Papers Relating to the Foreign Relations of the United States, Transmitted to Congress, With the Annual Message of the President, December 1, 1873
No. 324.
Mr. Thomas to Mr. Fish.
Lima, Peru, October 21, 1872. (Received November 18.)
Sir: I have the honor to inclose herewith one printed copy of President Pardo’s inaugural address, and one printed copy of his special message to Congress, concerning the financial affairs of Peru; both of which were delivered by him in person orally.
I am, &c.,
President Pardo’s inaugural address
Legislators: Called by the popular suffrage to occupy the highest post with which the nation can honor one of its sons, and raised to the same, notwithstanding an obstinate resistance where all means at the disposal of force were brought to bear [Page 747] even to an insurrection against national institutions, allow me, gentlemen, to humble myself before the dictates of Providence, and the grand victory popular opinion has obtained after a bloody struggle against arbitrariness.
In this wise Providence has willed it that the political history of half a century should terminate, aiding you in a visible manner to inaugurate your undertakings on the fifty-first anniversary of our national independence, over the foundations of a victorious opinion, and of a right snatched from brute force.
Let us leave, gentlemen, to posterity the historic appreciation of the character of the unfortunates whose actions led the country to the dangerous abyss from which patriotism has saved it, and let us only at present take into consideration the political lesson taught by our fruitful campaign of fourteen months’ duration, studying it now and forever after with that anxiousness and elevation of soul with which public men should consider the inclinations and desires of a nation, and the means which it embraces to direct and apply the same to its service, so as to lead everything in the right path.
The legal period has terminated; and to-day, in a pacific manner, the transfer of command is made. I have the honor to appear before you, and you are assembled in this august edifice because the nation has desired with its powerful arm to maintain public peace at all hazards, seeking in the practice of its institutions and that submission to authority and observance of the laws the fulfillment of its legitimate aspirations. Said victory would have been complete had not, on the termination of a struggle in which the nation has shown itself so great by its merits, a military rebellion broken out to interrupt the pacific and glorious achievement that popular opinion had obtained.
The results of said struggle fully demonstrate the programme of the government which has succeeded it, setting forth in a clear manner the inclinations and desires of the people, and the most urgent of political necessities.
If a veneration of the institutions and obedience to its mandates have been the means of the nation’s victory, the due practice of the same ought to be the first duty of the government it has established, for the simple reason that only on such solid basis can be consolidated a lasting public peace.
The most perfect conformity at present existing in the opinion of the people, and the legitimate representatives of same, would have been a sufficient guarantee that in this, as in any other period, the nation expected from your wisdom the most genuine idea of public sentiment expressed by you, and in the laws you may have promulgated a most complete satisfaction of their aspirations and necessities; to the confidence inspired from said harmony of sentiments and ideas there has been added the enthusiastic admiration shown by every one at perceiving the glorious attitude assumed by the representatives of the Peruvian nation; in such a trial, they all in a body denouncing, in defense of national institutions, the atrocity of those who dared to violate the sanctuary of our liberties.
Excuse me, gentlemen, if, at the commencement of the political task which the benevolence of my fellow citizens has honored me, I submit to your wisdom the several cases which, in my judgment, most imperatively demand your powerful aid and protection to direct, so as to facilitate the march of public administration.
The enlightened struggle and pacific victory of the people, during the last electoral agitation, has demonstrated in a brilliant manner how much progress has been made during the last few years toward political advancement, and this circumstance alone should be the reason for proving the necessity of confiding to them with more amplitude the administration of their local interests, embarrassed in such a manner that precludes a serious examination of abuses, and paralyzes the action of the people in the support of their own interests, separating from the administration of the same their most enlightened men, instead of opening to them the necessary facilities, so as to stimulate their generous activity.
