Memorandum by the Chief of the Division of Central America and Panama Affairs (Newbegin)45

Mr. Atterberry of ED 46 called this morning to state that the Exim-bank had received a formal request from Nicaragua for a loan of $1,600,000 for the purchase of agricultural machinery.47 He inquired as to the political advisability of granting such a loan and was informed that it would be most undesirable48 for the Eximbank to take favorable action on this request at least until after the February elections. It was emphasized that President Somoza would claim personal credit for obtaining such a loan, if granted, and that favorable action would be interpreted in Nicaragua as carrying with it the blessing of this Government for Somoza. Mr. Atterberry was further informed that it was assumed that the Eximbank, before granting a loan, would in any case go thoroughly into the question of Nicaraguan finances and the Nicaraguan economic situation. Mr. Atterberry concurred and stated that all that was wanted at this time was an opinion as to the political desirability of the loan.

R[obert] N[ewbegin]
  1. Addressed to the Assistant Secretary of State for American Republic Affairs (Braden) and to the Director and Deputy Director of the Office of American Republic Affairs (Briggs and Trueblood).
  2. Phil R. Atterberry, Divisional Assistant, Division of Investment and Economic Development.
  3. In course of a courtesy call on October 8, 1946, Ambassador Sevilla Sacasa informed Mr. Newbegin that he had submitted a new request for a loan of $1,600,000 since the Export-Import Bank had intimated that a request for a reduced loan would receive sympathetic interest. As regards the loan from the Bank of America, he said the proposal was then in definite form and was being submitted to the Nicaraguan National Bank for approval of the conditions (817.51/10–846).
  4. Assistant Secretary Braden wrote in the margin beside this word: “Agree 100%. SB”.