File No. 815.51/326.

The Acting Secretary of State to the American Minister .

No. 55.]

Sir: The Department acknowledges the receipt of your despatch No. 85 of the 4th ultimo in which you enclose a clipping from La Gaceta giving the terms of a proposed contract between the Government of Honduras and the Whitney Central National Bank of New Orleans for a loan of $500,000, and report on the information given you by Mr. Samuel Zemurray.

The correct title of the bank in New Orleans is now the Whitney Central Trust and Savings Bank of New Orleans. With this bank in their negotiations with Honduras are associated Messrs. William C. Sheldon and Company of New York. The Department was not informed until January 29th of the intention of these bankers to negotiate with Honduras a loan contract to replace the agreement entered into with Messrs. Morgan and Company, which has lapsed and from which Morgan and Company have withdrawn, according to an announcement made through their attorney, Mr. Jennings, to the Department on the 3rd ultimo. On February 3 a letter of introduction to you was sent by the Department to Mr. Lamar C. Quintero, [Page 610] who has gone to Honduras to represent the bankers in conjunction with Mr. Samuel Zemurray, which letter authorized you to tender Mr. Quintero such unofficial and informal assistance as you properly might.

The Department supposes that Mr. Quintero has communicated fully to the Legation the bases of the arrangement which the above-mentioned bankers propose to negotiate with the Government of Honduras, especially as the Department has seen recent press reports to the effect that the Honduran Assembly has approved the contract, copy of which was transmitted in our despatch No. 85, for a preliminary loan of $500,000.

A copy of a letter from Mr. George R. Sheldon, summarizing the plan of the bankers for a preliminary loan to be followed by one for $10,000,000, is enclosed for your confidential information.1

The Department shares the hope expressed by Mr. Sheldon that the Loan Convention will now be approved both by the Senate of the United States and the Assembly of Honduras, and you will devote all your efforts, in so far as is proper, to obtain the ratification thereof by the latter. Should Honduras formally approve the Loan Convention, the effect here would undoubtedly be very favorable.

I am [etc.]

Huntington Wilson.
  1. Not printed.