No. 34.
Mr. Logan
to Mr. Frelinghuysen.
Santiago, October 31, 1882. (Received December 16.)
Sir: I have to inform you that the sale of 1,000,000 tons of guano by the Chilian Government, advertised to take place last August, but postponed until the 18th of the present month, came off in this city upon the latter date.
There were nine bids in all, one of which came from the American firm of Grace & Co. The Chilian Government had adopted the standard [Page 80] rate of the English market as the basis of price. This standard relates to a unit founded upon the percentage of nitrogen and phosphorus which different samples yield upon chemical analysis. The; rate is 21 shillings for the unit of nitrogen, and 4½ shillings for the unit of phosphorus. The price of the guano per ton being fixed, therefore, the real bidding took place upon what is called the forfait, or the cost of removing it from its place of deposit to the European market, which includes digging, shipping, bags, insurance, landing charges, storage, porterage, commission, interest on money, &c. The effect of this was, of course, that the lowest bid for forfait left the Chilian Government the largest price for the guano per ton delivered in Europe, at the foregoing established rates.
The bidding upon the forfait ranged from £5 10s. to £2 19s. 10d. per ton. This latter bid was made by Miguel Baillie, of Paris, secured by an indorser, and a deposit of $500,000 forfeit money in a Valparaiso bank. Being far below all other bids, the contract was awarded to M. Baillie.
The impression of some here is that the bid is made by Dreyfus. All, however, agree in the statement that the contractor can make no money out of it, but upon the contrary must lose a considerable sum.
I have, &c.,