United States. Dept. of Commerce and Labor United States. Bureau of Foreign Commerce.

Consular reports, Issues 196-199 online

. (page 68 of 82)
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the prices of all commodities, of national as well as imported products, enor-
mously, and it is not exaggerating to express this increase by at least 300 per
cent.

The character of the Anglo-Saxon is against the success of such organized
and subsidized movements. His achievements are the fruit of his spirit of
initiative and independence. Spontaneous, self-resolved enterprises call forth
his best efforts, his ingenuity, and indomitable energy. The history of emi-
gration to the United States, the flourishing state of all British colonies,
rivaled by none of any other nation, stand as splendid testimonies to this
operation. Only when he is cajoled and managed by other than his own
impulses will he lose heart.

By nearly general assent, these poor, returning stragglers acknowledged
great kindness to them on the part of the planters themselves, but complained
bitterly of having been driven by Italian overseers, animated by unmodified
slavery traditions. This treatment seemed so oppressive and revolting to
them, though quietly borne by the other foreign colonists, that complete
collapse and failure followed, and the weary tramp and begging back to
Santos was undertaken.

If the United States would join the example set by the British and Cana-
dian governments and warn publicly against any systematic and interested
decoy to foreign lands by the allurement of irresponsible promises and glow-
ing pictures of wealth acquired without hard, very hard, labor, a great deal
of suffering and sadness may be averted from those who, in every commu-
nity, can so easily be led to chase after rainbows.

JULIAN HAUGWITZ,

Santos, January ij, iSgy. Vice- Consul,



FACTORIES AT BAHIA.

I transmit herewith a list of the manufacturing establishments of Bahia
(except cotton factories, which I reported upon last year*), with amount of
gross receipts and net profits per annum, in round numbers, as given by the
managers or superintendents of each; also, the number of hands employed,
male and female, by each, with wages paid per day, hours of labor, and the
year when the factory was established. The amounts of money were stated in
the depreciated paper currency of this country, which continually fluctuates
in value, having ranged for the past three years from 15 ^^ cents to 2 7)4 cents
per milreis. I reduced the amounts to United States equivalents at the rate
of 20 cents to the milreis, or 5 milreis to the dollar.

There have been no improvements of importance in the cotton industry
since my report in 1895.



♦Sec CoNsuLAK Rkpokts \o. i8i t November. 1895), p. 391.

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490 FINANCES OF COLOMBIA.



FINANCES OF COLOMBIA.

I have the honor to submit herewith a report on the financial condition
of the Republic of Colombia and a statement of the public debt. There
is now a good prospect for the settlement of the foreign debt on the basis
mentioned. If a settlement is brought about, it ought to be a great benefit
to Colombia and enable her to make another loan, which would greatly
benefit the people in the way of public improvements. The public debt is
now less than I5 per capita, and is the smallest public debt owed by any
nation in the world. Perhaps no country of the same size and population
has as many resources, and proper financial management should make
Colombia one of the foremost countries in South America.

The foreign debt, in gold, is as follows :

Principal ^9,567,500.00

Interest 7,730,552.00

Total 17,298,052.00

The interior debt, in paper, is as follows:

Consolidated ^5,905,113.95

Floating debt 1,892,110.60

Total 7,797,224.55

Adding to the amount of the floating debt above stated what is still due
the treasury for war expenses for 1885, and for pensions, etc., there would
be a total floating debt of ^8,405, 113.95 (paper). At the rate of exchange
of 150 premium, the floating debt in gold is J3, 362, 045. 58, which amount,
added to the foreign debt of J 17, 298,05 2, makes the total debt in gold
J 20, 660, 09 7. 58. As compared with 1894, the foreign debt has increased
^5908,909, being the interest on the capital.

