The National tribune., 1888-10-04
AFFAIRS IN PERU.
Seizure by the Government Of the
Railroads.
Special Correspondence NATIONAL TRIBUNE.

upon JnOS6 foreigners, without any reOT6SS, save
through an interference by their respective
home governments. Most of these sufferers
are American citizens, and it looks as though
the United States intends to take some decided
steps to secure a protection to the person and
property of her people residing here. To that
end the American Minister is in correspondence
with the Government at Washington on the
subject, and has recommended an increase of
the naval force at Callao; not for the purpose
of intimidating the Peruvian officials or to
take an active part in the matter, which only
the President and Congress could authorize,
but to lend a moral support to the negotiations
now pending, and to be ready in case of an
emergency. At present the United States
ships Trenton and Alert are here, under the
command of Capt Farquhar, a man of sound
Judgment and discretion.
Peru. like the United States, one of the
American Republics, recognizes the benefits OF
an amicable settlement of all difficulties by
civil and diplomatic negotiations, and has just
sent to the Government at Washington
Minister Plenipotentiary for that purpose; the
legation there having been abolished more than
q year ago. The forcible seizure of these rail
roads will be fully presented and discussed.
John Thorndyke, an American citizen and con-
tractor for the southern railways. aud who Is
the greatest loser, sailed for the United States
the other day to be able to present his claims
to the authorities in Washington. The ques-
ton of the status of these contractors involves
a very complicated discussion, and they occupy
peculiar position, being, as they are, engaged
upon public works for foreign government,
the construction of which is to be paid for out
of that governments funds and not resident
merchants doing business as private individals
However. subsequent clauses in the original
contracts gave to each vested right, in which
they should be protected.
THE PECULIARITIEs OF PERU.
Peru is one of the richest countries on the
American Continent in natural resources, and
for many years preserved her credit unin-
paired; but unfortunately Peruvian gentle
man is seldom found in business He is edu-
Gated for the law, and his career is politics,
which leads nearly every one to consider him
self as the natural guardian of the State; hence
many party lines are drawn TO keep the cOuu-
try in a state of excitement, and in a normal
state of revolution. The merchants are all for
eigners, the agricultural and mineral resources
are developed by foreigners, and the banks con-
trolled by foreign firms and commercial houses,
and in times of revolution it is the money of
foreign merchants in the country that pays the
troops during the struggles, care being taken
not to demand the money on forced loan !;
but they are constrained to supply funds for
self-preservation in being made to see that
without money the preservers of order will
disband and chaos be inaugurated. Sometimes
trumped-up charges are preferred and fines
exacted.
For many years the rich deposits of guano
| served as means of raising money for the State
and wealth for the Office-holderF and the credit
of the country was sound imposing a conf
dence in the integrity of the Government and
| ability to fulfill its obligations to that extent
| her bonds were considered good investment.
In the course of time these deposits of guano
| became exhausted, and the PeruYians, 10th to
MIR here tho coil hu LITTLE
| irrigation, is so productive as to have made
| them independent, decided upon a method of
development OF the inter beds and mineral re-
sources by the Inauguration of an extensive
system Of railroads TO furnish transportation to
and from the mines. It was determined to
make the work of construction Government
undertaking, and in the year 1868 President
Balta made contract with Henry Aleiggs for the
building Of 600 miles Of railroad over various
routes, viz Molendo TO Ariquipa, 90 miles
Juliaca to Cnzco, 2l2 miles, Chimbote to Hua-
raz I72 miles; Pacasmay0 to San Pedro, SO
miles; IIo to Moquequa, 90 miles; Ariquipa to
PunO. PIT miles, and Callao to OrOya, I45 miles.
For the cost of these roads Peru was to raise in
| cash lis, 100000 soles, and secure in bonds
| Il, 100000 soles. These enormous sums were
raised by foreign loans which were negotiated
! for by Messrs. Dreyfas q Co., as agents for the
Government, certain amount of guanO being
! bypothecated. The work was commenced OH
| the roads, corruption set in, enormous sums
squandered, and a course Of extraVagance prac-
| ticed, that Peru soon found herself with for
! eign debt of G37 900, 600 and an internal debt
| Of EI,000,000, for which she was paying an in
| terest more than her annual revenue; hence
! the financial condition of the country became
| so embarrassed, payment on bonds had to cease
| and work on the railroads discontinued. Some
| of these roads, however. were completed, but
| yielded no revenue.
| BUILDING OF THE MEIGGs ROADS.
On July Z, 1870. the Government Of Peru en-
tered into arrangements with Meiggs to pay
| the %, 100000 they were owing the contractor
at the rate of ass d. per sole in coins and bill:
of exchange such money to be used in the
construction of the railways; but the strain OF
the Government obliged them to use this money
| TO meet the urgent daily expenses, entailin(
| great loss to the contractor. Another effort wa
made in 1874 to relieve the con tractor, will
the same result; when, in 1875, the temporary
! suspension Of the work on the railways wa
ordered. By this employment Of the funds Sc
apart for the railways, as stipulated in the con
tract and the payment to BIeigss in bonds anC
deprecated paper, which he had to accept wa
an infringement Of the contract, and obligated
a compensation TO Meiggs for the losses. Meiggs
in order TO save himself, made proposals to tn
Government that were acceded to in 1876, ant
in which it was stipulated. by inserting claus
Ia the original cOnCracG, tlaC BleIBgS ShOuld Hn
dertake the management of the railways, hay
ing at the same time every right to appropriat
the net proceeds of the roads, TO make use O
them, and to retain them in his power unit
the railways should be completed TO the ter
minus mentioned in the original contract:
without causing any expense to the treasury
In return, he was obliged TO continue uniutel
ruptedly the regular movements of the train
for transport of passengers and freight; {
, make such repairs as necessary, and TO sustai
! all losses if the proceeds were insufficient {
cover expenses.
This is the condition in which these road
, stood when the sub-contractors and assignee
/ Of Henry Meiggs took charge, and they hel
these roads under that contract. To recove
the money due, as well as comply with thu
part Of the contract, they pushed forward til
> work Of construction and maintained the run
E ming of the regular trains during the war wit
: Chilli and the revolution that occurred at
= great loss; especially so in the case of ThorI
: | dyke, who had to not only repair the damag
to the roads, but build entire the machine -sho
that were wantony destroyed.
e A FINANCIAL WRECK
: The war with Chilli, at ruinous expense, ar
Il consequent loss Of the rich inter beds of TacI
q and Tarrapaca. left the Government of Peru sti
e more in debt; in fact, a complete financial wrec
y making it almost impossible to ever compile
i these roads or pay the debt due the contrat
4