HF 3212 P19B21 Ballivián Bolivia THE LIBRARY OF THE UNIVERSITY OF CALIFORNIA LOS ANGELES Pan American Financial Conference. BOLIVIA MEMORIAL From the Government Delegate and Representative of the National Chambers of Commerce and Banking Institutions. 1915. Pan American Financial Conference. BOLIVIA MEMORIAL By ADOLFO BALLIVIAN Government Delegate and Representative of the National Chambers of Commerce and Banking Institutions 1915. HP ■ 32-15- MEMORIAL ^502937 BOLR^IA, in response to the invitation extended to her by the United States Government to be represented at the "Pan American Financial Conference" to be held on May 24th, 1915, has appointed to act as her delegation the Envoy and Minister Plenipotentiary at Washing-ton and the Consul General in New York who also has been nominated to represent the Bolivian Chambers of Commerce and Bank- ing Institutions. The Minister of Finance, Mr. Julio Zamora, being unable to attend personally, for the purpose of elucidating the subjects and problems to be discussed at the said Con- vention, and undoubtedly of the most preeminent importance for the economic interests of the American Continents, has graciously consented to suggest in rough outlines "a few conceptions relating to such fundamental rec|uirements as may justly be considered as the basis for practical measures that will result in the perpetuation and the reliable and constant development of the commercial, industrial and financial relations between Bolivia and the United States, an ultimate purpose for the accomplishment of which, with respect to each and every Pan-American country, the said Convention is no doubt destined to take the initiative." As it appears expedient to record in its original form the true sentiment of the Government of Bolivia, as expressed with marked accuracy by her Minister of Finance, we shall give an unabridged transcription of the same, in pursuance of the above quotation : "Since no statement of concrete subjects for discussion is attached to the Note of hivitation, it may logically be presumed that the United States of America primarily intends to avail herself of this Convention for recording the truthful expression of the aims and requirements of each country, as well as data relating to the industrial and financial possil)ilities it affords, for the purpose of using them as a hasis for steadfastly pursuing the development of the channels of trade and industry which, while already existent, have not as yet assumed the desired importance. "W'e dare hope, nevertheless, that initiative measures, to be adopted in support and furtherance of the reciprocal commer- cial relations between North, Central and South America, will l)e sul)mitted to the Convention as a ijcneral subject for discussion in the interest of all concerned which, after all, is essentially the purpose for which it is held, as well as other subjects and projects tending to secure for the x\merican Continents the greatest possible degree of independence in their economic life. In view of such a program, we can only give our support to any and all such propositions as embody a practical idea and will redound to the common benefit, and in this connection we might suggest to the United States — as one of the efficient means for establishing more active business relations between the differ- ent countries — the necessity of increasing her merchant marine to such an extent that it will facilitate an ample interchange of domestic products. "With particular reference to the wants of Bolivia, it may be stated that, in the opinion of the Government, they consist essentially in two ]:)rimary requirements which must necessarily be made manifest, to wit : In the first place, supplies of capital for developing her industries, and in the second place, the open- ing up of markets for her products. "Commencing with the mining industry, irrefutably the most prosperous and comparatively the most largely developed source of production in the country, it may safely be said that every enterprise in this line is in need of the fruitful impulse imparted by capital, when supplied on terms that are in accordance with the peculiar character or nature of such enterprises, in so far as they will allow of such gradual development as they require. While the production of tin and copper has undoubtedly ad- vanced during the past few years, until the outputs now represent quite considerable figures, being the two largest items of our export trade, these results are to be attributed to the few enter- prises organized on a solid basis, and it nevertheless remains a fact that there are a large number of small producers who are prevented, by lack of financial resources, from actively devel- oping their workings. In this connection it is at once evident that the general economic situation would be more largely bene- fited by the relatively satisfactory earnings of the innumerable small enterprises, than by the affluence of three or four mines. "But if copper and tin offer a large field for the investment of foreign capital in our country, it behooves us for still better reasons to mention and urf^e the workiii!^ of our deposits of silver, bismuth, tungsten and antimony, which metals are now being produced on a small scale only, notwithstanding the abundant supplies. "With regard to agriculture in general, the conditions sur- rounding this field of endeavor are such as to allow of the state- ment — paradoxical as it may appear at first glance — that it offers far better chances of success by private initiative, inas- much as agriculture is not based on the set principles of modern industrial organization and is less dependent on scientific progress, both of which are factors for whose application the investment of large amounts of capital from which no immediate returns are expected, is an essential necessity. "It may readily be acknowledged that our agriculture is still in an embryonic state, and that it is being carried on with no other object in view, than that of obtaining from nature what she will readily give. This applies not only to foodstuffs and cattle breeding, but also to the production of rubber by a system that absolutely requires reorganization, with a view to establishing plantations that will in future be capable of com- peting against the scientifically devised East Indian rubber plantations. "The field of arts and manufactures still remains virgin soil. The country may be said to be devoid of manufacturing enterprises in any of the manifold and profitable lines, this leaving an untilled field for private initiative and for the invest- ment of capital, with the assurance of general good will to afford protection to such enterprises. "In the opinion of the Government of Bolivia, the main efforts of its delegates should be directed towards giving the capitalists and banking concerns in the United States an insight into the future of our industries, and into the safeguards pro- vided by our Constitution, so as to induce them to organize enter- prises of every description, and to supply capital. "Meanwhile, and independently of such initiative measures as their own judgment and due appreciation of existing condi- tions may induce them to take, it will in the judgment of the Government, be expedient to suggest, asa concrete and practical proposition, the necessity of establishing in Bolivia Mining and Agricultural Banks, or at least an agency of one of the large American banking institutions, for the purpose of making them available as a financial body or center, capable of examining into and reporting on any and all economic wants and requirements, whose satisfaction and fulfilment may be made mutually pro- fitable. "With reference to the United States as a market for our principal products which, for the time being, may be restricted to tin and copper, the Government considers it expedient to de- clare that without absolutely withdrawing from the present European markets as an Í7tdispensable requirement, the country would be willing to supply the United States with such quantities of crude material as her industries may require, for which pur- pose it would be primarily necessary for the U. S. A. to place herself on an equal footing with her competitors, with respect to operating conditions and to her capacity as a consignee, by means of the erection and installation of adequate smelting works. "With respect to the purely commercial field, the further i suggestion might be submitted to organize a general association of American manufacturers, for the exclusive purpose of main- taining information agencies in the capitals of the Central and South American countries so as to give the trade an opportunity to examine the samples, prices and catalogs of the goods they require, before ordering them from Europe, thereby affording them an opportunity of securing such advantages as may be gained by giving the preference to manufacturers and dealers in the United States." This plain and frank statement, emanating- from so authoritative a source, shows that the financial and com- mercial crisis now prevailing in our country can readily be overcome by the internal measures already in force, and that this may be accomplished with results insuring mutual be- nefits and permanent connections, if the United States, by exerting the powerful influence of her Goverment, will secure the beneficial cooperation of her financial and commercial centers. This is likewise borne out by the fact that the invitation to send representatives to the Washington Convention has met in pursuance of the wishes expressed by our Government, with so favorable a reception on the part of the banking and