Office of the Historian

Mr. Neill to Mr. Hay.

Legation of the United States,
Lima, Peru, December 16, 1901.
No. 550.]

Sir: * * * The law creating the gold standard in Peru was passed by Congress, and of which I herewith transmit copies and a translation. This decree also provides that the Government, as it thinks best, shall demonetize up to a million of silver soles and convert their value into Peruvian gold coins. Although this law was promulgated on the 14th instant, to-day, the 16th instant, the banks have not recommenced to pay out gold; perhaps they may do so in a few days.

* * * * * * *

I have, etc.,

Richard R. Neill.
[Inclosure.—Translation.]

The gold standard.

The President of the Republic:

Whereas Congress has passed the following law:

The Congress of the Peruvian Republic, exercising the attribute conferred by the ninth paragraph of article 59 of the constitution, has passed the following law:

  • Article 1. The monetary unit in the Republic is the Peruvian gold pound.
  • Art. 2. The Peruvian gold pound is a coined disk of twenty-two millimeters in diameter (0.022), composed of eleven parts gold and one of copper, the total weight of which is seven grams nine hundred and eighty-eight milligrams (7.988).
  • Half-pound pieces shall be coined, which shall be made of the same alloy in disks of nineteen millimeters and three-tenths (0.0193 m.) and of the corresponding weight of three grams nine hundred and ninety-four milligrams (3.994 grs.).
  • Art. 3. The silver and copper pieces coined according to the law of February 14, 1863, and article 7 of the law of December 30, 1872, existing in the Republic, shall be simply fractional parts of the pound, ten soles to each pound.
  • Art. 4. The gold coin is the only legal tender for the payment of debts, and no one is obliged to receive more than one hundred soles in silver or more than ten cents in copper coins.
  • Art. 5. Only the state has the right to coin money. Silver and copper money can only be coined by virtue of a special law which shall determine the amount.
  • Art. 6. The coinage of gold is unlimited. The national mint shall receive all the gold offered for the purpose of being converted into national money.
  • Art. 7. The introduction into the territory of the Republic of silver and copper coin whatsoever is prohibited, and persons wishing to import the same can do so by [Page 894] way of the port of Callao only, the respective manifests to be entered at the custom house there, in order that the administrator of the said customs may forward the money to the national mint to be smelted into ingots, at the importer’s expense, to whom the same shall be returned in the said form.
  • Passengers are not allowed to bring more than ten soles silver for their personal expenses.
  • Art. 8. The grade margin permitted is two per one thousand, for the pound and half pound.
  • The weight margin permitted will be twelve milligrams and ninety-six hundredths of milligrams (0.01296 g.) for the pound, and only nine milligrams and sixty-two hundredths of milligrams (0.00962 g.) for the half pounds.
  • Art. 9. The loss in weight resulting from the use of gold coin shall unfit its legal circulation whenever it exceeds fifty milligrams (0.050g.) for coins of one pound, and thirty-three milligrams (0.033 g.) for those of half pounds.
  • The loss in weight allowable for silver coin can not exceed 5 per cent and that for copper can not exceed 10 per cent of their respective weights.
  • The mint shall receive Peruvian silver and copper coins light in weight after being in circulation at their normal value and shall exchange them at par for new coins.
  • Art. 10. Coins with completely obliterated stamps, and such as have been chipped, filed, or pierced shall not come under this head.
  • The said coins shall lose their monetary character, and shall be considered as merchandise only.
  • Art. 11. All previous monetary laws are hereby repealed in all such respects as are in opposition to the present law.

transitory articles.

  • First. The Executive shall adopt measures calculated to foment the coining of the greatest possible amount of gold coin.
  • Second. English pounds and half pounds sterling shall be a legal tender in the Republic, the same as if they were Peruvian pounds and half pounds, respectively.
  • Third. Obligations contracted previous to the promulgation of the present law, in silver soles, may be canceled with the said coin up to two years from the present date.
  • After that term all obligations contracted in silver soles shall be canceled with gold coin at the rate of one pound for every ten soles silver.
  • Fourth. The Executive shall exercise its judgment in the smelting down to one million of silver soles, the value of which shall be replaced by Peruvian gold pounds.

The expense of this operation shall be placed to the demonetization account and chargeable to the extraordinary expenses of the treasury department.

Let this be communicated to the Executive in order that he may take the necessary steps for its promulgation.

Given at the House of Congress, in session at Lima, the 13th day of the month of December, 1901.

  • M. Candamo,
    President of the Senate.
  • Mariano H. Cornégo,
    President of the House of Deputies.
  • I. Capelo,
    Secretary of the Senate.
  • José Oliva,
    Secretary of the House of Deputies.

To His Excellency the Constitutional President of the Republic.

Therefore I order the printing, publishing, circulating, and due carrying out of this law.

Given at the Government house, Lima, on the 14th day of the month of December, 1901.

Eduardo L. de Ramaña.