and expenses.

The actual cash received on account of this loan appears, though the
Committee's figures are difficult to follow, to have come to just over
half a million. Out of the half million L16,850 went in cash commission,
and L106,000 in interest and sinking fund, leaving about L380,000 for
the railway contractors and the Government. On this loan the Committee
observes that the commission paid, of L108,500 bonds, and L16,850 in
cash was "greatly in excess of what is usually charged by contractors
for loans."

So far it was only a case of a thoroughly speculative transaction
carried through by means of the usual accompaniments. A defaulting State
believed to be possessed of great potential wealth, thought, or was
induced to think, that by building a railway it could tap that wealth.
The whole thing was a pure possibility. If the loan had been
successfully placed at the issue price it would have sufficed to build
the first section (fifty-three miles) of railway, and to leave something
over for work in the mahogany forests. It is barely possible that in
time the railway might have enabled the Government to produce enough
stuff out of its forests to meet the charges of the loan. But the
possibility was so remote that the terms offered had to be so liberal
that they frightened the public, which happened to be in a sensible
mood, until it was induced to buy by the creation of a market on the
Stock Exchange; the employment of intermediaries on disastrous terms,
and finally default, as soon as the loan charge could no longer be paid
out of the proceeds of the loan, completed the tale.

In May, 1869, the Minister for Honduras in Paris, M. H----, "took steps"
to issue a loan for 62,250,060 francs, or L2,490,000. Out of it a small
sum (about L62,000) was paid to the railway contractors in London, but
little of it seems to have been genuinely placed, since, when the
Franco-German war broke out in July, 1870, M. H---- sent 2,500,000
francs in cash (L100,000), and 39,000,000 francs in bonds, to Messrs.
B---- and G---- in London. Messrs. B---- and others made an agreement
with Mr. C. L----, presumably the gentleman who had taken over and
dealt with the unplaced balance of the First London Loan. By its terms
the net price to be paid by him for each 300 francs (L12) bond issued
originally at 225 francs (L9), was 124 francs (not quite L5). He
succeeded in selling bonds enough to realize L408,460, and he, together
with Messrs. B