The old and the new Peru

by Marie Robinson Wright

The only export duties charged in Peru are: a three per cent ad valorem tax on gold in bullion or dust; a charge of forty cents per dozen on “Panamá” hats exported from Paita; and a duty of twenty cents a kilogram, gross, or twenty-four cents a kilogram, net, equivalent to about four per cent ad valorem, on Pará rubber and caoutchouc. The import duties are more numerous; wines and liquors, tea, coffee, butter, cheese, and a few other products pay a duty of sixty-five per cent, and there is a long list of articles on which a duty of from ten to twenty per cent is charged; but all machinery which is used directly to favor industrial development is entered free of duty, as are also books and utensils for the purpose of public instruction.

A COCAINE FACTORY IN THE MONZON VALLEY.

Foreign merchants have established themselves in all the larger towns of Peru, and in the coast region they have built up very important enterprises. The English merchants devote themselves especially to the wholesale import and export trade, in which they have strong competitors among the Germans. The French have change of a great deal of the retail business, particularly in articles of luxury; and the Italians are the principal purveyors of foreign wines, table delicacies, etc. The Peruvian merchant has a share in all the trade and Peruvian salesmen travel throughout the country selling to the merchants of the interior the goods imported by the larger establishments of Lima and Callao. The North Americans have established few business houses, but they control a large share of the mining enterprises, and are financially interested in the construction of railways and other public works of the country. Some of the largest commercial and industrial establishments of the United States send their agents to Peru. But North American trade is still in the infancy of its development so far as the South American market is concerned, few shippers in the United States knowing much about the geography of the great southern continent. When, as has frequently occurred, merchandise ordered for Lima is sent to Mollendo as the nearest port, and goods for Arequipa are unloaded at Callao by the shipper’s orders, it becomes apparent that the knowledge concerning commercial routes south of the equator is decidedly limited among those exporters who are already in the field, to say nothing of those who have not yet entered it. But there is a growing interest among merchants of the United States in the trade of South America, and every year shows an increase in the correspondence directed to the Peruvian Consulate at New York seeking information on this subject. The Consul-General, Hon. Eduardo Higginson, brings large experience in the foreign service of his country to the particular task which occupies him in the great metropolis,—the promotion of commercial relations between the two countries. The offices of the consulate are fitted up with all the requisites of a consular bureau, and in its library may be found literature relating to the industrial and commercial conditions of Peru.

It is impossible that the reciprocity of trade between Peru and the United States should show any marked improvement until better facilities can be secured for rapid and cheap transportation. But this is to be accomplished by the inauguration of the new National Steamship Line, which, next year, will cover the distance between Callao and Panamá in four days, and, later, by the completion of the Panamá Canal. From 1902 to 1905 the imports from the United States were increased by twenty per cent, while the exports to that country remained stationary, and in 1905 declined, owing to the special privileges granted by the northern republic to Cuban sugars, with which Peru was unable to compete; in the same period, the shipments have more than doubled from Peru to Great Britain, where Peruvian sugars enter on equal terms with those of other countries.

The National Assembly of Commerce is an institution of increasing importance in Peru. Though recently organized, in 1905, it has already done much to foster trade and to promote the commercial relations of the country on a broad scale. When Secretary Root visited Lima, he was made an honorary member of this organization, which works as a kind of auxiliary of the Chambers of Commerce, as one of its founders described it in his address to Mr. Root on that occasion, “to carry into practice the formation of a world wide legislation which shall mark the courses in which the inexhaustible current of industrial products ought to run.” In most of the larger cities, chambers of commerce have been established to promote not only the direct interests of trade, but also the development of the national industries, with the success of which the trade of the country is closely identified.

The encouragement and promotion of manufacturing industry is especially desirable, and this field of enterprise offers exceptional opportunities for investment. Like all other South American countries, Peru imports many articles which could be profitably made at home and for which it furnishes a large share of the raw material. But, until comparatively recent years, few factories of importance existed in Peru, and most of these date from the period when the fall in silver and the consequent depreciation of the national currency made the importation of foreign manufactured articles enormously expensive, and encouraged the establishment of home enterprises to compete for this trade. During the period of the viceroyalty, the home government prohibited manufacturing in the colonies, in order to protect the commerce of the mother country; and in the earlier days of the republic the conditions were not favorable to the development of this branch of industry.

THE ITALIAN BANK, LIMA.

The most important manufacturing enterprises are in the hands of the Peruvians themselves, though Italians and other foreign colonists have established large factories within the past few years. The manufacture of cotton and woollen goods by the primitive process used among the Indians to-day has been in vogue from time immemorial, but not until nearly half a century ago, in 1861, were the first modern looms introduced, for the woollen factory of Lucre, near Cuzco, which was founded by Dr. Garmendia in 1860. The most modern establishment for the manufacture of woollen goods is that of Marangani, also in the neighborhood of Cuzco, founded in 1897, with Peruvian capital amounting to five thousand pounds, which has since been increased to thirty thousand pounds. The factory is now owned by the heirs of the founder, the largest shareholder, Don J. W. Rodriguez del Carpio, being also the manager of the enterprise. English, German, and Belgian machinery of the most modern manufacture is used, the factory is lighted by electricity, as are also the houses of the operatives. All the employés are native workmen, and the managers of the various sections are also Peruvians, except in one section, of which an Italian expert has charge. The company provides free instruction for the children of employés, as well as free medical attendance when required. Cashmeres, flannels, and fine cloths are manufactured from native wool, chiefly that of the sheep, though some alpaca is used. Only the dyes are imported, everything else used in the factory being of native origin, and the dyes are chiefly made from woods found in the Montaña. The Marangani establishment has direct communication with Cuzco by telephone, and with all the cities of the republic by telegraph. It is one of the most progressive and up-to-date enterprises in South America. The largest cloth factory in Peru is that of Santa Catalina, in Lima, which produces about a quarter of a million yards of cashmere and cloths for the army, besides various knitted goods. It gives work to between seven and eight thousand employés and its business is increasing annually. There are only four or five woollen factories in the republic, Arequipa having one of the larger ones, and Lima another.