740.00113 European War 1939/1062
The Ambassador in Nicaragua ( Stewart ) to the Secretary of State
[Received September 11.]
Sir: I have the honor to refer to the Department’s instruction no. 783 of August 2, 1943 and to despatch no. 1295 of July 19, 1943,9 both relative to proposed Nicaraguan legislation for the expropriation of the property of enemy nationals, and to report that the bill in an amended form has passed both houses of the Nicaraguan Congress. It has not yet been signed by the President or published in The Gazette (Official Daily) and no official text as passed is available to date. A member of the Embassy staff was told a few days ago that the text was being edited by the Ministry of Hacienda to incorporate the various changes and amendments approved by the House and Senate, but as this text may not be available for some time, a report is sent without further delay.[Page 637]
Note was promptly taken by the staff member of the Department’s precautionary suggestion that expropriation legislation should permit a high degree of selectivity in its operation and that the Embassy should refrain from offering advice with regard to details except as it might be requested and should not insist upon the enactment of specific legislative provisions which the Nicaraguan authorities are reluctant to adopt. In this connection I wish to point out that the mandatory character of existing control decrees, which the Ministry of Hacienda carried into the original draft of the present bill, was not a suggestion of the Embassy but a preference of the Nicaraguan administration for reasons set forth in despatch no. 1295. As the nationality of many foreign-born residents and native Nicaraguans born of one or two foreign parents was unsettled and controversial, the committee on nationality created by Art. 47 of Decree no. 77 could fail to certify that an unobjectionable person was of enemy nationality and thereby exempt him from control without exposing itself to a charge of inconsistency with the determination of some other branch of the government.
Early in the summer, however, the Defensa Nacional de Nicaragua required all foreign residents to register, prescribing a penalty for failure to do so. As a result the nationality of each person in the country became a matter of official record. After the House committee to which the expropriation bill was referred had recommended in a proposed report that a Consulting Commission be authorized to make exemptions, Dr. Leopoldo Arguello Gil, the attorney to Hacienda, informed the staff member that the administration was now disposed to accept that recommendation since Defensa Nacional had already passed on all questions of nationality in the country and a failure to adopt its finding for control purposes would expose the government to a charge of inconsistency. The staff member agreed to its propriety, suggesting, however, that the Consulting Commission be empowered to grant exemptions only on the approval of Defensa Nacional. Dr. Arguello accepted the amendment as a means of spreading responsibility and relieving the Commission pro tanto of personal pressure in that its refusal to exempt could be imputed to Defensa Nacional. The bill as passed retains these provisions which will, it is hoped, meet with the Department’s approval.
In reference to the Department’s caution against offering unsolicited advice to Nicaraguan officials or insisting on details of proposed legislation, it may be said that the staff member has been careful not to do so in any instance. His problem, on the contrary, has often been to refrain from making solicited suggestions on matters in which the United States has no interest. Dr. Arguello frequently calls on him at the Embassy or requests him to come to the Ministry for consultations [Page 638] not only relating to the bill but also to obtain his views on administrative questions which the National Bank has referred to the Minister. All of his conferences with the Minister have been at the Minister’s request. His relations with Dr. Arguello, moreover, are close personally as well as officially, and their exchange of ideas is in an atmosphere of informality.
On July 24, 1943 Dr. Arguello brought him a copy of the proposed House Committee Report on the expropriation bill before it had been submitted to Congress. This report had been given to the Minister of Hacienda for his reaction. It was left in the strictest confidence with the staff member for detailed study. A few days later Dr. Arguello called to review and discuss with him the proposed changes. Both agreed that the committee’s revision of the first two articles emasculated the bill by restricting the properties subject to expropriation to those which could not be otherwise used in commerce; by injecting unnecessarily a hearing which could postpone expropriation indefinitely; and by permitting the exclusion of proclaimed Nicaraguans from any effective control. After they had agreed that these and a few other revisions were objectionable, the staff member called on the Minister by invitation and in Dr. Arguello’s presence reviewed the criticisms. The Minister listened attentively and stated that he would discuss the report privately with the committee. He did so and the committee made revisions to conform in large measure to the suggestions. A translation of the report is submitted herewith.10 Portions of the original draft which were deleted on the Minister’s recommendation are enclosed in parentheses; additions to the original draft are underscored. It will be noted that the committee did not recede from its recommendation that a hearing be given the affected party, but it did make some changes in procedure which should expedite expropriation sales. Dr. Arguello stated that the criticisms were received and discussed by the committee in a judicial manner; that the committee members were in favor of the bill as a whole as a necessary war measure, and this attitude was clearly manifest in their defense of it in the Chamber. A translation of the reported debate in the Chamber is attached.10
The bill was approved by the Chamber of Deputies on August 6, 1943; was thereafter referred to a Senate committee which made a few minor changes and reported favorably. The Senate approved the bill so revised on August 20. On August 30 Dr. Arguello called the staff member to say that the bill had been assembled by the Ministry of Hacienda to incorporate the changes made and had been sent to the Presidential Mansion, but no copy was yet available. For the Department’s [Page 639] information there is enclosed a copy of the text as passed by the House.11 This copy was compiled by the Embassy staff member on the basis of the original draft and changes recommended by the committee which were reported to have been accepted by the Chamber. A copy of the final text will be transmitted as soon as it becomes available.