894.51 Or 4/23

The President of the Riggs National Bank ( Milton E. Ailes ) to the Economic Adviser of the Department of State ( Young )

Dear Dr. Young: Referring to my conversation with you yesterday, I enclose herewith copy of letter I have just received from Mr. Victor Schoepperle, Assistant Vice President of the National City Company, New York, giving further information touching the question of the use of the proceeds of the proposed loan to the Oriental Development Company.

Very truly yours,

Milton E. Ailes
[Enclosure]

The Assistant Vice President of the National City Company, New York ( Victor Schoepperle ) to the President of the Riggs National Bank ( Milton E. Ailes )

Dear Mr. Ailes: With reference to your inquiry as to the use of the proceeds of the proposed Oriental Development Company loan, we are pleased to submit the following:

Our representative at Tokyo, having received a written statement from the officials of the Company based on the sanction of the Minister of Finance that the proceeds will be spent in Japan and its colonies, [Page 505] has presumably not been advised as to the exact application of the proceeds. The Oriental Development Company was, of course, formed for the specific purpose of developing Korea (which is part of Japan proper), particularly along agricultural lines. Therefore, in view of the Government guarantee and the sanction of the Finance Minister authorizing the statement made by the Oriental Development Company that the proceeds will be spent exclusively in Japan, we can hardly believe that the Government would permit the use of the proceeds for any but productive purposes, and we cannot believe that the Oriental Development Company would use the funds for any purposes other than those above referred to.

The Japanese interests who have approached us on this matter are of foremost importance in Japan and, needless to say, we feel that they will appreciate the serious consideration which the State Department is giving this matter, particularly in view of the position taken by the Japanese Government, in sanctioning negotiations in the American market.

Very truly yours,

Victor Schoepperle