The consolidated interior debt has increased $483,217.95, while the float-
ing debt has diminished by J 1,446, 164, without taking into consideration the
amount of the claims pending on account of the revolution of 1885, which
were not known in 1894. However, from April, 1894, to April, 1896, the
committee charged with the adjustment of said claims has passed upon 448
cases out of the 1,534 which were pending, to the amount of Ji 71,5 72.30,
the total amount of claims being 11,370,543.21.

The total amount of claims presented since the committee commenced
their labors are for $14,549,679.54, of which I7, 660, 789.32 have been ad-
mitted and $6,888,888 have been rejected. There are still 1,093 claims
pending from the revolution of 1885, to say nothing of the claims now be-
ing presented on account of the revolution of 1895.

The liquidation of the National Bank, which had been decreed by law
70 of 1894, was suspended on account of the revolution of 1895 by decree
41 of February 4, 1895. Since January, 1896, the National Bank has been



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FINAN'CFS OF COLOMBIA. 49 1

under the control of the liquidation section and had received, up to June
3o» l53>»532-95> of which amount $243,339 is the proceeds of 25 per cent
additional import duties. Half of this amount has been destroyed and the
other half is for the purchase of silver bars to be made into fractional coins
and for the changing of nickel coins of 2j4 cents.

A short time since, a representative of the foreign bondholders reached
Bogota, with the purpose of entering into some kind of an arrangement with
the Government for the payment of the debt, as no payments have been
made for nearly twelve years. The [)roposition is that the settlement of the
debt be on the basis of ^2,700,000 ($i3»i39,55o), interest i^ per cent for
two years and increase every two years till 3 per cent is reached, which is to
be the maximum. There is a good prospect that this settlement will be
made. I sincerely trust this will prove correct.

LUTHER F. McKINNEY,

Bogota, October 77, i8g6. Minister,



AGREEMENT WITH THE BONDHOLDERS.

I have the honor to inclose herewith the translation of an agreement be-
tween the Government and the representative of the holders of the foreign
debt of the Republic of Colombia. I may add that this agreement has
just been approved by the bondholders, at a special meeting held in Lon-
don, and therefore goes into immediate effect.

JACOB SLEEPER,

Bogota, January 12^ ^^97^ Secretary of Legation,



[I^w 160 of 1896. — Translation.]

The Congress of Colombia, in view of the agreement of November 4, 1 896, betweert the
Ministe*- of Government, Acting Minister of the Treasury, and Mr. Frank B. Passmore, rep-
resentative of the bondholders of the foreign debt of the Republic of Colombia, whose tenor
is as follows :

"Agreement celebrated between Antonio Roldan, Minister of Government, Acting Min-
ister of the Treasury, and Frank B. Passmore, special commissioner, appointed by the council
of foreign bondholders of London."

The undersigned, to wit, Antonio Roldan, Ministerof Government, Acting Minister of the
Treasury, representing the Republic of Colombia, and duly authorized by His Excellency
the Vice-President of the Repul)lic, Acting President, on the one hand, and, on the other,
Frank B. Passmore, special commissioner appointed by the council of foreign bondholders of
London, representing the holders of the foreign debt of the said Republic, have agreed to
celebrate the following agreement:

Articlk I. The external debt to which this convention refers consists of the outstanding
principal and the accrued and unpaid interest on the 4^ per cent bonds of 1873. ^^^
amount of the said capital is /^i, 913,500, and the arrears of interest up to December 31,
1896, amount to ;^i, 600,942; total, ;f 3,5 14,442.



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492 FINANCES OF COLOMBIA.

