Loan Convention between the United States and Honduras.
The Government of Honduras having indicated the desirability of cooperation on the part of the United States for the refunding of its debt and the placing of its finances upon that sound and stable basis recognized as indispensable to assure strength and security of governmental administration, the meeting of foreign obligations, and the tranquility, prosperity, and progress of the country; and the Government of the United States, animated by a desire to promote the peace and prosperous development of all the Central American countries, and appreciating the wish of Honduras to contribute to such development by establishing on a firm footing its own material strength; and it being recognized as necessary, in view of the present conditions of Honduran finances and resources, that, to afford efficient and legitimate security and to obtain the special benefits sought, the Governments concerned should assume a special relation thereto; and the two Governments being convinced that some contract should be negotiated and concluded between the Government of Honduras and some competent and reliable American [Page 561] banking group, said contract to afford a beneficial, just, and equitable accomplishment of the purposes in question, have, with these objects in view, named as their plenipotentiaries:
- The President of the United States of America, Philander C. Knox, Secretary of State of the United States; and
- The President of Honduras, Juan E. Paredes, Envoy Extraordinary and Minister Plenipotentiary of the Republic of Honduras on special mission;
Who, having communicated to each other their respective full powers, found in good and due form, have agreed upon the following:
Article I.
The Government of Honduras undertakes to make and negotiate a contract providing for the refunding of its present internal and external debt and the adjustment and settlement of unliquidated claims, for the placing of its finances upon a sound and stable basis, and for the future development of the natural and economic resources of that country. The Governments of the United States and Honduras will take due note of all the provisions of the said contract when made, and will consult, in case of any difficulties, with a view to the faithful execution of the provisions of said contract, in order that all the benefits to Honduras and the security of the loan may at the same time be assured.
Article II.
The loan which shall be made by the Government of Honduras pursuant to the above undertaking shall be secured upon the customs of Honduras, and the Government of Honduras agrees not to alter the import or export customs duties, or other charges affecting the entry, exit, or transit of goods, during the existence of the loan under the said contract, without consultation and agreement with the Government of the United States.
Article III.
A full and detailed statement of the operations under this contract shall be submitted by the fiscal agent of the loan to the Department of State of the United States and to the Minister of Finance of the Government of Honduras at the expiration of each twelve months, and at such other times as may be requested by either of the two Governments.
Article IV.
The Government of Honduras, so long as the loan exists, will appoint from a list of names to be presented to it by the fiscal agent of the loan and approved by the President of the United States of America, a collector general of customs, who shall administer the customs [Page 562] in accordance with the contract securing said loan and will give this official full protection in the exercise of his functions. The Government of the United States will in turn afford such protection as it may find requisite.
Article V.
This convention shall be ratified and the ratifications hereof shall be exchanged at Tegucigalpa as soon as possible.
In faith whereof the respective plenipotentiaries have signed the present convention in the English and Spanish languages and have hereunto affixed their seals.