611.1731/107: Telegram

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

54. Department’s telegram No. 28, July 3, 6 p.m. President informed me this afternoon that Congress will adjourn on Saturday without passing proposed tariff law as transmitted in my despatch No. 851 of May 28.16 President informed me that he would be prepared to discuss with appropriate officials, and with me next week, principles on which negotiation of reciprocal trade agreements will be based.

Collector General of Customs has just furnished me in strict confidence copy of his letter to Minister of Hacienda, dated today, recommending one of two courses of action: (a) concluding special trade agreements with those countries, buying from in general more than they sell to Nicaragua such as the United States and France (and with Germany, if Germany suspends present barter principle); or (b) putting into effect reciprocal tariff, such as transmitted in despatch No. 851. Managing Director of National Bank told me yesterday that he was in favor of denouncing treaty with France,17 and thereby automatically terminating modi vivendi with the United States, Great Britain, Germany, Italy and Spain. Lindberg indicated likewise that would be the simplest procedure for Nicaragua, and that as we would be the first country to negotiate a trade agreement with [Page 822] Nicaragua subsequent to the denunciation of the French treaty, it would be to our advantage also.

I should appreciate Department’s observations by telegraph regarding proposed denunciation of Franco-Nicaraguan treaty.

Sending translations of Lindberg’s letter19 by air mail tomorrow.

  1. Not printed.
  2. The treaty then in force was that of January 27, 1902, which had been denounced by France in 1919 and revived on February 15, 1921. For the text of the original treaty, see British and Foreign State Papers, vol. xcv, p. 818.
  3. Not printed.