862.51 D 481/6

Memorandum by the Secretary of State

Mr. E. K. Howe, of the Potash Importing Corporation of America, came in at the suggestion of Mr. Hoover and explained to me that he handled the potash sold by the Potash Syndicate and sold it to the manufacturers; that he thought if loans could be raised in this country, he could use that influence to keep down the price of potash. I asked him if he meant by that that if we would not object to loans they could make a bargain with the Potash Syndicate that they would not charge more than a certain price. He said that if he did it, he would do it entirely separate from the Government; that he was interested in keeping down the price though he did not think the manufacturers were particularly interested. I suggested to him that I thought the farmers were; that the attitude of this Government in regard to such monopolies was that we did not in any case fix prices, limit production or control by governing the prices or production in any way; that it was a policy with us; that we had adopted the policy of requesting the bankers to notify the State Department in order that the Department might, if it desired, make any suggestions as to whether there was objection to the loans; that I was satisfied that if we had not done this, we would not have been able to negotiate our foreign debts and he admitted that that was true and that it was wise. Mr. Howe did not pretend to defend the rubber monopoly43 or others but said in this case they had always controlled the price by the Governments and he thought it was better to loan them money and in that way get a lower price. I told him that we could not become parties in any way to any agreement as to prices by any foreign monopoly; that if we withdrew our objection to the potash loan, we would have to do it to other monopolistic loans and there would be public agitation injurious not only to the bankers but severe criticism of the Department and quite likely legislation in Congress to control such loans; that the potash matter had been settled by Mr. Hoover, Mr. Mellon44 and myself in consultation [Page 211] with the President and I could not give him any encouragement that it could be changed. The only possible thing that might be done would be that when we collected all our debts, we might reexamine the question as to whether we would request the bankers to submit loans or have anything to do with them.

Mr. Howe left with the full understanding with me that at present this would not be changed.

F. B. K[ellogg]
  1. See Foreign Relations, 1925, vol. ii, pp. 245 ff.
  2. Andrew W. Mellon, Secretary of the Treasury.