South Bend news-times. (South Bend, Ind.) 1913-1938, 1914-06-19
NICARAGUA BANK
AND ROAD OWNED
BY NEW WORKERS
Foreign Relations Committee
Will Make Investigations
Before Passing on Two Pro-
posed Treaties.

WASHINGTON, June ia thor
ough investigation into the relation OF
American bankers to the government
OF Nicaragua and possibly other Cen
trail american states is TO be conduct
ed by the senate committee on foreign
relations before 1t reports the treaties
with Colombia and with Nicaragua or
submits 70 the senate the nomination
OF Boaz Long 10 be minister 10 Sal
vador.
Members OF the committee were
amazed at the disclosures of Thursday
although the surface was only
scratched. Responsible heads Of the
banking houses Of Brown Brothers
and company and OF the Seligmans
are TO be called 20 tell the commit
tee about their financial deals in Cen
trail America.
Before the committee today Sen.
William Alden Smith brought from
Secy. Of State Bryan and Atty.
Charles Douglas, who represents the
Nicaraguan government, that 81 per
cent OF the National railroad Of Mic
aragua Is owned by a syndicate OF
New York bankers. and 81 per cent
Of the National bank OF Nicaragua IS
owned by the same interests.
Property is MOrtgaged.
on the remaining 40 per cent of
the National railroad which is 219
miles long, there is short time loan
OF S1,0OO,O00 made by Brown Broth
ers and company. Foreclosure Of this
loan is threatened. Under question
ing by members OF the committee the
secretary of state said he had APP
proved the contract under which this
loan OF Sl.OO0.000 by the New York
banking house had been made The
81 per cent referred to was purchased
some time ago for $1,000, 900. The
value Of the road is estimated con
servatively at $4,000, 600, so that II
has passed into the hands Of New
York inanciers at 90 cents on the
dollar.
Attorney Douglas was questioned
sharply Friday in an effort TO learn
whether the S5.00O.0OO the treaty
provides shall be paid TO Nicaragua
VIII go TO the government or 10 indi-
Viduals and lawyers. Mr.. Douglas was
sure 1t would 60 into the treasury, but
out OF the sum 81 600, 900 is TO be used
10 pay off the loan TO Brown Brothers
and company. This loan which il was
said bears per cent interest can only
be repaid IL the secretary of state gets
the treaty ratified.
Would still Control
Even should this be done il was
pointed out in the committee that the
New York group of financiers would
still control the railroad and the ma
tional bank through their majority
left of the remaining $4,000. 600 would
go to the Nicaraguan government.
where the use TO which it might be put
is considered by many members OF
the committee TO be questionable.
At the conclusion OF the committee
meeting Chairman Stone said that no
member had asked that any OF the
bankers be summoned. but he added
that il such a request is made they
will be called.
1T is a fact" said Chairman Stone.
that there is a very distinct feeling in
the committee that the financial af>
fairs of Nicaragua should be carefully
inquired into in this connection.
think IL would be quite safe in pre-
dieting that this will be done"
The question OF fees TO be paid to
attorneys was not preached Thursday.
There will be ample time for that as
the hearing is to be resumed next
Monday when Judge Douglas is to sub
NIT detailed information relative to
the financial conditions of Nicaragua.
In the hearing Thursday Senator
Smith asked a number OF questions
that disclosed the fact that the Mica
raguan institutions which produce
revenue are largely differed by Amer
leans at high salaries.
May Order a Probe.
The Colombian treaty did not come
before the committee Thursday. OPP
position to IL has developed so rapidly.
however, that an amazing suggestion
is made by prominent democratic lead
ers To stem the tide of opposition. IL
is seriously proposed TO withdraw ii
and have an investigation made by
congressional committee into the cir
cumstances the acquisition OF the
Panama canal zone and the setting up
OF this republic Of Panama.
If this Is done the plan COntemplates
summOning former President RoOse-
welt, William Nelson Cromwell. the
New York lawyer and others who had
a prominent part in the initiation OF
the canal project. The purpose Of
this would be 10 show the rights OF
Colombia were ruthlessly taken from
her and the property passed into the
possession Of the United States in a
4 IL