The bargain,
even if it had been honestly carried out, was improvident enough.
Reduced to American money the nominal amount of the loan was
$3,788,500; of this amount the Republic was to receive but $1,600,000;
yet it contracted to pay as interest and sinking fund in twenty-five
years a sum amounting to $7,362,500. The contractors for the loan,
Hartmont & Co., of London, were authorized to retain $500,000 as their
commission. In fact, however, no more than $190,455 was ever paid to
the Dominican government. The brokers claimed that they tendered a
further sum of $1,055,500, though after the expiration of the time
limited in their contract, and that the tender was refused because of
negotiations then under way for the annexation of the Republic to the
United States, but such tender is denied on the Dominican side. At all
events, the loan contract was cancelled by the Dominican senate in
1870 on the ground of non-compliance of the brokers with its
conditions and the government made no payments for interest or sinking
fund. The brokers nevertheless continued to sell bonds in London and
pay the current interest with the proceeds.
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