PERU. 



625 



the expenditures at $17,380,406. But the ex- 

 penditure for 1874 has been estimated at $62,- 

 600,000, while the revenue for that year was 

 set down at but $51,100,000, leaving a deficit 

 of $11,400,000. 



The foreign debt consisted, in 1875, of the 

 following loans: Kailway, of 1869, at 5 per 

 cent., 290,000; railway 6 per cent., of 1870, 

 11,920,000 ; and railway 5 per cent., of 1872, 

 36,800,000: total, 49,010,000, or $196,100,- 

 000. The 6 per cent, loan of 1870 was issued at 

 the price of 82, and the 5 per cent, loan of 1872 

 at 72. The loan of 1872 was intended to be 

 for the nominal amount of 36,800,000; but 

 provisionally there was issued (in July, 1872) 

 only 15,000,000. All these loans, secured by 

 the guano deposits and other resources of the 

 country, are payable in twenty years, by means 

 of sinking-funds. 



The home debt amounted, in 1872, accord- 

 ing to report, to 2,500,000, exclusive of a 

 floating debt, of the amount of which nothing 

 was known. 



Before dismissing the subject of the national 

 indebtedness, it may be proper to transcribe 

 here the report of the Corporation of South 

 American Bondholders, published in a London 

 journal early in 1875 : 



As soon as the terms of the contract entered into 

 in August, 1869, between the Peruvian Government 

 and Messrs. Dreyfus Brothers & Co., for the sale 

 of two million tons of guano, became known to the. 

 bondholders, much dissatisfaction was expressed 

 with Article XVIII. of the contract, which, by im- 

 plication, abrogated the priority of the bondholders' 

 lien in respect of the proceeds of sales of guano for 

 interest and sinking-fund. A committee was ap- 

 pointed, which, after correspondence with the Gov- 

 ernment and contractors, succeeded in securing the 

 rights of the bondholders. The functions of the 

 committee being at an end, the committee was dis- 

 solved. 



The council, however, have continued to maintain 

 with the Government of Peru friendly correspond- 

 ence, which has been of reciprocal advantage. It is 

 of paramount importance to a country like Peru, 

 possessing valuable assets, and engaged in the con- 

 struction of extensive public works, requiring a large 

 expenditure of capital, that she should have the cor- 

 dial cooperation of those interested in her prosperi- 

 ty. The council consider Peru to be of so much 

 importance to the bondholding interests that they 

 are disposed, when circumstances permit, to appoint 

 a special agent for that country. Meanwhile they 

 have cultivated most cordial relations with the Pe- 

 ruvian legation, and have, through their correspond- 

 ents, placed themselves in direct communication 

 with the President, who manifests the most loyal 

 disposition toward the foreign creditors. 



The council were able, finally, to bring into prac- 

 tical effect the arrangement made in the first in- 

 stance with Messrs. J. Henry Schroder & Co., with 

 regard to the 6 per cent, loan of 1870. This having 

 been ratified by the Government, in conformity with 

 the negotiations carried on between Senor Pedro 

 Galvez and the council, a number of the 1870 bonds 

 were, in the months of April and October, with- 

 drawn from the market, by the application, of the 

 sinking-fund provided by the above arrangement, 

 and the same operation will be pursued this year. 



The new discoveries of guano are a subject of 



much moment to the bondholders, and not the less 



so since the quantity and quality of the deposits 



have been the subject of much controversy in the 



YOL. xv. 40 A 



public press. The presence in London of Mr. Hin- 

 dle, an engineer of long experience in Peru, induced 

 the council to call two private meetings of leading 

 bondholders, to hear his explanations. His state- 

 ments confirmed the results of the preliminary sur- 

 veys, and produced a favorable impression. 



It has, however, been the opinion of some leading 

 bondholders that an independent detailed survey 

 should be undertaken by the council on behalf of 

 the general body, and a correspondence has taken 

 place with the Peruvian Government, from which, 

 as yet, nothing definite has resulted, although the 

 Government appears inclined to meet the views of 

 the bondholders to a certain extent. 



As is well known, great depression of Peruvian 

 securities has prevailed, and many applications have 

 consequently been made to the council. To have 

 convened the bondholders in a public meeting might 

 have been regarded as an unfriendly act toward a 

 Government possessing such great resources as Peru, 

 and might have weakened, instead of strengthening, 

 the action of the Government. At the same time, a 

 meeting without definite aim, far from allaying pub- 

 lic anxiety, would only tend to increase it. 



The contract between the Peruvian Government 

 and Messrs. Dreyfus Brothers & Co. will expire in 

 July, 1875. The interests of the bondholders will 

 be sufficiently protected in respect of any fresh con- 

 tract which the Government may enter into with 

 responsible parties for the sale of guano, provided 

 the terms and spirit of the seventh clause of the 

 general bond of the 1872 loan be strictly observed. 



On the 3d of February was formally opened 

 the session extraordinary of the Congress, 

 when the President delivered the following 

 speech, than which no other report could pre- 

 sent a clearer view of the condition of the re- 

 public at that time : 



"REPRESENTATIVES: M.y first duty on 

 finding myself in the midst of you, in the tranquil 

 performance of your constitutional duties, is to re- 

 turn thanks to Almighty God for the rapid and hap- 

 py termination of the civil war which two months 

 ago threatened the republic, and for the proofs of 

 civic virtues evinced by our citizens upon that occa- 

 sion. 



The crisis through which the republic has passed 

 has sufficed to prove the power of order, law, and 

 progress, in our social organization ; and the Nation- 

 al Guards, the army and the navy have, by their spirit- 

 ed behavior, exercised a moral and material influence 

 greatly to the benefit of the true interests of the 

 country. The result has proved that the conscious- 

 ness of the existence of that power was well founded, 

 and has been a source of satisfaction to right-thinking 

 men of all parties, who desire their ideas or political 

 aspirations to be carried out after honorable and 

 peaceable legal conflict. 



The army, the navy, and the National Guards, well 

 deserve the public gratitude for their conduct during 

 this short though vigorous defense of social order, 

 justice, and our institutions. 



To consolidate the labor effected, and insure the 

 interests and rights of society against future attacks, 

 it is urgently requisite to determine a number of im- 

 portant matters which await your decision, and for 

 this reason I have summoned the sessions extraor- 

 dinary, in the hope that your intelligence and pa- 

 triotism will give them that correct and prompt so- 

 lution which the condition of th*e country imperious- 

 ly demands. 



The most important of these questions are those 

 with reference to the finances. 



The country is passing through a crisis which is 

 so serious that we cannot ignore it, because social 

 evils cannot be remedied unless the authorities ex- 

 amine into them. 



The advances received on account of the sales of 



