717.56/10–1151

The Chief of the Lend-Lease and Surplus Property Staff (Murphy) to the Chief of the Division of Investments, Bureau of Accounts, Treasury Department (Barnes)

confidential

My Dear Mr. Barnes: Telegraphic information from the American Embassy in Managua, Nicaragua, states that the Nicaraguan [Page 1526]Lend-Lease Settlement Arrangement has been formalized under date of September 26, 1951.1

As soon as the relevant documents have been received, the usual mimeographed copies will be prepared by this Department for limited official distribution. In the meantime, you may be informed that the settlement is for $516,000 which amount has been arrived at by reducing the amount of the “contingent account” balance of $4,768.78 by $528.94; therefore, and in order that the records of the Treasury Department may properly reflect this adjustment of the account, you are hereby authorized to charge off the sum of $528.94 against “contingent accounts receivable” and thereby reduce the balance due to $4,239.84 which, added to the residual balance due on the “treaty account”, makes $516,000.

The settlement terms, which require payment in full in three years, permit the acceptance of Nicaraguan cordobas instead of dollars at the option of the United States. The first payment, due October 1, 1951, is for $114,200 with scheduled quarterly payments thereafter in the amount of about $33,483 each. The conversion rate is fixed at seven cordobas to the dollar, or better, in case of a fall in the cordoba rate.

Out of the first payment, when made, the “contingent account” first should be liquidated ($4,239.84) with the remainder credited to “treaty account”, thus leaving the net balance due at $401,800 on the latter.

By virtue of the conclusion of this settlement, and dependent upon the early receipt of the initial installment, the Nicaraguan lend-lease position may be deemed “current”. Hence this Department no longer will be interested in the withholding of any refunds or credits which either have accrued or may accrue to the benefit of the Government of Nicaragua insofar as the lend-lease interest is concerned.2

Sincerely yours,

F[rancis] T. Murphy
  1. The exchange of notes dated September 26, 1951, at Managua, which constituted the Nicaraguan Lend-Lease Settlement Arrangement, were transmitted to the Department of State under cover of despatch 296, from Managua, October 13, 1951, not printed (717.56/10–1351).
  2. Documents in Department of State decimal file 717.56 through 1954 show that Nicaragua made all scheduled payments under the Lend-Lease Settlement Arrangement, and that the thirteenth and final payment was made on September 29, 1954.