Such serious embarrassments will never disappear if the law is not enforced to prevent them; taking into consideration the most suitable methods to be employed in the administration of localities, and reorganizing the municipality, so important to every nation, most powerful auxiliary to a democratic regime, and primary basis of political progress, both moral and material for Peru. Municipal reorganization will serve as a political school to all citizens, and will be beneficial in each locality to rouse the dormant and inactive principles prevalent in them all; it will emancipate the people from the administrative tutelage they are now living under, and free the government at the same time from the employment of a multitude of agents, who, being aliens to general administration, are a burden nevertheless, and the supporting of whom it is almost impossible, in a responsible point of view, to uphold before the people.
But municipal organization, as any other legitimate representation of the people, has for its foundation the establishment of a simple and rapid electoral principle, occupying their attention and activity the least possible time, and faithfully accomplishing their views, meet the expectations of a democratic principle, obviating the inconveniences [Page 748] that an imperfect law may offer for the free expression of popular will, and conjuring the dangers which its effect might occasion to public tranquillity.
Municipal organization, electoral organization, gentlemen, I consider, to the best of my judgment, to be the two corner-stones of the constitutional edifice.
To perfect in every possible way the laws referring to them will be the establishment of a republican government, without which such will never exist.
Legal responsibility of public functionaries, who abuse the authority vested in them, is another of the political necessities that has clearly been evidenced by the doings of the last few days, as without it any law is useless and any right contemptible. You may rest assured that, on my part, I will do whatever constitutional attributions permit me, so that the crimes perpetrated by persons exercising authority be submitted to the knowledge of the competent tribunals in compliance with the law, and you will be convinced that this duty will be fulfilled with that unbiased impartiality of a citizen to whom, from this very moment, has disappeared the hostile attitudes of political parties in Peru.
I will not omit to state, however, on this head, the insufficiency of our penal code of laws, and the dangers accruing, both to public, morals and the guarantees of the rights of citizens, through the dilatoriness so common in the proceedings of the administration of criminal justice. The energetic reformation of the same, in such a manner that it will guarantee with efficacy the rights of citizens and the exercise of authority, is the grand problem of political society you are called upon to resolve, as it has not been done in Peru. Now, more than ever, are those defects to be noted, if we look back at the disgraceful manner in which a portion of the army, led by disloyal chiefs, shook the foundations of society during the five days which it held power.
If public vengeance exacts the punishment of offenders, the honor of the loyal portion of the army demands the more urgently that it should be purified by bringing to justice all those of its members who were in any way implicated in the most atrocious crime the republic ever witnessed.
You may be convinced, gentlemen, that on reorganizing the reduced army it may be necessary for the nation to keep in active service, it will be confided solely to responsible chiefs and officers of unblemished antecedents and tried patriotism, the guardians of public interest and institutions, as of the honor of our flag.
But this will not be sufficient to arrive at the true reformation of the army. The establishment of an especial school will be necessary, so as to retemper, through the medium of education, a true military ardor; and a law of conscription should banish forever the horrible crime of recruiting, fixing on adequate reserves the means of augmenting the effective strength of the army when public peace or national honor demands them. A law which is controlled by invariable rules, stating the manner how it should be proceeded with on conferring military grades, is likewise a necessary condition, as much for the benefit of fiscal interests as for the glory and renown of the profession.
At the same time that public vengeance is satisfied by the punishment of delinquents against the country, it is an act of justice incumbent upon public functionaries to uphold and estimate at its proper value the distinguished services that constitutional order has experienced from the patriotism of the navy during the unfortunate days through which the republic has passed, having contributed another call to national gratitude.
For want of the necessary data by which I could be made acquainted with the true situation of our financial resources, my first duty will be to lay a statement before you, so that both chambers may simultaneously re-establish financial equilibrium, procuring the same through a proper management of the income and reduction of national expenses, as far as the public service permits, as also salaries of public functionaries and public works under commencement. The undertaking of new works before this object is attained would not only compromise the future financial prospects of our country, but also the conclusion of works that are at present on hand.
