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861.51/117: Telegram

The Ambassador in Russia ( Francis ) to the Secretary of State

619. National City consummated Russian loan $50,000,000, 3 years, following terms: Government deposits roubles 150,000,000 in its bank here upon which bank allows 6½ percent interest and ¼ percent commission quarterly, making total interest 7½ percent. Lenders give Russian Government credit $50,000,000 in America to be drawn as Government requires. Lenders privileged to sell deposited roubles any time during 3 years but must divide equally with Government all obtainable over 33⅓ which value is arbitrarily placed on rouble in loan. If roubles sold before expiration 3 years loan is thereby liquidated. Lenders furthermore have option at 94¾ percent on 5-year, 5½ percent Russian Government loan of $100,000,000, payable in America less agreed commission.

Embassy had no participation in negotiation but I am personally glad loan was effected as will promote better diplomatic relations which fear have become strained by Embassy’s persistent efforts for German-Austrian prisoners and by constant Jewish agitation in America.