Mr. Perry to Mr. Seward
Sir: I yesterday enjoyed an interview with Mr. Llorente, in the course of which his remarks on the subject of the difficulty with Peru presented no new feature except in one point.
He asked me what would be the course of our government in regard to cargoes of guano consigned to ports of the United States on Spanish account.
In connexion with this subject he said, that though Spain would not keep permanent possession of the Chincha Islands, yet the conduct of Peru might possibly make her occupation of considerable duration. Spain did not wish to deprive the markets of the world of that commodity on which the agriculture of many countries had come in a measure to depend.
She would not, however, permit the guano deposits to be used by Peru as a means of making or prolonging war against herself.
No contract or stipulation made by Peru, relating to or affecting the guano subsequent to the 14th of April, 1864, when the islands came into the possession of Spain, would be recognized by this government; those made previously would be religiously observed.
The Spanish government would establish a system by which the guano could be supplied to consumers as heretofore, by constituting Spanish agents in place of Peruvian in the ports of different countries, to whom the value of cargoes should be paid, which sums would be sequestered by the Spanish government until the events of the war, or the conditions of the treaty of peace, should definitively dispose of them. Mr. Llorente was careful to repeat that the sums received by the Spanish agents for the sale of guano would not be immediately appropriated by Spain as her own property, but they would be held and accounted for by her according to subsequent treaty stipulations with Peru, keeping in view always the compensation of her war expenses until Peru should agree to terms of peace and friendly intercourse.
Spain meant by this means to secure a guarantee of indemnity for her own war expenses whilst she deprived Peru of the resources afforded by this treasure, now in Spanish keeping, and at the same time responded to the commercial wants of other countries not implicated in this quarrel.
He thought he ought to announce these ideas or plans of the Spanish government to me, and he would be glad to know what I thought of them, whether there would be any difficulty interposed by my government to the substitution in the United States of the Peruvian consignees of guano by Spanish agents in the manner indicated.
I said that I could give no reply in the name of my government to the indications he had made, but I would write to Mr. Seward, and whatever instructions he might send me I would make haste to communicate to Mr. Llorente.
In reply to a remark of my own referring to the mortgage already made by Peru of the guano deposits as a security for the payment of her national debt, Mr. Llorente said: We shall not remove that security; the islands are always there, the guano deposits are practically inexhaustible, and we have declared that we will return them to Peru on the termination of the war. If our [Page 465] occupation be short it will not affect the guarantee for the Peruvian bondholders; if it be long, we might perhaps be induced under certain circumstances to pay the interest coming due on those bonds ourselves, to be deducted from the amount Peru might claim of us out of the proceeds of the guano sold by us, for which we must account on the day of settlement, or to make some other equitable arrangement with the bondholders. This referred, of course, to the old bonds only. No new contract or stipulation made by Peru subsequent to the Spanish occupation of the islands would have any validity for Spain.
I have no observation to make on the nature of this communication which will not suggest itself to you from the terms of the proposition itself.
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I have the honor to remain, with the highest respect, your obedient servant,
Hon. William H. Seward, Secretary of State, Washington.