Art. 2. P'or the conversion of this debt, new bonds, entitled ** ihe consolidated delit of
Colombia, 1896," shall be issued for the sum of ^^2,700,000, in series of j^l,ooo, ^{^500, and
;£'ioo, the arrears of interest up to the end of the present year of 1896 being included in the
said amount. The bonds shall be to bearer and shall be dated January I, 1897. They shall
carry interest from that date, and shall be signed by the fiscal agent or special commissioner
of the Republic in Ixjndon and countersigned by a representative of the bondholders, nomi-
nated by the council of foreign bondholders. Each bond shall have attached fifty half-yearly
coupons at the rate of i}4 pcr cent for the first three years, increasing every three. years by
one-half of I per cent until reaching 3 per cent. The Governrfient will provide new coupon
sheets free of charge to the bondholders when the coupons issued with the new bonds are
exhausted. These couix)ns shall be paid in London, in gold, on the 1st of January and the
1st of July in each year, the first coupon being payable July i, 1897.

Art. 3. The principal of the debt shall be converted at par, bond for bond, and the net
amount of the arrears cf interest, as stated in article I, at 43 per cent of their nominal value.
Fractional certificates for 1873 bonds shall be admitted for conversion for the value they rep-
resent, but only with a right to coupons from No. 27 on, including the interest due.

Art. 4. Coupons Nos. i to 26 which have not been presented for jmyment and outstand-
ing and unpaid bonds of 1873 shall be paid in order of deposit as far as the funds in Ix>ndon
in the hands of the bankers of the Republic will permit, if presented within two months
from the date of the commencement of the conversion. Upon the expiration of the two
months the said bonds still unpaid will be admitted to conversion as current bonds of 1873
while the conversion remains open.

Art. 5. For the amortization of the new bonds the Government assigns an accumulative
sinking fund of one-half of i per cent per annum on the principal of the debt, commencing
on the 1st of January, 1900, increasing at the rate of one-half of i per cent every three years
until it reaches i^4 per cent, the (Jovernment always reserving the right to increase this fund
when it may desire to do so. This fund is to be applied half-yearly in the redemption of said
bonds, by auction or purchase in the open market, as long as the price is below par, and in
payment of drawings at the rate of 60 per cent when the bonds are earning less than 3 per
cent, and at 70 per cent when interest rises to 3 per cent, in case the price reaches or exceeds
par. The council of foreign bondholders will verify these operations in conjunction with the
Government representative in London.

Art. 6. The amount necessary for the payment of the interest and the amortization fund
of the new bonds, as well as the amount necessary for the service of the debt, according to
article 9^payments of which must be made in English gold — will be taken by the Govern-
ment from the common fund, and the total amount of these charges will be considered as
included in the national estimates. The amount of this sum shall be handed to the agent of
the foreign bondholders in Bogota on the 1st day of each month, as hereinafter expressed.
The amount set aside for the payment of (he debt shall always be free from all taxation.

Art. 7. The agent of the foreign bondholders at Tk)gota shall remit monthly to London,
in pounds sterling, the funds handed to him, and the responsibility of the Government shall
cease on payment being made to said agent. These funds shall he remitted by the agent to
the council of foreign bondholders in Ix)ndon at the lowest rate of exchange at which first-
class drafts can be obtained. The agent shall notify the Government of the rate of exchange
obtainable before making the remittance, accompanied by a certificate signed by two banks
of the capital, and the Government shall have the right of substituting first-class bankers'
bills at a lower rate if the same are to be obtained, but this |X)wer shall not be used so as to
delay the dispatch of the remittance. The Government will provide that the total amount
payable shall be in Ix>ndon, in the hands of the bankers charged with the service, at least
fifteen days before the date fixed for the payment.

Art. 8. On the 1st of April and ist of October of each year, commencing with the 1st
of April, 1897, the agent of the bondholders in Bogota shall furnish the Government with an



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FINANCES OF COLOMBIA. 493

account of the sums received and remitted to him. Should the proceeds of the assignment
of the percentage of the customs, as specified in article 6, leave a surplus in his hands over
and above the sum required to discharge the service of the debt and all expenses connected
therewith for the said period of six months, then such surplus shall be returned to the Gov-
ernment or carried forward to the following six months, as the Government may direct.

