New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1890-05-14


CHILEAN Government. decree had been Issued
on February 9. 1882 by which the sale of l,ooO,-
600 tons of guano was ordered. with the under
standing that the proceeds should be divided, after
large deductions for expenses. between the Gov
crnmcnt of Chill and those creditors Of Peru whose
claims appeared 10 have been guaranteed by hen
on the deposits The treaty reailirmcd this prn-
cpe and provided for the continuance Of such
sales, under similar conditions, until the deposits
should be exhausted Any new beds which might
be discovered I'm the territories acquired by Chilli
were to belong TO that Government exclusively.
4 monopoly of the guanO business was secured by
the temporary occupation of the Lobos Island
beds which have been controlled by the same
Power The treaty also provided for the avoid
ancc of competition between Peru and Chill in
the disposal of any supplies Of guano which
might be discovered in either country. In Ar
ticle VIII the victorious Government expressly dis
claimed responsibility for any debts of Peru for
which the resources Of the newly acquired terri
tories were mortgaged Fifty per cent of tho
guano sales was TO be deposited in the Bank of
England to the account of the bondholdcrs, hut
the nitrate beds Were not recognized pledged
for the redemption of the creditors claims.
This distinction without difference, but
Chilli has persisted in adhering to this principle
Of action. 4 few years before the war Peru had
appropriated the nitrate deposits in Tarapaca and
compelled owners TO take bonds in settlement Of
their claims. This done in order 10 prevent
competition between nitrate and guano as fer
tilizer. After the war, when Chilli took pos
session of Tarapaca the works belonging To the
Peruvian Government were sold, rightful owners
of nitrate beds were renstatcd and the production
of the salts was declared free except in new de-
posts. which were reserved as the exclusive
e IL. Z.
port duty was levied for the benefit Of the Treas
ury. The guano business was indusrouSly deycl-
opcd equal shares of the net proceeds going to
the Bank of England for the bondholdcrs and to
the CHILEAN Treasury Meanwhile Peru was Mt
teriy bankrupt and its creditors were having re-
course 10 bargains and ntTlgucs with unstable
government after another. AS time wen on the
creditors and claimants. under the lcade rship Of
Michael !. Grace, began 10 take concerted measures
for the protection OF their interests The British
Foreign Office and the State Department at Wash
lngtOn do not appear TO have cNcrtcd much i'll
huence i'll the anar. The English bondholdcrs
authorized Mr.. Grace tO act their attorney IN
Lima. and he succeeded in obtaining the appoint
ment OF a commissioner, who drew up the text Of
a contract for wlplng out one-haf Of the public
debt and aiming the creditors with important
concessions. Chilli was held TO It's responsibilities
for the mortgage property in Tarapaca, Peru in
sstlng that the bondhOldcrs must look 10 that
Government for the liens on which their money
was advanced for the railways Chill protested
against the terms of The contract and prele
it,, execution. Still the fact remained and could
not be disputed that the conqucsts on the rain;
less coast included treasure in nitrate salts and
guano which had been pledged for payment OF
Pcru's Indebtedness
Mr.. Grace, far from being discouraged, devoted
his energies with renewed VigOr 10 the removal !
Of every obstacle to the negotiation Of a com
promise between Peru and its creditors. new
contract was prepared, by which provision was |
made for the exiting uishmcnt Of the entire public
debt and the transfer Of all the State railways
To the b0ndhOders Various American claimants. !
who had large interests in the railways, were
brought into the com bnatlon, so that no resist
ancc offered 10 the proposed conversion scheme
except from French investors under the control
Of VI. DrcyfGs, who had received large guano
concession from Picrola when he was Dictator
The pressure Oh Chilli increased The liquidation
Of Peruvian finances and the restoration of COM
mercial and Industrial activity in the North were
dependent upon the good offices Of the South.
Chilli had secured the rejection Of one contract.
