Memorandum of Conversation, by the Acting Chief of the Division of the American Republics (Briggs)

Mr. Long said that the Minister for Foreign Affairs had just brought to the Legation a memorandum on the proposed increase in the cordoba collection rate for import duties, which he would read to Mr. Briggs. The text of the memorandum is as follows:

“The Legation is already aware of the point of view of the Government of Nicaragua that the Trade Agreement with the United States would not be violated by the increase in terms of cordobas of duties on imports, including those for merchandise specified in Schedule I of the agreement, on account of the depreciation of the cordoba compared with its legal value. The Department of State seems to have a divergent criterion. In order to avoid a controversy in this matter my Government would appreciate hearing the suggestions of your Department concerning the manner of arriving, in the least time possible, at an arrangement which would give it the necessary liberty to effect the increase referred to in the import duties. It is its hope that such an arrangement can be made by an exchange of notes as to the interpretation of the corresponding articles of the trade agreement.”

Mr. Briggs said that what we have in mind is an exchange of notes which would terminate the articles having to do with the schedules, leaving the other parts of the Trade Agreement in full effect, and our Trade Agreements Division has been working very hard on the matter with the Legal Division and we have made considerable progress on it, and we hope to get it approved as far as the text is concerned by tomorrow. Under the terms, however, of the Trade Agreement an [Page 787] exchange of notes would be effective at the end of 30 days from the date of exchange. That is what we have had in mind and what we have tried to work out. It has, however, involved difficulties.

Mr. Long said that he hoped that the matter could be handled promptly, as the Nicaraguan Government felt that it was losing revenues every day that the new rate was delayed, and that the financial situation was critical.

Mr. Long said that the Minister for Foreign Affairs had inquired if there would be any obstacle to applying the increased collection rate to articles not on Schedule I.

Mr. Briggs replied that in the opinion of the Trade Agreements Division the provisions of Article XI require 30 days’ notice of any administrative increase in import duties, which would presumably be an obstacle.

Mr. Briggs assured Mr. Long that the Department would send him a telegram just as soon as the suggested solution outlined over the telephone could be adopted and fully approved by the Department. He hoped very much that it would go out tomorrow, but he, of course, could not guarantee it.