File No. 817.032/24
[Inclosure—Translation]
Message of the President of the Republic, General
Emiliano Chamorro, to the National Congress in ordinary session
December 15, 1917
When I became President I found an insolvent Treasury and a public
debt not liquidated, that for years had gone on increasing through
improvidence and governmental optimism. During General Zelaya’s
dictatorship, to the external debt enlarged by the Ethelburga loan
obtained in Europe, were added the emission of customs bonds and
also that of compulsory and personal loans which were never paid,
and which were so numerous and without limit that there exists no
exact account of them. To this must be added the later emission of
the Bonds of Internal Revenues, whose payment the State
unfortunately did not make, thus ruining the credit of the
Government. The past wars and revolutions have caused to fall on the
State the burden of indemnities legally accepted, and these and
other amounts due some years ago have placed us in the hard position
of not being able to obtain the necessary credit for the good
advancement of the country. This floating and unliquidated debt has
meant also a political danger, since Nicaragua has often been
exposed to a forcible collection of her debts, it being enough to
say that of the so-called internal debt which has been placed under
the direction of the Public Credit Commission 43% belongs to
foreigners who have continually, through the diplomatic
representatives of their respective countries, demanded immediate
payment.
This also explains the necessity to give the bonds to be issued for
the total extinction of the debt such securities as will make them
easily received and accepted with entire confidence, even abroad,
giving to them such guaranties that their own funding shall be
placed beyond the contingencies or failures which nullified the
emission of the former, and such securities are given equally to the
Nicaraguan creditors without party distinction and to the subjects
of foreign nations.
To the Public Credit Commission have been presented claims for twelve
and a half millions in value which, through a rigorous scaling down
of some and the voluntary agreements of others, are going to be paid
with a million and a half in actual cash out of the remainder of the
money from the Bryan-Chamorro Treaty and four millions in Customs
Bonds at 5%, whose emission you have just authorized.
[Page 1100]
The agreements, which have been made to arrive at the unavoidable and
transcendent end of the consolidation of our debt, have met with the
bitterest censure from the opposition. That censure is explained by
the necessity of attacking the Government, not being able to
reproach any of the proceedings as contrary to law or its political
principles. Some others, imbued with certain ideas of exaggerated
nationality, have pretended to see in some of the clauses foreign
political intervention or violations of the Constitution. It has
been argued that the obligation contracted by the Government to
limit the budget for general expenses to a certain fixed sum
deprived the Congress of a constitutional function, and that the
establishment of a High Commission in whose appointment the American
Government has part constituted a danger for the sovereignty of the
Republic.
Arguments easily refuted, if it be considered that the respective
contracts had to be approved by Congress and that the financial plan
is simply a law passed by the same high body. It is Congress, then,
which making use of its constitutional functions of fixing the
budget, fixes it from this moment to ninety-five thousand dollars a
month for expenses exclusively administrative, and it does so until
there are no more bonds to pay. It is natural that creditors, and
above all anyone to whom payments are being made in the form in
which Nicaragua has been doing it should seek the proper guaranty
and security with respect to a debtor, who for twenty-five years has
been at fault, and that the latter should reduce those expenses that
are above its revenue capacity. And precisely those expenses
exceeding simply administration, which we might call unproductive
and which are the ones that have made the constant deficit in former
budgets, are the only ones fixed, since the surplus of the revenues,
which will be quite considerable when the present abnormal situation
passes, will be spent after the payment of the debt on works of
public utility, as it will remain for the free determination of
Congress.
No person or nation considers its dignity and sovereignty lessened
when for the solution of its problems it agrees that any arising
difficulty should be settled by arbiters. On the contrary, in the
disputes among various countries there are always sought as
arbitrators citizens or sovereigns of nations without any connection
with the interested parties. This is precisely what has been done in
creating the High Commission. I stated before that 43% of the
internal debt belonged to foreigners, and the history of our small
nations teaches what sorrowful complications have arisen in Spanish
America from that class of binding obligations, for the best
solution of which there is finally recourse to arbitration or mixed
international tribunals. In our case all contingencies are once and
for all solved, with the maintenance of the High Commission in whose
organization the American Government intervenes. The moral force of
the Great Republic extends over our contracts its powerful
protection which, if it is a guaranty for the exact fulfilment of
the assumed obligations, also means that our weak country shall no
longer be a victim of any class of demands.
