No. 444.
Mr. Frelinghuysen to Mr. Partridge.

No. 28.]

Sir: I am in receipt, through the legation at Santiago, of a copy of a proclamation issued by Vice-President Montero on the 25th of November, 1882, which gives notice of a disavowal of the right of Chili to sell the guano and nitrates heretofore pledged to the creditors of Peru, of an intention to contest the sale, and of a determination to cut off those creditors of Peru who have entered into arrangement with the Chilian Government.

A copy of the decree* is herewith inclosed, out of abundant caution, although it is presumed that you are already in possession of its contents, and your attention is particularly called to articles second and third thereof, which provide that creditors of Peru who have agreed or shall agree with Chili for the payment in whole or in part of their claims shall thereby lose all rights which Peru may have granted them, and that the guano exported “in virtue of such contracts shall be judicially followed, and the result applied solely to such creditors as have entered into no agreement with the Chilian Government.” It is unnecessary for me to inform you that in the opinion of this Government the rights of creditors of Peru heretofore secured by lien upon the guano and nitrate deposits cannot be canceled at the election of the Peruvian Government. The delicate condition of affairs in Peru, Bolivia, and Chili may make it unwise to take any immediate action on the subject, and at this distance from Arequipa and Santiago I hesitate to give you definite instructions, fearing to embarrass you in the exercise of your discretion, but at such early day as shall seem to you advisable you will acquaint the Peruvian Government that so far as this decree may affect the ultimate rights of citizens of the United States who are creditors of the class described it cannot be accepted as valid or lawful.

I am, &c.,

  1. For decree referred to see page 88.