1940: Nicaragua

Nicaragua, like many of the American republics, has experienced something of an economic crisis, due to the loss of European markets and the low prices for coffee, which have dropped almost below the cost of production. The hostilities in Europe have deprived this republic of 40 per cent of its foreign markets. In 1939 the United States purchased 75 per cent of Nicaragua's exports ($6,500,000 worth), and supplied almost 70 per cent of Nicaraguan imports, a 35 per cent gain over 1938. Coffee shipments to the United States will now be put on a quota basis (195,000 bags), in accordance with the recent coffee convention (see EL SALVADOR). Gold exports in 1940, which have almost doubled since 1939, ranked above coffee in value, and the government's encouragement, through liberal mining concessions of foreign capital investment in the gold mining industry, should help to ease the foreign exchange stringency. The budget for 1939-40 estimated revenues and expenditures to balance at 20,281,000 córdobas, a substantially higher figure than the budgets of the two previous years.

President Anastasio Somoza has energetically pushed the project for canalizing the San Juan River, linking Lake Nicaragua and the Caribbean, to which Costa Rica finally agreed April 5. This barge canal would be used locally for moderate-draft shipping but could be expanded into a unit of the long-discussed Nicaraguan interoceanic canal. United States Army engineers have been making a field study to determine the feasibility and probable cost of the projected undertaking.