Peru in the Guano Age / Being a Short Account of a Recent Visit to the Guano Deposits, with Some Reflections on the Money They Have Produced and the Uses to Which It Has Been Applied

by A. J. Duffield

Still the world was comforted by the promise that next week all would be well, or the week after, or say the end of the month, in order to be sure. In the midst of this, General Prado, the possible future President of Peru, is despatched to Europe on a mission, the nature of which was kept a profound secret for three weeks.

Simple men, who believed in the despatch of the finance minister, knew for certain that General Prado had gone to England to raise more money on nitrate, in order that the Oroya Railway might be finished, and a station-house built somewhere in the Milky Way, which it is destined probably this marvellous line shall ultimately reach. And if London would only lend Peru, say another £10,000,000, then Lima would rejoice, and the whole earth be glad; the mountains would break out into psalms, and the valleys would laugh and sing, for would not Don Enrique Meiggs, the Messiah[5] of the Andes, once more return to reign?

At any rate it is quite certain that General Prado was announced to sail on the 14th of March, when the last stroke of the pen was to be put to the conveyance of the nitrate properties. Alas! the law's delay continued, and General Prado did not sail. It is natural to suppose at all events that Prado never meant to go to London without the nitrate contracts in his pocket—which will supply a larger income to Peru than the guano in all its glory ever did,—for the purpose of asking the bondholders to be merciful. The General finally left Callao for Europe on the 21st, amidst the forebodings of his friends, and the ill-concealed joy of his foes, but without the nitrate documents being signed. Still, before he could reach London the thing would be done, and the result could be telegraphed. In the meantime the new minister to Paris and London, Rivaguero, telegraphed to Lima some favourable news, the precise terms of which, of course, were not allowed to transpire, to the effect that an arrangement had been made satisfactory to all parties.

On this, further delay takes place in the important nitrate negotiations, and that in the face of a semi-official communication to the effect that next week merchants might rely upon it that all would be well and truly finished. In the stead of this, President Pardo 'reminds the Banks of an item which up to that period had never been dreamed or thought of, except by the President himself, namely, that they, the Banks, on the security of the nitrate bonds, would have to supply to the Government so many hundred thousand dollars per month!

All at once the whole fabric of the nitrate business fell down.

Two things may be inferred from this: President Pardo hoped, believed, perhaps knew, that the bondholders would give way, and he had become convinced that he had made a mistake in buying the nitrate properties; it is also likely that he knew for certain at this time that there was guano enough for all purposes, without meddling with the important nitrate matters, and thereby destroying a great and important national industry. He may also have been desirous to bury, in an oblivion of his own making, the honest compromise contained in the despatch of Don Juan Ignacio Elguera. A further light may have dawned on the Presidential mind, namely, that it will be perfectly easy for the Government to treble the export duty on nitrate, without in the least damaging the trade or dangerously interfering with the profits of the makers, by which means the Peruvian Government would reap an annual income without trouble, or any of the thousand vexations to which it has been subjected in the export and sale of its guano.

That it was the original intention of the Government to raise a loan on the 'purchase' of the nitrate properties, is evident from the terms of the tenth article of President Pardo's decree, which may be thus translated:—

'The establishments sold to the State shall be paid for within two years, or as soon after as possible, that funds for the purpose have been raised in Europe; payment shall be by bills on London, at not more than ninety days, and at the rate of exchange of forty-four pence to the sol,' etc.

Whatever value these particulars may possess or have given to them by future events[6], they will serve to show some of the peculiar features of the Peruvian Government, and to what shifts it can resort, or is compelled to make under adverse circumstances, or circumstances into which it may be brought by its enemies, or its own weakness, its inherent lack of stout-hearted honesty, and its inaptitude for what is known as business.

The nitrate deposits are well enough known. It is absolutely certain that in the year 1863 there were sold 1,508,000 cwts.; and in 1873 5,830,000 cwts. In that year the Government acknowledged to have received from the export of this article the sum of 2,250,000 dols. Should the permanent sale of nitrate reach 5,000,000 quintals per annum, there is no reason why the Government should not realise from this source at least 10,000,000 dols. a year: should it only double its present duties the amount would reach 12,000,000 dols.