816.51/1211
Mr. Frank P. Gage of the Manufacturers Trust Company to the Salvadoran Minister of Finance (Samayoa)85
Honorable Sir: We have examined a copy of Decree No. 12 issued by the National Assembly of the Republic of El Salvador on April 13, 1944, which we have been advised was published on April 21, 1944, in the Official Gazette, No. 87, Volume 136. We understand that such Decree has now officially become effective. We also understand that as a result of such Decree material modifications have thereby been effected in the terms and provisions of the Loan Contract dated June 24, 1922, between the Republic of El Salvador and Minor C. Keith, under which there have been issued and are now outstanding bonds of Series A in the aggregate principal amount of $3,229,000, bonds of Series B in the aggregate principal amount of £853,140 (Sterling) and bonds of Series C in the aggregate principal amount of $8,546,700. We further understand that the Republic of El Salvador does not intend to comply with and perform the terms and provisions of the Loan Contract on its part to be complied with and performed but, instead, intends to comply with and perform the terms and conditions of such Decree.
Under these circumstances, and upon the basis of the foregoing, as Successor Fiscal Agent under the Loan Contract we hereby formally protest against any action taken or to be taken by the Republic of El Salvador under the terms and provisions of such Decree upon the ground that the taking of any such action is and would be in violation of the terms and provisions of the Loan Contract, and in violation of [Page 1121] the rights of the holders of Series A, Series B and Series C bonds of the Republic of El Salvador issued and now outstanding thereunder and upon the further ground that any such action taken or to be taken by the Republic of El Salvador under the terms and provisions of such Decree is and would be unlawful under the laws of the State of New York, United States of America, pursuant to which, in accordance with the provisions of Article XXIII thereof, the Loan Contract is required to be construed.
Since the terms and provisions of the Loan Contract are known to you we do not think it necessary to point out to you the manner in which and the extent to which, by your action taken and to be taken under the terms and provisions of such Decree, you have violated and will violate the terms and provisions of the Loan Contract and the rights of the holders of Series A, Series B and Series C bonds of the Republic of El Salvador issued and now outstanding thereunder.
For your information we are transmitting a copy of this protest together with a copy of such Decree to the Honorable Cordell Hull, Secretary of State of the United States of America, Washington, D. C.
Very truly yours,
Trust Officer
- Copy transmitted to the Department by Mr. Gage in his letter of May 22, 1944, not printed.↩