No. 202.
Mr. C. S. Rand to Mr. Fish.
Sir: In obedience to paragraph 720 et sequitur, of consular instructions, I herewith transmit a report on the trade of the consular district under my charge.
There being no official publication of commercial statistics, no official record, even no periodical publication of imports or exports, prices current, or trade circulars, I have been compelled to rely upon the statements of prominent merchants of La Paz for the facts herein submitted to the Department, and must necessarily generalize where I would be explicit. Wherever the word peso occurs in this report it refers to the “feeble” dollar of 80 cents; the word boliviano to the hard dollar of 100 cents.
La Paz is not a producing center, and derives its commercial importance wholly from being the point whence are distributed the goods imported via Arica for the eastern and northern districts of Bolivia. The principal productions of Bolivia are the so-called Peruvian bark, cotton, sugar, rice, tobacco, chocolate, India-rubber, coca leaf, vanilla, cinnamon, copaiba, sarsaparilla, jalap, ipecacuanha, and numerous medicinal products unknown beyond her own borders. Gold, silver, platina, copper, tin, lead, and cobalt are mined very successfully.
Peruvian bark, coca leaf, and the metals are the staple articles of production.
Peruvian Bark.—This extremely valuable product of the variety known as calisaya, the richest in the salts of quinine, is almost the exclusive product of Bolivian forests, growing on the slopes of the Andes. That produced upon the plains, although identical in appearance, is notably deficient in the percentage of quinine, and, consequently, in commercial value. It is, I regret to say, gathered in the most reckless and wasteful manner by the professional bark-cutters, who, careless of future crops, look only to present gain. The trees are felled and the table or trunk bark stripped from the accessible portions, leaving perhaps one-third of the bark—that which rests upon the ground and that of the branches—to perish by decay. It seems incredible that a material readily salable in La Paz at from 50 to 70 cents per pound should be permitted to go to waste from gross carelessness; yet every effort made for the protection of the tree, or prevention of waste, has proven ineffectual. The inevitable consequence is the yearly diminution of the crop and gradual rise in price.
The present year about 10,000 quintals of 100 pounds each have arrived in La Paz—a diminution of nearly 8 per cent, over the yield of last year; while the price has risen from 52 pesos (of 80 cents gold value) to 68 pesos.
The bark is sorted in La Paz, generally by actual chemical analysis, and packed for exportation in ceroons of raw hide of 150 pounds each, two of which form a mule load. These are sent to Arica, Peru, the nearest seaport, and thence shipped, generally via Cape Horn, to the American and European markets. The expense of reaching these markets, including land carriage, freight, and waste, averages 28 pesos per quintal.
The export duties are upon tabla or trunk bark 5 pesos per quintal; upon canuto or hauch bark, 2.80 pesos. The date of the extermination [Page 269] of this extremely valuable plant is not far distant, a calamity whose importance it were difficult to estimate.
Coca.—This curious plant, which must not be confounded with the nut-producing chocolate, or that of the cocoa palm, is almost unknown beyond the confines of Bolivia and Peru. It is grown on terraces on the mountain slopes of warmer regions, principally in the province of Yungas. The plant is a shrub of rapid growth, producing three crops annually, in March, June, and November. The annual product is about cestos, or baskets, of 25 pounds each, whose market value in La Paz ranges from 8 to 12 pesos per basket. The collection of the government tax of 90 cents per basket is sold annually by sealed tender. This year it produces 240,000 pesos. This leaf, when consumed by those addicted to its use, in which may be included the entire Indian population of both sexes, is made into a little ball, containing in the center a small pill of the ashes of a plant rich in potash salts, and is then chewed until all its peculiar properties are exhausted. It gives great vigor and freedom from fatigue, and the Indian foot mail, or the soldier heavily accoutered, will march cheerfully twenty-five leagues per day, sustained by this wonderful leaf. The want of food seems little felt, but the coca is a necessity. It has attracted the attention of physicians as a nervous stimulant, and preparations of it are prescribed with excellent results. In the southern portion of the United States I believe it could be cultivated with success, and might form a valuable addition to our materia medica.
