FINANCIAL SUPERVISION: CUSTOMS RECEIVERSHIPS
Loans from the financiers of the stronger industrial nations to the governments of the less developed tropical and subtropical countries, which have been increasingly numerous in the last few decades, have been frequently followed by the adoption of some kind of control over the fiscal affairs of the borrowing government. The demands of the financiers for prompt payment of interest and the regular accumulation of a sinking fund for the retirement of the debt have, in the absence of such control, been difficult for the governments of revolution-torn countries to comply with. Factions alternating in power have looted the treasury and internal disorders have frequently made necessary the diversion of all possible revenues to the military branch of government for the purpose of suppressing insurrections. The tendency in such countries has been to borrow money to meet emergencies until the load of the debt has become too heavy for the revenues of the country. Defaults and falling bond prices have ensued. Financiers have accordingly insisted upon the creation of controls to assure the application of a fixed portion of the revenues to the service of the debt. The purposes of the bankers are accomplished by pledging revenues, providing for their collection by the agents of the bankers or their government, and, in some cases, by limiting or supervising the loans and expenditures of the borrowing government.
Sometimes it has been found possible to obtain these ends by negotiation with bona fide governments which are willing to part with some of their important functions because of their desperate need of money. Controls in Salvador and Bolivia have been obtained in this way. In other cases, the debtor nation, staggering under a heavy load, is willing to submit to the financial guidance of one country in order to avoid the diplomatic nagging and possible intervention of other and more. aggressive governments. Such was the situation in Santo Domingo and Liberia, Again the government seeking the