740.00113 European War 1939/911

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

No. 730

The Secretary of State refers to the Embassy’s despatch no. 1130 of June 7, 1943 which transmits a draft4 of certain legislation proposed [Page 634] to be introduced at the next session of the legislature which provides for the expropriation of the property of enemy nationals in Nicaragua.

As a general comment, the proposed drafts appear to have been the subject of thorough and careful study and seem well adapted to meet the end desired. The present draft, it is noted, relies much more upon administrative discretion than the previous draft legislation,5 and the effectiveness of the new law, if adopted, will therefore depend to a greater extent upon the energy with which the administrative bodies in charge of its being carried out attack the problem and prove themselves resistant to political and other pressures.

The granting of administrative discretion under the law will, however, afford opportunity to limit the expropriation to the property of Proclaimed List nationals who are, in the terms of the Department’s present categories “inherently bad”. The Department’s views on the undesirability of extending expropriation to persons not on the Proclaimed List are well known to the Embassy and need not be discussed here. In addition, it is noted that the earlier economic warfare measures adopted by Nicaragua will remain in full force and effect except as the same may be repealed by implication by the new law. As a result, interventorship or other action of a lesser degree of severity than expropriation will be permissible in those cases where such action is deemed desirable.

While the proposed drafts deal, primarily with the expropriation of properties owned by Proclaimed List and enemy nationals, it is noted that other provisions of the proposed laws, if effectively administered, should permit the closing of other previous gaps in the Nicaraguan control laws. Specific comments on such provisions are made below. As the proposed legislation seems to follow closely, in its essential aspects, the legislation heretofore adopted by Costa Rica, a copy of the proposed legislation is being forwarded by the Department together with a copy of this instruction, to the Embassy at San José, with the request that it forward to the Embassy any suggestions it might have on the proposed legislation. Since the Embassy at Costa Rica has dealt with the practical application of the comparable Costa Rican law for a period of over six months, it should be in a unique position to make suggestions as to possible improvements in the proposed Nicaraguan legislation. Nevertheless, many of the comments made in this instruction are based upon problems which have arisen out of the Costa Rican law as reported to the Department by the Embassy at San José.

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The Embassy may wish to consider the desirability of discussing such suggestions with the appropriate Nicaraguan authorities for such action as they may deem appropriate. The Department would appreciate being kept fully informed of the status of the adoption of the proposed legislation and any changes therein which are suggested or made from time to time. It should be noted that the Department has not attempted to pass upon the legal procedure set forth in the proposed legislation, as such matters depend primarily upon the provisions of the local civil code, with which the Department is not sufficiently familiar to pass judgment.

  1. Draft not printed.
  2. The draft transmitted by despatch No. 1130 refers to Decree No. 70 of December 16, 1941, No. 77 of February 17, 1942, and supplementary decrees of February 15 and March 1, 1943, Decrees Nos. 71 and 72 of December 16, 1941, also apply.