Copper.—The copper mines of Corocoro, a town fifteen leagues southwest of La Paz, yield abundantly, although without machinery for drainage or working, the water infiltrating being removed in the most primitive manner, on the backs of Indians. The ore is extremely rich, containing from 70 per cent, up to pure crystals of native copper. It occurs in a gangue of indurated clay, in the form of minute metallic grains, is separated by a simple system of washing, and sent to the coast on llamas, bearing 100 pounds each. The copper product of these mines last year was from 65,000 to 68,000 quintals. Its value is estimated at 8½ pesos per quintal of 70 per cent, fine, or in that proportion for higher grades. It is commercially known as banilla. The trade is controlled by English and French houses, no American capital being invested in it.
Gold and silver.—The precious metals are produced in abundance in Bolivia. The sands of the mountain streams yield gold in dust, seed-gold and nuggets, while quartz mining is pursued with varying success. By the law of October 12, 1869, referring to coinage, which formed the subject of my dispatch No. 6, of February 16, last, the exportation of uncoined bullion, whether of gold or silver, is prohibited, the mint authorities offering to purchase the entire yield at the following prices: Gold at 612 bolivianos or hard dollars; silver at 38 50/100 bolivianos per killogram of 1000/1000 fine. An export duty of five per cent, is levied upon the new comage. The effect of these provisions has been to unsettle exchanges, diminish transactions, encourage contraband remittances to the coast, and to utterly defeat the obtaining of any approximate idea of the real production of the precious metals.
During the year 1868 the national mint of Potosi purchased, of silver, 228,152 marks, 3 ounces, 4 drachms, 1 tomin, and 9 grains, at a cost of 8.38 bolivianos per mark, or 1,933,133.57 bolivianos. During the same year it issued coin to the amount of 2,610,730 bolivianos.
In 1869 it purchased of silver 159,362 marks, 2 ounces, 6 drachms, 3 [Page 270] tomins, costing 1,358,969 30 bolivianos, and coined 1,903,685 66 bolivianos.
No gold was purchased or coined, and none exists in circulation, save of foreign coinage, even this being rapidly absorbed for hoarding—a common practice in this country of frequent revolutions and consequent insecurity.
The coin issued during the two years mentioned consisted of a species of medal, of which I inclose two samples. An official analysis of the same, made at the mint of Santiago, (Chili,) gives the value of silver contained therein as 28 per cent, in Chilian currency. As the Chilian gold dollar is equal to 91.275 cents, estimated in American gold, it follows that this coin is worth intrinsically 25.557. Yet it is the circulating medium of Bolivia to-day at 40 cents, or half a peso, or about 65. This will account at once for the discrepancy in the amount paid by the mint for bullion in 1868 and 1869, 3,292,102.87 bolivianos Or hard dollars, and the nominal value of the issue for the same period, 4,514,415.66 bolivianos. In the official report to Congress of the secretary of the treasury, now before me, the government acknowledges a net revenue, after paying all expenses of coinage, &c., from this source, of 979,211.02 bolivianos.
The mint machinery at Potosi, built in Philadelphia at a cost of bolivianos, is now coining, in obedience to the law quoted, hard dollars of full weight and fineness; but so slowly that the few issued readily command a premium of from 10 to 12 per cent., irrespective of the export duty of 5 per cent., which is probably evaded.
No country in the world is so flooded with counterfeit coin as Bolivia, often only to be distinguished from the genuine by its superior workmanship.
Coffee.—The coffee of the Yungas region is unsurpassed in delicacy of flavor, even by the famed Mocha. Its production is, however, extremely limited, probably not exceeding twenty or thirty tons annually, and I doubt whether any, save a few samples as presents, has ever reached the United States. Were transportation easy, it would, doubtless, form a notable article of export, and its cultivation increase tenfold. At present it is almost exclusively cultivated for home consumption, and is obtainable in La Paz at from 20 to 25 cents per pound. The same may be said of the other products of Bolivia—sugar, cotton, bread-stuffs, cochineal, vanilla, cinnamon, tobacco, rice, cocoa, Indian-rubber, and a host of valuable medicinal and other vegetable productions, all of which are bountifully afforded by the almost uncultivated soil, yet never find their way, to any extent, to the markets of the world, from dearness of transportation.