There are, however, some public undertakings, as, for instance, popular instruction, in which the country should spare no expense to achieve the result, as the education of each citizen is the first condition of the true greatness of nations.-
I advisedly limit myself, to call your attention to the preceding points, because my object is not so much to present you with a pompous programme as to ask from your enlightenment, in the form of laws, the measures I consider necessary for the realization of the purposes we should endeavor to attain, and which are recapitulated in the definitive words “A practical republic;” “A republic of truth.” The above embraces my programme, or better still, the programme I have received from the nation which has sprung from each citizen’s heart, and which is at present the synthesis of national opinion.
Legislators: In the realization of this programme, the highest and most brilliant portion is yours, as it is incumbent on you to state legally the principles by which the nation should be ruled, the bases on which public undertakings should be organized, and even the regulation of these in voting for the current estimates; mine is the more [Page 749] humble duty of ordering your dispositions to be executed, as also to be the zealous guardian on the fulfillment of the laws.
Though limited to the same, my constant endeavors will be to arrange my political views in conformity with the opinion of the majority of the chambers, which legally represent the country’s opinions, and in my most loyal desire to establish a parliamentary system, I assure you, gentlemen, I sincerely regret a constitutional law prevents me from raising to the administration any members of Congress without their losing the right of representing the country.
Without this obstacle the representatives of the nation would periodically convey to the executive the will of the chambers, which are the soul of the country/and therefore be the spirit by which the administration should ever be guided.
My desires to arrive at this result will be to remove, by every possible means, that great impediment, while time is given to introduce into our code of laws so important an amelioration.
To obey the oath I have just taken with that constancy and rigidity of conviction, is the only manner of repaying that immense debt of gratitude I owe for the mark of distinction I have received at the hands of my fellow-citizens.
Let them be convinced, as also you, gentlemen, that if my abilities do not allow me to accomplish their expectations, the rectitude of my conscience will never be wanting as an acknowledgment of the confidence deposited in me.
Special message on the financial state of the country
Legislators: At the time I took the oath before you, to comply loyally with the duties that the constitution imposed upon me, I offered to manifest the situation in which we found the country as soon as I might be able to gather the data necessary to know it. To-day I have them, and I comply with this promise in virtue of the lawful duty and the honor with which my fellow-citizens have conferred their confidence, to lay before them the situation with that honesty which a man owes to his country and to himself; and I submit, therefore, to your high consideration the measures that that situation requires, to re-establish the equilibrium of the state, and to affirm and raise with this, in a manner efficacious and permanent, our credit at home and abroad.
There are various points which constitute the cardinal questions upon which I have the honor to occupy your attention, and which I will treat separately:
The product of guano in its relation with the foreign debt, to which payment it is attached, and the home expenses in their relations with the entries of the productions of the country, that which is only applied to property, will give us an exact idea of our annual deficit.
The arrangements contracted for the construction of railways, in the relations with the products of the hypothecations authorized for this object, and the total of the internal floating debt, will ratify yet more the necessity of re-establishing the equilibrium of the states to raise its credit and dignity, which the government of Peru is obligated to enforce with that religious exactitude which it has always complied with in its engagements, and in which alone it will permanently adhere to, when our home and foreign creditors are clearly assured of the economical strides of the country, by the definite settlement of its internal affairs. I will, in the end, submit to your high consideration the measures with which the government hope, without extinguishing immediately the deficit, by preparing for the gradual extinction of it, by devising means against the uncertainty of the future, the great material interests, political and social, of all parties, especially in Peru, that are intimately bound up with the regular march of the public administration.
