868.51/1090
The Minister in Greece (Skinner) to the Secretary of State
[Received March 29.]
Sir: I have the honor to report that the Blair financial group are making proposals to the Ministry of Communications for a loan of upwards of $1,200,000 to be employed in the construction of railway buildings, including especially a machine-shop. The Blair group have included in their proposition an obligation on the part of the Hellenic Government, should the terms be accepted, that, prices and quality being equal, American machinery and supplies are to be employed in erecting and equipping the new plant. I am unable to suggest at this writing what action the Government will finally take.
I inform the Department of the above proposal of the Blair group for the special purpose of calling attention to the possibility of safeguarding American export trade in connection with foreign loans. No sooner was it known in Athens that an American group were offering funds to the Ministry of Communications than German manufacturers of machines, tools and the like, invited the railway authorities to send representatives to Germany to look over German devices, with a view to their purchase and sale—a perfectly legitimate undertaking in itself, although it suggests that if German manufacturers are to furnish supplies, they should at the same time be invited to furnish the necessary capital.
It seems to me that we cannot ignore the relation of foreign loans to industrial prosperity in the United States. For myself, I would be quite satisfied if our financial houses could be induced, by common consent and without legislation, to make their financial support in foreign countries conditional upon an undertaking on the part of borrowers to patronize the American market, prices and quality being equal. Unfortunately, money lenders in the United States seem to have been too eager to place their funds to give any consistent thought to this other aspect of money lending. If, however, a scheme cannot be devised for the voluntary withholding of financial support without corresponding protection of our industrial interests, then perhaps it may become necessary in the near future to secure legislation covering the point involved.
I take the liberty of suggesting, as a working provisional arrangement, [Page 43] that hereafter, before the Department expresses itself generally as to the absence of objection to a foreign loan flotation in the United States, inquiries be made respecting the precise uses for which the capital is intended to be employed, with a view to inserting in the contract a clause similar to the one inserted by the Blair group in the tender to the Hellenic Government referred to in the beginning of this despatch.
I have [etc.]