No. 512.
Mr. Thomas
to Mr. Fish.
United
States Legation,
Lima,
Peru
,
December 20, 1873. (Received
January 19, 1874.)
No. 77.]
Sir: I have assumed that the inclosed copy of a
decree of the President of Peru will be interesting to the Secretary of
State. This paper prescribes rules and regulations for the government of the
banks of Peru which are not to be found in the laws by which these
institutions are established. A proclamation of this character, if issued by
the President of the United States, would surprise the public. It is
otherwise in this country. The President of Peru issues proclamations
intending to have the laws of Congress executed, and issues other
proclamations to provide for what the President considers omissions in
existing laws and these executive decrees are considered equally obligatory
by [Page 797] the community. In this instance
I am of the opinion that this recognized power of the President is wisely
exercised. In forbidding ttye circulation, after certain days named, of
bank-notes of a less denomination than four soles, the President has given
proof of his knowledge ot a well known law of currency generally in a
community wherein a paper circulation of face-values equivalent to the coins
of the country is by law authorized; in such cases coin will disappear, and
paper will become the existing currency. Seeing this, President Pardo has
wisely required the banks to withdraw from circulation and destroy all these
notes of less denomination than four soles each, that the channels in which
small notes now circulate may be filled with specie.
In those articles of this decree which require that the banks shall deposit
in the mint, as a guarantee for the notes they may issue, 70 per cent, of
their face-value in treasury-bonds or bonds of the internal consolidated
debt of Peru, and have always on deposit in their vaults 30 per cent, of the
face-value of their notes in circulation in gold or silver coin or silver in
bars, the. President’wisely provides for a sale of Peruvian bonds, at 92
cents to the dollar, to the amount of six millions, ($6,000,000,) a sum now
indispensable to the government, and takes precautions against a flood of
unredeemable bank-paper, which this community has now good cause to
apprehend. In all this I am led to believe that President Pardo gives
evidence of that sagacity, patriotism, and firmness which assures for Peru
good government during his presidential term.
I am, &c,
[Inclosure.]
The government and the hanks.—Important government
decree
[From the South Pacifie Times, December 20, 1873.]
Manuel Pardo, constitutional President of the republic, considering—
That the government ought to fix the conditions under which bank-notes
payable to bearer of the banks of issue should be received in the public
offices, offering only the credit of the state to the banks which may be
established and carry oh their operations in conformity with the
regulations and conditions it may determine—
Decrees:
-
Article 1. The administrators or
receivers of either public, fiscal, or municipal revenues, or of
those belonging to the charity or school boards, will not
receive any other notes than those issued by the banks expressly
authorized by the government to issue them according to the
dispositions of this decree.
-
Art. 2. No banks of issue can be
established with a smaller capital than 100,000 soles, the half
of which must be paid up in cash; nor can it issue a quantity of
notes payable to the bearer, whose value exceeds that of the
capital subscribed, nor issue notes whose value is less than
that of four soles. The notes actually in circulation for a less
sum than two soles will be called in and paid by the banks
before the 1st of June of the ensuing year, and those of two
soles before the 31st of December of the same year.
-
Art. 3. The banks of issue will
publish a monthly balance-sheet of debit and credit, and in the
said balance-sheet there will be clearly stated the amount of
coin and precious metals existing in their establishments, and
the amount of the notes in actual circulation. These monthly
balance-sheets must also state, along with the name of the bank,
the amount of issue for which the bank has been
authorized.
-
Art. 4. From the 1st of June next
the President and members of the chamber of commerce in Lima,
alternately with the commercial deputies from the departments,
will audit the balance of the bank monthly, audits exactness,
but only with regard to the money on hand and the circulation of
notes, and they will authorize the said balance with their
signatures.
-
Art. 5. The banks of issue will
deposit in the mint, as a guarantee for the notes they emit, a
sum either in treasury bonds or in those of the internal
consolidated debt, or of [Page 798] one or the other, in the proportion which the government may
fix, the nominal value of 70 per cent, of the issue of notes for
which each hank may he authorized.
-
Art. 6. This deposit will be made by
the existing banks in the following proportions: three-fourths
in treasury bonds and one-fourth in bonds of the internal
consolidated debt; and it must be made within the term of nine
months, each bank depositing the corresponding bonds in the
following manner: Fifteen per cent, of the authorized issue
deposited in bonds before the 10th of January; 10 per cent,
before the 10th of the months of February, March, and April; and
6 per cent, before the same date on the subsequent months, until
the deposit is completed.
-
Art. 7. The new banks of issue which
maybe established must make this deposit at one time, in order
to be authorized to issue, and before its commencement.
-
Art. 8. From the 1st of January,
1875, the banks of issue must open a special cash account in
their establishments, independent of the cash account of their
daily operations, to be entitled “deposit of circulation.” Each
bank will have constantly in deposit in its coffers gold, coined
silver, or silver bars, whose value shall be equal to the
difference between the quantity of notes in actual circulation
and the nominal value of the bonds deposited by the bank as a
guarantee for the said notes.
-
Art. 9. This cash-box will be in the
custody of a director of the bank, who shall be specially
appointed by the directory, and the said director will be most
careful that no money be taken out of it but in exchange for an
equal sum of notes withdrawn from circulation; and again that
they should Viot be taken out of the said safe without an equal
sum in gold or silver having been returned to the
deposit.
-
Art. 10. The holders of the notes
will be considered as the owners of the deposited bonds, and of
the funds belonging to the account “deposit of circulation” for
the sums necessary to pay back in coin the notes they possess.
