a first-rate and honourable finance house, to a country
which makes honest use of it in developing its resources and increasing
its power to make and grow things. The loan is taken out from England in
the shape of goods and services required for the equipment of a young
country, and the interest comes in every year in the shape of food and
raw material that feeds us and helps our industry. Such, it may be
asserted with confidence, is the usual course of events, and must have
been so, or England could not have been so greatly enriched by her
moneylending operations abroad, and the productive power of the world
could not have grown as it has, under the top-dressing that our finance
and trade have given it. But though it is thus clear enough that the
business must have been on the whole honestly and soundly worked, there
have been some ugly stains on its past, and its recent history has not
been quite free from unsavoury features.

In 1875 public opinion was so deeply stirred by the manner in which
English investors and borrowing states had suffered from the system by
which the business of international finance was handled, that a Select
Committee of the House of Commons was "appointed to inquire into the
circumstances attending the making of contracts for Loans with certain
Foreign States and also the causes which have led to the non-payment of
the principal moneys and interest due in respect of such loans." Its
report is a very interesting document, well worth the attention of those
interested in the vagaries of human folly. It will astound the reader
by reason of the wickedness of the waste of good capital involved, and
at the same time it is a very pleasant proof of the progress that has
been made in finance during the last half century. It is almost
incredible that such things should have happened so lately. It is quite
impossible that they could happen now.

In 1867 the Republic of Honduras had been for forty years in default on
its portion, amounting to L27,200, of a loan issued in London in 1825,
for the Federal States of Central America. Nevertheless it contracted
with Messrs. B---- and G---- for a loan of L1,000,000 to be issued in
Paris and London. The loan was to be secured on a railway, to be built,
or begun, out of its proceeds, and by a first mortgage on all the
domains and forests of the State. The Government undertook to pay
L140,000 annually for fifteen years, to meet interest on and redemption
of the l