Evening star., 1911-06-11
The Honduran Convention.

1t was decided on Friday by the Sen.
ate committee on foreign relations to
make to the Senate a favorable report
on the convention signed by representa-
tives of the United States and Honduras.
This convention provides for a loan Of
$1O,OOO,OOO by banking interests in the
United States for the refunding of the
debt Of Honduras. a proportion of the
customs revenues Of that country being
pledged for the repayment of the loan
and the collector Of customs to be named
by the bankers with the approval of the
President of the United States.
The Honduran convention marks one
of the important steps in dollar diplo-
macy. Secretary Knox. in an address at
the University Of Pennsylvania last sum-
mer. said:
IF this government can help to up
build and promote the thought that the
capital of the more advanced nations
of the world would be better employed in
assisting the peaceful development OF
those more backward than in financing
wars, 1t Is such a deviation from tradi-
tions as the American people will ap-
prove"
For many years Honduras has been
pressed by foreign creditors. mainly Brit
ish, but also Belgian, Dutch. French and
German. These foreign loans were nego-
tiated by Honduras, usually at high
rate because Of the risks the lenders took,
for the purpose Of carrying forward in
ternal Improvements. Graft and expense
kof promotion reduced the sum actually
applied to improvements to a trifie of the
amount borrowed. AS way OF securing
a return of their money British bond
holders devised a plan which compre-
hended the raising of the tariff and the
collection of the customs in their inter-
est In this plan little note was taken
OF American interests in Honduras. and
the Hondurans complained of the hard
terms the British would impose. Hon.
duras sounded American banking houses
with the idea that with a new loan to
refund the old debts and by capable fiscal
management Honduran finances might be
set straight and internal development
carried on The government of Honduras
asked II the government Of the United
States would lend its offices in further
ing the plan The United States agreed
to receive a definite suggestion as to how
the foreign debts problem might be solved
satisfactorily to foreign creditors and the
Honduran people. The British govern
ment announced that 1t would favor the
United States taking measures to aid in
the adjustment and the British bond
holders postponed their plan.
Honduras entered into a contract with
J. Pierpont Morgan & Co.. Kuhn. Loeb
& Co, the National City Bank and
the First National Bank Of New York.
This agreement was given the approval
of the American State Department. The
hot the limited States
and Honduras is that the two govern
ments Shall take due notice of the ar
rangement and shall give it such protec-
ton as may be requisite to secure the
advantages which have moved the gov
ernment of the United States in interest
ing itself in the transaction" The con-
vention went to the Senate, and, as re-
lated, has been favorably reported by the
committee on foreign relations. As al
Iready announced In The Star, a similar
convention has been negotiated between
the United States and Nicaragua and IS
also pending In the Senate.
The United States has a great role to
play in the Caribbean world. 1t owns the
Panama canal and zone. 1t has liberated
and rehabilitated Cuba. The good it has
done for Cuba is returning and will re-
turn many fold. Cuba's commerce with
the United States has increased from
$50, ,OOO, 900 in 1900 to s176, 100000 in 1910.
American exports TO Cuba last year
amounted to $52.9OO,OOO. The United
States is developing Porto Rico as
American territory. work that will be
for the benefit of both parties. The
United States set Santo Domingo on its
feet, and a stable situation Is secured
there. The United States has assumed
| the protection of the Panaman republic
French and American bankers, with the
approval Of the French and American
governments, are seeking to restore or
der and promote prosperity in Haiti, of
course hoping 10 make a profit for them
selves. The United States has obliga-
Itions to perform toward its smaller
lneighbors at the south. and good Ameri-
cans have no use for "scuttle" when II
comes to facing an obligation.