816.51/173: Telegram The Minister in Salvador (Schuyler) to the Secretary of State SAN SALVADOR, July 8, 1922-10 a.m. [Received 12:30 p.m.] 62. Has Department approved terms of loan contract as finally signed by Keith and Keilhauer on June 24th and received here yesterday? It is to be presented to the Congress on Monday for approval. SCHUYLER 816.51/173: Telegram The Secretary of State to the Minister in Salvador (Schuyler) 31. Your July 8, 10 a.m. WASHINGTON, July 15, 1922—1 p. m. 6. Department understands that the Minister for Foreign Affairs is prepared to send you the following note: "I have the honor to inform Your Excellency that the loan contract signed in the City of New York, the 24th of June last, between Mr. Minor C. Keith, for himself, and Mr. René Keilhauer, as the representative of this Government, has been approved by the National Legislative Assembly at a session held on the (date). By virtue of this approval, the Government of Salvador has the honor to assure the Government of the United States that the contents of the note which this Government had the honor to address to Your Excellency on the 20th October 1921, is applicable in all its parts to the above mentioned contract of the 24th June 1922, as approved by the National Assembly; and that all stipulations and conditions made therein with reference to the supervision of Customs and to the Collector General shall also become effective in the event that the provisions of Article XVI and [to?] XXII, both inclusive, should be applicable in accordance with the terms and provisions of the Loan Contract as approved by the National Assembly." 7. You are authorized to reply to this note textually as follows: "I have the honor to inform Your Excellency that the Government of the United States hereby acknowledges the receipt of the formal note of the Government of Salvador dated (date), in which that Government states as follows: (quote full text of proposed Salvador note). The note of the Government of Salvador of October 20, 1921, referred to, reads as follows: (quote full text of Salvador note of October 20, 1921, following corrections indicated in Department's instruction No. 31 of May 16°). 8 Foreign Relations, 1921, vol. II, p. 852. 'Not printed. My Government having now taken cognizance of the loan contract signed on June 24, 1922, between the Government of Salvador and Mr. Minor C. Keith, and approved by the Assembly of Salvador on (date), instructs me to acknowledge your note of (date), and to state that the Government of the United States is gratified to receive the assurances therein contained, and that the Secretary of State on his part is prepared to carry out the stipulations with reference to him in your note of October 20, 1921, and in Articles IX, XIX, and XXI of the loan contract in the event that it should be necessary to do so. My Government instructs me to repeat, however, that it must reserve entire liberty of action with regard to any diplomatic representations which it may feel it advisable to make with regard to the conduct of the office of the Collector General of Customs or with regard to the removal of that official in the event that he should prove incompetent or conduct his office in an improper manner. I take this occasion to renew to Your Excellency the assurance of my highest consideration." HUGHES 816.51/194: Telegram The Ambassador in Great Britain (Harvey) to the Secretary of State LONDON, August 17, 1922-11 a.m. [Received August 17-8:33 a.m.] 362. The representatives of Minor C. Keith and Blair and Company, are now here trying persuade the British holders of the 1908 and 1915 Salvadorean bonds to agree to the loan contract between the government of Salvador and Keith executed on June 24. The result of negotiations would be greatly aided if the Embassy would inform the trustee of the bondholders that the Department approved of the contract. Have you any objection? Please answer as soon as possible. HARVEY 816.51/194: Telegram The Secretary of State to the Ambassador in Great Britain (Harvey) WASHINGTON, August 22, 1922—4 p.m. 262. Your August 17, 11 A. M. You may inform the trustee of the bond holders that the Department would view with favor an adjustment of Salvador's existing debt under the terms of the Keith contract and that this Government, by an exchange of notes, has accepted certain assurances given by the Government of Salvador regarding the contract and has accepted stipulations of the contract referring to the Secretary of State. HUGHES 816.51/231 Messrs. Lansing and Woolsey to the Secretary of State WASHINGTON, December 8, 1922. SIR: Referring to the Department's letter of July 15th 10 in regard to the proposed loan