J. P. Morgan & Co. to the Under Secretary of State (Cotton)

Dear Mr. Secretary: Confirming Mr. Lament’s statement to you on the telephone, the German government proposes to issue, pursuant to the Young Plan and the Hague Agreements,27a an amount of 35 year 5½% bonds sufficient to produce approximately $300,000,000 in effective proceeds; two-thirds of the loan represents the capitalization of annuities payable to the creditor powers and one-third money borrowed by the German government for the German Railways and Posts. The loan is to be international and it is proposed to offer it in the United States, France, Great Britain, Switzerland, Holland, Belgium, Italy, Sweden, and Germany in separate tranches in the currencies of those countries respectively. The amounts of the [Page 106] several tranches have not yet been definitely determined, but it is not expected that the amount offered here will exceed $100,000,000 par amount of bonds or $85,000,000 effective proceeds; and it is expected that a substantially equivalent amount will be issued in France.

I am [etc.]

[Signature illegible]
  1. Great Britain, Cmd. 3484, Miscellaneous No. 4 (1930): Agreements Concluded at the Hague Conference, January 1930.