810.154/3275a

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

No. 1143

Sir: The Public Roads Administration has informed the Department that the Nicaraguan authorities wish to concentrate construction activities for the immediate future on the Sébaco–Jinotega section of the Inter-American highway10 and to defer operations on the unfinished portions of the Inter-American highway north of Condega and on the Rama Road.11

The Department has no objection to construction activities on the Sébaco–Jinotega section of the highway, which will unquestionably open up a new and fruitful portion of Nicaragua. At the same time it does not view with favor the virtual abandonment of activities on the other two highway projects mentioned above.

The Department understands that the section of the Inter-American highway north of Condega contained most of the strips of the highway which had not been completed to Pioneer highway standards before the Pioneer highway project was abandoned. It appears highly desirable to improve these strips at the earliest possible opportunity in order that a good through all weather highway may thus become available.

Moreover, revised estimates recently prepared by the Public Roads Administration show that the cost of completing the Inter-American highway via the Jinotega route would greatly exceed the figure specified in the project statement of June 18, 194212 and that even to [Page 191] complete the highway via Estelí and Condega would necessitate a moderate increase in that figure.

The United States is of course committed by the exchange of notes of April 8, 1942 to the Jinotega-Condega route. At the same time it appreciates that it may be difficult for the Nicaraguan Government to raise the extra cooperative funds which will be required of it if the Jinotega–Condega route is to be followed. Of the second $2,000,000 Export-Import credit obtained by the Nicaraguan Government, (see memorandum of conversation of September 7, 1943—copy attached for your convenience13) $1,750,000 has already been spent.

As you are doubtless aware, an auditor of the Public Roads Administration is now auditing the vouchers covering these expenditures, in as much as it appears that considerable disbursements have been erroneously charged to funds earmarked for the Inter-American highway. It appears that it should be possible to replace in large part the funds so diverted by funds received from the Army for work on the Pioneer highway. At the same time, the Department is apprehensive that, due to this unauthorized diversion of funds and the large increase in estimates, it may prove difficult for the Nicaraguan Government to provide its share of the cooperative funds required to complete the highway, via Jinotega, to high standards. The Department therefore believes that any construction between Jinotega and Condega should be postponed until after the section to the north of the latter city has been completed. In as much as the Pioneer highway was virtually completed from Sébaco to Condega via Estelí, the completion of the section north of Condega would provide a good through route in northern Nicaragua.

You are requested to inform the Nicaraguan authorities fully with respect to the above situation. You may indicate that the Congressional authorization under which this Government is defraying two-thirds of the construction costs on the Inter-American highway specifically required the President to assure himself that a through highway would be completed, and that the Department has the responsibility of seeing to it that this will be done, when giving its approval to any program of cooperative road construction in Nicaragua. You should make it clear that this Government is prepared to abide by its commitment embodied in the exchange of notes of April 8, 1942, but you should point out that if the Nicaraguan Government still wishes to carry out the program agreed to therein, it should be prepared to fulfil the reciprocal commitment it made on that date to defray at least one-third of the cooperative expenditures proposed to be incurred in completing the highway across Nicaragua by the Jinotega route. In this connection both the money diverted from the allocated [Page 192] Export-Import credit and the increase in estimated expenditures must be taken into consideration.

You are also requested to inform the Nicaraguan authorities that the Department feels that it would be undesirable to further delay construction of the Rama road, and to inquire whether the Nicaraguan Government would not be prepared to undertake construction on this route in a more vigorous manner.

Very truly yours,

For the Secretary of State:
A. A. Berle, Jr.
  1. For United States-Nicaraguan agreement on routing the highway through this section, see exchange of notes signed at Washington, April 8, 1942, in Department of State Executive Agreement Series No. 295, or 56 Stat. (pt. 2) 1845.
  2. For text of agreement between the United States and Nicaragua on construction of the Rama Road, effected by an exchange of notes signed at Washington, April 8 and April 18, 1942, see Foreign Relations, 1942, vol. vi, pp. 574575.
  3. Not printed.
  4. Memorandum not printed.