Art. 9. For the remuneration of the agents in Bogota and London, a sum of 2 per cent
shall be set aside, computed on the annual service of the debt. One-twelfth part of this sum
is to be remitted by the agent at Bogota each month to the council of foreign bondholders,
who shall arrange for its distribution. This amount shall cover bankers' charges, including
discount on bills if required, revenue stamps, notarial fees, advertising, and commissions
on purchases for the sinking fund, etc. The agent in Bc^ot4 shall be appointed by the
council.

Art. 10. The fiscal agent, or special commissioner of the Republic in London, shall
represent the Government in any question which may arise in carrying out this convention;
and all matters not provided for therein which may arise during the course of conversion or
thereafter shall be settled by said agent in conjunction with the council, and in case of dis-
agreement, by a third party agreed upon by the two parties interested.

Art. II. The conversion shall be effected in London by the council, and shall remain
open two years, unless the agent of the Government and the said council, by mutual agree-
ment and for special reasons, shall agree to extend it for another term, which shall not exceed
one year. The council may, on their own responsibility, issue certificates for fractions of new
bonds on any conditions they may think desirable so as to secure their early conversion and
withdrawal from circulation. Old converted securities shall be cancelled and delivered to
the Government or destroyed in the presence of a notary and the representative of the Republic
after the close of the conversion.

Art. 12. The agent of the Government shall do everything necessary to place at the dis-
posal of the council all balances in London arising out of former conventions or arrange-
ments relating to the bonds of 1873 which belong to the creditors. These funds, after pro-
viding for claims in accordance with article 4, shall be applied to the reduction of the expenses
attendant on carrying out the present convention.

Art. 13. The convention of 1873 ^^ abrogated, as well as all previous conventions re-
garding the settlement of the external debt. The outstanding obligations, however, previous
to 1873, may be admitted to the conversion of new bonds, if any should remain when that
operation closes, in the terms the agyt of the Government and the council shall agree upon,
provided they are presented within the first month of the said conversion. It is understood
that in no case shall the amount of the whole conversion exceed the jf 2,700,000 already
agreed upon.

Art. 14. Any balance of new bonds after providing for the conversion of the old securi-
ties under this arrangement, or remaining on hand on the close of such conversion (see arti-
cle 2), and the balance in Ix)ndon, mentioned in article 12, are to be at the disposal of the
council of foreign bondholders to meet the expenses of the operation, including Government
stamp duty on new bonds, engraving, legal expenses, advertising, and all incidentals, together
with the expenses incurred in the past by the council and the negotiation of the present
arrangement. In case the foregoing amount proves insufficient to cover the whole of these
expenses, the deficiency shall be made good by the bondholders.

Art. 15. The coupons due, which have not been paid, owing to their not having been
presented at the proper time, shall be paid afterwards by the council of bondholders; but
after the conversion is completed. The half-yearly coupons canceled by the Government
shall be duly remitted to the director of public credit

Art. 16. The present convention shall be duly ratified by law of Congress and shall be
submitted to the approval of the council of bondholders and of the bondholders of 1873 in
a public meeting convened for that purpose in London by the council of foreign bondholders.



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494 QUEBRACHO TANNING IN URUGUAY.

As soon as this convention has been ratified by Congress and by the foreign bondhold-
ers, as above provided for, it shall immediately become law and shall be binding on both
parties.

In faith whereof, we sign three duplicates in Bogota, the 4th of November, 1896.

ANTONIO ROLDAN.
FRANK B. PASSMORE.



DECREE.

Article i. The present convention is hereby approved.

Art. 2. There shall be appropriated in the national estimates the sums necessary for
the fulfillment of the obligations accepted by the Government, and which shall be met by the
national Treasury in virtue of the foregoing agreement. In case of approval of this agree-
ment, it is understood that the sums required shall be considered as included in the next
biennial budget.



QUEBRACHO TANNING IN URUGUAY.

