Papers Relating to the Foreign Relations of the United States, With the Annual Message of the President Transmitted to Congress December 3, 1907, (In two parts), Part II

File No. 3764/1–3.

Minister Combs to the Secretary of State.

American Legation,
Lima , August 13, 1907 .

Sir: I have the honor to inclose a copy of President Pardo’s message to Congress, with a résumé in English.

I have, etc.,

Leslie Combs.

[Inclosure.—Résumé.]

The message of President Pardo to Congress gives a complete idea of the general movement of Peru during the past year.

The budget for 1908 is put down at Ł2,866,156, which represents Ł186,889 in excess of the former one of 1907, but this is satisfactory, as it is based upon the natural increase of the receipts and not upon any new taxes.

The arrangement with the Peruvian corporation recently concluded, the expenditures required for the maintenance of the two cruisers purchased as a basis for our new navy, and the contracts for railways, will require an extra expenditure yearly of about Ł150,000, but this sum has already commenced to enter the public treasury owing to the development of trade and richness of the country.

His Excellency stated that he had great pleasure in announcing that the relations between Peru and other nations were extremely friendly and cordial, especially with the neighboring countries; that this was due in a great measure to the intelligent and conciliatory police of the diplomatic corps resident in Lima, and to the manner in which the Peruvian agents in foreign countries had assisted the policy of the Government.

The question regarding the final nationality of the Peruvian provinces of Tacua and Arica still occupied the attention of the Government, and of the whole nation, the opinion of which on this matter has from the first been clearly pronounced. There is reason to hope nevertheless that some arrangement is not far distant, as we may consider as a fact accepted by both of the interested governments that the only possible solution is one in accordance with the treaty of peace of October 20, 1883.

Among the most important events, on account of its undoubted effect upon our future diplomatic relations, I must mention the visit which the honorable Secretary of State of the United States paid to Lima during September, 1907. The Hon. Elihu Root had the opportunity of judging as to the cordiality of the sentiments which Peru entertains regarding his great country, and thus carry home to the United States a clear and exact idea of what is most necessary to render closer the bonds between the South American states and the great Republic of the north.

The telegraphic system has been considerably extended.

During the year 1906, 1,287 kilometers of new lines were constructed, and in the first six months of the present year 533 kilometers more have been made.

The Departments of Amazons and San Martin are now united with the capital, and so also are the Provinces of Ayabaca, Huancabamba, Pacasmayo, Cajamarca, Celendin, Chachapayas, Moyobamba, Huari, Cajatambo, Camas, Pancar-tambo, Urubamba, and Carabaya, and before long the telegraph wires will reach Contumaza, San Martin, Pomabamba, Patay, Bolognesi, Huamalies, and Dos de Mayo.

The construction of the new cruisers Almirante Gran and Coronel Bolognesi has been concluded, and they have been received by the chief of the naval commission in Europe; these vessels are now on their voyage out to Peru, and in a few days more will arrive at Callao.

The first step has therefore been successfully taken toward giving the nation, within the limit of our small public revenues, the elements for the defense of its extensive coast.

As soon as it became evident that a loan could not be made, the Government resolved to construct the railways to Huancayo and Cuzco, employing for this purpose the product of the tax on tobacco. I have had the satisfaction of seeing these works carried out by a national staff, and on their being handed over to the Peruvian corporation in accordance with the recent contract, everything has been completely organized and all the necessary material contracted, besides which there are now more than 4,000 laborers employed on the works. There is consequently every hope that these lines will be finished before the time set forth in the contract.

In order to study the possibility of uniting the different railways in the northern part of the Republic with each other and with the capital, many interesting surveys have been made which show the practicability of this idea at a comparatively small cost, if we consider the immense advantages to be derived therefrom. Surveys have been made of the following lines: From Guadalupe (Pacasmayo Line) to Combo (line from Eten to Ferrenape), 66 kilometers; from San Pedro (Pacasmayo Line) to Chocope (Trujillo Line), 52 kilometers; from Trujillo to Tablones (line from Chimbote to Recuay), 113 kilometers—total, 231 kilometers.

Other surveys will be made, so that once the lines already contracted from Chimbote to Recuay and from Lima to Huacho are constructed, the country will enjoy all the immense advantages derived from the capital with all the Departments of the northern region of the Republic.

