824.51/105
Messrs. Curtis, Mallet-Prevost
& Colt to the Secretary of
State
New
York
,
May 9,
1922
.
[Received May 10.]
Sir: Referring to our letter to you of March
27, 1922, and to your reply of April 11, regarding the proposed loan to
the Republic of Bolivia by Stifel-Nicolaus Investment Company, Spencer
Trask & Co., and The Equitable Trust Company of New York, we beg to
enclose herewith for your information:
- (1)
- Financing Plan submitted under date of May 1, 1922, by said
Bankers to the Financial Adviser of the Republic of
Bolivia;5
- (2)
- Letter addressed by the Bankers under date of May 1, 1922, to
said Financial Adviser, containing the bid for the bonds
mentioned in said Financing Plan;5
- (3)
- Letter dated May 3, 1922, from said Bankers to the Financial
Adviser of Bolivia, which contains changes to the Financing
Plan;5
and
- (4)
- Letter of May 6, 1922, from said Bankers to the Financial
Adviser, which contains further modifications to the Financing
Plan and the acceptance of the proposition in the name of the
Republic of Bolivia.
A Trust Agreement for the issuance of these bonds is now being prepared
and will be submitted to you as soon as completed.5
Respectfully yours,
Curtis, Mallet-Prevost & Colt
[Enclosure]
The Bankers to the Financial Adviser to the
Government of Bolivia (Bernheim)
Dear Sir: Referring to the conference which
Messrs. Parker, Ca-hill and Mallet-Prevost had yesterday with you
and with Messrs. Rivero, Gumucio and Maginnis, we hereby modify as
follows the [Page 644] proposition
which we made you on May 1st, as amended by our letter of May
3rd:
First: The Financing Plan is hereby modified
as follows:
- (1)
- The $4,000,000 of bonds heretofore reserved for the
completion of the Potosi-Sucre Railroad shall, when issued,
be used for such railroad construction as may be approved by
the Government and the undersigned Bankers.
- (2)
- The shares of the stock of the Banco de la Nación
Boliviana to be pledged as security for the loan shall
include all the shares belonging to the Government; shall be
not less than 114,000; and shall be sufficient to control
the Bank.
- (3)
- In order to enable the Government to carry out its
contract of July 8, 1921 with the Ulen Contracting
Corporation, the Government shall be at liberty to issue the
final $3,000,000 of bonds referred to in Article 33 of the
Ulen Contracting Corporation contract of July 8, 1921—or
rather the $3,000,000 of new bonds to be substituted for the
old—provided the conditions set forth in the Financing Plan
as to the sufficiency of the pledged taxes and revenues,
shall be complied with. To avoid any possible difficulty to
the Government in this connection, however, the Loan
Contract shall provide that in case the pledged taxes and
revenues should not meet the requirements of the Financing
Plan with reference to the issue of additional bonds, the
Government shall pledge as further security for the Loan
such additional taxes or revenues as may be approved by the
Trustee to an amount sufficient to increase the proceeds of
all pledged taxes and revenues so that the same shall not be
less than one and one-half times the amount required for the
annual service of the Loan, including the service upon the
additional bonds proposed to be issued.
We reserve our right to modify the above provisions in the Trust
Agreement which will be executed so as to further facilitate the
issue of said $3,000,000 of bonds by the Government.
Second: The offer we now make is subject to
the above modifications, as well as to all the other terms of our
letters of May 1st and May 3rd and of the Financing Plan therein
referred to; and is further subject to the following conditions:
- (1)
- That our present offer be immediately accepted.
- (2)
- That as the result of the preliminary contract which such
acceptance creates, the Republic shall execute a Trust
Agreement with The Equitable Trust Company of New York as
Trustee and Fiscal Agent providing for the issue of the
bonds. Said Trust Agreement shall be executed immediately
after the passage of the law of ratification below referred
to and shall be in form to be approved by our
counsel.
- (3)
- That on or before the 12th day of the present month the
Congress of Bolivia shall ratify and approve the contract
which we are about to enter into and shall authorize the
execution of the Trust Agreement above mentioned, such
ratification and approval to be in form satisfactory to our
counsel.
- (4)
- That notwithstanding the preliminary contract about to be
entered into, we reserve the right to cancel the same and to
withdraw [Page 645] our offer
at any time prior to the passage of the ratifying law above
mentioned if, in our opinion, the conditions of the market
or any extraordinary circumstances shall make this
necessary.
Subject to all of the above conditions, we offer to purchase the
$19,000,000 of bonds mentioned in our letter of May 1st at 92% of
their par value, with interest thereon from May 1, 1922 to date of
delivery, payment of the purchase price to be made in accordance
with the terms of our letter of May 1st last.
We are handing you this letter in duplicate so that if approved it
may be accepted by the Republic. We understand that Messrs. Rivero
and Gumucio have been duly authorized by Bolivia to close the
negotiations and to sign the respective contracts.
Respectfully yours,
Stifel-Nicolaus Investment
Company
By L. M.
Forster,
Secy.
Spencer Trask & Co.
The Equitable Trust Company of New
York
By M. K.
Parker,
Vice-President
The above proposition is hereby accepted with the understanding that
the failure of Congress to ratify this contract on or before May
12th as above provided shall not create any liability on the part of
the Republic.
Republic of Bolivia
Ramón Rivero
Financial Agent
C. Gumucio
Consul General
Approved—
E. H. Bernheim
Samuel Abbot Maginnis
