by the Honduras Government. It had bought them from timber merchants,
and they were found to be of most inferior quality. In the opinion of
the Committee "the purchase of these cargoes and the announcement of
their arrival in the form above referred to, were intended to induce,
and did induce, the public to believe that the hypothecated forests were
providing means for paying the interest upon the loan."

With the help of this fraud, and with a free and extensive market made
on the Stock Exchange, the 1870 Honduras 10 per cent. loan for
£2,500,000 nominal was successfully issued at 80. It also had a sinking
fund of 3 per cent., which was to pay it off in fifteen years. Mr. L----
again handled the operation, having taken over the contract from Messrs.
B---- and G----. But the success of the issue was more than hollow. It
was empty. For Mr. L----, in the process of making the market to promote
it, had bought nearly the whole loan. Applicants had evidently sold
nearly as fast as they applied; for on the 15th December, when the last
instalment was to be paid, less than £200,000 bonds remained in the
hands of the public. Nevertheless by October, 1872, nearly the whole of
the loan had been somehow disposed of to investors or speculators. One
of the means taken to stimulate the demand for them was the announcement
of extra drawings of bonds at par, over and above the operation of the 3
per cent, sinking fund, provided by the prospectus.

There is no need to linger over the complicated details of this sordid
story. The Committee's report sums up, as follows, the net results of
the 1869 and 1870 loans of Honduras:--

"In tracing the disposal of the proceeds of the 1869 and 1870 loans, it
must be remembered that your Committee had no evidence before them
relating to the funds resulting from three-fifths of the loan of 1869;