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schedule of amounts was merely for his information and was not a proposition from the Debt Commission. Department will answer Czechoslovak note as soon as possible.


8608.51/432 : Telegram

The Minister in Czechoslovakia (Einstein) to the Secretary of State

PRAGUE, September 3, 1925–3 p.m.

[Received September 3—1:56 p. m.] 50. Referring to my No. 46, August 10, 2 p. m. An official of the New York Trust Company who is now in Prague has told commercial attaché that company together with other American banks had made advance since last June of $12,000,000 to Czechoslovak Banking Office. Commercial attaché believes that this representative is negotiating further advances.


8608.51/433: Telegram

The Secretary of State to the Minister in Czechoslovakia (Einstein)



WASHINGTON, September 12, 1925–5 p. m. 43. Your telegram No. 50, September 3, 3 p. m. The Department communicated with the New York Trust Company and has received a reply which states that the company has been discussing with the Czechoslovak Banking Office the possibility of extending such a credit as you describe, and that these discussions are being continued in expectation of favorable outcome to debt-funding negotiations; also that the Government of Czechoslovakia is giving preliminary consideration to marketing some $13,000,000 of the Austrian League of Nations loan and $2,500,000 Hungarian loan. The Department is replying that it hopes the company will not commit itself in any way before consulting the Department, and that the Government of the United States does not at present time view Czechoslovak financing with favor. Report briefly any significant developments.


See telegram No. 37, Aug. 27, to the Minister in Czechoslovakia, vol. I, p. 130.

8601.51/435 : Telegram

The Minister in Czechoslovakia (Einstein) to the Secretary of State

PRAGUE, September 14, 1925—4 p. m.

[Received September 143 p. m.] 52. Your 43, my 50. Commercial attaché reports that Zell of New York Trust Company made positive statement to him that credit of $12,000,000 had actually been made to Czechoslovak Banking Office. This statement was made by Zell because of his interest in trying to ascertain if Federal Reserve Bank had made similar credit.


8608.51/439 : Telegram

The Minister in Czechoslovakia (Einstein) to the Secretary of State



PRAGUE, September 23, 1925—3 p. m.


[Received September 23—1:56 p. m.] 54. I understand that the Czechoslovak loan now being negotiated with the National City Company will be almost entirely utilized to meet maturing short-term indebtedness, although it is needed to stabilize the currency and to establish a reserve for a bank of issue.

Legation is in possession of information that Czechoslovak Debt Funding Commission is to conclude a Government loan in Paris today, and understanding is that Dillon, Read and Company will participate.



8608.51/443: Telegram

The Minister in Czechoslovakia (Einstein) to the Secretary of State



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PRAGUE, October 2, 1925—1 p. m.

[Received 5: 50 p. m.] 56. Department's No. 43, September 12, 5 p. m., and Legation's No. 54, September 23, 3 p. m. Commercial attaché has been informed

. that a loan for $50,000,000 has been agreed upon with the National City Company. Of this sum, half is available immediately; on the other half the Government retains a 6-months' option. Loan agreement specifically states that the proceeds will be utilized to meet short-term indebtedness, though some portions will go to repay previous advances.



Memorandum by Mr. Spencer Phenix, of the Office of the Economic


[WASHINGTON,] October 14, 1925. Mr. Ralph Crews, Counsel for the National City Company, telephoned this afternoon to say that representatives of the Czechoslovak Government desired to negotiate with the National City Company in connection with certain loans desired by them. Mr. Crews stated that the Czechoslovak representatives informed him that they had signed an agreement for the funding of the indebtedness of Czechoslovakia to the United States, but in view of the Department's correspondence last summer with the National City Company, he desired to have definite advice as to the Department's position with respect to such negotiations. I told Mr. Crews that I would endeavor to telephone him an answer to his inquiry during the afternoon.

I spoke with the Secretary about this matter and was informed by him that he had discussed the general question with Mr. Mellon and Mr. Hoover and that all three had agreed that no objection would be offered by this Government to negotiations looking to Czechoslovak financing in this country. Accordingly I telephoned Mr. Crews that the Department had no objection to negotiations between the National City Company and the Czechoslovak Government.





The Dominican Minister (Ariza) to the Secretary of State


WASHINGTON, March 31, 1925. MR. SECRETARY OF STATE: In order to forward to my Government under the head of information some ideas concerning the execution of the Convention signed in this city on December 27, 1924, between the United States of America and the Dominican Republic, which is awaiting the approval of the Dominican Congress, I have the honor to ask Your Excellency kindly to give me the ideas of the Department on the points herein below presented :

(a) It has been contended in the Dominican Republic that the wording of paragraph 1 of Article VII of the above-mentioned Convention according to which “these agreements will go into force after they are approved by the contracting parties”, supposes that the consolidation of the debt must take place before the exchange of ratifications of the treaty. Does the Secretary of State understand, as I do, that the exchange of ratifications precedes the consolidation of the debt, and is an indispensable requisite for the issue of the bonds of the contemplated $25,000,000 loan?

(6) Article III of the Convention of 1924 which reproduces word for word the first paragraph of the same article of the Convention of 1907, reads as follows: “Until the Dominican Republic has paid the whole amount of the bonds of the debt its public debt shall not be increased except by previous agreement between the Dominican Government and the United States". Does the phrase "the whole amount of the bonds of the debt" refer in the Convention of 1924 to the bonds to be issued for $25,000,000 in the same way as the same phrase in the Convention of 1907 had reference to the bonds also to be issued for $20,000,000? If so, does the State Department understand that the "previous agreement” between the two governments

For the text of the convention, see Foreign Relations, 1924, vol. I, p. 662. · Ibid., 1907, pt. 1, pp. 307, 309.


for the contract of the $25,000,000 loan results from the approval and ratification of the Convention of 1924, or on the contrary, there is required a separate and special agreement at the time of the issue of the new bonds?

(c) Since the Convention of 1924 has no stipulation in any particular form for the issuance of the $25,000,000 bonds, does the Department consider, as I do, that its language admits of the possibility both of one emission for the whole amount stated and various partial issues as may best serve the interests of the Dominican Republic?

(d) Article VII of the Convention of 1924 provides that when the ratifications of the said convention shall have been exchanged the Convention of February 8, 1907, shall be considered at an end. This being so, what would be the condition of the bonds issued under the Convention of 1907 that may not have been redeemed after the exchange of ratifications and before the consolidation of the debt? It seems evident that the Convention of 1907 having terminated, those bonds would stand under the protection of the Convention of 1924, and would continue to be governed as to the payment of interest and manner of amortization by the law enacted for every issue. The holders of such bonds could not invoke any vested right to claim that the Convention of 1907 is in force since the new convention extends to them the same guarantees. I avail myself [etc.]



l'he Secretary of State to the Dominican Minister (Ariza)

WASHINGTON, April 4, 1925. Sir: I have received your note of March 31, 1925, in which you transmit to me on behalf of your Government, various inquiries relative to the carrying out of the Convention between the United States and the Dominican Republic signed in Washington December 27, 1924, approved by the Senate of the United States and now pending ratification by the Dominican Congress.

You advise me (a) that it has been claimed in the Dominican Republic that the wording of the first paragraph of Article VII of the Treaty referred to, namely, “this agreement shall take effect after its approval by the Contracting Parties” implies that the refunding of the Republic's debt must be undertaken before the exchange of ratifications of this Convention, and you inquire whether I share your understanding that the exchange of ratifications should, on the contrary, take place prior to the refunding of the Republic's debt as an indispensable prerequisite to the issuance of the bonds of the proposed

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