814.51 An 4/orig.

The Chargé in Guatemala (Hewes) to the Secretary of State

No. 412

Sir: I have the honor to report that Mr. Reuben A. Yerkes, special representative of the Anglo and London Paris National Bank of San Francisco, accompanied by Mr. Lionel Stahl, called at the Legation on October 8th and presented a printed draft of a contract for a loan of $8,000,000 to the Government of Guatemala by a group of American banks headed by the institution named above. The tentative agreement contemplates the establishment of a fixed monetary standard on a gold basis and provides for the organization of a central bank with a gold capital which will have the exclusive right of issuing currency in the Republic.

Mr. Stahl has informed me that President Orellana has already approved the proposed contract in principle and has submitted it to the Minister of Finance for an opinion. He stated that some opposition was expected from Mr. Solares and other members of the Government, including the Assembly, but it is evident he anticipates the conclusion of the negotiations without material alterations being made in the form of the contract.

Mr. Yerkes was able to give me only three copies of the English text and two in Spanish. There are accordingly enclosed two copies of the proposed contract in English and one in Spanish.1 One copy in each language is retained for the files of the Legation.

I am [etc.]

Clarence B. Hewes
  1. Not printed.