before them
relating to the funds resulting from three-fifths of the loan of 1869;
only two-fifths of the loan was realized in this country, the remainder
was disposed of in Paris before August, 1870, and no account of the
application of the funds resulting from such portion of the loan could
be obtained.

"The two-fifths of the 1869 loan, and the whole of the loan of 1870,
produced net L2,051,511; out of this sum only L145,254 has been paid to
the railway contractors; a sum of L923,184 would have been sufficient to
discharge the interest and sinking fund in respect of the issued bonds
of the three loans, yet the trustees ... paid to Mr. L----L1,339,752 or
L416,568 beyond the sum so required to be paid upon the issued bonds of
the loans.

"There was paid to him for commissions (apart from expenses) on the
three loans, out of the above proceeds, the sum of L216,852. He also
received out of the same proceeds L41,090, being the difference between
L370,000 cash paid to him by the trustees and L328,910 scrip returned by
him to them. This L41,090 probably represents the premiums paid on the
purchase of the scrip before or immediately after the allotment of the
loan, and was certainly a misapplication of the proceeds of the loan.

"Mr. L---- was also paid, out of these proceeds, a further sum of
L57,318, nearly the whole of which seems to be a payment in discharge of
an allowance of L8 per bond in respect of the dealings in the 1867
loan.... In addition ... it will be remembered that Mr. L---- received
L50,000 'to maintain the credit of Honduras.'

"He also on the 18th of June, 1872, obtained L173,570 by delivering to
the trustees ... 5042 bonds of the 1870 loan, at L75 Per bond and 33,000
bonds of the 1869 loan at 104 francs per bond, and retaking them at the
same time from the trustees at L50 and 104 francs per bond respectively.
Mr. L---- had contracted to pay for these bonds and they had been issued
to him at the prices of L75 and 104 francs respectively, and the
remission in the price therefore amounted to a gift to him of L173,570
... out of this portion of the loan of 1869, and the loan of 1870, Mr.
L----has received in cash, or by the remission of his contracts,
L955,398."

It is little wonder that Honduras has been in default on these loans
ever since. In its Report the Committee commented severely on the action
of Don C---- G----, the London representative of the Republic. "He
sanctioned," it says, "Stock Excha