The following report on tanning in Uruguay is based upon all the data
obtainable, with a view of showing such new features in this branch of in-
dustry here as are unknown to our people at home. I am, to a great extent,
indebted for my information to the firm of Lanza Hermanos, proprietors
not alone of the largest tanning establishment of this country, but also of per-
haps the largest boot and shoe manufactory in this Republic, furnishing out-
side of their own home demands, foot wear for some of the armies of the
neighboring republics. These gentlemen have not only been kind enough
to accommodate me with such detailed information as I needed partly for
this report, but also have taken the trouble of furnishing me with samples
of the various qualities of leather, together wi\h the process and material
used by them for each kind of leather so tanned.

Mr. A. I^nza, one of the members of this firm, visited the United States
as a delegate to the Pan-American Conference from this Republic during
President Harrison's Administration, and has a great desire to see better and
closer trade relations established between the United States and Uruguay.

The special feature of this report is that it brings to the notice of our
people at home the use of a tanning material but little known to them,
which, in my judgment, is of sufficient importance to warrant their attention.
This material is a wood which grows in Upper Argentina and Paraguay in
great quantity, and is named quebracho.

The fact that some few years ago an individual knowing the good tan-
ning properties of quebracho made an extract from the chips and offal
thereof at the place where these timbers were originally cut for various pur-
poses and exported this extract to Europe led to a closer investigation, the
result of which is the export of the timber itself for tanning purposes. Now,



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QUEBRACHO TANNING IN URUGUAY. 495

shiploads of quebracho go to Euroi)e, and the export promises to increase
from year to year as tanners get better acquainted with its valuable proper-
ties.

The fact that the entire log is ground up into a coarse kind of sawdust
and thus used goes to prove its great economic value, taking into compari-
son other tanning materials, where only the bark of a tree furnishes the
desired qualities.

I am informed that the chemical tanning properties of quebracho, in pro-
portion to oak bark, stand as follows: Quebracho wood, 12 per cent; oak
bark, 10 per cent.

As before stated, this timber grows abundantly in the northern part of
Argentina and Paraguay. The principal cost and expense to be encountered
in making quebracho marketable are in the cutting and shipping of it to
the sea coast, first, because the wood itself is the hardest wood known, so
that extra- tempered tools must be used in cutting it down, and, second, it
is the heaviest wood known, considerably outweighing ebony, and therefore
expensive to handle and transport.

Quebracho is a wood never known to rot; it withstands the water and
underground use as well as the air, and gets harder from year to year. Extra-
tempered tools, as stated, must be used in working it when green, and, when
old, it becomes almost like metal. It is of a dark cherry-red color and takes
a most beautiful polish. Furniture made of quebracho will almost last for-
ever and is exceedingly beautiful.

Quebracho is here principally used for fencing poles, because of its lasting
quality, and the larger timbers find ready use for water constructions, etc.

When used for tanning purposes, it comes in large logs, which are cut
up into lengths of about 5 or 6 feet. These are put before a circular saw
and cut up into strips of about 3 by 3 inches, and these pieces again are put
into a machine consisting of a solid steel disk with numbers of projecting
teeth — somewhat resembling the solid iron-wheel cornsheller — which runs
with great speed, and cuts these pieces up into a coarse kind of sawdust,
which is taken up by an endless belt of cups that conveys the now ready tan-
ning material to its place of deposit.

The following table shows the total quantity of leather tanned in Monte-
video, the quantity of leather of each kind actually tanned by Messrs. I^nza
Hermanos, the percentage of quebracho wood used for each quality of
leather in proportion to other tanning material used with it, the time re-
quired to cure the leather, and the quantities used for each particular kind,
together with the average cost of the tanning material (quebracho), and,
lastly, the prices of leather sold by these parties to the public.
No. 199 4.



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Online LibraryUnited States. Dept. of Commerce and Labor United States. Bureau of Foreign CommerceConsular reports, Issues 196-199 → online text (page 68 of 82)