other commercial interests of Bolivia, who have even gone so far as to submit valuable suggestions to their represent- ative. We, therefore, beg leave to make known the various points which Mr. Jorge Saenz, President of the Chamber of 8 Commerce of La Paz, urges us, in behalf of the bankino- institutions and other interests of our country, to set forth before the Convention : I. "To make known the fact that there have been estabhshed in the cities of La Paz, Sucre, Oruro, Cochabamba, Potosi, Tarija, Santa Cruz and RiberaUa, properly organized Chambers of Commerce, in which all the Banking and prominent com- mercial interests are represented, and that these Chambers of Commerce are at all times prepared to furnish on request any required information regarding commercial and industrial matters. II. "To make every possible effort to induce the New York Exchange to establish a system of daily quotations of the market prices of Bolivian export products, such as tin, silver, copper, tungsten, antimony, bismuth, rubber and cinchona bark, and to have such quotations transmitted, through the agency of some information bureau, to the Bolivian Government, so as to enable the latter to communicate the same to the Chambers of Com- merce throughout the Republic of Bolivia. III. "To inform the business interests of the United States with regard to the basis on which Bolivian importers do business with European concerns, particularly with reference to the terms of payment for orders, or, in other words, to make known to them that such business is done on the basis of payment at the end of ninety days from date of receipt of the goods. To impress upon them, in short, the necessity of opening credits in favor of Bolivian firms of acknowledged financial and commercial stand- ing, so they may pay for the goods ordered against drafts made out to the order of Bolivian Banks, and payable at the end of ninety days as a minimum term. "The system now generally adopted by business concerns in the United States, under which they demand payment in advance for orders given them, is most unsuitable for the fur- therance of the development of commercial relations. IV. "To call the attention of the North American com- mercial interests to the necessity of reestablishing steamship traffic over a route which, starting from San Francisco, California, is to embrace the entire Western coast line of South America, for the purpose of facilitating and developing the trade in flour, lumber, fruit and other products of the soil, etc. V. "To suggest the proposition of establishing an American Bank in some of the cities of lioHvia, or else Branch Offices in some of the Departmental capitals. The National City Bank has already estal)lishcd a branch in T>uenos Aires, and an available Branch Office of an American 15ank would prove to be an imi)ortant factor in furtherance of the development of commercial intercourse. VI. "To secure special quotations on P.olivian rubber vi^hich, with respect to its vises in the arts and manufactures, pos- sesses the same qualities as the grade of rubber known as "Hard Fine Para." The export prices of Bolivian rubber are based at the present time under the "Moliendo" designation and it is thus being confounded w^ith the rubber exported from Perú v^^hich is of inferior quality. This is a highly important matter, by which our exporters will benefit to the extent of several hundred thousand dollars Bolivian Currency. Vn. "To call the attention of the Convention to the neces- sity of making the teaching of the Spanish language obligatory in the commercial schools and colleges of the United States, with a view to facilitating the development of commercial intercourse. VI IL "To point out to North American manufacturers the necessity of establishing in the United States tin smelting works on a large scale, as the only means for competing against the European smelting works, and for diverting the exports of this material into the American market. IX. "To impress upon the export trade of the United States the further necessity of adopting a different method of packing in the case of merchandise and machinery for shipment to Bolivia, since all such shipments, without exception, now arrive in exceedingly bad condition. They require a special method of packing, both solid and strong, so it wall be able to withstand the numerous trans-shipments to which such goods must generally be subjected. The economic conditions prevailing- in Bolivia having thus been outlined, with a snecification of the measures re- quired for the betterment of the same, and for opening- up new channels for her commerce and industry, in close con- nection with the United States of America, the delegates, vested with due authority, will be capable of handling- these and other subjects, and of amplifiying the same, in such manner as they may consider expedient in view of their experience and knowledge of this country. 10 In view of the fact that the proceedings of the Conven- tion will presiiniahly be confined to the discussion of matters of a general character, since it can scarcely be expected to enter into an examination and discussion of affairs directly and exclusively concerning each individual country, we have decided to prepare this present memorial which we shall strive to make as concise as possible, since we have reason to presume that the representatives of the other countries will have recourse to similar means of communication, thereby providing a collection of reference records that will be available for following up the initial suggestions which it will undoubtedly not be possible to convert into resolutions insuring immediate results. Our statement will be confined to demonstrations essen- tially of an economic and financial character, supported by specific data and statistical tal)les, without entering upon geo- graphical descriptions, etc., with respect to which it will be sufficient to refer to the valuable store of information gathered and supplied by the "Pan American Union" of Washington, on whose premises the Convention is to hold its sessions and to which all American coimtries are indebted for its efficent and persevering cooperation. We consider it opportune to transcribe on this occasion the ideas recently expressed by us in an article printed in "The Nation's Business," published in Washington, D. C. : "Bolivia, as well as all countries in the world, has been affected by the European war, in the depression, for the mo- ment, of her economical situation. it is time to point out how inaccurate it is to include under the common designation of South America (this being so frequently the case), all of the nationalities south iof Panama, especially as each one of them possesses its own peculiar characteristics, particularly with respect to natural resources and economic and trade conditions. In this way Bolivia, being so far, a country without seaports, all her energies have been employed in establishing a complete railway net of communication and developing her mineral resources — the agricultural products have been insuf- ficient to meet the demand of her domestic consumption — consequently the crisis in Bolivia is not so intense and the remedy for the actual economical problem is easier to achieve than in other countries with a more complicated economical organization. 11 Bolivian trade lias been mostly carried on with the German and lin^-lish markets, which are now shut up, so that we are unable to sell them those i)roducts, or use credits from those sources in order to divert trade in our natural dilemma towards the united States of America. There are two princi])al articles of exportation from Bolivia, wherefrom in reciprocation, the demand of articles of importation are obtained, i. e. India rubber and minerals — principally, tin and copper. INDIA RUBBER. Bolivia, and Brazil, produce the best quality of rubber obtained from the trees of the "Hevea or Syphonia Elástica" known in the market as Para Rubber, but owing to the fore- sight and persevering endeavors of the English Government to acclimatize those trees in their Asiatic dominions, seeds were carefully collected from Brazil since 1865 where with economical and scientific methods, plantations have spread all through the Orient causing deadly competition against the South American Rubber Industry, in spite of the superior quality of its product. Nevertheless, it seems to me, that in prevision of the prolongation of the war, and perhaps of future comphcations which may extend their devastations to the rubber regions in the Orient, it would be wise for the United States capi- talists to look forward and undertake, without delay, similar well organized plantations in the Jiabitat of the rubber tree in Bolivia and Brazil, where now^ on account of the depressed situation lands can easily be acquired as well as estates where already exist great quantities of fully matured rubber trees ready for immediate exploitation of the article. Furthermore, there are other most important consider- ations to be borne in mind if the people of this country care to be, once for all, free from subserviency to the English market with respect to this indispensable article for the in- dustrial world. I accordingly refer to the authoritative views of Mr. Henry C. Pearson, Editor of "The Indian Rubber ^^^orld" in which he calls attention to the possibility that in the near future, the closely planted areas of rubber trees in the Orient, will be subjected to different natural 12 perils producing the devastation that may perhaps wipe out those plantations entirely, as happened with the coffee in Ceylon : THE FUTURE OF RUBBERS As to the