The following exhibits relate to "Loan to Omsk Government, Russia, for War Purposes": From the files of Harris, Forbes and Co., New York) Exhibit No. 3302. Letter, 5/29/19, HFB to Harris, Forbes and Co., Boston, Mass. Exhibit No. 3303. Letter, 6/6/19, LWS to Harris, Forbes and Co., Boston, Mass. Exhibit No. 3304. Letter, 6/27/19, LWS to Harris Trust and SaviBank, Chicago. Exhibit No. 3305. Letter, 7/1/19, Harris Trust & Savings Bank to Harris, Forbes & Co., New York. (From the files of National City Bank, New York) Exhibit No. 3306. Letter, 7/22/19, J. H. Fulton to Robert Lansing, Secretary of State. Exhibit No. 3307. Letter, 8/18/19, Lansing to Kidder, Peabody. Exhibit No. 3308. Letter, 8/18/19, Lansing to National City Bank of New York. Exhibit No. 3309. Letter, 8/20/19, Kidder, Peabody to National City Bank. Exhibit No. 3310. Letter, 11/7/19, Kidder, Peabody to C. E. Mitchell. (From the files of Kidder, Peabody, New York) Exhibit No. 3311. Letter, 8/21/19, J. A. Stillman to Kidder, PeaBONIT. Exhibit No. 3312. Letter, 8/21/19, Charles H. Sabin to Kidder, Peabody. Exhibit No. 3313. Agreement, 10/10/19, Omsk Government, Baring Brothers, and Kidder, Peabody. Exhibit No. 3314. Letter, 11/11/19, from Winsor, Sabin, and Stallman. Exhibit No. 3315. Letter, 12/18/19, J. Slipper, Guaranty Trust Co. to Kidder, Peabody. Exhibit No. 3316. Letter, 12/23/19, C. S. S., Jr., to S. Ughet. Exhibit No. 3317. Letter, 12/24/19, Bauhmeter, Ughet to Kidder, Peabody. Exhibit No. 3318. Letter, 12/30/19, J. W. Carter, National City Bank to Kidder, Peabody. Exhibit No. 3319. Letter, 1/10/20, Ughet to Kidder, Peabody. Exhibit No. 3320. Letter, 2/21/20, Russian financial attaché to Kidder, Peabody. Exhibit No. 3321. Letter, 3/1/20, Ughet to Kidder, Peabody. Exhibit No. 3322. Letter, 3/3/20, Russian financial attaché to Kidder, Peabody. Exhibit No. 3323. Letter, 3/9/20, Russian financial attaché to Kidder, Peabody. Exhibit No. 3324. Letter, 3/15/20, Russian financial attaché to Kidder, Peabody. Exhibit No. 3325. Letter, 3/17/20, Russian financial attaché to Kidder, Peabody. Exhibit No. 3326. Letter, 3/24/20, Russian financial attaché to Kidder, Peabody. Exhibit No. 3327. Letter, 3/24/20, Russian financial attaché to Kidder, Peabody. Exhibit No. 3328. Letter, 4/14/20, Russian financial attaché to Kidder, Peabody. Exhibit No. 3329. Letter, 5/18/20, Russian financial attaché to Kidder, Peabody. Exhibit No. 3330. Letter, 6/11/20, to Baring Brothers & Co. Exhibit No. 3331. Letter, 10/2/20, Russian financial attaché to Kidder, Peabody. Exhibit No. 3332. Account, syndicate managers Omsk Government Commission A/C. Exhibit No. 3333. Accounts, 6 pp., Russian financial attaché to Kidder, Peabody. DEAR SIRS: The early date at which the 62% bank advances is due. i. e., June 18th, caused us to stimulate a consideration of this matter by the various banking institutions who were interested in Russian financing in a big way, either in the 62% credit or the 5%% bonds. At a meeting held yesterday at the office of J. P. Morgan & Company, Mr. Davison of that firm was present, as were also the representatives of the National City Bank and Company, the Guaranty Trust Company, Lee, Higginson & Co., ourselves, and others. The outlook seemed to be very discouraging for anything definite at this time, and the City Company reported that they thought it doubtful if even the interest on the 52's, due June 1st, would be paid. In consequence of that situation, we started to sell some of our own holdings and did succeed in placing $19,000 61⁄2's and $5,000 51⁄2's at a very satisfactory price. In the meantime, Mr. L. W. Smith got in touch with the Russian financial agent of the last recognized government there, and ascertained that in all probabilities the interest on the 52's, due June 1st, would be paid and that there were fair prospects of an adjustment of the 62's on some basis which would retain confidence in the ultimate outcome of the Russian bonds in this country. We, therefore, immediately stopped the sale, although we have not felt it advisable at the present time to cover up the sales we made and which could be made to some advantage. Our object in writing you is to explain this general situation and further to state that a committee, composed of Mr. Davison of J. P. M. & Co., a representative of the National City Bank, and somebody from our own firm, is arranging a conference with the State Department in Washington as early as possible next week in order to thresh out the whole problem, including its