860h.51/255

The Secretary of State to the Yugoslav Minister (Grouitch)

Sir: I have the honor to acknowledge the receipt of your note of July 13, 1922, in which you informed me that your Government desires to employ $4,700,000 of the proceeds of the loan of $25,000,000 recently made to your Government by American bankers for repair and construction of highways, for repair and construction of hospitals, and for erection of buildings for primary education, instead of applying that sum to repay the debt advances made by the National Bank in the amount of $2,000,000, for exchange stabilization [Page 1020] in the amount of $1,700,000, and for erection of buildings for Ministries other than the Ministry of Communications in the amount of $1,000,000, (the amount of $1,500,000 which previously it was intended to devote to the last mentioned end being reduced by $1,000,000).

In reply to your inquiry concerning the attitude of this Government in the matter, I take pleasure in advising you that this Government perceives no objection to the change in the employment of the proceeds of the loan in question as set forth in your note under acknowledgment.

Accept [etc.]

Charles E. Hughes