810.154/786

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

No. 823

Sir: Referring to my despatch No. 788, of April 2, 1935,27 I have the honor to inform the Department that on April 26, Messrs. Edwin W. James, and George Curtis Peck called at the Legation and stated that they had arrived that morning from Granada. That afternoon I presented them to the Minister for Foreign Affairs and made arrangements for them to be received by the President, who was then at “El Diamante” at Momotombo on the Lake of Managua, on Monday morning, April 29.

Prior to the interview with the President, I presented Messrs. James and Peck to the Minister of Fomento, Doctor Isaac Montealegre, and [Page 253] to the General Manager of the National Railroad, Señor José de la Luz Guerrero, each of whom presented their views orally to Messrs. James and Peck as to the route which, in their respective opinions, should be followed.

Mr. James explained that it would be useful for him to have information on two points: (1) the route which the Nicaraguan Government desired to follow, and (2) the principal needs of the Nicaraguan Government in connection with materials and, specifically, a list of the bridges to be built, in the order of their importance.

Both Doctor Montealegre and Mr. Guerrero agreed that the route should enter Nicaragua from Costa Rica near the western coast of the Lake of Nicaragua, and follow the route already approved in the reconnaissance survey to Granada. From Granada the route should be to Tipitapa, and thence to Sebaco. Doctor Montealegre had suggested that from Sebaco the route should touch El Sauce, the northern terminal of the León–El Sauce railroad spur. Mr. Guerrero pointed out, however, that from the point of view of the interests of the railroad such a junction would be uneconomic, and it was thereupon agreed that the road should pass from Sebaco to Estelí. No final decision was made as to the route from Estelí to the Honduran border. The two alternatives suggested were (1) from Estelí to San Marcos, Honduras, and (2) from Estelí to Ocotal and thence to Yuscarán, Honduras.

At the meeting with the President on April 29, the matter was again discussed in the presence of Messrs. James and Peck, Doctor Montealegre, Mr. Guerrero, the Under Secretary of Fomento, Doctor Federico Lacayo, and myself. It was agreed that letters, setting forth the needs of the Nicaraguan Government, should be sent to Mr. James, he promising to communicate with me through the Department as to the final decision reached.

I wish to take this opportunity to express my appreciation for the tactful manner in which Mr. James approached the Nicaraguan authorities, giving them the feeling that he was not interfering with their wishes as to the construction of the road, but at the same time giving them the benefit of his technical knowledge. Members of the government expressed to me their surprise that an American official who had never visited Nicaragua, should apparently have better knowledge than Nicaraguan officials of topographic and other conditions in Nicaragua. After Messrs. James and Peck had taken their leave, the President took the opportunity to say to me personally that his chief concern at present is the difficulty in obtaining the funds necessary to proceed with the road construction. I advised the President to await the recommendations which Mr. James will undoubtedly make regarding the technical work to be done before taking up the [Page 254] question of financing construction. I made it clear to the President, as has also been done on previous occasions, that the Congressional Act authorizing the purchase of materials to be used on the Inter-American Highway does not provide for the allotment of funds to be spent outside of the United States.

Respectfully yours,

Arthur Bliss Lane
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