Messrs. Lansing and Woolsey to the Secretary of State

Sir: Referring to the Department’s letter of July 15th10 in regard to the proposed loan to Salvador by bankers in the United States, we beg to state that since that date negotiations with a view to underwriting the proposed loan have been continued with bankers in New York City and that as a result thereof a Fiscal Agency Contract has been entered into between the Republic of Salvador (represented by René Keilhauer), Minor C. Keith and the Metropolitan Trust Company of the City of New York as Fiscal Agents and a Purchasing Agreement has been signed between the Republic of Salvador (represented by René Keilhauer) and Minor C. Keith, both Contracts being dated December 1, 1922. Lisman and Company of New York have advised Mr. Keith in a letter dated December 1, 1922, that they are prepared to enter into a contract for underwriting the bonds of Series A under certain conditions. We inclose herewith copies of these documents10 for your consideration in connection with the Loan Contract of June 24th last, a copy of which is also inclosed for convenience.10

The Fiscal Agency Contract has been forwarded to Salvador for immediate submission to a special session of the National Assembly which we are advised will be called at an early date. The Fiscal Agency Contract upon becoming operative will supersede the Loan Contract of June 24th in all respects, and the Purchasing Agreement of December 1st will in a similar manner supersede the Purchasing Agreement of June 24th. The Fiscal Agency Contract does not change the general plan set forth in the Loan Contract of June 24th but it is more concise than the latter Contract and contains modifications favorable to Salvador, notably the reduction of the sinking fund and the redemption price of the bonds.

We would be pleased if the Department would be good enough to advise us at the earliest possible date if it perceives any objections to the Fiscal Agency Contract as it is desirable that any changes suggested by the Department should be made before the Fiscal Agency Contract is submitted to the Assembly. If there is no objection to the Contract, we would ask the Department to telegraph the American Legation at San Salvador at our expense its views regarding the same for the information and guidance of the Legation.

It will be observed that one of the conditions of the Salvador-Keith Purchasing Agreement as well as of the proposed Keith-Lisman [Page 891] Agreement is that there should be an exchange of notes between the Republic of Salvador and the United States in respect of the Fiscal Agency Contract similar to those exchanged between these countries with reference to the Loan Contract of June 24th. We trust that when the Fiscal Agency Contract has received the sanction of the National Assembly in Salvador that there will be no objection on the part of the Department to entering into such an exchange of notes with reference to this Contract.

We are [etc.]

Lansing & Woolsey
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