824.51/227: Telegram

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

48. Your number 25, December 19, 6 p.m. Yesterday afternoon conveyed to President views of the Equitable Trust Company when the President stated that since the bankers had failed to loan Bolivia funds for the construction of the Potosi-Sucre Railroad he felt they had no further claims upon pledges that had been made to them for such loan and therefore it was only just that the bankers should now release the lien to enable the Bolivian Government to make the twelve million internal or external loan enabling continuation of construction. [Page 452] He stated also that in his opinion the bankers had not been fully advised of the action of Congress in seeking an avenue whereby this railroad could be built without impairing Bolivian credit or the interests of American bondholders; also that Bolivia under her new revenue law would have ample funds to meet the service of the New York loan promptly. He stated the law had been proposed with these considerations in view, together with the building of the Potosi-Sucre Railroad, an improvement which he had thought was provided for in the American loan. He expressed the hope that the bankers would examine carefully the new revenue law and place no obstacles in the way of the Government in raising money for the Potosi-Sucre Railroad. I am informed that Railway Works Company of London desires to consider contemplated loan and it desires to know if Equitable Trust Company would object. Have informed Fiscal Commission which advised bankers but no reply received. In view of this new phase of situation please instruct whether I shall make formal protest.