The advent of these old friends is looked upon as an augury of bright import by the Peruvian people, in view of the period of great trial and disaster that followed the decline of the guano trade in years past. It is certain that the revival of the industry will find Peru better able to profit by its blessings than formerly, when the possession of an apparently inexhaustible treasure led to reckless expenditure and resulted in the financial difficulties that an unlimited credit, continually drawn upon, invariably produces. In Alejandro Garland’s recent book on Peru, an interesting history of the guano trade is given, which places particular emphasis on the evils that developed out of its phenomenal growth and peculiar conditions.
THE PELICAN AT HOME.
In 1840, when the sale of guano first began to figure in the government receipts, the total revenues of the country did not exceed three million dollars. Ten years later, the government revenue from guano alone was more than five million dollars. The demand for the product increased in all parts of the world, and the annual exports rose to two hundred thousand tons. This rapid increase in the guano trade was largely due to the activity of the consignees, in whose hands the government placed it for sale, and their influence in the financial affairs of the country became very great. Every financial difficulty that arose at that time was met by mortgaging the future returns from the sale of guano; and Peru, counting on the extraordinary and abundant revenue from this source met all the demands of the government without recourse to taxation,—a condition unheard-of elsewhere in the financial history of the world.
GUANO ISLANDS OF LOBOS DE TIERRA.
But guano, though it brought to the Peruvian treasury the enormous sum of two hundred and twenty million dollars between the years 1840 and 1867, brought also such habits of extravagance in the government, that, not only did the entire sum disappear without adequate recompense to the country, but, at the time when General Mariano Ignacio Prado assumed the dictatorship, with Don Manuel Pardo as his Finance Minister, the public debt was forty-five million dollars, besides which, the government also owed the consignees of guano fifteen million dollars. Don Manuel Pardo sought to organize the finances of the nation on a more solid basis, independent of guano, by establishing permanent resources in the form of taxes and export duties; but the fatal glamour of wealth with which guano had dazzled the nation, cast his labor into the shade, and the existing evil was increased in the succeeding administration, though the intention of the energetic and public-spirited statesman, President Balta, was to put an end to the mismanagement of guano funds by employing this resource in the construction of railways and other public works.
In the meantime, nitrate, a powerful rival of guano, had been discovered in the desert of Tarapacá, then the southernmost province of Peru. The companies engaged in extracting nitrate, of which about five million quintals were exported annually, were competing with one another so closely that the low prices established by them threatened to ruin both the guano and the nitrate business; and President Manuel Pardo, in order to raise the selling price of both products, with a view to increasing the revenues of the nation, put into force a government monopoly of nitrate. As a result of the war with Chile which followed, the nitrate fields of Tarapacá passed into the possession of that country. The evils of competition again threatened to ruin the trade, until, under the auspices of the Chilean government, a system of limiting the production was adopted, which remains in force. What Peru lost in the nitrate fields of Tarapacá may be estimated from the statistics of Chile, which show the revenue from the export of nitrate and iodine (the latter obtained in the preparation of nitrate) to be five million pounds sterling yearly, nearly three-fourths of all Chile’s exports being from the nitrate fields.
DIGGING GUANO ON THE CHINCHA ISLANDS.