860f.51/421: Telegram

The Secretary of State to the Minister in Czechoslovakia ( Einstein )


34. Your No. 43, July 25, 1 p.m. On July 25 the Department inquired informally of the National City Company whether it had made an advance of $12,000,000 as installment on proposed future loan; and at the same time advised company of Department’s attitude on loans and credits by American bankers to Czechoslovakia at present. The company replied July 29, informing Department that the report was entirely erroneous and that neither the National City Company nor the National City Bank had any such credits outstanding at the present time.

Department informally advised by Dillon, Read and Company that today they received cable from Logan, reporting that the National City Bank had made private advances to the Czechoslovak Government up to $12,000,000 since June 15, 1925, and that the Government is not, therefore, in need of money at present, and that discussions for a general loan have been suspended; also that the European representative of the National City Company was advised yesterday for first time of Department’s attitude toward Czechoslovak financing.

Please investigate discreetly and report facts of actual situation with particular reference to whether Government of Czechoslovakia is or is not at this time in pressing need of funds.