Arizona republican., 1912-04-01
Announcement to That Elf feet Has Just Been Made by State
 Department
MORGAN COMPANY
 IS ELIMINATED
All Objectionable Features, It Is Announced, Have Been Removed in
 This Way
Associated Press DiSbdtchl

| 1SS0ciated Press Disbdtch1
 WASHINGTON. March 3l-The state department announced today the terms of proposed new loan to the government of Honduras. to be financed by the Whitney Central Trust & Savings Bank of New Or leans. instead of by the Morgan group in New York. The depart ment officials claim that the ob- jectionable features of the Morgan proposition have been eliminated hy the southern bankers and they are again urging the senate to act upon the Hondurau loan convention. which has been before the foreign relations committee for more than year.
 The offer of SlO,0O0.o00 loan by the Morgan group recently was withdrawn The southern bankers. it is announced. have made tender of a similar amount under new and radically different contract They propose to limit the first issuance of bonds to S6.000. GOO and will re- quire of Honduras SSO0.0O0 a year to meet the service of the loan. as com pared with $450 GOO year under the former contract The official an nouncement of the new loan issued today by the state department says in part:
 "The southern bankers limit the uses of their loan exclusively to the refunding of the Honduran foreign g. Hr. N .-H the Morgan group to promote rail- road building and other internal im- provements and to settle internal debts and claims pending against the Honduran governWent
 Tt was these provisions extending the uses Of the lodn beyond the set clement of the foreign debt that aroused criticism against the Nor gan contract, and the southern bank CTS claim that in eliminating these features they have presented terms satisfactory to Honduras and that acceptance of the loan may be eX- pected.
 Their optimism as to it's final acceptance. however, is based sim ply upon the approval given their contract by individual officials of the government of Honduras who have closely studied their offer. With the general public in Hon duras the southern bankers find themselves handicapped by wide spread prejudice toward loans in any form. and say that this oposition has undOubtedlv been augmented by the failure of the senate to rltify the convention
 If the senat" ratifics the conven- tion now and gives to the Whitney contract the tacit approval which such action implies. it will, it is de- clared. produce a wave of reaction in Honduras. dissipating the blind prejudice and paving the way for slne consideration of the Whitney contract on its merits The opposi- ton in Honduras to the loan con- vention has been almost wholly due to it's connection with the Morgan contract. against which popular op- position had been aroused. and with the convention divorced from that contract and resubmitted in connec- ton with a new contract indirectly approved by the United States sen ate and indOrsed by many prominent officials in Honduras the bankers feel confident of its complete success.
 "The new offer. as described by Acting Secretary Huntington Wilson, is for a $60O0.00O loan. payable in forty years with interest at the rate of per cent and with a sinking fund after five years of 1 per cent. The bonds are to be secured by the customs revenue of Honduras, col lected. as provided for in the loan convention. by Americans appointed by Honduras with the approval of the president Of the United States. Connected with the New Orleans bankers is the firm of William c. Sheldon X Go. If New York.
 Even before the New York bank CTS had withdrawn formally their offer of loan to Honduras the southern bankers, convinced of the impossibility of consummating the New York loan began to study the field with view to making the loan themselves Certain of them having large interests in Honduras; lt was essential to them that that country be put upon its feet finan- cially. and they offered. therefore. to advance loan in accordance with Honduras demands. limited exclu- srveiy to refunding the foreign debt. ' They have already made consid- erable headway. the Honduran con gress having accepted their terms for ia preliminary loan of s5oe.oo0. of fred to meet the pressing needs of ' 99t government