future, if the ratio of increase in producing and planting remains the same, the production of plantation of rubber in the next five years should reach 500,000,000 pounds. Such an output would probably mean a drop in price to at least 5 cents a pound. It would also mean a wonderful expansion of the rubber manufacturing industry in new and unimagined lines, as w^ell as in the old. But will nature allow such areas of one growth to supplant others? Will not rubber have its boll weevil, its scale, its bud rot? The planters have from the beginning fought white ants, canker, caterpillars ; and the entomologists and mycologists of the world are on the alert to defend these new plantations. Will it not happen that these closely planted areas will suffer and perhaps be wiped out as coffee was wiped out in Ceylon? And will it therefore not come about that a wider distribution of planted areas will be a necessary one that will include tropical Central and South America, Africa and our own Philippines, and thus assure the permanence of this most valuable product?" In Bolivia, there are great opportunities and new induce- ments for these plantations on account of the recent instal- lation of the "Madera Mamore Railway" built with American capital in connection at Porto Velho with ocean steamers of 4,000 tons admitting navigation during four months, and of 2,000 tons all year round. TIN AND COPPER. The output of tin in P)olivia represents 45,000 long tons of ore of 60% grade which has all been shipped to smelters in Germany and England, which on account of the war are now closed, so that Bolivia, notwithstanding being next to the Strait Settlements as producer of tin, is unable to obtain a market for her ore in this country as there does not exist any smelter here for that purpose; the one built 12 years ago in Bayonne, N. J. was never in operation and is now dismantled, since the English Government in view 13 of protecting their own output imposed a heavy duty on all ores exported from the Straits to smelters out of the British Dominions. The building of a smelter in this country to treat Boli- vian tin ores would be a solution offering mutual advantages. Amongst these advantages it is evident that in recipro- cation, which is the basis in which all legitimate commerce rests, this country will obtain the pig tin much cheaper than when imported from Europe by avoiding the ocean freight of $12 per ton on the metal from Europe to New York; in addition, it must be considered that the representative value of this new importation to this country means some $20,000,000 (thus increasing tenfold the actual imports of this country to Bolivia^ that would be invested in the pur- chase of x-Xmerican goods to be exported to Bolivia, and in this way, placing in this country the interchange of trade which existed between the European nations at war. These are some of the most essential features of the trade of my country to which I call the attention of the business people of the United States. I may as well mention that the Bolivian copper mines produce a higher qualit}^ of ore than any other South Ame- rican countries, consequently it would only require a simple form of metallurgical plant, that could easily be adapted alongfside the tin smelter. ^fc>^ PETROLEUM FIELDS. Recently vast extensions of petroleum fields have been discovered in the southern region of Bolivia, and the news- papers announce that a French Company with a capital of $4,000,000 has been organized to exploit those wells ; this, seems to me, another good opportunity to interest the Amer- ican capital in my country. As countless publications have been made with unprac- tical generalities emphasizing the opportunities for this coun- try to supplant the South American trade with Europe, it is well to remember that the general commercial situation is embarassed everywhere by financial stringency, in order to proceed with careful investigation and in a spirit of mutual help in preparing fields to meet future competition success- fully. 14 With these premises I may mention the goods and arti- cles that were imported from Eng-land, France, Germany, Belgium, etc., and which perhaps could be permanently im- ported in future from the United States: Rifles, revolvers, cartridges, cotton goods, chintz, watches, medicines and drugs, chemicals, cars and wagons, rails, carriages, auto- mobiles, electrical a])pliances, canned goods, meats, fish, fruits and vegetables, coal, hardware, glassware, earthenware, min- ing and agricultural machinery, champagne, wines and liquors, tin plate, plumbers' appliances, condensed milk, extract of meat, hams and bacon, musical instruments, pianos, pianolas, and gramophones, printing paper, and ink, station- ery, furniture, cement, hats, underwear, rubber goods, boots and shoes, soap and perfumery, etc." Both for individuals and nations, probity, an honorable record and reliable resources are endowments that constitute assets establishing their standing and credit, as a basis for sound financial operation and connections. BOLR^IA thus stands before the world of finance with an unstained record of exceptionally favorable description . FACTS AND DATA CONSTITUTING DISTINCTIVE FEATURES OF ECONOMIC CONDITIONS IN BOLIVIA I. Bolivia may be said to have maintained peace and order in her domain for 40 years past, the last shortlived disturbance having occured 20 years ago. II. Having no sea ports, she has devoted all her energy to the task of spreading a network of railways over her vast territory, admirably blessed with the gifts of Nature. III. The delicate problems arising in connection with the marking out of her boundaries, have practically all been solved by Bolivia in harmonious agreement with her ad- joining sister republics. IV. On a few occasions, as in the case of Brazil, for instance, where it became necessary to cede sections of her territory, the consideration for the same, amounting to $10,000,000, was wholly and entirely applied to the construc- tion of railways, without the misappropriation of a single penny. V. Bolivia has punctually paid the interest on its public 15 delít, incliuling- both inland and foreií^n loans, and attended to their redemption. VI. She has never failed to fulfil her oblis^ations, or refused to allow just claims, whether presented by her citizens, or by aliens. VTT. The life of aliens and foreig'n capital have always been amply protected, and there is no recollection of any claims having been presented for attacks on the same. VII. The foreii^n debt of Bolivia amounts to scarcely $15,000,000 and has now been reduced to $14,335,312, or actually to $9,383,812, inasmuch as the balance of the last loan of $4,951,500, made in 1913 by the Credit Mobilier de Paris, has not as yet been expended and is drawing- interest at the rate of 3% per annum in the country, until a decision shall have been arrived at with regard to the proposals for the construction of the Tupiza and La Quiaca railway (on the Argentine border), for which the said loan was exclu- sively appropriated. IX. The firm confidence and good credit which Bolivia enjoys in Europe are proven by the fact that the loan in question was placed on even more favorable terms than prior loans, viz. at 90%, with interest at the rate of 5% per annum and an annual redemption of 1%, under the supplementary obligation to buy the materials for the permanent way and the rolling stock for the said railway in France. X. The Bolivian constitution ranks among the most liberal, and the Mining Code as well as the Laws governing land concessions offer exceptional safeguards and other attractive features. XL The population of Bolivia is only 2,500,000, while the country covers an area of 708,195 square miles, the aver- age population per square mile being consequently 3.53, leaving an enormous field for the development of agriculture and for cattle raising, for both of which large sections of the country are splendidly adapted. XII. The different branches of arts and manufactures are still in a practically embryonic state, and likewise afford special advantages for all who are willing to establish the same, the Government having taken efficient and sagacious measures for the protection of infant industries. XIII. Bolivia, jointly with the Argentine Republic, Chile and Peru, constitutes a group exceptionally favored 16 with respect to its geogTaphical location, inasmuch as the immense area covered by these countries, affording ample room for hundreds of millions of future settlers, produces and contains in the depths of its soil all the natural products of the globe. With the productive aid of adequate capital, innumerable industrial enterprises can there derive ample vitality from mutual interchange alone. XIV. This territory, the greater part of which is within the temperate zone, is exempt from tropical diseases, and it may safely be expected that its present population of 20,000,000 will increase to over 50,000,000 inhabitants within a quarter of a century. STATISTICAL TABLES At the nominal rate of exchange in Bolivia, 12.50 Boli- vian dollars ("pesos bolivianos") are equal to 1 pound sterling, the value of the Bolivian dollar being consequently $0.40 U. S. Gold Cy. The present crisis has caused various declines in these exchange values. DEVELOPMENT OF IMPORTS AND EXPORTS DURING THE PERIOD 1902-1913. Year Exports Imports Total amounts 1902 Bs. 28.041,537 Bs. 14.143,342 Bs. 42.184,919 1903 25.169,148 16.252,885 41.422,033 1904 31.465,026 16.909,586 48.374,612 1905 41.795,937 20.298,772 62.094,709 1906 55.654,516 35.087,325 90.741,901 1907 50.331,548 37.897,611 88.229,159 1908 47.138,320 40.732,543 87.870,863 1909 63.764,467 34.224,764 97.989,231 1910 75,622.147 48.802,394 124.424,541 1911 82.631,172 58. 