860h.51/165: Telegram

The Secretary of State to the Chargé in the Kingdom of the Serbs, Croats and Slovenes (Boal)


12. Legation’s telegram no. 12, May 4, 4 p.m.

Blair & Co. report that of the first loan installment of $25,000,000, which is to be issued in the United States, $10,000,000 is allotted to railroad construction and $15,000,000 for rehabilitation of existing railways and construction of needed buildings.
Bertron, Griscom & Co. report that somewhat less than a third of the authorized 500,000,000 gold francs is to be issued immediately; that the initial issue is to be entirely for productive purposes such as, for example, restoration of railways and port facilities, with exception of a portion which might be used to pay Government debts owed abroad but not including debts owed to foreign governments.
The above reports appear to be inconsistent with your advices. Before the Department expresses an opinion to the bankers, it desires a definite report from you in regard to the amount and the purposes of the issue proposed. In addition, you will also inform the appropriate Yugoslav officials that the Government of the United States would be glad to learn the intentions of the Yugoslav Government in regard to the settlement or the refunding of its debt to this Government as soon as may be possible. You will furthermore intimate discreetly that the Government of the United States can not but take into consideration the pending loan negotiations in connection with the indebtedness mentioned above, and add that this Government up to now has had no intimation as to what proposals or representations the Government of the Kingdom of the Serbs, Croats and Slovenes may wish to make in this matter, nor has there been any intimation even as to when negotiations may be begun. In this connection see the Department’s circular of April 21, via Paris.2 Report by cable as soon as possible.