| The guano for the United States of North America, produced during the year 1871, was 23,100 tons, according to the accounts rendered, as per the accompanying documents of the minister of finance | S.902,602 87 |
| According to document No. 2, there was due on December 31, 1871, to the consignees of this guano, by previous engagements | 3,605,757 72 |
| Besides which we have to meet the service of the Peruvian-Chilian bonds, and can calculate that in more than four years, including the present, the time necessary for their re-imbursement. | |
| The sales of the guano in other markets from the year they were contracted under the administration of Dreyfus Brothers & Co., have been reduced from 533,700 tons, which they amounted to in 1869, to 393,700 tons, which were realized last year, and which, according to document No. 3, produced net the sum of | S.14,856,756 91 |
This realization was actually represented in each year as follows:
| Service of the impost in 1865 | S.5,000,000 00 |
| Service of the impost in 1870, at 6 per cent. interest on S.59,600, total of the bonds of the Oroga and Puno Railway | 3,576,000 00 |
| Service of the bonds by the Pisco and Ica Railway | 101,500 00 |
| Service of 7 per cent. upon S.75,000,000 of the impost of 1872 | 5,250,000 00 |
| S.13,927,500 00 | |
| Difference in favor of the exchequer | 929,256 91 |
This difference is represented at the payment of capital and interest by the advances of Dreyfus Brothers & Co., which, according to document No 4, amounted at the end of July last to S.16,871,368.50, and this, after deducting the S.7,500,000 which had been re-imbursed with the product of the loan of £15,000,000.
The résumé of these sums, and the result we arrive at, is, that the guano of Peru is totally detached for the service of the foreign debt and other creditors with which it is burdened and absorbed by those obligations.
| According to the accounts of the returns of the republic in 1871, which are numbered 5, the total expenditure in the year has been | S.112,514,952 30 |
| There has to be deducted from this amount the sums which figure in the account for the works on the railways, national exhibition, commissions and exchanges, creditors on former loans, interest, and other extraordinary expenses which come out of the product of guano, besides the interest and the liquidation of bonds of the foreign debt, according to the statement of the appended account, amount to | 95,385,111 00 |
| Showing the result of the ordinary interior expenditure for the year 1871 to be | 17,124,841 30 |
Referring again to the figures of this account, and the debt which remains up to the last of December, 1871, and which ought to be added to this sum, as the most part which ought to be paid to the different departments during the year to which this account refers, we will now examine the estimates made by the former administration to present to Congress, and deduct from them the ordinary expenditure to our foreign minister, public works, and extraordinary expenditures which ought to be charged against the guano account. We arrive at the following figures, which are required for the different branches of the service:
| Government department | S.1,002,000 00 |
| Police department | 2,913,000 00 |
| Equity department | 1,026,000 00 |
| Religious department | 291,000 00 |
| Public instruction | 1,498,000 00 |
| Hospitals | 353,000 00 |
| War department | 7,042,000 00 |
| Marine department | 2,568,000 00 |
| Foreign relations | 341,000 00 |
| Interior relations | 4,341,000 00 |
| But nothing is voted for public works or the ordinary service of the country; to those estimates requires to be added a yearly sum of | 21,375,000 00 |
| According to the preceding, the ordinary expenditure of the country may be computed at | 21,375,000 00 |
| But again, according to the accounts for last year, the expenditure for the service of the country was | 17,129,000 00 |
We will now look at the revenue of the country, without taking into account the guano, which is, as we all know, expended in the payment of the foreign and other debts.
According to the returns for last year, the amount collected as taxes is, as by the papers No. 6:
| Custom-house | S.6,213,000 00 |
| Income-tax | 575,000 00 |
| Tax on various establishments, public lighting, &c | 935,000 00 |
| Different branches of the census, &c., collected by the fiscal | 380,000 00 |
| The rent of the railways of Mollendo, Oroya and Pisco | 500,000 00 |
| Guano sold on the islands | 74,000 00 |
| Total interior revenue | 8,677,000 00 |
| Calculated at an ordinary increase, we are still within the limits of the expenditure last year, or say | 17,100,000 00 |
| Considering the increase by the new scale of wages, all we have to place in front of the ordinary taxes is | 8,600,000 00 |
| So that we have an annual deficit of | 8,500,000 00 |
Nor is this all. We have also a debt which hangs over the fiscal of Lima and the departments, and also over the receipts of the custom-house, and has been augmented by various sums which have been paid by decree of the government; others are being arranged for payment, with the rest of the public works now in progress, of which the actual cost would be lost if they are not finished. By reason of the number of those debts, and on account of the origin of some, and the nature of others, it is very difficult to give an exact enumeration of them, a special commission has been appointed with this object, and from the notes furnished by them the government has made those approximations.