371. 409 141.002,581 1912 90.122,987 49.508,990 139.631,977 1913 93.721,513 54.762,834 148.484,347 The figures for the year 1914 are not as yet available. The foregoing Table shows that the exports exceeded the imports by 71.14% in the year 1913. The growth in the volume of business (imports and ex- ports) during the last decade, i.e. from 1904 to 1913, is represented by the difference between 48,374,612 and 148,484,347 Bolivianos, equal to an increase of 301%. 17 GENERAL STATEMENTS OF EXPORTS, TABULATED ACCORDING TO COUNTRIES. SPECIFICATION COUNTRIES I Live Stock II Foodstuffs and beverages III Crude and roughly pre- pared mater- ials IV Manu- factured articles V Gold and sil- ver not manu- factured and gold and silver coin TOTAL AMOUNTS A lilts, in Bolivianos A ints. in Bolivianos A lilts, ill Bolivianos A mts. in Bolivianos A mts. in Bolivianos A mts. in Bolivianos Great Britain, 280.00 820.74 60.00 74.428,267.57 6.180,079.65 4.513,870.63 3.169,456.00 869,193.20 152.343.76 548,596.51 96,536.52 10.422.20 24,728.00 5,347.00 1,956.80 1,949.00 25,929.00 1,088.00 2,780.00 30,411.10 1.333,830.34 7 5 7fi4 .^7fi 01 1.766,909 96 7.973 73Q 3Í 56,820.00 4 571 838 63 3.172 236 00 14,242.68 10,867.27 150.00 913,846.98 590,517.19 559,475.51 98,136.52 32,621.40 24,728.00 13,637.40 Chile 117,310.00 171,870.00 10,729.00 1,600.00 138,126.16 411.20 3,038.00 18,750.00 Brazil 828.ÓÓ 100.00 7,462.40 2,056.80 1,680.00 1,450.00 612.80 1,680.00 1,450.00 612.80 600.00 :::::::::: ::::;:::: Italy 600.00 10.00 10 00 Totals 117,310.00' 27.759.89 90.000,807.84 261,199.30 3.314,436.46 93.721,513.49 EXPORTS FROM THE UNITED STATES TO BOLIVIA IN 1913: From New York Bs. 2,958,523.97 From San Francisco 952,620.00 From New Orleans 191,872.15 Bs. 4,103,016.12 leaving a balance of Bs. 50,659,818.00 for exports from Europe. NATIONAL REVENUES DURING THE LAST DECADE 1904-1913. Year Revenues Year Revenues 1904 1905 1906 1907 1908 Bs. 6.838,576 7.854,698 10.401,512 13.166,684 11.604,063 1909 1910 1911 1912 1913 Bs. 11.847,231 12.583,232 16.913,512 20.164,602 22.018,874 The above Table shows an increase of 23 0% during the said decade. The annual departmental revenues may be estimated at 3,000,000 Boli- vianos. AMOUNTS REQUIRED FOR THE PAYMENT OF INTERESTS ON ALL DEBTS AND FOR THEIR REDEMPTION. Guarantee of "Bolivia Railway" Bonds Bs. 750,000 Guarantee of "Cochabamba Light & Power" Bonds 225,000 For interest on, and redemption of other loans 3,360,620 Total Bs. 4,335,620 As the national revenues amount to a total of 22,018,874 Bolivianos, the above e.xpenditure represents less than 20'^f of the same, which is certainly a very significant proportion. 18 o M U z 2 O H o z Ü u Oí o u, b. O H u H < H c w < u ¡-^ ■r c c C os c ^ CM CM t^ t^ 00 rv U fo fe S S ?£> psns-^j 0\03 0\ I0lt4ttl3p3¿¡ }S3Ágiuj ooO¡ o " Qí JE3 \ XEQ MHiopM o — — < o u z D Z O H oa u o o z O H Z u H CO ^ o t^ —I CM 00 O M a\ O Cn" vOiO 0\ CM t^ o o oo oo o o o o oo oo (Xi Oío fS3X3)HJ noi)4M3p0}{ CM ro .-I te o P ,4_, CIh =^ O w u O O o <; <o O -H" O^ rt ^ j= /=-a j3^ O. 19 The floating debt invested in various public works and for public service purposes, consists of loans made by the national banks, amountinj^ to Bs. 5,687,154,80 and loans obtained from various other parties, amounting to Bs. 1,014,- 973,82, making a total of 6,702,128.62. BANKS OF ISSUE On December 31st, 1913, four Banks of issue were in operation, with an authorized capital stock of Bs. 75,000,000 of which 40,962,500 where paid up, divided as follows: Banco de la Nación Boliviana Bs. 25.000,000 Banco Mercantil 25.000.000 Banco Nacional de Bolivia 12.500,000 Banco Francisco Argadoña 12.500,000 Total Bs. 75.000,000 The paid up capital is as follows: Banco de la Nación Boliviana Bs. 18.962.500 Banco Mercantil 10.000,000 Banco Nacional de Bolivia 8.000,000 Banco Francisco Argandoña 4.000,000 Total Bs. 40.962,500 The profits for the half yearlv term expiring December 31st, 1913, amounted to Bs. 1,527,371,06. The right vouchsafed by Law to issue notes for a maximum amount of 150 per cent of the paid up capital stock of the four Banks, represents a total of Bs. 61,443,750, only Bs. 32,321,305 of which have been issued by the said Banks. The gold reserve amounted to Bs. 15,587,912.50 and the amount of coined gold on hand was consequently in excess of the 40% required by Law. Under an Act recently passed and relating to the organ- ization of the Banco de la Nación Boliviana, the said Bank has been granted the exclusive right to issue notes, the Banco Nacional de Bolivia, Banco Mercantil and Banco Francisco Argandoña having been deprived of such right, with the provision that they must redeem the notes issued by them within five terms of six months each, commencing on January 1st, 1913. 20 The only foreign Bank established in the country at the present time (but not empowered to issue notes) is the Banco Alemán Transatlántico, having a capital of Bs. 5,278,557. The annual dividends declared by the Banks vary between 10% and 20%;. MORTAGE BANKS Four institutions doing business in the country confine themselves exclusively to loans on real estate, against which they issue mortgage bonds. The Banks in question are the following: Crédito Hipotecario de Bolivia. Banco Hipotecario Nacional. Banco Hipotecario Garantizador de Valores. Banco Hipotecario Mercantil. Their total capital stock amounted on June 30th, 1913, to Bs. 11,597,628, and the paid up capital stock to Bs. 865,000. The amount of the profits on June 30th, 1914, was Bs. 87,322.22 divided as follows: The first mentioned Bank, 31,801.84; the second, Bs. 35,109.10; the third, Bs. 16,272.02, and the last mentioned Bank, 4,139.26. CURRENCY SYSTEM The gold standard was adopted by Law on December 5th, 1908, and the English sovereign and the Peruvian pound are legal tender for the payment of debts at the fixed rate of exchange of Bs. 12.50 each. The plan prepared by the Executive for the coining of national currency of various denominations, is subject to the decision of the next legislature. TIN The production of Tin in Bolivia has constantly in- creased, and is bound to increase further on a large scale. At the present time it amounts to about one fourth of the total output of the world, being surpassed only by the produc- tion of the Straits Settlements which has remained stationary for several years, with an evident tendency to decrease. The following Table shows the production in metric tons of 2,204,6 lbs. and the average market price per ton in London. 21 Bolivia Straits World i Average Years Settlements Production ' Price 1904 13,750 61,838 103,100 £126.14. 8 1905 15,023 59.500 102,400 143. 1. 8 1906 17,447 59,375 104.400 180.12.11 1907 16.858 56,550 102.400 172.12. 9 1908 19.077 63,690 113.400 133. 2. 6 1909 20.890 61.540 113,100 134.15. 6 1910 24,539 57,490 114,800 156. 6. 2 1911 25,628 57,944 117,600 192. 7. I 1912 25,100 61,528 124.700 209. 8. 5 1913 28,500 65,640 128,900 201.13. 7 The consumption in the United States in metric tons and the average price during the same period, has been : Years U. S. Cy. 1904 37,400 27.96 cents per pound 1905 40.800 31.36 ( 1906 43,700 39.82 ' 1907 39,700 38.17 ' 1908 32.800 29.46 ' 1909 42.800 29.72 ' 1910 49,900 44.25 ' 1911 48,000 34.12 ' 1912 51,700 42.28 ' 1913 45,000 46.10 ' The official statistics of Bolivia give the following figures for the exports of ''barrilla", the term commonly applied to tin concentrates for export, containing from 50% to 70% Tin: Years Metric Tons 1897 3,749.5 1898 4,396.0 ■ 1899 9,279.4 1900 16,234.2 1901 21,915.9 1902 17,608.3 1903 28,131.4 1904 20,691.9 1905 26,912.0 1906 39.526.1 1907 31,323.7 1908 32.541.6 1909 35.566.4 1910 38.548.1 1911 39.840.6 1912 38.614.0 1913 44.594.0 22 GENERAL TABLE SHOWING THE OUTPUT OF THE BOLIVIAN MINING INDUSTRY FR THE YEAR 1913. Metals Tin Silver . . . Copper . . Bismuth . Tungsten Zinc . . . . Lead . . . . Antimony tr.i Value in ^ Bolivianos 44,596.749 67.784,377 81,289 2,784.354 4.019,635 2.773.546 422.484 ' 2.092,925 282.597 \ 415,417 7.367,463 I 223,150 1,765.296 I 353,059 62,050 1 12,410 RUBBER We reprint below a few interesting: paragraphs from the official report for 1914 of the General Collector of Customs: "This vaulable export article which for many years has been one of the largest sources of revenue for the Treasury, as well as a contributory factor towards the development of the north- western and eastern districts of our country, has suffered — more particularly since 1912 — a complete setback with respect to the ruling market prices in Europe, their decline being exclusively due to the baneful competition of the similar product now being imported from the plantations established many years ago, princi- pally by English manufacturers, in the British Colonies in Asia and Africa. "The oldest statistical figures relating to the Bolivian export trade in this article, date from the year 1890, and it appears from the available data, carefully verified by the corresponding section of this Office, that the shipments during the said year amounted to 294,000 kilograms. The exports of this product subsequently increased gradually until 1910, when they reached a total of 3,465,063 kilograms. This was followed by a decrease in shipments, continuing until 1905, for which year the minimum figures of 1,468,233 kilograms were recorded. Beginning with the year 1906, however, the tide turned and exports increased again until 1913, when they attained the enormous amount of 5,143 metric tons, the highest figure recorded during the 24 years covered by our statistical data". Rubber being one of our principal export products, I consider it of the utmost importance to record in the following table the trade fluctuations to which this article has been subject during 23 the aforesaid term of 24 years, and which tend to confirm the foregoing statements. Year 1 Kilograms 1 Year Kilograms Year Kilograms 1890 294.000 1898 3.155,955 1906 1.929.608 1891 345.000 1899 2.664,091 1907 1.830,513 1892 363,430 1900 3.496,240 1908 2.606.591 1893 394.418 1901 3.465.063 1909 3.052,453 1894 632,500 1902 1.092.993 1910 3.117,650 1895 820,410 1903 1.745,324 1911 3.645,551 1896 1.140,712 i 1904 1.571,128 1912 4.079,828 1897 1.674,716 ! 