611.1731/171: Telegram

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

48. With reference to Department’s 24,40 and to conversation of today with Duggan.41

Point 3. (a) Nicaraguans now state they do not intend to apply at this time the official rate of exchange in converting currencies for customs purposes. Inclusion of reference in memorandum is therefore still essential. President Sacasa informed me yesterday that if official rate were applied prior to signing of treaty, the treaty would be blamed by the public for the consequent rise in prices.

[Page 807]

(b) Law of June 30, 1933, published in La Gaceta of July 10, 1933, provides in article 1:

“The payment of customs import and export duties and of corresponding charges will be made in the monetary unit of the Republic prescribed in article 1 of the law of March 20, 1912.

“The Exchange Control Commission is charged with fixing weekly the rate of exchange of our money in relation to others.”

Article 3 provides that the Executive shall fix the date on which the provisions of the law shall enter into force. The President has however never fixed this date. Hence although “the bases and methods prescribed under laws and regulations” of Nicaragua now in force provide for conversion of currencies for customs purposes at official rate, the par rate is now being used. Even though the official rate were later applied it does not appear that this method would be less favorable to importers, who would presumably increase the price of the article by at least the amount of the difference between the two rates.

(c) I trust the Department will reconsider this point in the light of the foregoing and in view of the importance attached by Nicaragua. It seems to me that the Nicaraguan proposal as transmitted in my 3942 is reasonable and is not contrary to the language or spirit of article 5. Please instruct by telegraph.

Point 7. I am satisfied to the best of my knowledge and belief that there is no system in force in Nicaragua as contemplated in the last paragraph of article 7. For the sake of the record, however, I respectfully suggest that the language of Department’s 23, March 2, 7 p.m., is considerably broader than that employed by me in conversation of February 27th and in my 46.

Schedule 2 was presented and discussed this morning. Nicaragua hopes that, in view of non-inclusion of sugar in Schedule 2 (which I emphasized is final) they will obtain independently of treaty some advantage for Nicaraguan sugar such as assuring a quota over a period of years. They contend the [that?] otherwise treaty will be severely attacked locally.

They inquire whether articles included in Schedule 2 of Honduran and Haitian agreements may be included in Nicaraguan Schedule 2 on the ground that should these agreements expire or otherwise cease to be in force Nicaragua would no longer enjoy certain concessions now granted those countries.

Lane
  1. Telegram No. 24, March 3, 2 p.m., not printed.
  2. Memorandum of conversation not printed.
  3. February 25, 10 p.m., p. 801.