Imports.—Frequent and direct mail and steam communication with France and England, from the coast, affect our commercial relations with Bolivia as seriously as with Chili and Peru, where the lion’s share of all commercial and industrial enterprises is in English hands. The heavy freights from the coast render our trade insignificant. In American cotton fabrics, La Paz receives yearly about 500 bales. It costs nearly 1 cent per yard to bring such fabrics from Arica, the port of landing, to La Paz, eighty leagues.
Kerosene oil is largely used here. It costs $1 50, gold, per gallon, at retail, (five gallons.) American tools are preferred, but there is no direct trade, the few in the market having been purchased in Lima. Our stationery, blank books, inks, pens, presses, agricultural machinery, and the thousand useful articles generally classed as American notions, are utterly unknown in Bolivia. Our fire-arms obtain the preference, [Page 271] however, the troops being principally armed with the Remington and Sharpe rifle.
American capital invested in Bolivia.—Several important industrial enterprises owe their establishment in Bolivia to American capital, most of them to one man, Mr. Henry Meiggs, formerly of Catskill, New York, and now engaged in railroad contracts in Peru, amounting to $70 000,000. Mr. Meiggs, in October last, entered into a contract with the Bolivian government, by which he purchased, irrevocably, all the guano of the deposits between 23° and 25° south latitude, belonging to Bolivia, agreeing to pay $6 per ton (of 2,240 pounds) for the first million tons, and thereafter to pay to Bolivia for all that he might extract the same price as paid Chili, the joint owner of the deposits, less 50 cents per ton, the extraction to be at his own expense.
In return for this concession, he agreed to loan the government tour millions of bolivianos, (five millions of pesos,) one million of which has already been paid, the payment of the other three being conditional upon the decision by the Chilian courts of the case of the former contractor, Arman, of Paris, who failed to comply with his obligations.
Mr. Meiggs has contracted with Chili for working of her portion of the guano beds. The territory alluded to was disputed ground, both Chili and Bolivia claiming it, but finally agreeing to work the deposits jointly. He has already expended half a million of dollars in buildings, machinery, railroads, &c., without having exported a single ton.
The Mejillones guano, as it is called, from the name of the bay where found, is phosphatic, containing but a small percentage of ammonia, and brings about £8 sterling per ton in the European markets. Some few thousand tons having been offered for sale in the Chilian market by the government, brought about $14 gold per ton, exclusive of $2 50 per ton for extraction. The present Bolivian congress, now sitting at Oruro, passed a, law on the 10th instant approving the contract made with Mr. Meiggs, in so far as regarded the loan, but materially modifying the terms of the contract, declaring that instead of paying $6 per ton, as covenanted in October last, he should pay the same price as paid to Chili, less 50 cents per ton. In the event of his refusal to accept these modifications in his contract, the president is authorized to annul it and call for fresh proposals. This modification implies a loss to Mr. Meiggs of over $5,000,000, and may result in very serious complications. The purpose of this dispatch will, however, only permit me to allude to the subject briefly at present.
Banco Boliviano.—Another important investment of American capital in Bolivia is the Banco Boliviano, established by decree of the government in October, 1868. It has an exclusive privilege within the territory of the republic for fifteen years, is granted the same right of summary process as possessed by the government itself in collections, is exempt from taxation or the use of stamped paper, and made the depository of all legal consignments. It is a bank of discount and deposit. Its capital (nominal) is two millions of hard dollars, of which 300,000 have been paid in. Its sole stockholder is Henry Meiggs, before alluded to. On the 1st of January last it declared a dividend of 15 per cent., or $45,000, and on the 1st of July another of 22 per cent., or $66,000, being together 37 per cent., or $111,000 in eighteen months. Since its establishment it has not lost one dollar from bills discounted or money loaned. It is managed with distinguished prudence and ability by Don Lorenzo Claro, an experienced Chilian merchant and financier. The average circulation (in bills of 5, 10, 20, 50, and 100 hard dollars) is $180,000.
