833.51/678: Telegram
The Minister in Uruguay ( Lay ) to the Secretary of State
[Received 3:46 p.m.]
16. Communicated contents Department’s telegram No. 10, March 6, 7 p.m. without comment to Minister of Finance a few hours before his departure for Europe, to which he replied verbally.
First—proposal now made intended to be a conversion plan by which new bonds shall be issued for previous and outstanding bonds; second—the proposal means an identic flat interest rate for both sterling and dollar bonds.
[Page 936]The Acting Minister of Finance handed me a statement yesterday in which the following appears “formula of settlement would be consolidation and conversion of the loans to be issued in three new issues, contemplating only that portion held abroad. For the bonds held in Uruguay an internal loan would be issued”.
This statement, forwarded by air mail today shows that the increased cost of the service on national and municipal dollar bonds under proposed plan over present cost would amount in third and subsequent years to approximately $1,500,000. Acting Minister will radio any communication received by this Legation from Foreign Bondholders Protective Council to the Minister who will be on steamer until March 21st.
I do not believe that Minister will go to New York unless he is encouraged to believe that the prospects are favorable for an adjustment on the basis of the plan he has proposed.