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firms as request them, entitling them to ship on lighters of "the National Agency” from Amapala to San Lorenzo.

The Government of the United States, in coming to this conclusion, is mindful of the position which the Government of Honduras assumed toward it in severing relations with the Imperial German Government.

It is of course to be understood that this action is taken only as a result of the peculiar circumstances of this case, and that the Com. mercial Export agency will continue to handle all freight between vessels and Amapala and will have all freedom to engage in competitive lighterage business from Amapala to San Lorenzo.

If you consider advisable you may state that the simplest solution, however, and to this the War Trade Board sees no objections, would be for all lighters to operate under the authorized agent of the Pacific Mail Steamship Co., which is understood to be the Commercial Export Co.

You will hand the President of Honduras a copy of the Trading with the Enemy Act and title 7 of the Espionage Act with the respectful indication that a careful study of these documents will show that persons in the United States are prohibited from engaging in any commercial transactions either for the benefit of or on behalf of enemies, directly or indirectly.

LANSING

File No. 763.72112/7158
The Chargé in Honduras (Curtis) to the Secretary of State

[Telegram]
TEGUCIGALPA, February 26, 1918, p. m.

[Received February 27, 4.50 p. m.] Your February 23, 7 p. m., brought to the attention of the President and Minister for Foreign Affairs orally yesterday afternoon, omitting reference to surveys now under way for the new port as none are being made. There were also other minor omissions due to mutilations. I did not consider it advisable to mention next to last paragraph of your cable.

The President stated positively that there is absolutely no German control or interest in the National Agency and explained the Germans claimed they would be paid for them (the lighters] owing to the statement made by the Honduranean Government when canceling exequaturs of the German consuls that Germans would receive still the protection provided by the laws, this being the only assurance of any kind they have had. He stated that the celebration was of birthday of some German royalty.

As to the manager of the National Agency, he intimated that he would be changed if you wish.

He offered no objection to your other proposals, but asked that the entire matter be set forth in writing for his consideration, and I, this morning, sent an aide-mémoire to the Minister for Foreign Affairs.

It seems probable your proposals will be accepted, but that I shall be asked to cable for a general license for all cargo now at Amapala, or at La Unión, or afloat. ...

CURTIS

File No. 763.72112/7397a

The Secretary of State to the Chargé in Honduras (Curtis)

[Telegram]

WASHINGTON, March 1, 1918, 6 p. m. Department's January 21, 7 p. m.,' first paragraph, and Department's January 5, 8 p. m.?

The United States Government is now prepared to make exhaustive survey of channel to and island of Sacate Grande. Obtain formal permission of Honduran Government for making such survey, also permission to land and store at Amapala gasoline necessary for carrying out operations.

LANSING

File No. 763.72112/7220
The Chargé in Honduras (Curtis) to the Secretary of State

[Telegram]
TEGUCIGALPA, March 1, 1918, 9 p. m.

[Received March 2, 4.44 p. m.] Referring to my cable of February 26, 7 p. m., President this afternoon after first submitting counter-proposition reluctantly agreed to the terms stated in your February 23, 7 p. m., but only for a period of two months and with the understanding that I would cable requesting immediately a general license by cable permitting all cargo now at Amapala, Corinto, La Unión, or at sea to be taken from Amapala to San Lorenzo by the National Agency should the consignees so desire. He made it clear that he considered that the assurances of the Honduranean Government as to absence of any German control or interest in the seized lighters ought not to be questioned and that no arrangement of a permanent character could be made until same were accepted by War Trade Board.

Have instructed steamship company to resume.

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Practically all of the cargo brought by the steamer City of Para is still in Amapala and license for its transportation should be cabled immediately. By special authority from the Honduranean Government some cargo for Rosario has been taken to San Lorenzo in the lighters of the Pacific Mail agent; a small quantity for the Government went in the National Agency lighters, as did some unidentified, and some for Santos Soto & Co.

I cannot recommend too strongly that no special licenses be given for shipments to those on the black list as it is impossible to make people here understand why Americans are permitted to [trade with them] whereas local firms are not.

CURTIS

File No. 763.72112/7398
The Chargé in Honduras (Curtis) to the Secretary of State

[Telegram]
TEGUCIGALPA, March 8, 1918, 10 p. m.

[Received March 9, 5 p. m.]

