THIRTIETH ANNUAL REPORT

OF THE

CORPORATION OF FOREIGN BONDHOLDERS.

IN presenting their Thirtieth Annual Report the Council have to express their regret that none of the defaulting foreign Governments have come to an Arrangement with their creditors during the past year. It is some satisfaction, however, to be able to record that no fresh default has occurred, and that the credit of several of the countries which are making honourable efforts to keep faith with the Bondholders has materially improved.

Though no actual settlement has been effected, the past year has been a busy one; matters connected with the Turkish Debt alone having occupied a large amount of time and caused much anxious thought and consideration.

It is probable that most of those who read these Reports, which are necessarily confined to a review of the most important features of each year's operations, have little idea what a large amount of work is done by the Corporation, no account of which appears, or which is only incidentally mentioned in these pages. Many schemes

which necessitate most careful consideration are discussed and are frequently embodied in draft Agreements. Only too often, however, the proposals, through some unexpected development, prove abortive, and all the labour expended produces no practical results. Whether settlements are effected or not, the volume of work is practically the same, but details of the negotiations cease to be of interest and it is useless to reproduce them, or, ay rate, to give them more than passing notice. It must also be remembered that the Corporation gives information on a great variety of questions to numerous correspondents and enquirers.

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These states have faithfully continued to NICARAGUA discharge their obligations to the Bondholders during the past year.

AND PARAGUAY.

In the case of Nicaragua, the Certificates issued by the Council under the Arrangement of 1895 should practically be all redeemed at the next redemption in January, 1904, so that the whole of the Sinking Fund will be thereafter applied to the Amortisation of the Bonds. Paraguay has already reduced the principal of her Debt by nearly 8 per cent. It is much to be regretted that in both these countries the currency should be so depreciated.

URUGUAY.

The service of the Debt and of the Railway Guarantees has been punctually effected during the past year. An unfortunate revolutionary outbreak occurred in March last, but a compromise was arranged between the contending parties. It is sincerely to be hoped that the rumours which have lately prevailed as to a recrudescence of these troubles will not prove to have any real foundation. Uruguay has now

honourably discharged her obligations for more than twelve years, and her credit has in consequence greatly improved. The industries of the country are in a flourishing condition, and it is lamentable to think that the progress of a country which is endowed with such exceptional resources should be retarded by civil war, the bane of so many of the Spanish-American Republics. It might have been hoped that the recent examples afforded by Colombia and Venezuela would have served as a sufficient warning in showing what these unfortunate revolutions mean.

The Government has continued to pay the SALVADOR. subsidy of £24,000 to the Railway Company, and, according to the last Report of the Directors, the line appears to be making good progress.

LIBERIA.

The price of the External Bonds has greatly appreciated during the past year, owing to the honourable manner in which the Government has fulfilled its engagements. A proposal was made last year by a well-known London firm for the purchase of the whole of the Bonds, but the Bondholders did not consider the offer sufficiently tempting in view of the improved state of the country.

The Council hope the Government will see their way to admit to the Arrangement of 1898 the few Bonds which were not sent in to be stamped within the time specified. The Arrangement approved by the Bondholders in July last year has been successfully carried into effect, the holders of upwards of 92 per cent. of the Bonds having signified their assent to the conversion. The undertaking of Portugal

PORTUGAL.

with regard to the assignment of the Customs Duties for the service of the Debt was formally notified by the Portuguese Government to the Governments of France and Germany. Although the Council maintain the opinion they previously expressed, that Portugal should have granted the more favourable terms asked for by the Committee associated with the Council, there is no doubt that the credit of the country has greatly improved, owing to an agreement having been effected with the External Bondholders. It is to be hoped that the Portuguese Government will break loose from the traditions of the past in the management of its finances, and that the deficits which appear year after year in their accounts, owing to excess of expenditure over revenue, will disappear.

GREECE.

The results of the last financial year show a falling off in the nett receipts of over 1,200,000 drachmæ as compared with 1901. The latter was, however, an exceptionally favourable year, and, as compared with the average of the preceding years, the returns for 1902 are on the whole fairly satisfactory. A small amount, moreover, was received from profit on exchange, from which no benefit was derived in 1901.

The Council, however, gather from the Report of the International Financial Commission, that little or no improvement has been made in the financial administration of the country since their last Report was issued. It is also greatly to be deplored that the Greek Government does not better appreciate the admirable work done by the Commission, and co-operate in a more liberal and friendly spirit with that body. It is the earnest desire of the Commission to improve the credit of the country, and,