817.51/1837: Telegram
The Chargé in Nicaragua (Munro) to the Secretary of State
[Received October 5—1:59 p.m.]
262. My 252, September 22, 9 a.m. After visiting Leon and talking with people there I am of the opinion that a loan sufficiently large to permit at least the payment of claims would be generally approved by the Liberal Party. The Liberal departments suffered more than any other district from the effects of the war and the economic situation there, which is still bad, would be greatly improved by a partial compensation for war losses. Moncada and other Liberal leaders favor a loan for this purpose. Apparently they are not inclined to approve a larger loan for other purposes although they might do so if there were a sufficiently strict control over the expenditure of the proceeds. A few Nicaraguan propagandists in the United States and Salvador will attack any loan but they do not represent any large or responsible element in Nicaragua itself.
It will be difficult, except in connection with a loan contract, to persuade the Nicaraguan Government to follow up the control of the internal revenues as the President is very reluctant to do so without gaining something tangible in exchange. I am still discussing the internal revenue matter with him.
The President informed me in strict confidence that the bankers had advised him by cable that they would submit a loan project for his consideration within a few days. He has apparently no information about the nature of the project.