[Page 272]The benefits conferred upon the commercial community by the establishment of this institution may be inferred from the fact that when founded the customary rate of interest, even upon the best securities, was from 18 to 30 per cent, per annum. It now rules at from 8 to 12, and at short dates, with approved securities, as low as 6 per cent, per annum. Hitherto, in the contributions demanded by the government of the business community, (one in July last and one now being imposed,) the bank has been respected. Whether this immunity is due to its being the depository of the people in general, to its being established upon foreign capital, or to its frequent favors to the government, I cannot say.
Crédito Hipotecario.—Another institution, established partly upon American capital, but admitting Bolivian stockholders, was opened on the 1st day of January, 1870. It is entitled the “Crédito Hipotecario de Bolivia,” or Bolivian Mortgage Bank, and is modeled after the crédit forcier of France. Its capital consists of 1,000 shares of 1,000 bolivianos each, of which 10 per cent, is paid up. Its object is to loan upon real estate, bonds bearing the same interest (now 10 per cent.) as paid to the society by the borrower. The latter pays an invariable semi annual sum to the society, consisting of 5 per cent, interest, ½ per cent, for administrative expenses, and a further sum, applicable to the sinking fund, of ½, 1, 2, or 2½ per cent., according to the series to which his loan has been referred by the board. The sinking fund increases with each payment, and the original debt, diminishing in like proportion, is gradually extinguished, the longest term being in twenty-four years, the shortest eleven. This institution has enabled many, groaning under the unbearable pressure of mortgages, at 24 or 30 per cent, per annum, to avail themselves of its advantages, and to borrow at rates from 12 to 16 per cent., with the knowledge that each semi-annual payment diminished the obligation. Some fifty-seven loans have been made since the organization of the society, ranging from 500 to 3,200 bolivianos each, and the coupon bonds issued in exchange are quoted steadily at 90 per cent, and accrued interest.
These two institutions, simplifying the relations of debtor and creditor, rendering, from their privileges and from their careful management, litigation almost impossible, lowering enormously the former oppressive rates of interest, have met with fierce but ineffectual opposition from those whose interests they wounded, but have been warmly supported by the community at large. Mr. Meiggs holds 300 shares in the latter institution. Two hundred more are held in Chili, the balance here.
A fourth enterprise, involving American capital, is that of Henry Meiggs & Co. for draining three large lakes at the head of the Valley of Clisa, near Cochabamba, for the purpose of irrigating the valley and of rendering fertile an immense extent of territory now unproductive. Three of the partners are Americans, the fourth a Chilian. The capital to be invested will be about $300,000, of which one-tenth has already been expended in preliminary operations. The ownership of the lakes has been, by the government decree, perpetually invested in the company. The lands of the valley will be enhanced in value millions of dollars upon the completion of the requisite canals and locks. The lakes are 75 feet above the upper end of the valley, and, being fed by springs, are deemed inexhaustible.
