once sold at 984, realising £147,375, and the proceeds paid into Court. It was then hoped that an immediate distribution would be made to the Debenture-holders, but it was found that various accounts had still to be adjusted, and that a considerable time must elapse before everything could be settled.

The Council therefore urged that application should be made to the Court to sanction an interim distribution. This was done, and the Court having granted the application, a sum of £7. 10s. per £100 Debentures is to be paid to the Debenture-holders on account.

The Council regret that the New Zealand Government have not recognised the claims of the Debenture-holders in a liberal and equitable spirit, and believe that, in the long run, it would have been for their own pecuniary advantage to have acted more generously.

The Committee have had a thankless task to perform, but they have, at any rate, succeeded in obtaining a considerable improvement in the terms of settlement originally offered by the Colonial Government.

CEDULAS.

The negotiations conducted by Messrs. O. Bemberg & Co. on behalf of the Provincial Government were resumed towards the latter part of the past year, and resulted in the signature, in October last, of an ad referendum Agreement between the Committee and the Executive Government of the Province. This Agreement was subject to (1) approval by the Legislature of the Province before 15th January, 1904; (2) acceptance by a General Meeting of the Cedula-holders, to be convened by the Council in London; (3) the formal adhesion of the holders of 60 per cent. of the Cedulas. The necessary Law was passed

by the Provincial Chambers on 31st December, 1903, and the Law and Agreement were submitted to a General Meeting of the Cedula-holders on 17th March. The meeting was not largely attended, and on a show of hands there appeared a small majority against the acceptance of the proposals.

The voting could not, however, be regarded as conclusive, and a poll was demanded. The result of the poll was that holders of upwards of $23,000,000 of Cedulas declared themselves in favour of the Scheme, and holders of about $8,500,000 against its adoption. The Council, therefore, felt it their duty to invite the Bondholders to lodge their securities for stamping in formal assent to the Arrangement, and this is now being carried out, but in view of the fact that the Cedulas are scattered throughout so many countries, and are held by such a vast number of individuals, it is too early to say whether the 60 per cent. of assents will be duly obtained.

Some opposition to the Scheme has been manifested in Buenos Ayres, but the Provincial Government have informed the Council that they do not attach importance to it.

The Committee have done everything in their power to secure the best terms possible; they have been for thirteen years actively engaged in endeavouring to effect an arrangement, and have been represented in Argentina by the eminent house of Messrs. E. Tornquist & Co.

Disappointing as the terms offered undoubtedly are, it is for the Bondholders carefully to consider what hope or prospect there is of obtaining any improvement, and what the effect may be on the value of their securities if the present proposals fall to the ground.

SANTO
DOMINGO.

The decision of the Arbitrators appointed to consider the case between the Governments of the United States and Santo Domingo with reference to the claims of the San Domingo Improvement Company was rendered on the 14th July. The award is not only favourable to the claims of the Company, but provides security which should guarantee the fulfilment of its terms.

It is hoped that a settlement with the holders of Dominican Bonds who have entrusted their interests to the Council may shortly be made. The delay has, of course, been trying, but the Council believe that the result will justify the recommendation of the Committee to the Bondholders in this country to abstain from sending in their Bonds for stamping under the Arrangement entered into with the French and Belgian holders in 1901.

Although no definite settlement has yet VENEZUELA. been arrived at with the Venezuelan Government, it must not be supposed that the Council and Committee have failed to do everything in their power to bring about an arrangement. Negotiations have been proceeding for many months past with the Banque de Paris et des Pays-Bas for a unification of the various obligations of the Republic, and recently the bases of an agreement have been approved by the Government's Representative in Paris. There are, however, still difficulties to be surmounted and many details to be arranged before the Agreement can be regarded as definitive. The Council and Committee are of opinion that the Unification Scheme proposed by the Banque de Paris offers the Bondholders some important advantages over a separate arrangement with each of the

different groups of creditors, and they therefore feel that some delay is justified in the hope that the project may eventually be carried through.

ECUADOR.

The Agreement made in July, 1903, between the Council and Committee and the Guayaquil and Quito Railway Company was duly approved by the holders of 75 per cent. of the Special Series Bonds outstanding. The External Debt Bonds held as collateral security were accordingly handed over to the Government, and the Railway Company lodged the $250,000 of Railway Bonds of the ordinary issue in their place. Two half-yearly amortisations, in accordance with the provisions of the new Agreement, have taken place, and the amount of Special Series Bonds outstanding is now reduced to $468,000.

SALVADOR.

In

These States have kept faith with the NICARAGUA, Bondholders during the past year. PARAGUAY, the case of Nicaragua the whole of the Arrear Coupon Certificates issued under the Arrangement of 1895 have now been redeemed, and consequently the sinking fund of 1 per cent. will in future be solely applied to the redemption of the principal of the Debt.

The price of Paraguay Bonds has steadily improved, and as it is difficult to obtain offers on the market for the sinking fund it will probably be desirable in future to call for tenders.

The Salvador Railway appears to be making satisfactory progress, and it is hoped that if the improvement continues the earnings of the line may be sufficient to provide the

interest on the Debentures apart from the Government subsidy of £24,000 per annum.

During the present year this Republic URUGUAY. has been involved in an unfortunate civil war. The 45 per cent. of the Customs Receipts assigned to the service of the Debt during the first six months of the present year shows a falling off of $464,565 as compared with the corresponding period in 1903. Notwithstanding this, the service of the Debt has been regularly and punctually carried out.

It is deplorable that a country which a short time ago had such bright prospects before it should have relapsed into a condition of internal disorder, which naturally exercises a prejudicial effect on its credit and retards its development.

LIBERIA.

This Republic has also continued to faithfully fulfil its obligations. The sinking fund of I per cent. comes into

operation on the 1st October next.

When it is remembered that the price of Liberian Bonds for many years stood at a merely nominal figure, and that they are now quoted at 65, the Bondholders may be congratulated on the result obtained through the efforts of the Council and Committee on their behalf, whilst the Government of Liberia are entitled to all credit for the honourable manner in which they have carried out the Arrangement of 1898.

GREECE.

In 1903 the net yield of the assigned revenues not only exceeded the sum of 50,000,000 dr. for the first time, but surpassed the return obtained in 1902 by about 2,500,000 dr. Owing to the satisfactory progress shown by the receipts,