The Secretary of State to Messrs. Davis, Polk, Wardwell, Gardiner & Reed
Sirs: The Department has received your letter of March 17, 1926, in which you inquire whether the Department has any objection to the flotation in the American market by Messrs. W. A. Harriman and Company, Incorporated, of a loan of $25,000,000 to $35,000,000 to a German export company to be formed by German industrials, the proceeds of the loan to be used to extend credit to German industrials in order to sell goods in Russia on the plan outlined in your letter and in your telegram of March 18.2
It clearly appears from the information before this Department that, in its essence, the proposed transaction would be Russian financing and in effect the flotation in the United States of a loan for the purpose of making an advance to the Soviet regime. That regime, as you know, has repudiated Russia’s obligations to the United States and to American nationals.
In the circumstances, I have to advise you that this Government would not view the proposed financing with favor at the present time.
I am [etc.]
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