$200,000 held in reserve in accordance with the Department's telegram. Under arrangements made with the representatives of Nicaragua on November 4, the Department now desires you to place the remaining $200,000 at the disposition of the Republic of Nicaragua, $100,000 of which sum has already been allotted to the Nicaraguan Mixed Claims Commission by draft drawn by Mr. Pedro Rafael Cuadra, Minister of Finance of Nicaragua, made payable to the Attorney of Nicaragua. If it is still necessary for Mr. Cuadra to give instructions to this effect, you will kindly request the same of him before complying with the suggestion made in this letter. I am [etc.] File No. 817.51/614. For the Secretary of State: J. B. MOORE. Brown Brothers and Company and J. and W. Seligman and Company to the Chief of Bureau of Latin-American Affairs. NEW YORK, November 24, 1913. DEAR MR. LONG: For the information of the State Department we beg to enclose herewith statement which was given to the press on Saturday [November 20] with reference to the Gold Reserve Fund for the redemption of Nicaraguan Bank Notes, etc. Yours, very truly, BROWN BROTHERS & Co. [Inclosure.] Statement to the press concerning Nicaraguan finances. The capital stock of the National Bank of Nicaragua has been raised from $100,000 U. S. gold to $300,000 U. S. gold, all of which has been paid in, in cash. Of this amount, 51% is owned by Brown Brothers & Company and J. & W. Seligman & Co., New York; 49% is owned by the Republic of Nicaragua. The Bank was organized for the twofold purpose of acting as Fiscal Agent of the Government and of doing a strictly commercial business. It operates in two Departments: The Issue Department, which has charge of the issue of the new currency on behalf of the Government, and the Banking Department, which is charged with the ordinary commercial business of the Bank. The two Departments are entirely distinct. In connection with this matter, a short statement of what has been accomplished through the Issue Department of the Bank since its organization and of the present condition of the Issue Department and the Reserve Fund will be of interest. The Issue Department has, by purchase and in exchange for its córdoba notes and silver córdobas, retired the bulk of the old national currency consisting of paper pesos (billetes) until the amount outstanding on November 15, 1913, had been reduced to a sum estimated at about 9,500,000 pesos, having a total gold value of about $760,000. On that date there were also outstanding $1,570,683 in córdoba notes of National Bank of Nicaragua and córdoba silver coins. This issue of currency (bank notes, silver and billetes) of a gold value of $2,330,000 is exchangeable for drafts on New York on presentation at the counter of the Issue Department. The Issue Department, on November 15th, held in its Reserve Fund the sum of $932,693 U. S. gold (equal to 40% of the outstanding currency). Of this, the sum of $829,100 was on deposits in, or in transit to, New York as special deposit to meet any drafts of the Issue Department that may be drawn for the purpose of redeeming Nicaragua currency. This Reserve Fund can not be used by the Bank in its commercial business; the balance, $103,590, consists of the bullion value of the silver coins. It will thus be seen that there are ample reserves for redemption of outstanding bank notes, silver and billetes. As additional currency is from time to time required by the expanding commerce of the country, that currency will be issued by the Bank and simultaneously there will be added to the Reserve Fund, by deposits in New York or London, an amount equal to the new currency so issued. As additional bank notes are thus from time to time put out, the Reserve Fund will be correspondingly strengthened and will bear a progressively higher relation to the total amount of currency issued. The Reserve Fund will be further increased by interest and commissions earned. In order further to strengthen the Reserve Fund, provision has been made that in the very unlikely contingency of the Fund at any time declining to $100,000 U. S. Gold, there shall be added thereto 25% of the Customs Revenue until the Fund amounts to $200,000 and this reinforcement of the Fund will be repeated as often as the Fund shall so decline in amount. Any such additions from Customs Revenues are to be permanent additions to the Fund. The present arrangements thus put the National currency of Nicaragua on an abundantly safe permanent basis. The value of the cordoba is equal to November 21, 1913. $1 U. S. Gold. 8c U. S. Gold. NATIONAL BANK OF NICARAGUA, Inc. File No. 817.51/613. The Nicaraguan Minister of Finance to the Minister of Nicaragua at Washington. [Memorandum-Summary-Translation.1] There seems to exist in Washington an erroneous idea of the political and economic situation of Nicaragua. As the loan secured is to be employed preferably in payment of the indebtedness to the bankers, increasing the capital of the [National] Bank, and monetary conversion, with $100,000 for the Mixed Commission, there will remain for the use of the Government only $640.000 to cover urgent administration expenses embracing salaries, liquor and tobacco bonds, maize imported from Salvador during the revolution at a cost of $35,000, payments to Cartago Court and Central American Bureau, and other expenses entailed by agreements. This explains the insistence that no reserve be made for the account of the Mixed Commission, and