Foreign Relations of the United States: Diplomatic Papers, 1943, The American Republics, Volume VI

740.00113 European War 1939/933

The Secretary of State to the Ambassador in Nicaragua (Stewart)

No. 783

Washington, August 2, 1943.

Sir: The Department refers to your despatch no. 1216, June 25, 1943⁶ describing discussions being held by the Nicaraguan officials and members of the Embassy staff with regard to proposed Nicaraguan legislation providing, among other things, for the expropriation of properties owned by Proclaimed List nationals in Nicaragua.

The Department, of course, will be pleased to see the passage of legislation implementing more fully the Washington and Rio de Janeiro Resolutions⁷ respecting economic warfare control measures. The Department nevertheless deems it appropriate to interject a note of caution which should be borne in mind in discussions between members of the Embassy staff and the Nicaraguan officials concerning the proposed legislation. As you know, the Department has always taken the position that economic warfare legislation, particularly when providing for expropriation or liquidation of Proclaimed List enterprises, should permit a high degree of selectivity in its operation. The Department appreciates the difficulties inherent, under the circumstances existing in Nicaragua, of granting broad administrative discretion in providing for expropriation or liquidation and that legislation, although mandatory in form, will be applied selectively in its actual administration. Notwithstanding these circumstances, however, it is felt that members of the Embassy staff should not suggest that the proposed legislation should be mandatory in terms so as to avoid taking a position which might be inconsistent with the selective approach which this Government has always deemed highly desirable.

In view of the changes in the proposed Nicaraguan legislation as a result of the suggestions made by the Embassy⁸ pursuant to the request of the Nicaraguans, it is the Department’s view that the proposed legislation, if adopted and effectively administered, will permit a fairly complete implementation of the Washington Resolutions by the Nicaraguan Government. If the proposed legislation is passed, therefore, it is suggested that it might be appropriate for the Embassy to express this Government’s gratification at the cooperation which has been shown by the Nicaraguan Government in matters affecting the war effort of the United Nations. The Department wishes to emphasize, however, that the matter of enacting legislation is a matter for the sovereign determination of Nicaragua. The Embassy should therefore refrain from offering advice with regard to the details of proposed legislation except as it may be requested, and should not insist upon the enactment of specific legislative provisions which the Nicaraguan authorities are reluctant to adopt.

Very truly yours,

For the Secretary of State:

Dean Acheson

6. Not printed.
7. For correspondence on the Third Meeting of the Foreign Ministers of the American Republics, held at Rio de Janeiro January 15–28, 1942, see Foreign Relations, 1942, vol. v, pp. 6 ff.
8. Suggestions outlined in despatch No. 1216 of June 25, 1943 (not printed), were designed to (1) clarify the scope of business enterprises subject to expropriation, (2) speed administrative action on expropriation proceedings, (3) designate more clearly which native Nicaraguans would not be exempt from expropriation action, (4) provide for the purchase of expropriated property by a limited number of approved nationals of allied countries, (5) withhold from expropriation property more than half owned by non-effected nationals, and (6) impose stiffer penalties on those concealing goods subject to expropriation.