The Washington herald., 1920-04-26
Constant Shifting ofMoney E xchange
Makes Business Contracts Gamble
ForAmerican Firms Operating in Peru

ninistsred with more consideration
and courtesy.
There Is probably more coal in
Peru than any other South AmerI-
can country. yet the republic i'm
ports hundreds Of thousands Of tons
yearly, and the domestic output is
negligible. In normal times British
coal was laid down in Lima for 81
to IS a ton and. as most of the
Peruvian deposits are at high aIti-
tudes and not connected with rail-
roads, the country bought its fuel
abroad. But today coal, when OBJ
tainable at all from England or the
united States, costs $40 to $50 a ton
In Peru, and this has led to interest,"
IN mining. One OF the railroad COM
panies being promoted has three
deposits OF good steam coal at low
attitude and near the coast, Plans
are being made to mine 100000 tons
yearly. Convenience to the coast,
with moderate labor cost, will make
II possible. 1t Is figured, TO deliver
coal at tidewater for 50 a ton and
sell II for $40. II the world short
age keeps prices up to that level
for few years, profits on this en-
terprise will run into tens OF mil
lions.
Such PROFITS q Reality.
Profits of that magnitude have
actually been made by the Chilean
mines. When coal was $40 a ton
in Peru a local company got some
money together and drilled for coal
In coast section where there was
reason to believe Ii existed. At a
depth OF 900 feet a seven-foot vein
OF fine steam coal was cut. More
money was put into the enterprise
and shaft started. but the work
proved costly. and the profit in sight
then did not encourage the inves-
tors in going ahead. Today, how
ever. this enterprise has been re-
sumed-had 1t been carried out at
the beginning, making coal avail
able the last five years, profits
would have been enormous. If Peru
can become South Americas coal
dealer she may have a source of
wealth comparable with the nitrate
beds surrendered to Chile.
About twenty-five years ago the
Peruvian Congress passed a law re-
quiring foreign insurance COM
panies doing business in the coun-
try to deposit $4,000 each with the
government as a guarantee fund
The companies, chiefly British, re-
garded this as "hold-up," and
withdrew, believing that the Peru
vians would change their law when
they found themselves without fire,
marine and other protection. But
the Peruvians, organized insurance
companies of their own, wrote poll
cies at lower premium and discover
ed that there were profits of IS to 50
per cent In the business. After a
year all the foreign companies came
back, depositing the required guar
antee fund. Then a new law was
passed requiring every foreign in
surance company to have a capital
of 100000, half to be invested in
Peruvian land and half in Peruvian
bonds, deposited as a guarantee,
Again the foreign companies with
drew. and now insurance. apart from
life, is thriving business that Pc
ruvians, mostly, handle themselves.
In conducting his own business
abroad Uncle Sam imposes grave
handicaps upon his representatives,
II United States consul pays any
body a salary above 1000 a year
that somebody must be an American.
Because few Americans value sub
ordinate consular positions, and a
Latin-American with even a limited
knowledge of English can get a bet
ter salary elsewhere. our consulates $
q re- n md n Much Of fhA
suPs own time is devoted to training
Latin n-Americans, who are promptly
hired by business concerns at higher
salaries. Civil service rules are also
extended to employees working for
our commercial attaches. under the
Department of Commerce--to avoid
the suggestion that we are mixing
business with diplomacy, these rep
resentatives are now called trade
commissioners" and have Offices
separate from our legations. An
other handicap Is that of consular
salaries. These are not only low,
but Uncle Sam has parsimonious lit-
tie tricks in paying them. For ex-
ample, a consul's salary is $500 ana
vice consui's $500. But when a
vice consul becomes acting consul.
as in Lima, where the consul recent
ly died. he gets only half a consults
salary, although doing all the work.
Despite congressional shortsighted-
ness, our consular service attracts
capable men who like 1t for it's own
sake. and stick to the job, although
they see subordinates stepping into
business positions at higher salaries
than their own. To such men the
attractions of the consular service
lie in the official standing II gives
them and their liking for foreign
countries.
lcopyrixht is2o. Public Ledger Coz