A fifth American enterprise in Bolivia, of importance perhaps greater than all the rest, is that of the National Bolivian Navigation Company, chartered by the United States during the recent session of Congress, possessing several valuable grants from this government, which were ratified [Page 273] by the Bolivian congress on the 11th instant, and fully empowered by the government of Brazil to carry out its aims and objects, which are briefly to connect immense regions of Bolivia, lying on the eastern water-shed of the Andes, with the rest of the world, by means of steam navigation. I look upon this enterprise as of the deepest importance to our commercial and industrial interests. Bolivia is as yet a terra incognita, walled in from her sister nations by natural barriers, only to be overcome by the steamer on the east and the locomotive on the west. Navigation once established on the sources of the Amazon and its tributaries, and a vast region of unrivaled fertility and capacity of production will be opened up to the enterprise of our people; a region whose products are all of great intrinsic value. A market will be opened in return for our agricultural implements, tools, and textile fabrics, and a new field of industry for such as deem our own too narrow. The eastern sections of Bolivia, at the headwaters of navigation, are sparsely populated for the want of outlet. A few Indians load their rude balsas, made of logs, with Peruvian bark, sarsaparilla, gold, and gums, and undertake the journey of two months’ weary and dangerous navigation, exposed to all sorts of discomfort, and reaching the mouth of the Amazon, or the stations of the Brazilian steamers, purchase a year’s supply of clothing and necessaries, and slowly regain their homes, well satisfied with the results of the voyage. What commercial results may we not look for when steam and intelligence penetrate these solitudes! It is almost incredible that the products of the eastern slope of the Andes should be packed on mules over the steep and dangerous mountain paths at an altitude of 15,000 feet, thence to descend to the coast to be shipped for Europe or the United States, upon vessels which, six months before, had passed the mouths of rivers whose waters are navigable to the very centers of production. Yet such is the case. The rapids of the Madera, the only important obstacle, will be surmounted either by railroad or canalization. The requisite steamers are now being built in the United States, and within a few months I hope to announce the arrival of the American flag in Bolivian waters.
On the western slope of the Andes the Peruvian government has contracted for a railroad from Arequipa (already connected with the Pacific by rail at Yslay) to Pimo, on the borders of Lake Fibicaco. From La Paz to the hither border of the lake is but twelve leagues, nearly level, and quite unobstructed by steamers of importance. A direct railroad from La Paz to Tacna has been also put under contract.
General observations.—A large numerical majority of the population of Bolivia is composed of aboriginal Indians, of the Aymara and Quchua races, the former in La Paz and its vicinity, the latter in the rest of the republic. They retain their native dress and language, and are the serfs of the higher races. Centuries of oppression have taught them to hate and tear their conquerors, but physical inferiority and hereditary timidity render them harmless. Their general expression is sad in the extreme; even their music is all in the minor key, and they weep at the slightest pretext. An amount of feudal service is still exacted from them. Those residing on estates must serve a week about as house servants in the city residence of the proprietors, and bring a weekly contingent of tagua or llama-dung, the universal fuel of La Paz, where wood as fuel is unknown.
There being literally no roads throughout the country, all traffic between the great centers and the outer world is perforce conducted by mules and llamas.
The usual cost of bringing a cargo of 300 pounds from Tacna. the terminus [Page 274] of the Arica railroad from the coast, or vice versa, is from 18 to 25 pesos.
Mules of great strength are required to bring exceptional articles, pianos, sofas, &c., from the coast, at a cost of 100 pesos each, and at very great risk to the load. The writer recently received an iron fireproof safe, of New York manufacture, by this means. When received it was broken into four pieces, and consequently useless.
To illustrate the cost of articles brought from abroad, I may mention a small printing press recently sent from New York for a gentleman in Cochabamba. Its original cost was $117 80 in currency; upon arriving at La Paz it had cost $231 66 in gold, about 120 per cent, having been added to the original invoice. It has still an inland journey of 85 leagues to undergo. It is not surprising, therefore, to find common white ware plates selling at 50 cents each. Ink costing 30 cents in Paris brings $1 25 here. Kerosene oil, quoted at 30 to 40 cents in New York, costs the consumer over $1 50 in La Paz, and in like proportion for all imported goods.
Until railroads, or even good ordinary roads, are built from the coast to the interior, it will be idle to expect the trade of Bolivia with the outer world to show activity or progress. Her cinchona and copper are at present her chief and almost only exports, the former becoming daily scarcer and poorer in quality, the latter exposed to all the vicissitudes of a mining interest.
The commercial future of Bolivia is, however, full of happy presage. If she curb the revolutionary spirit so chronic among her people, and only kept under by the iron hand of her present president, who, for the past six years, has averted every attempt at his overthrow; if she resolutely determine to devote her energies and resources to the intellectual and material progress of her people, she has a grander future than Chili or Peru. Her resources are greater than those of either of her sister republics; but they need development and an outlet. Her productions could be increased tenfold, but they require scientific working and reasonable proximity to water carriage.