[ Your March 1, 6 p. m. Minister for Foreign Affairs replies to my note requesting permission for the landing and storage of gasoline at Amapala by asking what is the object of the Government of the United States. He refers to his note of January 16 [15] which was transcribed in Legation's January 26 [16], 9 a. m.,' repeats that the Government is favorably disposed, but says that the Honduranean Government then understood that a private company would make proposals relative to the opening of the new port, whereas now it appears that it is our Government which desires to make the surveys. In the course of a conversation he acknowledged that permission had been given to make the surveys if [and] tacitly admitted that permission was still valid, although it had been given rather too hastily. He also asked how long will it take to complete the surveys.

It would appear that there is not enough warehouse space in Amapala of the kind required by law for gasoline in such quantity as our [Navy] proposes to place there. I am keeping in touch with commander of U.S.S. Yorktown.

CURTIS

File No. 763.72112/7398
The Acting Secretary of State to the Chargé in Honduras (Curtis)

[Telegram]

WASHINGTON, March 12, 1918, 3 p. m. Your March 8, 10 p. m. The surveys undertaken by the United States Government will be terminated as soon as possible, the Hon

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duran Government being supplied with a copy of the findings of the survey. The interest of the United States Government in the entire question is indicated in Department's January 5, 8 p. m.'

Gasoline is needed by United States naval vessel and power boat making the survey, for which reason Honduran Government is expected to accord special facilities.

POLK

File No. 763.72112/7469
The Secretary of State to the Chargé in Honduras (Curtis)

[Telegram]

WASHINGTON, March 18, 1918, 4 p.m. Your March 7, 6 p. m.,' and March 13, 3 p. m. Your interpretation of Department's cables was correct. War Trade Board now feels that as the Honduran Government has given formal assurance to effect that all German interests, present and future, have been eliminated, no special licenses to use the lighters of the National Agency will be required. Therefore you will inform the President that as the above assurances both in regard to present as well as future enemy interests in the lighters appear to be satisfactory, the War Trade Board sees no reason why American citizens may not discharge their cargo on National Agency lighters or may not transfer their goods by the same agency from Amapala to San Lorenzo, thus leaving the lighterage business at Amapala open to competition to all agencies in which there is no enemy taint.

War Trade Board has decided that as assurances of Government appear to meet requirements of act, the granting of any license to use National Agency lighters would be tantamount to stating Government of Honduras was acting in behalf of enemy interest.

Department also wishes that there be open competition now that American interests are in a position to dominate Amapala, in view of the fact that complaints have been received from American citizens that Commercial Export Co. was the monopoly of Rosario interests and working against business competition.

The opening of a new port with fair competition would appear to be best solution of matter.

You will carefully notice statement of War Trade Board in regard to “all German interests, present and future.” Impress upon President that the Board is acting upon his assurances as to future as well as present enemy interests.

LANSING

* Ante, p. 376. * Not printed.

File No. 763.72112; 7643
The Chargé in Honduras (Curtis) to the Secretary of State

[Telegram]
TEGUCIGALPA, March 21, 1918, 11 p. m.

[Received March 22, 5.25 p. m.] In view of mutilations in your March 18, 4 p. m., I have not yet presented the matter to the President. Morever, although he has given me most emphatic oral assurances as to the elimination of German interests he has not done so formally. I feel sure, however, that he will do so if I request it.

Referring to the third paragraph of your cable, I am informed by the special representative of the Pacific Mail that American interests do not dominate transportation at Amapala and that apart from Rosario cargo they have been carrying approximately 25 per cent only of the freight from Amapala to San Lorenzo, and that the result of free competition would probably be that the Government would so hinder the operation of the American charter that it would be impossible for them to compete. It seems to me that from a commercial point of view the selection of the Commercial Export Co. was not ideal. Some days ago Walter Bros., who are British but said to be operating with capital received from Parmelee & Co. of New York, objected to showing invoices to competitors. They may presumably ship by the National Agency and have already asked it to handle one shipment, but it is certainly better to show invoices to American competitors than as formerly to German.

As to the new port, I feel convinced that the Sacate Grande proposition will prove too costly to be remunerative and this opinion is shared by the commanders of the Cincinnati, Yorktown, and Marblehead, as well as by others who have studied the matter.

As the present arrangement does not expire until April 30, I shall take no action until further instructed.

CURTIS

File No. 763.72112/7645
The Secretary of State to the Chargé in Honduras (Curtis)

[Telegram-Extract]

WASHINGTON, March 27, 1918,7 p. m. Your March 21, 11 p. m. Department desires you to present substance of its March 18,4 p. m., to President of Honduras and considers it advisable to obtain from him formal assurance as to elimination of German interests, which you state you feel sure he will give if requested.

LANSING

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