862.51 East Prussia/4: Telegram

The Secretary of State to the Ambassador in Germany (Schurman)


56. (1) On May 3 the Department replied to an inquiry by Blair and Company as to a proposed offering of $20,000,000 bonds of the Province of East Prussia, Germany, that an expression of its attitude would be withheld pending receipt of definite information of action taken by the Beratungsstelle. It is now stated by Blair and Company that, in order to obtain that Committee’s consideration, a German borrower must present a firm offer, which is subject only to the Committee’s approval, so that, in case of such approval being given, the offer becomes a contract whereby the loan is purchased by bankers. The Company asks if they may accompany their bids by a statement of their being conditional upon the Department of State’s raising no objection to the bonds being publicly offered.

(2) You may consult the appropriate authorities informally and discreetly regarding the foregoing and explain the Department’s policy which was stated in its 5, January 9, 6 p.m. If you find the regulations are as indicated above, you may ask whether modification is possible and, if not, whether they would preclude consideration of contracts which are conditioned upon action by all the governmental authorities whose consent is necessary or customary for the issuance and sale of bonds.

(3) The Department has just been informed, in this connection, of the approval by the Beratungsstelle of a Speyer and Company loan for the city of Berlin “in principle.” What is the meaning of this?