817.516/227½: Telegram
The Chargé in Nicaragua ( Beaulac ) to the Secretary of State
[Received December 21—11:10 a.m.]
288. Department’s 174, December 20, 6 p.m. I delivered the text of the proposed preliminary agreement to President Moncada who requested time to study it in detail. I requested an interview with him today but he asked me to postpone my call until 9 o’clock tomorrow morning. I have just received from him the text of a “counter proposal made to the bankers in the form believed most favorable to Nicaragua.” The counter proposal differs from the proposed preliminary agreement as follows.
- Article 1. After the third sentence is inserted the following: “The retention of such experts and consultants however should be subject to mutual agreement.”
- Article 3. At the end of the article is inserted the following: “However, it is hereby understood that 90 per cent of all funds in excess of the normal requirements of a reserve fund shall be subject to the control of the Republic for the purpose of expending on the advancement of national projects; and it is further understood that the amount of the reserve fund retained to meet emergencies shall [Page 667] be in the same proportion as that provided for by the national bank rate laws of the United States.”
- Article 7. In the third sentence after the word “compensation” the phrase “and expenses” is omitted. At the end of the paragraph the expression “in connection with the preparation and execution of this agreement” is omitted. At the end the following has been added “however, the appointment, compensation and expenses of such experts, auditors, counsel or consultants shall be subject to mutual agreement.”
- Article 8. At the end of the article the following has been added “the Republic also reserves the right to cancel and conclude this agreement on 90 days notice to the bankers delivered at the Consulate at Washington, D. C. or cabled to bankers. And it is further understood that in case this agreement is at any time canceled and concluded that the bankers will not relinquish control of and supervision of the operation of the bank until an audit of the bank has been concluded by a group of auditors selected by mutual agreement.”
A new article 9 has been included as follows: “The Republic reserves the right to appoint, subject to mutual agreement, a first assistant manager of the bank; and it is also understood that the Republic reserves the right to make an audit of the bank if and when the Republic considers such audit desirable. In case such audit is made the accountants will be selected by mutual agreement.”
Article nine in the original is as ten of the counter proposal.