The sun. [volume] (New York [N.Y.]) 1916-1920, 1919-10-27
AMERICA
I: !: EASILY MEETS
:: FOREIGN DEBTS
Corporation of BOndholders
Finds Most Countries Are
-.ob Sound Financially.
FEW DEFAULTINGS NOTED
Ecuador and Paraguay Having
-, Difficulties Due to Fall
49, ing Off i'm Revenue.
written Especially for the Latin Ameri-
cdn Section Of THE Sun.

written Especially for the Latin Ameri-
cdn Section Of THE SUN.
The 1919 report of the Corporation Of
b., Foreign Bondholders indicates that for
r., the most part the Latin-American coun-
tries are in a very satisfactory financial
condition; in fact, at no time in the his
4 tory of the above mentioned institution
have so few defaultings been reported.
ioi According to the report during 1918,
y Costa, Rica. Colombia, Guatemala, Mica
70 ratua, Santo Domingo and Venezuela all
met the interest service on their foreign
debts in a, most commendable way. Not
lohly that, but in each instance notable
reduction in the total OF foreign indebt-
edness Is to be noted. Both Ecuador and
Paraguay are stated to be having dill
culties. but although interest payment
in these two cases is somewhat
in arrears there is no indication
7oof any intent to default. In both
countries the. falling off of the i'm
port revenue Is stated to be the cause of
their hardness In meeting the interest of
their debts, and It is expected that with
the return of normal business conditions
to these countries payments will be re-
sumed.
:, The two chief offenders are Mexico
and Honduras. In the case of the former
Inc COnultlOn is 1lOt Ielt 10 De SeTlOus, anu
1T is predicted that when the present un-
settled conditions shall have passed there
will be a prompt return to the high
financial rating which existed during the
Presidency of Gen. Diaz.
A to Honduras. little hope is held out.
The foreign debt of that country now
amounts to over s25.oo0,o 900. burden
evidently far beyond its resources, inter-
est on which is neither earned nor paid.
lie int IN hrxx.r m
the responsibility for this debt cannot be
placed on those who have ruled the
country's destiny during the present day
and generation, but was forced on the
country largely through circumstances
beyond it's control. Most of the debt is
the result of the attempt made during
the period of 1s5T-1S70 to construct an
interoceanic railway from Puerto Cortes
on the Caribbean Sea, to Amapala Bay,
on the Pacific coast. The floating of the
bonds for its construction was attended
with considerable graft and financial
mismanagement, with the result that of
the $4,000. 900 obtained from the sale of
Sbonds probably not over $1.500.000 was
ever actually spent in Honduras. It is
only natural, therefore, that recent Hon.
duran governments have totally repudi-
ated the debt incurred in the construc-
ton of the railway.
The foreign debt acknowledged by the
Honduras Government is less than $2,-
100000. and as the financial condition
of the republic has been steadily i'm
proving hopes are entertained for a sat
isfactory solution of the present prob
lens.
There is, however. little probability
that the old railway debt will ever be
paid off. The only hope is for the
holders of the bonds to make some ar
rangement whereby the defaulted inter-
est payments will be cancelled. the debt
itself greatly reduced and capital pro-
rided for the completion of the railroad.
While admittedly 1t is of no great value
as an interoceanic route, there could be
developed without doubt sufficient local
and export business to assure the sue
cess of the extension across the republic.
Access would be provided to various
cattle lands. to the mineral wealth of
the country and to the centres of popula-
ton. There is no question that Honduras
has vast undeveloped resources and II
the bond holders are willing to take the
risks involved in sending good money
sitter bad there is a chance of their get
ting a long delayed return on their un-
fortunate speculations.