840.51 Frozen Credits 17/8
The Ambassador in Nicaragua (Stewart) to the Secretary of State
[Received June 20.]
Sir: I have the honor to refer to the Department’s airgram of March 10, 1944; 4:00 p.m.,50 page 3, last paragraph, relative to the desire of the National Bank of Nicaragua that funds frozen in the United States to the credit of Proclaimed Nationals of Nicaragua be transferred to it for custody and use pursuant to the provisions of Decree no. 276, and to transmit herewith the Bank’s request for the specific release and remission of the following such credits:
. . . . . . . . . . . . . .
As explained in despatch no. 1528 of September 20, 1943,51 all cash assets of affected persons, which comprise all proclaimed persons, are divided by the National Bank into controlled funds and frozen funds pursuant to Article 28 of Decree no. 276. The controlled funds are those estimated as necessary for the maintenance of the affected person and his dependents; the payment of taxes, just debts and expenses authorized by the Decree, Article 29. The remainder constitute the frozen funds, which by Article 34 must be invested in Nicaraguan defense bonds to be issued in the name of the owner and frozen to his credit with the Bank. Bank officers complain that their inability to procure custody of the funds frozen in the United States prevents pro tanto their application of Decree no. 276; that as such funds belong to persons over whom Nicaragua has jurisdiction and whose [Page 1416] property the Bank is authorized and required to administer, the Bank is entitled to the same rights in respect of custody as was the owner before blocking, and the failure of the United States to make release is in effect a blocking against the National Bank of Nicaragua. The Nicaraguan national currency, it should be recalled, is supported by its dollar reserve with the Bank of the Manhattan Company, New York, New York, and hence the officials have more than an academic interest in acquiring dollar credits. The funds besides will increase those available for use of the Government.
As Nicaragua has evidenced a serious intention to carry into effect the provisions of Decree no. 276 and many expropriation proceedings have been initiated, I am sympathetic towards the Bank’s claim of custody over the funds in question and recommend that the several custodians of them in the United States be licensed to transfer them to the credit of the National Bank of Nicaragua.
Respectfully yours,