The Secretary of State to the Minister in El Salvador (Corrigan)
43. The Securities and Exchange Commission, through a special committee, is making a study of the whole problem of re-organization, refunding and readjustment of debt both as regards domestic obligations and foreign securities. It has been carrying on this investigation for months and has studied a great variety of domestic situations. From time to time it holds public hearings. Its purpose is to report upon the adequacy and workability of the present machinery and law for handling these situations.
In the course of its investigation of the handling of the default and re-adjustment situations that have arisen in the foreign field, it has gone thoroughly into the record of the activities of all bondholders protective committees, and is now engaged in an examination of the Salvadoran situation. The Department has been working in cooperation with the Commission which will do its utmost to guard against any episode in the investigation which might affect relations between this Government and the Salvadoran Government or prejudice the interests of the bondholders. The Commission will open a public hearing upon the Salvadoran situation at 10 o’clock Thursday morning. In the event that reports of this hearing create comment in Salvador, will you explain to the Government the nature of the broad investigation undertaken by the Commission, emphasizing that it is covering the whole of the domestic as well as the foreign field, and make clear that the study of the Salvadoran situation is only one small fraction of the Commission’s study.[Page 581]
Will you kindly immediately transmit to the Department by airmail all comment that may appear in the Salvadoran press regarding these hearings and cable any comment that may seem to you important as affecting either our relations with the Salvadoran Government or the interests of the bondholders.