The Birmingham age-herald., 1911-04-29
HONDURAS OBJECTS ID MORGAN LOAN Paredes Claims It Means
 Financial Ruin APPEALS TO PEOPLE Asks American People to Investigate What He Alleges Will Be a
 Financial Protectorate'
 Over His Country

New orleans, April hS z, Declaring that the consummatiorSg $ ne Ameri- can-Honduran convey : t-embracing the Morgan loan go1o posed by the state department s/oso nington, would mean financial ry.S Honduras, Juan Paredes, formero g .nce minister of Honduras, gavo . he press tonight lengthy stat In which he re- viewed the nee iations In this matter and appealed to the American public to investigate the proposal.
 Senor Paredes had charge of the dip lomatic negotiations on behalf of Hon duras concerning this question and has made public the correspondence relat- ing to 1t which passed between the governments of Great Britain, the United States and Honduras. These revelations" he says he feels that his countrymen should know in order to understand the attitude of tho American state department and what he characterizes as the unwarranted action of President Davila just be- fore he was busted president of Honduras as a result of the recent rev oiution.
 The American people have had the mistaken idea" said Senor Paredes. that the people of Honduras are anxi- ous to negotiate this Morgan loan. Nothing could be further from the truth. The United States government in July, 1909 invited the government of Hopduras to send a special commits sion to deal with J. P Morgan & Co.,, of New York for the settlement of Honduras debt and the claims against the railroad and wharf at Puerto Cortez In inviting us to negotiate with Morgan & Co.,, the suggestion of new bond deal was made and that Honduras give as security the customs house revenues of the country, on the same plan as that arranged with Santo Domingo, which means nothing less than a financial protectorate of the country.
 Tn response to this investigation I was sont to New York in September, 1909. as the financial agent of Honduras. After thorough examination of the proposal of tie state department and Morgan X Co. I declined to osiepsthe agreement, My action met with the approval of the peo- pie of Honduras, and on February the Honduran congress refused to ratify the agreement by an almost unanimous vote.
 United States Insists
 Notwithstanding the opposition of the Honduran congress and people to this plan, the United States government for one year and half has insisted that the deal be put through. Public opinion throughout Honduras condemns the pro posed loan as ruinous to the country"
 Senor Paredes pointed out that under an arrangement which the Honduras gov ernment had effected with the holders of her foreign bonds in Europe, just month before the state department at Wash ington took hand in the matter, the en- tire indebtedness would have been dis posed of by total payment of $1,600,000 in 40 annual installments. Under the proposed Morgan deal, he says. Honduras would have to pay total of s24 100000 to wipe out the same indebtedness.
 Under the proposed Morgan arrange ment,' said Senor Paredes, "our govern ment would never see the proceeds of one- fourth of the bond issue. It was provided in this agreement that I2,500,000 of the proceeds of the bond issue should re- fndlH OIl uepOSlt Wlln J. MOTRan ~ Co.,. to be expended at their direction in maintaining the 56 miles of railroad and in Improvements.
 '"This was one objection to the settle ment. There are two other principal req sons for our objection to this convention: First, that If frauds are committed by the American agents, whom the convention provided shall have charge of our GUS toms houses and collect the revenues, no fo them. nor would we have authority to punish the wrongdoer; and, second, Hon. duras Is dependent upon the customs revenues for the maintenance of the gov ernment. The total public income of Honduras is about $1, 400, 900 gold, and un- der the proposed Morgan contract half million of this would go to New York bankers annually as interest, $30.0O0 would go to their agents who administer the customs service. and s10000O would be placed In the sinking fund for retire ment of the bonds This would leave but $770, ,00O with which to administer the entire affairs of the government"
 Senor Paredes expressed the hope that the United States Senate would thorough ly investigate this question and not force his country into bankruptcy and the ac- ceptance of a financial protectorate' when such is not necessary. When this matter comes up In the United States Senate Senor Paredes probably will go to Washington and appear before the foreign affairs committee in opposition
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