The British Embassy to the Department of State 6

No. 142


The British Embassy have received instructions to bring to the notice of the State Department the following points in connection with British claims against the Nicaraguan Government, with special reference to the “Legation claim” of £19,800.0.0. It will be within the knowledge of the Department that the Nicaraguan Government [Page 661] had undertaken to pay this amount with interest, which would bring the total of the claim to about £25,500.0.0.

His Majesty’s Minister at Guatamala reports that he is informed by a member of the Claims Commission now sitting7 that £9000.0.0. in cash can be offered in payment of these claims. Of the items under consideration the claim for £10,000.0.0. on behalf of the London Bank of Central America had been reduced to £1000.0.0., thus leaving £8000.0.0. for the settlement of the remaining claim amounting to £9800.0.0.

The British Government cannot but consider that the reduction of the Bank claim to £1000.0.0. is excessive. In the circumstances they will be willing to agree to accept £8000.0.0. in cash as a settlement of the remaining claims, and it is suggested that a settlement might be made on this basis, the Bank being left to bring its claims before the Commission itself. The Commission having by their award admitted the justice of the claims other than that of the Bank, the British Government consider that there could be no objection to these claims being settled, as proposed, by the payment of £8000.0.0. in cash, the question of the Bank claim being held over for further consideration by the Commission.

In making this suggestion the British Embassy are instructed to point out that the British Government have shown their anxiety to facilitate the settlement of these claims by their recognition of the Commission. It has always been held that the Legation claim as a whole was not subject to further revision, and the fact that a reduction of the claims has been accepted is a further indication of the desire of the British authorities to consent to a settlement which would be not unduly onerous to Nicaragua. In the circumstances they feel that the suggestion indicated above for separating the Bank and the other claims and settling these latter on the basis proposed by the Commission, should be acceptable to the United States authorities, and the Embassy have been instructed to enquire whether the State Department feel able to support this suggestion.

  1. The substance of this memorandum was transmitted to the Minister in Nicaragua in a telegram of Feb. 16, 1918, 4 p.m., with instructions: “Please bring suggestion by informal good offices to attention Nicaraguan Government and Commission for its careful consideration.” (File No. 417.41/5a.)
  2. See Foreign Relations, 1917, p. 1119, and 1918, pp. 823 ff.