No. 11.
Mr. Tree to Mr. Bayard.

No. 51.]

Sir: The newspapers here announce the completion of financial arrangements l>y the Free State of the Congo witty the Société Générale, of Brussels; the Landesbank, of Vienna; the house of Mendelssohn, of [Page 21] Berlin; Le Comptoir d’Escompte, of Paris, and a group of German financiers, for the loan of 100,000,000 of francs for the use of the Congo State.

According to the plan said to be adopted, the whole amount is to be divided into lots of 20 francs, not bearing any interest and reimbursable by annual drawings in seventy-five years. A scale of premiums has been adopted, some of which are very high, one of 1,000,000 of francs figuring at the head of the list. The scheme, of course, simply means a lottery.

It is said that it is expected that if the scheme is successful the Congo State will realize by the operation 30,000,000 of francs, the bankers who are to float the loan about twenty millions, while the remaining fifty millions will be used towards the redemption of the bonds and payment of the premiums.

These 50,000,000 of francs, which are to be dedicated to the bondholders under the terms of the agreement, are to be invested in Belgium as a guarantee fund, under management entirely independent of that of the State of the Congo.

As the French and German laws, however, do not permit foreign lotteries, it is evident that the managers of the scheme will be compelled to seek markets outside of these countries. This is equally true of Belgium, but I believe it is expected that a special law will be passed authorizing the sale here of these bonds.

I have, &c.,