bearing upon the market for other foreign loans in this country, later on. We have it in mind, of course, that in the handling of the sale in the open market on any of our own holdings, we will expect to relieve you in proportion of our own holdings; this being along the lines of our agreement when the subject was up some time ago. Certain information which has come to us from various sources indicates that both the State and Treasury Departments are favorable to the administration taking a position which will insure public confidence in the general situation on f-reign investments and have taken such measures as will eventually protect the interests of those people who now hold the External Russian Government berds in this country. For obvious reasons the above is to be treated as strictly confidential. EFB J Hand written:] P. S.-Have covered 15,000 (M) 6%1⁄2's at 3% profit. DEAR SIRS: Mr. Beebe has kept you posted regarding the Russian situation. It occurs to us, however, that you may be interested in the developments which have taken place in the last two or three days in this situation. To go back a , this house has, by considerable persistence in keeping after the National ty Bank and J. P. Morgan & Co., has enabled to have two or three meetings tar Russian group to discuss the matter as fully as might be, with an idea deaving no stone unturned in connection with the payment of principal and terest of Russian bonds, External 51⁄2's and 61⁄2's. At a recent meeting at Morgan's a committee consisting of Mr. Davison, Caran, Mr. Mac Roberts, and the writer were appointed to take the matter ap with the State Department and the Russian Embassy, or whatever might main of it, at this time. Accordingly, the committee went to Washington on Wesday and had quite a long talk with Acting Secretary of State Polk and Mr. Myers of the State Department, Mr. Strauss of the Treasury Department. Ad Foreign Attaché Ughet of the Russian Government-the one in charge in resenting Russian interests. Apparently he was installed in office by the Keresky government, the last government which this Government recognized Russia. At the present time Mr. Ughet is leaning very strongly toward the Kichak government, which, as you known, has not yet been formally recognized by this country. At one time there was on deposit with the National City Company something ke $40,000,000 to the credit of the Russian Government-the proceeds of the two ssues above referred to. It was out of unexpended balances in this particular fund that interest money came to pay interest on the 52's and 62's. On June frst this fund had been reduced to $1,200,000, $700,000 of which was taken to pay the interest on the 51⁄2's on June first. As a matter of fact, these payments Were made with the knowledge and consent of the Treasury and State DepartBest, notwithstanding the fact that no interest has been paid at any time, as We understand it, on advances this Government has made to the Russian Governand which aggregate, if we are not mistaken, $187,000,000, somewhat ess that the amount generally supposed, owing to the fact as we understand it, that something like $225,000,000 of previously talked of advances were cancelled by this Government (this being confidential information from the State DepartLet The State Department advised us that they were expecting an attack on the part of Congress for permitting the Federal Government to waive their 'crest while allowing bondholders and customers of Wall Street houses to get interest. Mr. Polk, however, said he felt perfectly justified in the position he had taken and did not fear any attack which he had every reason to expect would soon be made. We were advised both by Treasury officials and State Department officials at the Government had taken a position that no further advances would be made to foreign countries by this Government, regardless of the claims of any particular government or group. That we had done enough, and they felt that there must be a halt at this time. They were, therefore, in no position to make yadvances which would have in mind the payment of principal of the 62's which mature on June 18th, nor is there any adequate available Russian assets in this country to take care of the principal at maturity. In fact, all Russian assets have been exhausted, except the minimum amount of leather, shoes, etc., which are sorely needed by the Kolchak government and which are being shipped from time to time to that government with the approval of our Government. We