been collected regarding the monthly rate charged in one hundred and forty-one different localities, which showed that in seven the usual rate of interest was I per cent. per month; in nine, 1 per cent.; in eighty-two, 2 per cent. ; in thirteen, 3 per cent.; in four, 4 per cent.; in three, 5 per cent.; in eighteen, 6 per cent.; in one, 10 per cent.; and in four, 12 per cent. These facts proved the urgent need of foreign capital which should be devoted to this class of business; this being the only means by which a considerable decrease in the rates of interest in vogue could be brought about.

The mining industry was making slow but steady progress. During the year, the output had amounted to 23,234 ozs. of gold, 1,010,204 ozs. of silver, and 25,198 ozs. of copper. The production of minerals was mainly in the hands of two companies, but a number of other concessions had been granted, and serious and methodical prospecting was being carried on in various directions. The deposits of precious and other metals which were known to exist through the country were very rich. The Government had done all in its power to foster the industry, and foreign capital was required for its development. Agriculture, though still in its infancy, was progressing rapidly, and it was satisfactory to note that improved methods of cultivation were gradually being adopted. At a very low computation, the value of the agricultural products in 1901-2 amounted to $6,206,125, whilst the total agricultural wealth of the country might be estimated at $12,733,345, and the value of the live stock at $12,154,180.

The Ulua Commercial Company had, during the past year, worked without interruption at the fulfilment of its contract. The canal joining the Ulua and Chamelecón rivers, viâ the Alvarado Lagoon, was now open from the lagoon to the latter river, the navigation of which would soon be begun. The railway along the northern coast had not progressed, work having been suspended by the Omoa Com- . pany, to whom the concession had been granted, for a sufficient space of time to justify the Government in annulling the contract. This, however, had not been done, in the hope that the Company would soon be able to overcome its difficulties, which were possibly of a financial description.

The following is a translation of the Minister's remarks concerning the Interoceanic Railway :—

"In order to give the Honduras Syndicate, for the last time, an opportunity of fulfilling the obligations contracted with the country,

the Company was granted, at the request of the Representative of the Syndicate, an extension of time of one year on the 7th March of last year. The respective resolution was brought to your knowledge for your approval or disapproval; but nothing was decided in any sense during your last sessions. In order to avoid an interpretation prejudicial to the interests of the country, and with a view to demonstrating in a clear manner, that neither was any right abrogated on account of the extension of time nor was the Company freed from any of its obligations, the Government addressed a definite communication in that sense to Señor Don Adolfo Pereira, General Representative of the Honduras Syndicate. A satisfactory reply was received from this gentleman on the 12th of the same month.

That the Company has not fulfilled the obligations of the contract is well known, nor does the Representative of the Syndicate deny it, as in the note to which I refer he says: This extension of time must be considered as existing on the 26th May, 1903, unless, during this time, a Congress should disapprove this extension of time, as only in this case would the contract be ended before the said date.' As this contract in its 3rd Article declares that by reason of the non-fulfilment of condition & Article 2, i.e., the reconstruction of the existing line and the building of the bridge over the Ulua, etc., etc., the abrogation of the contract will be effected de facto and without the need of an appeal to arbitration, the next Administration remains at full liberty to come to the decision which it may think most desirable in favour of the interests of the State. The Executive Power, whilst regretting that the contract should not have been complied with by the Syndicate, nevertheless obtained through it the construction of the bridge over the river Chamelecón, and, above all, succeeded in leaving this troublesome affair quite clear and free from any complication. The concession for the wharf at Puerto Cortés, closely allied to our railway, was never given effect, as I showed in my previous Reports; consequently, it has fallen into abeyance, which has not been declared in order to avoid creating difficulties for the Syndicate with regard to its undertaking; but the coming Government will encounter no obstacle as regards the annulling or renewing of the said contract, as it may think fit. I may further point out that according to the accounts of the Custom House at Puerto Cortés, the contractors for the wharf owe a large sum of money to the Exchequer for wharfage during preceding years; this was to have served for the construction of the building for the Custom House and 'Comandancia,' but remained unpaid."

TRADE STATISTICS.

The following figures, showing the value of Imports and Exports in 1902, are taken from the Report of the Minister of Internal Development. For the sake of comparison, the figures relating to the preceding year are also inserted. It will be observed that in the case of Import the classification is according to countries instead of according to articles :—

ITUANA RAILWAY.

Six per Cent. First Mortgage Debentures

...

£150,000

Committee of Ituana Railway Six per Cent. First Mortgage Debenture-Holders.

Payment of Coupons Nos. 24 and 25 (due 1st July, 1900, and 1st January, 1901) on 26th September, 1902, in accordance with the terms of the Agreement of 25th November, 1901, between Mr. Klingelhoefer, representing the Council, and the President of the Railway Company, was not made. In reply to their enquiries the Council were informed that the Railway Company had been thrown into a state of forced liquidation at the instance of the Banco da Republica, which, it is understood, was acting under the directions of the Federal Government.

In spite of telegrams sent to the Government through the kind intervention of Lord Rothschild, the Committee were quite unable to get any satisfactory answer with regard to the position of the Debenture-holders, and they

therefore decided to retain the services of Dr. Pires Brandão, the eminent Rio lawyer, who had conducted to so successful a conclusion the affairs of the Sorocabana Debentureholders.

Dr. Brandão advised the Committee that it was necessary to send out the Debentures to Brazil, and on the 15th of January last the £149,400 Debentures lodged with the Council were accordingly forwarded to Rio, together with a Power of Attorney in favour of Dr. Brandão.

The

The Council had every reason to hope that a settlement of the Debenture-holders' claims would be promptly effected, and it is, therefore, very disappointing to find that all sorts of irritating delays have been interposed. The two "Syndics" who were first appointed to carry out the liquidation were dismissed by the Judge of the Commercial Court for having presented an inventory and balancesheet drawn up by the old Directorate, whose administration had been characterised by such painful scandals. deposed "Syndics" had recourse to the Court of Appeal, which reversed the sentence of the Judge of the Commercial Court on the ground that the "Syndics" were the largest creditors, and, as such, should act as liquidators. progress of the liquidation was thus retarded, and matters were further complicated by the fact that prior to the reversal of his sentence the Judge of the Commercial Court had ordered that the creditors should appear for the purpose of drawing up a list from which two new "Syndics" were to be chosen. After the judgment of the Appeal Court was rendered, the Judge of the Commercial Court appointed two experts to check the inventory and balancesheet, but it was not until the beginning of July that the books necessary for the examination were produced.

The