The Secretary of State to the Ambassador in Argentina ( Weddell )
150. The Foreign Bondholders Protective Council reports that the Province of Buenos Aires has slightly improved its preceding offer and calculates that its present proposal would give American bondholders during the third period 63 percent of their contractual service as compared with 65 percent of contractual service offered holders of sterling bonds. The Council states that the Finance Minister of Buenos Aires Province urged the Council to make its reply by October 31.
According to the Council’s calculations, an increase of one-eighth of 1 percent would only increase service charges about $87,000 per annum and would give the American bondholders 64% percent of contractual service; an increase of $115,000 would give them equal service with British holders.
You may orally and informally bring to the attention of the Argentine Minister for Foreign Affairs that the Council and the Province are apparently close to agreement, communicating the foregoing discussion of the Province’s latest offer but making it clear that the estimates and suggestions are those of the Council. You may express the hope that Argentine financial authorities will study the Council’s estimates and if they are found correct that they will give consideration to its request for equality of treatment for the American bondholders. You may state that the highly commendable efforts of the Province to service its foreign debt are appreciated and it is very desirable from the standpoint of good will and Argentine credit that no misunderstanding of the terms of the settlement, or any actual remediable discrepancy between the terms offered the American bondholders and those offered the British, be allowed to create a feeling among American investors that they had been subjected to discrimination.