you can easily understand what will happen if $300,000 more is drawn for this Commission, which is not sitting at present. As evidence of the economic crisis in the country, note is made of the fact that all commercial houses in Granada and other sections are on strike; that all are suffering from loss of credit and cannot make importations, which in turn lowers our customs receipts and prolongs the economic crisis. To meet this crisis the Government wishes to advance $500,000 which is not possible if $100,000 should be diverted for the Commission. The original was shown to the Chief of the Division of Latin-American Affairs of the Department of State; the translation of the summary was read to the Secretary of State and filed December 13, 1913; it is not dated. The purpose of the Department of State to set apart 25% or 20% of the customs receipts for the Mixed Commission would be disastrous. The present budget as passed shows a deficit of $170,000 which, with a decrease of imports, will probably amount to not less than $1,000,000. If a reduction of 25% is made you can readily judge whether the work of the administration can be carried on during the present year. You may assure Mr. Bryan that all financial matters have been settled through the Bank and all claims submitted to the Mixed Commission, those that have been paid directly by the Foreign Minister having been based on the rulings of the Commission. PANAMA. DECLARATION EFFECTED BY EXCHANGE OF NOTES BETWEEN UNITED STATES AND PANAMA PERMITTING CONSULS TO TAKE NOTE, IN PERSON OR BY AUTHORIZED REPRESENTATIVES, OF DECLARATIONS OF VALUES OF EXPORTS MADE BY SHIPPERS BEFORE CUSTOMS OFFICERS. SIGNED AT WASHINGTON, APRIL 17, 1913.1 File No. 619.11212/12). Declaration of the Secretary of State. The undersigned, W. J. Bryan, Secretary of State of the United States of America, duly authorized thereto, in virtue of a reciprocal Declaration made by J. E. Lefevre Chargé d'Affaires of the Republic of Panama at Washington, does hereby declare that from and after June 1, 1913, and until the expiration of one month after the date on which either the United States of America or the Republic of Panama shall give notice of the withdrawal of said Declaration, the consuls of the Republic of Panama in the United States of America shall be permitted to take note in person, or through their authorized representatives, of the declaration made by shippers before the American customs officers in which they state the value of the merchandise exported to the Republic of Panama. The consuls of the Republic of Panama shall be given certified copies of the said declarations when requested by them. DEPARTMENT OF STATE, W. J. BRYAN Secretary of State of the United States. Washington, April 17, 1913. File No. 619.11212/12}. Declaration of the Chargé d'Affaires of Panama. The undersigned, J. E. Lefevre, Chargé d'Affaires of the Republic of Panama at Washington, duly authorized thereto, in virtue of a reciprocal Declaration made by W. J. Bryan, Secretary of State of the United States of America, does hereby declare that from and after June 1, 1913, and until the expiration of one month after the date on which either the Republic of Panama or the United States of America shall give notice of the withdrawal of said Declaration, the consuls of the United States of America in the Republic of Panama shall be permitted to take note in person, or through their authorized representatives, of the declaration made by shippers before the customs officers of the Republic of Panama in which they 1 Printed also as Treaty Series No. 578. state the value of the merchandise exported to the United States of America. The consuls of the United States of America shall be given certified copies of the said declarations when requested by them. The American Chargé d'Affaires to the Secretary of State. No. 250.] AMERICAN LEGATION, Panama, November 20, 1912. SIR: In reference to the riot which occurred on July 4th last between American soldiers and marines and the National Police of Panama, I have the honor to transmit herewith a translation of the book of Panama testimony which I enclosed to you with my despatch No. 222 of October 3, 1912.2 I have [etc.]. File No. 419.11D29/35. WM. WHITING ANDREWS. The American Chargé d'Affaires to the Secretary of State. No. 258.] AMERICAN LEGATION, Panama, December 5, 1912. SIR: I have the honor to relate some facts concerning the present status of the 4th of July incident. Captain Barber, Chief of the Canal Zone Police, gives it as his opinion that Leonidas Pretelt, Comandante of the Panaman National Police, has been willing to do as much as possible towards the detection and apprehension of the guilty policemen, but that he is only actually doing as much in that direction as the Administration allows him to do. While I have no definite knowledge I have the feeling that the Administration is not really exerting itself but is hoping that the passage of time will in some way enable them to wriggle out of the responsibility of satisfying the demands of the United States in adjustment of the 4th of July affair. I therefore, take every opportunity of reminding the Foreign Office that the expectation of the American Government has not lessened. Accordingly I have made use of the reception of instruction of November 23rd, 1912, to address a note to the Minister of Foreign Affairs mentioning the sentiment expressed in the above instruction. I have [etc.] WM. WHITING ANDREWS. |