817.51/1947: Telegram
The Minister in Nicaragua (Eberhardt) to the Secretary of State
[Received 9:45 p.m.]
257. Department’s telegram No. 132, June 14, 5 p.m. It is very difficult to ascertain what the political leaders of Nicaragua really think of the Cumberland plan … President Diaz, moreover, has been unable to give it careful consideration because of illness. … He has, however, expressed general approval of its principal features.
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It appears certain that neither Chamorro nor President Diaz will support any loan project that does not definitely assure the eventual construction of the Atlantic railroad. President Diaz has repeatedly expressed the opinion that the railroad would be insisted on by Congress. [Page 546] If it could be demonstrated that this line could be constructed, the approval of the remainder of the Cumberland recommendations could probably be obtained.
It is possible that Congress would pass an enabling act embodying the Cumberland financial plan and authorizing the Government to call for bids on a loan; but if the matter were handled in this way, it would be difficult to dissuade Congress from making undesirable or impractical changes. In addition, there would be considerable loss of time.
With respect to the bankers’ plan, it seems difficult to us to justify at the present time a loan which made no provision for the payment of claims. Such payment is an immediate financial necessity, whereas the proposed public works are not urgently needed during the present administration, although the attendant financial reforms are. Unless the claims are provided for now, the Government will continue to have a large floating debt, and the next administration will undoubtedly spend large sums making unduly generous settlements with politically favored claimants to the exclusion of foreigners and other Nicaraguans. Again, a provision for the settlement of claims will mean additional political support for the loan. Rosenthal is in accord with our views on this subject.
If it is possible, will the Department please send me at once three additional copies of the Cumberland report75 to be shown when advisable to Chamorro and other political leaders whose views on the subject it may later be necessary to ascertain.
- They were sent on June 22 (file No. 817.51/1947).↩