File No. 839.51/957.

The American Minister to the Secretary of State.

[Telegram—Paraphrase.]

The Government is in desperate straits unless some kind of loan is immediately consummated. The President has been compelled of pay out large sums for the expenses of the late war; these were proper expenses and the sums used to pay them were advanced by Michelena, to be charged to the loan. But owing to the uncertainty about the conclusion of the loan, Michelena absolutely refuses to advance another dollar.

Russell.