Messrs. Curtis, Mallet-Prevost & Colt to the Secretary of State

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:

Financing Plan submitted under date of May 1, 1922, by said Bankers to the Financial Adviser of the Republic of Bolivia;5
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
Letter dated May 3, 1922, from said Bankers to the Financial Adviser of Bolivia, which contains changes to the Financing Plan;5 and
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

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:

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.
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.
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:

That our present offer be immediately accepted.
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.
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.
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,
Spencer Trask & Co.
The Equitable Trust Company of New York
By M. K. Parker,

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

E. H. Bernheim
Samuel Abbot Maginnis

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