The Washington herald., 1921-04-11
WALKER REPORTS
PERUVIAN TRADE
LESS PESSIMISTIC
Commercial Depression
Light Contrasted with
Other Parts.
BANKING IN SLUMP
Tellers' Windows Free of Ac-
tivity; Small Movement of
Goods; Huge Surplus.

The business situation in Peru is
probably less pessimistic than in
any other part of South America,
according to Allen walker. man
ager of the international trade de-
partment OF the Guaranty Trust
Company of New York. who has just
returned from a five-months' busi-
ness trip through South America.
OF course, there is little movement
of merchandise, and there is sur
plus of goods in the warehouses.
The bank lobbies are free OF the
numbers of active customers VINO
we're pressing to the tellers' Wln-
dows few months back. and
steamers are going away from the
port of Callao lightly bArdened., But
compared with many other parts Oh
Latin America, the commercial de-
preston is not heavy.
People Responsible.
Concerning present conditions in
Peru, Mr.. Walker said further:
primarily the condition is due
to the people themselves. They are
characteristically conservative. Nat
urally they have (elt the heavy drop
III SukoE CONNoh' eN"N
upon what happens to cotton dur
ing the next few months the pros
perity of n number Of important
mercantile interests in Peru viii!
depend. The dullness of the copper
market also has depressed the .ac-
tivities of the great mining inter-
| ests. With the practical cessation
| of exports and the consequent re-
striction of imports, government
revenues have suffered along with
business, and there is the usual
labor reaction. But conditions may
| improve sooner than expected.
/ When the financial crisis came
upon Argentina, Brazil and Chile,
conditions in the United States,
England and other parts of the
World were also at their worst.
iii conditions in England. the
United States and Europe improve
| rapidly from now on. Peru may
| never feel the full weight of the
shock which some other countries
have experienced.
Able Head In Leguia.
President Augusta B. Leguia.
who is in office for the second
| time-though with some years be-
4 l"ttH. EluCC dlt hO scCOHd
| terms" in the sense that we use
the term in any of these countries
| was formerly the, Peruvian head of
the great English firm of Lockett
! & Company, and spent some years
in London. He is business man
| and has a practical sense of what
needs to be done. President Leguia
is a lover of American efficiency.
| al In. ynIn A
can missions-notably the naval and
educational-at the head of several
departments of his government, as
| the best means of affording his own
people an insight into what honest
| and vigorous administration can do.
| These missions are making an eX-
cellent record for themselves, though
handicapped by the governments
J need of increased revenue.
National Finances Critical.
Nothing needs more positive re-
adjustment than the national financ-
es. Up until 1914 there were only
gold and silver coin and subsidiary
| symbols of nickel and copper; no
paper currency at all. 1t was really
a bi-metallic basis. since the silver
had nothing back of it. During
| 1914, when the war prccipitated 4
world crisis, the people began to
hoard their gold. and there was
such a shortage. OF circulating me-
dia that a moratorium was declar-
ed. Even wealthy people were not
able to buy food because gold was
so hard to obtain. and gold alone
| was acceptable. The result was an
issue Of 100000 Peruvian pounds
! d. P. Is the money sign), secured
by 40 per cent of gold, 40 per cent
| negotiable bank paper. and 20 per
cent government bonds. The banks
held this proportion of gold in hand
when the moratorium was declared.
There was created the Junta de
Vigflancia-ar committee to super
wise currency operations. The gov
ernment held one-quarter of the
gold supply and the banks three
quarters. The banks were expected
to maintain their percentage OF gold
lat the maximum, and also to substi-
tute gold for government bonds and
rediscount paper as fast as oppor-
tunity offered.
Great Gold Reserve. ..
In 1917 the Banco Msrcantil
Americana del Peru Imported sS,-
| 100000 OF gold. which was more
than sufficient to back the whole
issue of paper. This Importation
| mainly accounts for the large per-
\ centage of gold reserve now OBJ
tanning in Peru. In 1918 exchange
went to nearly Sc to the L. p. on.
account of the insufficiency of cir
culating medium and the heavy
| trade balance having accumulated
as the result of the United States
embargo on exports, instituted by
the War Trade Board of the day.
In 1918, there was approved a law
providing. FOR deposits in British md
American banks-in London and
New York-v9n the basis of sol per
cent on telegraphic transfer Cor, 5&
per cent discount on sterling. re-
membering that Peruvian commerce
still operates on the sterling basis).
BY governmntal decree it was pro-
yided that four-fifths OF the amount
get aside-s15,0 ,000. 0.000-should be de-