1905 1 1.468,233 1913 5.143,214 ARTS AND MANUFACTURES As previously stated, mining is the only industry that has been developed on any considerable scale. In a primitive way, there is, in truth, some manufacturing of products for domestic consumption, such as wines, beer, spirituous liquors, cigarettes, matches, stearine candles, soap, boots and shoes, domestic wares, chocolate, crackers and biscuits, etc., but there still remains ample room for improvement in enterprises of this description. Agriculture and cattle raising offer great inducements to capitalists. The lands are now lying waste in consequence of the small local population, resulting in insignificant consumption. For the encouragement of settlers, the legislature of Bolivia enacted the law of October 13th, 1905, providing that all vacant lands are Government property and may be ac- quired by purchase or otherwise, in accordance with special regulations. The unit of land measurement is one hectare (2.47 acres). All individuals or parties are entitled to acquire land up to a maximum area of 20,000 hectares, against payment in cash of 10 cents Bolivian Currency (4c. U. S. Cy.) per hectare for ordinary land, and of one Boliviano (40c. U. S. Gold Cy.) for lands on which rubber trees are found. The purchaser is under obligation to settle at least one family on each area of one thousand hectares. 24 CRUDE OIL The oil wells of Bolivia, supplying a splendid fuel, are one of her most productive, if not most immense sources of wealth, in view of the increasing demand for this material. The reports of competent engineers, commissioned by foreign capitalists, show that there are enormous stores of crude oil, extending from Brazil through Bolivia to the Argentine, so vast and productive that they describe them as "the largest in the world." With respect to this industry as well as agriculture, development is dependent on the construction of railways that will provide convenient access to the Atlantic coast. To this end, the construction of the planned railway line between Santa Cruz and Puerto Suárez on the Paraguay river, may be considered as one of the most urgent necessities. RAILWAYS Kilometres Miles Actually in operation (1913) .... 1,284 803 In course of construction 613 383 Projected, with plans completed . . 116 485 Projected, plans in preparation . . 2,123 1,327 Proposed lines, plans not as yet commenced 450 281 Total 5,246 3,279 25 ROUTES TO BOLIVIA {Rcjviiit [rum a pciiiiphlct f^iiblislicd by llie Legation of Bolivia in U'iishi¡i}¡toii). By ¡Vay of Moliendo : From Moliendo to Puno (Pern) by railway, 324 miles, time 22 honrs ; from Pnno to Gnayaqui (Bolivia) by steamer crossing- Lake Titacaca at an elevation of 12,000 feet al)ove sea level, 180 miles., time 16 hours ; from Guayaqui to La Paz, 59 miles by railway, time 3 hours, l)eino- a total distance of 563 miles, covered in three and one half days. By Way of Arica ^ From Arica (Chile) to La Paz, a distance of 337 miles, covered by railway in 18 hours, but the time of travel on the down grade from La Paz to Arica will shortly be reduced to 12 hours, and to 14 hours on the up grade in the opposite direction. This line is equipped with coaches of the American Pullman car type, while European sleeping cars are in service on all the other lines. By Way of Anfofai:;asfa. The total distance of 573 miles between Antofagasta (Chile) and Oruro (Bolivia) is covered in two nights and one day. ^3' Way of flic Argentine Republic. From Buenos Aires by railway to the Bolivian border town of La Guiaca. A railway having its terminal at that city and extending through Tupiza to Uyuni, a station on the Antofagasta-Oruro line, is now in course of construction and will make it possible to travel from Buenos Aires to La Paz in about four days. Bolivia is blessed with exceptionally extensive, river navigation facilities, which immensely enhance her means of transportation and communication, the total length of her navigable rivers being about 12,000 miles. 27 Bv íf'av of Aiuarjoiias. The distance from Para (Brazil) to Villa Bella is 2,152 miles, and to Puerto Cobija (on the Acra Eiver) 2,533 miles, the time of travel over each of these routes being- 216 and 244 hours respectively. Practically the entire journey is made by steamer, but on the trip to Villa Bella the steamer stops at Porto Velho, and passenj^ers and goods are trans- ferred to the Madeira-Mamoré railway, for transportation over a distance of 200 miles. ^3' Way of the Farcii^iiay River. Ascending the Paraguay river from Buenos Aires. Puerto Pacheco is reached after travelling a distance of 1553 miles The journey is then continued to Puerto Suarez, 188 miles distant, and thence to La Gaiba, 167 miles further up stream. Another route of travel from Buenos Aires is on the Bermejo River, on which steamers navigate between Esquina Grande (Bolivia) and Rivadavia (Argentina). MOST DIRECT ROUTES FROM THE UNITED STATES TO BOLIVIA, AND EXPENSE OF TRAVEL. First class steamer passage: From New York to Panama, 7 days $75.00 From New Orleans to Panama, 5 days 55.00 From San Francisco to Panama, 25 days 120.00 Te second part of the journey is made l)y stramer from Panama to Arica, fare $120. — this distance being covered in 9 days by the fast steamer service connecting with the New York and New Orleans steamers. The final section of the trip is made by railway from Arica in 14 hours, the fare being $18. — inclusive of Pull- man berth. 28 IMMIGRATION LAW. All persons not over 60 years of age and establishing their good moral character, are vouchsafed the following privileges under the Law: The rigth of admittance to the country and of transportation to their place of destination over the roads and railways of the country. These privileges also extend to the wife and children of any such person, and include free transportation of their baggage, the right to occupy public lands for agricultural purposes and cattle raising, as well as for any other useful industrial purposes. Each immigrant may secure 50 hectares (about 120 acres) of land, the price of w^hich is fixed by law at 10 centavos (4 cents Gold Cy.) per hectare. Children over 14 years of age may secure an additional area of 25 hectares (about 60 acres). Immigrants may at their option pay either in cash or in annual instalments extending over 5 years, in which latter case interest on the purchase price of the land is charged at the rate of 5% per annum. Immigrants may select within the designated district the land they desire to purchase. Children over 18 years of age are entitled to purchase separate sections of land. No immigrant may become the owner of more than three parcels or sections, either by purchase or otherwise. In case immigrants acquire land against payment in instalments, they are prohibited from selling or otherwise transferring such property and from mortgaging the same, the State being the holder oí a first mortgage on such land. PATENT LAWS. All inventors are vouchsafed the full and undisturbed enjoyment of the benefits of their invention, provided the same are not contrary to public order and good morals. The discovery of any novel methods or processes for the improvement of any art or industry, is likewise considered to constitute an invention. Contrivances devised merely for the purpose of modi- fying the propositions of known devices, or the production of articles of merely ornamental character, will not be considered to constitute inventions. 29 The Government reserves the ri^'ht to acquire 1w pur- chase the secret of any useful invention, as a measure of pulilic utility. Patents will he i^ranted for a term of fifteen years onl)'-. TRADE-MARKS. The right of exclusive use of a trade-mark may he secured by application to the Department of Agriculture, Commerce, Industry, Development, etc. (Ministerio de Fomento), against an annual payment of 5 Bolivianos. Trade-mark rights may be secured on cuts or engravings, monograms, vignettes, embossed prints, letters and numbers with special designs, labels and wrappers for merchandise and any and all other marks intended to distinguish the same from other manufactured articles. The trade-mark, when duly secured, becomes the exclusive property of the manufac- turer or merchant who obtained it, in whom is vested the right to oppose its use by other parties. The owner of a trade-mark is entitled to appeal to the courts of Law for protection in the exercise of his right of exclusive use, and to assign such trade-mark to third parties. Assignments of trade-marks must be recorded in the proper office. The Treasury receipt proving the payment of the tax must be attached to all applications. Specimens of the marks or designs are filed with the records of the Notarial Office of the Treasury. The in- fringement or imitation of trade-marks is punishable by the penalty of a fine of 20 to 200 Bolivianos ($8 to $80), in addition to the penalties provided for in Art. 302 of the Penal Code. MINING CODE. The Bolivian mining laws are exceedingly liberal, as they vouchsafe to all aliens the same rights and