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

Dear Mr. Secretary: Referring again to the matter of the South Manchurian Railway loan, I have the honor to enclose the original of a letter which I have just received from Mr. R. M. Byrnes, Vice President of the National City Company of New York,58 in which he reviews the history of previous negotiations at the State Department for the purpose of setting the record straight, as Mr. Byrnes sees it.

On page four of Mr. Byrnes’ letter he states that he clearly understands from the letter of the Department of State addressed to me under date of May 23 that the Department does not regard with favor such a loan, but, before giving a final reply to that effect to the National City Company’s representative in Japan, the National City Company would appreciate it if I would inquire from the State Department whether, if a loan were issued in this country, and all the proceeds thereof were spent for equipment and materials in this country, the State Department would have any objection to its negotiation and flotation.

Will you kindly consider the matter from the standpoint of the expenditure of the entire proceeds of the proposed loan in the United States, and let me know as conveniently soon as possible if the State [Page 509] Department would be favorable or unfavorable to such loan on such condition?

Very respectfully,

M. E. Ailes
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