Evening star. [volume] (Washington, D.C.) 1854-1972, 1903-09-26
American Exporters Seem to
Be Indifferent.
FOREIGNERS ARE ALERT
OMITTED STATES MONEY AT DIS
COUNT IN MoNTEVIDEo.
Progress on the Harbor Works-Rela-
lions With Other South American
Countries-Horse Car Lines.

Special Correspondence OF The Evening Star.
MONTEVIDEO. Uruguay. August ~. 1893.
Uruguay is a small country, but it makes
the United States and Great Britain look
smaller. 1t discounts their money. don't
know anywhere else in the world that the
American dollar is worth only & cents or
the English pound sterling only $40. But
1t Is so here.
This depreciation puzzles. After an ex-
perience with a dozen different kinds Of
money from Colombia where a hundred
dollar bill of the United States is worth
$4,000 in the native currency, and Brazil.
where a quarter equals l 900 reis or mil
refs. to Peru, where the national currency
is based on the inca, a gold coin exactly
the same in weight and fineness as the
sovereign, 1t becomes a battling mystery.
Changing to the cheaper currency always
is loss. Changing to the dearer money is
equally SO. A traveller with leisure enough.
of curious turn of mind and money to
spare could make a valuable experiment.
He could start from San Francisco with
thousand dollar draft on New York, stop
in the various countries, change his funds
in each one to the local currency of the
next, and by the time he reached Rio de
Janeiro he would be able to show whether
the mere process of changing and paying
the bankers commissions had not reduced
his draft to zero Banking in South Ameri-
ca is purely for profit and the luckless trav-
eler pays the bankers toll or quits travel
Ing.
In the case of Uruguay. the dollar being
dear one, its purchasing power should be
relatively higher than the American dollar
the English sovereign But prices also
are relatively higher and the newcomer
firds that his 96 cents buys considerably
less than 96 cents worth of any article
The Explanation.
have not been able to figure it out, but
a resident banker came to my aid with the
explanation. Uruguayan credit he said. is
high in Europe. That is the first point. The
government maintains fixed gold re-
serve. and from it's own point of view needs
none. for 1t issues no paper currency. 1t
has subsidiary silver coinage and is con-
tent with that. The banks issue the paper
as a convenience to prevent carrying
around bags of gold on settlement day.
They are very conservative and do not issue
W to the full limit which is permitted them
by the law in proportion to the gold in their
vaults. Some of them which had the privi-
lege voluntarily waived ii. Enough paper
is put out by the banks to meet the needs
of commerce and no more. The ratio on
the gold basis was fixed years back, and
the Cruguayan standard was little dis
located, but 1t is a gold standard just the
same.
This I take to mean that the theoretical
gold dollar, or peso. of Uruguay has a lit
tie more gold than the actual coins OF the
United States. and when the banks issue
hve-dOllar note ii is against reserve that
would be equivalent to $50 in American
gold. If this explanation is not clear the
fault Is mine. for it was perfectly plain to
the banker who made it. The palpable fact
is that Uruguay has Il sound currency, and
financial disturbances are rare. 1nterna-
tional exchange Is effected on the Uru-
guavan basis. and drafts on London. Paris.
Berlin or New York made at a face
value less than that which sovereigns,
francs. marks or dollars are supposed to
be worth in those cities. Commerce con-
forms to the condition.
The New Harbor Works.
Uruguay also has a surplus or cash in the
treasury applicable to the new harbOr
works. The breakwater goes forward slow
ly. difficulties encountered as the
work advances and there is criticism, yet
the work does seem to advance. At least, l
saw signs OF progress in an interval of six
weeks. though the local critics declared
none had been made. The completion of
the harbor works must be matter of
years. What is important Is that after
many years waiting the work has begun.
and the time may be looked forward to
when the big ocean vessels Will not have to
lie two miles or more out, unable to coal or
load and unload their cargoes when the
surface of the Plate is churned by heavy
seas. as it is al most seasons.
Montevideo hardly will Overtake BuenOs
AyreS, which has completed magnificent
system of port works, but it may keep all
the commerce that properly belongs to il,
and that makes it sedate and prosperous
city. with population of quarter of d
million. a big seaport had to grow up near
the mouth of the Plate. That is why Mon
teTideo is what II is. The foreign residents
say that in the port, during the period of
political revolutions. trade went almost
without interruption. partly because it was
so thoroughly of an international character
and partly because of the understanding CT
the rival chiefs politicians that if bust
ness should be seriously unsettled their own
plans would be nullified.
Foreign Relations.
The present time seems to be one of po-
litcal turmoil. internally speaking. without
in any way affecting foreign or external re-
latons. The newspapers print much about
the movements of the 'blancos' and the
''Colorados" the whites and the reds a $ the
two political parties are called. l do not
know what ii is about. beyond that Presi-
dent Battle Is credited with forming pol
icy of Cancellation and has taken some of
his advisers from the leaders of the mod
crate opposition. and that the radical oppo-
SitOn has formally announced that while il
is still in opposition, it does not mean to
oppose the administration to the extent of
causing embarrassment to the country.
In its relations with other South Ameri-
can republics Uruguay has given evidence
of it's capacity to maintain its position. In
the reciprocal festivities and courtesies of
Brazil, Chile and Argentina il took part
and made quite apparent the desire to be
on good terms with its neighbors, well
as its purpose to be considered in any gen
eral South American policy, either relat
ing TO Europe or to the rest of the CONT
nent
business at this period IS fairly active
Dry hides have a good market in the United
States. Sailed hides and wool are fetching
good prices in Europe. Beef and mutton
are flOurishng. and some new refrigeratiug
chilled meat enterprises under way
As the government gets part of its revenues
from the export taxes. the value of this
market abroad is something more than in
the benefit TO general trade. With heavy
shipments the collections from the export
taxes increase propOrtionately. Land taxes
and other forms of internal imposts. COM
parativeIy. are light. except the slaughter
house tax, which is collected by the munich