They may make good their claims on the foregoing securities, in
case the banks should not comply with their obligation to pay
their notes at sight, and in current money.
-
Art. 11. The treasury bonds
deposited by the banks will be received in the mint under the
charge of a committee composed of the director of the mint, of
the president of the chamber of commerce, and placed in a safe
having three keys, one to remain in the possession of each of
these functionaries.
-
Art. 12. Each bank will present to
the said committee the notes of the authorized issue, in order
that they may be stamped with a seal which will state that they
are of the circulation authorized by the Government, and the
series, numbers, and amount of the stamped notes will be kept in
a separate book, and the accounts, together with the respective
declarations signed by the members of the committee, will be
made public.
-
Art. 13. The committee spoken of in
the preceding article will meet at any time when called upon by
the managing directors of a bank to authorize the destruction of
old notes, and to stamp those which are to take their
place.
-
Art. 14. If, at any time, a bank
should propose to diminish the amount of the issue for which it
has been authorized, it will make known its intention to the
government, who will order the return, by the committee, to the
bank which solicits it, the bonds corresponding to the value of
the stamped bills which shall be destroyed before the committee
itself. If a bank should wish to augment its issue, it will ask
permission from the Government, and under its inspection will
make good the required deposit at one time, just as if it were a
new bank.
-
Art. 15. The committee with whom are
deposited the responsible values of the banks will give in favor
of each one or more certificates, not transferable, in which the
series, numbers, and amount of the values deposited will be
stated.
-
Art. 16. The same committee will
calculate the interest which the certificates of each bank will
gain every three months, and will at once order the custom-house
of Callao to remit to each bank, monthly, the sum necessary to
cover in the three months the interests on the certificates of
deposits belonging to each bank.
-
Art. 17. The provisional receipts
which may be given to the custom-house by the banks will be sent
by the former to the comptroller’s office, who will make with
them the tri-monthly payments of the interest corresponding to
the bonds represented by the certificates of the banks. The said
payment will be on the certificates, and the provisional
receipts which may have been given will be returned.
-
Art. 18. The managers and directors
of the banks already established, or which may hereafter be
established, will state in writing to the finance minister, and
in accordance with the annexed form, the quantity of notes for
which they ask authorization, stating at the same time the date
of the establishment of the association they represent, the
subscribed capital, and the portion already paid up.
-
Art. 19. The issues of the existing
banks will be authorized as soon as their managers or directors
may desire, ten months being given for the stamping of the
notes, after which none which are not so stamped will be
received in the treasury.
-
Art. 20. From the 2d of January
next, both in Lima and Callao, and from the 31st of the same
month in the other departments, there will not be received in
any office, whether they be public or fiscal, municipal, or
belonging to the school and charity boards, bank-notes which are
not authorized by this supreme decree, and the cashiers [Page 799] or administrators who
may receive them will he removed from their posts by the
authorities on whom they depend.
-
Art. 22. The banks existing at
present in the departments will make the solicitude mentioned in
the nineteenth article to the prefect of the department, who
will at once authorize the issue asked for according to this
decree, informing the finance ministry. The banks which may
afterward be organized in the departments will also ask for the
authorization of the supreme government.
-
Art. 23. It is understood that the
term allowed for the deposit of bonds by the departmental banks
will be extended thirty days beyond that fixed for those of
Lima; the deposit will be made in the form and at the places
fixed by this decree, without making any distinction between
those of Lima or those of the departments.
The minister of state in charge of the portfolio of finance and commerce
is charged with the carrying out of this decree, causing it also to be
published and circulated.
Given in the government-house in
Lima, on the eighteenth day of December of the year one
thousand eight hundred and seventy-three.
- MANUEL PARDO.
-
Camilo N. Carrillo.
Mode of requesting authorization.
Your Excellency: (Name of managers,) directors
of the bank (name of bank) established (name of place) by a public
document drawn up (date) with a capital of the amount of (nominal
capital) has been collected, ask from your excellency authorization to
issue a quantity of bank-notes, payable to bearer, according to the
dispositions and enjoying the privileges conceded by the decree of the
18th of December, 1870.
Lima,—.
——— ———
Decree of Secretary of Treasury
Carrillo.
Lima
,
December 18,
1873.
In compliance with the clauses of the law of the 29th of April of the
current year, it is hereby resolved—
- 1st.
- A special issue will be made of treasury bonds for the sum of
s6,000,000 on the conditions set forth in the following
articles.
- 2d.
- The bonds of this issue will be of 10,000, of 1,000, and of
100 soles, divided in series, numbered and issued to
bearer.
- 3d.
- The bonds will be registered in the audit office and bear the
rubric of the finance minister, and the signatures of the
director of the audit office and of the chief of the section of
credit.
- 4th.
- The bonds will gain interest at the rate of 8 per cent, per
annum, payable every three months, on the 31st of March, the
30th of June, the 30th of September, and the 31st of December in
each year.
- 5th.
- The bonds will bear date January 2, 1873, and will be redeemed
at par, either in part or entirely, from the 2d of January to
the 30th of June, 1876, but in the mean time they will be
considered as current money, and as such will be received in the
public offices, according to the dispositions of the law which
creates them.
- 6th.
- The treasury bonds of this issue are intended to constitute a
guarantee-deposit of the banks of issue, and will be sold by the
treasury of Lima at 92 per cent.
Let this be registered, communicated, and published.
By the President:
