811.51/3108
The Foreign Trade Adviser (Young) to the Assistant Secretary of State (Dearing)
Mr. Dearing: Following the White House Conference with certain New York Bankers in June, 1921, concerning cooperation with the Government in undertaking foreign loans, these bankers gave assurances to the President that:
“All are in complete accord with your suggestion, and agree to keep the State Department fully informed of any and all negotiations for loans to foreign governments which may be undertaken by them.90
However, subsequent developments indicated that the attitude and desire of this Department were not clearly understood, and it was determined to issue a public statement on the subject. After careful consideration, a draft statement was prepared and communicated to the Secretaries of Commerce and the Treasury on December 7, 1921.91 …
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[Page 557]The mounting indebtedness of Europe, especially, to the United States makes more necessary than ever before the careful scrutiny of proposed loan transactions. This Government also has a very direct interest in seeing to it that loans to foreign governments are used for productive ends and not for military expenditures or to make up budgetary deficits. On January 12, 1922, the President wrote as follows to the Secretary of State:
“I do not suppose there is any way in which we can absolutely control American loans, but I do think that our efforts for accomplishment in the way of disarmament ought to justify a request to American bankers that no loans shall be made to any power which is making either maintained or increased expenditures for armament purposes.”
Accordingly, it is suggested that this Department issue a public statement in the sense of the attached draft92 as soon as possible. …