860h.51/581
The Minister in the Kingdom of the Serbs, Croats and Slovenes ( Dodge ) to the Secretary of State
[Received October 12.]
Sir: Referring to my Despatch No. 2726 of June 26th last,2 relative to the proposed Loan of Messrs. Blair and Company and Messrs. Armstrong, Whitworth and Company to the Yugoslav Government, I have the honor to inform you that since my return here I have renewed my acquaintance with Mr. Nelson O’Shaughnessy, the new representative here of Blair and Company. My despatch above referred to mentioned that the $3,000,000 six months Yugoslav Treasury Notes taken by Blair and Company on October 1st last, and renewed on April 1st last for another six months, would mature on October 1st next. The Yugoslav Government, although professing to have funds on hand sufficient to enable them to pay off these notes at maturity, are anxious to renew them and Blair and Company are also desirous of so doing in order thus to preserve for some time longer their option on the Adriatic Railway contract.3 Mr. O’Shaughnessy has lately shown me two telegrams which he has received from Blair and Company in New York concerning Blair and Company’s negotiations with the Department in connection with this [Page 742] note renewal. These telegrams appear to be of sufficient interest for me to quote them as follows:
“Sent September 21st. 1925, 4.36 p.m.
Received in Belgrade, September 22nd. 1925, 9.30 A.M.
Monday No. 27. Deliver the following to the Minister of Finance. ‘In response to our enquiry concerning the proposed $3,000,000 note issue, we have been advised by the American State Department United States Government does not view with favour Yugoslav financing at the present time. Presume Minister of Finance will take up matter direct with our Government. Are doing everything possible to secure modifications this decision.’ Blair.”
“Sent from New York September 22nd 4.46 p.m.
Received in Belgrade; Sept. 23rd 9.15 a.m.
Tuesday No. 28 Communicate the following to the Minister of Finance. ‘After bringing pressure to bear on our Government we are informed verbally that our Government reluctantly agreed not to raise objections to issue Six Months Notes to provide for funds for those maturing Sept. 30th. It was intimated that we could not count on any financing being approved either for renewal of the new notes or for other purposes until commission had come to Washington to settle outstanding questions debt owed by your Government to our Minister of Finance.’ Blair”.
Mr. O’Shaughnessy informs me that in view of the second telegram quoted above the renewal of the Yugoslav Treasury Notes for another six months is now practically assured but that further financing on the part of Blair and Company is at a standstill in view of the last sentence in this telegram and in view of the continued absence from Belgrade of the Minister of Finance, Dr. Stojadinovitch. As stated in my Despatch No. 2810 of the 12th instant,4 in reply to your Instruction No. 575 of July 23rd last,4 relative to the assurances given by the Yugoslav Government in connection with its debt to the United States, I am proposing to call upon Dr. Stojadinovitch upon his return in order to ascertain his intentions regarding the funding of this debt.
I may also mention that I learn strictly confidentially that the relations between Blair and Company and Armstrong, Whitworth and Company, have of late become still further strained and that unless they change for the better, it is unlikely that the British firm will be allowed to participate in further financing by Blair and Company. My Despatch No. 2670 of May 6th last4 reported complaints made by Blair and Company on account of the attitude in a number of matters of Armstrong, Whitworth and Company.
I may add in this connection that a few days ago Messrs. T. L. Addy Taylor and E. P. Thomas of the United States Steel Products [Page 743] Company called at the Legation and stated that they had been in correspondence with a lawyer here about the possibility of their Company bidding for the construction of the great bridge across the Danube at a point a few kilometres below Belgrade. They stated that their Company did not propose to finance this undertaking directly but possibly through Blair and Company. They proposed to call on Mr. O’Shaughnessy. As reported in my Despatch No. 2670, above referred to, and in other despatches, the construction of this bridge, the so-called Pancevo Bridge, has lately been considered by Blair and Company and Armstrong, Whitworth and Company as forming part of the proposed Adriatic Railway.
I have [etc.]