894.51 Or 4/23

The Secretary of State to the President of the Riggs National Bank (Milton E. Ailes)

Sir: Reference is made to your letters of February 1653 and 17, 1923, with enclosures, in regard to the proposed loan to the Oriental Development Company, and to other correspondence and conferences with the officers of this Department on the same subject.

I note that it is proposed to issue a loan, not to exceed $20,000,000, that the proceeds will be spent in Japan and its colonies, rather than as originally suggested in Manchuria, Mongolia, the South Sea Islands, Singapore, and the Straits Settlements. I note further the statement in Mr. Schoepperle’s letter of February 16, that although the National City Company is not advised as to the exact application of the proceeds, it believes, in view of the fact that the Oriental Development Company was formed for the purpose of developing Korea, particularly along agricultural lines, and further in view of the guarantee and sanction of the Japanese Government, that the proceeds will be used for productive purposes. With respect to the specific purposes to which the proceeds of the loan are to be devoted, I have also noted the statement in Mr. Schoepperle’s telegram to you dated February 23, 1923,53 that about 15,000,000 yen [Page 506] will be used for redemption of debentures, about 10,000,000 to retire bank loans, and the balance for development purposes in Chosen.

In reply to your inquiry in your letter of February 16 as to the attitude of the Department of State in the matter, I beg to say that this Department, in the light of the information at hand, offers no objection to the financing in question.

I am [etc.]

For the Secretary of State:
Leland Harrison

Assistant Secretary
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