The following surveys connected with the railroad to the River Ucayali have been made: From Cacaracra to Palca, 70 kilometers; from Port Wertheman to Cuatzirique, 76 kilometers 178 meters; from Cuatzirique to Sumbisidoni, 58 kilometers 772 meters; from Sumbisidoni to Penatinganorona, 23 kilometers 350 meters; from Penatinganorona to Cuatzingari, 33 kilometers 250 meters; from Cuatzingari to Shahuaya, 3 kilometers 600 meters—total, 265 kilometers 150 meters.

The contract signed with Mr. MacCune for the construction of the railroad to the River Ucayali, has put a stop to the surveys for account of the Government, as the latter will now intervene in those made by the concessionaire.

Surveys have also been made for the construction of a railroad to form a junction between the southern lines and the Ito Railway, and for the building of a pier at the port of Ito in order to meet the great requirements of international trade.

The concessionaires of the Huacho Railway are busy making surveys and there is every hope of the success of this concession.

The concessionaire of the railway from Chimbote to Recuay is carrying out his concession, although the works are not quite up to time, but as he had expended a large sum on the works and there have lately occurred great difficulties in obtaining capital in Europe for railways in Peru, we have not cared to trouble the concessionaire for the present.

From the latest news there is every hope that the concessionaire will succeed in obtaining shortly sufficient funds to conclude the line within the time fixed, but if the contrary should occur the contract will be rescinded.

The claim of the Guano Consignment Company of the United States has been paid, and for this purpose bonds of the internal debt were issued for the sum of $1,477,085.

The carrying out of the general budget for 1906 has been effected in the same satisfactory manner as in the previous year. The budget voted by Congress for 1906 was £2,506,386.0.83, and the receipts have amounted to £2,555,463.4.74, which shows an excess of £49,077.3.91.

This project presented to Congress for the budget for 1908 amounts to £2,366,156.100, and as the one in force for 1907 is for £2,679,266.519, there is a larger sum of receipts which is calculated to amount to £186,889.581.

The working of the mines in 1906 in the different Departments has been as follows:

* * * * * * *

In the movement of trade in 1906 the imports amounted to £4,999,046.740, while those in 1905 amounted to £4,357,696.837, showing an excess in 1906 of £641,349.903.

The exports in 1906 reached £5,817,232.312 against £5,751,620.290 in 1905—that is to say, a difference of £65,612.022 in favor of 1906.

As soon as the Government was authorized by law to contract the loan for £3,000,000 it communicated this fact to its bankers, but these parties replied that they would conclude the business with certain new conditions which the Government could not accept.

On June 20 last the arrangement was signed with the representative of “the Peruvian corporation,” Mr. Eyre, in order to definitely terminate the questions pending in the carrying out of the contract of January 11, 1890.

In accordance with the contract of April 11 of this year, Mr. Alfred MacCune has obliged himself to construct in five years a railway of the same gauge as the central one, which, starting from the line between La Orvya and Cerro de Pasco, shall terminate at a point on the River Ucayali, navigable at all times of the year for vessels drawing at least 5 feet of water, and another line to be constructed three years after that of the Ucayali, which, starting from the same point, shall come down to a point on the coast between Ancon and Vegueta.

The Government assists the construction of these lines in the following manner:

That of Ucayali, first, with £2,000,000 in bonds of 6 per cent at par, guaranteed by the tobacco revenue, to be handed over in half-yearly installments in proportion to the number of kilometers delivered to traffic; second, with 3,000 hectares of land in the highlands for each kilometer of railway constructed in the Ucayli section, to be delivered in lots when the railway is concluded.

That of the coast, the Government grants a subvention of £1,500 per kilometer, payable in the same bonds, and in like form but only up to the sum of £475,000 corresponding to 300 kilometers.

The concessionaire is bound to construct piers in the terminal ports and to stimulate the starting of a line of river steamers. The Government will grant a subvention of 2,000 hectares of land for each steamer with a fixed itinerary, and at the disposal of the Government in case of need.

The two lines revert to the State after the concessionaire has worked them for twenty-five years and after his receipt of the amounts paid as subvention.

The sanction of the contract of the railway to the River Ucayali and the authorization for the Government to construct the section between Huancayo and Hyacucho would be the realization of the idea of uniting the eastern regions of Peru, the south, and the coast, insuring our territorial integrity, the European colonization, the development of our agricultural and mining resources, and the national unity. Finally, by such action the Congress of 1907 would earn the gratitude of the nation.