Messrs. Davis, Polk, Wardwell, Gardiner & Reed to the Secretary of State

Sir: We are writing on behalf of our clients, Messrs. W. A. Harriman & Co., Inc., who are negotiating a credit to be extended to German industries who sell to Russia upon a plan substantially as follows:

The German industrials will organize an export company under the management of five leading banks and industries.
This German export company to sell its Three to Five-Year 6½% Dollar Notes to an American banking group, the Reischsbank to act as Trustee and to take full responsibility of the principal and interest until the same is invested in the following manner: By the purchase of Three to Five-Year Dollar Notes of German industrials who sell for export on time payments. These notes are to be accepted by the purchasers of goods and are to carry the guaranty of the German Government to the extent of sixty per cent, of their value and to be guaranteed as to the balance of forty per cent, by certain German banks acceptable to the Reichsbank and to our clients, W. A. Harriman & Co., Inc.

Our clients are informed by cable that this matter has been discussed with Mr. Gilbert,1 who sees no objection to the plan and feels that it is sound business from the American viewpoint, and also that Mr. Schacht, representative of the Deutsche Bank, is much in favor of the plan and is giving it his personal support.

We should be obliged if you would inform us whether the Department has any objection to our clients undertaking this business.

Respectfully yours,

Davis, Polk, Wardwell, Gardiner & Reed
  1. S. Parker Gilbert, agent general for reparation payments.