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

No. 1014

Sir: Referring to my despatch No. 1007 of August 21 and to my telegram No. 63 of August 22, 6 p.m., regarding the negotiation of a reciprocal trade agreement between Nicaragua and the United States, I have the honor to state that on August 22 the Minister for Foreign Affairs indicated to me that the indifference of the Minister of Hacienda, Don Francisco Castro, was the reason for the lack of progress in the negotiations. Dr. Argüello said that at the meeting of August 20 it was obvious that Mr. Castro had not read the text of the general provisions; for this reason the meeting was postponed until such time as he could familiarize himself with the text.

On August 22 I obtained the impression from a joint talk which I had with the President and Mr. Castro that afternoon, that Mr. Castro was taking greater interest in the negotiations and appeared to be quite prepared to accept the principles embodied in the general provisions, provided we should furnish him with a list of those products in which we are interested in securing concessions or assurances. As I pointed out in my telegram No. 63, he said that a new tariff law is being considered by the Government to simplify the existing tariff procedure, and that he wished to find out whether any of the products in which we are interested would be affected thereby. He expressed the opinion that the new law would not affect the United States to any extent. (If the new tariff is identical to that referred to in the Consulate’s despatch No. 37 of September 15, 1934,31 there will be certain articles, specifically wheat flour, which would be affected, insofar as the interests of the United States are concerned.) It is possible, however, that the suggested amended tariff may have undergone alterations since the date of the Consulate’s despatch. In any case, it would not appear that this matter need be the cause of any immediate anxiety on our part.

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As I obtained the impression from the Minister of Hacienda that he was somewhat suspicious regarding our attitude in negotiating the reciprocal trade agreement, (he asked me specifically as to whether Nicaragua would obtain any advantages therefrom) I made the following points in my talk with the President and him:

The general provisions as submitted to the Nicaraguan Government are based primarily on principles which were agreed upon among the countries represented at the Montevideo conference. I quoted the Minister of Foreign Affairs as having said that the general provisions submitted by us were almost identical with the draft of the treaty prepared by him.
It is not the intention of the United States Government to decrease the total revenue of the Nicaraguan Government. In asking for a reduction on a given product it is our intention to increase the amount of commerce between the two countries with respect to that particular product. In time, such increase in trade should increase rather than decrease the revenues of the Nicaraguan Government.
There is no desire on the part of the United States to impose an unfair treaty on Nicaragua. It would be contrary to the best interests of the United States for us to be subjected to the criticism that we were endeavoring to impose upon the Nicaraguan Government a treaty favorable only to us. I said such a procedure would do us not only untold harm in Nicaragua, but elsewhere as well, and that it was entirely contrary to the policies which had been enunciated by the President and by Secretary Hull.

On August 23 I informed the Minister for Foreign Affairs of my conversation with the President and Mr. Castro of the afternoon before. Dr. Argüello then said that he had advised those gentlemen, as I had, that the general provisions as submitted to us are consistent with the principles adopted at Montevideo, and that he felt certain that neither the United States Government nor its representative here would be a party to deceiving (engañar) Nicaragua in a trade agreement which, as far as dollars and cents are concerned, is of relatively little importance to the United States, but of great importance to Nicaragua. He said that he had advised the President and Mr. Castro that it would be suicide for the United States, for the sake of a few thousand dollars a year, to gain the impression of being an unscrupulous negotiator. Furthermore, he added that he had complete faith in our desire to help and not to injure Nicaragua.…

Respectfully yours,

Arthur Bliss Lane
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