A strip of land with 1200 miles of sea coast, without a natural
harbor, and 200 to 300 miles wide, consisting of a plain, mountains, a
plateau, and still another range of mountains--this is Peru.
In the west, where the rain never falls, are numerous small rivers,
to-day mountain torrents, to-morrow dry, rocky beds.
Between the lofty ranges of snow mountains is the highest plateau in
the world, after Thibet. The southern part of this plateau is dry and
desolate, the northern portion is well watered, with beautiful streams
running now through deep cañons and then through rich, fertile valleys
steadily descending toward the northeast; the valleys growing ever
broader, warmer and more delightful, until the montaña is reached,
only a few hundred feet above the Atlantic, where the streams have
become rivers, navigable to the ocean.
The western slope of the mountains is dry and barren, so that
breadstuffs and provisions are imported from Ecuador on the north, or
from lower Chili, far to the south. Yet no other country has
contributed so much to the world's fertility; for here are the great
deposits of guano and nitrates, more valuable than mines of gold and
silver. These deposits yielded for over thirty years a net annual
revenue of $20,000,000.
The eastern slope, rich and fertile, producing every tree and flower,
all fruits and vegetables grown in any part of the world; in the
mountains, mines of gold and silver, platinum and cinnabar, copper and
tin, lead and iron, coal and petroleum, nitrates and asphalt: a
bankrupt nation in the midst of untold wealth--such is Peru.
To bring the minerals down to the ocean, tens of millions of dollars
were expended on thirteen roads; but though none of them were ever
finished, they reached a few of the poorer mines. Seven of these roads
were built by the government, the others by private parties.
{23} The sales of guano and the production of gold and silver made
Peru a proud and wealthy nation. Everything prospered until the war
with Chili, from 1879 to 1883, ending in the defeat of Peru and the
loss of a portion of her territory, including a large part of her
guano deposit. She was unable to keep her railroads in operation, much
less to extend them, or to pay the interest on her bonds; and thus
bankruptcy followed defeat. At last, after fourteen years of default
and six years of negotiation, a contract was concluded with Peru by
Mr. M. P. Grace, of New York, in January, 1890, on behalf of the
bondholders. The bondholders became concessionaires, and in
consideration of the release of the bonded debt due to them by Peru,
receive valuable concessions, of money, of mines, of railroads, of
lands and of guano. These concessions include among other things a
government subsidy of $400,000 a year, secured from the customs of
Callao; the mines of Cerro de Pasco, which have yielded a yearly
average of $2,000,000 for over one hundred years; the entire railway
system (769 miles in length) of the state; a grant of 5,000,000 acres
for the extension of the Lake Titicaca railroad; a grant of 4,500,000
acres for the extension of the Central or Oroya railroad to the
navigable waters of the Ucayala, one of the main tributaries of the
Amazon; the exclusive control of the guano deposit until 2,000,000
tons have been sold, from which they expect to sell at least 80,000
tons a year, which will net $1,000,000. The concessionaires on their
part agree to liquidate the Peruvian debt, to repair the railroads,
and construct 974 miles in extension of the existing system at an
estimated cost of $16,000,000, and to assume certain other obligations
to a limited amount.
This, perhaps the most remarkable settlement ever made between a
bankrupt nation and its creditor, is due largely to Mr. Grace, and
cannot fail to develop the resources of Peru and restore her days of
prosperity.