The Guaranty Trust Company of New York and J. & W. Seligman & Co. to the Chief of the Division of Latin American Affairs (Morgan)
[Received March 12.]
Dear Sir: Enclosed herewith please find copies of recent cables exchanged between the undersigned and the Manager of the National Bank of Nicaragua, Inc.38 in which the Manager of the Bank transmits the request of the President of the Republic of Nicaragua for a loan to his Government and of our response indicating our willingness to extend such a loan on certain terms and conditions as to security and otherwise, all of which are fully set forth in the enclosed memorandum. An essential one of these conditions is that the said loan shall meet with the approval of the Department of State of the United States.
In connection with this matter, permit us to point out that should the loan be consummated we propose to charge 1% commission on the maximum amount of the proposed loan, viz.—$1,000,000.—together with 6% per annum interest on such amounts as may from time to time be actually advanced and outstanding.
The undersigned J. & W. Seligman & Co. have recently sold to the public $8,000,000.–Republic of Costa Rica External Secured Sinking Fund 7% Gold Bonds on a basis yielding to the purchasers about [Page 430]7.40% per annum; also $2,500,000.–7½% Secured Sinking Fund Gold Bonds of the Department of Cauca Valley of the Republic of Colombia on a basis yielding to the purchasers about 7.90% per annum, and other loans of similar character have been marketed by the undersigned and by other banking houses on approximately similar terms.
The advance which we are now prepared to make is therefore not attractive to us by reason of the rate of interest thereon nor is the advance for the purpose of protecting any existing loan or investment, for we have no loans or investments in Nicaragua. We have, however, been actively connected for many years with the constructive work that has resulted in the rehabilitation of the currency, the regulation of the budgetary and other financial affairs of the Republic, the present method of collection of the Customs and the rehabilitation of the railroad, and, having confidence in the good faith and rectitude of the Government of that country, we are willing to do what we can to preserve the labor of many years which has yielded great benefits to Nicaragua and has been a source of pride and gratification to us, by helping the established Government tide over the present period of difficulty without inflating its currency or parting with any of its National assets at a sacrifice.
We respectfully request a formal expression from your Department as to whether or not you approve of the proposed loan.
Yours very truly,
J. & W. Seligman & Co.
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