El Paso herald. (El Paso, Tex.) 1901-1931, 1912-05-13

the outcome OF the consideration OF
the NicaragUan treaty in the United
States senate. The NIcaraguan people,
after the end Of the Zelaya regime,
found themselves in such financial
situation that they could not meet
the interest on their bonds. They had
defaulted on the interest on their for
eign loans and innumerable internal
and external claims against the gov
eminent were brought up In this sit
uatiOn they were absolutely unable to
meet their obligations without outside
help. They might patronlze the mon
ey lenders, but the risks involved were
so great that the money lenders would
not advance more money except at the
most usuriOus rates-rates which
would have made II even more impos-
sible TO meet their interest charges in
the future than it was to meet them
then
Value Money Very Low.
Likewise. the currency problem had
grown to proportions which made II al
most hopeless. In years gone by, one
dollar of Nicaraguan money was worth
about 10 cents American Gradually the
financial condition Of this country
grew worse and worse until a dollar
Nicaraguan was worth only a little
more than four cents People who
owed debts, based on former rates OF
exchange, could force their creditors
to take a dollar worth four cents IN
satisfaction OF debt which had been
worth up TO 10 cents
On Mercy of L. :.
Having no other way TO escape from
a situation that could mean little else
than continued revolution and constant
danger Of outside pressure, Nicaragua
threw itself upon the mercies Of the
United States and agreed that u
would be willing TO give TO the United
States practical control Of the customs
houses Of the country, If Uncle sam in
turn would administer them after the
manner OF the customs administration
in SantO Domingo.
The Treaty.
The treaty agreed TO by Nicaragua
Is even more simple in character than
that with SauuO Domingo. After
recitation Of the facts Of the country
plight, telling of the II years Of
administrative abuses involving Illegal
diversion Of public property and reVe-
nue.. the accumulation Of debts and
claims, and the existence of ruiaous
and disputed concessions, Nicaragua
declared its willingness TO enter into
convention with the United states,
providing for the refundlng Of It's
debts. the adjustment and settlement
of claims against it. and the placing or
its finances upon a sound and stable
basis. 1t agreed that the loan thus
negotiated should be secured by the
customs revenues Of Nicaragua, ana
that IL would not alter its duties, or
other charges affecting the entry, exit,
or transit of goods during the exist
ence Of the loan without consultation
and agreement with the United States
1t also agreed that during the term OF
the loan a collector general OF customs
similar to the one in SautO Domingo,
should be appointed, subject TO the
approval Of the president OF the United
States. and that he should have the full
protection Of both governments In the
discharge Of his duties.
Approved Treaty Year Ago.
The Ntcaraguan government ap-
that time &c has been pending in the
senate of the United States The Nj
cara guam government is watching the
situation in Washington very closely
and is constantly hoping that the
desired action BY the senate may be
brought about
Some Oppose Loan.
It must be said that there is a fac
tlon IN Nicaragua which opposes me
loan. This is the Liberal party-the
party OF ZaIaya-althOugh IT now re-
pudiates any lingering friendships for
its eXiled leader. The Liberals pro-
fess to believe that Il. under the treaty.
the proposed $l5. 100000 should be made
available for the liquidation OF the ex-
ternal and internal debts Of the cOun-
try, for the adjustment and settlement
OF claims and for the construction OF
internal improvements, there would be !
tremendous lot OF graft secured from /
II by the party in power. and that very Z
much Of II would be diverted from us /
legitimate ends. Whether this suspi- I
Clon is founded upon the Liberal par I
tvs own record under Zelaya or upon I
other grounds, II probably Is true that |
unless adequate safeg yards are proVld- |
ed, there would be a diversion Of funds !
from their proper channels The state 4
department believes. however. that II I
can take such steps as viii overcome Z
this natural tendency OF the ruling !
classes IN these countries
Temporary Loan Secured.
ha "a
tually viii be ratified by the United
states senate. q temporary loan OF
Sl.5OO,OOO, with a sUDseQ uent addltlOnal
loan of S755, 900 for taking care Of the
pressing obligations OF the country and
the Improvement of the currency, has
been negotiated with the firms OF
Brown Brothers and j. and W. Sellg-
man company.
- The Nicaraguan government consent
ed TO plan placing Clifford D. ham
former collector OF the port OF Manila,
IN charge of the customs collection OF
the country, pending the ratlIlcatlon OF
the treaty by the United states Under
his administration the receipts OF Gus
toms have increased from Szo,OuU 10
$4,000 per month. Under this tempo
rary agreement a part OF the FUNDS re-
cetved are being used TO put the cur
rency upon a stable basis IL is the In
tentiOn Of the government 70 buy In I
$4,000, 600 worth OF the Nlcarag uan
unsecured paper money al Y IL 70
aside a large reserve fund, out OF
which outstanding paper money viii \
be redeemed upon this basis. This viii
permit the development of stable cur
rency, and while IL will result in
large profit 10 those who hold big I
quantities OF Nicaraguan paper secured /
when the exchange was % to one, yet \
II is about the only way out OF the diff
hculty.
Bank Organized
Another step in the direction Of bet
ter finances in Nicaragua has been the
organization Of a bank, under the laws
Of the state of Connecticut 81 percent
OF whose stock viii be owned by Brown
brothers and the Seligmans- Nicaragua
has reserved the right TO acquire a GER
tain percentage Of the stock Of the new
bank whenever II desires. This bank I
will be a bank OF issue, the govern
ment granting it the privilege OF issu-
ing bank notes properly secured.
New Gold Coin.
A new gold coin has been estab- /
lished as the. real unit of value hereaf-
ter to be maintained I'm Nicaragua II /
VIII be exactly equivalent to 81
American gold, and will be called the /
Cordoba" in honor of the national
heroes
If the pending treaty is ratified by
the United states senate. the yrbo1a !