Bankers' Dictature?

Senor L. F. Ibarra, President of the Nicaraguan Nationalist League, now in retirement at San Jose, Costa Rica, announced last week that he had sent to Rear Admiral Julian L. Latimer, commanding the U. S. forces occupying Nicaragua (TIME, Sept. 13 et seq.) a message as follows:

"You and your squadron should call yourselves pirates of Wall Street, because against all morality and justice, you trample on the honor of a weak people, solely obeying Kellogg's orders in behalf of a group of Jewish bankers located in New York, where the Statue of Liberty stands."

Senor Toribio Tijerino, onetime Nicaraguan Consul General at New York, recalled last week to Manhattan newsgatherers the fl, 1,000,000 loan negotiated between the present Nicaraguan Government (upheld by U. S. marines) and the Manhattan firms of J. &. W. Seligman & Co., and the Guaranty Trust Co. (TIME, May 16). Said Senor Tijerino: "The loan contract was entered into with the knowledge and approval of the State Department of the United States. . . .

"Without risking or spending one cent, without making an investment of any kind, the New York bankers have taken absolute control of Nicaragua. Its transport system, its currency and credit and, by those means, the government of Nicaragua itself, is in the hands of J. & W. Seligman & Co. and of the Guaranty Trust Co. of New York."

Senor Tijerino; then purported to explain the nature of the "loan contract." He alleged that a 1,000,000 credit was set up in Manhattan on which the Nicaraguan Government pays 6% annual interest, plus a 1% commission interest on the whole amount, whether any of the credit be withdrawn or not.

In return, he alleged, the U. S. bankers were given a majority position on the boards of the National Bank of Nicaragua, Inc., and the Pacific Railways of Nicaragua, Inc., a position which they allegedly made use of to transfer some 3,500,000 of funds belonging to these institutions from the Royal Bank of Canada to the Guaranty Trust Co. and J. & W. Seligman & Co. Upon these deposits, Senor Tijerino; alleged that only 2% and 2 1/2% interest is being paid.

Lastly Senor Tijerino; (whose statement to the press was in the form of an open letter to Senator Henrik Shipstead*) declared:

"It will interest you to know that in the reorganized [Nicaraguan] boards of directors, Mr. R. F. Loree, who is one of the vice presidents of the Guaranty Trust Co., and Mr. Philip Tillinghast, president and treasurer respectively of the National Bank of Nicaragua, have been granted salaries of $6,000 each. These salaries, Mr. Senator, are only in the nature of a windfall for these gentlemen.

"A very careful study of the [loan] contract, reveals that it does not in the least deal with a straight loan at all. In other words, the bankers are not lending Nicaragua one red penny of their money."

At Manhattan, Mr. Loree and Mr. Tillinghast would make to reporters no statement concerning Nicaragua.

* The Senator, a Farmer-Laborite, was chairman last January of a sub-committee investigating the Nicaraguan situation.