Incidentally in addition
to collecting their commission, they turned a penny for themselves by
taking the bonds with their friends at 50 and selling them to the
public at 70. When the Dominican repudiation of the bond issue was
published in England in 1872 a cash balance of $466,500 still remained
to the credit of the Dominican government, but it was coolly pocketed
by the principal agent, who claimed it as a set-off against alleged
damages in connection with a concession he had near Samana. In the ten
years of anarchy that followed in Santo Domingo no attempt was made to
straighten out the matter. The bonds having gone into default in 1872
dropped lower and lower until they reached 3 per cent in 1878.
The setback received by the credit of the Republic by reason of the
defaulted Hartmont bonds made further bond issues impossible for a
number of years. Finally an Amsterdam banking house, Westendorp & Co.,
was interested and in 1888 and 1890 floated the second and third bond
issues for L770,000 and L900,000 respectively. The object of the
second issue was to retire the Hartmont bonds at 20 per cent, to pay a
number of floating interior debts the owners of which were harassing
the government, and to provide cash for the treasury, principally for
military and naval expenditures, while the third issue was designed to
secure funds for the construction of a railroad between Puerto Plata
and Santiago.
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