The Hattiesburg news. (Hattiesburg, Miss.) 1908-1917, 1912-04-01
N. 0. BANK Makes
HUNDURAN loan
Whitney Central Trust and Savings
Bank, Instead of Morgan,
Financed Loan.
(By Associated Press,

Washington, April 1.-The State de-
partment announced today the terms
of a proposed new loan to the gov
eminent of Honduras, to be financed
by the Whitney Central Trust C Saw
ings Bank, of New Orleans, instead of
by the Morgan group in New York.
The Department officials claim that
the Objectionable features of the Nor
by the Southern bankers and they are
again urging the Senate to act upon
the Honduran loan convention, which
has been before the Foreign Rela-
lions Committee for more than a
year.
The offer of a $1O,OO0,OOO loan by
the Morgan group recently was with
drawn. The Southern bankers, it is
announced, have made a tender of
similar amount under a new and radi-
cally different contract. They propose
to limit the first issuance of bonds to
$6,000,000 and will require of Hon
duras 100000 a year to meet the
service of the loan, as compared with
$450,000 a year under the former con-
tract. The official announcement 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
debt, and discard the proposals of the
Morgan group to promote railroad
building and other internal improve
ments and to settle internal debts
and claims pending against the Hon
duran Government.
ut was these provisions extending
the uses of the loan beyond the set
Element of the foreign debt that arous-
ed criticism against the Morgan con-
tract, and the Southern bankers claim
that in eliminating these features
they have presented terms satlsfac-
tory to Honduras and that acceptance
of the loan may be expected.
Their optimism as to it's final ac-
ceptance, however, is based simply
upon the approval given their contract
by individual officials of the govern
ment of Honduras who have closely
studied their offer. With the gener-
al public in Honduras the Southern
no nh Nd than,Cn1ung ho nd
by a widespread prejudice toward
loans in any form, and say that this
opposition has undoubtedly been aug
mented by the failure of the Senate
to ratify the convention.
"If the Senate ratifies the conven-
ton 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 pref
udice and paving the way for a sane
consideration of the Whitney con
tract on it's merits. The opposition
in Honduras to the loan convention
has been almost wholly due to it's con
nection with the Morgan contract
against which popular opposition had
been aroused, and with the conven
ton divorced from that contract and
lresubmitted in connection with a new
contract indirectly approved by the
United States Senate and Endorsed by
many prominent officials in Honduras
the bankers feel confident of it's com
plete success.
THE new offer, as described by Act
ing Secretary Huntington Wilson, il
for a $6,000,000 loan, payable in for
t. years with interest at the rate of
per cent and with a sinking fund af
ter five years of per cent. Th'
bonds are to be secured by the Gus
{ ms revenue of Honduras, collected
as provided for in the loan conven
ton, by Americans appointed by Hon
. duras with the approval of the Presi
dent of the United States. Connected
with the New Orleans bankers is tn,
FIN of William c. Sheldon & Co., o
New York.
Even before the New York bank
e-s had withdrawn formally their OF
, fer of a loan to Honduras, the South
, ern bankers, convinced of the impos
, sibility of consuming the New Yorl
, loan, began to study the field with
= view to making the loan themselves
Certain of them having large intel
6 ests in Honduras, it was essential t
them that that country be put upo
| - feet financially, and they Offered
erefore, to advance a loan in accord
: lace with Honduras demands, Unite
exclusively to refunding the foreig
debt.