611.1731/152: Telegram

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

28. Department’s telegram No. 6, February 7, 3 [2] p.m. Negotiations temporarily suspended by local crisis were resumed yesterday.

We hope to reach definite decision on points 1, 3, 7, 10 and 11 of Department’s telegram at meeting this afternoon.

Nicaraguan negotiators are in agreement with us on points 2, 4, 5 and 6.

Point 8. In paragraph 2 of article 9 Nicaragua proposes that final clause commencing with “prior to the” and ending with “of such other country” be substituted by words “mutually acceptable” and that following additional sentence be inserted thereafter as second sentence of paragraph 2 of article 9: “In determining this share, there shall be taken into consideration the provisions regarding exchange control, for the purpose of maintaining balance of payments.” In view of last clause of paragraph 1 of article 9 it would seem that concession on our part would not unfavorably affect principle involved. Because of Nicaragua’s having shown good will in ceding on points 5 and 7 I trust that Department will feel it can telegraph approval of suggested change.

Point 9. Minister of Hacienda informs us that imports of flour and beans reaching Nicaragua through east coast ports enjoy a reduction of one surcharge of 12½% (see my despatch No. 1281 of February 1515 transmitting copy of letter from Vice Consul at Puerto Cabezas). On the other hand a special tax of 50 centavos a quintal on sugar imports and one of 10 centavos a pound on tobacco imports are levied in the east coast district for expenditure there in street paving.

In reply to the last sentence of Department’s telegram 6, Minister of Hacienda states that Nicaragua desires to be assured of an annual [Page 790] minimum quota on sugar of 20,000,000 pounds and reduction of duty on sugar so that duty on Nicaraguan sugar would be 20% greater than that paid on Cuban sugar.

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