A REPUBLIC'S DEBTS.

Poverty Bay Herald, Volume XXXX, Issue 13102, 16 June 1913, Page 4

A REPUBLIC'S DEBTS.

Behind. a short cable message received the other day stating that a British cruiser had been sent to Guatemala to compel, that Central American Republic to pay "'part of its debt's, lies an interesting story, pf, national" immorality, h'or thirteen years Guatemala has been evading its obligations to British creditors, amounting to over. £14,000,000. The history of the debt actually goes back to the year,. l^2s, ..when the sum of £1,428,571 was loaned" to the Central American Federation, . of which Guatemala "then formed part. Upon the break-ing-up of the Federation Guatemala assumed responsibility for part of this. Since then many different sums have been borrowed (writes a well-known authority on South America m the Westminster Gazette), and as many , ihore "arrangements" for the payment •of the defaulting a ipte,rest have .been splemnly entered 'inW. and as recklessly broken. When Sir 'Lionel Garden went to Guatemala m 1905 to represent Great Britain he Set himself to secure some. kind of settlement fbr the long-suffering , .bondholders, pc knew; it, was, no. use . asking for the whole 'amount, and, said the British Government would probably be satisfied if Guatemala, as a preliminary, restored the security on which; the loans were granted— the export duty on cptfee. Nothing ,was ...said about principal or arrears of interest, though^ it appears that the British Minister intended to ask for these arrears later on. The Gua'lemala Government had used this security m the ; style ' of a swindler who sells the same article to a number of different people. The coffee duty was. pledged to the British debt m 1895 ; two years later, without affording the slightest explanation or excuse, the Guatemalan Government pledged the same security to a German syndicate for an, advance; m the year following the duty upon coffee was reduced, thus lessening the value of the security oven had it been restorer!. Tho same 'thing was repeated m 1899, and although special commissions sat and arranged matters with the Government of Guatemala upon at least half a dozen occasions since, nothing was done, and the bondholders' position remained as bad as ever. -Sir Lionel Garden visited London last year, and urged that prompt and vigorous action should be taken. Sir Edward Grfev gave tho little State one last chance, and the President, hearing that, Great Rritaij. was m earnest, at once promised to begin payments again. HoWever, he was only bluffing, and the result wa» that a warship was despatched io the chief port of 'Guatemala to seize the Customs House if the Government would not comply with the British demand. The President, of course, appealed to the United States for- protection, but be did not get it, though tho United States, acted, as mediator. lhe Monroe Doctrine" is evidently not held to cover such flagrant bad- faith.