privileges enjoyed by citizens of the country. Any person legally capable of contracting obligations may apply for any number of mining claims, not exceeding thirty. The area of each claim is fixed by law at one hectare or 10,000 square metres, equal to about two and one half acres, measured in anv 30 direction at the option of the applicant, and the claim extends to an unlimited depth. The mode of proceeding prescribed by Law is as follows : Any person discovering deposits, placers, lodes or veins, must file the proper application with the Prefect of the Department in which the claim or claims a])plied for is or are located, and attach to such ap])lication a sketch or map plainly showing the location of the boundaries of the claim or claims, to which the application refers, as well as the location of the same with regard to adjoining mining claims. The application must be made out on stamped paper of the denomination of 10 Bolivianos ($4.00). The Prefect, after having caused the application to be published in the newspapers during a stated period, for the purpose of ascertaining whether opposition to the same is entered by third parties, shall issue decree of concession, and the ownership of the mining claims shall pass to the applicant, subject to an annual payment of 5 Bolivianos ($2.00) for each claim. Applications for mining claims are considered as having been abandoned in case of failure to have such claims surveyed and staked out within a term of 70 days from the date of first publication. Any person may file a denouncement of the abandonment of an application for mining claims, requesting that the same be adjudicated, whenever the owner has failed to comply with the provisions of the law governing such matter, in case of failure of such owner to pay the corresponding annual tax or license fee. No special permit is required for preliminary prospec- ting operations, and any one is at liberty to undertake the same, upon giving due notice to the authorities of the District in which such prospecting is to be done. Mining machinery and implements may be imported into the country free of import duty. CUSTOMS DEPARTMENT. Although Bolivia has at the present time no outlet on any sea in her own dominion, she has entered into various treaties with the surrounding countries, for the purpose of being able to exercise her right of free transit through foreign territory. In view of the ample facilities afforded 31 by these international agreements, the disadvantages re- sulting from the lack of a seaport have been remedied as far as possible. For the purpose of providing the commercial interests of the country with the most diversified means for the trans- action of foreign trade, the Government has established Customs Agencies at the ports of Moliendo, Antofagasta and Arica, the first named being in Peruvian and the two last mentioned on Chilean territory, and has placed the Bolivian Consuls in charge of similar agencies in Para, Rosario, Puerto Velho and Corumbá. The following list shows plainly the distribution of the Bolivian Custom Houses over the different sections of the country : Custom Houses for the: Northern District La Paz Central '' Oruro Southwestern " Uyuni Southern " Villazón (La Quiaca) Southeastern " Yacuiba Eastern " Puerto Suárez Northeastern " Villa Bella, Cobija & Manoa, (Abuná) Consular Invoices. The amounts to be collected as Consular Fees for the certification of invoices, are as follows: Consular invoices amounting to less than $200. . .$3.00 " $200 and over 2% Bills of Lading are certified free of charge. The Bolivian consulates are the only offices authorized to sell Consular Invoice Blanks, and they are issued -Jo applicants at the following rates: Per set of 4 copies $0.75 " 5 '' 0.90 The name of the Custom House through which the goods are to pass must be stated in the Consular invoice. 32 Five copies are required for shipments via Moliendo, and four copies for such as are to pass through any of the other Custom Houses. Fire arms, cartridges, etc. may be shipped wihtout special permit issued by the Consul or Consular Agent. The Consular Invoice must be made out in the Spanish language as a necessary requirement. Furthermore, all Consular Invoices must contain the following declarations : 1. The name of the port of destination of the mer- chandise. 2. The name of the person, firm or corporation to whom the merchandise is consigned. 3. The gross and net weights in kilograms ( 1 kilogram =2.2046 lbs.) 4. The contents of the packages, to be authenticated by the presentation of commercial invoices. 5. An affirmation of the shippers that the contents as stated in the invoices are identical with the actual contents of the packages. In order to avoid the possibility of customs duty being collected twice on the same goods, each package must bear in large letters the inscription "EN TRÁNSITO A BO- LIVIA". COMMERCIAL TRAVELLING AGENTS. (Travelling salesmen) Commercial Agents of this description are subject to the payment of municipal taxes in all the cities in which they do business, in accordance with their respective tax rates. The tax in La Paz varies between 200 and 300 Bolivianos ($80.00 and $120.00); in Cochabamba it amounts to LOOO Bolivianos (S400.00) ; in Oruro to 250 Bolivianos ($100.00) ; in Potosi to 200 Bolivianos ($80.00) ; in Sucre to 300 Boli- vianos ($120.00) ; in Uyuni to 250 Bolivianos ($100.00) ; in Santa Cruz it varies between 400 and 800 Bolivianos ($160 to $320), and the tax in Tarija is 200 Bolivianos ($80.00). As these taxes are paid in to the exchequer of 33 holders of concessions for the collection of taxes, they are inclined to offer inducements to commercial agents who merely furnish security and deposit with the Custom Houses for the amount of the samples they succeed in selling. MONOPOLIES. Bolivia has monopolies on alcohol, tobacco and matches. The first mentioned monopoly has reduced the sale of spirit- uous liquors, while those on the two last mentioned articles have resulted in the establishment of new national industries. The revenues derived by the Treasury from the alcohol and tobacco monopolies amount to over 2,000,000 Bolivianos. DIPLOMATIC AND CONSULAR AGENTS OF BOLIVIA IN THE UNITED STATES. Hon. Ignacio Calderón, Envoy Extraordinary and Minister Plenipotentiary at Washington. Cónsul General: Adolfo Balltvián. Consuls : Wilfred Schoff Esq Philadelphia, Pa. Edwin H. Heath Esq Kansas City Federico Harmwel Esq Chicago, 111. Raymond M. Glaken Esq Baltimore, Md. Arthur P. Cushing Esq Boston, Mass. Carlos Sanjinés Esq San Francisco, Cal. Juan Argote Esq New Orleans, La. Vice Consuls'. Tohn D. Leitch Esq Norfolk, Va. T. G. Gonigal Mobile, Ala. The Hon. John D. O. Rear is accredited to the Bolivian Government in La Paz in the capacity of Envoy Extraordi- nary and jNIinister Plenipotentiary of The United States. 34 With the exception of the Secretary of Legation in La Paz, who also exercises the Consular functions, the United States has no Consular Agent in any other part of Bolivia. PAN AMERICAN CURRENCY. The interesting proposition to create a Pan American currency has been mentioned in the Bulletins of the Pan American Union, and the realization of this plan appears desiderable to us. The report states that the Hon. Horatio G. Knowles, Ex-Minister of the United States to Bolivia, has suggested the idea to have all the American countries undertake the coinage of gold currency of uniform fineness, for the purpose of making it legal tender in all the different states of the western hemisphere. He proposed that the coins in question should bear on one face two images, repre- senting the native race and American womanhood, and on the reverse the arms of each of the American Republics, and that they be made to replace the British Sovereign, now so generally used. In the issue of the Bulletin of the said Union for the current month, this idea is amplified by Mr. Horatio Cassel- berry of Philadelphia, who suggests that the said coin, while identical in shape and design for all these countries, should not represent the same value in all of them, because in his opinion difficulties would be apt to arise with regard to the exchange of the said currency which would be legal tender in 21 countries, in each of which the legal provisions relating to the currency are different, unless all of them should previ- ously agree upon the adoption of a uniform system. But however this may be, we think it would be worth while to make the foregoing suggestions a subject of debate on this present occasion. METRIC SYSTEM OF WEIGHTS AND MEASURES. It may be expedient to recall in this connection the suggestions made to adopt the metric system of measurements and weights in the United States, in order to facilitate cal- culations and business transactions, and to conform to the system generally adopted by the American countries. 