832.51 Sa 6/101: Telegram
The Acting Secretary of State to the Consul at Sao Paulo ( Cameron )
The Department has been approached by representatives of Baker, Kellogg and Company and Ulen and Company with regard to the failure of the Government of São Paulo to deliver an issue of vicinal bonds to the Itararé-Fartura Railroad which were assigned by the latter to the American interests mentioned as security for an advance of about $380,000 made to the railroad company. It is alleged that as security for the bonds not yet delivered the Government has taken a mortgage on the railroad. American interests consider it unjust for the Government to refuse delivery of the bonds on the ground of the Company’s failure to meet certain [Page 1021] financial requirements when such failure is caused by the Government’s refusal to deliver the bonds.
The American interests have not exhausted their legal remedies, or even taken the case into court, feeling that such procedure would entail great delay and expense which should not be necessary under the circumstances. They have asked the Department to use its informal good offices in an endeavor to persuade the Government of Sao Paulo to settle the case.
Consult with Mr. Ralph D. Kellogg, now at Sao Paulo, and if you see no objection discuss the matter informally with the appropriate authorities, expressing the hope that a solution mutually satisfactory to the Government and the American interests concerned may be reached in the near future. Endeavor to ascertain definitely the reason for the state’s refusal to deliver the bonds. Report briefly by cable and fully by mail.