The Chairman of the Bondholders Protective Committee for the Republic of El Salvador ( Lisman ) to the Secretary of State

Dear Sir: We wish to thank you for the assurances given to our Mr. Lavis by the Department of State to the effect that the Department would continue its cooperative attitude and policy towards this [Page 575] Committee. We understand that you have asked whether the Committee proposes to avail itself of the lien of 1% of the face amount of the deposited bonds, as provided in the Deposit Agreement, when and as the bonds are returned to the holders.

We wish to point out that the Committee plans to make no further charge against the bondholders either by way of deduction or pursuant to the provisions of the Deposit Agreement upon return of the bonds. If the Government of El Salvador enters into the proposed Readjustment Agreement and performs its obligations thereunder, there will be no necessity for the Committee to make any further charge against the bondholders. The Committee is not acting for profit and only desires to have its necessary expenses and its own nominal fees covered. It has no use for additional funds. Of course, if the Government of El Salvador does not perform its obligations under or with respect to the proposed Readjustment Agreement, and the matter should require protracted litigation and other expenses, it may be the duty of the Committe to take action which would require further expense to the bondholders. This, however, is not contemplated and will not occur except under most unusual circumstances.

Very truly yours,

F. J. Lisman