611.1731/117
The Minister in Nicaragua (Lane) to the Secretary of State
[Received August 15.]
Sir: With reference to the Department’s strictly confidential instruction No. 305 of August 3, 1935 (no file number), regarding the desirability of concluding a reciprocal trade agreement with Nicaragua, I personally delivered a note to the Minister for Foreign Affairs on August 8 requesting him to submit a list of Nicaragua’s desiderata, particularly insofar as treatment of Nicaraguan products by the United States is concerned and expressing the hope that I might shortly be favored by the receipt of the views of the Government of Nicaragua on the revised general provisions as transmitted in my Aide-Mémoire of July 2226 (see my despatch No. 940 of July 22, 1935). A copy of my note No. 276 of August 8, 1935 to Dr. Argüello is herewith enclosed.26
I orally informed Dr. Argüello that I had received detailed and comprehensive instructions which should enable us to come to an early agreement within a short period, provided the Nicaraguan Government would formulate its views as to the concessions it desires. For my own part, I said, I am ready at any time to take up seriatim with Dr. Argüello, and any other negotiator or negotiators who may be designated, the various products on which we should request tariff concession or assurance. I expressed the hope that, because of the friendly personal relations existing between us and of his efficient manner of handling business between our respective offices, he would take part in the oral conversations. Dr. Argüello replied that such a procedure would be highly satisfactory to him and that he would take up the matter with the President on the latter’s return.
On the morning of August 9 the President, who had returned to Managua at 1 a.m. from Chontales, sent word to me that he should appreciate my company at lunch. During my conversation with him, at which the Minister of Hacienda, Don Francisco Castro… was present. I informed him of my visit to the Foreign Minister on the previous day and inquired whether Dr. Argüello had furnished him with a copy of my note. The President replied in the negative.
I then again emphasized the advisability of the Nicaraguan Government submitting its requests for concessions at the earliest possible date and said that, as soon as this were done, I should be ready to discuss with the President, or with such negotiator or negotiators as he might designate, the technical details. The President replied that he [Page 829] would urge Dr. Argüello to hurry the matter and added that he agreed with me as to the wisdom of holding round-table conversations rather than carrying on the negotiations through formal written communications which would necessitate endless correspondence and consequent loss of time.
I then referred to the intimations which had been made by the Nicaraguan Chargé d’Affaires in Washington27 regarding the desirability of granting a tariff reduction with respect to Nicaraguan “full-duty” sugar. I said that insofar as I was aware, no definite request had been made, but that Dr. De Bayle had treated the matter abstractly. The President remarked that Dr. De Bayle had suggested the desirability of requesting the United States Government to grant a reduction on the duty in sugar and had requested instructions, but that he (Dr. Sacasa) had replied that he preferred to take up the matter with the Legation here. I remarked that over a year ago the Nicaraguan Government had requested us to grant a quota for “full-duty” sugar for Nicaragua and that as evidence of our good-will we had granted Nicaragua over 6,000,000 pounds, second only to the quota for Peru—a little over 7,000,000 pounds; that Nicaragua had been granted considerably more than El Salvador, Dominican Republic and Mexico. I pointed out that, despite the granting of this quota, no “full-duty” sugar had as yet been imported into the United States by Nicaragua during the calendar years of 1934 or 1935. I added that no request, insofar as I was aware, had been made by Nicaragua during 1934 for a reduction on sugar tariff. I expressed the opinion, however, that should the Nicaraguan Government desire to make any request with respect to sugar tariff reduction, we should give such request our sympathetic consideration. The special treatment of Cuba was emphasized by me. I expressed my understanding that because of the fact that the Nicaraguan sugar is not completely white in color, it would have difficulty in competing with other sugar in the United States. I said that Mr. O’Reardon of the Ingenio San Antonio had so informed me. The President requested Dr. Castro to get in touch with Don Salvador Muñoz of the Nicaraguan Sugar Estates, Limited, at Granada and discuss the matter with him.
The President said that he would take up actively the general matter of the trade agreement and the specific matter of desired concessions and would let me know as soon as possible regarding developments.
This afternoon I received a telephone conversation from Mr. Ignatius O’Reardon (see my despatch No. 968 of August 9, 193528), who said that, having conferred today in Granada with the management of [Page 830] his company, he was of the opinion that if Nicaragua could obtain a reduction of 20% less than the duty of $1.9875 per cwt, which he stated he believed is applicable to Nicaraguan 99.8% polarization sugar, Nicaragua would be able to compete with other sugars in the United States.
Pursuant to the Department’s instruction No. 305 and to the specific authorization contained in the paragraph on page 2 entitled Wheat Flour, I propose to take up this product foremost with the Nicaraguan officials and believe that it would not be inadvisable to enquire orally during the conversations whether a reduction on the duty for this article would be possible. Should the answer be in the negative, I may then make a request for binding. I do not believe, however, that anything would be lost by at least proposing the question regarding reduction, for it might then be said that we were in effect granting a concession to Nicaragua in withdrawing our request for reduction in tariff on this product.
Respectfully yours,