824.51/103a: Telegram

The Secretary of State to the Minister in Bolivia ( Cottrell )

4. The Department is informed by the Equitable Trust Company that a British banking group, which is being actively aided by the British Minister, is opposing the conclusion of a loan with the American bankers and that the Government appears to be carrying on negotiations with the British group. The Agreement between the Bolivian Government and Stifel-Nicolaus, Spencer Trask, and Equitable Trust, dated December 5, 1921, provides that the Republic will negotiate for the proposed large loan exclusively with the bankers who made the million dollar loan in December. It further provides that for 6 months after December 5, the Republic would not negotiate or issue any external loan without the consent of the bankers and that for a period of 3 years the bankers should have a preferential [Page 642] right to purchase, on the best terms offered by any other responsible house, any loan which the Government may issue.

You may, when a suitable opportunity presents, discuss this matter very informally with the British Minister, suggesting that he may not be fully conversant with the terms of the contract with the American bankers. The bankers do not desire that you should take the matter up with the Bolivian Government at this time. The Department will be glad to have a report from you on this subject by cable at an early date.

Hughes