Mr. Strobel to Mr. Uhl.
Santiago, June 1, 1895. (Received July 12.)
Sir: I have the honor to report the resumption of specie payment in Chile on this date. This is the result of two laws, one passed by Congress on February 11 last, providing for the redemption by the Government of its paper money on June 1, in gold, at the rate of 18 pence to the peso, and the second, passed on May 28, providing for a loan of £2,000,000. As it was feared that the redemption at the above rate by the Government, as provided for by the law of February 11, might cause a drain upon the banks in view of the low rate of exchange ruling prior to the date fixed for conversion, the loan was authorized for the purpose of helping the banks in case of need and therefore to strengthen public confidence in the operation. This loan has been taken by the Rothschilds at 93½, with interest at 4½ per cent.
The resumption of specie payment closes a question that has been agitating the people for a number of years past, and places the country once more on a gold basis, for the first time since 1878.
I have, etc.,