35 A FEW GENERAL SUGGESTIONS REGARDING THE NATURE OF THE ENTERPRISES IN WHICH TFIE UNITED STATES CAPITAL MIGHT BE INVESTED TO GOOD ADVANTAGE IN BOLIVIA. United States Banks in Bolivia. Notwithstanding" the fact that there is a general demand for the estabhshnient of such banks in all the Latin American countries, and while fully aware that response to this demand would prove theoretically beneficial, .we still adhere to our personal opinion, that even under the most favorable condi- tions the volume of transactions constituting banking opera- tions in the proper sense of the term, such as loans, the discounting of commercial paper, deposits, etc. (i. e. the bank- ing business as now conducted by similar national institu- tions) would not be sufficient to constitute a decisive factor in favor of their organization. In our judgment the actual requirements of Latin America call for an extension of the present banking connections on an efficient basis, and this present convention offers a favorable opportunity for pro- moting the extension of such reciprocal relations between American banks. Men prominent in the financial world of this country have expressed the opinion that "Banks are not established in the natural order of things for the purpose of creating business, but for managing, developing and extending such business as has been previously established." This opinion is based on the methods followed by British, German and Belgian capital in South America, where the financiers of these European countries began by investing their funds in railways, manufacturing and other enterprises, while their banking interests only established South American branches later on, and practically merely for attending to the foreign business of their own countries. The principal and i)rimary requirement of South America is the liberal investment of United States capital, and when that has been fulfilled, a vast and profitable field of operations will have been opened up for the banking interests of this country. 36 Among concurring opinions regarding these matters we may quote the following statement of Mr. F. Abbot Goodhue of Boston: The wisest plan at the present time is to make more loans to South America, instead of opening branches of bank- ing institutions. Mone}^ expended for loans will be pro- fitabh' invested, business will become prosperous, and we shall thus open the way for the establishment of banks." Similar opinions are now being adopted and maintained by financial authorities, and the conviction is gaining ground that it is an absolutely necessary requirement for the South American countries and business interests to obtain credits which will enable them to pay for the supplies which this countrv sells them. This was actually the method followed by the European countries, which until recently were given the preference. 1)ecause the Old World money markets were loaning at cheaper rates and were in a position to compete to good advantage against the delivery charges, rates of interest, etc. demanded in the United States. This may be explained by the fact that the European countries are much older, and that the mass of their population has been able to accumulate ample savings, such as are practically unheard of in the United States, with the result that they have an abundance of available funds to lend. Moreover, the necessary invest- ments for railways and other public enterprises have already been made in the countries of Europe, and as no further funds are required for such purposes, their people are naturally induced to look aliroad for chances to invest their unproduc- tive capital, and consequently satisfied to get moderate returns from the same. The present change in the direction in which South America must look for her supplies, makes it imperative, that 1)usiness be conducted on the above indicated basis, and in this connection it becomes necessary of course to provide sufficient security for the capital to be invested — by giving the proper guarantees which Bolivia is fortunately in a posi- tion to offer to a satisfactory extent. What we need, most of all, are financial organizations that will uplift our mining industry, agriculture, arts, manu- factures, immigration, etc., by establishing several special banks, as well as factories, an agricultural loan and credit system, and similar institutions, all of which require through 37 investigation, while we are compelled to confine ourselves on this occasion to a few superficial remarks. TIN AND COPPER SMELTING WORKS. When the European war broke out, and Bolivia was prevented from exporting" these ores to Europe through the usual channels, the Bolivian Government made the most stre- nuous efforts to solve this exceedingly important problem. The ores could not be shipped to this country, because there were no smelting works in the United States available for the purpose. To have them smelted and refined by private concerns would have been a risky undertaking, as it might reasonably be excepted that the temporarily sus- pended relations Ijetween the mine owners and the British and German smelting works would be resumed upon the conclusion of the war. In view of this emergency the Consulate General of Bo- livia in New York suceeded in interesting capitalists in this country in the matter. These parties submitted to the Bolivian Government a proposition based on the suggestion that a smelting works for the purposes in question should be erected and installed in the United States, for account of the Government of Bolivia, as being the only available means for making sure that supplies of ore W'Ould continue to be shipped to these Government w^orks, even after the termina- tion of the war, by giving the Bolivian mine owners an interest in the proportional quantity of ore supplied by them to the Smelting Works, following the cooperative plan adopted in Austria and other countries. The bankers offered to advance the funds required for the erection and complete installation of the plant, and to take part in the management, under the strict supervision that was to be exercised by the Bolivian Government. Among other matters, which it would' be idle to mention on this occasion, it was planned that the Smelting Works were to supply this country wnth about 30,000 tons of block tin, representing an amount two thirds of its annual consumption, and that Bolivia was thus to provide a sum in excess of 20,000,000, to be used for sub- stituting New^ York exchange for London exchange, and eventually to be invested in export goods. The Bolivian Government arrived at the conclusion that 38 the proposition should not be accepted, on the i^round that "it would induce the State to transgress beyond the scope of its proper functions, and thus to become an operator en- gaged in the metallurgical industry," On the other hand, our Government, responding to an evident national desire, has for some time been considering the erection and installation of an electric smelting works in its own territory, in consideration of the fact, that while there is an abundance of available hydraulic power, the supply of coal is scarce, and its importation would place a plant operated by fuel combustion at a disadvantage. In support of these plans on our part, we have caused tests to be made in this country, with the following results : Bolivian tin concentrates ("barrilla") tested in New Jersey, produced an output of 66.96%, and when smelted at the Pittsburgh Electric Smelting Works, the product was block tin 98.75% pure (capable of being further refined), with a residue of 1.89% slag. These recently obtained data have been transmitted, so as to make them available in case they are considered of sufficient importance. This matter has meanwhile aroused very great interest, and it appears from press reports that the "Compañía Esta- ñífera de Llallagua," owned by Chilean capitalists, but having its property in Bolivia, has organized a company for the erection and installation of a smelting works on the Pacific Coast, at the port of Arica or Mejillones. We beg to call the attention of parties in the United States, interested in such enterprises, to the foregoing particulars. In case any of them should be inclined to take up this proposition, the only practical way to proceed would be, in our judgment, to acquire the ownership of tin mines in Bolivia, by means of an efficiently constituted organization, and in such manner that the Bolivian owners would still retain an interest in the enterprise. In this manner (provided of course it should for some reason or other prove impractic- able to instal an electric smelting w^orks in Bolivia) a plant could easily be erected and installed in the United States, as it would have the output of the Company's own mines to work on, and therefore be on a solid basis, without any risk of the supplies of material being turned back into their former channels, upon the conclusion of the European war. 39 THE MADEIRA-MAMORÉ RAILWAY. Although on Brazilian soil, this means of communication is of preeminent importance for Bolivia, as it provides her with a means of access to, and egress from the Atlantic, and has opened up to human enterprise vast territories abounding in natural wealth seldom equalled. In this con- nection it will be sufficient to point out, that the highest grade rubber known is gathered in these districts, which also supply many other products that are now being gradually discovered and worked. The fondest hopes and expectations of Bolivia have for time immemorial been centered in this railway, and it was for this reason that she consented to cede to Brazil her extensive and luxuriant territory in El Acre, placing the fullest confidence in the material advance and other benefits which the country would derive from this railway, which Brazil bound herself to construct. She has loyally fulfilled this obligation, nowithstanding excessive financial sacrifices, far surpassing the estimated cost. The Company that undertook the construction of the railway was incorporated under the laws of Maine, and became involved in financial difficulties which do not call for discussion at this time, with the result that the administration of its affairs has recently been placed in the hands of Trustees. Inasmuch as both Brazil and Bolivia have interests of the utmost importance that are closely connected with the successful operation of the said railway, we venture to point out, that it will be