to Salvador by bankers in the United States, we beg to state that since that date negotiations with a view to underwriting the proposed loan have been continued with bankers in New York City and that as a result thereof a Fiscal Agency Contract has been entered into between the Republic of Salvador (represented by René Keilhauer), Minor C. Keith and the Metropolitan Trust Company of the City of New York as Fiscal Agents and a Purchasing Agreement has been signed between the Republic of Salvador (represented by René Keilhauer) and Minor C. Keith, both Contracts being dated December 1, 1922. Lisman and Company of New York have advised Mr. Keith in a letter dated December 1, 1922, that they are prepared to enter into a contract for underwriting the bonds of Series A under certain conditions. We inclose herewith copies of these documents 10 for your consideration in connection with the Loan Contract of June 24th last, a copy of which is also inclosed for convenience.10 The Fiscal Agency Contract has been forwarded to Salvador for immediate submission to a special session of the National Assembly which we are advised will be called at an early date. The Fiscal Agency Contract upon becoming operative will supersede the Loan Contract of June 24th in all respects, and the Purchasing Agreement of December 1st will in a similar manner supersede the Purchasing Agreement of June 24th. The Fiscal Agency Contract does not change the general plan set forth in the Loan Contract of June 24th but it is more concise than the latter Contract and contains modifications favorable to Salvador, notably the reduction of the sinking fund and the redemption price of the bonds. We would be pleased if the Department would be good enough to advise us at the earliest possible date if it perceives any objections to the Fiscal Agency Contract as it is desirable that any changes suggested by the Department should be made before the Fiscal Agency Contract is submitted to the Assembly. If there is no objection to the Contract, we would ask the Department to telegraph the American Legation at San Salvador at our expense its views regarding the same for the information and guidance of the Legation. It will be observed that one of the conditions of the SalvadorKeith Purchasing Agreement as well as of the proposed Keith-Lis 10 Not printed. man Agreement is that there should be an exchange of notes between the Republic of Salvador and the United States in respect of the Fiscal Agency Contract similar to those exchanged between these countries with reference to the Loan Contract of June 24th. We trust that when the Fiscal Agency Contract has received the sanction of the National Assembly in Salvador that there will be no objection on the part of the Department to entering into such an exchange of notes with reference to this Contract. We are [etc.] 816.51/222: Telegram LANSING & WOOLSEY The Chargé in Salvador (Hewes) to the Secretary of State SAN SALVADOR, December 28, 1922—noon. [Received December 29-12: 12 a.m.] 120. This Government accepted and signed the terms of the New York Bankers and Mr. Keith yesterday thereby concluding the loan negotiations. 816.51/222 : Telegram HEWES The Secretary of State to the Chargé in Salvador (Hewes) WASHINGTON, December 30, 1922-5 p.m. 53. Reference your December 28, noon. To what terms do you refer? Is Mr. Keith proceeding under contract of last June or under new contract of December 1st? Because of new provisions in December contract, Department is still considering advisability of acquiescing in contract and has not as yet committed itself to a further exchange of notes. Also it is not prepared at this time to approve of Mr. Keith proceeding under contract of last June. Bearing this in mind, you will refrain from discussing loan with Government officials. If you are asked regarding Department's views you should simply say that matter is still receiving consideration. HUGHES 816.51/224: Telegram The Chargé in Salvador (Hewes) to the Secretary of State SAN SALVADOR, January 3 [2?], 1923-6 p.m. [Received January 3-10:40 a.m.] 3. By Executive decree issued today the Metropolitan Trust Company of New York is named fiscal agent of the loan in accordance with article II of the contract of June 24th. HEWES 816.51/222: Telegram The Secretary of State to the Chargé in Salvador (Hewes) WASHINGTON, January 9, 1923—5 p.m. 2. Department's December 30, 5 p. m. Department has now informed bankers that it has no objection to their proceeding under loan contract of June 24 last. HUGHES AGREEMENT SIGNED BY THE PRESIDENTS OF NICARAGUA, HONDURAS, AND SALVADOR AUGUST 20, 1922, ON BOARD THE U. S. S. "TACOMA" IN FONSECA BAY (See volume I, pp. 417 ff.) |