Memorandum by the War Department to the Department of State17

OPD 601.5 (20 Sep 45)
The War Department has been approached, through the Commanding General, Caribbean Defense Command, by Taca Airways who have offered to rent a portion of the Army buildings and facilities on the airfield at Puerto Cabezas, Nicaragua. This company has offered to assume the cost of maintenance and to make available at any time to the United States Government the facilities so leased. This airfield was built by the United States in its own name and is currently being maintained under the secret agreement with Pan American Airways, Inc.,18 at a cost to the United States of $27,600 per annum.
The offer from Taca appears to be a reasonable one which would effect a considerable saving to the United States Government. The War Department does not feel, however, that it is in a position to negotiate directly with a commercial concern in a foreign country for leasing of facilities which would, under the terms of the present agreement with Nicaragua, revert to that country upon expiration of this agreement.
In view of the fact that this field was improved and buildings were erected by the United States directly, it is felt that the Government of Nicaragua can be approached with the offer of a total relinquishment of the field in accordance with the agreement with Nicaragua. Concurrently, the Government of Nicaragua can be told about the offer from Taca Airways and be requested to consider this offer favorably so that the United States will have continuing rights on the field.
If the above negotiations could be successfully carried out without prejudice to any long-term rights which may be later deemed necessary by the Joint Chiefs of Staff, the maintenance on the field by the United States could be terminated, and the United States would then have continuing rights on a field which is being maintained without cost to this Government. Furthermore, the terms of the agreement with Nicaragua could be fully carried out.
It is therefore requested that steps be taken by the State Department toward negotiations along the lines mentioned above, if such action would not adversely affect negotiations for any long-term rights which may later be deemed necessary. It is suggested that negotiations be made in collaboration with the Chief of Engineers who is thoroughly familiar with maintenance costs and figures pertaining to the field in question.
If it is the opinion of the Department of State that the negotiations outlined above would adversely affect any negotiations for such post-war rights as may be later deemed necessary by the Joint Chiefs of Staff, it is suggested that Nicaragua be queried regarding whether or not there would be any objection to the United States leasing all or part of its buildings at Puerto Cabezas to Taca Airways on a revocable lease until such time as the present agreement with Nicaragua expires.
For the Secretary of War:
R. L. Vittrup

Colonel, GSC
  1. This memorandum was directed to the attention of Mr. Stokeley Morgan, Chief of the Aviation Division.
  2. In regard to the so-called Airport Development Program, see instruction 557, October 22, to Guatemala, and letter of November 1 from the Secretary of War to the Secretary of State, pp. 101 and 105.