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several places in the south of that country, among them Corpus, Yuscarán, Cholutua, and Nacaome.
It is also reported that they have suffered two defeats, one at the Robreral, another at Santa Maria.
President Vasquez is supposedly intrenched at Cerro de Hule, a mountain pass in the neighborhood of the capital of Honduras, whence he can keep an attacking army in check.
Thé invading Honduraneans and their Nicaraguan allies under General Ortiz occupy the whole territory in the south west, but a new development makes them fear to advance. Salvador is said to be massing troops on the frontier of Honduras, and it is difficult to say what attitude President Ezeta will take or whom he will support, Vasquez or Bonilla.
Everywhere men are being recruited and commerce and agriculture are in a state of paralysis, every available man being engaged for mili. tary service.
The money collected in the last loan is fast disappearing in the necessities of the war, and another forced loan may soon be expected.
It is very difficult to get reliable data from the seat of war, the Government carefully giving out only such information as is favorable. I beg to remain, etc.,
Mr. Baker to Mr. Gresham,
LEGATION OF THE UNITED STATES,
Managua, March 12, 1894. (Received April 4.) SIR: I am pleased to be able to report that the war between Nicaragua and Honduras is over. It resulted in the overthrow of Vasquez, the late President of the latter country, and the establishment of the authority of Dr. Policarpo Bonilla over all Honduranean territory. The Nicaraguan troops have returned to this country, and were greeted with great demonstrations of applause at all towns through which they passed. These demonstrations culminated in a mammoth parade and a feast to the returning heroes at Leon, which lasted three days, and which has just now been brought to a close.
President Zelaya and his advisers now express the greatest confidence that a long era of peace for these two countries is now before us.
Mr. Vasquez made his escape into Salvador, and, having attempted to escape from that country to Amapala for the purpose of continuing the turmoil, he was arrested by order of President Ezeta, and taken to the capital of that country. I understand that he will be permitted to proceed to the United States.
General Ortiz, who commanded the Nicaraguan troops, proved himself a level-headed, self-contained, and humane commander. I have, etc.,
POLITICAL SITUATION IN NICARAGUA,
Mr. Baker to Mr. Gresham.
LEGATION OF THE UNITED STATES,
(Received November 13.) SIR: I carried out my intention of leaving San Jose, Costa Rica, on the evening of the 18th, reaching Punta Arenas on the evening of the 20th. I sailed from there on the following morning by Pacific Mail steamer and arrived in Corinto Sunday afternoon, the 22d.
At that place I found a very uneasy condition of public feeling. The air was full of rumors of an impending revolution and reports that General Zelaya had assumed dictatorial powers and has placed in confinement or banished a large number of prominent citizens of the opposition party. I was also shown a copy of a decree, of which I inclose a translation.
The main points of this decree, issued by the Constituent Assembly, are to suspend individual guarantees, to establish martial law, to empower the President to raise forced loans, and to authorize him to imprison or banish those convicted or suspected of intention to change the present order of things.
I arrived in Managua last evening, and this morning had a conference with President Zelaya. He assured me that but five citizens in all-two from this place and three from Granada—had been placed under arrest, and I found this statement to be correct. The President's explanation of the reasons for the decree was that a large number—between 3,000 and 4,000—of arms were missing, and were thought to be secreted with a view of being used in an attempt to overthrow the present Gov. ernment. He claimed also to have strong evidence of the existence of a conspiracy intended for the destruction of the present peaceful condition of things.
In the same conversation the President intimated that the parpose of the administration was to place an export tax upon coffee, as has recently been done in Costa Rica. He also assured me that in levying the forced loan which is provided by the decree, Americans and other foreigners doing business in this country would be exempt.
It has been rumored that the constituent convention would provide, in the new instrument, that all foreign citizens should take the oath of allegiance to this country, and should agree not to call upon their home Government for protection. This the President denies absolutely, but explains that hereafter all persons entering into contracts with this Government for the purpose of doing Government work, would be required to enter into such an agreement. He assured me also that it is the earnest wish of the Government to encourage the immigration of enterprising people of means who are willing to engage in the development of the country, and that every reasonable encouragement would be held out to such. I beg, etc.,
(Inclosure in No. 121.- Translation.)
DECREE OF OCTOBER 19, 1893. The Constituent Assembly:
Whereas it has been discovered that plans are being made for the purpose of destroying public order and that the executive must be vested with powers required by existing conditions, the assembly decrees: Art. 1. Individual guaranties are suspended.
ART. 2. The executive power shall be authorized to exact forced loans from privato parties, as well as general ones, and to fix the method and time in which they are to be paid.
ART. 3. Persons committing any of the crimes mentioned in article 635 of the Military Ordinances shall be subject to the military authorities.
ART. 4. The executive power shall be anthorized, in accord with the council of ministers, to place in continement or to banish any person convicted or suspected of plans or projects which have for their object the change of public order.
ART. 5. The executive power is also authorized to legislate in matters relating to war, finance, and public works.
ART. 6. In case the loan mentioned in article 2 should be general, no quota shall be assigned to persons owning less than $5,000 besides their dwelling house.
Art. 7. The present law shall be in force from the time of its promulgation, and shall continue in vigor until the new fundamental law shall have become obligatory; the executive power is authorized, if he deems it advisable, to reestablish the enjoyment of the suspended guaranties.
To the executive power. Hall of the sessions of the National Constituent
Presiding Deputy. AG. DUARTE,
Secretary. T. GUZMAN,
AUTHORITY OF DIPLOMATIC OFFICERS TO CELEBRATE MARRIAGES.
Mr. Baker to Mr. Gresham.
