The sun., 1918-12-27
PERU GRANTS U. s.
S15,OOO,OOO CREDIT
Federal Reserve Bank Ar
ranges Exchange System
to Stimulate Trade.
PLAN STABILIZEs RATES
Negotiations With Other
South American Nations
Reported Under Way.

PERUVIAN credit for $4,000. 900,
which Is said to be the forerunner Of
similar credits with other South Anneri-
"a, countries for the purpose of stimu-
,,,lnr trade between the United States
and the nations 10 the southwark, has
h.en negotiated cith the Government Of
PERU. according to announcement made
Of New York.
The Peruvian Government has obli-
rated Itself TO provide up to Si5,o00,00
exchange required TO pay for commodi-
ties imported by the United States from
mat country. The rate n S5.01k for a
peruvian pound, which has the same
naritv as the pound sterling, namely
iIs665 plus a commission OF one-twen-
,,e,h Of per cent. and cable charges, or
approximately S5.0S&.
Prior to September ls, when the new
Peruvian currency law went into effect,
the Peruvian pound was at a large pre-
MUM and the dollar at a corresponding
discount In Peru. Rates OF s5.75 and
1895 were frequent. That currency law
established the rate of $5.01k, a rate
continued in the new arrangements con-
summated by the Federal Reserve Bank
Of New York.
To Keep Gold Here.
The negotiation Of this credit evidences
again the policy OF the Federal Reserve
Bank to keep gold in this country. With
the aid VI it the avenues Of import are
expected 10 be accelerated, and the Re-
serve Board hopes to see growing trade
relations between the United States and
Peru The statement issued by the Fed
tral Reserve Bank OF New York yester-
day follows:
The Federal Reserve Board an
rounces that pursuant TO arrangements
effected with 1t the Peruvian Govern
mcnt is prepared to furnish up to the
amount of Sl5,o00,000 Peruvian ex-
change required to pay for commodities
imported from Peru to the United States.
Such exchange may be obtained by
American importers (through their
banks in the United States) and by such
hanks by the deposit Through the Fed
cral Reserve Bank of their respective
dstrirts) with the Federal Reserve
Bank Of New York to the credit OF the
Iunta de Vtgilancia de la Emission de
Cheques Circulares of Peru Of 1901 Il
for each Peruvian pound desired, and
the payment, in addition. of q commits
sion Of one-twenteth of per cent. and
cable charges
Assumes No Responsibility.
Each deposit must be accompanied
by the guarantee OF the bank making II
or through which It is made that 1t Is
for the purpose of taking up specific bills
of exchange drawn bona fde against inn
ports into this country from Peru
whether OF not covered by letters OF
credit. Upon receipt Of such deposit
commission. cable charges and guaran-
tee, the Federal Reserve Bank OF New
York will cable the Junta de Eigilancia
de Ia Emission de Cheques Circulares TO
nay the equivalent OF the deposit at the
rate above mentioned in Peruvian funds
10 the party in Peru designated by the
depositor.
Under the terms of the arrangement
such payment will be made in Peruvian
bank notes. The Federal Reserve Bank
Of New York will receive deposits as
above mentioned only upon the under
standing that II assumes no responsible.
fly except to credit them to the Junta de
Niglancia de la Emission de Cheques
Clrculares OF Peru, and to cable to the
Junta de Visianeia the instructions
given by the depositor"