say they have no available funds. There is, however, an aggregate of approximately $1,000,000 coming from various sources which will soon stand to the credit of the Russian Government. This money, however, is urgently needed in connection with shipping of supplies to the Kolchak government and the present Russian authorities feel that they cannot consent to any of that $1,000,000 being used to pay interest on June 18th on the 62's. It would seem, therefore, as if there was every probability that the 62's principal would not be paid at maturity and quite a strong probability that no interest will be paid. There is a bare possibility of the latter being accomplished, as there is on the books of the Guaranty Trust Company of this city a credit of several million dollars to the former Russian Government, although the attorneys of the Trust Company advised the Trust Company that they should not pay out any of this money at this time on several grounds, one of which is that there is no one in authority here to check it out, but more particularly on the ground that it has been set off against claims accruing to the Guaranty Trust Company from the Russian Government. Just what turn this will take we do not know. We have a lot of hope, but not very much expectation that we can get any money from the Guaranty sources, which information you will please regard as confidential. Mr. Ughet has already cabled the Kolchak government to ascertain whether they would be willing to issue scrip to pay interest on the 61⁄2's on June 18, and we have assurances from Secretary Polk that at the proper time our Government will be willing to issue a statement in connection with the Russian bond situation in a form somewhat similar to the following: "Owing to the present confusion in Russia and the absence of any government, recognized by the American Government, it is not practicable at this time for the State Department to make any presentation of the claims of the holders of Russian bonds. The people of America, however, are now, as they have been in the past, most sympathetic with the great Russian people and eagerly desire to see them work out for themselves a stable form of government which the United States Government will be able to recognize. When that time comes the State Department will use its good offices to call to the attention of that Government the high claim, not only legally but morally, which the American holders of this Russian external loan have. It will be remembered that this money was advanced in good faith when Russia was fighting for her life, that the bonds were sold in good faith to American investors, and that the credit was used in buying supplies which were sorely needed by the Russian people for their military and civilian needs at the time. Whatever form of Russian government ultimately emerges, it is to be expected that it will follow the practice which civilized governments have always followed, of recognizing the legitimate external loans of predecessor governments." which we believe will be more or less reassuring at the time it is issued. We have done our very best to convince the State Department, the Treasury Department, and the Russian Embassy of the very great importance that this loan be paid both principal and interest-anyhow the interest- having in mind the financial relationship of this country and Russia in the future, and the much bigger and broader question of the desirability of not affronting the American investing public at this time, when they are expected to take hundreds of millions of obligations of foreign governments, etc. The State and Treasury Departments appreciate our position and will use every effort to bring about a satisfactory adjustment. We believe, however, that the outcome will be that the bonds will not be paid at maturity, and with only a moderately good chance that the interest will be paid when due. Everyone expressed the feeling that the bondholders would lose nothing in the end, either principal or interest, which is our feeling here in fact, the feeling of everyone with whom we have talked who is familiar with the situation. We shall, therefore, have to get what consolation we can out of the fact that however annoying it may be to have the default in interest and principal at this time, it will work out all right in the end, and that people should not unnecessarily sacrifice their securities. If we are able to get any additional light on the situation we shall at once advise you. LWS C C to C Very truly yours, |