According to return No. 7, there are waiting for payment bills and papers accepted by the treasury and the custom-house, and they will have to be paid at the value specified in the documents which accompany them; or, say:
| For bills granted by those offices on account of the railways of Payta and Piura, Chimbote and Huaraz, Pacasmayo and Magdalena, Ilo and Moquegua, Huacho, Sayan, Salaverry and Trujillo, Lima and Chancay | S. 2,799,000 00 |
| For returning to H. Meigs, esq., the 10 per cent. guarantee which was given in deposit on the railways, and which is secured in bills against the custom-house in Callao | 2,200,000 00 |
| For various payments made in July | 1,727,000 00 |
| Debts due by the fiscals of departments | 632,000 00 |
| These together amounting to | 7,358,000 00 |
As it is impossible to say how much will be necessary to complete the various public works (outside of railways) in the course of construction in the republic, and for which must be allowed for one year the sum of at least S. 2,000,000.
Without going into an examination of the state of the loan of 1872, as it does not belong to this department, we will notice only the results of its relations with the objects which it effects. The amount of this loan authorized by Congress for public works represents a nominal value of £15,000,000, whose approximate produce will be the following:
| £15,000,000, at 75 per cent., is £11,250,000 | S. 56,250,000 00 |
| Deduct two millions sterling of the same, say 75 per cent., which has been taken by Dreyfus for his previous loan | 7,500,000 00 |
| Leaving | 48,750,000 00 |
| Expenses and commissions | 2,325,000 00 |
| Leaving a total of | 46,425,000 00 |
| Gained in exchange | 2,416,643 83 |
| Approximate amount received of this loan | 48,841,643 83 |
With this sum the preference ought to be given to the public works authorized by the law of the Congress, and which have been contracted for in the following sums, as shown in the account No. 8:
| Railway Juliaca to Cuzco | S. 25,000,000 00 |
| Railway Chimbote to Huaraz | 24,000,000 00 |
| Railway Ilo and Moquegua, contracted for at S.6,700,000, and bought by Meigs at 75 per cent. by decree December 30, 1871 | 5,025,000 00 |
| Section of railway Pacasmayo to Guadalupe | 2,100,000 00 |
| Section of railway Calasñique and Magdaleno, contracted for at S. 5,000,000, and bought at 75 per cent. by the same decree | 3,750,000 00 |
| Railway Payta to Piura | 1,945,000 00 |
| Works of irrigation in Peru | 10,000,000 00 |
| Total | 71,820,000 00 |
Over and above this, we have contracts to pay for other public works which are not included in the law which authorized the loan of 1872; or, say, the following:
[Page 752]| Railway of Salaverry and Trujillo | S.3,400,000 00 | |
| Railway of Huacho and Sayan | 1,700,000 00 | |
| One-third of the cost of the railway of Tacna and Bolivia | 6,000,000 00 | |
| Total | S. 11,100,000 00 | |
| 82,920,000 00 |
In this is not included the two millions six hundred soles which the government is obliged to lend to the contractors of the railway between Lima and Pisco, according to contract dated 12th July, 1869, which sum is to be returned by them during the term of their privilege, which is for twenty-five years.
On account of railway works has been granted, as is shown in account No. 7, orders for payment on the treasury in Lima, and on the custom-houses of Callao, Arica, and Iquique, for the sum of S.2,799,000, and in such a manner that should one of those fail it can be recovered from the others, leaving a debt to be paid for railways and irrigation of S.80,121,000, to pay which there is only the sum of S.48,841,000, the realized produce of the last loan.
The financial position of Peru is now comprehended in the five preceding paragraphs with all necessary clearness, not so much to lament the state which the country has been reduced to, as in order to discover the remedies which must be resorted to for its salvation. It is the place of the government to take the initiative to point those out, no matter how pain or difficult its mission.