1t could facilitate the acceptance of fhe second
contract by timely concessions Fresh masses Of
capital would he hrough, into Peru, the railways
would he completed aud Chilli would profit largely
ia a commercial sense from the restoration of
prosperity i'm the North. Diplomatic appeals made
in this spirit finally prevailed. Chill agreed a
few weeks ago to protocol which enabled Mr.
Grace and his associates 10 carry their contract
through the Peruvian Congress and 10 cIcct "A
general settlement with the creditors.
In this protocol Chill conceded 10 Peru III"
privilege Of working the gnano beds a. lluanillos.
Punra de Lobos and HJhclan dc Eica for eight
Years. These are TIE principal g,iano deposits
in the South. ;Lc existence of which known
before the war. For four years Chill viii only
De allowed IA obtain such supplies may be
needed for its own agriculture. bat after that
period it will be AZ liberty - work all the re-
naming deposits Chill also restores 10 Peru the
lobos Islands, Of which II has remained 40 pos
Session under the Treaty OF AucIu. and agrees
10 refund 80 per cent Of the enano sales which
II has effected since February - lS-2. The 30
per cent deposits IN the Bank OF England are
left al the disposal of the bonihoGcrs Chill
virtually abandons The guano monopoly the
coast and allows The hOudhOlder,, 10 whom Peru
ssgns all thcs" CONCESSIONS four years Of cN-
elusive control. and cght years for working opera
tcns in the best beds in 'rarapaca In return Lord
DOnonghmore, as tine representative OF thc bond
holders. has released Chill from all further re-
spOnsibiiy and obligations for the salt and guano
deposits which were PLEDGED for the payment Of
Pcru'> debts.
ndcr the contract tie Government comedies -
the bondholdcrS all Tie puano In its territory 10
the extent ~ 100000 tons rcscrying for itp'lf
any excess there may be over that amount. Tine
residue Of the 80 per cent Of the puano Of the
Lobos Islands belonging 10 Peru is also transferred
10 them, after the claims OF Chill for obligations
contracted under Tie Igcsils Administration, not
exceeding 2,0Oo.00O sDlcs, have been deducted.
Exclusive ownership Is retained by the Govern
menf In the guanO beds Of the Chin0ha Islands.
which are reserved for the requirements Of Peru
Wan agriculture; but otherwise Ru9no can only
be exported by the bondhodcrs until they siail
have obtained their allotment Of 5000. 1000 tons.
II the commission Of engineers appointed by me
tual agreement discl0srs the existence Of th"
81. 600 600 tons. the hOndhOldprs viii Ice required
to extend the Juiiaca Railway from Sicuani 10
CuzcO within eight years: and II they fail 10 do
So, the amount of their gIan0 concession VIII DE
reduced from 3.OO0OOO 10 2,O0o.OOO tons. Nopl.
nally the grant of 900. 600 tons is made for the
purpose Of securing tie completion Of The rail
way 10 ancient Cu2cO. the capital Of tie lrcaS
The amount of gllanO in the remaining deposits
can only he cOnircturcd. The supplies in The two
lubos Islands there is reason 10 believe are pIac
tlcaliy exhausted. Ike those Of the Chinchd and
Basta groups: and the guano which is sent -
market from the Iarapaca deposits is Of very low
grade. The bondholdcrs expect 10 derive large
returns from the guanO nCrSSions but II is cN-
trcmcly doubtful if they ran Succeed in obtain
ing the amount stipulated for by their contract
The vessels now loading at Iluanios and other
glanO ports are the last which Will hc allowed 10
take careOcs under Chilian administration The
beds are - be transferred al once 10 representa-
tivcs Of The Fneish boudholders and ! suspect
that the discovery Will speedily he made that the
most dcSolating war ever fought in SOuth America,
with the exception Of the invasion Of Paraguay,
was brought OH for the control 81 manure beds
IL ihn lntNn.f nrnln