The Chargé in Nicaragua (Carrigan) to the Secretary of State

No. 935

Sir: I have the honor to refer to the Legation’s despatch No. 901 of March 16, 1938, and to the Department’s telegram No. 26 of March 25, 6 p.m.15 regarding the proposed delivery of an aide-mémoire to the Foreign Office regarding the Trade Agreement as affected by the exchange of Notes of February 8, 1938.

Minister Long, on March 29, 1938, called on the Acting Foreign Minister to discuss this matter with him and to present the aide-mémoire in accordance with the Department’s amendments. I have the honor to enclose a copy of the aide-mémoire as delivered.

He made use of this opportunity to recall to the Acting Minister for Foreign Affairs the question of the package tax, of the beer tax, and of the municipal taxes. The Acting Foreign Minister said that he had told the appropriate Nicaraguan authorities regarding these taxes and their relation to the Trade Agreement, but that, presumably, they had not clearly understood the situation. He said that he would [Page 795] again take up the matter and that he was glad to have the aide-mémoire as it would be of use in clarifying the situation.

Respectfully yours,

John Willard Carrigan

The American Legation to the Nicaraguan Ministry for Foreign Affairs


The American Minister called on the Acting Minister for Foreign Affairs with reference to the status of the Trade Agreement as affected by the exchange of Notes of February 8, 1938.

The American Minister mentioned the termination of Article 1 of the Agreement and stated his understanding that the Nicaraguan Government does not contemplate any increase in the basic rates of duty set forth in Schedule I, nor with reference to the American products therein mentioned, any increase in any of the charges relating to importation into Nicaragua. For instance, under the Nicaraguan tariff in effect just before the signature of the Trade Agreement hog lard was dutiable at 12 centavos; these 12 centavos were reduced to 10 centavos under the Agreement, and, in accordance with the Note of February 8, Nicaragua will continue to charge 10 centavos. To clear the shipment, however, these 10 centavos will require the payment of a number of “circulating” centavos of a cordoba at a rate to be determined by Nicaragua: at present, 20 centavos (circulating currency) would be required, the rate now being 200%. Another instance—the Consular Invoice Fee will remain at 3% on articles listed in Schedule I when imported from the United States.

With respect to the first paragraph of Article 2 of the Trade Agreement, the American Minister expressed his understanding that its termination had resulted in no change in the customs treatment accorded the Nicaraguan products enumerated in Schedule 2, upon their importation into the United States.

Article IV of the Trade Agreement has not been modified by the exchange of Notes. It provides—and continues to provide—that articles of either country, when introduced into the other country, shall be exempt from internal taxes, charges, or exactions other or higher than those applied to like products of the other country or of any third country. For instance, American beer shall be exempt from any internal tax other or higher than that applicable to Nicaraguan beer—and vice versa. Also, for example, American products shall pay no higher municipal taxes (such as those of the National District) than are paid by like articles of Nicaraguan origin—and, again, vice versa.

  1. Not printed; it contained changes in text of draft aide-mémoire enclosed with legation’s despatch No. 901, March 16.