Peru, therefore, must expend in a most profitable manner the proceeds of this loan, as the works on the railways, on which depend the welfare of this people, cannot be realized, and it is impossible to discharge by the proceeds of the taxation of the country the immense weight which overhangs it, and impedes the proper attention being given to the general expenditure of the country.
To secure the proper discharge of this loan, it is requisite, first, to liquidate the home expenses and create resources to support the country’s vitality, without placing any dependence upon the proceeds obtained by the sale of guano, 1st, because this resource is totally expended in maintaining our foreign credit; and, 2d, we can only rely on this as a guarantee, when it is seen that this tax is not required to confront the ordinary expenditure.
The liquidation of the ordinary home expenditure can be obtained in two ways: 1st, the paying off of our floating debt; 2d, the filling up of the deficit between our revenue and home expenditure. But it is not possible to transact any operations on credit in order to obtain this first result, without having first obtained the second; because we can only have recourse to credit when we see that we are secure in our daily expenditure, and still less can we trust to that credit which has been employed to such an extent, the repayment of which is first necessary before we obtain further supplies.
Our financial position, at the present moment, is to create such resources as will cover the difference between our ordinary payments and receipts, or, say S.8,500,000 a year; then we can have foreign credit to confront the works already contracted for; home credit to pay engagements due, and secure at the same time the progress of the administration, in which is included foreign and home credit, railways, public prosperity, and management.
We cannot say if it be possible to obtain this result, but it is necessary, if the government have this intention, that they should confide in the people, without continuing to deceive them as to the true situation of the country; nor does it become them, in the dignity to which they have risen, for us to intimidate, but still to place this before them with firmness and resolution. The definite solution of this, our financial problem, is thus reduced to the three following points:
- 1st.
- The creation of S.8,500,000, in addition to the former revenue, to establish an equilibrium in the home affairs of the nation, re-establishing our home and foreign credit; then it is possible to follow the other two points.
- 2d.
- To use our home credit to cancel our floating debt.
- 3d.
- The definite emission of the loan to conclude our railways. The completion of these two problems depends entirely on the fulfillment of the first. In the creation of our ordinary home resources it is necessary, under all circumstances, to attend principally to these two essentials—public taxation; immediate and sufficient funds. These are the two beacons which must guide us to the solution of this difficult problem. The fountains from which we must obtain the results which the situation of the country demands cannot be other than “direct taxation” or “indirect taxation.” The first it is very difficult for the general government to impose, and, at the same time, produces no good results; it would be better to do it regularly by recovering a contribution on sales, which is now collected under the name of “contributions on land-owners and properties, industries and patents,” and is applicable only to the municipalities who will have charge of the localities, and will be responsible to the treasury.
By this means are obtained three results: 1st, a quicker return of local impost taxes; 2d, less repugnance in the payment of them when it is positively known by the contributor that it will ultimately revert to his own benefit; 3d, a quicker return for produce.
Under these circumstances has been presented to the cabinet a project of decentralization in the administration, and which the government consider to be the base of public reform in the administration of Peru, and also to consign by this means the taxes of each locality to the payment of the expenses there; thus making a clear saving to the nation in the estimates of S. 1,500,000, without a diminution in the revenue, besides which, by this means of local administration, a great amount of attention will be given to the public good.
By the adoption of a decentral government and the local administration of the affairs of each district in Peru, the estimated deficit is thus reduced to S. 7,000,000, which sum ought to be still more reduced by other public taxes.
The indirect contributions which remain are two, a tax on the exportation of saltpeter, and the imposts of the custom-house.
Document No. 9 shows the gradual increase in the export of saltpeter during the last twenty-two years.
The estimated exportation of this article in the year 1873 would be S. 6,000,000.
The special circumstances connected with the exportation of saltpeter show an incontestable right on the part of the country to look to this as a means to replenish the treasury, and we believe without any hurt to this industry. Without mentioning the gratitude with which we look to this rich portion of our territory to replenish our exhausted coffers, we could call the attention of the people to the monopoly which Peru exercises in the world, in the production of nitrate of tarapaca, proving that in the last few years the production has been annually increased, and has nearly doubled the price during the last eight years.
