William Jennings Bryan to Woodrow Wilson

Title

William Jennings Bryan to Woodrow Wilson

Creator

Bryan, William Jennings, 1860-1925

Identifier

WWP17916

Date

1913 August 6

Description

William Jennings Bryan writes to Woodrow Wilson about conditions in Ecuador.

Source

Wilson Papers, Library of Congress, Library of Congress, Washington, District of Columbia

Subject

Wilson, Woodrow, 1856-1924--Correspondence

Text

My dear Mr. President:–

I had an interesting experience yesterday. Mr. John R. MacArthur of the firm of MacArthur Brothers, who are now building the New York aquaduct and are among the largest contractors in the world, was here in regard to the sanitation of Guayaquil. In the course of our conversation I said to him that the greatest obstacle in the way of the development of the small Latin–American countries is their inability to get money at a low rate of interest; that the rate of interest being determined partly by the value of the money and partly by the risk that the lender takes, the Latin–American countries instead of being able to get their money at three per cent, as we can, were paying six per cent or more. He at once approved of the statement of the difficulty and suggested that, in the base of Ecuador, if this Government could guarantee four per cent those dealing with Ecuador might be willing to carry the additional risk. To this I replied that there would be no additional risk and that the benefit ought to be given to Ecuador and not to the financiers. This was an addition to his proposition, which struck him favorably. Without intimating to him that the same idea had been under consideration by us, I asked him to develop his thought in a letter in order that I might show it to you. In pursuance of this suggestion, he dictated a letter which I herewith enclose. You will notice that he lays the foundation for our action in this case by calling attention to our interest in the sanitation of Guayaquil because of its proximity to the Canal. He then, on page four, says “In these circumstances, and having concern chiefly for our own interests, would it not be a friendly and helpful act for this Government to offer its assistance in the carrying out of this great and humane work by standing sponsor for the bonds to be emitted to meet the cost thereof?”On page five he says, in reference to the sinking fund “If it were possible to carry out our magnanimous suggestion that Ecuador be permitted to itself profit by the much lower rate of interest and charges involved in this plan, we feel sure that much of the unfair criticism now directed by South and Central American countries against our Government and people would cease, and in its stead a feeling of loyalty and appreciation arise.”Later in the afternoon I had occasion to talk with a New York banker, Mr. Jarvis, who is interested in Cuba and the Dominican Republic and who is considering taking an interest in the Nicaragua National Bank. In discussing the question of interest, I asked him whether it was not possible to separate the value of the money from the cost of the risk in the matter of interest and give the people of Nicaragua the benefit in case the risk could be eliminated. He at once took hold of the proposition as a new one and one of great importance. I did not suggest to him that our Government could aid in any way in eliminating the risk by merely suggested that that portion of the interest which was intended to cover risk might be set apart as a sum to be applied upon the principal in case the interest and principal were paid promptly. I mention these two instances to show how these two men, one a business man of great experience and the other a banker of large experience, accepted the idea of rendering some service to these countries by reducing the interest charge.
It occurs to me that this Ecuador matter might furnish us an opportunity to test the plan, because we have soa deep an interest in the sanitation of Guayaquil. (I do not know whether you have the place in mind, but if you will look at your map you will find that it is the first place that ships stop going south on the Pacific coast and the last place that they stop coming north, and that sanitary conditions are of the gravest importance to us because of our control of the Isthmus. We Pres Taft sent Colonel Gorgas down there to examine into the situation not long ago, but unfortunately he went at at time when the country was irritated over this railroad difficulty which we are trying to settle, and the spirit of co–operation was not then what it ought to be.)I believe that a proposition to Ecuador to the effect that we would accept her four–and–a–half per cent bonds at par and hold them as security for three per cent bonds issued by us, the difference of one and one–half per cent to be turned into a sinking fund to retire the bonds, would be accepted gratefully; at least, it would be a way to show our good will that would at once strike the people down there as well as the people of our country as a practical means of rendering a neighborly favor. If the plan was accepted by Ecuador, I have no doubt that we would be solicited by the Central American countries to do the same thing and that we would soon have these countries bound to us by the strongest of obligations and that, too, without the incurring of any substantial risk, for a favor so obviously beneficial to them and so disinterested on our part could not help but create a profound impression. Considering the manner in which these poor countries have been plundered by financiers who first demand a high rate of interest and a big discount to cover risk taken and then appeal to their governments to eliminate the risk and leave them in possession of the tax levied because of the risk —— in view of these experiences we would furnish a modern example of the Good Samaritan.

With assurances of respect, etc.,
I am, my dear Mr. President,
WJ Bryan


The President,
The White House.

Original Format

Letter

To

Wilson, Woodrow, 1856-1924

Files

http://resources.presidentwilson.org/wp-content/uploads/2018/06/Temp00428.pdf

Tags

Citation

Bryan, William Jennings, 1860-1925, “William Jennings Bryan to Woodrow Wilson,” 1913 August 6, WWP17916, First Year Wilson Papers, Woodrow Wilson Presidential Library & Museum, Staunton, Virginia.