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

No. 870

Sir: With reference to previous correspondence regarding disestablishment of the Naval Base at Corinto, I have the honor to report that the Base was, in accordance with Article III of the Agreement constituted by an exchange of Notes in October-November, 1942,19 [Page 1079] formally turned over to the Nicaraguan Government on the morning of June 6.

[Here follows list of names of persons attending the ceremony.]

There are enclosed copies of the exchange of notes between this Embassy and the Foreign Office20 regarding the transfer. It will be noted, in recapitulation, that the Naval Base and all fixed improvements were turned over to the Nicaraguan Government without charge in accordance with Article III(2) of the Agreement (this Embassy’s Note No. 96 of October 14, 1942). The remaining material and equipment was sold by the Foreign Liquidation Commission to the Nicaraguan Government in exchange for an Embassy site in Managua of 7,600 square varas valued at $106,400. A blueprint of the property is enclosed for the Foreign Buildings Office.21

The transactions covering transfer of the surplus property and receipt of the Embassy site were conducted by Carlos Miller, as authorized representative of the Foreign Liquidation Commission. Certification of Mr. Miller’s representative powers in two affidavits dated June 11 to the Nicaraguan Government was made by me. The deed vesting title to the property in the Foreign Liquidation Commission was signed by Mr. Miller on June 15.

Since it was necessary for the Nicaraguan Government to purchase the land from a private individual in order to fulfill its contract, the transfer of title was effected on a triangular basis. That is, the deed transferring title to the Foreign Liquidation Commission was signed by the original owner, José María Castellón, who was in turn reimbursed by the Nicaraguan Government. A copy of the Executive Order covering the transaction and guaranteeing clear title follows under separate cover. This mode of transfer was accepted upon verification from reputable lawyers of its legality and in the desire to close the deal expeditiously.

Although uniformly greeted in the press as another example of United States generosity in application of the Good Neighbor Policy, the transfer of the Naval Base has at the same time been drawn into the perennial political conflict. As pointed out in my A–210 of June 13, 1946,21 President Somoza’s prolonged stay at Corinto since June 6 coupled with his refusal to publish details of the transaction and give even a summary inventory of the equipment acquired have given rise to rumors that he is gutting the property for his personal use. Official statements to the effect that an inventory is being made [Page 1080] and will be published upon completion are met with skepticism and the belief that such an inventory will exclude pilfered equipment.

Another belief editorially expressed, and which has not been denied by Somoza, is that he will acquire or has already acquired, the property in his own name for disposal at a handsome profit. Credence is lent to this possibility by Somoza’s reported statement to Gabry Rivas, … editor of La Nueva Prensa, that the Government plans to utilize the equipment in the development of public utilities and useful commercial enterprises in exchange for shares. Adding further to the confusion and suspicion is a published exchange of telegrams between Captain Salvadore D’Arbelles, Somoza’s presumed Guardia representative at Corinto and Roberto Calejas Reyes, head of the Chinandega water works in which Somoza is a reportedly important stockholder. Calejas Reyes apparently demurred to the propriety of using Government owned water piped from the Base and was informed, on behalf of the President, that the surplus property involved did not belong to the Government.

Although virtually all of the opposition press is taking a hand in the dispute, particular emphasis is being given the matter by the recently reopened Conservative daily, La Prensa in accusing the President of venality and calling for an accounting to the nation. It is most probable that the case will be raised at the next meeting of Congress commencing on June 18.

Respectfully yours,

Fletcher Warren
  1. Notes of October 14 and November 25, 1942, not printed.
  2. The Embassy’s notes of May 6, June 1, and June 3, and the Foreign Office notes of June 1 and June 8, not printed.
  3. Not printed.
  4. Not printed.