expedient for both countries to exert every possible effort, to the limit of their capacity, with a view to saving the situation and imparting new life to the enterprise, by adequate reorganization, either by interesting capitalists in the United States in an arrangement to be based on a long term lease, or by reorganizing the Company in some way which it is not incumbent upon us to discuss. THE YUNGAS RAILWAY. The Yungas Provinces, located at a short distance from La Paz, present not only some of the most beautiful landscape panoramas in the world, but also contain an exuberant wealth 40 of natural products, such as different kinds of wood, fruit, cocoa, etc. For the purpose of opening up an outlet for these products, and of increasing the output, the Bolivian Government is now endeavoring to interest United States capital in the construction of a railway which is to connect the Bolivian metropolis wnth these virgin territories and all their natural wealth. The estimated cost of the railway is only 2,500.000, to be secured by ample guaranties. BOLIVIAN p:nterprises CROWDING EACH OTHER IN SEEKING THE COOPERATION OF UNITED STATES CAPITAL. Since the European war unexepectedly cast its shadow over the earth, all nations have apparently lived in the hope of being able to redeem at least some of the losses they have suffered, by appealing to this country as the successor in the great financial mission, the burden of which has here- tofore rested on the shoulders of Europe. Applicants in ever increasing niunbers have meanwhile presented themselves at the Consulate General of Bolivia in New York, with the request to be placed in touch with capitalists interested in such propositions, for the purpose of calling upon them to undertake various enterprises in the field of mining, agriculture, arts, industries etc. and the proposition has even been made to establish Bolivian business agencies in this city. OFFICIAL INFORMATION BUREAUS. In ^•iew of this forward movement, it will in our opinion be expedient to establish such sources of reliable information, for the purpose of guiding the judgment of others and pro- tecting to a certain extent the interests of Bolivian business men and manufacturers, as well as of the capitalists of this country, who are in quest of connections and combinations,, that will prove mutually beneficial and profitable. 41 CONCLUSION. Commercial intercourse having- been established for many years between Bolivia and Great Britain, Germany and France, all of which countries preeminently adapted them- selves to existing conditions, by facilitating business inter- change, it was a foregone conclusion that the channels of trade, if guided into different directions, would naturally take their course towards the United States, where they might be expected to meet with a favorable reception. In this connection, however, we are confronted by the following problems: I. Bolivian commerce, whose funds were either out- standing in F.uro.pe, or derived from liberal European credits, was suddlenly prevented from recovering the former, or from availing itself of the latter in this country. II. On the other hand. North American capitalists, commanding abundant funds, for which their own country offered exceedingly profitable chances for investment, and not satisfied wnth the moderate profits which European Capi- tal was content to accept, hesitated to open credits, partly in consequence of ignorance of the conditions and requirements that are the foundation of Bolivian trade. North American manufacturers, while desirous of opening up new markets for their products, do not venture to engage in trials in this direction, for which they have not prepared themselves by prior inquiries into existing conditions, and by a thorough knowledge of the territories in question. In my opinion, it is on the basis of these two factors that the difficult task of solving this complicated problem will have to be undertaken. A great has been deal said about the practical utility of establishing in South America a system of Banks owned by U. S. capital, a necessity to w^hich this country has re- sponded by authorizing the organization of foreign branches, such as have already been opened in Buenos Aires and Rio de Janeiro. However, while this measure does afford obvious advantages, by facilitating direct commercial interchange on a more economical basis, its adoption will by no means solve 43 the probelm as such, unless these Banks are wihins^- to come to the rescue of merchants and prockicers, by advancin^^ them funds to tide them over the present crisis, which is undoubt- edly merely transitory. Referring- once more to the two principal sources of supply for the Bolivian export trade, I am firmly convinced that the Government of Bolivia will not shrink from any sacrifices required for the advancement and possibly for the regeneration of the rubber extracting industry, whose field is irrefutably the richest and most liberally endowed territory in the world. The present decline of this industry is due to the per- severing efforts of the British to uproot it in the Amazon countries, and to transplant it to their possessions in the Far East, which have proven successful in consequence of the application of scientific and economical methods, and there is no reason why they should not likewise be applied to our rubber producing districts with the same determination that will undoubtedly insure good results. To this end it will be imperative to decide on a system for the consolidation of priA'ate property, while avoiding the accumulation of large estates and offering inducements to settlers. A further urgent necessity is a reduction in the cost of transportation over the Madeira-Mamoré railway, and the subsidizing of a steamship line to provide a direct steamer service to Porto Velho, one of the terminals of the said railway and a point up to which the river is ready navigable for ocean steamers of a tonnage of three to four thousand tons, thereby establishing a direct traffic route between the said port and those on the western Pacific coast, by way of the Panama canal. The foregoing propositions provide a safe and reliable basis for the investment of North American capital for the promotion of rubber tree plantation enterprises which just now — more than at any other time — are a subject well worth careful study and consideration on the part of the practical minds of farsighted men, in view of the serious complications liable to result from the present tremendous clash of arms, whose devastating consequences may even deal a serious blow to the similar industrial enterprises in Asia, to which we have had reference. In considering these matters, we must not overlook the 44 fact that in Bolivia as well as in the other South American countries, it was British, French and Belgian capital that supplied the loans and built the railways, in view of the moderate rates of interest charged and the liberal terms allowed, neither of which appear to satisfy the capitalists of the United States. It will be well to bear in mind, moreover, that Bolivia can unfortunately not expect to draw^ immigration from Great Britain, France and the United States, since these countries offer to their population greater inducements at home than could possible be offered them abroad. The Germans, on the other hand, are spreading everywhere, creating industrial centers and commercial associations, admirabh^ organized, which they thus succeed in rendering profitable both for themselves and for the country in which they establish them. Overpopulation of their own country and the consequent dif- ficulty of earning a living at home, cause the Italian and Spanish people to emigrate, and they constitute an element that always meets with a good reception. In Bolivia, the increase of her population is a necessity overshadowing all other considerations, and in this connec- tion it w^ill be well to bear in mind the saying that immigration "is not attracted," but "attracts itself." Only with an increased population will she be able to increase her produc- tion, and consequently her imports, thereby providing traffic and revenue for the comparatively extensive railway system which Bolivia now has at her service. It may not be out of place, perhaps, to state on this occasion, as an expression of our personal conviction, that, while admiring and honoring the United States for its gi- gantic enterprise in joining the two Oceans by the construc- tion of the Panama Canal, from which posterity wall derive such benefits as it would be difficult for our minds to foretell, we do not think that it will bestow on countries like Bolivia such immediate and tangible benefits as have generally been expected. The Canal as such cannot effect an increase either in the production or imports of the country, and before it will be able to exert an influence on the same, it will be indispensable to increase both the producing and consuming population, and all efforts to that end must necessarily be centered in the Government and in instutions interested in the furtherance of immigration. NEW YORK, MAY 20th, 1915. ^l^:i. \ ,: :^ ís >S ^:. J r_!,^jIiJ^ .--_i_.l2.< zsaifiíi— :jiZiaL£: ^' UNIVERSITY OF CALIFORNIA LIBRARY Los Angeles This book is DDE on the last date stamped below. ÍÍECT) CD-Wit SEP 2 r Form L9-Series 4939 YORK PRINTING CC r, J. DASSORI. PROPRiETO SPANISH PRINTIN( 108 Park Row. New Yos PAM PHLET BINDER ^^Z Syracuse, N. Y. ^^ Siocklon, Colif. PLEASE DO NOT REMOVE THIS BOOK CARdS -^tllBRARYi?/- University Research Library I I ^ (VJ IT IV J r. I r r > z O r 3 1158 01093 9964 UC SOUTHERN REGIONAL LIBRARY FACILITY AA 001 018 558 5