104 



CHILI. 



the two countries is to be solved. Let the manufac- 

 turers begin by making their own markets accessible, 

 and asserting the principle of free interchange, without 

 which unlimited production is simply ruinous. Let 

 them seek to exchange for our copper and wool upon 

 equitable terms, as in former times ; then may they 

 certainly reckon upon us as permanent consumers of 

 their products. We will pay them for their ma- 

 chinery, hardware, and dry goods witli our wool, 

 niter, and copper. Efforts to augment the various 

 agricultural and manufactured products of a country 

 within the natural limits imposed by soil, climate, 

 geographical position, and the grade of civilization 

 enjoyed, are always laudable. 



The attitude assumed by the Chilian Gov- 

 ernment toward the holders of Peruvian bonds 

 was alluded to in detail in our volume for 

 1879. The following extracts from the Lon- 

 don "Times" and from a British financial 

 journal will throw the necessary light upon 

 that question as it stood in the summer of 

 1881. It may be added that, down to the end 

 of that year, little hope was entertained by the 

 most sanguine of an early dividend. The net 

 proceeds of thirteen cargoes sold on account 

 of the Chilian Government, and to be applied 

 in favor of the bondholders, was reported by 

 the London consignees to amount to but 17,- 

 828 10. 1 The total claim represented by bonds 

 is 32,000,000. 



With regard to the reports in the market to the 

 effect that the Chilian Government are going to as- 

 sume the burden of the Peruvian debt at a smaller 

 rate of interest, the truth appears to be that some large 

 bondholders here, seeing that the committee are prac- 

 tically impotent and that some other combination must 

 be formed to protect the bondholders, have made a 

 proposal to the Chilian minister to accept what, in 

 fact, is a composition, the bondholders agreeing in 

 return to renounce all their rights. The Chilian 

 minister, we believe, is inclined to listen to the pro- 

 posal, whatever it may be, but nothing can be done 

 now respecting it without conferring with Messrs. A. 

 Gibbs and Sons, with whom communications have 

 been opened. In any case the Chilian Government 

 are not likely to agree to any arrangement which 

 would cause them loss, which would probably be the 

 result of their promising to pay 2 per cent on the 

 Peruvian debt. The most favorable estimate by the 

 best judges is that there will not be a net revenue 

 from the guano sales of more than one per cent on the 

 total amount of the Peruvian debt, and the realization 

 of even that amount depends upon the possibility of 

 obtaining sufficient guano of a marketable quality. 

 On this head very considerable doubts are entertained. 



There has been a great deal of excitement in Peru- 

 vian bonds on the circulation of various rumors which 

 seem to be mostly devoid of authority. It is eminent- 

 ly improbable that the Chilian Government will adopt 

 the course which some ardent admirers of its gen- 

 erosity have been suggesting. There is no reason 

 that we can see why Chili should take upon her the 

 Peruvian debt, and guarantee two, or any, per cent 

 to the bondholders. She does all she can fairly be 

 expected to do when she gives the bondholders access 

 to the property hypothecated to them in security for 

 the foreign debt of Peru. Sanguine views have, 

 however, oeen in the ascendant, and the price of the 

 bonds has had a substantial rise. There is this much 

 to be said in their favor, that even at one per cent (if 

 it were sure) the bonds would be cheap at .their pres- 

 ent market quotations. Calculating on the basis ot 

 the vessels chartered and loading, on their way or 

 arrived, allowing for only twenty more ships during 

 the rest of the year, nearly two per cent on the loan 



would, it is said, be within sight. There is, we agree 

 with a correspondent of a contemporary, something 

 more tangible in the prospect here than we have at 

 present with the Turks. But no progress we would 

 remind this correspondent and other critics is likely 

 to be made by indulging in mere abuse of the com- 

 mittee of Peruvian bondholders. The letter from that 

 body, which we publish elsewhere, proves their anxiety 

 to have done with controversies and wrangling with 

 the Chilian Government or any one else. But it is mere 

 fatuity to call in question the credentials of the com- 

 mittee, or to speak of them as " impotent." Never 

 was a committee appointed by a more indubitable 

 vote. Out of a total of 32,000,000 bonds no less 

 than 26,000,000 were registered or deposited, and 

 21.000,000 were voted on. The fact that the bond- 

 holders paid the assessment on their bonds sufficiently 

 demonstrates how much they were in earnest in the 

 mutter, and how little foundation there is for the at- 

 tempt to discredit their committee on the authority of 

 anonymous "large" bondholders. If there was any 

 pressure put on the bondholders to deposit their bonds 

 and vote, it was applied by the Chilian minister^ who 

 caused it to be announced that their not registering or 

 depositing would deprive them of their right to par- 

 ticipate in the proceeds of the sales of the guano. 

 The attacks on the committee are baseless clamors. 



The subjoined additional extract from the 

 message read by President Pinto at the open- 

 ing of the Chilian Congress on June 1, 1881, 

 will serve to complete the sketch of affairs in 

 that country in tbat year : 



FELLOW-CITIZENS OF THE SENATE AND CHAMBEB OF 

 DEPUTIES : It affords me pleasure to be able to inform 

 you that our relations with friendly powers are on a 

 footing of perfect cordiality. 



A slight modification which circumstances appeared 

 to me to warrant has taken place in our relations with 

 Spain.* You are aware of the eagerness with which 

 Peru and Bolivia hastened to sign a treaty of peace 

 with Spain, in the belief that by this means they would 

 be able to obtain warlike elements to use against us. 

 The Peninsular Government, after entering into a 

 treaty of peace with our enemies, maintained, how- 

 ever, the strictest neutrality, notwithstanding that the 

 truce with Chili subsisted and still subsists. In con- 

 formity with this lofty policy, it ever showed itself 

 disposed to deny to our enemies all favors which it 

 could not grant to us also. These antecedents, added 

 to the friendly attitude assumed by the Spanish com- 

 munity at Iquique on a sad occasion, induced me to 

 think that it would be proper to show that, on our 

 part, we were not insensible to these conciliatory 

 actions. Believing, therefore, that I faithfully inter- 

 preted public feeling in the matter, I issued the de- 

 cree of January 31st last, opening our ports to Span- 

 ish vessels. In conformity with the law of January 

 12th of last year, which empowered me to give in the 

 adhesion of Chili to the Postal Union, I applied, dip- 

 lomatically, to the Swiss Federal Council for the in- 

 corporation of our country into that convention from 

 the first of April of this year. 



While devoting, as you may suppose, particular 

 attention to the requirements of the war in which we 

 are engaged, the different branches of the public serv- 

 ice have not been neglected. 



The advancement of our frontier, both north and 

 south, has rendered necessary the creation of new 

 provinces and departments, and several bills having 

 this object in view will shortly be submitted to you. 



The public roads have been duly attended to with 

 the sums provided for in the estimates, and with pri- 

 vate donations. I have issued decrees giving to the 

 inhabitants of provinces some participation m road 

 affairs, which will have the effect of improving the 



* A treaty of peace between Chill and Spain, after fifteen 

 years' interruption, was concluded in 1881. 



