862.51 R 24/8
Messrs Hornblower, Miller & Garrison to the Secretary of State
[Received January 18.]
Dear Sir: I refer to our letter of January 4th,47 requesting your usual action respecting the proposed loan to the Municipal Gas and Electric Corporation of Recklinghausen, Germany, by the issue of said Corporation’s $1,500,000.—First Mortgage 20–Year Sinking Fund 7% Gold Bonds.
My clients, The Foreign Trade Securities Company, Limited, 43 Exchange Place, New York, advised me today that sometime in October 1927 they had presented this matter to you and have today called my attention to your reply thereto, dated October 14, 1927.47
In your letter of October 14, 1927, you state that the information before the Department indicates that under German regulations in force, this issue is subject to the approval of the Advisory Office for Foreign Loans, the Beratungsstelle, and that you should prefer that the Department’s views be not requested until the Department can be informed that the approval of the Beratungsstelle had already been obtained. We have investigated this situation and are advised by our Berlin office, as well as by our Berlin counsel, Dr. Wilhelm Beutner, that this loan is not included in the German regulations to which you refer, and that the approval of the Beratungsstelle is not required for the reason that this is not a Municipal loan but a loan to a public utility or corporation for which the City of Recklinghausen has not given any guaranty and, therefore, does not come within the regulations of the Beratungsstelle. We are advised that loans of this character are treated as ordinary corporation loans.
Very truly yours,