832.51 Sa 6/93
Mr. Andrew Ten Eyck, for E. H. Rollins & Sons, New York, to the Secretary of State
Memorandum for the Secretary of State:
In accordance with the suggestion of the Secretary of State at a conference this morning I reduce to writing the following inquiry on behalf of the investment bond house of E. H. Rollins & Sons of 44 Wall Street, New York City:
In 1926 the State of Sao Paulo, Brazil, brought out a £5,000,000, 7½% loan in London. This loan was brought out through the Sao Paulo Coffee Institute by Lazard Brothers, and was specifically secured by a first charge and receipt of transport tax of one gold milreis on each bag of coffee, and by all the assets of the Institute above mentioned. This issue was brought to the attention of E. H. Rollins & Sons and discussed with the Secretary of Commerce, Mr. Hoover, but was not offered in this market due to his opposition to the nature of the business, involving as it seemed apparent to him, the financing of a monopoly, which might have had the tendency of raising the price of coffee to the American consumer.
This loan has been very successful in London and the bonds are now selling above par. E. H. Rollins & Sons would like to consider the possibility of calling the present issue in London and bringing out a dollar issue in the American market, provided of course the situation would be such that the government would not object to the financing. The call and refunding operation would not involve any new money, nor would it change the actual existing situation as far as coffee is concerned. At the present time it would be possible for E. H. Rollins & Sons to do this business at probably a more favorable rate than that current in London, thereby showing a distinct advantage to the State of Sao Paulo.
The Secretary of Commerce has advised the undersigned to present the matter to the Secretary of State for appropriate consideration, [Page 1020] and conference with the departments of the government concerned, because of recent developments with regard to American financing operations in Brazil to the end that the matter may be presented to the President. It is respectfully requested that specific approval be given to the call and refunding operation above set forth.