The Secretary of State to Mr. Thomas W. Lamont of J. P. Morgan & Co.

My Dear Mr. Lamont: I beg to acknowledge the receipt of your letter of May 26, 1925, in which you were good enough to inform me, in confirmation of telephone advices, in regard to the proposed banking credit of $50,000,000 to Italian banks for a term of six months, with an option of renewal for a further like period. I note that it is expected that the Italian Government would undertake to guarantee the credit, and I note further your observations to the effect that this is a banking credit rather than a public flotation of a Government loan.

In the circumstances I desire to say that while this Department expresses no opinion concerning the transaction in question, it could not withhold objection to a public flotation of Italian bonds or an extension of credit to the Italian Government to take up the credit in question or for other purposes, unless, in the meantime, the Italian Government had taken suitable steps looking toward the settlement or refunding of its indebtedness to the Government of the United States.

Very sincerely yours,

Frank B. Kellogg