While drawing attention to the great increase in the consumption and price of saltpeter, it is still worth while to apply ourselves to the greater cultivation of the land, on account of the diminution of the consumption of guano, although its present price is still relatively higher than that of saltpeter.
In referring to this duty, which can be collected on the export of saltpeter, the government is certain that eventually it will not injure the trade—leaving the exportation free to such a price as assures the producer of all the costs of its manufacture, and recovering only a duty on future profits, on a scale in proportion to these. The government indulges in the hope that by this means a new rise will take place in the European markets, and that the actual payment of this tax will fall on the consumer in place of the manufacturer.
The adoption of this project as a law awaits the decision of the supreme Congress, and by which the minister of home affairs would be enabled to supply a sum of S. 2,000,000, thus reducing the deficit to S. 5,000,000, which remains to be made up by the custom-house; nor do we think that it will be difficult to wait until this is completely paid up. The means to be adopted to augment the public taxes is the problem which must now occupy, our attention; the means fixed upon must comply with the three following necessary points: The augmentation of the tax to the figure already stated, with the least prejudice to the consumer, and without any great disturbance to commerce.
That it is necessary to raise the taxes cannot be doubted for one instant, for only by the increase of those can we hope for the financial salvation of our country; nor ought any time be allowed to elapse before it is put into execution.
This proposal has been made on the information, received from the tariff of duties, and the documents which accompany it, which has given us a clear knowledge of the means to be employed by the government to raise the duties collected in the customhouse to S. 2,500,000, more or less, by our increase of 5 per cent. on value, as now recovered, and by an increase of 10 per cent. on many articles which are now free, and which can easily bear the additional impost. By this means, and according to all reasonable calculations, the actual increase in the duties collected at the custom-house will be S. 4,000,000, which thus reduces the deficit to S. 1,00,000 a year. It is impossible, in such a document as this, to enlarge upon the details of the means which occur to my mind to analyze what may follow, because it is of the utmost importance to explain to all those interested. The changes which are comprehended in the five articles before stated are based upon the present tariff. The additional charge, by this means, on a yard of calico is little more than a quarter of a cent per yard; woolen goods, one cent per yard; cotton and silk mixed, three cents per yard; woolen trousers, twenty cents per pair; boots, fifteen cents per pair.
When once, by this means now proposed, we redeem our credit and have completely established our receipts and expenses, having thus consolidated our credit at home and abroad, we can again reduce the taxes to the lowest possible limit. The government has made arrangements with the bank here for a favorable consideration of this programme, and we view with pleasure the decision arrived at by the different establishments [Page 754] of trust in Lima, who will co-operate all in their power for the financial salvation of the country.
This is also necessary in order to complete the engagements contracted for by the country, treating with respect the contractors and the people, who thus enable by their patriotism their government to adopt the means to restore the equilibrium of the nation.
Legislators, in the course of this document I have restricted myself as much as possible to our situation, limiting myself to the particulars necessary in order to allow you to judge of the same, and you have, with all the exactness with which we can obtain it, a knowledge of our financial position, which shows that we are at the junction of the two roads which lead to very different destinations; that we are in one of those positions, of salvation or destruction, in which Providence many times places men to prove the strength of their spirit. This is, gentlemen, the mission which we have now received, and of which we have to return a faithful account to our fellow-citizens, and in our history to future generations: by our decisions now we will make our republic great—greater than it ever yet was; by our genius we will remove her from the position she now holds to the elevated situation we have dreamed of for the last twenty years; but we can also, by only abandoning her in her actual path, by only one moment of indifference, weariness, or neglect, cause for a long time the evil, consequences of this period, the bitter fruits of which we now recognize, if Peru and its representatives do not place in our financial salvation the vigor which is necessary to reconquer our political rights. I trust, gentlemen, that in your patriotism will be found the hand that Peru seeks to save herself; and the same time I trust and believe that you will be sustained by the enthusiasm of the nation in every step which that patriotism and your wisdom may suggest.