respectfully yours,

Allan Dawson