LEGATION OF THE UNITED STATES, Managua, January 22, 1894. (Received February 23.) SIR: Captain T. W. Tucker, commander of the Victoria on Lake Nicaragua, has applied to me to perform the marriage ceremony for himself and a young lady of this country. Both are Americans and Protestants. Captain Tucker informs me that there is no ordained Protestant minister or other person authorized to conduct a marriage ceremony in Nicaragua other than Catholic clergymen. Can you authorize me to perform this ceremony ! I have, etc.,
Mr. Un to Mr. Baker.
DEPARTMENT OF STATE,
Washington, February 24, 1894. SIR: I have received your No. 199, of 22d ultimo, relative to the application made to you by Captain T. W. Tucker, commander of the Victoria, on Lake Nicaragua, to perform a marriage ceremony.
This Department is not competent to authorize you to perform the marriage ceremony, even where both the parties are citizens of the United States. It is essential that marriages of American citizens abroad shall be performed according to the laws of the country where the marriage takes place. In this connection you may consult the circular of February 8, 1887. (F. R., 1887, p. 1133.) I am, etc.,
EDWIN F. UAL,
Mr. Guzman to Mr. Gresham.
Washington, January 9, 1895. SIR: I have received instructions from my Government to state to your excellency that, in view of the present tariff law of the United States, Nicaragua considers abrogated by said law the arrangement of commercial reciprocity concluded between the two countries,
and that consequently it will henceforth be regarded as nonexistent.
In giving this information to your excellency, I have the honor to renew to you the assurances of my highest consideration.
Mr. Gresham to Mr. Guzman
DEPARTMENT OF STATE,
Washington, January 12, 1895. SIR: I have the honor to acknowledge receipt of your note of the 9th instant, and to accept the notification therein made that your Govern. ment considers the reciprocity arrangement between the Ŭnited States and Nicaragua abrogated by the existing tariff law of the United States. Accept, etc.,
Mr. Baker to Mr. Gresham.
LEGATION OF THE UNITED STATES,
(Received November 3.) SIR: The financial condition of Nicaragua has been, for some time past, a source of anxiety, as well as inconvenience, to the public officials of the State. It is understood that the country felt itself unable to pay the semiannual interest due on July 1 to its foreign bondholders, although the sum was not large, amounting to but £8,500 sterling. The Government treasury is empty, and money must be bad to meet current obligations. The revenues from every source are already anticipated and mortgaged for some time to come. In this dilemma, the Government sought a home loan of $500,000 to tide over, but they had no security to offer, and their naked credit did not attract investors; especially in view of the fact that payment had been suspended upon the outstanding custom-house bonds, of which there are about $428,000 unliquidated.
These bonds were issued three years ago, in 1891, by the Sacasa administration, and were sold at 85 cents on the dollar. They bore 12 per cent interest per annum on their face value, and were received at par in payment for customs dues to the extent of 40 per cent of those dues; 40 per cent was paid in cash, and a premium of 20 per cent was
credited to the importer as “benefits." In other words, supposing I hold one of these bonds whose face value is $ 100. Upon this the accumulated interest is now $38; interest and principal $138. I go to the treasury to pay my import duties and present this bond. My rebate aniounts to $27.60, being 20 per cent upon the principal and interest; then, with my credit of 40 per cent on the face value, I pay into the treasury but $32.40 in settling my $100 of dues, and receive a credit on my bond of $40, leaving it still worth, for revenue purposes, $98. In using this same bond in the next transaction, I am again entitled to my premium or rebate of 20 per cent.
The Government finding itself pressed for cash with which to pay their ordinary expenses, announced that, until the year 1896 at least, these bonds would no longer be received; that all dues to the Government must be paid in cash.
In addition, the Government announced that unless a loan could be negotiated they would be compelled to make an issue of paper money,
The two announcements created great consternation in commercial and financial circles. A meeting of the business men of the country was called at Managua for consultation. The conference was held on the 5th and 6th instant, and the situation was carefully gone over. The result was the Government agreed to take up the outstanding cus. toms bonds, adding to their face all the benefits, privileges, and interests, for which a new bond would be issued. The face of the new bond will show a value of $2.056 for each $1 of the face of the old bond for which the Government received 85 cents. Under the agreement with the merchants these new bonds are to bear 6 per cent interest, and are to be received for customs dues to the extent of 30 per cent of such dues, 70 per cent being payable in cash. This conversion swells this class of indebtedness of the Government to about $877,000.
It was also agreed that the Government will issue $500,000 of paper money, which shall be received for all Government dues, a premium of $5 to be allowed on each $100 paid into the treasury in this currency. The Government further agrees to call this money in and cancel it at the rate of $25,000 per month, commencing January 1, 1896. It is noted, however, that the
Government has not agreed to limit the issue of paper money to $500,000; but it announces that, unless the loan of $500,000 can be negotiated, it will probably be forced to make a second issue of $500,000. As a matter of fact, it is ascertained that an edition of $1,000,000 has been printed and is only awaiting the signatures of the proper officers.
Bonds to the amount of $300,000, gold, were some time ago issued, pledging the export coffee tax for the next year in payment; and these bonds were recently negotiated in Belgium in exchange for rifles and other munitions of war. New fortifications are also to be erected in the vicinity of Managua.
The present export tax on coffee is 2 silver soles per 100 pounds. The next year's crop is estimated at about 150,000 sacks of 100 pounds each. As silver is now at a heavy discount, it is understood among the merchants here that the present export coffee tax is to be increased to $2, gold, per 100 pounds, in order to meet the obligation above noticed. The Government has not, however, taken official action on this point.
Going back a couple of years, a year or so after the original issue of the custom-house bonds, the Government, finding the annount of cash which was coming into the public treasury small, conceived the idea of increasing it by making a large increase in the import duties. The