740.00113 E.W. 1939/911

The Ambassador in Nicaragua ( Stewart ) to the Secretary of State

No. 1130

Sir: I have the honor to refer to my despatches nos. 734 of February 13, 1943, 790 of February 26, 1943, and 829 of March 9, 19431 relative to Emergency Decrees of Nicaragua imposing supervision and control over the property of enemy nationals, and to report that the new legislation anticipated in those despatches has been prepared. The draft has been delivered to a member of the Embassy staff by the Minister of Hacienda, Dr. Ramon Sevilla Sacasa, and a copy of it in Spanish, together with an informal translation, is transmitted herewith.2

The proposed legislation has been incorporated in drafts of two ostensibly unconnected laws. The first relates exclusively to the future administration, taxation, expropriation, and sale of the property of enemy aliens and the investment of sale proceeds in defense bonds; the second authorizes the issuance of such bonds and prescribes their terms. In many respects the proposed legislation is modeled on that enacted by Costa Rica for similar purposes. It will require a more drastic occupation of and intervention in the business enterprises of enemy aliens in all instances, and is expected to result in decrees for the forced transfer and total liquidation of them in most. It will hence [Page 633] be seen that the Nicaraguan Government has elected to adopt the more effective of the two alternatives for control of business enterprises required by Resolution VII of the Inter-American Conference on Systems of Economic and Financial Control.3

As stated in the prior despatches, supra, Dr. Leopoldo Arguello Gil, attorney to the Minister of Hacienda, was charged with the preparation of the drafts early last March. After many consultations with a member of the Embassy staff he stated early in April that his work had been completed; that he would submit the draft to the Minister of Hacienda, who was not expected to change it on any material point, and would then send a copy to the Embassy for examination and criticism. Delivery of any copy to the Embassy was postponed from day to day, and no satisfactory explanation of the delay was offered. Rumors were current that no such law would be decreed; later, that President Somoza intended to present it to Congress with instructions for its defeat there. About the middle of April, when pressed for delivery, Dr. Arguello Gil stated that he was himself at a loss to understand what had happened to his draft; that he had requested the Minister to return it, and was delaying a planned vacation to Mexico on that account. He left for Mexico the latter part of April.

As the Embassy received no information about the draft or prospects of its enactment, I mentioned the matter to President Somoza on May 25. He assured me that he was confident that the law would pass, and promised to mention it to members of Congress the following day. A member of the Embassy staff called lately on the Minister of Hacienda and received from him a copy of the draft. The Embassy’s views and criticism were invited. As it is expected that the bill will soon be presented to the Nicaraguan Congress, it is requested that the Department transmit its comments as expeditiously as possible.

Respectfully yours,

James B. Stewart
  1. None printed.
  2. Not printed.
  3. For correspondence on the Inter-American Conference on Systems of Economic and Financial Control, held at Washington June 30–July 10, 1942, see Foreign Relations, 1942, vol. v, pp. 58 ff. For text of Resolutions, see Pan American Union, Congress and Conference Series No. 39: Final Act of the Inter-American Conference on Systems of Economic and Financial Control (Washington, 1942).